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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2O549
FORM 10-K
Annual Report Pursuant to Section l3 or l5(d) of the
Securities Exchange Act of l934
For the fiscal year ended April 3O, l996 Commission File Number 0-ll3O6
VALUE LINE, INC.
(Exact name of registrant as specified in its charter)
New York l3-3l39843
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) Number)
220 East 42nd Street, New York, N.Y. lOOl7-5891
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 907-1500
Securities registered pursuant to Section l2(b) of the Act:
None
Securities registered pursuant to Section l2(g) of the Act:
Common Stock, $.10 par value
Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section l3 or l5(d) of the Securities Exchange Act of
l934 during the preceding l2 months and (2) has been subject to such filing
requirements for the past 9O days.
Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the registrant's voting stock held by
non-affiliates on June 28, 1996 was $66,883,950.
There were 9,976,975 shares of the Company's Common Stock outstanding at
June 28, 1996.
DOCUMENTS INCORPORATED BY REFERENCE.
The following documents are incorporated by reference with this filing:
Part III: l996 Definitive Proxy Statement.
Part I
Item l. BUSINESS.
Value Line, Inc. (the "Company"), a New York corporation, was organized in
l982 and is the successor to substantially all of the operations of Arnold
Bernhard & Company, Inc. ("AB&Co.").
The Company's primary businesses are producing investment related
periodical publications through its wholly-owned subsidiary Value Line
Publishing, Inc. ("VLP") and providing 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
Mutual Fund Survey, The Value Line No-Load Fund Advisor, The Value Line OTC
Special Situations Service, The Value Line Options Survey, The Value Line
Convertibles Survey and The Value Line Industry Review which is only available
in electronic format. The Company's periodical publications are direct marketed
through media and direct mail to retail and institutional investors. The
Company is investment adviser for the Value Line Family of Mutual Funds, which
on April 30, l996, included 16 open-end investment companies with various
investment objectives. In addition, the Company manages investments for private
and institutional clients and, through VLP, provides financial database
information through computer media and computer time-sharing facilities
(DataFile and other services). VLP also markets personal computer software
services (VALUE/SCREEN III) and other electronic products for institutional
investors. The Company is registered with the Securities and Exchange
Commission as an investment adviser under the Investment Advisers Act of l94O.
In addition to VLP, the Company's other wholly-owned subsidiaries include a
registered broker-dealer, Value Line Securities, Inc., and an advertising
agency, Vanderbilt Advertising Agency, Inc. These subsidiaries primarily
provide services used by the Company in its publishing and investment management
businesses. Compupower Corporation, another subsidiary, serves the subscription
fulfillment needs of publishers. 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
1. Publications:
The Value Line Investment Survey is a weekly investment related periodical
that in addition to various timely articles on current economic, financial and
investment matters ranks common stocks for future relative performance based on
computer-generated statistics of financial results and stock market performance.
The key evaluations for each stock covered are "Timeliness(TM)" and "Safety."
"Timeliness(TM)" relates to the probable relative price performance of a stock
over the next six to twelve months, as compared to the rest of the approximately
l,7OO covered stocks. Rankings are updated each week and range from Rank l 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 l for the least risky stocks to Rank 5 for the
riskiest. Value Line employs approximately 90 analysts and statisticians who
prepare articles of interest for each periodical and who evaluate stock
performance and provide future earnings estimates and quarterly written
evaluations with weekly updates when relevant. The annual subscription price of
The Value Line Investment Survey is $570.
The Expanded Edition of The Value Line Investment Survey was introduced by
the Company in April 1995. It provides detailed descriptions of 1,800
additional small- and medium-capitalization stocks, many listed on NASDAQ,
beyond the 1,700 stocks of larger- capitalization companies traditionally
covered in The Value Line Investment Survey.
Like The Value Line Investment Survey, the Expanded Edition has its own
"Summary & Index" providing updated ranks and other data, as well as "screens"
of key financial performance measures. The "Ratings and Reports" section,
providing updated reports on about 140 stocks each week, has been organized to
correspond closely to the industries reviewed in the Standard Edition of The
Value Line Investment Survey. A new combined Index, published quarterly, allows
the subscriber to locate easily a specific stock among the 3,500 stocks covered.
The Expanded Edition includes a number of new as well as standard features:
- - A new Performance Ranking System incorporates many of the elements of the
Value Line Timeliness/TM Ranking System, modified to accom-modate the 1,800
stocks in the Expanded Edition. The Performance/TM Rank is based on
earnings growth and price momentum and is designed to predict relative
price performance over the next six to 12 months.
- - An expanded Business Section provides detail about companies, focusing on
business lines and strategies.
- - An enlarged Assets and Liabilities Section provides long-term statistics
and a more complete balance sheet on each company.
- - New Total-Return Statistics provide an "at a glance" look at a particular
stock's performance -- appreciation plus dividends -- over the past three
months, six months, and one, three, and five
3
years.
The principal difference between the Expanded Edition and The Value Line
Investment Survey is that the Expanded Edition does not include financial
forecasts or analysts' comments. This modification has allowed Value Line to
offer this service at a low price.
The cost of the Expanded Edition to current subscribers of The Value Line
Investment Survey is $125 per year and $695 per year for new subscribers
combining both Editions.
The Value Line Mutual Fund Survey provides full-page profiles of 1500
mutual funds and condensed coverage of an additional 550 funds. Every two weeks
subscribers receive an updated issue, containing about 150 fund reports, plus a
"Performance & Index" providing current rankings and performance figures for the
full universe of more than 2,000 funds. The Value Line Mutual Fund Survey also
includes semi-annual profiles and analyses on 100 of the nation's major fund
families. Additionally, subscribers receive a 12-page periodical monthly
newsletter containing articles of general interest to subscribers and readers,
"The Value Line Mutual Fund Advisor," with articles on investment trends and
issues concerning mutual fund investors. Funds are ranked for both risk and
overall risk-adjusted performance using strictly quantitative means. A large
binder is provided to house the periodic fund reports. A second binder is
provided to full-term subscribers for the periodical monthly newsletter. The
annual subscription price of The Value Line Mutual Fund Survey is $295.
The Company instituted on-line distribution of individual one-page reports
from The Value Line Investment Survey and The Value Line Mutual Fund Survey
through the CompuServe on-line network. The price per page for these documents
is $5.
The Value Line No-Load Fund Advisor is a periodical monthly newsletter for
investors who wish to manage their own portfolios of no- and low-load, open-end
mutual funds. Each issue features strategies for maximizing total return, with
special attention given to tax considerations. Also featured are in-depth
interviews with noted portfolio managers, model portfolios for a range of
investor profiles, and information about retirement planning, industry news, and
listings (with descriptions) of new funds worthy of further consideration. A
full statistical review, including latest performance, rankings, and sector
weightings, is updated each month on 600 leading no-load and low-load funds.
The annual subscription price of The Value Line No-Load Fund Advisor is $107.
The Value Line OTC Special Situations Service, published periodically 24
times a year, concentrates on fast-growing, smaller companies whose stocks are
perceived by Company analysts as having exceptional appreciation potential. The
annual subscription price of The Value Line OTC Special Situations Service is
$429.
The Value Line Options Survey, a periodical weekly service published 48
times a year, evaluates and ranks for future performance the most active options
listed on United States exchanges (approximately 8,000). The annual
subscription price of The Value
4
Line Options Survey is $445. An electronic version of this publica-tion, The
Value Line Daily Options Survey was introduced during the latter part of fiscal
1995.
The Value Line Convertibles Survey, a periodical service published 48 times
a year, evaluates and ranks for future market performance approximately 58O
convertible securities (bonds and preferred stocks) and approximately 75
warrants. The annual subscription price of The Value Line Convertibles Survey
is $625.
The Value Line Industry Review, a periodical monthly publication now
available only in electronic form, evaluates 104 industry groups for relative
performance. Providing detailed and extensive sector analysis, it is designed
to meet the needs of professional portfolio managers. The annual subscription
price of The Value Line Industry Review is $1,075.
The Total Return Service is a customized data service derived from The
Value Line Industry Review publication. It was developed to help publicly
traded companies meet the SEC's mandated executive-compensa-tion disclosure
requirements. The service consists of a line graph comparing the total return
of a public company's stock over the last five years to a published equity
market index and a published or constructed industry index.
2. Electronic Products:
Value Line Investment Survey for Windows is a powerful menu-driven software
program with fast filtering, ranking, reporting and graphing capabilities on
over 5,000 stocks, including the 1,700 stocks covered in the Company's benchmark
publication, The Value Line Investment Survey. The product was introduced to
the market during June 1996 and available during July 1996 for distribution.
Value Line Fund Analyzer and Value Line No-Load Analyzer are electronic
versions of the Mutual Fund Survey launched in the latter part of fiscal 1995.
Value Line Investment Survey for Windows 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 Portfolio Manager, a special
module that lets users create and track their own stock portfolios. An
exclusive E-page feature on the CD-ROM version allows the user to view and print
actual full-page stock reports from the respected Value Line Investment Survey
publication. In addition, weekly updates and technical support are available
through Value Line Online, the Company's proprietary Bulletin Board.
