VALUE LINE INC (VALU) FY 2024 MD&A

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help a reader understand Value Line, its operations and business factors. The MD&A should be read in conjunction with Item 1, “Business”, and Item 1A, “Risk Factors” of Form 10-K, and in conjunction with the consolidated financial statements and the accompanying notes contained in Item 8 of this report.

The MD&A includes the following subsections:

Executive Summary of the Business

The Company's core business is producing investment periodicals and their underlying research and making available certain Value Line copyrights, Value Line trademarks and Value Line Proprietary Ranks and other proprietary information, to third parties under written agreements for use in third-party managed and marketed investment products and for other purposes. Value Line markets under well-known brands including Value Line®, the Value Line logo®, The Value Line Investment Survey®, Smart Research, Smarter Investing™ and The Most Trusted Name in Investment Research®. The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company. EULAV Asset Management Trust (“EAM”) was established to provide the investment management services to the Value Line Funds, institutional and individual accounts and provide distribution, marketing, and administrative services to the Value Line® Mutual Funds ("Value Line Funds"). The Company maintains a significant investment in EAM from which it receives payments in respect of its non-voting revenues and non-voting profits interests.

The Company’s target audiences within the investment research field are individual investors, colleges, libraries, and investment management professionals. Individuals come to Value Line for complete research in one package. Institutional licensees consist of corporations, financial professionals, colleges, and municipal libraries. Libraries and universities offer the Company’s detailed research to their patrons and students. Investment management professionals use the research and historical information in their day-to-day businesses. The Company has a dedicated department that solicits institutional subscriptions.

Payments received for new and renewal subscriptions and the value of receivables for amounts billed to retail and institutional customers are recorded as unearned revenue until the order is fulfilled. As the orders are fulfilled, the Company recognizes revenue in equal installments over the life of the particular subscription. Accordingly, the subscription fees to be earned by fulfilling subscriptions after the date of a particular balance sheet are shown on that balance sheet as unearned revenue within current and long-term liabilities.

The Company allocates resources and assesses financial performance on a consolidated basis. It does so because significant costs are shared in common by all products, and as a result, it does not have discrete financial information available for separate business components to assess performance and make resource allocation decisions for more than one segment. Therefore, the investment periodicals and related publications (such as digital equivalents), along with supplying the embedded Proprietary information and intellectual property rights, are treated as one segment, Publishing.

21

Asset Management and Mutual Fund Distribution Businesses

Pursuant to the EAM Declaration of Trust, the Company maintains an interest in certain revenues of EAM and a portion of the residual profits of EAM but has no voting authority with respect to the election or removal of the trustees of EAM or control of its business.

The business of EAM is managed by its trustees each owning 20% of the voting interest in EAM and by its officers subject to the direction of the trustees. The Company’s non-voting revenues and non-voting profits interests in EAM entitle it to receive a range of 41% to 55% of EAM’s revenues (excluding distribution revenues) from EAM’s mutual fund and separate account business and 50% of the residual profits of EAM (subject to temporary increase in certain limited circumstances). The Voting Profits Interest Holders received the other 50% of residual profits of EAM. Distribution is not less than 90% of EAM’s profits payable each fiscal quarter under the provisions of the EAM Trust Agreement.

Business Environment

The U.S. economy has shown some signs of slowing, as the Federal Reserve likely nears the end of its most restrictive monetary policy course in four decades. The nation’s gross domestic product (GDP) expanded by an estimated 1.3% (annualized) in the first quarter. This marked a notable slowdown from the respective advances of 4.9% and 3.4% recorded during the third and fourth quarters of calendar 2023. Gains in consumer spending, residential and nonresidential investment, and government spending were partly offset by a decrease in private inventory investment and an increase in imports.

As of mid-2024, the Federal Reserve was not yet ready to reverse monetary policy course. In June, it kept the federal funds rate at a “sufficiently restrictive” 5.25% to 5.50% for the seventh-consecutive Federal Open Market Committee (FOMC) meeting. At that time, the central bank’s projection for interest-rate cuts in 2024 was lowered from three to one. In addition, four Federal Reserve voting members predicted no interest-rate cuts this year, citing the need to see more progress on the inflation front.

