-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NpLLocGfacPEx4HhqzZ7fK/0r5gZgNP6SH/j1WYgVm59ZMyG1fq3baoLo2sxLB8Y 8bftRtI8reLXUpFq+QtLzg== 0000912057-97-025346.txt : 19970730 0000912057-97-025346.hdr.sgml : 19970730 ACCESSION NUMBER: 0000912057-97-025346 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970729 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: VALUE LINE INC CENTRAL INDEX KEY: 0000717720 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [6282] IRS NUMBER: 133139843 STATE OF INCORPORATION: NY FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-11306 FILM NUMBER: 97647381 BUSINESS ADDRESS: STREET 1: 220 E 42ND ST CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2129071500 10-K 1 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended April 30, 1997 Commission File Number 0-11306 VALUE LINE, INC. (Exact name of registrant as specified in its charter) New York 13-3139843 (State or other jurisdiction of (IRS Employer Identification incorporation or organization) Number) 220 East 42nd Street, New York, N.Y. 10017-5891 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 907-1500 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.10 par value 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the registrant's voting stock held by non-affiliates on June 27, 1997 was $87,121,000. There were 9,978,625 shares of the Company's Common Stock outstanding at June 27, 1997. DOCUMENTS INCORPORATED BY REFERENCE None Part I Item 1. BUSINESS. Value Line, Inc. (the "Company"), a New York corporation, was organized in 1982 and is the successor to substantially all of the operations of Arnold Bernhard & Company, Inc. ("AB&Co."). The Company's primary businesses are producing investment related periodical publications through its wholly-owned subsidiary, Value Line Publishing, Inc. ("VLP"), and providing invest-ment advisory services to mutual funds, institutions and individual clients. VLP publishes The Value Line Investment Survey, one of the nation's major periodical investment services, as well as The Value Line Investment Survey - Expanded Edition, The Value Line Mutual Fund Survey, The Value Line No-Load Fund Advisor, The Value Line OTC Special Situations Service, The Value Line Options Survey and The Value Line Convertibles Survey. The Company's periodical publications are direct marketed through media and direct mail to retail and institutional investors. The Company is investment adviser for the Value Line Family of Mutual Funds, which on April 30, 1997, included 16 open-end investment companies with various investment objectives. In addition, the Company manages investments for private and institutional clients and, through VLP, provides financial database information through computer media and computer time-sharing facilities (DataFile and other services). VLP also markets investment analysis software, Value Line Investment Survey FOR WINDOWS-Registered Trademark-, introduced in July 1996, VALUE/SCREEN III (for DOS and Apple systems), Mutual Fund Survey FOR WINDOWS-Registered Trademark- and other electronic products. The Company is registered with the Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940. In addition to VLP, the Company's other wholly-owned subsidiaries include a registered broker-dealer, Value Line Securities, Inc., and an advertising agency, Vanderbilt Advertising Agency, Inc. These subsidiaries primarily provide services used by the Company in its publishing and investment management businesses. Compupower Corporation, another subsidiary, serves the subscription fulfillment needs of the Company's publishing operations. Value Line Distribution Center, Inc. ("VLDC") handles all of the mailings of the publications to the Company's subscribers. Additionally, VLDC provides office space for Compupower Corporation's client relations and data processing departments. The name "Value Line," as used to describe the Company, its products, and its subsidiaries, is a registered trade-mark of the Company. As used herein, except as the context otherwise requires, the term "Company" includes the Company and its consolidated subsidiaries. A. Investment Information and Publications. VLP publishes investment related publications and produces electronic products described below: l. Publications: The Value Line Investment Survey is a weekly investment related periodical that in addition to various timely articles on current economic, financial and investment matters ranks common stocks for future relative performance based on computer-generated statistics of financial results and stock market performance. The key evaluations for each stock covered are "Timeliness(TM)" and "Safety." "Timeliness(TM)" relates to the probable relative price performance of a stock over the next six to twelve months, as compared to the rest of the approximately 1,700 covered stocks. Rankings are updated each week and range from Rank 1 for the expected best performing stocks to Rank 5 for the expected poorest performers. "Safety" rankings are a measure of risk and are based primarily on the issuer's relative financial strength and the stock's price stability. "Safety" ranges from Rank 1 for the least risky stocks to Rank 5 for the riskiest. VLP employs approximately 75 - 80 analysts and statisticians who prepare articles of interest for each periodical and who evaluate stock performance and provide future earnings estimates and quarterly written evaluations with weekly updates when relevant. The annual subscription price of The Value Line Investment Survey is $570. The Expanded Edition of The Value Line Investment Survey was introduced by VLP in April 1995. It provides detailed descriptions of 1,800 additional small- and medium-capitalization stocks, many listed on NASDAQ, beyond the 1,700 stocks of larger-capitalization companies traditionally covered in The Value Line Investment Survey. Like The Value Line Investment Survey, the Expanded Edition has its own "Summary & Index" providing updated ranks and other data, as well as "screens" of key financial performance measures. The "Ratings and Reports" section, providing updated reports on about 140 stocks each week, has been organized to correspond closely to the industries reviewed in the Standard Edition of The Value Line Investment Survey. A new combined Index, published quarterly, allows the subscriber to easily locate a specific stock among the 3,500 stocks covered. The Expanded Edition includes a number of new as well as standard features: - - A new Performance Ranking System incorporates many of the elements of the Value Line Timeliness/(TM) Ranking System, modified to accommodate the 1,800 stocks in the Expanded Edition. The Performance/(TM) Rank is based on earnings growth and price momentum and is designed to predict relative price performance over the next six to 12 months. - - An expanded Business Section provides detail about companies, focusing on business lines and strategies. - - An enlarged Assets and Liabilities Section provides long-term statistics and a more complete balance sheet on each company. - - New Total-Return Statistics provide an "at a glance" look at a particular stock's performance --appreciation plus dividends --over the past three months, six months, and one, three and five years. The principal difference between the Expanded Edition and The Value Line Investment Survey is that the Expanded Edition does not include financial forecasts or analysts' comments. This modification has allowed VLP to offer this service at a relatively low price. The cost of the Expanded Edition to current subscribers of The Value Line Investment Survey is $125 per year for their first subscription, $175 for renewals and $695 per year for new subscribers combining both Editions, while stand-alone subscriptions are offered at $249. The Value Line Mutual Fund Survey provides full-page profiles of 1500 mutual funds and condensed coverage of an additional 500 funds. Every two weeks subscribers receive an updated issue, containing about 150 fund reports, plus a "Performance & Index" providing current rankings and performance figures for the full universe of more than 2,000 funds. The Value Line Mutual Fund Survey also includes semi-annual profiles and analyses on 100 of the nation's major fund families. Additionally, subscribers receive a 12-page periodical, monthly newsletter containing articles of general interest to subscribers and readers, "The Value Line Mutual Fund Advisor," with articles on investment trends and issues concerning mutual fund investors. Funds are ranked for both risk and overall risk-adjusted performance using strictly quantitative means. A large binder is provided to house the periodic fund reports. A second binder is provided to full-term subscribers for the periodical monthly newsletter. The annual subscription price of The Value Line Mutual Fund Survey is $295. VLP has instituted on-line distribution of individual one-page reports from The Value Line Investment Survey and The Value Line Mutual Fund Survey through the CompuServe on-line network. The price per page for these documents is $5. The Value Line No-Load Fund Advisor is a periodical monthly newsletter for investors who wish to manage their own portfolios of no- and low-load, open-end mutual funds. Each issue features strategies for maximizing total return, with special attention given to tax considerations. Also featured are in-depth interviews with noted portfolio managers, model portfolios for a range of investor profiles, and information about retirement planning, industry news, and listings (with descriptions) of new funds worthy of further consideration. A full statistical review, including latest performance, rankings and sector weightings, is updated each month on 600 leading no-load and low-load funds. The annual subscription price of The Value Line No-Load Fund Advisor is $107. The Value Line OTC Special Situations Service, published periodically 24 times a year, concentrates on fast-growing, smaller companies whose stocks are perceived by VLP analysts as having exceptional appreciation potential. The annual subscription price of The Value Line OTC Special Situations Service is $429. The Value Line Options Survey, a periodical weekly service published 48 times a year, evaluates and ranks for future performance the most active options listed on United States exchanges (approximately 8,000). The annual subscription price of The Value Line Options Survey is $445. An electronic version of this publication, The Value Line Daily Options Survey, was introduced during the latter part of fiscal 1995. The Value Line Convertibles Survey, a periodical service published 48 times a year, evaluates and ranks for future market performance approximately 580 convertible securities (bonds and preferred stocks) and approximately 75 warrants. The annual subscription price of The Value Line Convertibles Survey is $625. The Total Return Service is a customized data service. It was developed to help publicly traded companies meet the SEC's mandated executive-compensation disclosure requirements. The service consists of a line graph comparing the total return of a public company's stock over the last five years to a published equity market index and a published or constructed industry index. 