Exhibit 99
THE DOLAN COMPANY REPORTS THIRD QUARTER 2013 RESULTS
| | • | | Third quarter revenues decreased 20.7% year-over-year to $35.5 million |
| | • | | Net loss attributable to The Dolan Company was $27.5 million, or $0.91 per diluted share. This includes a $35.4 million non-cash goodwill impairment charge. |
| | • | | Cash earnings were $0.5 million, or $0.02 per diluted share (See “Non-GAAP Financial Measures” below) |
| | • | | Adjusted EBITDA was $5.6 million (See “Non-GAAP Financial Measures” below) |
| | • | | Free cash flow was $5.8 million (See “Non-GAAP Financial Measures” below) |
MINNEAPOLIS, MN – November 12, 2013 – 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.
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“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.
“Subsequent to the end of the third quarter, we signed a sixth amendment to our credit agreement with our banking syndicate. We view this amendment as a short-term solution to our balance sheet as we explore options to provide a broader long-term solution to our capital structure,” Dolan said.
“Due to continued trends of declining public notice advertising revenue, we recorded a non-cash goodwill impairment charge of $35.4 million,” Dolan said.
2013 Guidance
The guidance covers revenue and adjusted EBITDA for the Professional Services Division, including NDeX Minnesota, and the Business Information Division, and it includes corporate costs. The company’s 2013 financial guidance is:
| | |
| | | 2013 Financial Guidance
(dollars in millions) |
Total revenues | | $150-$154 million |
Adjusted EBITDA | | $26-$28 million |
This guidance presumes the following: 1) Litigation Support segment revenues and adjusted EBITDA will be flat to slightly up; 2) Business Information Division revenues will be down year-over-year by low double digits; 3) depreciation expense will be $5.7-$5.9 million; 4) amortization expense will be $8.9-$9.1 million; and 5) there will be 30.2 to 30.4 million fully diluted shares outstanding. This guidance excludes the effect of any divestiture or other transactional activity during the remainder of 2013.
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Third Quarter 2013
Financial results for the three months ended September 30, 2013, and 2012 are as follows:
| | | | | | | | | | | | |
| Dollars in thousands, except per share data | | Three Months
Ended September 30, 2013 (unaudited) | | | Three Months
Ended September 30,
2012 (unaudited) | | | Year-over-
Year %
Change | |
Total revenues | | $ | 35,460 | | | $ | 44,725 | | | | (20.7 | )% |
Professional Services Division revenues | | | 19,885 | | | | 27,437 | | | | (27.5 | )% |
Business Information Division revenues | | | 15,575 | | | | 17,288 | | | | (9.9 | )% |
Operating loss | | | (34,177 | ) | | | (1,189 | ) | | | (2,774.4 | )% |
Net loss attributable to The Dolan Company | | | (27,476 | ) | | | (103,504 | ) | | | 73.5 | % |
Adjusted EBITDA* | | | 5,612 | | | | 11,345 | | | | (50.5 | %) |
(Loss) income from continuing operations attributable to The Dolan Company per diluted share | | $ | (0.87 | ) | | $ | 0.25 | | | | (448.0 | )% |
Cash earnings* | | | 475 | | | | 3,932 | | | | (87.9 | )% |
Cash earnings per diluted share* | | $ | 0.02 | | | $ | 0.13 | | | | (84.6 | )% |
| * | Please refer to the “Non-GAAP Financial Measures” below for a reconciliation of these non-GAAP financial measures to GAAP and why the company believes these are important measures of its performance. |
Professional Services Division Results
The Professional Services Division provides specialized services to the legal profession through Counsel Press and DiscoverReady. Together, Counsel Press and DiscoverReady compose the company’s litigation support segment. Counsel Press is the largest provider of appellate services in the United States, and DiscoverReady provides outsourced discovery management, including document review, data hosting and processing services, to major corporations and law firms.
