The Dolan Company (NYSE: DM), a leading provider of professional services and business information to legal, financial and real estate sectors in the United States, today announced financial results for the three months ended June 30, 2013.
“Recent operating trends continued in the second quarter, as our e-discovery business posted very strong growth, while our mortgage-related business, National Default Exchange, or NDeX, remained under pressure,” said James P. Dolan, chairman, chief executive officer, and president. “We saw balanced demand for both our document review and technology processing segments within the e-discovery business. We appreciate our long-term customers and we are encouraged about our new client opportunities,” Dolan said.
“Once again, our mortgage default-related businesses remained depressed as the industry continues to experience a reduced pace of foreclosure referrals from the largest servicers. Given the lack of visibility and growing losses at NDeX, we have decided to sell certain of those businesses, including NDeX South and NDeX Indiana, which were sold early in the third quarter,” Dolan said.
“Our litigation support segment showed exceptional growth this quarter, although some of it is timing related. Litigation support revenue grew by almost 60% year over year, driven by nearly 75% growth in our e-discovery business as compared to an unusually weak second quarter a year ago. On a sequential basis, DiscoverReady revenues grew by 18% as we saw strong demand from existing clients while continuing to develop and grow a broad pipeline of new clients,” Dolan said.
“During the second quarter we continued to make progress in improving our balance sheet. We generated $7.6 million in free cash flow, which was used to pay down our net debt to $140.6 million at the end of the quarter. Our free cash flow was driven primarily by the receipt of a tax refund of approximately $11 million during the quarter, which was offset in part by $4.9 million of cash used by discontinued operations and roughly $1 million of one-time expenses associated with severance and professional fees,” Dolan said.