EDGAR 10-K Filing

Company CIK: 717720
Filing Year: 2021
Filename: 717720_10-K_2021_0001437749-21-017788.json

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ITEM 1. BUSINESS
Item 1. BUSINESS.
Value Line, Inc. is a New York corporation headquartered in New York City and formed in 1982. The Company's core business is producing investment periodicals and their underlying research and making available certain Value Line copyrights, Value Line trademarks and Value Line Proprietary Ranks and other proprietary information, to third parties under written agreements for use in third-party managed and marketed investment products and for other purposes. Value Line markets under well-known brands including Value Line®, the Value Line logo®, The Value Line Investment Survey®, Smart Research, Smarter Investing™ and The Most Trusted Name in Investment Research®. The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. Effective December 23, 2010, EULAV Asset Management Trust (“EAM”) was established to provide investment management services to the Value Line Funds accounts and provides distribution, marketing, and administrative services to the Value Line Funds. Value Line holds substantial non-voting revenues and non-voting profits interests in EAM.
The Company is the successor to substantially all of the operations of Arnold Bernhard & Co, Inc. ("AB&Co."). AB&Co. is the controlling shareholder of the Company and, as of April 30, 2021, owns 90.28% of the outstanding shares of the common stock of the Company.
A. Investment Related Periodicals & Publications
The investment periodicals and related publications offered by Value Line Publishing LLC (“VLP”), a wholly-owned entity of the Company, cover a broad spectrum of investments including stocks, mutual funds, ETFs and options. The Company’s periodicals and related publications and services are marketed to individual and professional investors, as well as to institutions including municipal and university libraries and investment firms.
The services generally fall into four categories:
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Comprehensive reference periodical publications
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Targeted, niche periodical newsletters
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Investment analysis software
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Current and historical financial databases
The comprehensive research services (The Value Line Investment Survey, The Value Line Investment Survey - Small and Mid-Cap, The Value Line 600, and The Value Line Fund Advisor Plus) provide both statistical and text coverage of a large number of investment securities, with an emphasis placed on Value Line’s proprietary research, analysis and statistical ranks. The Value Line Investment Survey is the Company’s flagship service, published each week in print and daily on the web, and covering approximately 1,700 stocks.
The niche newsletters (Value Line Select®, Value Line Select: Dividend Income & Growth, Value Line Select: ETFs, The Value Line Special Situations Service®, The Value Line M&A Service, The Value Line Climate Change Investing Service, and The Value Line Information You Should Know Wealth Newsletter) provide information on a less comprehensive basis for securities that the Company believes will be of particular interest to subscribers. Value Line Select® is a targeted service with an emphasis on Value Line’s proprietary in-depth research analysis and statistical selections, highlighting a monthly stock with strong return potential and reasonable risk. Value Line Select: Dividend Income & Growth represents Value Line's targeted coverage of dividend paying stocks with good growth potential. Value Line Select: ETFs recommends a new ETF for purchase each month. The Value Line Special Situations Service provides in-depth research analysis on selected small and mid-cap stocks. The Value Line M&A Service recommends stocks that Value Line thinks will soon get purchased by other corporations or private equity firms. The Value Line Climate Change Investing Service recommends stocks that should benefit from the fight against climate change and/or rising temperatures. The Value Line Information You Should Know Wealth Newsletter provides insightful information on various personal finance topics.
Value Line offers digital versions of most of its products through the Company’s website, www.valueline.com. Subscribers to the print versions have, in some cases, received free access to the corresponding digital versions, although digital subscribers do not receive a free print edition. The most comprehensive of the Company’s online platforms is The Value Line Research Center, which allows subscribers to access most of the Company’s research and publications at a packaged price via the Internet.
Investment analysis software (The Value Line Investment Analyzer) includes data sorting and filtering tools. In addition, for institutional and professional subscribers, VLP offers current and historical financial databases (DataFile, Estimates & Projections, and Mutual Funds) via the Internet.
The print and digital services include, but are not limited to the following:
The Value Line Investment Survey
The Value Line Investment Survey is an investment periodical research service providing both timely articles on economic, financial and investment matters and analysis and ranks for equity securities. Two of the evaluations for covered equity securities are "Timeliness™" and "Safety™”. “Timeliness” Ranks relate to the probable relative price performance of one stock over the next six to twelve months, as compared to the rest of the approximately 1,700 stocks covered. Ranks are updated each week and range from Rank 1 for the expected best performing stocks to Rank 5 for the expected poorest performers. "Safety" Ranks are a measure of risk and are based on the issuer's relative Financial Strength and its stock's Price Stability. "Safety" ranges from Rank 1 for the least risky stocks to Rank 5 for the riskiest. VLP employs analysts and statisticians who prepare articles of interest for each periodical and who evaluate stock performance and provide future earnings estimates and quarterly written evaluations with more frequent updates when relevant. The Value Line Investment Survey is comprised of three parts: The "Summary & Index" provides updated Timeliness and Safety Ranks, selected financial data, and "screens" of key financial measures; the "Ratings & Reports" section contains updated reports on about 130 stocks each week; and the “Selection & Opinion” section provides economic commentary and data, general interest articles, and four model portfolios managed by analysts covering a range of investment approaches. A fifth model portfolio, the Aggressive Growth portfolio, is included in the weekly “Ratings & Reports”, as well as in the weekly subscriber-only email newsletter.
The Value Line Investment Survey - Small and Mid-Cap
The Value Line Investment Survey - Small and Mid-Cap is an investment research product introduced in 1995 that provides short descriptions of and extensive data for approximately 1,700 small and medium-capitalization stocks, many listed on The NASDAQ Exchange, beyond the approximately 1,700 equity securities of generally larger-capitalization companies covered in The Value Line Investment Survey. Like The Value Line Investment Survey, the Small and Mid-Cap has its own "Summary & Index" providing updated performance ranks and other data, as well as "screens" of key financial measures and two model portfolios. The "Ratings and Reports" section, providing updated reports on around 130 equity securities each week, has been organized to correspond closely to the industries reviewed in The Value Line Investment Survey. One unique feature of the Small and Mid-Cap is the Performance Ranking System. The Performance Rank is based on facts, such as earnings growth and price momentum, and is designed to predict relative price performance over the next six to twelve months. The principal differences between the Small and Mid-Cap Survey and The Value Line Investment Survey are that the Small and Mid-Cap Survey does not include Value Line’s Timeliness Ranks and price targets, financial forecasts, analyst commentary, or a Selection & Opinion section. These modifications allow VLP to offer this service at a lower price.
The Value Line Fund Advisor Plus
The Value Line Mutual Fund Ranking System was introduced in 1993. It is the system utilized in the Fund Advisor Plus product, a 48-page newsletter featuring load, no-load, and low-load open-end mutual funds. Each issue offers strategies for maximizing total return, and highlights of specific mutual funds. It also includes information about retirement planning and industry news. A full statistical review, including latest performance, ranks, and sector weightings, is updated each month on approximately 800 leading load, no-load and low-load funds. Included with this product is online access to Value Line’s database of approximately 20,000 mutual funds, including screening tools and full-page printable reports on each fund. Two model portfolios are also part of the service. One recommends specific mutual funds from different objective groups, while the other highlights similar exchange traded funds (ETFs).
The Value Line Fund Advisor Plus contains data on approximately 20,000 no-load and low-load funds and a digital screener.
The Value Line Special Situations Service
The Value Line Special Situations Service’s core focus is on smaller companies whose equity securities are perceived by Value Line’s analysts as having exceptional appreciation potential. This publication was introduced in 1951.
The Value Line Options Survey
The Value Line Options Survey is a daily digital service that evaluates and ranks approximately 500,000 U.S. equity and equity index options. Features include an interactive database, spreadsheet tools, and a weekly email newsletter. This product is only offered as an online subscription.
Value Line Select
Value Line Select is a monthly stock selection service and was first published in 1998. It focuses each month on a single company that the Value Line Research Department has selected from a group of high-quality companies whose stocks are viewed as having a superior risk/reward ratio. Recommendations are backed by in-depth research and are subject to ongoing monitoring by research personnel.
Value Line Select: Dividend Income & Growth
Value Line Select: Dividend Income & Growth (formerly Value Line Dividend Select), a monthly stock selection service, was introduced in June 2011. This product focuses on companies with dividend yields greater than the average of all stocks covered by Value Line, with a preference for companies that have consistently increased their dividends above the rate of inflation over the longer term and, based on Value Line analysis, have the financial strength both to support and increase dividend payments in the future. Value Line Select: Dividend Income and Growth is available online and in print.
Value Line Select: ETFs
In May 2017, we launched Value Line Select: ETFs, a monthly ETF selection service. This product focuses on ETFs that appear poised to outperform the broader market. The selection process utilizes an industry approach, with the same data-focused analysis that is the hallmark of Value Line.
The New Value Line ETFs Service
In September 2019, we introduced The New Value Line ETFs Service. This online-only product provides data, analysis, and screening capabilities on more than 2,700 publicly traded ETFs. Almost all of the ETFs tracked in the product are ranked by The Value Line ETF Ranking System, a proprietary estimate with the goal of predicting an ETF’s future performance relative to all other ranked ETFs. The screener includes more than 30 fields, and each ETF has its own full PDF report. All data and information can be downloaded, exported, and printed.
The Value Line 600
The Value Line 600 is a monthly publication, which contains full-page research reports on approximately 600 equity securities. Its reports provide information on many actively traded, larger capitalization issues as well as some smaller growth stocks. As a lower priced service, it offers investors who want the same type of analysis provided in The Value Line Investment Survey, but who do not want or need coverage of the approximately 1,700 companies covered by that product a suitable alternative. Readers also receive supplemental reports as well as a monthly Index, which includes updated statistics, including proprietary ranks and ratings.
Value Line Information You Should Know Wealth Newsletter
This is a monthly service that started in January 2020. It is a general interest publication focusing on useful and actionable investing and financial information. It is a succinct 4 page newsletter covering topics such as. “How Can I Avoid Probate? And Should I?”, “How to Handle Your Investments in a Bear Market”. It is available as a print product or as a PDF delivered via email. The newsletter is marketed via a variety of channels including as an add-on in select direct mail campaigns and email.
The Value Line M&A Service
This is a monthly service that was launched in September 2020. The objective of the service is to identify companies that possess characteristics, such as a successful product lineup, market position or important technology that would interest larger corporations or private equity firms. The main feature of the M&A Service consists of a detailed, multipage highlight on a stock that Value Line thinks is a good acquisition candidate. New recommendations are then added to the M&A Model Portfolio. Each month, the service provides updates on all previous recommendations, until we suggest that subscribers sell their shares.
The Value Line Climate Change Investing Service
This monthly service was introduced in April 2021. This publication, designed for the climate-conscious, profit-oriented investor, seeks to provide key climate news alongside a managed portfolio of twenty stocks, chosen by our analysts, which stand to benefit from responses to climate change. Selections are vetted based not only on time-tested financial measures, but also the potential impact of climate change and measures taken to combat it on their business. Our selections fall into two main groups: businesses that are focused on providing environmental solutions, and those that are likely to thrive in a changing climate. Every issue features new updates to our portfolio.
Value Line Investment Analyzer
Value Line Investment Analyzer is a powerful menu-driven software program with fast filtering, ranking, reporting and graphing capabilities utilizing more than 230 data fields for various industries and indices and for the approximately 1,700 stocks covered in VLP’s flagship publication, The Value Line Investment Survey. Value Line Investment Analyzer allows subscribers to apply numerous charting and graphing variables for comparative research. In addition to containing digital replicas of the entire Value Line Investment Survey, the Value Line Investment Analyzer includes 20-minute delayed data updates through its integration with the Value Line databases via the Internet. Value Line Investment Analyzer Professional is a more comprehensive product which covers some 5,500 stocks and allows subscribers to create both standardized and customized screens.
Value Line DataFile Products
For our institutional customers, Value Line offers both current and historical data for equities, mutual funds and exchange traded funds (“ETFs”). Value Line DataFile products are offered via an FTP site. Below is a listing of the DataFile products:
Fundamental DataFile I and II
Value Line’s Fundamental DataFile I contains fundamental data (both current and historical) on more than 5,500 publicly traded companies that follow U.S. generally accepted accounting principles (“GAAP”). This data product provides annual data from 1955, quarterly data from 1963, and full quarterly data as reported to the SEC from 1985. Value Line also offers historical data on over 9,500 companies that no longer exist in nearly 100 industries via our “Dead Company” File. The Fundamental DataFile has over 400 annual and over 80 quarterly fields for each of the companies included in the database. DataFile is sold primarily to the institutional and academic markets. Value Line also offers a scaled down DataFile product, Fundamental DataFile II, which includes a limited set of historical fundamental data.
Estimates and Projections DataFile
This DataFile offering contains the proprietary estimates and projections from Value Line analysts on approximately 1,700 companies. Data includes earnings, sales, cash flow, book value, margin, and other popular fields. Estimates are for the current year and next year, while projections encompass the three to five year period.
Mutual Fund DataFile
The Value Line Mutual Fund DataFile covers approximately 20,000 mutual funds with up to 20 years of historical data with more than 200 data fields. The Mutual Fund DataFile provides monthly pricing, basic fund information, weekly performance data, sector weights, and many other important mutual fund data fields. This file is updated monthly and delivered via FTP.
Value Line Research Center
The Value Line Research Center provides on-line access to select Company investment research services covering stocks, mutual funds, options and special situations stocks. This service includes full digital subscriptions to The Value Line Investment Survey, The Value Line Fund Advisor Plus, The Value Line Daily Options Survey, The Value Line Investment Survey - Small and Mid-Cap, The New Value Line ETFs Service and The Value Line Special Situations Service. Users can screen more than 250 data fields, create graphs using multiple different variables, and access technical history. The Value Line Research Center has the ability to track model portfolios (large, small and mid-cap) as well as providing ranks and news.
Digital Services
The Value Line Investment Survey - Smart Investor offers digital access to full page reports, analyst commentary and Value Line proprietary ranks on approximately 1,700 stocks. Online tools include a screener, alerts, watch-lists and charting. Print capabilities are included.
The Value Line Investment Survey - Savvy Investor offers digital access to full page reports and Value Line proprietary ranks on approximately 3,400 stocks. Online tools include a screener, alerts, watch-lists and charting. Print capabilities are included.
The Value Line Investment Survey - Small Cap Investor offers digital access to full page reports and Value Line proprietary ranks on approximately 1,700 stocks. One year of history is included. Online tools include a screener, alerts, watch-lists and charting. Print capabilities are included.
The Value Line Investment Survey - Investor 600, equivalent to The Value Line 600 print, offers digital access to full page reports, analyst commentary and Value Line proprietary ranks on approximately 600 selected stocks covering the same variety of industries as The Value Line Investment Survey. Online tools include a screener, alerts, watch-lists and charting. Print capabilities are included.