Division revenues for the third quarter were $19.9 million, a decrease of 27.5% from $27.4 million in the third quarter of 2012. The decrease was the result of lower revenue at DiscoverReady.
All but $0.5 million of Professional Service revenue came from the Litigation Support segment. The remaining $0.5 million of revenue came from NDeX Minnesota and was flat with last year. NDeX Minnesota generated $0.1 million of EBITDA for the quarter.
Direct operating expenses within the Professional Services Division decreased 15.6% to $8.8 million during the third quarter of 2013, from $10.4 million for the same period in 2012. Selling, general and administrative expenses were $6.9 million during the third quarter of 2013, a 15.7% decline from the same period in 2012. The lower operating expenses reflect the decrease of operating expenses at DiscoverReady.
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 third quarter of 2013 were $15.6 million, a 9.9% decrease from $17.3 million in the third quarter of 2012. The majority of the decrease was driven by lower public notice revenues.
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Direct operating expenses for the Business Information Division were $5.6 million during the second quarter of 2013, a 9.2% decline compared to $6.1 million last year. In addition, SG&A expenses of $7.2 million were 2.3% lower than last year.
Balance Sheet and Liquidity
As of September 30, 2013, the company held $2.8 million of cash and cash equivalents, compared to $15.6 million for the same period last year. During the third quarter of 2013, the company generated $6.5 million of cash from operating activities and had $5.8 million of free cash flow, which is defined as net cash provided by operating activities minus capital expenditures from continuing operations. Quarterly capital expenditures from continuing operations were $0.7 million. Days sales outstanding were 72.1 days for the third quarter of 2013, down from 75.4 days in the third quarter of last year.
Total debt outstanding at the end of the third quarter was $131.5 million, of which $106.8 million was under a term loan facility. Net debt was $128.7 million, down $33.8 million from the end of 2012 and a decrease of $45.9 million from a year ago. At September 30, 2013, the combined weighted-average interest rate on the company’s credit facilities was 5.8%. The leverage ratio at the end of the quarter was 4.2 times total debt to trailing twelve-month pro forma adjusted EBITDA, which is within the maximum of 5.0 times allowed under the senior debt covenants for that period.
Non-GAAP Financial Measures
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting in the United States. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, The Dolan Company reports the following non-GAAP measures:
| | • | | Adjusted EBITDA, defined as GAAP income from continuing operations adjusted for the impact of the following: net interest expense resulting from the company’s net cash or borrowing position, which includes non-cash interest income or expense related to the changes in fair value of interest rate swaps; income tax expense; non-cash expenses, including depreciation and amortization, charges for stock options and restricted stock the company has granted, and fair value adjustments on earnouts recorded in connection with acquisitions; non-recurring items of income or expense, if applicable, including impairments of long-lived assets; and distributions paid to holders of noncontrolling interest; |
| | • | | Cash earnings, defined as GAAP income from continuing operations adjusted for the impact of the following: noncontrolling interests; non-cash expenses, including non-cash interest income or expense related to the changes in the fair value of interest rate swaps, charges for stock options and restricted stock granted, fair value adjustments on earnouts recorded in connection with acquisitions, and amortization; certain non-recurring items of income or expense, including impairments of long-lived assets; and an adjustment to income tax expense related to the above reconciling items at the appropriate then-in-effect tax rate; |
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| | • | | Cash earnings per diluted share, defined as cash earnings divided by the number of weighted average diluted shares outstanding; and |
| | • | | Free cash flow, defined as net cash provided by operating activities minus capital expenditures from continuing operations. |
The Dolan Company provides these measures because it believes that they are helpful to investors in comparing year-over-year performance in light of certain non-recurring charges, and to better understand its operating performance and profitability, competitive position and future prospects. Non-GAAP measures should be considered in conjunction with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net income attributable to The Dolan Company. In addition, it should be noted that the company’s calculations of adjusted EBITDA, cash earnings, cash earnings per diluted share, and free cash flow may not be comparable to the calculations of such measures by other companies.
