Minneapolis-based Dolan Media posts 10% earnings increase in fourth

Daily Record, The (Baltimore), Feb 25, 2009 by Danielle Ulman

Dolan Media Co., parent of The Daily Record, reported a 10 percent increase in earnings for the fourth quarter Tuesday, with a renewed confidence that foreclosures, the company's main driver of revenue, would continue to grow in 2009.

The Minneapolis-based company had net income of $3.4 million for the fourth quarter, or 12 cents a share, compared to earnings of $3.1 million, or 12 cents a share, in the corresponding quarter of 2007. Dolan beat Wall Street estimates of earnings of 11 cents per share.

James P. Dolan, president, chairman and chief executive of the company, said in a conference call with analysts that President Barack Obama's foreclosure plan will not stem the process completely.

"Our view remains that despite these developments, foreclosures will continue to rise in 2009," he said. "We believe the growing unemployment rate and economic picture will put pressure on the foreclosure rate and mortgage delinquencies."

Dolan said despite the government's "well-intentioned" actions, foreclosures would continue to grow, allowing the company's business to grow. The company does not have plans for any acquisitions in 2009.

Dolan's two divisions, business information and professional services, both brought in revenue for the quarter. In the business information division -- the side that publishes nearly 60 business and legal newspapers -- public notice revenue grew by 8.6 percent for the quarter to $10.1 million, with much of that growth coming from the acquisition of The Mecklenburg Times in Charlotte, N.C.

Circulation revenue fell 5.3 percent to $3.2 million, the result of decreased bulk renewals of publications at several law firms.

On the professional services side of the company, which provides specialized services to the legal profession, revenue grew 105 percent to $37 million for the quarter. Dolan subsidiary American Processing Company LLC, a leading provider of mortgage default processing services in the country, provided a boost to the company with $19.5 million in revenues.

Both divisions of Dolan rely on foreclosures and public notices announcing foreclosures to drive in revenue.

After discontinuing its market guidance last year because of concerns about regulatory changes to the foreclosure market, the company returned to providing estimates for revenues for the year. Dolan said revenues for 2009 would fall in the range of $236 million to $240 million.

The company expects its business information division to bring in revenues between $88 million and $90 million. The professional services division will bring in estimated revenues of $148 million to $150 million.

Dolan released its earnings report following the close of the market Tuesday. Shares of Dolan's stock rose 15.9 percent or 80 cents to $5.84 on the New York Stock Exchange.