Value Line(US:VALU)2024-09-13 21:21Financial Performance - For the three months ended July 31, 2024, net income was $5,887,000, or $0.62 per share, representing a 21.2% increase from $4,859,000, or $0.52 per share, in the same period of 2023[118]. - Total operating revenues for the three months ended July 31, 2024, were $8,884,000, down 8.8% from $9,743,000 in the same period of 2023[119]. - The company's operating expenses increased slightly to $7,037,000, up 0.6% from $6,996,000 in the same period of 2023[118]. - Cash inflows from operating activities for the three months ended July 31, 2024, were $4,771,000, a decrease from $5,058,000 during the same period in 2023[147]. - Cash outflows from financing activities were $3,006,000 for the three months ended July 31, 2024, compared to $2,830,000 for the same period in 2023[150]. Revenue Sources - Non-voting revenues and non-voting profits interests from EULAV Asset Management Trust increased by 48.4% to $4,241,000 compared to $2,857,000 in the prior year[118]. - Subscription sales for print publications accounted for 18.2% of total gross sales, while digital subscriptions accounted for 9.2% in the three months ended July 31, 2024[121]. - Investment periodicals and related publications revenues were $6,287,000 for the three months ended July 31, 2024, a decrease of 2.6% compared to $6,457,000 in the prior fiscal year[123]. - Digital revenues for the three months ended July 31, 2024, were $4,054,000, slightly lower compared to the prior fiscal year, indicating a shift from print to digital services[124]. Investment Performance - Investment gains for the three months ended July 31, 2024, were $1,709,000, a significant increase of 126.4% from $755,000 in the prior year[118]. - Total investment gains for the three months ended July 31, 2024, were $1,709,000, a 126.4% increase from $755,000 in the prior year, primarily due to unrealized gains on equity securities[141]. - During the three months ended July 31, 2024, total investment management fees earned from the Value Line Funds were $7,376,000, an increase from $5,428,000 in the same period of the prior year[130][131]. Assets and Capital - Total assets in the Value Line Funds managed by EAM increased to $4.60 billion, up $1.13 billion or 32.6% from $3.47 billion at July 31, 2023[129]. - As of July 31, 2024, the company had working capital of $50,381,000, an increase from $48,770,000 as of April 30, 2024[146]. - As of July 31, 2024, retained earnings were $107,311,000, up from $104,249,000 as of April 30, 2024[151]. Market Conditions - The U.S. GDP expanded by an estimated 3.0% in the June quarter of 2024, more than double the 1.4% gain recorded in the March period[114]. - The Federal Reserve is expected to begin reducing the federal funds rate after holding it steady in a range of 5.25% to 5.50% for eight consecutive meetings[115]. Tax and Compliance - The effective income tax rate for the three months ended July 31, 2024, was 24.50%, up from 23.87% in the prior year, primarily due to increased state and local income taxes[143]. - The company is evaluating the impact of new accounting standards on disclosures in its Consolidated Financial Statements[152][153]. Other Financial Metrics - The average common shares outstanding decreased slightly to 9,419,938 in the three months ended July 31, 2024, from 9,432,573 in the same period of 2023[118]. - Unearned subscription revenue as of July 31, 2024, was $21,076,000, a decrease of 5.4% from $22,281,000 as of April 30, 2024[122]. - The aggregate cost and fair value of fixed income securities classified as available-for-sale as of July 31, 2024, were $34,042,000 and $33,928,000, respectively[159]. - The fair value of equity securities as of July 31, 2024, was $21,724,000, an increase from $16,344,000 as of April 30, 2024[169]. - The company expects to continue using cash for dividend payments, with quarterly dividends of $0.30 per share during fiscal year 2025 totaling $2,827,000[150]. - The company does not anticipate making any borrowings during the next twelve months[151]. Circulation and Marketing - Total print circulation decreased by 2.2% compared to the previous year, reflecting management's decision to reduce marketing efforts in a challenging market environment[124]. - Non-voting revenues interest from EAM increased by 40.7% to $3,680,000 compared to $2,616,000 in the prior year[135]. - The Value Line equity and hybrid funds' assets increased by 33.0% to $4,566 million, while fixed income funds decreased by 5.1% to $37 million as of July 31, 2024[134].