10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

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 incorporation or organization)	(I.R.S. Employer Identification No.)
915 East First Street Los Angeles, California	90012-4050
(Address of principal executive offices)	(Zip code)

(213) 229-5300

(Registrant's telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	DJCO	The Nasdaq Stock Market

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: ☒         No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes: ☒          No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer: ☐	Accelerated Filer: ☐
Non-accelerated Filer: ☐	Smaller Reporting Company: ☒
	Emerging Growth Company: ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes: ☐ No: ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date: 1,377,026 shares outstanding at July 31, 2022

1

DAILY JOURNAL CORPORATION

INDEX

	Page Nos.
PART I   Financial Information
Item 1.  Financial Statements (Unaudited)
Consolidated Balance Sheets ‑ June 30, 2022 and September 30, 2021	3
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income ‑ Three months ended June 30, 2022 and 2021	4
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income ‑ Nine months ended June 30, 2022 and 2021	5
Consolidated Statements of Shareholders’ Equity ‑ Nine months ended June 30, 2022 and 2021	6
Consolidated Statements of Cash Flows ‑ Nine months ended June 30, 2022 and 2021	7
Notes to Consolidated Financial Statements	8
Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4.     Controls and Procedures	25
Part II   Other Information
Item 6.      Exhibits	26

2

PART I

Item 1. FINANCIAL STATEMENTS

DAILY JOURNAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30			September 30
	2022			2021
ASSETS
Current assets
Cash and cash equivalents	$	8,879,000		$	12,596,000
Restricted cash		2,044,000			2,043,000
Marketable securities at fair value -- common stocks		341,855,000			347,573,000
Accounts receivable, less allowance for doubtful accounts of $250,000 at June 30, 2022 and September 30, 2021		10,694,000			9,524,000
Inventories		70,000			43,000
Income tax receivable		3,950,000			---
Prepaid expenses and other current assets		552,000			557,000
Total current assets		368,044,000			372,336,000
Property, plant and equipment, at cost
Land, buildings and improvements		16,330,000			16,499,000
Furniture, office equipment and computer software		1,702,000			1,688,000
Machinery and equipment		1,524,000			1,524,000
		19,556,000			19,711,000
Less accumulated depreciation		(9,947,000	)		(9,706,000	)
		9,609,000			10,005,000
Operating lease right-of-use assets		130,000			215,000
Deferred income taxes		6,791,000			8,021,000
	$	384,574,000		$	390,577,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	4,407,000		$	4,239,000
Accrued liabilities		5,391,000			6,052,000
Income tax payable		---			6,244,000
Note payable collateralized by real estate		152,000			147,000
Deferred subscriptions		2,800,000			2,694,000
Deferred consulting fees		6,695,000			5,498,000
Deferred maintenance agreements and others		10,796,000			9,138,000
Total current liabilities		30,241,000			34,012,000
Long term liabilities
Investment margin account borrowings		75,000,000			32,000,000
Note payable collateralized by real estate		1,316,000			1,431,000
Deferred maintenance agreements and others		383,000			995,000
Accrued liabilities		3,250,000			3,383,000
Deferred income taxes		50,540,000			64,115,000
Total long term liabilities		130,489,000			101,924,000
Commitments and contingencies (Notes 10 and 11)		---			---
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; 1,805,053 shares issued, including 428,027 and 424,307 treasury shares, at June 30, 2022 and September 30, 2021, respectively		14,000			14,000
Additional paid-in capital		1,755,000			1,755,000
Retained earnings		222,075,000			252,872,000
Total shareholders' equity		223,844,000			254,641,000
	$	384,574,000		$	390,577,000

See accompanying Notes to Consolidated Financial Statements

3

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Three months ended June 30
	2022			2021
Revenues
Advertising	$	1,989,000		$	2,195,000
Circulation		1,097,000			1,126,000
Advertising service fees and other		787,000			762,000
Licensing and maintenance fees		4,633,000			5,602,000
Consulting fees		2,267,000			2,100,000
Other public service fees		1,779,000			1,777,000
		12,552,000			13,562,000
Costs and expenses
Salaries and employee benefits		9,421,000			8,780,000
Increase to the long-term supplemental compensation accrual		1,985,000			655,000
Outside services		1,074,000			794,000
Postage and delivery expenses		165,000			160,000
Newsprint and printing expenses		174,000			162,000
Depreciation and amortization		73,000			114,000
Equipment maintenance and software		263,000			298,000
Credit card merchant discount fees		429,000			462,000
Rent expenses		64,000			66,000
Accounting and legal fees		206,000			252,000
Other general and administrative expenses		801,000			495,000
		14,655,000			12,238,000
(Loss) income from operations		(2,103,000	)		1,324,000
Other income (expense)
Dividends and interest income		1,263,000			776,000
Gains on sale of land		272,000			---
Other income		---			69,000
Net unrealized (losses) gains on marketable securities		(12,666,000	)		55,686,000
Interest expense on margin loans and others		(281,000	)		(68,000	)
Interest expense on note payable collateralized by real estate		(12,000	)		(14,000	)
(Loss) income before income taxes		(13,527,000	)		57,773,000
Income tax benefits (provisions)		3,665,000			(15,200,000	)
Net (loss) income	$	(9,862,000	)	$	42,573,000
Weighted average number of common shares outstanding - basic and diluted		1,380,133			1,380,746
Basic and diluted net (loss) income per share	$	(7.15	)	$	30.83
Comprehensive (loss) income	$	(9,862,000	)	$	42,573,000

See accompanying Notes to Consolidated Financial Statements.

4

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Nine months ended June 30
	2022			2021
Revenues
Advertising	$	5,679,000		$	5,649,000
Circulation		3,279,000			3,458,000
Advertising service fees and other		2,200,000			1,964,000
Licensing and maintenance fees		13,721,000			16,990,000
Consulting fees		4,697,000			4,649,000
Other public service fees		5,221,000			5,242,000
		34,797,000			37,952,000
Costs and expenses
Salaries and employee benefits		26,745,000			25,818,000
(Decrease) increase to the long-term supplemental compensation accrual		(65,000	)		1,410,000
Outside services		2,912,000			2,236,000
Postage and delivery expenses		492,000			490,000
Newsprint and printing expenses		529,000			469,000
Depreciation and amortization		301,000			344,000
Equipment maintenance and software		881,000			946,000
Credit card merchant discount fees		1,249,000			1,397,000
Rent expenses		187,000			228,000
Accounting and legal fees		748,000			746,000
Other general and administrative expenses		2,492,000			1,554,000
		36,471,000			35,638,000
(Loss) income from operations		(1,674,000	)		2,314,000
Other income (expense)
Dividends and interest income		4,251,000			2,063,000
Gains on sale of land		272,000			---
Other income		---			69,000
Realized gains on sales of marketable securities		14,249,000			18,478,000
Net unrealized (losses) gains on marketable securities		(57,075,000	)		131,754,000
Interest expense on margin loans and others		(517,000	)		(196,000	)
Interest expense on note payable collateralized by real estate		(38,000	)		(48,000	)
(Loss) income before income taxes		(40,532,000	)		154,434,000
Income tax benefits (provisions)		9,735,000			(40,115,000	)
Net (loss) income	$	(30,797,000	)	$	114,319,000
Weighted average number of common shares outstanding - basic and diluted		1,380,542			1,380,746
Basic and diluted net (loss) income per share	$	(22.31	)	$	82.80
Comprehensive (loss) income	$	(30,797,000	)	$	114,319,000

See accompanying Notes to Consolidated Financial Statements.

5

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

											Additional					Total
	Common Stock				Treasury Stock						Paid-in		Retained			Shareholders'
	Share		Amount		Share			Amount			Capital		Earnings			Equity
Balance at September 30, 2020		1,805,053	$	18,000		(424,307	)	$	(4,000	)	$	1,755,000	$	139,972,000		$	141,741,000
Net income		---		---		---			---			---		59,270,000			59,270,000
Balance at December 31, 2020		1,805,053		18,000		(424,307	)		(4,000	)		1,755,000		199,242,000			201,011,000
Net income		---		---		---			---			---		12,476,000			12,476,000
Balance at March 31, 2021		1,805,053		18,000		(424,307	)		(4,000	)		1,755,000		211,718,000			213,487,000
Net income		---		---		---			---			---		42,573,000			42,573,000
Balance at June 30, 2021		1,805,053	$	18,000		(424,307	)	$	(4,000	)	$	1,755,000	$	254,291,000		$	256,060,000
Balance at September 30, 2021		1,805,053	$	18,000		(424,307	)	$	(4,000	)	$	1,755,000	$	252,872,000		$	254,641,000
Net income		---		---		---			---			---		6,878,000			6,878,000
Balance at December 31, 2021		1,805,053		18,000		(424,307	)		(4,000	)		1,755,000		259,750,000			261,519,000
Net loss		---		---		---			---			---		(27,813,000	)		(27,813,000	)
Balance at March 31, 2022		1,805,053	$	18,000		(424,307	)		(4,000	)		1,755,000		231,937,000			233,706,000
Receipt of donated treasury stock		---		---		(3,720	)		---			---		---			---
Net loss		---		---		---			---			---		(9,862,000	)		(9,862,000	)
Balance at June 30, 2022		1,805,053	$	18,000		(428,027	)	$	(4,000	)	$	1,755,000	$	222,075,000		$	223,844,000

See accompanying Notes to Consolidated Financial Statements

6

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months Ended June 30
	2022			2021
Cash flows from operating activities
Net (loss) income	$	(30,797,000	)	$	114,319,000
Adjustments to reconcile net (loss) income to net cash (used in) provided from operations
Depreciation and amortization		301,000			344,000
Net unrealized losses (gains) on marketable securities		57,075,000			(131,754,000	)
Realized gains on sales of marketable securities		(14,249,000	)		(18,478,000	)
Gains on sale of land		(272,000	)		---
Deferred income taxes		(12,345,000	)		38,556,000
Changes in operating assets and liabilities
(Increase) decrease in current assets
Accounts receivable, net		(1,170,000	)		(3,288,000	)
Inventories		(27,000	)		(19,000	)
Prepaid expenses and other assets		90,000			(16,000	)
Income tax receivable		(3,950,000	)		601,000
Increase (decrease) in liabilities
Accounts payable		168,000			96,000
Accrued liabilities		(794,000	)		2,080,000
Income tax payable		(6,244,000	)		375,000
Deferred subscriptions		106,000			(191,000	)
Deferred consulting fees		1,197,000			131,000
Deferred maintenance agreements and others		1,046,000			(2,734,000	)
Net cash (used in) provided from operating activities		(9,865,000	)		22,000
Cash flows from investing activities
Proceeds from sales of marketable securities		80,570,000			20,002,000
Purchases of marketable securities		(117,678,000	)		(39,995,000	)
Sale of land		381,000			---
Purchases of property, plant and equipment		(14,000	)		(29,000	)
Net cash used in investing activities		(36,741,000	)		(20,022,000	)
Cash flows from financing activities
Payment to margin loan principal		(14,000	)		(14,493,000	)
Borrowing from margin loan account		43,014,000			17,000,000
Payment of real estate loan principal		(110,000	)		(94,000	)
Net cash provided from financing activities		42,890,000			2,413,000
Decrease in cash and restricted cash and cash equivalents		(3,716,000	)		(17,587,000	)
Cash and restricted cash and cash equivalents
Beginning of period		14,639,000			28,963,000
End of period	$	10,923,000		$	11,376,000
Interest paid during period	$	509,000		$	245,000
Net income taxes paid	$	12,801,000		$	580,000

See accompanying Notes to Consolidated Financial Statements.

7

DAILY JOURNAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - The Corporation and Operations

Daily Journal Corporation (the “Company”) publishes newspapers and websites reporting California and Arizona news and produces several specialized information services. It also serves as a newspaper representative specializing in public notice advertising. This is sometimes referred to as the Company’s “Traditional Business”.

Journal Technologies, Inc. (“Journal Technologies”), a wholly-owned subsidiary of the Company, supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other critical justice partners and to extend electronic services to the public, including efiling and a website to pay traffic citations and fees online. These products are licensed in approximately 30 states and internationally.

Essentially all of the Company’s U.S. operations are based in California, Arizona and Utah. The Company also has a presence in Australia where Journal Technologies is working on three software installation projects.

