VALUE LINE INC
For the period ended Jul 31, 2024. Filed Sep 13, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2024 · Filed Sep 13, 2024
VALU$42.37-4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-01-31; filed 2024-03-15.
0001437749-24-008060
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-07-31; filed 2024-09-13.
0001437749-24-029168
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 86 current paragraphs.
42 unchanged; 34 reworded; 10 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 32 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
The investment periodicals and related publications (retail and institutional) and Value Line copyrights and Value Line Proprietary Ranks and other proprietary information consolidate into one segment called Publishing. The Publishing segment constitutes the Company’s only reportable business segment.
Current report
The U.S. economy, after showing signs of slowing down during the first three months of calendar 2024, reaccelerated in the second quarter. The nation’s gross domestic product expanded by an estimated 3.0% in the June quarter, more than double the 1.4% gain recorded in the March period. The advance was fueled by a 2.9% increase in personal consumption expenditures, which was nearly twice the pace logged in the initial quarter. The consumer sector, which accounts for two-thirds of the nation’s output, has proven resilient amid higher inflation and elevated lending rates the last few years. But these gains may have come at a price, as consumer credit card debt rose to a record $1.14 trillion in the second stanza and loan delinquencies are on the rise.
Current report
The economic advance comes as the Federal Reserve appears poised to start winding down its most restrictive monetary policy course in four decades in an effort to rein in inflation. The Fed looks close to achieving its goal, as the pace of both consumer and producer (wholesale) price growth eased further over the summer months and moved closer to the central bank’s target growth rate of 2%. This has likely given the lead bank the confidence to begin reducing the federal funds rate after holding it steady, in a range of 5.25% to 5.50%, for eight-consecutive Federal Open Market Committee (FOMC) meetings through July of this year.
Current report
The central bank also is keeping a close eye on the labor market, which is the other part of its dual mandate. Initial weekly unemployment claims in July and August were running at a level indicative of a tight labor market, but other metrics suggest that overall labor conditions are softening. These included a series of sharp downward revision to earlier job creation totals, a steady upward move in the nation’s unemployment rate ( from 3.7% in January to 4.3% at the end of July), and the Labor Department’s report stating that monthly payroll figures overstated job growth by roughly 818,000 in the 12 months that ended in March, 2024. Our sense is that the state of the job market going forward will play a big role in deciding just how aggressively the Federal Reserve will reduce the benchmark short-term interest rate over the remaining months of calendar 2024.
Current report
In conclusion, the Federal Reserve appears to be inching closer to achieving its goal of taming inflation, which jumped to a 40-year high in June, 2022, without leading to a sharp deterioration in the U.S. labor market and pushing the economy into recession. This has provided a supportive backdrop for Corporate America and the U.S. stock market. In all, the business environment has held up well, with profit growth for S&P 500 companies averaging nearly 11% in the second quarter. This represented the highest year-over-year earnings growth for S&P 500 companies since the final quarter of 2021, and was likely needed to justify the Index’s high price-to-earnings multiple, which at the end of the second calendar quarter was above both its five- and 10-year averages.
Current report
During the three months ended July 31, 2024, office and administrative expenses of $1,145,000 increased 5.1% above the prior fiscal year, due to an increases that resulted from a software upgrade project to replace outdated software and costs of outsourced product billing functions that were previously handled internally by employees.
Current report
During the three months ended July 31, 2024, the Company’s total investment gains of $1,709,000 increased 126.4% above prior fiscal year, primarily derived from unrealized gains on equity securities and increases in the interest income. Proceeds from the sales of equity securities during the three months ended July 31, 2024 and July 31, 2023 were $90,000 and $516,000, respectively.
Current report
Recent Accounting Pronouncements
Current report
In November 2023, the FASB issued Accounting Standards Update 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis. ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We are evaluating the impact of ASU 2023-07 on disclosures in our Consolidated Financial Statements.
Current report
In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. We are evaluating the impact of ASU 2023-09 on disclosures in our Consolidated Financial Statements.
Removed paragraphs (8)
Previous report
The investment periodicals and related publications (such as digital equivalents), along with supplying the embedded Proprietary information and intellectual property rights, are treated as one segment, Publishing. It is the Company’s only reportable segment, and all required segment financial information can be found directly in the consolidated financial statements.
