Daily Journal Corp. (DJCO, Financial) filed Quarterly Report for the period ended 2009-06-30.
DAILY JOURNAL CORPORATION publishes newspapers in California Washington Arizona Colorado and Nevada. They publish the California Lawyer magazine and produce several specialized information services. It also publishes The Code of Colorado Regulations and serves as a newspaper representative specializing in public notice advertising. Essentially all of the Company\'s operations are based in California Arizona Colorado and Washington. Daily Journal Corp. has a market cap of $73.5 million; its shares were traded at around $50.5 with a P/E ratio of 9.5 and P/S ratio of 1.8. Daily Journal Corp. had an annual average earning growth of 7.4% over the past 5 years.
Consolidated revenues were $30,315,000 and $30,078,000 for the nine months ended June 30, 2009 and 2008, respectively. This increase of $237,000 (1%) was primarily from an increase in public notice advertising revenues of $2,224,000, which more than offset a decrease of $791,000 (22%) in display advertising revenues and a $1,295,000 (43%) decrease in classified advertising revenues. The Company continued to benefit from the large number of foreclosure sales in California and Arizona, for which public notice advertising is required by law. The Company\'s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals ("The Daily Journals"), accounted for about 96% of the total public notice advertising revenues. Public notice advertising revenues and related advertising and other service fees constituted about 53% of the Company\'s total revenues. (Consolidated revenues were $10,852,000 and $11,154,000 for the three months ended June 30, 2009 and 2008, respectively.)
Costs and expenses decreased by $891,000 (4%) to $21,456,000 from $22,347,000. Total personnel costs decreased by $675,000 (5%) to $12,710,000 primarily due to savings from departmental reorganizations, partially offset by an annual salary adjustment. Newsprint and printing expenses decreased by $159,000 (10%) primarily resulting from fewer subscribers and paper price decreases. Postage and delivery expenses decreased by $143,000 (11%) mainly because there were fewer subscribers. (Costs and expenses were $7,260,000 and $7,827,000 for the three months ended June 30, 2009 and 2008, respectively.)
Consolidated net income was $5,773,000 and $5,149,000 for the nine months ended June 30, 2009 and 2008, respectively. On a pretax profit of $9,383,000 and $8,299,000 for the nine months ended June 30, 2009 and 2008, the Company recorded a tax provision of $3,610,000 and $3,150,000, respectively. The Internal Revenue Service has been examining the tax returns for years 2002 to 2007 and has proposed an assessment that, if upheld, would result in disallowance of about $700,000 of previously claimed research and development credits. As of June 30, 2009, the Company had approximately $700,000 of unrecognized tax benefits, all of which would have an effective rate impact if recognized. The Company is continuing to contest the issue in the United States Tax Court, and the ultimate resolution of this dispute cannot be ascertained at this time. Net income per share increased to $4.08 from $3.54.
During the nine months ended June 30, 2009, the Company\'s cash and cash equivalents, U.S. Treasury Note and Bill and marketable security positions increased by $29,211,000, including an unrealized gain on the investments of $25,898,000. Cash and cash equivalents and U.S. Treasury Notes and Bills were used primarily for the purchase of marketable securities of $20,424,000, capital assets of $182,000 (mostly computer software and office equipment) and the Company s common shares for an aggregate amount of $1,970,000. All the marketable securities are common stocks and bonds, and almost all of the unrealized appreciation was in the common stocks. The cash provided by operating activities of $5,695,000 included a net decrease in deferred subscription and other revenues of $619,000. Proceeds from the sale of subscriptions from newspapers, court rule books and other publications and for software licenses and maintenance and other services are recorded as deferred revenue and are included in earned revenue only when the services are rendered. Cash flows from operating activities increased by $1,488,000 during the nine months ended June 30, 2009 as compared to the prior period primarily due to the decreases in accounts receivable of $1,365,000.
As of June 30, 2009, the Company had working capital of $40,794,000, including the liability for deferred subscription and other revenues of $5,228,000 which are scheduled to be earned within one year and the deferred tax liability of $9,970,000 for the unrealized gain on the investments. The Company believes that it will be able to fund its operations for the foreseeable future through its cash flows from operating activities and its current working capital.
Read the The complete ReportDJCO is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, Bruce Berkowitz of Fairholme Capital Management.
