x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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New York
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13-3139843
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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220 East 42nd Street, New York, New York
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10017-5891
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
¨
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Non-accelerated filer
x
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Smaller reporting company
¨
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|||
(Do not check if a smaller reporting company)
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Class
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Outstanding at February 28, 2011
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Common stock, $.10 par value
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9,974,881 Shares
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Page No.
|
||
PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
Financial Statements
|
|
Consolidated Condensed Balance Sheets as of January 31, 2011 and April 30, 2010
|
3
|
|
Consolidated Condensed Statements of Income for the three and nine months ended January 31, 2011 and 2010
|
4
|
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Consolidated Condensed Statements of Cash Flows for the nine months ended January 31, 2011 and 2010
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5
|
|
Consolidated Condensed Statement of Changes in Shareholders’ Equity for the nine months ended January 31, 2011
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6
|
|
Consolidated Condensed Statement of Changes in Shareholders’ Equity for the nine months ended January 31, 2010
|
7
|
|
Notes to Consolidated Condensed Financial Statements
|
8
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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20
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Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
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33
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Item 4.
|
Controls and Procedures
|
35
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PART II. OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
36
|
Item 1A.
|
Risk Factors
|
36
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
36
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Item 5.
|
Other Information.
|
37
|
Item 6.
|
Exhibits
|
37
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Signatures
|
38
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EX-10.16
|
EAM Trust Agreement
|
|
EX-14.1
|
Code of Business Conduct and Ethics
|
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EX-14.2
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Code of Ethics Regarding Securities Transactions and Insider Trading Policy
|
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EX-31.1
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(Certifications required under Section 302 of the Sarbanes-Oxley Act of 2002)
|
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EX-31.2
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(Certifications required under Section 302 of the Sarbanes-Oxley Act of 2002)
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EX-31.3
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(Certifications required under Section 302 of the Sarbanes-Oxley Act of 2002)
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EX-32.1
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(Certifications required under Section 906 of the Sarbanes-Oxley Act of 2002)
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|
EX-99.1 | Press release dated March 24, 2011 |
Jan. 31,
|
Apr. 30,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents (including short term investments of $7,004 and $15,946, respectively)
|
$ | 7,575 | $ | 16,435 | ||||
Securities available for sale
|
10,025 | 23,529 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $46 and $47, respectively
|
1,429 | 1,681 | ||||||
Receivable from affiliates
|
25 | 1,520 | ||||||
Prepaid and refundable income taxes
|
488 | 2,086 | ||||||
Prepaid expenses and other current assets
|
854 | 995 | ||||||
Deferred income taxes
|
5,291 | 8,690 | ||||||
Total current assets
|
25,687 | 54,936 | ||||||
Long term assets
|
||||||||
Investment in EAM Trust
|
56,668 | - | ||||||
Property and equipment, net
|
4,147 | 4,257 | ||||||
Capitalized software and other intangible assets, net
|
1,074 | 792 | ||||||
Total long term assets
|
61,889 | 5,049 | ||||||
Total assets
|
$ | 87,576 | $ | 59,985 | ||||
Liabilities and Shareholders' Equity
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$ | 3,340 | $ | 4,982 | ||||
Accrued salaries
|
842 | 1,351 | ||||||
Dividends payable
|
1,996 | - | ||||||
Accrued taxes payable
|
780 | 780 | ||||||
Reserve for settlement expenses including fair fund
|
3,483 | 4,247 | ||||||
Unearned revenue
|
21,611 | 22,314 | ||||||
Total current liabilities
|
32,052 | 33,674 | ||||||
Long term liabilities
|
||||||||
Unearned revenue
|
4,178 | 4,863 | ||||||
Deferred income taxes
|
18,880 | - | ||||||
Total long term liabilities
|
23,058 | 4,863 | ||||||
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
|
991 | 991 | ||||||
Retained earnings
|
30,878 | 19,813 | ||||||
Treasury stock, at cost (22,698 shares on 1/31/11 and 18,400 shares on 4/30/10)
|
(411 | ) | (354 | ) | ||||
Accumulated other comprehensive income/(loss), net of tax
|
8 | (2 | ) | |||||
Total shareholders' equity
|
32,466 | 21,448 | ||||||
Total liabilities and shareholders' equity
|
$ | 87,576 | $ | 59,985 |
Three months ended
|
Nine months ended
|
|||||||||||||||
Jan. 31,
|
Jan. 31,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues:
|
||||||||||||||||
Investment periodicals and related publications
|
$ | 8,669 | $ | 8,864 | $ | 25,853 | $ | 27,343 | ||||||||
Copyright data fees
|
954 | 883 | 2,596 | 2,477 | ||||||||||||
Investment management fees & services
|
2,412 | 4,825 | 10,693 | 14,407 | ||||||||||||
Total revenues
|
12,035 | 14,572 | 39,142 | 44,227 | ||||||||||||
Expenses:
|
||||||||||||||||
Advertising and promotion
|
1,366 | 2,440 | 5,443 | 6,933 | ||||||||||||
Salaries and employee benefits
|
5,322 | 4,084 | 13,587 | 12,634 | ||||||||||||
Production and distribution
|
1,238 | 1,330 | 3,518 | 3,895 | ||||||||||||
Office and administration
|
2,283 | 2,135 | 6,970 | 7,825 | ||||||||||||
Expenses related to restructuring
|
1,302 | - | 3,764 | - | ||||||||||||
Provision for settlement
|
- | - | - | 47,706 | ||||||||||||
Total expenses
|
11,511 | 9,989 | 33,282 | 78,993 | ||||||||||||
Income/(loss) from operations
|
524 | 4,583 | 5,860 | (34,766 | ) | |||||||||||
Gain on deconsolidation of subsidiaries
|
50,510 | - | 50,510 | - | ||||||||||||
Revenues and profits interest from EAM Trust
|
724 | - | 724 | - | ||||||||||||
Income from securities transactions, net
|
(40 | ) | 185 | 48 | 553 | |||||||||||
Income/(loss) before income taxes
|
51,718 | 4,768 | 57,142 | (34,213 | ) | |||||||||||
Provision for income taxes/(benefit)
|
20,101 | 1,198 | 22,121 | (8,580 | ) | |||||||||||
Net income/(loss)
|
$ | 31,617 | $ | 3,570 | $ | 35,021 | $ | (25,633 | ) | |||||||
Earnings/(loss) per share, basic & fully diluted
|
$ | 3.17 | $ | 0.36 | $ | 3.51 | $ | (2.57 | ) | |||||||
Weighted average number of common shares
|
9,981,447 | 9,981,600 | 9,981,549 | 9,981,600 |
For the nine months
|
||||||||
ended
|
||||||||
Jan. 31,
|
Jan. 31,
|
|||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income/(loss)
|
$ | 35,021 | $ | (25,633 | ) | |||
Adjustments to reconcile net income/(loss) to net cash
|
||||||||
provided by/(used in) operating activities:
|
||||||||
Depreciation and amortization
|
439 | 548 | ||||||
Amortization of bond premium
|
13 | 853 | ||||||
Gain on deconsolidation of subsidiaries
|
(50,510 | ) | - | |||||
Postemployment non-cash compensation
|
1,475 | - | ||||||
Revenues and profits interest in EAM Trust
|
(724 | ) | - | |||||
(Gains)/losses on sales of trading securities
|
||||||||
and securities classified as available for sale
|
64 | (71 | ) | |||||
Unrealized gains/(losses) on securities
|
(5 | ) | 201 | |||||
Deferred income taxes
|
22,121 | (8,326 | ) | |||||
Writedown of software
|
- | 720 | ||||||
Changes in assets and liabilities:
|
||||||||
Proceeds from sales of trading securities
|
- | 10,511 | ||||||
(Decrease) in unearned revenue
|
(1,388 | ) | (3,427 | ) | ||||
(Decrease)/increase in reserve for settlement
|
(764 | ) | 4,000 | |||||
(Decrease)/increase in accounts pay. & accrued exp.
