-----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, BEPwO+8G7H1fuJnhfB/OCNwYwmO01bN+PiQeJMx+WqhtyNz1RMBDoIWld2U/O/ez zNcL0pioVVFcsT3JG8g7Vw== 0000913827-97-000002.txt : 19970221 0000913827-97-000002.hdr.sgml : 19970221 ACCESSION NUMBER: 0000913827-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970211 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: 97524085 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, 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 January 31, 1997 Common Stock, par value $ .01 per share 1,627,870 shares DAILY JOURNAL CORPORATION INDEX Page Nos. PART I Financial Information Item 1. Financial statements Consolidated Balance Sheet - December 31, 1996 and September 30, 1996 3 Consolidated Statement of Income - Three months ended December 31, 1996 and 1995 4 Consolidated Statement of Cash Flows - Three months ended December 31, 1996 and 1995 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II Other Information Item 6. Exhibits and Reports on Form 8-K 8 PART I Item 1. Financial Statements DAILY JOURNAL CORPORATION - CONSOLIDATED BALANCE SHEET (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 1,027,000 $ 1,093,000 U.S. Treasury Bills, at cost plus discount earned 6,933,000 5,593,000 Accounts receivable, less allowance for doubtful accounts of $700,000 and $600,000 4,250,000 5,433,000 Inventories 40,000 48,000 Prepaid expenses and other assets 297,000 329,000 Deferred income taxes 818,000 817,000 Total current assets 13,365,000 13,313,000 Property, plant and equipment, at cost: Land, buildings and improvements 7,648,000 7,648,000 Furniture and office equipment 4,817,000 4,885,000 Machinery and equipment 1,420,000 1,447,000 13,885,000 13,980,000 Less accumulated depreciation (5,639,000) (5,599,000) 8,246,000 8,381,000 Deferred income taxes 207,000 157,000 Intangible assets, at cost, less accumulated amortization of $437,000 and $749,000 592,000 638,000 $22,410,000 $22,489,000 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 2,202,000 $ 2,775,000 Accrued liabilities 2,143,000 2,462,000 Income taxes payable 416,000 -- Deferred subscription revenue 6,503,000 6,524,000 Total current liabilities 11,264,000 11,761,000 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 1,627,870 shares and 1,637,870 shares respectively, outstanding 16,000 16,000 Other paid-in capital 2,070,000 2,082,000 Retained earnings 9,411,000 8,981,000 Less 30,429 treasury shares at cost (351,000) (351,000) Total shareholders' equity 11,146,000 10,728,000 $22,410,000 $22,489,000
See accompanying notes to consolidated financial statements. DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Three months ended December 31 1996 1995 Revenues: Advertising $5,194,000 $ 4,817,000 Circulation 2,950,000 2,730,000 Advertising service fees and other 719,000 815,000 8,863,000 8,362,000 Costs and expenses: Salaries and employee benefits 3,604,000 3,497,000 Newsprint and printing expenses 792,000 1,037,000 Commissions and other outside services 1,141,000 1,078,000 Postage and delivery expenses 620,000 615,000 Depreciation and amortization 368,000 327,000 Other, including interest expense 1,180,000 886,000 7,705,000 7,440,000 Income before taxes 1,158,000 922,000 Provision for income taxes 460,000 330,000 Net income $ 698,000 $ 592,000 Weighted average number of common shares outstanding 1,600,050 1,615,877 Net income per share $ .44 $ .37
See accompanying notes to consolidated financial statements. DAILY JOURNAL CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Three months ended December 31 1996 1995 Cash flows from operating activities: Net Income $ 698,000 $ 592,000 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 368,000 327,000 Deferred income taxes (51,000) 36,000 Discount earned on U.S. Treasury Bills (105,000) (43,000) Changes in assets and liabilities: (Increase) decrease in current assets Accounts receivable, net 1,183,000 850,000 Inventories 8,000 (87,000) Prepaid expenses and other assets 32,000 108,000 Increase (decrease) in current liabilities Accounts payable (573,000) (474,000) Accrued liabilities (319,000) (724,000) Income taxes payable 416,000 207,000 Deferred subscription revenue (21,000) 189,000 Cash provided by operating activities 1,636,000 981,000 Cash flows from investing activities: Net investments in U.S. Treasury Bills (1,235,000) (487,000) Capital expenditures (187,000) (234,000) Cash used for investing activities (1,422,000) (721,000) Cash flows from financing activities: Purchase of common stock (280,000) - Principal payments of notes payable - (134,000) Cash used for financing activities (280,000) (134,000) Increase (decrease) in cash and cash equivalents (66,000) 126,000 Cash and cash equivalents: Beginning of period 1,093,000 573,000 End of period $1,027,000 $ 699,000 Interest paid during period $ - $ 35,000 Income taxes paid during period $ 5,000 $ -
