##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended: September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period From  to.
 Commission File Number: 001-33603
 Dolan Media Company
 (Exact name of registrant as specified in its charter)
 Delaware
    
    43-2004527(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)
 
 706 Second Avenue South, Suite 1200,
Minneapolis, Minnesota 55402  (Address, including zip code of registrants principal executive offices)
 
 (612) 317-9420  Registrants telephone number, including area code
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o
 o þ




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##### 



PART I  FINANCIAL INFORMATION
    
    
    1Item 1. Financial Statements
    
    
    1Condensed Consolidated Balance Sheets as of September 30, 2008 (unaudited) and December 31, 2007
    
    
    1Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended
September 30, 2008 and 2007
    
    
    2Condensed Consolidated Statements of Stockholders Equity (Deficit) as of September 30, 2008
(unaudited)
    
    
    3Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September
30, 2008 and 2007
    
    
    4Notes to Unaudited Condensed Consolidated Interim Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    54Item 4T. Controls and Procedures
    
    
    54PART II  OTHER INFORMATION
    
    
    54Item 1. Legal Proceedings
    
    
    54Item 1A. Risk Factors
    
    
    55Item 2. Unregistered Sales of Securities and Use of Proceeds
    
    
    58Item 3. Defaults Upon Senior Securities
    
    
    58Item 4. Submission of Matters to a Vote of Security Holders
    
    
    58Item 5. Other Information
    
    
    58Item 6. Exhibits
    
    
    58SIGNATURES
    
    
    59Section 302 Certification of James P. DolanSection 302 Certification of Scott J. PolleiSection 906 Certification of James P. DolanSection 906 Certification of Scott J. Pollei




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Dolan Media Company
 
 Condensed Consolidated Balance Sheets
 (in thousands, except share data)
 September 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assetsCash
    
    $
    1,999
    
    
    $
    1,346Accounts receivable, including unbilled
services (net of allowances for doubtful
accounts of $1,820 and $1,283 as of
September 30, 2008, and December 31, 2007,
respectively)
    
    
    43,589
    
    
    
    20,689Unbilled pass-through costs
    
    
    9,391
    
    
    
    Prepaid expenses and other current assets
    
    
    5,912
    
    
    
    2,649Deferred income taxes
    
    
    273
    
    
    
    259Total current assets
    
    
    61,164
    
    
    
    24,943Investments
    
    
    17,234
    
    
    
    18,479Property and equipment, net
    
    
    24,065
    
    
    
    13,066Finite-life intangible assets, net
    
    
    258,973
    
    
    
    88,946Goodwill
    
    
    122,114
    
    
    
    79,044Other assets
    
    
    1,970
    
    
    
    1,889Total assets
    
    $
    485,520
    
    
    $
    226,367LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    6,952
    
    
    $
    4,749Accounts payable
    
    
    11,316
    
    
    
    6,068Accrued pass-through liabilities
    
    
    22,412
    
    
    
    Accrued compensation
    
    
    7,443
    
    
    
    4,677Accrued liabilities
    
    
    3,058
    
    
    
    2,922Due to sellers of acquired businesses
    
    
    1,975
    
    
    
    600Deferred revenue
    
    
    13,437
    
    
    
    11,387Total current liabilities
    
    
    66,593
    
    
    
    30,403Long-term debt, less current portion
    
    
    164,750
    
    
    
    56,301Deferred income taxes
    
    
    16,830
    
    
    
    4,393Deferred revenue and other liabilities
    
    
    3,948
    
    
    
    3,890Total liabilities
    
    
    252,121
    
    
    
    94,987Minority interest in consolidated
subsidiary (redemption value of $14,365 as
of September 30, 2008)
    
    
    15,010
    
    
    
    2,204Commitments and contingencies (Note 12)Stockholders equityCommon stock, $0.001 par value;
authorized: 70,000,000 shares;
outstanding: 29,955,149 and 25,088,718
shares as of September 30, 2008, and
December 31, 2007, respectively
    
    
    30
    
    
    
    25Preferred stock, $0.001 par value;
authorized: 5,000,000 shares; no shares
outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    290,715
    
    
    
    212,364Accumulated deficit
    
    
    (72,356
    )
    
    
    (83,213
    )Total stockholders equity
    
    
    218,389
    
    
    
    129,176Total liabilities and stockholders equity
    
    $
    485,520
    
    
    $
    226,367
   1




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##### Table of Contents



Dolan Media Company
 
 Unaudited Condensed Consolidated Statements of Operations
 (in thousands, except share and per share data)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesBusiness Information
    
    $
    22,211
    
    
    $
    20,962
    
    
    $
    68,406
    
    
    $
    62,030Professional Services
    
    
    25,673
    
    
    
    17,362
    
    
    
    62,542
    
    
    
    49,044Total revenues
    
    
    47,884
    
    
    
    38,324
    
    
    
    130,948
    
    
    
    111,074Operating expensesDirect operating: Business Information
    
    
    7,961
    
    
    
    7,380
    
    
    
    23,686
    
    
    
    21,258Direct operating: Professional Services
    
    
    9,941
    
    
    
    6,008
    
    
    
    22,688
    
    
    
    16,905Selling, general and administrative
    
    
    18,950
    
    
    
    15,167
    
    
    
    51,787
    
    
    
    44,157Amortization
    
    
    3,050
    
    
    
    1,871
    
    
    
    7,587
    
    
    
    5,585Depreciation
    
    
    1,501
    
    
    
    1,206
    
    
    
    3,790
    
    
    
    2,851Total operating expenses
    
    
    41,403
    
    
    
    31,632
    
    
    
    109,538
    
    
    
    90,756Equity in earnings of The Detroit Legal News
Publishing, LLC
    
    
    1,329
    
    
    
    1,611
    
    
    
    4,355
    
    
    
    3,856Operating income
    
    
    7,810
    
    
    
    8,303
    
    
    
    25,765
    
    
    
    24,174Non-operating expenseNon-cash interest expense related to
redeemable preferred stock
    
    
    
    
    
    
    (9,872
    )
    
    
    
    
    
    
    (66,132
    )Interest expense, net of interest income
    
    
    (1,931
    )
    
    
    (3,190
    )
    
    
    (4,669
    )
    
    
    (6,618
    )Break-up fee and other income (expense), net
    
    
    (1,489
    )
    
    
    (8
    )
    
    
    (1,466
    )
    
    
    (21
    )Total non-operating expense
    
    
    (3,420
    )
    
    
    (13,070
    )
    
    
    (6,135
    )
    
    
    (72,771
    )Income (loss) before income taxes and
minority interest
    
    
    4,390
    
    
    
    (4,767
    )
    
    
    19,630
    
    
    
    (48,597
    )Income tax expense
    
    
    (1,471
    )
    
    
    (1,657
    )
    
    
    (7,257
    )
    
    
    (5,764
    )Minority interest in net income of subsidiary
    
    
    (466
    )
    
    
    (1,091
    )
    
    
    (1,516
    )
    
    
    (2,798
    )Net income (loss)
    
    $
    2,453
    
    
    $
    (7,515
    )
    
    $
    10,857
    
    
    $
    (57,159
    )Net income (loss) per share:Basic
    
    $
    0.09
    
    
    $
    (0.38
    )
    
    $
    0.42
    
    
    $
    (4.46
    )Diluted
    
    $
    0.09
    
    
    $
    (0.38
    )
    
    $
    0.42
    
    
    $
    (4.46
    )Weighted average shares outstanding:Basic
    
    
    27,926,118
    
    
    
    19,675,101
    
    
    
    25,940,102
    
    
    
    12,812,282Diluted
    
    
    28,059,701
    
    
    
    19,675,101
    
    
    
    26,105,413
    
    
    
    12,812,282
   2




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Dolan Media Company
 
 Condensed Consolidated Statements of Stockholders Equity (Deficit)
 (in thousands, except share data)
 AdditionalCommon Stock
    
    
    Paid-In
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    TotalBalance (deficit) at December 31, 2006
    
    
    9,324,000
    
    
    $
    1
    
    
    $
    303
    
    
    $
    (29,179
    )
    
    $
    (28,875
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54,034
    )
    
    
    (54,034
    )Stock-based compensation expense,
including issuance of restricted
stock (shares are net of
forfeitures)
    
    
    171,563
    
    
    
    
    
    
    
    970
    
    
    
    
    
    
    
    970Preferred stock series C conversion
    
    
    5,093,155
    
    
    
    5
    
    
    
    73,844
    
    
    
    
    
    
    
    73,849Initial public offering proceeds, net
of underwriting discount and offering
costs
    
    
    10,500,000
    
    
    
    11
    
    
    
    137,255
    
    
    
    
    
    
    
    137,266Other
    
    
    
    
    
    
    8
    
    
    
    (8
    )
    
    
    
    
    
    
    Balance (deficit) at December 31, 2007
    
    
    25,088,718
    
    
    $
    25
    
    
    $
    212,364
    
    
    $
    (83,213
    )
    
