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<SEC-DOCUMENT>0001193125-09-040584.txt : 20090420
<SEC-HEADER>0001193125-09-040584.hdr.sgml : 20090420
<ACCEPTANCE-DATETIME>20090227130724
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-09-040584
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20090227

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DAILY JOURNAL CORP
		CENTRAL INDEX KEY:			0000783412
		STANDARD INDUSTRIAL CLASSIFICATION:	NEWSPAPERS:  PUBLISHING OR PUBLISHING & PRINTING [2711]
		IRS NUMBER:				954133299
		STATE OF INCORPORATION:			SC
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		915 EAST FIRST STREET
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90012
		BUSINESS PHONE:		2132295300

	MAIL ADDRESS:	
		STREET 1:		355 SOUTH GRAND AVENUE 34TH FLOOR
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90071-1560

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DAILY JOURNAL CO
		DATE OF NAME CHANGE:	19870427
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<TITLE>Response Letter</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>DAILY JOURNAL CORPORATION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>915 East First Street </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Los Angeles, California 90012 </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>(213) 229-5300 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">February&nbsp;26, 2009
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Ms.&nbsp;Beverly&nbsp;A. Singleton </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Staff Accountant
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">U.S. Securities and Exchange Commission </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">100 F Street, N.E.
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Washington, D.C. 20549-3561 </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">Re:</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Daily Journal Corporation </FONT></TD></TR></TABLE>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Form 10-K for the year ended September&nbsp;30, 2008 </FONT></TD></TR></TABLE>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Filed December&nbsp;22, 2008 </FONT></TD></TR></TABLE>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">File No. 0-14665 </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Dear Ms.&nbsp;Singleton: </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The purpose of this letter is to respond to your letter dated January&nbsp;29, 2009. To assist you in reviewing our responses, we will precede each
response with a copy (in bold type) of the point stated in your letter. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Results of Operations, page 15 </FONT></P> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>To enhance an understanding of your discussion, please consider expanding the first paragraph to define and disclose that you operate in two business segments:
(i)&nbsp;traditional business (e.g., newspaper publishing and related services), and (ii)&nbsp;information systems and services (i.e., the operations of Sustain Technologies, Inc. or &#147;Sustain&#148;). In addition, please consider providing a
table that discloses the amount of revenue and pre-tax profit or income attributed to each of these segments for each period in which statements of income are provided, similar to the disclosure provided in Note 7 to the audited financial
statements. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In future filings, we will expand the first paragraph of Management&#146;s Discussion and Analysis to
disclose that we operate in two business segments. We will also provide a table of key financial information for each reportable segment. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Provide a discussion of the income statement revenue line item &#147;Advertising service fees and other,&#148; as it is unclear as to which revenue generating operations or
business segment these pertain. In this regard, discuss the source of the revenue and the reasons for the change in revenues during the period. </B></FONT></TD></TR></TABLE>

<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In future filings, we will explain that &#147;Advertising service fees and other&#148; relates to the
traditional business and not to Sustain, which is in the computer software business. We will also explain that these amounts are primarily agency commissions received from third-party newspapers in which the advertising is placed, and fees generated
when filing notices with government agencies. In addition, if there are material changes in these amounts from period-to-period, we will explain the reasons for such changes. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>See the fourth and sixth paragraphs under this heading where you refer to the impact on the change in total &#145;costs and expenses&#146; and &#145;Sustain business segment
pre-tax income&#146; excluding (or &#147;ignoring&#148; or &#147;before&#148;) the reversal of the contingent liability at Sustain in 2007. Such discussion appears to result in disclosing a non-GAAP measure of &#147;total costs and expenses&#148;
and &#147;pre-tax income&#148; that excludes the fiscal year 2007 reversal of the contingent liability. In future filings, please revise the discussion to discuss the total change in financial results without excluding any special charges or
credits. You may discuss the individual dollar impact that the special charges or credits had on your results of operations provided that a &#145;non-GAAP&#146; total amount is not disclosed. See FR-65 for guidance. </B></FONT></TD></TR></TABLE> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We have reviewed the guidance in FR-65. While we do not necessarily agree with your comment that both the fourth and sixth paragraphs contain non-GAAP
financial measures, Sustain&#146;s three-year old 2007 contingent liability reversal will not appear in any future comparative financial statements, and we will therefore not be addressing it in future MD&amp;A disclosures. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><U>Liquidity and Capital Resources, page 16 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>4.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>Revise your computation of working capital to include the current liability of &#145;deferred subscription and other revenues,&#146; as to not present a non-GAAP liquidity
measure. You may separately discuss the impact that the current liability will have on your working capital situation, without giving effect to a non-GAAP total. </B></FONT></TD></TR></TABLE> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In future filings, we will include &#147;deferred subscription and other revenues&#148; as a current liability when referring to the Company&#146;s total
working capital. As of September&nbsp;30, 2008, the Company had working capital of $18,759,000, including the liability for deferred subscription and other revenues of $5,847,000 which were scheduled to be earned within one year. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><U>Fair Value of Financial Instruments, page 23 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>5.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>We note your disclosure that you transferred your investments in U.S. Treasury Notes and Bills from the &#147;held-to-maturity&#148; category at September&nbsp;30, 2007 to the
&#147;available-for-sale&#148; category at September&nbsp;30, 2008. Please provide us with a detailed explanation as to the circumstances that led you to transfer these investments from &#147;held-to-maturity&#148; at September&nbsp;30, 2007 to the
category of &#147;available-for-sale&#148; at September&nbsp;30, 2008. Your response should address the factors given in paragraph 8(a)-(f)&nbsp;of SFAS 115, and future filings should provide the disclosures required by paragraph 22 of SFAS 115.
</B></FONT></TD></TR></TABLE>

<p Style='page-break-before:always'>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">In 2008, we decided to sell some of our Treasury Notes and Bills, which were bearing interest at an
almost nominal rate, in order to pay off our bank debt, on which we were paying annual interest of 6.84%. These sales required us to change the classification of these investments. None of the factors in paragraph 8(a)-(f)&nbsp;of SFAS 115 had any
role in our decision to sell the Treasury Notes and Bills. In future filings, consistent with paragraph 22 of SFAS 115, if we sell any security classified as held-to-maturity, we will disclose in the notes to our financial statements the amortized
cost amount of the sold security, the related realized or unrealized gain or loss, and the circumstances leading to the decision to sell the security. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman"
SIZE="2"><U>Item&nbsp;15(2). Exhibits, page 31 </U></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>6.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>We note that your Articles of Incorporation and Bylaws are incorporated by reference to filings made almost ten years ago. Also, contrary to the assertion in the footnotes to
your exhibit index, these two exhibits did not bear the same number in the original filings. See Item&nbsp;10(d) of Regulation S-K regarding documents on file for more than five years. Accordingly, in order to avoid any potential confusion, we
suggest you re-file these exhibits in connection with your next Annual Report on Form 10-K. </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">We will re-file our Articles
of Incorporation and Bylaws with our next Annual Report on Form 10-K. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">* * * * </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">We acknowledge that the Company is responsible for the adequacy and accuracy of the disclosure in the filing; that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission
from taking any action with respect to the filing; and that the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Please direct any comments or questions regarding the foregoing to the undersigned at (213)&nbsp;229-5300. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Sincerely,</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Gerald L. Salzman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Gerald L. Salzman</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">President</FONT></TD></TR>
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