Advertising expenses: |
| The Company expenses advertising costs as incurred. |
Cash and Cash Equivalents: |
| For purposes of the Consolidated Statements of Cash Flows, the Company considers all cash held at banks and short-term liquid investments with an original maturity of less than three months to be cash and cash equivalents. As of April 30, 2019 and April 30, 2018, cash equivalents included $5,617,000 and $4,982,000, respectively, for amounts invested in money market mutual funds that invest in short-term U.S. government securities. |
| Note 2 - Supplementary Cash Flow Information: |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| State and local income tax payments | $ | 387 | $ | 307 | $ | 560 | ||||||
| Federal income tax payments to the Parent | $ | 2,700 | $ | 3,975 | $ | 6,824 |
| See Note 3 - Related Party Transactions for tax amounts associated with Arnold Bernhard and Co., Inc. (“AB&Co.” or the \"Parent\"). |
| Note 9 - 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 (“ABM” or the “Sublandlord”) 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 $32,146, which will be fully refunded after the lease term expires. The lease is a net lease requiring the Company to pay for certain operating expenses associated with the Warehouse as well as utilities supplied to the Warehouse. |
| The total amount of the base rent payments is being charged to expense on the straight-line method over the term of the lease. |
| Future minimum payments, exclusive of potential increases in real estate taxes and operating cost escalations, under operating leases for office space, with remaining terms of one year or more, are as follows: |
| Fiscal Years Ended April 30, | ($ in thousands) | |||
| 2020 | 1,399 | |||
| 2021 | 1,432 | |||
| 2022 | 1,506 | |||
| 2023 | 1,597 | |||
| 2024 and thereafter | 6,899 | |||
| $ | 12,833 |
| For the fiscal years ended April 30, 2019, 2018 and 2017, rental expenses were $1,278,000, $1,246,000 and $1,677,000, respectively. |
| Note 8 - Employees' Profit Sharing and Savings Plan: |
| Substantially all employees of the Company and its subsidiaries are members of the Value Line, Inc. Profit Sharing and Savings Plan (the \"Plan\"). In general, this is a qualified, contributory plan which provides for a discretionary annual Company contribution which is determined by a formula based on the salaries of eligible employees and the amount of consolidated net operating income as defined in the Plan. For the fiscal years ended April 30, 2019, 2018 and 2017, the estimated profit sharing plan contribution, which is included as an expense in salaries and employee benefits in the Consolidated Statements of Income, was $592,000, $496,000 and $345,000, respectively. During fiscal 2017 the U.S. Department of Labor Employee Benefits Security Administration examined the Plan for the period May 1, 2010 through March 17, 2016. As a result of the examination, the Plan sponsor decided to reimburse the Plan in the amount of $277,000 during fiscal 2017. The reimbursement was for fees received indirectly by the Plan sponsor from EAM, related to the Plan assets invested in the Value Line Mutual Funds, subsequent to Value Line's divestiture of its asset management and advisory business on December 23, 2010. Prior to then, Value Line received fees under a class exemption for certain transactions between investment companies and employee benefit plans. After the corporate restructuring, the fee payments may no longer have qualified under the exemption, and therefore, Value Line decided to pay the fees that it previously collected indirectly from EAM back to the Plan. |
| Note 11 - Comprehensive Income: |
| The FASB's ASC Comprehensive Income topic requires the reporting of comprehensive income in addition to net income from operations. Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that otherwise would not be recognized in the calculation of net income. |
| As of April 30, 2019 and April 30, 2018, the Company held equity securities consisting primarily of ETFs with high relative dividend yields that are classified as securities available-for-sale on the Consolidated Balance Sheets. As of April 30, 2019 and April 30, 2018 the Company also held fixed income securities consisting of certificates of deposits and securities issued by federal, state, and local governments within the United States that are classified as securities available-for-sale on the Consolidated Balance Sheets. The change in valuation of these securities, net of deferred income taxes, has been recorded in accumulated other comprehensive income in the Company's Consolidated Balance Sheets. |
| The components of comprehensive income that are included in the Consolidated Statement of Changes in Shareholders' Equity for the twelve months ending April 30, 2019 are as follows: |
| Fiscal Year Ended April 30, 2019 | ||||||||||||
| ($ in thousands) | Amount Before Tax | Tax (Expense) / Benefit | Amount Net of Tax | |||||||||
| Change in unrealized gains on securities | $ | 1,133 | $ | (238 | ) | $ | 895 | |||||
| $ | 1,133 | $ | (238 | ) | $ | 895 |
| The components of comprehensive income that are included in the Consolidated Statement of Changes in Shareholders' Equity for the twelve months ending April 30, 2018 are as follows: |
| Fiscal Year Ended April 30, 2018 | ||||||||||||
| ($ in thousands) | Amount Before Tax | Tax (Expense) / Benefit | Amount Net of Tax | |||||||||
| Change in unrealized gains on securities | $ | 437 | $ | 8 | $ | 445 | ||||||
| Less: Gains realized in net income | (152 | ) | 32 | (120 | ) | |||||||
| $ | 285 | $ | 40 | $ | 325 |
| The components of comprehensive income that are included in the Consolidated Statement of Changes in Shareholders' Equity for the twelve months ending April 30, 2017 are as follows: |
| Fiscal Year Ended April 30, 2017 | ||||||||||||
| ($ in thousands) | Amount Before Tax | Tax (Expense) / Benefit | Amount Net of Tax | |||||||||
| Change in unrealized gains on securities | $ | 554 | $ | (196 | ) | $ | 358 | |||||
| Less: Gains realized in net income | (39 | ) | 14 | (25 | ) | |||||||
| $ | 515 | $ | (182 | ) | $ | 333 |
| Note 17 - Concentration: |
| During the twelve months ended April 30, 2019, 20.5% of total publishing revenues of $36,257,000 were derived from a single customer. During the twelve months ended April 30, 2018, 17.7% of total publishing revenues of $35,868,000 were derived from a single customer. |
Principles of Consolidation: |
| The Company follows the guidance in the Financial Accounting Standards Board's (\"FASB\") Topic 810 “Consolidation” to determine if it should consolidate its investment in a variable interest entity (\"VIE\"). A VIE is a legal entity in which either (i) equity investors do not have sufficient equity investment at risk to enable the entity to finance its activities independently or (ii) the equity holders at risk lack the obligation to absorb losses, the right to receive residual returns or the right to make decisions about the entity’s activities that most significantly affect the entity's economic performance. A holder of a variable interest in a VIE is required to consolidate the entity if it is determined that it has a controlling financial interest in the VIE and is therefore the primary beneficiary. The determination of a controlling financial interest in a VIE is based on a qualitative assessment to identify the variable interest holder, if any, that has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) either the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The accounting guidance requires the Company to perform an ongoing assessment of whether the Company is the primary beneficiary of a VIE and the Company has determined it is not the primary beneficiary of a VIE (see Note 5 ). |
| In accordance with FASB's Topic 810, the assets, liabilities, and results of operations of subsidiaries in which the Company has a controlling interest have been consolidated. All significant intercompany accounts and transactions have been eliminated in consolidation. On December 23, 2010, the Company completed the Restructuring Transaction and deconsolidated the related affiliates in accordance with FASB's Topic 810. As part of the Restructuring Transaction, the Company received a significant non-voting revenues interest (excluding distribution revenues) and a significant non-voting profits interest in the new entity, EULAV Asset Management, a Delaware statutory trust (“EAM” or “EAM Trust”). The Company relied on the guidance in FASB's ASC Topics 323 and 810 in its determination not to consolidate its investment in EAM and to account for such investment under the equity method of accounting. The Company reports the amount it receives for its non-voting revenues and non-voting profits interests as a separate line item below operating income in the Consolidated Statements of Income. |
Earnings per share: |
| Earnings per share are based on the weighted average number of shares of common stock and common stock equivalents outstanding during each period. Any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding. The Company does not have any potentially dilutive common shares from outstanding stock options, warrants, restricted stock, or restricted stock units. |