To access the 1,700 stocks covered exclusively in The Value Line Investment
Survey publication, subscribers are offered a two-month trial subscription with
monthly updates and Value Line Online weekly data for $55, or a full year
subscription for $595. This product is available on both CD-ROM and 3.5 disk.
5
A Special 5,000 Stock Edition, a powerful yet economical profes-sional tool
on CD-ROM, is available with monthly updates and Value Line Online weekly data
for $95 for a two-month trial subscription, or $995 for a full year. This
Special Edition contains full financial and business descriptions on over 5,000
stocks, Timeliness and Safety Rankings on 3,500 stocks, and 1,700 stocks with
analysts' comments and estimates found in The Value Line Investment Survey
publication.
Both versions are compatible with Windows 95 or 3.1. A system of 486 or
higher is recommended, with 8MB RAM minimum and 35MB of free hard disc space.
VALUE/SCREEN III is a data and software service for screening common
stocks. It is intended for use by investors with personal computers and is sold
primarily to retail investors. It provides extensive financial data on about
1,600 companies covered by The Value Line Investment Survey. Users can screen
on as many as 49 variables for companies' financial performance and for
investment objectives.
Value Line DataFile contains historic annual and quarterly financial
records for more than 5,400 companies in numerous industries, including air
transport, industrial services, beverage, machinery, bank, insurance and
finance, savings and loan associations, toys, and securities brokers. DataFile
is sold to the institutional market. The Company 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, The Value Line Industry Review, and custom services.
B. Investment Management.
As of April 30, 1996, the Company was the investment adviser for 16 mutual
funds registered under the Investment Company Act of l94O. 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.
6
Total net assets of the Value Line Funds at April 30, 1996, were:
(in millions)
The Value Line Fund, Inc. $ 360
The Value Line Income Fund, Inc. 148
The Value Line Special Situations Fund, Inc. 102
Value Line Leveraged Growth Investors, Inc. 382
The Value Line Cash Fund, Inc. 341
Value Line U.S. Government Securities Fund, Inc. 221
Value Line Centurion Fund, Inc. 572
The Value Line Tax Exempt Fund, Inc. 231
Value Line Convertible Fund, Inc. 74
Value Line Aggressive Income Trust 48
Value Line New York Tax Exempt Trust 38
Value Line Strategic Asset Management Trust 984
Value Line Intermediate Bond Fund, Inc. 16
Value Line Small-Cap Growth Fund, Inc. 20
Value Line Asset Allocation Fund, Inc. 60
Value Line U.S. Multinational Company Fund, Inc. 13
------
$3,610
The investment advisory contracts between each of the Value Line Funds and
the Company provide that the Company will render investment research, advice,
and supervision to the funds. These contracts must be approved annually in
accordance with statutory procedures. The Company furnishes each fund with its
investment program, subject to such fund's fundamental investment policies and
to control and review by such fund's Board of Directors or Trustees. Each
contract also provides that the Company will furnish, at its expense, various
administrative services, office space, equipment and administrative personnel
necessary for managing the affairs of the funds. Advisory fee rates vary among
the funds and may be subject to certain limitations. Each mutual fund may use
"Value Line" in its name only so long as the Company acts as its investment
adviser. The Company has agreed to waive its advisory fees payable by the Value
Line U.S. Multina-tional Company Fund, Inc. and to absorb all operating expenses
(other than brokerage commissions) until September 30, 1996.
Value Line Asset Management ("VLAM"), a division of the Company, manages
pension funds and institutional and individual portfolios by utilizing the
techniques developed for The Value Line Investment Survey. VLAM has varied
investment advisory agreements with its clients which call for payments to the
Company calculated on the basis of the market value of the securities portfolio
under management.
The Company also acts as investment adviser for the Hyperion Value Line
Equity Trust, a Canadian mutual fund, and as sub-advisor to other mutual funds.
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 and for other publishers. For the year ended April 3O, l996,
approximately 36% of Compupower's revenues were derived from services rendered
to the Company.
3. Value Line Securities, Inc.:
Value Line Securities, Inc. ("VLS") is registered as a broker-dealer under
the Securities Exchange Act of l934 and is a member of the National Association
of Securities Dealers, Inc. VLS acts as the underwriter and distributor of the
Value Line Funds. Shares of the Value Line Funds are sold to the public without
a sales charge (i.e., on a "no-load" basis), and VLS derives no revenue from
such sales. Since l986, VLS has effected listed portfolio brokerage
transactions 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. Value Line Securities also receives 12b-1
fees from certain of the Value Line Funds.
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 l,7OO common stocks contained in The Value Line Investment Survey.
The calculation of both indices is done by a firm unaffiliated with the Company.
Futures contracts based upon fluctuations in the Value Line Arithmetic Composite
are traded on the Kansas City Board of Trade, and options on the Index are
traded on the Philadelphia Stock Exchange. The Company receives fees in
connection with these activities.
E. Investments.
The Company invests in the Value Line Funds and in other marketable
securities.
F. Employees.
At April 30, 1996, the Company and its subsidiaries employed 381
8
persons.
The Company, its affiliates, and its officers, directors, and employees may
from time to time own securities which are also held in the portfolios of the
Value Line Funds or recommended in the Company's publications. The Company has
imposed rules upon itself and such persons requiring monthly reports of
securities transactions for their respective accounts and restricting trading in
various types of securities in order to avoid possible conflicts of interest.
G. Assets.
The Company's assets identifiable to each of its principal business
segments were as follows:
April 30,
1996 1995
(in thousands)
Investment Information
& Publications $ 15,902 $ 11,788
Investment Management 271,088 208,930
Corporate Assets 46,836 44,280
-------- --------
$333,826 $264,998
======== =========
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 organiza-tions and that it publishes the world's largest investment
service periodicals in terms of number of subscriptions and annual revenues.
I. Executive Officers.
The following table lists the names, ages (at June 28, 1996), and principal
occupations and employment during the past five years of the Company's Executive
Officers. All officers are elected to terms of office for one year. Except as
otherwise indicated, each of the following has held an executive position with
the companies indicated for at least five years.
9
Name Age Principal Occupation or Employment
- --------------------- --- ----------------------------------
Jean Bernhard Buttner 61 Chairman of the Board, President, and Chief
Executive Officer of the Company and AB&Co.
Chairman of the Board of each of the Value
Line Funds.
Samuel Eisenstadt 74 Senior Vice President and Research Chairman.
David T. Henigson 38 Vice President since 1992 and Treasurer since
1994; Director of Compliance and Internal
Auditor; Vice President of each of the Value
Line Funds since 1992 and Secretary and
Treasurer since 1994.
Howard A. Brecher 42 Vice President since 1996 and Secretary since
1992; Secretary and General Counsel of AB&Co.
since 1991.
Item 2. PROPERTIES.
On June 4, 1993, the Company entered into a new lease agreement for
approximately 80,000 square feet that provided for the relocation of its office
space to 220 East 42nd Street, New York, New York. The Company owns a
distribution facility of approximately 23,OOO square feet in North Bergen, New
Jersey. The primary purpose of this location is the distribution of the
Company's publication products. Compupower leases its approximately
8,OOO-square foot-office and computer facility in Secaucus, New Jersey. 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 will
consolidate into a single facility the distribution operations for the various
Company publications and the fulfillment operations of Compupower Corporation.
The remaining building capacity will provide warehouse storage, a disaster
recovery site and will provide for future business expansion. The Company
believes the capacity of these facilities is sufficient to meet the Company's
current and expected future requirements.
10
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, l996.
Part II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Registrant's Common Stock is traded in the over-the-counter market.
The approximate number of record holders of the Registrant's Common Stock at
April 3O, l996 was 1,361. 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, 1994...... 34 36 31 1/2 33 .20
October 31, 1994... 32 34 1/2 30 1/2 32 1/2 .20
January 31, 1995... 30 1/2 33 29 30 3/4 .0
April 30, 1995..... 31 33 1/4 26 3/4 29 .20
July 31, 1995...... 32 32 3/4 28 1/2 28 1/2 .20
October 31, 1995... 33 3/4 34 1/4 29 3/4 29 3/4 .20
January 31, 1996... 39 1/2 39 1/2 32 1/2 32 3/4 .20
April 30, 1996..... 39 3/8 40 1/2 32 1/2 34 1/2 .20
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,
1996 1995 1994 1993 1992
(in thousands, except per share amounts)
Revenues:
Investment
periodicals
and related
publications... $ 58,509 $ 55,912 $ 57,830 $ 56,127 $ 53,745
Investment
management
fees and services $ 26,564 $ 23,182 $ 24,220 $ 22,274 $ 20,816
Settlement of
disputed securities
transactions $ 2,054 $ 617 $ 408 $ - $ 862
Total revenues $ 87,127 $ 79,711 $ 82,458 $ 78,401 $ 75,423
Income from
operations...... $ 32,486 $29,660 $ 32,464 $ 30,667 $ 30,012
Net income........ $ 41,714 $ 23,168 $ 28,902 $ 27,723 $ 26,265
Earnings per
share........... $ 4.18 $ 2.32 $ 2.90 $ 2.78 $ 2.64
Total assets..... $333,826 $264,998 $200,321 $176,095 $152,457
Long term debt.... $ - $ - $ - $ 3,000 $ -
Cash dividends
declared per share $ .80 $ .60 $ .80 $ .60 $ .60
12
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Operating Results
Net income for the twelve months ended April 30, 1996 of $41,714,000 or
$4.18 per share was $18,546,000 or 80% higher than the prior year's net income
of $23,168,000 or $2.32 per share. Net income, sales, operating income and
income from securities transactions for the twelve months ended April 30, 1996
all set new record highs for the Company. Net earnings for the fiscal year
ended April 30, 1995 of $23,168,000 or $2.32 per share compared with net
earnings of $28,902,000 or $2.90 per share for fiscal year 1994. The decrease
in net earnings for fiscal 1995 from the fiscal 1994's level was primarily due
to a decline in Income from Securites Transactions of $7,047,000, including
losses of $4,980,000 related to the Company's strategy of realizing capital
losses which would to reduce income taxes. The $1,550,000 expended in support
of The Value Line Cash Fund during fiscal 1995 also contributed to the decrease.
