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Value Line, Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 14, 2012 04:00PM
Value Line, Inc. (VALU) filed Quarterly Report for the period ended 2012-07-31. Value Line, Inc. has a market cap of $111.3 million; its shares were traded at around $9.69 with a P/E ratio of 16.1 and P/S ratio of 3. The dividend yield of Value Line, Inc. stocks is 5.3%.
Highlight of Business Operations:During the three months ended July 31, 2012, the Company s net income of $1,776,000, or $0.18 per share, was $300,000 or 14.5% below net income of $2,076,000, or $0.21 per share, for the three months ended July 31, 2011. Income from operations of $1,352,000 for the three months ended July 31, 2012, was $286,000 or 17.5% below income from operations of $1,638,000 for the three months ended July 31, 2011. Income before income taxes, which is inclusive of the non-voting revenues and non-voting profits interests from EAM for the three months ended July 31, 2012, was $2,851,000, which is $370,000 or 11.5% below income before income taxes of $3,221,000 for the three months ended July 31, 2011.
Investment periodicals and related publications revenues and circulation were down approximately 4% for the three months ended July 31, 2012, as compared to the three months ended July 31, 2011. The Company continued its efforts to attract new subscribers through various marketing channels, primarily direct mail and the internet for retail users and by the efforts of our sales personnel in the institutional market. Factors that have contributed to the decline in the investment periodicals and related publications revenues and circulation include competition in the form of free or low cost investment research on the Internet and research provided by brokerage firms at no direct cost to their clients. For twelve month period ended July 31, 2012, core (third time and thereafter renewed) subscriber renewal rates for the flagship product, The Value Line Investment Survey, are 71%, down from 81% last fiscal year. The Company is not adding enough new subscribers to offset the subscribers that choose not to renew this product. The Company has been successful in growing revenues from digitally-delivered investment periodicals within institutional sales. Gross institutional sales orders of $2,318,000 for the three months ended July 31, 2012, were $317,000 or 15.8% above comparable sales orders of $2,001,000, for the three months ended July 31, 2011. This increase continues a positive growth trend for Institutional Sales, but is not sufficient to wholly offset the lost revenues from retail subscribers.
Print publication revenues decreased $306,000, or 5.9%, for the three months ended July 31, 2012 from the prior fiscal year for the reasons described earlier. For the three months ended July 31, 2012, earned revenues from institutional print publications increased $93,000 or 36.1% as compared to the prior fiscal year. For the three months ended July 31, 2012, print publications revenues from retail subscribers decreased $399,000 or 8.1%, as compared to the prior fiscal year. Print circulation has fallen 8.7% as of July 31, 2012 as compared to print circulation at July 31, 2011.
Total results of EAM s investment management operations during the three months ended July 31, 2011, before interest holder distributions, include total investment management fees earned from the Value Line Funds of $3,301,000, 12b-1 fees of $928,000 and other income of $4,000. For the same period, total investment management fee waivers were $230,000 and 12b-1 fee waivers were $618,000. During the three months ended July 31, 2011, EAM s net income was $162,000, after giving effect to Value Line s non-voting revenues interest of $1,491,000, but before distributions to voting interest holders and to the Company in respect of its non-voting profits interest.
The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM s investment management fee revenues from its mutual fund and separate accounts business. EAM currently has no separately managed account clients. During the three months ended July 31, 2012, the Company recorded income of $1,473,000, consisting of $1,394,000, from its non-voting revenues interest in EAM and $79,000, from its non-voting profits interest in EAM without incurring any directly related expenses. During the three months ended July 31, 2011, the Company recorded income of $1,572,000, consisting of $1,491,000, from its non-voting revenues interest in EAM and $81,000 from its non-voting profits interests in EAM.
Stocks Discussed: VALU,