2. Electronic Products: Value Line Investment Survey FOR WINDOWS-Registered Trademark- is a powerful menu-driven software program with fast filtering, ranking, reporting and graphing capabilities on over 5,000 stocks, including the 1,700 stocks covered in VLP's benchmark publication, The Value Line Investment Survey. The product was introduced to the market during June 1996 and available during July 1996 for distribution. Value Line Mutual Fund Survey FOR WINDOWS-Registered Trademark- and Value Line No-Load Analyzer for Windows-Registered Trademark- are electronic versions of the Mutual Fund Survey launched in the latter part of fiscal 1995. Value Line Investment Survey FOR WINDOWS-Registered Trademark- provides over 200 search fields on eachstock, more than 50 charting and graphing variables for comparative research, and 10 years of historical financial data for scrutinizing performance, risk and yield. The software includes a portfolio module that lets users create and track their own stock portfolios. An exclusive E-page feature on the CD-ROM version allows the user to view and print actual full-page stock reports from the respected Value Line Investment Survey and Expanded publications. In addition, weekly updates and technical support are available through Value Line On-line, the VLP's electronic Bulletin Board system and are now available through our web site (www.valueline.com). In addition to retrieving demos of the software and sample E pages, you can request information on all of our products. To access the 1,700 stocks covered exclusively in The Value Line Investment Survey publication, subscribers are offered a two-month trial subscription with monthly updates and Value Line On-line weekly data for $55, a full-year subscription for $595 or $195 for subscribers to The Value Line Investment Survey print edition. This product is available on both CD-ROM and 3.5 disk. A Special 5,000 Stock Edition, a powerful yet economical professional tool on CD-ROM, is available with monthly updates and Value Line On-line weekly data for $95 for a two-month trial subscription, or $995 for a full year or $495 for subscribers to The Value Line Investment Survey print edition. This Special Edition contains full financial and business descriptions on over 5,000 stocks, Timeliness Rankings on 1,700 stocks, Safety Rankings on over 4,000 stocks and 1,700 stocks with analysts' comments and estimates found in The Value Line Investment Survey publication. Windows is a registered trademark of Microsoft Corp. Value Line, Inc. and Microsoft Corp. are not affiliated companies. Both versions are compatible with Windows 95 or 3.X. A system of 486 or higher is recommended, with 8MB RAM minimum and 70MB of free hard disk space. VALUE/SCREEN III is a data and software service for screening common stocks. It is compatible with DOS and Apple systems and is primarily sold to retail investors. It provides extensive financial data on about 1,600 companies covered by The Value Line Investment Survey. Users can screen on as many as 49 variables for companies' financial performance and for investment objectives. Value Line DataFile contains historic annual and quarterly financial records for more than 5,400 companies in numerous industries, including air transport, industrial services, beverage, machinery, bank, insurance and finance, savings and loan associations, toys, and securities brokers. DataFile is sold to the institutional market. Value Line Data File II, which includes less historical data is also available. During fiscal 1997, Value Line introduced the Value Line Mutual Fund Data File. VLP also offers an Estimates and Projections File, with year-ahead and three- to five-year estimates of financial performance and projections of stock-price ranges, as well as a Convertible Securities File, and custom services. B. Investment Management: As of April 30, 1997, the Company was the investment adviser for 16 mutual funds registered under the Investment Company Act of 1940. Value Line Securities, Inc., a wholly owned subsidiary of the Company, underwrites and distributes shares of the Value Line Funds. State Street Bank and Trust Company, an unaffiliated entity, acts as custodian of the Funds' assets. Share-holder services for the Value Line Funds are provided by National Financial Data Services, an unaffiliated entity associated with State Street Bank and Trust Company. Total net assets of the Value Line Funds at April 30, 1997, were: (in thousands) The Value Line Fund, Inc. $ 334,104 The Value Line Income Fund, Inc. 144,417 The Value Line Special Situations Fund, Inc. 83,675 Value Line Leveraged Growth Investors, Inc. 354,761 The Value Line Cash Fund, Inc. 327,914 Value Line U.S. Government Securities Fund, Inc. 189,234 Value Line Centurion Fund, Inc. 622,058 The Value Line Tax Exempt Fund, Inc. 209,956 Value Line Convertible Fund, Inc. 69,425 Value Line Aggressive Income Trust 84,868 Value Line New York Tax Exempt Trust 31,959 Value Line Strategic Asset Management Trust 1,089,370 Value Line Intermediate Bond Fund, Inc. 14,803 Value Line Small-Cap Growth Fund, Inc. 17,272 Value Line Asset Allocation Fund, Inc. 79,110 Value Line U.S. Multinational Company Fund, Inc. 19,186 ---------- $3,672,112 ---------- The investment advisory contracts between each of the Value Line Funds and the Company provide that the Company will render investment research, advice, and supervision to the funds. These contracts must be approved annually in accordance with statutory procedures. The Company furnishes each fund with its investment program, subject to such fund's fundamental investment policies and to control and review by such fund's Board of Directors or Trustees. Each contract also provides that the Company will furnish, at its expense, various administrative services, office space, equipment and administrative personnel necessary for managing the affairs of the funds. Advisory fee rates vary among the funds and may be subject to certain limitations. Each mutual fund may use "Value Line" in its name only so long as the Company acts as its investment adviser. The Company had agreed to waive its advisory fees payable by the Value Line U.S. Multinational Company Fund, Inc. and to absorb all operating expenses of that Fund (other than brokerage commissions) until December 31, 1996. Value Line Asset Management ("VLAM"), a division of the Company, manages pension funds and institutional and individual portfolios by utilizing the techniques developed for The Value Line Investment Survey. VLAM has varied investment advisory agreements with its clients which call for payments to the Company calculated on the basis of the market value of the securities portfolio under management. The Company also acts as investment adviser for the Hyperion Value Line U.S. Equity Fund and the Talvest Global Diversified Fund, Canadian mutual funds, and as sub-advisor to other mutual funds. C. Wholly-Owned Operating Subsidiaries: 1. Vanderbilt Advertising Agency, Inc.: Vanderbilt Advertising Agency, Inc. ("Vanderbilt") places advertising for the Company's publications, investment advisory services, and mutual funds. Commission income generated by Vanderbilt serves to reduce the Company's advertising expenses. 2. Compupower Corporation: Compupower provides computerized subscription fulfillment services for the Company as well as client relations services for Company publications. Additionally, this Company also provides microfiche and imaging services to Value Line, its affiliates and third-party customers. 3. Value Line Securities, Inc.: Value Line Securities, Inc. ("VLS") is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. VLS acts as the underwriter and distributor of the Value Line Funds. Shares of the Value Line Funds are sold to the public without a sales charge (i.e., on a "no-load" basis), and VLS derives no revenue from such sales. Since 1986, VLS has effected brokerage transactions in exchange-listed securities for certain of the Value Line Funds, clearing such transactions on a fully disclosed basis through unaffiliated broker-dealers who receive a portion of the gross commissions. VLS also receives 12b-1 fees from certain of the Value Line Funds. 4. Value Line Distribution Center, Inc. Value Line Distribution Center, Inc. ("VLDC") handles all of the mailings of the publications to the Company's subscribers. Additionally, VLDC provides office space for the Compupower Corporation's client relations and data processing departments. D. Other Businesses. The Company publishes the Value Line Arithmetic Composite and the Value Line Geometric Composite, daily indices of the stock market performance of the approximately 1,700 common stocks contained in The Value Line Investment Survey. The calculation of both indices is done by a firm unaffiliated with the Company. Futures contracts based upon fluctuations in the Value Line Arithmetic Composite are traded on the Kansas City Board of Trade, and options on the Index are traded on the Philadelphia Stock Exchange. The Company receives fees in connection with these activities. E. Investments. The Company invests in the Value Line Funds and in other marketable securities. F. Employees. At April 30, 1997, the Company and its subsidiaries employed 373 persons. The Company, its affiliates, officers, directors and employees may from time to time own securities which are also held in the portfolios of the Value Line Funds or recommended in the Company's publications. The Company has imposed rules upon itself and such persons requiring monthly reports of securities transactions for their respective accounts and restricting trading in various types of securities in order to avoid possible conflicts of interest. G. Assets. The Company's assets identifiable to each of its principal business segments were as follows: April 30, 1997 1996 (in thousands) Investment Periodicals & Related Publications $ 20,644 $ 15,902 Investment Management 137,649 271,088 Corporate Assets 2,017 47,077 -------- -------- $160,310 $334,067 -------- -------- H. Competition. The investment management and the investment information and publications industries are very competitive. There are many competing firms and a wide variety of product offerings. Some of the firms in these industries are substantially larger and have greater financial resources than the Company. The Company believes that it is one of the world's largest independent securities research organizations and that it publishes the world's largest investment service periodicals in terms of number of subscriptions, annual revenues and number of equity research analysts. I. Executive Officers. The following table lists the names, ages (at June 27, 1997), and principal occupations and employment during the past five years of the Company's Executive Officers. All officers are elected to terms of office for one year. Except as otherwise indicated, each of the following has held an executive position with the companies indicated for at least five years. Name Age Principal Occupation or Employment ---- --- ---------------------------------- Jean Bernhard Buttner 62 Chairman of the Board, President and Chief Executive Officer of the Company and AB&Co. Chairman of the Board of each of the Value Line Funds. Samuel Eisenstadt 75 Senior Vice President and Research Chairman. David T. Henigson 39 Vice President since 1992 and Treasurer since 1994; Director of Compliance and Internal Auditor; Vice President of each of the Value Line Funds since 1992 and Secretary and Treasurer since 1994. Howard A. Brecher 43 Vice President since 1996 and Secretary since 1992; Secretary and General Counsel of AB&Co. since 1991. Item 2. PROPERTIES. On June 4, 1993, the Company entered into a new lease agreement for approximately 80,000 square feet that provided for the relocation of its office space to 220 East 42nd Street, New York, New York. The Company owns a distribution facility of approximately 23,000 square feet in North Bergen, New Jersey. The facility is currently vacant pending a sale. During January 1996, a subsidiary of the Company purchased for cash an approximately 85,000 square foot warehouse facility for $4,100,000. The new facility has consolidated into a single facility the distribution operations for the various Company publications and the fulfillment operations of Compupower Corporation. The remaining building capacity provides warehouse space, a disaster recovery site and will provide for future business expansion. The Company believes the capacity of these facilities is sufficient to meet the Company's current and expected future requirements. Item 3. LEGAL PROCEEDINGS. There are no material pending legal proceedings. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of the stockholders during the fourth quarter of the fiscal year ended April 30, 1997. Part II Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Registrant's Common Stock is traded in the over-the-counter market. The approximate number of record holders of the Registrant's Common Stock at April 30, 1997 was 1,619. Over-the-counter price quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. The range of the bid and asked quotations and the dividends paid on these shares during the past two fiscal years were as follows:
Dividend High Low Declared Quarter Ended Bid Asked Bid Asked Per Share July 31, 1995. . . . 32 32 3/4 28 1/2 28 1/2 .20 October 31, 1995 . . 33 3/4 34 1/4 29 3/4 29 3/4 .20 January 31, 1996 . . 39 1/2 39 1/2 32 1/2 32 3/4 .20 April 30, 1996 . . . 39 3/8 40 1/2 32 1/2 34 1/2 .20 July 31, 1996. . . . 38 1/4 38 3/4 30 1/2 33 1/4 .20 October 31, 1996 . . 38 1/4 39 33 1/4 34 .25 January 31, 1997 . . 46 51 29 30 15.25 April 30, 1997 . . . 33 1/4 34 1/4 29 29 3/4 .25
Item 6. SELECTED FINANCIAL DATA. Earnings per share for each of the fiscal years shown below are based on the weighted average number of shares outstanding.
