<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended OCTOBER 31, 1998 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 (I.R.S. Employer
incorporation or organization) Identification No.)
220 East 42nd Street, New York, New York 10017-5891
- -------------------------------------------------------------------------------
(address of principal executive offices) (zip code)
Registrant's telephone number including area code (212) 907-1500
--------------
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at October 31, 1998
----- -------------------------------
Common stock, $.10 par value 9,978,625 Shares
----------------
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VALUE LINE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Oct. 31, April 30,
Assets 1998 1998
-------- ---------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (including short term
investments of $34,250 and $29,072, respectively) $34,744 $29,937
Trading securities 7,795 8,861
Accounts receivable, net of allowance for doubtful
accounts of $519 and $507, respectively 2,206 1,287
Receivable from affiliates 2,304 2,339
Prepaid expenses and other current assets 1,564 1,688
Deferred income taxes 1,444 1,444
-------- ---------
Total current assets 50,057 45,556
Long term securities available for sale 138,261 149,277
Property and equipment, net 12,232 12,651
Goodwill 39 41
-------- ---------
Total assets $200,589 $207,525
-------- ---------
-------- ---------
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities $7,238 $7,170
Accrued salaries 1,211 1,764
Dividends payable 2,495 2,495
Accrued taxes payable 2,187 347
-------- ---------
Total current liabilities 13,131 11,776
Unearned revenue 39,904 42,543
Deferred income taxes 10,936 15,294
Deferred charges 836 975
Shareholders' Equity:
Common stock, $.10 par value; authorized 30,000,000
shares; issued 10,000,000 shares 1,000 1,000
Additional paid-in capital 959 959
Retained earnings 115,332 108,392
Treasury stock, at cost (21,375 shares on 10/31/98,
21,375 shares on 4/30/98) (411) (411)
Unrealized gain on securities, net of taxes 18,902 26,997
-------- ---------
Total shareholders' equity 135,782 136,937
-------- ---------
Total liabilities and shareholders' equity $200,589 $207,525
-------- ---------
-------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VALUE LINE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended Six months ended
Oct. 31, Oct. 31,
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Investment periodicals and
related publications $15,483 $15,309 $31,080 $30,742
Investment management fees & svcs 7,908 8,412 16,449 16,149
Gain on sale of operating facility --- --- 518 ---
------- ------- ------- -------
Total revenues 23,391 23,721 48,047 46,891
------- ------- ------- -------
Expenses:
Advertising and promotion 4,018 3,716 7,549 6,870
Salaries and employee benefits 5,753 5,676 11,726 10,997
Printing, paper and distribution 1,808 1,910 3,679 3,686
Office and administration 2,274 1,952 4,520 3,896
------- ------- ------- -------
Total expenses 13,853 13,254 27,474 25,449
------- ------- ------- -------
Income from operations 9,538 10,467 20,573 21,442
Income from securities transactions, net (31) 1,162 111 3,065
------- ------- ------- -------
Income before income taxes 9,507 11,629 20,684 24,507
Provision for income taxes 4,086 4,566 8,754 9,633
------- ------- ------- -------
Net income $5,421 $7,063 $11,930 $14,874
------- ------- ------- -------
------- ------- ------- -------
Earnings per share, basic & fully diluted $0.55 $0.71 $1.20 $1.49
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
VALUE LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
OCT. 31, OCT. 31,
1998 1997
------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $11,930 $14,874
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 874 788
(Gains)/losses on sales of trading securities, securities
held for sale and futures contracts 670 (1,554)
Unrealized (gains)/losses on trading securities 515 (571)
Gain on sale of operating facility (518) ---
Writedown of equipment 85 ---
CHANGES IN ASSETS AND LIABILITIES:
Decrease in unearned revenue (2,639) (4,295)
Increase in deferred charges (139) (139)
Increase/(decrease) in accounts payable and accrued expenses 68 (2,727)
Decrease in accrued salaries (553) (560)
Increase/(decrease) in accrued taxes payable 1,840 (54)
Decrease in prepaid expenses
and other current assets 124 296
(Increase)/decrease in accounts receivable (919) 298
(Increase)/decrease in receivable from affiliates 35 (350)
------- --------
Total adjustments (557) (8,868)
------- --------
NET CASH PROVIDED BY OPERATIONS 11,373 6,006
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities --- 9,762
Purchases of securities (1,586) (10,254)
Proceeds from sales of trading securities 3,870 21,936
Purchases of trading securities (3,840) (25,787)
Acquisition of property, and equipment, net (602) (399)