Value Line Pro Premium digital service includes The Value Line Investment Survey® and The Value Line Investment Survey® - Small & Mid-Cap and covers 3,400 stocks. This equity package monitors companies with market values ranging from $100 million to well over $1 trillion, across nearly 100 industries, representing 95% of daily U.S. trading volume. There are over 250 data fields that can be screened to help make informed decisions. Features of the service include three years of historical reports and data, customizable modules, alerts and screening.
Value Line Pro Basic digital service covers the 1,700 stocks included in The Value Line Investment Survey®, drawn from 100 industries, representing 90% of total U.S. trading volume. There are over 200 data fields that can be screened to help make informed decisions. Features of the service include three years of historical reports and data, customizable modules, alerts and screening.
Value Line Pro Elite digital service includes The Value Line Investment Survey® and The Value Line Investment Survey® - Small & Mid-Cap. Pro Elite service package aimed at professional industry includes digital access to full page reports and Value Line proprietary ranks on approximately 3,400 stocks. In addition, our database of mostly microcap firms adds more than 2,000 additional names. Five years’ history is included. Online tools include a screener, alerts, watch-lists and charting. Downloading and print capabilities are included.
The Value Line Investment Survey - Library Basic covers the 1,700 stocks included in The Value Line Investment Survey, drawn from nearly 100 industries, and representing 90% of total U.S. daily trading volume. There are over 200 data fields that can be applied to help you make more informed decisions. Value Line has led its subscribers towards financial success by satisfying the demand for actionable insights and tools to manage equity investments.
The Value Line Investment Survey - Library Elite offers libraries digital access to full reports, analyst commentary and Value Line proprietary ranks on approximately 3,400 stocks, along with one year of fully-detailed history. Online tools include a screener, and charting. Print capabilities are included.
The Value Line Pro Equity Research Center is an equities-only package that includes access to exclusive premium services and provides online access to all of Value Line’s equity products. This service offered both to financial advisers and high-net-worth individuals, includes full online subscriptions to The Value Line Investment Survey, The Value Line Investment Survey - Small & Mid-Cap, Value Line Select, Value Line Select: Dividend Income and Growth, The Value Line Special Situations Service, The Value Line M&A Service, and The Value Line Pro ETF Package. Users can screen more than 250 data fields, create graphs using multiple different variables, and access technical history. The Value Line Pro Equity Research Center has the ability to track model portfolios (large, small and mid-cap) as well as providing ranks and news.
Value Line Library Research Center
The Value Line Library Research Center provides on-line access to select Company investment research services covering stocks, mutual funds, options, special situations stocks, and climate change investing. This service includes full digital subscriptions to The Value Line Investment Survey, The Value Line Fund Advisor Plus, The Value Line Daily Options Survey, The Value Line Investment Survey - Small and Mid-Cap, The New Value Line ETFs Service, The Value Line Special Situations Service, and The Value Line Climate Change Investing Service. Users can screen more than 250 data fields, create graphs using multiple different variables, and access technical history. Value Line Library Research Center has the ability to track model portfolios (large, small and mid-cap) as well as providing ranks and news.
Quantitative Strategies
Value Line Quantitative Strategy Portfolios are developed based on our renowned proprietary Ranking Systems for TimelinessTM, Performance and SafetyTM, Financial Strength Ratings, and a comprehensive database of fundamental research and analysis. All of these quantitative investment products have a solid theoretical foundation and have demonstrated superior empirical results. These strategies are available for licensing by Financial Professionals such as RIAs and Portfolio Managers.
All the digital services have Charting features, including many options to chart against popular indexes with the ability to save settings and print. Products offer an Alerts Hub which allows the user to set up alerts for up to 25 companies, with delivery via text or email.
B. Copyright Programs
The Company’s available copyright services, which include certain proprietary Ranking System results and other proprietary information are made available for use in third party products, such as unit investment trusts, variable annuities, managed accounts and exchange traded funds. The sponsors of these products act as wholesalers and distribute the products generally by syndicating them through an extensive network of national and regional brokerage firms. The sponsors of these products will typically receive Proprietary Ranking System results, which may include Value Line Timeliness, Safety, Technical and Performance ranks, as screens for their portfolios. The sponsors are also given permission to associate Value Line’s trademarks with the products. Value Line collects a copyright fee from each of the product sponsors/managers primarily based upon the market value of assets invested in each product’s portfolio utilizing the Value Line proprietary data. Since these fees are based on the market value of the respective portfolios using the Value Line proprietary data, the payments to Value Line, which are typically received on a quarterly basis, will fluctuate.
Value Line’s primary copyright products are structured as ETFs and Unit Investment Trusts, all of which have in common some degree of reliance on the Value Line Ranking System for their portfolio creation. These products are offered and distributed by independent sponsors.
C. Investment Management Services
Pursuant to the EAM Declaration of Trust, the Company receives an interest in certain revenues of EAM and a portion of the residual profits of EAM but has no voting authority with respect to the election, removal or replacement of the trustees of EAM. The business of EAM is managed by five individual trustees and a Delaware resident trustee (collectively, the “Trustees”) and by its officers subject to the direction of the Trustees.
Collectively, the holders of the voting profits interests in EAM are entitled to receive 50% of the residual profits of the business, subject to temporary adjustments in certain circumstances. Value Line holds a non-voting profits interest representing 50% of residual profits, subject to temporary adjustments in certain circumstances, and has no power to vote for the election, removal or replacement of the trustees of EAM. Value Line also has a non-voting revenues interest in EAM pursuant to which it is entitled to receive a portion of the non-distribution revenues of the business ranging from 41% at non-distribution fee revenue levels of $9 million or less to 55% at such revenue levels of $35 million or more. In the event the business is sold or liquidated, the first $56.1 million of net proceeds plus any additional capital contributions (Value Line or any holder of a voting profits interest, at its discretion, may make future contributions to its capital account in EAM), which contributions would increase its capital account but not its percentage interest in operating profits, will be distributed in accordance with capital accounts; 20% of the next $56.1 million will be distributed to the holders of the voting profits interests and 80% to the holder of the non-voting profits interests (currently, Value Line); and the excess will be distributed 45% to the holders of the voting profits interests and 55% to the holder of the non-voting profits interest (Value Line). EAM has elected to be taxed as a pass-through entity similar to a partnership.
Also, pursuant to the EAM Declaration of Trust, Value Line (1) granted each Fund use of the name “Value Line” so long as EAM remains the Fund’s adviser and on the condition that the Fund does not alter its investment objectives or fundamental policies from those in effect on the date of the investment advisory agreement with EAM, provided also that the Funds do not use leverage for investment purposes or engage in short selling or other complex or unusual investment strategies that create a risk profile similar to that of so-called hedge funds, (2) agreed to provide EAM its proprietary Ranking System information without charge or expense on as favorable basis as to Value Line’s best institutional customers and (3) agreed to capitalize the business with $7 million of cash and cash equivalents at inception.
EAM is organized as a Delaware statutory trust and has no fixed term. However, in the event that control of the Company’s majority shareholder changes, or in the event that the majority shareholder no longer beneficially owns 5% or more of the voting securities of the Company, then the Company has the right, but not the obligation, to buy the voting profits interests in EAM at a fair market value to be determined by an independent valuation firm in accordance with the terms of the EAM Declaration of Trust.
Value Line also has certain consent rights with respect to extraordinary events involving EAM, such as a proposed sale of all or a significant part of EAM, material acquisitions, entering into businesses other than asset management and fund distribution, paying compensation in excess of the mandated limit of 22.5%-30% of non-distribution fee revenues (depending on the level of such revenues), declaring voluntary bankruptcy, making material changes in tax or accounting policies or making substantial borrowings, and entering into related party transactions. These rights were established to protect Value Line’s non-voting revenues and non-voting profits interests in EAM.
EAM acts as the Adviser to the Value Line Funds. EULAV Securities acts as the Distributor for the Value Line Funds. State Street Bank, an unaffiliated entity, is the custodian of the assets of the Value Line Funds and provides them with fund accounting and administrative services. Shareholder services for the Value Line Funds are provided by SS&C, formerly named DST Asset Manager Solutions.
The Company maintains a significant interest in the cash flows generated by EAM and will continue to receive ongoing payments in respect of its non-voting revenues and non-voting profits interests, as discussed below. Total assets in the Value Line Funds managed and/or distributed by EAM at April 30, 2021, were $4.96 billion, which is $1.4 billion, or 38.8%, above total assets of $3.58 billion in the Value Line Funds managed and/or distributed by EAM at April 30, 2020.
Total net assets of the Value Line Funds at April 30, 2021, were:
($ in thousands)
Value Line Asset Allocation Fund
$ 1,798,031
Value Line Capital Appreciation Fund
769,783
Value Line Small Cap Opportunities Fund
519,226
Value Line Mid Cap Focused Fund
472,270
Value Line Select Growth Fund
467,145
Value Line Larger Companies Focused Fund
406,175
Value Line Strategic Asset Management Fund
265,551
Value Line Centurion Fund
166,055
Value Line Core Bond Fund
51,684
Value Line Tax Exempt Fund
48,853
Total EAM managed net assets
$ 4,964,773
Investment management fees and distribution service fees (“12b-1 fees”) vary among the Value Line Funds and may be subject to certain limitations. Certain investment strategies among the equity funds include, but are not limited to, reliance on the Value Line Timeliness ™ Ranking System (the “Ranking System”) and/or the Value Line Performance Ranking System in selecting securities for purchase or sale. Each Ranking System seeks to compare the estimated probable market performance of each stock during the next six to twelve months to that of all of the approximately 1,700 stocks under review in each system and ranks stocks on a scale of 1 (highest) to 5 (lowest). All the stocks followed by the Ranking System are listed on U.S. stock exchanges or traded in the U.S. over-the-counter markets. Prospectuses and annual reports for each of the Value Line open end mutual funds are available on the Funds’ website www.vlfunds.com. Each mutual fund may use "Value Line" in its name only to the extent permitted by the terms of the EAM Declaration of Trust.
D. Wholly-Owned Operating Subsidiaries
Wholly-owned operating subsidiaries of the Company as of April 30, 2021 include the following:
1.
Value Line Publishing LLC (“VLP”) is the publishing unit for the investment related periodical publications and copyrights.
2.
Vanderbilt Advertising Agency, Inc. places advertising on behalf of the Company's publications.
3.
Value Line Distribution Center, Inc. (“VLDC”) provides subscription fulfillment services and subscriber relations services for Value Line’s publications and continues to distribute Value Line’s print publications.
E. Trademarks
The Company holds trademark and service mark registrations for various names and logos in multiple countries. Value Line believes that these trademarks and service marks provide significant value to the Company and are an important factor in the marketing of its products and services, as well as in the marketing of the Value Line Funds, now managed by EAM. The Company is utilizing all of its trademarks and service marks, and properly maintaining all registrations.
F. Investments
As of April 30, 2021 and April 30, 2020, the Company held total investment assets (excluding its interests in EAM) with a fair market value of $26,182,000 and $29,204,000, respectively, including equity securities and available-for-sale fixed income securities on the Consolidated Balance Sheets. As of April 30, 2021 and April 30, 2020, the Company held equity securities, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), Invesco Financial Preferred ETF (PGF), ProShares Trust S&P 500 Dividend Aristocrats ETF (NOBL), iShares Preferred & Income Securities ETF (PFF), and other Exchange Traded Funds and common stock equity securities. As of April 30, 2021 and April 30, 2020, the Company held fixed income securities classified as available-for-sale, that consist of certificates of deposits and securities issued by federal, state and local governments within the United States.
G. Employees
At April 30, 2021, the Company and its subsidiaries employed 166 people.
The Company and its affiliates, officers, directors and employees may from time to time own securities which are also held in the portfolios of the Value Line Funds or recommended in the Company's publications. Value Line analysts are not permitted to own securities of the companies they cover. The Company has adopted rules requiring reports of securities transactions by employees for their respective accounts. The Company has also established policies restricting trading in securities whose ranks are about to change in order to avoid possible conflicts of interest.
H. Principal Business Segments
The information with respect to revenues from external customers and profit and loss of the Company's identifiable principal business segments is incorporated herein by reference to Note 18 of the Notes to the Company's Consolidated Financial Statements included in this Form 10-K.
The investment periodicals and related publications (retail and institutional) and Value Line copyrights and Value Line Proprietary Ranks and other proprietary information, consolidated into one segment called Publishing. The Publishing segment constitutes the Company’s only reportable business segment.
I. Competition
The investment information and publishing business conducted by the Company and the investment management business conducted by EAM are very competitive. There are many competing firms and a wide variety of product offerings. Some of the firms in these industries are substantially larger and have greater financial resources than the Company and EAM. The Internet continues to increase the amount of competition in the form of free and paid online investment research. With regard to the investment management business conducted by EAM, the prevalence of broker supermarkets or platforms permitting easy transfer of assets among mutual funds, mutual fund families, and other investment vehicles tends to increase the speed with which shareholders can leave or enter the Value Line Funds based, among other things, on short-term fluctuations in performance.
J. Executive Officers of the Registrant
The following table lists the names, ages (at June 30, 2021), and principal occupations and employment during the past five years of the Company's Executive Officers. All officers are elected to terms of office for one year. Except as noted, each of the following has held an executive position with the companies indicated for at least five years.
Name
Age
Principal Occupation or Employment
Howard A. Brecher
Chairman and Chief Executive Officer since October 2011; Acting Chairman and Acting Chief Executive Officer from November 2009 to October 2011; Chief Legal Officer; Vice President and Secretary until January 2010; Vice President and Secretary of each of the Value Line Funds from June 2008 to December 2010; Secretary of EAM LLC from February 2009 until December 2010; Director and General Counsel of AB&Co. Mr. Brecher has been an officer of the Company for more than 20 years.
Stephen R. Anastasio
Vice President since December 2010; Director since February 2010; Treasurer since 2005. Mr. Anastasio has been an officer of the Company for more than 10 years.
WEBSITE ACCESS TO SEC REPORTS
The Company’s Internet site address is www.valueline.com. The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports are made available on the “Corporate Filings” page under the “About Value Line” tab on the Company’s website @www.valueline.com/About/corporate_filings.aspx. free of charge as soon as reasonably practicable after the reports are filed electronically with the SEC. All of the Company’s SEC reports are also available on the SEC Internet site, www.sec.gov.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
In addition to the risks referred to elsewhere in this Form 10-K, the following risks, among others, sometimes may have affected, and in the future could affect, the Company’s businesses, financial condition or results of operations and/or the investment management business conducted by EAM and consequently, the amount of revenue we receive from EAM. The risks described below are not the only ones we face. Additional risks not discussed or not presently known to us or that we currently deem insignificant, may also impact our businesses.
The Company and its subsidiaries are dependent on the efforts of its executives and professional staff.