Investment in Unconsolidated Entities: |
| The Company accounts for its investment in its unconsolidated entity, EAM, using the equity method of accounting in accordance with FASB’s ASC 323. The equity method is an appropriate means of recognizing increases or decreases measured by GAAP in the economic resources underlying the investments. Under the equity method, an investor recognizes its share of the earnings or losses of an investee in the periods for which they are reported by the investee in its financial statements rather than in the period in which an investee declares a dividend or distribution. An investor adjusts the carrying amount of an investment for its share of the earnings or losses recognized by the investee. |
| The Company’s “interests” in EAM, the investment adviser to and the sole member of the distributor of the Value Line Funds, consist of a \"non-voting revenues interest\" and a \"non-voting profits interest\" in EAM as defined in the EAM Trust Agreement. The non-voting revenues interest entitles the Company to receive a range of 41% to 55%, based on the amount of EAM’s adjusted gross revenues, excluding EULAV Securities' distribution revenues (“Revenues Interest”). The non-voting profits interest entitles the Company to receive 50% of EAM's profits, subject to certain limited adjustments as defined in the EAM Trust Agreement (“Profits Interest”). The Revenues Interest and at least 90% of the Profits Interest are to be distributed each quarter to all interest holders of EAM, including Value Line. Subsequent to the Restructuring Date, the Company's Revenues Interest in EAM excludes participation in the service and distribution fees of EAM's subsidiary EULAV Securities. The Company reflects its non-voting revenues and non-voting profits interests in EAM as non-operating income under the equity method of accounting subsequent to the Restructuring Transaction. Although the Company does not have control over the operating and financial policies of EAM, pursuant to the EAM Trust Agreement, the Company has a contractual right to receive its share of EAM's revenues and profits. |
| As of April 30, 2019 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents | $ | 5,617 | $ | - | $ | - | $ | 5,617 | ||||||||
| Securities available-for-sale | 21,828 | - | - | 21,828 | ||||||||||||
| $ | 27,445 | $ | - | $ | - | $ | 27,445 |
| As of April 30, 2018 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents | $ | 4,982 | $ | - | $ | - | $ | 4,982 | ||||||||
| Securities available-for-sale | 17,844 | - | - | 17,844 | ||||||||||||
| $ | 22,826 | $ | - | $ | - | $ | 22,826 |
Valuation of Securities: |
| The Company's securities classified as cash equivalents and available-for-sale consist of shares of money market funds that invest primarily in short-term U.S. Government securities and investments in equities including ETFs and are valued in accordance with the requirements of the Fair Value Measurements Topic of the FASB's ASC 820. The securities classified as available-for-sale reflected in the Consolidated Balance Sheets are valued at market and unrealized gains and losses, net of applicable taxes, are reported as a separate component of shareholders' equity. Realized gains and losses on sales of the securities classified as available-for-sale are recorded in earnings as of the trade date and are determined on the identified cost method. |
| The Company classifies its securities available-for-sale as current assets to properly reflect its liquidity and to recognize the fact that it has liquid assets available-for-sale should the need arise. |
| Market valuations of securities listed on a securities exchange and ETF shares are based on the closing sales prices on the last business day of each month. The market value of the Company's fixed maturity U.S. Government debt securities is determined utilizing publicly quoted market prices. Cash equivalents consist of investments in money market funds that invest primarily in U.S. Government securities valued in accordance with rule 2a -7 under the 1940 Act. |
| The Fair Value Measurements Topic of FASB's ASC defines fair value as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. The Fair Value Measurements Topic established a three -tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the information that market participants would use in pricing the asset or liability, including assumptions about risk. Examples of risks include those inherent in a particular valuation technique used to measure fair value such as the risk inherent in the inputs to the valuation technique. Inputs are classified as observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. |
| The three -tier hierarchy of inputs is summarized in the three broad levels listed below. |
| Level 1 – quoted prices in active markets for identical investments |
| Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) |
| The following summarizes the levels of fair value measurements of the Company’s investments: |
| As of April 30, 2019 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents | $ | 5,617 | $ | - | $ | - | $ | 5,617 | ||||||||
| Securities available-for-sale | 21,828 | - | - | 21,828 | ||||||||||||
| $ | 27,445 | $ | - | $ | - | $ | 27,445 |
| As of April 30, 2018 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents | $ | 4,982 | $ | - | $ | - | $ | 4,982 | ||||||||
| Securities available-for-sale | 17,844 | - | - | 17,844 | ||||||||||||
| $ | 22,826 | $ | - | $ | - | $ | 22,826 |
| The Company had no other financial instruments such as futures, forwards and swap contracts. For the periods ended April 30, 2019 and April 30, 2018, there were no Level 2 nor Level 3 investments. The Company does not have any liabilities subject to fair value measurement. |
| Note 7 - Federal, State and Local Income Taxes: |
| In accordance with the requirements of the Income Tax Topic of the FASB's ASC, the Company's provision for income taxes includes the following: |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Current tax expense: | ||||||||||||
| Federal | $ | 2,964 | $ | 3,853 | $ | 6,360 | ||||||
| State and local | 600 | 365 | 469 | |||||||||
| Current tax expense | 3,564 | 4,218 | 6,829 | |||||||||
| Deferred tax expense (benefit): | ||||||||||||
| Federal | (650 | ) | (7,021 | ) | (1,299 | ) | ||||||
| State and local | 1,162 | (37 | ) | (412 | ) | |||||||
| Deferred tax expense (benefit): | 512 | (7,058 | ) | (1,711 | ) | |||||||
| Income tax provision | $ | 4,076 | $ | (2,840 | ) | $ | 5,118 |
| 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 for the twelve months ended April 30, 2019 using the Federal Tax Rate of 21%, and computed its income tax expense for the twelve months ended April 30, 2018 using a blended Federal Income tax rate of 30.33%. The 21% Federal Tax Rate applies to the full fiscal year ending April 30, 2019 and each year thereafter. |
| The overall effective income tax rates, as a percentage of pre-tax ordinary income for the twelve months ended April 30, 2019, April 30, 2018 and April 30, 2017 were 26.81%, (23.87% ) and 33.05%, respectively. The overall change in the effective Federal tax rate during the twelve months ended April 30, 2019 and April 30, 2018 is primarily a result of the reduced Federal Tax Rate. As mentioned above, in fiscal 2018 the U.S. statutory federal corporate income tax rate was reduced from 35% to 21%, which resulted in a tax benefit of 54.51% of pre-tax income for the twelve months ended April 30, 2018, primarily attributable to the effect on the long-term deferred tax liability. The Company re-calculated its net deferred tax assets and liabilities using the Federal Tax Rate under the Tax Act and allocated it directly to both current and deferred income tax expenses from continuing operations. In addition, due to evolving state tax legislation, the Company's state and local effective income tax rate, net of Federal income tax benefit, increased from 0.7% of pretax income for the twelve months ended April 30, 2018, to 6.02% of pretax income for the twelve months ended April 30, 2019. The fluctuation in the effective income tax rate during fiscal 2017 is primarily attributable to the attribution of 100% of the gain on the sale of the Company's operating facility to one tax jurisdiction. |
| Deferred income taxes, a liability, are provided for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability are as follows: |
| Fiscal Years Ended April 30, | ||||||||
| ($ in thousands) | 2019 | 2018 | ||||||
| Federal tax liability (benefit): | ||||||||
| Deferred gain on deconsolidation of EAM | $ | 10,669 | $ | 10,658 | ||||
| Deferred non-cash post-employment compensation | (372 | ) | (372 | ) | ||||
| Depreciation and amortization | 130 | 119 | ||||||
| Unrealized gain on securities held for sale | 446 | 208 | ||||||
| Deferred charges | (354 | ) | (331 | ) | ||||
| Other | (279 | ) | 210 | |||||
| Total federal tax liability | 10,240 | 10,492 | ||||||
| State and local tax liabilities (benefits): | ||||||||