Revenues of $87,127,000 for fiscal 1996 compare to revenues of $79,711,000
and $82,458,000 for fiscal year's 1995 and 1994, respectively. Subscription
revenues of $58,509,000 were 5% higher than revenues of $55,912,000 for fiscal
1995. Full term subscription levels to all products increased 23% from the
prior year's level while full term circulation increased 10% to The Value Line
Investment Survey. The increase in subscription levels was a result of
increased marketing including an advance renewal program in November 1995 that
was offered to The Value Line Investment Survey's subscribers in anticipation of
a 9% price increase that was effective February 1, 1996. The Value Line
Investment Survey - Expanded edition contributed in excess of $2,350,000 of
revenues during fiscal 1996, it's first year of circulation and revenues from
The Value Line Investment Survey increased by $2,316,000 during this same
period. These increases were partially offset by decreases in revenues from the
print version of Value Line Mutual Fund Survey. Subscription revenues of
$55,912,000 for the fiscal year ended April 30, 1995 decreased 3.3% from fiscal
1994. The decrease in publications revenues is primarily a result of the
decline in subscription levels for the Value Line Investment Survey due to the
uncertain financial market conditions that existed during the first three
quarters of fiscal 1995. Revenues derived from investment management fees and
services for the twelve months ended April 30, 1996 of $26,564,000 were
$3,382,000 or 15% higher than the level at April 30, 1995. The increase in
revenues resulted primarily from a 14% increase in the average annual net assets
under management in the Company's mutual funds. Assets in the Company's mutual
funds at April 30, 1996 increased 21% from the levels at April 30, 1995.
Investment management fees and services revenues of $23,182,000 for the fiscal
year ended April 30, 1995 decreased 4.3% from the fiscal 1994 level. The
decrease in fiscal 1995 was primarily a result of a 6.5% decline in the average
annual assets under management in the Value Line mutual funds during the fiscal
year. Mutual fund net assets under management at April 30, 1995 were
approximately equal to
13
the net assets under management at April 30, 1994. Revenues for fiscal year
1996, 1995 and 1994 include proceeds of $2,054,000, $617,000 and $408,000,
respectively, from the settlement of a disputed securities transaction.
Expenses for the twelve months ended April 30, 1996 of $54,641,000 were 9%
above the prior year's level of $50,051,000. Advertising expenses of
$15,322,000 were $573,000 or 4% above the prior year's level. Advertising
expenses for The Value Line Investment Survey increased 37% while additional
marketing expenses of $1,355,000 were also incurred in fiscal 1996 for a variety
of new products. These increases were offset by a significant reduction in
advertising expenses for the print version of the Value Line Mutual Fund Survey
during the development of a new electronic version. Salary and employee benefit
expenses of $20,892,000 for fiscal 1996 were 10% higher than the prior year's
level of $18,935,000 as a result of general salary increases, the fulfillment of
vacant staff positions and an increase in the employee profit sharing plan from
12% in fiscal 1995 to 15% in fiscal 1996. Office and administration expenses of
$10,039,000 increased 16% from the prior year's level of $8,620,000. The
increase is attributed to additional professional fees related to potential
business expansion alternatives, a lawsuit in which the Company is the
plaintiff, various tax matters and conversion fees in connection with the
upgrade of the Company's fulfillment software. Relocation expenses also
increased as a result of a decision to consolidate the Company's fulfillment,
distribution and warehouse operations in the recently acquired facility. These
increases were partially offset by decreases resulting from amortization of a
deferred free rent credit and a decrease in software amortization related to a
decision during fiscal 1995 to replace Compupower's fulfillment software.
Expenses for the fiscal year ended April 30, 1995, exclusive of the
non-recurring expense of $1,550,000 were $47,884,000, a decrease of $1,702,000
or 3% over fiscal 1994's level of $49,586,000. Advertising expenses of
$14,749,000 for the twelve months ended April 30, 1995 decreased $3,596,000 from
expenses of $18,345,000 for the comparable period in fiscal 1994. The decrease
in advertising expenses resulted from management's decision to effectively
market products during improved financial market conditions. Salaries and
employee benefit expenses of $18,935,000 for the twelve months of fiscal 1995
were $1,662,000 above the prior level of $17,273,000 primarily as a result of
the additional staff in support of the Mutual Fund Survey and the cost of
replacement staff and recruiting fees at Compupower and the Mutual Fund
management and research divisions. Office and administration expenses of
$8,003,000 increased $838,000 or 12% from the prior year's level as a result of
a $445,000 increase in depreciation and amortization expenses affiliated with
the new office facility and the computer hardware upgrade, $315,000 of
accelerated amortization resulting from a decision to upgrade the fulfillment
software at Compupower and an increase in professional fees. These increases
were offset by a reduction in rent expenses of $767,000 or 34%.
Income from securities transactions for fiscal year 1996 of $35,898,000
increased $27,239,000 from the prior year's level of $8,659,000. The increase
in capital gains produced by the Company's trading portfolios of $12,440,000,
and from sales of equity and fixed income share holdings in the Value Line
mutual funds of $8,888,000, in
14
connection with our annual portfolio realignment were the major contributors to
the additional income from securities transactions. Capital gains distributions
from the Company's mutual funds also increased $4,710,000 during fiscal 1996.
Income from securities transactions of $8,659,000 for the fiscal year ended
April 30, 1995 decreased by $7,047,000 or 45% from $15,706,000 at April 30,
1994. In addition to a $764,000 decrease in capital gains produced by the
Hedge, Tilt and Stem portfolios, the Company also incurred losses of $4,980,000
in connection with tax planning matters. Sales of mutual fund shares,
unrelated to the tax planning matters, have produced $326,000 of capital losses
during the 1995 fiscal year as compared to a $101,000 gain in fiscal year 1994.
The decline was largely the result of a decision to liquidate an investment in
one of the Company's mutual funds during the latter part of fiscal 1995 in order
to redeploy these assets in other investment vehicles.
Liquidity and Capital Resources
The Company has liquid resources which are used in its business totaling
$266,534,000 at April 30, 1996. In addition to $88,799,000 in working capital,
the Company has marketable securities with a market value of $177,735,000, that,
although classified as non-current assets are also readily marketable as the
need for capital arises. The Company has entered into agreements to sell and
repurchase U.S. Government Agency debt securities with a market value of
$39,681,000 at April 30, 1996. The repurchase obligations of $36,994,000 have
been entered into on a short term basis. The securities, currently available
for sale, mature during calendar year 1997 and are readily marketable should
management decide to liquidate the Company's investments and related
obligations. During June 1996, the Company sold approximately $10,000,000 of
these U.S. Government Agency securities and satisfied the related $9,100,000
repurchase obligation. The Company's cash position, including its investment in
The Value Line Cash Fund, has decreased $13,274,000 at April 30, 1996, primarily
as a result of the purchase of additional equity and fixed income shares in the
Value Line Mutual Funds and the purchase of a distribution facility during
January 1996.
Management believes that the Company's cash and other liquid asset
resources used in its business together with future cash flows from operations
will be sufficient to finance current and forecasted operations.
Management anticipates no significant borrowing requirements during fiscal
1997 other than the short term refinancing of the remaining repurchase
obligations.
15
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 lO-K:
Page Numbers
Reports of independent accountants 23
Consolidated balance sheets--April 3O, 1996 and 1995 27
Consolidated statements of income and retained earnings
--years ended April 3O, 1996, 1995 and 1994 28
Consolidated statements of cash flows
--years ended April 3O, 1996, 1995 and 1994 29
Notes to the consolidated financial statements 30
Supplementary schedules 42
Quarterly Results (Unaudited):
(in thousands, except per share amounts)
Income Earnings
Total From Net Per
Revenues Operations Income Share
1996, by Quarter -
First............ $20,028 $ 7,549 $10,224 $1.02
Second........... 22,811 10,134 8,250 .83
Third............ 21,689 7,512 14,291 1.43
Fourth........... 22,599 7,291 8,949 .90
Total $87,127 $32,486 $41,714 $4.18
1995, by Quarter -
First............ $20,214 $ 5,090 $ 3,428 $ .34
Second........... 20,423 7,985 6,961 .70
Third............ 19,425 7,223 7,011 .70
Fourth........... 19,649 9,362 5,768 .58
Total $79,711 $29,660 $23,168 $2.32
1994, by Quarter -
First............ $19,615 $ 9,149 $ 8,370 $ .84
Second........... 20,079 8,712 8,139 .82
Third............ 21,636 7,503 8,992 .90
Fourth........... 21,128 7,100 3,401 .34
Total $82,458 $32,464 $28,902 $2.90
16
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 is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, l996, except that the information
pertaining to Executive Officers is set forth in Part I herein under the caption
"Executive Officers of the Registrant."
