Direct operating expenses within the Professional Services Division increased 36.4% to $14.1 million during the second quarter of 2013, from $10.3 million for the same period in 2012. Lower direct operating expenses at NDeX were offset by higher direct operating expenses at DiscoverReady. Selling, general and administrative expenses were $10.0 million during the second quarter of 2013, a 2.1% decline from the same period in 2012. NDeX showed an SG&A decline in the quarter, while SG&A at DiscoverReady was essentially flat.

Business Information Division Results

The Business Information Division publishes print and electronic legal publications, business journals, court and commercial media and other highly focused information products and services, operates web sites and produces events for targeted professional audiences in 19 geographic markets across the United States.

Business Information Division revenues for the second quarter of 2013 were $16.6 million, a 9.5% decrease from $18.3 million in the second quarter of 2012. The majority of the decrease was driven by lower public notice revenues.

Direct operating expenses for the Business Information Division were $6.1 million during the second quarter of 2013, a 6.4% decline compared to $6.5 million last year. In addition, SG&A expenses of $7.4 million were 6.0% lower than last year.

Balance Sheet and Liquidity

As of June 30, 2013, the company held $1.7 million of cash and cash equivalents, compared to $1.2 million for the same period last year. During the second quarter of 2013, the company generated $8.9 million of cash from operating activities and had $7.6 million of free cash flow, which is defined as net cash provided by operating activities minus capital expenditures from continuing operations. Second quarter free cash flow includes an income tax refund of $11.2 million. Quarterly capital expenditures from continuing operations were $1.3 million. Days sales outstanding were 74.4 days for the second quarter of 2013, up from 66.0 days in the second quarter of last year.

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