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 January 31, 2001 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 January 31, 2001 ----- ------------------------------- Common stock, $.10 par value 9,978,625 Shares ----------------
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED) <TABLE> <CAPTION> Jan. 31, April 30, Assets 2001 2000 ---------- ---------- <S> <C> <C> Current Assets: Cash and cash equivalents (including short term investments of $49,605 and $47,456, respectively) $49,897 $47,933 Trading securities 23,014 19,044 Accounts receivable, net of allowance for doubtful accounts of $144 and $133, respectively 2,266 2,495 Receivable from affiliates 3,264 3,061 Prepaid expenses and other current assets 1,243 1,115 Deferred income taxes 139 139 ---------- ---------- Total current assets 79,823 73,787 Long term securities available for sale 193,435 210,468 Property and equipment, net 9,664 10,402 Capitalized software and other intangible assets, net 3,091 3,541 ---------- ---------- Total assets $286,013 $298,198 ========== ========== Liabilities and Shareholders' Equity Current Liabilities: Accounts payable and accrued liabilities $6,194 $7,162 Accrued salaries 1,888 2,063 Dividends payable 2,495 2,495 Accrued taxes payable 2,936 1,041 ---------- ---------- Total current liabilities 13,513 12,761 Unearned revenue 38,107 41,116 Deferred income taxes 23,674 33,036 Deferred charges 211 419 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 166,334 149,304 Treasury stock, at cost (21,375 shares on 1/31/01, and 4/30/00) (411) (411) Accumulated other comprehensive income, net of tax 42,626 60,014 ---------- ---------- Total shareholders' equity 210,508 210,866 ---------- ---------- Total liabilities and shareholders' equity $286,013 $298,198 ========== ========== </TABLE> The accompanying notes and independent auditor's review report 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) (UNAUDITED) <TABLE> <CAPTION> Three months ended Nine months ended Jan. 31, Jan. 31, 2001 2000 2001 2000 -------- -------- -------- -------- <S> <C> <C> <C> <C> Revenues: Investment periodicals and related publications $14,189 $14,421 $42,060 $43,821 Investment management fees & svcs 10,767 9,644 33,124 27,490 -------- -------- -------- -------- Total revenues 24,956 24,065 75,184 71,311 -------- -------- -------- -------- Expenses: Advertising and promotion 6,591 6,760 17,300 14,668 Salaries and employee benefits 5,975 6,161 18,066 17,956 Production and distribution 1,979 1,661 5,668 4,973 Office and administration 2,275 2,397 6,646 6,511 -------- -------- -------- -------- Total expenses 16,820 16,979 47,680 44,108 -------- -------- -------- -------- Income from operations 8,136 7,086 27,504 27,203 Income from securities transactions, net 10,803 14,976 13,017 17,372 -------- -------- -------- -------- Income before income taxes 18,939 22,062 40,521 44,575 Provision for income taxes 7,146 7,969 16,006 17,182 -------- -------- -------- -------- Net income $11,793 $14,093 $24,515 $27,393 ======== ======== ======== ======== Earnings per share, basic & fully diluted $1.19 $1.41 $2.46 $2.75 ======== ======== ======== ======== </TABLE> The accompanying notes and independent auditor's review report 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) (UNAUDITED) <TABLE> <CAPTION> For the nine months ended Jan 31, Jan. 31, 2001 2000 --------- --------- <S> <C> <C> Cash flows from operating activities: Net income $24,515 $27,393 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,416 1,828 Gains on sales of trading securities and securities held for sale (10,600) (12,964) Unrealized losses/(gains) on trading securities 1,647 (1,327) Writedown of equipment 161 3 Changes in assets and liabilities: Decrease in unearned revenue (3,009) (4,478) Decrease in deferred charges (208) (208) (Decrease)/increase in accounts payable and accrued expenses (968) 2,869 Decrease in accrued salaries (175) (317) Increase in accrued taxes payable 1,895 3,813 Increase in prepaid expenses and other current assets (128) (1,004) Decrease/(increase) in accounts receivable 229 (157) Increase in receivable from affiliates (203) (557) --------- --------- Total adjustments (8,943) (12,499) --------- --------- Net cash provided by operations 15,572 14,894 Cash flows from investing activities: Proceeds from sales of long term securities 35,075 11,528 Purchases of long term securities (34,348) (14,416) Proceeds