Years ended April 30, 1997 1996 1995 1994 1993 (in thousands, except per share amounts) Revenues: Investment periodicals and related publications. . . . . $ 62,442 $ 58,509 $ 55,912 $ 57,830 $ 56,127 Investment management fees and services . . $ 29,136 $ 26,564 $ 23,182 $ 24,220 $ 22,274 Settlement of disputed securities transactions . . . . $ 196 $ 2,054 $ 617 $ 408 $ - Total revenues . . . . $ 91,774 $ 87,127 $ 79,711 $ 82,458 $ 78,401 Income from operations. . $ 36,277 $ 32,486 $ 29,660 $ 32,464 $ 30,667 Net income. . . . . . . . $ 45,512 $ 41,714 $ 23,168 $ 28,902 $ 27,723 Earnings per share. . . . $ 4.56 $ 4.18 $ 2.32 $ 2.90 $ 2.78 Total assets. . . . . . . $160,310 $333,826 $264,998 $200,321 $176,095 Long term debt. . . . . . $ - $ - $ - $ - $ 3,000 Cash dividends declared per share. . . $ 15.95 $ .80 $ .60 $ .80 $ .60
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. FISCAL 1997 OPERATING RESULTS Net income, revenues, income from operations and income from securities transactions for fiscal 1997 all set new record high levels for the Company, exceeding the previous record highs set in fiscal 1996. Net income for the year ended April 30, 1997 was $45,512,000 or $4.56 per share compared to net income of $41,714,000 or $4.18 per share for the same period during fiscal 1996. The year ended April 30, 1997 included a one time gain of $17,580,000 on sales of various securities holdings in preparation for the payment of a special dividend of $15.00 per share on January 2, 1997. Income from operations for the year ended April 30, 1997 exceeded the prior year's level by 12%. Revenues of $91,774,000 for fiscal 1997 were $4,647,000 or 5% above the comparable results for fiscal 1996. Subscription revenues for the year ended April 30, 1997 of $62,442,000 increased $3,933,000 or 6% from revenues of $58,509,000 for fiscal 1996. The increase was a result of higher revenues from The Value Line Investment Survey, a portion of which approximately 3% was a result of the price increase effective February 1996. Additional revenues from new products, including The Value Line Investment Survey-Condensed Edition, The Value Line Investment Survey-Expanded Edition and the Value Line Investment Survey FOR WINDOWS-Registered Trademark-, introduced in July 1996, contributed to the overall increase in subscription revenues. Average full term subscription levels for all publications during fiscal 1997, through April 30, 1997 increased 8% compared to the average level for the year ended April 30, 1996. Revenues derived from investment management fees and services for the year ended April 30, 1997 of $29,136,000 were $2,572,000 or 10% above the level at April 30, 1996. Revenues increased primarily as a result of additional average annual net assets under management in the Company's mutual funds. Included in fiscal 1997 and 1996 revenues are proceeds of $196,000 and $2,054,000 respectively, received from the settlement of disputed securities trades. Expenses for the year ended April 30, 1997 of $55,497,000 were $856,000 or 2% above last year's comparable expenses of $54,641,000. Advertising expenses of $15,739,000 were 3% above last year's level and include an increase for various new products, including the Value Line Investment Survey FOR WINDOWS-Registered Trademark-. Additionally, the Company incurred $848,000 of promotional expenses related to a selling arrangement for two of the equity mutual funds for which the Company is the advisor. Salary and employee benefit expenses of $22,002,000 were 5% above last year's comparable level of $20,892,000. Restructuring expenses for several of the Company's operations, incentive compensation and the additional staffing in various support departments as well as the Asset Management division accounted for most of the increase. Printing, paper and distribution expenses of $8,495,000 increased 1% for the year ended April 30, 1997 compared with expenses of $8,388,000 for fiscal 1996. The additional costs incurred during fiscal 1997, associated with the production and distribution of new products were offset by a decline in printing expenses that resulted primarily from a negotiated favorable pricing agreement with the Company's printing vendor that became effective January 1, 1996. Also, Compupower discontinued servicing third party customers and the Company closed The Value Line Investment Survey-Canadian Edition. The distribution costs have also been reduced through the use of new technology that maximizes 2nd class discounts offered by the U.S. Postal Service. Office and administration expenses of $9,261,000 decreased $778,000 or 8% from fiscal 1996's level. Proceeds of $906,000 were received from a negotiated settlement with the Company's landlord. There was also a decrease in professional fees that were incurred in fiscal 1996 in connection with an active lawsuit in which the Company was the plaintiff and the receipt of $558,000 of proceeds during fiscal 1997 from the settlement of this lawsuit. Restructuring Compupower resulted in a charge of $328,000 for the write-off of goodwill during fiscal 1997. Additional expenses were incurred to relocate the fulfillment, distribution and client relations operations to the Company's new operating facility located in New Jersey. The Company's investment portfolios produced income from securities transactions for the year ended April 30, 1997 of $36,898,000 compared to income of $35,898,000 for the comparable period of fiscal 1996. The increase was a result of additional capital gains of $15,377,000 from sales of the Company's mutual fund holdings offset by lower capital gains from securities held in the Company's trading portfolios of $11,949,000. Additionally, capital gains distributions from the Company's mutual funds increased $2,518,000. The lower capital gains in the trading portfolio was a result of a significant reduction in the securities holdings during the third quarter of fiscal 1997. In addition, there was a correction in the financial markets during the first five months of fiscal 1997 as compared to the rapidly rising market during the comparable period of fiscal 1996. The Company's sale of stock futures indices, used to reduce the financial market exposure from the Company's equity securities holdings, resulted in an increase in capital losses of $4,253,000 during fiscal 1997. The increase in capital losses from sale of stock future indices resulted from a decision to reduce the Company's overall equity securities financial market exposure. The capital gains recognized from appreciation in the Company's long term securities portfolio offset the losses on the sales of the stock indices. Liquidity and Capital Resources The Company has liquid resources which are used in its business of $133,376,000 at April 30, 1997. In addition to $25,261,000 in working capital, the Company has long-term securities available for sale with a market value of $108,115,000, that, although classified as non-current assets, are also readily marketable should the need arise. During fiscal 1997, the Company sold U.S. Government Agency debt securities under agreements to sell and repurchase and received $40,057,000 from these sales. A portion of the proceeds were used to satisfy $36,994,000 of repurchase obligations. On January 2, 1997, the Company paid a special dividend in the aggregate amount of $149,700,000 or $15.00 per share. The dividend was paid pursuant to a transaction in which Arnold Bernhard & Co., Inc. (AB&Co.), the owner of approximately 80% of the outstanding common stock of the Company, settled a lawsuit and purchased all the AB&Co. shares held by the Arnold Van Hoven Bernhard family and the trustees of a trust of which he is the income beneficiary. Accordingly, Jean B. Buttner, Chief Executive Officer of the Company, now owns 100% of the voting shares of AB&Co. During the third quarter of fiscal 1997, the Company sold various holdings from its long term securities available for sale and its short term trading portfolio and received $81,191,000 and $56,170,000, respectively. These proceeds, together with $12,339,000 from the Company's holdings in the Value Line Cash Fund were used to finance the special dividend. The special dividend was paid from the Company's accumulated earnings and profits. The Company's cash flow from operations of $11,836,000 decreased $9,050,000 from last year's level, primarily as a result of increased income tax payments from sales of securities holdings and increased operating profit. Management believes that the Company's cash and other liquid asset resources used in its business together with future cash flows from operations will be sufficient to finance current and forecasted operations. Management anticipates no significant borrowing requirements during fiscal 1998. FISCAL 1996 OPERATING RESULTS Net income for the twelve months ended April 30, 1996 of $41,714,000 or $4.18 per share was $18,546,000 or 80% higher than the prior year's net income of $23,168,000 or $2.32 per share. Net income, revenues, income from operations and income from securities transactions for the twelve months ended April 30, 1996 all set new record highs for the Company. Net income for the fiscal year ended April 30, 1995 of $23,168,000 or $2.32 per share compared with net income of $28,902,000 or $2.90 per share for fiscal year 1994. The decrease in net income for fiscal 1995 from the fiscal 1994's level was primarily due to a decline in income from securities transactions of $7,047,000, including losses of $4,980,000 related to the Company's strategy of realizing capital losses which would reduce income taxes. The $1,550,000 expended in support of The Value Line Cash Fund during fiscal 1995 also contributed to the decrease. Revenues of $87,127,000 for fiscal 1996 compare to revenues of $79,711,000 and $82,458,000 for fiscal year's 1995 and 1994, respectively. Subscription revenues of $58,509,000 were 5% higher