SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended JULY 31, 1999 Commission file number 0-11306 ------- VALUE LINE, INC. ---------------- (Exact name of registrant as specified in its charter) New York 13-3139843 - -------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 220 East 42nd Street, New York, New York 10017-5891 - -------------------------------------------------------------------- (address of principal executive offices) (zip code) Registrant's telephone number including area code (212) 907-1500 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July 31, 1999 ----- ---------------------------- Common stock, $.10 par value 9,978,625 Shares
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS <TABLE> <CAPTION> VALUE LINE, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS) July 31, April 30, 1999 1999 ----------- ----------- <S> <C> <C> Assets Current Assets: Cash and cash equivalents (including short term investments of $44,286 and $41,250, respectively) $44,812 $41,826 Trading securities 14,510 14,023 Accounts receivable, net of allowance for doubtful accounts of $286 and $295, respectively 1,908 1,846 Receivable from affiliates 2,991 2,587 Prepaid expenses and other current assets 3,010 1,792 Deferred income taxes 418 1,443 ----------- ----------- Total current assets 67,649 63,517 Long term securities available for sale 176,968 168,591 Property and equipment, net 11,447 11,662 Goodwill 36 37 ----------- ----------- Total assets $256,100 $243,807 ----------- ----------- ----------- ----------- Liabilities and Shareholders' Equity Current Liabilities: Accounts payable and accrued liabilities $6,397 $5,842 Accrued salaries 985 1,765 Dividends payable 2,495 2,495 Accrued taxes payable 4,576 741 ----------- ----------- Total current liabilities 14,453 10,843 Unearned revenue 41,228 43,100 Deferred income taxes 24,436 22,264 Deferred charges 628 697 Shareholders' Equity: Common stock, $.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares 1,000 1,000 Additional paid-in capital 959 959 Retained earnings 130,004 125,585 Treasury stock, at cost (21,375 shares on 7/31/99, and 4/30/99) (411) (411) Unrealized gain on securities, net of taxes 43,803 39,770 ----------- ----------- Total shareholders' equity 175,355 166,903 ----------- ----------- Total liabilities and shareholders' equity $256,100 $243,807 ----------- ----------- ----------- ----------- </TABLE> The accompanying notes are an integral part of these financial statements. 2
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) <TABLE> <CAPTION> For the three months ended July 31, July 31, 1999 1998 ----------- ----------- <S> <C> <C> Revenues: Investment periodicals and related publications $14,970 $15,597 Investment management fees & svcs 8,861 8,541 Gain on disposal of operating facility -- 518 ----------- ----------- Total revenues 23,831 24,656 ----------- ----------- Expenses: Advertising and promotion 3,540 3,531 Salaries and employee benefits 6,066 5,973 Printing, paper and distribution 1,746 1,871 Office and administration 2,187 2,246 ----------- ----------- Total expenses 13,539 13,621 ----------- ----------- Income from operations 10,292 11,035 Income from securities trans., net 1,185 142 ----------- ----------- Income before income taxes 11,477 11,177 Provision for income taxes 4,563 4,668 ----------- ----------- Net income $6,914 $6,509 ----------- ----------- ----------- ----------- Earnings per share, basic & fully diluted $0.69 $0.65 ----------- ----------- ----------- ----------- </TABLE> The accompanying notes are an integral part of these financial statements. 3
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) <TABLE> <CAPTION> For the three months ended July 31, July 31, 1999 1998 ---------- ---------- <S> <C> <C> Cash flows from operating activities: Net income $ 6,914 $ 6,509 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 401 407 (Gains)/losses on sales of trading securities and securities held for sale (395) 295 Unrealized (gains)/losses on trading securities (43) 235 Gain on sale of operating facility -- (518) Changes in assets and liabilities: Increase/(decrease) in unearned revenue (1,872) 779 Decrease in deferred charges (69) (69) Increase/(decrease) in accounts payable and accrued expenses 555 (1,412) (Decrease) in accrued salaries (780) (780) Increase in accrued taxes payable 3,835 3,612 (Increase)/decrease in prepaid expenses and other current assets (193) 231 (Increase) in accounts receivable (130) (1,031) (Increase) in receivable from affiliates (404) (141) -------- -------- Total adjustments 905 1,608 -------- -------- Net cash provided by operations 7,819 8,117 Cash flows from investing activities: Purchases of long term securities (2,172) (1,295) Proceeds from sales of trading securities 6,283 2,461 Purchases of trading securities (6,264) (1,945) Acquisitions of property, and equipment, net (185) (284) Proceeds from sale of operating facility -- 577 -------- -------- Net cash (used in) investing activities (2,338) (486) Cash flows from financing activities: Dividends paid (2,495) (2,495) -------- -------- Net cash (used in) financing activities (2,495) (2,495) -------- -------- Net increase in cash and cash equivalents 2,986 5,136 Cash and cash equivalents at beginning of period 41,826 29,937 -------- -------- Cash and cash equivalents at end of period $ 44,812 $ 35,073 ======== ======== </TABLE> The accompanying notes are an integral part of these financial statements 4