The following is a reconciliation of income from continuing operations to adjusted EBITDA (in thousands):
| | | | | | | | |
| | | Three Months Ended
September 30, | |
| | | 2013 | | | 2012 | |
Loss from continuing operations | | $ | (26,764 | ) | | $ | (2,357 | ) |
Interest expense, net | | | 2,719 | | | | 2,202 | |
Income tax expense (benefit) | | | (10,132 | ) | | | (1,034 | ) |
Amortization of intangibles | | | 2,228 | | | | 2,376 | |
Depreciation expense | | | 1,398 | | | | 1,207 | |
Impairment of long-lived assets | | | 35,414 | | | | 9,317 | |
Amortization of Detroit Legal News Publishing intangible | | | 377 | | | | 377 | |
Non-cash compensation expense | | | 618 | | | | 771 | |
Non-cash fair value adjustments on earnout liabilities recorded in connection with acquisitions | | | — | | | | (1,514 | ) |
Net distributions to holders of non-controlling interest | | | (246 | ) | | | — | |
| | | | | | | | |
Adjusted EBITDA | | $ | 5,612 | | | $ | 11,345 | |
| | | | | | | | |
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The following is a reconciliation of income from continuing operations to cash earnings and cash earnings per diluted share (in thousands, except per share data):
| | | | | | | | |
| | | Three Months Ended
September 30, | |
| | | 2013 | | | 2012 | |
Loss from continuing operations | | $ | (26,764 | ) | | $ | (2,357 | ) |
Noncontrolling interests | | | 77 | | | | (575 | ) |
Non-cash compensation expense | | | 618 | | | | 771 | |
Non-cash fair value adjustments on earnout liabilities recorded in connection with acquisitions | | | — | | | | (1,514 | ) |
Amortization of intangibles | | | 2,228 | | | | 2,376 | |
Impairment of long-lived assets | | | 35,414 | | | | 9,317 | |
Amortization of Detroit Legal News Publishing intangible | | | 377 | | | | 377 | |
Adjustment to income tax expense related to reconciling items at effective tax rate | | | (11,475 | ) | | | (4,463 | ) |
| | | | | | | | |
Cash earnings | | $ | 475 | | | $ | 3,932 | |
| | | | | | | | |
(Loss) income from continuing operations attributable to The Dolan Company per diluted share (GAAP) | | $ | (0.87 | ) | | $ | 0.25 | |
| | | | | | | | |
Cash earnings per diluted share | | $ | 0.02 | | | $ | 0.13 | |
| | | | | | | | |
Weighted average diluted shares outstanding | | | 30,537 | | | | 30,327 | |
Conference Call
The company has scheduled a conference call for Tuesday, November 12, at 8:30 a.m. U.S. Eastern Daylight Time (7:30 a.m. U.S. Central Daylight Time). The dial-in number is (888) 517-2513, and the passcode is 681 4229#. The call will be hosted by James P. Dolan, chairman, chief executive officer and president, and will include Scott J. Pollei, executive vice president and chief operating officer, and Vicki J. Duncomb, vice president and chief financial officer. It will be broadcast live over the Internet and will be accessible through the investor relations section of the company’s Web site at www.thedolancompany.com. Interested parties should access the webcast approximately 10 to 15 minutes before the scheduled start time to register and download any necessary software needed to listen to the call. Prior to the conference call start, a slide presentation highlighting points discussed in the conference call will be available through the investor relations section of the company’s Web site at www.thedolancompany.com. The webcast and slide presentation will be archived online and will be available at the investor relations section of the company’s Web site for a period of 21 days after the call. In addition, the company’s SEC Form 10-Q is available via its Web site atwww.thedolancompany.com, or investors can request a hard copy of the 10-Q free of charge upon request.
