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Dolan Media gains from mortgage mess
The Minneapolis legal publisher, which went public last month, said processing of foreclosures helped boost revenue.
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Aided by an acquisition and an increase in revenue from mortgage foreclosures, Dolan Media Co. saw second-quarter sales jump 33 percent in its first quarter as a public company.
Since Dolan Media completed its initial public offering Aug. 1, the stock has had a total return of nearly 38 percent. That puts Dolan in rare territory. Among the more than 130 IPOs in the United States this year, Dolan's return since inception ranks 13th.
Dolan is the only Minnesota company to complete an IPO in 2007.
The company was formed in 1992 by President and CEO Jim Dolan and venture capital firm Cherry Tree Investments. Its business information division specializes in niche publications, including business journals, court and commercial newspapers and related websites. Its professional services division provides services that enable law firms and attorneys to process residential mortgage defaults, court appeals and other legal proceedings.
Second-quarter revenue grew 32.8 percent over the same period last year. The fastest growth was in professional services, where revenue rose 68.8 percent to $15.5 million. Part of the growth was because of an acquisition in the first quarter of 2007, but Dolan also had an 85.5 percent increase in mortgage default processing services revenue.
"This is a dynamic time in the foreclosure marketplace," Jim Dolan said during a conference call. The company gets revenue both from its professional services division, which processes foreclosures, and from placing foreclosure notices in its publications in the business information division.
Dolan Media's net IPO proceeds were $138 million, most of which went to redeem preferred stock and repay outstanding debt.
The company's $21.9 million net loss for the quarter included a noncash interest expense of $26.3 million related to the redeemable preferred stock.
Dolan told analysts that the company had one acquisition target for the second half of 2007 and another for 2008.
Patrick Kennedy • 612-673-7926
2nd quarter FY2007, 6/30
2007 2006 % chg.
Revenue $37.1 $27.9 +32.8
Income* -21.9 -8.4 --
Earn/share -2.34 -0.90 --
6 months
Revenue $72.8 $50.6 +43.7
Income* -49.6 -9.5 --
Earn/share -5.32 -1.03 --
Figures in millions except for earnings per share.
*Adjusted EBITDA for the second quarter and six months ended June 30 was $10.1 million and $20.9 million compared with $7.6 million and $13.4 million for the same periods in 2006.
Patrick Kennedy • pkennedy@startribune.com
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