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Daily Journal Corporation Announces Financial Results for the Fiscal Year ended September 30, 2012



  Daily Journal Corporation Announces Financial Results for the Fiscal Year
  ended September 30, 2012

Business Wire

LOS ANGELES -- December 14, 2012

During the fiscal year ended September 30, 2012, consolidated pretax income of
Daily Journal Corporation (NASDAQ:DJCO) decreased by $4,099,000 to $7,901,000
from $12,000,000 in the prior year, primarily resulting from (i) a reduction
in trustee sale notice and related service fee revenues of $2,216,000,
partially offset by a reduction in operating costs and expenses of $519,000
and an increase in dividends and interest income of $734,000, and (ii) the
recording of an impairment loss of $2,855,000 ($1,720,000 net of taxes)
related to the marketable securities of one issuer held by the Company as an
investment. This impairment does not necessarily indicate the loss in value of
these securities is permanent. U.S. GAAP requires that the Company recognize
other-than-temporary impairment losses in earnings rather than in accumulated
comprehensive income when the security prices remain below cost for a period
of time that may be deemed excessive even in instances where the Company
possesses the ability and intent to hold the security.

The Company’s traditional business segment income from operations decreased by
$1,547,000 to $10,877,000 from $12,424,000 primarily because of the reduction
in trustee sale notice and related service fee revenues, partially offset by
the reduction in operating costs and expenses, including a reduction in
expenses related to the Company’s Management Incentive Plan, professional
service fees and rents.

Sustain’s business segment had a pretax loss of $2,188,000 compared to
$1,622,000 in the prior year period primarily due to an increase in personnel
costs and a decrease in consulting and support revenues from governmental
agencies, reflecting in part continuing governmental budget constraints.

Comprehensive income includes net income and net unrealized gains on
investments, net of taxes.

 
Comprehensive Income
                                                 Fiscal ended September 30
                                                 2012           2011
                                                                 
Net income                                       $ 5,541,000    $ 7,840,000
Net change in unrealized appreciation of           15,085,000     (3,627,000 )
investments (net of taxes)
Reclassification of other-than-temporary
impairment losses recognized in net income         1,720,000      ---         
(net of taxes)
Comprehensive income                             $ 22,346,000   $ 4,213,000   
                                                                              

Consolidated revenues were $31,874,000 and $34,513,000 for fiscal 2012 and
2011, respectively. This decrease of $2,639,000 was primarily from decreases
of $2,216,000 in trustee sale notice and related service fee revenues and
$237,000 in circulation revenues. Although public notice advertising revenues
were down compared to the prior year period, the Company still continued to
benefit from the large number of foreclosures in California and Arizona for
which public notice advertising is required by law.

At September 30, 2012, the Company held marketable securities valued at
$102,156,000, including unrealized gains of $52,464,000. It accrued a
liability of $20,898,000 for income taxes due only upon the sales of the
appreciated securities. The marketable securities consist of common stocks of
three Fortune 200 companies, two foreign companies and certain bonds of a
sixth, and most of the unrealized gains were in the common stocks.

Consolidated net income was $5,541,000 and $7,840,000 for the fiscal year
ended September 30, 2012 and 2011, respectively. Net income per share
decreased to $4.01 from $5.68, primarily due to the recording of the after-tax
impairment losses on investments of $1,720,000.

 
Financial Information for the Company’s Reportable Segments
 
                           Traditional         Sustain          Total
                           business
Fiscal 2012
Revenues                   $  28,956,000       $ 2,918,000      $ 31,874,000
Income (loss) from            10,877,000         (2,195,000 )     8,682,000
operations
Other-than-temporary
impairment losses             2,855,000          ---              2,855,000

on investments
Pretax income (loss)          10,089,000         (2,188,000 )     7,901,000
Income tax (expense)          (3,340,000  )      980,000          (2,360,000 )
benefit
Net income (loss)             6,749,000          (1,208,000 )     5,541,000
                                                                 
Fiscal 2011
Revenues                   $  31,532,000       $ 2,981,000      $ 34,513,000
Income (loss) from            12,424,000         (1,622,000 )     10,802,000
operations
Pretax income (loss)          13,622,000         (1,622,000 )     12,000,000
Income tax (expense)          (4,735,000  )      575,000          (4,160,000 )
benefit
Net income (loss)             8,887,000          (1,047,000 )     7,840,000
                                                                              

Daily Journal Corporation publishes newspapers and web sites covering
California and Arizona, as well as the California Lawyer magazine, and
produces several specialized information services. Sustain Technologies, Inc.,
a wholly owned subsidiary, supplies case management software systems and
related products to courts and other justice agencies. In December 2012, the
Company purchased all of the outstanding stock of New Dawn Technologies, Inc.
based in Logan, Utah, which provides products and services similar to those of
Sustain.

Daily Journal Corporation’s Form 10-K for the fiscal year ended September 30,
2012 is expected to be filed electronically with the Securities and Exchange
Commission today. We invite your attention to the Form 10-K which contains our
consolidated financial statements, management’s discussion and analysis of
financial condition and results of operations and other information.

This press release includes “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Certain statements contained in
this press release are “forward-looking” statements that involve risks and
uncertainties that may cause actual future events or results to differ
materially from those described in the forward-looking statements. Words such
as “expects,” “intends,” “anticipates,” “should,” “believes,” “will,” “plans,”
“estimates,” “may,” variations of such words and similar expressions are
intended to identify such forward-looking statements. We disclaim any
intention or obligation to revise any forward-looking statements whether as a
result of new information, future developments, or otherwise. Although we
believe that the expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will prove to have
been correct. Additional information concerning factors that could cause
actual results to differ materially from those in the forward-looking
statements is contained from time to time in documents we file with the
Securities and Exchange Commission, including our Annual Report on Form 10-K
we expect to file today for the fiscal year ended September 30, 2012

Contact:

Daily Journal Corporation
Tu To, 213-229-5436
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