The Dolan Company’s stock fell to its lowest-ever price of $0.44 Tuesday, a day after the company said that it amended a credit agreement.
Minneapolis-based Dolan provides professional services and business information to the legal, financial, and real estate industries. The company has seen its stock fall nearly 90 percent in the last year.
The credit agreement amendment allows Miami-based investment firm Bayside Capital, which holds the majority of Dolan’s debt under the company’s senior credit facility, to act as a lender for Dolan but requires Bayside and Dolan to agree on a capital-restructuring plan “promptly” after Bayside Capital makes its plan proposal. It grants Dolan access, however, to its revolving credit facility while the company and lenders work out how to restructure Dolan’s balance sheet.
The credit amendment also temporarily waives Dolan’s default on certain debts that came due at the end of 2013. And it increases the interest rate on outstanding loan amounts by 2 percent per year, requires an additional fee equal to 2 percent of the sum of the outstanding term loans and revolving commitments, and requires Dolan to have engaged a chief restructuring officer—which it did in early January.
In November, Dolan announced a different amendment to its credit deal with U.S. Bank and Wells Fargo. It said at the time that its revised deal with the banks required the company to come up with $50 million in cash to pay down its outstanding loans, and the agreement moved up the loans’ due date to the end of 2014.
Dolan’s stock has been trading below the minimum requirements of the NYSE. The exchange sent a listings notice to Dolan because it requires an average closing price of at least $1 per share over 30 consecutive trading days to remain listed.
Dolan’s stock price fell under $1 per share in November, when its price plummeted 50 percent after the company reported a continued quarterly loss and a 20 percent drop in sales.
For the third quarter, which ended September 30, the company reported revenue of $35.5 million, down from $44.7 million in the third quarter of 2012. Third-quarter revenue fell short of analysts’ projections of $43.8 million.
Dolan’s revenue has been falling year after year—from $294 million in 2010 to $269 million in 2011 to $254 million in 2012. Now, the company expects its 2013 revenue to be between $150 and $154 million—almost half what it was three years before. A portion of that drop, however, may be attributed to the July sale of two of its struggling mortgage default businesses.
In September, Dolan adopted a so-called “shareholder rights plan,” which is meant to limit the amount of the company’s stock a shareholder or potential shareholder might purchase. The move was ultimately made to allow Dolan to pay lower income taxes in the coming years.
Dolan is one of Minnesota’s 60 largest public companies based on its annual revenue, although it may drop a few spots throughout 2014.
This article is reprinted in partnership with Twin Cities Business.