Item 11. EXECUTIVE COMPENSATION.
Information required by this item is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, 1996.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information required by this item is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, 1996.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information required by this item is incorporated herein by reference to
the annual proxy statement to be filed with the Securities and Exchange
Commission within 12O days after April 3O, 1996.
17
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.
All other Schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto.
3. Exhibits
3.1 Articles of Incorporation of the Company, as amended
through April 17, 1983 are incorporated by reference to
the Registration Statement - Form S-1 of Value Line,
Inc. Part II, Item 16.(a) 3.1 filed with the Securities
and Exchange Commission on April 7, 1983.
3.2 Certificate of Amendment of Certificate of
Incorporation dated October 24, 1989.
10.8 Form of tax allocation arrangement between the Company
and AB&Co. incorporated by reference to the
Registration Statement - Form S-1 of Value Line, Inc.
Part II, Item 16.(a) 10.8 filed with the Securities and
Exchange Commission on April 7, 1983.
10.9 Form of Servicing and Reimbursement Agreement between
the Company and AB&Co., dated as of November 1, 1982
incorporated by reference to the Registration Statement
- Form S-1 of Value Line, Inc. Part II, Item 16.(a)
10.9 filed with the Securities and Exchange Commission
on April 7, 1983.
10.10 Value Line, Inc. Profit Sharing and Savings Plan as
amended and restated effective May 1, 1989, including
amendments through April 30, 1995.
10.13 Lease for the Company's premises at 220 East 42nd
Street, New York, N.Y. incorporated by reference to the
Annual Report on Form 10-K for the year ended April 30,
1994.
21 Subsidiaries of the Registrant.
18
(b) Reports on Form 8-K.
A Form 8-K was filed on March 26, 1996 indicating the termination of
Price Waterhouse LLP (PW) as the Company's independent accountants on
March 25, 1996. On that same date, the Company engaged Horowitz &
Ullmann as its new independent accountants. The termination of the
engagement of PW and the selection of Horowitz & Ullmann were recom-
mended by the Audit Committee of the Board of Directors and approved
by the entire Board of Directors.
(c) Exhibits.
Subsidiaries of the Registrant, Exhibit 21 attached.
19
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 1O-K for the
fiscal year ended April 3O, 1996, 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
Principal Executive Officer
By: /s/ Stephen R. Anastasio
----------------------------------
Stephen R. Anastasio
Principal Financial
and Accounting Officer
Dated:
20
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 1O-K for the
fiscal year ended April 3O, 1996, to be signed on its behalf by the undersigned
as Directors of the Registrant.
s/Jean Bernhard Buttner s/William S. Kanaga
Jean Bernhard Buttner William S. Kanaga
s/Harold Bernard, Jr. s/Howard A. Brecher
Harold Bernard, Jr. Howard A. Brecher
s/W. Scott Thomas s/Samuel Eisenstadt
W. Scott Thomas Samuel Eisenstadt
s/David T. Henigson
David T. Henigson
Dated:
21
LETTERHEAD
Report of Independent Accountants
To the Board of Directors
and Shareholders of
Value Line, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statement of income and retained earnings and of cash flows present
fairly, in all material respects, the financial position of Value Line, Inc.
and its subsidiaries at April 30, 1996 and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. The financial statements of Value
Line, Inc., and its subsidiaries as of April 30, 1995 and 1994 were audited by
other auditors whose report dated June 26, 1995 expressed an unqualified opinion
on those statements.
We conducted our audit of these statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for the opinion expressed above.
Our audits of the consolidated financial statements referred to above also
included an audit of the Financial Statement Schedules listed in Item 14 (a)
of this Form 10-K. In our opinion, these Financial Statement Schedules
present fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated statements.
/s/ Horowitz and Ullman, P.C.
HOROWITZ & ULLMANN, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
New York, NY
June 28, 1996
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Value Line, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income and retained earnings and of cash flows
present fairly, in all material respects, the financial position of Value
Line, Inc. and its subsidiaries at April 30, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended April 30, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
Our audits of the consolidated financial statements referred to above also
included an audit of the Financial Statement Schedules listed in Item 14(a) of
this Form 10-K. In our opinion, these Financial Statement Schedules present
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/Price Waterhouse LLP
PRICE WATERHOUSE LLP
New York, New York
June 26, 1995
[LETTERHEAD]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the registration
statement on Form S-8 (No. 2-90593) of our report dated June 28, 1996 relating
to the consolidated financial statements of Value Line, Inc. and subsidiaries
for the year ended April 30, 1996 which appears on page 23 of this Form 10-K.
We also consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appear in this Form 10-K.
/s/Horowitz & Ullmann, P.C.
HOROWITZ & ULLMANN, P.C.
Certified Public Accountants
New York, NY
July 3, 1996
25
Value Line, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)
Apr. 30, Apr. 30,
Assets 1996 1995
-------- --------
Current Assets:
Cash and cash equivalents (including short term
investments of $31,116 and $43,608, respectively) $31,752 $45,026
Trading securities 64,314 48,187
Short term securities available for sale 39,681 39,099
Accounts receivable, net of allowance for doubtful
accounts of $528 and $350, respectively 2,997 3,348
Receivable from affiliates 1,965 1,641
Prepaid expenses and other current assets 2,872 1,416
-------- --------
Total current assets 143,581 138,717
Long term securities available for sale 177,735 118,013
Property and equipment, net 12,120 7,922
Goodwill 390 346
-------- --------
Total assets $333,826 $264,998
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities $8,433 $6,358
Securities sold under agreements to repurchase 36,994 36,994
Accrued salaries 1,808 1,466
Dividends and interest payable 2,058 534
Accrued taxes payable 5,489 3,054
-------- --------
Total current liabilities 54,782 48,406
Unearned revenue 42,993 36,789
Deferred charges 1,530 1,808
Deferred income taxes 13,255 4,806
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 944 940
Retained earnings 196,834 163,101
Treasury stock, at cost (23,025 shares on April 30,
1996, and 24,650 on April 30, 1995) (443) (474)
Unrealized gains on securities available for sale,
net of taxes 22,931 8,622
-------- --------
Total shareholders' equity 221,266 173,189
-------- --------
Total liabilities and shareholders' equity $333,826 $264,998
======== ========
The accompanying notes are an integral part of these financial statements.
26
Value Line, Inc.
Consolidated Statements of Income and Retained Earnings
(in thousands, except per share amounts)
Years ended April 30,
1996 1995 1994
-------- -------- --------
Revenues:
Investment periodicals and related publications $58,509 $55,912 $57,830
Investment management fees & services 26,564 23,182 24,220
Settlement of disputed securities transactions 2,054 617 408
-------- -------- --------
Total revenues 87,127 79,711 82,458
-------- -------- --------
Expenses:
Advertising and promotion 15,322 14,749 18,345
Salaries and employee benefits 20,892 18,935 17,273
Printing, paper and distribution 8,388 6,197 6,803
Office and administration 10,039 8,620 7,573
Mutual fund support expenses - 1,550 -
-------- -------- --------
Total expenses 54,641 50,051 49,994
-------- -------- --------
Income from operations 32,486 29,660 32,464
Income from securities transactions, net 35,898 8,659 15,706
-------- -------- --------
Income before income taxes 68,384 38,319 48,170
Provision for income taxes 26,670 15,151 19,268
-------- -------- --------
Net income $41,714 $23,168 $28,902
Retained earnings, at beginning of year 163,101 145,918 124,995
Dividends declared (7,981) (5,985) (7,979)
-------- -------- --------
Retained earnings, at end of year $196,834 $163,101 $145,918
======== ======== ========
Earnings per share $4.18 $2.32 $2.90
======== ======== ========
The accompanying notes are an integral part of these financial statements.