| Deferred gain on deconsolidation of EAM | 2,530 | 1,299 | ||||||
| Deferred non-cash post-employment compensation | (74 | ) | (45 | ) | ||||
| Depreciation and amortization | 40 | 15 | ||||||
| Other | (112 | ) | (47 | ) | ||||
| Total state and local tax liabilities | 2,384 | 1,222 | ||||||
| Deferred tax liability, long-term | $ | 12,624 | $ | 11,714 |
| The tax effect of temporary differences giving rise to the Company's long-term deferred tax liability is primarily a result of the federal, state and local taxes related to the $50,805,000 gain from deconsolidation of the Company's asset management and mutual fund distribution subsidiaries, partially offset by the long-term tax benefit related to the non-cash post-employment compensation of $1,770,000 granted to VLI's former employee. |
| The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflects the tax effect of any tax law changes and certain other discrete events in the period in which they occur. |
| The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pre-tax income as a result of the following: |
| Fiscal Years Ended April 30, | ||||||||||||
| 2019 | 2018 | 2017 | ||||||||||
| U.S. statutory federal tax rate | 21.00 | % | 30.33 | % | 35.00 | % | ||||||
| Increase (decrease) in tax rate from: | ||||||||||||
| Effect on deferred tax liabilities from federal tax rate reduction to 21% | - | -54.51 | % | - | ||||||||
| State and local income taxes, net of federal income tax benefit | 6.02 | % | 0.70 | % | -0.88 | % | ||||||
| Effect of dividends received deductions | -0.24 | % | -0.49 | % | -0.33 | % | ||||||
| Domestic production tax credit | - | - | -0.17 | % | ||||||||
| Other, net | 0.03 | % | 0.10 | % | -0.57 | % | ||||||
| Effective income tax rate | 26.81 | % | -23.87 | % | 33.05 | % |
| The Company believes that, as of April 30, 2019, there were no material uncertain tax positions that would require disclosure under GAAP. |
| The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company's liability/(benefit) as if it filed a separate return. Beginning with the fiscal year ended April 30, 2017, the Company files combined income tax returns with the Parent on a unitary basis in certain states as a result of changes in state tax regulations. The Company does not anticipate any significant tax implications from the change to unitary state tax filing. |
| The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years ended 2016 through 2018, are subject to examination by the tax authorities, generally for three years after they are filed with the tax authorities. The Company is presently engaged in a federal tax audit for the fiscal year ended April 30, 2015 and does not expect it to have a material effect on the financial statements. |
Income Taxes: |
| The Company computes its income tax provision in accordance with the Income Tax Topic of the FASB's ASC. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the Consolidated Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book values and the tax bases of particular assets and liabilities, using tax rates currently in effect for the years in which the differences are expected to reverse. The Company adopted the provisions of ASU 2015 -17, Income taxes (Topic 740 ) during the first quarter of fiscal 2018 and now classifies all deferred taxes as long-term liabilities on the Consolidated Balance Sheets. |
| The Income Tax Topic of the FASB's ASC establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. As of April 30, 2019, management has reviewed the tax positions for the years still subject to tax audit under the statute of limitations, evaluated the implications, and determined that there is no material impact to the Company's financial statements. |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Investment management fees earned from the Value Line Funds, net of waivers shown below | $ | 16,715 | $ | 15,988 | $ | 14,701 | ||||||
| 12b-1 fees and other fees, net of waivers shown below | $ | 6,811 | $ | 6,455 | $ | 5,822 | ||||||
| Other income | $ | 273 | $ | 171 | $ | 205 | ||||||
| Investment management fee waivers and reimbursements | $ | 421 | $ | 487 | $ | 474 | ||||||
| 12b-1 fee waivers | $ | 654 | $ | 754 | $ | 923 | ||||||
| Value Line’s non-voting revenues interest | $ | 8,260 | $ | 8,040 | $ | 7,195 | ||||||
| EAM's net income (1) | $ | 2,098 | $ | 1,492 | $ | 1,038 |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Dividend income | $ | 257 | $ | 226 | $ | 193 | ||||||
| Interest income | 201 | 103 | 33 | |||||||||
| Capital gain distributions from ETFs (1) | - | 152 | 39 | |||||||||
| Other | 46 | 59 | 47 | |||||||||
| Total income from securities transactions, net | $ | 504 | $ | 540 | $ | 312 |
| Note 4 - Investments: |
| Securities Available-for-Sale: |
| Investments held by the Company and its subsidiaries are classified as securities available-for-sale in accordance with FASB's ASC 320, Investments - Debt and Equity Securities. All of the Company's securities classified as available-for-sale were readily marketable or had a maturity of twelve months or less and are classified as current assets on the Consolidated Balance Sheets. |
| Equity Securities: |
| Equity securities classified as available-for-sale on the Consolidated Balance Sheets, consist 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. |
| As of April 30, 2019 and April 30, 2018, the aggregate cost of the equity securities classified as available-for-sale, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), PowerShares Financial Preferred ETF (PGF), Select Utilities Select Sector SPDR ETF (XLU), First Trust Value Line 100 ETF (FVL), Proshares Trust S&P 500 Dividend Aristocrats ETF (NOBL) and Ishares Select Dividend ETF (DVY) was $8,541,000 and $8,385,000, respectively, and the fair value was $10,622,000 and $9,379,000, respectively. |
| Proceeds from sales of equity securities classified as available-for-sale were $0 and $152,000 during the twelve months ended April 30, 2019 and April 30, 2018, respectively. Capital gain distributions of $152,000 were reclassified from Accumulated Other Comprehensive Income in the Consolidated Balance Sheet to the Consolidated Statement of Income during the twelve months ended April 30, 2018. There were no capital gain distributions in fiscal 2019. There were no 2019 or fiscal 2018. The increase in gross unrealized gains on equity securities classified as available-for-sale of $1,087,000, net of deferred taxes of $228,000 was included in Shareholders' Equity at April 30, 2019. The increase in gross unrealized gains on equity securities classified as available-for-sale of $282,000, net of deferred tax benefit of $42,000 was included in Shareholders' Equity at April 30, 2018. |
| The carrying value and fair value of securities available-for-sale at April 30, 2019 were as follows: |
| ($ in thousands) | Cost | Gross Unrealized Gains | Fair Value | |||||||||
| ETFs - equities | $ | 8,541 | $ | 2,081 | $ | 10,622 |
| The carrying value and fair value of securities available-for-sale at April 30, 2018 were as follows: |
| ($ in thousands) | Cost | Gross Unrealized Holding Gains | Fair Value | |||||||||
| ETFs - equities | $ | 8,385 | $ | 994 | $ | 9,379 |
| Government Debt Securities (Fixed Income Securities): |
| Fixed income securities consist of certificates of deposits and securities issued by federal, state and local governments within the United States. |
| The aggregate cost and fair value at April 30, 2019 of fixed income securities classified as available-for-sale were as follows: |
| Amortized | Gross Unrealized | |||||||||||
| ($ in thousands) | Historical Cost | Holding Gains | Fair Value | |||||||||
| Maturity | ||||||||||||
| Due within 1 year | $ | 6,913 | $ | 33 | $ | 6,946 | ||||||
| Due 1 year through 5 years | 4,250 | 10 | 4,260 | |||||||||
| Total investment in government debt securities | $ | 11,163 | $ | 43 | $ | 11,206 |
| The increase in gross unrealized gains of $46,000 on fixed income securities classified as available-for-sale net of deferred income taxes of $10,000, was included in Accumulated Other Comprehensive Income on the Consolidated Balance Sheet as of April 30, 2019. |
| The aggregate cost and fair value at April 30, 2018 of fixed income securities classified as available-for-sale were as follows: |
| Amortized | Gross Unrealized | Gross Unrealized | ||||||||||||||
| ($ in thousands) | Historical Cost | Holding Gains | Holding Losses | Fair Value | ||||||||||||
| Maturity | ||||||||||||||||
| Due within 1 year | $ | 7,868 | $ | 10 | $ | (12 | ) | $ | 7,866 | |||||||
| Due 1 year through 5 years | 600 | - | (1 | ) | 599 | |||||||||||
| Total investment in government debt securities | $ | 8,468 | $ | 10 | $ | (13 | ) | $ | 8,465 |
| The decrease in gross unrealized losses of $2,500 on fixed income securities classified as available-for-sale net of deferred income taxes of $1,200, was included in Accumulated Other Comprehensive Income on the Consolidated Balance Sheet as of April 30, 2018. |
| The average yield on the Government debt securities classified as available-for-sale at April 30, 2019 and April 30, 2018 was 2.09% and 1.24%, respectively. |
