“In the second quarter, revenues at NDeX declined by 32% compared to last year. However, our reported NDeX results only include revenue from our Michigan and Minnesota operations, since NDeX South and Indiana were sold subsequent to quarter end, and are therefore classified as discontinued operations for the quarter. As we have said before, we are moving NDeX towards a model based on technology services and away from a labor intensive model delivering broader services. At a minimum, this will address the losses and negative cash flow we have been experiencing the past few quarters at NDeX. In the future, we hope to grow the new technology services business on a more consistently profitable basis,” Dolan said.
“Business Information Division revenue declined by almost 10% in the second quarter compared to last year. This was driven by public notice revenues, which declined 16%. Similar to the past couple of quarters, public notice advertising felt the impact of lower mortgage default volumes, which reduced margins and profitability. We believe the decline in public notice revenue should improve at some point in the future,” Dolan said.
“The net loss attributable to The Dolan Company of $140.4 million includes total non-cash impairment charges of $86.1 million, of which $58.4 million was in discontinued operations, and tax expense of $49.6 million, primarily related to a non-cash valuation allowance against all of our deferred tax assets,” Dolan said.
2013 GuidanceDue to the sale of NDeX South and Indiana and the lack of near-term visibility into the company’s remaining mortgage default processing operations, the company has provided only partial 2013 guidance. The guidance discusses revenue and adjusted EBITDA only for its Business Information Division and its litigation support segment as well as corporate costs. The company’s 2013 financial guidance for these segments is:
2013 Financial Guidance ( dollars in millions )
|Total revenues (excluding NDeX operations)||$160-$170 million|
|Adjusted EBITDA (excluding NDeX operations)||$30-$35 million|