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Statement Regarding Forward Looking Information
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts are forward-looking statements. Such forward-looking statements include statements related to the company’s “guidance” as well as statements using words such as “anticipate,” “expect,” “believe,” “convinced,” “continue,” “to come,” “will,” “may,” “estimate,” “assume,” “presume,”“pursue,” “outlook,” “look,” “optimistic,” “plan,” “goal,” “milestone” and similar expressions. Forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: our ability to fund our ongoing operations, repay our indebtedness, pay dividends on our preferred stock, fund capital expenditures, make divestitures on acceptable terms, and make any acquisitions; our ability to comply with covenants in our debt instruments; our ability to obtain waivers from our lenders of any failure to comply with covenants in our debt instruments or of events of default; our ability to amend our debt instruments in the future; our ability to retain key customers and develop new customer relationships in our litigation support services segmen; the possibility that we may have to record significant charges to earnings as a result of impairment of our intangible assets; our ability to retain key personnel; the adverse resolution of a future lawsuit or claim against us; the failure or disruption of our proprietary case management software systems, our document hosting, processing, conversion and review systems, or our website and online networks; the risk that our customers or their clients fail to timely pay us for our services, or at all; the effect of existing and future legislation, government investigations, litigation, court orders, settlements and client slow-downs on our mortgage default processing services and public notice operations;; and the other risk factors described under “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2012, which we filed with the SEC on March 8, 2013, and those highlighted in our Form 10-Q for the quarter ended September 30, 2013, which the company expects to file today. We undertake no obligation to update any forward-looking statements in light of new information or future events.
FOR IMMEDIATE RELEASE
Contact Robert J. Evans,
Director of Business Development & Investor Relations
(612) 317-9430
Bob.evans@thedolancompany.com
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The Dolan Company
Condensed Consolidated Balance Sheets
(in thousands, except share data)
| | | | | | | | |
| | | September 30, | | | December 31, | |
| | | 2013 | | | 2012 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 2,813 | | | $ | 3,509 | |
Accounts receivable, including unbilled services (net of allowances of $1,370 and $1,809 as of September 30, 2013, and December 31, 2012, respectively) | | | 26,006 | | | | 60,300 | |
Unbilled pass-through costs | | | — | | | | 4,668 | |
Prepaid expenses and other current assets | | | 4,112 | | | | 3,271 | |
Income tax receivable | | | 2,779 | | | | 10,823 | |
Current portion of notes receivable | | | 2,575 | | | | — | |
Assets held for sale | | | 4,985 | | | | — | |
| | | | | | | | |
Total current assets | | | 43,270 | | | | 82,571 | |
Investments | | | 8,267 | | | | 10,069 | |
Property and equipment, net | | | 11,513 | | | | 18,091 | |
Finite-lived intangible assets, net | | | 57,271 | | | | 162,212 | |
Goodwill and indefinite-lived intangible assets | | | 105,457 | | | | 151,329 | |
Deferred income taxes | | | — | | | | 23,358 | |
Other assets | | | 955 | | | | 1,910 | |