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED JULY 31, 1999 (in thousands, except share amounts) <TABLE> <CAPTION> Common stock Accumulated Number Additional Other of paid-in Treasury Comprehensive Retained Comprehensive shares Amount capital Stock income earnings income Total ----------- ----------- ----------- ----------- ------------- ----------- ------------- ---------- <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at May 1, 1999 9,978,125 $1,000 $959 ($411) $125,585 $39,770 $166,903 Comprehensive income Net income $6,914 6,914 6,914 Other comprehensive income, net of tax: Change in unrealized gains on securities 4,033 4,033 4,033 ------------- Comprehensive income $10,947 ------------- ------------- Dividends declared (2,495) (2,495) ----------- ----------- ----------- ----------- ----------- ------------- ---------- Balance at July 31, 1999 9,978,125 $1,000 $959 ($411) $130,004 $43,803 $175,355 ----------- ----------- ----------- ----------- ----------- ------------- ---------- ----------- ----------- ----------- ----------- ----------- ------------- ---------- </TABLE> The accompanying notes are an integral part of these financial statements. 5
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED JULY 31, 1998 (in thousands, except share amounts) <TABLE> <CAPTION> Common stock Accumulated Number Additional Other of paid-in Treasury Comprehensive Retained Comprehensive shares Amount capital Stock income earnings income Total ----------- ----------- ----------- ----------- ------------- ----------- ------------- ---------- <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at May 1, 1998 9,978,625 $1,000 $959 ($411) $108,392 $26,997 $136,937 Comprehensive income Net income $6,509 6,509 6,509 Other comprehensive income, net of tax: Change in unrealized gains on securities (2,733) (2,733) (2,733) ------------- Comprehensive income $3,776 ------------- ------------- Dividends declared (2,495) (2,495) ----------- ----------- ---------- ----------- ----------- ------------- ---------- Balance at July 31, 1998 9,978,625 $1,000 $959 ($411) $112,406 $24,264 $138,218 ----------- ----------- ---------- ----------- ----------- ------------- ---------- ----------- ----------- ---------- ----------- ----------- ------------- ---------- </TABLE> The accompanying notes are an integral part of these financial statements. 6
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS SIGNIFICANT ACCOUNTING POLICIES - NOTE 1: In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal recurring accruals except as noted below) considered necessary for a fair presentation. This report should be read in conjunction with the financial statements and footnotes contained in the Company's annual report on Form 10-K, dated July 15, 1999 for the fiscal year ended April 30, 1999. Results of operations covered by this report may not be indicative of the results of operations for the entire year. Cash and Cash Equivalents: The Company considers all cash held at banks and invested in the Value Line money market funds with an original maturity of less than three months to be cash and cash equivalents. As of July 31, 1999 and April 30, 1999, cash equivalents included $43,913,000 and $40,925,000, respectively, invested in the Value Line money market funds. Valuation of Securities: The Company's long-term securities portfolio, which consists of shares of the Value Line Mutual Funds are valued at market value in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Unrealized gains and losses on these securities are reported, net of applicable taxes, as a separate component of Shareholders' Equity. Realized gains and losses on sales of the securities are recorded in earnings on trade date and are determined on the identified cost method. Trading securities, which consist of securities held by Value Line Securities, Inc., the Company's broker-dealer subsidiary, are valued at market with realized and unrealized gains and losses included in earnings. Earnings per Share, basic & fully diluted: Earnings per share are based on the weighted average number of shares of common stock outstanding during the period. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 7
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS MARKETABLE SECURITIES - NOTE 2: Trading Securities: Securities held by Value Line Securities, Inc. had an aggregate cost of $12,358,000 and $11,914,000 and a market value of $14,510,000 and $14,023,000 at July 31, 1999 and April 30, 1999, respectively. Long-Term Securities Available for Sale: The aggregate cost of the long-term securities was $109,579,000 and $107,406,000 and the market value was $176,968,000 and $168,591,000 at July 31, 1999 and April 30, 1999, respectively. At July 31, 1999, the increase in gross unrealized appreciation on these securities of $6,205,000, net of deferred taxes of $2,172,000, was included in shareholders' equity. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - NOTE 3: Cash payments for income taxes were $1,187,000 and $922,000 during the three months ended July 31, 1999 and 1998, respectively. DISCLOSURE OF CREDIT RISK OF FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK - NOTE 4: In the normal course of business, the Company enters into contractual committments, principally financial futures contracts for securities indices. Financial futures contracts provide for the delayed delivery of financial instruments for which the seller agrees to make delivery at a specified future date, at a specified price or yield. The contract or notional amount of these contracts reflects the extent of involvement the Company has in these contracts. At July 31, 1999, the underlying notional value of such committments was $3,491,000. The average fair value of the committments during fiscal 2000 was $3,394,000. Risk arises from the potential inability of counterparts to meet the terms of their contracts and from movements in securities values. The Company limits its credit risk associated with such instruments by entering exclusively into exchange traded futures contracts. No single customer accounted for a significant portion of the Company's sales nor accounts receivables in fiscal 2000 or fiscal 1999. 8
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS COMPREHENSIVE INCOME - NOTE 5: Statement no. 130 requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. At July 31, 1999 and 1998, the Company held long term securities classified as available-for-sale. The increase during the first three months of fiscal 1999 in gross unrealized gains on these securities and the related deferred taxes was $6,205,000 and $2,172,000, respectively. The decrease during the first quarter of fiscal 1998 in gross unrealized gains on these securities and the related deferred taxes was $4,204,000 and $1,471,000, respectively. ESTIMATED FAIR VALUE OF FINANCIAL AND DERIVATIVE INSTRUMENTS - NOTE 6: Statement of Accounting Standards No. 119, "Disclosure About Derivative Financial Instruments and Fair Value of Financial Instruments," requires disclosure of information regarding derivative instruments, which include financial index futures contracts. Derivative instruments held for trading purposes are reflected at fair value at July 31, 1999 and April 30, 1999. Net realized trading losses related to derivative financial instruments amounted to $69,000 at July 31, 1999. Income from securities transactions in the Statement of Income are reflected net of derivative trading activity. GAIN ON SALE OF OPERATING FACILITY - NOTE 7: Pursuant to the Company's realignment of its production and distribution departments, the Company sold its idle North Bergen, New Jersey operating facility during May 1998 for which it received gross proceeds of $577,000. The gain on the sale of the operating facility is included in revenues in the Consolidated Statements of Income. 9
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS RELATED PARTY TRANSACTIONS - NOTE 8: The Company acts as investment adviser and manager for fifteen open-ended investment companies, the Value Line Family of Funds. The Company earns investment management fees based upon the average daily net asset values of the respective funds. The Company also earns brokerage commission income, net of clearing fees, on securities transactions executed by Value Line Securities, Inc. on behalf of the funds that are cleared on a fully disclosed basis through non-affiliated brokers. For the three months ended July 31, 1999 and 1998 investment management fees and brokerage commission income, net of clearing fees, amounted to $7,975,000, and $7,089,000, respectively. The related receivables from the funds for management advisory fees included in Receivable from affiliates were $2,727,000 and $2,487,000 at July 31, 1999 and April 30, 1999, respectively. At July 31, 1999 and April 30, 1999, Receivable from affiliates included a receivable from the Parent of $166,000 and $26,000, respectively. For the three months ended July 31, 1999 the Company made federal income tax payments to the Parent amounting to $200,000. BUSINESS SEGMENTS - NOTE 9: The Company operates two reportable business segments: Publishing and Investment Management Services. The publishing segment produces investment related periodicals in both print and electronic form. The investment management segment provides advisory services to mutual funds, institutional and individual clients as well as brokerage services for the Value Line family of mutual funds. The segments are differentiated by the products and services they offer. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company allocates all revenues and expenses, except for depreciation related to corporate assets, between the two reportable segments. 10
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS <TABLE> <CAPTION> Disclosure of Reportable Segment Profit and Segment Assets July 31, 1999 Publishing Investment Total Management Services <S> <C> <C> <C> Revenues from external customers $14,970 $8,861 $23,831 Intersegment revenues 16 -- 16 Income from securities transactions 68 1,117 1,185 Depreciation and amortization 359 12 371 Segment profit 5,823 4,499 10,322 Segment assets 19,676 235,036 254,712 Expenditures for segment assets 185 -- 185 <CAPTION> July 31, 1998 Publishing Investment Total Management Services <S> <C> <C> <C> Revenues from external customers $15,597 $8,541 $24,138 Gain on sale of operating facility 518 -- 518 Intersegment revenues 19 -- 19 Income from securities transactions 62 80 142 Depreciation and amortization 365 13 378 Segment profit 6,103 4,961 11,064 Segment assets 19,331 187,756 207,087 Expenditures for segment assets 282 2 284 </TABLE> 11
