Value Line(US:VALU)2020-12-11 21:43Financial Performance - For the three months ended October 31, 2020, net income was $5,056,000, or $0.53 per share, representing a 20.1% increase compared to $4,211,000, or $0.44 per share, for the same period in 2019[138]. - For the six months ended October 31, 2020, net income was $10,173,000, or $1.06 per share, a 28.8% increase from $7,901,000, or $0.82 per share, in 2019[137]. - Total operating revenues for the three months ended October 31, 2020, were $10,210,000, a 1.3% increase from $10,080,000 in 2019[139]. - Income from operations for the three months ended October 31, 2020, was $2,188,000, down 16.8% from $2,629,000 in the same period last year[136]. - Income from securities transactions netted $1,281,000 for the six months ended October 31, 2020, compared to $284,000 for the same period in 2019[165]. Revenue Breakdown - Non-voting revenues and non-voting profits interests from EAM Trust increased by 37.8% to $4,214,000 for the three months ended October 31, 2020, compared to $3,058,000 in 2019[136]. - Total publishing revenues for the six months ended October 31, 2020, were $20,538,000, a 4.3% increase from $19,697,000 in 2019[139]. - Copyright fees increased by 5.7% to $3,309,000 for the three months ended October 31, 2020, compared to $3,131,000 in 2019[139]. - Digital publication revenues increased by 2.5% to $3,937,000 for the three months ended October 31, 2020, while print revenues decreased by 4.7% to $2,964,000[139]. - Total investment periodicals and related publications revenues were $13,993,000, a slight increase of 0.1%, while excluding an extra week of print products servings, revenues decreased by 1.3%[142]. Expenses - Total expenses for the six months ended October 31, 2020, were $16,124,000, a 7.2% increase from $15,043,000 in the prior year[159]. - Advertising and promotion expenses increased by 16.4% to $817,000 for the three months ended October 31, 2020, and by 13.8% to $1,872,000 for the six months ended October 31, 2020[160]. - Salaries and employee benefits increased by 3.7% to $4,554,000 for the three months and by 3.3% to $9,062,000 for the six months ended October 31, 2020, compared to the prior fiscal year[161]. - Production and distribution expenses rose by 11.8% to $1,392,000 for the three months and by 10.6% to $2,665,000 for the six months ended October 31, 2020, primarily due to production support costs[162]. - Office and administrative expenses increased by 13.1% to $1,259,000 for the three months and by 14.2% to $2,525,000 for the six months ended October 31, 2020, driven by higher professional fees and bank service costs[163]. Assets and Investments - Total assets in Value Line Funds managed and/or distributed by EAM reached $4.46 billion, reflecting a $965 million increase or 27.6% from $3.50 billion in the prior year[148]. - The aggregate cost of fixed income securities classified as available-for-sale was $12,185,000 as of October 31, 2020, with a fair value of $12,300,000[188]. - As of October 31, 2020, the aggregate cost of equity securities classified as available-for-sale was $15,909,000, with a fair value of $17,185,000[194]. - A hypothetical 30% increase in the fair value of equity securities and ETFs held for dividend yield as of October 31, 2020 would result in an estimated fair value of $22,341,000, representing a 6.44% increase in shareholders' equity[195]. - The company's equity investment strategy focuses on acquiring equity securities across diverse industries, primarily in ETFs and select blue chip stocks[193]. Cash Flow - Cash inflows from operating activities were $7,668,000 for the six months ended October 31, 2020, significantly up from $1,802,000 in the same period of 2019[173]. - Cash outflows from financing activities were $4,441,000 for the six months ended October 31, 2020, including $4,039,000 in quarterly dividend payments[175]. - Working capital increased to $18,000,000 as of October 31, 2020, from $13,700,000 as of April 30, 2020[171]. Taxation - The effective income tax rate decreased to 24.93% for the six months ended October 31, 2020, from 27.29% in the prior year, due to changes in state and local tax allocation factors[166]. Market and Sales - Institutional Sales generated total sales orders of $6,270,000, up 9.2% compared to the prior fiscal year, while retail telemarketing sales orders reached $3,907,000, an increase of 9.1%[142]. - New sales of print and digital publications increased as a percentage of total gross sales, with print new sales at 13.5% and digital new sales at 15.9% for the three months ended October 31, 2020[140]. - Total digital circulation increased by 2.0% compared to the previous year, while total print circulation was up by 1.0%[143]. New Initiatives - The Value Line M&A Service was launched in the second quarter of fiscal 2021, focusing on identifying quality companies for potential mergers or acquisitions[144].