Note 2 - Basis of Presentation

In the opinion of the Company, the accompanying interim unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of its financial position as of June 30, 2022, its results of operations for the three- and nine-month periods ended June 30, 2022 and 2021, its consolidated statements of shareholders’ equity for the nine months ended June 30, 2022 and 2021 and cash flows for the nine months ended June 30, 2022 and 2021. The results of operations for the nine months ended June 30, 2022 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, 2021.

Certain reclassifications of previously reported amounts have been made to conform to the current year’s presentation.

Note 3 – New Accounting Pronouncement

No new accounting pronouncement issued or effective has had, or is expected to have, a material impact on the Company’s consolidated financial statements.

8

Note 4 – Right-of-Use (ROU) Asset

At June 30, 2022, the Company had a right-of-use asset and lease liability of approximately $130,000 for its operating office and equipment leases, including approximately $35,000 beyond one year.  Operating office and equipment leases are included in operating lease ROU assets, current accrued liabilities and long-term accrued liabilities in the Company’s accompanying Consolidated Balance Sheets. 

Note 5 – Revenue Recognition

The Company recognizes revenues in accordance with the provisions of ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606).

For the Traditional Business, proceeds from the sale of subscriptions for newspapers, court rule books and other publications and other services are recorded as deferred revenue and are included in earned revenue only when the services are provided, generally over the subscription term. Advertising revenues are recognized when advertisements are published and are net of agency commissions.

Journal Technologies contracts may include several products and services, which are generally distinct and include separate transaction pricing and performance obligations. Most are one-transaction contracts. These current subscription-type contract revenues include (i) implementation consulting fees to configure the system to go-live, (ii) subscription software license, maintenance (including updates and upgrades) and support fees, and (iii) third-party hosting fees when used. Revenues for consulting are generally recognized at point of delivery (go-live) upon completion of services. These contracts include assurance warranty provisions for limited periods and do not include financing terms. For some contracts, the Company acts as a principal with respect to certain services, such as data conversion, interfaces and hosting that are provided by third-parties, and recognizes such revenues on a gross basis. For legacy contracts with perpetual license arrangements, licenses and consulting services are recognized at point of delivery (go-live), and maintenance revenues are recognized ratably after the go-live. Other public service fees are earned and recognized as revenues when the Company processes credit card payments on behalf of the courts via its websites through which the public can efile cases and pay traffic citations and other fees.

ASC 606 also requires the capitalization of certain costs of obtaining contracts, specifically sales commissions which are to be amortized over the expected term of the contracts. For its software contracts, the Company incurs an immaterial amount of sales commission costs which have no significant impact on the Company’s financial condition and results of operations. In addition, the Company’s implementation and fulfillment costs do not meet all criteria required for capitalization.

Since the Company generally recognizes revenues when it can invoice the customer pursuant to the contract for the value of completed performance, as a practical expedient and because reliable estimates cannot be made, it has elected not to include as revenues the transaction price allocated to unsatisfied performance obligations. Also, as a practical expedient, the Company has elected not to include its evaluation of variable consideration of certain usage based fees (i.e. public service fees) that are included in some contracts. Furthermore, there are no fulfillment costs to be capitalized for the software contracts because these costs do not generate or enhance resources that will be used in satisfying future performance obligations.

9

Note 6 - Treasury stock and net (loss) income per common share

In June 2022, the Company received from Director Charles T. Munger 3,720 shares of Daily Journal common stock as his gracious personal gift (worth approximately $1 million on the date of the gift) for the purpose of establishing a new senior management equity incentive plan. These donated shares are now considered treasury stock, and the Company accounted for them using the par method which resulted in an immaterial effected amount on Treasury Stock and Additional Paid-in Capital. In addition, the number of outstanding shares of the Company was reduced by these 3,720 shares to reflect the actual number of outstanding shares of 1,377,026 as of June 30, 2022. The net (loss) income per common share is based on the weighted average number of shares outstanding during the comparable financial periods. The shares used in the calculation were 1,380,542 and 1,380,133 for the nine- and three-month periods ended June 30, 2022 respectively. For both the nine- and three-month periods ended June 30, 2021, the weighted average number of shares outstanding was 1,380,746.

Note 7 - Basic and Diluted Net Income Per Share

The Company does not have any common stock equivalents, and therefore basic and diluted net income per share are the same.

Note 8 - Investments in Marketable Securities

All investments are classified as “Current assets” because they are available for sale at any time. These “available-for-sale” marketable securities are stated at fair value. The Company uses quoted prices in active markets for identical assets (consistent with the Level 1 definition in the fair value hierarchy) to measure the fair value of its investments on a recurring basis pursuant to ASC 820, Fair Value Measurement. As of June 30, 2022 and September 30, 2021, there were net accumulated pretax unrealized gains of $187,018,000 and $244,093,000, respectively, recorded in the accompanying Consolidated Balance Sheets. Most of the accumulated pretax unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

For the nine months ended June 30, 2022, the Company recorded and included in its net income the net unrealized losses on marketable securities of $57,075,000, as compared with the net unrealized gains on marketable securities of $131,754,000, in the prior year period.

In December 2021 and March 2022, the Company sold part of its marketable securities for approximately $80,570,000, realizing net gains of $14,249,000, and borrowed an additional net $43,000,000 from the margin loan account to primarily purchase additional marketable securities with a total cost of approximately $117,678,000.

10

 

Investments in marketable securities as of June 30, 2022 and September 30, 2021 are summarized below.

Investment in Marketable Securities

	June 30, 2022						September 30, 2021
	Aggregate fair value		Adjusted cost basis		Pretax unrealized gains		Aggregate fair value		Adjusted cost basis		Pretax unrealized gains
Marketable securities
Common stocks	$	341,855,000	$	154,837,000	$	187,018,000	$	347,573,000	$	103,480,000	$	244,093,000

Note 9 - Income Taxes

For the nine months ended June 30, 2022, the Company recorded an income tax benefit of $9,735,000 on the pretax loss of $40,532,000.   The income tax benefit consisted of a tax benefit of $15,425,000 on the unrealized losses on marketable securities and a benefit of $250,000 for the dividends received deduction and other permanent book and tax differences, offset by tax provisions of $3,850,000 on the realized gains on marketable securities, $500,000 on income from operations, and $1,590,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability.  Consequently, the overall effective tax rate for the nine months ended June 30, 2022 was 24%, after including the taxes on the realized gains and unrealized losses on marketable securities.

For the nine months ended June 30, 2021, the Company recorded a provision for income taxes of $40,115,000 on pretax income of $154,434,000.   This was the net result of applying the effective tax rate anticipated for fiscal 2021 to pretax income before the unrealized and realized gains on marketable securities for the nine months ended June 30, 2021. The effective rate of 21.32%, which was higher than the statutory rate of 21% primarily due to state taxes which were offset by the dividends received deduction, resulted in a tax provision of $896,000 on pretax income before the unrealized and realized gains on marketable securities. In addition, the Company recorded a tax provision of $34,405,000 on the unrealized gains on marketable securities, and a tax provision of $4,821,000 on the realized gains on marketable securities, both of which were offset by a tax benefit of $7,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the nine months ended June 30, 2021 was 26%, after including the taxes on the realized and unrealized gains on marketable securities.

The Company files consolidated federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2018 with regard to federal income taxes and fiscal 2017 for state income taxes. 

Note 10 - Debt and Commitments

During fiscal 2013, the Company borrowed from its investment margin account the aggregate purchase price of $29.5 million for two acquisitions, in each case pledging its marketable securities as collateral. There were also subsequent borrowings of net $45.5 million to purchase additional marketable securities bringing the margin loan balance up to $75 million as of June 30, 2022. The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 50 basis points with interest only payable monthly. The interest rate as of June 30, 2022 was 2.25%. These investment margin account borrowings do not mature.

11

 

In November 2015, the Company purchased a 30,700 square foot office building constructed in 1998 on about 3.6 acres in Logan, Utah that had been previously leased by Journal Technologies. The Company paid $1.24 million and financed the balance with a real estate bank loan of $2.26 million which had a fixed interest rate of 4.66%. This loan is secured by the Logan facility and can be paid off at any time without prepayment penalty. In October 2020, the Company executed an amendment to lower the interest rate of this loan to a fixed rate of 3.33% for the remaining 10 years. This real estate loan had a balance of approximately $1.47 million as of June 30, 2022. Each monthly installment payment is about $16,600. In April 2022, the Company sold approximately 17,564 square feet of the land along the front of its Logan building to the City of Logan for approximately $381,000 in connection with the City of Logan’s street widening project.

The Company also owns its facilities in Los Angeles and leases space for its other offices under operating leases which expire at various dates through October 2023.

Note 11 - Contingencies

From time to time, the Company is subject to contingencies, including litigation, arising in the normal course of its business. While it is not possible to predict the results of such contingencies, management does not believe the ultimate outcome of these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

12

Note 12 - 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:         

Overall Financial Results (000)

For the nine months ended June 30

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	5,679		$	5,649		$	---		$	---		$	---		$	---		$	5,679		$	5,649
Circulation		3,279			3,458			---			---			---			---			3,279			3,458
Advertising service fees and other		2,200			1,964			---			---			---			---			2,200			1,964
Licensing and maintenance fees		---			---			13,721			16,990			---			---			13,721			16,990
Consulting fees		---			---			4,697			4,649			---			---			4,697			4,649
Other public service fees		---			---			5,221			5,242			---			---			5,221			5,242
Total revenues		11,158			11,071			23,639			26,881			---			---			34,797			37,952
Operating expenses
Salaries and employee benefits		6,864			6,687			19,881			19,131			---			---			26,745			25,818
(Decrease) increase to the long-term supplemental compensation accrual		(25	)		1,410			(40	)		---			---			---			(65	)		1,410
Others		2,877			2,904			6,914			5,506			---			---			9,791			8,410
Total operating expenses		9,716			11,001			26,755			24,637			---			---			36,471			35,638
Income (loss) from operations		1,442			70			(3,116	)		2,244			---			---			(1,674	)		2,314
Dividends and interest income		---			---			---			---			4,251			2,063			4,251			2,063
Gains on sale of land		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(38	)		(48	)		(38	)		(48	)
Interest expenses on margin loans		---			---			---			---			(517	)		(196	)		(517	)		(196	)
Net realized gains on sales of marketable securities		---			---			---			---			14,249			18,478			14,249			18,478
Net unrealized (losses) gains on marketable securities		---			---			---			---			(57,075	)		131,754			(57,075	)		131,754
Pretax income (loss)		1,442			70			(3,116	)		2,244			(38,858	)		152,120			(40,532	)		154,434
Income tax (expense) benefit		(335	)		(15	)		985			(785	)		9,085			(39,315	)		9,735			(40,115	)
Net income (loss)	$	1,107		$	55		$	(2,131	)	$	1,459		$	(29,773	)	$	112,805		$	(30,797	)	$	114,319
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	22		$	10		$	7		$	---		$	---		$	14		$	29

13

 

Overall Financial Results (000)

For the three months ended June 30

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,989		$	2,195		$	---		$	---		$	---		$	---		$	1,989		$	2,195
Circulation		1,097			1,126			---			---			---			---			1,097			1,126
Advertising service fees and other		787			762			---			---			---			---			787			762
Licensing and maintenance fees		---			---			4,633			5,602			---			---			4,633			5,602
Consulting fees		---			---			2,267			2,100			---			---			2,267			2,100
Other public service fees		---			---			1,779			1,777			---			---			1,779			1,777
Total revenues		3,873			4,083			8,679			9,479			---			---			12,552			13,562
Operating expenses
Salaries and employee benefits		2,134			2,081			7,287			6,699			---			---			9,421			8,780
Increase to the long-term Supplemental compensation accrual		1,985			655			---			---			---			---			1,985			655
Others		904			929			2,345			1,874			---			---			3,249			2,803
Total operating expenses		5,023			3,665			9,632			8,573			---			---			14,655			12,238
Income (loss) from operations		(1,150	)		418			(953	)		906			---			---			(2,103	)		1,324
Dividends and interest income		---			---			---			---			1,263			776			1,263			776
Gains on land sale		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(12	)		(14	)		(12	)		(14	)
Interest expenses on margin loans		---			---			---			---			(281	)		(68	)		(281	)		(68	)
Net unrealized (losses) gains on marketable securities		---			---			---			---			(12,666	)		55,686			(12,666	)		55,686
Pretax (loss) income		(1,150	)		418			(953	)		906			(11,424	)		56,449			(13,527	)		57,773
Income tax benefit (expense)		225			(175	)		280			(460	)		3,160			(14,565	)		3,665			(15,200	)
Net (loss) income	$	(925	)	$	243		$	(673	)	$	446		$	(8,264	)	$	41,884		$	(9,862	)	$	42,573
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	---		$	7		$	---		$	---		$	---		$	11		$	---

During the nine months ended June 30, 2022, the Traditional Business had total operating revenues of $11,158,000 with $7,879,000 recognized after services were provided and $3,279,000 recognized ratably over the subscription terms, as compared with total operating revenues of $11,071,000 with $7,613,000 recognized after services were provided and $3,458,000 recognized ratably over the subscription terms in the prior fiscal year period. Total operating revenues for the Company’s software business were $23,639,000 with $9,989,000 recognized upon completion of services and $13,650,000 recognized ratably over the subscription periods, as compared with total operating revenues of $26,881,000 with $11,029,000 recognized upon completion of services and $15,852,000 recognized ratably over the subscription periods in the prior fiscal year period.