than revenues of $55,912,000 for fiscal 1995. Full term subscription levels to all products increased 23% from the prior year's level. The increase in subscription levels was a result of increased marketing including an advance renewal program in November 1995 that was offered to The Value Line Investment Survey's subscribers in anticipation of a 9% price increase that was effective February 1, 1996. Subscription revenues of $55,912,000 for the fiscal year ended April 30, 1995 decreased 3.3% from fiscal 1994. The decrease in publications revenues is primarily a result of the decline in subscription levels due to the uncertain financial market conditions that existed during the first three quarters of fiscal 1995. Revenues derived from investment management fees and services for the twelve months ended April 30, 1996 of $26,564,000 were $3,382,000 or 15% higher than the level at April 30, 1995. The increase in revenues resulted primarily from an increase in the average annual net assets under management in the Company's mutual funds. Assets in the Company's mutual funds at April 30, 1996 increased 21% from the levels at April 30, 1995. Investment management fees and services of $23,182,000 for the fiscal year ended April 30, 1995 decreased 4.3% from the fiscal 1994 level. The decrease in fiscal 1995 was primarily a result of a decline in the average annual assets under management in the Value Line mutual funds during the fiscal year. Mutual fund net assets under management at April 30, 1995 were approximately equal to the net assets under management at April 30, 1994. Revenues for fiscal year 1996, 1995 and 1994 include proceeds of $2,054,000, $617,000 and $408,000, respectively, from the settlement of a disputed securities transactions. Expenses for the twelve months ended April 30, 1996 of $54,641,000 were 9% above the prior year's level of $50,051,000. Advertising expenses of $15,322,000 were $573,000 or 4% above the prior year's level which was a result of additional marketing expenses incurred in fiscal 1996 for a variety of new products. Salary and employee benefit expenses of $20,892,000 for fiscal 1996 were 10% higher than the prior year's level of $18,935,000 as a result of general salary increases, the fulfillment of vacant staff positions and an increase in the employee profit sharing plan from 12% in fiscal 1995 to 15% in fiscal 1996. Office and administration expenses of $10,039,000 increased 16% from the prior year's level of $8,620,000. The increase is attributed to additional professional fees related to potential business expansion alternatives, a lawsuit in which the Company is the plaintiff, various tax matters and conversion fees in connection with the upgrade of the Company's fulfillment software. Relocation expenses also increased as a result of a decision to consolidate the Company's fulfillment, distribution and warehouse operations in the recently acquired facility. These increases were partially offset by decreases resulting from amortization of a deferred free rent credit and a decrease in software amortization related to a decision during fiscal 1995 to replace Compupower's fulfillment software. Expenses for the fiscal year ended April 30, 1995, exclusive of the non-recurring expense of $1,550,000 were $47,884,000, a decrease of $1,702,000 or 3% over fiscal 1994's level of $49,586,000. Advertising expenses of $14,749,000 for the twelve months ended April 30, 1995 decreased $3,596,000 from expenses of $18,345,000 for the comparable period in fiscal 1994. The decrease in advertising expenses resulted from management's decision to effectively market products during improved financial market conditions. Salaries and employee benefit expenses of $18,935,000 for the twelve months of fiscal 1995 were $1,662,000 above the prior level of $17,273,000 primarily as a result of the additional staff in various support and operating divisions of the Company. Office and administration expenses of $8,003,000 increased $838,000 or 12% from the prior year's level as a result of a $445,000 increase in depreciation and amortization expenses affiliated with the new office facility and the computer hardware upgrade, $315,000 of accelerated amortization resulting from a decision to upgrade the fulfillment software at Compupower and an increase in professional fees. These increases were offset by a reduction in rent expenses of $767,000 or 34%. Income from securities transactions for fiscal year 1996 of $35,898,000 increased $27,239,000 from the prior year's level of $8,659,000. The increase in capital gains produced by the Company's trading portfolios of $12,440,000, and from sales of equity and fixed income share holdings in the Value Line mutual funds of $8,888,000, in connection with an annual portfolio realignment were the major contributors to the additional income from securities transactions. Capital gains distributions from the Company's mutual funds also increased $4,710,000 during fiscal 1996. Income from securities transactions of $8,659,000 for the fiscal year ended April 30, 1995 decreased by $7,047,000 or 45% from $15,706,000 at April 30, 1994. In addition to a $764,000 decrease in capital gains produced by the Hedge, Tilt and Stem portfolios, the Company also incurred losses of $4,980,000 related to tax planning. Sales of mutual fund shares have produced $326,000 of capital losses during the 1995 fiscal year as compared to a $101,000 gain in fiscal year 1994. The decline was largely the result of a decision to liquidate an investment in one of the Company's mutual funds during the latter part of fiscal 1995 in order to redeploy these assets in other investment vehicles. Liquidity and Capital Resources The Company had liquid resources which are used in its business totaling $266,534,000 at April 30, 1996. In addition to $88,799,000 in working capital, the Company had marketable securities with a market value of $177,735,000, that, although classified as non-current assets are also readily marketable as the need for capital arises. The Company has entered into agreemnts to sell and repurchase U.S. Government Agency debt securities with a market value of $39,681,000 at April 30, 1996. The repurchase obligations of $36,994,000 have been entered into on a short term basis. The securities, currently available for sale, mature during calendar year 1997 and are readily marketable should management decide to liquidate the Company's investments and related obligations. During June 1996, the Company sold approximately $10,000,000 of these U.S. Government Agency securities and satisfied the related $9,100,000 repurchase obligation. The Company's cash position, including its investment in The Value Line Cash Fund, has decreased $13,274,000 at April 30, 1996, primarily as a result of the purchase of additional equity and fixed income shares in the Value Line Mutual Funds and the purchase of a distribution facility during January 1996. Management anticipates no significant borrowing requirements during fiscal 1997 other than the short term refinancing of the remaining repurchase obligations. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following consolidated financial statements of the registrant and its subsidiaries are included as a part of this Form 10K: Page Numbers Reports of independent accountants 22 Consolidated balance sheets--April 30, 1997 and 1996 25 Consolidated statements of income and retained earnings --years ended April 30, 1997, 1996 and 1995 26 Consolidated statements of cash flows --years ended April 30 1997, 1996 and 1995 27 Notes to the consolidated financial statements 28 Supplementary schedules 40 Quarterly Results (Unaudited): (in thousands, except per share amounts)
Income Earnings Total From Net Per Revenues Operations Income Share 1997, by Quarter - First. . . . . $22,457 $ 9,421 $ 6,526 $ .65 Second . . . . 22,347 9,024 7,839 .79 Third. . . . . 23,767 8,415 25,113 2.52 Fourth . . . . 23,203 9,417 6,034 .60 Total . . . . $91,774 $36,277 $45,512 $4.56 1996, by Quarter - First. . . . . $20,028 $ 7,549 $10,224 $1.02 Second . . . . 22,811 10,134 8,250 .83 Third. . . . . 21,689 7,512 14,291 1.43 Fourth . . . . 22,599 7,291 8,949 .90 Total . . . . $87,127 $32,486 $41,714 $4.18 1995, by Quarter - First. . . . . $20,214 $ 5,090 $ 3,428 $ .34 Second . . . . 20,423 7,985 6,961 .70 Third. . . . . 19,425 7,223 7,011 .70 Fourth . . . . 19,649 9,362 5,768 .58 Total . . . . $79,711 $29,660 $23,168 $2.32