Proceeds from sale of land, building & equipment 582 ---
------- --------
Net cash (used in) investing activities (1,576) (4,742)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of treasury stock --- 15
Dividends paid (4,990) (4,990)
------- --------
Net cash (used in) financing activities (4,990) (4,975)
------- --------
Net increase/(decrease) in cash and cash equivalents 4,807 (3,711)
cash and cash equivalents at beginning of period 29,937 16,083
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $34,744 $12,372
------- --------
------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<PAGE>
VALUE LINE, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED OCTOBER 31, 1998
(in thousands, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Number Par value Additional other
of common of common paid-in Treasury Comprehensive Retained comprehensive
shares shares capital Stock income earnings income Total
--------- --------- ---------- -------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT MAY 1, 1998 9,978,625 $1,000 $959 ($411) $108,392 $26,997 $136,937
Comprehensive income
Net income $11,930 11,930 11,930
Other comprehensive income,
net of tax:
Change in unrealized
gains on securities ($8,095) (8,095) (8,095)
-------------
Comprehensive income $3,835
-------------
-------------
Dividends declared (4,990) (4,990)
--------- --------- ---------- -------- -------- ------------- --------
BALANCE AT OCTOBER 31, 1998 9,978,625 $1,000 $959 ($411) $115,332 $18,902 $135,782
--------- --------- ---------- -------- -------- ------------- --------
--------- --------- ---------- -------- -------- ------------- --------
</TABLE>
VALUE LINE, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED OCTOBER 31, 1998
(in thousands, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Number Par value Additional other
of common of common paid-in Treasury Comprehensive Retained comprehensive
shares shares capital Stock income earnings income Total
--------- --------- ---------- -------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JULY 31, 1998 9,978,625 $1,000 $959 ($411) $112,406 $24,264 $138,218
Comprehensive income
Net income $5,421 5,421 5,421
Other comprehensive income,
net of tax:
Change in unrealized
gains on securities ($5,362) (5,362) (5,362)
-------------
Comprehensive income $59
-------------
-------------
Dividends declared (2,495) (2,495)
--------- --------- ---------- -------- -------- ------------- --------
BALANCE AT OCTOBER 31, 1998 9,978,625 $1,000 $959 ($411) $115,332 $18,902 $135,782
--------- --------- ---------- -------- -------- ------------- --------
--------- --------- ---------- -------- -------- ------------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
VALUE LINE, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED OCTOBER 31, 1997
(in thousands, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Number Par value Additional other
of common of common paid-in Treasury Comprehensive Retained comprehensive
shares shares capital Stock income earnings income Total
--------- --------- ---------- -------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT MAY 1, 1997 9,978,125 $1,000 $954 ($421) $83,194 $11,637 $96,364
Comprehensive income
Net income $14,874 14,874 14,874
Other comprehensive income,
net of tax:
Change in unrealized
gains on securities 12,758 12,758 12,758
-------------
Comprehensive income $27,632
-------------
-------------
Exercise of stock options 500 5 10 15
Dividends declared (4,990) (4,990)
--------- --------- ---------- -------- -------- ------------- --------
BALANCE AT OCTOBER 31, 1997 9,978,625 $1,000 $959 ($411) $93,078 $24,395 $119,021
--------- --------- ---------- -------- -------- ------------- --------
--------- --------- ---------- -------- -------- ------------- --------
</TABLE>
VALUE LINE, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED OCTOBER 31, 1997
(in thousands, except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Number Par value Additional other
of common of common paid-in Treasury Comprehensive Retained comprehensive
shares shares capital Stock income earnings income Total
--------- --------- ---------- -------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JULY 31, 1997 9,978,625 $1,000 $959 ($411) $88,510 $24,249 $114,307
Comprehensive income
Net income $7,063 7,063 7,063
Other comprehensive income,
net of tax:
Change in unrealized
gains on securities 146 146 146
-------------
Comprehensive income $7,209
-------------
-------------
Dividends declared (2,495) (2,495)
--------- --------- ---------- -------- -------- ------------- --------
BALANCE AT OCTOBER 31, 1997 9,978,625 $1,000 $959 ($411) $93,078 $24,395 $119,021
--------- --------- ---------- -------- -------- ------------- --------
--------- --------- ---------- -------- -------- ------------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
VALUE LINE, INC.
