-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Wu27So3L81I9FYBw3ftdJqvirj8Qm3oAWBNFLW2eIGHGxOVCs81lBGmr6U8/7DUk Dvw4CQaizrpMtKCzyvnlJA== 0000913827-96-000002.txt : 19960216 0000913827-96-000002.hdr.sgml : 19960216 ACCESSION NUMBER: 0000913827-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960214 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAILY JOURNAL CORP CENTRAL INDEX KEY: 0000783412 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 954133299 STATE OF INCORPORATION: SC FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14665 FILM NUMBER: 96518830 BUSINESS ADDRESS: STREET 1: 915 E FIRST STREET CITY: LOS ANGELES STATE: CA ZIP: 90012 BUSINESS PHONE: 2132295436 MAIL ADDRESS: STREET 1: 915 E FIRST STREET CITY: LOS ANGELES STATE: CA ZIP: 90012 FORMER COMPANY: FORMER CONFORMED NAME: DAILY JOURNAL CO DATE OF NAME CHANGE: 19870427 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _____________________ Commission File Number 0-14665 DAILY JOURNAL CORPORATION (Exact name of registrant as specified in its charter) South Carolina 95-4133299 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 355 South Grand Ave., 34th floor Los Angeles, California 90071-1560 (Address of principal executive office) (Zip code) Registrant's telephone number, including area code: (213) 624-7715 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes: X No: Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Class Outstanding at January 31, 1996 Common Stock, par value $ .01 per share 1,646,306 shares DAILY JOURNAL CORPORATION INDEX Page Nos. PART I Financial Information Item 1. Financial statements Consolidated Balance Sheet - December 31, 1995 and September 30, 1995 3 Consolidated Statement of Income - Three months ended December 31, 1995 and 1994 4 Consolidated Statement of Cash Flows - Three months ended December 31, 1995 and 1994 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II Other Information Item 6. Exhibits and Reports on Form 8-K 9 PART I Item 1. Financial Statements DAILY JOURNAL CORPORATION - CONSOLIDATED BALANCE SHEET (Unaudited) December 31 September 30 1995 1995 ASSETS Current assets: Cash and cash equivalents $ 699,000 $ 573,000 U.S. Treasury Bills, at cost plus discount earned 3,464,000 2,934,000 Accounts receivable, less allowance for doubtful accounts of $600,000 5,681,000 6,531,000 Inventories 204,000 117,000 Prepaid expenses and other assets 270,000 378,000 Deferred income taxes 890,000 951,000 Total current assets 11,208,000 11,484,000 Property, plant and equipment, at cost: Land, buildings and improvements 6,960,000 6,951,000 Furniture and office equipment 5,090,000 4,884,000 Machinery and equipment 1,567,000 1,548,000 13,617,000 13,383,000 Less accumulated depreciation (5,726,000) (5,461,000) 7,891,000 7,922,000 Deferred tax benefits 247,000 222,000 Intangible assets, at cost, less accumulated amortization of $325,000 and $263,000 1,062,000 1,124,000 $20,408,000 $20,752,000 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,016,000 $ 2,490,000 Accrued liabilities 2,102,000 2,826,000 Notes payable 536,000 536,000 Income taxes payable 207,000 - Deferred subscription revenue 5,987,000 5,798,000 Total current liabilities 10,848,000 11,650,000 Notes payable 591,000 725,000 Shareholders' equity: Preferred stock, $.01 par value, 5,000,000 shares authorized and no shares issued - - Common stock, $.01 par value, 5,000,000 shares authorized, 1,646,306 shares, outstanding 16,000 16,000 Other paid-in capital 2,093,000 2,093,000 Retained earnings 7,211,000 6,619,000 Less 30,429 treasury shares at cost (351,000) (351,000) Total shareholders' equity 8,969,000 8,377,000 $20,408,000 $20,752,000 See accompanying notes to consolidated financial statements. DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENT OF INCOME (Unaudited) Three months ended December 31 1995 1994 Revenues: Advertising $ 4,817,000 $ 4,677,000 Circulation 2,730,000 2,563,000 Advertising service fees and other 815,000 886,000 8,362,000 8,126,000 Costs and expenses: Salaries and employee benefits 3,497,000 3,390,000 Newsprint and printing expenses 1,037,000 824,000 Commissions and other outside services 1,078,000 1,004,000 Postage and delivery expenses 615,000 519,000 Depreciation and amortization 327,000 440,000 Other, including interest expense 886,000 885,000 7,440,000 7,062,000 Income before taxes 922,000 1,064,000 Provision for income taxes 330,000 425,000 Net income $ 592,000 $ 639,000 Weighted average number of common shares outstanding 1,615,877 1,623,638 Net income per share $ .37 $ .39 See accompanying notes to consolidated financial statements. DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Three months ended December 31 1995 1994 Cash flows from operating activities: Net income $ 592,000 $ 639,000 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 327,000 440,000 Deferred income taxes 36,000 (24,000) Discount earned on U.S. Treasury Bills (43,000) (12,000) Changes in assets and liabilities: (Increase) decrease in current assets Accounts receivable, net 850,000 259,000 Inventories (87,000) (9,000) Prepaid expenses and other assets 108,000) (53,000) Increase (decrease) in current liabilities Accounts payable (474,000) (870,000) Accrued liabilities (724,000) (504,000) Income taxes payable 207,000 448,000) Deferred subscription revenue 189,000 (64,000) Cash provided by operating activities 981,000 250,000 Cash flows from investing activities: Net investments in U.S. Treasury Bills (487,000) - Capital expenditures (234,000) (137,000) Cash used for investing activities (721,000) (137,000) Cash flows from financing activities: Principal payments of notes payable (134,000) (143,000) Cash used for financing activities (134,000) (143,000) Increase (decrease) in cash and cash equivalents 126,000 (30,000) Cash and cash equivalents: Beginning of period 573,000 2,068,000 End of period $ 699,000 $ 2,038,000 Interest paid during period $ 35,000 $ 44,000 See accompanying notes to consolidated financial statements. DAILY JOURNAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 - The Corporation and Operations: The Company