10-K 1 a10-k.txt 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, 2000 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 July 6, 2000 was $58,304,528. There were 9,978,625 shares of the Company's Common Stock outstanding at July 6, 2000. 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."). As of July 6, 2000, AB & Co. owns approximately 85% of the Company's issued and outstanding common stock. The Company's primary businesses are producing investment related periodical publications through its wholly-owned subsidiary, Value Line Publishing, Inc. ("VLP"), and providing investment 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 Investment Survey - Condensed Edition, Value Line Select, The Value Line Mutual Fund Survey, The Value Line No-Load Fund Advisor, The Value Line Special Situations Service, The Value Line Options Survey and The Value Line Convertibles Survey. The Company's periodical publications are 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, 2000, included 15 open-end investment companies with various investment objectives. In addition, the Company manages investments for private and institutional clients and, through VLP, provides historical financial databases in standard computer formats (DataFile, Estimates & Projections, Convertibles, Mutual Funds and other services). VLP also markets investment analysis software, The Value Line Investment Survey for Windows(R), The Mutual Fund Survey for Windows(R), Value Line Daily Options, Electronic Convertibles, Value Line Small Cap Plus and other electronic products. Value Line also offers products directly on its internet site, valueline.com. 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 investment management and publishing 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 computer operation's center. The name "Value Line," as used to describe the Company, its products, and its subsidiaries, is a registered trademark 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: 2 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. Two of the more important evaluations for each stock covered are "Timeliness(TM)" and "Safety (TM)." "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 110 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, introduced in 1995, 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 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 unique as well as standard features: o The 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. o An expanded Business Section provides detail about companies, focusing on business lines and strategies. o An enlarged Assets and Liabilities Section provides long-term statistics and a more complete balance sheet on each company. o 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. 3 The principal difference between the Expanded Edition and The Value Line Investment Survey's Standard Edition is that the Expanded Edition does not include Value Line's financial forecasts or analysts' comments. This modification has allowed VLP to offer this service at a relatively low price. The annual cost of the Expanded Edition to current subscribers of The Value Line Investment Survey is $125 for the first year, $175 for second year renewals and $225 for subsequent renewals and $695 for new subscribers combining both Editions. Stand-alone subscriptions are offered at $249. The Value Line Mutual Fund Survey, introduced in 1993, provides full-page profiles of 1,500 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, as well as articles on investment trends and issues concerning mutual fund investors. The Value Line Mutual Fund Survey also includes semi-annual profiles and analyses on 100 of the nation's major fund families. Funds are ranked for both risk and overall risk-adjusted performance using strictly quantitative means. A large binder is provided to house the fund reports. The annual subscription price of The Value Line Mutual Fund Survey is $345. 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 $85. The Value Line 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 Special Situations Service is $495. This product is also available via the Value Line Internet site at an annual subscription of $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 10,000). The annual subscription price of The Value Line Options Survey is $399. An electronic version of this publication, The Value Line Daily Options Survey (available over the Internet), was introduced during the latter part of fiscal 1995. The price of online access to this service is $299. The Value Line Convertibles Survey, a periodical service published 48 times a year, evaluates and ranks for future market performance approximately 600 convertible securities (bonds and preferred stocks) and approximately 120 warrants. The annual subscription price of The Value Line Convertibles Survey is $525 and the service is available over the Internet at an annual subscription price of $425. 4 Value Line Select was first published in January 1998. As a stock recommendation service with an exclusive circulation, it focuses each month on one company that VLP analysts, economists and statisticians recommend as an investment. Recommendations are backed by in-depth research and subject to ongoing monitoring. An annual subscription to Value Line Select is $795. The Value Line Investment Survey - Condensed Edition is a monthly service, which contains full-page reports on more than 600 stocks. Its reports provide information on many actively traded, larger capitalization issues as well as some smaller growth stocks. Since it was introduced in fiscal 1996, it has proven to be very popular among investors who want the same type of analysis provided in the full Investment Survey, but who don't want or need coverage of the large number of companies contained in that publication. Readers also receive supplemental reports as well as a monthly Index, which includes updated statistics. An annual subscription is $145. 2. Electronic Products: Value Line Investment Survey for Windows(R) is a powerful menu-driven software program with fast filtering, ranking, reporting and graphing capabilities on over 6,200 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. Version 3.0 of the product was released in December of 1997 with major enhancements to the user interface and the ability for users to update their data from our internet site (www.valueline.com). New features are added continuously. Since the latter part of 1998, customers can view and print the proprietary page format directly through the Web site. Value Line Investment Survey for Windows(R) provides over 200 search fields on each stock, 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. In addition to containing digital replicas of the entire Value Line Investment Survey, the program includes up-to the-minute data updates through its seemless integration with the Value Line web site (www.valueline.com).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 CD-ROM updates and weekly internet updates for $55, a full-year subscription for $570($195 for subscribers to The Value Line Investment Survey print edition.) This product is available on CD-ROM. A Special Plus Stock Edition, a powerful yet economical professional tool on CD-ROM, is distributed on a monthly basis with weekly internet updates for $95 for a two-month trial subscription, or $995 for a full year ($495 for subscribers to The Value Line Investment Survey print edition.) This Special Edition contains full financial and business descriptions on over 6,200 stocks. Value Line Small Cap Plus is now available exclusively over the Value Line Internet site. The service is updated monthly and was first released in early 1999. The publication covers, evaluates and rates 600 mostly small-cap stocks that VLP analysts consider promising for future growth potential but may not have an extensive financial history. Similar to the Value Line 5 Investment Survey - Expanded Edition, each issue contains ratings and reports on about 200 stocks and includes a Performance Ranking System modified to accommodate the idiosyncrasies of the small-cap market. An annual subscription to Value Line Small Cap Plus costs $145. Windows is a registered trademark of Microsoft Corp. Value Line, Inc. and Microsoft Corp. are not affiliated companies. Both versions are compatible with Windows 2000, 98, NT 4.X, 95 and 3.X. Value Line Mutual Fund Survey for Windows(R) is the electronic version of the Value Line Mutual Fund Survey. The program features powerful sorting, filtering and portfolio analysis. Version 2 was introduced in 1998, with added features such as style attribution analysis, portfolio stress tester, portfolio rebalancing, correlation of Fund returns, manager bios and photos and hypothetical assets to differentiate us from the competition. Value Line DataFile contains historic annual and quarterly financial records for more than 5,000 companies in numerous industries, including air transport, industrial services, beverage, machinery, bank, insurance and finance, savings and loan associations, toys, and securities bro-kers. DataFile is sold to the institutional market. Value Line Data File II, which includes less historical data is also available. This version complies with Microsoft Access format for small businesses. 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. 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. Technological initiatives to automate and upgrade information systems are currently underway. This project will increase the number of stocks in the various Value Line publications to include all U.S. company stocks covered on the major exchanges. 3. Value Line Internet: Value Line made significant improvements to its Internet Web Site WWW.VALUELINE.COM, in fiscal 2000. Included, is a multimedia section that features daily market reports and updates on stocks, options and convertibles as well as Webcasting of daily analyst commentary and fast-breaking developments on companies in the news. In addition, Value Line has added a host of new tools to chart and filter stocks, mutual fund tools with which to build a portfolio, and financial calculators. The Company's complete retail product line can be ordered through the Web Site. We continue to offer program enhancements, weekly data updates and survey page updates for both the Value Line Investment Survey for Windows(R) and the Value Line Mutual Fund Survey for Windows(R) via the internet. 6 B. Investment Management. As of April 30, 2000, the Company was the investment adviser for 15 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. Shareholder 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, 2000, were:
