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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 September 30, 2013.
“The third quarter was a period of change as we work on building for the future,” said James P. Dolan, chairman, chief executive officer and president. "We were able to sell our largest NDeX mortgage default processing operations during the quarter, which eliminated the negative cash flows from these businesses, while providing some cash to pay down debt as well as a more predictable cash flow stream in the future.”
“Our Business Information Division continued to be affected by lower public notice advertising,” Dolan said. “Similar to previous quarters, public notices in the third quarter felt the impact of lower mortgage default volumes, which reduced revenues and profitability. We believe our public notice revenue should stabilize as we enter 2014,” Dolan said.
“Meanwhile, we experienced some challenges in our Litigation Support Services segment in the third quarter. Revenues for this segment decreased by 28% during the quarter, including a 33% decline at DiscoverReady, our e-discovery business. I should point out that DiscoverReady’s third quarter is compared against a record third quarter last year. Through the first three quarters of 2013, DiscoverReady is up 14%, which is consistent with our previous guidance,” Dolan said.
“DiscoverReady’s third quarter revenues were affected not only by the quarterly lumpiness that is inherent to the e-discovery business, but also decreased primarily as the result of a period of reduced work from DiscoverReady’s largest customer. Despite these near-term challenges, we remain encouraged by the opportunity and growth potential within the e-discovery market,” Dolan said.
“During the third quarter we continued to make progress toward improving our balance sheet. We generated $5.8 million in free cash flow, which was used in part to pay down our net debt to $128.7 million at the end of the quarter. Our net debt has been reduced as a result of our free cash flow from operations, working capital management, and payments from our NDeX sale transactions,” Dolan said.