publishes newspapers in California, Washington, Arizona, Colorado and Nevada and the California Lawyer magazine and produces several specialized information services. It also serves as a newspaper representative specializing in public notice advertising. Note 2 - Basis of Presentation In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly its financial position as of December 31, 1995 and September 30, 1995, the results of operations for the three-month period ended December 31, 1995 and 1994 and its cash flows for the three months ended December 31, 1995 and 1994. The results of operations for the three months ended December 31, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. The consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1995. DAILY JOURNAL CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Revenues were $8,362,000 and $8,126,000 for the three months ended December 31, 1995 and 1994, respectively. This increase of 3% is primarily attributable to the recent acquisitions which accounted for revenues of $360,000 and to subscription rate increases partially offset by decreases in classified and display advertising lineage. Public notice advertising lineage increased. During the three months ended December 31, 1995, display and classified advertising revenues were down by $216,000 while public notice advertising revenues increased by $356,000 primarily resulting from recent acquisitions and increased trustee sale notices. The Company's smaller newspapers, excluding the Los Angeles and San Francisco Daily Journals ("The Journals"), accounted for about 82% of the total public notice advertising revenues. Public notice advertising revenues and related advertising and other service fees constituted about 36% of the Company's total revenues. Circulation revenues increased $167,000 including $152,000 from the recent acquisitions. The Daily Journals accounted for about 63% of the Company's total circulation revenues, and their circulation levels decreased slightly. The Rule Book and Judicial Profile services generated about 23% of the total circulation revenues, with the other newspapers and services accounting for the balance. Costs and expenses increased by 6% to $7,440,000 from $7,062,000 including $419,000 from recent acquisitions. Personnel costs increased by $107,000 of which $153,000 resulted from recent acquisitions. Newsprint and printing expenses increased by $213,000 primarily because of the higher cost of newsprint. Postage expenses increased primarily because of increased postal rates. Depreciation and amortization expenses decreased by $113,000, mainly due to more assets becoming fully depreciated and partial offset by the amortization of costs of recent acquisitions. Pretax income for the three months ended December 31, 1995 decreased $142,000 (14%) to $922,000 from $1,064,000 in the comparable period in fiscal 1995. The Company's smaller newspapers and its newspaper representative, which specializes in public notice advertising, accounted for about 64% of the Company's pretax income. Net income was $592,000 compared to $639,000 in the comparable prior year period. Net income per share decreased to $.37 from $.39. Liquidity and Capital Resources During the three months ended December 31, 1995, the Company's cash and cash equivalent position increased by $126,000, and the investments in U. S. Treasury Bills increased by $530,000. In addition, cash and cash equivalents were used to reduce notes payable by $134,000 and for the net purchase of capital assets of $234,000. The cash provided by operating activities of $981,000 included a net increase in prepayments for subscriptions of $189,000. Proceeds from the sale of subscriptions from newspapers, court rule books and other publications are booked as deferred subscription revenue and are included in earned revenue only over the duration of the subscription. As of December 31, 1995, the Company had working capital of $6,347,000 before deducting the liability for deferred subscription revenues of $5,987,000 which will be earned within one year. The cash and short-term investments in U. S. Treasury Bills, aggregating about $4.2 million at December 31, 1995, and the current level of cash provided by operating activities appear adequate to meet the obligations of the Company. In recent months, in general, newsprint prices have been rising and postal costs have increased due to higher postal rates. These developments are likely to continue to increase total expenses. The Company completed in 1990 a new Los Angeles office and printing facility. This has been financed by a term loan which has a balance payable of $1,127,000 at December 31, 1995. It bears interest at the prime rate plus one percentage point and is repayable in equal monthly installments of $45,000 through January 1998. The term loan is secured by all assets of the Company except real estate. The assets pledged include net accounts receivable of approximately $5.7 million. The term loan limits dividends and the amount the Company can pay to repurchase stock, but the loan may be repaid at any time without penalty. DAILY JOURNAL CORPORATION PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K: (A) Exhibits - none (B) Reports on Form 8-K - None SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DAILY JOURNAL CORPORATION (Registrant) /s/ Gerald L. Salzman Gerald L. Salzman Chief Financial Officer DATE: February 12, 1996 EX-27 2
5 This schedule contains summary financial information extracted from the Registrant's Consolidated Balance Sheet (Unaudited) as of December 31, 1995 and Consolidated Statements of Income and Cash Flows (Unaudited) for the three months ended December 31, 1995 and the notes thereto and is qualified in its entirety by reference to such financial statements. 3-MOS SEP-30-1996 DEC-31-1995 699,000 3,464,000 6,319,000 600,000 204,000 11,208,000 13,617,000 5,726,000 20,408,000 10,848,000 591,000 0 0 16,000 8,953,000 20,408,000 8,278,000 8,362,000 0 0 0 83,000 34,000 922,000 330,000 592,000 0 0 0 592,000 .37 .37
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