The Company’s future success relies upon its ability to retain and recruit qualified professionals and executives. The Company’s executive officers do not have employment agreements with the Company and the Company does not maintain “key man” insurance policies on any of its executive officers. The loss of the services of key personnel could have an adverse effect on the Company.
A decrease in the revenue generated by EAM’s investment management business could adversely affect the Company’s cash flow and financial condition.
The Company derives a significant portion of its cash flow from its non-voting revenues and non-voting profits interests in EAM. A decrease in the revenue generated by EAM’s investment management business, whether resulting from performance, competitive, regulatory or other reasons, would reduce the amount of cash flow received by the Company from EAM, which reduction could adversely affect the Company’s cash flow and financial condition.
EAM’s assets under management, which impact EAM’s revenue, and consequently the amount of the cash flow that the Company receives from EAM, are subject to fluctuations based on market conditions and individual fund performance.
Financial market declines and/or adverse changes in interest rates would generally negatively impact the level of EAM’s assets under management and consequently its revenue and net income. Major sources of investment management revenue for EAM (i.e., investment management and service and distribution fees) are calculated as percentages of assets under management. A decline in securities prices or in the sale of investment products or an increase in fund redemptions would reduce fee income. A prolonged recession or other economic or political events could also adversely impact EAM’s revenue if it led to decreased demand for products, a higher redemption rate, or a decline in securities prices. Good performance of managed assets relative to both competing products and benchmark indices generally assists in both retention and growth of assets, and may result in additional revenues. Conversely, poor performance of managed assets relative to competing products or benchmark indices tends to result in decreased sales and increased redemptions with corresponding decreases in revenues to EAM. Poor performance could therefore reduce the amount of cash flow that the Company receives from EAM, which reduction could adversely affect the Company’s financial condition.
EAM derives all of its investment management fees from the Value Line Funds.
EAM is dependent upon management contracts and service and distribution contracts with the Value Line Funds under which these fees are paid. As required by the Investment Company Act of 1940 (the “1940 Act”), the Trustees/Directors of the Funds, all of whom are independent of the Company and EAM (except for the CEO of EAM), have the right to terminate such contracts. If any of these contracts are terminated, not renewed, or amended to reduce fees, EAM’s financial results, and consequently, the amount of cash flow received by the Company from EAM, and the Company’s financial condition, may be adversely affected.
A decrease in the revenue generated by a significant customer could adversely affect the Company’s cash flow and financial condition.
The Company derives a significant portion of its cash flow and publishing revenues from a single significant customer.
If the Company does not maintain its subscriber base, its operating results could suffer.
A substantial portion of the Company’s revenue is generated from print and digital subscriptions, which are paid in advance by subscribers. Unearned revenues are accounted for on the Consolidated Balance Sheets of the Company within current and long-term liabilities. The backlog of orders is primarily generated through renewals and new subscription marketing efforts as the Company deems appropriate. Future results will depend on the renewal of existing subscribers and obtaining new subscriptions for the investment periodicals and related publications. The availability of competitive information on the Internet at low or no cost has had and may continue to have a negative impact on the demand for our products.
The Company believes that the negative trend in retail print subscription revenue experienced in recent years is likely to continue.
During the last several years, the Company has experienced a negative trend in retail print subscription revenue. While circulation of some print publications has increased, others have experienced a decline in circulation or in average yearly price realized. It is expected that print revenues will continue to decline long-term, while the Company emphasizes digital offerings. The Company has established the goal of maintaining competitive digital products and marketing them through traditional and digital channels to retail and institutional customers. However, the Company is not able to predict whether revenues from digital retail publications will grow more than print revenues decline.
Loss of copyright clients or decline in their customers, or assets managed by third party sponsors could reduce the Company’s revenues.
Copyright agreements are based on market interest in the respective proprietary information. The Company believes 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, competition and on fluctuations in segments of the equity markets. If the fees from proprietary information decline, the Company’s operating results could suffer.
Failure to protect its intellectual property rights and proprietary information could harm the Company’s ability to compete effectively and could negatively affect operating results.
The Company’s trademarks are important assets to the Company. Although its trademarks are registered in the United States and in certain foreign countries, the Company may not always be successful in asserting global trademark protection. In the event that other parties infringe on its intellectual property rights and it is not successful in defending its intellectual property rights, the result may be a dilution in the value of the Company’s brands in the marketplace. If the value of the Company’s brands becomes diluted, such developments could adversely affect the value that its customers associate with its brands, and thereby negatively impact its sales. Any infringement of our intellectual property rights would also likely result in a commitment of Company resources to protect these rights through litigation or otherwise. In addition, third parties may assert claims against our intellectual property rights and we may not be able successfully to resolve such claims. The Company is utilizing all of its trademarks and properly maintaining registrations for them.
Adverse changes in market and economic conditions could lower demand for the Company’s and EAM’s products and services.
The Company provides its products and services to individual investors, financial advisors, and institutional clients. Adverse conditions in the financial and securities markets may have an impact on the Company’s subscription revenues, securities income, and copyright fees which could adversely affect the Company’s results of operations and financial condition. Adverse conditions in the financial and securities markets could also have an adverse effect on EAM’s investment management revenues and reduce the amount of cash flow that the Company receives from EAM, which reduction could adversely affect the Company’s financial condition.
The Company and EAM face significant competition in their respective businesses.
Both the investment information and publishing business conducted by the Company and the investment management business conducted by EAM are very competitive. There are many competing firms and a wide variety of product offerings. Some of the firms in these industries are substantially larger and have greater financial resources than the Company and EAM. With regard to the investment information and publishing business, barriers to entry have been reduced by the minimal cost structure of the Internet and other technologies. With regard to the investment management business, the absence of significant barriers to entry by new investment management firms in the mutual fund industry increases competitive pressure. Competition in the investment management business is based on various factors, including business reputation, investment performance, quality of service, marketing, distribution services offered, the range of products offered and fees charged. Access to mutual fund distribution channels has also become increasingly competitive.
Government regulations, any changes to government regulations, and regulatory proceedings and litigation may adversely impact the business.
Changes in legal, regulatory, accounting, tax and compliance requirements could have an effect on EAM’s operations and results, including but not limited to increased expenses and restraints on marketing certain funds and other investment products. EAM is registered with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”). The Advisers Act imposes numerous obligations on registered investment advisers, including fiduciary, record keeping, operational and disclosure obligations. ES is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority, also known as “FINRA”. Each Value Line Fund is a registered investment company under the 1940 Act. The 1940 Act requires numerous compliance measures, which must be observed, and involves regulation by the SEC. Each fund and its shareholders may face adverse tax consequences if the Value Line Funds are unable to maintain qualification as registered investment companies under the Internal Revenue Code of 1986, as amended. Those laws and regulations generally grant broad administrative powers to regulatory agencies and bodies such as the SEC and FINRA. If these agencies and bodies believe that EAM, ES or the Value Line Funds have failed to comply with their laws and regulations, these agencies and bodies have the power to impose sanctions. EAM, ES and the Value Line Funds, like other companies, can also face lawsuits by private parties. Regulatory proceedings and lawsuits are subject to uncertainties, and the outcomes are difficult to predict. Changes in laws, regulations or governmental policies, and the costs associated with compliance, could adversely affect the business and operations of the EAM, ES and the Value Line Funds. An adverse resolution of any regulatory proceeding or lawsuit against the EAM or ES could result in substantial costs or reputational harm to them or to the Value Line Funds and have an adverse effect on their respective business and operations. An adverse effect on the business and operations of EAM, ES and/or the Value Line Funds could reduce the amount of cash flow that the Company receives in respect of its non-voting revenues and non-voting profits interests in EAM and, consequently, could adversely affect the Company’s cash flows, results of operations and financial condition.
Terrorist attacks could adversely affect the Company and EAM.
A terrorist attack, including biological or chemical weapons attacks, and the response to such terrorist attacks, could have a significant impact on the New York City area, the local economy, the United States economy, the global economy, and U.S. and/or global financial markets, and could also have a material adverse effect on the Company’s business and on the investment management business conducted by EAM.
Future pandemic outbreaks could disrupt the Company’s operations.
A substantial recurrence of infections of the COVID-19 virus or its variants could disrupt Company printing and distribution operations, or supplies of materials and services needed for the print publishing business. While the Company believes that its office, editorial, and administrative operations, and those of its suppliers of data and other services, are adequately backed-up for fully remote operations if needed, likewise a future pandemic outbreak could interfere with the continuity of printing and distribution operations, as well as endangering personnel of the Company and its supply chain partners.
Our controlling stockholder exercises voting control over the Company and has the ability to elect or remove from office all of our directors.
As of April 30, 2021, AB&Co., Inc. beneficially owned 90.28% of the outstanding shares of the Company’s voting stock. AB&Co. is therefore able to exercise voting control with respect to all matters requiring stockholder approval, including the election or removal from office of all of our directors.
We are not subject to most of the listing standards that normally apply to companies whose shares are quoted on NASDAQ.
Our shares of common stock are quoted on the NASDAQ Capital Market (“NASDAQ”). Under the NASDAQ listing standards, we are deemed to be a “controlled company” by virtue of the fact that AB&Co. has voting power with respect to more than 50% of our outstanding shares of voting stock. A controlled company is not required to have a majority of its board of directors comprised of independent directors. Director nominees are not required to be selected or recommended for the board’s selection by a majority of independent directors or a nomination committee comprised solely of independent directors, nor do the NASDAQ listing standards require a controlled company to certify the adoption of a formal written charter or board resolution, as applicable, addressing the nominations process. A controlled company is also exempt from NASDAQ’s requirements regarding the determination of officer compensation by a majority of the independent directors or a compensation committee comprised solely of independent directors. Although we currently comply with certain of the NASDAQ listing standards that do not apply to controlled companies, our compliance is voluntary, and there can be no assurance that we will continue to comply with these standards in the future.
We are subject to cyber risks and may incur costs in connection with our efforts to enhance and ensure security from cyber attacks.
Substantial aspects of our business depend on the secure operation of our computer systems and e-commerce websites. Security breaches could expose us to a risk of loss or misuse of sensitive information, including our own proprietary information and that of our customers and employees. While we devote substantial resources to maintaining adequate levels of cyber security, our resources and technical sophistication may not be adequate to prevent all of the rapidly evolving types of cyber attacks. Anticipated attacks and risks may cause us to incur increasing costs for technology, personnel, insurance and services to enhance security or to respond to occurrences. We maintain cyber risk insurance, but this insurance may not be sufficient to cover all of our losses from any possible future breaches of our systems.
Changes to existing accounting pronouncements or taxation rules or practices may affect how we conduct our business and affect our reported results of operations.
New accounting pronouncements or tax rules and varying interpretations of accounting pronouncements or taxation practice have occurred and may occur in the future. A change in accounting pronouncements or interpretations or taxation rules or practices can have a significant effect on our reported results and may even affect our reporting of transactions completed before the change is effective. Changes to existing rules and pronouncements, future changes, if any, or the questioning of current practices or interpretations may adversely affect our reported financial results or the way we conduct our business.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. UNRESOLVED STAFF COMMENTS.
None.

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ITEM 2. PROPERTIES
Item 2. PROPERTIES.
The Company leases 24,726 square feet of office space at 551 Fifth Avenue in New York, NY. In addition to the New York office space, the Company leases a warehouse facility with 24,110 square feet in New Jersey. The facility primarily serves the fulfillment and the distribution operations of VLDC for the various Company publications and serves as a disaster recovery site for the Company.
On November 30, 2016, Value Line, Inc., received consent from the landlord at 551 Fifth Avenue, New York, NY to the terms of a new sublease agreement between Value Line, Inc. and ABM Industries, Incorporated commencing on December 1, 2016. Pursuant to the agreement Value Line leased from ABM 24,726 square feet of office space located on the second and third floors at 551 Fifth Avenue, New York, NY (“Building” or “Premises”) beginning on December 1, 2016 and ending on November 29, 2027. Base rent under the sublease agreement is $1,126,000 per annum during the first year with an annual increase in base rent of 2.25% scheduled for each subsequent year, payable in equal monthly installments on the first day of each month, subject to customary concessions in the Company’s favor and pass-through of certain increases in utility costs and real estate taxes over the base year. The Company provided a security deposit represented by a letter of credit in the amount of $469,000 in October 2016, which is scheduled to be reduced to $305,000 on September 30, 2021 and fully refunded after the sublease ends. This Building became the Company’s new corporate office facility. The Company is required to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises. The sublease terms provide for a significant decrease (23% initially) in the Company’s annual rental expenditure taking into account free rent for the first six months of the sublease. Sublandlord provided Value Line a work allowance of $417,000 which accompanied with the six months free rent worth $563,000 was applied against the Company’s obligation to pay rent at our NYC headquarters, delaying the actual rent payments until November 2017.
On February 29, 2016, the Company’s subsidiary VLDC and Seagis Property Group LP (the “Landlord”) entered into a lease agreement, pursuant to which VLDC has leased 24,110 square feet of warehouse and appurtenant office space located at 205 Chubb Ave., Lyndhurst, NJ (“Warehouse”) beginning on May 1, 2016 and ending on April 30, 2024 (“Lease”). Base rent under the Lease is $192,880 per annum payable in equal monthly installments on the first day of each month, in advance during fiscal 2017 and will gradually increase to $237,218 in fiscal 2024, subject to customary increases based on operating costs and real estate taxes. The Company provided a security deposit in cash in the amount of $32,146, which will be fully refunded after the lease term expires. The lease is a net lease requiring the Company to pay for certain operating expenses associated with the Warehouse as well as utilities supplied to the Warehouse.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. LEGAL PROCEEDINGS.
None.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. MINE SAFETY DISCLOSURES.
Not applicable.
Part II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
The Registrant's Common Stock is traded on NASDAQ under the symbol “VALU”. The approximate number of record holders of the Registrant's Common Stock at April 30, 2021 was 30. As of April 30, 2021, the closing stock price was $30.54.
The reported high and low prices and the dividends declared on these shares during the past two fiscal years were as follows:
Quarter Ended
High
Low
Regular Dividend
Declared Per Share
April 30, 2021
$ 33.00
$ 26.53
$ 0.22
January 31, 2021
$ 35.95
$ 25.40
$ 0.21
October 31, 2020
$ 31.80
$ 23.76
$ 0.21
July 31, 2020
$ 34.00
$ 20.46
$ 0.21
April 30, 2020
$ 36.60
$ 20.01
$ 0.21
January 31, 2020
$ 36.31
$ 19.62
$ 0.20
October 31, 2019
$ 27.27
$ 18.40
$ 0.20
July 31, 2019
$ 29.49
$ 20.86
$ 0.20
On July 16, 2021, the Board of Directors of Value Line declared a quarterly dividend of $0.22 per share to shareholders of record as of July 26, 2021 to be paid on August 11, 2021.
There are no securities of the Company authorized for issuance under equity compensation plans. The Company did not sell any unregistered shares of common stock during the fiscal year ended April 30, 2021.