Meantime, the case for a “soft” economic landing remained in play, as the second half of calendar 2024 commenced. True, there were pockets of weakness in the economy, including contracting activity in the manufacturing sector and the slowing pace of both residential and nonresidential construction. However, the consumer is still spending, though not at the rate seen coming out of the COVID-19 pandemic, buoyed by a still-resilient labor market. Through the first five months of this year, the nation added an estimated 1.2 million jobs, and the unemployment rate was at 4.0%, a level suggestive of full employment. This, combined with an easing in the pace of consumer and producer (wholesale) price growth in May, suggests that the Fed is making progress on its dual mandate to promote stable pricing and maximum employment.

In conclusion, the Federal Reserve’s restrictive monetary policy course has made a notable dent in inflation, which peaked in June of 2022, without disrupting the labor market. While some more work needs to be done to bring the pace of price growth closer to the Fed’s target rate of 2%, we think a cut to the benchmark short-term interest rate is quite plausible if inflation continues on its overall downward trajectory during the second half of 2024. In all, the current business environment has held up well, with profit growth expectations for S&P 500 companies in the second half of the year being ratcheted up. For 2024, Wall Street is now predicting low double-digit corporate earnings growth, a level that may be needed justify the S&P 500’s elevated price-to-earnings multiple.

22

Results of Operations for Fiscal Years 2024, 2023 and 2022

The following table illustrates the Company’s key components of revenues and expenses.

During the three months ended April 30, 2024, the Company’s net income of $4,784,000, or $0.51 per share, was 18.6% above net income of $4,033,000, or $0.43 per share, for the three months ended April 30, 2023. During the three months ended April 30, 2024, the Company’s income from operations was $1,488,000 compared to income from operations of $2,757,000 during the three months ended April 30, 2023.

During the twelve months ended April 30, 2024, the Company’s net income of $19,016,000, or $2.02 per share, was 5.2% above net income of $18,069,000, or $1.91 per share, for the twelve months ended April 30, 2023. During the twelve months ended April 30, 2024, the Company’s income from operations was $9,141,000 compared to income from operations of $11,470,000 during the twelve months ended April 30, 2023. For the twelve months ended April 30, 2024, operating expenses increased slightly above those during the twelve months ended April 30, 2023. Due to stock market trends, copyright revenue, an element of operating income, declined this year while at the same time, revenues and profits income from EAM were up significantly.

During the twelve months ended April 30, 2024, there were 9,428,379 average common shares outstanding as compared to 9,458,605 average common shares outstanding during the twelve months ended April 30, 2023.

During the twelve months ended April 30, 2023, the Company’s net income of $18,069,000, or $1.91 per share, was 24.1% below net income of $23,822,000, or $2.50 per share, for the twelve months ended April 30, 2022. Fiscal 2022 included a gain of $2,331,000 from the tax-free forgiveness of SBA’s PPP loan to the Company. During the twelve months ended April 30, 2023, the Company’s income from operations was $11,470,000 compared to income from operations of $10,800,000 during the twelve months ended April 30, 2022. For the twelve months ended April 30, 2023, operating expenses decreased 5.0% below those during the twelve months ended April 30, 2022.

During the twelve months ended April 30, 2023, there were 9,458,605 average common shares outstanding as compared to 9,544,421 average common shares outstanding during the twelve months ended April 30, 2022.

During the three months ended April 30, 2023, the Company’s net income of $4,033,000, or $0.43 per share, was 5.9% below net income of $3,807,000, or $0.40 per share, for the three months ended April 30, 2022. During the three months ended April 30, 2023, the Company’s income from operations was $2,757,000 compared to income from operations of $2,923,000 during the three months ended April 30, 2022.

23

During the three months ended April 30, 2022, the Company’s net income of $3,807,000, or $0.40 per share, was 37.1% below net income of $6,051,000, or $0.64 per share, for the three months ended April 30, 2021. During the three months ended April 30, 2022, the Company’s income from operations was $2,923,000 compared to income from operations of $838,000 during the three months ended April 30, 2021 due to an increase in copyright fees and well controlled expenses in the fourth fiscal quarter of 2022.

