During the six months ended March 31, 2011, consolidated pretax income of Daily Journal Corporation (NASDAQ:DJCO) increased by $130,000 to $6,296,000 from $6,166,000 in the prior year period. The Company’s traditional business segment pretax profit increased by $397,000 to $6,908,000 from $6,511,000. Consolidated revenues declined by $1,099,000, and costs and expenses decreased by $1,129,000. Total personnel costs decreased by $1,173,000 to $7,005,000 primarily due to savings from departmental reorganizations and a reduction in the long-term accrual for the Company’s Management Incentive Plan of $170,000 due to reduced consolidated pretax profits before this accrual versus an increase of $540,000 in the prior comparable period, partially offset by annual salary adjustments. Sustain’s business segment had a pretax loss of $612,000 compared to $345,000 in the prior year period primarily because of a decrease in consulting revenues from governmental agencies. Consolidated revenues were $17,869,000 and $18,968,000 for the six months ended March 31, 2011 and 2010, respectively. This decrease of $1,099,000 was primarily from decreases in public notice advertising revenues of $275,000, classified advertising revenues of $96,000, display advertising revenues of $65,000, Sustain consulting revenues of $98,000 and circulation revenues of $239,000. 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 March 31, 2011, the Company held marketable securities valued at $72,474,000, including unrealized gains of $41,682,000. It accrued a liability of $16,604,000 for income taxes due only upon the sales of the appreciated securities. The marketable securities consist of common stocks of two Fortune 200 companies and two foreign companies and certain bonds of a fifth, and almost all of the unrealized gains were in the common stocks. Consolidated net income was $4,026,000 and $3,816,000 for the six months ended March 31, 2011 and 2010, respectively. Net income per share increased to $2.92 from $2.76.
|Reportable Segments||Total Results|
|Traditional Business||Sustain||for both Segments|
|Six months ended March 31, 2011|
|Pretax income (loss)||6,908,000||(612,000||)||6,296,000|
|Income tax benefit (expense)||(2,490,000||)||220,000||(2,270,000||)|
|Net income (loss)||4,418,000||(392,000||)||4,026,000|
|Six months ended March 31, 2010|
|Pretax income (loss)||6,511,000||(345,000||)||6,166,000|
|Income tax benefit (expense)||(2,480,000||)||130,000||(2,350,000||)|
|Net income (loss)||4,031,000||(215,000||)||3,816,000|
Daily Journal Corporation’s Form 10-Q for the period ended March 31, 2011 is expected to be filed electronically with the Securities and Exchange Commission today. We invite your attention to the Form 10-Q which contains our consolidated financial statements, management’s discussion and analysis of financial condition and results of operations and other information.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, including the Form 10-Q we expect to file today and our Annual Report on Form 10-K for the fiscal year ended September 30, 2010.