Purchases of Equity Securities by the Company
The following table provides information with respect to all repurchases of common stock made by or on behalf of the Company during the fiscal quarter ended April 30, 2021. All purchases listed below were made in the open market at prevailing market prices.
ISSUER PURCHASES OF EQUITY SECURITIES
Period
(a) Total
Number of
Shares (or
Units)
Purchased
(b) Average
Price Paid per
Share (or Unit)
(c) Total
Number of
Shares (or Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs (1)
February 1, 2021 through February 28, 2021
3,659
$ 29.49
3,659
$ 847,000
March 1, 2021 through March 31, 2021
8,766
28.57
8,766
597,000
April 1, 2021 through April 30, 2021
4,045
30.21
4,045
474,000
Total
16,470
$ 29.18
16,470
$ 474,000
(1)
On July 16, 2021, the Company's Board of Directors approved a share repurchase program authorizing the repurchase of shares of the Company’s common stock up to an aggregate purchase price of $2,000,000. The repurchases may be made from time to time on the open market at prevailing market prices, in negotiated transactions off the market, in block purchases or otherwise. The repurchase program may be suspended or discontinued at any time at the Company’s discretion and has no set expiration date.
During fiscal 2021, the Company repurchased an aggregate of 53,551 shares of the Company's common stock for $1,526,000 at an average price of $28.50 per share under the prior repurchase program authorized on April 17, 2020. During fiscal 2020, the Company repurchased an aggregate of 46,840 shares of the Company's common stock for $1,214,000 at an average price of $25.91 per share under the prior repurchase program authorized on October 19, 2018. During fiscal 2019, the Company repurchased an aggregate of 28,059 shares of the Company's common stock for $608,000 at an average price of $21.68 per share under the prior repurchase program authorized on October 19, 2018.
Arnold Bernhard and Co., Inc. may purchase additional shares of common stock of the Company from time to time.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. SELECTED FINANCIAL DATA
The following data should be read in conjunction with the annual consolidated financial statements, related notes and other financial information appearing elsewhere herein. We have revised our prior period financial statements for the years ended April 30, 2020 and April 30, 2019 to reflect the correction of an immaterial error as described in this Annual Report in Notes to Consolidated Financial Statements, “Note 1. Significant Accounting Policies” and “Note 20. Revision of Previously Issued Consolidated Financial Statements.”
Fiscal Years Ended April 30,
($ in thousands, except number of shares and earnings per share amounts)
2018(1)
2017(1)
Revenues:
Investment periodicals and related publications
$ 27,629
$ 27,628
$ 28,820
$ 29,503
$ 30,168
Copyright fees
12,763
12,671
7,437
6,365
4,406
Total investment periodicals and related publications
$ 40,392
$ 40,299
$ 36,257
$ 35,868
$ 34,574
Gain on sale of operating facility
-
-
-
-
8,123
Total revenues
$ 40,392
$ 40,299
$ 36,257
$ 35,868
$ 42,697
Income from operations
$ 7,535
$ 9,090
$ 5,413
$ 2,572
$ 7,459
Revenues and profits interests from EAM Trust
$ 17,321
$ 12,350
$ 9,309
$ 8,786
$ 7,714
Investment gains/(losses) (1)
$ 5,420
$ (789 )
$ 1,591
$
$
Net income (1)
$ 23,280
$ 14,943
$ 12,009
$ 14,738
$ 10,367
Earnings per share, basic and fully diluted (1)
$ 2.43
$ 1.55
$ 1.24
$ 1.52
$ 1.07
Total assets
$ 121,136
$ 109,728
$ 91,788
$ 86,788
$ 86,724
Long term liabilities
$ 26,199
$ 29,364
$ 18,864
$ 18,376
$ 24,280
Weighted average number of common shares outstanding
9,596,912
9,646,885
9,683,771
9,703,255
9,721,958
Cumulative cash dividends declared per share during the fiscal year
$ 0.85
$ 0.81
$ 0.77
$ 0.93
$ 0.69
(1)
The Company adopted FASB Accounting Standard Update No. 2016-01, " Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities" effective May 1, 2018 for fiscal year 2019. The effect of this ASU on investment gains/(losses), net income and earnings per share is not reflected in fiscal 2017 and 2018.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help a reader understand Value Line, its operations and business factors. The MD&A should be read in conjunction with Item 1, “Business”, and Item 1A, “Risk Factors” of Form 10-K, and in conjunction with the consolidated financial statements and the accompanying notes contained in Item 8 of this report.
The MD&A includes the following subsections:
●
Executive Summary of the Business
●
Revision of Previously Issued Consolidated Financial Statements
●
Results of Operations
●
Liquidity and Capital Resources
●
Recent Accounting Pronouncements
●
Critical Accounting Estimates and Policies
Executive Summary of the Business
The Company's core business is producing investment periodicals and their underlying research and making available certain Value Line copyrights, Value Line trademarks and Value Line Proprietary Ranks and other proprietary information, to third parties under written agreements for use in third-party managed and marketed investment products and for other purposes. Value Line markets under well-known brands including Value Line®, the Value Line logo®, The Value Line Investment Survey®, Smart Research, Smarter Investing™ and The Most Trusted Name in Investment Research®. The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. EULAV Asset Management Trust (“EAM”) was established to provide the investment management services to the Value Line Funds, institutional and individual accounts and provide distribution, marketing, and administrative services to the Value Line® Mutual Funds ("Value Line Funds"). The Company maintains a significant investment in EAM from which it receives payments in respect of its non-voting revenues and non-voting profits interests.
The Company’s target audiences within the investment research field are individual investors, colleges, libraries, and investment management professionals. Individuals come to Value Line for complete research in one package. Institutional licensees consist of corporations, financial professionals, colleges, and municipal libraries. Libraries and universities offer the Company’s detailed research to their patrons and students. Investment management professionals use the research and historical information in their day-to-day businesses. The Company has a dedicated department that solicits institutional subscriptions.
Payments received for new and renewal subscriptions and the value of receivables for amounts billed to retail and institutional customers are recorded as unearned revenue until the order is fulfilled. As the orders are fulfilled, the Company recognizes revenue in equal installments over the life of the particular subscription. Accordingly, the subscription fees to be earned by fulfilling subscriptions after the date of a particular balance sheet are shown on that balance sheet as unearned revenue within current and long-term liabilities.
The investment periodicals and related publications (retail and institutional) and Value Line copyrights and Value Line Proprietary Ranks and other proprietary information consolidate into one segment called Publishing. The Publishing segment constitutes the Company’s only reportable business segment.
Asset Management and Mutual Fund Distribution Businesses
Pursuant to the EAM Declaration of Trust, the Company maintains an interest in certain revenues of EAM and a portion of the residual profits of EAM but has no voting authority with respect to the election or removal of the trustees of EAM or control of its business.
The business of EAM is managed by its trustees each owning 20% of the voting profits interest in EAM and by its officers subject to the direction of the trustees. The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive a range of 41% to 55% of EAM’s revenues (excluding distribution revenues) from EAM’s mutual fund and separate account business and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Voting Profits Interest Holders will receive the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM’s profits payable each fiscal quarter under the provisions of the EAM Trust Agreement.
Business Environment
The nation's economy seems to be on a comparatively secure growth path once more after a topsy-turvy and pandemic-impacted 2020. Specifically, following last year's dramatic ups and down, the United States saw GDP growth come in at a strong 6.4% during the opening quarter of this year. The growth has been underpinned by relative strength in consumer activity, business investment, and home building.
Meanwhile, most signals are fairly positive for the start of the second six months of 2021, with recent data showing further resilience in home prices, durable goods orders, and consumer confidence. The lone discordant note has been an acceleration in inflationary pressures borne of materials shortages (such as lumber and computer chips) and surging prices for key commodities like energy products. At this point, the Federal Reserve, which is charged with helping to maintain price stability, sees these pressures as largely transitory, and thus is reluctant to put the brakes on things by raising interest rates at this point.
Revision of Previously Issued Consolidated Financial Statements
As described further below and herein, this Form 10-K reflects the revision of our consolidated financial statements as of and for each of the years ended April 30, 2020 and April 30, 2019. This Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the revision adjustments in the years ended April 30, 2020 and April 30, 2019.
The Company has determined that the previously issued financial statements for the years ended April 30, 2020 and April 30, 2019 did not include the adoption of Accounting Standards Update No. 2016-01 (“ASU 2016-01”) as is required by U.S. generally accepted accounting principles (“GAAP”). The Company has corrected this immaterial error by revising the Consolidated Balance Sheets as of April 30, 2020 and 2019, and the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Shareholders’ Equity, and Consolidated Statements of Cash Flows for the years ended April 30, 2020 and April 30, 2019, by including the adoption of ASU 2016-01 as of the beginning of the fiscal year ended April 30, 2019.
In January 2016, the FASB issued ASU 2016-01 Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 changed accounting for equity investments, financial liabilities under the fair value option, and presentation and disclosure requirements for financial instruments. ASU 2016-01 does not apply to equity investments in consolidated subsidiaries or those accounted for under the equity method of accounting. Equity investments with readily determinable fair values are measured at fair value with changes in fair value recognized in Net Income. ASU 2016-01 was effective for Value Line Inc. on May 1, 2018, which required a cumulative effect adjustment to opening Retained Earnings to be recorded for equity investments with readily determinable fair values. As of the adoption date, the Company held equity securities with a fair value of approximately $9,379,000, which included a net unrealized gain of $994,000, and an associated deferred tax liability of $209,000. The Company has recorded a cumulative effect adjustment of $785,000 to decrease Accumulated Other Comprehensive Income with a corresponding increase to Retained Earnings for the amount of the unrealized gain, net of tax, as of the beginning of fiscal year 2019, which resulted in no change to Total Shareholders’ Equity. Other than the aforementioned cumulative effect adjustment, the principal impact of ASU 2016-01 to the Company’s financial statements is the recognition of changes in the fair values of equity securities in the Statements of Income, instead of the Statements of Comprehensive Income, as they were reported prior to the adoption of ASU 2016-01, which results in no change to total shareholders’ equity.
Results of Operations for Fiscal Years 2021, 2020 and 2019
The following table illustrates the Company’s key components of revenues and expenses.
Fiscal Years Ended April 30,
Change
($ in thousands, except earnings per share)
'21 vs. '20
'20 vs. '19
Income from operations
$ 7,535
$ 9,090
$ 5,413
-17.1 %
67.9 %
Non-voting revenues and non-voting profits interests from EAM Trust
17,321
12,350
9,309
40.3 %
32.7 %
Income from operations plus non-voting revenues and non-voting profits interests from EAM Trust
24,856
21,440
14,722
15.9 %
45.6 %
Operating expenses
32,857
31,209
30,844
5.3 %
1.2 %
Investment gains/(losses)
5,420
(789 )
1,591
-786.9 %
-149.6 %
Income before income taxes
$ 30,276
$ 20,651
$ 16,313
46.6 %
26.6 %
Net income
$ 23,280
$ 14,943
$ 12,009
55.8 %
24.4 %
Earnings per share
$ 2.43
$ 1.55
$ 1.24
56.8 %
25.0 %
During the twelve months ended April 30, 2021, the Company’s net income of $23,280,000, or $2.43 per share, was 55.8% above net income of $14,943,000, or $1.55 per share, for the twelve months ended April 30, 2020. During the twelve months ended April 30, 2021, the Company’s income from operations of $7,535,000 was 17.1% below income from operations of $9,090,000 during the twelve months ended April 30, 2020. For the twelve months ended April 30, 2021, operating expenses increased 5.3% above those during the twelve months ended April 30, 2020. The largest factors in the increase in net income during the twelve months ended April 30, 2021, compared to the prior fiscal year, were an increase from revenues and profits interests in EAM Trust and an increase in realized capital gains on sales of equity securities and unrealized gains on equity securities held at the end of the period.
During the twelve months ended April 30, 2021, there were 9,596,912 average common shares outstanding as compared to 9,646,885 average common shares outstanding during the twelve months ended April 30, 2020.
During the three months ended April 30, 2021, the Company’s net income of $6,051,000, or $0.64 per share, was 234.9% above net income of $1,807,000, or $0.19 per share, for the three months ended April 30, 2020. During the three months ended April 30, 2021, the Company’s income from operations of $838,000 was 35.9% below income from operations of $1,307,000 during the three months ended April 30, 2020.
During the twelve months ended April 30, 2020, the Company’s income from operations of $9,090,000 was $3,677,000 or 67.9% above income from operations of $5,413,000 during the twelve months ended April 30, 2019. During the twelve months ended April 30, 2020, there were 9,646,885 average common shares outstanding as compared to 9,683,771 average common shares outstanding during the twelve months ended April 30, 2019. For the twelve months ended April 30, 2020, operating expenses increased 1.2% above those during the twelve months ended April 30, 2019. During the twelve months ended April 30, 2020, the Company’s net income of $14,943,000, or $1.55 per share, was $2,934,000 or 24.4% above net income of $12,009,000, or $1.24 per share, for the twelve months ended April 30, 2019. The largest factors in the increases in net income and income from operations during the twelve months ended April 30, 2020, compared to the prior fiscal year were an increase in copyright fees, an increase from revenues and profits interests in EAM Trust and well controlled overall expenses.
During the three months ended April 30, 2020, the Company’s income from operations of $1,307,000 was 34.7% above income from operations of $970,000 during the three months ended April 30, 2019. During the three months ended April 30, 2020, the Company’s net income of $1,807,000, or $0.19 per share, was 36.2% below net income of $2,833,000, or $0.29 per share, for the three months ended April 30, 2019.
During the twelve months ended April 30, 2019, the Company’s income from operations of $5,413,000 was 110.5% above income from operations of $2,572,000 during the twelve months ended April 30, 2018. During the twelve months ended April 30, 2019, there were 9,683,771 average common shares outstanding as compared to 9,703,255 average common shares outstanding during the twelve months ended April 30, 2018. For the twelve months ended April 30, 2019, operating expenses were well controlled and decreased $2,452,000 or 7.4% below those during the twelve months ended April 30, 2018. During the twelve months ended April 30, 2019, the Company’s net income of $12,009,000, or $1.24 per share, was 18.5% below net income of $14,738,000, or $1.52 per share, for the twelve months ended April 30, 2018. The largest factor in the decrease in net income during the twelve months ended April 30, 2019, compared to the prior fiscal year was the January 1, 2018, reduction in the U.S. statutory federal corporate income tax rate from 35% to 21% resulting in a one-time deferred noncash tax benefit of $6,485,000 or 54.51% of pre-tax income during fiscal 2018.