from sales of trading securities 30,543 20,870 Purchases of trading securities (36,004) (22,019) Acquisitions of property, and equipment (580) (553) Expenditures for capitalized software (809) (979) --------- --------- Net cash used in investing activities (6,123) (5,569) Cash flows from financing activities: Dividends paid (7,485) (7,484) --------- --------- Net cash used in financing activities (7,485) (7,484) --------- --------- Net increase in cash and cash equivalents 1,964 1,841 Cash and cash equivalents at beginning of period 47,933 41,826 --------- --------- Cash and cash equivalents at end of period $49,897 $43,667 ========= ========= </TABLE> The accompanying notes and independent auditor's review report are an integral part of these financial statements. 4
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE NINE MONTHS ENDED JANUARY 31, 2000 (in thousands, except share amounts) (UNAUDITED) <TABLE> <CAPTION> Common stock Accumulated Number Additional Other Total of paid-in Treasury Comprehensive Retained Comprehensive Shareholders' shares Amount capital Stock income earnings income Equity --------- ------ ---------- -------- ------------- -------- ------------- ------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at May 1, 2000 9,978,625 $1,000 $959 ($411) $149,304 $60,014 $210,866 Comprehensive income Net income $24,515 24,515 24,515 Other comprehensive income, net of tax: Change in unrealized gains on securities (17,388) (17,388) (17,388) ------------- Comprehensive income $7,127 ============= Dividends declared (7,485) (7,485) --------- ------ ---------- -------- -------- ------------- ------------- Balance at January 31, 2001 9,978,625 $1,000 $959 ($411) $166,334 $42,626 $210,508 ========= ====== ========== ======== ======== ============= ============= </TABLE> The accompanying notes and independent auditor's review report are an integral part of these financial statements. 5
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS VALUE LINE, INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE NINE MONTHS ENDED JANUARY 31, 2000 (in thousands, except share amounts) (UNAUDITED) <TABLE> <CAPTION> Common stock Accumulated Number Additional Other Total of paid-in Treasury Comprehensive Retained Comprehensive Shareholders' shares Amount capital Stock income earnings income Equity --------- ------ ---------- -------- ------------- -------- ------------- ------------- <S> <C> <C> <C> <C> <C> <C> <C> <C> Balance at May 1, 1999 9,978,625 $1,000 $959 ($411) $125,585 $39,770 $166,903 Comprehensive income Net income $27,393 27,393 27,393 Other comprehensive income, net of tax: Change in unrealized gains on securities 14,020 14,020 14,020 ------------- Comprehensive income $41,413 ============= Dividends declared (7,484) (7,484) --------- ------ ---------- -------- -------- ------------- ------------- Balance at January 31, 2000 9,978,625 $1,000 $959 ($411) $145,494 $53,790 $200,832 ========= ====== ========== ======== ======== ============= ============= </TABLE> The accompanying notes and independent auditor's review report 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 13, 2000 for the fiscal year ended April 30, 2000. 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 January 31, 2001 and April 30, 2000, cash equivalents included $49,314,000 and $46,726,000, 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. Advertising expenses: The Company expenses advertising costs as incurred. 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
MARKETABLE SECURITIES - NOTE 2: Trading Securities: Securities held by the Company and by Value Line Securities, Inc. had an aggregate cost of $21,441,000 and $15,821,000 and a market value of $23,014,000 and $19,044,000 at January 31, 2001 and April 30, 2000, respectively. Long-Term Securities Available for Sale: The aggregate cost of the long-term securities was $127,857,000 and $118,135,000 and the market value was $193,435,000 and $210,468,000 at January 31, 2001 and April 30, 2000, respectively. At January 31, 2001, the decrease in gross unrealized appreciation on these securities of $26,751,000, net of deferred taxes of $9,363,000, was included in shareholders' equity. The Company received gross proceeds of $35,075,000 and $11,528,000 from sales of long term securities during the nine months of fiscal 2001 and 2000, respectively. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - NOTE 3: Cash payments for income taxes were $14,111,000 and $13,827,000 during the nine months ended January 31, 2001 and 2000, respectively. EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN - NOTE 4: Substantially all employees of the Company and its subsidiaries are members of the Value Line, Inc. Profit Sharing and Savings Plan (the "Plan"). In general, this is a qualified, contributory plan which provides for a discretionary annual Company contribution which is determined by a formula based upon the salaries of eligible employees and the amount of consolidated net operating income as defined in the Plan. Plan expense, included in salaries and employee benefits in the Consolidated Statements of Income and Retained Earnings for the nine months ended January 31, 2001 and 2000, was $1,035,000 and $879,000, respectively. 8
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 January 31, 2001 and 2000, the Company held long term securities classified as available-for-sale. The decrease in gross unrealized gains on these securities during the nine months ended January 31, 2001 and the related deferred taxes was $26,751,000 and $9,363,000, respectively. The increase during the first nine months of fiscal 2000 in gross unrealized gains on these securities and the related deferred taxes was $21,570,000 and $7,550,000, respectively. RELATED PARTY TRANSACTIONS - NOTE 6: 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. Effective July 1, 2000, the Company received service and distribution fees under rule 12b-1 of the Investment Company Act of 1940 from all but three of the fifteen mutual funds for which Value Line is the adviser. 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 nine months ended January 31, 2001 and January 31, 2000 investment management fees, 12b-1 service and distribution fees and brokerage commission income, net of clearing fees, amounted to $30,682,000 and $24,656,000, respectively. These amounts include service and distribution fees of $4,742,000 and $556,000, respectively. The related receivables from the funds for management advisory fees and 12b-1 service fees included in Receivable from affiliates were $3,170,000 and $2,972,000 at January 31, 2001 and April 30, 2000, respectively. For the nine months ended January 31, 2001 and 2000, the Company was reimbursed $389,000 and $387,000, respectively, for payments it made on behalf of and services it provided to Arnold Bernhard and Company, Inc. ("Parent"). At January 31, 2001 and April 30, 2000, Receivable from Affiliates included a receivable from the Parent of $51,000 and $44,000, respectively. For the nine months ended January 31, 2001 and 2000, the Company made federal income tax payments to the Parent amounting to $11,450,000 and $10,900,000, respectively. 9
FEDERAL, STATE AND LOCAL INCOME TAXES - NOTE 7: The Company computes its tax in accordance with the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". The provision for income taxes includes the following: <TABLE> <CAPTION> Nine months ended January 31, 2001 2000 ----------------------------- (in thousands) <S> <C> <C> Current: Federal $14,004 $14,036 State and local 2,537 2,501 ----------------------------- 16,541 16,537 Deferred: Federal (519) 680 State and local (16) (35) ----------------------------- (535) 645 ----------------------------- $16,006 $17,182 ============================= </TABLE> Deferred taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's deferred tax asset/(liability) are primarily a result of unrealized gains on the Company's trading and long term securities portfolios. BUSINESS SEGMENTS - NOTE 8: 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
Disclosure of Reportable Segment Profit and Segment Assets (in thousands) <TABLE> <CAPTION> Nine months ended January 31, 2001 Publishing Investment Total Management Services <S> <C> <C> <C> Revenues from external customers $42,060 $33,124 $75,184 Intersegment revenues 101 -- 101 Income from securities transactions 216 12,801 13,017 Depreciation and amortization 2,308 61 2,369 Segment profit 11,652 15,900 27,552 Segment assets 20,007 265,388 285,395 Expenditures for segment assets 1,280 100 1,380 <CAPTION> Nine months ended January 31, 2000 Publishing Investment Total Management Services <S> <C> <C> <C> Revenues from external customers $43,821 $27,490 $71,311 Intersegment revenues 35 -- 35 Income from securities transactions 188 17,184 17,372 Depreciation and amortization 1,725 50 1,775 Segment profit 14,468 12,788 27,256 Segment assets 20,940 264,952 285,892 Expenditures for segment assets 1,530 2 1,532 </TABLE> 11
