LOS ANGELES, Dec. 12, 2019 (GLOBE NEWSWIRE) -- During fiscal 2019, Daily Journal Corporation (NASDAQ:DJCO) had consolidated revenues of $48,655,000 as compared with $40,703,000 in the prior year.  This increase of $7,952,000 was primarily from (i) Journal Technologies' increased license and maintenance fees of $2,954,000, consulting fees of $2,707,000 and public service fees of $2,370,000, and (ii) the Traditional Business' increases of display advertising net revenues of $344,000, including conference revenues, and legal notice advertising net revenues of $106,000, partially offset by a reduction in the Traditional Business' classified advertising net revenues of $246,000, trustee sale notice advertising net revenues of $196,000 and circulation revenues of $152,000.

     The Traditional Business' pretax income decreased by $218,000 to $19,000 from $237,000 in the prior year.  Journal Technologies' pretax loss increased by $3,944,000 to $18,336,000 from $14,392,000, after (i) the goodwill impairment expenses of $13,400,000 during this fiscal year as compared with none in the prior fiscal year, and (ii) no amortization costs of intangible assets during fiscal 2019 (fully amortized by last year-end) as compared with $3,058,000 in fiscal 2018. 

     On October 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2016-01, Financial Instruments – Overall (Subtopic 825-10):  Recognition and Measurement of Financial Assets and Financial Liabilities.  This ASU requires an entity that holds financial assets or owes financial liabilities to, among other things, measure equity investments at fair value and recognize net unrealized gains (losses) through net income (loss).  Accordingly, the Company's net loss of $25,216,000 (-$18.26 per share) for fiscal 2019, included net unrealized losses on investments of $17,715,000 as well as the goodwill impairment losses of $13,400,000.   For fiscal 2018, the Company recorded net unrealized gains (losses) for its available-for-sale marketable securities in other comprehensive income.  There was net income of $8,201,000 ($5.94 per share) in fiscal 2018 primarily because of the tax cuts.  

     During the prior fiscal year, the Tax Act reduced the maximum corporate income tax rate from 35% to 21%.  The impact to the Company's financial statements in fiscal 2018 was as follows:  (i) fiscal 2018 income tax expense or benefit was calculated using a blended rate of 24.28% pursuant to IRC Section 15, (ii) deferred tax expense included a discrete net tax benefit of approximately $16 million resulting from a revaluation of deferred tax assets and liabilities to the expected tax rate that will be applied when temporary differences are expected to reverse, (iii) items that were expected to reverse during fiscal 2018 were valued at the blended rate of 24.28% while temporary differences that will reverse after fiscal 2018 were valued at the 21% rate, and (iv) approximately $20 million of the revaluation of deferred taxes related to items that were initially recorded as accumulated other comprehensive income. This revaluation of approximately $20 million was recorded as a component of income tax expense or benefit in continuing operations.  Consequently, during fiscal 2018, the Company recorded an income tax benefit of $19,540,000 on a pretax loss of $11,339,000.  The effective tax rate (before the discrete item discussed above) was greater than the statutory rate primarily due to the dividends received deduction which increases the loss for tax purposes. 

     This press release 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 press release 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.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. 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 we file with the Securities and Exchange Commission.