Total operating revenues
Fiscal Years Ended April 30,
Change
($ in thousands)
'21 vs. '20
'20 vs. '19
Investment periodicals and related publications:
Print
$ 11,929
$ 12,351
$ 13,339
-3.4 %
-7.4 %
Digital
15,700
15,277
15,481
2.8 %
-1.3 %
Total investment periodicals and related publications
27,629
27,628
28,820
0.0 %
-4.1 %
Copyright fees
12,763
12,671
7,437
0.7 %
70.4 %
Total operating revenues
$ 40,392
$ 40,299
$ 36,257
0.2 %
11.1 %
Within investment periodicals and related publications, subscription sales orders are derived from print and digital products. The following chart illustrates the changes in the sales orders associated with print and digital subscriptions.
Sources of subscription sales
Fiscal Years Ended April 30,
Print
Digital
Print
Digital
Print
Digital
New Sales
14.6 %
15.4 %
10.0 %
15.8 %
13.4 %
13.3 %
Renewal Sales
85.4 %
84.7 %
90.0 %
84.2 %
86.6 %
86.7 %
Total Gross Sales
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
100.0 %
During the twelve months ended April 30, 2021 new sales of print publications increased as a percent of the total gross print sales versus the prior fiscal year due to an increase in new Telemarketing gross sales of print publications. During the twelve months ended April 30, 2021 renewal sales of digital publications increased as a percent of the total gross digital sales versus the prior fiscal year due to an increase in renewal gross sales of Institutional digital publications as customer migration to digital services continues gradually.
During the twelve months ended April 30, 2020, new sales of digital publications increased as a percent of the total gross digital sales versus the prior fiscal year due to an increase in new Institutional gross sales of digital publications. During the twelve months ended April 30, 2020, new sales of print publications decreased as a percent of the total gross print sales versus the prior fiscal year due to the timing of advertising.
As of April 30,
Change
($ in thousands)
'21 vs. '20
'20 vs. '19
Unearned subscription revenue (current and long-term liabilities)
$ 25,088
$ 24,738
$ 25,483
1.4 %
-2.9 %
Unearned subscription revenue as of April 30, 2021, is 1.4% above April 30, 2020, and unearned subscription revenue as of April 30, 2020, is 2.9% below April 30, 2019. A certain amount of variation is to be expected due to the volume of new orders and timing of renewal orders, direct mail campaigns and large Institutional Sales orders.
Investment periodicals and related publications revenues
Investment periodicals and related publications revenues of $27,629,000 (excluding copyright fees) during the twelve months ended April 30, 2021, which included an extra week of servings for the weekly print products were comparable with publishing revenues in the prior fiscal year, (decreased 0.6% excluding the extra week of print products servings) during the twelve months ended April 30, 2021, as compared to the prior fiscal year. The Company continued activity to attract new subscribers, primarily digital subscriptions through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. Total product line circulation at April 30, 2021, was 5.9% above total product line circulation at April 30, 2020, reversing a long term trend. During the twelve months ended April 30, 2021, Institutional Sales department generated total sales orders of $15,067,000 or 11.1% above the prior fiscal year and the retail telemarketing sales team generated total sales orders of $8,658,000 or 4.0% above the prior fiscal year.
Total print circulation at April 30, 2021 was 6.5% above the total print circulation at April 30, 2020. Print publication revenues of $11,929,000, which included the extra week of servings for the weekly print products decreased 3.4%, (4.8% excluding the extra week of print products servings) during the twelve months ended April 30, 2021 as compared to the prior fiscal year. Total digital circulation at April 30, 2021 was 5.1% above total digital circulation at April 30, 2020. Digital revenues of $15,700,000 were up 2.8% offsetting the decrease in revenues from print publications, as compared to the prior fiscal year.
Investment periodicals and related publications revenues of $27,628,000 (excluding copyright fees), decreased 4.1% during the twelve months ended April 30, 2020, as compared to the prior fiscal year. Total product line circulation at April 30, 2020, was 5.4% below total product line circulation at April 30, 2019. During the twelve months ended April 30, 2020, Institutional Sales department generated total sales orders of $13,566,000 and the retail telemarketing sales team generated total sales orders of $8,322,000.
Print publication revenues of $12,351,000, decreased 7.4%, during the twelve months ended April 30, 2020, as compared to the prior fiscal year as a result of a 6.1% decline in total print circulation in fiscal 2020. Total digital circulation at April 30, 2020, was 4.4% below total digital circulation at April 30, 2019, however, digital publications revenues of $15,277,000 during the twelve months ended April 30, 2020, were only 1.3 % below the prior fiscal year, as higher-priced subscriptions were generally retained.
Investment periodicals and related publications revenues of $28,820,000 decreased 2.3%, during the twelve months ended April 30, 2019, as compared to the prior fiscal year. Total product line circulation at April 30, 2019, was 2.4% below total product line circulation at April 30, 2018. During the twelve months ended April 30, 2019, Institutional Sales department generated total sales orders of $14,815,000 which is 2.3% above the prior fiscal year and the retail telemarketing sales team generated total sales orders of $8,946,000 which is 1% above the prior fiscal year.
Total print circulation at April 30, 2019, was 3.0% below the total print circulation at April 30, 2018. Print publication revenues of $13,339,000 decreased 3.7% during the twelve months ended April 30, 2019 as compared to the prior fiscal year. Total digital circulation at April 30, 2019, was 1.6% below total digital circulation at April 30, 2018 and digital publications revenues of $15,481,000 during the twelve months ended April 30, 2019 were 1.1% below the prior fiscal year.
Value Line serves primarily individual and professional investors in stocks, who pay mostly on annual subscription plans, for basic services or as much as $100,000 or more annually for comprehensive premium quality research, not obtainable elsewhere. The ongoing goal of adding new subscribers has led us to introduce publications and packages at a range of price points. Further, new services and new features for existing services are regularly under consideration. Prominently introduced in fiscal 2020 and 2021 were new features in the Value Line Research Center, which are The New Value Line ETFs Service, new monthly publication Value Line Information You Should Know Wealth Newsletter, The Value Line M & A Service, and our Value Line Climate Change Investing Service.
The Value Line Proprietary Ranks (the “Ranking System”), a component of the Company’s flagship product, The Value Line Investment Survey, is also utilized in the Company’s copyright business. The Ranking System is made available to EAM for specific uses without charge. During the six month period ended April 30, 2021, the combined Ranking System “Rank 1 & 2” stocks’ increase of 31.3% outperformed the S&P 500 Index’s increase of 27.9% during the comparable period. During the twelve month period ended April 30, 2021, the combined Ranking System “Rank 1 & 2” stocks’ increase of 46.2% outperformed the S&P 500 Index’s increase of 43.6% during the comparable period.
Copyright fees
During the twelve months ended April 30, 2021, copyright fees of $12,763,000 were 0.7% above those during the corresponding period in the prior fiscal year. During the twelve months ended April 30, 2020, copyright fees of $12,671,000 were 70.4% above those during the twelve months ended April 30, 2019. During the twelve months ended April 30, 2019, copyright fees of $7,437,000 were 16.8% above the prior fiscal year. The Company has negotiated with the sponsor of the largest exchange traded fund (“ETF”) in the program, the restructuring of the Company’s asset based fees and overall fees of the ETF in light of the competitive market.
Investment management fees and services - (unconsolidated)
The Company has substantial non-voting revenues and non-voting profits interests in EAM, the asset manager to the Value Line Mutual Funds. Accordingly, the Company does not report this operation as a separate business segment, although it maintains a significant interest in the cash flows generated by this business and will receive ongoing payments in respect of its non-voting revenues and non-voting profits interests.
Total assets in the Value Line Funds managed and/or distributed by EAM at April 30, 2021, were $4.96 billion, which is $1.4 billion, or 38.8%, above total assets of $3.58 billion in the Value Line Funds managed and/or distributed by EAM at April 30, 2020. The increase reflects successful investment selection capturing market appreciation and positive net flows for the Value Line Funds, partially offset by net redemptions in eight of the ten Funds over the twelve month period ended April 30, 2021.
Total assets in the Value Line Funds managed and/or distributed by EAM at April 30, 2020, were $3.58 billion, which is $485 million, or 15.7%, above total assets of $3.09 billion in the Value Line Funds managed and/or distributed by EAM at April 30, 2019.
Shares of Value Line Strategic Asset Management Trust (“SAM”) and Value Line Centurion Fund (“Centurion”) are only distributed within certain variable annuity and variable life insurance contracts.
Value Line Funds experienced net redemptions and the associated net asset outflows (redemptions less new sales) in fiscal 2021. Sales and inflows for the Value Line Equity Funds during fiscal 2020 increased 109.7%, as compared to fiscal 2019.
The following table shows the change in assets for the past three fiscal years including sales (inflows), redemptions (outflows), dividends and capital gain distributions, and market value changes. Inflows for sales, and outflows for redemptions reflect decisions of individual investors and/or their investment advisors. The table also illustrates the assets within the Value Line Funds broken down into equity funds, variable annuity funds and fixed income funds as of April 30, 2021, 2020 and 2019.
Value Line Mutual Funds
Asset Flows
For the Years Ended April 30,
vs.
vs.
Value Line equity fund assets (excludes variable annuity)- beginning
$ 3,107,549,794
$ 2,582,416,326
$ 1,991,265,258
20.3 %
29.7 %
Sales/inflows
1,444,784,921
1,516,434,399
710,828,252
-4.7 %
113.3 %
Dividends/Capital Gains Reinvested
245,356,118
206,956,280
165,389,974
18.6 %
25.1 %
Redemptions/outflows
(1,265,805,045 )
(1,006,449,848 )
(461,981,970 )
25.8 %
117.9 %
Dividend and Capital Gain Distributions
(257,754,064 )
(214,033,328 )
(171,356,856 )
20.4 %
24.9 %
Market value change
1,158,498,934
22,225,964
348,271,669
5112.4 %
-93.6 %
Value Line equity fund assets (non-variable annuity)- ending
4,432,630,658
3,107,549,794
2,582,416,326
42.6 %
20.3 %
Variable annuity fund assets - beginning
$ 365,271,893
$ 402,171,626
$ 378,970,470
-9.2 %
6.1 %
Sales/inflows
4,494,490
3,489,595
4,023,089
28.8 %
-13.3 %
Dividends/Capital Gains Reinvested
46,943,739
34,384,214
29,440,239
36.5 %
16.8 %
Redemptions/outflows
(48,782,673 )
(50,911,955 )
(53,044,047 )
-4.2 %
-4.0 %
Dividend and Capital Gain Distributions
(46,943,739 )
(34,384,214 )
(29,440,239 )
36.5 %
16.8 %
Market value change
110,622,123
10,522,627
72,222,114
951.3 %
-85.4 %
Variable annuity fund assets - ending
431,605,833
365,271,893
402,171,626
18.2 %
-9.2 %
Fixed income fund assets - beginning (1)
$ 103,255,601
$ 106,204,372
$ 110,860,197
-2.8 %
-4.2 %
Sales/inflows
2,690,636
5,872,737
1,581,923
-54.2 %
271.2 %
Dividends/Capital Gains Reinvested
1,810,046
2,247,503
2,337,429
-19.5 %
-3.8 %
Redemptions/outflows
(8,240,615 )
(13,556,768 )
(10,837,962 )
-39.2 %
25.1 %
Dividend and Capital Gain Distributions
(2,084,557 )
(2,578,873 )
(2,743,543 )
-19.2 %
-6.0 %
Market value change
3,105,260
5,066,630
5,006,328
-38.7 %
1.2 %
Fixed income fund assets - ending
100,536,371
103,255,601
106,204,372
-2.6 %
-2.8 %
Assets under management - ending
$ 4,964,772,862
$ 3,576,077,288
$ 3,090,792,324
38.8 %
15.7 %
As of April 30, 2021 four of six Value Line equity and hybrid mutual funds, excluding SAM and Centurion, held an overall four or five star rating by Morningstar, Inc. The Advisor/Independent Broker Dealer channel has successfully become the largest channel for sales and distribution of The Value Line Funds. This is a growing channel as EAM continues to add more advisers each year.
EAM Trust - Results of operations before distribution to interest holders
The overall results of EAM’s investment management operations during the twelve months ended April 30, 2021, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $29,022,000, 12b-1 fees and other fees of $9,604,000 and other net income of $361,000. For the same period, total investment management fee waivers were $121,000 and 12b-1 fee waivers for three Value Line Funds were $651,000. During the twelve months ended April 30, 2021, EAM's net income was $4,262,000 after giving effect to Value Line’s non-voting revenues interest of $15,190,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
The overall results of EAM’s investment management operations during the twelve months ended April 30, 2020, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $21,985,000, 12b-1 fees and other fees of $8,436,000 and other net losses of $156,000. For the same period, total investment management fee waivers were $302,000 and 12b-1 fee waivers for three Value Line Funds were $667,000. During the twelve months ended April 30, 2020, EAM's net income was $2,332,000 after giving effect to Value Line’s non-voting revenues interest of $11,184,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
The overall results of EAM’s investment management operations during the twelve months ended April 30, 2019, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $16,715,000, 12b-1 fees and other fees of $6,811,000 and other income of $273,000. For the same period, total investment management fee waivers were $421,000 and 12b-1 fee waivers for three Value Line Funds were $654,000. During the twelve months ended April 30, 2019, EAM's net income was $2,098,000 after giving effect to Value Line’s non-voting revenues interest of $8,260,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
As of April 30, 2021 and April 30, 2020, three of the Value Line Funds have all or a portion of the 12b-1 fees being waived, and one fund has partial investment management fee waivers in place. Although, under the terms of the EAM Declaration of Trust, the Company does not receive or share in the revenues from 12b-1 distribution fees, the Company could benefit from the fee waivers to the extent that the resulting reduction of expense ratios and enhancement of the performance of the Value Line Funds attracts new assets.
The Value Line equity and hybrid funds’ assets represent 89.1%, variable annuity funds issued by GIAC represent 8.9%, and fixed income fund assets represent 2.0%, respectively, of total fund assets under management (“AUM”) as of April 30, 2021. At April 30, 2021, equity, hybrid and GIAC variable annuities AUM increased by 40.1% and fixed income AUM decreased by 2.6% as compared to fiscal 2020.
The Value Line equity and hybrid funds’ assets represent 86.7%, variable annuity funds issued by GIAC represent 10.4%, and fixed income fund assets represent 2.9%, respectively, of total fund assets under management (“AUM”) as of April 30, 2020. At April 30, 2020, equity, hybrid and GIAC variable annuities AUM increased by 16.3% and fixed income AUM decreased by 2.8% as compared to fiscal 2019.
EAM - The Company’s non-voting revenues and non-voting profits interests
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, and 50% of EAM’s net profits, not less than 90% of which is distributed in cash every fiscal quarter. The applicable recent non-voting revenues interest percentage for the fourth quarter of fiscal 2021 was 52.95%.
