<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarterly Period Ended January 31, 2000 Commission File No. 0-15284
J2 COMMUNICATIONS
(Exact name of registrant as specified in its charter)
California 95-4053296
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
10850 Wilshire Blvd., Suite 1000
Los Angeles, California 90024
(Address of principal executive offices)
Registrant's telephone number: (310) 474-5252
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
As of March 13, 2000 the registrant had 1,310,392 shares of its common stock
outstanding.
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
J2 COMMUNICATIONS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF AS OF
JAN. 31, 2000 JUL. 31, 1999
------------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and Cash Equivalents $ 1,748,000 $ 1,858,000
Prepaid Expenses 18,000 23,000
Fixed Assets, net of accumulated depreciation
of $13,000 and $8,000, respectively 22,000 19,000
Intangible Assets, net of amortization of
$2,669,000 and $2,549,000, respectively 3,296,000 3,416,000
Other Assets 50,000 34,000
----------- -----------
TOTAL ASSETS $ 5,134,000 $ 5,350,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts Payable $ 238,000 $ 197,000
Accrued Expenses 347,000 432,000
Accrued Income Taxes 0 25,000
Settlement Payable 203,000 203,000
Minority Interest in Consolidated Subsidiary 271,000 186,000
Stock Appreciation Rights Payable 1,134,000 1,717,000
----------- -----------
TOTAL LIABILITIES 2,193,000 2,760,000
STOCKHOLDERS' EQUITY
Preferred Stock, no par value, 2,000,000 shares
authorized, no shares issued and outstanding 0 0
Common Stock, no par value, 15,000,000 shares
authorized, 1,310,392 and 1,233,712 shares
issued and outstanding, respectively 8,922,000 8,755,000
Less: Note Receivable for Common Stock (137,000) (134,000)
Less: Treasury Stock, at cost, 1,166 shares (2,000) (2,000)
Accumulated Deficit (5,842,000) (6,029,000)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 2,941,000 2,590,000
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,134,000 $ 5,350,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
2
<PAGE> 3
J2 COMMUNICATIONS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JAN. 31, ENDED JAN. 31,
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE
Trademark $ 222,000 $ 173,000 $ 539,000 $ 776,000
Video 3,000 4,000 7,000 6,000
----------- ----------- ----------- -----------
Total Revenue 225,000 177,000 546,000 782,000
COSTS AND EXPENSES
Costs Related to Trademark Revenue 7,000 0 11,000 125,000
Costs Related to Video Revenue 1,000 4,000 2,000 6,000
Costs Related to Internet Operations 86,000 0 193,000 0
Amortization of Intangible Assets 60,000 60,000 120,000 120,000
Selling, General & Administrative Expenses 347,000 199,000 568,000 361,000
Stock Appreciation Rights Benefit (605,000) 0 (583,000) 0
----------- ----------- ----------- -----------
Total Costs and Expenses (104,000) 263,000 311,000 612,000
----------- ----------- ----------- -----------
OPERATING INCOME/(LOSS) 329,000 (86,000) 235,000 170,000
OTHER INCOME/(EXPENSE)
Interest Income 19,000 25,000 38,000 38,000
Minority Interest in Income of
Consolidated Subsidiary (3,000) 0 (85,000) (64,000)
----------- ----------- ----------- -----------
Total Other Income/(Expense) 16,000 25,000 (47,000) (26,000)
----------- ----------- ----------- -----------
INCOME/(LOSS) BEFORE INCOME TAXES 345,000 (61,000) 188,000 144,000
Provision for Income Taxes 1,000 0 1,000 11,000
----------- ----------- ----------- -----------
NET INCOME/(LOSS) $ 344,000 $ (61,000) $ 187,000 $ 133,000
=========== =========== =========== ===========
Net Income/(Loss) Per Share - Basic $ 0.27 $ (0.05) $ 0.15 $ 0.11
=========== =========== =========== ===========
Weighted Average Number of Common
Shares - Basic 1,281,965 1,211,000 1,258,067 1,206,000
=========== =========== =========== ===========
Net Income/(Loss) Per Share - Diluted $ 0.25 $ (0.05) $ 0.14 $ 0.11
=========== =========== =========== ===========
Weighted Average Number of Common and
Common Equivalent Shares - Diluted 1,364,841 1,211,000 1,375,144 1,206,000
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
J2 COMMUNICATIONS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JAN. 31,
2000 1999
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 187,000 $ 133,000
Adjustments to reconcile Net Income to Net Cash
Used in Operating Activities:
Depreciation and Amortization 125,000 120,000
Minority Interest in Income of Consolidated Subsidiary 85,000 65,000