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. The Public Record Corporation, a wholly owned and consolidated subsidiary since it was acquired in January 1995, publishes The Code of Colorado Regulations and a newspaper 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 December 31, 1996 and September 30, 1996, the results of operations for the three month periods ended December 31, 1996 and 1995 and its cash flows for the three months ended December 31, 1996 and 1995. The results of operations for the three months ended December 31, 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, 1996. DAILY JOURNAL CORPORATION Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Revenues were $8,863,000 and $8,362,000 for the three months ended December 31, 1996 and 1995, respectively. This increase of 6% is primarily attributable to subscription and advertising rate increases and additional public notice lineage partially offset by a decrease in commercial advertising lineage. During the three months ended December 31, 1996, classified advertising revenues increased by $180,000 and display advertising revenues were up by $41,000. Public notice advertising revenues increased by $156,000 primarily resulting from increased trustee sale notices, but we anticipate an overall decline in revenues from publishing foreclosure notices during this fiscal year. The Company's smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals ("The Daily Journals"), accounted for about 86% of the total public notice advertising revenues. Public notice advertising revenues and related advertising and other service fees constituted about 32% of the Company's total revenues. Circulation revenues increased an aggregate of $220,000. 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 24% of the total circulation revenues, with the other newspapers and services accounting for the balance. Costs and expenses increased by $265,000 (4%) from $7,440,000 to $7,705,000. Personnel costs increased an aggregate of $107,000 (3%) primarily due to the normal annual salary adjustments. Newsprint and printing expenses decreased by $245,000 primarily because of lower newsprint costs. Commissions and other outside services increased by $63,000 primarily because of commissions paid on additional agency public notice sales. The increase in other expenses of $294,000 includes additional legal and bad debt expenses. Pretax income in the three months ended December 31, 1996 increased $236,000 (26%) to $1,158,000 from $922,000 in fiscal 1996. The Company's smaller newspapers and its newspaper representative, which specializes in public notice advertising, accounted for about 41% of the Company's pretax income. Net income was $698,000 compared to $592,000 in the comparible prior year period. Net income per share increased to $.44 from $.37. Liquidity and Capital Resources During the three months ended December 31, 1996, the Company's cash and cash equivalent position decreased by $66,000 and the investments in U.S. Treasury Bills increased by $1,340,000. In addition, cash and cash equivalents were used for the purchase of capital assets of $187,000 and to purchase common stock for an aggregate amount of $280,000. The cash provided by operating activities of $1,636,000 included a net decrease in prepayments for subscriptions of $21,000. 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, 1996, the Company had working capital of $8,604,000 before deducting the liability for deferred subscription revenues of $6,503,000 which will be earned within one year. The cash and short-term investments in U.S. Treasury Bills, aggregating about $8 million at December 31, 1996, and the current level of cash provided by operating activities appear adequate to meet the obligations of the Company. 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, 1997 EX-27 2
5 This schedule contains summary financial information extracted from the Regis- trant's Consolidated Balance Sheet (Unaudited) as of 12/31/96 and 9/30/96, Stmt. (Unaudited) for the 3 mos. ended 12/31/96 and 12/31/95, and Stmt. of Cash Flows (Unaudited) for the 3 mos. ended 12/31/96 and 12/31/95 and the notes thereto and is qualified in its entirety by reference to such financial statements. 3-MOS SEP-30-1997 DEC-31-1997 1,027,000 6,933,000 4,950,000 700,000 40,000 13,365,000 13,885,000 5,639,000 22,410,000 11,264,000 0 0 0 16,000 11,130,000 22,410,000 8,768,000 8,863,000 0 7,560,000 0 145,000 0 1,158,000 460,000 698,000 0 0 0 698,000 .44 .44
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