Value Line Inc. (VALU, Financial) filed Quarterly Report for the period ended 2010-10-31.
Value Line Inc. has a market cap of $148.7 million; its shares were traded at around $14.9 with a P/E ratio of 13.3 and P/S ratio of 2.6. The dividend yield of Value Line Inc. stocks is 5.4%.VALU is in the portfolios of Jeff Auxier of Auxier Focus Fund, Mario Gabelli of GAMCO Investors, Chuck Royce of Royce& Associates.
Investment periodicals and related publications revenues were down $589,000 or 6% and $1,293,000 or 7% for the three months and six months ended October 31, 2010, respectively, as compared to the prior fiscal year. While the Company continues to attract new subscribers through various marketing channels, primarily direct mail and the Internet, total product line circulation remains weaker than in past years. Factors that have contributed to the decline in the investment periodicals and related publications revenues 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. As of October 31, 2010, total company-wide circulation has declined 5% compared to the previous fiscal year. Overall renewal rates for the flagship product, The Value Line Investment Survey, are 75%, up from 71% a year earlier, although the Company is not adding enough new subscribers to offset the subscribers that choose not to renew the flagship product and other Value Line products. The Company has been successful in growing electronic investment periodicals within institutional sales, with earned revenues increasing $180,000 or 10% and $310,000 or 8% for the three and six months ended October 31, 2010, respectively, from the previous year. Gross institutional sales for the three months ended October 31, 2010 were $2,393,000, an increase of $379,000 or 19% and $4,594,000 for the six months ended October 31, 2010, up $581,000 or 15% from the previous fiscal year. This continues to be a positive growth trend, but not sufficient to wholly offset the lost revenues from retail subscribers.
For the three months and six months ended October 31, 2010, print publication revenues decreased $560,000 or 9% and $1,196,000 or 10%, respectively, from the last fiscal year for the reasons described earlier. Print circulation, which has always dominated the Company s subscription base, has fallen 7% as of October 31, 2010 as compared to the last fiscal year. Electronic publications revenues for the three months and six months ended October 31, 2010 were down 1% or $29,000 and 2% or $97,000, respectively, as compared to the prior fiscal year. The electronic publication revenues are broken down into institutional accounts and retail subscribers. For
Copyright data fees have increased $37,000 or 4% and $47,000 or 3% for the three months and six months ended October 31, 2010 as compared to the prior fiscal year. As of October 31, 2010, total third party sponsored assets were attributable to four contracts for copyright data and represent $2.8 billion in various products as compared to four contracts and $2.4 billion in assets last fiscal year, representing a 19% increase in assets year over year. The combination of the underperformance by the Ranking System and the broad and deep declines in the equity markets from late 2008 and early 2009 significantly impacted assets of the third party sponsors that are customers of the Company s copyright data business. The Company believes the growth of this part of the business is dependent upon the desire of third parties to use the Value Line trademarks and proprietary research for their products. Today this market is significantly more competitive as a result of product diversification and growth of the use of indices by portfolio managers. Copyright data fees have been a critical component of the Company s plan to replace shrinking publishing revenues but no new products have been added in fiscal year 2011. One account was added and one lost in June 2010.
Overall assets in the Value Line Funds at October 31, 2010 decreased $309 million since October 31, 2009 primarily as a result of net redemptions from the Value Line equity mutual funds and a decline in the U.S. Government Money Market Fund that resulted primarily from the Company s payment of approximately $44 million to settle the SEC matter in November 2009 and $30 million for the special $3.00 per share dividend paid to all the Company s shareholders during April 2010. Total net assets in the Value Line Funds have fallen from $2.3 billion at fiscal 2010 year end to $2.1 billion at October 31, 2010 primarily as a result of net redemptions in certain Value Line equity mutual funds.
As a result of a 17% and 15% decline in average assets under management for the three months and six months ended October 31, 2010 as compared to the previous year, investment management fees and distribution services revenues for the three months and six months ended October 31, 2010 were $816,000 or 17% and $1,301,000 or 14% below the prior fiscal year. Management fees for the three months and six months ended October 31, 2010 were down $601,000 or 16% and $983,000 or 13%, respectively, as compared to the prior fiscal year. Distribution services revenues (12b-1 fees) decreased $199,000 or 19% and $299,000 or 14% for the three months and six months of fiscal 2011. During both the three months and six months ended October 31, 2010, contractual fee waivers have applied to most of the Value Line Funds. For the three months ended October 31, 2010 and 2009, 12b-1 fee waivers were $613,000 and $687,000, respectively. For the six months ended October 31, 2010 and 2009, 12b-1 fee waivers were $1,233,000 and $1,355,000, respectively. Management fee waivers were $192,000 and $378,000 for the three months and six months ended October 31, 2010, respectively and $244,000 and $440,000 for the three months and six months ended October 31, 2009, respectively. Twelve of the fourteen funds have all or a portion of the 12b-1 fees being waived and five of the fourteen funds have partial management fee waivers in place. With limited exception, the Company and its subsidiaries have no right to recoup the previously waived management fees and 12b-1 fees.