    $
    129,176Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,857
    
    
    
    10,857Private placement of common stock,
net of offering costs
    
    
    4,000,000
    
    
    
    4
    
    
    
    60,537
    
    
    
    
    
    
    
    60,541Issuance of common stock in a
business acquisition
    
    
    825,528
    
    
    
    1
    
    
    
    16,460
    
    
    
    
    
    
    
    16,461Issuance of common stock pursuant to
the exercise of stock options under
the 2007 incentive compensation plan
    
    
    4,714
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    13Stock-based compensation expense,
including issuance of restricted
stock (shares are net of forfeitures)
    
    
    36,189
    
    
    
    
    
    
    
    1,341
    
    
    
    
    
    
    
    1,341Balance (deficit) at September 30, 2008 (unaudited)
    
    
    29,955,149
    
    
    $
    30
    
    
    $
    290,715
    
    
    $
    (72,356
    )
    
    $
    218,389
   3




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##### Table of Contents



Dolan Media Company
 
 Unaudited Condensed Consolidated Statements of Cash Flows
 (in thousands)
 Nine Months EndedSeptember 30,2008
    
    
    2007Cash flows from operating activitiesNet income (loss)
    
    $
    10,857
    
    
    $
    (57,159
    )Distributions received from The Detroit Legal News Publishing, LLC
    
    
    5,600
    
    
    
    4,200Minority interest distributions paid
    
    
    (1,351
    )
    
    
    (1,814
    )Non-cash operating activities:Amortization
    
    
    7,587
    
    
    
    5,585Depreciation
    
    
    3,790
    
    
    
    2,851Equity in earnings of The Detroit Legal News Publishing, LLC
    
    
    (4,355
    )
    
    
    (3,856
    )Minority interest
    
    
    1,516
    
    
    
    2,798Stock-based compensation expense
    
    
    1,341
    
    
    
    564Deferred income taxes
    
    
    (576
    )
    
    
    Change in value of interest rate swap and accretion of interest on
note payable
    
    
    213
    
    
    
    698Non-cash interest related to redeemable preferred stock
    
    
    
    
    
    
    66,611Amortization of debt issuance costs
    
    
    156
    
    
    
    696Change in accounting estimate related to self-insured medical reserve
    
    
    (470
    )
    
    
    Changes in operating assets and liabilities, net of effects of
business acquisitions:Accounts
receivable, including pass-through costs (billed and unbilled)
    
    
    (9,354
    )
    
    
    (3,705
    )Prepaid expenses and other current assets
    
    
    (1,840
    )
    
    
    (707
    )Other assets
    
    
    90
    
    
    
    28Accounts payable and accrued liabilities
    
    
    1,048
    
    
    
    4,313Deferred revenue
    
    
    1,959
    
    
    
    (767
    )Net cash provided by operating activities
    
    
    16,211
    
    
    
    20,336Cash flows from investing activitiesAcquisitions and investments
    
    
    (183,518
    )
    
    
    (17,335
    )Capital expenditures
    
    
    (3,957
    )
    
    
    (5,724
    )Other
    
    
    100
    
    
    
    130Net cash used in investing activities
    
    
    (187,375
    )
    
    
    (22,929
    )Cash flows from financing activitiesNet borrowings on senior revolving note
    
    
    90,000
    
    
    
    Proceeds from borrowings or conversions on senior term notes (Note 6)
    
    
    25,000
    
    
    
    10,000Payments on senior long-term debt
    
    
    (2,746
    )
    
    
    (39,750
    )Proceeds from private placement of common stock, net of offering costs
    
    
    60,541
    
    
    
    Proceeds from stock options exercises
    
    
    3
    
    
    
    Proceeds from initial public offering, net of underwriting discount
    
    
    
    
    
    
    141,593Redemption of preferred stock
    
    
    
    
    
    
    (101,089
    )Payments of initial public offering costs
    
    
    
    
    
    
    (3,985
    )Capital contribution from minority partner
    
    
    1,179
    
    
    
    Payment on unsecured note payable
    
    
    (1,750
    )
    
    
    Payments of deferred financing costs
    
    
    (404
    )
    
    
    (891
    )Other
    
    
    (6
    )
    
    
    (30
    )Net cash provided by financing activities
    
    
    171,817
    
    
    
    5,848Net increase in cash and cash equivalents
    
    
    653
    
    
    
    3,255Cash and cash equivalents at beginning of the period
    
    
    1,346
    
    
    
    786Cash and cash equivalents at end of the period
    
    $
    1,999
    
    
    $
    4,041
   4




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##### Table of Contents



Notes to Unaudited Condensed Consolidated Interim Financial Statements
 Note 1. Nature of Business and Significant Accounting Policies
 Basis of Presentation:
    Use of Estimates in the Preparation of Financial Statements:
 Revenue Recognition: pass-through Reporting Revenue Gross as a Principal
versus Net as an Agent
  5




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New Accounting Pronouncements:
   Level 1
    
    Unadjusted quoted prices in active markets for
identical assets or liabilitiesLevel 2
    
    Unadjusted quoted prices in active markets for  similar
assets or liabilities, orUnadjusted quoted prices for identical or similar
assets or liabilities in markets that are not active, orInputs other than quoted prices that are observable
for the asset or liabilityLevel 3
    
    Unobservable inputs for the asset or liability
  .
 SFAS No. 159
  6




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##### Table of Contents



SFAS No. 160 SFAS No. 160)
  SFAS No. 142 SFAS No. 141
  7




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##### Table of Contents



Note 2. Basic and Diluted Income (Loss) Per Share
  in thousands,
except per share amounts
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    2,453
    
    
    $
    (7,515
    )
    
    $
    10,857
    
    
    $
    (57,159
    )Basic:Weighted average common shares outstanding
    
    
    28,093
    
    
    
    19,675
    
    
    
    26,106
    
    
    
    12,812Weighted average common shares of unvested restricted stock
    
    
    (167
    )
    
    
    
    
    
    
    (166
    )
    
    
    Shares used in the computation of basic net income (loss)
per share
    
    
    27,926
    
    
    
    19,675
    
    
    
    25,940
    
    
    
    12,812Net income (loss) per share  basic
    
    $
    0.09
    
    
    $
    (0.38
    )
    
    $
    0.42
    
    
    $
    (4.46
    )Diluted:Shares used in the computation of basic net income (loss)
per share
    
    
    27,926
    
    
    
    19,675
    
    
    
    25,940
    
    
    
    12,812Stock options and restricted stock
    
    
    134
    
    
    
    
    
    
    
    165
    
    
    
    Shares used in the computation of dilutive net income
(loss) per share
    
    
    28,060
    
    
    
    19,675
    
    
    
    26,105
    
    
    
    12,812Net income (loss) per share  diluted
    
    $
    0.09
    
    
    $
    (0.38
    )
    
    $
    0.42
    
    
    $
    (4.46
    )
  Note 3. Acquisitions
  Legal and Business Publishers, Inc.: The Mecklenburg Times
  8




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##### Table of Contents



Wilford & Geske:
   Minnesota Political Press: Politics in
Minnesota
 Midwest Law Printing Co., Inc.:
 National Default Exchange, L.P. and related entities:
  9




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##### Table of Contents



long-term
    10




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##### Table of Contents



in thousands
 MidwestLegal and
    
    
    
    
    
    
    MN
    
    
    LawBusiness
    
    
    Wilford &
    
    
    Political
    
    
    PrintingPublishers
    
    
    Geske
    
    
    Press
    
    
    Co., Inc.
    
    
    NDEx
    
    
    TotalAssets acquired and liabilities assumed at
their fair values:Working capital (deficit)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    10
    
    
    $
    (2,618
    )
    
    $
    (2,608
    )Property and equipment
    
    
    50
    
    
    
    122
    
    
    
    
    
    
    
    
    
    
    
    3,090
    
    
    
    3,262Software
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,624
    
    
    
    7,624Long-term service contract
    
    
    
    
    
    
    13,573
    
    
    
    
    
    
    
    
    
    
    
    154,000
    
    
    
    167,573Other finite-life intangible assets
    
    
    3,645
    
    
    
    
    
    
    
    334
    
    
    
    650
    
    
    
    5,000
    
    
    
    9,629Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,470
    
    
    
    42,470Deferred tax liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,000
    
    
    
    13,000Total consideration, including direct expenses
    
    $
    3,695
    
    
    $
    13,695
    
    
    $
    334
    
    
    $
    660
    
    
    $
    196,566
    
    
    $
    214,950
 Other acquisition related costs:
 Break-up fee:
 Pro Forma Information (unaudited):
 Pro FormaThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Total revenues
    
    $
    61,446
    
    
    $
    56,919
    
    
    $
    186,519
    
    
    $
    167,699Net income (loss)
    
    
    2,636
    
    
    
    (6,873
    )
    
    
    11,799
    
    
    
    (55,411
    )Net income (loss) per share:Basic
    
    $
    0.09
    
    
    $
    (0.34
    )
    
    $
    0.44
    
    
    $
    (4.06
    )Diluted
    
    $
    0.09
    
    
    $
    (0.34
    )
    
    $
    0.44
    
    
    $
    (4.06
    )Pro forma weighted average shares outstanding:Basic
    
    
    28,482
    
    
    
    20,501
    
    
    
    26,675
    
    
    
    13,638Diluted
    
    
    28,885
    
    
    
    20,501
    
    
    
    26,930
    
    
    
    13,638
  11




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Note 4. Investments
 (in
thousands)
 Accounting
    
    
    Percent
    
    
    September 30,
    
    
    December 31,Method
    
    
    Ownership
    
    
    2008
    
    
    2007The Detroit Legal News Publishing, LLC
    
    Equity
    
    
    35
    
    
    $
    16,334
    
    
    $
    17,579GovDelivery, Inc.
    