Previous report
The U.S. economy performed much better than expected during calendar 2023. Last year started with talks of the possibility of at least a mild recession during the 12-month period, with restrictive monetary policies leading to a decrease in demand for goods and services. That scenario, however, did not materialize, as U.S. consumer spending held up in 2023 despite elevated inflation and higher interest rates. The consumer sector was buoyed by savings built up during the COVID-19 pandemic, the unprecedented government spending of recent years, and growth in real wages. For the full year, GDP expanded 2.5%.
Previous report
The economy also got off to a solid start this year, but the consensus expectation is that GDP growth will slow in the second and third quarters. The Federal Reserve in its March Beige Book summation of economic conditions said there are signs of some fatigue in the consumer sector, which accounts for roughly two-thirds of the nation’s economic output. Potential headwinds for the U.S. consumer include rising personal debt levels and still elevated interest rates. Elsewhere, both durable goods orders and manufacturing activity were notably weaker at the start of 2024. Clearly, there are signs of some increasing sluggishness in parts of the economy. Although a recession, which is defined as two-consecutive quarters of falling GDP, is not expected during calendar 2024, our view is that the pace of GDP growth will drop below 2% this year.
Previous report
Meantime, Federal Reserve Chairman Jerome Powell and the Federal Open Market Committee (FOMC) are walking a tightrope on monetary policy. The central bank does not want to start cutting interest rates too early and see inflation reaccelerate. This was a problem for the U.S. economy in the late 1970s. However, the FOMC also must guard against staying too restrictive and risk creating stress in parts of the economy. Concerns about the negative impact of higher rates on the regional banks and the commercial real estate market persist. Our stance is that the Federal Reserve will begin loosening monetary policy in the second half of this year, but a cut as early as the June FOMC meeting can’t be ruled out if the economy were to weaken more than expected in the coming months.
Previous report
In conclusion, the Federal Reserve’s restrictive monetary tightening course has clearly made a dent in inflation without disrupting the labor market. The progress has been significant enough that Fed Chairman Powell hinted in his March testimony before Congress that the central bank could begin cutting rates by midyear, perhaps even earlier, if inflation continues on its downward trajectory. In all, the current business environment has held up fairly well, with profit growth for S&P 500 companies averaging around 4% in the fourth quarter. For 2024, Wall Street anticipates low double-digit corporate earnings growth.
Previous report
During the nine months ended January 31, 2024, the Company’s net income of $14,232,000, or $1.51 per share, was 1.4% above net income of $14,036,000, or $1.48 per share, for the nine months ended January 31, 2023. For the nine months ended January 31, 2024, operating expenses decreased 2.0% below those during the nine months ended January 31, 2023.
Previous report
During the nine months ended January 31, 2024, office and administrative expenses of $3,442,000 decreased 4.8% below the prior fiscal year, primarily due to decreases in professional fees and utilities.
Previous report
During the nine months ended January 31, 2024, the Company’s investment gains, primarily derived from dividend and interest income, investment gains recognized on sales of equity securities during the period and unrealized gains recognized on equity securities held at the end of the period in fiscal 2024, resulted in investment gains of $1,685,000. During the nine months ended January 31, 2023, the Company’s investment gains, primarily derived from dividend and interest income, investment gains recognized on sales of equity securities during the period and unrealized gains recognized on equity securities held at January 31, 2023 in fiscal 2023, resulted in investment gains of $1,276,000. Proceeds from the sales of equity securities during the nine months ended January 31, 2024 and January 31, 2023 were $1,129,000 and $1,421,000, respectively.
Reworded paragraphs (34)
Previous wording
The business of EAM is managed by its trustees each owning 20% of the voting interest in EAM and by its officers subject to the direction of the trustees. The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive a range of 41% to 55% of EAM’s revenues (excluding distribution revenues) from EAM’s mutual fund and separate account business distributed quarterly and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Voting Profits Interest Holders will receive the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM’s profits payable each fiscal quarter under the provisions of the EAM Trust Agreement.
Current wording
The business of EAM is managed by its trustees each owning 20% of the voting interest in EAM and by its officers subject to the direction of the trustees. The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive a range of 41% to 55% of EAM’s revenues (excluding distribution revenues) from EAM’s mutual fund and separate account business and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Voting Profits Interest Holders will receive the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM’s profits payable each fiscal quarter under the provisions of the EAM Trust Agreement.