27
Value Line, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Years ended April 30,
1996 1995 1994
-------- -------- --------
Cash flows from operating activities:
Net income $41,714 $23,168 $28,902
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,288 1,293 866
Accretion of discount (582) (484) ---
(Gains)/losses on sale of trading securities
and securities held for sale (11,631) 4,077 (6,851)
Unrealized (gains)/losses on trading securities (9,030) (3,445) 1,060
Loss on write-down of equipment (166) 166 ---
Deferred income taxes 4,205 653 (510)
Changes in assets and liabilities:
Increase/(decrease) in unearned revenue 6,204 1,260 (56)
(Increase)/decrease in deferred charges (278) 1,048 1,121
Increase/(decrease) in accounts payable
and accrued expenses 727 (1,676) 642
Increase in accrued salaries 342 213 77
Increase/(decrease) in interest payable (471) 534 (10)
Increase/(decrease) in accrued taxes payable (1,027) 955 (366)
(Increase)/decrease in prepaid expenses and
other current assets (1,456) 388 (529)
(Increase)/decrease in accounts receivable 555 (735) (1,907)
(Increase)/decrease in receivable from affiliates (324) (190) 32
-------- -------- --------
Total adjustments (11,644) 4,057 (6,431)
-------- -------- --------
Net cash provided by operations 30,070 27,225 22,471
-------- -------- --------
Cash flows from investing activities:
Proceeds from sales of securities 18,085 46,945 6,218
Purchase of securities (52,211) (35,374) (30,382)
Proceeds from sale of trading securities 64,333 74,964 90,761
Purchase of trading securities (61,574) (70,708) (77,908)
Acquisition of property, and equipment, net (6,026) (1,376) (5,838)
-------- -------- --------
Net cash provided by/(used in) investing activities (37,393) 14,451 (17,149)
-------- -------- --------
Cash flows from financing activities:
Proceeds from sale of treasury stock 35 --- 72
Dividends paid (5,986) (7,980) (7,480)
Loan repayment --- (3,000) ---
-------- -------- --------
Net cash (used in) financing activities (5,951) (10,980) (7,408)
-------- -------- --------
Net increase/(decrease) in cash and cash equivalents (13,274) 30,696 (2,086)
Cash and cash equivalents at beginning of period 45,026 14,330 16,416
-------- -------- --------
Cash and cash equivalents at end of period $31,752 $45,026 $14,330
======== ======== ========
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 80% of the issued and outstanding common stock of the
Company.
Principles of consolidation: The consolidated financial statements include
the accounts of the Company and all of its subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Revenue recognition: Subscription revenues are recognized ratably over the
terms of the subscriptions which range from three months to three years.
Accordingly, the amount of subscription fees to be earned by servicing
subscriptions after the date of the balance sheet is shown as unearned revenue.
The unearned revenue shown on the balance sheet is a noncurrent deferred credit.
This classification recognizes that the fulfillment of this
commitment will require the use of significantly less current assets than the
amount of the unearned revenues and, accordingly, combining it with current
liabilities would significantly understate the liquidity position of the
Company.
Investment management fees are recorded as revenue as the related services are
performed.
Securities Sold Under Agreements to Repurchase:
The Company has entered into agreements to sell and repurchase U.S. Government
Agency debt securities. The securities are recorded at market value and are
included in "Short-term securities available for sale" on the Consolidated
Balance Sheets.
Valuation of Securities:
Effective May 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115"). As a result of adopting SFAS 115, the
Company changed the method by which it values its long-term securities
portfolio, which consists of shares of the Value Line Mutual Funds, and
short-term securities portfolio, which the Company classifies as available for
sale, from the lower of aggregate cost or market to market value.Unrealized
gains and losses on these securities are reported, net of applicable taxes, as
a separate component of Shareholders' Equity. Realized gains and losses on sales
of the securities are recorded in earnings on trade date and are determined on
the identified cost method. SFAS 115 cannot be retroactively applied to the
financial statements of periods prior to May 1, 1994.
Trading securities, which consist of securities held by Value Line Securities,
Inc., the Company's broker-dealer subsidiary, and certain adjustable rate
preferred shares held by the Company, are valued at market with unrealized gains
and losses included in earnings.
Goodwill: Goodwill represents the excess of the purchase price over the fair
value of net assets acquired and is being amortized over a period of 40 years.
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, 1996 and 1995, cash equivalents included
$25,238,000 and $41,503,000, respectively, invested in the Value Line money
market funds.
Reclassification: Certain prior year amounts disclosed in the Consolidated
Financial Statements and Notes thereto have been reclassified to conform to
current year presentation.
Note 2-Supplementary Cash Flow Information:
Cash payments for income taxes were $24,056,000, $12,974,000 and $20,171,000,
in 1996, 1995 and 1994, respectively. Interest payments of $2,618,000,
$1,315,000 and $183,000 were made in 1996, 1995, and 1994, respectively.
Note 3-Related Party Transactions:
The Company acts as investment adviser and manager for sixteen open-end
investment companies known as the Value Line Family of Funds (see Note 4). The
Company earns investment management fees calculated based upon the average daily
net asset values of the respective funds. The Company also earns brokerage
commission income, net of clearing fees, on securities transactions executed by
Value Line Securities, Inc. on behalf of the funds and other advisory clients of
the Company that are cleared on a fully disclosed basis through non-affiliated
brokers. For the years ended April 30, 1996, 1995 and 1994, investment
management fees and brokerage commission income, net of clearing fees, amounted
to $19,686,000, $17,782,000 and $19,098,000, respectively. The related
receivables from the funds for management advisory fees included in Receivable
from affiliates in the Consolidated Balance Sheets were $1,631,000 and
$1,352,000, at April 30, 1995 and 1994, respectively.
For the years ended April 30, 1996, 1995 and 1994, the Company was reimbursed
$438,000, $414,000 and $454,000, respectively, for payments it made on behalf of
and services it provided to the Parent. At April 30, 1996 and 1995, Receivable
from affiliates included a receivable from the Parent of $89,000 and $257,000,
respectively. For the years ended April 30, 1996, 1995 and 1994, the Company
made federal income tax payments to the Parent amounting to $19,952,000,
$10,225,000 and $16,020,000, respectively. At April 30, 1996 and 1995, prepaid
expenses and other current assets included a receivable of $563,000 and
accrued taxes payable included a payable of $438,000 to the Parent,
respectively. These data are in accordance with the tax sharing arrangement
described in Note 6.
Note 4-Investments:
Trading Securities:
Securities held by Value Line Securities, Inc. had an aggregate cost of
$48,066,000 and $40,767,000 and a market value of $64,314,000 and $48,187,000 at
April 30, 1996 and April 30, 1995, respectively.
Short-Term Securities Available for Sale:
Short-term securities available for sale consists of Value Line, Inc.'s
holdings in the following securities:
Federal National Mortgage Association (FNMA), floating rate notes due
August 5, 1997; par value $30,325,000.
Federal Farm Credit Bank (FFCB), floating rate notes due February 12,
1997; par value $10,000,000.
The market value of the Company's holdings in the FNMA and FFCB, which
approximates cost, at April 30, 1996 was $29,831,000 and $9,850,000 and at April
30, 1995 was $29,438,000 and $9,661,000, respectively. These notes were
purchased at a discount from their respective face values. The accretion of this
discount has been included as an addition to the cost of the securities and
reflected as interest income in the Consolidated Statements of Income and
Retained Earnings.
Long-Term Securities Available for Sale:
The aggregate cost of the long-term securities was $142,456,000 and
$104,749,000 and the market value was $177,734,000 and $118,013,000 at April 30,
1996 and April 30, 1995, respectively. The change in gross unrealized gains on
these securities of $22,014,000 and $13,264,000, net of the change in deferred
taxes of $7,705,000 and $4,642,000, were included in shareholders' equity at
April 30, 1996 and 1995, respectively. Realized gains from the sales of these
securities were $3,581,000 and realized losses were $5,306,000 during fiscal
years 1996 and 1995, respectively. The proceeds received from sales of these
securities during the fiscal year ended April 30, 1996 were $18,085,000 and
$46,934,000 during the fiscal year ended April 30, 1995, respectively. At April
30, 1994, these securities were recorded at the lower of aggregate cost or
market.
For the years ended April 30, 1996, 1995 and 1994, Income from securities
transactions, net consisted of $5,275,000, $4,938,000 and $5,094,000 of dividend
income; $20,814,000, $396,000 and $11,789,000 of net realized capital gains;
$2,758,000, $1,912,000 and $56,000 of interest income; and $2,148,000,
$1,865,000 and $183,000 of related interest expense, respectively. Net income
from securities transactions also included $9,197,000 and $3,279,000 of
unrealized gains for the year's ended April 30, 1996 and 1995, respectively and
$1,060,000 of unrealized losses on marketable securities for the year ended
April 30, 1994.
Note 5-Property and Equipment:
Property and equipment are carried at cost. Depreciation and amortization are
provided using the straight-line method over the estimated useful lives of the
assets, or in the case of leasehold improvements, over the remaining terms of
the leases. For income tax purposes, depreciation of furniture and equipment is
computed using accelerated methods and buildings and leasehold improvements are
depreciated over prescribed, extended tax lives.
Property and equipment consisted of the following: April 30,
1996 1995
-------------------
(in thousands)
Land $785 $59
Building and leasehold improvements 6,695 3,442
Furniture and equipment 11,020 9,789
-------------------
18,500 13,290
Accumulated depreciation and amortization (6,380) (5,368)
-------------------
$12,120 $7,922
-------------------
-------------------
During January 1996, the Company purchased for cash an approximately 85,000
square foot warehouse facility for $4,100,000 under a newly formed subsidiary,
Value Line Distribution Center, Inc. The new facility will house the
distribution operations for the various Company publications and the fulfillment
operations of the Compupower Corporation. The remaining building capacity will
provide warehouse storage, a disaster recovery site and will provide for future
business expansion.