(in thousands) The Value Line Fund, Inc. $ 492,957 Value Line Income and Growth Fund, Inc. 232,946 The Value Line Special Situations Fund, Inc. 467,854 Value Line Leveraged Growth Investors, Inc. 778,528 The Value Line Cash Fund, Inc. 341,731 Value Line U.S. Government Securities Fund, Inc. 139,817 Value Line Centurion Fund, Inc. 946,653 The Value Line Tax Exempt Fund, Inc. 162,657 Value Line Convertible Fund, Inc. 106,323 Value Line Aggressive Income Trust 128,555 Value Line New York Tax Exempt Trust 28,314 Value Line Strategic Asset Management Trust 1,626,375 Value Line Emerging Opportunities Fund, Inc. 46,777 Value Line Asset Allocation Fund, Inc. 304,505 Value Line U.S. Multinational Company Fund, Inc. 43,909 ---------- $5,847,901 ==========
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. 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. 7 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 subscriber relations services for Company publications. Additionally, Compupower 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). 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. During fiscal 2000 VLS also received 12b-1 fees from three of the Value Line Funds. Effective July 1, 2000, the shareholders' of ten of the Value Line Funds approved a service and distribution plan pursuant to rule 12b-1 providing for a charge to shareholders of .25% assets annually. These payments may be used by the Company as an offset to certain marketing and distribution costs. 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 Compupower Corporation's subscriber 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. 8 THE VALUE LINE STRATEGY TRUST SERIES I: During the past year we licensed certain trademarks and proprietary information for a new series of "unit investment trust", THE VALUE LINE STRATEGY TRUST SERIES I. The fundamental strategy for this Trust and future Trusts in this series is to invest in the 100 Rank #1 stocks and maintain a static portfolio position in these 100 stocks for a fourteen-month period. At the end of the fourteen months the portfolio will be liquidated and the investors will be invited to reinvest their distribution in the next available VALUE LINE STRATEGY TRUST SERIES . Ranson, the underwriter of the UITs, intends to introduce a new UIT Series every two months. These unit investment trusts are sold by an extensive network of brokerage firms and provide publicity for the ranking system within the brokerage industry. As of this date, nine trusts have been established with a total asset value of approximately $65,000,000. VALUE LINE TARGET 25 PORTFOLIO: The fundamental strategy for this Trust and future Trusts in this series is to invest in a selected 25 stocks of the 100 Rank #1 stocks and maintain a static portfolio position in these 25 stocks for a fourteen-month period. At the end of the fourteen months the portfolio will be liquidated and the investors will be invited to reinvest their distribution in the next available VALUE LINE TARGET 25 PORTFOLIO. Nike Securities, the underwriter of this UIT, intends to introduce a new UIT series every month. These unit investment trusts are sold by an extensive network of brokerage firms and provide an exposure for the ranking system within the brokerage industry. As of July 6, 2000 four Series Trusts have been established with aggregate assets over $85,000,000. E. Investments. The Company invests in the Value Line Funds and in other marketable securities. F. Employees. At April 30, 2000, the Company and its subsidiaries employed 317 people. 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 people 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, 2000 1999 (in thousands) Investment Periodicals & Related Publications $ 21,393 $ 19,529 Investment Management 276,195 223,063 Corporate Assets 610 1,215 -------- -------- $298,198 $243,807
9 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 periodicals service 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 July 6, 2000), 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. 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 65 Chairman of the Board, President and Chief Executive Officer of the Company and AB&Co. Chairman of the Board and President of each of the Value Line Funds. Samuel Eisenstadt 78 Senior Vice President and Research Chairman. David T. Henigson 42 Vice President and Treasurer; Director of Compliance and Internal Audit; Vice President, of each of the Value Line Funds and Secretary and Treasurer; Vice President of AB&Co. Howard A. Brecher 46 Vice President and Secretary; Vice President, Secretary, Treasurer and General Counsel of AB&Co. Item 2. PROPERTIES. On June 4, 1993, the Company entered into a lease agreement for approximately 77,000 square feet that provided for the relocation of its office space to 220 East 42nd Street, New York, New York. 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 location 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 10 business expansion. The Company owned a distribution facility in North Bergen, New Jersey. The land and premises were sold in May of 1998. 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, 2000. Part II Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. The Registrant's Common Stock is traded on the over-the-counter market. The approximate number of record holders of the Registrant's Common Stock at April 30, 2000 was 1,310. 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, 1998 ............. $49 1/2 $ 42 $36 7/8 $37 7/8 $ .25 October 31, 1998 .......... 42 5/8 46 3/8 33 9/16 34 5/16 .25 January 31, 1999 .......... 41 1/4 42 1/8 37 7/8 38 .25 April 30, 1999 ............ 38 1/4 39 1/4 34 9/16 35 7/8 .25 July 31, 1999 ............. 40 13/16 42 36 3/4 37 1/8 .25 October 31, 1999 .......... 38 1/4 39 1/4 33 34 7/8 .25 January 31, 2000 .......... 37 1/2 39 1/4 34 1/4 34 5/8 .25 April 30, 2000 ............ 39 40 1/4 32 5/8 34 3/4 .25
11 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, 2000 1999 1998 1997 1996 (in thousands, except per share amounts) Revenues: Investment periodicals and related publications ......... $ 58,857 $ 62,220 $ 61,210 $ 62,442 $ 58,509 Investment management fees and services .... $ 37,385 $ 33,080 $ 32,405 $ 29,136 $ 26,564 Gain on sale of operating facility ... $ -- $ 518 $ -- $ -- $ -- Settlement of disputed securities transactions ......... $ -- $ -- $ -- $ -- $ 2,054 Total revenues ....... $ 96,242 $ 95,818 $ 93,615 $ 91,774 $ 87,127 Income from operations ........... $ 36,428 $ 39,436 $ 39,360 $ 36,277 $ 32,486 Net income ............ $ 33,698 $ 27,172 $ 35,177 $ 45,512 $ 41,714 Earnings per share, basic and fully diluted ......... $ 3.38 $ 2.72 $ 3.53 $ 4.56 $ 4.18 Total assets ........... $298,198 $243,807 $207,525 $160,310 $333,826 Cash dividends declared per share ..... $ 1.00 $ 1.00 $ 1.00 $ 15.95 $ .80
12 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. FISCAL 2000 OPERATING RESULTS Net income for the twelve months ended April 30, 2000 of $33,698,000, or $3.38 per share ranked fourth highest in Value Line's history and was 24% higher than the prior year's net income of $27,172,000, or $2.72 per share. Revenues of $96,242,000 for fiscal year 2000, the highest in Value Line's history, were $424,000 higher than the prior year's revenues of $95,818,000. Operating income of $36,428,000 for the twelve months ended April 30, 2000, was the third highest in the history of the Company and 8% lower than operating income of $39,436,000 for the same period of last fiscal year. The decrease from last fiscal year's operating income is due largely to $3,458,000 of additional advertising expenses related to selling arrangements for the Value Line mutual funds and expenses related to the engagement of an outside advertising agency for the Company's publication business. Additionally, both revenues and operating income for last fiscal year include a gain of $518,000 from the sale of the vacant North Bergen, New Jersey operating facility. Total assets of $298,198,000 at April 30, 2000 increased 22% from the balance at April 30, 1999. Subscription revenues of $58,857,000 were 5% below revenues from the prior fiscal year. The decrease in subscription revenues compared to the prior year is due primarily to a 5% net decrease in revenues from THE VALUE LINE INVESTMENT SURVEY and related products, which includes THE VALUE LINE INVESTMENT SURVEY FOR WINDOWS, CONDENSED, EXPANDED EDITION AND V.L. SELECT. The decrease in publication revenues is largely a result of the reduced level of advertising that occurred while the Company has been in the process of revising its advertising strategy. Additionally, the availability of free or low cost data on the Internet has also had a negative impact on revenue growth. The decline in revenues from THE VALUE LINE INVESTMENT SURVEY was offset in part by increased revenues from THE VALUE LINE INVESTMENT SURVEY FOR WINDOWS, THE VALUE LINE INVESTMENT SURVEY - CONDENSED EDITION and VALUE LINE SELECT products. Investment management fees and services revenues of $37,385,000 for fiscal 2000, a new record high for the Company for any fiscal year, were $4,305,000, or 13%, above the prior year's revenues. The higher revenues from investment management fees and services, compared to the prior year, resulted primarily from the increase in the year-over-year average net assets under management in the Company's mutual funds. Reduced revenues from individually managed asset accounts partially offset the increased revenues from the Company's mutual funds. Assets under management in the Company's mutual funds at April 30, 2000 increased 20% from the level at April 30, 1999. Operating expenses for the twelve months ended April 30, 2000 of $59,814,000 were 6% above last year's expenses of $56,382,000. Total company-wide advertising and promotional expenses of $21,629,000 were 25% above the prior year's expenses. When compared to the prior year, savings from the planned reduction of television advertising through April 30, 2000 were offset 13 by the increase in expenses relating to a selling arrangement for two of the Company's equity mutual funds and increased promotional fees to discount brokers based on higher invested assets in the Value Line mutual funds. Additionally, the Company engaged an outside advertising agency to promote its products that failed to produce the expected results. Salaries and employee benefit expenses of $22,986,000 were less than 1% above expenses of $22,950,000 recorded in the prior fiscal year. The stable level of salaries and benefits resulted primarily from savings in employee benefits and related expenses and staff reductions in the Asset Management, Purchasing and Y2K divisions and the outsourcing of the Customer Service division at the Compupower Corporation. Production and distribution costs of $6,809,000 were 9% below expenses of $7,454,000 for the twelve months ended April 30, 1999. The lower expenses resulted from a decrease in maintenance and production expenses related to the Company's web-site and a decline in