During the twelve months ended April 30, 2022, the Company’s net income of $23,822,000, or $2.50 per share, was 2.3% above net income of $23,280,000, or $2.43 per share, for the twelve months ended April 30, 2021. During the twelve months ended April 30, 2022, the Company’s income from operations was $10,800,000 compared to income from operations of $7,535,000 during the twelve months ended April 30, 2021. For the twelve months ended April 30, 2022, operating expenses decreased 9.5% below those during the twelve months ended April 30, 2021. The largest factors in the increase in net income during the twelve months ended April 30, 2022, compared to the prior fiscal year, were a gain on forgiveness by the SBA of the Company’s PPP loan, an increase in copyright fees, an increase from revenues and profits interests in EAM Trust and well controlled expenses.

Total operating revenues

Within investment periodicals and related publications, subscription sales orders are derived from print and digital products. The following chart illustrates the changes in the sales orders associated with print and digital subscriptions.

Sources of subscription sales

During the twelve months ended April 30, 2024, new sales of print and digital publications increased as a percent of the total gross sales as a result of an increase in new sales orders while conversion and renewal sales orders decreased from the prior fiscal year.

24

During the twelve months ended April 30, 2023, new sales of print and digital publications decreased as a percent of the total gross sales versus the prior fiscal years as a result of weakened sentiment among prospective customers in a period of market volatility. During the twelve months ended April 30, 2023, renewal sales of print and digital publications increased as a percent of the total gross sales versus the prior fiscal years.

A certain amount of variation is to be expected due to the volume of new orders and timing of long-term renewal contracts, direct mail campaigns and large Institutional Sales orders.

Investment periodicals and related publications revenues

Investment periodicals and related publications revenues of $25,420,000 (excluding copyright fees) during the twelve months ended April 30, 2024 were 3.1% below publishing revenues of $26,232,000 in the prior fiscal year. The Company continued activity to attract new subscribers, primarily digital subscriptions through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. As fewer individual investors manage their own portfolios, particularly in volatile markets, total product line circulation at April 30, 2024, was 3.2% below total product line circulation at April 30, 2023. However, Institutional Sales department total sales orders reached a record level last fiscal year ended April 30, 2023 and this higher profit margin distribution to financial advisors and professional investors significantly offsets the long-term trend of declining individual investor circulation.

Circulation also reflected management’s decision to reduce marketing efforts temporarily while the challenging stock market environment persisted. Total print circulation at April 30, 2024 was 4.6% below the total print circulation at April 30, 2023. During the twelve months ended April 30, 2024, print publication revenues of $9,286,000, decreased 6.8%, below print publication revenues of $9,963,000 during April of 2023 because we deferred advertising in light of negative sentiment among prospective individual customers in a challenging market environment. Total digital circulation at April 30, 2024 was 1.4% below total digital circulation at April 30, 2023 with the professional clientele offsetting individual subscribers. During the twelve months ended April 30, 2024, digital revenues of $16,134,000 were slight below prior fiscal year. These figures reflect weak investor sentiment, likely temporary, and the ongoing shift from our print services to digital counterparts. Further, publishing revenue is fairly steady, despite the dip in print circulation. Sales of our higher-price, higher-profit, publications have been stronger than sales of lower price “starter” products.

Investment periodicals and related publications revenues of $26,232,000 (excluding copyright fees) during the twelve months ended April 30, 2023 were 3.4% below publishing revenues of $27,145,000 in the prior fiscal year. The Company continued activity to attract new subscribers, primarily digital subscriptions through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. As fewer individual investors manage their own portfolios, total product line circulation at April 30, 2023, was 10.4% below total product line circulation at April 30, 2022. However, during the twelve months ended April 30, 2023, Institutional Sales department total sales orders, representing our growing business with financial advisors and professional investors, reached a record of $15,236,000, 10.0% above the prior fiscal year. The retail telemarketing sales team generated total sales orders of $7,409,000 or 10.6% below the prior fiscal year.

Total print circulation at April 30, 2023 was 16.0% below the total print circulation at April 30, 2022. During the twelve months ended April 30, 2023, print publication revenues of $9,963,000, decreased 11.5%, below print publication revenues of $11,253,000 during April of 2022 because we deferred advertising in light of negative sentiment among prospective individual customers in a challenging market environment. Total digital circulation at April 30, 2023 was 2.7% below total digital circulation at April 30, 2022 with the professional clientele offsetting individual subscribers. During the twelve months ended April 30, 2023, digital revenues of $16,269,000 were up 2.4% as compared to the prior fiscal year. These figures reflect weak investor sentiment, likely temporary, and the ongoing shift from our print services to digital counterparts. Further, publishing revenue is fairly steady, despite the dip in print circulation. Sales of our higher-price, higher-profit, publications have been stronger than sales of lower price “starter” products.