Note 6-Federal, State and Local Income Taxes:
The Company computes its tax in accordance with the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".
The provision for income taxes includes the following:
Years ended April 30,
1996 1995 1994
------------------------------------
(in thousands)
Current:
Federal $18,612 $10,733 $15,676
State and local 3,852 3,765 4,102
------------------------------------
22,464 14,498 19,778
Deferred:
Federal 4,034 795 (523)
State and local 172 (142) 13
------------------------------------
4,206 653 (510)
------------------------------------
$26,670 $15,151 $19,268
------------------------------------
Deferred taxes are provided for temporary differences between the financial
reporting basis and the tax basis of the Company's assets and liabilities. The
tax effect of temporary differences giving rise to the Company's deferred tax
(liability)/asset are as follows:
Years ended April 30,
1996 1995 1994
----------------------------------
(in thousands)
Unrealized gains on securities
held for sale ($12,347) ($4,642) -
Unrealized gains on trading securities (5,661) (2,489) (1,279)
Relocation reserve 220 263 675
Depreciation (572) (363) (393)
Deferred charges 959 770 267
Accretion of securities under
repurchase agreements (319) - -
Other, net 42 694 258
-----------------------------------
($17,678) ($5,767) ($472)
-----------------------------------
-----------------------------------
Included in accrued taxes payable in current liabilities in the Consolidated
Balance Sheets are deferred federal tax liabilities of $4,664,000 and $1,373,000
at April 30, 1996 and 1995, respectively. Also included in accrued taxes payable
are deferred state and local tax benefits of $241,000 and $413,000 at April 30,
1996 and 1995, respectively.
The provision for income taxes differs from the amount of income tax
determined by applying the applicable U.S. statutory income tax rate to pretax
income as a result of the following:
Years ended April 30,
1996 1995 1994
----------------------------
(in thousands)
Tax expense at the U.S. statutory rate $24,016 $13,458 $16,917
Increase (decrease) in tax expense from:
State and local income taxes, net of
federal income tax benefit 2,611 2,351 2,670
Effect of tax exempt income and dividend
deductions (586) (684) (768)
Other, net 629 26 449
------------------------------
$26,670 $15,151 $19,268
------------------------------
------------------------------
The Company is included in the consolidated federal income tax return of the
Parent. The Company has a tax sharing arrangement which requires it to make tax
payments to the Parent equal to the Company's liability as if it filed a
separate return.
Note 7-Employees' Profit Sharing and Savings Plan:
Substantially all employees of the Company and its subsidiaries are members of
the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan"). In general,
this is a qualified, contributory plan which provides for a discretionary annual
Company contribution which is determined by a formula based upon the salaries of
eligible employees and the amount of consolidated net operating income as
defined in the Plan. Plan expense, included in salaries and employee benefits
in the Consolidated Statements of Income and Retained Earnings, for the years
ended April 30, 1996, 1995 and 1994 was $1,331,000, $968,000 and $1,470,000,
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, 1996,
is as follows:
Number of Option
Shares Prices
--------- ----------
Outstanding at May 1, 1993 10,200 $17.00 to $29.75
Granted -
Exercised (3,950) $17.00 to $20.00
Cancelled -
----------
Outstanding at April 30, 1994 6,250 $17.50 to $29.75
Granted -
Exercised -
Cancelled -
----------
Outstanding at April 30, 1995 6,250 17.50 to $29.75
Granted -
Exercised (1,625) $17.50 to $29.75
Cancelled -
---------
Outstanding at April 30, 1996 4,625 17.50 to $29.75
---------
---------
Options outstanding at April 30, 1996 expire at various dates through March
2003. At April 30, 1996, 3,375 of the outstanding options were exercisable. Of
the common stock held in treasury at April 30, 1995, 4,625 shares were held for
exercise of stock options.
Note 9-Treasury Stock:
Treasury stock, at cost, for the three years ended April 30, 1996, consists of
the following:
Shares Amount
-------- -------------
(in thousands)
Balance May 1, 1993 28,600 $550
Exercise of incentive stock options (3,950) (76)
-------- ------------
Balance April 30, 1994 24,650 474
Exercise of incentive stock options - -
-------- ------------
Balance April 30, 1995 24,650 474
Exercise of incentive stock options (1,625) (31)
-------- ------------
Balance April 30, 1996 23,025 $443
-------- ------------
-------- ------------
The Company's Board of Directors authorized the purchase of up to 1,000,000
shares of the Company's common stock from time to time in negotiated
transactions.
Note 10-Securities Sold under Agreements to Repurchase:
On June 28, 1994, the Company entered into short-term agreements to repurchase
certain securities sold. These agreements were entered into to repurchase the
Federal National Mortgage Association Floating Rate Notes due August 5, 1997
(FNMA), par value $30,325,000, and Federal Farm Credit Bank Floating Rate Notes
due February 12, 1997 (FFCB), par value $10,000,000, stated in Note 4. The
outstanding balance of the obligations under the repurchase agreements in the
aggregate amount of $36,994,000 accrue interest at a stated annual interest rate
of 5.3% and mature on May 6, 1996 ($27,899,000) with respect to the
FNMA and May 12, 1996 ($9,095,000) for the obligation to repurchase the FFCB
securities. During June 1996, the Company sold the FFCB securities and satisfied
its obligation under the repurchase agreement. The Company intends to refinance
the FNMA obligation on a short term basis.
Note 11-Lease Commitments:
On June 4, 1993, the Company entered into a 15 year lease agreement that
provides new primary office space, replacing the previous lease that expired
during the second quarter of fiscal year 1994. The lease includes free rental
periods as well as scheduled base rent escalations over the term of the lease.
The total amount of the base rent payments is being charged to expense on the
straight-line method over the term of the lease. The Company has recorded a
Deferred charge on its Consolidated Balance Sheets to reflect the
excess of annual rental expense over cash payments since inception of the lease.
Future minimum payments, exclusive of forecasted increases in real estate
taxes and wage escalations, under operating leases for office space, with
remaining terms of one year or more, are as follows:
Year ended April 30: (in thousands)
1997 $1,536
1998 1,536
1999 1,784
2000 1,827
2001 1,827
Thereafter 13,195
---------
$21,705
Rental expense for the years ended April 30, 1996, 1995 and 1994 under
operating leases covering office space was $1,402,000, $1,481,000 and $2,248,000
respectively.
Note 12-Business Segments:
The Company operates in two business segments: Investment Periodicals and
related Publications, and Investment Management. Identifiable assets consisted
of:
April 30,
1996 1995
---------------------------------
Identifiable assets: (in thousands)
Investment periodicals and
related publications $15,902 $11,788
Investment management 271,088 208,930
Corporate assets 46,836 44,280
--------- ----------
Total $333,826 $264,998
---------- ----------
---------- ----------
Revenues and income from operations were as follows:
Years ended April 30,
1996 1995 1994
------------------------------
Revenues: (in thousands)
Investment periodicals and
related publications $58,649 $56,041 $58,005
Intersegment revenues (140) (129) (175)
---------------------------------
58,509 55,912 57,830
Investment management 26,564 23,182 24,220
Settlement of disputed securities trans. 2,054 617 408
---------------------------------
Consolidated revenues $87,127 $79,711 $82,458
Income from operations:
Investment periodicals and
related publications $15,492 $15,396 $17,285
Investment management 14,940 13,647 14,771
Settlement of disputed securities trans. 2,054 617 408
--------------------------------
Consolidated income from operations $32,486 $29,660 $32,464
--------------------------------
--------------------------------
Note 13-Net Capital:
The Company's wholly owned subsidiary, Value Line Securities, Inc. is subject to
the net capital provisions of Rule 15c3-1 under the Securities Exchange Act of
1934, which requires the maintenance of minimum net capital of $100,000 and
requires that aggregate indebtedness, as defined, shall not exceed fifteen times
net capital, as defined. Additionally, dividends may only be declared if
aggregate indebtedness is less than twelve times net capital.
At April 30, 1996, Value Line Securities', Inc. net capital, as defined, of
$50,216,022 exceeded required net capital by $49,241,172 and the ratio of
aggregate indebtedness to net capital was .29 to 1.
Note 14-Financial Instruments with Off-Balance-Sheet Risk and
Concentration of Credit Risk:
The Company executes, as agent, securities transactions on behalf of the Value
Line mutual funds. If either the mutual fund or a counterparty fail to perform,
the Company may be required to discharge the obligations of the nonperforming
party. In such circumstances, the Company may sustain a loss if the market
value of the security is different from the contract value of the transaction.
In the normal course of business, the Company enters into contractual
commitments, principally financial futures contracts for securities indices.
Financial futures contracts provide for the delayed delivery of financial
instruments for which the seller agrees to make delivery at a specified future
date, at a specified price or yield. The contract or notional amount of these
contracts reflects the extent of involvement the Company has in these contracts.
At April 30, 1996, the underlying notional value of such commitments was
$11,787,300. Risk arises from the potential inability of counterparties
to meet the terms of their contracts and from movements in securities values.
The Company limits its credit risk associated with such instruments by entering
exclusively into exchange traded futures contracts.