Previous wording
Results of Operations for the Three and Nine Months Ended January 31, 2024 and 2023
Current wording
Results of Operations for the Three Months Ended July 31, 2024 and 2023
Previous wording
During the three months ended January 31, 2024, the Company’s net income of $5,885,000, or $0.62 per share, was 12.2% above net income of $5,248,000, or $0.55 per share, for the three months ended January 31, 2023. For the three months ended January 31, 2024, operating expenses decreased 1.2% below those during the three months ended January 31, 2023.
Current wording
During the three months ended July 31, 2024, the Company’s net income of $5,887,000, or $0.62 per share, was 21.2% above net income of $4,859,000, or $0.52 per share, for the three months ended July 31, 2023. For the three months ended July 31, 2024, operating expenses increased slightly above those during the three months ended July 31, 2023.
Previous wording
During the nine months ended January 31, 2024, there were 9,429,575 average common shares outstanding as compared to 9,465,955 average common shares outstanding during the nine months ended January 31, 2023.
Current wording
During the three months ended July 31, 2024, there were 9,419,938 average common shares outstanding as compared to 9,432,573 average common shares outstanding during the three months ended July 31, 2023.
Previous wording
During the nine months ended January 31, 2024, new sales of print publications increased while conversion and renewal sales orders decreased from the prior fiscal year. New sales of digital publications decreased while conversion and renewal sales orders increased from the prior fiscal year.
Current wording
During the three months ended July 31, 2024, new sales of print publications increased as a percent of the total gross sales as a result of an increase in new sales orders while conversion and renewal sales orders decreased from the prior fiscal year.
Previous wording
Unearned subscription revenue as of January 31, 2024, is 2.1% below April 30, 2023 and 1.2% below January 31, 2023. A certain amount of variation is to be expected due to the volume of new orders and timing of long-term renewal contracts, direct mail campaigns and large Institutional Sales orders.
Current wording
Unearned subscription revenue as of July 31, 2024 is 5.4% below April 30, 2024 and 2.5% below last fiscal year. A certain amount of variation is to be expected due to the volume of new orders and timing of long-term renewal contracts, direct mail campaigns and large Institutional Sales orders.
Previous wording
Investment periodicals and related publications revenues of $19,174,000 (excluding copyright fees) during the nine months ended January 31, 2024 were 3.1% below publishing revenues of $19,795,000, as compared to the prior fiscal year. The Company continued activity to attract new subscribers, primarily digital subscriptions through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. As fewer individual investors manage their own portfolios, total product line circulation at January 31, 2024, was 3.6% below total product line circulation at January 31, 2023. However, Institutional Sales department total sales orders reached a record level in the fiscal year ended April 30, 2023 and this growing, more profitable business with financial advisors and professional investors significantly offsets the long-term trend of declining individual investor circulation.
Current wording
Investment periodicals and related publications revenues of $6,287,000 (excluding copyright fees) during the three months ended July 31, 2024 were 2.6% below publications revenues of $6,457,000 in the prior fiscal year. The Company continued actions to attract new subscribers through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. As fewer individual investors manage their own portfolios, particularly in volatile markets, total product line circulation at July 31, 2024, was 2.6% below total product line circulation at July 31, 2023.
Previous wording
Circulation also reflected management’s decision to reduce marketing efforts temporarily while the challenging stock market environment persisted. Total print circulation at January 31, 2024 was 5.0% below the total print circulation at January 31, 2023. During the nine months ended January 31, 2024, print publication revenues of $6,987,000 decreased 7.3%, below print publication revenues of $7,539,000 during the same quarter of 2023. Total digital circulation at January 31, 2024 was 1.7% below total digital circulation at January 31, 2023 with the professional clientele offsetting the decline in individual subscribers. During the nine months ended January 31, 2024, digital revenues of $12,187,000 were down 0.6% as compared to the prior fiscal year. These figures reflect weak investor sentiment, likely temporary, and the ongoing shift from our print services to digital counterparts. Sales of our higher-price, higher-profit, publications have been stronger than sales of lower price “starter” products.
