During the three months ended December 31, 2011, consolidated pretax income of Daily Journal Corporation (NASDAQ:DJCO) decreased by $803,000 to $2,586,000 from $3,389,000 in the prior year period. Consolidated revenues declined by $1,375,000, and costs and expenses decreased by $448,000. Dividends and interest income increased by $115,000. The Company’s traditional business segment pretax profit decreased by $646,000 to $3,030,000 from $3,676,000 primarily because of a reduction in trustee sale notice and related service fee revenues. Total personnel costs decreased by $132,000 to $3,317,000 primarily due to a $170,000 reduction in expenses related to the Company’s Management Incentive Plan (“Incentive Plan”), partially offset by annual salary adjustments. The reduction in Incentive Plan expenses consisted of a decrease of $240,000 in the Incentive Plan accrual during the three months ended December 31, 2011 due to reduced consolidated pretax profits before this accrual versus a decrease of $70,000 in the prior year period. Other general and administrative expenses decreased by $216,000 primarily resulting from reduced professional service fees. Sustain’s business segment had a pretax loss of $444,000 compared to $287,000 in the prior year period primarily due to a decrease in consulting and support revenues from governmental agencies, reflecting in part continuing governmental budget constraints.
Consolidated revenues were $7,920,000 and $9,295,000 for the three months ended December 31, 2011 and 2010, respectively. This decrease of $1,375,000 was primarily from decreases of $1,031,000 in trustee sale notice and related service fee revenues, $69,000 in government notice revenues, $31,000 in legal advertising notice and service fees, $20,000 in classified advertising revenues, $37,000 in display advertising revenues, $73,000 in circulation revenues and $99,000 in Sustain consulting revenues. 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.
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