paper, printing and distribution expenses that were directly related to lower production runs for print publications. Office and administration expenses of $8,390,000 were 3% below last year's expenses of $8,648,000. The decline in administrative expenses from last year is the result of reduced professional fees, telecommunication charges and depreciation expenses. Administrative expenses for fiscal 2000 have been reduced by $275,000 that resulted from the favorable resolution of two litigations in which the Company was the plaintiff. Additional administrative costs in fiscal year 2000 include expenses related to the amortization of capitalized employee salaries and fringe benefit expenses for Value Line software programmers associated with the adoption in the latter half of fiscal year 1999 of SOP 98-1 "Accounting for the Costs of Computer Software Developed for Internal Use". The new SOP 98-1 requires the Company to defer the internal costs of developing and enhancing various computer software programs such as those associated with the Internet site, version 3 of the Value Line Investment Survey for Windows and other products. The Company's securities portfolios produced income of $18,504,000 for the twelve months ended April 30, 2000, an increase of $13,311,000 over last year's income of $5,193,000. This was primarily due to an increase of $8,106,000 in capital gain distributions from the Value Line mutual funds, an additional $3,725,000 in capital gains from the Company's trading portfolio and an increase of $959,000 in dividend income. The strong performance of the Value Line equity mutual funds and trading portfolios in an overall favorable market enviroment during fiscal 2000 was mainly responsible for the increase in income from securities transactions. Liquidity and Capital Resources Value Line, Inc. ("the Company") had liquid resources, which are used in its business, of $271,494,000 at April 30, 2000. In addition to $61,026,000 of working capital, the Company had long-term securities available for sale with a market value of $210,468,000, that, although classified as non-current assets, are also readily marketable should the need arise. The Company's cash flow from operations of $19,637,000 for the fiscal year ended April 30, 2000 was lower than fiscal 1999's cash flow of $26,130,000. This was primarily due to the higher volume of prepayments for subscriptions during fiscal 1999, and the timing of payments during fiscal 2000 of certain promotional costs. Net cash outflows for investing activities during fiscal 2000 were $711,000 lower than fiscal 1999's outflows primarily due 14 to a decrease in trading activity in the Company's trading and long-term securities partially offset by increased expenditures for capitalized software. Year 2000 (Y2K): During the Y2K rollover, the Company's systems and those of its third party critical vendors performed without any problems. Value Line continues all operations without any Y-2K related issues, both internally and externally including the use of the Company's products by our clients. The effective transition was the result of Value Line's extensive year 2000 planning. The Company's expenditures for the Y2K project were $509,000, $732,000, and $251,000 during fiscal years 2000, 1999 and 1998, respectively.These expenditures include new software and hardware, allocation of staff time, temporary assistance for clerical tasks, legal counsel, testing tools and external, third-party monitoring of the Company's Y2K implementation plan. Management believes that the Company's cash and other liquid asset resources used in its business together with the future cash flows from operations will be sufficient to finance current and forecasted operations. Management anticipates no borrowing for fiscal year 2001. FISCAL 1999 OPERATING RESULTS Net earnings for fiscal year 1999 were $27,172,000, $2.72 per share, compared to net earnings for fiscal year 1998 of $35,177,000, or $3.53 per share. Revenues of $95,818,000 for fiscal 1999, a new record high for the Company, exceeded the prior year's revenues of $93,615,000 by 2%. Operating income of $39,436,000 for the twelve months ended April 30, 1999 also set a new record high for Value Line. The fourth quarter and fiscal year 1999 operating results include the capitalization of $1,092,000, net of amortization of $95,000 associated with the cost of developing internal use software. Inclusive and exclusive of the capitalization of these costs, both net earnings of $7,048,000 or $.70 per share and operating income of $11,058,000 were the highest during any fourth quarter period in the history of the Company. Revenues of $95,818,000 for fiscal year 1999 were $2,203,000 above fiscal year's 1998 revenues. Subscription revenues of $62,220,000, the second highest in the history of the Company, were $1,010,000 or 2% above revenues in the prior fiscal year. The increase in subscription revenues from the prior year's level is due primarily to a 2% increase in revenues from THE VALUE LINE INVESTMENT SURVEY and related products, including an increase of almost $1,700,000 in fiscal 1999's revenues from new products. Investment management fees and services revenues of $33,080,000 for the fiscal year ended April 30, 1999, were $664,000, or 2%, above the prior year's revenues. The higher revenues from investment management fees and services, compared to the prior year, resulted primarily from an increase in the year-to-date average net assets under management in the Company's mutual funds. This was partially offset by reduced revenues from individually managed asset accounts. During fiscal 1999, the Company also recorded as revenues a gain of $518,000 from the sale of the Company's North Bergen, New Jersey, vacant operating facility. 15 Operating expenses for the year ended April 30, 1999, were $56,382,000, $2,127,000, or 4%, above last year's total expenses of $54,255,000. Total advertising and promotional expenses of $17,330,000 were $2,240,000, or 15%, above the prior year's expenses. Promotional expenses for the Value Line Family of Mutual Funds were $1,126,000 above the prior fiscal year's expenses primarily due to an increase in expenses relating to a selling arrangement for two of the Company's equity mutual funds of which the Company is the adviser. In addition, the current year's advertising expenses for THE VALUE INVESTMENT SURVEY and related products and for new publications, including Value Line Select, were $977,000 and $487,000, respectively, higher than the prior year's expenses. Salaries and employee benefit expenses of $22,950,000 were 4% above expenses of $22,153,000 recorded in the prior year. The increase from the prior year is primarily the result of revisions to the salary structure in the Research Department, employment of additional staff in the Asset Management and Y2000 divisions, and general increases in salaries and incentive compensation granted in March and August 1998. These increases were partially offset by the capitalization of $1,092,000 of employee salaries and fringe benefits associated with the adoption of SOP 98-1 "Accounting for the costs of computer software developed for internal use". Production and distribution costs of $7,454,000 were 12% below expenses of $8,498,000 for the fiscal year ended April 30, 1998. Increases in production and distribution expenses associated with new publications and increased expenses for software and Internet development and maintenance were offset by lower expenses for paper usage, service mailers, and subscriber guides resulting from lower production runs for print publications. In addition, April 1998 production expenses included approximately $500,000 of expenses related to the Compupower Corporation's migration of production and distribution data from a mainframe system to a client server database. Office and administration expenses of $8,648,000 were 2% above last year's expenses of $8,514,000. The increase in administrative expenses from the prior year's level is primarily due to increased fees for professional services, higher property rent pursuant to a scheduled rent increase included in the Company's New York City lease, and additional depreciation expenses resulting primarily from a change to the asset lives assigned to personal computers. These increases were partially offset by lower consulting fees at the Company's fulfillment operation and reduced insurance expenses. In addition, the receipt of proceeds of $126,000 from the settlement of an intellectual property infringement lawsuit in which the Company was the plaintiff reduced fiscal 1998's office and administrative expenses. The Company's securities portfolios produced income of $5,193,000 during fiscal year 1999, a decrease of $13,079,000 from last year's income of $18,272,000. This was due primarily to a $9,119,000 reduction in the size of the capital gain distributions from the Company's family of mutual funds. The lower capital gains distributions from the Value Line mutual funds resulted from management's effective tax planning decisions to minimize capital gain distributions from the Company's mutual funds. The tax planning strategy maintained fund shareholder values while reducing the tax liability for all Value Line mutual fund shareholders, including the Company. Although the Company's earnings were lower due to the reduced taxable capital gain distributions, shareholder's equity increased by the appreciation in the value of the long-term securities portfolio that resulted from the higher net asset value of the mutual fund shares. This was a direct result of minimizing the realization of taxable capital gains within the Value Line mutual funds. In addition, the lower capital gains from the Company's trading portfolio that resulted from a decrease in the average assets invested in this portfolio also contributed to the decline in the income from securities transactions. 