Note 10 - Operating Segments

6 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

10

- Operating Segments

The Company’s reportable segments are: (i) the Traditional Business and (ii) Journal Technologies. All inter-segment transactions were eliminated. Summarized financial information regarding the Company’s reportable segments is shown in the following table:

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Six months ended March 31, 2020
Revenues
Advertising	$	4,118,000		$	---		$	---		$	4,118,000
Circulation		2,598,000			---			---			2,598,000
Advertising service fees and other		1,348,000			---			---			1,348,000
Licensing and maintenance fees		---			10,715,000			---			10,715,000
Consulting fees		---			1,918,000			---			1,918,000
Other public service fees		---			3,336,000			---			3,336,000
Operating expenses		7,906,000			18,743,000			---			26,649,000
Income (loss) from operations		158,000			(2,774,000	)		---			(2,616,000	)
Dividends and interest income		---			---			2,977,000			2,977,000
Other income		---			---			3,000			3,000
Net unrealized losses on investments		---			---			(57,680,000	)		(57,680,000	)
Interest expenses on note payable collateralized by real estate		(43,000	)		---			---			(43,000	)
Interest expenses on margin loans and others		---			---			(337,000	)		(337,000	)
Pretax income (loss)		115,000			(2,774,000	)		(55,037,000	)		(57,696,000	)
Income tax (expense) benefit		(30,000	)		925,000			14,685,000			15,580,000
Net income (loss)		85,000			(1,849,000	)		(40,352,000	)		(42,116,000	)
Total assets		16,074,000			19,578,000			139,083,000			174,735,000
Capital expenditures		99,000			69,000			---			168,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Six months ended March 31, 2019
Revenues
Advertising	$	4,300,000		$	---		$	---		$	4,300,000
Circulation		2,611,000			---			---			2,611,000
Advertising service fees and other		1,293,000			---			---			1,293,000
Licensing and maintenance fees		---			9,430,000			---			9,430,000
Consulting fees		---			940,000			---			940,000
Other public service fees		---			2,566,000			---			2,566,000
Operating expenses		8,348,000			17,984,000			---			26,332,000
Loss from operations		(144,000	)		(5,048,000	)		---			(5,192,000	)
Dividends and interest income		---			---			2,671,000			2,671,000
Other income		---			---			19,000			19,000
Net unrealized losses on investments		---			---			(20,143,000	)		(20,143,000	)
Interest expenses on note payable collateralized by real estate		(45,000	)		---			---			(45,000	)
Interest expenses on margin loans		---			---			(425,000	)		(425,000	)
Pretax loss		(189,000	)		(5,048,000	)		(17,878,000	)		(23,115,000	)
Income tax benefit		115,000			1,300,000			5,185,000			6,600,000
Net loss		(74,000	)		(3,748,000	)		(12,693,000	)		(16,515,000	)
Total assets		17,399,000			31,710,000			194,354,000			243,463,000
Capital expenditures		50,000			34,000			---			84,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Three months ended March 31, 2020
Revenues
Advertising	$	1,992,000		$	---		$	---		$	1,992,000
Circulation		1,286,000			---			---			1,286,000
Advertising service fees and other		654,000			---			---			654,000
Licensing and maintenance fees		---			5,505,000			---			5,505,000
Consulting fees		---			1,229,000			---			1,229,000
Other public service fees		---			1,690,000			---			1,690,000
Operating expenses		3,908,000			9,546,000			---			13,454,000
Income (loss) from operations		24,000			(1,122,000	)		---			(1,098,000	)
Dividends and interest income		---			---			1,297,000			1,297,000
Net unrealized losses on investments		---			---			(77,211,000	)		(77,211,000	)
Interest expenses on note payable collateralized by real estate		(21,000	)		---			---			(21,000	)
Interest expenses on margin loans and others		---			---			(153,000	)		(153,000	)
Pretax income (loss)		3,000			(1,122,000	)		(76,067,000	)		(77,186,000	)
Income tax benefit		---			415,000			20,445,000			20,860,000
Net income (loss)		3,000			(707,000	)		(55,622,000	)		(56,326,000	)
Total assets		16,074,000			19,578,000			139,083,000			174,735,000
Capital expenditures		64,000			7,000			---			71,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Three months ended March 31, 2019
Revenues
Advertising	$	2,108,000		$	---		$	---		$	2,108,000
Circulation		1,273,000			---			---			1,273,000
Advertising service fees and other		624,000			---			---			624,000
Licensing and maintenance fees		---			4,640,000			---			4,640,000
Consulting fees		---			399,000			---			399,000
Other public service fees		---			1,668,000			---			1,668,000
Operating expenses		4,140,000			9,243,000			---			13,383,000
Loss from operations		(135,000	)		(2,536,000	)		---			(2,671,000	)
Dividends and interest income		---			---			1,141,000			1,141,000
Other income		---			---			9,000			9,000
Net unrealized gains on investments		---			---			8,497,000			8,497,000
Interest expenses on note payable collateralized by real estate		(22,000	)		---			---			(22,000	)
Interest expenses on margin loans		---			---			(219,000	)		(219,000	)
Pretax income (loss)		(157,000	)		(2,536,000	)		9,428,000			6,735,000
Income tax benefit (expense)		35,000			715,000			(2,467,000	)		(1,717,000	)
Net (loss) income		(122,000	)		(1,821,000	)		6,961,000			5,018,000
Total assets		17,399,000			31,710,000			194,354,000			243,463,000
Capital expenditures		---			---			---			---

