Dolan Media Company (DM, Financial) filed Quarterly Report for the period ended 2010-09-30.
Dolan Media Company has a market cap of $331.9 million; its shares were traded at around $11.06 with a P/E ratio of 10.8 and P/S ratio of 1.2. DM is in the portfolios of Paul Tudor Jones of The Tudor Group.
DiscoverReady: On November 2, 2009, we acquired an 85% equity interest in DiscoverReady. We paid the sellers $28.9 million in cash at closing and placed an additional $3.0 million in escrow pursuant to the terms of an escrow agreement to secure the sellers obligations under the purchase agreement (including payment of any indemnification claims and working capital and capital lease liability adjustments). After closing, DR Holdco LLC held a 15% noncontrolling interest in DiscoverReady. The individual sellers of DiscoverReady, along with other DiscoverReady employees, own all the equity interests of DR Holdco. In accordance with the terms of the DiscoverReady operating agreement, we repurchased a 0.3% equity interest in DiscoverReady from DR Holdco in connection with the expiration of the employment agreement of the former CFO of DiscoverReady in April 2010. We paid $0.1 million for this equity interest in DiscoverReady, increasing our total equity interest to 85.3%, and decreasing the noncontrolling interest to 14.7%.
Albertelli: On October 1, 2009, NDeX acquired the mortgage default processing services and related title business of the Albertelli sellers. NDeX paid $7.0 million in cash at closing, paid an additional $1.0 million on October 1, 2010, which had been held back to secure the Albertelli sellers obligations under the asset purchase agreement (including payment of any indemnification claims and working capital adjustments), and paid the first of two $1.0 million installment payments on October 1, 2010. The remaining $1.0 installment payment will be made on October 1, 2011. NDeX also entered into a 20-year services agreement with James E. Albertelli, P.A. (one of the Albertelli sellers), which provides for the exclusive referral of residential mortgage default and related files from that law firm to NDeX for processing in Florida.
In connection with the Albertelli acquisition, NDeX became obligated to pay the Albertelli sellers up to an additional $9.0 million in three annual installments of up to $3.0 million each. The amount of these annual cash payments is based upon the adjusted EBITDA for the acquired mortgage default processing services and related title business during the twelve calendar months ending on each of September 30, 2010, 2011, and 2012. At September 30, 2010, we have liabilities on our balance sheet in the amount of $7.9 million for the discounted amount of the earnouts payable to the Albertelli sellers, of which $3.0 million was paid on October 1, 2010, as was mutually agreed upon by us and the Albertelli sellers. This liability is adjusted to fair value at each reporting period.
We own 35.0% of the membership interests in DLNP, the publisher of The Detroit Legal News and ten other publications. We account for our investment in DLNP using the equity method. For the three months ended September 30, 2010 and 2009, our percentage share of DLNPs earnings was $1.2 million and $0.9 million, respectively, which we recognized as operating income. This is net of amortization of $0.4 million for both periods. For both the nine months ended September 30, 2010 and 2009, our percentage share of DLNPs earnings was $3.7 million, which we recognized as operating income. This is net of amortization of $1.1 million for both periods. NDeX handles all public notices required to be published in connection with files it services for Trott & Trott pursuant to our services agreement with Trott & Trott and places a significant amount of these notices in The Detroit Legal News. Trott & Trott pays DLNP for these public notices. See Liquidity and Capital Resources Cash Flows Provided by Operating Activities below for information regarding distributions paid to us by DLNP.
We are required to record the redeemable noncontrolling interests (NCI) in NDeX and DiscoverReady to their redemption amounts at each reporting period. The NDeX NCI is adjusted to the estimated redemption amount at each reporting period based on the formula as discussed above. The DiscoverReady NCI is adjusted to fair value each period using a market approach. During the three and nine months ended September 30, 2010, the adjustments recorded to the NCI for NDeX were $0.4 million ($0.3 million net of tax) and $(1.4) million (($0.8) million net of tax), respectively, and the adjustments recorded to the NCI for DiscoverReady were $2.6 million ($1.6 million net of tax) and $7.8 million ($4.8 million net of tax). Please see our unaudited condensed consolidated statements of stockholders equity and comprehensive income, as well as Note 1 to our
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Dolan Media Company has a market cap of $331.9 million; its shares were traded at around $11.06 with a P/E ratio of 10.8 and P/S ratio of 1.2. DM is in the portfolios of Paul Tudor Jones of The Tudor Group.