|
(1,536 | ) | 844 | |||||
(Decrease) in accrued salaries
|
(389 | ) | (122 | ) | ||||
Increase/(decrease) in accrued taxes payable
|
161 | (392 | ) | |||||
Decrease/(increase) in prepaid and refundable income taxes
|
1,598 | (1,920 | ) | |||||
Decrease in prepaid exp. and other current assets
|
139 | 27 | ||||||
Decrease in accounts receivable
|
252 | 114 | ||||||
Decrease/(increase) in receivable from affiliates
|
1,358 | (585 | ) | |||||
Total adjustments
|
(27,696 | ) | 2,975 | |||||
Net cash provided by/(used in) operating activities
|
7,325 | (22,658 | ) | |||||
Cash flows from investing activities:
|
||||||||
Purchases/sales of securities classified as available for sale:
|
||||||||
Proceeds from sales of fixed income securities
|
34,024 | 30,202 | ||||||
Purchase of fixed income securities
|
(21,314 | ) | (28,748 | ) | ||||
Purchase of equity securities
|
(790 | ) | - | |||||
Cash contributed to deconsolidated subsidiary capital
|
(5,484 | ) | - | |||||
Revenues and profits distribution from EAM Trust
|
156 | - | ||||||
Acquisition of property and equipment
|
(98 | ) | (55 | ) | ||||
Expenditures for capitalized software
|
(662 | ) | (466 | ) | ||||
Net cash provided by investing activities
|
5,832 | 933 | ||||||
Cash flows from financing activities:
|
||||||||
Purchase of treasury stock at cost
|
(57 | ) | - | |||||
Dividends paid
|
(21,960 | ) | (6,987 | ) | ||||
Net cash used in financing activities
|
(22,017 | ) | (6,987 | ) | ||||
Net (decrease) in cash and cash equivalents
|
(8,860 | ) | (28,712 | ) | ||||
Cash and cash equivalents at beginning of year
|
16,435 | 42,936 | ||||||
Cash and cash equivalents at end of period
|
$ | 7,575 | $ | 14,224 |
Common stock
|
Accumulated
|
|||||||||||||||||||||||||||||||
Number
|
Additional
|
Other
|
||||||||||||||||||||||||||||||
of
|
paid-in
|
Treasury
|
Comprehensive
|
Retained
|
Comprehensive
|
|||||||||||||||||||||||||||
shares
|
Amount
|
capital
|
Stock
|
income/(loss)
|
earnings
|
income/(loss)
|
Total
|
|||||||||||||||||||||||||
Balance at April 30, 2010
|
9,981,600 | $ | 1,000 | $ | 991 | $ | (354 | ) | $ | 19,813 | $ | (2 | ) | $ | 21,448 | |||||||||||||||||
Comprehensive income
|
||||||||||||||||||||||||||||||||
Net income
|
$ | 35,021 | 35,021 | 35,021 | ||||||||||||||||||||||||||||
Other comprehensive income, net of tax:
|
||||||||||||||||||||||||||||||||
Change in unrealized gains on securities, net of taxes
|
10 | 10 | 10 | |||||||||||||||||||||||||||||
Comprehensive income
|
$ | 35,031 | ||||||||||||||||||||||||||||||
Purchase of treasury stock
|
(4,298 | ) | (57 | ) | (57 | ) | ||||||||||||||||||||||||||
Dividends declared
|
(23,956 | ) | (23,956 | ) | ||||||||||||||||||||||||||||
Balance at January 31, 2011
|
9,977,302 | $ | 1,000 | $ | 991 | $ | (411 | ) | $ | 30,878 | $ | 8 | $ | 32,466 |
Common
stock
|
Accumulated
|
|||||||||||||||||||||||||||||||
Number
|
Additional
|
Other
|
||||||||||||||||||||||||||||||
of
|
paid-in
|
Treasury
|
Comprehensive
|
Retained
|
Comprehensive
|
|||||||||||||||||||||||||||
shares
|
Amount
|
capital
|
Stock
|
income/(loss)
|
earnings
|
income/(loss)
|
Total
|
|||||||||||||||||||||||||
Balance at April 30, 2009
|
9,981,600 | $ | 1,000 | $ | 991 | $ | (354 | ) | $ | 78,935 | $ | 297 | $ | 80,869 | ||||||||||||||||||
Comprehensive income/(loss)
|
||||||||||||||||||||||||||||||||
Net income/(loss)
|
$ | (25,633 | ) | (25,633 | ) | (25,633 | ) | |||||||||||||||||||||||||
Other comprehensive income/(loss), net of tax:
|
||||||||||||||||||||||||||||||||
Change in unrealized gains on securities, net of taxes
|
(77 | ) | (77 | ) | (77 | ) | ||||||||||||||||||||||||||
Comprehensive income/(loss)
|
$ | (25,710 | ) | |||||||||||||||||||||||||||||
Dividends declared
|
(5,989 | ) | (5,989 | ) | ||||||||||||||||||||||||||||
Balance at January 31, 2010
|
9,981,600 | $ | 1,000 | $ | 991 | $ | (354 | ) | $ | 47,313 | $ | 220 | $ | 49,170 |
(in thousands) | ||||||||||||
Valuation Inputs
|
Total
Investments
|
Cash
Equivalents
|
Investments in
Securities
Available-for-
Sale
|
|||||||||
Level 1 - quoted prices
|
$ | 7,818 | $ | 7,004 | $ | 814 | ||||||
Level 2 - other significant observable inputs
|
9,211 | - | 9,211 | |||||||||
Level 3 - significant unobservable inputs
|
- | - | - | |||||||||
Total
|
$ | 17,029 | $ | 7,004 | $ | 10,025 |
(in thousands)
|
||||||||||||
Amortized Historical
|
Gross Unrealized
|
|||||||||||
Maturity
|
Cost
|
Fair Value
|
Holding Losses
|
|||||||||
Due within 1 year
|
$ | 9,222 | $ | 9,211 | $ | (11 | ) | |||||
Total investment in government debt securities
|
$ | 9,222 | $ | 9,211 | $ | (11 | ) |
(in thousands)
|
||||||||||||
Amortized Historical
|
Gross Unrealized
|
|||||||||||
Maturity
|
Cost
|
Fair Value
|
Holding Gains/(Losses)
|
|||||||||
Due within 1 year
|
$ | 22,012 | $ | 22,014 | $ | 2 | ||||||
Due 1 year through 5 years
|
1,520 | 1,515 | (5 | ) | ||||||||
Total investment in government debt securities
|
$ | 23,532 | $ | 23,529 | $ | (3 | ) |
Investment in Unconsolidated Entities:
|
|||||||
Equity Method Investment:
|
|||||||
The Company has recorded an asset, Investment in EAM, on its consolidated condensed balance sheet of $56,100,000 as a result of the deconsolidation of EULAV Asset Management LLC ("EULAV Asset Management") and EULAV Securities, Inc. ("ESI"), the former asset management and broker-dealer subsidiaries. In accordance with the Consolidation Topic of the FASB’s ASC, the Company recognized a pre-tax gain in net income of $50,510,000 measured as the difference between the fair value of the consideration received, including satisfaction of its postemployment compensation obligation of $1,475,000, less the carrying value of the former subsidiaries’ assets and liabilities. In addtion, the Company incurred expenses of $3,764,000 associated with the divestiture. The value of VLI's investment in EAM at
January 31, 2011 reflects the fair value of the nonvoting revenues and profits interest received in the Transaction, plus the $7,000,000 of cash and liquid securities contributed to EAM's capital account by VLI, and $568,000 of undistributed earnings from EAM. EAM is an investment adviser and through its wholly owned subsidiary ES, is the distributor of the Value Line Funds.
|
|||||||
The Company utilized the services of valuation consultants to determine the fair value of the EAM asset and the value of the Class A voting profits interest granted to its former employee. The methodology utilized by the third party valuation consultants was the discounted cash flows method to determine the fair value of VLI's nonvoting revenues and profits interest and the fair value of the Class A voting profits interest granted to a former employee. Based upon the results of the valuation and cash and other assets transferred by VLI to EAM in the transaction, the Company recorded a fair value of $56,100,000 for VLI's nonvoting EAM Trust investment. The obligation for postemployment compensation granted to the former employee was valued at $1,475,000 for the Class A voting profits interest.
|
|||||||
The Company evaluates this asset for impairment which requires a determination as to whether an event or change in circumstances has occurred in the period that may have a significant adverse effect on the fair value of the investment. Impairment indicators include, but are not limited to the following: (a) a significant deterioration in the earnings performance, asset quality, or business prospects of the investee, (b) a significant adverse change in the regulatory, economic, or technological environment of the investee, (c) a significant adverse change in the general market condition of the industry in which the investee operates, or (d) factors that raise significant concerns about the investee’s ability to continue as a going concern such as negative cash flows, working capital deficiencies,
or noncompliance with statutory capital requirements. The Company did not record any impairment losses on its equity method investment in EAM during fiscal year 2011.
