During the three months ended December 31, 2012, consolidated pretax income of Daily Journal Corporation (NASDAQ:DJCO) decreased by $1,322,000 (51%) to $1,264,000 from $2,586,000 in the comparable prior year period, primarily resulting from (i) a reduction in trustee sale notice and related service fee revenues of $567,000 and (ii) an increase in operating costs and expenses of $1,328,000, including $938,000 for the Company’s new subsidiary, New Dawn Technologies, Inc., partially offset by New Dawn’s additional revenues of $247,000 and an increase in dividends and interest income of $241,000. (In December 2012, the Company purchased all of the outstanding stock of New Dawn, which is based in Logan, Utah and provides products and services to courts and other justice agencies.)
The Company’s traditional business segment pretax income decreased by $275,000 to $2,755,000 from $3,030,000 primarily because of the reduction in trustee sale notice and related service fee revenues of $567,000, partially offset by a reduction in operating costs and expenses of $9,000.
Sustain’s and New Dawn’s business segment had a pretax loss of $1,491,000 compared to $444,000 in the prior year period primarily due to (i) the addition of New Dawn’s pretax loss of $691,000 and (ii) an increase in Sustain’s personnel costs during the three months ended December 31, 2012.
|Three months ended December 31|
|Net change in unrealized appreciation of investments (net of taxes)||7,197,000||3,919,000|
Consolidated revenues were $7,693,000 and $7,920,000 for the three months ended December 31, 2012 and 2011, respectively. This decrease of $227,000 was primarily from the reduction in trustee sale notice and related service fee revenues of $567,000, partially offset by New Dawn’s additional maintenance revenues of $247,000. Although public notice advertising revenues were down compared to the prior year period, and although that trend is expected to continue, 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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