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. There have been no disagreements with the independent accountants on accounting and financial disclosure matters. Part III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Information required by this item will be filed as an amendment to this Form 10-K. Item 11. EXECUTIVE COMPENSATION. Information required by this item will be filed as an amendment to this Form 10-K. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Information required by this item will be filed as an amendment to this Form 10-K. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Information required by this item will be filed as an amendment to this Form 10-K. Part IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. Financial Statements See Item 8. 2. Schedules Schedule I - Marketable Securities. Schedule XIII - Other Investments. (Reg. S-X, Article 5) All other Schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. 3. Exhibits 3.1 Articles of Incorporation of the Company, as amended through April 17, 1983 are Incorporated by reference to the Registration Statement - Form S-1 of Value Line, Inc. Part II, Item 16.(a) 3.1 filed with the Securities and Exchange Commission on April 7, 1983. 3.2 Certificate of Amendment of Certificate of Incorporation dated October 24, 1989. 10.8 Form of tax allocation arrangement between the Company and AB&Co. incorporated by reference to the Registration Statement - Form S-1 of Value Line, Inc. Part II, Item 16.(a) 10.8 filed with the Securities and Exchange Commission on April 7, 1983. 10.9 Form of Servicing and Reimbursement Agreement between the Company and AB&Co., dated as of November 1, 1982 incorporated by reference to the Registration Statement - Form S-1 of Value Line, Inc. Part II, Item 16.(a) 10.9 filed with the Securities and Exchange Commission on April 7, 1983. 10.10 Value Line, Inc. Profit Sharing and Savings Plan as amended and restated effective May 1, 1989, including amendments through April 30, 1995. 10.13 Lease for the Company's premises at 220 East 42nd Street, New York, N.Y. incorporated by reference to the Annual Report on Form 10-K for the year ended April 30, 1994. 21 Subsidiaries of the Registrant. (b) Reports on Form 8-K. None (c) Exhibits. 21 Subsidiaries of the Registrant 27 Financial Data Schedules 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 on Form 10-K for the fiscal year ended April 30, 1997, to be signed on its behalf by the undersigned, thereunto duly authorized. VALUE LINE, INC. (Registrant) By: s/Jean Bernhard Buttner Jean Bernhard Buttner Chairman & Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: s/Jean Bernhard Buttner Jean Bernhard Buttner Chairman & Chief Executive Officer By: s/Stephen R. Anastasio Stephen R. Anastasio Principal Financial and Accounting Officer Dated: July 15, 1997 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-K for the fiscal year ended April 30, 1997, to be signed on its behalf by the undersigned as Directors of the Registrant. s/Jean Bernhard Buttner s/William S. Kanaga Jean Bernhard Buttner William S. Kanaga s/Harold Bernard, Jr. s/Howard A. Brecher Harold Bernard, Jr. Howard A. Brecher s/W. Scott Thomas s/Samuel Eisenstadt W. Scott Thomas Samuel Eisenstadt s/David T. Henigson David T. Henigson Dated: July 15, 1997 HOROWITZ & ULLMANN, P.C. Certified Public Accountants 275 MADISON AVENUE NEW YORK, NY 10016 TELEPHONE (212)532-3736 --- FAX (212)545-8997 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the registration statement on Form S-8 (No. 2-90593) of our report dated June 27, 1997 relating to the consolidated financial statements of Value Line, Inc. and subsidiaries for the years ended April 30, 1997 and 1996 which appears on page 22 of this Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedules, which appear in this Form 10-K. /s/ Horowitz & Ullmann, P.C. HOROWITZ & ULLMANN, P.C. Certified Public Accountants New York, NY June 30, 1997 HOROWITZ & ULLMANN, P.C. Certified Public Accountants 275 MADISON AVENUE NEW YORK, NY 10016 TELEPHONE (212)532-3736 --- REPORT OF INDEPENDENT ACCOUNTANTS FAX (212)545-8997 To the Board of Directors and Shareholders of Value Line, Inc. In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income and retained earnings and of cash flows present fairly, in all material respects, the financial position of Value Line, Inc. and its subsidiaries at April 30, 1997 and 1996 and the results of their operations and their cash flows for the years then ended in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management, our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. Our audits of the consolidated financial statements referred to above also included an audit of the Financial Statement Schedules listed in Item 14 (a) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated statements. /s/ Horowitz & Ullmann, P.C HOROWITZ & ULLMANN, P.C. CERTIFIED PUBLIC ACCOUNTANTS New York, NY June 27, 1997 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Value Line, Inc. In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income and retained earnings and of cash flows present fairly, in all material respects, the financial position of Value Line, Inc. and its subsidiaries at April 30, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended April 30, 1995, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits of the consolidated financial statements referred to above also included an audit of the Financial Statement Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. /s/ Price Waterhouse LLP PRICE WATERHOUSE, LLP New York, New York June 26, 1995 VALUE LINE, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Apr. 30, Apr. 30, Assets 1997 1996 Current Assets: --------- --------- Cash and cash equivalents (including short term investments of $15,476 and $31,116, respectively) $ 16,083 $ 31,752 Trading securities 15,217 64,314 Short term securities available for sale -- 39,681 Accounts receivable, net of allowance for doubtful accounts of $593 and $528, respectively 2,603 2,997 Receivable from affiliates 1,849 1,965 Prepaid expenses and other current assets 1,824 2,872 Deferred income taxes 1,205 241 -------- -------- Total current assets 38,781 143,822 Long term securities available for sale 108,115 177,735 Property and equipment, net 13,370 12,120 Goodwill 44 390 -------- -------- Total assets $160,310 $334,067 -------- -------- -------- -------- Liabilities and Shareholders' Equity Current Liabilities: Accounts payable and accrued liabilities $ 8,009 $ 8,433 Securities sold under agreements to repurchase -- 36,994 Accrued salaries 2,208 1,808 Dividends and interest payable 2,495 2,058 Accrued taxes payable 808 5,730 -------- -------- Total current liabilities 13,520 55,023 Unearned revenue 42,191 42,993 Deferred charges 1,253 1,530 Deferred income taxes 6,982 13,255 Shareholders' Equity: Common stock, $.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares 1,000 1,000 Additional paid-in capital 954 944 Retained earnings 83,194 196,834 Treasury stock, at cost (21,875 shares on April 30, 1997, and 23,025 on April 30, 1996) (421) (443) Unrealized gains on securities available for sale, net of taxes 11,637 22,931 -------- -------- Total shareholders' equity 96,364 221,266 -------- -------- Total liabilities and shareholders' equity $160,310 $334,067 -------- -------- -------- -------- The accompanying notes are an integral part of these financial statements.
VALUE LINE, INC. CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Years ended April 30, 1997 1996 1995 -------- -------- -------- Revenues: Investment periodicals and related publications $ 62,442 $ 58,509 $ 55,912 Investment management fees & services 29,136 26,564 23,182 Settlement of disputed securities transactions 196 2,054 617 -------- -------- -------- Total revenues 91,774 87,127 79,711 -------- -------- -------- Expenses: Advertising and promotion 15,739 15,322 14,749 Salaries and employee benefits 22,002 20,892 18,935 Printing, paper and distribution 8,495 8,388 6,197 Office and administration 9,261 10,039 8,620 Mutual fund support expenses - - 1,550 -------- -------- -------- Total expenses 55,497 54,641 50,051 -------- -------- -------- Income from operations 36,277 32,486 29,660 Income from securities transactions, net 36,898 35,898 8,659 -------- -------- -------- Income before income taxes 73,175 68,384 38,319 Provision for income taxes 27,663 26,670 15,151 -------- -------- -------- Net income $ 45,512 $ 41,714 $ 23,168 Retained earnings, at beginning of year 196,834 163,101 145,918 Dividends declared (159,152) (7,981) (5,985) -------- -------- -------- Retained earnings, at end of year $ 83,194 $196,834 $163,101 -------- -------- -------- -------- -------- -------- Earnings per share $ 4.56 $ 4.18 $ 2.32 -------- -------- -------- -------- -------- -------- The accompanying notes are an integral part of these financial statements.
VALUE LINE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Years ended April 30, 1997 1996 1995 Cash flows from operating activities: -------- -------- -------- Net income $ 45,512 $ 41,714 $ 23,168 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,477 1,288 1,293 Write-down of goodwill 328 -- Accretion of discount (224) (582) (484) (Gains)/losses on sale of trading securities and securities held for sale (46,439) (20,815) (397) Unrealized (gains)/losses on trading securities 14,732 (9,030) (3,445) Loss/(gain) on write-down of equipment 21 (166) 166 Deferred income taxes (5,820) 4,205 653 Changes in assets and liabilities: Increase/(decrease) in unearned revenue (802) 6,204 1,260 (Increase)/decrease in deferred charges (277) (278) 1,048 Increase/(decrease) in accounts payable and accrued expenses 1,605 727 (1,676) Increase in accrued salaries 400 342 213 Increase/(decrease) in interest payable (63) (471) 534 Increase/(decrease) in accrued taxes payable (258) (1,027) 955 (Increase)/decrease in prepaid expenses and other current assets 1,048 (1,456) 388 (Increase)/decrease in accounts receivable 480 555 (735) (Increase)/decrease in receivable from affiliates 116 (324) (190) -------- -------- -------- Total adjustments (33,676) (20,828) (417) -------- -------- -------- Net cash provided by operations 11,836 20,886 22,751 -------- -------- -------- Cash flows from investing activities: Proceeds from sales of securities 149,505 27,269 51,419 Purchase of securities (26,543) (52,211) (35,374) Proceeds from sale of trading securities 114,116 64,333 74,964 Purchase of trading securities (66,239) (61,574) (70,708) Acquisition of property, and equipment, net (2,730) (6,026) (1,376) -------- -------- -------- Net cash provided by/(used in) investing activities 168,109 (28,209) 18,925 -------- -------- -------- Cash flows from financing activities: Proceeds from sale of treasury stock 32 35 --- Dividends paid (158,652) (5,986) (7,980) Loan repayment (36,994) --- (3,000) -------- -------- -------- Net cash (used in) financing activities (195,614) (5,951) (10,980) -------- -------- -------- Net increase/(decrease) in cash and cash equivalents (15,669) (13,274) 30,696 Cash and cash equivalents at beginning of period 31,752 45,026 14,330 -------- -------- -------- Cash and cash equivalents at end of period $ 16,083 $ 31,752 $ 45,026 -------- -------- -------- -------- -------- -------- The accompanying notes are an integral part of these financial statements.