The Company recorded income from its non-voting revenues interest and its non-voting profits interest in EAM as follows:
Fiscal Years Ended April 30,
Change
($ in thousands)
'21 vs. '20
'20 vs. '19
Non-voting revenues interest
$ 15,190
$ 11,184
$ 8,260
35.8 %
35.4 %
Non-voting profits interest
2,131
1,166
1,049
82.8 %
11.2 %
$ 17,321
$ 12,350
$ 9,309
40.3 %
32.7 %
Operating expenses
Fiscal Years Ended April 30,
Change
($ in thousands)
'21 vs. '20
'20 vs. '19
Advertising and promotion
$ 3,745
$ 3,350
$ 3,406
11.8 %
-1.6 %
Salaries and employee benefits
18,865
18,189
17,781
3.7 %
2.3 %
Production and distribution
5,440
4,945
5,222
10.0 %
-5.3 %
Office and administration
4,807
4,725
4,435
1.7 %
6.5 %
Total expenses
$ 32,857
$ 31,209
$ 30,844
5.3 %
1.2 %
Expenses within the Company are categorized into advertising and promotion, salaries and employee benefits, production and distribution, office and administration.
Operating expenses of $32,857,000 during the twelve months ended April 30, 2021, were 5.3% above those during the twelve months ended April 30, 2020. Operating expenses of $8,886,000 during the three months ended April 30, 2021, were 4.6% above those during the three months ended April 30, 2020.
Operating expenses of $31,209,000 during the twelve months ended April 30, 2020, were 1.2% above those during the twelve months ended April 30, 2019. Production and distribution expense categories decreased by 5.3% as a result of cost controls, decrease in printing and distribution costs, primarily a result of a 6.1% reduction in print circulation, and a decline in amortization of internally developed software during the twelve months ended April 30, 2020. Operating expenses of $8,492,000 during the three months ended April 30, 2020, were 3.4% above those during the three months ended April 30, 2019.
Operating expenses of $30,844,000 during the twelve months ended April 30, 2019, were 7.4% below those during the twelve months ended April 30, 2018. All major expense categories decreased as a result of cost controls and a decline in amortization of internally developed software during the twelve months ended April 30, 2019.
Advertising and promotion
During twelve months ended April 30, 2021, advertising and promotion expenses of $3,745,000 increased 11.8% as compared to the prior fiscal year. During the twelve months ended April 30, 2021, increases were primarily due to advertising expenses and institutional sales promotion. Total sales commissions increased by $110,000 during the twelve months ended April 30, 2021. During the twelve months ended April 30, 2021, Institutional gross sales increased by $1.5 million and the retail telemarketing gross sales orders increased by $336,000 above the prior fiscal year.
During twelve months ended April 30, 2020, advertising and promotion expenses of $3,350,000, decreased 1.6% as compared to the prior fiscal year. During the twelve months ended April 30, 2020, an increase in media marketing expenses and institutional sales promotion was offset by a 15.7% decrease in direct marketing expenses. In fiscal 2020 direct mail expenses decreased for all products except for The Value Line Investment Survey and The Value Line 600. During the twelve months ended April 30, 2020, sales commissions decreased 3.7% as compared to fiscal 2019.
During the twelve months ended April 30, 2019, advertising and promotion expenses of $3,406,000 decreased 9.9% as compared to the prior fiscal year. During the twelve months ended April 30, 2019, a $442,000 decrease in direct mail expenses for The Value Line Investment Survey and The Value Line 600 was partially offset by a $170,000 increase in media marketing expenses and institutional sales promotion. During the twelve months ended April 30, 2019 sales commissions decreased $60,000 as compared to fiscal 2018.
Salaries and employee benefits
During the twelve months ended April 30, 2021, salaries and employee benefits of $18,865,000 increased 3.7% above the prior fiscal year. The increase during the twelve months ended April 30, 2021, was primarily due to increases in Profit Sharing employee retirement benefits during fiscal 2021 and increases in salaries and employee benefits in Institutional Sales, Research and Quantitative Research departments including recruitment fees that were partially offset by a 3.4% decrease in salaries and employee benefits in the Information Technology department (“IT”), reflecting completion of certain initiatives to upgrade operating systems.
During the twelve months ended April 30, 2020, salaries and employee benefits of $18,189,000, increased 2.3% above the prior fiscal year due to a 47.0% increase in Profit Sharing employee retirement benefits during fiscal 2020 and a 10.2% increase in independent contractors’ costs over the prior year.
During the twelve months ended April 30, 2019, salaries and employee benefits of $17,781,000 decreased 3.8% below the prior fiscal year primarily due to decreases in salaries and employee benefits in the Information Technology department (“IT”).
During the twelve months ended April 30, 2021, 2020 and 2019, the Company recorded profit sharing expenses of $980,000, $870,000 and $592,000, respectively.
Production and distribution
During the twelve months ended April 30, 2021, production and distribution expenses of $5,440,000 increased 10.0% above the prior fiscal year. The increase of $440,000 during the twelve months ended April 30, 2021, was attributable to costs related to production support of the Company’s website, maintenance of the Company’s publishing and application software and operating systems as compared to fiscal 2020.
During the twelve months ended April 30, 2020, production and distribution expenses of $4,945,000, decreased 5.3% below the prior fiscal year. During the twelve months ended April 30, 2020, a 1.8% decrease in overall expenses related to renegotiated production support of the Company’s website, maintenance of the Company’s publishing and application software and operating systems and a 56.3% decrease in amortization of internally developed software costs related to digital security and publication production software as compared to fiscal 2019. In fiscal 2020, printing and distribution costs decreased 9.8% due to a 6.1% decrease in print circulation during the twelve months ended April 30, 2020.
During the twelve months ended April 30, 2019, production and distribution expenses of $5,222,000 decreased 10.8% below the prior fiscal year. During the twelve months ended April 30, 2019, a decrease of $719,000 was attributable to a decline in amortization of internally developed software costs related to digital security and publication production software. In fiscal 2019 distribution costs increased 2.8% due to a 2% increase in postal rates in January 2018 and 2% in January 2019.
Office and administration
During the twelve months ended April 30, 2021, office and administrative expenses of $4,807,000 increased 1.7% above the prior fiscal year. The increase during the twelve months ended April 30, 2021 was primarily a result of an increase in bank service costs based on higher credit card gross receipts of $13.2 million in fiscal 2021 which were 18.5% higher than credit card gross receipts of $11.2 million in the prior fiscal year.
During the twelve months ended April 30, 2020, office and administrative expenses of $4,725,000, increased 6.5% above the prior fiscal year. The increase of $222,000 during the twelve months ended April 30, 2020, was a result of the operating lease amortization expense in fiscal 2020 due to a change in lease accounting standard ASU 2016-02,"Leases (Topic 842)".
During the twelve months ended April 30, 2019, office and administrative expenses of $4,435,000 decreased 14.2% below the prior fiscal year.
Concentration
During the twelve months ended April 30, 2021, 31.6% of total publishing revenues of $40,392,000 were derived from a single customer. During the twelve months ended April 30, 2020, 31.4% of total publishing revenues of $40,299,000 were derived from a single customer. During the twelve months ended April 30, 2019, 20.5% of total publishing revenues of $36,257,000 were derived from a single customer.
Lease Commitments
On November 30, 2016, Value Line, Inc. received consent from the landlord at 551 Fifth Avenue, New York, NY to the terms of a new sublease agreement between Value Line, Inc. and ABM Industries, Incorporated commencing on December 1, 2016. Pursuant to the agreement Value Line leased from ABM 24,726 square feet of office space located on the second and third floors at 551 Fifth Avenue, New York, NY (“Building” or “Premises”) beginning on December 1, 2016 and ending on November 29, 2027. Base rent under the sublease agreement is $1,126,000 per annum during the first year with an annual increase in base rent of 2.25% scheduled for each subsequent year, payable in equal monthly installments on the first day of each month, subject to customary concessions in the Company’s favor and pass-through of certain increases in utility costs and real estate taxes over the base year. The Company provided a security deposit represented by a letter of credit in the amount of $469,000 in October 2016, which is scheduled to be reduced to $305,000 on October 3, 2021 and fully refunded after the sublease ends. This Building became the Company’s new corporate office facility. The Company is required to pay for certain operating expenses associated with the Premises as well as utilities supplied to the Premises. The sublease terms provide for a significant decrease (23% initially) in the Company’s annual rental expenditure taking into account free rent for the first six months of the sublease. Sublandlord provided Value Line a work allowance of $417,000 which accompanied with the six months free rent worth $563,000 was applied against the Company’s obligation to pay rent at our NYC headquarters, delaying the actual rent payments until November 2017.
On February 29, 2016, the Company’s subsidiary VLDC and Seagis Property Group LP (the “Landlord”) entered into a lease agreement, pursuant to which VLDC has leased 24,110 square feet of warehouse and appurtenant office space located at 205 Chubb Ave., Lyndhurst, NJ (“Warehouse”) beginning on May 1, 2016 and ending on April 30, 2024 (“Lease”). Base rent under the Lease is $192,880 per annum payable in equal monthly installments on the first day of each month, in advance during fiscal 2017 and will gradually increase to $237,218 in fiscal 2024, subject to customary increases based on operating costs and real estate taxes. The Company provided a security deposit in cash in the amount of $32,146, which will be fully refunded after the lease term expires. The lease is a net lease requiring the Company to pay for certain operating expenses associated with the Warehouse as well as utilities supplied to the Warehouse.
Investment gains / (losses)
Fiscal Years Ended April 30,
Change
($ in thousands)
'21 vs. '20
'20 vs. '19
Dividend income
$
$
$
62.8 %
37.0 %
Interest income
-50.9 %
38.8 %
Investment gains/(losses) recognized on sales of equity securities during the period
(1,075 )
-
177.7 %
n/a
Unrealized gains/(losses) recognized on equity securities held at the end of the period
3,875
(339 )
1,087
1243.1 %
-131.2 %
Other
-
(6 )
100.0 %
-113.0 %
Total investment gains/(losses)
$ 5,420
$ (789 )
$ 1,591
786.9 %
-149.6 %
During the twelve months ended April 30, 2021, the Company’s investment gains, primarily derived from dividend and interest income, investment gains recognized on sales of equity securities during the period and unrealized gains recognized on equity securities held at the end of the period in fiscal 2021, was $5,420,000. During the twelve months ended April 30, 2020, the Company’s investment losses, primarily derived from dividend and interest income, investment losses recognized on sales of equity securities during the period and unrealized losses recognized on equity securities held at the end of the period in fiscal 2020, were $789,000. Proceeds from maturities and sales of government debt securities classified as available-for-sale during the twelve months ended April 30, 2021 and April 30, 2020, were $14,902,000 and $8,663,000, respectively. Proceeds from the sales of equity securities during the twelve months ended April 30, 2021 and April 30, 2020 were $8,212,000 and $4,387,000, respectively. There were no capital gain distributions from ETFs in fiscal 2021 or fiscal 2020.
During the twelve months ended April 30, 2019, the Company’s investment gains, primarily derived from dividend and interest income and unrealized gains recognized on equity securities held at the end of the period in fiscal 2019, was $1,591,000. Proceeds from maturities and sales of government debt securities classified as available-for-sale during the twelve months ended April 30, 2019, were $8,346,000. There were no sales or proceeds from sales of equity securities during the twelve months ended April 30, 2019. There were no capital gain distributions from ETFs in fiscal 2019.
Effective income tax rate
The overall effective income tax rates, as a percentage of pre-tax ordinary income for the twelve months ended April 30, 2021, April 30, 2020 and April 30, 2019 were 23.11%, 27.64% and 26.38%, respectively. The decrease in the effective tax rate during the twelve months ended April 30, 2021 is primarily a result of a decrease in the state and local income taxes from 6.30% to 2.05% as a result of changes in state and local income tax allocations, such as the effect of the reduction in the New York State and New York City tax allocation factors on deferred taxes in fiscal 2021. The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to changes in tax law, including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-income tax, the Company's geographic profit mix between tax jurisdictions, taxation method adopted by each locality, new interpretations of existing tax laws and rulings and settlements with tax authorities.
The Company's state and local effective income tax rate, net of Federal income tax benefit, increased to 6.30% of pretax income for the twelve months ended April 30, 2020 from 6.02% of pretax income for the twelve months ended April 30, 2019 due to evolving state tax legislation.
Liquidity and Capital Resources
The Company had working capital, defined as current assets less current liabilities, of $23,312,000 as of April 30, 2021 and $13,700,000 as of April 30, 2020. These amounts include short-term unearned revenue of $19,162,000 and $18,854,000 reflected in total current liabilities at April 30, 2021 and April 30, 2020, respectively. Cash and short-term securities were $45,353,000 and $34,158,000 as of April 30, 2021 and April 30, 2020, respectively.
The Company’s cash and cash equivalents include $18,209,000 and $2,115,000 at April 30, 2021 and April 30, 2020, respectively, invested primarily in commercial banks and in Money Market Funds at brokers, which operate under Rule 2a-7 of the 1940 Act and invest primarily in short-term U.S. government securities.
Cash from operating activities
The Company had cash inflows from operating activities of $16,410,000 during the twelve months ended April 30, 2021, compared to cash inflows from operations of $13,745,000 and $11,494,000 during the twelve months ended April 30, 2020 and 2019, respectively. The increase in cash flows from fiscal 2020 to fiscal 2021 is primarily attributable to higher net income and an increase in cash receipts from EAM and the timing of receipts from copyright programs. The increase in cash flows from fiscal 2019 to fiscal 2020 is primarily attributable to higher pre-tax income and an increase in cash receipts from copyright programs.
Cash from investing activities
The Company’s cash inflows from investing activities of $7,381,000 during the twelve months ended April 30, 2021, compared to cash outflows from investing activities of $8,657,000 and $2,972,000 for the twelve months ended April 30, 2020 and April 30, 2019, respectively. Cash inflows for the twelve months ended April 30, 2021, were higher than in fiscal 2020 primarily due to the Company’s decision not to reinvest proceeds in fixed income securities in fiscal 2021. Cash outflows for the twelve months ended April 30, 2020, were higher than in fiscal 2019 primarily due to the Company’s decision to invest in additional equity and fixed income securities in fiscal 2020.
Cash from financing activities
During the twelve months ended April 30, 2021, the Company’s cash outflows from financing activities were $9,574,000 and compared to cash outflows from financing activities of $6,627,000 and $7,970,000 for the twelve months ended April 30, 2020 and 2019, respectively. Cash outflows for financing activities included $1,526,000, $1,214,000 and $608,000 for the repurchase of 53,551 shares, 46,840 shares and 28,059 shares of the Company’s common stock under the April 17, 2020, board approved common stock repurchase programs, during fiscal years 2021, 2020 and 2019, respectively. During fiscal 2020, the Company applied for and received an SBA loan under the Paycheck Protection Program in the amount of $2,331,000. Quarterly regular dividend payments of $0.21 per share during fiscal 2021 aggregated $8,068,000. Quarterly dividend payments of $0.20 per share during fiscal 2020 aggregated $7,724,000. Quarterly dividend payments of $0.19 per share during fiscal 2019 aggregated $7,362,000.