Stock Appreciation Rights Benefit (583,000) 0
Interest on Note Receivable for Common Stock (3,000) 0
Change in Assets and Liabilities:
Increase in Accounts Receivable 0 (27,000)
Decrease in Prepaid Expenses 5,000 20,000
Increase in Other Assets (16,000) (21,000)
Increase in Accounts Payable 41,000 30,000
Decrease in Accrued Expenses (85,000) (43,000)
Decrease in Income Taxes Payable (25,000) 0
Decrease in Deferred Revenue 0 (466,000)
----------- -----------
NET CASH AND CASH EQUIVALENTS
USED IN OPERATING ACTIVITIES (269,000) (189,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets (8,000) 0
Sale of Short-term Investments 0 582,000
----------- -----------
NET CASH AND CASH EQUIVALENTS (USED IN)/
PROVIDED BY INVESTING ACTIVITIES (8,000) 582,000
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of Stock Options 167,000 0
----------- -----------
NET CASH AND CASH EQUIVALENTS PROVIDED
BY FINANCING ACTIVITIES 167,000 0
----------- -----------
NET (DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (110,000) 393,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,858,000 879,000
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,748,000 $ 1,272,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
J2 COMMUNICATIONS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial statements. Accordingly, they do not include all of the information
and disclosures required for annual financial statements. These financial
statements should be read in conjunction with the financial statements and
related footnotes for the year ended July 31, 1999 included in the J2
Communications ("Company" or "Registrant") annual report on Form 10-K for that
period.
In the opinion of the Company's management, all adjustments (consisting of
normal recurring accruals) necessary to present fairly the Company's financial
position as of January 31, 2000, the results of operations for the three and six
month periods ended January 31, 2000 and 1999 and cash flows for the six month
periods ended January 31, 2000 and 1999 have been included.
The results of operations for the three and six month periods ended January 31,
2000 are not necessarily indicative of the results to be expected for the full
fiscal year. For further information, refer to the financial statements and
related footnotes included in the Company's annual report on Form 10-K for the
year ended July 31, 1999.
Certain amounts for the three and six month periods ended January 31, 1999 have
been reclassified to conform to the presentation of the January 31, 2000
amounts.
NOTE B - EARNINGS PER SHARE
Diluted earnings per share amounts are calculated using the treasury method and
are based upon the weighted average number of common and common equivalent
shares outstanding during the period. Common equivalent shares are excluded from
the computation in periods in which they would have an anti-dilutive effect. The
difference between basic and diluted earnings per share is solely attributable
to stock options, which are considered anti-dilutive when option exercise prices
exceed the weighted average market price per share of common stock during the
period. The following table shows the weighted average number of common and
common equivalent shares used in the calculation of basic and fully diluted
earnings per share:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JAN. 31, 2000 JAN. 31, 1999
------------- -------------
<S> <C> <C>
Weighted Average Number of Common Shares Outstanding 1,258,067 1,206,000
Weighted Average Number of Common Shares Assuming
Exercise of Stock Options 117,077 0
--------- ---------
Fully Diluted Weighted Average Number of Common Shares 1,375,144 1,206,000
========= =========
</TABLE>
5
<PAGE> 6
J2 COMMUNICATIONS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE C - JOINT VENTURE
The Company is the successor to a 75% interest in a joint venture ("Joint
Venture") established in 1975 for the development and production of the film
"National Lampoon's Animal House" ("Film"). The current operations of the Joint
Venture consist solely of collecting certain proceeds from the distribution and
exploitation of the Film by the copyright owner. For financial statement
purposes, the Joint Venture has been consolidated and a liability recognized
corresponding to the minority partner's interest in the proceeds from the Joint
Venture. The revenue received by the joint venture was approximately $314,000
and $251,000 for the six month periods ended January 31, 2000 and 1999,
respectively.