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Value Line Inc. has a market cap of $148.7 million; its shares were traded at around $14.9 with a P/E ratio of 13.3 and P/S ratio of 2.6. The dividend yield of Value Line Inc. stocks is 5.4%.VALU is in the portfolios of Jeff Auxier of Auxier Focus Fund, Mario Gabelli of GAMCO Investors, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
For the six months ended October 31, 2010, the Company s net income of $3,404,000 or $0.34 per share compared to the net loss of $29,199,000 or $2.93 per share for the six months ended October 31, 2009. Net income for the second quarter ended October 31, 2010 of $1,087,000 or $0.11 per share was $1,294,000 or 54% below net income of $2,381,000 or $0.23 per share for the second quarter of the prior fiscal year. Operating income of $5,336,000 for the six months ended October 31, 2010 compared to an operating loss of $39,351,000 for the six months ended October 31, 2009. The operating and net losses of the Company during the first six months of the prior fiscal year were a result of the Company recording a provision for the SEC Settlement discussed in Item 3 of the Company s Annual Report on Form 10-K for the fiscal year ended April 30, 2010 of $47,706,000. Operating income for the second quarter ended October 31, 2010 of $1,790,000 was $1,645,000 or 48% below operating income of $3,435,000 for the second quarter of the prior fiscal year due largely to $1,120,000 of expenses related to the Company s restructuring of its asset management division.Investment periodicals and related publications revenues were down $589,000 or 6% and $1,293,000 or 7% for the three months and six months ended October 31, 2010, respectively, as compared to the prior fiscal year. While the Company continues to attract new subscribers through various marketing channels, primarily direct mail and the Internet, total product line circulation remains weaker than in past years. Factors that have contributed to the decline in the investment periodicals and related publications revenues 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. As of October 31, 2010, total company-wide circulation has declined 5% compared to the previous fiscal year. Overall renewal rates for the flagship product, The Value Line Investment Survey, are 75%, up from 71% a year earlier, although the Company is not adding enough new subscribers to offset the subscribers that choose not to renew the flagship product and other Value Line products. The Company has been successful in growing electronic investment periodicals within institutional sales, with earned revenues increasing $180,000 or 10% and $310,000 or 8% for the three and six months ended October 31, 2010, respectively, from the previous year. Gross institutional sales for the three months ended October 31, 2010 were $2,393,000, an increase of $379,000 or 19% and $4,594,000 for the six months ended October 31, 2010, up $581,000 or 15% from the previous fiscal year. This continues to be a positive growth trend, but not sufficient to wholly offset the lost revenues from retail subscribers.
For the three months and six months ended October 31, 2010, print publication revenues decreased $560,000 or 9% and $1,196,000 or 10%, respectively, from the last fiscal year for the reasons described earlier. Print circulation, which has always dominated the Company s subscription base, has fallen 7% as of October 31, 2010 as compared to the last fiscal year. Electronic publications revenues for the three months and six months ended October 31, 2010 were down 1% or $29,000 and 2% or $97,000, respectively, as compared to the prior fiscal year. The electronic publication revenues are broken down into institutional accounts and retail subscribers. For
Copyright data fees have increased $37,000 or 4% and $47,000 or 3% for the three months and six months ended October 31, 2010 as compared to the prior fiscal year. As of October 31, 2010, total third party sponsored assets were attributable to four contracts for copyright data and represent $2.8 billion in various products as compared to four contracts and $2.4 billion in assets last fiscal year, representing a 19% increase in assets year over year. The combination of the underperformance by the Ranking System and the broad and deep declines in the equity markets from late 2008 and early 2009 significantly impacted assets of the third party sponsors that are customers of the Company s copyright data business. The Company believes the growth of this part of the business is dependent upon the desire of third parties to use the Value Line trademarks and proprietary research for their products. Today this market is significantly more competitive as a result of product diversification and growth of the use of indices by portfolio managers. Copyright data fees have been a critical component of the Company s plan to replace shrinking publishing revenues but no new products have been added in fiscal year 2011. One account was added and one lost in June 2010.
Overall assets in the Value Line Funds at October 31, 2010 decreased $309 million since October 31, 2009 primarily as a result of net redemptions from the Value Line equity mutual funds and a decline in the U.S. Government Money Market Fund that resulted primarily from the Company s payment of approximately $44 million to settle the SEC matter in November 2009 and $30 million for the special $3.00 per share dividend paid to all the Company s shareholders during April 2010. Total net assets in the Value Line Funds have fallen from $2.3 billion at fiscal 2010 year end to $2.1 billion at October 31, 2010 primarily as a result of net redemptions in certain Value Line equity mutual funds.
As a result of a 17% and 15% decline in average assets under management for the three months and six months ended October 31, 2010 as compared to the previous year, investment management fees and distribution services revenues for the three months and six months ended October 31, 2010 were $816,000 or 17% and $1,301,000 or 14% below the prior fiscal year. Management fees for the three months and six months ended October 31, 2010 were down $601,000 or 16% and $983,000 or 13%, respectively, as compared to the prior fiscal year. Distribution services revenues (12b-1 fees) decreased $199,000 or 19% and $299,000 or 14% for the three months and six months of fiscal 2011. During both the three months and six months ended October 31, 2010, contractual fee waivers have applied to most of the Value Line Funds. For the three months ended October 31, 2010 and 2009, 12b-1 fee waivers were $613,000 and $687,000, respectively. For the six months ended October 31, 2010 and 2009, 12b-1 fee waivers were $1,233,000 and $1,355,000, respectively. Management fee waivers were $192,000 and $378,000 for the three months and six months ended October 31, 2010, respectively and $244,000 and $440,000 for the three months and six months ended October 31, 2009, respectively. Twelve of the fourteen funds have all or a portion of the 12b-1 fees being waived and five of the fourteen funds have partial management fee waivers in place. With limited exception, the Company and its subsidiaries have no right to recoup the previously waived management fees and 12b-1 fees.
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