    Cost
    
    
    15
    
    
    
    900
    
    
    
    900Total
    
    
    
    
    
    
    
    
    
    $
    17,234
    
    
    $
    18,479
 The Detroit Legal News Publishing, LLC:
  (in thousands)
 As of September 30,
    
    
    As of December 31,2008
    
    
    2007Carrying value of investment
    
    $
    16,334
    
    
    $
    17,579Underlying finite-lived customer list, net of amortization
    
    
    10,806
    
    
    
    11,937
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Equity in earnings of DLNP, net of
amortization of
customer list
    
    $
    1,329
    
    
    $
    1,611
    
    
    $
    4,355
    
    
    $
    3,856Distributions received
    
    
    2,100
    
    
    
    1,400
    
    
    
    5,600
    
    
    
    4,200Amortization expense
    
    
    377
    
    
    
    364
    
    
    
    1,131
    
    
    
    1,082
 (in thousands)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    11,676
    
    
    $
    11,609
    
    
    $
    36,113
    
    
    $
    30,698Cost of revenues
    
    
    4,874
    
    
    
    4,420
    
    
    
    14,413
    
    
    
    11,932Gross profit
    
    
    6,802
    
    
    
    7,189
    
    
    
    21,700
    
    
    
    18,766Selling, general and administrative expenses *
    
    
    1,593
    
    
    
    1,481
    
    
    
    4,825
    
    
    
    4,403Operating income *
    
    
    5,209
    
    
    
    5,708
    
    
    
    16,875
    
    
    
    14,363Net income
    
    $
    4,873
    
    
    $
    5,644
    
    
    $
    15,673
    
    
    $
    14,109Companys 35% share of net income
    
    $
    1,706
    
    
    $
    1,975
    
    
    $
    5,486
    
    
    $
    4,938Less amortization of intangible assets
    
    
    377
    
    
    
    364
    
    
    
    1,131
    
    
    
    1,082Equity in earnings of DLNP, LLC
    
    $
    1,329
    
    
    $
    1,611
    
    
    $
    4,355
    
    
    $
    3,856
 *
    
    For comparison purposes only, the Company has changed the selling, general and administrative
expenses and operating income presented here for the three and nine months ended September 30, 2007
from those previously reported to reflect current year treatment of Michigan business taxes as a
non-operating expense as a result of changes in Michigan tax law.  12




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##### Table of Contents



GovDelivery, Inc.:
 Note 5. Goodwill and Finite-life Intangible Assets
 Goodwill:
 (in thousands)
 Business
    
    
    ProfessionalInformation
    
    
    Services
    
    
    TotalBalance as of December 31, 2007
    
    $
    58,632
    
    
    $
    20,412
    
    
    $
    79,044Venture Publications, Inc.*
    
    
    600
    
    
    
    
    
    
    
    600NDEx
    
    
    
    
    
    
    42,470
    
    
    
    42,470Balance as of September 30, 2008
    
    $
    59,232
    
    
    $
    62,882
    
    
    $
    122,114
 *
    
    Represents additional cash payment paid to Venture Publications, Inc. in connection with the
acquired assets achieving certain revenue targets set forth in the asset purchase agreement. This
has been accounted for as additional purchase price. Finite-Life Intangible Assets: (in thousands, except amortization
periods)
 As of September 30, 2008
    
    
    As of December 31, 2007Amortization
    
    
    Gross
    
    
    Accumulated
    
    
    
    
    
    
    Gross
    
    
    AccumulatedPeriod
    
    
    Amount
    
    
    Amortization
    
    
    Net
    
    
    Amount
    
    
    Amortization
    
    
    NetMastheads and tradenames
    
    
    30
    
    
    $
    11,939
    
    
    $
    (1,697
    )
    
    $
    10,242
    
    
    $
    11,298
    
    
    $
    (1,401
    )
    
    $
    9,897Advertising customer lists
    
    
    5-11
    
    
    
    16,445
    
    
    
    (5,881
    )
    
    
    10,564
    
    
    
    13,441
    
    
    
    (4,736
    )
    
    
    8,705Subscriber customer lists
    
    
    2-14
    
    
    
    7,645
    
    
    
    (2,482
    )
    
    
    5,163
    
    
    
    7,311
    
    
    
    (1,959
    )
    
    
    5,352Professional services
customer lists
    
    
    7
    
    
    
    7,632
    
    
    
    (3,445
    )
    
    
    4,187
    
    
    
    6,982
    
    
    
    (2,674
    )
    
    
    4,308Noncompete agreements
    
    
    5
    
    
    
    5,750
    
    
    
    (378
    )
    
    
    5,372
    
    
    
    750
    
    
    
    (182
    )
    
    
    568APC long-term service
contracts
    
    
    15
    
    
    
    59,874
    
    
    
    (7,727
    )
    
    
    52,147
    
    
    
    46,300
    
    
    
    (4,810
    )
    
    
    41,490APC customer lists
    
    
    14
    
    
    
    13,267
    
    
    
    (819
    )
    
    
    12,448
    
    
    
    13,357
    
    
    
    (82
    )
    
    
    13,275Customer relationship
    
    
    14
    
    
    
    3,283
    
    
    
    (439
    )
    
    
    2,844
    
    
    
    3,283
    
    
    
    (267
    )
    
    
    3,016SunWel contract
    
    
    7
    
    
    
    3,322
    
    
    
    (803
    )
    
    
    2,519
    
    
    
    2,821
    
    
    
    (486
    )
    
    
    2,335Exhibitor customer list
    
    
    1
    
    
    
    404
    
    
    
    (404
    )
    
    
    
    
    
    
    404
    
    
    
    (404
    )
    
    
    NDEx long-term service
contracts
    
    
    25
    
    
    
    154,000
    
    
    
    (513
    )
    
    
    153,487
    
    
    
    
    
    
    
    
    
    
    
    Total intangibles
    
    
    
    
    
    $
    283,561
    
    
    $
    (24,588
    )
    
    $
    258,973
    
    
    $
    105,947
    
    
    $
    (17,001
    )
    
    $
    88,946
   13




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##### Table of Contents



Note 6. Long-Term Debt, Capital Lease Obligation
 (in
thousands)
 September
    
    
    December 31,30, 2008
    
    
    2007Senior secured debt (see below):Senior variable-rate term note, payable in quarterly
installments with a balloon payment due August 8,
2014
    
    $
    71,004
    
    
    $
    48,750Senior variable-rate revolving note due August 8, 2012
    
    
    99,000
    
    
    
    9,000Total senior secured debt
    
    
    170,004
    
    
    
    57,750Unsecured note payable
    
    
    1,695
    
    
    
    3,290Capital lease obligations
    
    
    3
    
    
    
    10171,702
    
    
    
    61,050Less current portion
    
    
    6,952
    
    
    
    4,749Long-term debt, less current portion
    
    $
    164,750
    
    
    $
    56,301
 Senior Secured Debt:
  14




---



##### Table of Contents



Unsecured Note Payable:
 Note 7. Common and Preferred Stock
      15




---



##### Table of Contents



Note 8. Income Taxes
    Note 9. Major Customers and Related Parties
    16




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##### Table of Contents



Percent of Outstanding MembershipMember
    
    Interests of APCDolan APC, LLC (the Companys wholly-owned subsidiary)
    
    
    84.7
    %APC Investments, LLC
    
    
    7.6
    %Feiwell & Hannoy Professional Corporation
    
    
    1.7
    %Sellers of NDEx (as a group)
    
    
    6.1
    %
  Note 10. Reportable Segments
  in thousands
 Three Months Ended September 30, 2008Business
    
    
    ProfessionalInformation
    
    
    Services
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    22,211
    
    
    $
    25,673
    
    
    $
    
    
    
    $
    47,884Direct operating expenses
    
    
    7,961
    
    
    
    9,941
    
    
    
    
    
    
    
    17,902Selling, general and administrative expenses
    
    
    9,486
    
    
    