Long-term notes receivable, net of current portion | | | 9,513 | | | | — | |
| | | | | | | | |
Total assets | | $ | 236,246 | | | $ | 449,540 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
Current liabilities | | | | | | | | |
Current portion of long-term debt | | $ | 131,474 | | | $ | 15,162 | |
Accounts payable | | | 12,602 | | | | 20,860 | |
Accrued pass-through liabilities | | | — | | | | 10,617 | |
Accrued compensation | | | 5,507 | | | | 7,941 | |
Accrued liabilities | | | 2,747 | | | | 5,283 | |
Due to sellers of acquired businesses | | | — | | | | 5,017 | |
Deferred revenue | | | 7,322 | | | | 13,278 | |
| | | | | | | | |
Total current liabilities | | | 159,652 | | | | 78,158 | |
Long-term debt, less current portion | | | 73 | | | | 150,881 | |
Deferred income taxes | | | 20,497 | | | | — | |
Other liabilities | | | 5,724 | | | | 7,240 | |
| | | | | | | | |
Total liabilities | | | 185,946 | | | | 236,279 | |
| | | | | | | | |
Redeemable noncontrolling interest | | | 7,836 | | | | 7,283 | |
| | | | | | | | |
Commitments and contingencies (Note 15) | | | | | | | | |
Stockholders’ equity | | | | | | | | |
Common stock, $0.001 par value; authorized: 70,000,000 shares; outstanding: 30,860,367 and 30,955,321 shares as of September 30, 2013,and December 31, 2012, respectively | | | 31 | | | | 31 | |
Preferred stock, $0.001 par value; authorized: 5,000,000 shares; | | | | | | | | |
Series A: Junior Participating: designated: 5,000 shares; no shares outstanding | | | — | | | | — | |
Series B: designated: 1,600,000 shares; outstanding: 700,000 shares as of September 30, 2013, no shares as of December 31, 2012 | | | 1 | | | | — | |
Series C: Junior Participating: designated: 50,000 shares; no shares outstanding | | | — | | | | — | |
Other comprehensive loss, net of tax | | | (157 | ) | | | (867 | ) |
Additional paid-in capital | | | 318,815 | | | | 301,956 | |
Accumulated deficit | | | (264,356 | ) | | | (88,285 | ) |
| | | | | | | | |
Total The Dolan Company stockholders’ equity | | | 54,334 | | | | 212,835 | |
Noncontrolling interest | | | (11,870 | ) | | | (6,857 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 42,464 | | | | 205,978 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 236,246 | | | $ | 449,540 | |
| | | | | | | | |
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The Dolan Company
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Revenues | | | | | | | | | | | | | | | | |
Professional Services | | $ | 19,885 | | | $ | 27,437 | | | $ | 69,635 | | | $ | 63,152 | |
Business Information | | | 15,575 | | | | 17,288 | | | | 47,949 | | | | 53,313 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 35,460 | | | | 44,725 | | | | 117,584 | | | | 116,465 | |
| | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | |
Direct operating: Professional Services | | | 8,798 | | | | 10,426 | | | | 30,651 | | | | 25,936 | |
Direct operating: Business Information | | | 5,564 | | | | 6,125 | | | | 17,660 | | | | 19,155 | |
Selling, general and administrative | | | 16,103 | | | | 18,373 | | | | 49,074 | | | | 52,673 | |
Amortization | | | 2,228 | | | | 2,376 | | | | 6,682 | | | | 7,298 | |
Depreciation | | | 1,398 | | | | 1,207 | | | | 4,224 | | | | 3,628 | |
Fair value and other adjustments on earnout liabilities and due to seller | | | — | | | | (1,514 | ) | | | (5,021 | ) | | | (11,576 | ) |
Impairment of long-lived assets and goodwill | | | 35,414 | | | | 9,317 | | | | 35,414 | | | | 9,317 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 69,505 | | | | 46,310 | | | | 138,684 | | | | 106,431 | |