During the three months ended June 30, 2022, the Traditional Business had total operating revenues of $3,873,000 with $2,776,000 recognized after services were provided and $1,097,000 recognized ratably over the subscription terms, as compared with total operating revenues of $4,083,000 with $2,957,000 recognized after services were provided and $1,126,000 recognized ratably over the subscription terms in the prior fiscal year period. Total operating revenues for the Company’s software business were $8,679,000 with $4,046,000 recognized upon completion of services and $4,633,000 recognized ratably over the subscription periods, as compared with total operating revenues of $9,479,000 with $4,312,000 recognized upon completion of services and $5,167,000 recognized ratably over the subscription periods in the prior fiscal year period.

14

 

Approximately 68% of the Company’s revenues during the nine-month period ended June 30, 2022 were derived from Journal Technologies, as compared with 71% in the prior year period. In addition, the Company’s revenues have been primarily from the United States with approximately 5% from foreign countries during the nine-months ended June 30, 2022. Journal Technologies’ revenues are primarily from governmental agencies.

Note 12 - Subsequent Events

The Company has completed an evaluation of all subsequent events through the issuance date of these financial statements and concluded that no subsequent events occurred that required recognition to the financial statements or disclosures in the Notes to Consolidated Financial Statements.

15

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The Company continues to operate as two different businesses: (1) The Traditional Business, being the business of newspaper publishing and related services that the Company had before 1999 when it purchased a software development company, and (2) Journal Technologies, Inc. (“Journal Technologies”), a wholly-owned subsidiary which supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other critical justice partners and to extend electronic services to the public, including efiling and a website to pay traffic citations and fees online. These products are licensed in approximately 30 states and internationally.

Impact of the COVID-19 Pandemic

On March 13, 2020, the United States declared the outbreak of COVID-19 to be a national emergency, and several states and municipalities also declared public health emergencies. Unprecedented actions were taken by public health and other governmental authorities to contain and combat the spread of COVID-19, including “stay-at-home” orders and similar mandates that restricted the daily activities of individuals and limited the operation of businesses that were deemed “non-essential”. In addition, most of Journal Technologies’ customers, which are primarily courts and governmental agencies in the United States, Canada and Australia, were either closed or significantly scaled back their activities. Similarly, many law firms and companies from which the Traditional Business derives advertising and subscription revenues also curtailed their in-person operations and spending.

Management believes that the COVID-19 pandemic has had, and, with the Delta and Omicron variant cases, and most recently the more contagious BA.4 and BA.5 sub-variant cases, will continue to have, a significant impact on the Company’s business operations. It is also possible that governments may again take actions in response to the pandemic and new variants and sub-variants, such as a renewed closure, or scaling back of operations, of courts and other governmental agencies that are the customers of the Company. Furthermore, even as courts, governmental agencies and other businesses return to more normal operations, there are likely to be changes in those operations and personal behaviors going forward, including limitations on travel and more working from home, which will adversely affect the Company, its financial results and cash flows.

Due to the uncertainties associated with the duration and severity of the COVID-19 pandemic, the efforts to contain it, and the related changes in business operations and personal behaviors, management cannot at this point estimate the magnitude of its impact on the Company’s business operations. In recent years, the newspaper industry, including our Traditional Business, has declined, and we expect this general trend to continue due to the impacts of COVID-19 and its aftermath, including fewer lawyers receiving our newspapers at their offices as they continue to work from home.

For Journal Technologies, there have been several delays or cancellations in government procurement processes. Also, although we have been able to complete some existing projects remotely, we have been delayed in finishing certain implementations and trainings because of our inability to work with clients in-person. Given that we are typically paid for implementation services upon “go-live” of a system, receipt of those revenues has been delayed.

16

Reportable Segments (for the nine months ended June 30, 2022 and 2021)

The Company’s Traditional Business is one reportable segment, and the other is Journal Technologies. Additional details about each of the reportable segments and its corporate income and expenses is set forth below:

Overall Financial Results (000)

For the nine months ended June 30

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	5,679		$	5,649		$	---		$	---		$	---		$	---		$	5,679		$	5,649
Circulation		3,279			3,458			---			---			---			---			3,279			3,458
Advertising service fees and other		2,200			1,964			---			---			---			---			2,200			1,964
Licensing and maintenance fees		---			---			13,721			16,990			---			---			13,721			16,990
Consulting fees		---			---			4,697			4,649			---			---			4,697			4,649
Other public service fees		---			---			5,221			5,242			---			---			5,221			5,242
Total revenues		11,158			11,071			23,639			26,881			---			---			34,797			37,952
Operating expenses
Salaries and employee benefits		6,864			6,687			19,881			19,131			---			---			26,745			25,818
(Decrease) increase to the long-term supplemental compensation accrual		(25	)		1,410			(40	)		---			---			---			(65	)		1,410
Others		2,877			2,904			6,914			5,506			---			---			9,791			8,410
Total operating expenses		9,716			11,001			26,755			24,637			---			---			36,471			35,638
Income (loss) from operations		1,442			70			(3,116	)		2,244			---			---			(1,674	)		2,314
Dividends and interest income		---			---			---			---			4,251			2,063			4,251			2,063
Gains on sale of land		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(38	)		(48	)		(38	)		(48	)
Interest expenses on margin loans		---			---			---			---			(517	)		(196	)		(517	)		(196	)
Net realized gains on sales of marketable securities		---			---			---			---			14,249			18,478			14,249			18,478
Net unrealized (losses) gains on marketable securities		---			---			---			---			(57,075	)		131,754			(57,075	)		131,754
Pretax income (loss)		1,442			70			(3,116	)		2,244			(38,858	)		152,120			(40,532	)		154,434
Income tax (expense) benefit		(335	)		(15	)		985			(785	)		9,085			(39,315	)		9,735			(40,115	)
Net income (loss)	$	1,107		$	55		$	(2,131	)	$	1,459		$	(29,773	)	$	112,805		$	(30,797	)	$	114,319
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	22		$	10		$	7		$	---		$	---		$	14		$	29

17

Comparable nine-month periods ended June 30, 2022 and 2021

Consolidated Financial Comparison

Consolidated revenues were $34,797,000 and $37,952,000 for the nine months ended June 30, 2022 and 2021, respectively. This decrease of $3,155,000 (8%) was primarily from decreases in (i) Journal Technologies’ license and maintenance fees of $3,269,000 and public service fees of $21,000, and (ii) the Traditional Business’ circulation revenues of $179,000, partially offset by increases in Journal Technologies’ consulting fees of $48,000 and the Traditional Business’ advertising net revenues of $30,000 and advertising service fees and other of $236,000.

Approximately 68% of the Company’s revenues during the nine months ended June 30, 2022 were derived from Journal Technologies, as compared with 71% in the prior fiscal year period. In addition, the Company’s revenues have been primarily from the United States, with approximately 5% from foreign countries. Almost all of Journal Technologies’ revenues are from governmental agencies.

Consolidated operating expenses increased by $833,000 (2%) to $36,471,000 from $35,638,000 for the nine months ended June 30, 2022. Total salaries and employee benefits increased by $927,000 (4%) to $26,745,000 from $25,818,000 primarily because of (i) salary adjustments and some Australian payroll tax accruals. Outside services increased by $676,000 (30%) to $2,912,000 from $2,236,000 mainly because of increased third-party hosting fees which were billed to clients. Newsprint and printing expenses increased by $60,000 (13%) to $529,000 from $469,000 primarily resulting from newsprint price increases and additional purchases of printing supplies. Other general and administrative expenses increased by $938,000 (60%) to $2,492,000 from $1,554,000 mainly because there were increased miscellaneous office equipment purchases and business travel expenses as compared to the prior fiscal year period.

The Company’s non-operating income, net of expenses, decreased by $190,978,000 to a loss of $38,858,000 from a gain of $152,120,000 in the prior fiscal year period primarily because of the recordings of (i) net unrealized losses on marketable securities of $57,075,000 during the nine months ended June 30, 2022 as compared with net unrealized gains of $131,754,000 in the prior year period, and (ii) realized net gains on sales of marketable securities of $14,249,000 during the nine months ended June 30, 2022 as compared with $18,478,000 in the prior year period. In addition, there were gains of $272,000 on a partial land sale associated with the City of Logan’s street widening project.

During the nine months ended June 30, 2022, the Company’s consolidated pretax loss was $40,532,000, as compared to pretax income of $154,434,000 in the prior fiscal year period. There was consolidated net loss of $30,797,000 (-$22.31 per share) for the nine months ended June 30, 2022, as compared with consolidated net income of $114,319,000 ($82.80 per share) in the prior fiscal year period.

At June 30, 2022, the aggregate fair market value of the Company’s marketable securities was $341,855,000. These securities had approximately $187,018,000 of net unrealized gains before taxes of $50,540,000. They generated approximately $4,251,000 in dividends income during the nine months ended June 30, 2022, as compared with $2,063,000 in the prior fiscal year period. Most of the unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

18

Taxes

For the nine months ended June 30, 2022, the Company recorded an income tax benefit of $9,735,000 on the pretax loss of $40,532,000.   The income tax benefit consisted of a tax benefit of $15,425,000 on the unrealized losses on marketable securities and a benefit of $250,000 for the dividends received deduction and other permanent book and tax differences, offset by tax provisions of $3,850,000 on the realized gains on marketable securities, $500,000 on income from operations, and $1,590,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability.  Consequently, the overall effective tax rate for the nine months ended June 30, 2022 was 24%, after including the taxes on the realized gains and unrealized losses on marketable securities.

For the nine months ended June 30, 2021, the Company recorded a provision for income taxes of $40,115,000 on pretax income of $154,434,000.   This was the net result of applying the effective tax rate anticipated for fiscal 2021 to pretax income before the unrealized and realized gains on marketable securities for the nine months ended June 30, 2021. The effective rate of 21.32%, which was higher than the statutory rate of 21% primarily due to state taxes which were offset by the dividends received deduction, resulted in a tax provision of $896,000 on pretax income before the unrealized and realized gains on marketable securities. In addition, the Company recorded a tax provision of $34,405,000 on the unrealized gains on marketable securities, and a tax provision of $4,821,000 on the realized gains on marketable securities, both of which were offset by a tax benefit of $7,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the nine months ended June 30, 2021 was 26%, after including the taxes on the realized and unrealized gains on marketable securities.

The Company files consolidated federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2018 with regard to federal income taxes and fiscal 2017 for state income taxes. 

The Traditional Business (for the nine-month periods ended June 30, 2022 and 2021)

The Traditional Business’ pretax income increased by $1,372,000 to $1,442,000 from $70,000 in the prior fiscal year period, primarily resulting from a reduction to the long-term supplemental compensation accrual of $25,000 as compared with an increase of $1,410,000 in the prior fiscal year period.

During the nine months ended June 30, 2022, the Traditional Business had total operating revenues of $11,158,000, as compared with $11,071,000 in the prior fiscal year period. Advertising revenues increased by $30,000 (1%) to $5,679,000 from $5,649,000, primarily because of increased legal notice advertising net revenues of $122,000 and trustee sale notice advertising net revenues of $130,000 primarily resulting from the lifting of the foreclosure moratoriums relative to the “Eviction and Foreclosure Orders” and lenders’ processing files that were already in the pipeline when the pandemic struck. These increases were offset by decreased government notice advertising net revenues of $149,000 and commercial advertising net revenues of $73,000.