    6,646
    
    
    
    2,818
    
    
    
    18,950Amortization and depreciation
    
    
    1,275
    
    
    
    3,059
    
    
    
    217
    
    
    
    4,551Equity in Earnings of DLNP, LLC
    
    
    1,329
    
    
    
    
    
    
    
    
    
    
    
    1,329Operating income (loss)
    
    $
    4,818
    
    
    $
    6,027
    
    
    $
    (3,035
    )
    
    $
    7,810
  17




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##### Table of Contents



Three Months Ended September 30, 2007Business
    
    
    ProfessionalInformation
    
    
    Services
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    20,962
    
    
    $
    17,362
    
    
    $
    
    
    
    $
    38,324Direct operating expenses
    
    
    7,380
    
    
    
    6,008
    
    
    
    
    
    
    
    13,388Selling, general and administrative expenses
    
    
    8,331
    
    
    
    4,054
    
    
    
    2,782
    
    
    
    15,167Amortization and depreciation
    
    
    1,168
    
    
    
    1,759
    
    
    
    150
    
    
    
    3,077Equity in Earnings of DLNP, LLC
    
    
    1,611
    
    
    
    
    
    
    
    
    
    
    
    1,611Operating income (loss)
    
    $
    5,694
    
    
    $
    5,541
    
    
    $
    (2,932
    )
    
    $
    8,303
 Nine Months Ended September 30, 2008Business
    
    
    ProfessionalInformation
    
    
    Services
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    68,406
    
    
    $
    62,542
    
    
    $
    
    
    
    $
    130,948Direct operating expenses
    
    
    23,686
    
    
    
    22,688
    
    
    
    
    
    
    
    46,374Selling, general and administrative expenses
    
    
    29,311
    
    
    
    15,889
    
    
    
    6,587
    
    
    
    51,787Amortization and depreciation
    
    
    3,663
    
    
    
    7,124
    
    
    
    590
    
    
    
    11,377Equity in Earnings of DLNP, LLC
    
    
    4,355
    
    
    
    
    
    
    
    
    
    
    
    4,355Operating income (loss)
    
    $
    16,101
    
    
    $
    16,841
    
    
    $
    (7,177
    )
    
    $
    25,765
 Nine Months Ended September 30, 2007Business
    
    
    ProfessionalInformation
    
    
    Services
    
    
    Corporate
    
    
    TotalRevenues
    
    $
    62,030
    
    
    $
    49,044
    
    
    $
    
    
    
    $
    111,074Direct operating expenses
    
    
    21,258
    
    
    
    16,905
    
    
    
    
    
    
    
    38,163Selling, general and administrative expenses
    
    
    25,084
    
    
    
    12,441
    
    
    
    6,632
    
    
    
    44,157Amortization and depreciation
    
    
    3,308
    
    
    
    4,748
    
    
    
    380
    
    
    
    8,436Equity in Earnings of DLNP, LLC
    
    
    3,856
    
    
    
    
    
    
    
    
    
    
    
    3,856Operating income (loss)
    
    $
    16,236
    
    
    $
    14,950
    
    
    $
    (7,012
    )
    
    $
    24,174
 Note 11. Share-Based Compensation
   Stock Options:
  Dividend yield
    
    0.0%Expected volatility
    
    28.0%Risk free interest rate
    
    3.0%  3.27%Expected term of options
    
    4.75 yearsWeighted average grant date fair value
    
    $4.89  $5.42
  18




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##### Table of Contents



Weighted
    
    
    Weighted
    
    
    Weighted AverageNumber of
    
    
    Average Grant
    
    
    Average
    
    
    RemainingShares
    
    
    Date Fair Value
    
    
    Exercise Price
    
    
    Contractual LifeOutstanding options at December 31, 2007
    
    
    992,667
    
    
    $
    4.34
    
    
    $
    13.03
    
    
    6.87 Yrs.Granted
    
    
    440,750
    
    
    
    4.91
    
    
    
    16.59
    
    
    
    Exercised
    
    
    (4,714
    )
    
    
    1.50
    
    
    
    2.78
    
    
    
    Canceled or forfeited
    
    
    (65,192
    )
    
    
    4.53
    
    
    
    13.90
    
    
    
    Outstanding options at September 30, 2008
    
    
    1,363,511
    
    
    $
    4.52
    
    
    $
    14.17
    
    
    6.28 Yrs.Options exercisable at September 30, 2008
    
    
    260,948
    
    
    $
    3.98
    
    
    $
    11.75
    
    
    6.30 Yrs.
  Restricted Stock Grants:
 WeightedAverageNumber
    
    
    Grant Dateof Shares
    
    
    Fair ValueNonvested, December 31, 2007
    
    
    152,789
    
    
    $
    14.68Granted
    
    
    54,139
    
    
    
    16.51Vested
    
    
    (35,505
    )
    
    
    14.50Canceled or forfeited
    
    
    (17,950
    )
    
    
    15.00Nonvested, September 30, 2008
    
    
    153,473
    
    
    $
    15.33
  Note 12. Contingencies and Commitments
   19




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##### Table of Contents



Note 13. Subsequent Events
 in thousands
 October 2,
    
    
    September 30,2008
    
    
    2008Senior secured debt (see below):Senior variable-rate term note, payable in quarterly
installments with a balloon payment due August 8,
2014
    
    $
    156,004
    
    
    $
    71,004Senior variable-rate revolving note due August 8, 2012
    
    
    14,000
    
    
    
    99,000Total senior secured debt
    
    
    170,004
    
    
    
    170,004Unsecured note payable
    
    
    1,695
    
    
    
    1,695Capital lease obligations
    
    
    3
    
    
    
    3171,702
    
    
    
    171,702Less current portion
    
    
    9,504
    
    
    
    6,952Long-term debt, less current portion
    
    $
    162,198
    
    
    $
    164,750
 in thousands
 2008 (remainder of year)
    
    $
    2,2572009
    
    
    11,9952010
    
    
    13,7502011
    
    
    18,3502012
    
    
    24,9502013 and thereafter
    
    
    100,400Total
    
    $
    171,702
  20




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  
    
    our business operates in highly competitive markets and depends upon the economies and
the demographics of the legal, financial and real estate sectors in the markets we serve
and changes in those sectors could have an adverse effect on our revenues, cash flows and
profitability;
 
    
    a change in the laws governing public notice requirements may reduce or eliminate the
amount of public notices required to be published in print, affect how newspapers are
chosen for publication of public notices or adversely change the eligibility requirements
for publishing public notices, which could adversely affect our revenues, profitability and
growth opportunities;
 
    
    a decrease in paid subscriptions to our print publications could adversely affect our
circulation revenues to the extent we are not able to sufficiently increase our print
subscription rates and adversely affect our advertising and display revenues to the extent
advertisers begin placing fewer print advertisements with us due to print decreased
readership;
 
    
    we have owned and operated the businesses in our Professional Services Division (APC and
Counsel Press) for a short period of time;
 
    
    regulation of sub-prime, Alt-A and other residential mortgage products, including bills
introduced in states where we do business, the Hope for Homeowners Act and the Emergency
Economic Stabilization Act, and voluntary foreclosure relief programs developed by lenders,
loan servicers and the Hope Now Alliance, a consortium that includes loan servicers, may
have an adverse effect on or restrict our mortgage default processing services and public
notice operations;
 
    
    APCs revenues are very concentrated, as APC provides mortgage default processing
services primarily to six law firm customers, and if the number of case files referred to
APC by these law firm customers decreases or fails to increase, our operating results and
ability to execute our growth strategy could be adversely affected;
 
    
    key attorneys at each of APCs six law firm customers are employed by APC or NDEx and
almost all of these attorneys hold a direct or indirect equity interest in APC. As a
result, these key attorneys may, in certain circumstances, have interests that differ from
or conflict with our interests;
 
    
    a key component of our operating income and operating cash flows has been, and may
continue to be, our minority equity investment (35%) in The Detroit Legal News Publishing,
LLC;
  21




---



##### Table of Contents




    
    we may be required to incur additional indebtedness or raise additional capital to fund
our operations, repay indebtedness, fund capital expenditures or fund acquisitions, which
may not be available to us at all or on acceptable terms when needed;
 
    
    we are dependent on our senior management team, especially James P. Dolan, our founder,
chairman, chief executive officer and president; Scott J. Pollei, our executive vice
president and chief financial officer; Mark W.C. Stodder, our executive vice president
business information; and David A. Trott, chairman and chief executive officer, APC;
 
    
    we intend to continue to pursue acquisition opportunities, which we may not complete or
integrate successfully into our business and which may subject us to considerable business
and financial risks;
 
    
    growing our business may place a strain on our management and internal systems,
processes and controls;
 
    
    we incurred additional indebtedness to close the acquisition of NDEx and this additional
debt consumed a significant portion of our ability to borrow and may limit our ability to
pursue other acquisitions or growth strategies;
 
    
    the acquisition of NDEx may expose us to particular business and financial risks that
include, but are not limited to: (1) diverting managements time, attention and resources
from managing the business; (2) incurring significant additional capital expenditures and
operating expenses to improve, coordinate or integrate managerial, operational, financial
and administrative systems; (3) failing to integrate the operations, personnel and internal
controls of NDEx into APC or to manage NDEx or our growth; and (4) facing operational
difficulties in new markets or with new product and service offerings; and
 
    
    if our goodwill or finite-life intangible assets become impaired, we may be required to
record a significant charge to earnings.
   Overview
   22