|
|||||||
EAM's overall results before distributions to all interest holders including Value Line for the period from December 23, 2010 through January 31, 2011 consist of total management fees earned from the Value Line Funds of $1,388,000 and service and distribution 12b-1 fees of $390,000. For the same period, total management fee waivers were $72,000 and 12b-1 fee waivers were $213,000. After revenue distributions of $665,000 to VLI, total revenues were $1,113,000 for the period from December 23, 2010 to January 31, 2011. Operating expenses of EAM for the period from December 23, 2010 through January 31, 2011, were $994,000 and EAM's net income was $119,000 before distribution to interest holders. At January 31, 2011, EAM's total assets were $57,413,000, total
liabilities were $1,221,000 and total equity was $56,192,000.
|
|||||||
Note 3 - Supplementary Cash Flow Information:
|
|||||||
Cash payments for income taxes were $262,000 and $2,401,000 for the nine months ended January 31, 2011 and 2010, respectively. The Company also received $1,598,000 of federal income tax refunds during the first quarter of fiscal 2011, which was included as prepaid and refundable income taxes as of April 30, 2010.
|
|||||||
On December 23, 2010, the Company completed the Restructuring Transaction which included the receipt of a nonvoting revenues and profits interest in EAM in exchange for VLI's voting shares in EULAV Asset Management and ESI. This investment, classified as Investment in EAM on the Consolidated Condensed Balance Sheet was valued at $56,100,000, which included cash of $5,484,000 and $1,516,000 of FDIC insured corporate notes, contributed by VLI to EAM as part of the Transaction. The Company satisfied its postemployment compensation obligation valued at $1,475,000 by granting a Class A voting profits interest to VLI's former employee in connection with the transaction.
|
(in thousands)
|
||||||||||||
Before
|
Tax Expense
|
Net of
|
||||||||||
Nine months ended January 31, 2011
|
Tax Amount
|
(Benefit)
|
Tax Amount
|
|||||||||
Unrealized gains/(losses) on securities:
|
||||||||||||
Unrealized holding losses arising during the period
|
$ | (48 | ) | $ | 17 | $ | (31 | ) | ||||
Add: Reclassification adjustments for
|
||||||||||||
losses realized in net income
|
64 | (23 | ) | 41 | ||||||||
Other comprehensive income
|
$ | 16 | $ | (6 | ) | $ | 10 | |||||
(in thousands)
|
||||||||||||
Before
|
Tax Expense
|
Net of
|
||||||||||
Nine months ended January 31, 2010
|
Tax Amount
|
(Benefit)
|
Tax Amount
|
|||||||||
Unrealized gains/(losses) on securities:
|
||||||||||||
Unrealized holding losses arising during the period
|
$ | (139 | ) | $ | 50 | $ | (89 | ) | ||||
Add: Reclassification adjustments for
|
||||||||||||
losses realized in net income
|
20 | (8 | ) | 12 | ||||||||
Other comprehensive income
|
$ | (119 | ) | $ | 42 | $ | (77 | ) |
The provision for income taxes includes the following:
|
Nine months ended January 31,
|
|||||||
2011
|
2010
|
|||||||
(in thousands)
|
||||||||
Current tax expense:
|
||||||||
Federal
|
$ | 248 | $ | - | ||||
State and local
|
- | - | ||||||
248 | - | |||||||
Deferred tax expense/(benefit):
|
||||||||
Federal
|
19,282 | (6,662 | ) | |||||
State and local
|
2,591 | (1,918 | ) | |||||
21,873 | (8,580 | ) | ||||||
Provision for income taxes/(benefit)
|
$ | 22,121 | $ | (8,580 | ) |
Nine months ended January
31,
|
||||||||
2011
|
2010
|
|||||||
U.S. statutory federal rate
|
35.00 | % | 35.00 | % | ||||
Increase/(decrease) in tax rate from:
|
||||||||
Tax effect of non-deductible portion of provision for settlement
|
- | -11.97 | % | |||||
State and local income taxes, net of federal income tax benefit
|
2.95 | % | 3.59 | % | ||||
Effect of tax exempt income and dividend deductions
|
- | 0.69 | % | |||||
Alternative minimum tax - net operating loss limitation
|
0.96 | % | - | |||||
Other, net
|
-0.20 | % | -2.23 | % | ||||
Effective income tax rate
|
38.71 | % | 25.08 | % |
Nine months ended January 31, 2011
|
||||||||||||
Investment
|
||||||||||||
Periodicals,
|
|
|
||||||||||
Publishing &
|
Investment
|
|||||||||||
Copyright Data
|
Management
|
Total
|
||||||||||
Revenues from external customers
|
$ | 28,449 | $ | 10,693 | $ | 39,142 | ||||||
Intersegment revenues
|
7 | - | 7 | |||||||||
Income/(loss) from securities transactions
|
(3 | ) | 6 | 3 | ||||||||
Gain from deconsolidation of subsidiaries*
|
- | 50,510 | 50,510 | |||||||||
Depreciation and amortization
|
425 | 14 | 439 | |||||||||
Segment profit/(loss) from operations *
|
6,866 | (1,006 | ) | 5,860 | ||||||||
Segment assets
|
12,101 | - | 12,101 | |||||||||
Expenditures for segment assets
|
750 | 10 | 760 | |||||||||
Nine months ended January 31, 2010
|
||||||||||||
Investment
|
||||||||||||
Periodicals,
|
|
|
||||||||||
Publishing &
|
Investment
|
|||||||||||
Copyright Data
|
Management | Total | ||||||||||
Revenues from external customers
|
$ | 29,820 | $ | 14,407 | $ | 44,227 | ||||||
Intersegment revenues
|
15 | - | 15 | |||||||||
Income/(loss) from securities transactions
|
(57 | ) | 167 | 110 | ||||||||
Depreciation and amortization
|
514 | 33 | 547 | |||||||||
Segment profit/(loss) from operations *
|
8,017 | (42,783 | ) | (34,766 | ) | |||||||
Segment assets
|
12,467 | 12,189 | 24,656 | |||||||||
Expenditures for segment assets
|
516 | 5 | 521 | |||||||||
(in thousands)
|
|||||||||||||
Nine months ended January 31,
|
|||||||||||||
2011 | 2010 | ||||||||||||
Revenues
|
|||||||||||||
Total revenues for reportable segments
|
$ | 39,149 | $ | 44,242 | |||||||||
Elimination of intersegment revenues
|
(7 | ) | (15 | ) | |||||||||
Total consolidated revenues
|
$ | 39,142 | $ | 44,227 | |||||||||
Profit/(loss) before income taxes *
|
|||||||||||||
Total profit/(loss) for reportable segments
|
$ | 56,373 | $ | (34,656 | ) | ||||||||
Add: Revenues and profits interest from EAM Trust
|
724 | - | |||||||||||
Add: Income from securities transactions related to corporate assets
|
45 | 444 | |||||||||||
Less: Depreciation related to corporate assets
|
- | (1 | ) | ||||||||||
Profit/(loss) before income taxes
|
$ | 57,142 | $ | (34,213 | ) | ||||||||
Assets
|
|||||||||||||
Total assets for reportable segments
|
$ | 12,101 | $ | 24,656 | |||||||||
Corporate assets
|
75,475 | 61,105 | |||||||||||
Consolidated total assets
|
$ | 87,576 | $ | 85,761 | |||||||||
(in thousands except for
shares and cost per share)
|
Date
|
Shares
|
Total Average
Cost
Assigned
|
Average Cost
per Share
|
||||||||||
Balance April 30, 2010
|
18,400 | $ | 354 | |||||||||||
Purchases effected in open market
|
January, 2011
|
4,298 | 57 | $ | 13.26 | |||||||||
Balance January 31, 2011
|
22,698 | $ | 411 |
During the period from 1986 until voluntarily suspended by VLI in November 2004, VLI had arrangements with several of the Value Line Funds managed by VLI pursuant to which, acting through an affiliated broker in respect of certain securities trades, it charged the Funds commission rates of $0.0488 per share, forwarded such transactions to unaffiliated brokerage firms for execution, clearance and settlement at a commission rate that varied from $.02 to $.01 per share. The SEC alleged that VLI’s affiliated broker retained the excess without providing any brokerage services. On November 4, 2009, the Company, its former brokerage subsidiary and Jean Bernhard Buttner and David T. Henigson, who were former officers and directors of the Company concluded a settlement with the SEC as a result of an
investigation into the brokerage practices discussed above (the “Settlement”).