NOTE D - SEGMENT INFORMATION
The Company operates in three business segments: licensing and exploitation of
the "National Lampoon" trademark and related properties, operation of the
nationallampoon.com website and video distribution. Segment operating
income/(loss) excludes the amortization of intangible assets, stock appreciation
rights costs, interest income and income taxes. Selling, general and
administrative expenses not specifically attributable to any segment have been
allocated equally between the trademark and internet segments. Summarized
financial information for the six month periods ended January 31, 2000 and 1999
concerning the Company's segments is as follows:
<TABLE>
<CAPTION>
Trademark Internet Video Total
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Three Months Ended January 31, 2000
Segment revenue $ 222,000 $ 0 $ 3,000 $ 225,000
Segment operating income/(loss) 67,000 (288,000) 2,000 (219,000)
Three Months Ended January 31, 1999
Segment revenue $ 173,000 $ 0 $ 4,000 $ 177,000
Segment operating income/(loss) (26,000) 0 0 (26,000)
Six Months Ended January 31, 2000
Segment revenue $ 539,000 $ 0 $ 7,000 $ 546,000
Segment operating income/(loss) 205,000 (523,000) 5,000 (313,000)
Six Months Ended January 31, 1999
Segment revenue $ 776,000 $ 0 $ 6,000 $ 782,000
Segment operating income/(loss) 226,000 0 0 226,000
</TABLE>
6
<PAGE> 7
J2 COMMUNICATIONS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D - SEGMENT INFORMATION (CONTINUED)
A reconciliation of segment operating (loss)/income to net income/(loss) before
income taxes for the three and six month periods ended January 31, 2000 and 1999
is as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
JAN. 31, 2000 JAN. 31, 1999
------------- -------------
<S> <C> <C>
Total segment operating loss $(219,000) $ (26,000)
Amortization of intangible assets 60,000 60,000
Stock appreciation rights benefit (605,000) 0
Interest income (19,000) (25,000)
--------- ---------
Net income/(loss) before income taxes $ 345,000 $ (61,000)
========= =========
</TABLE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JAN. 31, 2000 JAN. 31, 1999
--------- ---------
<S> <C> <C>
Total segment operating (loss)/income $(313,000) $ 226,000
Amortization of intangible assets 120,000 120,000
Stock appreciation rights benefit (583,000) 0
Interest income (38,000) (38,000)
--------- ---------
Net income before income taxes $ 188,000 $ 144,000
========= =========
</TABLE>
7
<PAGE> 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THE THREE MONTHS ENDED JANUARY 31, 2000 VS. THE THREE MONTHS ENDED JANUARY 31,
1999
For the quarter ended January 31, 2000 trademark and related revenues
were approximately $222,000 as compared to approximately $173,000 for the
quarter ended January 31, 1999. The increase in trademark and related revenues
of 28% results primarily from increased revenue from the film "National
Lampoon's Loaded Weapon I." The Company's internet operations (primarily its
website, NATIONALLAMPOON.COM, that was launched in October 1999) did not
generate significant revenue during the quarter ended January 31, 2000 primarily
due to the time lag between an advertisement appearing on the website,
collection of the revenue associated with that advertisement by the Company's
advertising sales agency and subsequent remittance of that revenue, less
commissions, to the Company. Advertising first appeared on the Company's website
during November 1999. (SEE FUTURE COMMITMENTS).
Costs related to trademark and video revenue for the quarter ended
January 31, 2000 increased to approximately $8,000 versus approximately $4,000
for the quarter ended January 31, 1999. Costs related to internet operations
(excluding selling, general and administrative expenses related to internet
operations) were approximately $86,000 during the quarter ended January 31,
2000. These costs include website development and maintenance, content creation
and third party hosting of the website. There were no costs related to internet
operations during the same period last year as the Company's internet operations
did not commence until April 1999. Amortization of intangible assets, the costs
of the Company's acquisition of the "National Lampoon" trademark, was $60,000
for each of the quarters ended January 31, 2000 and 1999.
Selling, general and administrative costs increased by approximately 74%
to approximately $347,000 during the quarter ended January 31, 2000 versus
approximately $199,000 during the same period last year. This increase results
from increased salaries and related expenses of approximately $103,000 primarily
associated with the Company's internet operations and increased expenses
relating to preparation of the Company's proxy statement and annual report for
its annual shareholder meeting in January 2000.
During the quarter ended January 31, 2000, the Company recorded a
benefit of approximately $605,000 related to stock appreciation rights ("SAR")
granted to the Company's chief executive officer. This benefit results from a
decrease in the Company's stock price during the quarter that decreased the
amount payable by the Company to the chief executive officer upon exercise of
the outstanding SAR.
Interest income during the quarter ended January 31, 2000 decreased to
approximately $19,000 versus approximately $25,000 during the quarter ended
January 31, 1999. This decrease results from a decrease in cash and cash
equivalents held during the quarter versus the same period last year.
