-----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, DsjVuR5Hhch8XIwyDQajNUQpkUGEQeAfq578Nuz33pZ9UdJjO5dU1MDG0ISTJWIr jFn1SSGHCO4WLCIsQ5PN9g== 0000913827-96-000020.txt : 19960812 0000913827-96-000020.hdr.sgml : 19960812 ACCESSION NUMBER: 0000913827-96-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 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: 96606883 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 June 30, 1996 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 July 31, 1996 Common Stock, par value $.01 per share 1,639,906 shares (1 of 10) DAILY JOURNAL CORPORATION INDEX Page Nos. PART I Financial Information Item 1. Financial statements Consolidated Balance Sheet - June 30, 1996 and September 30, 1995 3 Consolidated Statement of Income - Three months ended June 30, 1996 and 1995 4 Consolidated Statement of Income - Nine months ended June 30, 1996 and 1995 5 Consolidated Statement of Cash Flows - Nine months ended June 30, 1996 and 1995 6 Notes to Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations8-9 PART IIOther Information Item 6. Exhibits and Reports on Form 8-K 10 (2 of 10) PART I Item 1. Financial Statements DAILY JOURNAL CORPORATION - CONSOLIDATED BALANCE SHEET (Unaudited) June 30 September 30 1996 1995 ASSETS Current assets: Cash and cash equivalents $ 380,000 $ 573,000 U.S. Treasury Bills, at cost plus discount earned 3,964,000 2,934,000 Accounts receivable, less allowance for doubtful accounts of $600,000 6,548,000 6,531,000 Inventories 167,000 117,000 Prepaid expenses and other assets 295,000 378,000 Deferred income taxes 759,000 951,000 Total current assets 12,113,000 11,484,000 Property, plant and equipment, at cost: Land, buildings and improvements 7,658,000 6,951,000 Furniture and office equipment 5,238,000 4,884,000 Machinery and equipment 1,477,000 1,548,000 14,373,000 13,383,000 Less accumulated depreciation (5,999,000) (5,461,000) 8,374,000 7,922,000 Deferred tax benefits 335,000 222,000 Intangible assets, at cost, less accumulated amortization of $451,000 and $263,000 936,000 1,124,000 $21,758,000 $20,752,000 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,203,000 $2,490,000 Accrued liabilities 2,453,000 2,826,000 Notes payable 536,000 536,000 Income taxes payable 73,000 - Deferred subscription revenue 6,352,000 5,798,000 Total current liabilities 11,617,000 11,650,000 Notes payable - 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, 1,639,906 shares, outstanding 16,000 16,000 Other paid-in capital 2,085,000 2,093,000 Retained earnings 8,391,000 6,619,000 Less 30,429 treasury shares at cost (351,000) (351,000) Total shareholders' equity 10,141,000 8,377,000 $21,758,000 $20,752,000 See accompanying notes to consolidated financial statements. (3 of 10) DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENT OF INCOME (Unaudited) Three months ended June 30 1996 1995 Revenues: Advertising $ 5,836,000 $ 5,547,000 Circulation 2,811,000 2,731,000 Advertising service fees and other 979,000 935,000 9,626,000 9,213,000 Costs and expenses: Salaries and employee benefits 3,534,000 3,589,000 Newsprint and printing expenses 995,000 995,000 Commissions and other outside services 1,381,000 1,317,000 Postage and delivery expenses 588,000 644,000 Depreciation and amortization 353,000 518,000 Other, including interest expense 1,485,000 1,140,000 8,336,000 8,203,000 Income before taxes 1,290,000 1,010,000 Provision for income taxes 525,000 435,000 Net income $ 765,000 $ 575,000 Weighted average number of common shares outstanding 1,615,823 1,619,435 Net income per share $ .47 $ .36 See accompanying notes to consolidated financial statements. (4 of 10) DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENT OF INCOME (Unaudited) Nine months ended June 30 1996 1995 Revenues: Advertising $15,900,000 $15,198,000 Circulation 8,139,000 7,988,000 Advertising service fees and other 2,657,000 2,689,000 26,696,000 25,875,000 Costs and expenses: Salaries and employee benefits 10,617,000 10,509,000 Newsprint and printing expenses 2,984,000 2,788,000 Commissions and other outside services 3,639,000 3,436,000 Postage and delivery expenses 1,762,000 1,815,000 Depreciation and amortization 1,070,000 1,465,000 Other, including interest expense 3,400,000 2,943,000 23,472,000 22,956,000 Income before taxes 3,224,000 2,919,000 Provision for income taxes 1,300,000 1,200,000 Net income $ 1,924,000 $ 1,719,000 Weighted average number of common shares outstanding 1,615,859 1,621,937 Net income per share $ 1.19 $ 1.06 See accompanying notes to consolidated financial statements. (5 of 10) DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Nine months ended June 30 1996 1995 Cash flows from operating activities: Net income $ 1,924,000 $ 1,719,000 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 1,070,000 1,465,000 Deferred income taxes 79,000 133,000 Discount earned on U.S. Treasury Bills (59,000) (40,000) Gains on sales of capital assets - (2,000) Changes in assets and liabilities: (Increase) decrease in current assets Accounts receivable, net (17,000) (664,000) Inventories (50,000) (31,000) Prepaid expenses and other assets 83,000 (38,000) Increase (decrease) in current liabilities Accounts payable (287,000) (558,000) Accrued liabilities (373,000) (405,000) Income taxes payable 73,000 95,000 Deferred subscription revenue 554,000 68,000 Cash provided by operating activities 2,997,000 1,742,000 Cash flows from investing activities: Net investments in U. S. Treasury Bills (971,000) (463,000) Capital expenditures including acquisitions (1,334,000) (2,212,000) Cash used for investing activities (2,305,000) (2,675,000) Cash flows from financing activities: Principal payments of notes payable (725,000) (422,000) Purchase of common stock (160,000) (152,000) Cash used for financing activities (885,000) (574,000) Increase (decrease) in cash and cash equivalents (193,000) (1,507,000) Cash and cash equivalents: Beginning of year 573,000 2,068,000 End of period $ 380,000 $ 561,000 Interest paid during period $ 92,000 $ 130,000 Income taxes paid during period $ 1,061,000 $ 972,000 See accompanying notes to consolidated financial statements. (6 of 10) 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. The Public Record Corporation, a wholly owned and consolidated subsidiary since it was acquired in January 1995, publishes The Code of Colorado Regulations and newspapers for the Colorado legal profession. Essentially all of the Company's operations are based in California, Arizona, Colorado and Washington. 