|
The Settlement required that the two former officers and directors no longer be directors or officers of any publicly traded company in the U.S. that has a class of securities registered pursuant to section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) or is required to file reports pursuant to section 15(d) of the Exchange Act and disassociate themselves from the Company’s investment management and brokerage business. In the case of the Company’s former CEO and indirect controlling shareholder, Jean Bernhard Buttner, the Settlement expressly permitted her to continue to exercise control until November 4, 2010, which date was extended by the Commission to December 24, 2010, for the purpose of engaging in one or more transactions that would result in her
terminating her affiliated person status with respect to the Company’s then broker-dealer and investment adviser subsidiaries. This was achieved on December 23, 2010 upon the closing of the Restructuring Transaction in which EAM succeeded to the regulated businesses formerly conducted by the Company.
|
The Settlement with the SEC that resolved the Commission’s investigation resulted in VLI being precluded from receiving the revenue, through its brokerage subsidiary, from commissions charged for securities trading by the Value Line Funds. VLI had suspended this practice in 2004, five years prior to the Settlement, so this aspect of the Settlement will not result in any change in revenue compared to more recent fiscal years. The Settlement also resulted in the investment adviser business being transferred to EAM. However, VLI continues to have both a nonvoting revenues interest and a nonvoting profits interest in EAM.
|
The outstanding provision for settlement in the amount of $3,483,000 reflected as liability in the consolidated condensed balance sheet as of January 31, 2011, includes anticipated costs of Fair Fund administration as well as certain fees and costs arising from reaching and implementing the Settlement.
|
On December 23, 2010, EULAV Asset Management, LLC was restructured as a Delaware statutory trust and renamed EULAV Asset Management (which we refer to as the “Adviser” or "EAM"). In accordance with the Investment Company Act of 1940 (the “1940 Act”), at the time of the restructuring, each Fund’s prior investment advisory agreement terminated and the Adviser entered into a new investment advisory agreement with each Fund. The services provided by the Adviser under each new agreement and the rates at which fees are paid by each Fund under its new agreement are the same as under that Fund’s prior investment advisory agreement. In addition, the other terms of each Fund’s new investment advisory agreement are the same as that Fund’s prior
investment advisory agreement, except for the date of execution, the two-year initial term, immaterial updating changes and immaterial changes in form. Neither VLI nor EAM provided any guarantees as it relates to the Funds and/or the new investment advisory agreements.
|
Each Fund has a distribution agreement with EULAV Securities LLC (the “Distributor" or "ES"), a wholly-owned subsidiary of the Adviser, pursuant to which the Distributor acts as principal underwriter and distributor of the Value Line Funds for the sale and distribution of their shares. On May 5, 2009, the Distributor changed its name from “Value Line Securities, Inc.” to “EULAV Securities, Inc.” As part of the restructuring described above, EULAV Securities, Inc. was restructured as a Delaware limited liability company and changed its name to EULAV Securities LLC. No other changes were made to the Distributor’s organization, including its operations and personnel. For its services under the agreements, the Distributor is not entitled
to receive any compensation, although it is entitled to receive fees under each Fund’s Service and Distribution Plan.
|
As part of the restructuring, the predecessor Adviser’s capital structure was revised so that VLI owns only nonvoting revenue and profits interests and five individuals each owns 20% of the voting profits interests of the Adviser. The holders of the Adviser’s voting profits interests have the right to elect five trustees of the Adviser, who manage the combined company consisting of the Adviser and the Distributor much like a board of directors. The five initial holders of the Adviser’s voting profits interests are: Mr. Appel, Avi T. Aronovitz, Richard Berenger, Howard B. Sirota and R. Alastair Short. These persons elected themselves as the five initial Trustees of the Adviser. Mr. Sirota subsequently resigned as a Trustee but continues to hold 20% of
the voting profits interests, and the Company understands he has not yet been replaced as a Trustee as of this writing. The Trustees initially delegated the authority to manage the day-to-day business of the Adviser and the Distributor to the Adviser’s senior executive, Mitchell E. Appel, who is one of the Trustees.
|
Each of these five individuals was granted a voting profits interest having 20% of the voting power for the election of Trustees and other matters submitted for approval by the holders of the voting profits interests of the Adviser in exchange for the agreement by such individual to act as an initial voting profits interest holder and, in the case of Mr. Appel, as the initial senior executive officer, of EAM in order to enable VLI to complete the required disassociation with EAM and ES. Collectively, the voting profits interests receive 50% of the residual profit of the business, in which the share of Mr. Appel is 45% and the others each 1.25%, subject to temporary adjustments in certain circumstances. VLI retains a nonvoting profits interest representing 50% of residual profits, subject to
temporary adjustments in certain circumstances and has no power to vote for the election, removal or replacement of the trustees of the Adviser. VLI also has an interest in non-distribution revenues of the business ranging from 41% at non-distribution fee revenue levels of $9 million or less to 55% at such revenue levels of $35 million or more. In the event the business is sold or liquidated, the first $56.1 million of net proceeds (the value of the business at the time the Restructuring Transaction was approved as determined by the directors of Value Line after reviewing a valuation report by the directors’ financial advisors) plus any additional capital contributions (VLI or any holder of a voting profits interest, at its discretion, may make future contributions to its capital account in EAM), which contributions would increase its capital account but not its percentage interest in operating profits, will be distributed in accordance with capital accounts; 20% of
the next $56.1 million will be distributed to the holders of the voting profits interests and 80% to the holders of the nonvoting profits interests (initially VLI); and the excess will be distributed 45% to the holders of the voting profits interests and 55% to the holders of the nonvoting profits interests.
|
When VLI contributed its investment advisory business to EULAV Asset Management in June 2008, it granted EULAV Asset Management the right to have the existing Value Line Funds use the name "Value Line" inasmuch as the then existing investment advisory agreements gave the Value Line Funds that right, agreed to continue its access to Value Line's ranking information and agreed to maintain a stated level of liquid capital. In connection with the Restructuring Transaction in 2010 VLI re-granted such license of the Value Line name to EAM for use by the existing Value Line Funds with certain new conditions not in effect in 2008 and also imposed certain conditions for continued use of the Value Line name in the new investment advisory agreements, extended its agreement to provide access to the ranking
information and capitalized the business with $7 million while disclaiming any agreement to provide any future capital support.VLI has not provided any guarantee with respect to any aspect of EAM's operations, including but not limited to future debt agreements. VLI has not assumed and does not assume any liability of the Company for any period on or after the effective date of the restructuring, December 23, 2010.
|
The EAM Trust has no fixed term, but in the event that control of the Company’s majority shareholder changes or the majority shareholder no longer owns 5% or more of the voting securities of the Company, then the Company has the right, but not the obligation, to buy the voting profits interests at a fair market value to be determined by an independent valuation firm in accordance with the terms of the EAM Trust Agreement.
|
The Company has with respect to the Adviser the benefit of certain consent rights involving extraordinary events, such as a proposed sale of all or a significant part of the Adviser, material acquisitions, entering into businesses other than asset management and fund distribution, paying compensation in excess of the mandated limit of 22.5%-30% of non-distribution fee revenues (depending on the level of such revenues), declaring voluntary bankruptcy, making material changes in tax or accounting policies or making substantial borrowings, and entering into related party transactions. These rights were established to protect the Company’s nonvoting revenues and nonvoting profits interests in EAM.
|
As a result of the restructuring, the Company ceased to “control” (as that term is defined in the 1940 Act) the Adviser or the Distributor. Under the terms of the settlement with the SEC stemming from the Company’s brokerage practices with certain Value Line Funds prior to November 2004, Jean Bernhard Buttner, who controls Arnold Bernhard & Co., Inc., which owns 86.5% of the Company’s common stock (the “Control Person”), and David Henigson, a former officer and director of the Company were barred from association with any broker, dealer, or investment adviser and were prohibited from serving or acting in various capacities, including as an “affiliated person” (as that term is defined in the 1940 Act) of the Value Line Funds, the Adviser or the
Distributor (due to Mrs. Buttner’s control over the Company, the requirement of disassociation on her part was postponed until December 24, 2010). The required “disassociation” was accomplished when the Company transferred 100% of the voting control over the regulated investment adviser and broker-dealer subsidiaries to the five individual voting profits interest holders of the Adviser, none of whom is under the control of the Company, its majority shareholder or Mrs. Buttner.
|
On a short-term transitional basis, EAM and ES occupy a portion of the premises that the Company leases from a third party. The Company receives rental payments from EAM and provides certain accounting and other administrative support services to EAM. In accordance with the terms of the restructuring plan, the Company has given notice to EAM to vacate the Company’s premises on or before June 1, 2011.
|
Set forth below is brief biographical information with respect to the five individuals who have been issued all of the voting profits interests in the Adviser, including information with respect to association with the Company as an employee or director prior to the transaction:
|
- Mr. A. Short, the first Chairman of the Trustees of EAM, is a former practicing attorney with an extensive background in the mutual funds industry and interests in private equity firms. He served as (executive) Vice Chairman of W. P. Stewart & Co., Inc. and serves as an independent director and Audit Chair of an unrelated funds group.