Trustee sale notices are very much dependent on the number of California and Arizona foreclosures for which public notice advertising is required by law. The number of foreclosure notices published by the Company increased by 63% during the nine months ended June 30, 2022 as compared to the prior fiscal year period, primarily because of the lifting of foreclosure moratoriums, as discussed above. The Company’s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals (“The Daily Journals”), accounted for about 87% of the total public notice advertising revenues during the nine months ended June 30, 2022. Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 19% of the Company's total operating revenues for the nine months ended June 30, 2022 and 16% in the prior fiscal year period.

19

The Daily Journals accounted for about 92% of the Traditional Business’ total circulation revenues, which declined by $179,000 (5%) to $3,279,000 from $3,458,000. The court rule and judicial profile services generated about 5% of the total circulation revenues, with the other newspapers and services accounting for the balance. Advertising service fees and other are Traditional Business segment revenues, which include primarily (i) agency commissions received from outside newspapers in which the advertising is placed, and (ii) fees generated when filing notices with government agencies.

The Traditional Business segment operating expenses, excluding the adjustments to the long-term supplemental compensation accrual, increased by $150,000 (2%) to $9,741,000 from $9,591,000, primarily resulting from the annual salary adjustments.

Journal Technologies (for the nine-month periods ended June 30, 2022 and 2021)

During the nine months ended June 30, 2022, Journal Technologies’ business segment pretax loss increased by $5,360,000 to $3,116,000 from pretax income of $2,244,000 in the prior fiscal year period.

Revenues decreased by $3,242,000 (12%) to $23,639,000 from $26,881,000 in the prior fiscal year period. Licensing and maintenance fees decreased by $3,269,000 (19%) to $13,721,000 from $16,990,000 primarily resulting from the reduction in legacy software products’ maintenance and support revenues as the Company ended effective July 1, 2021 the maintenance of these legacy software products, so as to focus on supporting the Company’s main eSeries products. Consulting fees increased by $48,000 (1%) to $4,697,000 from $4,649,000. Other public service fees decreased by $21,000 to $5,221,000 from $5,242,000 primarily due to decreased traffic citation fee revenues.

Deferred consulting fees primarily represent advances from customers of Journal Technologies for installation services and are recognized upon final project go-lives. Deferred revenues on license and maintenance contracts represent prepayments of annual license and maintenance fees and are recognized ratably over the maintenance period.

Operating expenses increased by $2,118,000 (9%) to $26,755,000 from $24,637,000 primarily because of (i) increased personnel costs resulting from the salary adjustments and some Australian payroll tax accruals, (ii) increased third-party hosting fees which were billed to clients and (iii) additional miscellaneous office equipment purchases and increased business travel expenses.

Journal Technologies continues to update and upgrade its software products. These costs are expensed as incurred and will impact earnings at least through the foreseeable future.

20

Reportable Segments (for the three-month periods ended June 30, 2022 and 2021)

Overall Financial Results (000)

For the three months ended June 30

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,989		$	2,195		$	---		$	---		$	---		$	---		$	1,989		$	2,195
Circulation		1,097			1,126			---			---			---			---			1,097			1,126
Advertising service fees and other		787			762			---			---			---			---			787			762
Licensing and maintenance fees		---			---			4,633			5,602			---			---			4,633			5,602
Consulting fees		---			---			2,267			2,100			---			---			2,267			2,100
Other public service fees		---			---			1,779			1,777			---			---			1,779			1,777
Total revenues		3,873			4,083			8,679			9,479			---			---			12,552			13,562
Operating expenses
Salaries and employee benefits		2,134			2,081			7,287			6,699			---			---			9,421			8,780
Increase to the long-term Supplemental compensation accrual		1,985			655			---			---			---			---			1,985			655
Others		904			929			2,345			1,874			---			---			3,249			2,803
Total operating expenses		5,023			3,665			9,632			8,573			---			---			14,655			12,238
Income (loss) from operations		(1,150	)		418			(953	)		906			---			---			(2,103	)		1,324
Dividends and interest income		---			---			---			---			1,263			776			1,263			776
Gains on land sale		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(12	)		(14	)		(12	)		(14	)
Interest expenses on margin loans		---			---			---			---			(281	)		(68	)		(281	)		(68	)
Net unrealized (losses) gains on marketable securities		---			---			---			---			(12,666	)		55,686			(12,666	)		55,686
Pretax (loss) income		(1,150	)		418			(953	)		906			(11,424	)		56,449			(13,527	)		57,773
Income tax benefit (expense)		225			(175	)		280			(460	)		3,160			(14,565	)		3,665			(15,200	)
Net (loss) income	$	(925	)	$	243		$	(673	)	$	446		$	(8,264	)	$	41,884		$	(9,862	)	$	42,573
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	---		$	7		$	---		$	---		$	---		$	11		$	---

Comparable three-month periods ended June 30, 2022 and 2021

Consolidated Financial Comparison

Consolidated revenues were $12,552,000 and $13,562,000 for the three months ended June 30, 2022 and 2021, respectively. This decrease of $1,010,000 (7%) resulted primarily from decreases in Journal Technologies’ license and maintenance fees of $969,000, and the Traditional Business’ advertising net revenues of $206,000 and circulation revenues of $29,000, partially offset by increases in (i) Journal Technologies’ consulting fees of $167,000 and public service fees of $2,000, and (ii) the Traditional Business’ advertising service fees and other of $25,000.

Approximately 69% of the Company’s revenues during the three months ended June 30, 2022 were derived from Journal Technologies, as compared with 70% in the prior fiscal year period.

21

Consolidated operating expenses increased by $2,417,000 (20%) to $14,655,000 from $12,238,000 for the three months ended June 30, 2022. Total salaries and employee benefits increased by $641,000 to $9,421,000 from $8,780,000 primarily because of the salary adjustments and some Australian payroll tax accruals. Outside services increased by $280,000 (35%) to $1,074,000 from $794,000 mainly because of increased third-party hosting fees which were billed to clients. Newsprint and printing expenses increased by $12,000 (7%) to $174,000 from $162,000 primarily resulting from newsprint price increases and additional purchases of printing supplies. Other general and administrative expenses increased by $306,000 (62%) to $801,000 from $495,000 mainly because there were increased miscellaneous office equipment purchases and business travel expenses as compared to the prior fiscal year period.

The Company’s non-operating income, net of expenses, decreased by $67,873,000 to a loss of $11,424,000 from a gain of $56,449,000 in the prior fiscal year period primarily because of the recording of net unrealized losses on marketable securities of $12,666,000 during the three months ended June 30, 2022 as compared with net unrealized gains of $55,686,000 in the prior fiscal year period. In addition, there were gains of $272,000 on partial land sale associated with the City of Logan’s street widening project.

During the three months ended June 30, 2022, consolidated pretax loss was $13,527,000, as compared to pretax income of $57,773,000 in the prior fiscal year period. There was consolidated net loss of $9,862,000 (-$7.15 per share) for the three months ended June 30, 2022, as compared with consolidated net income of $42,573,000 ($30.83 per share) in the prior fiscal year period.

The Traditional Business (for the three-month periods ended June 30, 2022 and 2021)

The Traditional Business’ pretax loss increased by $1,568,000 to $1,150,000 from pretax income of $418,000 in the prior fiscal year period, primarily resulting from an increase to the long-term supplemental compensation accrual of $1,985,000 as compared with an increase of $655,000 in the prior fiscal year period.

During the three months ended June 30, 2022, the Traditional Business had total operating revenues of $3,873,000, as compared with $4,083,000 in the prior fiscal year period. Advertising revenues decreased by $206,000 (9%) to $1,989,000 from $2,195,000, primarily because of decreased commercial advertising net revenues of $125,000 and government notice advertising net revenues of $123,000. These increases were offset by increased legal notice advertising net revenues of $38,000 and trustee sale notice advertising net revenues of $4,000.

The Traditional Business segment operating expenses, excluding the adjustments to the long-term supplemental compensation accrual, increased by $28,000 (1%) to $3,038,000 from $3,010,000, primarily resulting from the annual salary adjustments.

22

Journal Technologies (for the three-month periods ended June 30, 2022 and 2021)

During the three months ended June 30, 2022, Journal Technologies’ business segment pretax loss increased by $1,859,000 to $953,000 from pretax income of $906,000 in the prior fiscal year period.

Revenues decreased by $800,000 (8%) to $8,679,000 from $9,479,000 in the prior fiscal year period. Licensing and maintenance fees decreased by $969,000 (17%) to $4,633,000 from $5,602,000 primarily resulting from the reduction in legacy software products’ maintenance and support revenues. Consulting fees increased by $167,000 (8%) to $2,267,000 from $2,100,000. Other public service fees increased slightly by $2,000 to $1,779,000 from $1,777,000.

Operating expenses increased by $1,059,000 (12%) to $9,632,000 from $8,573,000 primarily because of (i) increased personnel costs resulting from the salary adjustments and some Australian payroll tax accruals, (ii) increased third-party hosting fees which were billed to clients and (iii) additional miscellaneous office equipment purchases and increased business travel expenses.

Liquidity and Capital Resources

For the nine months ended June 30, 2022, the Company’s cash and cash equivalents, restricted cash, and marketable security positions decreased by $9,434,000, after the sales of marketable securities of approximately $80,570,000 and additional net borrowing of $43,000,000 from the margin loan account, partially offset by the recording of net pretax unrealized losses on marketable securities of $57,075,000. Cash, cash equivalents, the proceeds from the sales of marketable securities and additional net borrowing were primarily used to purchase additional marketable securities of $117,678,000.

The investments in marketable securities, which had an adjusted cost basis of approximately $154,837,000 and a market value of about $341,855,000 at June 30, 2022, generated approximately $4,251,000 in dividends income during the nine months ended June 30, 2022. These securities had approximately $187,018,000 of net unrealized gains before estimated taxes of $50,540,000 which will become due only when we sell securities in which there is unrealized appreciation.

Cash flows from operating activities decreased by $9,887,000 during the nine months ended June 30, 2022 as compared to the prior fiscal year period, primarily due to (i) increases in deferred tax assets of $50,901,000 and the Company’s income tax receivable of $4,551,000, (ii) decreases in the Company’s income tax payable of $6,619,000 and (iii) decreases in net accounts payable and accrued liabilities of $2,802,000 (because of the timing difference in remitting efiling fees to the courts). This was partially offset by (i) increases in net income of $47,942,000, excluding the increases in unrealized losses on marketable securities of $188,829,000 and decreases in realized net gains on sales of marketable securities of $4,229,000, (ii) decreases in the Company’s accounts receivable of $2,118,000 mainly resulting from more collections, and (iii) increases in deferred revenues of $5,143,000.

As of June 30, 2022, the Company had working capital of $337,803,000, including the liabilities for deferred subscriptions, deferred consulting fees and deferred maintenance agreements and others of $20,291,000.

The Company believes that it will be able to fund its operations for the foreseeable future through its cash flows from operations and its current working capital and expects that any such cash flows will be invested in its businesses. The Company may or may not have the ability to borrow additional amounts against its marketable securities and, among other possibilities, it may be required to consider selling some of those securities to generate cash if needed to fund ongoing operations. The amount available for borrowing is based on the market value of the Company’s investment portfolio and fluctuates depending on the value of the underlying securities.  In addition, the Company could be subject to margin calls should the balance of the investment decrease significantly. 

23

The Company is not a smaller version of Berkshire Hathaway Inc.  Instead, it hopes to be a significant software company while it also operates its Traditional Business.

Critical Accounting Policies and Estimates

The Company’s financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Management believes that revenue recognition, accounting for software costs, fair value measurement and disclosures (including the long-term Incentive Plan liabilities) and income taxes are critical accounting policies and estimates.

The Company’s critical accounting policies are detailed in its Annual Report on Form 10-K for the year ended September 30, 2021. The above discussion and analysis should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this report.