No single customer accounted for a significant portion of the Company's sales
in 1996, 1995 or 1994, nor accounts receivable for 1996 or 1995.
Note 15-Estimated Fair Value of Financial and Derivative Instruments:
Statement of Accounting Standards No. 119, "Disclosure About Derivative
Financial Instruments and Fair Value of Financial Instruments," requires
disclosure of information regarding derivative instruments, which include
financial index futures contracts.
Derivative instruments held for trading purposes are reflected at fair value
at April 30, 1996. The fair value and the average fair value of derivative
instruments at April 30, 1996 and for the year then ended consists of
liabilities of $128,600 and $138,957, respectively.
Net trading gains related to equity securities aggregated $18,622,301 for the
year ended April 30, 1996. Net trading losses related to derivative financial
instruments amounted to $1,525,168 for the year ended April 30, 1996.
Note 16-Mutual Fund Support Expenses:
On June 28, 1994, the Company purchased, as part of its investment management
operations for which it receives fee income, U.S. Government Agency notes with a
market value as of that date of $38,615,000 from the Value Line Cash Fund, for
which it is the investment adviser. In order to maintain a $1.00 per share net
asset value, as part of the same transaction, the Company reimbursed the Value
Line Cash Fund $1,550,000 for losses the Fund incurred on the sale which the
Company may recoup in the future.
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
4,000 AAR CORP $82,198 $81,500
2,600 ABR INFORMATION SVCS INC 123,955 162,500
3,000 ABT BLDG PRODS CORP 63,750 61,500
4,000 ACXIOM CORP 113,000 110,000
4,000 ADAC LABS 56,700 65,500
2,600 ADAPTEC INC 154,375 149,500
5,050 ADVANTA CORP 125,408 282,169
5,500 AIR EXPRESS INTL CORP 105,875 154,000
2,000 ALLIED GROUP INC 76,000 71,750
3,000 ALLIED PRODS CORP DEL 47,430 79,125
8,400 ALLIED SIGNAL INC 357,932 488,250
1,800 ALLSTATE CORP 70,254 69,975
10,200 AMERICAN BANKERS INS GROUP INC 291,925 402,900
6,100 AMERICAN EXPRESS CO 234,054 295,850
4,200 AMERICAN INTL GROUP INC 226,639 383,775
6,000 AMERICAN TRAVELLERS CORP 120,000 117,000
7,100 AMGEN INC 341,700 408,250
5,200 APTARGROUP INC 192,479 195,650
6,100 AUSPEX SYS INC 78,538 118,187
5,000 AUTOMATIC DATA PROCESSING INC 140,813 194,375
2,000 AVERY DENNISON CORP 107,536 114,000
13,100 AVONDALE INDS INC 182,200 250,537
10,000 BAKER HUGHES INC 269,170 317,500
11,600 BALLY ENTERTAINMENT GROUP 109,921 242,150
5,000 BECTON DICKINSON + CO 270,311 403,125
5,000 BED BATH + BEYOND INC 179,125 295,312
4,000 BEL FUSE INC 64,700 74,500
10,000 BENTON OIL + GAS CO 147,000 175,000
8,000 BLOUNT INTL INC 165,653 248,000
3,000 BMC SOFTWARE INC 160,000 182,625
5,900 BOSTON SCIENTIFIC CORP 167,308 254,437
6,600 CABOT CORP 151,337 176,550
10,000 CALENERGY INC 251,748 260,000
300 CALLAWAY GOLF CO 7,359 8,025
3,600 CAMPBELL SOUP CO 147,583 225,000
5,000 CARDINAL HEALTH INC 288,425 313,750
4,000 CARNIVAL CORP 113,740 116,000
2,400 CASCADE COMMUNICATIONS CORP 142,280 240,600
5,900 CASEYS GEN STORES INC 138,827 127,219
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
11,800 CATO CORP NEW 109,150 112,100
24,300 CENTERIOR ENERGY CORP 271,067 167,062
4,000 CERIDIAN CORP 131,120 191,000
3,000 CHESAPEAKE ENERGY CORP 128,262 212,250
4,000 CHRONIMED INC 82,200 99,500
5,200 CINCINNATI BELL INC 127,802 256,100
4,200 CNA FINL CORP 409,101 408,450
400 COASTAL CORP 11,412 15,850
6,500 COCA COLA CO 253,898 529,750
2,000 COGNOS INC 115,600 135,500
6,000 COHERENT INC 102,750 321,750
12,100 COMPUTER ASSOC INTL INC 578,892 887,837
6,600 COMPUTER DATA SYS INC 95,743 117,150
2,000 COMPUTER SCIENCES CORP 80,165 148,000
6,150 CONMED CORP 100,721 182,962
8,600 CONSECO INC 277,146 313,900
4,800 CRANE CO 167,388 199,200
1,800 CSX CORP 93,033 92,250
4,000 CTS CORP 106,782 167,000
7,000 CURATIVE TECHNOLOGIES INC 138,475 156,625
23,800 DANAHER CORP 554,790 937,125
5,000 DANKA BUS SYS 217,375 240,000
7,000 DATA GEN CORP 89,470 107,625
2,200 DEERE + CO 60,064 85,525
18,000 DIGITAL SYS INTL INC 270,402 355,500
10,700 DIONEX CORP 248,275 391,888
1,600 DISNEY WALT CO 88,048 99,200
9,000 DOVER CORP 292,195 463,500
3,300 DU PONT E I DE NEMOURS + CO 192,174 265,237
4,000 DURIRON INC 101,000 105,000
8,500 DYNATECH CORP 177,000 218,875
6,000 EAGLE HARDWARE AND GRODEN 68,250 60,750
8,000 ECKERD CORP DEL 330,896 382,000
17,000 EQUIFAX INC 279,123 414,740
10,800 FEDERAL NATL MTG ASSN 296,744 330,750
6,600 FIFTH THIRD BANCORP 233,125 364,650
3,000 FINOVA GROUP INC 137,055 166,500
2,900 FISERV INC 71,150 88,450
7,800 FLUOR CORP 398,859 515,775
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
4,000 FOSTER WHEELER CORP 165,908 185,000
14,500 GAP INC 364,123 436,812
12,000 GENERAL COMMUNICATION INC 96,228 93,000
6,000 GENERAL MTRS CORP 258,580 325,500
7,000 GENERAL NUTRITION COS INC 132,938 136,500
1,500 GENETICS INST INC 108,750 106,500
12,000 GENRAD INC 152,720 181,500
10,800 GLEASON CORP 437,724 425,250
2,200 GLENAYRE TECHNOLOGIES INC 102,850 102,850
19,000 GLOBAL MARINE INC 103,075 216,125
6,800 GOODRICH B F CO 204,527 270,300
2,600 GREAT ATLANTIC + PAC TEA INC 91,806 90,675
15,400 HALLIBURTON CO 547,992 883,575
2,400 HARLEY DAVIDSON INC 103,481 105,900
3,000 HBO + CO 111,900 356,250
600 HEALTHSOUTH CORP 22,368 22,275
11,000 HENRY JACK + ASSOC INC 289,718 345,125
5,000 HERBALIFE INTL INC 65,000 65,000
13,000 HERTIAGE MEDIA CORP 212,244 498,875
4,200 HEWLETT PACKARD CO 401,976 444,675
5,000 HFS INC 137,213 256,875
2,200 HILTON HOTELS CORP 211,344 232,100
4,000 HOLOGIC INC 113,000 118,000
2,400 HOME DEPOT INC 91,082 113,700
4,100 HOUSEHOLD INTL INC 197,071 283,413
2,600 IDEXX LABS INC 118,950 115,700
4,600 ILLINOIS TOOL WKS INC 189,414 309,350
5,000 INPUT/OUTPUT INC 141,177 173,750
4,000 INTEL CORP 271,500 271,000
4,800 INTERNATIONAL BUSINESS MACHS 390,244 516,000
4,000 INTERVOICE INC 107,000 112,000
29,500 INVACARE CORP 638,991 767,000
8,000 JABIL CIRCUIT INC 86,400 94,000
21,700 JLG INDS INC 307,163 1,182,650
12,103 JOHNSON + JOHNSON 488,821 1,119,527
4,000 JONES APPAREL GROUP INC 148,448 205,500
6,000 KROGER CO 233,610 246,750
4,100 LA QUINTA INNS INC 100,591 119,925
2,000 LCS INDS COM NEW 41,100 52,500
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
3,000 LEADER FINL CORP 107,250 132,000
5,200 LIZ CLAIBORNE 148,712 189,150
2,200 LOEWS CORP 139,178 167,750
3,800 LOGICON INC 110,257 113,050
12,000 LONGHORN STEAKS INC 294,600 325,500
5,000 LORAL SPACE + COMMUNICATIONS 37,338 71,875