- Mr. A. Aronovitz is an experienced accountant and financial executive and served as interim chief financial officer of Comverse Technologies, a public company, after being appointed to the position following a securities investigation.
- Mr. R. Berenger is a highly experienced compliance official, principally in the brokerage industry.
- Mr. H. Sirota is a New York City securities attorney who was employed by the NASD before entering private law practice.
- Mr. M. Appel was the Chief Financial Officer of VLI from April 2008 to December 2010 and from September 2005 to November 2007; President of each of the Value Line Funds since June 2008; President of EULAV Asset Management and ESI from February 2009 until the restructuring on December 23, 2010; Treasurer of VLI from June to September 2005; and Chief Financial Officer, XTF Asset Management from November 2007 to April 2008. Mr. Appel served as a Director on the Company's Board from February 2010 to October 2010. He earned his MBA from New York University.
|
On September 3, 2008, VLI was served with a derivative shareholder's suit filed in New York County Supreme Court naming certain current and former directors of the Company and alleging breach of fiduciary duty and related allegations, all arising from the SEC matter. The complaint sought return of remuneration by the Directors and other remedies. A second derivative shareholder's suit was filed in New York County Supreme Court on or about November 9, 2009, naming certain current and former VLI Directors and the Parent as defendants. This suit primarily restates the same or similar allegations and seeks similar remedies as were sought in the earlier derivative shareholder's suit served in September 2008. By order dated January 8, 2010, the Court granted Plaintiffs' motion to consolidate the two cases. VLI has
advised its insurance carriers of these developments and it is not possible to estimate an amount or range of loss on VLI's financial statements.
|
The present and former directors of VLI who are defendants in the consolidated cases filed in 2008 and 2009 are Howard A. Brecher, Edgar A. Buttner, Jean Bernhard Buttner and David Henigson. The complaints do not specify a basis for calculating remuneration that the actions seek to have returned to the Company, nor do the original or amended complaints state a total of such remuneration. In a document filed in 2011, the plaintiffs indicated an amount at issue in the case of $5 million. The defendants responded to the complaint in the consolidated case on August 20, 2010, and the case is proceeding in New York County.
|
Following mediation under the auspices of the court, on March 22, 2011, an agreement was reached by the parties to settle the litigation. The settlement in principle is subject to the parties’ execution of a settlement agreement and court approval. Provided the settlement agreement is consummated and approved, the settlement in principle calls for payment of settlement funds in an aggregate sum of $2.9 million for the benefit of the Company’s minority shareholders (that is, exclusive of the Parent and all other defendants). That sum is inclusive of any and all costs and expenses of the plaintiffs in relation to the case, including but not limited to legal fees and related charges and court costs. The settlement in principle calls for payment of
settlement funds by parties other than the Company for the benefit of the Company’s minority shareholders. The settlement, therefore, will have no material effect on the financial condition, results of operations or cash flows of the Company.
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
|
|
·
|
dependence on key personnel;
|
|
·
|
maintaining revenue from subscriptions for the Company’s products;
|
|
·
|
protection of intellectual property rights;
|
|
·
|
changes in market and economic conditions, including global financial uncertainty;
|
|
·
|
fluctuations in the Company’s assets under management due to broadly based changes in the values of equity and debt securities, redemptions by investors and other factors;
|
|
·
|
dependence for revenue and profits from EULAV Asset Management Trust, a Delaware business trust (“EAM”), which provides investment management and distribution, marketing and administrative services to the Value Line Funds;
|
|
·
|
competition in the fields of publishing, copyright data and investment management;
|
|
·
|
the impact of government regulation on the Company’s business and the uncertainties of litigation and regulatory proceedings;
|
|
·
|
availability of free or low cost investment data through discount brokers or generally over the internet;
|
|
·
|
there is a risk that, while the restructuring transaction that closed on December 23, 2010, was and is believed to comply with the requirements of the Settlement, the Company might be required to take additional steps to insure compliance, which could have negative consequences to the Company’s consolidated financial statements;
|
|
·
|
terrorist attacks and natural disasters; and
|
●
|
other risks and uncertainties, including but not limited to the risks described in Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended April 30, 2010 and in Part II, Item 1A of this Quarterly Report on Form 10-Q, and other risks and uncertainties from time to time.
|
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
(in thousands, |
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
||||||||||||||||||
except earnings/(loss) per share)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Earnings/(loss) per share
|
$ | 3.17 | $ | 0.36 | 780.6 | % | $ | 3.51 | $ | (2.57 | ) | 236.6 | % | |||||||||||
Net income/(loss)
|
$ | 31,617 | $ | 3,570 | 785.6 | % | $ | 35,021 | $ | (25,633 | ) | 236.6 | % | |||||||||||
Operating income/(loss)
|
$ | 524 | $ | 4,583 | -88.6 | % | $ | 5,860 | $ | (34,766 | ) | 116.9 | % | |||||||||||
Operating expenses
|
$ | 11,511 | $ | 9,989 | 15.2 | % | $ | 33,282 | $ | 78,993 | -57.9 | % | ||||||||||||
Gain from de-consolidation of subsidiaries
|
$ | 50,510 | - | #N/A | $ | 50,510 | - | #N/A | ||||||||||||||||
Revenues and profits interests from EAM Trust
|
$ | 724 | - | #N/A | $ | 724 | - | #N/A | ||||||||||||||||
Income/(loss) from securities transactions, net
|
$ | (40 | ) | $ | 185 | -121.6 | % | $ | 48 | $ | 553 | -91.3 | % |
Operating revenues | ||||||||||||||||||||||||
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Investment periodicals and related publications
|
$ | 8,669 | $ | 8,864 | -2.2 | % | $ | 25,853 | $ | 27,343 | -5.4 | % | ||||||||||||
Copyright data fees
|
954 | 883 | 8.0 | % | 2,596 | 2,477 | 4.8 | % | ||||||||||||||||
Investment management fees and services
|
2,412 | 4,825 | -50.0 | % | 10,693 | 14,407 | -25.8 | % | ||||||||||||||||
Total operating revenues
|
$ | 12,035 | $ | 14,572 | -17.4 | % | $ | 39,142 | $ | 44,227 | -11.5 | % |
Subscription Revenues | ||||||||||||||||||||||||
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Print publication revenues
|
$ | 5,468 | $ | 5,799 | -5.7 | % | $ | 16,347 | $ | 17,874 | -8.5 | % | ||||||||||||
Electronic publication revenues
|
3,201 | 3,067 | 4.4 | % | 9,506 | 9,469 | 0.4 | % | ||||||||||||||||
Total investment periodicals and related publications revenues
|
$ | 8,669 | $ | 8,866 | -2.2 | % | $ | 25,853 | $ | 27,343 | -5.4 | % |
Sources of Subscription Revenues | ||||||||||||||||||||||||||||||||
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||||||||||||||||||
Print
|
Electronic
|
Print
|
Electronic
|
Print
|
Electronic
|
Print
|
Electronic
|
