Daily Journal Corporation Announces Financial Results for the Three Months Ended December 31, 2012

  Daily Journal Corporation Announces Financial Results for the Three Months
  Ended December 31, 2012

Business Wire

LOS ANGELES -- February 14, 2013

During the three months ended December 31, 2012, consolidated pretax income of
Daily Journal Corporation (NASDAQ:DJCO) decreased by $1,322,000 (51%) to
$1,264,000 from $2,586,000 in the comparable prior year period, primarily
resulting from (i) a reduction in trustee sale notice and related service fee
revenues of $567,000 and (ii) an increase in operating costs and expenses of
$1,328,000, including $938,000 for the Company’s new subsidiary, New Dawn
Technologies, Inc., partially offset by New Dawn’s additional revenues of
$247,000 and an increase in dividends and interest income of $241,000. (In
December 2012, the Company purchased all of the outstanding stock of New Dawn,
which is based in Logan, Utah and provides products and services to courts and
other justice agencies.)

The Company’s traditional business segment pretax income decreased by $275,000
to $2,755,000 from $3,030,000 primarily because of the reduction in trustee
sale notice and related service fee revenues of $567,000, partially offset by
a reduction in operating costs and expenses of $9,000.

Sustain’s and New Dawn’s business segment had a pretax loss of $1,491,000
compared to $444,000 in the prior year period primarily due to (i) the
addition of New Dawn’s pretax loss of $691,000 and (ii) an increase in
Sustain’s personnel costs during the three months ended December 31, 2012.

Comprehensive Income
                                         
                                         Three months ended December 31
                                            2012            2011
                                                         
Net income                               $   834,000     $   1,706,000
Net change in unrealized appreciation of
                                            7,197,000       3,919,000
investments (net of taxes)
Comprehensive income                     $   8,031,000   $   5,625,000
                                                             

Consolidated revenues were $7,693,000 and $7,920,000 for the three months
ended December 31, 2012 and 2011, respectively. This decrease of $227,000 was
primarily from the reduction in trustee sale notice and related service fee
revenues of $567,000, partially offset by New Dawn’s additional maintenance
revenues of $247,000. Although public notice advertising revenues were down
compared to the prior year period, and although that trend is expected to
continue, 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 December 31, 2012, the Company held marketable securities valued at
$114,120,000, including unrealized gains of $64,427,000. It accrued a
liability of $25,664,000 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 $834,000 and $1,706,000 for the three months ended
December 31, 2012 and 2011, respectively. Net income per share decreased to
$.60 from $1.24, primarily due to the loss attributable to New Dawn.

Financial Information for the Company’s Reportable Segments

                               Traditional      Sustain &
                              business                        Total
                                                New Dawn*
Three months ended December
31, 2012
Revenues                       $ 6,695,000      $ 998,000        $ 7,693,000
Pretax income (loss)             2,755,000        (1,491,000 )     1,264,000
Income tax (expense) benefit     (930,000   )     500,000          (430,000  )
Net income (loss)                1,825,000        (991,000   )     834,000
                                                                 
                               Traditional      Sustain          Total
                               business
Three months ended December
31, 2011
Revenues                       $ 7,212,000      $ 708,000        $ 7,920,000
Pretax income (loss)             3,030,000        (444,000   )     2,586,000
Income tax (expense) benefit     (1,030,000 )     150,000          (880,000  )
Net income (loss)                2,000,000        (294,000   )     1,706,000

* Includes New Dawn’s financial results from December 5 through December 31,
2012 with revenues of $247,000, expenses of $938,000 (including depreciation
and amortization expenses of $163,000), and inter-company income tax benefits
of $230,000.

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.
and New Dawn Technologies, Inc. are wholly-owned subsidiaries and supply case
management software systems and related products to courts and other justice
agencies.

Daily Journal Corporation’s Form 10-Q for the period ended December 31, 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 the Form 10-Q we expect to file
today and our Annual Report on Form 10-K for the fiscal year ended September
30, 2012.

Contact:

Daily Journal Corporation
Tu To, (213) 229-5436
 
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