| Income from Securities Transactions: |
| Income from securities transactions was comprised of the following: |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Dividend income | $ | 257 | $ | 226 | $ | 193 | ||||||
| Interest income | 201 | 103 | 33 | |||||||||
| Capital gain distributions from ETFs (1) | - | 152 | 39 | |||||||||
| Other | 46 | 59 | 47 | |||||||||
| Total income from securities transactions, net | $ | 504 | $ | 540 | $ | 312 |
| ( 1 ) Capital gain distributions of $152,000 and $39,000 were reclassified from Accumulated Other Comprehensive Income in the Consolidated Balance Sheets to the Consolidated Statements of Income in fiscal 2018 and 2017, respectively. |
| The changes in the value of equity and fixed income securities investments are recorded in Other Comprehensive Income in the Consolidated Financial Statements. Realized gains and losses are recorded on the trade date in the Consolidated Statements of Income when securities are sold, mature or are redeemed. As of April 30, 2019, the changes in gross unrealized gains of $1,133,000, net of deferred tax expense of $238,000 were recorded in Accumulated Other Comprehensive Income in the Consolidated Balance Sheets. As of April 30, 2018, the changes in gross unrealized gains of $285,000, net of deferred tax benefit of $40,000, were recorded in Accumulated Other Comprehensive Income in the Consolidated Balance Sheets. |
| Investment in Unconsolidated Entities: |
| Equity Method Investment: |
| As of April 30, 2019 and April 30, 2018, the Company's investment in EAM Trust, on the Consolidated Balance Sheets was $58,625,000 and $58,233,000, respectively. |
| The value of VLI’s investment in EAM at April 30, 2019 and April 30, 2018 reflects the fair value of contributed capital of $55,805,000 at inception, which included $5,820,000 of cash and liquid securities in excess of working capital requirements contributed to EAM’s capital account by VLI, plus VLI's share of non-voting revenues and non-voting profits from EAM less distributions, made quarterly to VLI by EAM, during the period subsequent to its initial investment through the dates of the Consolidated Balance Sheets. |
| It is anticipated that EAM will have sufficient liquidity and earn enough profit to conduct its current and future operations so the management of EAM will not need additional funding. |
| The Company monitors its Investment in EAM Trust for impairment to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. Impairment indicators include, but are not limited to the following: (a) a significant deterioration in the earnings performance, asset quality, or business prospects of the investee, (b) a significant adverse change in the regulatory, economic, or technological environment of the investee, (c) a significant adverse change in the general market condition of the industry in which the investee operates, or (d) factors that raise significant concerns about the investee’s ability to continue as a going concern such as negative cash flows, working capital deficiencies, or noncompliance with statutory capital and regulatory requirements. EAM did not 2019 or 2018. |
| The components of EAM’s investment management operations, provided to the Company by EAM, were as follows: |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Investment management fees earned from the Value Line Funds, net of waivers shown below | $ | 16,715 | $ | 15,988 | $ | 14,701 | ||||||
| 12b-1 fees and other fees, net of waivers shown below | $ | 6,811 | $ | 6,455 | $ | 5,822 | ||||||
| Other income | $ | 273 | $ | 171 | $ | 205 | ||||||
| Investment management fee waivers and reimbursements | $ | 421 | $ | 487 | $ | 474 | ||||||
| 12b-1 fee waivers | $ | 654 | $ | 754 | $ | 923 | ||||||
| Value Line’s non-voting revenues interest | $ | 8,260 | $ | 8,040 | $ | 7,195 | ||||||
| EAM's net income (1) | $ | 2,098 | $ | 1,492 | $ | 1,038 |
| ( 1 ) Represents EAM's net income, after giving effect to Value Line’s non-voting revenues interest, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest. |
| Fiscal Years Ended April 30, | ||||||||
| ($ in thousands) | 2019 | 2018 | ||||||
| EAM's total assets | $ | 60,683 | $ | 60,203 | ||||
| EAM's total liabilities (1) | (3,547 | ) | (3,128 | ) | ||||
| EAM's total equity | $ | 57,136 | $ | 57,075 |
| ( 1 ) At April 30, 2019 and 2018, EAM's total liabilities included a payable to VLI for its accrued non-voting revenues and non-voting profits interests of $2,420,000 and $2,113,000, respectively. |
Recent Accounting Pronouncements: |
| In February 2016, the FASB issued ASU 2016 -02, Leases (Topic 842 ) (“ASU 2016 -02\" ), effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The core principle of Topic 842 requires that a lessee should recognize the assets and liabilities on the balance sheet and disclose key information about leasing arrangements. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. The adoption of ASU 2016 -02 does not have a material impact on our consolidated condensed financial statements and related disclosures. |
| In August 2016, the FASB issued Accounting Standards Update No. 2016 -15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016 -15” ), effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments in ASU 2016 -15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The Company has adopted ASU 2016 -15 in the first quarter of fiscal 2019. As a result, it has reclassified, within the Consolidated Condensed Statement of Cash Flows, $9.3 $8.8 twelve months ended April 30, 2019 and April 30, 2018, respectively, of EAM non-voting revenues interest and profits interest, from operating activities to investing activities. |
| The FASB issued ASU No. 2014 -09, “Revenue from Contracts with Customers (Topic 606 )”, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. In addition, ASU No. 2014 -09 requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU No. 2014 -09 supersedes most existing U.S. GAAP revenue recognition principles, and it permits the use of either the retrospective or cumulative effect transition method. ASU No. 2014 -09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. The Company has adopted ASU No. 2014 -09 in the first quarter of fiscal 2019, which does not have a material impact on the Company's consolidated condensed financial statements and related disclosures. |
| In November 2016, the FASB issued ASU No. 2016 -18, \"Statement of Cash Flows (Topic 230 ): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)\", effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. This ASU requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The Company has adopted ASU No. 2016 -18 in the first quarter of fiscal 2019, which does not have a material impact on the Company's consolidated condensed financial statements and related disclosures. |
| 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 is complying with applicable state laws and is continuing to evaluate aspects of the impact of the 2018 ruling (South Dakota vs. Wayfair ) on its operations. |
| Note 1 -Organization and Summary of Significant Accounting Policies: |
| Value Line, Inc. (\"Value Line\" or \"VLI\", and collectively with its subsidiaries, the “Company”) is incorporated in the State of New York. The name \"Value Line\" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. 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 Ranking System results and other proprietary information, to third parties under written agreements for use in third -party managed and marketed investment products and for other purposes. The Company maintains a significant investment in Eulav Asset Management LLC (\"EAM\") from which it received a non-voting revenues interest and a non-voting profits interest. EAM was established to provide investment management services to the Value Line Mutual Funds (\"Value Line Funds\" or the \"Funds\"). |
| Prior to December 23, 2010 ( the \"Restructuring Date\"), VLI, through its direct subsidiary EULAV Asset Management LLC (\"EAM LLC\"), provided investment management services to the Value Line Funds, institutions and individual accounts, and through EAM LLC's subsidiary EULAV Securities, Inc. (\"ESI\"), provided distribution, marketing, and administrative services to the Value Line Funds. On December 23, 2010, the Company deconsolidated the asset management and mutual fund distribution subsidiaries and exchanged its controlling interest in these subsidiaries for a non-voting revenues interest and a non-voting profits interest in EULAV Asset Management Trust, a Delaware business statutory trust (\"EAM\" or \"EAM Trust\"), the successor to EAM LLC and the sole member of EULAV Securities LLC (\"ES\"), the successor to ESI, (the \"Restructuring Transaction\"). Pursuant to the EAM Declaration of Trust dated as of December 23, 2010 ( the \"EAM Trust Agreement\"), VLI granted EAM the right to use the Value Line name for all existing Value Line Funds and agreed to supply, without charge or expense, the Value Line Proprietary Ranking System information to EAM for use in managing the Value Line Funds. |