Highlight of Business Operations:
Our total revenues increased $16.1 million, or 26%, from $62.3 million for the three months ended September 30, 2009, to $78.5 million for the three months ended September 30, 2010, largely as a result of increased revenues in our litigation support services segment. The revenue growth was driven primarily by our DiscoverReady business which we acquired in November 2009. These operations generated $10.9 million in revenues during the three months ended September 30, 2010 (for this period in 2009, under previous ownership and thus not reflected in our operating results for the three months ended September 30, 2009, these operations generated $5.3 million in revenues). In addition, our NDeX operations in Florida, which we acquired in October 2009, added $2.7 million in revenues for the three months ended September 30, 2010. Our NDeX operations in Florida and the DiscoverReady acquisition in the fourth quarter of 2009, together accounted for the majority of the 22.4% increase in our operating expenses for the three month period ended September 30, 2010. Further, net income attributable to The Dolan Company increased to $9.0 million for the third quarter of 2010 from $5.9 million for the same period in 2009. Net income attributable to The Dolan Company increased from $22.7 million for the nine months ended September 30, 2009, to $26.8 million for the nine months ended September 30, 2010.DiscoverReady: On November 2, 2009, we acquired an 85% equity interest in DiscoverReady. We paid the sellers $28.9 million in cash at closing and placed an additional $3.0 million in escrow pursuant to the terms of an escrow agreement to secure the sellers obligations under the purchase agreement (including payment of any indemnification claims and working capital and capital lease liability adjustments). After closing, DR Holdco LLC held a 15% noncontrolling interest in DiscoverReady. The individual sellers of DiscoverReady, along with other DiscoverReady employees, own all the equity interests of DR Holdco. In accordance with the terms of the DiscoverReady operating agreement, we repurchased a 0.3% equity interest in DiscoverReady from DR Holdco in connection with the expiration of the employment agreement of the former CFO of DiscoverReady in April 2010. We paid $0.1 million for this equity interest in DiscoverReady, increasing our total equity interest to 85.3%, and decreasing the noncontrolling interest to 14.7%.
Albertelli: On October 1, 2009, NDeX acquired the mortgage default processing services and related title business of the Albertelli sellers. NDeX paid $7.0 million in cash at closing, paid an additional $1.0 million on October 1, 2010, which had been held back to secure the Albertelli sellers obligations under the asset purchase agreement (including payment of any indemnification claims and working capital adjustments), and paid the first of two $1.0 million installment payments on October 1, 2010. The remaining $1.0 installment payment will be made on October 1, 2011. NDeX also entered into a 20-year services agreement with James E. Albertelli, P.A. (one of the Albertelli sellers), which provides for the exclusive referral of residential mortgage default and related files from that law firm to NDeX for processing in Florida.
In connection with the Albertelli acquisition, NDeX became obligated to pay the Albertelli sellers up to an additional $9.0 million in three annual installments of up to $3.0 million each. The amount of these annual cash payments is based upon the adjusted EBITDA for the acquired mortgage default processing services and related title business during the twelve calendar months ending on each of September 30, 2010, 2011, and 2012. At September 30, 2010, we have liabilities on our balance sheet in the amount of $7.9 million for the discounted amount of the earnouts payable to the Albertelli sellers, of which $3.0 million was paid on October 1, 2010, as was mutually agreed upon by us and the Albertelli sellers. This liability is adjusted to fair value at each reporting period.
We own 35.0% of the membership interests in DLNP, the publisher of The Detroit Legal News and ten other publications. We account for our investment in DLNP using the equity method. For the three months ended September 30, 2010 and 2009, our percentage share of DLNPs earnings was $1.2 million and $0.9 million, respectively, which we recognized as operating income. This is net of amortization of $0.4 million for both periods. For both the nine months ended September 30, 2010 and 2009, our percentage share of DLNPs earnings was $3.7 million, which we recognized as operating income. This is net of amortization of $1.1 million for both periods. NDeX handles all public notices required to be published in connection with files it services for Trott & Trott pursuant to our services agreement with Trott & Trott and places a significant amount of these notices in The Detroit Legal News. Trott & Trott pays DLNP for these public notices. See Liquidity and Capital Resources Cash Flows Provided by Operating Activities below for information regarding distributions paid to us by DLNP.
We are required to record the redeemable noncontrolling interests (NCI) in NDeX and DiscoverReady to their redemption amounts at each reporting period. The NDeX NCI is adjusted to the estimated redemption amount at each reporting period based on the formula as discussed above. The DiscoverReady NCI is adjusted to fair value each period using a market approach. During the three and nine months ended September 30, 2010, the adjustments recorded to the NCI for NDeX were $0.4 million ($0.3 million net of tax) and $(1.4) million (($0.8) million net of tax), respectively, and the adjustments recorded to the NCI for DiscoverReady were $2.6 million ($1.6 million net of tax) and $7.8 million ($4.8 million net of tax). Please see our unaudited condensed consolidated statements of stockholders equity and comprehensive income, as well as Note 1 to our
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