Current wording
Circulation also reflected management’s decision to reduce marketing efforts temporarily while the challenging stock market environment persisted during the fiscal year ended April 30, 2024. Total print circulation at July 31, 2024 was 2.2% below the total print circulation at July 31, 2023. During the three months ended July 31, 2024, print publication revenues of $2,233,000 decreased 6.3%, below print publication revenues of $2,382,000 during the corresponding period of 2024 because we deferred advertising in light of negative sentiment among prospective individual customers in a challenging market environment. Total digital circulation at July 31, 2024 was 3.1% below total digital circulation at July 31, 2023. During the three months ended July 31, 2024, digital revenues of $4,054,000 were slightly lower when compared to the prior fiscal year. These figures reflect weak investor sentiment, likely temporary, and the ongoing shift from our print services to digital counterparts. Sales of our higher-price, higher-profit, publications have been stronger than sales of lower price “starter” products.
Previous wording
Value Line serves primarily individual and professional investors in stocks, and other securities, who pay mostly on annual or multi-year subscription plans, for basic services or as much as $100,000 or more annually for comprehensive premium quality research, not obtainable elsewhere. The ongoing goal of adding new subscribers has led us to introduce publications and packages at a range of price points.
Current wording
Value Line serves primarily individual and professional investors in stocks, and other securities, who pay mostly on annual or multi-year subscription plans, for basic services or as much as $100,000 or more annually for comprehensive premium quality research, not obtainable elsewhere.
Previous wording
The Value Line Proprietary Ranks (the “Ranking System”), a component of the Company’s flagship product,The Value Line Investment Survey, are also utilized in the Company’s copyright business. The Ranking System is made available to EAM for specific uses without charge. During the twelve month period ended January 31, 2024, the combined Ranking System “Rank 1 & 2” stocks’ increase of 9.1% compared favorably to the Russell 2000 Index’s increase of 0.8% during the comparable period.
Current wording
The Value Line Proprietary Ranks (the “Ranking System”), a component of the Company’s flagship product,The Value Line Investment Survey, are also utilized in the Company’s copyright business. The Ranking System is made available to EAM for specific uses without charge. During the twelve month period ended July 31, 2024, the combined Ranking System “Rank 1 & 2” stocks’ increase of 18.4% compared favorably to the Russell 2000 Index’s increase of 12.5% during the comparable period.
Previous wording
During the nine months ended January 31, 2024, copyright fees of $9,310,000 were 8.6% below those during the corresponding period in the prior fiscal year. These fees depend on the assets under management in financial products with contractual arrangements to use the Ranks and other Value Line proprietary information.
Current wording
During the three months ended July 31, 2024, copyright fees of $2,597,000 were 21.0% below those during the corresponding period in the prior fiscal year. These fees depend on the assets under management in financial products with contractual arrangements to use the Ranks and other Value Line proprietary information.
Previous wording
Total assets in the Value Line Funds managed and/or distributed by EAM at January 31, 2024, were $4.06 billion, which is $1.02 billion, or 33.6%, above total assets of $3.04 billion in the Value Line Funds managed and/or distributed by EAM at January 31, 2023.
Current wording
Total assets in the Value Line Funds managed and/or distributed by EAM at July 31, 2024, were $4.60 billion, which is $1.13 billion, or 32.6%, above total assets of $3.47 billion in the Value Line Funds managed and/or distributed by EAM at July 31, 2023.
Previous wording
The gross fees and net income of EAM’s investment management operations during the nine months ended January 31, 2024, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $17,388,000, 12b-1 fees and other fees of 4,811,000 and other net gains of $295,000. For the same period, total investment management fee waivers were $239,000 and 12b-1 fee waivers were $72,000. During the nine months ended January 31, 2024, EAM's net income was $1,842,000 after giving effect to Value Line’s non-voting revenues interest of $8,420,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
Current wording
The gross fees and net income of EAM’s investment management operations during the three months ended July 31, 2024, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $7,376,000, 12b-1 fees and other fees of $1,942,000 and other net gains of $156,000. For the same period, total investment management fee waivers were $47,000 and 12b-1 fee waivers were $23,000. During the three months ended July 31, 2024, EAM's net income was $1,122,000 after giving effect to Value Line’s non-voting revenues interest of $3,680,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
Previous wording
The gross fees and net income of EAM’s investment management operations during the nine months ended January 31, 2023, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $14,951,000, 12b-1 fees and other fees of $4,507,000 and other net gains of $150,000. For the same period, total investment management fee waivers were $104,000 and 12b-1 fee waivers were $80,000. During the nine months ended January 31, 2023, EAM's net income was $1,198,000 after giving effect to Value Line’s non-voting revenues interest of $7,917,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
Current wording
The gross fees and net income of EAM’s investment management operations during the three months ended July 31, 2023, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $5,428,000, 12b-1 fees and other fees of $1,579,000 and other net gains of $117,000. For the same period, total investment management fee waivers were $48,000 and 12b-1 fee waivers were $25,000. During the three months ended July 31, 2023, EAM's net income was $482,000 after giving effect to Value Line’s non-voting revenues interest of $2,616,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
Previous wording
As of January 31, 2024, one of the Value Line Funds has full 12b-1 fees waivers in place, and five funds have partial investment management fee waivers in place. Although, under the terms of the EAM Declaration of Trust, the Company does not receive or share in the revenues from 12b-1 distribution fees, the Company could benefit from the fee waivers to the extent that the resulting reduction of expense ratios and enhancement of the performance of the Value Line Funds attracts new assets.
