UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): May 12, 2014
DAILY JOURNAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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SOUTH CAROLINA |
0-14665 |
95-4133299 |
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(State or Other Jurisdiction |
(Commission File No.) |
(I.R.S. Employer |
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of Incorporation) |
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Identification No.) |
915 East First Street
Los Angeles, CA 90012-4050
(Address of Principal Executive Offices and Zip Code)
Registrant’s telephone number, including area code: (213) 229-5300
Not applicable
(Former name or former address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (See General Instructions A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a–12 under the Exchange Act (17 CFR 240.14a–12)
☐ Pre-commencement communication pursuant to Rule 14d–2(b) under the Exchange Act (17 CFR 240.14d–2(b))
☐ Pre-commencement communications pursuant to Rule 13e–4(c) under the Exchange Act (17 CFR 240.13e–4(c))
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Item 2.02 |
Results of Operations and Financial Condition |
On May 12, 2014, Daily Journal Corporation (the “Company”) issued a press release announcing its preliminary financial results for the fiscal quarter ended March 31, 2014. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein.
The information in this Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01
Financial Statements and Exhibits
(d)
Exhibits
99.1
Press release dated May 12, 2014
[SIGNATURE PAGE FOLLOWS]
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DAILY JOURNAL CORPORATION |
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| By: | /s/ Gerald L. Salzman | ||
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Gerald L. Salzman |
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| Chief Executive Officer | |||
| President | |||
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Chief Financial Officer |
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| Treasurer | |||
| Dated: May 12, 2014 | |||
EXHIBIT INDEX
| Exhibits | Description | |
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99.1 |
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Press release dated May 12, 2014 |
Exhibit 99.1
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Contact: Tu To |
(213) 229-5436 |
FOR IMMEDIATE RELEASE – LOS ANGELES, CALIFORNIA, May 12, 2014
Daily Journal Corporation Announces Preliminary Financial Results
for the Six Months ended March 31, 2014
Daily Journal Corporation (NASDAQ: DJCO) today announced preliminary financial results for the six months ended March 31, 2014. The results are preliminary because the Company’s independent registered public accounting firm, Ernst & Young, LLP, has not completed its audit of the Company’s financial statements or its audit of the Company’s internal control over financial reporting for the fiscal year ended September 30, 2013. Accordingly, the Company is not yet able to file with the Securities and Exchange Commission its Form 10-K for fiscal 2013 or its Forms 10-Q for the first and second quarters of fiscal 2014 and is announcing these preliminary results to provide the market with important information about the Company’s performance for the six months ended March 31, 2014. Meanwhile, NASDAQ has granted the Company an exception to regain compliance with its listing rules by June 30, 2014 provided that all required reports are filed by then.
Consolidated revenues were $20,779,000 and $17,446,000 for the six months ended March 31, 2014 and 2013, respectively. This increase of $3,333,000 (19%) was primarily from additional New Dawn (acquired in December 2012) and ISD (acquired in September 2013) revenues of $5,833,000, partially offset by a reduction in trustee sale notice and related service fee revenues of $2,548,000, which is consistent with the recent trend in those revenues.
During the six months ended March 31, 2014, the Company had a consolidated pretax loss of $473,000 as compared to pretax income of $2,925,000 in the prior year period. This was a decrease in profits of $3,398,000 that included $1,983,000 of additional amortizations of intangible acquisition costs. The Company’s traditional business segment pretax income decreased by $2,875,000 (56%) to $2,293,000 from $5,168,000, primarily resulting from the reduction in trustee sale notice and related service fee revenues. The Company’s technology business segment had a pretax loss of $2,766,000 compared to $2,243,000 in the prior year period. The expenses in the 2014 period included $2,618,000 of intangible amortization expenses related to the two acquisitions.
At March 31, 2014, the Company held marketable securities valued at $168,028,000, including unrealized gains of $120,051,000. It accrued a liability of $46,917,000 for income taxes due only upon the sales of the net appreciated securities. The marketable securities consist of common stocks of three Fortune 200 companies, two foreign companies and certain bonds of a sixth, and most of the unrealized gains were in the common stocks.
Comprehensive income includes net (loss) income and unrealized net gains on investments, net of taxes, as summarized below:
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Comprehensive Income |
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Six months ended March 31 |
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2014 |
2013 |
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Net (loss) income |
$ | (373,000 | ) | $ | 1,985,000 | |||
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Net change in unrealized appreciation of investments (net of taxes) |
18,725,000 | 10,915,000 | ||||||
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Comprehensive income |
$ | 18,352,000 | $ | 12,900,000 | ||||
During the six months ended March 31, 2014, there was a preliminary consolidated net loss of $373,000 versus net income of $1,985,000 for the six months ended March 31, 2013. The preliminary net loss per share was $.27 as compared with net income of $1.44 per share in the prior year period.
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Financial Information for the Company’s Reportable Segments |
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Traditional business |
The Technology Companies* |
Total |
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Six months ended March 31, 2014 |
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Revenues |
$ | 9,997,000 | $ | 10,782,000 | $ | 20,779,000 | ||||||
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Income (loss) from operations |
1,134,000 | (2,817,000 | ) | (1,683,000 | ) | |||||||
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Pretax income (loss) |
2,293,000 | (2,766,000 | ) | (473,000 | ) | |||||||
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Income tax (expense) benefit |
(1,190,000 | ) | 1,290,000 | 100,000 | ||||||||
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Net income (loss) |
1,103,000 | (1,476,000 | ) | (373,000 | ) | |||||||
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Amortization of intangible assets |
--- | 2,618,000 | 2,618,000 | |||||||||
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Traditional business |
Sustain & New Dawn** |
Total |
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Six months ended March 31, 2013 |
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Revenues |
$ | 12,439,000 | $ | 5,007,000 | $ | 17,446,000 | ||||||
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Income (loss) from operations |
4,122,000 | (2,264,000 | ) | 1,858,000 | ||||||||
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Pretax income (loss) |
5,168,000 | (2,243,000 | ) | 2,925,000 | ||||||||
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Income tax (expense) benefit |
(1,660,000 | ) | 720,000 | (940,000 | ) | |||||||
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Net income (loss) |
3,508,000 | (1,523,000 | ) | 1,985,000 | ||||||||
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Amortization of intangible assets |
--- | 635,000 | 635,000 | |||||||||
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* |
Included (i) New Dawn’s financial results with revenues of $4,298,000 and expenses of $6,115,000 (including intangible amortization expenses of $950,000) and (ii) ISD’s financial results with revenues of $5,224,000 and expenses of $4,113,000 (including intangible amortization expenses of $1,668,000). |
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** |
Included New Dawn’s financial results from December 5, 2012 through March 31, 2013 with revenues of $3,690,000 and expenses of $4,046,000 (including intangible amortization expenses of $635,000). |
These preliminary results are based on management’s review of operations for the six months ended March 31, 2014 and remain subject to the completion of our auditor’s review.
Daily Journal Corporation publishes newspapers and web sites covering California and Arizona, as well as the California Lawyer magazine, and produces several specialized information services. Sustain Technologies, Inc., New Dawn Technologies, Inc. and ISD Technologies, Inc. are wholly-owned subsidiaries and supply 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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