---



##### Table of Contents



Recent Developments
 Regulatory Environment
     Acquisition of NDEx
    23




---



##### Table of Contents



Private Placement
  Amendment to Credit Facility
   24




---



##### Table of Contents



Changes in our Ownership in APC
  Percent of OutstandingMember
    
    Membership Interests of APCDolan APC, LLC (the Companys wholly-owned subsidiary)
    
    
    84.7
    %APC Investments, LLC
    
    
    7.6
    %Feiwell & Hannoy, Professional Corporation
    
    
    1.7
    %Sellers of NDEx (as a group)
    
    
    6.1
    %
 Initial Public Offering
     25




---



##### Table of Contents



Recent Acquisitions
  Business Information
 The Mecklenburg Times The Mecklenburg Times
  Professional Services
     26




---



##### Table of Contents



Revenues
  
    
    46.4% and 52.2%, respectively, from our Business Information Division; and
 
    
    53.6% and 47.8%, respectively, from our Professional Services Division.
 Business Information.
   Professional Services.
  27




---



##### Table of Contents



.
    28




---



##### Table of Contents



Operating Expenses
  
    
    Direct operating expenses, which consist primarily of the cost of compensation and
employee benefits for our editorial personnel in our Business Information Division and the
processing staff at APC and Counsel Press, and production and distribution expenses, such as
compensation (including stock-based compensation expense) and employee benefits for
personnel involved in the production and distribution of our business information products,
the cost of newsprint and the cost of delivery of our business information products;
 
    
    Selling, general and administrative expenses, which consist primarily of the cost of
compensation (including stock-based compensation expense) and employee benefits for our
sales, human resources, accounting and information technology personnel, publishers and
other members of management, rent, other sales and marketing related expenses, other
office-related payments and direct acquisition costs related to acquisitions that we are no
longer pursuing;
 
    
    Depreciation expense, which represents the cost of fixed assets and software allocated
over the estimated useful lives of these assets, with such useful lives ranging from one to
thirty years; and
 
    
    Amortization expense, which represents the cost of finite-lived intangibles acquired
through business combinations allocated over the estimated useful lives of these
intangibles, with such useful lives ranging from one to thirty years.
  Equity in Earnings of The Detroit Legal News Publishing
   29




---



##### Table of Contents



Minority Interest in Net Income of Subsidiary
  
    
    a 9.1% membership interest in APC held by Trott & Trott from January 1, 2008, through
January 31, 2008, and APC Investments, LLC, a limited liability company owned by the
shareholders of Trott & Trott, including APC President Dave Trott and APCs two executive
vice presidents in Michigan, from February 1, 2008, through September 1, 2008; and a 7.6%
membership interest in APC that APC Investments held for the period September 2, 2008,
through September 30, 2008;
 
    
    a 2.3% membership interest in APC that Feiwell & Hannoy held for the period of January 1,
2008, through February 21, 2008; a 2.0% membership interest in APC that Feiwell & Hannoy
held for the period of February 22, 2008, through September 1, 2008; and a 1.7% membership
interest in APC that Feiwell & Hannoy held for the period September 2, 2008, through
September 30, 2008; and
 
    
    a 6.1% membership interest in APC held by the sellers of NDEx
(as a group) from September 2, 2008,
through September 30, 2008.
    Three Months ended September 30,
    
    
    Nine Months ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007APC Investments*
    
    $
    361,418
    
    
    $
    569,966
    
    
    $
    1,098,178
    
    
    $
    1,489,470Feiwell & Hannoy
    
    
    81,187
    
    
    
    141,353
    
    
    
    253,333
    
    
    
    324,345Sellers of NDEx (as a group)**
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    442,605
    
    
    $
    711,319
    
    
    $
    1,351,511
    
    
    $
    1,813,815
 *
    
    Trott & Trott prior to February 1, 2008**
    
    Members of APC since September 2, 2008. To the extent earned, we would expect to make the first
payment in the fourth quarter of 2008.  30




---



##### Table of Contents



Critical Accounting Policies
    Purchase Accounting
 The Mecklenberg Times
  31




---



##### Table of Contents



Valuation of Our Company Equity Securities
     Goodwill, Other Intangible Assets and Other Long-Lived Assets
     32




---



##### Table of Contents



Share-Based Compensation Expense
    2008Dividend yield
    
    
    0.0%Expected volatility
    
    
    28.0%Risk free interest rate
    
    
    3.0%  3.27%Expected term of options
    
    
    4.75 yearsWeighted average grant date fair value
    
    
    $4.89  5.42%
       33




---



##### Table of Contents



Income Taxes
   Accounts Receivable Allowances
   New Accounting Pronouncements
  Non-GAAP Financial Measures
   34




---



##### Table of Contents



Adjusted EBITDA
 before
 
    
    non-cash interest expense related to redeemable preferred stock;
    
    interest expense, net;
    
    income tax expense;
    
    depreciation and amortization;
    
    non-cash compensation expense;
    
    non-recurring income and/or expense; and
    
    minority interest in net income of subsidiary;
 after
 
    
    minority interest distributions paid.
 Managements Use of Adjusted EBITDA
     35




---



##### Table of Contents



in thousands
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    2,453
    
    
    $
    (7,515
    )
    
    $
    10,857
    
    
    $
    (57,159
    )Non-cash interest expense related to
redeemable preferred stock
    
    
    
    
    
    
    9,872
    
    
    
    
    
    
    
    66,132Interest expense, net
    
    
    1,931
    
    
    
    3,190
    
    
    
    4,669
    
    
    
    6,618Income tax expense
    
    
    1,471
    
    
    
    1,657
    
    
    
    7,257
    
    
    
    5,764Amortization of intangibles
    
    
    3,050
    
    
    
    1,871
    
    
    
    7,587
    
    
    
    5,585Depreciation expense
    
    
    1,501
    
    
    
    1,206
    
    
    
    3,790
    
    
    
    2,851Amortization of DLNP intangible
    
    
    377
    
    
    
    364
    
    
    
    1,131
    
    
    
    1,082Non-cash compensation expense
    
    
    549
    
    
    
    543
    
    
    
    1,341
    
    
    
    564Non-recurring income and/or expense
    
    
    1,500
    
    
    
    
    
    
    
    1,500
    
    
    
    Minority interest in net income of subsidiary
    
    
    466
    
    
    
    1,091
    
    
    
    1,516
    
    
    
    2,798Cash distributions to minority interest
    
    
    (443
    )
    
    
    (712
    )
    
    
    (1,351
    )
    
    
    (1,814
    )Adjusted EBITDA
    
    $
    12,855
    
    
    $
    11,567
    
    
    $
    38,297
    
    
    $
    32,421
 Cash Earnings and Cash Earnings per Diluted Share
 before
 
    
    non-cash interest expense related to redeemable preferred stock;
    
    non-cash interest income related to the change in fair value of interest rate swaps;
    
    amortization expense; and
    
    an adjustment to income tax expense related to the reconciling items above at a 40% tax
rate.
   36




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##### Table of Contents



Managements Use of Cash Earnings and Cash Earnings Per Diluted Share
    in thousands, except share and per share data
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    2,453
    
    
    $
    (7,515
    )
    
    $
    10,857
    
    
    $
    (57,159
    )Non-cash interest expense related to
redeemable preferred stock
    
    
    
    
    
    
    9,872
    
    
    
    
    
    
    
    66,132Non-cash interest income related to the
change in fair value of interest rate
swaps
    
    
    80
    
    
    
    810
    
    
    
    58
    
    
    
    423Amortization of intangibles
    
    
    3,050
    
    
    
    1,871
    
    
    
    7,587
    
    
    
    5,585Amortization of DLNP intangible
    
    
    377
    
    
    
    364
    
    
    
    1,131
    
    
    
    1,082Adjustment to income tax expense related
to reconciling items at a 40% tax rate
    
    
    (1,403
    )
    
    
    (1,218
    )
    
    
    (3,511
    )
    
    
    (2,836
    )Cash earnings
    
    $
    4,557
    
    
    $
    4,184
    
    
    $
    16,122
    
    
    $
    13,227Net income (loss) per diluted share (GAAP)
    
    $
    0.09
    
    
    $
    (0.38
    )
    