| Use of Estimates: |
| The preparation of financial statements in conformity with U.S. generally accepted accounting principles (\"GAAP\") requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. |
| Principles of Consolidation: |
| The Company follows the guidance in the Financial Accounting Standards Board's (\"FASB\") Topic 810 “Consolidation” to determine if it should consolidate its investment in a variable interest entity (\"VIE\"). A VIE is a legal entity in which either (i) equity investors do not have sufficient equity investment at risk to enable the entity to finance its activities independently or (ii) the equity holders at risk lack the obligation to absorb losses, the right to receive residual returns or the right to make decisions about the entity’s activities that most significantly affect the entity's economic performance. A holder of a variable interest in a VIE is required to consolidate the entity if it is determined that it has a controlling financial interest in the VIE and is therefore the primary beneficiary. The determination of a controlling financial interest in a VIE is based on a qualitative assessment to identify the variable interest holder, if any, that has (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (ii) either the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. The accounting guidance requires the Company to perform an ongoing assessment of whether the Company is the primary beneficiary of a VIE and the Company has determined it is not the primary beneficiary of a VIE (see Note 5 ). |
| In accordance with FASB's Topic 810, the assets, liabilities, and results of operations of subsidiaries in which the Company has a controlling interest have been consolidated. All significant intercompany accounts and transactions have been eliminated in consolidation. On December 23, 2010, the Company completed the Restructuring Transaction and deconsolidated the related affiliates in accordance with FASB's Topic 810. As part of the Restructuring Transaction, the Company received a significant non-voting revenues interest (excluding distribution revenues) and a significant non-voting profits interest in the new entity, EULAV Asset Management, a Delaware statutory trust (“EAM” or “EAM Trust”). The Company relied on the guidance in FASB's ASC Topics 323 and 810 in its determination not to consolidate its investment in EAM and to account for such investment under the equity method of accounting. The Company reports the amount it receives for its non-voting revenues and non-voting profits interests as a separate line item below operating income in the Consolidated Statements of Income. |
| Revenue Recognition: |
| Depending upon the product, subscription fulfillment for Value Line periodicals and related publications is available in print or digitally, via internet access. The length of a subscription varies by product and offer received by the subscriber. Generally, subscriptions are offered as annual subscriptions. Subscription revenues, net of discounts, are recognized ratably on a straight line basis when the product is served to the client over the life of the subscription. Accordingly, the amount of subscription fees to be earned by fulfilling subscriptions after the date of the balance sheets are shown as unearned revenue within current and long-term liabilities. |
| Copyright fees are derived from providing certain Value Line trademarks and the Value Line Proprietary Ranking System results to third parties under written agreements for use in selecting securities for third party marketed products, including unit investment trusts, annuities and exchange traded funds (\"ETFs\"). The Company earns asset-based copyright fees as specified in the individual agreements. Revenue is recognized monthly over the term of the agreement and, because it is asset-based, will fluctuate as the market value of the underlying portfolio increases or decreases in value. |
| EAM earns investment management fees from the Value Line Funds. The management fees and average daily net assets for the Value Line Funds are calculated by State Street Bank, which serves as the fund accountant, fund administrator, and custodian of the Value Line Funds. |
| The Value Line Funds are open-end management companies registered under the Investment Company Act of 1940 (the \"1940 Act\"). Shareholder transactions for the Value Line Funds are processed each business day by the third party transfer agent of the Funds. Shares can be redeemed without advance notice upon request of the shareowners each day that the New York Stock Exchange is open. |
| Investment in Unconsolidated Entities: |
| The Company accounts for its investment in its unconsolidated entity, EAM, using the equity method of accounting in accordance with FASB’s ASC 323. The equity method is an appropriate means of recognizing increases or decreases measured by GAAP in the economic resources underlying the investments. Under the equity method, an investor recognizes its share of the earnings or losses of an investee in the periods for which they are reported by the investee in its financial statements rather than in the period in which an investee declares a dividend or distribution. An investor adjusts the carrying amount of an investment for its share of the earnings or losses recognized by the investee. |
| The Company’s “interests” in EAM, the investment adviser to and the sole member of the distributor of the Value Line Funds, consist of a \"non-voting revenues interest\" and a \"non-voting profits interest\" in EAM as defined in the EAM Trust Agreement. The non-voting revenues interest entitles the Company to receive a range of 41% to 55%, based on the amount of EAM’s adjusted gross revenues, excluding EULAV Securities' distribution revenues (“Revenues Interest”). The non-voting profits interest entitles the Company to receive 50% of EAM's profits, subject to certain limited adjustments as defined in the EAM Trust Agreement (“Profits Interest”). The Revenues Interest and at least 90% of the Profits Interest are to be distributed each quarter to all interest holders of EAM, including Value Line. Subsequent to the Restructuring Date, the Company's Revenues Interest in EAM excludes participation in the service and distribution fees of EAM's subsidiary EULAV Securities. The Company reflects its non-voting revenues and non-voting profits interests in EAM as non-operating income under the equity method of accounting subsequent to the Restructuring Transaction. Although the Company does not have control over the operating and financial policies of EAM, pursuant to the EAM Trust Agreement, the Company has a contractual right to receive its share of EAM's revenues and profits. |
| Recent Accounting Pronouncements: |
| In February 2016, the FASB issued ASU 2016 -02, Leases (Topic 842 ) (“ASU 2016 -02\" ), effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The core principle of Topic 842 requires that a lessee should recognize the assets and liabilities on the balance sheet and disclose key information about leasing arrangements. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. The adoption of ASU 2016 -02 does not have a material impact on our consolidated condensed financial statements and related disclosures. |
| In August 2016, the FASB issued Accounting Standards Update No. 2016 -15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016 -15” ), effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The amendments in ASU 2016 -15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The Company has adopted ASU 2016 -15 in the first quarter of fiscal 2019. As a result, it has reclassified, within the Consolidated Condensed Statement of Cash Flows, $9.3 $8.8 twelve months ended April 30, 2019 and April 30, 2018, respectively, of EAM non-voting revenues interest and profits interest, from operating activities to investing activities. |
| The FASB issued ASU No. 2014 -09, “Revenue from Contracts with Customers (Topic 606 )”, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. In addition, ASU No. 2014 -09 requires disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU No. 2014 -09 supersedes most existing U.S. GAAP revenue recognition principles, and it permits the use of either the retrospective or cumulative effect transition method. ASU No. 2014 -09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. The Company has adopted ASU No. 2014 -09 in the first quarter of fiscal 2019, which does not have a material impact on the Company's consolidated condensed financial statements and related disclosures. |
| In November 2016, the FASB issued ASU No. 2016 -18, \"Statement of Cash Flows (Topic 230 ): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)\", effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. This ASU requires that the reconciliation of the beginning-of-period and end-of-period amounts shown in the statement of cash flows include cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The Company has adopted ASU No. 2016 -18 in the first quarter of fiscal 2019, which does not have a material impact on the Company's consolidated condensed financial statements and related disclosures. |