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Significant Accounting Policies - Note 1:
- ----------------------------------------------------
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of normal recurring
accruals except as noted below) considered necessary for a fair presentation.
This report should be read in conjunction with the financial statements and
footnotes contained in the Company's annual report on Form 10-K, dated July 15,
1998 for the fiscal year ended April 30, 1998. Results of operations covered
by this report may not be indicative of the results of operations for the entire
year.
Cash and Cash Equivalents:
The Company considers all cash held at banks and invested in the Value Line
money market funds with an original maturity of less than three months to be
cash and cash equivalents. As of October 31, 1998 and April 30, 1998, cash
equivalents included $33,400,000 and $28,283,000, respectively, invested in the
Value Line money market funds.
Valuation of Securities:
The Company's long-term securities portfolio, which consists of shares of the
Value Line Mutual Funds are valued at market value in accordance with Statement
of Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities. Unrealized gains and losses on these securities are
reported, net of applicable taxes, as a separate component of Shareholders'
Equity. Realized gains and losses on sales of the securities are recorded in
earnings on trade date and are determined on the identified cost method.
Trading securities, which consist of securities held by Value Line Securities,
Inc., the Company's broker-dealer subsidiary, are valued at market with realized
and unrealized gains and losses included in earnings.
Earnings per Share, basic & fully diluted:
Earnings per share are based on the weighted average number of shares of common
stock outstanding during the period.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
7
<PAGE>
Marketable Securities - Note 2:
- ----------------------------------------------------
Trading Securities:
Securities held by Value Line Securities, Inc. had an aggregate cost of
$7,213,000 and $7,914,000 and a market value of $7,795,000 and $8,861,000 at
October 31, 1998 and April 30, 1998, respectively.
Long-Term Securities Available for Sale:
The aggregate cost of the long-term securities was $109,181,000 and $107,743,000
and the market value was $138,261,000 and $149,277,000 at October 31, 1998 and
April 30, 1998, respectively. At October 31, 1998, the decrease in gross
unrealized appreciation on these securities of $12,454,000, net of deferred
taxes of $4,359,000, was included in shareholders' equity.
Supplemental Disclosure of Cash Flow Information - Note 3:
- -----------------------------------------------------------------
Cash payments for income taxes were $6,914,000 and $9,688,000 during the six
months ended October 31, 1998 and 1997, respectively.
Comprehensive Income - Note 4:
- ----------------------------------------------------
During the fiscal year 1999, the Company adopted FASB statement no. 130,
Reporting Comprehensive Income. Statement no. 130 requires the reporting of
comprehensive income in addition to net income from operations. Comprehensive
income is a more inclusive financial reporting methodology that includes
disclosure of certain financial information that historically has not been
recognized in the calculation of net income.
At October 31, 1998 and 1997, the Company held long term securities classified
as available-for-sale. The change in valuation of these securities, net of
deferred taxes has been recorded in the Company's Consolidated Balance Sheets.
The decrease in gross unrealized gains was $8,249,000 and $12,454,000 and the
change in the related deferred taxes was $2,887,000 and $4,359,000 during the
three months and six months ended October 31, 1998, respectively. The increase
in gross unrealized gains on these securities was $225,000 and $19,628,000 and
the change in the related deferred taxes was $79,000 and $6,870,000, during the
three months and six months ended October 31, 1997, respectively.
Gain on Sale of Operating Facility - Note 5:
- ----------------------------------------------------
Pursuant to the Company's realignment of its production and distribution
departments, the Company sold its vacant North Bergen, New Jersey operating
facility during May 1998 for which it received gross proceeds of $577,000. The
gain on the sale of the operating facility is included in revenues in the
Consolidated Statements of Income.
8
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
LIQUIDITY AND CAPITAL RESOURCES:
Value Line, Inc. (the Company) had liquid resources which are used in its
business of $175,187,000 at October 31, 1998. In addition to $36,926,000 of
working capital, the Company had long-term securities available for sale with a
market value of $138,261,000, that, although classified as non-current assets,
are also readily marketable should the need arise.
