LOS ANGELES, Feb. 08, 2016 (GLOBE NEWSWIRE) -- During the three months ended December 31, 2015, Daily Journal Corporation (NASDAQ:DJCO) had a consolidated pretax loss of $135,000 compared to pretax income of $408,000 in the prior year period.  This was a decrease in profit of $543,000 that resulted primarily from (i) decreases in The Traditional Business's trustee sale notice and related service fee revenues and commercial advertising revenues and (ii) Journal Technologies' additional personnel costs and travel expenses, primarily for installation services.
Overall Financial Results (000)
For the three months ended December 31
                         
  Reportable Segments            
                         
  Traditional Business     Journal Technologies     Corporate income and expenses     Total  
  2015     2014     2015   2014     2015      2014      2015   2014  
Revenues                                                            
Advertising $ 2,321     $ 2,704       $  ---     $  ---     $  ---     $  ---     $ 2,321     $ 2,704  
Circulation   1,506       1,524       ---     ---     ---     ---       1,506       1,524  
Advertising service fees and other   650       685       ---     ---     ---     ---       650       685  
Licensing and maintenance fees   ---       ---       3,647     3,757     ---     ---       3,647       3,757  
Consulting fees   ---       ---       1,376     1,192     ---     ---       1,376       1,192  
Other public service fees   ---       ---       1,315     1,461     ---     ---       1,315       1,461  
Total revenues   4,477       4,913       6,338     6,410     ---     ---       10,815       11,323  
Expenses                                                            
Salaries and employee benefits   2,469       2,438       4,179     4,174     ---     ---       6,648       6,612  
Amortization of intangible assets   35       ---       1,224     1,224     ---     ---       1,259       1,224  
Others   1,849       2,185       2,021     1,663     ---     ---       3,870       3,848  
Total operating expenses   4,353       4,623       7,424     7,061     ---     ---       11,777       11,684  
Income (loss) from operations   124       290       (1,086 )   (651 )   ---     ---       (962 )     (361 )
                             
Other income (net), primarily  dividends and interest income   7       ---       ---     ---     912         846        919       846  
Interest and penalty expenses accrued for uncertain and unrecognized tax benefits   ---       ---       (24 )   (20 )   ---     ---       (24 )     (20 )
Interest expenses on margin loans   ---       ---       ---     ---        (59        (57     (59 )     (57 )
Interest expenses on note payable collateralized by real estate    (9 )     ---       ---     ---     ---     ---       (9 )     ---  
Pretax income (loss) $ 122     $ 290     $ (1,110 ) $ (671 )     $ 853      $ 789     $ (135 )   $ 408  

Consolidated revenues were $10,815,000 and $11,323,000 for the three months ended December 31, 2015 and 2014, respectively.   This decrease of $508,000 was primarily from the continuing decline in The Traditional Business's trustee sale notice and related service fee revenues of $245,000, and  a decline in commercial advertising revenues of $208,000 primarily due to the discontinuance of publishing the California Lawyer magazine.  It also reflects a decline in Journal Technologies' public service fees of $146,000.   Consolidated operating costs and expenses increased by $93,000 to $11,777,000 from $11,684,000, primarily resulting from the additional expenses for Journal Technologies described above. 

The Company's Traditional Business segment's pretax income decreased by $168,000 to $122,000 from $290,000, primarily resulting from the decreases in trustee sale notice and related service fee revenues and commercial advertising revenues, partially offset by decreased legal, accounting and tax fees.   The Company's Journal Technologies' business segment pretax loss increased by $439,000 to $1,110,000 from $671,000 primarily resulting from the decrease in public service fees and the increase in  personnel costs and additional travel expenses for installation services.  The Company's non-operating income, net of expenses, increased by $58,000 to $827,000, primarily because of additional dividends and interest income from the Company's marketable securities. 

The Company recorded an income tax benefit of $185,000 on a pretax loss of $135,000 for the three months ended December 31, 2015.  The income tax benefit was the result of applying the effective tax rate anticipated for fiscal 2016 to the pretax loss for the first quarter of fiscal 2016. The effective tax rate was lower than the statutory rate primarily due to the dividends received deduction.  On pretax income of $408,000 for the three months ended December 31, 2014, the Company recorded a tax benefit of $25,000 which was the net result of applying the effective tax rate anticipated for fiscal 2015 to pretax income for the first quarter of fiscal 2015. 

At December 31, 2015, the Company held marketable securities valued at $178,984,000, including net unrealized gains of $120,602,000.   It accrued a liability of $46,455,000 for income taxes due only upon the sales of the net appreciated securities. 

Comprehensive (loss) income includes net income and unrealized net (losses) gains on investments, net of taxes, as summarized below: 
Comprehensive Income (Loss)
   
  Three months ended December 31
    2015     2014  
             
Net income $       50,000   $   433,000  
Net change in unrealized appreciation of  investments (net of taxes)       5,927,000         (3,642,000 )
  $   5,977,000   $   (3,209,000 )

Daily Journal Corporation publishes newspapers and web sites covering California and Arizona, and produces several specialized information services.  Journal Technologies, Inc. is a wholly-owned subsidiary and supplies case management software systems and related products to courts and other justice agencies. 

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.

Contact: Tu To(213) 229-5436