During the three months ended December 31, 2010, consolidated pretax income of Daily Journal Corporation (NASDAQ:DJCO) increased by $21,000 to $3,389,000 from $3,368,000 in the prior year period. The Company’s traditional business segment pretax profit increased by $68,000 to $3,676,000 from $3,608,000. Revenues declined by $496,000, and costs and expenses decreased by $573,000. Total personnel costs decreased by $656,000 to $3,449,000 primarily due to savings from departmental reorganizations and a reduction in the accrual for the Company’s Management Incentive Plan, partially offset by an annual salary adjustment. Sustain’s business segment had a pretax loss of $287,000 compared to $240,000 in the prior year period primarily because of a decrease in consulting revenues from governmental agencies.
Consolidated revenues were $9,295,000 and $9,858,000 for the three months ended December 31, 2010 and 2009, respectively. This decrease of $563,000 was primarily from decreases in public notice advertising revenues of $210,000, classified advertising revenues of $40,000, circulation revenues of $125,000 and Sustain consulting revenues of $46,000, partially offset by an increase in display advertising revenues of $29,000. 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 December 31, 2010, the Company held marketable securities valued at $60,363,000, including unrealized gains of $39,935,000. It accrued a liability of $15,908,000 for income taxes due only upon the sales of the appreciated securities. All the marketable securities are common stocks of two Fortune 200 companies and certain bonds of a third, and almost all of the unrealized gains were in the common stocks.
Consolidated net income was $2,184,000 and $2,088,000 for the three months ended December 31, 2010 and 2009, respectively. Net income per share increased to $1.58 from $1.51.
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