Daily Journal Corporation Announces Financial Results for the Nine Months Ended June 30, 2014
August 18, 2014 at 16:35 PM EDT
LOS ANGELES, Aug. 18, 2014 (GLOBE NEWSWIRE) -- During the nine months ended June 30, 2014, Daily Journal Corporation (Nasdaq:DJCO) had a consolidated pretax loss of $46,000 as compared to pretax income of $4,086,000 in the prior year period. This was a decrease in profits of $4,132,000 that included $2,531,000 of additional amortizations of intangible acquisition costs.
Consolidated revenues were $31,926,000 and $26,650,000 for the nine months ended June 30, 2014 and 2013, respectively. This increase of $5,276,000 (20%) was primarily from additional New Dawn (acquired in December 2012) and ISD (acquired in September 2013) revenues of $8,038,000, partially offset by a reduction in trustee sale notice and related service fee revenues of $2,429,000, which is consistent with the recent trend in those revenues.
The Company's traditional business segment pretax income decreased by $3,836,000 (49%) to $4,033,000 from $7,869,000, primarily resulting from the reduction in trustee sale notice and related service fee revenues. The Company's technology business segment had a pretax loss of $4,079,000 compared to $3,783,000 in the prior year period. The expenses in the 2014 period included $3,642,000 of intangible amortization expenses related to the two acquisitions as compared with $1,111,000 of intangible amortization expenses for the first acquisition in the prior year period.
For the nine months ended June 30, 2014, the Company recorded an income tax benefit of $2,300,000 on a pretax loss of $46,000. The income tax benefit was the net result of applying the projected annual tax rate of 4.96% adjusted for any discrete items recorded year to date (mainly a permanent benefit related to differences in acquired liabilities for tax versus GAAP purposes existing at the time of the acquisition of New Dawn). As a result of this tax benefit, the Company's after tax consolidated net income for the nine months ended June 30, 2014 was $2,254,000, compared to $2,811,000 in the nine-month period ended June 30, 2013. Accordingly, after tax consolidated net income per share decreased to $1.63 from $2.04 per share in the prior year period.
At June 30, 2014, the Company held marketable securities valued at $166,823,000, including unrealized gains of $118,845,000. It accrued a liability of $46,260,000 for income taxes due only upon the sales of the net 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.
Comprehensive income includes net income and unrealized net gains on investments, net of taxes, as summarized below:
Certain financial information for the Company's reportable segments is summarized below:
* Includes New Dawn's financial results from December 5, 2012 through June 30, 2013 with revenues of $6,430,000 and expenses of $7,168,000 (including intangible amortization expenses of $1,111,000).
The Company expects to file its quarterly report on Form 10-Q for the period ended June 30, 2014 today. When it does, the Company expects once again to be current in its filing of periodic reports with the Securities and Exchange Commission.
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., New Dawn Technologies, Inc. and ISD Technologies, Inc. are wholly-owned subsidiaries and supply case management software systems and related products to courts and other justice agencies.
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.
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