|||||||||||||||||||||||||
New Subscribers
|
10.8 | % | 29.3 | % | 10.3 | % | 31.4 | % | 11.0 | % | 29.9 | % | 10.3 | % | 30.7 | % | ||||||||||||||||
Renewals
|
89.2 | % | 70.7 | % | 89.7 | % | 68.6 | % | 89.0 | % | 70.1 | % | 89.7 | % | 69.3 | % | ||||||||||||||||
Total Subscribers
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
At January 31,
|
2011
|
2010
|
Percentage Change
|
|||||||||
(in thousands)
|
FY 11 vs. 10
|
|||||||||||
Unearned revenues (short and long term)
|
$ | 25,789 | $ | 25,570 | 0.9 | % |
Total Net Assets | ||||||||||||
At January 31,
|
2011
|
2010
|
Percentage Change
|
|||||||||
(in thousands)
|
FY 11 vs. 10
|
|||||||||||
Equity funds
|
$ | 1,809,711 | $ | 1,913,592 | -5.4 | % | ||||||
Fixed income funds
|
241,391 | 251,067 | -3.9 | % | ||||||||
U.S. Government Money Market Fund
|
102,018 | 127,174 | -19.8 | % | ||||||||
Total net assets
|
$ | 2,153,120 | $ | 2,291,833 | -6.1 | % |
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Advertising and promotion
|
$ | 1,366 | $ | 2,440 | -44.0 | % | $ | 5,443 | $ | 6,933 | -21.5 | % |
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Salaries and employee benefits
|
$ | 5,322 | $ | 4,084 | 30.3 | % | $ | 13,587 | $ | 12,634 | 7.5 | % |
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Production and distribution
|
$ | 1,238 | $ | 1,330 | -6.9 | % | $ | 3,518 | $ | 3,895 | -9.7 | % |
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Office and administration
|
$ | 2,283 | $ | 2,135 | 6.9 | % | $ | 6,970 | $ | 7,825 | -10.9 | % |
Three Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Expenses related to restructuring
|
$ | 1,302 | - | #N/A | $ | 3,764 | - | #N/A |
Investment Periodicals, Publishing & Copyright Data
|
Investment Management
|
|||||||||||||||||||||||
Nine Months Ended January 31,
|
Nine Months Ended January 31,
|
|||||||||||||||||||||||
2011
|
2010
|
Percentage Change
|
2011
|
2010
|
Percentage Change
|
|||||||||||||||||||
(in thousands)
|
FY 11 vs. 10
|
FY 11 vs. 10
|
||||||||||||||||||||||
Segment revenues from external customers
|
$ | 28,449 | $ | 29,820 | -4.6 | % | $ | 10,693 | $ | 14,407 | -25.8 | % | ||||||||||||
Segment profit/(loss) from operations
|
$ | 6,866 | $ | 8,017 | -14.4 | % | $ | (1,006 | ) | $ | (42,783 | ) | 97.6 | % | ||||||||||
Segment profit margin from operations
|
24.1 | % | 26.9 | % | -10.2 | % | -9.4 | % | -297.0 | % | 96.8 | % |
Estimated Fair Value after
|
||||||||||||||||||||
Hypothetical Change in Interest Rates
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
(bp = basis points)
|
||||||||||||||||||||
6 mos.
|
6 mos.
|
1 yr.
|
1 yr.
|
|||||||||||||||||
Fair
|
50bp
|
50bp
|
100bp
|
100bp
|
||||||||||||||||
Value
|
increase
|
decrease
|
increase
|
decrease
|
||||||||||||||||
As of January 31, 2011
|
||||||||||||||||||||
Investments in securities with fixed maturities
|
$ | 9,211 | $ | 9,197 | $ | 9,200 | $ | 9,197 | $ | 9,200 | ||||||||||
As of April 30, 2010
|
||||||||||||||||||||
Investments in securities with fixed maturities
|
$ | 23,532 | $ | 23,468 | $ | 23,470 | $ | 23,463 | $ | 23,463 |
Estimated
|
|||||||||||||
Fair Value after
|
Hypothetical Percentage
|
||||||||||||
Hypothetical
|
Hypothetical
|
Increase (Decrease) in
|
|||||||||||
Fair Value
|
Price Change
|
Change in Prices
|
Shareholders’ Equity
|
||||||||||
As of January 31, 2011
|
$ | 814 |
30% increase
|
$ | 1,058 | 0.49 | % | ||||||
30% decrease
|
$ | 570 | (0.49 | )% |
|
(a)
|
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Acting Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding disclosure.
|
|
(b)
|
The registrant’s principal executive officer and principal financial officer have determined that there have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
|
(c)
|
On January 20, 2011, the Company's Board of Directors approved the repurchase of shares of the Company’s common stock up to an aggregate purchase price not to exceed $3,200,000. Based on current market prices, the Company believes that the repurchase program is in the best interests of the shareholders. The repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market within the Rule 10b-18 Safe Harbor rule. The repurchase program is expected to continue through January 15, 2012 unless extended or shortened by the Board of Directors.
|
Item 6.
|
Exhibits
|
|
10.16
|
EAM Trust Agreement
|
|
14.1
|
Code of Business Conduct and Ethics
|
|
14.2
|
Code of Ethics Regarding Securities Transactions and Insider Trading Policy
|
|
31.1
|
Certificate of Acting Chief Executive Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certificate of Principal Financial Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.3
|
Certificate of Principal Accounting Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Joint Acting Chief Executive Officer/Principal Financial Officer Certificate Required Under Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
99.1 | Press release dated March 24, 2011 |
Value Line, Inc.
|
||
(Registrant)
|
||
Date: March 24, 2011
|
By:
|
s/Howard A. Brecher
|
Howard A. Brecher
|
||
Acting Chief Executive Officer
|
||
(Principal Executive Officer)
|
||
Date: March 24, 2011
|
By:
|
s/John A. McKay
|
John A. McKay
|
||
Chief Financial Officer
|
||
(Principal Financial Officer)
|
||
Date: March 24, 2011
|
By:
|
s/Stephen R. Anastasio
|
Stephen R. Anastasio
|
||
Vice President and Treasurer
|
||
(Principal Accounting Officer)
|
|
Page
|
||
ARTICLE I Definitions
|
1
|
|
SECTION 1.1
|
Definitions
|
1
|
SECTION 1.2
|
Terms Generally
|
5
|
ARTICLE II General Provisions
|
6
|
|
SECTION 2.1
|
Conversion
|
6
|
SECTION 2.2
|
Shareholders
|
7
|
SECTION 2.3
|
Name
|
8
|
SECTION 2.4
|
Limitation of Liability
|
8
|
SECTION 2.5
|
Term
|
8
|
SECTION 2.6
|
Purpose; Powers
|
8
|
SECTION 2.7
|
Registered Office and Registered Agent; Places of Business
|
9
|
ARTICLE III Management and Operation of the Company
|
9
|
|
SECTION 3.1
|
Management
|
9
|
SECTION 3.2
|
Certain Duties and Obligations of the Trustees
|
14
|
SECTION 3.3
|
Officers
|
15
|
SECTION 3.4
|
Exculpation and Indemnification
|
15
|
SECTION 3.5
|
Voting
|
16
|
SECTION 3.6
|
Occupancy and Back Office
|
17
|
SECTION 3.7
|
Regulatory Matters.
|
17
|
ARTICLE IV Distributions
|
18
|
|
SECTION 4.1
|
Distributions – General Principles and Definitions
|
19
|
ARTICLE V Capital Commitments; Allocations; Expenses
|
23
|
|
SECTION 5.1
|
Capital Accounts
|
23
|
SECTION 5.2
|
Allocations of Gross Revenues, Profits and Losses
|
23
|
SECTION 5.3
|
Tax Allocations
|
25
|
ARTICLE VI Books and Reports; Tax Matters
|
25
|
|
SECTION 6.1
|
General Matters
|
25
|
SECTION 6.2
|
Fiscal Year
|
27
|
SECTION 6.3
|
Certain Tax Matters
|
27
|
ARTICLE VII Dissolution
|
28
|
|
SECTION 7.1
|
Dissolution
|
28
|
SECTION 7.2
|
Winding-up
|
28
|
SECTION 7.3
|
No Obligation to Restore Capital Accounts
|
29
|
ARTICLE VIII Transfer of Shareholders' Interests
|
29
|
|
SECTION 8.1
|
Transfer of Interests by Shareholders
|
29
|
SECTION 8.2
|
Other Transfer Provisions
|
32
|
ARTICLE IX Additional Shareholders
|
33
|
|
SECTION 9.1
|
Additional Shareholders
|
33
|
ARTICLE X Miscellaneous
|
34
|
|
SECTION 10.1
|
Jurisdiction
|
34
|
SECTION 10.2
|
Governing Law
|
34
|
SECTION 10.3
|
Successors and Assigns
|
34
|
SECTION 10.4
|
Confidentiality
|
34
|
SECTION 10.5
|
Notices
|
35
|
SECTION 10.6
|
Counterparts
|
35
|
SECTION 10.7
|
Entire Agreement
|
35
|
SECTION 10.8
|
Amendments
|
35
|
SECTION 10.9
|
Titles
|
36
|
SECTION 10.10
|
Irreparable Harm
|
36
|
SECTION 10.11
|
Dispute Resolution
|
37
|
SECTION 10.12
|
Partnership Tax Treatment
|
37
|
SECTION 10.13
|
Severability
|
38
|
1.