For the three months ended January 31, 2000, the Company had net income
of approximately $344,000, or $0.27 per share, versus a net loss of
approximately $61,000, or ($0.05) per share, for the three months ended January
31, 1999. This increase results primarily from the benefit recorded by the
Company relating to the outstanding SAR that was partially
8
<PAGE> 9
offset by the Company's significant expenses related to its internet operations.
During the quarters ended January 31, 2000 and 1999, the Company had no
significant provision for income taxes.
THE SIX MONTHS ENDED JANUARY 31, 2000 VS. THE SIX MONTHS ENDED JANUARY 31, 1999
For the six months ended January 31, 2000 trademark and related revenues
were approximately $539,000 as compared to approximately $776,000 for the six
months ended January 31, 1999. The decrease in trademark revenues of 31% results
primarily from expiration in August 1999 of an agreement between the Company and
International Family Entertainment, Inc. that resulted in revenue of
approximately $167,000 during the six months ended January 31, 1999. The
Company's internet operations (primarily its website, NATIONALLAMPOON.COM, that
was launched in October 1999) did not generate significant revenue during the
six months ended January 31, 2000 primarily due to the time lag between an
advertisement appearing on the website, collection of the revenue associated
with that advertisement by the Company's advertising sales agency and subsequent
remittance of that revenue, less commissions, to the Company. Advertising first
appeared on the Company's website during November 1999. (SEE FUTURE
COMMITMENTS).
Costs related to trademark and video revenue for the six months ended
January 31, 2000 decreased to approximately $13,000 versus approximately
$131,000 for the six months ended January 31, 1999. This decrease results
primarily from (i) no magazine being published during the six months ended
January 31, 2000 versus costs of approximately $45,000 for magazine publishing
during the six months ended January 31, 1999 and (ii) decreased royalties
payable to third parties that are based upon certain revenues received by the
Company. Costs related to internet operations (excluding selling, general and
administrative expenses related to internet operations) were approximately
$193,000 during the six months ended January 31, 2000. There were no costs
related to internet operations during the same period last year as the Company's
internet operations did not commence until April 1999. Amortization of
intangible assets, the costs of the Company's acquisition of the "National
Lampoon" trademark, was $120,000 for each of the six month periods ended January
31, 2000 and 1999.
Selling, general and administrative costs increased by approximately 57%
to approximately $568,000 during the six month period ended January 31, 2000
versus approximately $361,000 during the same six month period last year. This
increase results from increased salaries and related expenses of approximately
$130,000 primarily associated with the Company's internet operations and
increased expenses relating to preparation of the Company's proxy statement for
its annual meeting in January 2000.
During the six months ended January 31, 2000, the Company recorded a
benefit of approximately $583,000 related to the SAR granted to the Company's
chief executive officer. This benefit results from a decrease in the Company's
stock price during the six months ended January 31, 2000 that decreases the
amount of compensation payable by the Company to the chief executive officer
upon exercise of the outstanding SAR.
Interest income during the six months ended January 31, 2000 was
unchanged as compared to the same period last year at approximately $38,000.
For the six months ended January 31, 2000, the Company had net income of
approximately $187,000, or $0.15 per share, versus net income of approximately
$133,000, or $0.11 per share, for the six months ended January 31, 1999. This
increase results primarily
9
<PAGE> 10
from the benefit recorded by the Company relating to the SAR partially offset by
decreased trademark and related revenues and costs associated with the Company's
internet operations (including associated increased selling, general and
administrative expenses). During the six month periods ended January 31, 2000
and 1999, the Company had no significant provision for income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal source of working capital during the three and
six month periods ended January 31, 2000 was trademark and related income. The
Company's management believes that its existing cash resources will be
sufficient to fund its ongoing operations for the next twelve months.
For the six months ended January 31, 2000, the Company's net cash flow
used in its operating activities was approximately $269,000, an increase of
approximately $80,000 versus approximately $189,000 of net cash flow used in
operating activities during the six months ended January 31, 1999. This increase
results primarily from the funding of the Company's internet operations. As of
January 31, 2000, the Company had cash and cash equivalents of approximately
$1,748,000 as compared to approximately $1,858,000 at July 31, 1999.