16 Liquidity and Capital Resources Value Line, Inc. (the Company) had liquid resources which are used in its business of $219,361,000 at April 30, 1999. In addition to $50,770,000of working capital, the Company had long-term securities available for sale with a market value of $168,591,000, that, although classified as non-current assets, are also readily marketable should the need arise. The Company's cash flow from operations of $24,634,000 for fiscal 1999 was $4,213,000 higher than fiscal 1998's cash flow primarily due to increased income from operations, the timing of payments for income taxes and higher volume of prepayments for subscriptions to the Company's products resulting from an increase in total new, full term orders. This increase to cash flow was partially offset by the increase in accounts receivable that resulted from the efficiencies in order processing in the new subscription fulfillment system. Net cash outflows for investing activities during fiscal 1999 were $6,163,000 higher than fiscal 1998's outflows due primarily to the Company's decision during fiscal 1999 to invest additional cash in its short term trading portfolio to support its trading strategies. The receipt of $591,000 of proceeds during fiscal 1999, primarily from the sale of the Company's North Bergen, New Jersey vacant operating facility also contributed to the increase from fiscal 1998's cash flow from investing activities. Year 2000 (Y2K): Our Year 2000 planning was launched in 1997 with an initial assessment of the Company's systems, its risk of exposure, the steps necessary to achieve Y2K compliance, and the resources necessary to implement those steps. The first phase of the plan involved a complete assessment of the Company's systems and a survey of vendors. Systems were categorized into three groups - Mission Critical, Critical, and Non-Critical. Mission Critical systems are systems that would result in a disruption of service or services. Critical systems are defined as those that could cause minor disruption of services. Non-Critical systems are defined as those that would have no significant impact on operations or services. The second phase of the project was the actual replacement and/or modification of systems and applications. This phase also included the implementation of the modified applications back into the production environment. The second phase has been completed since January 1999. State of Readiness - Y2K: We are now well into the third phase of the project: testing and further implementation based on test results. Due to the timely and successful initial assessment of the Company's year 2000 readiness, we are able to continue to enhance our current products, create new products and release updated versions of our electronic products while still maintaining our Y2K test environments throughout the year. 17 Anticipated Costs - Y2K: The Company's fiscal year 1998 expenditures for the Y2K project were $251,000. The Company's fiscal year 1999 expenditures for the Y2K project were $732,000. The Company's fiscal year 2000 budget is projected to be $414,000. These expenditures include new software and hardware, allocation of staff time, temporary assistance for clerical tasks, legal counsel, testing tools and external, third-party monitoring of the Company's Y2K implementation plan. Risks - Y2K: We cannot predict with certainty what will happen as the millennium approaches. We cannot be sure that we will find every problem in the Company's systems, that the vendors the Company relies upon will find every problem in their systems, or that the Securities Industry will not experience system failures that will negatively and materially impact Value Line. The Company will continue to work toward compliance and urge its vendors to do the same, but niether the Company, nor its vendors, can predict the future with certainty. Contingency Planning - Y2K: Value Line is in the process of finalizing contingency plans to account for the possible failure of every Mission Critical system. Whether this involves performing tasks manually, or locating alternative vendors for Mission Critical software and hardware systems, Value Line is committed to having viable contingency plans developed for every Mission Critical system. We continue to reassess and adjust our risk management process and contingency plans. We believe we have sufficient planning to properly communicate and coordinate any disruption that the turn of the century could cause to our production environment. We are carefully monitoring our third party vendors and should have a better understanding of their Y2K readiness by June of 1999. We will continue to monitor and evaluate all vendors' Y2K status beyond the year 2000. Recent AICPA Pronouncements: The Accounting Standards Committee of the AICPA recently issued Statement of Position ("SOP") 98-1 which requires entities to adopt uniform rules in their financial statements in accounting for the cost of computer software developed or obtained for internal use. The SOP requires companies to capitalize as long-lived assets, for fiscal years beginning after December 15, 1998, many of the costs associated with developing or obtaining software for internal use to amortize those costs over the software's estimated useful life in a systematic and rational manner. The Company capitalized $1,092,000 of expenses during fiscal year 1999 that qualifies for amortization under the new statement. Accordingly, earnings have increased to the extent of the capitalized costs (net of amortization of $95,000) during fiscal year 1999. Thereafter, assuming capitalized costs remain constant, the initial increase in earnings will diminish as the capitalized costs are amortized. Once the amount capitalized in the first year of application is fully amortized, the increase in earnings due to this accounting change will cease provided the amount capitalized each year remains constant. 18 Management believes that the Company's cash and other liquid asset resources used in its business together with the future cash flows from operations will be sufficient to finance current and forecasted operations. Management anticipates no borrowing for fiscal year 2000. 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 24 Consolidated balance sheets--April 30, 2000 and 1999 25 Consolidated statements of income and retained earnings --years ended April 30, 2000,1999, 1998 26 Consolidated statements of cash flows --years ended April 30, 2000, 1999 and 1998 27 Consolidated statement of changes in stockholders' equity --years ended April 30, 2000, 1999 and 1998 28 Notes to the consolidated financial statements 29 Supplementary schedules 43
Quarterly Results (Unaudited): (in thousands, except per share amounts)
Income Earnings Total From Net Per Revenues Operations Income Share 2000, by Quarter - First ...................... $23,831 $10,292 $ 6,914 $0.69 Second ..................... 23,415 9,825 6,386 0.64 Third ...................... 24,065 7,086 14,093 1.41 Fourth ..................... 24,931 9,225 6,305 0.64 ------- ------- ------- ----- Total .................... $96,242 $36,428 $33,698 $3.38 1999, by Quarter - First ...................... $24,656 $11,035 $ 6,509 $ .65 Second ..................... 23,391 9,538 5,421 .55 Third ...................... 23,538 7,805 8,194 .82 Fourth ..................... 24,233 11,058 7,048 .70 ------- ------- ------- ----- Total .................... $95,818 $39,436 $27,172 $2.72
19
Income Earnings Total From Net Per 1998, by Quarter - Revenues Operations Income Share First ................ $23,170 $10,975 $ 7,811 $ .78 Second ............... 23,721 10,467 7,063 .71 Third ................ 23,524 9,884 14,326 1.44 Fourth ............... 23,200 8,034 5,977 .60 ------- ------- ------- ----- Total .............. $93,615 $39,360 $35,177 $3.53
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. 20 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, incorporated by reference to the Annual Report on Form 10-K for the year ended April 30, 1996. 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. 21 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, 2000, 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 13, 2000 22 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, 2000, to be signed on its behalf by the undersigned as Directors of the Registrant. /s/ Jean Bernhard Buttner /s/ Howard A. Brecher Jean Bernhard Buttner Howard A. Brecher /s/ Harold Bernard, Jr. /s/ Samuel Eisenstadt Harold Bernard, Jr. Samuel Eisenstadt /s/ W. Scott Thomas /s/ David T. Henigson W. Scott Thomas David T. Henigson /s/ Linda S. Wilson Linda S. Wilson Dated: July 13,2000 23 [LETTERHEAD OF HOROWITZ & ULLMANN, P.C.] 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, changes in stockholders' equity, and cash flows present fairly, in all material respects, the financial position of Value Line, Inc. and its subsidiaries at April 30, 2000 and 1999, and the results of their operations, changes in stockholders' equity, and their cash flows for each of the three years in the period ended April 30, 2000, 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 Schedules listed in Item 14(a) of 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. July 13, 2000 24 VALUE LINE, INC. Consolidated Balance Sheets (in thousands, except share amounts)
Apr. 30, Apr. 30, Assets 2000 1999 Current Assets: --------- --------- Cash and cash equivalents (including short term investments of $47,456 and $41,250, respectively) $ 47,933 $ 41,826 Trading securities $ 19,044 $ 14,023 Accounts receivable, net of allowance for doubtful accounts of $133 and $295, respectively $ 2,495 $ 1,846 Receivable from affiliates $ 3,061 $ 2,587 Prepaid expenses and other current assets $ 1,115 $ 913 Deferred income taxes $ 139 $ 418 --------- --------- Total current assets $ 73,787 $ 61,613 Long term securities available for sale $ 210,468 $ 168,591 Property and equipment, net $ 10,402 $ 11,662 Capitalized software and other intangible assets, net $ 3,541 $ 1,941 --------- --------- Total assets $ 298,198 $ 243,807 ========= ========= Liabilities and Shareholders' Equity Current Liabilities: Accounts payable and accrued liabilities $ 7,162 $ 5,842 Accrued salaries $ 2,063 $ 1,765 Dividends payable $ 2,495 $ 2,495 Accrued taxes payable $ 1,041 $ 741 --------- --------- Total current liabilities $ 12,761 $ 10,843 Unearned revenue $ 41,116 $ 43,100 Deferred charges $ 419 $ 697 Deferred income taxes $ 33,036 $ 22,264 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 $ 959 $ 959 Retained earnings $ 149,304 $ 125,585 Treasury stock, at cost (21,375 shares on April 30, 2000, and 21,375 on April 30, 1999) ($ 411) ($ 411) Accumulated other comprehensive income, net of taxes $ 60,014 $ 39,770 --------- --------- Total shareholders' equity $ 210,866 $ 166,903 --------- --------- Total liabilities and shareholders' equity $ 298,198 $ 243,807 ========= =========
The accompanying notes are an integral part of these financial statements 25 VALUE LINE, INC. Consolidated Statements of Income and Retained Earnings (in thousands, except per share amounts)
Years ended April 30, 2000 1999 1998 -------- -------- -------- Revenues: Investment periodicals and related publications $ 58,857 $ 62,220 $ 61,210 Investment management fees & services 37,385 33,080 32,405 Gain on sale of operating facility -- 518 -- -------- -------- -------- Total revenues 96,242 95,818 93,615 -------- -------- -------- Expenses: Advertising and promotion 21,629 17,330 15,090 Salaries and employee benefits 22,986 22,950 22,153 Production and distribution 6,809 7,454 8,498 Office and administration 8,390 8,648 8,514 -------- -------- -------- Total expenses 59,814 56,382 54,255 -------- -------- -------- Income from operations 36,428 39,436 39,360 Income from securities transactions, net 18,504 5,193 18,272 -------- -------- -------- Income before income taxes 54,932 44,629 57,632 Provision for income taxes 21,234 17,457 22,455 -------- -------- -------- Net income 33,698 27,172 35,177 Retained earnings, at beginning of year 125,585 108,392 83,194 Dividends declared (9,979) (9,979) (9,979) -------- -------- -------- Retained earnings, at end of year $149,304 $125,585 $108,392 ======== ======== ======== Earnings per share, basic and fully diluted $ 3.38 $ 2.72 $ 3.53 ======== ======== ========