Value Line, Inc. Notes to Consolidated Financial Statements Note 1-Organization and Summary of Significant Accounting Policies: Value Line, Inc. (the "Company") is incorporated in New York State and carries on the investment periodicals and related publications and investment management activities formerly performed by Arnold Bernhard & Co., Inc. (the "Parent") which owns approximately 80% of the issued and outstanding common stock of the Company. Principles of consolidation: The consolidated financial statements include the accounts of the Company and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Revenue recognition: Subscription revenues are recognized ratably over the terms of the subscriptions which range from three months to three years. Accordingly, the amount of subscription fees to be earned by servicing subscriptions after the date of the balance sheet is shown as unearned revenue. The unearned revenue shown on the balance sheet is a noncurrent deferred credit. This classification recognizes that the fulfillment of this commitment will require the use of significantly less current assets than the amount of the unearned revenues and, accordingly, combining it with current liabilities would significantly understate the liquidity position of the Company. Investment management fees are recorded as revenue as the related services are performed. Securities Sold Under Agreements to Repurchase: The Company has entered into agreements to sell and repurchase U.S. Government Agency debt securities. The securities are recorded at market value and are included in "Short-term securities available for sale" on the Consolidated Balance Sheets. Valuation of Securities: Effective May 1, 1994, the Company adopted the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("SFAS 115"). As a result of adopting SFAS 115, the Company changed the method by which it values its long-term securities portfolio, which consists of shares of the Value Line Mutual Funds, and short-term securities portfolio, which the Company classifies as available for sale, from the lower of aggregate cost or market to market value. Unrealized gains and losses on these securities are reported, net of applicable taxes, as a separate component of Shareholders' Equity. Realized gains and losses on sales of the securities are recorded in earnings on trade date and are determined on the identified cost method. SFAS 115 cannot be retroactively applied to the financial statements of periods prior to May 1, 1994. Trading securities, which consist of securities held by Value Line Securities, Inc., the Company's broker-dealer subsidiary are valued at market with unrealized gains and losses included in earnings. Goodwill: Goodwill represents the excess of the purchase price over the fair value of net assets acquired and is being amortized over a period of 14 years. During fiscal 1997, the Company accelerated the amortization of the goodwill associated with the Compupower Corporation. This resulted from managements decision to cease third party activity and reorganize the fulfillment operation. Earnings per share: Earnings per share are based on the weighted average number of shares of common stock and common stock equivalents outstanding during each year. Cash and Cash Equivalents: For purposes of the Consolidated Statements of Cash Flows, the Company considers all cash held at banks and short term liquid investments with an original maturity of less than three months to be cash and cash equivalents. As of April 30, 1997 and 1996, cash equivalents included $13,815,000 and $25,238,000, respectively, invested in the Value Line money market funds. Reclassification: Certain prior year amounts disclosed in the Consolidated Financial Statements and Notes thereto have been reclassified to conform to current year presentation. Note 2-Supplementary Cash Flow Information: Cash payments for income taxes were $33,677,000, $24,056,000 and $12,974,000, in 1997, 1996 and 1995, respectively. Interest payments of $1,188,000, $2,618,000 and $1,315,000 were made in 1997, 1996, and 1995, respectively. Note 3-Related Party Transactions: The Company acts as investment adviser and manager for sixteen open-end investment companies, the Value Line Family of Funds (see Note 4). The Company earns investment management fees calculated based upon the average daily net asset values of the respective funds. The Company also earns brokerage commission income, net of clearing fees, on securities transactions executed by Value Line Securities, Inc. on behalf of the funds and other advisory clients of the Company that are cleared on a fully disclosed basis through non-affiliated brokers. For the years ended April 30, 1997, 1996 and 1995, investment management fees and brokerage commission income, net of clearing fees, amounted to $22,443,000, $19,686,000, and $17,782,000, respectively. The related receivables from the funds for management advisory fees included in Receivable from affiliates were $1,703,000 and $1,631,000 at April 30, 1997 and 1996, respectively. For the years ended April 30, 1997, 1996, and 1995, the Company was reimbursed $493,000, $438,000, and $414,000, respectively, for payments it made on behalf of and services it provided to the Parent. At April 30, 1997 and 1996, Receivable from affiliates included a receivable from the Parent of $44,000 and $89,000, respectively. For the years ended April 30, 1997, 1996, and 1995, the Company made federal income tax payments to the Parent amounting to $29,200,000, $19,952,000, and $10,225,000, respectively. At April 30, 1997 and 1996, accrued taxes payable are presented net of a receivable of $834,000 and prepaid expenses and other current assets included a receivable of $563,000 to the Parent, respectively. These data are in accordance with the tax sharing arrangement described in Note 6. Note 4-Investments: Trading Securities: Securities held by Value Line Securities, Inc. had an aggregate cost of $13,702,000 and $48,066,000 and a market value of $15,217,000 and $64,314,000 at April 30, 1997 and April 30, 1996, respectively. Short-Term Securities Available for Sale: Short-term securities available for sale, which were sold during fiscal 1997 as further explained below, consisted of the Company's holdings in the following securities: Federal National Mortgage Association (FNMA), floating rate notes due August 5, 1997; par value $30,325,000. Federal Farm Credit Bank (FFCB), floating rate notes due February 12, 1997; par value $10,000,000. During the first quarter of fiscal 1997, the Company sold the FFCB securities and received proceeds of $9,870,000 which were equivalent to the recorded market value of these securities. During the second quarter of fiscal 1997, the Company sold the FNMA securities and received proceeds of $30,187,000, including accrued interest and realized a net capital gain of $154,000. At April 30, 1996, the market value of the FNMA and FFCB securities, which approximates cost, was $29,831,000 and $9,850,000, respectively. These notes were purchased at a discount from their respective face values. The accretion of this discount had been included as an addition to the cost of the securities and reflected as interest income in the Consolidated Statements of Income and Retained Earnings. Long-Term Securities Available for Sale: The aggregate cost of the long-term securities was $90,211,000 and $142,456,000 and the market value was $108,115,000 and $177,734,000 at April 30, 1997 and April 30, 1996, respectively. The change in gross unrealized gains on these securities of $17,374,918 and $22,014,000, net of the change in deferred taxes of $6,081,000 and $7,705,000, were included in shareholders' equity at April 30, 1997 and 1996, respectively. Realized gains from the sales of these securities were $18,958,000 and $3,581,000 during fiscal years 1997 and 1996, respectively. The proceeds received from sales of these securities during the fiscal year ended April 30, 1997 were $91,662,000 and $18,085,000 during the fiscal year ended April 30, 1996, respectively. For the years ended April 30, 1997, 1996, and 1995, Income from securities transactions consisted of $4,868,000, $5,275,000, and $4,938,000 of dividend income; $46,418,000, $20,814,000, and $396,000 of net realized capital gains; $1,474,000, $2,758,000, and $1,912,000 of interest income; and $1,124,000, $2,148,000, and $1,865,000 of related interest expense, respectively. Income from securities transactions also included $14,732,000, $9,197,000 and $3,279,000 of unrealized gains for the year's ended April 30, 1997, 1996 and 1995, respectively. Note 5-Property and Equipment: Property and equipment are carried at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements, over the remaining terms of the leases. For income tax purposes, depreciation of furniture and equipment is computed using accelerated methods and buildings and leasehold improvements are depreciated over prescribed, extended tax lives. Property and equipment consisted of the following: April 30, 1997 1996 --------------------------- (in thousands) Land $ 785 $ 785 Building and leasehold improvements 7,992 6,695 Furniture and equipment 10,146 11,020 --------------------------- 18,923 18,500 Accumulated depreciation and amortization (5,553) (6,380) --------------------------- $13,370 $12,120 --------------------------- During January 1996, the Company purchased for cash an approximately 85,000 square foot warehouse facility for $4,100,000 under a newly formed subsidiary, Value Line Distribution Center, Inc. The new facility houses the distribution operations for the various Company publications and the fulfillment operations of the Compupower Corporation. The remaining building capacity will provide warehouse storage, a disaster recovery site and will provide for future business expansion. Note 6-Federal, State and Local Income Taxes: The Company computes its tax in accordance with the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". The provision for income taxes includes the following: Years ended April 30, 1997 1996 1995 ------------------------------------- (in thousands) Current: Federal $28,565 $18,612 $10,733 State and local 4,918 3,852 3,765 ------------------------------------- 33,483 22,464 14,498 Deferred: Federal (5,753) 4,034 795 State and local (67) 172 (142) ------------------------------------- (5,820) 4,206 653 ------------------------------------- $27,663 $26,670 $15,151 ------------------------------------- ------------------------------------- Deferred taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's deferred tax (liability)/asset are as follows:
