Daily Journal Corporation Announces Financial Results for the Three Months ended December 31, 2021

Rhea-AI Summary

During Q4 2021, Daily Journal Corporation (DJCO) reported consolidated revenues of $11,528,000, an increase of $1,108,000 from the previous year, driven by higher consulting and public service fees. However, the Traditional Business saw a $42,000 drop in pretax income, totaling $506,000. The company's marketable securities generated $875,000 in dividends. Consolidated net income was $6,878,000 or $4.98 per share, down from $59,270,000 or $42.93 per share in Q4 2020. The ongoing pandemic poses risks to operations, particularly affecting court-related services.

Positive

• Consolidated revenues increased by $1,108,000 year-over-year.
• Marketable securities generated $875,000 in dividend income, up from $638,000.

Negative

• Consolidated net income decreased significantly to $6,878,000 from $59,270,000.
• Traditional Business' pretax income fell by $42,000 to $506,000.
• Pandemic-related risks may affect future operations.

LOS ANGELES, Feb. 11, 2022 (GLOBE NEWSWIRE) -- During the three months ended December 31, 2021, Daily Journal Corporation (NASDAQ:DJCO) had consolidated revenues of $11,528,000 as compared with $10,420,000 in the prior year period. This increase of $1,108,000 was primarily from increases in (i) Journal Technologies’ consulting fees of $1,517,000 and public service fees of $99,000, and (ii) the Traditional Business’ advertising net revenues of $102,000, partially offset by decreases in (i) Journal Technologies’ license and maintenance fees of $553,000 and (ii) the Traditional Business’ circulation revenues of $93,000.

The Traditional Business’ pretax income decreased by $42,000 to $506,000 from $548,000 in the prior fiscal year period. Journal Technologies’ business segment pretax loss decreased by $413,000 to $450,000 from $863,000 in the prior fiscal year period. In December 2021, the Company sold part of its marketable securities for approximately $50,020,000, realizing gains on the sales of those marketable securities of $46,694,000, and simultaneously borrowed an additional $37,014,000 from its margin loan account to purchase additional marketable securities with a total cost of approximately $87,125,000. The Company’s investments generated approximately $875,000 in dividends income for the three months ended December 31, 2021, as compared with $638,000 in the prior fiscal year period. During the three months ended December 31, 2021, consolidated pretax income was $11,438,000, as compared to $81,450,000 in the prior fiscal year period. There was consolidated net income of $6,878,000 ($4.98 per share) for the three months ended December 31, 2021, as compared with $59,270,000 ($42.93 per share) in the prior fiscal year period.

The Company believes that the Coronavirus pandemic has had, and, with the Delta and Omicron variant cases, will continue to have, a significant impact on the Company’s business operations. It is possible that governments may again take actions in response to the pandemic, such as the renewed closure, or scaling back of operations, of courts and other governmental agencies that are the customers of the Company. This might also include a fair degree of volatility in the value of the Company’s marketable securities. At December 31, 2021, the Company held marketable securities valued at $395,284,000, including net pretax unrealized gains of $208,005,000, and accrued a deferred tax liability of $56,175,000 for estimated income taxes due only upon the sales of the net appreciated securities.

For the three months ended December 31, 2021, the Company recorded a provision for income taxes of $4,560,000 on pretax income of $11,438,000.   The income tax provision consisted of a tax provision of $230,000 on income from operations, a tax benefit of $91,000 for the dividends received deduction and other permanent book and tax differences, a tax benefit of $9,747,000 on the unrealized losses on marketable securities, a tax provision of $12,612,000 on the realized gains on marketable securities and a tax provision of $1,556,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the three months ended December 31, 2021 was 40%, after including the taxes on the realized gains and unrealized losses on marketable securities.

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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.

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FAQ

What were Daily Journal Corporation's Q4 2021 earnings results?

Daily Journal Corporation reported consolidated net income of $6,878,000, or $4.98 per share, for Q4 2021.

How did the revenue of Daily Journal Corporation change in Q4 2021?

The company's consolidated revenues rose to $11,528,000, an increase of $1,108,000 compared to the previous year.

What is the financial outlook for Daily Journal Corporation amid the pandemic?

The company faces potential operational impacts due to the pandemic, particularly affecting its court-related services.

How much did Daily Journal Corporation earn from dividends in Q4 2021?

Daily Journal Corporation generated approximately $875,000 in dividends from its investments during Q4 2021.