The accompanying notes are an integral part of these financial statements. 26 VALUE LINE, INC. Consolidated Statements of Cash Flows (in thousands)
Years ended April 30, 2000 1999 1998 -------- -------- -------- Cash flows from operating activities: Net income $ 33,698 $ 27,172 $ 35,177 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,523 2,139 1,855 Deferred income taxes 703 1,119 (196) Gains on sales of trading securities and securities held for sale (13,497) (1,311) (15,985) Unrealized (gains)/losses on trading securities (1,112) (1,013) 568 Gain on sale of operating facility -- (518) -- Other 2 25 (13) Changes in assets and liabilities: Increase/(decrease) in unearned revenue (1,984) 557 352 Decrease in deferred charges (278) (278) (278) Increase/(decrease) in accounts payable and accrued expenses 1,320 (1,328) (765) Increase/(decrease) in accrued salaries 298 1 (444) (Decrease)/increase in accrued taxes payable (252) 394 (461) (Increase)/decrease in prepaid expenses and other current assets (202) (22) 103 (Increase)/decrease in accounts receivable (1,108) (559) 1,229 (Increase) in receivable from affiliates (474) (248) (490) -------- -------- -------- Total adjustments (14,061) (1,042) (14,525) -------- -------- -------- Net cash provided by operations 19,637 26,130 20,652 -------- -------- -------- Cash flows from investing activities: Proceeds from sales of long term securities 18,467 8,980 21,824 Purchases of long term securities (18,452) (6,636) (27,376) Proceeds from sales of trading securities 35,939 13,251 39,461 Purchases of trading securities (36,640) (18,097) (29,655) Acquisition of property, and equipment, net (398) (855) (857) Expenditures for capitalized software (2,470) (1,496) (231) Proceeds from sales of operating facility and equipment 3 591 -- -------- -------- -------- Net cash provided by/(used in) investing activities (3,551) (4,262) 3,166 -------- -------- -------- Cash flows from financing activities: Proceeds from sale of treasury stock 15 Dividends paid (9,979) (9,979) (9,979) -------- -------- -------- Net cash (used in) financing activities (9,979) (9,979) (9,964) -------- -------- -------- Net increase in cash and cash equivalents 6,107 11,889 13,854 Cash and cash equivalents at beginning of period 41,826 29,937 16,083 -------- -------- -------- Cash and cash equivalents at end of period $ 47,933 $ 41,826 $ 29,937 ======== ======== ========
The accompanying notes are an integral part of these financial statements 27 VALUE LINE, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE YEARS ENDED APRIL 30, 2000, 1999 AND 1998 (in thousands, except share amounts)
Accumulated Number Par value Additional other of common of common paid-in Treasury Comprehensive Retained comprehensive shares shares capital Stock income earnings income Total --------- --------- ---------- -------- ------------- -------- ------------- ------- BALANCE AT MAY 1, 1997 9,978,125 $1,000 $954 ($421) $ 83,194 $11,637 $ 96,364 Comprehensive income Net income $35,177 35,177 35,177 Other comprehensive income, net of tax: Change in unrealized gains on securities 15,360 15,360 15,360 ------- Comprehensive income $50,537 ======= Exercise of stock options 500 5 10 15 Dividends declared (9,979) (9,979) --------- ------ ---- ----- -------- ------- -------- BALANCE AT APRIL 30, 1998 9,978,625 $1,000 $959 ($411) $108,392 $26,997 $136,937 ========= ====== ==== ===== ======== ======= ======== Comprehensive income Net income 27,172 27,172 27,172 Other comprehensive income, net of tax: Change in unrealized gains on securities 12,773 12,773 12,773 ------- Comprehensive income $39,945 ======= Dividends declared (9,979) (9,979) --------- ------ ---- ----- -------- ------- -------- BALANCE AT APRIL 30, 1999 9,978,625 $1,000 $959 ($411) $125,585 $39,770 $166,903 ========= ====== ==== ===== ======== ======= ======== Comprehensive income Net income 33,698 33,698 33,698 Other comprehensive income, net of tax: Change in unrealized gains on securities 20,244 20,244 20,244 ------- Comprehensive income $53,942 ======= Dividends declared (9,979) (9,979) --------- ------ ---- ----- -------- ------- -------- BALANCE AT APRIL 30, 2000 9,978,625 $1,000 $959 ($411) $149,304 $60,014 $210,866 ========= ====== ==== ===== ======== ======= ========
The accompanying notes are an integral part of these financial statements. 28 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 83% 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. 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 fewer 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. Valuation of Securities: The Company accounts for the valuation of its securities holdings in accordance with the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". 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, at 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. 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. 29 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. Advertising expenses: The Company expenses advertising costs as incurred. 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, 2000 and 1999, cash equivalents included $46,726,000 and $40,925,000, respectively, invested in the Value Line money market funds. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 2-SUPPLEMENTARY CASH FLOW INFORMATION: Cash payments for income taxes were $20,713,000, $15,712,000, and $23,114,000 in fiscal 2000, 1999, and 1998, respectively. Interest payments of $17,000, $86,000, and $47,000, were made in fiscal 2000, 1999, and 1998, respectively. 30 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3-RELATED PARTY TRANSACTIONS: The Company acts as investment adviser and manager for fifteen open-ended investment companies, the Value Line Family of Funds (see Note 4). The Company earns investment management fees 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 that are cleared on a fully disclosed basis through non-affiliated brokers. For the years ended April 30, 2000, 1999 and 1998, investment management fees and brokerage commission income, net of clearing fees, amounted to $33,658,000, $28,351,000, and $25,348,000, respectively. The related receivables from the funds for management advisory fees included in Receivable from affiliates were $2,972,000 and $2,487,000 at April 30, 2000 and 1999, respectively. For the years ended April 30, 2000, 1999, and 1998, the Company was reimbursed $519,000, $496,000, and $461,000, respectively, for payments it made on behalf of and services it provided to the Parent. At April 30, 2000 and 1999, Receivable from affiliates included a receivable from the Parent of $44,000 and $26,000, respectively. For the years ended April 30, 2000, 1999, and 1998, the Company made federal income tax payments to the Parent amounting to $17,460,000, $12,870,000, and $18,800,000, respectively. At April 30, 2000 and 1999, accrued taxes payable include a federal tax liability owed to the Parent in the amount of $401,000 and $152,000, respectively. These data are in accordance with the tax sharing arrangement described in Note 6. 31 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4-INVESTMENTS: Trading Securities: Securities held by Value Line Securities, Inc. had an aggregate cost of $15,821,000 and $11,914,000 and a market value of $19,044,000 and $14,023,000 at April 30, 2000 and April 30, 1999, respectively. Net realized trading gains amounted to $3,188,000 during the year ended April 30, 2000. Net realized trading losses related to equity securities aggregated $587,000 during fiscal 1999. Net realized trading gains amounted to $6,869,000 for the year ended April 30, 1998. The net unrealized gains on trading securities for the period ended April 30, 2000 and 1999 were $1,112,000 and $1,013,000, respectively, and net unrealized trading losses were $568,000 during fiscal years 1998. Long-Term Securities Available for Sale: The aggregate cost of the long-term securities, which are invested in the Value Line mutual funds, was $118,135,000 and $107,406,000 and the market value was $210,468,000 and $168,591,000 at April 30, 2000 and 1999, respectively. The change in gross unrealized gains on these securities of $31,144,000, $19,651,000, and $23,630,000, net of the change in deferred taxes of $10,900,000, $6,878,000, and $8,270,000, were included in shareholders' equity at April 30, 2000, 1999 and 1998, respectively. Realized capital gains from sales of these securities were $10,748,000, $2,157,000, and $11,980,000, during fiscal years 2000, 1999 and 1998, respectively. The proceeds received from the sales of these securities during the fiscal years ended April 30, 2000, 1999, and 1998 were $18,467,000, $8,980,000, and $21,824,000, respectively. For the years ended April 30, 2000, 1999, and 1998, Income from securities transactions also included $3,871,000, $2,912,000, and $2,818,000, of dividend income; $36,000, $77,000, and $78,000, of interest income; and $17,000, $86,000, and $47,000, of related interest expense, respectively. Investment income for fiscal year 2000, 1999 and 1998 included losses related to derivative financial futures contracts in the amount of $439,000, $259,000 and $1,179,000, respectively. 32 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 consist of the following: April 30, 2000 1999 ---------------------- (in thousands) Land $ 726 $ 726 Building and leasehold improvements 7,821 7,821 Furniture and equipment 11,024 10,635 ---------------------- 19,571 19,182 Accumulated depreciation and amortization (9,169) (7,520) ---------------------- $10,402 $11,662 ======================
Pursuant to the Company's realignment of its production and distribution departments, the Company sold its vacant North Bergen, New Jersey operating facility during May 1998 and received gross proceeds of $577,000. The gain on the sale of the operating facility in the amount of $518,000 is included in revenues in the Consolidated Statements of Income in fiscal 1999. 33 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, 2000 1999 1998 --------------------------------------------- (in thousands) Current: Federal $17,529 $13,405 $18,202 State and local 2,831 2,934 4,449 --------------------------------------------- 20,360 16,339 22,651 Deferred: Federal 776 868 (18) State and local 98 250 (178) --------------------------------------------- 874 1,118 (196) --------------------------------------------- $21,234 $17,457 $22,455 =============================================