|
The Purchaser is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act.
|
1
|
2.
|
If the Purchaser wishes to resell or transfer all or any portion of the Interests, the Purchaser will obtain from the Company any consent required and from each purchaser or transferee a letter containing the same representations and agreements as set forth herein and will have such purchaser or transferee complete a Notice of Transfer.
|
1
|
3.
|
The Purchaser (i) hereby agrees that this Transfer Certificate may be attached to the Declaration and (ii) by executing and delivering this Notice of Transfer, with the consent of the Company if required by the Declaration and the completion of any other requirements (such as an opinion of counsel) set forth in the Declaration, hereby becomes a Holder under the Declaration and agrees to be bound by all the terms thereof.
|
1
|
Schedule 1
|
||
Annex A
|
||
Annex B
|
Unvested
Percentage
|
Vested
Percentage
Profits Interests
|
Applicable
Anniversary
|
||
100%
|
0%
|
First
|
||
100%
|
0%
|
Second
|
||
100%
|
0%
|
Third
|
||
93%
|
7%
|
Fourth
|
||
86%
|
14%
|
Fifth
|
||
79%
|
21%
|
Sixth
|
||
72%
|
28%
|
Seventh
|
||
65%
|
35%
|
Eighth
|
||
58%
|
42%
|
Ninth
|
||
51%
|
49%
|
Tenth
|
Revenues Interest and Nonvoting Profits Interest
Shareholder:
|
||
Value Line, Inc.
|
||
By:
|
/s/ Howard Brecher
|
|
Name: Howard Brecher
|
||
Title: Acting Chairman and Acting Chief
Executive Officer
|
||
Class A Voting Profits Interest Shareholder and
Trustee:
|
||
/s/ Mitchell Appel
|
||
Mitchell Appel
|
||
Class B Voting Profits Interest Shareholders and
Trustees including the Delaware Trustee:
|
||
/s/ Avi T. Aronovitz
|
||
Avi T. Aronovitz
|
||
/s/ Richard Berenger
|
||
Richard Berenger
|
||
/s/ Howard B. Sirota
|
||
Howard B. Sirota
|
/s/ R. Alastair Short
|
||
R. Alastair Short
|
||
The Corporation Trust Company
|
||
By:
|
/s/ Jennifer A. Schwartz
|
|
Name: Jennifer A. Schwartz
|
||
Title: Assistant Vice President
|
SHAREHOLDER
|
CLASS OF INTEREST
|
PERCENTAGE
INTEREST IN
CLASS
|
VOTING
PERCENTAGE
|
INITIAL CAPITAL
ACCOUNTS
|
||||||||||
Value Line, Inc.
|
Revenues Interest
|
100 | % | 0 | % | $ | 56,100,000 | |||||||
Value Line, Inc.
|
Nonvoting Profits Interest
|
100 | % | 0 | % | $ | 0 | |||||||
Mitchell Appel
|
Class A Voting Profits Interest
|
100 | % | 20 | % | $ | 0 | |||||||
Avi T. Aronovitz
|
Class B Voting Profits Interests
|
25 | % | 20 | % | $ | 0 | |||||||
Richard Berenger
|
Class B Voting Profits Interests
|
25 | % | 20 | % | $ | 0 | |||||||
Howard B. Sirota
|
Class B Voting Profits Interests
|
25 | % | 20 | % | $ | 0 | |||||||
R. Alastair Short
|
Class B Voting Profits Interests
|
25 | % | 20 | % | $ | 0 |
Shareholder
|
Address
|
|
Value Line, Inc.
|
220 East 42
nd
Street, 6
th
Floor
New York, New York
|
|
Mitchell Appel
|
220 East 42
nd
Street, 6
th
Floor
New York, New York
|
|
Avi T. Aronovitz
|
60 Meadow Drive
Woodsburgh, New York 11598
|
|
Richard Berenger
|
45 Dustman Lane
Bardonia, New York 10954
|
|
Howard B. Sirota
|
Gusrae, Kaplan, Bruno & Nussbaum
120 Wall Street
New York, New York 10005
|
|
R. Alastair Short
|
|
175 Riverside Drive, 16-F
New York, New York 10024
|
1.
|
The Purchaser is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act.
|
2.
|
If the Purchaser wishes to resell or transfer all or any portion of the Interests, the Purchaser will obtain from the Company any consent required and from each purchaser or transferee a letter containing the same representations and agreements as set forth herein and will have such purchaser or transferee complete a Notice of Transfer.
|
3.
|
The Purchaser (i) hereby agrees that this Transfer Certificate may be attached to the Declaration and (ii) by executing and delivering this Notice of Transfer, with the consent of the Company if required by the Declaration and the completion of any other requirements (such as an opinion of counsel) set forth in the Declaration, hereby becomes a Holder under the Declaration and agrees to be bound by all the terms thereof.
|
Address:
|
|||
By:
|
|||
Name:
|
|||
Title:
|
Address:
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|
·
|
Any employee, officer or director who authorizes, directs, approves or participates in any violation of the Code or of any applicable law, rule or regulation;
|
|
·
|
Any employee, officer or director who has deliberately failed to report a violation of the Code or of any applicable law, rule or regulation, who has concealed any such violation or who has deliberately withheld or misstated relevant information concerning such a violation;
|
|
·
|
Any employee, officer or director who retaliates, directly or indirectly, or encourages others to do so, against any other employee, officer or director because of a report by that person of a suspected violation of the Code or of any applicable law, rule or regulation;
|
|
·
|
Any employee, officer or director who knowingly refers a false allegation of a violation of the Code or of any applicable law, rule or regulation or who deliberately abuses the procedures established for investigating suspected violations of the Code; and
|
|
·
|
Any employee, officer or director who refuses to return a signed certification of the Code or who fails to return a signed certification of the Code after reasonable opportunity to do so.
|
|
1.
|
I have received and carefully read the Code of Business Conduct and Ethics of Value Line, Inc.
|
|
2.
|
I understand the Code of Business Conduct and Ethics
|
|
3.
|
I have complied and will continue to comply with the terms of the Code of Business Conduct and Ethics.
|
DATE:
|
SIGNATURE:
|
|
·
|
A director (which term when used herein includes any director nominee),
|
|
·
|
A named executive officer, i.e., CEO, CFO, and three other officers in the proxy statement compensation table, or
|
|
·
|
A person known by the Company to be the beneficial owner of more than 5% of the Company’s common stock (a “5% stockholder”), or
|
|
·
|
A person known by the Company to be an immediate family member of any of the foregoing.
|
|
1.
|
CONFIDENTIALITY, INSIDER TRADING RULES APPLICABLE TO OFFICERS, DIRECTORS AND EMPLOYEES
|
|
(a)
|
The name of Stock Highlights prior to the time when subscribers to Value Line’s Services have had one business day to act on a recommendation;
|
|
(b)
|
The name of a Special Situation after selection for publication in a Value Line Service and prior to the time when we remove the stock from the restricted list;
|
|
(c)
|
All Value Line Select recommendations prior to the time the information has been made available to subscribers to that Service;
|
|
(d)
|
Any information privately tendered to any person in the Value Line organization that, if or when publicly known, would be likely to affect the price of a security.
|
|
2.
|
TRADING AND OTHER RULES APPLICABLE TO OFFICERS AND EMPLOYEES
|
|
(a)
|
Employees, including officers, are:
|
|
(i)
|
Forbidden to act as investment advisers, to operate any security account management service, or to give any investment advice to any person for profit or benefit; whether direct or indirect, without the express written authorization of the ACEO of VLI.
|
|
(ii)
|
Forbidden from serving on the Board of Directors of any publicly traded company without the express prior written authorization of the ACEO of VLI.
|
|
(iii)
|
Forbidden from purchasing any security that has been selected or is about to be recommended as a special recommendation or Stock Highlight by any of the Value Line Services or if its Timeliness or Performance Rank is being upgraded by one of the Services until at least 1 business day after Publication (electronic or print) of the Service.
