Daily Journal Corporation: A Year of Growth and Transformation

Daily Journal Corporation (DJCO) has released its financial results for the fiscal year ended September 30, 2024, showcasing a year of significant growth and transformation. The company, which publishes newspapers and web sites covering California and Arizona, and produces specialized information services, has seen a notable increase in revenues and profitability.



Revenue Growth and Segment Performance

DJCO's consolidated revenues for fiscal 2024 reached $69,931,000, a 3.3% increase from the prior year. This growth was primarily driven by increases in Journal Technologies' license and maintenance fees, which rose by 10.4% to $4,762,000, and other public service fees, which increased by 11.5% to $1,577,000. These increases were partially offset by a decrease in consulting fees of 9.6% to $4,690,000. Additionally, the Traditional Business' advertising revenues and advertising service fees and other contributed to the overall revenue growth.

The Traditional Business' pretax income decreased by 6.1% to $1,579,000, primarily due to increased merchant discount fees, additional promotional expenses, postage, and press repairs and maintenance. However, this was partially offset by an increase in revenues of 3.4% to $573,000. Journal Technologies' business segment pretax income decreased by 49.9% to $2,491,000, primarily due to increased operating expenses of 90.5% to $4,129,000. These increases were partially offset by increased operating revenues of 37.5% to $1,649,000.

Marketable Securities and Non-Operating Income

At September 30, 2024, DJCO held marketable securities valued at $358,691,000, including net pretax unrealized gains of $219,597,000. During March 2024, the company sold a portion of its marketable securities for approximately $40,579,000, realizing net gains of $14,261,000. These proceeds, along with excess cash from operations, were used to pay down the Company's margin loan balance to $27,500,000 from $75,000,000 at September 30, 2023, aggregating a paydown of approximately $47,500,000 during fiscal 2024.

DJCO's non-operating income, net of expenses, increased by 371.4% to $100,208,000 from $21,450,000 in the prior fiscal year, primarily because of the recording of net realized and unrealized gains on marketable securities of $96,142,000. These increases were partially offset by a decrease in dividends and interest income of 14.8% to $7,102,000 from $8,340,000.

Consolidated Pretax Income and Effective Tax Rate

DJCO's consolidated pretax income for fiscal 2024 was $104,278,000, up from $28,102,000 in the prior fiscal year. The company recorded an income tax provision of $26,165,000 on pretax income of $104,278,000, resulting in a consolidated net income of $78,113,000 ($56.73 per share) for fiscal 2024, compared with $21,452,000 ($15.58 per share) in the prior fiscal year. The overall effective tax rate for fiscal 2024 was 25.1%, after including the taxes on the realized and unrealized gains on marketable securities.

In conclusion, Daily Journal Corporation's fiscal 2024 financial results demonstrate a year of significant growth and transformation, with increased revenues, profitability, and a strong focus on strategic investments in its Journal Technologies segment. As the company continues to navigate the evolving media landscape, investors will closely monitor its progress and potential opportunities for further growth.