Daily Journal(DJCO) - 2022 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended March 31, 2022, were $10,717,000, a decrease of 23.4% compared to $13,970,000 for the same period in 2021[12] - Net loss for the three months ended March 31, 2022, was $27,813,000, compared to a net income of $12,476,000 for the same period in 2021[12] - Total revenues for the six months ended March 31, 2022, were $22,245,000, a decrease of 8.8% from $24,390,000 for the same period in 2021[14] - Net loss for the six months ended March 31, 2022, was $20,935,000, compared to a net income of $71,746,000 for the same period in 2021[14] - The company reported a significant unrealized loss on marketable securities of $8,321,000 for the three months ended March 31, 2022[12] - The company reported a significant unrealized loss on marketable securities of $44,409,000 for the six months ended March 31, 2022, compared to a gain of $76,068,000 in the same period of 2021[21] - The Company recorded net unrealized losses on marketable securities of $44,409,000 for the six months ended March 31, 2022, compared to net unrealized gains of $76,068,000 in the prior year period[41] - The Company recorded an income tax benefit of $6,070,000 on a pretax loss of $27,005,000 for the six months ended March 31, 2022[8] - Total operating revenues for 2022 reached $7,285 million, up from $6,988 million in 2021, representing a growth of approximately 4.3%[53] - Net income for 2022 was $2,032 million, compared to a net loss of $188 million in 2021, indicating a significant turnaround[53] Revenue Breakdown - Advertising revenue increased to $1,896,000 for the three months ended March 31, 2022, up 7.6% from $1,762,000 in 2021[12] - Advertising revenues increased to $3,690,000 for the six months ended March 31, 2022, compared to $3,454,000 in the prior year, reflecting a growth of 6.8%[14] - Advertising revenue rose to $3,690 million in 2022, up from $3,454 million in 2021, marking an increase of approximately 6.8%[53] - Circulation revenue decreased to $2,182 million in 2022 from $2,332 million in 2021, a decline of about 6.4%[53] - Consulting fees decreased significantly to $669,000, down 70.9% from $2,305,000 in the prior year[12] - The company’s consulting fees for the six months ended March 31, 2022, were $2,430,000, a slight decrease from $2,549,000 in the same period of 2021[14] - Consulting fees generated $2,430 million in 2022, down from $2,549 million in 2021, a decrease of approximately 4.7%[53] Assets and Liabilities - Total current assets as of March 31, 2022, were $373,303,000, slightly up from $372,336,000 as of September 30, 2021[8] - Total current liabilities decreased to $24,379,000 from $34,012,000, reflecting a reduction of 28.3%[8] - Long-term liabilities increased to $132,005,000 as of March 31, 2022, compared to $101,924,000 as of September 30, 2021, an increase of 29.5%[8] - Shareholders' equity decreased to $233,706,000 from $254,641,000, a decline of 8.2%[8] - The company had cash and cash equivalents of $7,329,000 at the end of the period, down from $8,211,000 at the end of the previous year[21] - Total assets increased to $19,924 million in 2022 from $14,586 million in 2021, reflecting a growth of approximately 36.0%[53] Operating Expenses - Income from operations decreased to $429,000 for the six months ended March 31, 2022, down from $990,000 in the prior year[14] - The company’s total expenses for the six months ended March 31, 2022, were $21,816,000, down from $23,400,000 in the same period of 2021, indicating a reduction of 6.8%[14] - Operating expenses decreased to $4,693 million in 2022 from $7,336 million in 2021, a reduction of about 36.0%[53] - Capital expenditures for 2022 were reported at $3 million, a decrease from $22 million in 2021[53] Marketable Securities - The Company had net accumulated pretax unrealized gains of $199,684,000 in marketable securities, down from $244,093,000 as of September 30, 2021[40] - The Company realized net gains of $14,249,000 from the sale of marketable securities totaling approximately $80,570,000 in December 2021 and March 2022[42] - The Company’s investments in common stocks had a fair value of $354,521,000 as of March 31, 2022, with an adjusted unrealized gain of $199,684,000[45] Segment Information - The Company’s reportable segments include the Traditional Business and Journal Technologies, with all inter-segment transactions eliminated[52] - The total operating revenues for Journal Technologies in 2022 were $14,960 million, down from $17,402 million in 2021, a decline of approximately 14.0%[53] - Total operating revenues for the Traditional Business in 2022 were $7,285,000, an increase from $6,988,000 in 2021, with $5,103,000 recognized after services and $2,182,000 recognized ratably[55] - Total operating revenues for the Company's software business were $14,960,000 in 2022, down from $17,402,000 in 2021, with $5,943,000 recognized upon completion of services and $9,017,000 recognized ratably[55] - For the three months ended March 31, 2022, total operating revenues for the Traditional Business were $3,711,000, compared to $3,459,000 in the same period of 2021[56] - Approximately 67% of the Company's revenues during the six-month period ended March 31, 2022, were derived from Journal Technologies, down from 71% in the prior year[59] - The Company's revenues were primarily from the United States, with approximately 4% from foreign countries during the six months ended March 31, 2022[59] - Total operating revenues for the Company's software business in the three months ended March 31, 2022, were $7,006,000, compared to $10,511,000 in the same period of 2021[57] Other Financial Metrics - The weighted average number of common shares outstanding was 1,380,746, with a basic and diluted net loss per share of $(20.14)[12] - The weighted average number of common shares outstanding remained unchanged at 1,380,746 for both periods[14] - The overall effective tax rate for the six months ended March 31, 2022, was 22.5%, influenced by various tax provisions and benefits[8] - The Company had a margin loan balance of $75 million as of March 31, 2022, with an interest rate of 1%[49] - The Company’s real estate loan had a balance of approximately $1.5 million as of March 31, 2022, with monthly payments of about $16,600[50]