VALUE LINE, INC. NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS <TABLE> <CAPTION> Reconciliation of Reportable Segment Revenues, Operating Profit and Assets 1999 1998 <S> <C> <C> Revenues Total revenues for reportable segments $23,847 $24,675 Elimination of intersegment revenues ($16) ($19) ----------------------------- Total consolidated revenues $23,831 $24,656 ----------------------------- ----------------------------- Segment profit Total profit for reportable segments $11,507 $11,206 Less: Depreciation related to corporate assets (30) (29) ----------------------------- Income before income taxes $11,477 $11,177 ----------------------------- ----------------------------- Assets Total assets for reportable segments $254,712 $207,087 Corporate assets 1,388 2,378 ----------------------------- Consolidated total assets $256,100 $209,465 ----------------------------- ----------------------------- </TABLE> 12
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: LIQUIDITY AND CAPITAL RESOURCES: Value Line, Inc. (the Company) had liquid resources which are used in its business of $230,164,000 at July 31, 1999. In addition to $53,196,000 of working capital, the Company had long-term securities available for sale with a market value of $176,968,000, that, although classified as non-current assets, are also readily marketable should the need arise. The Company's cash flow from operations of $905,000 for fiscal the first quarter of fiscal 2000 was lower than fiscal 1998's cash flow of $1,608,000 primarily due to the higher volume of prepayments for subscriptions during the first quarter of fiscal 1999. Net cash outflows for investing activities during fiscal 2000 were $1,852,000 higher than fiscal 1999's outflows due primarily to the Company's decision during fiscal 2000 to invest additional cash in its short term trading portfolio to support its trading strategies. The receipt of $577,000 of proceeds during the three months ended July 31, 1998, from the sale of the Company's North Bergen, New Jersey vacant operating facility also contributed to the variance in cash flows from investing activities. Year 2000 (Y2K): Our Year 2000 planning was launched in 1997 with an initial assessment of the Company's systems, its risk of exposure, the steps necessary to achieve Y2K compliance, and the resources necessary to implement those steps. The first phase of the plan involved a complete assessment of the Company's systems and a survey of vendors. Systems were categorized into three groups - Mission Critical, Critical, and Non-Critical. Mission Critical systems are systems that would result in a disruption of service or services. Critical systems are defined as those that could cause minor disruption of services. Non-Critical systems are defined as those that would have no significant impact on operations or services. The second phase of the project was the actual replacement and/or modification of systems and applications. This phase also included the implementation of the modified applications back into the production environment. The second phase has been completed since January 1999. The third phase of the project, testing and further implementation based on test results, has also been completed. Due to the timely and successful initial assessment of the Company's year 2000 readiness, we are able to continue to enhance our current products, create new products and release updated versions of our electronic products while still maintaining our Y2K test environments throughout the year. State of Readiness - Y2K We are now well into the fourth phase of the project: Testing and Implementation. This phase involves testing each system, implementing changes to our product environment, and then re-testing each system. All mission critical systems are Y2K compliant. Though we cannot provide absolute assurances, we currently believe the Company has completed the tasks required to ensure Y2K compliance and we will be testing throughout the year. The Year 2000 project is currently on schedule. Anticipated Costs - Y2K The Company's fiscal year 1998 expenditures for the Y2K project were $251,000. The Company's fiscal year 1999 expenditures for the Y2K project were $732,000. The Company's fiscal year 2000 expenditures through July 31, 1999 for the Y2K project were $108,000. The projected budget for the remainder of fiscal year 2000 is $306,000. These expenditures include new software and hardware, allocation of staff time, temporary assistance for clerical tasks, legal counsel, testing tools and external, third-party monitoring of the Company's Y2K implementation plan. Risks - Y2K We cannot predict with certainty what will happen as the millennium approaches. We cannot be sure that we will find every problem in the Company's systems, that the vendors the Company relies upon will find every problem in their systems, or that the Securities Industry will not experience system failures that will negatively and materially impact Value Line. The Company will continue to work toward compliance and urge its vendors to do the same, but neither the Company, nor its vendors, can predict the future with certainty. 13