DAILY JOURNAL CORPORATION publishes newspapers in California Washington Arizona Colorado and Nevada. They publish the California Lawyer magazine and produce several specialized information services. It also publishes The Code of Colorado Regulations and serves as a newspaper representative specializing in public notice advertising. Essentially all of the Company\'s operations are based in California Arizona Colorado and Washington. Daily Journal Corp. has a market cap of $73.5 million; its shares were traded at around $50.5 with a P/E ratio of 9.5 and P/S ratio of 1.8. Daily Journal Corp. had an annual average earning growth of 7.4% over the past 5 years.
Highlight of Business Operations:
During the nine months ended June 30, 2009, consolidated pretax income increased by $1,084,000 (13%) to $9,383,000 from $8,299,000 in the nine months ended June 30, 2008. The Company s traditional business segment pretax profit increased by $1,027,000 (12%) to $9,351,000 from $8,324,000 primarily because of an increase in trustee foreclosure sale notices and a decrease in personnel costs. Sustain s business segment pretax income increased $57,000 to $32,000 from a loss of $25,000, primarily because of increased consulting revenues.Consolidated revenues were $30,315,000 and $30,078,000 for the nine months ended June 30, 2009 and 2008, respectively. This increase of $237,000 (1%) was primarily from an increase in public notice advertising revenues of $2,224,000, which more than offset a decrease of $791,000 (22%) in display advertising revenues and a $1,295,000 (43%) decrease in classified advertising revenues. The Company continued to benefit from the large number of foreclosure sales in California and Arizona, for which public notice advertising is required by law. The Company\'s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals ("The Daily Journals"), accounted for about 96% of the total public notice advertising revenues. Public notice advertising revenues and related advertising and other service fees constituted about 53% of the Company\'s total revenues. (Consolidated revenues were $10,852,000 and $11,154,000 for the three months ended June 30, 2009 and 2008, respectively.)
Costs and expenses decreased by $891,000 (4%) to $21,456,000 from $22,347,000. Total personnel costs decreased by $675,000 (5%) to $12,710,000 primarily due to savings from departmental reorganizations, partially offset by an annual salary adjustment. Newsprint and printing expenses decreased by $159,000 (10%) primarily resulting from fewer subscribers and paper price decreases. Postage and delivery expenses decreased by $143,000 (11%) mainly because there were fewer subscribers. (Costs and expenses were $7,260,000 and $7,827,000 for the three months ended June 30, 2009 and 2008, respectively.)
Consolidated net income was $5,773,000 and $5,149,000 for the nine months ended June 30, 2009 and 2008, respectively. On a pretax profit of $9,383,000 and $8,299,000 for the nine months ended June 30, 2009 and 2008, the Company recorded a tax provision of $3,610,000 and $3,150,000, respectively. The Internal Revenue Service has been examining the tax returns for years 2002 to 2007 and has proposed an assessment that, if upheld, would result in disallowance of about $700,000 of previously claimed research and development credits. As of June 30, 2009, the Company had approximately $700,000 of unrecognized tax benefits, all of which would have an effective rate impact if recognized. The Company is continuing to contest the issue in the United States Tax Court, and the ultimate resolution of this dispute cannot be ascertained at this time. Net income per share increased to $4.08 from $3.54.
During the nine months ended June 30, 2009, the Company\'s cash and cash equivalents, U.S. Treasury Note and Bill and marketable security positions increased by $29,211,000, including an unrealized gain on the investments of $25,898,000. Cash and cash equivalents and U.S. Treasury Notes and Bills were used primarily for the purchase of marketable securities of $20,424,000, capital assets of $182,000 (mostly computer software and office equipment) and the Company s common shares for an aggregate amount of $1,970,000. All the marketable securities are common stocks and bonds, and almost all of the unrealized appreciation was in the common stocks. The cash provided by operating activities of $5,695,000 included a net decrease in deferred subscription and other revenues of $619,000. Proceeds from the sale of subscriptions from newspapers, court rule books and other publications and for software licenses and maintenance and other services are recorded as deferred revenue and are included in earned revenue only when the services are rendered. Cash flows from operating activities increased by $1,488,000 during the nine months ended June 30, 2009 as compared to the prior period primarily due to the decreases in accounts receivable of $1,365,000.
As of June 30, 2009, the Company had working capital of $40,794,000, including the liability for deferred subscription and other revenues of $5,228,000 which are scheduled to be earned within one year and the deferred tax liability of $9,970,000 for the unrealized gain on the investments. The Company believes that it will be able to fund its operations for the foreseeable future through its cash flows from operating activities and its current working capital.
Read the The complete ReportDJCO is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, Bruce Berkowitz of Fairholme Capital Management.