|
|
(iv)
|
Forbidden from selling any security if its Timeliness or Performance Rank is being downgraded or if a Value Line Service is recommending that it be sold until at least 1 business day after Publication (electronic or print) of the Service.
|
|
(v)
|
Required to not sell securities purchased for themselves or for accounts in which they have a beneficial interest, until at least 7 calendar days after purchase. Further, in all cases, permission must be obtained from the Authorized Approvers before the sale transaction can be placed.
|
|
(vi)
|
Prohibited without the express prior written authorization of the ACEO of VLI from accepting any offer made by any person whereby the officer or employee would be enabled to purchase or sell any security at a price, or under other conditions, more favorable than those obtainable at the time by the general public.
|
|
(vii)
|
Prohibited from receiving or giving any gift other than a gift of a value of less than $100 to or from any person that does business with VLI or any of its subsidiaries.
|
|
3.
|
PRE-CLEARANCE OF TRADES APPLICABLE TO OFFICERS AND EMPLOYEES
|
|
(a)
|
Transactions effected in any account in which the employee has no direct or indirect influence or control or beneficial interest;
|
|
(b)
|
Transactions in securities that are the direct obligations of the United States or issued by or guaranteed by an agency of the U.S. federal government;
|
|
(c)
|
Purchases of shares in automatic investment plans;
|
|
(d)
|
Transactions in the shares of any registered open-end investment company (mutual fund);
|
|
(e)
|
Transactions in banker’s acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements.
|
|
4.
|
REPORTING OBLIGATIONS APPLICABLE TO OFFICERS, EMPLOYEES AND DIRECTORS
|
|
(a)
|
All officers and employees of VLI
|
|
(b)
|
Directors
|
|
(1)
|
VLI directors who are not employees of VLI or their subsidiaries are not required to comply with Section 4(a).
|
|
5.
|
REPORTING VIOLATIONS AND CONFIDENTIALITY
|
|
(a)
|
Reporting Violations. All officers, directors and employees are required to report any violations of this Code that come to their attention to the ACEO.
|
|
(b)
|
Confidentiality. Information obtained from any officer, director or employee hereunder will normally be kept in strict confidence by VLI but may under certain circumstances be provided to third parties. For example, reports of securities transactions and violations hereunder will be made available to any regulatory or self-regulatory organization to the extent required by law or regulation, and in certain circumstances, may in VLI’s ACEO’s discretion be made available to other civil and criminal authorities.
|
|
6.
|
RECORD KEEPING REQUIREMENTS
|
|
VLI’s Administration Department shall maintain and preserve in an easily accessible place:
|
|
1.
|
A copy of this Code of Ethics (“Code”) and any prior Code that was in effect at any time during the past five years;
|
|
2.
|
A record of any violation of this Code and any action taken as a result of such violation for a period of five years;
|
|
3.
|
A copy of each report submitted under this Code for a period of five years (only those reports submitted during the previous two years must be maintained and preserved in an easily accessible place);
|
|
4.
|
A list of all persons who are, or within the past five years were, required to make reports pursuant to this Code; and
|
|
5.
|
The names of any person who is serving or who has served as review officer (also referred to as an “Authorized Approver”) or alternative review officer within the past five years.
|
|
7.
|
AMENDMENTS TO THE CODE
|
|
8.
|
DEFINITIONS
|
|
(a)
|
Automatic investment plan means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An automatic investment plan includes a dividend reinvestment plan.
|
|
(b)
|
Beneficial ownership is interpreted in the same manner as it would be under Section 16a-1(a)(2) of the Securities Exchange Act of 1934 in determining whether a person has beneficial ownership of a security for purposes of Section 16 of the Securities Exchange Act of 1934 and the rules and regulations thereunder.
|
|
(c)
|
Initial public offering means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.
|
|
(d)
|
Limited offering means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) or pursuant to Regulation D.
|
|
(e)
|
Purchase or sale of a security includes, among other things, the writing of an option to purchase or sell as security.
|
|
(f)
|
Reportable security means a security as defined in Section 202(a) (18) of the Investment Advisers Act, except that it does not include:
|
(i)
|
direct obligations of the United States
|
(ii)
|
bankers’ acceptances, bank certificates of deposit,
commercial paper and high quality short-term debt instruments, including repurchase agreements
|
(iii)
|
shares issued by money market funds
|
(iv)
|
shares issued by open-end funds
|
(v)
|
shares issued by unit investment trusts that are invested
exclusively in one or more open-end funds, none of which
are reportable funds.
|
(vi)
|
shares issued by closed-end funds, open-end funds or
ETFs lawfully using the “Value Line” brand
|
Date:
|
Print your name:
|
|||
Your Signature:
|
|
1.
|
I have reviewed this report on Form 10-Q of Value Line, Inc. for the quarter ended January 31, 2011;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 24, 2011
|
By:
|
s/Howard A. Brecher
|
Howard A. Brecher
|
||
Acting Chief Executive Officer
|
||
(Principal Executive Officer)
|
|
1.
|
I have reviewed this report on Form 10-Q of Value Line, Inc. for the quarter ended January 31, 2011;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 24, 2011
|
By:
|
s/John A. McKay
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John A. McKay
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||
Chief Financial Officer
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(Principal Financial Officer)
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1.
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I have reviewed this report on Form 10-Q of Value Line, Inc. for the quarter ended January 31, 2011;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 24, 2011
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By:
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s/Stephen R. Anastasio
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Stephen R. Anastasio
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Vice President and Treasurer
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(Principal Accounting Officer)
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Date: March 24, 2011
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By:
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s/Howard A. Brecher
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Howard A. Brecher
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Acting Chief Executive Officer
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(Principal Executive Officer)
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||
Date: March 24, 2011
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By:
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s/ John A. McKay
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John A. McKay
|
||
Chief Financial Officer
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||
(Principal Financial Officer)
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||
Date: March 24, 2011
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By:
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s/Stephen R. Anastasio
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Stephen R. Anastasio
|
||
Vice President and Treasurer
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||
(Principal Accounting Officer)
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For Immediate Release
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Contact:
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Howard A. Brecher
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March 24, 2011
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Value Line, Inc.
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NEWS RELEASE
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(212) 907-1500
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·
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dependence on key personnel;
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·
|
maintaining revenue from subscriptions for the Company’s products;
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·
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protection of intellectual property rights;
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·
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changes in market and economic conditions, including global financial uncertainty;
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·
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fluctuations in the Company’s assets under management due to broadly based changes in the values of equity and debt securities, redemptions by investors and other factors;
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·
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dependence for revenue and profits from EULAV Asset Management Trust, a Delaware business trust (“EAM”), which provides investment management and distribution, marketing and administrative services to the Value Line Funds;
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·
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competition in the fields of publishing, copyright data and investment management;
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·
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the impact of government regulation on the Company’s business and the uncertainties of litigation and regulatory proceedings;
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·
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availability of free or low cost investment data through discount brokers or generally over the internet;
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·
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there is a risk that, while the restructuring transaction that closed on December 23, 2010, was and is believed to comply with the requirements of the Settlement, the Company might be required to take additional steps to insure compliance, which could have negative consequences to the Company’s consolidated financial statements;
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·
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terrorist attacks and natural disasters; and
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·
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other risks and uncertainties, including but not limited to the risks described in Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended April 30, 2010 and in Part II, Item 1A of this Quarterly Report on Form 10-Q, and other risks and uncertainties from time to time.
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For the three months
ended January 31,
|
For the nine months
ended January 31,
|
|||
2011
|
2010
|
2011
|
2010
|
|
Revenues
|
$12,035
|
$14,572
|
$39,142
|
$44,227
|
Operating income/(loss)
|
$524
|
$4,583
|
$5,860
|
($34,766)
|
Gain from deconsolidation of subsidiaries
|
$50,510
|
-
|
$50,510
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-
|
Revenues and profits interests from EAM Trust
|
$724
|
-
|
$724
|
-
|
Income/(loss) from securities transactions, net
|
($40)
|
$185
|
$48
|
$553
|
Income/(loss) before income taxes
|
$51,718
|
$4,768
|
$57,142
|
($34,213)
|
Net income/(loss)
|
$31,617
|
$3,570
|
$35,021
|
($25,633)
|
Earnings/(loss) per share, basic and fully diluted
|
$3.17
|
$0.36
|
$3.51
|
($2.57)
|