| 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 is complying with applicable state laws and is continuing to evaluate aspects of the impact of the 2018 ruling (South Dakota vs. Wayfair ) on its operations. |
| Valuation of Securities: |
| The Company's securities classified as cash equivalents and available-for-sale consist of shares of money market funds that invest primarily in short-term U.S. Government securities and investments in equities including ETFs and are valued in accordance with the requirements of the Fair Value Measurements Topic of the FASB's ASC 820. The securities classified as available-for-sale reflected in the Consolidated Balance Sheets are valued at market and unrealized gains and losses, net of applicable taxes, are reported as a separate component of shareholders' equity. Realized gains and losses on sales of the securities classified as available-for-sale are recorded in earnings as of the trade date and are determined on the identified cost method. |
| The Company classifies its securities available-for-sale as current assets to properly reflect its liquidity and to recognize the fact that it has liquid assets available-for-sale should the need arise. |
| Market valuations of securities listed on a securities exchange and ETF shares are based on the closing sales prices on the last business day of each month. The market value of the Company's fixed maturity U.S. Government debt securities is determined utilizing publicly quoted market prices. Cash equivalents consist of investments in money market funds that invest primarily in U.S. Government securities valued in accordance with rule 2a -7 under the 1940 Act. |
| The Fair Value Measurements Topic of FASB's ASC defines fair value as the price that the Company would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market for the investment. The Fair Value Measurements Topic established a three -tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the information that market participants would use in pricing the asset or liability, including assumptions about risk. Examples of risks include those inherent in a particular valuation technique used to measure fair value such as the risk inherent in the inputs to the valuation technique. Inputs are classified as observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the factors market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. |
| The three -tier hierarchy of inputs is summarized in the three broad levels listed below. |
| Level 1 – quoted prices in active markets for identical investments |
| Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) |
| The following summarizes the levels of fair value measurements of the Company’s investments: |
| As of April 30, 2019 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents | $ | 5,617 | $ | - | $ | - | $ | 5,617 | ||||||||
| Securities available-for-sale | 21,828 | - | - | 21,828 | ||||||||||||
| $ | 27,445 | $ | - | $ | - | $ | 27,445 |
| As of April 30, 2018 | ||||||||||||||||
| ($ in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Cash equivalents | $ | 4,982 | $ | - | $ | - | $ | 4,982 | ||||||||
| Securities available-for-sale | 17,844 | - | - | 17,844 | ||||||||||||
| $ | 22,826 | $ | - | $ | - | $ | 22,826 |
| The Company had no other financial instruments such as futures, forwards and swap contracts. For the periods ended April 30, 2019 and April 30, 2018, there were no Level 2 nor Level 3 investments. The Company does not have any liabilities subject to fair value measurement. |
| Advertising expenses: |
| The Company expenses advertising costs as incurred. |
| Income Taxes: |
| The Company computes its income tax provision in accordance with the Income Tax Topic of the FASB's ASC. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the Consolidated Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book values and the tax bases of particular assets and liabilities, using tax rates currently in effect for the years in which the differences are expected to reverse. The Company adopted the provisions of ASU 2015 -17, Income taxes (Topic 740 ) during the first quarter of fiscal 2018 and now classifies all deferred taxes as long-term liabilities on the Consolidated Balance Sheets. |
| The Income Tax Topic of the FASB's ASC establishes for all entities, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. As of April 30, 2019, management has reviewed the tax positions for the years still subject to tax audit under the statute of limitations, evaluated the implications, and determined that there is no material impact to the Company's financial statements. |
| Earnings per share: |
| Earnings per share are based on the weighted average number of shares of common stock and common stock equivalents outstanding during each period. Any shares that are reacquired during the period are weighted for the portion of the period that they are outstanding. The Company does not have any potentially dilutive common shares from outstanding stock options, warrants, restricted stock, or restricted stock units. |
| Cash and Cash Equivalents: |
| For purposes of the Consolidated Statements of Cash Flows, the Company considers all cash held at banks and short-term liquid investments with an original maturity of less than three months to be cash and cash equivalents. As of April 30, 2019 and April 30, 2018, cash equivalents included $5,617,000 and $4,982,000, respectively, for amounts invested in money market mutual funds that invest in short-term U.S. government securities. |
| Note 6 - Property and Equipment: |
| Property and equipment are carried at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets, or in the case of leasehold improvements, over the remaining terms of the leases. For income tax purposes, depreciation of furniture and equipment is computed using accelerated methods and buildings and leasehold improvements are depreciated over prescribed extended tax lives. Property and equipment, net, on the Consolidated Balance Sheets was comprised of the following: |
| As of April 30, | ||||||||
| ($ in thousands) | 2019 | 2018 | ||||||
| Building and leasehold improvements | $ | 1,013 | $ | 1,013 | ||||
| Furniture and equipment | 4,042 | 4,031 | ||||||
5,055 | 5,044 | |||||||
| Accumulated depreciation and amortization | (3,909 | ) | (3,673 | ) | ||||
| Total property and equipment, net | $ | 1,146 | $ | 1,371 |
| As of April 30, | ||||||||
| ($ in thousands) | 2019 | 2018 | ||||||
| Building and leasehold improvements | $ | 1,013 | $ | 1,013 | ||||
| Furniture and equipment | 4,042 | 4,031 | ||||||
5,055 | 5,044 | |||||||
| Accumulated depreciation and amortization | (3,909 | ) | (3,673 | ) | ||||
| Total property and equipment, net | $ | 1,146 | $ | 1,371 |
| Note 3 - Related Party Transactions: |
| Investment Management (overview): |
| On December 23, 2010, the Company deconsolidated its asset management and mutual fund distribution businesses and its interest in these businesses was restructured as a non-voting revenues and non-voting profits interests in EAM. Accordingly, the Company no longer reports this operation as a separate business segment, although it still maintains a significant interest in the cash flows generated by this business and will receive non-voting revenues and non-voting profits interests going forward, as discussed below. |
| Total assets in the Value Line Funds managed and/or distributed by EAM at April 30, 2019, were $3.09 billion, which is $610 million, or 24.6%, above total assets of $2.48 billion in the Value Line Funds managed and/or distributed by EAM at April 30, 2018. |
| The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive quarterly distributions in 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. Value Line’s percent share of EAM’s revenues is calculated each fiscal quarter. The applicable recent non-voting revenues interest percentage for the fourth quarter of fiscal 2019 was 50.31%. |
| The non-voting revenues and 90% of the Company's non-voting profits interests due from EAM to the Company are payable each fiscal quarter under the provisions of the EAM Trust Agreement. The distributable amounts earned through the balance sheet date, which is included in the Investment in EAM Trust on the Consolidated Balance Sheets, and not yet paid, were $2,420,000 and $2,113,000 at April 30, 2019 and April 30, 2018, respectively. |
| EAM Trust - VLI's non-voting revenues and non-voting profits interests: |
| The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business. EAM currently has no separately managed account clients. The Company recorded income from its non-voting revenues interest and its non-voting profits interests in EAM as follows: |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Non-voting revenues interest in EAM | $ | 8,260 | $ | 8,040 | $ | 7,195 | ||||||
| Non-voting profits interest in EAM | 1,049 | 746 | 519 | |||||||||
| $ | 9,309 | $ | 8,786 | $ | 7,714 |
| Transactions with Parent: |