At April 30, 2021 there were 9,563,170 common shares outstanding as compared to 9,616,721 common shares outstanding at April 30, 2020. The Company expects financing activities to continue to include use of cash for dividend payments for the foreseeable future.
Management believes that the Company’s cash and other liquid asset resources used in its business together with the proceeds from the SBA loan and the future cash flows from operations and from the Company’s non-voting revenues and non-voting profits interests in EAM will be sufficient to finance current and forecasted liquidity needs for the next twelve months. Management does not anticipate making any additional borrowings during the next twelve months. As of April 30, 2021, retained earnings and liquid assets were $72,502,000 and $45,353,000, respectively. As of April 30, 2020, retained earnings and liquid assets were $57,374,000 and $34,158,000, respectively.
Seasonality
Our publishing revenues are comprised of subscriptions which are generally annual subscriptions. Our cash flows from operating activities are minimally seasonal in nature, primarily due to the timing of customer payments made for orders and subscription renewals.
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”. This ASU requires that, for leases longer than one year, a lessee recognize in the statements of financial position a right-of-use asset, representing the right to use the underlying asset for the lease term, and a lease liability, representing the liability to make lease payments. It also requires that for finance leases, a lessee recognize interest expense on the lease liability, separately from the amortization of the right-of-use asset in the statements of earnings, while for operating leases, such amounts should be recognized as a combined expense. The Company adopted this ASU in May 2019 under a modified retrospective approach (see Note 9).
On June 21, 2018, the United States Supreme Court reversed the 1992 ruling in Quill, which protected firms delivering items by common carrier into a state where it had no physical presence from having to collect sales tax in such state. The Company has integrated the effects of the various state laws into its operations and continues to do so.
Critical Accounting Estimates and Policies
The Company prepares its consolidated financial statements in accordance with Generally Accepted Accounting Principles as in effect in the United States (U.S. “GAAP”). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent, and the Company evaluates its estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies reflect the significant judgments and estimates used in the preparation of its Consolidated Financial Statements:
●
Revenue recognition
●
Income taxes
●
Valuation of EAM
Revenue Recognition
The majority of the Company’s revenues come from the sale of print and digital subscriptions and fees for copyright proprietary information. The Company recognizes subscription revenue, net of discounts, in equal amounts over the term of the subscription, which generally ranges from three months to one year or longer, varying based on the product or service. Copyright fees are calculated monthly based on market fluctuation and billed quarterly. The Company believes that the estimates related to revenue recognition are critical accounting estimates, and to the extent that there are material differences between its determination of revenues and actual results, its financial condition or results of operations may be affected.
Income Taxes
The Company’s effective annual income tax expense rate is based on the U.S. federal and state and local jurisdiction tax rates on income and losses that are part of its Consolidated Financial Statements. Tax-planning opportunities, non-taxable income, expenses that are not deductible in the Company’s tax returns, and the blend of business income, including income derived from the Company’s non-voting revenue and non-voting profits interests in EAM and income from securities transactions, will impact the effective tax rate in the jurisdictions in which the Company operates. Significant judgment is required in evaluating the Company’s tax positions.
Tax law requires items to be included in the tax return at different times from when these items are reflected in the Company’s Consolidated Financial Statements. As a result, the effective tax rate reflected in the Company’s Consolidated Financial Statements is different from the tax rate reported on the Company’s tax returns (the Company’s cash tax rate). These differences reverse over time, such as depreciation and amortization expenses. These timing differences create deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on temporary differences between the financial reporting and the tax basis of assets and liabilities.
On December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act (the “Tax Act”), was enacted. The Tax Act lowered the U.S. federal income tax rate (“Federal Tax Rate”) from 35% to 21% effective January 1, 2018. Accordingly, the Company computes Federal income tax expense using the Federal Tax Rate of 21% in fiscal year 2019 and each year thereafter.
In assessing the need for a valuation allowance, the Company considers both positive and negative evidence, including tax-planning strategies, projected future taxable income, and recent financial performance. If after future assessments of the realizability of the deferred tax assets the Company determines a lesser allowance is required, the Company would record a reduction to the income tax expense and to the valuation allowance in the period this determination was made. This would cause the Company’s income tax expense, effective tax rate, and net income to fluctuate.
In addition, the Company establishes reserves at the time that it determines that it is more likely than not that it will need to pay additional taxes related to certain matters. The Company adjusts these reserves, including any impact of the related interest and penalties, in light of changing facts and circumstances such as the progress of a tax audit. A number of years may elapse before a particular matter for which the Company has established a reserve is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. Such liabilities are recorded as income taxes payable in the Company’s Consolidated Balance Sheets. The settlement of any particular issue would usually require the use of cash. Favorable resolutions of tax matters for which the Company has previously established reserves are recognized as a reduction to the Company’s income tax expense when the amounts involved become known.
Assessing the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns requires judgment. Variations in the actual outcome of these future tax consequences could materially impact the Company’s financial position, results of operations, or cash flows.
Investment in EAM Trust
The Company accounts for its investment in EAM using the equity method of accounting. The value of its investment in EAM is the fair value of the contributed capital at inception, plus the Company’s share of non-voting revenues and non-voting profits from EAM, less distributions received from EAM. The Company evaluates its investment in EAM on a regular basis for other-than-temporary impairment, which requires significant judgment and includes quantitative and qualitative analysis of identified events or circumstances that impact the fair value of the investment.
Should the fair value of the investment fall below its carrying value, the Company will determine whether the investment is other-than-temporarily impaired, which includes assessing the severity and duration of the impairment and the likelihood of recovery. If the investment is considered to be other-than-temporarily impaired, the Company will write down the investment to its fair value. Since the inception of EAM, the Company has not recognized any other-than-temporary impairment in the investment.
Off-Balance Sheet Arrangements
We are not a party to any off-balance sheet arrangements, other than operating leases and a secured Letter of Credit (“LOC”) in the amount of $469,000 issued as a security deposit for the Company’s office facility entered into in the ordinary course of business. The LOC is secured by a restricted Money Market Investment of similar amount.
Contractual Obligations
Below is a summary of certain contractual obligations of the Company as of April 30, 2021 ($ in thousands):
Payments due by period
Contractual Obligations
Total
Less than 1
1-3 years
3-5 years
More than 5
year
years
Loan Obligations
$ 2,331
$ 2,331
$ -
$ -
$ -
Operating Lease Obligations
10,002
1,506
3,231
2,890
2,375
Total
$ 12,333
$ 3,837
$ 3,231
$ 2,890
$ 2,375

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Market Risk Disclosures
The Company’s Consolidated Balance Sheet includes a substantial amount of assets whose fair values are subject to market risks. The Company’s market risks are primarily associated with interest rates and equity price risk. The following sections address the significant market risks associated with the Company’s investment activities.
Interest Rate Risk
The Company’s strategy has been to acquire debt securities with low credit risk. Despite this strategy management recognizes and accepts the possibility that losses may occur. To limit the price fluctuation in these securities from interest rate changes, the Company’s management invests primarily in short-term obligations maturing within one year.
The fair values of the Company’s fixed maturity investments will fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally translate into decreases and increases in fair values of those instruments. Additionally, fair values of interest rate sensitive instruments may be affected by prepayment options, relative values of alternative investments, and other general market conditions.
Fixed income securities consist of bank certificates of deposits and securities issued by federal, state and local governments within the United States. As of April 30, 2021 the aggregate cost and fair value of fixed income securities classified as available-for-sale were $2,596,000 and $2,600,000, respectively. As of April 30, 2020 the aggregate cost and fair value of fixed income securities classified as available-for-sale were $14,902,000 and $15,079,000, respectively.
The following table summarizes the estimated effects of hypothetical increases and decreases in interest rates on assets that are subject to interest rate risk. It is assumed that the changes occur immediately and uniformly to each category of instrument containing interest rate risks. The hypothetical changes in market interest rates do not reflect what could be deemed best or worst case scenarios. Variations in market interest rates could produce significant changes in the timing of repayments due to prepayment options available. For these reasons, actual results might differ from those reflected in the table.
Fixed Income Securities
Estimated Fair Value after
Hypothetical Change in Interest Rates
(in thousands)
(bp = basis points)
1 year
1 year
1 year
1 year
Fair
50 bp
50 bp
100 bp
100 bp
Value
increase
decrease
increase
decrease
As of April 30, 2021
Investments in securities with fixed maturities*
$ 2,600
n/a
n/a
n/a
n/a
As of April 30, 2020
Investments in securities with fixed maturities
$ 15,079
$ 15,058
$ 15,179
$ 14,998
$ 15,240
* U.S. T-Bill due 5/20/21
Management regularly monitors the maturity structure of the Company’s investments in debt securities in order to maintain an acceptable price risk associated with changes in interest rates.
Equity Price Risk
The carrying values of investments subject to equity price risks are based on quoted market prices as of the balance sheet dates. Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the issuer, the relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.
The Company’s equity investment strategy has been to acquire equity securities across a diversity of industry groups. The portfolio consists of ETFs held for dividend yield that attempt to replicate the performance of certain equity indexes and ETFs that hold preferred shares primarily of financial institutions. In order to maintain liquidity in these securities, the Company’s policy has been to invest in and hold in its portfolio, no more than 5% of the approximate average daily trading volume in any one issue.
As of April 30, 2021 and April 30, 2020, the aggregate cost of the equity securities, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), Invesco Financial Preferred ETF (PGF), ProShares Trust S&P 500 Dividend Aristocrats ETF (NOBL), iShares Preferred & Income Securities ETF (PFF), and other Exchange Traded Funds and common stock equity securities was a combined total $19,105,000 and $12,877,000, respectively, and the fair value was $23,582,000 and $14,125,000, respectively.
Equity Securities
Estimated Fair
Value after
Hypothetical
Percentage
Hypothetical
Hypothetical
Increase (Decrease) in
($ in thousands)
Fair Value
Price Change
Change in Prices
Shareholders’ Equity
As of April 30, 2021
Equity Securities and ETFs held for dividend yield
$ 23,582
30% increase
$ 30,657
7.81 %
30% decrease
$ 16,507
-7.81 %
Equity Securities
Estimated Fair
Value after
Hypothetical
Percentage
Hypothetical
Hypothetical
Increase (Decrease) in
($ in thousands)
Fair Value
Price Change
Change in Prices
Shareholders’ Equity
As of April 30, 2020
Equity Securities and ETFs held for dividend yield
$ 14,125
30% increase
$ 18,363
6.25 %
30% decrease
$ 9,888
-6.25 %

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements of the registrant and its subsidiaries are included as a part of this Form 10-K:
Page Number
Report of independent auditors
Consolidated balance sheets at April 30, 2021 and 2020
Consolidated statements of income for the fiscal years ended April 30, 2021, 2020 and 2019
Consolidated statements of comprehensive income for the fiscal years ended April 30, 2021, 2020 and 2019
Consolidated statements of cash flows for the fiscal years ended April 30, 2021, 2020 and 2019
Consolidated statement of changes in shareholders’ equity for the fiscal years ended April 30, 2021, 2020 and 2019
Notes to the consolidated financial statements
Quarterly Results (Unaudited)
($ in thousands, except per share amounts)
We have revised our first, second and third quarters of fiscal 2021, 2020 and 2019 to reflect the correction of an immaterial error by including the adoption of FASB Accounting Standards Update No. 2016-01, “Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” as of the beginning of the fiscal year ended April 30, 2019. The revisions are described in the Annual Report in Notes to Consolidated Financial Statements.
Net Revenues
Income/ (Loss)
from
Operations
Revenues
and Profits
Interests in
EAM Trust
Investment
Gains/(Losses)
Net
Income
Earnings
Per Share
2021, by Quarter
First
$ 10,328
$ 2,226
$ 3,644
$ 1,170
$ 5,274
$ 0.55
Second
10,210
2,188
4,214
4,919
0.51
Third
10,130
2,283
4,734
1,785
7,036
0.73
Fourth
9,724
4,729
2,327
6,051
0.64
Total *
$ 40,392
$ 7,535
$ 17,321
$ 5,420
$ 23,280
$ 2.43
2020, by Quarter
First
$ 9,617
$ 2,025
$ 2,871
$
$ 3,761
$ 0.39
Second
10,080
2,629
3,058
4,460
0.46
Third
10,803
3,129
3,455
4,915
0.51
Fourth **
9,799
1,307
2,966
(1,763 )
1,807
0.19
Total
$ 40,299
$ 9,090
$ 12,350
$ (789 )
$ 14,943
$ 1.55
2019, by Quarter
First
$ 8,971
$ 1,270
$ 2,271
$
$ 3,529
$ 0.36
Second
9,051
1,760
2,384
(188 )
3,057
0.32
Third
9,052
1,413
2,210
2,590
0.27
Fourth
9,183
2,444
2,833
0.29
Total
$ 36,257
$ 5,413
$ 9,309
$ 1,591
$ 12,009
$ 1.24
* During fiscal 2021, the company recognized $4,710,000 of investment gains on sales of equity securities and unrealized gains on equity securities held at the end of the period.
** During the fourth quarter of fiscal 2020, the company recognized $1,414,000 of investment losses on sales of equity securities and unrealized losses on sales of equity securities held at the end of the period.
A summary of the revisions is as follows:
($ in thousands, except per share amounts)
Investment Gains/(Losses)
Net Income
Earnings Per Share
Originally Reported
Corrected
Originally Reported
Corrected
Originally Reported
Corrected
2021, by Quarter
First
$
$ 1,170
$ 5,117
$ 5,274
$ 0.53
$ 0.55
Second
$
$
$ 5,056
$ 4,919
$ 0.53
$ 0.51
Third
$
$ 1,785
$ 6,029
$ 7,036
$ 0.63
$ 0.73
2020, by Quarter
First
$
$
$ 3,690
$ 3,761
$ 0.38
$ 0.39
Second
$
$
$ 4,211
$ 4,460
$ 0.44
$ 0.46
Third
$
$
$ 4,952
$ 4,915
$ 0.51
$ 0.51
2019, by Quarter
First
$
$
$ 3,104
$ 3,529
$ 0.32
$ 0.36
Second
$
$ (188 )
$ 3,302
$ 3,057
$ 0.34
$ 0.32
Third
$
$
$ 2,451
$ 2,590
$ 0.25
$ 0.27

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.

---

ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. CONTROLS AND PROCEDURES.
(a)
Evaluation of Disclosure Controls and Procedures.
The Company's Chief Executive Officer and Vice President & Treasurer carried out an evaluation of the effectiveness of the Company's "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) or 15d-15(e)) as of April 30, 2021, as required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15. The Company’s Chief Executive Officer and Vice President & Treasurer are engaged in a comprehensive effort to review, evaluate and improve the Company's controls; however, management does not expect that the Company's disclosure controls or its internal controls over financial reporting can prevent all possible errors and fraud.