Years ended April 30, 1997 1996 1995 -------------------------------------- (in thousands) Unrealized gains on securities held for sale ($6,266) ($12,347) ($4,642) Unrealized gains on trading securities (532) (5,661) (2,489) Relocation reserve 177 220 263 Depreciation (637) (572) (363) Deferred charges 1,249 959 770 Accretion of securities under repurchase agreements - (319) - Other, net 233 42 694 -------------------------------------- ($5,777) ($17,678) ($5,767) -------------------------------------- --------------------------------------
Included in Deferred income taxes in total current assets are deferred federal and state and local tax assets of $897,000 and $308,000 at April 30, 1997, respectively. At April 30, 1996, included in accrued taxes payable in total current liabilities in the Consolidated Balance Sheets are deferred federal tax liabilities of $4,664,000 and deferred state and local tax benefits of $241,000, respectively. The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:
Years ended April 30, 1997 1996 1995 -------------------------------------- (in thousands) Tax expense at the U.S. statutory rate $25,699 $24,016 $13,458 Increase (decrease) in tax expense from: State and local income taxes, net of federal income tax benefit 3,147 2,611 2,351 Effect of tax exempt income and dividend deductions (409) (586) (684) Other, net (774) 629 26 -------------------------------------- $27,663 $26,670 $15,151 -------------------------------------- --------------------------------------
The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing arrangement which requires it to make tax payments to the Parent equal to the Company's liability as if it filed a separate return. Note 7-Employees' Profit Sharing and Savings Plan: Substantially all employees of the Company and its subsidiaries are members of the Value Line, Inc. Profit Sharing and Savings Plan ("the Plan"). In general, this is a qualified, contributory plan which provides for a discretionary annual Company contribution which is determined by a formula based upon the salaries of eligible employees and the amount of consolidated net operating income as defined in the Plan. Plan expense, included in salaries and employee benefits in the Consolidated Statements of Income and Retained Earnings, for the years ended April 30, 1997, 1996, and 1995 was $1,550,000, $1,331,000, and $968,000, respectively. Note 8-Incentive Stock Options: On April 17, 1993, the Incentive Stock Option Plan expired. On the date of expiration, 22,550 options available for grant were cancelled. Information on the 1983 Incentive Stock Option Plan for the three years ended April 30, 1997, is as follows: Number of Option Shares Prices --------- Outstanding at April 30, 1994 6,250 $17.50 to $29.75 Granted - Exercised - Cancelled - --------- Outstanding at April 30, 1995 6,250 $17.50 to $29.75 Granted - Exercised (1,625) $17.50 to $29.75 Cancelled - --------- Outstanding at April 30, 1996 4,625 $17.50 to $29.75 Granted - Exercised (1,150) $17.50 to $29.75 Cancelled - --------- Outstanding at April 30, 1997 3,475 $29.75 --------- --------- Options outstanding at April 30, 1997 expire at various dates through March 2003. At April 30, 1997, 3,475 of the outstanding options were exercisable. Of the common stock held in treasury at April 30, 1997, 3,475 shares were held for exercise of stock options. Note 9-Treasury Stock: Treasury stock, at cost, for the three years ended April 30, 1997, consists of the following: Shares Amount ------ ----------- (in thousands) Balance April 30, 1994 24,650 474 Exercise of incentive stock options - - ------ ----------- Balance April 30, 1995 24,650 474 Exercise of incentive stock options (1,625) (31) ------ ----------- Balance April 30, 1996 23,025 443 Exercise of incentive stock options (1,150) (22) ------ ----------- Balance April 30, 1997 21,875 $421 ------ ----------- ------ ----------- The Company's Board of Directors authorized the purchase of up to 1,000,000 shares of the Company's common stock from time to time in negotiated transactions. Note 10-Securities Sold under Agreements to Repurchase: On June 28, 1994, the Company entered into short-term agreements to repurchase certain securities sold. These agreements were entered into to repurchase the Federal National Mortgage Association Floating Rate Notes due August 5, 1997 (FNMA), par value $30,325,000, and Federal Farm Credit Bank Floating Rate Notes due February 12, 1997 (FFCB), par value $10,000,000, stated in Note 4. The outstanding balance of the obligations under the repurchase agreements in the aggregate amount of $36,994,000, ($27,899,000) with respect to the FNMA and ($9,095,000) for the obligation to repurchase the FFCB securities, was repaid from the proceeds of the sale of the securities. Note 11-Lease Commitments: On June 4, 1993, the Company entered into a 15 year lease agreement that provides new primary office space, replacing the previous lease that expired during the second quarter of fiscal year 1994. The lease includes free rental periods as well as scheduled base rent escalations over the term of the lease. The total amount of the base rent payments is being charged to expense on the straight-line method over the term of the lease. The Company has recorded a Deferred charge on its Consolidated Balance Sheets to reflect the excess of annual rental expense over cash payments since inception of the lease. Future minimum payments, exclusive of forecasted increases in real estate taxes and wage escalations, under operating leases for office space, with remaining terms of one year or more, are as follows: Year ended April 30: (in thousands) 1998 $ 1,565 1999 1,813 2000 1,846 2001 1,827 2002 1,827 Thereafter 11,368 ------- $20,246 Rental expense for the years ended April 30, 1997, 1996, and 1995 under operating leases covering office space was $1,456,000, $1,402,000, and $1,481,000, respectively. Note 12-Business Segments: The Company operates in two business segments: Investment Periodicals and related Publications, and Investment Management. Identifiable assets consisted of: April 30, 1997 1996 ---------------------------- Identifiable assets: (in thousands) Investment periodicals and related publications $ 20,644 $ 15,902 Investment management 137,649 271,088 Corporate assets 2,017 47,077 ---------------------------- Total $160,310 $334,067 ---------------------------- ---------------------------- Revenues and income from operations were as follows: Years ended April 30, 1997 1996 1995 ---------------------------------- Revenues: (in thousands) Investment periodicals and related publications $62,590 $58,649 $56,041 Intersegment revenues (148) (140) (129) ---------------------------------- 62,442 58,509 55,912 Investment management 29,136 26,564 23,182 Settlement of disputed securities trans. 196 2,054 617 ---------------------------------- Consolidated revenues $91,774 $87,127 $79,711 ---------------------------------- ---------------------------------- Income from operations: Investment periodicals and related publications $20,205 $15,492 $15,396 Investment management 15,876 14,940 13,647 Settlement of disputed securities trans. 196 2,054 617 ---------------------------------- Consolidated income from operations $36,277 $32,486 $29,660 ---------------------------------- ---------------------------------- Note 13-Net Capital: The Company's wholly owned subsidiary, Value Line Securities, Inc. is subject to the net capital provisions of Rule 15c3-1 under the Securities Exchange Act of 1934, which requires the maintenance of minimum net capital of $100,000 and requires that aggregate indebtedness, as defined, shall not exceed fifteen times net capital, as defined. Additionally, dividends may only be declared if aggregate indebtedness is less than twelve times net capital. At April 30, 1997, Value Line Securities', Inc. net capital, as defined, of $5,541,000 exceeded required net capital by $4,904,000 and the ratio of aggregate indebtedness to net capital was 1.72 to 1. Note 14-Financial Instruments with Off-Balance-Sheet Risk and Concentration of Credit Risk: The Company executes, as agent, securities transactions on behalf of the Value Line mutual funds. If either the mutual fund or a counterparty fail to perform, the Company may be required to discharge the obligations of the nonperforming party. In such circumstances, the Company may sustain a loss if the market value of the security is different from the contract value of the transaction. In the normal course of business, the Company enters into contractual commitments, principally financial futures contracts for securities indices. Financial futures contracts provide for the delayed delivery of financial instruments for which the seller agrees to make delivery at a specified future date, at a specified price or yield. The contract or notional amount of these contracts reflects the extent of involvement the Company has in these contracts. At April 30, 1997, the underlying notional value of such commitments was $7,228,000. Risk arises from the potential inability of counterparties to meet the terms of their contracts and from movements in securities values. The Company limits its credit risk associated with such instruments by entering exclusively into exchange traded futures contracts. No single customer accounted for a significant portion of the Company's sales in 1997, 1996 or 1995, nor accounts receivable for 1997 or 1996. Note 15-Estimated Fair Value of Financial and Derivative Instruments: Statement of Accounting Standards No. 119, "Disclosure About Derivative Financial Instruments and Fair Value of Financial Instruments," requires disclosure of information regarding derivative instruments, which include financial index futures contracts. Derivative instruments held for trading purposes are reflected at fair value at April 30, 1997. The fair value and the average fair value of derivative instruments at April 30, 1997 and for the year then ended consists of an asset of $86,000 and a liability of $482,000, respectively. Net realized trading gains related to equity securities aggregated $21,405,000 for the year ended April 30, 1997. The net unrealized losses on trading securities for the period ended April 30, 1997 was $14,732,000. Net trading losses related to derivative financial instruments amounted to $5,778,000 for the year ended April 30, 1997. Note 