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 June 30, 1996 and September 30, 1995, the results of operations for the three- and nine-month periods ended June 30, 1996 and 1995 and its cash flows for the nine months ended June 30, 1996 and 1995. The results of operations for the three and nine months ended June 30, 1996 and 1995 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. These financial statements should 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. (7 of 10) DAILY JOURNAL CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Revenues were $26,696,000 and $25,875,000 for the nine months ended June 30, 1996 and 1995, respectively. This increase of 3% is primarily attributable to the recent acquisitions which accounted for additional revenues of $588,000 and to subscription rate increases partially offset by decreases in classified and display advertising lineage. Public notice advertising lineage increased. During the nine months ended June 30, 1996, display and classified advertising revenues were down by $359,000 while public notice advertising revenues increased by $1,061,000 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 Daily Journals"), accounted for about 83% of the total public notice advertising revenues. Public notice advertising revenues and related advertising and other service fees constituted about 37% of the Company's total revenues. Circulation revenues increased an aggregate of $151,000 of which $180,000 resulted from the recent acquisitions. The Daily Journals accounted for about 62% 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 2% from $22,956,000 to $23,472,000 including $644,000 from recent acquisitions. Personnel costs increased an aggregate of $108,000 of which $293,000 resulted from recent acquisitions. Newsprint and printing expenses increased by $196,000 primarily because of the higher cost of newsprint. Commissions and other outside services increased by $203,000 primarily because of commissions paid on additional agency sales. Depreciation and amortization expenses decreased by $395,000, mainly due to more assets becoming fully depreciated and partial offset by the amortization of costs of recent acquisitions. The increase in other expenses of $457,000 primarily includes additional legal and bad debt expenses. Pretax income for the nine months ended June 30, 1996 increased $305,000 (10%) to $3,224,000 from $2,919,000 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 63% of the Company's pretax income. Net income was $1,924,000 compared to $1,719,000 in the comparable prior year period. Net income per share increased to $1.19 from $1.06. Liquidity and Capital Resources During the nine months ended June 30, 1996, the Company's cash and cash equivalent position decreased by $193,000, and the investments in U. S. Treasury Bills increased by $1,030,000. In addition, cash and cash equivalents were used to reduce notes payable by $725,000, for the net purchase of capital assets of $1,334,000, including land of $705,000 and to purchase common stock for an aggregate amount of $160,000. The cash provided by operating activities of $2,997,000 included a net increase in prepayments for subscriptions of $554,000. 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 June 30, 1996, the Company had working capital of $6,848,000 before deducting the liability for deferred subscription revenues of $6,352,000 which will be earned within one year. The cash and short-term investments in U. S. Treasury Bills, aggregating about $4.3 million at June 30, 1996, and the current level of cash provided by operating activities appear adequate to meet the obligations of the Company. In April 1996 the Company purchased land near the Los Angeles facility for $705,000, and after improvements, this will be used, at least in the near term, for additional parking. The Company completed in 1990 a new Los Angeles office and (8 of 10) printing facility. This had been financed by a term loan which had a balance payable of $536,000 at June 30, 1996, and this balance was paid off in July 1996. (9 of 10) DAILY JOURNAL CORPORATION PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K: (A) Exhibits - none 27 Financial Data Schedule (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: August 9, 1996 (10 of 10) EX-27 2
5 This schedule contains summary financial information extracted from the Regis- trant's Consolidated Balance Sheet (Unaudited) as of 6/30/96 and 9/30/95, Stmt. of Income (Unaudited) for the 3 & 9 mos. ended 6/30/96, and Stmt. of Cash Flows (Unaudited) for the 9 mos. ended 6/30/96 & 6/30/95 and the notes thereto and is qualified in its entirety by reference to such financial statements. 9-MOS SEP-30-1996 JUN-30-1996 380,000 3,964,000 7,159,000 600,000 167,000 12,113,000 14,373,000 5,999,000 21,758,000 11,617,000 536,000 0 0 16,000 10,125,000 21,758,000 26,442,000 26,696,000 0 22,868,000 0 518,000 86,000 3,224,000 1,300,000 1,924,000 0 0 0 1,924,000 1.19 1.19
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