Equity in (loss) earnings of affiliates | | | (132 | ) | | | 396 | | | | (227 | ) | | | 1,420 | |
| | | | | | | | | | | | | | | | |
Operating (loss) income | | | (34,177 | ) | | | (1,189 | ) | | | (21,327 | ) | | | 11,454 | |
| | | | | | | | | | | | | | | | |
Non-operating expense | | | | | | | | | | | | | | | | |
Interest expense, net of interest income | | | (2,719 | ) | | | (2,202 | ) | | | (7,737 | ) | | | (6,266 | ) |
| | | | | | | | | | | | | | | | |
(Loss) income from continuing operations before income taxes | | | (36,896 | ) | | | (3,391 | ) | | | (29,064 | ) | | | 5,188 | |
Income tax benefit (expense) | | | 10,132 | | | | 1,034 | | | | (40,892 | ) | | | (2,499 | ) |
| | | | | | | | | | | | | | | | |
(Loss) income from continuing operations | | | (26,764 | ) | | | (2,357 | ) | | | (69,956 | ) | | | 2,689 | |
Discontinued operations, net of tax | | | (1,052 | ) | | | (111,093 | ) | | | (109,242 | ) | | | (110,772 | ) |
| | | | | | | | | | | | | | | | |
Net loss | | | (27,816 | ) | | | (113,450 | ) | | | (179,198 | ) | | | (108,083 | ) |
Less: Net loss attributable to noncontrolling interests | | | 340 | | | | 9,946 | | | | 4,119 | | | | 9,666 | |
| | | | | | | | | | | | | | | | |
Net loss attributable to The Dolan Company | | $ | (27,476 | ) | | $ | (103,504 | ) | | $ | (175,079 | ) | | $ | (98,417 | ) |
| | | | | | | | | | | | | | | | |
Income allocated to preferred shares | | | (372 | ) | | | — | | | | (992 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Net loss allocable to common shares | | $ | (27,848 | ) | | $ | (103,504 | ) | | $ | (176,071 | ) | | $ | (98,417 | ) |
| | | | | | | | | | | | | | | | |
Earnings (loss) per share – basic and diluted: | | | | | | | | | | | | | | | | |
(Loss) income from continuing operations attributable to The Dolan Company | | $ | (0.87 | ) | | $ | 0.25 | | | $ | (2.16 | ) | | $ | 0.41 | |
Discontinued operations attributable to The Dolan Company | | | (0.03 | ) | | | (3.66 | ) | | | (3.59 | ) | | | (3.66 | ) |
Income allocated to preferred shares | | | (0.01 | ) | | | — | | | | (0.03 | ) | | | — | |
| | | | | | | | | | | | | | | | |
Net loss attributable to The Dolan Company | | | (0.91 | ) | | | (3.41 | ) | | | (5.78 | ) | | | (3.25 | ) |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding - basic and diluted | | | 30,537 | | | | 30,327 | | | | 30,445 | | | | 30,260 | |
| | | | | | | | | | | | | | | | |
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The Dolan Company
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30, | | | Nine Months Ended
September 30, | |
| | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Cash flows from operating activities | | | | | | | | | | | | | | | | |
Net (loss) income | | $ | (27,816 | ) | | $ | (113,450 | ) | | $ | (179,198 | ) | | $ | (108,083 | ) |
Loss (income) from discontinued operations | | | 1,052 | | | | 111,093 | | | | 109,242 | | | | 110,772 | |
| | | | | | | | | | | | | | | | |
(Loss) income from continuing operations | | | (26,764 | ) | | | (2,357 | ) | | | (69,956 | ) | | | 2,689 | |
Distributions received from The Detroit Legal News Publishing, LLC | | | 280 | | | | 784 | | | | 1,575 | | | | 2,247 | |
Distributions paid to holders of non-controlling interests | | | (246 | ) | | | — | | | | (498 | ) | | | — | |
Non-cash operating activities: | | | | | | | | | | | | | | | | |
Amortization | | | 2,228 | | | | 2,376 | | | | 6,682 | | | | 7,298 | |
Depreciation | | | 1,398 | | | | 1,207 | | | | 4,224 | | | | 3,628 | |
Impairment of long-lived assets | | | 35,414 | | | | 9,317 | | | | 35,414 | | | | 9,317 | |