| During the fiscal years ended April 30, 2019 and April 30, 2018, the Company was reimbursed $384,000 and $362,000, respectively for payments it made on behalf of and for services it provided to AB&Co. There were no receivables due from the Parent at April 30, 2019 or April 30, 2018. |
| The Company is a party to a tax-sharing arrangement with the Parent which allocates the tax liabilities of the two Companies between them. For the years ended April 30, 2019, 2018, and 2017, the Company made payments to the Parent for federal income tax amounting to $2,700,000, $3,975,000 and $6,824,000, respectively. |
| From time to time, the Parent has purchased additional shares of common stock of the Company in the market when and as the Parent has determined it to be appropriate. The Parent may make additional purchases of common stock of the Company from time to time in the future. As of April 30, 2019, the Parent owned 89.34% of the outstanding shares of common stock of the Company. |
| Note 15 - Restricted Cash and Deposits: |
| Restricted Money Market Investment in the noncurrent assets on the Consolidated Balance Sheets at April 30, 2019 and April 30, 2018, includes $469,000 ,$469,000 |
Revenue Recognition: |
| Depending upon the product, subscription fulfillment for Value Line periodicals and related publications is available in print or digitally, via internet access. The length of a subscription varies by product and offer received by the subscriber. Generally, subscriptions are offered as annual subscriptions. Subscription revenues, net of discounts, are recognized ratably on a straight line basis when the product is served to the client over the life of the subscription. Accordingly, the amount of subscription fees to be earned by fulfilling subscriptions after the date of the balance sheets are shown as unearned revenue within current and long-term liabilities. |
| Copyright fees are derived from providing certain Value Line trademarks and the Value Line Proprietary Ranking System results to third parties under written agreements for use in selecting securities for third party marketed products, including unit investment trusts, annuities and exchange traded funds (\"ETFs\"). The Company earns asset-based copyright fees as specified in the individual agreements. Revenue is recognized monthly over the term of the agreement and, because it is asset-based, will fluctuate as the market value of the underlying portfolio increases or decreases in value. |
| EAM earns investment management fees from the Value Line Funds. The management fees and average daily net assets for the Value Line Funds are calculated by State Street Bank, which serves as the fund accountant, fund administrator, and custodian of the Value Line Funds. |
| The Value Line Funds are open-end management companies registered under the Investment Company Act of 1940 (the \"1940 Act\"). Shareholder transactions for the Value Line Funds are processed each business day by the third party transfer agent of the Funds. Shares can be redeemed without advance notice upon request of the shareowners each day that the New York Stock Exchange is open. |
| ($ in thousands) | Cost | Gross Unrealized Gains | Fair Value | |||||||||
| ETFs - equities | $ | 8,541 | $ | 2,081 | $ | 10,622 |
| ($ in thousands) | Cost | Gross Unrealized Holding Gains | Fair Value | |||||||||
| ETFs - equities | $ | 8,385 | $ | 994 | $ | 9,379 |
| Amortized | Gross Unrealized | |||||||||||
| ($ in thousands) | Historical Cost | Holding Gains | Fair Value | |||||||||
| Maturity | ||||||||||||
| Due within 1 year | $ | 6,913 | $ | 33 | $ | 6,946 | ||||||
| Due 1 year through 5 years | 4,250 | 10 | 4,260 | |||||||||
| Total investment in government debt securities | $ | 11,163 | $ | 43 | $ | 11,206 |
| Amortized | Gross Unrealized | Gross Unrealized | ||||||||||||||
| ($ in thousands) | Historical Cost | Holding Gains | Holding Losses | Fair Value | ||||||||||||
| Maturity | ||||||||||||||||
| Due within 1 year | $ | 7,868 | $ | 10 | $ | (12 | ) | $ | 7,866 | |||||||
| Due 1 year through 5 years | 600 | - | (1 | ) | 599 | |||||||||||
| Total investment in government debt securities | $ | 8,468 | $ | 10 | $ | (13 | ) | $ | 8,465 |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| State and local income tax payments | $ | 387 | $ | 307 | $ | 560 | ||||||
| Federal income tax payments to the Parent | $ | 2,700 | $ | 3,975 | $ | 6,824 |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Current tax expense: | ||||||||||||
| Federal | $ | 2,964 | $ | 3,853 | $ | 6,360 | ||||||
| State and local | 600 | 365 | 469 | |||||||||
| Current tax expense | 3,564 | 4,218 | 6,829 | |||||||||
| Deferred tax expense (benefit): | ||||||||||||
| Federal | (650 | ) | (7,021 | ) | (1,299 | ) | ||||||
| State and local | 1,162 | (37 | ) | (412 | ) | |||||||
| Deferred tax expense (benefit): | 512 | (7,058 | ) | (1,711 | ) | |||||||
| Income tax provision | $ | 4,076 | $ | (2,840 | ) | $ | 5,118 |
| Fiscal Year Ended April 30, 2019 | ||||||||||||
| ($ in thousands) | Amount Before Tax | Tax (Expense) / Benefit | Amount Net of Tax | |||||||||
| Change in unrealized gains on securities | $ | 1,133 | $ | (238 | ) | $ | 895 | |||||
| $ | 1,133 | $ | (238 | ) | $ | 895 |
| Fiscal Year Ended April 30, 2018 | ||||||||||||
| ($ in thousands) | Amount Before Tax | Tax (Expense) / Benefit | Amount Net of Tax | |||||||||
| Change in unrealized gains on securities | $ | 437 | $ | 8 | $ | 445 | ||||||
| Less: Gains realized in net income | (152 | ) | 32 | (120 | ) | |||||||
| $ | 285 | $ | 40 | $ | 325 |
| Fiscal Year Ended April 30, 2017 | ||||||||||||
| ($ in thousands) | Amount Before Tax | Tax (Expense) / Benefit | Amount Net of Tax | |||||||||
| Change in unrealized gains on securities | $ | 554 | $ | (196 | ) | $ | 358 | |||||
| Less: Gains realized in net income | (39 | ) | 14 | (25 | ) | |||||||
| $ | 515 | $ | (182 | ) | $ | 333 |
| Fiscal Years Ended April 30, | ||||||||
| ($ in thousands) | 2019 | 2018 | ||||||
| Federal tax liability (benefit): | ||||||||
| Deferred gain on deconsolidation of EAM | $ | 10,669 | $ | 10,658 | ||||
| Deferred non-cash post-employment compensation | (372 | ) | (372 | ) | ||||
| Depreciation and amortization | 130 | 119 | ||||||
| Unrealized gain on securities held for sale | 446 | 208 | ||||||
| Deferred charges | (354 | ) | (331 | ) | ||||
| Other | (279 | ) | 210 | |||||
| Total federal tax liability | 10,240 | 10,492 | ||||||
| State and local tax liabilities (benefits): | ||||||||
| Deferred gain on deconsolidation of EAM | 2,530 | 1,299 | ||||||
| Deferred non-cash post-employment compensation | (74 | ) | (45 | ) | ||||
| Depreciation and amortization | 40 | 15 | ||||||
| Other | (112 | ) | (47 | ) | ||||
| Total state and local tax liabilities | 2,384 | 1,222 | ||||||
| Deferred tax liability, long-term | $ | 12,624 | $ | 11,714 |
| Fiscal Years Ended April 30, | ||||||||||||
| 2019 | 2018 | 2017 | ||||||||||
| U.S. statutory federal tax rate | 21.00 | % | 30.33 | % | 35.00 | % | ||||||
| Increase (decrease) in tax rate from: | ||||||||||||
| Effect on deferred tax liabilities from federal tax rate reduction to 21% | - | -54.51 | % | - | ||||||||
| State and local income taxes, net of federal income tax benefit | 6.02 | % | 0.70 | % | -0.88 | % | ||||||
| Effect of dividends received deductions | -0.24 | % | -0.49 | % | -0.33 | % | ||||||
| Domestic production tax credit | - | - | -0.17 | % | ||||||||
| Other, net | 0.03 | % | 0.10 | % | -0.57 | % | ||||||
| Effective income tax rate | 26.81 | % | -23.87 | % | 33.05 | % |
| Fiscal Years Ended April 30, | ($ in thousands) | |||
| 2020 | 1,399 | |||
| 2021 | 1,432 | |||
| 2022 | 1,506 | |||
| 2023 | 1,597 | |||
| 2024 and thereafter | 6,899 | |||
| $ | 12,833 |
| ($ in thousands except for cost per share) | Shares | Cost Assigned | Average Cost per Share | Aggregate Purchase Price Remaining Under the Program | ||||||||||||
| Balance as of April 30, 2016 (1) | 243,411 | $ | 3,040 | $ | 12.49 | $ | 1,350 | |||||||||
| Purchases effected in open market (2) | 44,924 | $ | 741 | $ | 16.51 | $ | 609 | |||||||||
| Balance as of April 30, 2017 | 288,335 | $ | 3,781 | $ | 13.11 | $ | 609 | |||||||||
| Purchases effected in open market (2) | 20,045 | $ | 354 | $ | 17.67 | $ | 255 | |||||||||
| Balance as of April 30, 2018 | 308,380 | $ | 4,135 | $ | 13.41 | $ | - | |||||||||
| Purchases effected in open market (2) (3) | 28,059 | $ | 608 | $ | 21.68 | $ | 1,438 | |||||||||
| Balance as of April 30, 2019 | 336,439 | $ | 4,743 | $ | 14.10 | $ | 1,438 |
| Value Line | ||||||||||||||||
| ($ in thousands) | VIE Assets | Investment in EAM Trust (1) | Liabilities | Maximum Exposure to Loss | ||||||||||||
| As of April 30, 2019 | $ | 60,683 | $ | 58,625 | $ | - | $ | 58,625 | ||||||||
| As of April 30, 2018 | $ | 60,203 | $ | 58,233 | $ | - | $ | 58,233 |
| Note 19 - Business Segments: |
| Prior to December 23, 2010, ( the Restructuring Transaction date), the Company operated two reportable business segments: (1 ) Publishing and (2 ) Investment Management. The Publishing segment, the Company's only reportable segment subsequent to the Restructuring Transaction date, produces investment periodicals and related publications (retail and institutional) in both print and digital form, and includes Value Line copyrights and Value Line Proprietary Ranking System results and other proprietary information. |