During the

six

months ended

March 31, 2020,

the Traditional Business had total revenues of

$8,064,000

of which

$5,466,000

were recognized, at a point of time, after services were provided, and

$2,598,000

were recognized ratably over the subscription terms. Total revenues for the Journal Technologies’ software business were

$15,969,000

of which

$5,631,000

were recognized upon completion of services with customer acceptance, while

$10,338,000

were recognized ratably over the license and maintenance periods.

During the

six

months ended

March 31, 2019,

the Traditional Business had total revenues of

$8,204,000

of which

$5,593,000

were recognized, at a point of time, after services were provided, and

$2,611,000

were recognized ratably over the subscription terms. Total revenues for the Company’s software business were

$12,936,000

of which

$4,035,000

were recognized upon completion of services with customer acceptance, while

$8,901,000

were recognized ratably over the license and maintenance periods.

During the

three

months ended

March 31, 2020,

the Traditional Business had total revenues of

$3,932,000

of which

$2,646,000

were recognized, at a point of time, after services were provided, and

$1,286,000

were recognized ratably over the subscription terms. Total revenues for the Journal Technologies’ software business were

$8,424,000

of which

$3,177,000

were recognized upon completion of services with customer acceptance, while

$5,247,000

were recognized ratably over the license and maintenance periods.

During the

three

months ended

March 31, 2019,

the Traditional Business had total revenues of

$4,005,000

of which

$2,732,000

were recognized, at a point of time, after services were provided, and

$1,273,000

were recognized ratably over the subscription terms. Total revenues for the Company’s software business were

$6,707,000

of which

$2,100,000

were recognized upon completion of services with customer acceptance, while

$4,607,000

were recognized ratably over the subscription periods.

Approximately

68%

and

66%

of the Company’s revenues during the

three

- and

six

-month periods ended

March 31, 2020

were derived from Journal Technologies, as compared with

63%

and

61%

in the prior year periods. In addition, the Company’s revenues have been primarily from the United States with approximately

1%

from foreign countries. Journal Technologies’ revenues are primarily from governmental agencies.

The following table sets forth certain deferred obligations from

October 1, 2019

through

March 31, 2020:

	Beginning Balance Oct. 1, 2019		Addition		Recognized			Ending Balance March 31, 2020
Deferred subscriptions	$	3,195,000	$	2,287,000	$	(2,598,000	)	$	2,884,000
Deferred installation contracts		1,932,000		1,471,000		(2,295,000	)		1,108,000
Deferred maintenance agreements and others		16,057,000		7,738,000		(10,338,000	)		13,457,000