24

Disclosure Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q 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 document, including but not limited to those in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” 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. There are many factors that could cause actual results to differ materially from those contained in the forward-looking statements. These factors include, among others: risks associated with software development and implementation efforts; Journal Technologies’ reliance on professional services engagements with justice agencies; material changes in the costs of postage and paper; possible changes in the law, particularly changes limiting or eliminating the requirements for public notice advertising; possible loss of the adjudicated status of the Company’s newspapers and their legal authority to publish public notice advertising; the impacts of COVID-19 variants and the efforts to contain it on the Company’s customers, advertisers and subscribers, particularly the closure or scaling back of operations of courts, justice agencies and other businesses; a further decline in subscriber revenues; possible security breaches of the Company’s software or websites; changes in accounting guidance; material weaknesses in the Company’s internal control over financial reporting; and declines in the market prices of the securities owned by the Company. In addition, such statements could be affected by general industry and market conditions, general economic conditions (particularly in California) and other factors.  Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in this Form 10-Q, including in conjunction with the forward-looking statements themselves. 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 filed by the Company with the Securities and Exchange Commission, including in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

Item 4. CONTROLS AND PROCEDURES

In light of the material weaknesses in the Company’s internal control over financial reporting discussed in the Company’s Form 10-K for the fiscal year ended September 30, 2021, management concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2022.  There were no material changes in the Company’s internal control over financial reporting or in other factors reasonably likely to affect its internal control over financial reporting during the quarter ended June 30, 2022.

25

PART II

Item 6. Exhibits

31	Certifications by Chief Financial Officer and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certifications by Chief Financial Officer and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation
101.DEF	Inline XBRL Taxonomy Extension Definition
101.LAB	Inline XBRL Taxonomy Extension Labels
101.PRE	Inline XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101

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/ Tu To

Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

/s/ Steven Myhill-Jones

Interim Chief Executive Officer

Chairman of the Board

(Principal Executive Officer)

DATE: August 12, 2022

26

EX-31

Exhibit 31

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tu To, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Daily Journal Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2022

/s/ Tu To

______________________________

Tu To

Chief Financial Officer

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven Myhill-Jones, certify that:

6. I have reviewed this quarterly report on Form 10-Q of Daily Journal Corporation;

7. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

8. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

9. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

10. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2022

/s/ Steven Myhill-Jones

______________________________

Steven Myhill-Jones

Interim Chief Executive Officer

Chairman of the Board         

EX-32

Exhibit 32

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Daily Journal Corporation (the "Company") for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Tu To, Chief Financial Officer of the Company, certify, pursuant 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Tu To

____________________________________________

Tu To
Chief Financial Officer

August 12, 2022

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document.

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Daily Journal Corporation (the "Company") for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven Myhill-Jones, Interim Chief Executive Officer of the Company, certify, pursuant 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Steven Myhill-Jones

____________________________________________

Steven Myhill-Jones
Interim Chief Executive Officer

Chairman of the Board

August 12, 2022

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document.

XML

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2022	Jul. 31, 2022
Document Information [Line Items]
Entity Central Index Key	0000783412
Entity Registrant Name	DAILY JOURNAL CORPORATION
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	0-14665
Entity Incorporation, State or Country Code	SC
Entity Tax Identification Number	95-4133299
Entity Address, Address Line One	915 East First Street
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90012-4050
City Area Code	213
Local Phone Number	229-5300
Title of 12(b) Security	Common Stock
Trading Symbol	DJCO
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,377,026

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Current assets
Cash and cash equivalents	$ 8,879,000	$ 12,596,000
Restricted cash	2,044,000	2,043,000
Marketable securities at fair value -- common stocks	341,855,000	347,573,000
Accounts receivable, less allowance for doubtful accounts of $250,000 at June 30, 2022 and September 30, 2021	10,694,000	9,524,000
Inventories	70,000	43,000
Income tax receivable	3,950,000
Prepaid expenses and other current assets	552,000	557,000
Total current assets	368,044,000	372,336,000
Property, plant and equipment, at cost
Land, buildings and improvements	16,330,000	16,499,000
Furniture, office equipment and computer software	1,702,000	1,688,000
Machinery and equipment	1,524,000	1,524,000
Property, Plant and Equipment, Gross, Ending Balance	19,556,000	19,711,000
Less accumulated depreciation	(9,947,000)	(9,706,000)
Property, Plant and Equipment, Net, Total	9,609,000	10,005,000
Operating lease right-of-use assets	130,000	215,000
Deferred income taxes	6,791,000	8,021,000
Assets, Total	384,574,000	390,577,000
Current liabilities
Accounts payable	4,407,000	4,239,000
Accrued liabilities	5,391,000	6,052,000
Income tax payable		6,244,000
Note payable collateralized by real estate	152,000	147,000
Total current liabilities	30,241,000	34,012,000
Long term liabilities
Investment margin account borrowings	75,000,000	32,000,000
Note payable collateralized by real estate	1,316,000	1,431,000
Deferred maintenance agreements and others	383,000	995,000
Accrued liabilities	3,250,000	3,383,000
Deferred income taxes	50,540,000	64,115,000
Total long term liabilities	130,489,000	101,924,000
Commitments and contingencies (Notes 10 and 11)
Shareholders' equity
Preferred stock, $.01 par value, 5,000,000 shares authorized and no shares issued	0	0
Common stock, $.01 par value, 5,000,000 shares authorized; 1,805,053 shares issued, including 428,027 and 424,307 treasury shares, at June 30, 2022 and September 30, 2021, respectively	14,000	14,000
Additional paid-in capital	1,755,000	1,755,000
Retained earnings	222,075,000	252,872,000
Total shareholders' equity	223,844,000	254,641,000
Liabilities and Equity, Total	384,574,000	390,577,000
Subscription and Circulation [Member]
Current liabilities
Deferred revenue	2,800,000	2,694,000
Professional Fees [Member]
Current liabilities
Deferred revenue	6,695,000	5,498,000
License and Maintenance [Member]
Current liabilities
Deferred revenue	$ 10,796,000	$ 9,138,000

XML

Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Accounts receivable, allowance for doubtful accounts	$ 250,000	$ 250,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	5,000,000	5,000,000
Common stock, shares issued (in shares)	1,805,053	1,805,053
Common stock, treasury shares (in shares)	428,027	424,307

XML

Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenues
Revenue from Contract with Customer, Including Assessed Tax	$ 12,552,000	$ 13,562,000	$ 34,797,000	$ 37,952,000
Costs and expenses
Salaries and employee benefits	9,421,000	8,780,000	26,745,000	25,818,000
Increase to the long-term supplemental compensation accrual	1,985,000	655,000	(65,000)	1,410,000
Outside services	1,074,000	794,000	2,912,000	2,236,000
Postage and delivery expenses	165,000	160,000	492,000	490,000
Newsprint and printing expenses	174,000	162,000	529,000	469,000
Depreciation and amortization	73,000	114,000	301,000	344,000
Equipment maintenance and software	263,000	298,000	881,000	946,000
Credit card merchant discount fees	429,000	462,000	1,249,000	1,397,000
Rent expenses	64,000	66,000	187,000	228,000
Accounting and legal fees	206,000	252,000	748,000	746,000
Other general and administrative expenses	801,000	495,000	2,492,000	1,554,000
Total operating expenses	14,655,000	12,238,000	36,471,000	35,638,000
(Loss) income from operations	(2,103,000)	1,324,000	(1,674,000)	2,314,000
Other income (expense)
Dividends and interest income	1,263,000	776,000	4,251,000	2,063,000
Gains on sale of land	272,000		272,000
Other income		69,000		69,000
Net unrealized (losses) gains on marketable securities	(12,666,000)	55,686,000	(57,075,000)	131,754,000
(Loss) income before income taxes	(13,527,000)	57,773,000	(40,532,000)	154,434,000
Income tax benefits (provisions)	3,665,000	(15,200,000)	9,735,000	(40,115,000)
Net (loss) income	$ (9,862,000)	$ 42,573,000	$ (30,797,000)	$ 114,319,000
Weighted average number of common shares outstanding - basic and diluted (in shares)	1,380,133	1,380,746	1,380,542	1,380,746
Basic and diluted net (loss) income per share (in dollars per share)	$ (7.15)	$ 30.83	$ (22.31)	$ 82.80
Comprehensive (loss) income	$ (9,862,000)	$ 42,573,000	$ (30,797,000)	$ 114,319,000
Realized gains on sales of marketable securities			14,249,000	18,478,000
Net unrealized losses (gains) on marketable securities	12,666,000	(55,686,000)	57,075,000	(131,754,000)
Margin Account [Member]
Other income (expense)
Interest expense on debt	(281,000)	(68,000)	(517,000)	(196,000)
Real Estate Bank Loan Secured by Logan Office [Member]
Costs and expenses
Increase to the long-term supplemental compensation accrual	1,985,000	655,000
Other income (expense)
Interest expense on debt	(12,000)	(14,000)	(38,000)	(48,000)
Advertising [Member]
Revenues
Revenue from Contract with Customer, Including Assessed Tax	1,989,000	2,195,000	5,679,000	5,649,000
Subscription and Circulation [Member]
Revenues
Revenue from Contract with Customer, Including Assessed Tax	1,097,000	1,126,000	3,279,000	3,458,000
Advertising Service Fees and Other [Member]
Revenues
Revenue from Contract with Customer, Including Assessed Tax	787,000	762,000	2,200,000	1,964,000
License and Maintenance [Member]
Revenues
Revenue from Contract with Customer, Including Assessed Tax	4,633,000	5,602,000	13,721,000	16,990,000
Consulting Fees [Member]
Revenues
Revenue from Contract with Customer, Including Assessed Tax	2,267,000	2,100,000	4,697,000	4,649,000
Service, Other [Member]
Revenues
Revenue from Contract with Customer, Including Assessed Tax	$ 1,779,000	$ 1,777,000	$ 5,221,000	$ 5,242,000

XML

Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Sep. 30, 2020	1,805,053	(424,307)
Balance at Sep. 30, 2020	$ 18,000	$ (4,000)	$ 1,755,000	$ 139,972,000	$ 141,741,000
Net income (loss)				59,270,000	59,270,000
Net (loss) income				59,270,000	59,270,000
Balance (in shares) at Dec. 31, 2020	1,805,053	(424,307)
Balance at Dec. 31, 2020	$ 18,000	$ (4,000)	1,755,000	199,242,000	201,011,000
Balance (in shares) at Sep. 30, 2020	1,805,053	(424,307)
Balance at Sep. 30, 2020	$ 18,000	$ (4,000)	1,755,000	139,972,000	141,741,000
Net income (loss)					114,319,000
Net (loss) income					114,319,000
Balance (in shares) at Jun. 30, 2021	1,805,053	(424,307)
Balance at Jun. 30, 2021	$ 18,000	$ (4,000)	1,755,000	254,291,000	256,060,000
Balance (in shares) at Dec. 31, 2020	1,805,053	(424,307)
Balance at Dec. 31, 2020	$ 18,000	$ (4,000)	1,755,000	199,242,000	201,011,000
Net income (loss)				12,476,000	12,476,000
Net (loss) income				12,476,000	12,476,000
Balance (in shares) at Mar. 31, 2021	1,805,053	(424,307)
Balance at Mar. 31, 2021	$ 18,000	$ (4,000)	1,755,000	211,718,000	213,487,000
Net income (loss)				42,573,000	42,573,000
Net (loss) income				42,573,000	42,573,000
Balance (in shares) at Jun. 30, 2021	1,805,053	(424,307)
Balance at Jun. 30, 2021	$ 18,000	$ (4,000)	1,755,000	254,291,000	256,060,000
Balance (in shares) at Sep. 30, 2021	1,805,053	(424,307)
Balance at Sep. 30, 2021	$ 18,000	$ (4,000)	1,755,000	252,872,000	254,641,000
Net income (loss)				6,878,000	6,878,000
Net (loss) income				6,878,000	6,878,000
Balance (in shares) at Dec. 31, 2021	1,805,053	(424,307)
Balance at Dec. 31, 2021	$ 18,000	$ (4,000)	1,755,000	259,750,000	261,519,000
Balance (in shares) at Sep. 30, 2021	1,805,053	(424,307)
Balance at Sep. 30, 2021	$ 18,000	$ (4,000)	1,755,000	252,872,000	254,641,000
Net income (loss)					(30,797,000)
Net (loss) income					(30,797,000)
Balance (in shares) at Jun. 30, 2022	1,805,053	(428,027)
Balance at Jun. 30, 2022	$ 18,000	$ (4,000)	1,755,000	222,075,000	223,844,000
Balance (in shares) at Dec. 31, 2021	1,805,053	(424,307)
Balance at Dec. 31, 2021	$ 18,000	$ (4,000)	1,755,000	259,750,000	261,519,000
Net income (loss)				(27,813,000)	(27,813,000)
Net (loss) income				(27,813,000)	(27,813,000)
Balance (in shares) at Mar. 31, 2022	1,805,053	(424,307)
Balance at Mar. 31, 2022	$ 18,000	$ (4,000)	1,755,000	231,937,000	233,706,000
Net income (loss)				(9,862,000)	(9,862,000)
Net (loss) income				(9,862,000)	(9,862,000)
Receipt of donated treasury stock (in shares)		(3,720)
Balance (in shares) at Jun. 30, 2022	1,805,053	(428,027)
Balance at Jun. 30, 2022	$ 18,000	$ (4,000)	$ 1,755,000	$ 222,075,000	$ 223,844,000