Equity in loss (earnings) of affiliates | | | 132 | | | | (396 | ) | | | 227 | | | | (1,420 | ) |
Stock-based compensation expense | | | 618 | | | | 778 | | | | 2,052 | | | | 2,266 | |
Deferred income taxes | | | (10,929 | ) | | | (49,625 | ) | | | 39,832 | | | | (45,912 | ) |
Amortization of debt issuance costs | | | 401 | | | | 114 | | | | 568 | | | | 327 | |
Non-cash fair value adjustment on earnout recorded in connection with acquisitions | | | — | | | | (1,541 | ) | | | (5,021 | ) | | | (11,492 | ) |
Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | |
Accounts receivable and unbilled pass-through costs | | | 7,731 | | | | (9,884 | ) | | | 7,601 | | | | (2,430 | ) |
Prepaid expenses and other current assets | | | (557 | ) | | | (608 | ) | | | 9,695 | | | | 596 | |
Other assets | | | (12 | ) | | | 62 | | | | (18 | ) | | | 93 | |
Accounts payable and accrued liabilities | | | (2,772 | ) | | | 1,624 | | | | (7,083 | ) | | | 1,575 | |
Deferred revenue and other liabilities | | | 104 | | | | 2,224 | | | | (604 | ) | | | 2,413 | |
| | | | | | | | | | | | | | | | |
Cash from operating activities – continuing operations | | | 7,026 | | | | (45,925 | ) | | | 24,690 | | | | (28,805 | ) |
Cash (used in) from operating activities – discontinued operations | | | (493 | ) | | | 43,031 | | | | (7,730 | ) | | | 49,951 | |
| | | | | | | | | | | | | | | | |
Net cash provided by operating activities | | | 6,533 | | | | (2,894 | ) | | | 16,960 | | | | 21,146 | |
| | | | | | | | | | | | | | | | |
Cash flows from investing activities | | | | | | | | | | | | | | | | |
Acquisitions and investments | | | — | | | | — | | | | — | | | | (145 | ) |
Capital expenditures | | | (736 | ) | | | (1,218 | ) | | | (3,766 | ) | | | (2,760 | ) |
| | | | | | | | | | | | | | | | |
Cash used in investing activities – continuing operations | | | (736 | ) | | | (1,218 | ) | | | (3,766 | ) | | | (2,905 | ) |
Cash used in investing activities – discontinued operations | | | 6,710 | | | | (1,008 | ) | | | 6,545 | | | | (2,114 | ) |
| | | | | | | | | | | | | | | | |
Net cash used in investing activities | | | 5,974 | | | | (2,226 | ) | | | 2,779 | | | | (5,019 | ) |
| | | | | | | | | | | | | | | | |
Cash flows from financing activities | | | | | | | | | | | | | | | | |
Net payments on senior revolving note | | | (2,300 | ) | | | 21,500 | | | | (3,700 | ) | | | 19,300 | |
Payments on senior long-term debt | | | (8,369 | ) | | | (1,250 | ) | | | (30,669 | ) | | | (3,750 | ) |
Payment on unsecured notes payable | | | — | | | | (632 | ) | | | — | | | | (1,879 | ) |
Proceeds of preferred stock offering, net of offering costs | | | — | | | | — | | | | 14,967 | | | | — | |
Net payments of deferred acquisition costs and earnouts | | | — | | | | (1 | ) | | | — | | | | (14,401 | ) |
Payments of deferred financing costs | | | (286 | ) | | | — | | | | (286 | ) | | | (313 | ) |
Payments of preferred stock dividend | | | (373 | ) | | | — | | | | (620 | ) | | | — | |
Other | | | (33 | ) | | | (67 | ) | | | (127 | ) | | | (250 | ) |
| | | | | | | | | | | | | | | | |
Net cash used in financing activities | | | (11,361 | ) | | | 19,550 | | | | (20,435 | ) | | | (1,293 | ) |
| | | | | | | | | | | | | | | | |
Net change in cash and cash equivalents | | | 1,146 | | | | 14,430 | | | | (696 | ) | | | 14,834 | |
Cash and cash equivalents at beginning of the period | | | 1,667 | | | | 1,156 | | | | 3,509 | | | | 752 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents at end of the period | | $ | 2,813 | | | $ | 15,586 | | | $ | 2,813 | | | $ | 15,586 | |
| | | | | | | | | | | | | | | | |
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