valu20211031

valu20211031_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________________________ to __________________________________

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 incorporation or organization)	(I.R.S. Employer Identification No.)

551 Fifth Avenue, New York, New York	10176-0001
(Address of principal executive offices)	(Zip Code)

(212) 907-1500

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each Exchange on which registered
Common stock, $0.10 par value per share	VALU	The Nasdaq Capital Market

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ 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 December 7, 2021
Common stock, $0.10 par value per share	9,537,600 shares

VALUE LINE INC.

TABLE OF CONTENTS


		Page No.
	PART I. FINANCIAL INFORMATION

Item 1.	Consolidated Condensed Financial Statements

	Consolidated Condensed Balance Sheets as of October 31, 2021 and April 30, 2021	3

	Consolidated Condensed Statements of Income for the three and six months ended October 31, 2021 and October 31, 2020	4

	Consolidated Condensed Statements of Comprehensive Income for the three and six months ended October 31, 2021 and October 31, 2020	5

	Consolidated Condensed Statements of Cash Flows for the six months ended October 31, 2021 and October 31, 2020	6

	Consolidated Condensed Statement of Changes in Shareholders’ Equity for the six months ended October 31, 2021	7

	Consolidated Condensed Statement of Changes in Shareholders’ Equity for the six months ended October 31, 2020	7

	Notes to Consolidated Condensed Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	32

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
	Signatures	35

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Balance Sheets

(in thousands, except share amounts)

	October 31,			April 30,
	2021			2021
	(unaudited)
Assets
Current Assets:
Cash and cash equivalents (including short term investments of $24,459 and $18,209, respectively)	$	24,958		$	19,171
Equity securities		26,685			23,582
Available-for-sale Fixed Income securities		597			2,600
Accounts receivable, net of allowance for doubtful accounts of $38 and $36, respectively		1,595			3,985
Prepaid and refundable income taxes		365			616
Prepaid expenses and other current assets		1,178			1,282
Total current assets		55,378			51,236

Long term assets:
Investment in EAM Trust		61,058			60,977
Restricted money market investments		469			469
Property and equipment, net		7,684			8,311
Capitalized software and other intangible assets, net		101			143
Total long term assets		69,312			69,900

Total assets	$	124,690		$	121,136

Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	997		$	2,077
Accrued salaries		1,146			1,163
Dividends payable		2,100			2,104
Accrued taxes on income		103			-
Loan obligation-short term		-			2,331
Operating lease obligation-short term		1,181			1,087
Unearned revenue		17,453			19,162
Total current liabilities		22,980			27,924

Long term liabilities:
Unearned revenue		5,147			5,926
Operating lease obligation-long term		6,763			7,368
Deferred income taxes		13,110			12,905
Total long term liabilities		25,020			26,199
Total liabilities		48,000			54,123

Shareholders' Equity:
Common stock, $0.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares		1,000			1,000
Additional paid-in capital		991			991
Retained earnings		82,700			72,502
Treasury stock, at cost (453,419 shares and 436,830 shares, respectively)		(8,000	)		(7,483	)
Accumulated other comprehensive income, net of tax		(1	)		3
Total shareholders' equity		76,690			67,013

Total liabilities and shareholders' equity	$	124,690		$	121,136

The accompanying notes are an integral part of these consolidated condensed financial statements.

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statements of Income

(in thousands, except share & per share amounts)

(unaudited)

	For the Three Months Ended				For the Six Months Ended
	October 31,				October 31,
	2021		2020		2021		2020

Revenues:
Investment periodicals and related publications	$	6,635	$	6,901	$	13,582	$	13,993
Copyright fees		3,338		3,309		6,557		6,545
Total publishing revenues		9,973		10,210		20,139		20,538

Expenses:
Advertising and promotion		676		817		1,723		1,872
Salaries and employee benefits		4,303		4,554		8,960		9,062
Production and distribution		1,311		1,392		2,527		2,665
Office and administration		946		1,259		1,927		2,525
Total expenses		7,236		8,022		15,137		16,124
Income from operations		2,737		2,188		5,002		4,414

Gain on forgiveness of PPP loan (see note 16)		2,331		-		2,331		-

Revenues and profits interests in EAM Trust		4,892		4,214		9,697		7,858
Investment gains		368		138		762		1,308
Income before income taxes		10,328		6,540		17,792		13,580
Income tax provision		1,824		1,621		3,391		3,387
Net income	$	8,504	$	4,919	$	14,401	$	10,193

Earnings per share, basic & fully diluted	$	0.89	$	0.51	$	1.51	$	1.06


Weighted average number of common shares		9,554,673		9,608,792		9,557,333		9,612,756

The accompanying notes are an integral part of these consolidated condensed financial statements.