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities
Net (loss) income	$ (30,797,000)	$ 114,319,000
Adjustments to reconcile net (loss) income to net cash (used in) provided from operations
Depreciation and amortization	301,000	344,000
Net unrealized losses (gains) on marketable securities	57,075,000	(131,754,000)
Realized gains on sales of marketable securities	(14,249,000)	(18,478,000)
Gains on sale of land	(272,000)
Deferred income taxes	(12,345,000)	38,556,000
(Increase) decrease in current assets
Accounts receivable, net	(1,170,000)	(3,288,000)
Inventories	(27,000)	(19,000)
Prepaid expenses and other assets	90,000	(16,000)
Income tax receivable	(3,950,000)	601,000
Increase (decrease) in liabilities
Accounts payable	168,000	96,000
Accrued liabilities	(794,000)	2,080,000
Income tax payable	(6,244,000)	375,000
Net cash (used in) provided from operating activities	(9,865,000)	22,000
Cash flows from investing activities
Proceeds from sales of marketable securities	80,570,000	20,002,000
Purchases of marketable securities	(117,678,000)	(39,995,000)
Sale of land	381,000
Purchases of property, plant and equipment	(14,000)	(29,000)
Net cash used in investing activities	(36,741,000)	(20,022,000)
Cash flows from financing activities
Payment to margin loan principal	(14,000)	(14,493,000)
Borrowing from margin loan account	43,014,000	17,000,000
Payment of real estate loan principal	(110,000)	(94,000)
Net cash provided from financing activities	42,890,000	2,413,000
Decrease in cash and restricted cash and cash equivalents	(3,716,000)	(17,587,000)
Cash and restricted cash and cash equivalents
Beginning of period	14,639,000	28,963,000
End of period	10,923,000	11,376,000
Interest paid during period	509,000	245,000
Net income taxes paid	12,801,000	580,000
Subscription and Circulation [Member]
Increase (decrease) in liabilities
Deferred subscriptions	106,000	(191,000)
Professional Fees [Member]
Increase (decrease) in liabilities
Deferred subscriptions	1,197,000	131,000
License and Maintenance [Member]
Increase (decrease) in liabilities
Deferred subscriptions	$ 1,046,000	$ (2,734,000)

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Note 1 - The Corporation and Operations

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note 1 - The Corporation and Operations

Daily Journal Corporation (the “Company”) publishes newspapers and websites reporting California and Arizona news and produces several specialized information services. It also serves as a newspaper representative specializing in public notice advertising. This is sometimes referred to as the Company’s “Traditional Business”.

Journal Technologies, Inc. (“Journal Technologies”), a wholly-owned subsidiary of the Company, supplies case management software systems and related products to courts, prosecutor and public defender offices, probation departments and other justice agencies, including administrative law organizations, city and county governments and bar associations. These organizations use the Journal Technologies family of products to help manage cases and information electronically, to interface with other critical justice partners and to extend electronic services to the public, including efiling and a website to pay traffic citations and fees online. These products are licensed in approximately 30 states and internationally.

Essentially all of the Company’s U.S. operations are based in California, Arizona and Utah. The Company also has a presence in Australia where Journal Technologies is working on three software installation projects.

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Note 2 - Basis of Presentation

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Basis of Accounting [Text Block]

Note 2 - Basis of Presentation

In the opinion of the Company, the accompanying interim unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of its financial position as of June 30, 2022, its results of operations for the three- and nine-month periods ended June 30, 2022 and 2021, its consolidated statements of shareholders’ equity for the nine months ended June 30, 2022 and 2021 and cash flows for the nine months ended June 30, 2022 and 2021. The results of operations for the nine months ended June 30, 2022 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, 2021.

Certain reclassifications of previously reported amounts have been made to conform to the current year’s presentation.

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Note 3 - New Accounting Pronouncement

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

New Accounting Pronouncement [Text Block]

Note 3 – New Accounting Pronouncement

No new accounting pronouncement issued or effective has had, or is expected to have, a material impact on the Company’s consolidated financial statements.

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Note 4 - Right-of-use (ROU) Asset

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 4 – Right-of-Use (ROU) Asset

At June 30, 2022, the Company had a right-of-use asset and lease liability of approximately $130,000 for its operating office and equipment leases, including approximately $35,000 beyond one year.  Operating office and equipment leases are included in operating lease ROU assets, current accrued liabilities and long-term accrued liabilities in the Company’s accompanying Consolidated Balance Sheets. 

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Note 5 - Revenue Recognition

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note 5 – Revenue Recognition

The Company recognizes revenues in accordance with the provisions of ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606).

For the Traditional Business, proceeds from the sale of subscriptions for newspapers, court rule books and other publications and other services are recorded as deferred revenue and are included in earned revenue only when the services are provided, generally over the subscription term. Advertising revenues are recognized when advertisements are published and are net of agency commissions.

Journal Technologies contracts may include several products and services, which are generally distinct and include separate transaction pricing and performance obligations. Most are one-transaction contracts. These current subscription-type contract revenues include (i) implementation consulting fees to configure the system to go-live, (ii) subscription software license, maintenance (including updates and upgrades) and support fees, and (iii) third-party hosting fees when used. Revenues for consulting are generally recognized at point of delivery (go-live) upon completion of services. These contracts include assurance warranty provisions for limited periods and do not include financing terms. For some contracts, the Company acts as a principal with respect to certain services, such as data conversion, interfaces and hosting that are provided by third-parties, and recognizes such revenues on a gross basis. For legacy contracts with perpetual license arrangements, licenses and consulting services are recognized at point of delivery (go-live), and maintenance revenues are recognized ratably after the go-live. Other public service fees are earned and recognized as revenues when the Company processes credit card payments on behalf of the courts via its websites through which the public can efile cases and pay traffic citations and other fees.

ASC 606 also requires the capitalization of certain costs of obtaining contracts, specifically sales commissions which are to be amortized over the expected term of the contracts. For its software contracts, the Company incurs an immaterial amount of sales commission costs which have no significant impact on the Company’s financial condition and results of operations. In addition, the Company’s implementation and fulfillment costs do not meet all criteria required for capitalization.

Since the Company generally recognizes revenues when it can invoice the customer pursuant to the contract for the value of completed performance, as a practical expedient and because reliable estimates cannot be made, it has elected not to include as revenues the transaction price allocated to unsatisfied performance obligations. Also, as a practical expedient, the Company has elected not to include its evaluation of variable consideration of certain usage based fees (i.e. public service fees) that are included in some contracts. Furthermore, there are no fulfillment costs to be capitalized for the software contracts because these costs do not generate or enhance resources that will be used in satisfying future performance obligations.

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Note 6 - Treasury Stock and Net (Loss) Income Per Common Share

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note 6 - Treasury stock and net (loss) income per common share

In June 2022, the Company received from Director Charles T. Munger 3,720 shares of Daily Journal common stock as his gracious personal gift (worth approximately $1 million on the date of the gift) for the purpose of establishing a new senior management equity incentive plan. These donated shares are now considered treasury stock, and the Company accounted for them using the par method which resulted in an immaterial effected amount on Treasury Stock and Additional Paid-in Capital. In addition, the number of outstanding shares of the Company was reduced by these 3,720 shares to reflect the actual number of outstanding shares of 1,377,026 as of June 30, 2022. The net (loss) income per common share is based on the weighted average number of shares outstanding during the comparable financial periods. The shares used in the calculation were 1,380,542 and 1,380,133 for the nine- and three-month periods ended June 30, 2022 respectively. For both the nine- and three-month periods ended June 30, 2021, the weighted average number of shares outstanding was 1,380,746.

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Note 7 - Basic and Diluted Net Income Per Share

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

Note 7 - Basic and Diluted Net Income Per Share

The Company does not have any common stock equivalents, and therefore basic and diluted net income per share are the same.

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Note 8 - Investments in Marketable Securities

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 8 - Investments in Marketable Securities

All investments are classified as “Current assets” because they are available for sale at any time. These “available-for-sale” marketable securities are stated at fair value. The Company uses quoted prices in active markets for identical assets (consistent with the Level 1 definition in the fair value hierarchy) to measure the fair value of its investments on a recurring basis pursuant to ASC 820, Fair Value Measurement. As of June 30, 2022 and September 30, 2021, there were net accumulated pretax unrealized gains of $187,018,000 and $244,093,000, respectively, recorded in the accompanying Consolidated Balance Sheets. Most of the accumulated pretax unrealized gains were in the common stocks of three U.S. financial institutions and one foreign manufacturer.

For the nine months ended June 30, 2022, the Company recorded and included in its net income the net unrealized losses on marketable securities of $57,075,000, as compared with the net unrealized gains on marketable securities of $131,754,000, in the prior year period.

In December 2021 and March 2022, the Company sold part of its marketable securities for approximately $80,570,000, realizing net gains of $14,249,000, and borrowed an additional net $43,000,000 from the margin loan account to primarily purchase additional marketable securities with a total cost of approximately $117,678,000.

Investments in marketable securities as of June 30, 2022 and September 30, 2021 are summarized below.

Investment in Marketable Securities

	June 30, 2022						September 30, 2021
	Aggregate fair value		Adjusted cost basis		Pretax unrealized gains		Aggregate fair value		Adjusted cost basis		Pretax unrealized gains
Marketable securities
Common stocks	$	341,855,000	$	154,837,000	$	187,018,000	$	347,573,000	$	103,480,000	$	244,093,000

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Note 9 - Income Taxes

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

Note 9 - Income Taxes

For the nine months ended June 30, 2022, the Company recorded an income tax benefit of $9,735,000 on the pretax loss of $40,532,000.   The income tax benefit consisted of a tax benefit of $15,425,000 on the unrealized losses on marketable securities and a benefit of $250,000 for the dividends received deduction and other permanent book and tax differences, offset by tax provisions of $3,850,000 on the realized gains on marketable securities, $500,000 on income from operations, and $1,590,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability.  Consequently, the overall effective tax rate for the nine months ended June 30, 2022 was 24%, after including the taxes on the realized gains and unrealized losses on marketable securities.

For the nine months ended June 30, 2021, the Company recorded a provision for income taxes of $40,115,000 on pretax income of $154,434,000.   This was the net result of applying the effective tax rate anticipated for fiscal 2021 to pretax income before the unrealized and realized gains on marketable securities for the nine months ended June 30, 2021. The effective rate of 21.32%, which was higher than the statutory rate of 21% primarily due to state taxes which were offset by the dividends received deduction, resulted in a tax provision of $896,000 on pretax income before the unrealized and realized gains on marketable securities. In addition, the Company recorded a tax provision of $34,405,000 on the unrealized gains on marketable securities, and a tax provision of $4,821,000 on the realized gains on marketable securities, both of which were offset by a tax benefit of $7,000 for the effect of a change in state apportionment on the beginning of the year’s deferred tax liability. Consequently, the overall effective tax rate for the nine months ended June 30, 2021 was 26%, after including the taxes on the realized and unrealized gains on marketable securities.

The Company files consolidated federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for fiscal years before fiscal 2018 with regard to federal income taxes and fiscal 2017 for state income taxes. 

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Note 10 - Debt and Commitments

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note 10 - Debt and Commitments

During fiscal 2013, the Company borrowed from its investment margin account the aggregate purchase price of $29.5 million for two acquisitions, in each case pledging its marketable securities as collateral. There were also subsequent borrowings of net $45.5 million to purchase additional marketable securities bringing the margin loan balance up to $75 million as of June 30, 2022. The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 50 basis points with interest only payable monthly. The interest rate as of June 30, 2022 was 2.25%. These investment margin account borrowings do not mature.

In November 2015, the Company purchased a 30,700 square foot office building constructed in 1998 on about 3.6 acres in Logan, Utah that had been previously leased by Journal Technologies. The Company paid $1.24 million and financed the balance with a real estate bank loan of $2.26 million which had a fixed interest rate of 4.66%. This loan is secured by the Logan facility and can be paid off at any time without prepayment penalty. In October 2020, the Company executed an amendment to lower the interest rate of this loan to a fixed rate of 3.33% for the remaining 10 years. This real estate loan had a balance of approximately $1.47 million as of June 30, 2022. Each monthly installment payment is about $16,600. In April 2022, the Company sold approximately 17,564 square feet of the land along the front of its Logan building to the City of Logan for approximately $381,000 in connection with the City of Logan’s street widening project.

