Daily Journal Corporation Announces Financial Results for fiscal 2017 ended September 30, 2017
December 13, 2017 at 15:43 PM EST
LOS ANGELES, Dec. 13, 2017 (GLOBE NEWSWIRE) -- During fiscal 2017, Daily Journal Corporation (NASDAQ:DJCO) had consolidated revenues of $41,384,000 as compared with $41,612,000 in the prior year. This decrease of $228,000 was primarily from the reduction in (i) The Traditional Business’s trustee sale notice and its related service fee revenues of $724,000 and (ii) Journal Technologies’ public service fees of $1,051,000 primarily due to a reduction in the number of traffic tickets processed online for the public to pay traffic citations, partially offset by increased Journal Technologies’ license and maintenance fees of $1,279,000 and consulting fees of $391,000. Consolidated operating expenses increased by $6,299,000 (13%) to $54,551,000 from $48,252,000, primarily resulting from additional personnel costs and services for Journal Technologies.
The Company’s Traditional Business segment’s pretax income decreased by $1,501,000 to a pretax loss of $360,000 from pretax income of $1,141,000. Trustee sale notice and its related service fee revenues decreased by $724,000. Journal Technologies’ business segment pretax loss increased by $4,213,000 (53%) to $12,142,000 from $7,929,000, after recording the interest and penalty expense reversal of $743,000 for uncertain and unrecognized tax benefits in March 2017 mentioned below, and including the amortization costs of intangible assets of $4,895,000 for both fiscal 2017 and 2016. This increase in loss primarily resulted from (i) the decreases in public service fees of $1,051,000, partially offset by increased licensing and maintenance fees of $1,279,000 and consulting fees of $391,000, and (ii) the increases in personnel costs of $3,817,000 primarily for installation services.
The Company’s non-operating income, net of expenses, increased by $1,437,000 (39%) to $5,099,000 from $3,662,000 primarily because of the interest and penalty expense reversal of $743,000 for uncertain and unrecognized tax benefits and more dividend income, partially offset by increases in the interest rate on the two fiscal 2013 acquisition margin loans and additional interest expense for the Company’s real estate loan incurred in November 2015 for the purchase of an office building in Utah. During fiscal 2017, consolidated pretax loss was $8,068,000 as compared with $2,978,000 in the prior year.
During fiscal 2017, the Company recorded an income tax benefit of $7,150,000 on pretax loss of $8,068,000. The effective tax rate was greater than the statutory rate primarily due to the dividends received deduction which increases the loss for tax purposes. On pretax loss of $2,978,000 for fiscal 2016, the Company recorded an income tax benefit of $1,935,000. The effective tax rate was greater than the statutory rate mainly resulting from the dividends received deduction. The Company’s effective tax rate was 89% and 65% for fiscal 2017 and 2016, respectively.
There was a consolidated net loss after tax benefits of $918,000 (-$0.66 per share) for fiscal 2017 as compared with $1,043,000 (-$0.76 per share) in the prior year.
At September 30, 2017, the Company held marketable securities valued at $229,265,000, including net unrealized gains of $165,872,000, and accrued a liability of $64,550,000 for income taxes due only upon the sales of the net appreciated securities.
Comprehensive income includes net losses and unrealized net gains (losses) on investments, net of taxes, as summarized below:
Daily Journal Corporation publishes newspapers and web sites covering California and Arizona, and produces several specialized information services. Journal Technologies, Inc. is a wholly-owned subsidiary and supplies 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.