Current wording
As of July 31, 2024, one of the Value Line Funds has 12b-1 fees waivers in place, and five funds have partial investment management fee waivers in place. Although, under the terms of the EAM Declaration of Trust, the Company does not receive or share in the revenues from 12b-1 distribution fees, the Company could benefit from the fee waivers to the extent that the resulting reduction of expense ratios and enhancement of the performance of the Value Line Funds attracts new assets.
Previous wording
The Value Line equity and hybrid funds’ assets represent 99.1% and fixed income fund assets represent 0.90%, respectively, of total fund assets under management (“AUM”) as of January 31, 2024. At January 31, 2024, equity and hybrid AUM increased by 34.3% and fixed income AUM decreased by 11.9% as compared to last year at January 31, 2023.
Current wording
The Value Line equity and hybrid funds’ assets represent 99.2% and fixed income fund assets represent 0.8%, respectively, of total fund assets under management (“AUM”) as of July 31, 2024. At July 31, 2024, equity and hybrid AUM increased by 33.0% and fixed income AUM decreased by 5.1% as compared to last year at July 31, 2023.
Previous wording
The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business that is distributed quarterly, and 50% of EAM’s net profits, not less than 90% of which is distributed in cash every fiscal quarter.
Current wording
The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business, and 50% of EAM’s net profits, not less than 90% of which is distributed in cash every fiscal quarter.
Previous wording
Expenses within the Company are categorized into advertising and promotion, salaries and employee benefits, production and distribution, office and administration. Operating expenses of $20,831,000 during the nine months ended January 31, 2024, were 2.0% below those during the nine months ended January 31, 2023 as a result of cost controls in fiscal year 2023 and fiscal year 2024.
Current wording
Expenses within the Company are categorized into advertising and promotion, salaries and employee benefits, production and distribution, office and administration. Operating expenses of $7,037,000 during the three months ended July 31, 2024, were slightly above those during the three months ended July 31, 2023.
Previous wording
During the nine months ended January 31, 2024, advertising and promotion expenses of $2,139,000 decreased 4.8% as compared to the prior fiscal year. During the nine months ended January 31, 2024, decreases were primarily due to decreases in renewal solicitations and sales commissions.
Current wording
During the three months ended July 31, 2024, advertising and promotion expenses of $860,000 increased 11.4% as compared to the prior fiscal year. During the three months ended July 31, 2024, increases were primarily due to increases in third-party telemarketing & sales consulting.
Previous wording
During the nine months ended January 31, 2024, salaries and employee benefits of $11,156,000 decreased 3.6% below the prior fiscal year, primarily due to decreases in salaries and employee benefits resulting from reduced employee headcount in fiscal year 2024.
Current wording
During the three months ended July 31, 2024, salaries and employee benefits of $3,543,000 decreased 5.3% below the prior fiscal year, primarily due to decreases in salaries and employee benefits resulting from reduced employee headcount during fiscal years 2024 and 2025.
Previous wording
During the nine months ended January 31, 2024, production and distribution expenses of $4,094,000 increased 6.9% above prior fiscal year primarily due to increases in production support of the Company’s website and maintenance of the Company’s publishing and application software and operating systems. Increase in third party distribution expense is associated with outsourcing and upgrading a portion of our customer fulfillment operations.
