Value Line Inc. (VALU, Financial) filed Amended Quarterly Report for the period ended 2008-10-31.
VALUE LINE INC.'s primary businesses are producing investment related periodical publications through its wholly-owned subsidiary Value Line Publishing Inc. and providing investment advisory services to mutual funds institutions and individual clients. Value Line Inc. has a market cap of $310.3 million; its shares were traded at around $31.09 with a P/E ratio of 12.8 and P/S ratio of 3.8. The dividend yield of Value Line Inc. stocks is 3.9%. Value Line Inc. had an annual average earning growth of 9.8% over the past 5 years.
For the six months ended October 31, 2008 print publication revenues decreased $1,871,000 or 11.9% below last fiscal year for the reasons described above. Electronic publications revenues grew by $341,000 or 5.7% for the six months ended October 31, 2008. The electronic revenues are broken down into institutional accounts and retail subscribers. For the six months ended October 31, 2008, institutional revenues increased $659,000 or 24%, while revenues from retail subscribers were down $318,000 or 10% as compared to the six months ended October 31, 2007. The decrease in electronic retail publications revenues is primarily attributable to the decrease in circulation within the Company s software products. Circulation of The Value Line Investment Analyzer decreased 14%, which resulted in a $229,000 decline in revenues from this product. The increase in institutional revenues is a result of expanding the sales force on the institutional side of the business.
Licensing fee revenues have decreased $525,000 or 15% for the six months ended October 31, 2008 as compared to the six months ended October 31, 2007. As of October 31, 2008, total third party sponsored assets attributable to the licensing business represent $3.6 billion in various products. The broad and deep declines throughout the equity markets have impacted assets attributable to the licensing business and resulted in lower asset based fees paid to the Company. While the third party sponsors continue to raise assets the broad market decline has eroded those assets as well as previous appreciation in existing assets. The Company is in discussion with new sponsors to increase products offered, but no new agreements have been signed in fiscal 2009. The Company believes the growth of the business is dependent upon the desire of third party marketers to use the Value Line trademarks and proprietary research for their products, signing new licensing agreements, and the marketplace s acceptance of new products. As stated in the past, Value Line believes it was an early entrant into this new market seven years ago. Today this market has significantly broadened as a result of product diversification and growth of the use of indexes by portfolio managers, and the Company and its third party sponsors face more competition in the marketplace.
As a result of the decline in assets under management, investment management fees and distribution services revenues for the six months ended October 31, 2008 were $1,316,000 or 8% below the prior fiscal year. Management fees for the first six months of fiscal year 2009 were down $1,032,000 or 8% as compared to the first six months of fiscal year 2008. There was a net decrease of $175,000 or 5% in distribution services revenues. During the period, voluntary and contractual fee waivers exist for certain of the Value Line Funds. For the six months ended October 31, 2008 and 2007, 12b-1 fee waivers were $1,658,000 and $2,042,000, respectively. For the six months ended October 31, 2008 and 2007, total management fee waivers were $101,000 and $117,000, respectively. The Company s subsidiaries, EULAV Asset Management and Value Line Securities, have no right to recoup the previously waived management fees and 12b-1 fees from the Value Line Funds. Separately managed accounts revenues decreased $109,000 or 18% for the six months ended October 31, 2008 as compared to the six months ended October 31, 2007 due to market decline in the portfolios.
Expenses within the Company are categorized into Advertising and promotion, Salaries and employee benefits, Production and distribution, and Office and administration. Operating expenses of $24,809,000 for the six months ended October 31, 2008 were $1,279,000 or 5% above operating expenses of $23,530,000 last fiscal year. Operating expenses of $12,061,000 for the second quarter ended October 31, 2008 were $367,000 or 3% above operating expenses of $11,694,000 for the second quarter of the prior fiscal year.
Advertising and promotion expenses for the six months ended October 31, 2008 decreased $505,000 as compared to the first six months ended October 31, 2007. Costs associated with direct mail decreased $568,000 or 31% below last fiscal year, due to an ongoing targeted reduction in the overall number of pieces mailed year to year. Print advertising promoting the Value Line Funds in select markets increased by $239,000 for the six months ended October 31, 2008. While supermarket platform expenses were level with the prior year, the platform expenses are expected to be lower in the upcoming months due to the decline in fund assets under management.
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VALUE LINE INC.'s primary businesses are producing investment related periodical publications through its wholly-owned subsidiary Value Line Publishing Inc. and providing investment advisory services to mutual funds institutions and individual clients. Value Line Inc. has a market cap of $310.3 million; its shares were traded at around $31.09 with a P/E ratio of 12.8 and P/S ratio of 3.8. The dividend yield of Value Line Inc. stocks is 3.9%. Value Line Inc. had an annual average earning growth of 9.8% over the past 5 years.