FUTURE COMMITMENTS
The Company does not have any material future commitments for capital
expenditures. However, the Company has and will continue to use its working
capital to fund its internet operations that, during the six months ended
January 31, 2000, have not generated significant revenue and have resulted in
segment operating losses of approximately $523,000. (SEE NOTE D - SEGMENT
INFORMATION). Due to substantial competition among companies with internet-based
business strategies and the developing economics of the internet in general, it
is uncertain when, and if, the Company will be able to generate revenues from
its internet operations sufficient to offset the significant costs incurred to
date and the ongoing costs that the Company expects to incur in the future to
support its internet operations.
The Company has entered into an agreement with Phase 2 Media, an
internet advertising agency, for the sale of banner and sponsorship advertising
on the Company's website. Advertising began appearing on the Company's website
beginning in November 1999. Advertising revenue is dependent upon many factors
including, among others, the number of website viewers, the length of time each
user spends on the website and the advertising agency's ability to sell
advertising space based upon these and other factors. The Company also expects
to generate revenue by syndicating the original programming it creates for its
own website to third parties for use on other websites and from the sale of
"National Lampoon" branded merchandise in its on-line store.
FORWARD-LOOKING STATEMENTS
The foregoing discussion, as well as the other sections of this
Quarterly Report on Form 10-Q, contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that reflect the
Company's current views with respect to future events and financial results.
Forward-looking statements usually include the verbs "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "projects," "understands" and other
verbs suggesting uncertainty. The Company reminds shareholders that
forward-looking statements are merely predictions and therefore inherently
subject to uncertainties and other factors which could cause
10
<PAGE> 11
the actual results to differ materially from the forward-looking statements.
Potential factors that could affect forward-looking statements include, among
other things, the Company's ability to identify, produce and complete projects
that are successful in the marketplace, to arrange financing, distribution and
promotion for these projects on favorable terms in various markets and to
attract and retain qualified personnel.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
In the ordinary course of business, the Company has or may become
involved in disputes or litigation. On the basis of information available to it,
management believes any such contingencies will not have a materially adverse
impact on the Company's financial position or results of operations.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On January 13, 2000, the Company held its annual meeting of
shareholders. James P. Jimirro, James Fellows, Bruce P. Vann, John De Simio,
Gary Cowan and Daniel Laikin were each elected to the board of directors until
the next annual meeting of shareholders or until their respective successor is
elected and qualified. Each nominee, except Mr. Laikin, received 1,131,835 votes
with 567 votes withheld. Mr. Laikin received 922,812 votes with 209,590 votes
withheld. Two proposals submitted for shareholder approval, along with the
results of voting for each, are as follows:
1. The ratification of appointment of the firm of Arthur Andersen
LLP to serve as the Company's independent auditors for the
fiscal year ending July 31, 2000. This proposal was approved by
a vote of 1,132,115 votes for, 144 votes against with 143
abstentions and no broker non-votes.
2. Approval of the J2 Communications Amended and Restated 1999
Stock Option, Deferred Stock and Restricted Stock Plan. This
proposal was approved by a vote of 462,297 votes for, 15,934
votes against with 6,825 abstentions and 647,346 broker
non-votes.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-K)
3.1 Restated Articles of Incorporation of Registrant.(1)
3.2 Bylaws of Registrant.(1)
27 Financial Data Schedule.(2)
-------------------------------
(1) Incorporated by reference to Form S-1 as filed with the
Securities and Exchange Commission on July 28, 1986 as amended
September 22, 1986 and October 2, 1986.
(2) Filed electronically with Securities and Exchange Commission,
omitted in copies distributed to shareholders or other persons.
(b) FORMS 8-K
None.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: March 13, 2000 J2 COMMUNICATIONS
By: /s/Christopher M. Trunkey
---------------------------
Christopher M. Trunkey,
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-END> JAN-31-2000
<CASH> 1,748,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,748,000
<PP&E> 6,000,000
<DEPRECIATION> 2,682,000
<TOTAL-ASSETS> 5,134,000
<CURRENT-LIABILITIES> 2,193,000
<BONDS> 0
<COMMON> 8,783,000
0
0
<OTHER-SE> (5,842,000)
<TOTAL-LIABILITY-AND-EQUITY> 5,134,000
<SALES> 225,000
<TOTAL-REVENUES> 244,000
<CGS> 94,000
<TOTAL-COSTS> (104,000)
<OTHER-EXPENSES> 3,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 345,000
<INCOME-TAX> 1,000
<INCOME-CONTINUING> 344,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 344,000
<EPS-BASIC> 0.27
<EPS-DILUTED> 0.25
</TABLE>
