Value Line(VALU) - 2025 Q2 - Quarterly Report

Financial Performance - For the six months ended October 31, 2024, the company's net income was $11,572,000, or $1.23 per share, representing a 38.6% increase from $8,347,000, or $0.89 per share, in the same period of 2023[164]. - During the three months ended October 31, 2024, the company's net income was $5,685,000, or $0.60 per share, which is 63.0% higher than $3,488,000, or $0.37 per share, for the same period in 2023[165]. - The company's income before income taxes for the three months ended October 31, 2024, was $7,560,000, reflecting a 64.7% increase from $4,590,000 in the same period of 2023[163]. - The company's income from operations for the six months ended October 31, 2024, was $3,591,000, a decrease of 33.8% from $5,421,000 in the same period of 2023[164]. Revenue and Expenses - Total publishing revenues for the six months ended October 31, 2024, were $17,725,000, down 8.4% from $19,353,000 in the prior fiscal year[175]. - Print publication revenues decreased by 6.3% to $4,414,000 during the six months ended October 31, 2024, compared to $4,709,000 in the same period last year[176]. - Digital revenues for the same period were $8,055,000, slightly lower than $8,146,000 in the prior fiscal year, reflecting weak investor sentiment[176]. - Copyright fees fell by 19.1% to $5,256,000 during the six months ended October 31, 2024, compared to $6,498,000 in the previous year[179]. - The company's total operating expenses for the six months ended October 31, 2024, were $14,134,000, which is a 1.4% increase from $13,932,000 in the same period of 2023[164]. - Advertising and promotion expenses increased by 26.9% to $1,722,000 during the six months ended October 31, 2024, compared to $1,357,000 in the prior fiscal year[192]. - Office and administrative expenses increased by 4.1% to $2,356,000 for the six months ended October 31, 2024, due to software upgrades and outsourced fulfillment costs[195]. Investment Performance - Total investment gains increased by 993.5% to $2,895,000, primarily from unrealized gains on equity securities and increased interest income[198]. - Investment gains for the three months ended October 31, 2024, were $1,186,000, a significant increase of 209.9% compared to a loss of $1,079,000 in the same period of 2023[163]. - EAM's investment management fees for the six months ended October 31, 2024, were $15,342,000, up from $11,068,000 in the same period last year[184]. - Total assets in the Value Line Funds managed by EAM increased by 44.6% to $4.78 billion as of October 31, 2024, from $3.31 billion a year earlier[181]. Cash Flow - Cash inflows from operating activities rose to $7,844,000 for the six months ended October 31, 2024, compared to $5,763,000 in the same period last year[205]. - Cash inflows from investing activities were $4,889,000 for the six months ended October 31, 2024, compared to cash outflows of $3,808,000 in the prior year[208]. - Cash outflows from financing activities were $5,830,000 for the six months ended October 31, 2024, with quarterly dividend payments totaling $5,652,000[209]. Tax and Working Capital - The effective income tax rate increased to 24.65% for the six months ended October 31, 2024, up from 23.76% in the prior year, primarily due to higher state and local income taxes[200]. - Working capital increased to $52,961,000 as of October 31, 2024, compared to $48,770,000 as of April 30, 2024[203]. Market and Economic Conditions - The U.S. economy's GDP expanded by an estimated 2.8% in the September 2024 period, following a 3.0% advance in the June quarter, driven by a 3.5% increase in personal consumption expenditures[158]. - The Federal Reserve reduced the federal funds rate by 0.75 percentage points to a range of 4.50% to 4.75% as of November 2024, indicating a shift in monetary policy to support economic growth[159]. Securities and Investments - The aggregate cost and fair value of fixed income securities classified as available-for-sale were $39,008,000 and $38,915,000, respectively, as of October 31, 2024[226]. - The fair value of fixed income securities would decrease to $37,909,000 with a hypothetical 100 basis points increase in interest rates[228]. - The fair value of fixed income securities would increase to $39,359,000 with a hypothetical 100 basis points decrease in interest rates[228]. - The estimated fair value of equity securities as of October 31, 2024, is $21,837,000, up from $16,344,000 as of April 30, 2024[233]. - The aggregate cost of equity securities increased from $11,663,000 to $15,505,000 between April 30, 2024, and October 31, 2024[233]. - A hypothetical 30% increase in equity prices would raise the estimated fair value of equity securities to $28,388,000, while a 30% decrease would lower it to $15,286,000[234]. - The company's policy limits investments in any single issue to no more than 5% of the approximate average daily trading volume to maintain liquidity[232]. - The estimated fair value of equity securities would change by 5.35% in shareholders' equity with a hypothetical 30% price change[234]. - The company regularly monitors the maturity structure of its investments to manage price risk associated with interest rate changes[228].