| As more fully described in Note 1 - Organization and Summary of Significant Accounting Policies, the Company deconsolidated its investment management business on December 23, 2010 and therefore no longer reports the investment management operation as a separate business unit. Although VLI continues to receive significant cash flows from these operations through its non-controlling investment in EAM, it no longer considers this to be a reportable business segment due to its lack of control over the operating and financial policies of EAM. |
| Fiscal Years Ended April 30, | ||||||||
| ($ in thousands) | 2019 | 2018 | ||||||
| EAM's total assets | $ | 60,683 | $ | 60,203 | ||||
| EAM's total liabilities (1) | (3,547 | ) | (3,128 | ) | ||||
| EAM's total equity | $ | 57,136 | $ | 57,075 |
| Note 13 - Treasury Stock and Repurchase Program: |
| On October 19, 2018, 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 $2,000,000. The repurchases may be made from time to time on the open market at prevailing market prices, in negotiated transactions off the market, in block purchases or otherwise. The repurchase program may be suspended or discontinued at any time at the Company’s discretion and has no set expiration date. |
| Treasury stock, at cost, consists of the following: |
| ($ in thousands except for cost per share) | Shares | Cost Assigned | Average Cost per Share | Aggregate Purchase Price Remaining Under the Program | ||||||||||||
| Balance as of April 30, 2016 (1) | 243,411 | $ | 3,040 | $ | 12.49 | $ | 1,350 | |||||||||
| Purchases effected in open market (2) | 44,924 | $ | 741 | $ | 16.51 | $ | 609 | |||||||||
| Balance as of April 30, 2017 | 288,335 | $ | 3,781 | $ | 13.11 | $ | 609 | |||||||||
| Purchases effected in open market (2) | 20,045 | $ | 354 | $ | 17.67 | $ | 255 | |||||||||
| Balance as of April 30, 2018 | 308,380 | $ | 4,135 | $ | 13.41 | $ | - | |||||||||
| Purchases effected in open market (2) (3) | 28,059 | $ | 608 | $ | 21.68 | $ | 1,438 | |||||||||
| Balance as of April 30, 2019 | 336,439 | $ | 4,743 | $ | 14.10 | $ | 1,438 |
| ( 1 ) Included 85,219 shares with a total average cost of $1,036,000 that were acquired during the former repurchase program, which was authorized in January 2011 and expired in January 2012; 18,400 shares were acquired prior to the repurchase program authorized in January 2011. |
| ( 2 ) Were acquired during the $3 million repurchase program authorized in September 2012. |
| ( 3 ) Were acquired during the $2 million repurchase program authorized in October 2018. |
Use of Estimates: |
| The preparation of financial statements in conformity with U.S. generally accepted accounting principles (\"GAAP\") requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. |
| Note 18 - Concentration of Credit Risk: |
| Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At April 30, 2019 and 2018, the Company had $1,597,000 and $2,151,000, respectively, in excess of the FDIC insured limit. |
| Note 10 - Disclosure of Credit Risk of Financial Instruments with Off-Balance Sheet Risk: |
| Other than EAM and the Value Line Funds as explained in Note 3 - Related Party Transactions, a single customer accounted for a significant portion of the Company's sales in fiscal 2019, 2018 or 2017, and its accounts receivable as of April 30, 2019 or 2018. During the twelve months ended April 30, 2019, 2018 and 2017, 20.5%, 17.7% and 10.3%, respectively, of total publishing revenues were derived from a single customer as explained in Note 17 - Concentration. |
| Note 14 - Copyright Fees: |
| During the twelve months ended April 30, 2019, copyright fees of $7,437,000 were 16.8% above fiscal 2018. During the twelve months ended April 30, 2018, copyright fees of $6,365,000 were 44.5% above fiscal 2017. As of April 30, 2019, total third party sponsored assets were $6.1 billion, as compared to $4.2 billion in assets at April 30, 2018. |
| Note 16 - Gain on Sale of Operating Facility: |
| On July 29, 2016, Value Line closed the sale of its 85,000 sq. ft. distribution, fulfillment and warehouse operating facility located at 125 East Union Avenue, East Rutherford, NJ, received net proceeds of $11,555,000 and reported an increment to net profits after tax during the first quarter of fiscal 2017 of approximately $5.28 million. The distribution, fulfillment and warehouse operations were relocated to an alternative 24,110 sq. ft. leased facility (See Note 9 ). |
| Note 12 - Accounting for the Costs of Computer Software Developed for Internal Use: |
| The Company has adopted the provisions of the Statement of Position 98 -1 (SOP 98 -1 ), \"Accounting for the Costs of Computer Software Developed for Internal Use\". SOP 98 -1 requires companies to capitalize as long-lived assets many of the costs associated with developing or obtaining software for internal use and amortize those costs over the software's estimated useful life in a systematic and rational manner. |
| During the twelve months ended April 30, 2019 the Company capitalized $111,000 related to the third party programmers' costs. The Company did not incur and did not capitalize expenditures related to the development of software for internal use during the twelve months ended April 30, 2019 or April 30, 2018. During the twelve months ended April 30, 2017 the Company capitalized $407,000 related to the development of software for internal use. Total capitalized software includes $215,000 of internal costs to develop software and $192,000 of third party programmers' costs for the twelve months ended April 30, 2017. Such costs are capitalized and amortized over the expected useful life of the asset which is 3 to 5 years. Total amortization expenses for the years ended April 30, 2019, 2018 and 2017 were $131,000, $848,000 and $4,397,000, respectively. |
| Fiscal Years Ended April 30, | ||||||||||||
| ($ in thousands) | 2019 | 2018 | 2017 | |||||||||
| Non-voting revenues interest in EAM | $ | 8,260 | $ | 8,040 | $ | 7,195 | ||||||
| Non-voting profits interest in EAM | 1,049 | 746 | 519 | |||||||||
| $ | 9,309 | $ | 8,786 | $ | 7,714 |
| Note 5 - Variable Interest Entity: |
| The Company retained a non-voting revenues interest and a 50% non-voting profits interest in EAM, which was formed, as a result of the Restructuring Transaction on December 23, 2010, to carry on the asset management and mutual fund distribution businesses formerly conducted by the Company. EAM is considered to be a VIE in relation to the Company. The Company makes its determination for consolidation of EAM as a VIE based on a qualitative assessment of the purpose and design of EAM, the terms and characteristics of the variable interests in EAM, and the risks EAM is designed to originate and pass through to holders of variable interests. Other than EAM, the Company does not have an interest in any other VIEs. |
| The Company has determined that it does not have a controlling financial interest in EAM because it does not have the power to direct the activities of EAM that most significantly impact its economic performance. Value Line does not hold any voting stock of EAM and it does not have any involvement in the day-to-day activities or operations of EAM. Although the EAM Trust Agreement provides Value Line with certain consent rights and contains certain restrictive covenants related to the activities of EAM, these are considered to be protective rights and therefore Value Line does not maintain control over EAM. |
| In addition, although EAM is expected to be profitable, there is a risk that it could operate at a loss. While all of the profit interest shareholders in EAM are subject to variability based on EAM’s operations risk, Value Line’s non-voting revenues interest in EAM is a preferred interest in the revenues of EAM, rather than a profits interest in EAM, and Value Line accordingly believes it is subject to proportionately less risk than other holders of the profits interests. |
| The Company has not provided any explicit or implicit financial or other support to EAM other than what was contractually agreed to in the EAM Trust Agreement. Value Line has no obligation to fund EAM in the future and, as a result, has no exposure to loss beyond its initial investment and any undistributed revenues and profits interests retained in EAM. The following table presents the total assets of EAM, the maximum exposure to loss due to involvement with EAM, as well as the value of the assets and liabilities the Company has recorded on its Consolidated Balance Sheets for its interest in EAM. |
| Value Line | ||||||||||||||||
| ($ in thousands) | VIE Assets | Investment in EAM Trust (1) | Liabilities | Maximum Exposure to Loss | ||||||||||||
| As of April 30, 2019 | $ | 60,683 | $ | 58,625 | $ | - | $ | 58,625 | ||||||||
| As of April 30, 2018 | $ | 60,203 | $ | 58,233 | $ | - | $ | 58,233 |
| ( 1 ) Reported within Long-Term Assets on Consolidated Balance Sheets. |