    $
    0.42
    
    
    $
    (4.46
    )Cash earnings per diluted share
    
    $
    0.16
    
    
    $
    0.21
    
    
    $
    0.62
    
    
    $
    1.03Weighted average diluted shares outstanding
    
    
    28,059,701
    
    
    
    19,675,101
    
    
    
    26,105,413
    
    
    
    12,812,282
  37




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##### Table of Contents



RESULTS OF OPERATIONS
 in thousands, except per share data
 Three Months Ended September 30,% of
    
    
    
    
    
    
    % of2008
    
    
    Revenues
    
    
    2007
    
    
    RevenuesRevenues:Business Information
    
    $
    22,211
    
    
    
    46.4
    %
    
    $
    20,962
    
    
    
    54.7
    %Professional Services
    
    
    25,673
    
    
    
    53.6
    %
    
    
    17,362
    
    
    
    45.3
    %Total revenues
    
    
    47,884
    
    
    
    100.0
    %
    
    
    38,324
    
    
    
    100.0
    %Operating expenses:Business Information
    
    
    18,722
    
    
    
    39.1
    %
    
    
    16,879
    
    
    
    44.0
    %Professional Services
    
    
    19,646
    
    
    
    41.0
    %
    
    
    11,821
    
    
    
    30.8
    %Unallocated corporate operating expenses
    
    
    3,035
    
    
    
    6.3
    %
    
    
    2,932
    
    
    
    7.7
    %Total operating expenses
    
    
    41,403
    
    
    
    86.5
    %
    
    
    31,632
    
    
    
    82.5
    %Equity in earnings of The Detroit Legal
News Publishing, LLC, net of amortization
    
    
    1,329
    
    
    
    2.8
    %
    
    
    1,611
    
    
    
    4.2
    %Operating income
    
    
    7,810
    
    
    
    16.3
    %
    
    
    8,303
    
    
    
    21.7
    %Non-cash interest expense related to
redeemable preferred stock
    
    
    
    
    
    
    0.0
    %
    
    
    (9,872
    )
    
    
    (25.8
    )%Interest expense, net
    
    
    (1,931
    )
    
    
    (4.0
    )%
    
    
    (3,190
    )
    
    
    (8.3
    )%Break up fee and other income (expense), net
    
    
    (1,489
    )
    
    
    (3.1
    )%
    
    
    (8
    )
    
    
    0.0
    %Income (loss) before income taxes
    
    
    4,390
    
    
    
    9.2
    %
    
    
    (4,767
    )
    
    
    (12.4
    )%Income tax expense
    
    
    (1,471
    )
    
    
    (3.1
    )%
    
    
    (1,657
    )
    
    
    (4.3
    )%Minority interest
    
    
    (466
    )
    
    
    (1.0
    )%
    
    
    (1,091
    )
    
    
    (2.8
    )%Net income (loss)
    
    $
    2,453
    
    
    
    5.1
    %
    
    $
    (7,515
    )
    
    
    (19.6
    )%Adjusted EBITDA (non-GAAP)
    
    $
    12,855
    
    
    
    26.8
    %
    
    $
    11,567
    
    
    
    30.2
    %Net income (loss) per diluted share
    
    $
    0.09
    
    
    
    
    
    
    $
    (0.38
    )Cash earnings per diluted share (non-GAAP)
    
    $
    0.16
    
    
    
    
    
    
    $
    0.21
 Nine Months Ended September 30,% of
    
    
    
    
    
    
    % of2008
    
    
    Revenues
    
    
    2007
    
    
    RevenuesRevenues:Business Information
    
    $
    68,406
    
    
    
    52.2
    %
    
    $
    62,030
    
    
    
    55.8
    %Professional Services
    
    
    62,542
    
    
    
    47.8
    %
    
    
    49,044
    
    
    
    44.2
    %Total revenues
    
    
    130,948
    
    
    
    100.0
    %
    
    
    111,074
    
    
    
    100.0
    %Operating expenses:Business Information
    
    
    56,660
    
    
    
    43.3
    %
    
    
    49,650
    
    
    
    44.7
    %Professional Services
    
    
    45,701
    
    
    
    34.9
    %
    
    
    34,094
    
    
    
    30.7
    %Unallocated corporate operating expenses
    
    
    7,177
    
    
    
    5.5
    %
    
    
    7,012
    
    
    
    6.3
    %Total operating expenses
    
    
    109,538
    
    
    
    83.6
    %
    
    
    90,756
    
    
    
    81.7
    %Equity in earnings of The Detroit Legal
News Publishing, LLC, net of amortization
    
    
    4,355
    
    
    
    3.3
    %
    
    
    3,856
    
    
    
    3.5
    %Operating income
    
    
    25,765
    
    
    
    19.7
    %
    
    
    24,174
    
    
    
    21.8
    %Non-cash interest expense related to
redeemable preferred stock
    
    
    
    
    
    
    0.0
    %
    
    
    (66,132
    )
    
    
    (59.5
    )%Interest expense, net
    
    
    (4,669
    )
    
    
    (3.6
    )%
    
    
    (6,618
    )
    
    
    (6.0
    )%Break-up fee and other income (expense), net
    
    
    (1,466
    )
    
    
    (1.1
    )%
    
    
    (21
    )
    
    
    0.0
    %Income (loss) before income taxes
    
    
    19,630
    
    
    
    15.0
    %
    
    
    (48,597
    )
    
    
    (43.8
    )%Income tax expense
    
    
    (7,257
    )
    
    
    (5.5
    )%
    
    
    (5,764
    )
    
    
    (5.2
    )%Minority interest
    
    
    (1,516
    )
    
    
    (1.2
    )%
    
    
    (2,798
    )
    
    
    (2.5
    )%Net income (loss)
    
    $
    10,857
    
    
    
    8.3
    %
    
    $
    (57,159
    )
    
    
    (51.5
    )%Adjusted EBITDA (non-GAAP)
    
    $
    38,297
    
    
    
    29.2
    %
    
    $
    32,421
    
    
    
    29.2
    %Net income (loss) per diluted share
    
    $
    0.42
    
    
    
    
    
    
    $
    (4.46
    )Cash earnings per diluted share (non-GAAP)
    
    $
    0.62
    
    
    
    
    
    
    $
    1.03
  38




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##### Table of Contents



Three Months Ended September 30, 2008
Compared to Three Months Ended September 30, 2007
 Revenues
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total revenues
    
    $
    47.9
    
    
    $
    38.3
    
    
    $
    9.6
    
    
    
    24.9
    %
  
    
    $8.5 million of revenues from businesses we acquired on or after July 1, 2007, which we
refer to as acquired businesses. These revenues consisted of: (1) $0.6 million in revenues
from the assets of Legal and Business Publishers, Inc. (including The Mecklenburg Times)
acquired on February 13, 2008; (2) $1.3 million in revenues from the mortgage default
processing services business of Wilford & Geske acquired on February 22, 2008; and (3) $6.6
million in revenues from NDEx, which we acquired on September 2, 2008. Acquired businesses
do not include fold in acquisitions, which we define below.
    
    $1.0 million of revenues from organic revenue growth, primarily related to increased
public notices placed in our Business Information products and increased appellate services
revenues. We define organic revenue growth as the net increase in revenue produced by: (1)
businesses we owned and operated prior to July 1, 2007, which we refer to as existing
businesses; (2) customer lists, goodwill or other
finite-life intangible assets we purchased on
or after July 1, 2007, and integrated into our existing businesses; and (3) businesses that
we account for as acquisitions under the purchase method of accounting in accordance with
SFAS No. 141 Business Combinations, but do not report separately for internal financial
purposes, which we refer to as fold in acquisitions.
  Operating Expenses
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total operating expenses
    
    $
    41.4
    
    
    $
    31.6
    
    
    $
    9.8
    
    
    
    30.9
    %Direct operating expense
    
    
    17.9
    
    
    
    13.4
    
    
    
    4.5
    
    
    
    33.7
    %Selling, general and administrative expenses
    
    
    19.0
    
    
    
    15.2
    
    
    
    3.8
    
    
    
    24.9
    %Depreciation expense
    
    
    1.5
    
    
    
    1.2
    
    
    
    0.3
    
    
    
    24.5
    %Amortization expense
    
    
    3.1
    
    
    
    1.9
    
    
    
    1.2
    
    
    
    63.0
    %
   39




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##### Table of Contents



Direct Operating Expenses.
 Selling, General and Administrative Expenses. Sarbanes-Oxley
 Depreciation and Amortization Expense.
 Break-up Fee and Other Income (Expense), Net
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Break-up fee and other income (expense), net
    
    $
    (1.5
    )
    
    $
    
    
    
    $
    1.5
    
    
    
    100.
    %
   40




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##### Table of Contents



Adjusted EBITDA
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase (decrease)($s in millions)Adjusted EBITDA
    
    $
    12.9
    
    
    $
    11.6
    
    
    $
    1.3
    
    
    