Reconciliation of Reportable Segment Revenues, Operating Profit and Assets (in thousands) <TABLE> <CAPTION> Nine months ended January 31, 2001 2000 ----------------------------- <S> <C> <C> Revenues Total revenues for reportable segments $75,285 $71,346 Elimination of intersegment revenues (101) (35) ----------------------------- Total consolidated revenues $75,184 $71,311 ============================= Segment profit Total profit for reportable segments $40,569 $44,628 Less: Depreciation related to corporate assets (48) (53) ----------------------------- Income before income taxes $40,521 $44,575 ============================= Assets Total assets for reportable segments $285,395 $285,892 Corporate assets 618 1,073 ----------------------------- Consolidated total assets $286,013 $286,965 ============================= </TABLE> 12
HOROWITZ & ULLMANN, P.C. Certified Public Accountants 275 Madison Avenue A member of the New York, NY 10016 AICPA SEC Practice Section Telephone: (212) 532-3736 New York State Society of CPA's Facsimile: (212) 545-8997 E-mail: cpas@horowitz-ullmann.com REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Value Line, Inc. New York, NY We have reviewed the accompanying consolidated balance sheet of Value Line, Inc. and its subsidiaries as of January 31, 2001 and the related consolidated statements of income, changes in stockholders' equity, and cash flows for the nine month periods ended January 31, 2001 and 2000. All information included in these financial statements is the representation of the Company's management. We conducted our review in accordance with-standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquires of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of April 30, 2000 and the related consolidated statements of income, changes in stockholders equity, and cash flows for the year then ended (not presented herein), and in our report dated July 13, 2000, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of April 30, 2000 is fairly stated in all material respects. /s/ Horowitz & Ullmann, P.A. March 15, 2001 13
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 $259,745,000 at January 31, 2001. In addition to $66,310,000 of working capital, the Company had long-term securities available for sale with a market value of $193,435,000, that, although classified as non-current assets, are also readily marketable should the need arise. The Company's cash flow from operations of $15,572,000 for the nine months ended January 31, 2001 was 5% higher than fiscal 2000's cash flow of $14,894,000. The increase was primarily due to a 38% increase in new full term subscription orders. Net cash outflows from investing activities during the first nine months of fiscal 2001 were $554,000 higher than net cash outflows for the first nine months of fiscal 2000 due largely to the Company's decision to realign its long-term securities holdings and invest additional funds in its trading portfolio. 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 2001. RESULTS OF OPERATIONS: Revenues of $75,184,000 and $24,956,000 for the first nine months and third quarter of fiscal year 2001 set new record highs for the Company and exceeded last year's revenues by 5% and 4%, respectively. Operating income of $27,504,000 for the nine months ended January 31, 2001, was 1% higher than operating income of $27,203,000 for the same period of last fiscal year. Operating income for the third quarter was 15% higher than the previous year's. Net income for the nine months ended January 31, 2001 of $24,515,000, or $2.46 per share, compares to the prior year's net income of $27,393,000, or $2.75 per share. Total assets at January 31, 2001 of $286,013,000 were approximately equal to the total assets at January 31, 2000. However, shareholders' equity increased 5% to $210,508,000 during the same period. Subscription revenues of $42,060,000 were 4% below revenues of the prior fiscal year. The decrease in subscription revenues compared to the prior year is due primarily to a 5% net decrease in revenues from THE VALUE LINE INVESTMENT SURVEY and related products, which includes THE VALUE LINE INVESTMENT SURVEY FOR WINDOWS, CONDENSED, EXPANDED EDITION AND V.L. SELECT. The decrease in publication revenues is