16-Special Dividend Distribution: On December 16, 1996, the Board of Directors of Value Line, Inc. declared a special $15.00 per share dividend which was paid January 2, 1997, to all Value Line, Inc. shareholders of record on December 26, 1996. The Company paid this dividend out of accumulated earnings and profits. The dividend was paid pursuant to a transaction in which Arnold Bernhard & Co., Inc. ("AB&Co."), the owner of approximately 80% of the outstanding common stock of Value Line, Inc., settled a lawsuit and purchased all the AB&Co. shares held by the Arnold Van Hoven Bernhard family and the trustees of a trust of which he is the income beneficiary. Accordingly, Jean B. Buttner, Chief Executive Officer of the Company, now owns 100% of the voting shares of AB&Co. Value Line, Inc. Schedule 1 - Marketable Securities Shares Common Stock Name Cost Market 2,500 AIRBOURNE FREIGHT CORP. 88,338 87,813 3,200 AMERICAN BANKERS INS GROUP, INC. 86,400 169,200 600 AMERICAN INTERNATIONAL GROUP, INC 73,086 77,100 1,000 AMERICAN STORES CO. 40,810 45,500 3,500 ANNTAYLOR STORES CORP. 81,648 84,875 2,100 APPLIED POWER, INC 82,939 88,988 2,000 AVERY DENNISON CORP. 71,435 73,500 6,100 AVONDALE INDUSTRIES, INC 72,700 108,275 6,000 AZTEC MANUFACTURING CO. 60,050 55,500 1,500 BAKER HUGHES, INC 55,215 51,750 3,200 BANCTEC, INC. 81,079 73,200 1,000 BARR LABORATORIES, INC. 43,560 45,250 700 BINKS MANUFACTURING CO. 28,030 28,438 3,000 BURLINGTON COAT FACTORY WHS 56,055 57,000 2,000 BURLINGTON RESOURCES, INC. 104,620 84,750 2,000 CDI CORP. 64,370 75,750 2,000 CAMCO INTERNATIONAL, INC. 84,370 88,750 4,000 CAMPBELL SOUP CO. 165,120 204,500 2,000 CARSON PIRIE SCOTT & CO. 60,745 59,500 1,200 CENTRAL NEWSPAPERS, INC. 57,672 64,650 6,000 CHIQUITA BRANDS INTERNATIONAL, INC. 93,610 86,250 1,000 CINCINNATI BELL, INC. 24,505 56,000 2,200 COLE NATIONAL CORP. 57,757 72,600 3,000 COLTEC INDUSTRIES, INC. 60,180 60,750 1,000 COMPAQ COMPUTER CORP. 84,060 85,375 1,300 COMPUTER TASK GROUP, INC. 54,066 56,063 2,600 COMPUWARE CORP. 77,650 98,150 4,000 COMVERSE TECHNOLOGY, INC. 134,000 157,000 2,800 CONSECO, INC. 44,992 115,850 2,000 CONSOLIDATED GRAPHICS, INC. 47,550 48,750 4,000 COOPER COMPANIES, INC. 84,365 71,500 3,800 CYTEC INDUSTRIES, INC. 107,885 142,975 4,000 DANAHER CORP 82,315 180,500 1,200 DAYTON HUDSON CORP 51,372 54,000 2,800 DEAN FOODS CO 97,343 103,250 1,200 DEL LABS INC 29,922 29,400 1,500 DIONEX CORP 70,125 73,313 5,000 DIXIE GROUP INC 39,063 33,125 1,500 DRECO ENERGY SVCS LTD 61,200 47,625 4,600 DRESS BARN,THE 71,150 63,825 4,000 DUCOMMUN INC DEL 97,303 95,500 Value Line, Inc. Schedule 1 - Marketable Securities Shares Common Stock Name Cost Market 2,000 ECOLAB INC 79,870 81,500 2,000 ELETRONICS FOR IMAGING INC 82,050 78,500 2,000 ETHAN ALLEN INTERIORS INC 67,370 88,500 6,000 EXPEDITORES INTL WASH INC 130,500 150,000 2,200 FABRI CTRS AMER INC 39,732 42,075 8,000 FAIRFIELDCMNTYS INC 101,819 208,000 3,600 FAMILY DLR STORES INC 90,770 94,050 7,000 FARAH INCORPARATED 72,183 69,125 19,900 FILENES BASEMENT CORP 111,200 116,913 2,000 FISERV INC 78,500 75,500 2,000 FOUNTAIN PWR BOAT INDS INC 35,600 34,000 2,200 FRUIT OF THE LOOM INC 90,882 79,200 2,000 FULLER H B CO 98,250 107,250 6,000 FUNCO INC 84,050 104,250 5,000 FURNITUREBRANDS INTL INC 67,675 73,750 2,000 GENERAL BINDING CORP 63,600 55,500 7,000 GENESCO INC 73,545 81,375 3,000 GIBSON GREETINGS INC 63,000 61,500 3,000 GLOBAL INDUSTRIES INC 65,400 63,000 4,200 GOODYS FAMILY CLOTHING INC 78,275 73,500 6,400 GRAHAM FIELD HEALTH PRODS INC 78,434 56,000 5,000 GRIFFON CORP 68,925 60,625 1,200 GUIDANT CORP 71,622 81,900 2,900 GUILFORD MLS INC 88,787 81,925 6,000 HANDLEMANCO DEL 50,610 37,500 2,000 HARTE HANKS COMMUNICATIONS 57,620 54,500 2,000 HELEN TROY LTD 45,100 46,500 2,400 HERBALIFEINTL INC 69,675 38,700 2,000 HEXCEL CORP NEW 41,620 35,750 1,600 HILLENBRAND INDS INC 70,896 68,800 4,000 HILTON HOTELS CORP 116,740 108,000 3,000 HOOPER HOLMES INC 46,305 52,125 1,200 HORACE MANN EDUCATORS CORP NEW 55,272 56,250 4,500 HOST MARRIOTT CORP 81,395 78,188 6,000 ITEQ INC 44,175 36,000 3,000 IMPERIAL CR INDS INC 60,525 43,688 3,000 INTERFACEINC 64,500 67,125 900 INTERNATIONAL BUSINESS MACHS 137,717 144,675 4,000 INTERNATIONAL GAME TECHNOLOGY 78,240 63,500 1,600 JABIL CIRCUIT INC 72,280 77,400 2,000 JOHNSON +JOHNSON 106,370 122,500 5,000 JONES APPAREL GROUP INC 91,577 208,750 Value Line, Inc. Schedule 1 - Marketable Securities Shares Common Stock Name Cost Market 4,000 KUHLMAN CORP 87,740 101,000 3,000 LA Z BOY INC 95,805 97,875 2,000 LANDS END,INC. 55,620 53,500 4,000 LIBBEY INC 120,990 124,000 2,000 LINCOLN ELEC CO 73,000 77,000 1,000 LONE STARINDS INC 36,560 39,500 1,800 LUBRIZOL CORP 61,758 58,950 3,000 M A R C INC 48,900 45,750 5,000 MAGNETEK INC 68,175 83,750 3,000 MANITOWOC INC 92,055 121,500 4,000 MARTIN MARIETTA MATLS INC 113,740 109,000 2,000 MILLER HERMAN INC 47,625 64,750 2,500 MOHAWK INDS INC 66,250 55,938 4,000 MOLECULAR DYNAMICS INC 50,700 49,500 4,000 MORNINGSTAR GRP INC 89,200 97,000 2,000 MOSINEE PAPER CORP 73,000 81,000 1,400 MUELLER INDS INC 61,859 52,500 2,800 NBTY INC 45,150 53,200 3,950 NATIONAL DATA CORP 65,116 148,125 2,000 NEW ENGLAND BUSINESS SVC INC 47,620 52,750 6,000 NOBLE DRILLING CORP 58,128 104,250 2,000 NORTEK INC 43,495 41,250 1,200 NORTHERN TELECOM LTD 80,772 87,150 5,000 OMNICOM GROUP 120,650 265,000 12,000 O'SULLIVAN INDUSTRIES 126,720 162,000 3,000 OXFORD INDS INC 69,743 72,750 2,000 PACIFIC SUNWEAR OF CALIF 62,600 62,500 3,000 PATTERSON DENTAL CO 93,150 100,500 2,000 PAUL HARRIS STORES INC 41,100 25,750 2,000 PAXAR CORP 39,120 38,500 1,500 PEOPLESOFT INC 62,625 62,250 1,200 PHILADELPHIA CONS HLDG CORP 30,060 35,700 4,200 PIER 1 IMPORTS INC 82,152 82,950 2,000 PINKERTONS INC NEW 56,370 53,000 3,200 PLAYBOY ENTERPRISES INC 50,192 44,400 1,300 POMEROY COMPUTER RESOURCES 38,740 31,525 10,000 POWELL INDS INC 114,750 140,000 4,000 PRECISION CASTPARTS CORP 190,490 214,000 900 PROCTER + GAMBLE CO 110,979 113,175 1,000 PROGRESSIVE CORP OHIO 65,310 76,125 2,000 QUAKER FABRIC CORP NEW 32,600 27,250 4,000 QUALITY FOOD CTRS INC 152,500 160,500 Value Line, Inc. Schedule 1 - Marketable Securities Shares Common Stock Name Cost Market 2,200 REHABCARE GROUP INC 52,910 66,000 4,000 REXEL INC 66,864 70,500 5,000 RISER FOODS INC 126,749 173,125 4,000 ROBERT HALF INTL INC 82,370 157,000 2,000 ROGERS CORP 58,870 59,250 3,000 ROLLINS TRUCK LEASING CORP 40,680 39,375 2,000 ROSS STORES INC 51,750 56,250 2,000 RUSS BERRIE + CO INC 44,120 38,500 3,000 RYKOFF S E + CO 54,930 54,375 1,700 SPX CORP 71,302 92,863 2,500 SAFESKIN CORP 60,313 55,938 4,000 SAFEWAY INC 161,990 178,500 3,000 ST JOHN KNITS INC 139,827 115,125 1,500 SCOTSMAN INDS INC 39,465 38,250 7,550 SHOWBIZ PIZZA TIME INC 110,513 145,338 3,000 SMITHFIELD FOODS INC 115,125 138,375 3,232 STANDARD COML CORP 64,742 57,368 3,200 STANLEY FURNITURE INC 68,960 64,000 2,200 STEIN MART INC 62,425 63,800 3,000 SUNAMERICA INC 125,430 138,000 2,000 SUNBEAM CORP DEL NEW 62,870 63,500 2,000 TJX COS INC NEW 90,620 94,500 3,500 TAB PRODSCO 36,960 33,250 3,000 TASTY BAKING CORP 50,430 49,500 3,000 TEL SAVE HLDGS INC 47,025 42,000 1,200 THIOKOL CORP DEL 74,322 78,300 3,000 THOMAS INDS INC 72,555 70,500 1,600 TIFFANY +CO NEW 66,096 63,400 1,000 TIMKEN CO 49,935 58,125 5,700 TUESDAY MORNING CORP 124,929 161,025 1,500 TYCO INT LTD 80,465 91,500 2,000 USA WASTESVCS INC 64,870 65,500 4,000 URS CORP NEW 39,303 40,000 2,000 U S FILTER CORP 70,120 60,750 1,600 UNITED TECHNOLOGIES CORP 111,348 121,000 3,000 UNITED WASTE SYS INC 90,000 101,250 2,500 UNIVERSAL HEALTH SVCS INC 84,088 94,688 3,200 VALASSIS COMMUNICATIONS INC 66,642 78,400 4,200 VALMONT INDS INC 77,250 167,475 900 VULCAN MATLS CO 57,879 58,838 2,000 WESTPOINT STEVENS INC 72,750 78,250 3,000 WOLVERINE WORLD WIDE INC 82,805 120,750 Value Line, Inc. Schedule 1 - Marketable Securities Shares Common Stock Name Cost Market 3,000 WYMAN GORDON CO 63,750 63,000 3,000 YELLOW CORP 62,625 57,750 8,000 INTER CITY PRODS CORP 38,980 39,500 3,000 CKE RESTAURANTS INC 65,120 58,875 3,000 AES CORP 145,618 195,750 3,000 AMCOL INTL CORP 54,900 51,000 1,000 BERLITZ INTERNATIONAL INC 24,435 24,125 7,000 CHART INDS INC 117,595 143,500 3,300 COSTCO COS INC 83,800 95,288 5,000 EAGLE HARDWARE AND GRODEN 105,500 93,750 8,000 INTERNATIONAL MUREX TECH CORP 54,775 48,000 1,500 INTERSTATE BAKERIES CORP 77,153 77,813 3,000 KINETIC CONCEPTS INC 44,625 44,625 3,000 MONACO COACH CORP 64,588 60,000 4,000 MOTIVE POWER INDS INC 48,700 47,000 2,000 PROMUS HOTEL CORP 68,370 70,500 2,000 WELLPOINT HEALTH NETWORKS INC 77,620 84,500 3,000 ZOLTEK COMPANIES INC 106,500 86,859 ------------------------- 13,701,662 15,217,352 ------------------------- ------------------------- Value Line, Inc. Schedule XIII - Other Investments
Historical Mutual fund Investments Cost Market Value The Value Line Fund, Inc. $ 2,369,176.22 $ 4,416,364 The Value Line Special Situations Fund, Inc. 3,315,466.18 3,268,233 The Value Line Income Fund, Inc. 1,056,047.02 1,392,438 Value Line Leveraged Growth Investors, Inc. 14,108,058.01 19,843,395 Value Line U.S. Government Securities Fund, Inc. 1,253,582.26 1,259,406 The Value Line Tax Exempt Fund, Inc., High Yield Portfolio 1,064,228.74 1,137,395 Value Line Convertible Fund, Inc. 794,095.71 817,107 Value Line Aggressive Income Trust 1,014,527.24 1,048,184 Value Line New York Tax Exempt Trust 990,478.21 1,049,691 Value Line Intermediate Bond Fund Inc. 9,668,847.67 9,429,628 Value Line Small-Cap Growth Fund 10,017,363.61 11,185,388 Value Line Asset Allocation Fund, Inc. 33,290,854.10 39,356,379 Value Line US Multinational Company Fund 11,267,899.17 13,911,624 ---------------------------------- Total $90,210,624.14 $108,115,232 ---------------------------------- ----------------------------------
EX-21 2 EXHIBIT 21 Exhibit 21 Subsidiaries of the Registrant ---------------------------------- Percentage of Voting Securities State of Owned By Incorporation Registrant ------------- ---------- Compupower Corporation Delaware 100% Value Line Securities, Inc. New York 100% The Vanderbilt Advertising Agency, Inc. New York 100% Value Line Publishing, Inc. New York 100% Value Line Distribution Center, Inc. New Jersey 100% EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF INCOME AND RETAINED EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 12-MOS APR-30-1997 APR-30-1997 16,083 15,217 5,045 (593) 0 38,781 18,923 (5,553) 160,310 13,520 0 0 0 1,000 95,364 160,310 62,442 91,774 0 55,497 0 0 1,124 73,175 27,663 45,512 0 0 0 45,512 4.56 4.56
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