Current wording
During the three months ended July 31, 2024, production and distribution expenses of $1,489,000 increased 6.7% above prior fiscal year primarily due to increases in third-party distribution and mailing expenses that resulted from outsourcing our internal distribution operations during the latter part of fiscal year 2024 and additional costs in third-party fulfillment software expenses. This increase was partially offset by decreases in production expenses to support the Company’s website and maintenance of the Company’s publishing application software and operating systems.
Previous wording
During the nine months ended January 31, 2024, 32.7% of total publishing revenues of $28,484,000 were derived from a single customer.
Current wording
During the three months ended July 31, 2024, 29.2% of total publishing revenues of $6,287,000 were derived from a single customer.
Previous wording
The overall effective income tax rates, as a percentage of pre-tax ordinary income for the nine months ended January 31, 2024 and January 31, 2023 were 23.80% and 24.15%, respectively. The lower effective tax rate during nine months ended January 31, 2024 as compared to January 31, 2023, is primarily a result of a decrease in the state and local income taxes from 3.39% to 3.04% due to changes in state and local income tax allocations. The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to changes in tax law, including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company's geographic profit mix among tax jurisdictions, taxation method adopted by each locality, new interpretations of existing tax laws and rulings and settlements with tax authorities.
Current wording
The overall effective income tax rates, as a percentage of pre-tax ordinary income for the three months ended July 31, 2024 and July 31, 2023 were 24.50% and 23.87%, respectively. The higher effective tax rate during three months ended July 31, 2024 as compared to July 31, 2023, is primarily a result of an increase in the state and local income taxes from 3.10% to 3.69% due to changes in state and local income tax allocations. The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to changes in tax law, including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company's geographic profit mix among tax jurisdictions, taxation method adopted by each locality, new interpretations of existing tax laws and rulings and settlements with tax authorities.
Previous wording
On November 30, 2016, Value Line, Inc. received consent from the landlord at 551 Fifth Avenue, New York, NY to the terms of a new sublease agreement between Value Line, Inc. and ABM Industries, Incorporated commencing on December 1, 2016. Pursuant to the agreement Value Line leased from ABM 24,726 square feet of office space located on the second and third floors at 551 Fifth Avenue, New York, NY (“Building” or “Premises”) beginning on December 1, 2016 and ending on November 29, 2027. Base rent under the sublease agreement is $1,126,000 per annum during the first year with an annual increase in base rent of 2.25% scheduled for each subsequent year, payable in equal monthly installments on the first day of each month, subject to customary concessions in the Company’s favor and pass-through of certain increases in utility costs and real estate taxes over the base year. The Company provided a security deposit represented by a letter of credit in the amount of $469,000 in October 2016, which was reduced to $305,000 on October 3, 2021 and is to be fully refunded after the sublease ends. This Building became the Company’s new corporate office facility. The Company is required to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises. The sublease terms provide free rent for the first six months of the sublease. Sublandlord provided Value Line a work allowance of $417,000 which accompanied with the six months free rent worth $563,000 was applied against the Company’s obligation to pay rent at our NYC headquarters, delaying the actual rent payments until November 2017.
Current wording
On November 30, 2016, Value Line, Inc. received consent from the landlord at 551 Fifth Avenue, New York, NY to the terms of a new sublease agreement between Value Line, Inc. and ABM Industries, Incorporated commencing on December 1, 2016. Pursuant to the agreement Value Line leased from ABM 24,726 square feet of office space located on the second and third floors at 551 Fifth Avenue, New York, NY (“Building” or “Premises”) beginning on December 1, 2016 and ending on November 29, 2027. Base rent under the sublease agreement is $1,126,000 per annum during the first year with an annual increase in base rent of 2.25% scheduled for each subsequent year, payable in equal monthly installments on the first day of each month, subject to customary concessions in the Company’s favor and pass-through of certain increases in utility costs and real estate taxes over the base year. The Company provided a security deposit represented by a letter of credit in the amount of $469,000 in October 2016, which was reduced to $305,000 on October 3, 2021 and is to be fully refunded after the sublease ends. This Building became the Company’s new corporate office facility. The Company is required to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises. The sublease terms provide for a significant decrease (23% initially) in the Company’s annual rental expenditure taking into account free rent for the first six months of the sublease. Sublandlord provided Value Line a work allowance of $417,000 which accompanied with the six months free rent worth $563,000 was applied against the Company’s obligation to pay rent at our NYC headquarters, delaying the actual rent payments until November 2017.