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: Contingency Planning - Y2K Value Line is in the process of finalizing contingency plans to account for the possible failure of every Mission Critical system. Whether this involves performing tasks manually, or locating alternative vendors for Mission Critical software and hardware systems, Value Line is committed to having viable contingency plans developed for every Mission Critical system. We continue to reassess and adjust our risk management process and contingency plans. We believe we have sufficient planning to properly communicate and coordinate any disruption that the turn of the century could cause to our production environment. We are carefully monitoring our third party vendors and have developed a plan to provide alternative suppliers for those vendors that will not be compliant with the year 2000. We will continue to monitor and evaluate all vendors' Y2K status beyond the year 2000. Management believes that the Company's cash and other liquid asset resources used in its business together with the future cash flows from operations will be sufficient to finance current and forecasted operations. Management anticipates no borrowing for fiscal year 2000. RESULTS OF OPERATIONS: Net income for the three months ended July 31, 1999 was $6,914,000 or $0.69 per share, compared to prior year net income of $6,509,000, or $0.65 per share, an increase of 6%. Revenues of $23,831,000 for the first quarter of fiscal 2000, the second highest during any first quarter period, were $825,000 or 3% below the prior year's revenues of $24,656,000. Operating income was $10,292,000 for the three months ended July 31, 1999 as compared to operating income of $11,035,000 for the same period of last fiscal year. Operating income is ranked the third highest during any first quarter period, surpassed by the last two consecutive record first quarter periods. Both revenues and operating income for last fiscal year includes a gain of $518,000 from the sale of the vacant, North Bergen New Jersey operating facility. Subscription revenues of $14,970,000 were 4% below revenues from the prior fiscal year. The decrease in subscription revenues compared to the prior year is due primarily to a 4% net decrease in revenues from THE VALUE LINE INVESTMENT SURVEY and related products. The lower publication revenues is due largely to the recent decline in circulation to Company's print products that resulted from the reduced level of advertising that occurred while the Company was in the process of revising its advertising strategy. This decline in revenues from the print products was offset in part by the additional revenues from new products. Investment management fees and services revenues of $8,861,000 for the three months ended July 31, 1999, were 4%, above the prior year's revenues. The higher revenues from investment management fees and services, compared to the prior year, resulted primarily from a 5% increase in the year-over-year average net assets under management in the Company's mutual funds. Reduced revenues from individually managed asset accounts partially offset the increased revenues from the Company's mutual funds. Operating expenses for the three months ended July 31, 1999, were $13,539,000, 1%, below last year's total expenses of $13,621,000. Total advertising and promotional expenses of $3,540,000 were approximately equal to the prior year's expenses. When compared to the prior year, savings from the planned reduction in advertising through July 31, 1999 were offset by the increase in expenses relating to a selling arrangement for two of the Company's equity mutual funds of which the Company is the adviser. Salaries and employee benefit expenses of $6,066,000 were 2% above expenses of $5,973,000 recorded in the prior fiscal year. Production and distribution costs of $1,746,000 were 7% below expenses of $1,871,000 for the three months ended July 31, 1998. The lower expenses resulted from a decrease in maintenance expenses related to the Company's web-site and a decline in paper, printing and distribution expenses that were directly related to lower production runs for print publications. Office and administration expenses of $2,187,000 were 3% below last year's expenses of $2,246,000. The decline in administrative expenses from last year's level was a result of reduced professional fees and lower telephone and insurance expenses. Additional costs included in fiscal year 2000 include expenses related to the amortization of capitalized employee salaries and fringe 14
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: benefits associated with the adoption, in the latter half of fiscal year 1999, of SOP 98-1 "Accounting for the Costs of Computer Software developed for Internal Use". The Company's securities portfolios produced income of $1,185,000 for the three months ended July 31, 1999, an increase of 735% over last year's income of $142,000. This was due primarily to a strong rally in the equity market, primarily technology stocks during the Company's first fiscal quarter ended July 31, 1999. 15
VALUE LINE, INC. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10Q report for the period ended July 31, 1999 to be signed on its behalf by the undersigned thereunto duly authorized. Value Line, Inc. (Registrant) Date: September 14, 1999 By: /s/Jean Bernhard Buttner ------------------------- Jean Bernhard Buttner Chairman & Chief Executive Officer Date: September 14, 1999 By: /s/Stephen R. Anastasio ------------------------- Stephen R. Anastasio Chief Accounting Officer 16