    11.1
    %Adjusted EBITDA margin
    
    
    26.8
    %
    
    
    30.2
    %
    
    
    (3.3
    )%
    
    
    (11.1
    )%
  Cash Earnings and Cash Earnings per Diluted Share
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase (decrease)Cash earnings (in millions)
    
    $
    4.6
    
    
    $
    4.2
    
    
    $
    0.4
    
    
    
    9.0
    %Cash earning per diluted share
    
    $
    0.16
    
    
    $
    0.21
    
    
    $
    (0.05
    )
    
    
    (23.8
    )%
  Non-Cash Interest Expense Related to Redeemable Preferred Stock
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Decrease($s in millions)Non-cash interest
expense related to
redeemable
preferred stock
    
    $
    
    
    
    $
    (9.9
    )
    
    $
    (9.9
    )
    
    
    (100
    )%
   41




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##### Table of Contents



Interest Expense, Net
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Decrease($s in millions)Interest expense, net
    
    $
    1.9
    
    
    $
    3.2
    
    
    $
    (1.3
    )
    
    
    (39.5
    )%
  Income Tax Expense
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Decrease($s in millions)Income tax expense
    
    $
    1.5
    
    
    $
    1.7
    
    
    $
    (0.2
    )
    
    
    (11.2
    )%
  Business Information Division Results
 Revenues
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase (decrease)($s in millions)Total Business Information Division Revenues
    
    $
    22.2
    
    
    $
    21.0
    
    
    $
    1.2
    
    
    
    6.0
    %Display and classified advertising revenues
    
    
    8.4
    
    
    
    8.7
    
    
    
    (0.3
    )
    
    
    (3.2
    )%Public notice revenues
    
    
    10.2
    
    
    
    8.5
    
    
    
    1.7
    
    
    
    20.1
    %Circulation revenues
    
    
    3.3
    
    
    
    3.2
    
    
    
    0.1
    
    
    
    4.6
    %Other revenues
    
    
    0.3
    
    
    
    0.6
    
    
    
    (0.3
    )
    
    
    (50.6
    )%
 year-over-year
  42




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##### Table of Contents



The Mecklenburg Times non-renewals Lawyers USA
 The Daily Record
 Operating Expenses
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total operating expenses
    
    $
    18.7
    
    
    $
    16.9
    
    
    $
    1.8
    
    
    
    10.9
    %Direct operating expense
    
    
    8.0
    
    
    
    7.4
    
    
    
    0.6
    
    
    
    7.9
    %Selling, general and administrative expenses
    
    
    9.5
    
    
    
    8.3
    
    
    
    1.2
    
    
    
    13.9
    %Depreciation expense
    
    
    0.5
    
    
    
    0.4
    
    
    
    0.1
    
    
    
    16.9
    %Amortization expense
    
    
    0.8
    
    
    
    0.8
    
    
    
    
    
    
    
    5.1
    %
   43




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##### Table of Contents



Professional Services Division Results
 Revenues
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total Professional Services Division revenues
    
    $
    25.7
    
    
    $
    17.4
    
    
    $
    8.3
    
    
    
    47.9
    %Mortgage default
processing services and
related revenues
    
    
    21.2
    
    
    
    13.7
    
    
    
    7.5
    
    
    
    54.7
    %Appellate services revenues
    
    
    4.5
    
    
    
    3.7
    
    
    
    0.8
    
    
    
    22.3
    %
   Operating Expenses
 Three Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total operating expenses
    
    $
    19.6
    
    
    $
    11.8
    
    
    $
    7.8
    
    
    
    66.2
    %Direct operating expense
    
    
    9.9
    
    
    
    6.0
    
    
    
    3.9
    
    
    
    65.5
    %Selling, general and
administrative expenses
    
    
    6.6
    
    
    
    4.1
    
    
    
    2.6
    
    
    
    63.9
    %Depreciation expense
    
    
    0.8
    
    
    
    0.7
    
    
    
    0.2
    
    
    
    24.5
    %Amortization expense
    
    
    2.2
    
    
    
    1.1
    
    
    
    1.1
    
    
    
    103.1
    %
    44




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##### Table of Contents



Nine Months Ended September 30, 2008
Compared to Nine Months Ended September 30, 2007
 Revenues
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total revenues
    
    $
    130.9
    
    
    $
    111.1
    
    
    $
    19.9
    
    
    
    17.9
    %
  
    
    $12.0 million of revenues from businesses we acquired on or after January 1, 2007, which
we refer to as acquired businesses. These revenues consisted of: (1) $0.7 million in
revenues from the assets of Venture Publications (including the Mississippi Business
Journal) acquired on March 30, 2007; (2) $1.5 million in
revenues from the assets of Legal and Business Publishers (including The Mecklenburg Times)
acquired on February 13, 2008; (3) $3.3 million in revenues from the mortgage default
processing services business of Wilford & Geske acquired on February 22, 2008; and (4) $6.6
million in revenues from the NDEx business acquired in September 2008. Acquired businesses do
not include fold in acquisitions, which we define below.
    
    $7.8 million of revenues from organic revenue growth, primarily from an increase in
public notices placed with our Business Information products. We define organic revenue
growth as the net increase in revenue produced by: (1) businesses we owned and operated
prior to January 1, 2007, which we refer to as existing businesses; (2) customer lists,
goodwill or other finite-life intangible assets we purchased on or after January 1, 2007, and
integrated into our existing businesses; and (3) businesses that we account for as
acquisitions under the purchase method of accounting in accordance with SFAS No. 141
Business Combinations, but do not report separately for internal financial purposes, which
we refer to as fold in acquisitions.
  Operating Expenses
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total operating expenses
    
    $
    109.5
    
    
    $
    90.8
    
    
    $
    18.8
    
    
    
    20.7
    %Direct operating expense
    
    
    46.4
    
    
    
    38.2
    
    
    
    8.2
    
    
    
    21.5
    %Selling, general and administrative expenses
    
    
    51.8
    
    
    
    44.2
    
    
    
    7.6
    
    
    
    17.3
    %Depreciation expense
    
    
    3.8
    
    
    
    2.9
    
    
    
    0.9
    
    
    
    32.9
    %Amortization expense
    
    
    7.6
    
    
    
    5.6
    
    
    
    2.0
    
    
    
    35.8
    %
  Direct Operating Expenses.
  45




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##### Table of Contents



Selling, General and Administrative Expenses.
 Depreciation and Amortization Expense.
 Break-up Fee and Other Income (Expense), net
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Break-up fee and other income (expense), net
    
    $
    (1.5
    )
    
    $
    
    
    
    $
    1.5
    
    
    
    100.0
    %
  Adjusted EBITDA
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Adjusted EBITDA
    
    $
    38.3
    
    
    $
    32.4
    
    
    $
    5.9
    
    
    
    18.1
    %Adjusted EBITDA margin
    
    
    29.2
    %
    
    
    29.2
    %
    
    
    0.1
    %
    
    
    0.2
    %
  Cash Earnings and Cash Earnings per Diluted Share
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase (decrease)Cash earnings (in millions)
    
    $
    16.1
    
    
    $
    13.2
    
    
    $
    2.9
    
    
    
    21.9
    %Cash earnings per diluted share
    
    $
    0.62
    
    
    $
    1.03
    
    
    $
    (0.41
    )
    
    
    (39.8
    )%
   46




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Non-Cash Interest Expense Related to Redeemable Preferred Stock
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Decrease($s in millions)Non-cash interest
expense related to
redeemable
preferred stock
    
    $
    
    
    
    $
    66.1
    
    
    $
    (66.1
    )
    
    
    (100.0
    %)
  Interest Expense, Net
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Decrease($s in millions)Interest expense, net
    
    $
    4.7
    
    
    $
    6.6
    
    
    $
    (1.9
    )
    
    
    (29.4
    )%
  Income Tax Expense
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Income tax expense
    
    $
    7.3
    
    
    $
    5.8
    
    
    $
    1.5
    
    
    
    25.9
    %
  Business Information Division Results
 Revenues
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase (decrease)($s in millions)Total Business Information Division Revenues
    
    $
    68.4
    
    
    $
    62.0
    
    
    $
    6.4
    
    
    
    10.3
    %Display and classified advertising revenues
    
    
    25.3
    
    
    
    26.0
    
    
    
    (0.6
    )
    
    
    (2.5
    )%Public notice revenues
    
    
    31.4
    
    
    
    23.8
    
    
    
    7.6
    
    
    
    32.1
    %Circulation revenues
    
    
    10.4
    
    
    
    10.2
    
    
    
    0.2
    
    
    
    2.4
    %Other revenues
    
    
    1.3
    
    
    
    2.1
    
    
    
    (0.9
    )
    
    
    (39.8
    )%
  47




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The Daily Record
 Operating Expenses
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total operating expenses
    
    $
    56.7
    
    
    $
    49.7
    
    
    $
    7.0
    
    
    
    14.1
    %Direct operating expense
    
    
    23.7
    
    
    