The Company also owns its facilities in Los Angeles and leases space for its other offices under operating leases which expire at various dates through October 2023.

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Note 11 - Contingencies

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 11 - Contingencies

From time to time, the Company is subject to contingencies, including litigation, arising in the normal course of its business. While it is not possible to predict the results of such contingencies, management does not believe the ultimate outcome of these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

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Note 12 - Operating Segments

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 12 - 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:         

Overall Financial Results (000)

For the nine months ended June 30

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	5,679		$	5,649		$	---		$	---		$	---		$	---		$	5,679		$	5,649
Circulation		3,279			3,458			---			---			---			---			3,279			3,458
Advertising service fees and other		2,200			1,964			---			---			---			---			2,200			1,964
Licensing and maintenance fees		---			---			13,721			16,990			---			---			13,721			16,990
Consulting fees		---			---			4,697			4,649			---			---			4,697			4,649
Other public service fees		---			---			5,221			5,242			---			---			5,221			5,242
Total revenues		11,158			11,071			23,639			26,881			---			---			34,797			37,952
Operating expenses
Salaries and employee benefits		6,864			6,687			19,881			19,131			---			---			26,745			25,818
(Decrease) increase to the long-term supplemental compensation accrual		(25	)		1,410			(40	)		---			---			---			(65	)		1,410
Others		2,877			2,904			6,914			5,506			---			---			9,791			8,410
Total operating expenses		9,716			11,001			26,755			24,637			---			---			36,471			35,638
Income (loss) from operations		1,442			70			(3,116	)		2,244			---			---			(1,674	)		2,314
Dividends and interest income		---			---			---			---			4,251			2,063			4,251			2,063
Gains on sale of land		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(38	)		(48	)		(38	)		(48	)
Interest expenses on margin loans		---			---			---			---			(517	)		(196	)		(517	)		(196	)
Net realized gains on sales of marketable securities		---			---			---			---			14,249			18,478			14,249			18,478
Net unrealized (losses) gains on marketable securities		---			---			---			---			(57,075	)		131,754			(57,075	)		131,754
Pretax income (loss)		1,442			70			(3,116	)		2,244			(38,858	)		152,120			(40,532	)		154,434
Income tax (expense) benefit		(335	)		(15	)		985			(785	)		9,085			(39,315	)		9,735			(40,115	)
Net income (loss)	$	1,107		$	55		$	(2,131	)	$	1,459		$	(29,773	)	$	112,805		$	(30,797	)	$	114,319
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	22		$	10		$	7		$	---		$	---		$	14		$	29

Overall Financial Results (000)

For the three months ended June 30

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,989		$	2,195		$	---		$	---		$	---		$	---		$	1,989		$	2,195
Circulation		1,097			1,126			---			---			---			---			1,097			1,126
Advertising service fees and other		787			762			---			---			---			---			787			762
Licensing and maintenance fees		---			---			4,633			5,602			---			---			4,633			5,602
Consulting fees		---			---			2,267			2,100			---			---			2,267			2,100
Other public service fees		---			---			1,779			1,777			---			---			1,779			1,777
Total revenues		3,873			4,083			8,679			9,479			---			---			12,552			13,562
Operating expenses
Salaries and employee benefits		2,134			2,081			7,287			6,699			---			---			9,421			8,780
Increase to the long-term Supplemental compensation accrual		1,985			655			---			---			---			---			1,985			655
Others		904			929			2,345			1,874			---			---			3,249			2,803
Total operating expenses		5,023			3,665			9,632			8,573			---			---			14,655			12,238
Income (loss) from operations		(1,150	)		418			(953	)		906			---			---			(2,103	)		1,324
Dividends and interest income		---			---			---			---			1,263			776			1,263			776
Gains on land sale		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(12	)		(14	)		(12	)		(14	)
Interest expenses on margin loans		---			---			---			---			(281	)		(68	)		(281	)		(68	)
Net unrealized (losses) gains on marketable securities		---			---			---			---			(12,666	)		55,686			(12,666	)		55,686
Pretax (loss) income		(1,150	)		418			(953	)		906			(11,424	)		56,449			(13,527	)		57,773
Income tax benefit (expense)		225			(175	)		280			(460	)		3,160			(14,565	)		3,665			(15,200	)
Net (loss) income	$	(925	)	$	243		$	(673	)	$	446		$	(8,264	)	$	41,884		$	(9,862	)	$	42,573
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	---		$	7		$	---		$	---		$	---		$	11		$	---

During the nine months ended June 30, 2022, the Traditional Business had total operating revenues of $11,158,000 with $7,879,000 recognized after services were provided and $3,279,000 recognized ratably over the subscription terms, as compared with total operating revenues of $11,071,000 with $7,613,000 recognized after services were provided and $3,458,000 recognized ratably over the subscription terms in the prior fiscal year period. Total operating revenues for the Company’s software business were $23,639,000 with $9,989,000 recognized upon completion of services and $13,650,000 recognized ratably over the subscription periods, as compared with total operating revenues of $26,881,000 with $11,029,000 recognized upon completion of services and $15,852,000 recognized ratably over the subscription periods in the prior fiscal year period.

During the three months ended June 30, 2022, the Traditional Business had total operating revenues of $3,873,000 with $2,776,000 recognized after services were provided and $1,097,000 recognized ratably over the subscription terms, as compared with total operating revenues of $4,083,000 with $2,957,000 recognized after services were provided and $1,126,000 recognized ratably over the subscription terms in the prior fiscal year period. Total operating revenues for the Company’s software business were $8,679,000 with $4,046,000 recognized upon completion of services and $4,633,000 recognized ratably over the subscription periods, as compared with total operating revenues of $9,479,000 with $4,312,000 recognized upon completion of services and $5,167,000 recognized ratably over the subscription periods in the prior fiscal year period.

Approximately 68% of the Company’s revenues during the nine-month period ended June 30, 2022 were derived from Journal Technologies, as compared with 71% in the prior year period. In addition, the Company’s revenues have been primarily from the United States with approximately 5% from foreign countries during the nine-months ended June 30, 2022. Journal Technologies’ revenues are primarily from governmental agencies.

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Note 12 - Subsequent Events

9 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

Note 12 - Subsequent Events

The Company has completed an evaluation of all subsequent events through the issuance date of these financial statements and concluded that no subsequent events occurred that required recognition to the financial statements or disclosures in the Notes to Consolidated Financial Statements.

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Note 8 - Investments in Marketable Securities (Tables)

9 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Available-for-Sale Securities Reconciliation [Table Text Block]

	June 30, 2022						September 30, 2021
	Aggregate fair value		Adjusted cost basis		Pretax unrealized gains		Aggregate fair value		Adjusted cost basis		Pretax unrealized gains
Marketable securities
Common stocks	$	341,855,000	$	154,837,000	$	187,018,000	$	347,573,000	$	103,480,000	$	244,093,000

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Note 12 - Operating Segments (Tables)

9 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	5,679		$	5,649		$	---		$	---		$	---		$	---		$	5,679		$	5,649
Circulation		3,279			3,458			---			---			---			---			3,279			3,458
Advertising service fees and other		2,200			1,964			---			---			---			---			2,200			1,964
Licensing and maintenance fees		---			---			13,721			16,990			---			---			13,721			16,990
Consulting fees		---			---			4,697			4,649			---			---			4,697			4,649
Other public service fees		---			---			5,221			5,242			---			---			5,221			5,242
Total revenues		11,158			11,071			23,639			26,881			---			---			34,797			37,952
Operating expenses
Salaries and employee benefits		6,864			6,687			19,881			19,131			---			---			26,745			25,818
(Decrease) increase to the long-term supplemental compensation accrual		(25	)		1,410			(40	)		---			---			---			(65	)		1,410
Others		2,877			2,904			6,914			5,506			---			---			9,791			8,410
Total operating expenses		9,716			11,001			26,755			24,637			---			---			36,471			35,638
Income (loss) from operations		1,442			70			(3,116	)		2,244			---			---			(1,674	)		2,314
Dividends and interest income		---			---			---			---			4,251			2,063			4,251			2,063
Gains on sale of land		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(38	)		(48	)		(38	)		(48	)
Interest expenses on margin loans		---			---			---			---			(517	)		(196	)		(517	)		(196	)
Net realized gains on sales of marketable securities		---			---			---			---			14,249			18,478			14,249			18,478
Net unrealized (losses) gains on marketable securities		---			---			---			---			(57,075	)		131,754			(57,075	)		131,754
Pretax income (loss)		1,442			70			(3,116	)		2,244			(38,858	)		152,120			(40,532	)		154,434
Income tax (expense) benefit		(335	)		(15	)		985			(785	)		9,085			(39,315	)		9,735			(40,115	)
Net income (loss)	$	1,107		$	55		$	(2,131	)	$	1,459		$	(29,773	)	$	112,805		$	(30,797	)	$	114,319
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	22		$	10		$	7		$	---		$	---		$	14		$	29

	Reportable Segments
	Traditional Business						Journal Technologies						Corporate income and expenses						Total
	2022			2021			2022			2021			2022			2021			2022			2021
Revenues
Advertising	$	1,989		$	2,195		$	---		$	---		$	---		$	---		$	1,989		$	2,195
Circulation		1,097			1,126			---			---			---			---			1,097			1,126
Advertising service fees and other		787			762			---			---			---			---			787			762
Licensing and maintenance fees		---			---			4,633			5,602			---			---			4,633			5,602
Consulting fees		---			---			2,267			2,100			---			---			2,267			2,100
Other public service fees		---			---			1,779			1,777			---			---			1,779			1,777
Total revenues		3,873			4,083			8,679			9,479			---			---			12,552			13,562
Operating expenses
Salaries and employee benefits		2,134			2,081			7,287			6,699			---			---			9,421			8,780
Increase to the long-term Supplemental compensation accrual		1,985			655			---			---			---			---			1,985			655
Others		904			929			2,345			1,874			---			---			3,249			2,803
Total operating expenses		5,023			3,665			9,632			8,573			---			---			14,655			12,238
Income (loss) from operations		(1,150	)		418			(953	)		906			---			---			(2,103	)		1,324
Dividends and interest income		---			---			---			---			1,263			776			1,263			776
Gains on land sale		---			---			---			---			272			---			272			---
Other income		---			---			---			---			---			69			---			69
Interest expenses on note payable collateralized by real estate and other		---			---			---			---			(12	)		(14	)		(12	)		(14	)
Interest expenses on margin loans		---			---			---			---			(281	)		(68	)		(281	)		(68	)
Net unrealized (losses) gains on marketable securities		---			---			---			---			(12,666	)		55,686			(12,666	)		55,686
Pretax (loss) income		(1,150	)		418			(953	)		906			(11,424	)		56,449			(13,527	)		57,773
Income tax benefit (expense)		225			(175	)		280			(460	)		3,160			(14,565	)		3,665			(15,200	)
Net (loss) income	$	(925	)	$	243		$	(673	)	$	446		$	(8,264	)	$	41,884		$	(9,862	)	$	42,573
Total assets	$	22,091		$	17,894		$	20,814		$	21,498		$	341,669		$	350,108		$	384,574		$	389,500
Capital expenditures	$	4		$	---		$	7		$	---		$	---		$	---		$	11		$	---

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Note 4 - Right-of-use (ROU) Asset (Details Textual) - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Operating Lease, Right-of-Use Asset	$ 130,000	$ 215,000
Office Lease Obligations Beyond One Year	35,000
Accrued Liabilities, Current and Noncurrent [Member]
Operating Lease, Liability, Total	$ 130,000

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Note 6 - Treasury Stock and Net (Loss) Income Per Common Share (Details Textual) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Receipt of Donated Treasury Stock, Shares (in shares)	3,720
Value of Donated Treasury Shares	$ 1
Common Stock, Shares, Outstanding, Ending Balance (in shares)	1,377,026	1,377,026		1,377,026
Weighted Average Number of Shares Outstanding, Basic, Total (in shares)		1,380,133	1,380,746	1,380,542	1,380,746

