LOS ANGELES, May 12, 2022 (GLOBE NEWSWIRE) — During the six months ended March 31, 2022, Daily Journal Corporation (NASDAQ: DJCO) reported consolidated revenue of $22,245,000, compared to $24,390,000 a year earlier. . This decrease of $2,145,000 is primarily attributable to the decrease in (i) Journal Technologies license and maintenance fees of $2,300,000, consulting fees of $119,000 and utility fees of $23,000 , and (ii) broadcast revenue of $150,000 from the traditional business, partially offset by increases in net advertising revenue from the traditional business of $236,000 and advertising and other services expenses of $211,000 .
The traditional business’ pre-tax profit increased by $2,940,000 to $2,592,000 from a pre-tax loss of $348,000 in the prior year, primarily due to a reduction in additional long-term compensation expense of $2,010,000 compared to an increase of $755,000 in the prior year. period of the year. The Journal Technologies business segment’s pre-tax loss increased by $3,501,000 to $2,163,000 from the prior year’s pre-tax profit of $1,338,000, primarily due to lower revenue resulting the Company’s decision to discontinue maintenance of its legacy software products effective July 1. 2021 to focus on supporting Journal Technologies’ core eSeries products. In December 2021 and March 2022, the Company sold a portion of its marketable securities for approximately $80,570,000, realizing net gains on sales of these marketable securities of $14,249,000, and borrowed an additional net amount of 43 $000,000 from the margin loan account to purchase primarily additional marketable securities with a total cost of approximately $117,678,000. The Company’s investments generated approximately $2,988,000 in dividend income for the six months ended March 31, 2022, compared to $1,287,000 during the prior year period. During the six months ended March 31, 2022, the consolidated loss before tax amounted to $27,005,000, compared to profit before tax of $96,661,000 during the prior year period. There was a consolidated net loss of $20,935,000 ($-15.16 per share) for the six months ended March 31, 2022, compared to net earnings of $71,746,000 ($51.96 per share) for the prior year period.
The Company believes that the coronavirus pandemic has had and, together with the recently reported elevated and more contagious Delta and Omicron variant cases of the BA.2 and BA.2.12.1 subvariants, will continue to have an impact. significant impact on the Company’s business operations. Governments may again take action in response to the pandemic, such as renewed closure or reduction of operations of courts and other government agencies that are clients of the Company. It could also include a certain degree of volatility in the value of the marketable securities of the Company. As of March 31, 2022, the Company held marketable securities worth $354,521,000, including net unrealized pre-tax gains of $199,684,000, and recognized a deferred tax liability of $53,825,000 for estimated income taxes due only on sales of securities whose net worth has appreciated.
For the six months ended March 31, 2022, the Company recorded an income tax benefit of $6,070,000 on the pre-tax loss of $27,005,000. The tax benefit consisted of a tax benefit of $11,971,000 on unrealized losses on marketable securities, a tax provision of $3,841,000 on realized gains on marketable securities, a tax provision of $740,000 on operating income, a tax benefit of $125,000 on dividends deduction received and other permanent accounting and tax differences, and a tax provision of $1,445,000 for the effect of a change in the allocation of the State on the beginning of the deferred tax liability of the year. Accordingly, the overall effective tax rate for the six months ended March 31, 2022 was 22.5%, after taking into account taxes on realized capital gains and unrealized capital losses on securities. shift.
Daily Journal Corporation publishes newspapers and websites covering California and Arizona, and produces several specialty news services. Journal Technologies, Inc. is a wholly owned subsidiary and provides case management software systems and related products to courts and other legal agencies.
This press release contains “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 in this press release are “forward-looking” statements that involve risks and uncertainties that could 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 these words and similar expressions are intended to identify such forward-looking statements. We disclaim any intention or obligation to revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot guarantee that these expectations will prove to be correct. Additional information regarding factors that could cause actual results to differ materially from those contained in the forward-looking statements is contained from time to time in documents we file with the Securities and Exchange Commission.
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