    21.3
    
    
    
    2.4
    
    
    
    11.4
    %Selling, general and administrative expenses
    
    
    29.3
    
    
    
    25.1
    
    
    
    4.2
    
    
    
    16.9
    %Depreciation expense
    
    
    1.4
    
    
    
    1.0
    
    
    
    0.3
    
    
    
    30.1
    %Amortization expense
    
    
    2.3
    
    
    
    2.3
    
    
    
    
    
    
    
    1.9
    %
  Professional Services Division Results
 Revenues
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total Professional Services Division revenues
    
    $
    62.5
    
    
    $
    49.0
    
    
    $
    13.5
    
    
    
    27.5
    %Mortgage default
processing services and
related revenues
    
    
    51.1
    
    
    
    37.9
    
    
    
    13.2
    
    
    
    34.8
    %Appellate services revenues
    
    
    11.5
    
    
    
    11.2
    
    
    
    0.3
    
    
    
    2.9
    %
  48




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##### Table of Contents



Operating Expenses
 Nine Months Ended September 30,2008
    
    
    2007
    
    
    Increase($s in millions)Total operating expenses
    
    $
    45.7
    
    
    $
    34.1
    
    
    $
    11.6
    
    
    
    34.0
    %Direct operating expense
    
    
    22.7
    
    
    
    16.9
    
    
    
    5.8
    
    
    
    34.2
    %Selling, general and
administrative expenses
    
    
    15.9
    
    
    
    12.4
    
    
    
    3.4
    
    
    
    27.7
    %Depreciation expense
    
    
    1.8
    
    
    
    1.4
    
    
    
    0.4
    
    
    
    29.1
    %Amortization expense
    
    
    5.3
    
    
    
    3.3
    
    
    
    2.0
    
    
    
    59.1
    %
   Off Balance Sheet Arrangements
   49




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Liquidity and Capital Resources
  September 30,
    
    
    December 31,2008
    
    
    2007Cash
    
    $
    1,999
    
    
    $
    1,346Working capital (deficit)
    
    
    (5,429
    )
    
    
    (5,460
    )Long-term debt, less current portion
    
    
    164,750
    
    
    
    56,301
 Nine MonthsEnded September 30,2008
    
    
    2007Net cash provided by operating activities
    
    $
    16,211
    
    
    $
    20,336Net cash used in investing activities:Acquisitions and investments
    
    
    (183,518
    )
    
    
    (17,335
    )Capital expenditures
    
    
    (3,957
    )
    
    
    (5,724
    )Net cash provided by financing activities
    
    
    171,817
    
    
    
    5,848
 Cash Flows Provided by Operating Activities
     September 30,
    
    
    December 31,2008
    
    
    2007Allowance for doubtful accounts as a percentage of gross accounts receivable
    
    
    3.3
    %
    
    
    5.8
    %Day sales outstanding
    
    
    68.9
    
    
    
    54.6
   50




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Cash Flows Used by Investing Activities
    Cash Flows Provided by Financing Activities
    51




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##### Table of Contents



Credit Agreement.
 The Mecklenburg Times
     52




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##### Table of Contents




    
    incurring indebtedness (including guarantee obligations) or liens;
    
    entering into mergers, consolidations, liquidations or dissolutions;
    
    selling assets;
    
    entering into certain acquisition transactions;
    
    forming or entering into partnerships and joint ventures;
    
    entering into negative pledge agreements;
    
    paying dividends, redeeming or repurchasing shares or making other payments in respect of
capital stock;
    
    entering into transactions with affiliates;
    
    making investments;
    
    entering into sale and leaseback transactions; and
    
    changing our line of business.
  Future Needs
     53




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
  Accounting for Derivative Instruments and Hedging Activities
   
 Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
 15d-15(f)
 
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   54




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##### Table of Contents



Item 1A. Risk Factors
  Regulation of sub-prime, Alt-A and other residential mortgage products, including bills introduced
in states where we do business, the Hope for Homeowners Act and the Emergency Economic
Stabilization Act, and voluntary foreclosure relief programs developed by lenders, loan servicers
and the Hope Now Alliance, a consortium that includes loan servicers, may have an adverse effect on
or restrict our mortgage default processing services and public notice operations.
 .
   55




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We may be required to incur additional indebtedness or raise additional capital to fund our
operations and acquisitions, repay our indebtedness and to fund capital expenditures and this
additional cash may not be available to us on satisfactory timing or terms or at all.
  If our goodwill or finite-life intangible assets become impaired, we may be required to record
a significant charge to earnings.*
 Note 5
  Future changes in, or interpretations of, financial accounting standards or practices or
existing taxation rules or practices may cause adverse unexpected revenue and expense fluctuations
and adversely affect our reported results of operations.*
 SFAS
No. 141R
  56




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##### Table of Contents



Our common stock has a limited trading history and, during that time, the market price of our
common stock has been , and may continue to be , volatile. The market price of our common stock
depends on a variety of factors, which could cause our common stock to trade at prices below the
price you have paid.
  
    
    variations in our quarterly operating results;
    
    changes in the legal or regulatory environment affecting our business;
    
    changes in our earnings estimates or expectations as to our future
financial performance, including financial estimates by securities
analysts and investors;
    
    the contents of published research reports about us or our industry or
the failure of securities analysts to cover our common stock;
    
    additions or departures of key management personnel;
    
    any increased indebtedness we may incur in the future;
    
    announcements by us or others and developments affecting us;
    
    actions by institutional stockholders;
    
    changes in market valuations of similar companies;
    
    speculation or reports by the press or investment community with
respect to us or our industry in general; and
    
    general economic, market and political conditions.
  Future sales of our common stock in the public market may adversely affect the market price of our
common stock or our ability to raise additional capital.
   57




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##### Table of Contents



Item 2. Unregistered Sales of Securities and Use of Proceeds
   
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibit Index
 ExhibitNo
    
    Title
    
    Method of Filing2.1
    *
    
    Equity Purchase Agreement among the
Company, APC and the Sellers named therein
dated July 28, 2008
    
    Incorporated by
reference to
Exhibit 2.1 of our
current report on
Form 8-K filed with
the SEC on July 28,
200810.1
    
    
    Securities Purchase Agreement among the
Company and the Purchasers named therein
dated July 28, 2008
    
    Incorporated by
reference to
Exhibit 10.1 of our
current report on
Form 8-K filed with
the SEC on July 28,
200810.2
    
    
    First Amendment to Second Amended and
Restated Credit Agreement with the Company,
its consolidated subsidiaries and a
syndicate of lenders dated July 28, 2008
    
    Incorporated by
reference to
Exhibit 10.2 of our
current report on
Form 8-K filed with
the SEC on July 28,
200810.3
    **
    
    Amended and Restated Services Agreement
dated September 2, 2008 by and between
National Default Exchange, LP and Barrett
Daffin Frappier Turner & Engel, LLP
    
    Incorporated by
reference to
Exhibit 10.1 of our
current report on
Form 8-K filed with
the SEC on
September 2, 200810.4
    
    
    Amendment No. 4 to the Amended and Restated
Operating Agreement of American Processing
Company, LLC
    
    Incorporated by
reference to
Exhibit 10.2 of our
current report on
Form 8-K filed with
the SEC on
September 2, 200831.1
    
    
    Section 302 Certification of James P. Dolan
    
    Filed herewith31.2
    
    
    Section 302 Certification of Scott J. Pollei
    
    Filed herewith32.1
    
    
    Section 906 Certification of James P. Dolan
    
    Furnished herewith32.2
    
    
    Section 906 Certification of Scott J. Pollei
    
    Furnished herewith
 
 *
    
    The schedules to the Equity Purchase Agreement have been omitted pursuant to Item 601(b)(2) of
Regulation S-K. We agree to furnish supplementally to the SEC, upon request, a copy of the omitted
schedules.**
    
    Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted
portions have been separately filed with the Securities and Exchange Commission.  58




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SIGNATURES
  DOLAN MEDIA COMPANYDated: November 12, 2008By:
    /s/ James P. DolanJames P. DolanChairman, Chief Executive Officer and President
(Principal Executive Officer)Dated: November 12, 2008By:
    /s/ Scott J. PolleiScott J. PolleiExecutive Vice President and Chief Financial Officer
(Principal Financial Officer)Dated: November 12, 2008By:
    /s/ Vicki J. DuncombVicki J. DuncombVice President, Finance
(Principal Accounting Officer)  59




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##### Table of Contents



Exhibit Index
 ExhibitNo
    
    Title
    
    Method of Filing31.1
    
    
    Section 302 Certification of James P. Dolan
    
    Filed herewith31.2
    
    
    Section 302 Certification of Scott J. Pollei
    
    Filed herewith32.1
    
    
    Section 906 Certification of James P. Dolan
    
    Furnished herewith32.2
    
    
    Section 906 Certification of Scott J. Pollei
    
    Furnished herewith
  60