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Note 8 - Investments in Marketable Securities (Details Textual) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Sep. 30, 2021
Marketable Securities, Accumulated Unrealized Gain (Loss)			$ 187,018,000		$ 187,018,000		$ 244,093,000
Marketable Securities, Unrealized Gain (Loss)			$ (12,666,000)	$ 55,686,000	(57,075,000)	$ 131,754,000
Proceeds from Sale and Maturity of Debt Securities, Available-for-Sale, Total	$ 80,570,000	$ 80,570,000			80,570,000	20,002,000
Marketable Securities, Realized Gain (Loss)	14,249,000	14,249,000			14,249,000	18,478,000
Borrowed Funds from Margin Loan Account	43,000,000	43,000,000
Payments to Acquire Marketable Securities	$ 117,678,000	$ 117,678,000			$ 117,678,000	$ 39,995,000

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Note 8 - Investments in Marketable Securities - Summary of Investments (Details) - Common Stock [Member] - USD ($)	Jun. 30, 2022	Sep. 30, 2021
Aggregate fair value	$ 341,855,000	$ 347,573,000
Amortized/adjusted cost basis	154,837,000	103,480,000
Pretax net unrealized gains	$ 187,018,000	$ 244,093,000

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Note 9 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Expense (Benefit), Total	$ (3,665,000)	$ 15,200,000	$ (9,735,000)	$ 40,115,000
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest, Total	$ (13,527,000)	$ 57,773,000	(40,532,000)	154,434,000
Effective Income Tax Rate Reconciliation, Unrealized Gains (Losses) on Marketable Securities, Amount			(15,425,000)	34,405,000
Effective Income Tax Rate Reconciliation, Benefit for the Dividends Received Deduction and Other Permanent Book and Tax Differences, Amount			250,000
Effective Income Tax Rate Reconciliation, Realized Gains on Marketable Securities, Amount			3,850,000	$ 4,821,000
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount			500,000
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount			$ 1,590,000
Effective Income Tax Rate Reconciliation, Percent, Total			24.00%	26.00%
Effective Income Tax Rate Reconciliation before Realized and Unrealized Gains of Marketable Securities, Percent				21.32%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent				21.00%
Effective Income Tax Rate Reconciliation, Deduction, Dividends, Amount				$ 896,000
Effective Income Tax Rate Reconciliation, Tax Contingency, State and Local, Amount				$ 7,000
Domestic Tax Authority [Member]
Open Tax Year			2018
State and Local Jurisdiction [Member]
Open Tax Year			2017

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Note 10 - Debt and Commitments (Details Textual)	1 Months Ended		3 Months Ended	9 Months Ended		12 Months Ended
	Apr. 30, 2022 USD ($) a	Nov. 30, 2015 USD ($) ft² a	Jun. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2021 USD ($)	Oct. 31, 2020
Investment Margin Account			$ 75,000,000	$ 75,000,000			$ 32,000,000
Payments to Acquire Property, Plant, and Equipment, Total			11,000	14,000	$ 29,000
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member]
Area of Real Estate Property (Square Foot) | a	17,564
Proceeds from Sale of Land Held-for-use	$ 381,000
UTAH | Building [Member]
Area of Real Estate Property (Square Foot) | ft²		30,700
UTAH | Land [Member]
Area of Land (Acre) | a		3.6
Payments to Acquire Property, Plant, and Equipment, Total		$ 1,240,000
Margin Account [Member]
Proceeds from Issuance of Debt				45,500,000		$ 29,500,000
Investment Margin Account			$ 75,000,000	$ 75,000,000
Debt Instrument, Interest Rate, Effective Percentage			2.25%	2.25%
Margin Account [Member] | Fed Funds Rate [Member]
Debt Instrument, Basis Spread on Variable Rate						0.50%
Real Estate Bank Loan Secured by Logan Office [Member]
Loans Payable to Bank, Total		$ 2,260,000	$ 1,470,000	$ 1,470,000
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate		4.66%						3.33%
Long-term Debt, Term (Year)								10 years
Debt Instrument, Periodic Payment, Total				$ 16,600

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Note 12 - Operating Segments (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue from Contract with Customer, Including Assessed Tax	$ 12,552,000	$ 13,562,000	$ 34,797,000	$ 37,952,000
Product Concentration Risk [Member] | Revenue Benchmark [Member] | Non-US [Member]
Concentration Risk, Percentage			5.00%
Traditional Business [Member]
Revenue from Contract with Customer, Including Assessed Tax	3,873,000	4,083,000	$ 11,158,000	11,071,000
Traditional Business [Member] | Transferred at Point in Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	2,776,000	2,957,000	7,879,000	7,613,000
Traditional Business [Member] | Transferred over Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	1,097,000	1,126,000	3,279,000	3,458,000
Journal Technologies [Member]
Revenue from Contract with Customer, Including Assessed Tax	8,679,000	9,479,000	$ 23,639,000	$ 26,881,000
Journal Technologies [Member] | Product Concentration Risk [Member] | Revenue Benchmark [Member]
Concentration Risk, Percentage			68.00%	71.00%
Journal Technologies [Member] | Transferred at Point in Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	4,046,000	4,312,000	$ 9,989,000	$ 11,029,000
Journal Technologies [Member] | Transferred over Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 4,633,000	$ 5,167,000	$ 13,650,000	$ 15,852,000

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Note 12 - Operating Segments - Summarized Financial Information for Reportable Segments (Details) - USD ($)	1 Months Ended		3 Months Ended						9 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Jun. 30, 2022	Jun. 30, 2021	Sep. 30, 2021
Revenue from Contract with Customer, Including Assessed Tax			$ 12,552,000			$ 13,562,000			$ 34,797,000	$ 37,952,000
Salaries and employee benefits			9,421,000			8,780,000			26,745,000	25,818,000
(Decrease) increase to the long-term supplemental compensation accrual			1,985,000			655,000			(65,000)	1,410,000
Others			3,249,000			2,803,000			9,791,000	8,410,000
Total operating expenses			14,655,000			12,238,000			36,471,000	35,638,000
Income (loss) from operations			(2,103,000)			1,324,000			(1,674,000)	2,314,000
Dividends and interest income			1,263,000			776,000			4,251,000	2,063,000
Gains on sale of land			272,000						272,000
Other income						69,000				69,000
Net realized gains on sales of marketable securities	$ 14,249,000	$ 14,249,000							14,249,000	18,478,000
Marketable Securities, Unrealized Gain (Loss)			(12,666,000)			55,686,000			(57,075,000)	131,754,000
Pretax income (loss)			(13,527,000)			57,773,000			(40,532,000)	154,434,000
Income tax benefits (provisions)			3,665,000			(15,200,000)			9,735,000	(40,115,000)
Net (loss) income			(9,862,000)	$ (27,813,000)	$ 6,878,000	42,573,000	$ 12,476,000	$ 59,270,000	(30,797,000)	114,319,000
Total assets			384,574,000			389,500,000			384,574,000	389,500,000	$ 390,577,000
Capital expenditures			11,000						14,000	29,000
Gains on sale of land			272,000						272,000
Real Estate Bank Loan Secured by Logan Office [Member]
(Decrease) increase to the long-term supplemental compensation accrual			1,985,000			655,000
Interest expense on debt			(12,000)			(14,000)			(38,000)	(48,000)
Margin Account [Member]
Interest expense on debt			(281,000)			(68,000)			(517,000)	(196,000)
Advertising [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,989,000			2,195,000			5,679,000	5,649,000
Subscription and Circulation [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,097,000			1,126,000			3,279,000	3,458,000
Advertising Service Fees and Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			787,000			762,000			2,200,000	1,964,000
License and Maintenance [Member]
Revenue from Contract with Customer, Including Assessed Tax			4,633,000			5,602,000			13,721,000	16,990,000
Consulting Fees [Member]
Revenue from Contract with Customer, Including Assessed Tax			2,267,000			2,100,000			4,697,000	4,649,000
Service, Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,779,000			1,777,000			5,221,000	5,242,000
Traditional Business [Member]
Revenue from Contract with Customer, Including Assessed Tax			3,873,000			4,083,000			11,158,000	11,071,000
Journal Technologies [Member]
Revenue from Contract with Customer, Including Assessed Tax			8,679,000			9,479,000			23,639,000	26,881,000
Operating Segments [Member] | Traditional Business [Member]
Revenue from Contract with Customer, Including Assessed Tax			3,873,000			4,083,000			11,158,000	11,071,000
Salaries and employee benefits			2,134,000			2,081,000			6,864,000	6,687,000
(Decrease) increase to the long-term supplemental compensation accrual									(25,000)	1,410,000
Others			904,000			929,000			2,877,000	2,904,000
Total operating expenses			5,023,000			3,665,000			9,716,000	11,001,000
Income (loss) from operations			(1,150,000)			418,000			1,442,000	70,000
Pretax income (loss)			(1,150,000)			418,000			1,442,000	70,000
Income tax benefits (provisions)			225,000			(175,000)			(335,000)	(15,000)
Net (loss) income			(925,000)			243,000			1,107,000	55,000
Total assets			22,091,000			17,894,000			22,091,000	17,894,000
Capital expenditures			4,000						4,000	22,000
Operating Segments [Member] | Traditional Business [Member] | Real Estate Bank Loan Secured by Logan Office [Member]
(Decrease) increase to the long-term supplemental compensation accrual			1,985,000
Operating Segments [Member] | Traditional Business [Member] | Advertising [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,989,000			2,195,000			5,679,000	5,649,000
Operating Segments [Member] | Traditional Business [Member] | Subscription and Circulation [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,097,000			1,126,000			3,279,000	3,458,000
Operating Segments [Member] | Traditional Business [Member] | Advertising Service Fees and Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			787,000			762,000			2,200,000	1,964,000
Operating Segments [Member] | Journal Technologies [Member]
Revenue from Contract with Customer, Including Assessed Tax			8,679,000			9,479,000			23,639,000	26,881,000
Salaries and employee benefits			7,287,000			6,699,000			19,881,000	19,131,000
(Decrease) increase to the long-term supplemental compensation accrual									(40,000)
Others			2,345,000			1,874,000			6,914,000	5,506,000
Total operating expenses			9,632,000			8,573,000			26,755,000	24,637,000
Income (loss) from operations			(953,000)			906,000			(3,116,000)	2,244,000
Pretax income (loss)			(953,000)			906,000			(3,116,000)	2,244,000
Income tax benefits (provisions)			280,000			(460,000)			985,000	(785,000)
Net (loss) income			(673,000)			446,000			(2,131,000)	1,459,000
Total assets			20,814,000			21,498,000			20,814,000	21,498,000
Capital expenditures			7,000						10,000	7,000
Operating Segments [Member] | Journal Technologies [Member] | Real Estate Bank Loan Secured by Logan Office [Member]
(Decrease) increase to the long-term supplemental compensation accrual						655,000
Operating Segments [Member] | Journal Technologies [Member] | License and Maintenance [Member]
Revenue from Contract with Customer, Including Assessed Tax			4,633,000			5,602,000			13,721,000	16,990,000
Operating Segments [Member] | Journal Technologies [Member] | Consulting Fees [Member]
Revenue from Contract with Customer, Including Assessed Tax			2,267,000			2,100,000			4,697,000	4,649,000
Operating Segments [Member] | Journal Technologies [Member] | Service, Other [Member]
Revenue from Contract with Customer, Including Assessed Tax			1,779,000			1,777,000			5,221,000	5,242,000
Corporate, Non-Segment [Member]
Dividends and interest income			1,263,000			776,000			4,251,000	2,063,000
Gains on sale of land			272,000						272,000
Other income						69,000				69,000
Net realized gains on sales of marketable securities									14,249,000	18,478,000
Marketable Securities, Unrealized Gain (Loss)			(12,666,000)			55,686,000			(57,075,000)	131,754,000
Pretax income (loss)			(11,424,000)			56,449,000			(38,858,000)	152,120,000
Income tax benefits (provisions)			3,160,000			(14,565,000)			9,085,000	(39,315,000)
Net (loss) income			(8,264,000)			41,884,000			(29,773,000)	112,805,000
Total assets			341,669,000			350,108,000			341,669,000	350,108,000
Gains on sale of land			272,000						272,000
Corporate, Non-Segment [Member] | Real Estate Bank Loan Secured by Logan Office [Member]
Interest expense on debt			(12,000)			(14,000)			(38,000)	(48,000)
Corporate, Non-Segment [Member] | Margin Account [Member]
Interest expense on debt			$ (281,000)			$ (68,000)			$ (517,000)	$ (196,000)