Policy Management System Corp., also known as Mynd, lost $39.2 million, or $1.21 a share, in the second quarter, bringing its first-half loss to $55.2 million.
This year has been hard for the Columbia, S.C., vendor of mortgage origination software, which is doing business as Mynd even though shareholders have yet to approve the name change. Aside from mounting losses, it has had to deal with legal problems and uncertainty about future ownership. Salvation may be a few weeks away.
A tender offer of $16 a share from Computer Sciences Corp. of El Segundo, Calif., made June 20, was extended last week until Sept. 12. Mynd's stock jumped on the news; it was trading at $13 late Friday, up 5% from Thursday's close.
Mynd has attributed its stunted performance to three factors: rising interest rates and the resulting decrease in use of its origination technology; charges associated with the termination of a merger agreement with Welsh, Carson, Anderson & Stowe of New York; and lenders' apprehensions about using its software because it has been in talks to sell to other companies for five months.
Larry Wilson, the chairman and chief executive officer of Mynd, said the losses "are undeniably affected by market uncertainty associated with the company's ownership." Timothy V. Williams, chief financial officer, said, "Customers are delaying licensing decisions until the merger's complete."
The company has been trying to sell itself since reporting a loss for the first quarter, analysts said; it has received three offers. Welsh, Carson made the first bid in March, offering $14 a share. On April 28, Electronic Data Systems Corp. of Plano, Tex., came in with an offer of $18 to $20 per share but rescinded it after completing due diligence.
Mynd agreed to merge with Welsh Carson on March 30 but terminated the deal after CSC extended its offer of $16 per share on June 20. Though a merger may improve Mynd's fortunes, the company still faces a lawsuit accusing it of failing to deliver on promises to mortgage lender clients.
In February, Chase Manhattan Mortgage Corp. sued Mynd and a subsidiary, Cybertek, for $20 million, charging that Cybertek sold computer programs "that do not work, were not timely developed, and do not meet Chase's specified needs."
A spokesman for Mynd said Friday that activity on the lawsuit has been suspended pending the outcome of the merger with CSC.