Previous wording
On February 29, 2016, the Company’s subsidiary VLDC and Seagis Property Group LP (the “Landlord”) entered into a lease agreement, pursuant to which VLDC has leased 24,110 square feet of warehouse and appurtenant office space located at 205 Chubb Ave., Lyndhurst, NJ (“Warehouse”) beginning on May 1, 2016 and ending on April 30, 2024 (“Lease”). Base rent under the Lease is $192,880 per annum payable in equal monthly installments on the first day of each month, in advance during fiscal 2017 and increasing to $237,218 in fiscal 2024, subject to customary increases based on operating costs and real estate taxes. The Company provided a security deposit in cash in the amount of $32,146, which will be fully refunded after the lease term expires. The lease is a net lease requiring the Company to pay for certain operating expenses associated with the Warehouse as well as utilities supplied to the Warehouse. The Company is making alternative arrangements for the functions performed at the Warehouse, subsequent to the expiration of the lease.
Current wording
On February 29, 2016, the Company’s subsidiary VLDC and Seagis Property Group LP (the “Landlord”) entered into a lease agreement, pursuant to which VLDC leased 24,110 square feet of warehouse and appurtenant office space located at 205 Chubb Ave., Lyndhurst, NJ (“Warehouse”) beginning on May 1, 2016 and ending on April 30, 2024 (“Lease”). Base rent under the Lease was $237,218 per annum. The Company provided a security deposit in cash in the amount of $32,146, which has been fully refunded. VLDC distributed Value Line’s print publications. The Company has outsourced to a U.S. facility the functions formerly performed at the Warehouse.
Previous wording
The Company had working capital, defined as current assets less current liabilities, of $47,658,000 as of January 31, 2024 and $42,788,000 as of April 30, 2023. These amounts include short-term unearned revenue of $15,953,000 and $16,771,000 reflected in total current liabilities at January 31, 2024 and April 30, 2023, respectively. Cash and short-term securities were $67,299,000 and $62,064,000 as of January 31, 2024 and April 30, 2023, respectively.
Current wording
The Company had working capital, defined as current assets less current liabilities, of $50,381,000 as of July 31, 2024 and $48,770,000 as of April 30, 2024. These amounts include short-term unearned revenue of $15,991,000 and $15,764,000 reflected in total current liabilities at July 31, 2024 and April 30, 2024, respectively. Cash and short-term securities were $71,280,000 and $68,345,000 as of July 31, 2024 and April 30, 2024, respectively.
Previous wording
The Company’s cash and cash equivalents include $4,739,000 and $7,240,000 at January 31, 2024 and April 30, 2023, respectively, invested primarily in commercial banks and in Money Market Funds at brokers, which operate under Rule 2a-7 of the 1940 Act and invest primarily in short-term U.S. government securities.
Current wording
The Company’s cash and cash equivalents include $15,248,000 and $4,136,000 at July 31, 2024 and April 30, 2024, respectively, invested primarily in commercial banks and in Money Market Funds at brokers, which operate under Rule 2a-7 of the 1940 Act and invest primarily in short-term U.S. government securities.
Previous wording
The Company had cash inflows from operating activities of $14,169,000 during the nine months ended January 31, 2024, compared to cash inflows of $13,978,000 during the nine months ended January 31, 2023. The increase in cash inflows was a result of increased interest income, the timing of receipts from accounts receivable and slowdown in the decline of unearned revenue from the same period last year.
Current wording
The Company had cash inflows from operating activities of $4,771,000 during the three months ended July 31, 2024, compared to cash inflows of $5,058,000 during the three months ended July 31, 2023. The change in cash inflows was a result of an increase in unrealized gains on equity securities and a decrease in accounts receivable from customers, offset by a smaller decline of unearned revenue from the same period last year.
Previous wording
The Company had cash outflows from investing activities of $7,719,000 during the nine months ended January 31, 2024, compared to cash outflows from investing activities of $20,222,000 for the nine months ended January 31, 2023, respectively. The lower cash outflows for the nine months ended January 31, 2024 compared to January 31, 2023, was primarily due to increases in proceeds from maturities of fixed income securities.