The Company's cash flow from operations of $11,373,000 for the first six months
of fiscal 1999 was $5,367,000 higher than fiscal 1998's cash flow primarily due
to an increase in prepayments for future subscriptions to the Company's products
and a change in the timing of the receipt and payment of invoices for
significant advertising and promotion vendors. Tax related timing differences
and the utilization of prior period credits also contributed to the additional
cash flows from operations. This increase to cash flow was partially offset by
the increase in accounts receivable that resulted from the efficiencies in order
processing in the new subscription fulfillment system. Net cash outflows for
investing activities during fiscal 1999 were $3,166,000 less than fiscal 1998's
outflows due primarily to the Company's decision in fiscal 1998 to invest
additional cash in its short term trading portfolio. The receipt of $577,000 of
proceeds during fiscal 1999 from the sale of the Company's North Bergen, New
Jersey vacant operating facility also contributed to the increase in comparable
cash flow from investing activities.
Year 2000 (Y2K):
Preparedness for the Year 2000 by Value Line, Inc. began in 1997 with an initial
assessment of the Company's systems, its risk of exposure, the steps necessary
to achieve Y2K compliance, and the resources necessary to implement those steps.
The first phase of the plan involved a complete assessment of the Company's
systems and a survey of vendors. Systems were categorized into three groups -
Mission Critical, Critical, and Non-Critical. Mission Critical systems are
systems that would result in a disruption of service or services. Critical
systems are defined as those that could cause minor disruption of services.
Non-Critical systems are defined as those that would have no significant impact
on operations or services.
State of Readiness - Y2K
We are now into the second phase of the project: Remediation, Testing and
Implementation. This phase involves remediating or replacing non-compliant
systems, testing each system, implementing changes to our production
environment, and then re-testing each system. Under the direction of the Y2K
project team, the Information Technology Department is working towards the Y2K
compliance of all systems by the first quarter of calendar 1999. Though we
cannot provide absolute assurances, we currently believe the Company will reach
its objectives by that time. The Year 2000 project is currently on schedule.
Anticipated Costs - Y2K
The Company's fiscal year 1998 expenditures for the Y2K project were $251,000.
The Company's fiscal year 1999 budget for the Y2K project is $790,000 of which
$232,000 was incurred during the six months ended October 31, 1998. The
Company's fiscal year 2000 budget is projected to be $400,000. These
expenditures include new software and hardware, allocation of staff time,
temporary assistance for clerical tasks, legal counsel, testing tools and
external, third-party monitoring of the Company's Y2K implementation plan.
Risks - Y2K
As the Securities and Exchange Commission recently noted, we cannot predict
with certainty what will happen as the millennium approaches. We are
attempting to purge every system of Year 2000 problems, but we cannot be sure
that we will find every problem in the Company's systems, that the vendors
the Company relies upon will find every problem in their systems, or that the
Securities Industry will not experience system failures that will negatively
and materially impact Value Line. The Company will continue to work toward
compliance and urge its vendors to do the same, but because neither the
Company, nor its vendors, can predict the future with certainty, Value Line
is also developing a contingency plan.
9
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
Contingency Planning - Y2K
Value Line is in the process of finalizing contingency plans to account for the
possible failure of every Mission Critical system. Whether this involves
performing tasks manually, or locating alternative vendors for Mission Critical
software and hardware systems, Value Line is committed to having viable
contingency plans developed for every Mission Critical system by the second
quarter of calendar 1999.
Recent AICPA Pronouncements:
The Accounting Standards Committee of the AICPA recently issued Statement of
Position ("SOP") 98-1 which requires entities to adopt uniform rules in their
financial statements in accounting for the cost of computer software
developed or obtained for internal use. The SOP requires companies to
capitalize as long-lived assets, for fiscal years beginning after December
15, 1998, many of the costs associated with developing or obtaining software
for internal use to amortize those costs over the software's estimated useful
life in a systematic and rational manner. Management estimates that the
Company currently expenses approximately $1,000,000 to $1,500,000 of expenses
each fiscal year that would qualify for amortization under the new statement.
Accordingly, earnings will increase to the extent of capitalized costs (net
of amortization) during the initial year of application. Thereafter, assuming
capitalized costs remain constant, the increase in earnings will diminish as
the initial costs are amortized. Once the amount capitalized in the first
year of application is fully amortized, the increase in earnings due to this
accounting change will cease.
Management believes that the Company's cash and other liquid asset resources
used in its business together with the future cash flows from operations will be
sufficient to finance current and forecasted operations. Management anticipates
no borrowing for the remainder of fiscal 1999.