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statements of Comprehensive Income

(in thousands)

(unaudited)

	For the Three Months Ended					For the Six Months Ended
	October 31,					October 31,
	2021		2020			2021			2020


Net income	$	8,504	$	4,919		$	14,401		$	10,193

Other comprehensive income/(loss), net of tax:
Change in unrealized gains/(losses) on fixed income securities, net of taxes		-		(9	)		(4	)		(46	)
Other comprehensive income/(loss)		-		(9	)		(4	)		(46	)
Comprehensive income	$	8,504	$	4,910		$	14,397		$	10,147

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statements of Cash Flows

(in thousands)

(unaudited)

	For the Six Months Ended
	October 31,
	2021			2020
Cash flows from operating activities:
Net income	$	14,401		$	10,193

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		669			638
Investment (gains)/losses		(356	)		(952	)
Non-voting revenues interest in EAM Trust		(8,412	)		(7,009	)
Non-voting profits interest in EAM Trust		(1,285	)		(849	)
Distributions received from EAM Trust		9,616			6,672
Gain on forgiveness of PPP loan (see note 16)		(2,331	)		-
Deferred income taxes		(225	)		26
Deferred rent obligation		(511	)		(470	)
Changes in operating assets and liabilities:
Unearned revenue		(2,488	)		(1,949	)
Accounts payable & accrued expenses		(1,080	)		(304	)
Accrued salaries		(17	)		(127	)
Accrued taxes on income		534			(1,151	)
Prepaid and refundable income taxes		251			-
Prepaid expenses and other current assets		104			112
Accounts receivable		2,390			2,838
Total adjustments		(3,141	)		(2,525	)
Net cash provided by operating activities		11,260			7,668

Cash flows from investing activities:

Purchases of equity securities		(3,434	)		(7,636	)
Purchases of fixed income securities classified as available for sale		(498	)		(2,496	)
Proceeds from sales of equity securities		687			5,529
Proceeds from sales of fixed income securities classified as available for sale		2,496			5,214
Acquisition of property and equipment		-			(21	)
Expenditures for capitalized software		-			(82	)
Net cash provided by/(used in) investing activities		(749	)		508

Cash flows from financing activities:
Purchase of treasury stock at cost		(517	)		(422	)
Receivable from clearing broker		-			608
Payable to clearing broker		-			(588	)
Dividends paid		(4,207	)		(4,039	)
Net cash used in financing activities		(4,724	)		(4,441	)
Net change in cash and cash equivalents		5,787			3,735
Cash, cash equivalents and restricted cash at beginning of period		19,640			5,423
Cash, cash equivalents and restricted cash at end of period	$	25,427		$	9,158

The accompanying notes are an integral part of these consolidated condensed financial statements.

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Six Months Ended October 31, 2021

(in thousands, except share amounts)

(unaudited)

	Common stock				Additional paid-in-		Treasury stock						Retained			Accumulated other comprehensive
	Shares		Amount		capital		Shares			Amount			earnings			income			Total
Balance at April 30, 2021		10,000,000	$	1,000	$	991		(436,830	)	$	(7,483	)	$	72,502		$	3		$	67,013

Net income														14,401						14,401
Change in unrealized gains on Fixed Income securities, net of taxes																	(4	)		(4	)
Purchase of treasury stock								(16,589	)		(517	)								(517	)
Dividends declared														(4,203	)					(4,203	)
Balance at October 31, 2021		10,000,000	$	1,000	$	991		(453,419	)	$	(8,000	)	$	82,700		$	(1	)	$	76,690

Dividends declared per common share were $0.44 for the six months ending October 31, 2021.

Part I - Financial Information

Item 1. Financial Statements

Value Line, Inc.

Consolidated Condensed Statement of Changes in Shareholders' Equity

For the Six Months Ended October 31, 2020

(in thousands, except share amounts)

(unaudited)

Common stock

Additional

paid-in-

Treasury stock

Retained

Accumulated other comprehensive

Shares

Amount

capital

Shares

Amount

earnings

income

Total

Balance at April 30, 2020

10,000,000

SEC Form 10-Q filed by Value Line, Inc.