Current wording
The Company had cash inflows from investing activities of $9,473,000 during the three months ended July 31, 2024, compared to cash outflows from investing activities of $267,000 for the three months ended July 31, 2023, respectively. The significant cash inflows in investing activities for the three months ended July 31, 2024 was a result of the company’s conscious decisions to invest the proceeds from maturities of fixed income short-term securities in the company’s short-term U.S. Government money market funds at higher yields than U.S Treasury Bills.
Previous wording
During the nine months ended January 31, 2024, the Company’s cash outflows from financing activities were $8,260,000, compared to cash outflows from financing activities of $11,598,000 for the nine months ended January 31, 2023. Quarterly dividend payments of $0.28 per share during fiscal year 2024 aggregated $7,922,000. Quarterly regular dividend payments of $0.25 per share during fiscal year 2023 aggregated $7,111,000.
Current wording
During the three months ended July 31, 2024, the Company’s cash outflows from financing activities were $3,006,000, compared to cash outflows from financing activities of $2,830,000 for the three months ended July 31, 2023. Quarterly dividend payments of $0.30 per share during fiscal year 2025 aggregated $2,827,000. Quarterly regular dividend payments of $0.28 per share during fiscal year 2024 aggregated $2,642,000.
Previous wording
At January 31, 2024 there were 9,429,575 common shares outstanding as compared to 9,465,955 common shares outstanding at January 31, 2023. The Company expects financing activities to continue to include use of cash for dividend payments for the foreseeable future.
Current wording
At July 31, 2024 there were 9,418,074 common shares outstanding as compared to 9,430,529 common shares outstanding at July 31, 2023. The Company expects financing activities to continue to include use of cash for dividend payments for the foreseeable future.
Previous wording
Management believes that the Company’s cash and other liquid asset resources used in its business together with future cash flows from operations and from the Company’s non-voting revenues and non-voting profits interests in EAM will be sufficient to finance current and forecasted liquidity needs for the next twelve months and beyond. Management does not anticipate making any borrowings during the next twelve months. As of January 31, 2024, retained earnings and liquid assets were $102,292,000 and $67,299,000, respectively. As of April 30, 2023, retained earnings and liquid assets were $95,979,000 and $62,064,000, respectively. There are no off-balance-sheet arrangements, so none affect the interpretations of reported assets, liquidity, and debt.
Current wording
Management believes that the Company’s cash and other liquid asset resources used in its business together with future cash flows from operations and from the Company’s non-voting revenues and non-voting profits interests in EAM will be sufficient to finance current and forecasted liquidity needs for the next twelve months and beyond. Management does not anticipate making any borrowings during the next twelve months. As of July 31, 2024, retained earnings and liquid assets were $107,311,000 and $71,280,000, respectively. As of April 30, 2024, retained earnings and liquid assets were $104,249,000 and $68,345,000, respectively. There are no off-balance-sheet arrangements, so none affect the interpretations of reported assets, liquidity, and debt.
Previous wording
The Company’s critical accounting policy relates to the valuation of EAM. There have been no material changes in our critical accounting policies during the nine months ended January 31, 2024. For a complete discussion of our critical accounting policies, refer to “Critical Accounting Policies and Estimates” discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for fiscal year ended April 30, 2023.
Current wording
The Company’s critical accounting policy relates to the valuation of EAM. There have been no material changes in our critical accounting policies during the three months ended July 31, 2024. For a complete discussion of our critical accounting policies, refer to “Critical Accounting Policies and Estimates” discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for fiscal year ended April 30, 2024.
Previous wording
We are a party to lease contracts which will result in cash payments to lessors in future periods. Operating lease liabilities are included in our Consolidated Balance Sheets. Estimated payments of these liabilities in each of the next five fiscal years and thereafter are (in thousands): $413 in 2024; $1,429 in 2025; $1,461 in 2026; $1,493 in 2027 and $883 in 2028 totaling $5,679.
Current wording
We are a party to a lease contract which will result in cash payments to a lessor in future periods. Operating lease liabilities are included in our Consolidated Balance Sheets. Estimated payments of these liabilities in each of the next four fiscal years and thereafter are (in thousands): $1,075 in 2025; $1,461 in 2026; $1,493 in 2027 and $882 in 2028 totaling $4,911.