Note 10 - Operating Segments

9 Months Ended

Jun. 30, 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
Nine months ended June 30, 2020
Revenues
Advertising	$	5,415,000		$	---		$	---		$	5,415,000
Circulation		3,857,000			---			---			3,857,000
Advertising service fees and other		1,923,000			---			---			1,923,000
Licensing and maintenance fees		---			16,246,000			---			16,246,000
Consulting fees		---			5,065,000			---			5,065,000
Other public service fees		---			4,401,000			---			4,401,000
Operating expenses		11,766,000			27,164,000			---			38,930,000
Loss from operations		(571,000	)		(1,452,000	)		---			(2,023,000	)
Dividends and interest income		---			---			4,573,000			4,573,000
Other income		---			---			3,000			3,000
Net unrealized losses on investments		---			---			(41,191,000	)		(41,191,000	)
Interest expenses on note payable collateralized by real estate		(63,000	)		---			---			(63,000	)
Interest expenses on margin loans and others		---			---			(401,000	)		(401,000	)
Pretax loss		(634,000	)		(1,452,000	)		(37,016,000	)		(39,102,000	)
Income tax benefit		185,000			380,000			10,695,000			11,260,000
Net income (loss)		(449,000	)		(1,072,000	)		(26,321,000	)		(27,842,000	)
Total assets		17,752,000			24,667,000			155,545,000			197,964,000
Capital expenditures		99,000			69,000			---			168,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Nine months ended June 30, 2019
Revenues
Advertising	$	6,753,000		$	---		$	---		$	6,753,000
Circulation		3,930,000			---			---			3,930,000
Advertising service fees and other		2,028,000			---			---			2,028,000
Licensing and maintenance fees		---			15,244,000			---			15,244,000
Consulting fees		---			3,567,000			---			3,567,000
Other public service fees		---			4,136,000			---			4,136,000
Operating expenses		12,485,000			27,241,000			---			39,726,000
Income (loss) from operations		226,000			(4,294,000	)		---			(4,068,000	)
Dividends and interest income		---			---			4,039,000			4,039,000
Other income		---			---			29,000			29,000
Net unrealized losses on investments		---			---			(16,929,000	)		(16,929,000	)
Interest expenses on note payable collateralized by real estate		(67,000	)		---			---			(67,000	)
Interest expenses on margin loans		---			---			(676,000	)		(676,000	)
Pretax income (loss)		159,000			(4,294,000	)		(13,537,000	)		(17,672,000	)
Income tax (expense) benefit		(110,000	)		1,155,000			3,935,000			4,980,000
Net income (loss)		49,000			(3,139,000	)		(9,602,000	)		(12,692,000	)
Total assets		18,276,000			33,903,000			197,576,000			249,755,000
Capital expenditures		63,000			34,000			---			97,000

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Three months ended June 30, 2020
Revenues
Advertising	$	1,297,000		$	---		$	---		$	1,297,000
Circulation		1,259,000			---			---			1,259,000
Advertising service fees and other		575,000			---			---			575,000
Licensing and maintenance fees		---			5,531,000			---			5,531,000
Consulting fees		---			3,147,000			---			3,147,000
Other public service fees		---			1,065,000			---			1,065,000
Operating expenses		3,860,000			8,421,000			---			12,281,000
Income (loss) from operations		(729,000	)		1,322,000			---			593,000
Dividends and interest income		---			---			1,596,000			1,596,000
Net unrealized losses on investments		---			---			16,489,000			16,489,000
Interest expenses on note payable collateralized by real estate		(20,000	)		---			---			(20,000	)
Interest expenses on margin loans and others		---			---			(64,000	)		(64,000	)
Pretax income (loss)		(749,000	)		1,322,000			18,021,000			18,594,000
Income tax benefit (expense)		215,000			(545,000	)		(3,990,000	)		(4,320,000	)
Net (loss) income		(534,000	)		777,000			14,031,000			14,274,000
Total assets		17,752,000			24,667,000			155,545,000			197,964,000
Capital expenditures		---			---			---			---

	Reportable Segments
	Traditional Business			Journal Technologies			Corporate income and expenses			Total
Three months ended June 30, 2019
Revenues
Advertising	$	2,453,000		$	---		$	---		$	2,453,000
Circulation		1,319,000			---			---			1,319,000
Advertising service fees and other		735,000			---			---			735,000
Licensing and maintenance fees		---			5,814,000			---			5,814,000
Consulting fees		---			2,627,000			---			2,627,000
Other public service fees		---			1,570,000			---			1,570,000
Operating expenses		4,137,000			9,257,000			---			13,394,000
Income from operations		370,000			754,000			---			1,124,000
Dividends and interest income		---			---			1,368,000			1,368,000
Other income		---			---			10,000			10,000
Net unrealized gains on investments		---			---			3,214,000			3,214,000
Interest expenses on note payable collateralized by real estate		(22,000	)		---			---			(22,000	)
Interest expenses on margin loans		---			---			(251,000	)		(251,000	)
Pretax income		348,000			754,000			4,341,000			5,443,000
Income tax expense		(225,000	)		(145,000	)		(1,250,000	)		(1,620,000	)
Net income		123,000			609,000			3,091,000			3,823,000
Total assets		18,276,000			33,903,000			197,576,000			249,755,000
Capital expenditures		13,000			---			---			13,000

During the nine months ended June 30, 2020 and 2019, the Traditional Business had total revenues of $11,195,000 and $12,711,000 of which $7,338,000 and $8,781,000, respectively, were recognized, at a point of time, after services were provided, and $3,857,000 and $3,930,000, respectively, were recognized ratably over the subscription terms. Total revenues for the Journal Technologies’ software business were $25,712,000 and $22,947,000 of which $9,889,000 and $8,611,000, respectively, were recognized upon completion of services with customer acceptance, while $15,823,000 and $14,336,000, respectively, were recognized ratably over the license and maintenance periods.

During the three months ended June 30, 2020 and 2019, the Traditional Business had total revenues of $3,131,000 and $4,507,000 of which $1,872,000 and $3,188,000, respectively, were recognized, at a point of time, after services were provided, and $1,259,000 and $1,319,000, respectively, were recognized ratably over the subscription terms. Total revenues for the Journal Technologies’ software business were $9,743,000 and $10,011,000 of which $4,258,000 and $4,576,000, respectively, were recognized upon completion of services with customer acceptance, while $5,485,000 and $5,435,000, respectively, were recognized ratably over the license and maintenance periods.

Approximately 76% and 70% of the Company’s revenues during the three- and nine-month periods ended June 30, 2020 were derived from Journal Technologies, as compared with 69% and 64% 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 June 30, 2020:

	Beginning Balance Oct. 1, 2019		Addition		Recognized			Ending Balance June 30, 2020
Deferred subscriptions	$	3,195,000	$	3,676,000	$	(3,857,000	)	$	3,014,000
Deferred installation contracts		1,932,000		4,039,000		(5,488,000	)		483,000
Deferred maintenance agreements and others		16,057,000		16,749,000		(15,823,000	)		16,983,000