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Vice President & Treasurer, as appropriate, to allow timely decisions regarding required disclosure.
The Company’s management has evaluated, with the participation of the Company’s Chief Executive Officer and, the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Vice President & Treasurer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
This Form 10-K does not include an attestation report of the Company's registered public accounting firm regarding the Company’s internal control over financial reporting. Under applicable SEC rules, no such attestation report by the Company's registered public accounting firm is required.
Changes in Internal Controls
In the course of the evaluation of disclosure controls and procedures, the Chief Executive Officer and Vice President & Treasurer considered certain internal control areas in which the Company has made and is continuing to make changes to improve and enhance controls. Based upon that evaluation, the Chief Executive Officer and Vice President & Treasurer of the Company concluded that there were no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.
(b)
Management’s Annual Report on Internal Control over Financial Reporting.
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, and effected by the board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.
Under the supervision and with the participation of management, including the Chief Executive Officer and the Vice President & Treasurer, acting as Principal Financial Officer, the Company has assessed the effectiveness of its internal control over financial reporting as of April 30, 2021. In making this assessment, management used the criteria described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment and those criteria, management concluded that the Company did maintain effective internal control over financial reporting as of April 30, 2021.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control systems over financial reporting during the fourth quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The Company administrative and finance personnel have been operating on a near-fully remote basis during the entirety of the fiscal year ended April 30, 2021 as a result of pandemic restrictions and precautions. The internal control systems have remained intact.

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ITEM 9B. OTHER INFORMATION
Item 9B. OTHER INFORMATION.
None.
Part III

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
(a) Names of Directors, Age as of June 30, 2021 and Principal Occupation
Director
			Since
Howard A. Brecher* (67). Chairman and Chief Executive Officer of the Company since October 2011; Acting Chairman and Acting Chief Executive Officer of the Company from November 2009 until October 2011; Chief Legal Officer of the Company from prior to 2005 to the present; Vice President and Secretary of the Value Line Funds from June 2008 until December 2010; Secretary of EAM LLC from February 2009 until December 2010; Director and General Counsel of AB&Co., Inc. from prior to 2005 to the present.
Mr. Brecher has been an officer of the Company for more than 25 years. In addition to his current roles with the Company, he has also served as Secretary of the Company and as a senior officer of significant affiliates of the Company. Mr. Brecher is a graduate of Harvard College, Harvard Business School and Harvard Law School. He also holds a Master’s Degree in tax law from New York University.
Stephen P. Davis (69). Retired Deputy Commissioner, New York City Police Department (“NYPD”), from 2014 to 2018. Managing Member, Davis Investigative Group, LLC from 2001 to 2013, and since April, 2018. Mr. Davis served as a senior appointed official in the NYPD from which he retired in 1992 as a uniformed senior officer. He has successfully managed his own business serving the financial services industry and other clients for more than 15 years.
Alfred R. Fiore (65). Retired Chief of Police, Westport, CT from 2004 to 2011. Mr. Fiore served as the senior official of a municipal department with both executive and budget responsibilities. He was Chief of Police, Westport, CT for seven years and was a member of that Police Department for more than 33 years.
Glenn J. Muenzer (63). Special Agent (Retired), Federal Bureau of Investigation (the “FBI”) from 1991 to 2012. Mr. Muenzer is an accomplished law enforcement professional with extensive law enforcement and financial investigative experience. Prior to joining the FBI, Mr. Muenzer was Vice President and Manager of Internal Audit at Thomson McKinnon Securities, Inc.; Assistant Vice President of Internal Audit at EF Hutton; Senior Auditor with Deloitte. Mr. Muenzer is a Certified Public Accountant and Certified in Financial Forensics.
Stephen R. Anastasio* (62). Vice President of the Company since December 2010; Treasurer since September 2005 and Director since February 2010. Mr. Anastasio has been employed by Value Line, Inc. for more than 30 years. In addition to his current roles with the Company, he has served as Chief Financial Officer, Treasurer, Chief Accounting Officer and Corporate Controller of the Company. Mr. Anastasio is a graduate of Fairleigh Dickinson University and is a Certified Public Accountant.
Mary Bernstein* (71). Director of Accounting of the Company since 2010; Accounting Manager of the Company from 2000 to 2010. Mrs. Bernstein holds an MBA Degree in accounting from Baruch College of CUNY and is a Certified Public Accountant. Mrs. Bernstein has been employed by Value Line, Inc. for 25 years.
* Member of the Executive Committee of the Board of Directors.
Except as noted, the directors have held their respective positions for at least five years. Information about the experience, qualifications, attributes and skills of the directors is incorporated by reference from the section entitled "Director Qualifications" in the Company's Proxy Statement for the 2021 Annual Meeting of Shareholders.
(b)
The information pertaining to executive officers of the Company is set forth in Part I, Item I, subsection J under the caption "Executive Officers of the Registrant" of this Form 10-K.
Audit Committee
The Company has a standing Audit Committee performing the functions described in Section 3(a) (58) (A) of the Securities Exchange Act of 1934, the members of which are: Mr. Glenn Muenzer, Mr. Stephen Davis, and Mr. Alfred Fiore. Mr. Muenzer, a qualified financial expert, was elected Chairman of the Audit Committee in 2012. The Board of Directors have determined that Mr. Muenzer is an “audit committee financial expert” (as defined in the rules and regulations of the SEC). The Board of Directors believes that the experience and financial sophistication of the members of the Audit Committee are sufficient to permit the members of the Audit Committee to fulfill the duties and responsibilities of the Audit Committee. All members of the Audit Committee meet the NASDAQ’s financial sophistication requirements for audit committee members.
Code of Ethics
The Company’s Code of Business Conduct and Ethics that applies to its principal executive officer, principal financial officer, all other officers, and all other employees is available on the Company’s website at www.valueline.com/About/Code of Ethics.aspx.
Procedures for Shareholders to Nominate Directors
There have been no material changes to the procedures by which shareholders of the Company may recommend nominees to the Company's Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC on Forms 3, 4 and 5. Executive officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish the Company with copies of all Forms 3, 4 and 5 they file.
Based on the Company's review of the copies of such forms that it has received and written representations from certain reporting persons confirming that they were not required to file Forms 5 for the fiscal year ended April 30, 2021, the Company believes that all its executive officers, directors and greater than ten percent shareholders complied with applicable SEC filing requirements during fiscal 2021.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. EXECUTIVE COMPENSATION.
The information required in response to this Item 11, Executive Compensation, is incorporated by reference from the section entitled “Compensation of Directors and Executive Officers” in the Company’s Proxy Statement for the 2021 Annual Meeting of Shareholders.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information as of April 30, 2021 as to shares of the Company's Common Stock held by persons known to the Company to be the beneficial owners of more than 5% of the Company's Common Stock.
Name and Address of
Beneficial Owner
Number of Shares
Beneficially Owned
Percentage of Shares
Beneficially Owned
Arnold Bernhard & Co., Inc.*
8,633,733
90.28%
551 Fifth Avenue
New York, NY 10176
*All of the outstanding voting stock of Arnold Bernhard & Co., Inc. is owned by Jean B. Buttner.
The following table sets forth information as of April 30, 2021, with respect to shares of the Company's Common Stock owned by each director of the Company, by each executive officer listed in the Summary Compensation Table and by all executive officers and directors as a group.
Name and Address of Beneficial Owner
Number of Shares
Beneficially Owned
Percentage of Shares
Beneficially Owned
Howard A. Brecher
1,600
*
Stephen R. Anastasio
1,200
*
Glenn J. Muenzer
*
Stephen P. Davis
*
Alfred R. Fiore
*
Mary Bernstein
*
All directors and executive officers as a group (6 persons)
3,900
*
* Less than one percent
Securities Authorized for Issuance under Equity Compensation Plans
There are no securities of the Company authorized for issuance under equity compensation plans.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
AB&Co., which owns 90.28% of the outstanding shares of the Company’s common stock as of April 30, 2021, utilizes the services of officers and employees of the Company to the extent necessary to conduct its business. The Company and AB&Co. allocate costs for office space, equipment and supplies and shared staff pursuant to a servicing and reimbursement agreement. During the fiscal years ended April 30, 2021 and April 30, 2020, the Company was reimbursed $408,000 and $388,000, respectively for payments it made on behalf of and services it provided to AB&Co. There were no receivables due from the Parent at April 30, 2021 or April 30, 2020. In addition, a tax-sharing arrangement allocates the tax liabilities of the two companies between them. The Company is included in the consolidated federal income tax return filed by AB&Co. The Company pays to AB&Co. an amount equal to the Company's liability as if it filed a separate federal income tax return. For the years ended April 30, 2021 and 2020, the Company made payments to AB&Co. for federal income taxes amounting to $7,154,000 and $3,325,000, respectively.
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 the Value Line Mutual Funds and separate accounts business, and 50% of EAM’s net profits. EAM currently has no separately managed account clients.
During the twelve months ended April 30, 2021 and April 30, 2020, the Company recorded income of $17,321,000 and $12,350,000, respectively, consisting of $15,190,000 and $11,184,000, from its non-voting revenues interest in EAM and $2,131,000 and $1,166,000, from its non-voting profits interest in EAM without incurring any directly related expenses. During the twelve months ended April 30, 2019, the Company recorded income of $9,309,000, consisting of $8,260,000, from its non-voting revenues interest in EAM and $1,049,000, from its non-voting profits interest in EAM.
Included in the Company’s Investment in EAM Trust are receivables due from EAM of $4,664,000 and $2,949,000 at April 30, 2021 and April 30, 2020, respectively, for the unpaid portion of Value Line’s non-voting revenues and non-voting profits interests. The non-voting revenues and non-voting profits interests due from EAM are payable to Value Line quarterly under the provisions of the EAM Declaration of Trust.
The Company has adopted a written Related Party Transactions Policy as part of its Code of Business Conduct and Ethics. This policy requires that any related party transaction which would be required to be disclosed under Item 404(a) of Regulation S-K must be approved or ratified by the Audit Committee of the Board of Directors. Transactions covered for the fiscal year ended April 30, 2021 include the matters described in the preceding paragraphs of this Item 13.
Director Independence
The information required with respect to director independence and related matters are incorporated by reference from the section entitled “Compensation of Directors and Executive Officers” in the Company’s Proxy Statement for the 2021 Annual Meeting of Shareholders.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit and Non-Audit Fees
The following table illustrates the fees billed by the Company’s independent auditor, Horowitz & Ullmann P.C., for services provided:
Fiscal Years Ended April 30,
Audit fees
$ 155,400
$ 155,750
$ 151,000
Audit-related fees
9,375
12,320
4,240
Tax related fees
171,700
124,395
170,115
Total
$ 336,475
$ 292,465
$ 325,355
In the above table, in accordance with the SEC's definitions and rules, “audit fees” are fees billed by Horowitz & Ullmann, P.C. for professional services for the audit of the Company's consolidated financial statements for the fiscal years ended April 30, 2021, 2020 and 2019 included in Form 10-K and the review of consolidated condensed financial statements and included in Form 10-Qs and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements; “audit-related fees” are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company's consolidated financial statements; and “tax fees” are fees for tax compliance, tax advice and tax planning.
Audit Committee Pre-Approval Policies and Procedures.
The Audit Committee of the Company's Board of Directors approves all services provided by Horowitz & Ullmann, P.C., prior to the provision of those services. The Audit Committee has not adopted any specific pre-approval policies and procedures.
Part IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
(1)
Financial Statements - See Part II Item 8.
All other Schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(b)
Exhibits
3.1
Certificate of Incorporation of the Company, as amended through April 7, 1983, is incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of Value Line, Inc. filed with the SEC on April 7, 1983.
3.2
Certificate of Amendment of Certificate of Incorporation dated October 24, 1989 is incorporated by reference to Exhibit 3.2 to the Amended Annual Report on Form 10-K/A for the year ended April 30, 2008 filed with the SEC on June 8, 2009.
3.3
By-laws of the Company, as amended through January 18, 1996, are incorporated by reference to Exhibit 99. (A) 3 to the Amended Quarterly Report on Form 10-Q/A for the quarter ended January 31, 1996 filed with the SEC on March 19, 1996.
10.1
Form of tax allocation arrangement between the Company and AB&Co., Inc. is incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-1 of Value Line, Inc. filed with the SEC on April 7, 1983.
10.2
Form of Servicing and Reimbursement Agreement between the Company and AB&Co., dated as of November 1, 1982, is incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-1 of Value Line, Inc. filed with the SEC on April 7, 1983.
10.4
Form of indemnification agreement, dated July 13, 2010, by and between the Company and each of Howard A. Brecher, Stephen Davis, Alfred Fiore, William E. Reed, Mitchell E. Appel, Stephen R. Anastasio and Thomas T. Sarkany is incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K for the year ended April 30, 2010 filed with the SEC on July 16, 2010.
10.5
EULAV Asset Management Declaration of Trust dated as of December 23, 2010 is incorporated by reference to Exhibit 10 to the Quarterly Report on Form 10-Q for the quarter ended January 31, 2011 filed with the SEC on March 24, 2011.
10.6(a)
Agreement of Sublease, dated as of February 7, 2013, for the Company’s premises at 485 Lexington Ave., New York, NY, is incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended January 31, 2013 filed with the SEC on March 13, 2013.
10.6(b)
Lease Modification, dated as of February 7, 2013, is incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended January 31, 2013 filed with the SEC on March 13, 2013.
10.7
Agreement of Lease, dated as of February 29, 2016, between the Company’s subsidiary, VLDC and SPG 205 Chubb Ave., Lyndhurst, NJ, is incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended January 31, 2016 filed with the SEC on March 11, 2016.
10.8
Agreement of Sublease, dated as of October 3, 2016, possession commencing December 1, 2016 for The Company’s premises at 551 Fifth Ave., New York, NY and Consent of Landlord dated November 30, 2016, is incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended October 31, 2016 filed with the SEC on December 13, 2016.
14.1(a)
Code of Business Conduct and Ethics is incorporated by reference to Exhibit 14.1 to the Quarterly Report on Form 10-Q for the quarter ended January 31, 2011 filed with the SEC on March 24, 2011.
14.1(b) Code of Business Conduct and Ethics *
21.1
List of subsidiaries of Value Line, Inc.*
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2
Certification of Principal Financial Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This exhibit shall not be deemed “filed” as a part of this Annual Report on Form 10-K.*
32.2
Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This exhibit shall not be deemed “filed” as a part of this Annual Report on Form 10-K.*
99.1
EULAV Asset Management Audited Consolidated Financial Statements as of April 30, 2021. Separate financial statements of subsidiaries not consolidated and fifty percent or less owned persons.*
* Filed herewith.
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Extension Presentation Linkbase Document