RESULTS OF OPERATIONS:
Revenues of $48,047,000 for the first six months of fiscal 1999 exceeded the
prior year's revenues of $46,891,000 by 2.5% and set a new record high for
the Company. Revenues of $23,391,000 for the three months ended October 31,
1998 were the second highest in the Company's history during any October
quarter. Net earnings for the six months ended October 31, 1998, were
$11,930,000, $1.20 per share as compared to net income for the six months
ended October 31, 1997 of $14,874,000 or $1.49 per share. Net income of
$5,421,000 or $.55 per share for the second quarter of fiscal 1999 compares
to net income of $7,063,000 or $.71 per share for the similar period during
fiscal 1998.
Subscription revenues of $31,080,000 were $338,000 or 1.1% above revenues
in the comparable prior year period. The increase from the prior year is due
primarily to a 2.0% increase in revenues from The Value Line Investment
Survey and related products, including revenues from new products. Revenues
from investment management fees and services of $16,449,000 for the six
months ended October 31, 1998, were $300,000, or 2.0%, above the prior year's
revenues. The increase from the prior year is primarily the result of a 6%
increase in the year-to-date average net assets in the Company's family of
mutual funds. The Company also recorded revenues of $518,000 from the sale
of its North Bergen, New Jersey, vacant operating facility.
Operating expenses for the first six months of fiscal year 1999 were
$27,474,000, $2,025,000 or 8% above last year's expenses of $25,449,000.
Total advertising and promotional expenses of $7,549,000 were $679,000, or
10%, above the prior year's expenses. The increase was due largely to the
additional promotional expenses for the Value Line family of Mutual Funds,
including additional expenses relating to a selling arrangement for two of
the equity mutual funds for which the Company is the advisor. Salaries and
employee benefit expenses of $11,726,000 were 7% above the prior year's
expenses of $10,997,000. The increase from the prior year's expenses is
primarily the result of revisions to the salary structure in the Equity
Research Department, employment of additional staff in the Asset Management
division and general increases in salaries and incentive compensation.
Production and distribution costs of $3,679,000 were approximately equal with
expenses for the six months ended October 31, 1997. The increases in
production and distribution expenses that resulted from increased circulation
to new products and the additional expenses related to software and Internet
maintenance have been more than offset by lower expenses in our print
publications due to lower print production runs and the lower costs of
producing and distributing our increasingly popular electronic products.
10
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
Office and administration expenses of $4,520,000 increased $624,000, or 16%,
from the prior year's level primarily as a result of increased fees for
professional services and higher rent and depreciation expenses. In addition,
fiscal year-to-date 1998 office and administrative expenses were reduced by
proceeds of $126,000 from the settlement of an intellectual property
infringement.
The Company's securities portfolios produced net income of $111,000 for the
six months ended October 31, 1998, a decrease of $2,954,000 from last year's net
income of $3,065,000. This decrease was due primarily to a restructuring of the
Company's trading portfolio which resulted in a reduction in the size of the
Company's trading portfolio during the latter part of fiscal 1998. Additionally,
the extreme volatility in the equities securities markets during the first five
months of fiscal 1999 due to continuing weaknesses in several foreign economies,
which have severely impacted the United States financial markets also
contributed to the decline in income from securities. The overall equity market
condition improved during the last month of the Company's second quarter period.
11
<PAGE>
VALUE LINE, INC.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Form 10Q report for the period ended October 31,
1998 to be signed on its behalf by the undersigned thereunto duly authorized.
Value Line, Inc.
(Registrant)
Date: December 14, 1998 By: s/Jean Bernhard Buttner
-----------------------------
Jean Bernhard Buttner
Chairman & Chief Executive Officer
Date: December 14, 1998 By: s/Stephen R. Anastasio
-----------------------------
Stephen R. Anastasio
Chief Accounting Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME, CONSOLIDATED STATEMENTS OF
CASH FLOWS, AND STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-START> MAY-01-1998
<PERIOD-END> OCT-31-1998
<CASH> 34,744
<SECURITIES> 7,795
<RECEIVABLES> 5,029
<ALLOWANCES> (519)
<INVENTORY> 0
<CURRENT-ASSETS> 50,057
<PP&E> 18,515
<DEPRECIATION> (6,283)
<TOTAL-ASSETS> 200,589
<CURRENT-LIABILITIES> 13,131
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> 134,782
<TOTAL-LIABILITY-AND-EQUITY> 200,589
<SALES> 31,598
<TOTAL-REVENUES> 48,047
<CGS> 0
<TOTAL-COSTS> 27,474
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 20,684
<INCOME-TAX> 8,754
<INCOME-CONTINUING> 11,930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,930
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.20
</TABLE>