largely a result of the reduced level of advertising during last fiscal year that occurred while the Company had been in the process of revising its advertising strategy. Additionally, the availability of free or low cost data on the Internet is believed to have had a negative impact on revenue growth. Investment management fees and services revenues of $33,124,000 for the nine months ended January 31, 2001, were 20% above the prior fiscal year's revenues. The increase in revenues from investment management fees and services, compared to the prior year, resulted primarily from the receipt of higher service and distribution fees and higher investment advisory fees from the Value Line Mutual Funds. The increase in service and distribution fees resulted from the additional revenues received during fiscal 2001 from a plan adopted under Rule 12b-1 of the Investment Company Act of 1940 for all but two of the fifteen mutual funds for which Value Line is the adviser, effective July 1, 2000. The increase of 5% in the year-over-year average net assets under management in the Company's mutual funds contributed to the higher investment advisory fees. Operating expenses for the nine months ended January 31, 2001 of $47,680,000 were 8% higher than last year's expenses of $44,108,000. Total company-wide advertising and promotional expenses of $17,300,000 were 18% above the prior year's expenses. When compared to the prior year, advertising 14
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS: expenses increased 3% for THE VALUE LINE INVESTMENT SURVEY and related products, and a 42% increase in advertising expenses for the Value Line mutual funds, including expenses relating to a selling arrangement for two of the Company's equity mutual funds. Additionally, promotion fees to discount brokers for attracting additional investments in the Value Line mutual funds increased $400,000 based on the higher level of invested assets the mutual funds experienced through these brokers. Salaries and employee benefit expenses of $18,066,000 were 1% above expenses of $17,956,000 recorded in the prior fiscal year. The increase in salaries and employee benefit expenses is primarily attributable to higher employee benefit expenses as compared to last fiscal year. The increase is partially offset by lower expenses due to the outsourcing of the Customer Service division and staff reductions in the Asset Management, Y2K and data collection divisions. Production and distribution costs for the first nine months of fiscal 2001 of $5,668,000 were 14% above expenses of $4,973,000 for the nine months ended January 31, 2000. The increase in production expenses resulted from the amortization of development costs for THE VALUE LINE INVESTMENT SURVEY FOR WINDOWS Version 3 and Version 2 of the Company's Website and higher outside data collection expenses for THE VALUE LINE MUTUAL FUND SURVEY. These increases were partly offset by lower paper, printing and distribution expenses related to lower production runs for print publications. Office and administration expenses of $6,646,000 were 2% above last year's expenses of $6,511,000. The increase from the prior year is primarily attributable to amortization of development costs for Internet enhancements and maintenance and for the electronic subscription fulfillment operation. The Company's securities portfolios produced income of $13,017,000 for the nine months ended January 31, 2001 compared to income of $17,372,000 during last fiscal year. The Value Line trading portfolio produced a return similar to the weighted average benchmark indices. However, the decline in these financial markets indices during the latter part of the third quarter of fiscal 2001 as compared to last fiscal year, resulted in trading losses that accounted for most of the decrease in the income from securities transactions. Dividend income from the Value Line mutual funds increased 38% from the level during first nine months of fiscal 2000. 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 January 31, 2001 to be signed on its behalf by the undersigned thereunto duly authorized. Value Line, Inc. (Registrant) Date: March 19, 2001 By: /s/Jean Bernhard Buttner ------------------------------------- Jean Bernhard Buttner Chairman & Chief Executive Officer Date: March 19, 2001 By: /s/Stephen R. Anastasio -------------------------------------- Stephen R. Anastasio Chief Accounting Officer 16