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: 34 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended April 30, 2000 1999 1998 ---------------------------------------------- (in thousands) Unrealized gains on securities held for sale ($32,315) ($21,415) ($14,537) Unrealized gains on trading securities (1,127) (738) (291) Relocation reserve 64 64 284 Depreciation and amortization (568) (663) (626) Deferred charges 703 1,047 1,095 Other, net (207) (141) 224 ---------------------------------------------- ($33,449) ($21,846) ($13,851) ==============================================
Included in Deferred income taxes in total current assets are deferred state and local income taxes of $139,000 and $237,000 at April 30, 2000 and 1999, respectively. At April 30, 1999, deferred income taxes in current assets also included $182,000 of deferred federal taxes. 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, 2000 1999 1998 --------------------------------------------- (in thousands) Tax expense at the U.S. statutory rate $19,226 $15,620 $20,171 Increase (decrease) in tax expense from: State and local income taxes, net of federal income tax benefit 1,904 2,070 2,776 Effect of tax exempt income and dividend deductions (110) (62) (64) Other, net 214 (171) (428) --------------------------------------------- 21,234 $17,457 $22,455 =============================================
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. 35 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, 2000, 1999, and 1998 was $1,189,000, $1,609,000, and $1,455,000, 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, 2000, is as follows:
Number of Option Shares Prices --------- ------ Outstanding at April 30, 1997 3,475 $29.75 Granted - Exercised (500) $29.75 Cancelled - --------- Outstanding at April 30, 1998 2,975 $29.75 Granted - Exercised - $29.75 Cancelled - --------- Outstanding at April 30, 1999 2,975 $29.75 Granted - Exercised - Cancelled - --------- Outstanding at April 30, 2000 2,975 $29.75 =========
36 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Options outstanding at April 30, 2000 expire at various dates through March 2003. At April 30, 2000, 2,975 of the outstanding options were exercisable. Of the common stock held in treasury at April 30, 2000, 2,975 shares were held for exercise of stock options. NOTE 9-TREASURY STOCK: Treasury stock, at cost, for the three years ended April 30, 2000, consists of the following:
Shares Amount ----------------- ----------------- (in thousands) Balance April 30, 1997 21,875 421 Exercise of incentive stock options (500) (10) ----------------- ----------------- Balance April 30, 1998 21,375 411 Exercise of incentive stock options - - ----------------- ----------------- Balance April 30, 1999 21,375 411 Exercise of incentive stock options - - ----------------- ----------------- Balance April 30, 2000 21,375 411 ================= =================
NOTE 10-LEASE COMMITMENTS: On June 4, 1993, the Company entered into a 15 year lease agreement to provide primary office space. 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. 37 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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) 2001 1,790 2002 1,782 2003 1,766 2004 1,958 2005 1,997 Thereafter 5,389 --------- $14,682 =========
Rental expense for the years ended April 30, 2000, 1999, and 1998 under operating leases covering office space was $1,490,000, $1,505,000, and $1,288,000, respectively. NOTE 11-BUSINESS SEGMENTS: The Company operates two reportable business segments: Publishing and Investment Management Services. The publishing segment produces investment related periodicals in both print and electronic form. The investment management segment provides advisory services to mutual funds, institutional and individual clients as well as brokerage services for the Value Line family of mutual funds. The segments are differentiated by the products and services they offer. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company allocates all revenues and expenses, except for depreciation related to corporate assets, between the two reportable segments. Disclosure of Reportable Segment Profit and Segment Assets (in thousands)
APRIL 30, 2000 Publishing Investment Total Management Services Revenues from external customers $58,857 $37,385 $96,242 Intersegment revenues 74 0 74 Income from securities transactions 275 18,229 18,504 Depreciation and amortization 2,440 37 2,477 Segment profit 17,714 18,760 36,474 Segment assets 21,393 276,195 297,588 Expenditures for segment assets 2,868 0 2,868
38 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1999 Publishing Investment Total Management Services Revenues from external customers $62,220 $33,080 $95,300 Gain on sale of operating facility 518 0 518 Intersegment revenues 76 0 76 Income from securities transactions 258 4,935 5,193 Depreciation and amortization 1,969 53 2,022 Segment profit 22,467 17,086 39,553 Segment assets 19,529 223,063 242,592 Expenditures for segment assets 2,341 10 2,351
Reconciliation of Reportable Segment Revenues, Operating Profit and Assets (in thousands)
2000 1999 REVENUES Total revenues for reportable segments $96,316 $95,894 Elimination of intersegment revenues (74) (76) ----------------------- Total consolidated revenues $96,242 $95,818 ======================= SEGMENT PROFIT Total profit for reportable segments $54,978 $44,746 Less: Depreciation related to corporate assets (46) (117) ----------------------- Income before income taxes $54,932 $44,629 ======================= ASSETS Total assets for reportable segments $297,588 $242,592 Corporate assets 610 1,215 ----------------------- Consolidated total assets $298,198 $243,807 =======================
39 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 12-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 or one-fifteenth of aggregate indebtedness, if larger. Additionally, dividends may only be declared if aggregate indebtedness is less than twelve times net capital. At April 30, 2000, Value Line Securities, Inc. net capital, as defined, of $13,473,000 exceeded required net capital by $13,196,000 and the ratio of aggregate indebtedness to net capital was .31 to 1. NOTE 13-DISCLOSURE OF CREDIT RISK OF FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK: In the normal course of business, the Company enters into contractual committments, 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, 2000, the Company did not have an investment in financial futures contracts. The average fair value of the committments during fiscal 2000 was $1,374,000. Risk arises from the potential inability of counterparts 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. 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. No single customer accounted for a significant portion of the Company's sales in 2000, 1999 or 1998, nor accounts receivable for 2000 or 1999. 40 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 14-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, 1999 and 1998. Net realized trading losses related to derivative financial instruments amounted to $439,000, $259,000, and $2,925,000 for the years ended April 30, 2000, 1999 and 1998, respectively. Income from securities transactions in the Statement of Income are reflected net of derivative trading activity. NOTE 15-YEAR 2000: During fiscal 1998, the Company established a central committee to coordinate, evaluate and implement changes to ensure that its computer systems and software applications were converted to become year 2000 compliant with no disruption to business services. The conversion and implementation process was successfully completed without significant cost or effect to the Company's operations. The Company's fiscal year 2000, 1999 and 1998 expenditures for the Y2K project were $509,000, $732,000 and $251,000, respectively. These expenditures included new software and hardware, allocation of staff time, temporary assistance for clerical tasks, legal counsel, testing tools and external, third-party monitoring of the Company's Y2K implementation plan. NOTE 16-COMPREHENSIVE INCOME: During the fiscal year 1999, the Company adopted FASB statement no. 130, Reporting Comprehensive Income. Statement no. 130 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. At April 30, 2000, 1999, and 1998, the Company held long term securities classified as available for sale. The change in valuation of these securities, net of deferred taxes has been recorded in the Company's Consolidated Balance Sheets. The increase in gross unrealized gains was $31,144,000, $19,651,000, and $23,630,000 and the change in the related deferred taxes was $10,900,000, $6,878,000, and $8,270,000 during the three years ended April 30, 2000, 1999 and 1998, respectively. 41 VALUE LINE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 17-ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED FOR INTERNAL USE: During fiscal year 1999, the Company adopted the provisions of the Statement of Position 98-1, (SOP 98-1), "Accounting for the Costs of Computer Software Developed for Internal Use". SOP 98-1 is effective for tax years ending after December 31, 1998. The SOP 98-1 requires companies to capitalize as long-lived assets many of the costs associated with developing or obtaining software for internal use and amortize those costs over the software's estimated useful life in a systematic and rational manner. At April 30, 2000 and 1999 the Company capitalized $896,000 and $997,000 of costs, net of amortization, related to the development of software for internal use. Such costs are capitalized and amortized over the expected useful life of the asset which approximates 3 years. 42 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000
COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- 3COM CORP 800 34,994 31,550 3DO CO 1,600 13,961 9,800 AASTROM BIOSCIENCES INC 2,600 14,430 7,475 ABERCROMBIE AND FITCH CO 3 503 47 ACT MFG INC 100 2,818 3,638 ADAPTEC INC 300 12,556 8,100 ADAPTIVE BROADBAND CORP 4,600 125,649 149,500 ADC TELECOMMUNICATIONS INC 1,650 39,288 100,238 ADELPHIA COMM 3 465 600 ADELPHIA COMMUNICATIONS CORP 2 810 950 ADMINISTAFF INC 500 15,025 20,125 ADOBE SYS INC 300 16,717 36,281 ADTRAN INC 700 27,200 47,294 ADVANCED ENERGY INDS INC 850 47,033 58,650 ADVANCED FIBRE COMMUNICATIONS 1,700 88,419 77,669 ADVANCED LTG TECHNOLOGIES INC 800 13,521 12,200 ADVANCED MICRO DEVICES INC 652 29,952 57,463 ADVENT SOFTWARE INC 400 9,113 21,000 ADVO INC 1,400 37,783 42,000 AEGON 1,400 101,286 101,325 AES CORP 950 54,339 85,441 AFFILIATED MANAGERS GROUP INC 200 8,491 8,025 AFTERMARKET TECHNOLOGY CORP 400 5,300 4,650 ALBERTSONS INC 1 261 813 ALCATEL ALSTHOM 2,450 103,663 111,322 ALCOA INC 1,150 82,723 74,606 ALLEN TELECOM INC 200 2,923 3,550 ALLIANCE PHARMACEUTICAL CORP 400 6,695 3,175 ALLIANCE SEMICONDUCTOR CORP 300 3,465 6,113 ALYSIS TECHNOLOGIES INC 1,700 12,835 7,969 AMAZON COM INC 100 5,363 5,519 AMERICA ONLINE INC DEL 600 36,374 35,888 AMERICAN EAGLE OUTFITTERS INC 200 7,513 3,400 AMERICAN EXPRESS CO 900 131,224 135,056 AMERICAN FREIGHTWAYS CORP 700 12,199 13,038 AMERICAN INTL GROUP INC 2,450 176,702 268,734 AMERICAN PWR CONVERSION CORP 1,650 31,317 58,266 AMERITRADE HLDG CORP 3 465 225 AMGEN INC 3,200 114,834 179,200 AMPHENOL CORP NEW 600 25,721 38,250 ANADIGICS INC 600 37,140 45,150 ANALOG DEVICES INC 200 12,823 15,363 ANHEUSER BUSCH COS INC 900 53,946 63,506 ANNTAYLOR STORES CORP 2 410 525 43 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- ANTEC CORP 200 9,598 10,750 APAC TELESERVICES INC 2,500 21,200 23,750 APOLLO GROUP INC 100 2,162 2,900 APPLE COMPUTER 750 77,659 93,047 APPLIED FILMS CORP 700 21,298 17,500 APPLIED MATERIALS INC 750 24,445 76,359 APPLIED PWR INC 201 5,590 5,969 APRIA HEALTHCARE GROUP INC 200 2,960 2,788 ARGOSY GAMING CORP 300 3,915 4,800 ARKANSAS BEST CORP 450 5,076 5,822 ARTHROCARE CORP 1,700 93,373 173,188 ARTISAN COMPONENTS INC 600 6,405 5,925 ASPECT COMMUNICATIONS INC 250 8,703 8,875 ASPEN TECHNOLOGY INC 200 6,735 7,075 ASSOCIATES FIRST CAP CORP 1 280 331 ASTEC INDS INC 300 6,693 7,538 AT HOME CORP 202 8,998 4,350 AT+T CORP 177 10,213 8,860 ATMEL CORP 300 13,519 14,681 AUDIOVOX CORP 100 7,005 3,431 AURORA BIOSCIENCE CORP 800 26,315 29,000 AUTOZONE INC 550 16,517 12,616 AVIGEN INC 200 7,710 6,550 AVX CORP NEW 1,050 67,393 102,309 AXYS PHARMACEUTICAL INC 2,200 11,663 13,200 AZTAR CORP 1,500 15,381 17,906 BANK AMER CORP 200 9,110 9,800 BARRA INC 250 8,903 10,531 BCE INC 400 47,870 45,900 BEA SYS INC 2,000 81,502 96,500 BELL ATLANTIC CORP 1,000 53,899 59,250 BELLSOUTH CORP 3,250 145,820 158,234 BERINGER WINE ESTATES HLDGS 700 23,623 25,288 BEST BUY CO INC 702 48,351 56,750 BIOGEN INC 650 19,070 38,228 BIOJECT MED TECHNOLOGIES INC 800 7,790 5,800 BIOSITE DIAGNOSTICS INC 600 16,030 13,875 BOEING CO 400 15,914 15,875 BORDERS GROUP INC 800 12,340 12,700 BORG WARNER AUTOMOTIVE INC 200 8,362 8,363 BP AMOCO PLC 1,300 60,104 66,300 BRINKER INTL INC 400 14,020 12,750 BRISTOL MYERS SQUIBB CO 700 44,465 36,706 BRITISH TELECOMMUNICATIONS 500 77,161 91,500 C CUBE MICROSYSTEMS INC 300 17,315 19,275 C H ROBINSON WORLDWIDE 100 4,775 5,000 44 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- C+D TECHNOLOGIES 300 15,546 19,331 CABLE DESIGN TECHNOLOGIES CORP 950 30,191 32,538 CABLETRON SYSTEMS INC 1,400 30,808 32,025 CABOT CORP 1,100 32,368 29,700 CACI INC 100 2,124 2,344 CALIFORNIA AMPLIFIER INC 103 2,208 4,013 CALIFORNIA MICRO DEVICES CORP 400 7,133 8,400 CANDELA CORP 600 5,787 8,063 CARDIODYNAMICS INTL CORP 1,900 15,495 10,569 CATELLUS DEV CORP 400 5,074 5,200 CBRL GROUP INC 3 428 1,200 CCC INFORMATION SVCS GROUP INC 200 2,310 2,775 CDW COMPUTER CTRS INC 500 23,850 52,000 CELGENE CORP 300 10,290 14,119 CELL PATHWAYS INC NEW 400 15,476 10,375 CENDANT CORP 2,050 37,643 31,647 CENTENNIAL COMMUNICATIONS CORP 600 11,130 11,850 CEPHALON INC 900 26,170 50,625 CERNER CORP 100 2,336 2,206 CHASE MANHATTAN CORP NEW 3,400 273,531 245,013 CHEESECAKE FACTORY 900 28,339 36,844 CHEVRON CORP 200 15,935 17,025 CHIRON CORP 700 29,969 31,675 CHOICEPOINT INC 400 14,939 15,200 CIENA CORP 600 51,160 74,175 CIRCUIT CITY STORES INC 100 6,068 5,881 CISCO SYS INC 4,050 78,188 280,779 CMG INFORMATION SVCS INC 600 44,175 42,750 CNET NETWORKS INC 200 5,900 6,913 COASTCAST CORP 700 8,547 12,381 COCA COLA CO 2,000 101,681 94,125 COHERENT INC 1,600 86,411 92,500 COLE KENNETH PRODTNS INC 2,500 63,840 102,188 COLGATE PALMOLIVE CO 750 40,697 42,844 COLLAGENEX PHARMACEUTICALS INC 300 5,565 3,038 COMCAST CORP 700 26,644 27,300 COMDISCO INC 500 15,494 15,531 COMMERCE BANCORP INC N J 1 24 22 COMMSCOPE INC 900 37,058 42,750 COMMUNICATION INTELLIGENCE COR 800 4,615 2,425 COMPUTER ASSOC INTL INC 550 28,861 30,697 COMPUTER SCIENCES CORP 550 41,587 44,859 COMPUWARE CORP 302 7,929 3,781 CONCORD CAMERA CORP 1,600 25,684 29,200 CONCORD EFS INC 100 2,719 2,238 CONCURRENT COMPUTER CORP 300 5,415 3,000 45 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- COOPER COS INC 300 9,184 10,088 COOPER INDS INC 4 520 250 COPART INC 1,600 8,695 27,600 COREL CORP 100 2,487 663 CORNING INC 1,000 158,856 197,500 CORSAIR COMMUNICATIONS INC 1,000 18,369 18,125 COSTCO WHSL CORP NEW 1,450 69,391 78,391 COTT CORP QUE 1,400 8,563 7,306 CROWN CASTLE INTL CORP 300 11,313 11,513 CRYO CELL INTL INC 1,400 12,720 8,313 CSG SYS INTL INC 150 7,800 6,919 CSX CORP 203 5,650 4,431 CTS CORP 602 30,273 37,875 CURAGEN CORP 800 25,725 21,300 CV THERAPEUTICS INC 500 20,906 19,938 CVS CORP 4 620 600 CYBERONICS INC 1,000 25,613 20,375 CYBEX COMPUTER PRODS CORP 600 19,540 16,425 CYGNUS INC 1,000 12,625 12,500 CYTOGEN CORP 1,600 14,586 10,500 CYTOTHERAPEUTICS 400 3,745 1,775 CYTYC CORP 2,900 74,636 129,775 D.R.HORTON INC 200 2,335 2,588 DANKA BUS SYS 5 713 94 DATAKEY INC 500 4,025 3,500 DATARAM CORP 300 5,303 6,206 DATASCOPE CORP 300 10,215 9,938 DATATEC SYS INC 400 2,895 3,575 DAVOX CORP 800 11,240 20,400 DELL COMPUTER CORP 400 20,475 20,050 DEUTSCHE TELEKOM AG 600 46,830 40,500 DIAL CORP NEW 300 3,540 4,181 DIGITAL MICROWAVE CORP 100 3,268 3,694 DIRECT FOCUS INC 700 18,210 22,925 DISNEY WALT CO 500 19,613 21,656 DOLLAR GEN CORP 1 -- 11 DREYERS GRAND ICE CREAM INC 1,250 21,728 30,000 DU PONT E I DE NEMOURS + CO 102 6,596 4,819 DUKE ENERGY CO 1,200 65,048 69,000 DURA PHARMACEUTICALS INC 300 4,478 3,900 DYCOM INDS INC 1,600 71,157 83,200 E M C CORP MASS 1,600 160,339 222,300 EASTMAN KODAK CO 2,150 133,571 120,266 ECHOSTAR COMMUNICATIONS CORP N 900 24,488 57,319 ECLIPSYS CORP 500 5,750 4,000 ELAN PLC 600 26,705 25,725 46 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- ELCOM INTL INC 100 2,155 719 ELCOR CHEM CORP 1,000 24,944 31,813 ELECTRO SCIENTIFIC INDS INC 100 5,705 6,306 ELECTRONIC ARTS 100 7,619 6,050 ENERGY BIOSYSTEMS CORP 600 9,474 4,088 ENZO BIOCHEM INC 150 7,320 6,075 EPITOPE INC 200 2,773 1,750 ERICSSON L M TEL CO 400 34,050 35,375 ESHED ROBOTEC 1982 LTD 1,300 15,015 7,881 ESS TECHNOLOGY INC 504 8,370 7,325 ETHAN ALLEN INTERIORS INC 100 2,649 2,669 EVOLVING SYS INC 300 2,153 2,550 EXCALIBUR TECHNOLOGIES CORP 100 2,811 3,550 EXPEDITORES INTL WASH INC 100 3,674 4,275 EXTENDED SYS INC 400 19,170 15,900 EXXON MOBIL CORP 1,700 120,777 132,069 F5 NETWORKS INC 1 705 81 FAIR ISSAC + CO INC 500 21,081 21,156 FEDERAL NATL MTG ASSN 2,850 182,552 171,891 FIRST HEALTH GROUP CORP 300 9,053 9,131 FLEXTRONICS INTERNATIONAL 750 43,169 52,688 FLORIDA PROGRESS CORP 300 12,690 14,700 FLOWERS INDS INC 400 4,920 6,100 FOREST OIL CORP 4 720 1,150 FORWARD AIR CORP 1,100 16,856 37,813 FURNITURE BRANDS INTL INC 202 4,472 4,000 GATEWAY INC 1,600 89,593 88,400 GEMSTAR INTL GROUP LTD 850 12,879 39,313 GENERAL DATACOMM INDS INC 400 2,795 2,875 GENERAL DYNAMICS CORP 1 318 888 GENERAL ELEC CO 1,650 140,209 259,463 GENERAL MTRS CORP 1,502 122,554 142,038 GENERAL SEMICONDUCTOR INC 200 3,498 4,000 GENZYME CORP 100 4,756 4,881 GEORGIA GULF CORP 1,900 47,070 45,719 GEOWORKS 700 17,743 11,419 GILAT SATELLITE NETWORKS LTD 301 26,770 26,838 GLOBECOMM SYS INC 1,000 22,531 18,875 GO2NET 100 5,580 5,950 GTE CORP 800 52,403 54,200 GUESS INC 1,300 30,584 35,750 GUIDANT CORP 950 53,410 54,506 HAIN FOOD GROUP INC 800 22,471 21,450 HANDLEMAN CO DEL 400 4,495 4,800 HANNAFORD BROS CO 300 20,846 21,713 HARLEY DAVIDSON INC 700 28,061 27,869 47 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- HARMAN INTL INDS INC NEW 200 11,591 13,075 HARMONIC INC 1,800 128,268 132,863 HELIX TECHNOLOGY CORP 1,950 102,979 99,572 HERCULES INC 4 870 175 HEWLETT PACKARD CO 2 960 575 HOME DEPOT INC 4,354 183,671 244,697 HOMEBASE INC 600 1,899 1,238 HONDA MOTOR LTD 100 8,272 8,850 HONEYWELL INTL INC 50 2,390 2,800 HOOPER HOLMES INC 2,800 28,963 48,650 HYSEQ INC 400 13,020 11,275 I LINK CORP 300 2,303 2,250 I2 TECHNOLOGIES INC 300 29,663 38,775 IDEC PHARMACEUTICALS CORP 1,100 69,678 70,400 IDEXX LABS INC 1,200 30,510 31,500 ILEX ONCOLOGY INC 600 16,005 14,400 IMAGINON INC 300 774 441 IMMUNE RESPONSE CORP DEL 600 4,493 5,025 IMMUNEX CORP NEW 1,750 38,978 68,906 IMMUNOGEN INC 1,600 15,411 16,200 IMPERIAL BANCORP 402 8,405 8,163 INFONAUTICS CORP 1,500 13,481 9,671 INFORMATION RES INC 200 1,883 1,263 INGENUUS CORPORATION 2,900 7,758 7,794 INHALE THERAPEUTIC SYS 1,100 70,449 68,063 INSIGHT ENTERPRISES INC 800 23,819 33,450 INSO CORP 1,400 26,683 6,475 INTEGRA LIFESCIENCES CORP 400 7,026 4,525 INTEGRATED DEVICE TECHNOLOGY 950 36,366 45,659 INTEL CORP 2,050 108,922 259,966 INTELECT COMMUNICATIONS INC 400 2,895 1,225 INTELLICORP 900 8,820 2,025 INTERDIGITAL COMM CORP 100 3,624 2,069 INTERGRAPH CORP 700 5,066 4,769 INTERIM SVCS INC 100 1,761 1,713 INTERLEUKIN GENETICS INC 1,400 18,770 9,100 INTERMEDIA COMMUNICATIONS INC 2 1,210 75 INTERNATIONAL HOME FOODS INC 600 11,113 8,738 INTERVOICE INC 202 5,780 3,313 INTEST CORP 600 12,780 13,425 INTIMATE BRANDS INC 3 390 390 INTUIT 900 31,046 32,344 INVESTMENT TECHNOLOGY GROUP 300 9,415 11,250 ISLE CAPRI CASINOS INC 1,300 11,115 18,038 IVAX CORP 1,000 20,329 27,375 JABIL CIRCUIT INC 200 6,468 8,188 48 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- JDA SOFTWARE GROUP INC 900 17,483 16,763 JDS UNIPHASE CORP 1,301 126,556 134,975 JETFORM CORP 400 3,320 2,425 JOHNSON + JOHNSON 1,300 107,133 107,250 JONES PHARMA INC 2,000 54,613 57,625 K MART CORP 500 4,869 4,063 K V PHARMACEUTICAL CO 400 12,920 10,500 KEMET CORP 400 11,945 29,800 KENNAMETAL INC 700 18,885 20,125 KEY ENERGY SVCS INC 1,400 14,364 13,650 KEYCORP NEW 300 5,959 5,550 KLA TENCOR CORP 900 58,025 67,388 KOHLS CORP 600 30,915 28,800 KONINKLIJKE PHILIPS ELECTRS NV 403 14,798 18,056 KOPIN CORP 400 21,695 30,975 KULICKE + SOFFA INDS INC 500 32,269 39,156 KYOCERA CORP 300 49,923 49,819 LA Z BOY INC 206 4,673 3,850 LAMSON + SESSIONS CO 100 805 788 LANDSTAR SYS INC 100 6,311 5,725 LAUDER ESTEE COS INC 2 510 1,225 LCC INTL INC 1,000 20,638 24,438 LEAPNET INC 2,000 14,288 8,250 LEARNING TREE INTL INC 200 6,035 9,588 LEGATO SYSTEMS INC 2 610 44 LEXMARK INTL GROUP INC 300 33,746 35,400 LIGHTBRIDGE INC 200 5,760 4,200 LINEAR TECHNOLOGY CORP 200 6,356 11,425 LOUISIANA PAC CORP 200 2,612 2,675 LOWES COS INC 50 2,903 2,475 LSI LOGIC CORP 250 13,606 15,625 LUCENT TECHNOLOGIES INC 1,253 76,665 77,809 LYCOS INC 300 11,344 13,950 MACDERMID INC 200 6,723 4,688 MACROMEDIA INC 650 42,422 56,550 MACROVISION CORP 200 9,510 9,775 MARSH + MCLENNAN COS INC 150 14,183 14,784 MATRIX PHARMACEUTICALS 500 4,025 4,594 MATTEL INC 4 720 925 MAXIM PHARMACEUTICALS INC 200 14,135 7,750 MBNA CORP 2,650 48,030 70,391 MCKESSON HBO INC 4 1,145 138 MCLEODUSA INC 4,900 113,831 122,500 MEDAREX INC 100 4,319 5,300 MEDICIS PHARMACEUTICAL CORP 500 20,088 21,875 MEDIMMUNE INC 450 34,425 71,972 49 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- MEDTRONIC INC 2,550 102,423 132,441 MEMBERWORKS INC 600 20,005 19,378 MEMC ELECTR MATLS INC 300 5,440 5,213 MENS