3,000 LSI INDS INC 50,400 55,500
800 LUXOTTICA GROUP S P A 61,124 64,400
13,500 MANPOWER INC WIS 379,805 499,500
4,000 MARRIOT INTL INC 186,356 195,000
4,000 MASLAND CORP 78,500 81,500
8,125 MATTEL INC 132,282 211,250
10,100 MBNA CORP 182,290 286,587
11,200 MCDONALDS CORP 327,793 536,200
3,600 MCDONNELL DOUGLAS CORP 75,972 347,400
7,600 MDL INFORMATION SYS INC 131,600 210,900
3,100 MEDIC COMPUTER SYS INC 140,430 289,850
11,100 MEDTRONIC INC 358,451 589,687
2,000 MERCANTILE STORES INC 118,620 124,750
6,900 MERCK + CO INC 301,907 417,450
9,200 MERIDIAN DATA INC 146,860 159,850
3,600 MGIC INVT CORP WIS 185,968 195,300
12,000 MICROGRAFX INC 197,250 192,000
600 MICROSOFT CORP 32,625 68,025
3,000 MILLER HERMAN INC 89,625 91,875
6,900 MIRAGE RESORTS INC 164,677 361,387
19,300 MONEY STORE INC 452,276 487,325
10,000 MTS SYS CORP 169,500 210,000
6,000 MYLEX CORP 127,386 146,250
13,950 NATIONAL DATA CORP 249,731 491,737
20,000 NATIONAL ED CORP 154,900 297,500
5,100 NATIONSBANK CORP 261,303 406,725
3,000 NATURES SUNSHINE PRODS INC 69,000 75,000
4,000 NCI BLDG SYS INC 94,200 145,000
4,448 NELLCOR PURITAN BENNETT INC 132,050 217,952
8,500 NIKE INC 432,930 743,750
6,000 NOBLE DRILLING CORP 58,128 90,000
5,100 NORWEST CORP 113,668 184,238
14,300 OAKWOOD HOMES CORP 549,135 638,138
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
4,000 OEC MED SYS INC 51,240 46,000
9,000 OLYMPIC FINL LTD 183,665 200,250
3,400 OMNICARE INC 178,928 204,000
12,000 OMNICOM GROUP 302,610 520,500
4,500 ORACLE SYS CORP 146,250 151,875
9,000 ORCHARD SUPPLY HARDWARE 186,242 239,625
20,000 ORNDA HEALTHCORP 352,500 550,000
4,800 OXFORD HEALTH PLANS INC 183,100 242,400
2,000 PAIRGAIN TECHNOLOGIES INC 111,000 191,000
16,300 PARK ELECTROCHEMICAL CORP 524,126 407,500
8,000 PARTNERRE LTD 240,000 226,000
4,000 PENNCORP FINL GROUP INC 105,740 122,500
2,000 PEOPLESOFT INC 92,000 126,000
11,100 PEPSICO INC 475,359 704,850
3,300 PETSMART INC 122,925 146,437
12,800 PFIZER INC 557,234 881,600
8,100 PHILIP MORRIS COS INC 731,240 730,013
4,400 PHP HEALTHCARE CORP 137,489 134,200
20,000 PHYSICIANS COMPUTER NETWORK IN 187,750 225,000
12,500 PRAXAIR INC 259,897 482,812
11,000 PRICE COSTCO INC 190,625 209,000
4,100 PRIDE PETE SVCS INC 36,387 67,137
5,500 PRIMARK CORP 166,347 195,250
14,000 PROTOCOL SYS INC 208,134 273,000
18,200 QUICK + REILLY GROUP INC 474,558 555,100
4,000 QUIKSILVER INC 116,500 152,000
2,000 QUINTILES TRANSNATIONAL CORP 118,600 146,500
3,000 RAYCHEM CORP 155,405 233,625
8,000 READING + BATES CORP 152,480 196,000
3,000 REGIS CORP MINNESOTA 70,500 110,625
10,000 RENAL TREATMENT CTRS INC 129,750 290,000
4,000 RESOUND CORP 52,700 49,500
3,000 RESPIRONICS INC 66,900 65,578
2,200 REYNOLDS + REYNOLDS CO 102,075 102,076
8,300 RICHFOOD HLDGS INC 182,849 270,787
3,000 ROBERT HALF INTL INC 123,555 172,500
8,800 ROSS STORES INC 269,350 303,600
4,000 SAFESKIN CORP 88,200 117,000
27,200 SAFEWAY INC 523,116 918,000
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
3,100 SANIFILL INC 99,773 134,462
8,500 SCHERING PLOUGH CORP 285,371 487,687
3,100 SCI SYS INC 94,162 132,912
4,000 SEACOR HLDGS INC 134,700 165,000
6,000 SHAW GROUP INC 83,550 117,750
11,500 SHELL CDA LTD 354,582 392,765
7,700 SHOWBIZ PIZZA TIME INC 171,512 167,475
1,600 SKYLINE CORP 38,848 39,200
5,800 SMITH INTL INC 97,098 172,550
7,000 SODAK GAMING INC 164,350 180,250
6,400 SONAT OFFSHORE DRILLING INC 274,917 351,200
6,000 SOUTHERN ENERGY HOMES INC 104,550 105,750
7,000 SPECTRAN CORP 74,725 88,812
4,400 SPRINT CORP 136,148 185,350
12,000 STAPLES INC 120,000 228,000
3,000 STAR BANC CORP 118,665 197,625
4,800 STERLING SOFTWARE INC. 179,688 373,200
8,000 STRUCTURAL DYNAMICS RESH CORP 195,500 255,000
2,400 STURM RUGER + CO INC 96,144 96,900
23,200 SUN ENERGY PARTNERS L P 103,864 98,600
4,000 SUN MICROSYSTEMS INC 140,500 217,000
8,800 SUNAMERICA INC 366,755 479,600
4,000 SUNDSTRAND CORP 126,620 147,000
6,300 SUNTRUST BKS INC 324,476 444,150
8,000 SYMBOL TECHNOLOGIES INC 206,416 370,000
6,900 SYSCO CORP 186,269 221,662
21,000 SYSTEM SOFTWARE ASSOC INC 463,942 501,375
6,000 TECHNE CORP 158,480 168,000
1,600 TELECOM CORP OF NEW ZEALAND 106,096 108,000
8,100 TEXAS INDS INC 419,418 518,400
3,700 TEXAS INSTRS INC 246,737 209,050
3,500 THERMEDICS INC 102,585 105,875
4,800 THERMO ELECTRON CORP 289,344 295,800
5,200 TIDEWATER INC 165,612 221,000
6,100 TRAVELERS GROUP INC 380,670 375,150
5,000 TSI INC MINN 89,000 91,250
15,100 UNICOM CORP 492,240 415,250
4,800 UNION CARBIDE CORP 144,256 218,400
4,900 UNITED DOMINION INDS LTD 87,622 117,600
Value Line, Inc
Schedule I - Marketable Securities
Shares Common Stock Name Cost Market
3,600 UNITED HEALTHCARE CORP 224,658 210,600
20,000 UNIVERSAL ELECTRS INC 191,500 210,000
4,000 UNIVERSAL HEALTH SVCS INC 203,698 222,000
7,200 US FACS CORP 131,952 132,300
9,600 USF + G CORP 133,725 152,400
5,200 UST INC 146,526 166,400
2,500 USX U S STL GROUP 82,075 82,500
6,200 VALMONT INDS INC 129,750 198,400
1,800 VIKING OFFICE PRODS INC 106,425 106,875
4,000 VIVUS 112,700 121,000
6,700 WABAN INC 166,863 164,150
6,000 WHOLE FOODS MKT INC 99,750 122,250
15,900 WILLIAMS COS INC 696,690 812,887
2,000 WISCONSIN CENT TRANSN CORP 150,600 169,000
11,300 WOLVERINE WORLD WIDE INC 236,665 348,887
6,000 WOODHEAD INDUSTRIES 94,500 93,000
11,500 WORLDCOM INC GA 433,437 540,500
5,000 XIRCOM INC 75,625 81,625
4,000 ZALE CORP NEW 69,500 74,500
500 ZIONS BANCORP 34,140 37,250
4,000 ZOLL MED CORP 62,200 58,000
6,000 ZOOM TELEPHONICS INC 115,548 138,094
----------- -----------
$48,066,092 $64,313,698
=========== ===========
Value Line, Inc.
Schedule XIII - Other Investments
Historical
Mutual Fund Investments Cost Market Value
The Value Line Fund, Inc. $18,330,707 $25,266,394
The Value Line Special Situations Fund, Inc. 5,214,484 6,857,773
The Value Line Income Fund, Inc. 4,622,975 6,157,892
Value Line Leveraged Growth Investors, Inc. 26,141,088 36,667,269
Value Line U.S. Government Securities Fund, Inc. 2,787,569 2,751,085
The Value Line Tax Exempt Fund, Inc., High Yield Portfolio 11,323,692 11,623,921
Value Line Convertible Fund, Inc. 10,832,698 12,314,635
Value Line Aggressive Income Trust 4,723,333 4,915,617
Value Line New York Tax Exempt Trust 3,715,427 3,689,899
Value Line Intermediate Bond Fund Inc. 9,260,554 9,032,780
Value Line Small-Cap Growth Fund 8,360,490 11,739,281
Value Line Asset Allocation Fund, Inc. 28,014,279 36,637,666
Value Line US Multinational Company Fund 9,128,400 10,079,940
--------------------------------
Total $142,455,696 $177,734,152
================================