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