WEARHOUSE INC 1,550 36,103 33,228 MENTOR GRAPHICS CORP 2,203 30,084 29,166 MERCK + CO INC 3,400 233,566 236,300 MERCURY COMPUTER SYS INC 100 1,403 3,844 MERCURY GEN CORP NEW 4 470 63 MERIX CORP 100 1,955 2,188 MERRILL LYNCH + CO INC 200 17,652 20,388 META GROUP INC 300 9,665 6,750 METTLER TOLEDO INTL INC 950 35,066 32,775 MICHAEL FOODS INC NEW 700 15,248 15,006 MICHAELS STORES INC 1,400 41,064 55,213 MICRON TECHNOLOGY INC 100 13,180 13,925 MICROS SYS INC 1,250 72,794 50,313 MICROSOFT 2 760 75 MICROSOFT CORP 3,300 201,798 230,175 MICROSTRATEGY INC 500 15,756 12,938 MICROTEST INC 700 9,266 7,744 MICROVISION INC WASH 300 10,209 9,919 MICROWARE SYS CORP 1,000 6,434 4,125 MINIMED INC 350 22,889 43,028 MINNESOTA MNG + MFG CO 900 82,350 77,850 MODIS PROFESSIONAL SVCS INC 303 2,824 2,306 MOLECULAR DEVICES CORP 600 30,155 25,791 MOLEX INC 200 11,225 10,988 MONDAVI ROBERT CORP 300 11,040 9,956 MORGAN J P + CO INC 800 94,009 102,700 MORGAN STANLEY DEAN WITTER+CO 2,700 200,428 207,225 MOTOROLA INC 202 26,776 24,700 MRV COMMUNICATIONS INC 400 21,495 27,575 MSC INDL DIRECT INC 600 10,424 8,400 MYRIAD GENETICS INC 100 5,100 6,438 NASDAQ 100 INDEX 3 2,165 1,163 NATIONAL DATA CORP 200 6,900 5,550 NATIONAL DISC BROKERS GROUP 500 15,338 14,594 NATIONAL SEMICONDUCTOR CORP 150 7,639 9,113 NATIONAL STEEL CORP 300 1,853 1,875 NAVIDEC INC 100 1,693 844 NAVIGANT CONSULTING CO 300 11,756 2,981 NBTY INC 1,100 8,433 19,525 NETRIX CORP 3 1,590 2,100 NETRIX CORP 200 2,510 2,500 NETWORK APPLIANCE INC 650 35,163 48,059 NETWORKS ASSOCS INC 600 14,063 15,263 50 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- NEUROCRINE BIOSCIENCES INC 500 15,925 10,625 NEW ERA OF NETWORKS INC 1,200 28,110 37,650 NEWHALL LD + FARMING CO CALIF 500 13,525 13,500 NEWPORT CORP 600 46,499 72,788 NEXTEL COMMUNICATIONS INC 800 99,163 87,550 NOKIA CORP 3,150 89,559 179,156 NORTEL NETWORKS CORP 2,400 162,487 271,800 NORTH FORK BANCORPORATION INC 200 3,435 3,238 NORTHERN TRUST CORP 1,950 66,830 125,044 NOVELLUS SYS INC 250 14,584 16,672 NOVEN PHARMACEUTICALS INC 600 3,792 7,050 OAK TECHNOLOGY 2,603 36,983 36,684 OMNICOM GROUP 250 23,794 22,766 ONTRACK DATA INTL INC 1,300 11,496 11,294 OPEN MKT INC 700 9,648 7,219 ORACLE CORP 3,702 111,367 295,919 ORBOTECH LTD 200 15,591 17,050 OSICOM TECHNOLOGIES INC 200 8,891 10,400 OVERSEAS SHIPHOLDING GROUP INC 300 7,178 7,856 P COM INC 400 7,520 4,325 PACIFIC SUNWEAR OF CALIF 600 17,768 20,438 PARADIGM ADVANCED TECHNOLOGIES 200 530 413 PARLEX CORP 100 3,105 2,338 PATINA OIL + GAS CORP 300 2,696 4,163 PATTERSON DENTAL CO 200 7,003 9,625 PAXAR CORP 1,800 18,503 18,338 PAYCHEX INC 450 20,222 23,681 PC CONNECTION INC 300 8,903 14,363 PE CORP 1,650 86,674 99,000 PEGASUS COMMUNICATIONS CORP 200 20,379 21,825 PEGASYSTEMS INC 1,900 14,583 16,863 PENTAIR INC 200 7,548 7,650 PENTON MEDIA INC 500 12,925 13,156 PEPSICO INC 700 24,535 25,681 PERICOM SEMICONDUCTOR CORP 800 28,840 35,150 PETCO ANIMAL SUPPLIES INC 3,000 41,166 34,688 PETROLEUM GEO SVCS AS 200 2,725 3,250 PFIZER INC 4,400 134,877 185,350 PHOTON DYNAMICS INC 400 24,570 29,600 PHOTOWORKS INC 3,700 25,023 13,413 PICTURETEL CORP 3,500 13,963 14,875 PIER 1 IMPORTS INC 700 7,779 7,963 PINNACLE SYS INC 800 14,651 19,200 PIONEER STD ELECTRS INC 300 4,290 4,594 PLANAR SYS INC 400 4,570 4,475 PLEXUS CORP 900 53,920 68,963 51 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- PMC SIERRA INC 301 53,661 57,650 POGO PRODUCING CO 2,100 55,449 53,813 POLARIS INDS INC 100 2,980 3,063 POLAROID CORP 900 19,883 18,169 POLYMEDICA CORP 700 17,923 37,581 POPE + TALBOT INC 1,600 20,880 33,900 PRESSTEK INC 700 16,748 14,700 PRI AUTOMATION INC 500 32,681 39,938 PRINCETON VIDEO IMAGE INC 700 7,210 5,250 PROGENICS PHAARMACEUTICALS INC 300 20,690 13,800 PROGRESS SOFTWARE CORP 200 4,810 4,000 PROSOFT DEV INC 1,600 24,330 26,800 PROVINCE HEALTHCARE CO 800 23,478 23,100 PSW TECHNOLOGIES INC 400 14,820 9,100 PUMA TECHNOLOGY INC 701 19,896 22,288 QLOGIC CORP 300 22,106 30,094 QUALCOMM INC 2,401 176,223 260,925 QUINTEL COMMUNICATIONS INC 2,100 13,905 7,088 RADIANCE MED SYS INC 1,600 17,955 14,000 RADIANT SYS INC 200 2,073 3,725 RAMBUS INC DEL 150 23,606 34,500 RAMTRON INTL CORP 700 8,560 7,569 REAL NETWORKS INC 1 505 950 REMEDY CORP 600 26,318 31,875 REMEDYTEMP 500 10,400 9,906 RESMED INC 1,200 23,180 40,800 RESPIRONICS INC 1,700 24,760 27,625 REXALL SUNDOWN INC 700 11,791 13,475 ROADWAY EXPRESS INC DEL 1,600 29,680 37,600 ROHN INDS INC 2,500 12,162 9,531 ROWAN COS INC 100 1,762 2,794 ROYAL DUTCH PETE CO 2,250 131,305 129,094 S + P 500 INDEX 2 6,073 4,125 SAFEGUARD SCIENTIFICS INC 800 28,559 33,400 SALTON INC 1,000 41,875 42,938 SANDISK CORP 200 17,725 18,325 SANMINA CORP 950 33,847 57,059 SANTA CRUZ OPERATION INC 100 2,493 606 SAWTEK INC 101 5,085 5,106 SBC COMMUNICATIONS INC 400 16,308 17,525 SCHOLASTIC CORP 200 11,310 9,338 SCHOOL SPECIALTY INC 300 5,996 5,588 SCHWAB CHARLES CORP 850 37,177 37,825 SCI SYS INC 50 2,546 2,663 SCICLONE PHARMACEUTICALS INC 302 7,150 3,281 SCIENTIFIC ATLANTA INC 1,900 92,109 123,619 52 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- SCM MICROSYSTEMS INC 300 24,659 23,738 SEACHANGE INTL INC 200 7,450 6,000 SEMEX CORP 500 5,681 5,000 SEMTECH CORP 300 18,213 20,456 SENSAR CORP 400 13,620 8,625 SENSORMATIC ELECTRS CORP 1,400 17,482 23,363 SHELL TRANS + TRADING PLC 1,300 61,753 62,725 SICOR INC 3,450 35,757 39,028 SIEBEL SYS INC 800 63,263 98,300 SIGMA DESIGNS 2,500 14,400 10,625 SIRIUS SATELLITE RADIO INC 600 26,486 23,813 SKYWEST INC 100 4,018 4,213 SLM HLDG CORP 350 14,359 10,959 SOFTWARE SPECTRUM INC 300 7,290 5,456 SOLECTRON CORP 1,100 44,093 51,494 SONIC FDRY INC 200 11,935 8,950 SONOSITE INC 400 12,589 13,175 SONY CORP 400 78,612 90,250 SOURCE INFORMATION MGMT CO 300 4,721 4,425 SPECTRA PHYSICS LASERS INC 100 4,268 5,100 SPECTRANETICS CORP 800 3,540 4,100 SPEEDFAM IPEC INC 1,700 29,966 26,881 SPIEGEL INC 1,600 10,674 13,200 SPLASH TECHNOLOGY HLDGS INC 1,000 13,731 12,875 STANDARD PAC CORP NEW 200 2,458 2,013 STARBUCKS CORP 250 9,547 7,559 STARTEC GLOBAL COMMUNICATIONS 900 22,783 13,163 STARTEK INC 200 7,273 10,275 STATION CASINOS INC 2,750 60,303 78,375 STEEL TECHNOLOGIES INC 500 5,963 4,031 STILLWATER MNG CO 1,000 35,406 28,000 STORAGE COMPUTER CORP 1,000 12,538 6,938 STRYKER CORP 150 5,695 10,781 SUIZA FOODS CORP 1,100 43,836 42,831 SUN MICROSYSTEMS INC 2,700 96,866 248,231 SUPERGEN INC 100 2,829 3,313 SUPERIOR INDS INTL INC 200 6,223 6,438 SURMODICS INC 600 10,305 15,300 SYBASE INC 2,450 35,708 49,459 SYMANTEC CORP 450 22,260 28,097 SYMBOL TECHNOLOGIES INC 500 21,399 27,875 SYNTROLEUM CORP 800 15,440 15,700 SYSCO CORP 600 21,443 22,575 TARGET CORP 100 7,093 6,656 TECHNE CORP 1,900 111,729 135,138 TELEFONICA S A 759 49,032 50,288 53 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- TELEFONOS DE MEXICO S A 2,000 103,263 117,625 TELETECH HLDGS INC 700 28,525 22,838 TELLABS INC 202 11,185 11,013 TELXON CORP 1,000 14,269 14,750 TENNECO AUTOMOTIVE INC 6 405 375 TERADYNE INC 750 71,503 82,500 TEREX CORP NEW 6 893 1,050 TEXAS INSTRS INC 850 112,939 138,444 THE GOOD GUYS INC 5,100 31,011 14,663 TIMBERLAND CO 1,200 49,761 83,250 TIMBERLINE SOFTWARE CORP 0 4 3 TITAN CORP 1,700 65,404 72,994 TOMMY HILFIGER CORP 205 6,812 1,888 TOPPS INC 1,100 11,148 9,625 TOSCO CORP 300 8,696 9,619 TOTAL FINA SA 1,900 136,889 143,688 TOWER AUTOMOTIVE INC 200 2,758 3,125 TOYOTA MTR CO 2,350 117,722 234,853 TRANSMEDIA ASIA PAC INC 1,500 6,356 5,344 TREDEGAR INDS INC 500 12,150 12,906 TREEV INC 1,100 7,618 6,738 TRENDWEST RESORTS INC 100 2,518 2,325 TRIANGLE PHARMACEUTICALS INC 200 1,760 1,294 TRIMBLE NAVIGATION LTD 100 1,069 2,763 TRIMERIS INC 300 14,378 10,331 TRIPATH IMAGING INC 1,200 9,060 7,200 TRITON ENERGY LTD 1,700 52,906 61,944 TRIUMPH GROUP INC NEW 400 11,295 10,750 TV GUIDE INC 900 22,426 26,831 TWEETER HOME ENTMT GROUP INC 700 22,260 25,813 TYCO INTL LTD NEW 1,550 70,699 71,203 U S WEST INC NEW 200 14,760 14,238 UNICOM CORP 100 3,893 3,975 UNISOURCE ENERGY CORP 400 6,445 6,500 UNISYS CORP 302 8,900 7,256 UNITED PARCEL SVC INC 3 690 544 UNITED RENTALS INC 300 6,446 4,069 UNITED STATIONERS INC 350 8,963 11,681 UNITED TECHNOLOGIES CORP 2 785 363 UNIVERSAL ELECTRS INC 1,500 19,913 30,750 US FREIGHTWAYS CORP 200 7,256 9,325 US LEC CORP 600 15,168 15,675 V ONE CORP 3,100 16,030 13,369 VALENCE TECHNOLOGY INC 400 6,995 6,175 VENTANA MED SYS INC 600 22,724 16,913 VERITAS SOFTWARE CORP 1 855 700 54 VALUE LINE, INC. SCHEDULE 1-MARKETABLE SECURITIES AS OF APRIL 30, 2000 COMMON STOCK NAME NUMBER OF SHARES COST MKT VALUE ------------------------------- ------------------ ------------ ----------- VERITY INC 900 27,776 29,194 VERSANT CORP 1,500 16,388 9,750 VIASAT INC 100 3,205 4,681 VIISAGE TECHNOLOGY INC 1,800 19,524 11,700 VINTAGE PETE INC 500 9,744 9,938 VIRTUALFUND COM INC 1,400 7,770 4,506 VISUAL NETWORKS INC 500 19,950 19,500 VISX INC DEL 100 7,817 1,581 VITESSE SEMICONDUCTOR CORP 150 7,978 10,209 VOICESTREAM WIRELESS CORP 1 68 99 VYSIS INC 1,200 16,116 8,925 WAL MART STORES INC 4,602 156,852 255,725 WALGREEN CO 50 1,443 1,406 WARNER LAMBERT CO 800 69,909 91,050 WEBB DEL CORP 103 2,976 1,588 WEBB INTERACTIVE SVCS INC 1,200 13,235 19,200 WELLS FARGO + CO NEW 400 16,570 16,425 WESTELL TECHNOLOGIES 2,500 56,144 71,094 WESTERN DIGITAL CORP 2,700 17,829 18,731 WEYERHAEUSER CO 200 11,160 10,688 WHITEHALL JEWELLERS INC 800 15,540 13,750 WHOLE FOODS MKT INC 100 3,706 4,256 WILD OATS MKTS INC 300 5,640 3,975 WILSONS LEATHER EXPERTS INC 800 11,928 9,700 WINSTAR COMMUNICATIONS INC 300 10,463 11,963 WIRELESS TELECOM GROUP INC 100 843 325 WORLDCOM INC 200 9,621 9,088 WORLDPAGES COM INC 1,000 7,788 6,563 WPP GROUP PLC 1,400 41,834 108,325 XICOR INC 600 7,193 10,725 XILINX INC 100 2,020 7,325 XYBERNAUT CORP 400 5,895 3,900 ZEBRA TECHNOLOGIES CORP 300 15,278 17,100 ZEROPLUS COM INC 1,300 12,234 6,094 ZIONS BANCORP 200 8,335 8,300 ZOMAX OPTICAL MEDIA INC 100 5,111 4,731 ZORAN CORP 200 7,435 9,988 GRAND TOTAL 15,820,489 19,044,909
55 VALUE LINE, INC. Schedule XIII-Other Investments:4/30/2000
HISTORICAL MUTUAL FUND INVESTMENTS COST MARKET VALUE The Value Line Fund. Inc. $ 4,170,136 $ 8,287,114 The Value Line Special Situations Fund, Inc. 9,381,860 17,100,971 The Value Line Income and Growth Fund, Inc. 2,994,624 4,092,166 The Value Line Leveraged Growth Investors, Inc. 21,956,996 47,898,502 The Value Line U.S. Government Securities Fund, Inc. 1,066 1,061 The Value Line Tax Exempt Fund, Inc. National Bond 1,293,008 1,264,102 The Value Line New York Tax Exempt Trust 1,190,267 1,187,969 The Value Line Convertible Fund, Inc. 3,714,903 3,662,322 The Value Line Aggressive Income Trust 3,074,357 2,820,643 The Value Line Emerging Opportunity Fund, Inc. 12,648,840 24,540,121 The Value Line Asset Allocation Fund, Inc. 45,274,195 71,673,982 The Value Line U.S. Multinational Company Fund 12,435,197 27,938,571 -------------- -------------- $ 118,135,449 $ 210,467,524 ============== ==============
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