Highlight of Business Operations:
For the six months ended October 31, 2008 the Company s net income of $15,604,000 or $1.56 per share was $3,302,000 or 27% above net income of $12,302,000 or $1.23 per share for the six months ended October 31, 2007. Net income for the second quarter ended October 31, 2008 of $10,542,000 or $1.05 per share was $4,183,000 or 66% above net income of $6,359,000 or $0.64 per share for the second quarter of the prior fiscal year. Operating income of $13,731,000 for the six months ended October 31, 2008 was $4,650,000 or 25% below operating income of $18,381,000 last fiscal year. Operating income of $6,266,000 for the second quarter ended October 31, 2008 was $3,150,000 or 33% below operating income of $9,416,000 for the second quarter of the prior fiscal year. The Company s income from securities transactions of $10,716,000 for the six months ended October 31, 2008 was 576% above last year s income of $1,586,000. Shareholders equity of $79,763,000 at October 31, 2008 was 7% lower than shareholders equity of $85,329,000 at October 31, 2007.For the six months ended October 31, 2008 print publication revenues decreased $1,871,000 or 11.9% below last fiscal year for the reasons described above. Electronic publications revenues grew by $341,000 or 5.7% for the six months ended October 31, 2008. The electronic revenues are broken down into institutional accounts and retail subscribers. For the six months ended October 31, 2008, institutional revenues increased $659,000 or 24%, while revenues from retail subscribers were down $318,000 or 10% as compared to the six months ended October 31, 2007. The decrease in electronic retail publications revenues is primarily attributable to the decrease in circulation within the Company s software products. Circulation of The Value Line Investment Analyzer decreased 14%, which resulted in a $229,000 decline in revenues from this product. The increase in institutional revenues is a result of expanding the sales force on the institutional side of the business.
Licensing fee revenues have decreased $525,000 or 15% for the six months ended October 31, 2008 as compared to the six months ended October 31, 2007. As of October 31, 2008, total third party sponsored assets attributable to the licensing business represent $3.6 billion in various products. The broad and deep declines throughout the equity markets have impacted assets attributable to the licensing business and resulted in lower asset based fees paid to the Company. While the third party sponsors continue to raise assets the broad market decline has eroded those assets as well as previous appreciation in existing assets. The Company is in discussion with new sponsors to increase products offered, but no new agreements have been signed in fiscal 2009. The Company believes the growth of the business is dependent upon the desire of third party marketers to use the Value Line trademarks and proprietary research for their products, signing new licensing agreements, and the marketplace s acceptance of new products. As stated in the past, Value Line believes it was an early entrant into this new market seven years ago. Today this market has significantly broadened as a result of product diversification and growth of the use of indexes by portfolio managers, and the Company and its third party sponsors face more competition in the marketplace.
As a result of the decline in assets under management, investment management fees and distribution services revenues for the six months ended October 31, 2008 were $1,316,000 or 8% below the prior fiscal year. Management fees for the first six months of fiscal year 2009 were down $1,032,000 or 8% as compared to the first six months of fiscal year 2008. There was a net decrease of $175,000 or 5% in distribution services revenues. During the period, voluntary and contractual fee waivers exist for certain of the Value Line Funds. For the six months ended October 31, 2008 and 2007, 12b-1 fee waivers were $1,658,000 and $2,042,000, respectively. For the six months ended October 31, 2008 and 2007, total management fee waivers were $101,000 and $117,000, respectively. The Company s subsidiaries, EULAV Asset Management and Value Line Securities, have no right to recoup the previously waived management fees and 12b-1 fees from the Value Line Funds. Separately managed accounts revenues decreased $109,000 or 18% for the six months ended October 31, 2008 as compared to the six months ended October 31, 2007 due to market decline in the portfolios.
Expenses within the Company are categorized into Advertising and promotion, Salaries and employee benefits, Production and distribution, and Office and administration. Operating expenses of $24,809,000 for the six months ended October 31, 2008 were $1,279,000 or 5% above operating expenses of $23,530,000 last fiscal year. Operating expenses of $12,061,000 for the second quarter ended October 31, 2008 were $367,000 or 3% above operating expenses of $11,694,000 for the second quarter of the prior fiscal year.
Advertising and promotion expenses for the six months ended October 31, 2008 decreased $505,000 as compared to the first six months ended October 31, 2007. Costs associated with direct mail decreased $568,000 or 31% below last fiscal year, due to an ongoing targeted reduction in the overall number of pieces mailed year to year. Print advertising promoting the Value Line Funds in select markets increased by $239,000 for the six months ended October 31, 2008. While supermarket platform expenses were level with the prior year, the platform expenses are expected to be lower in the upcoming months due to the decline in fund assets under management.
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