25

Investment periodicals and related publications revenues of $27,145,000 (excluding copyright fees) during the twelve months ended April 30, 2022 were 1.8% below publishing revenues of $27,629,000, which included an extra week of servings for the weekly print products during the twelve months ended April 30, 2021, (decreased 1.1% excluding the extra week of print products servings), as compared to the prior fiscal year. The Company continued activity to attract new subscribers, primarily digital subscriptions through various marketing channels, primarily direct mail, e-mail, and by the efforts of our sales personnel. Total product line circulation at April 30, 2022, was 4.7% below total product line circulation at April 30, 2021. During the twelve months ended April 30, 2022, Institutional Sales department generated total sales orders of $13,853,000 and the retail telemarketing sales team generated total sales orders of $8,292,000.

Total print circulation at April 30, 2022 was 7.6% below the total print circulation at April 30, 2021. During the twelve months ended April 30, 2022, print publication revenues of $11,253,000, decreased 5.7%, below print publication revenues of $11,929,000, which included the extra week of servings for the weekly print products during the twelve months ended April 30, 2021, (decreased 4.2% excluding the extra week of print products servings) as compared to the prior fiscal year. Total digital circulation at April 30, 2022 was comparable to total digital circulation at April 30, 2021. During the twelve months ended April 30, 2022, digital revenues of $15,892,000 were up 1.2% partially offsetting the decrease in revenues from print publications, as compared to the prior fiscal year.

Value Line serves primarily individual and professional investors in stocks, who pay mostly on annual subscription plans, for basic services or as much as $100,000 or more annually for comprehensive premium quality research, not obtainable elsewhere. The ongoing goal of adding new subscribers has led us to introduce publications and packages at a range of price points. Further, new services and new features for existing services are regularly under consideration. Prominently introduced in fiscal 2020 and 2021 were new features in the Value Line Research Center, which are The New Value Line ETFs Service, new monthly publication Value Line Information You Should Know Wealth Newsletter, The Value Line M & A Service, and our Value Line Climate Change Investing Service.

The Value Line Proprietary Ranks (the “Ranking System”), a component of the Company’s flagship product, The Value Line Investment Survey, is also utilized in the Company’s copyright business. The Ranking System is made available to EAM for specific uses without charge. During the six month period ended April 30, 2024, the combined Ranking System “Rank 1 & 2” stocks’ increase of 20.0% compared to the Russell 2000 Index’s increase of 18.2% during the comparable period. During the twelve month period ended April 30, 2024, the combined Ranking System “Rank 1 & 2” stocks’ increase of 16.3% compared favorably to the Russell 2000 Index’s increase of 11.6% during the comparable period.

Copyright fees

During the twelve months ended April 30, 2024, copyright fees of $12,067,000 were 10.4% below those during the corresponding period in the prior fiscal year. During the twelve months ended April 30, 2023, copyright fees of $13,463,000 were 0.6% above those during the corresponding period in the prior fiscal year. During the twelve months ended April 30, 2022, copyright fees of $13,380,000 were 4.8% above those during the corresponding period in the prior fiscal year. These fees depend on the assets under management in financial products with contractual arrangements to use the Ranks and other Value Line proprietary information.

Investment management fees and services – (unconsolidated)

The Company has substantial non-voting revenues and non-voting profits interests in EAM, the investment adviser to the Value Line Mutual Funds. Accordingly, the Company does not report this operation as a separate business segment, although it maintains a significant interest in the cash flows generated by this business and will receive ongoing payments in respect of its non-voting revenues and non-voting profits interests.

Total assets in the Value Line Funds managed and/or distributed by EAM at April 30, 2024, were $4.17 billion, which is $1.08 billion, or 35.0%, above total assets of $3.09 billion in the Value Line Funds managed and/or distributed by EAM at April 30, 2023.

Total assets in the Value Line Funds managed and/or distributed by EAM at April 30, 2023, were $3.09 billion, which is $0.27 billion, or 8.0%, below total assets of $3.36 billion in the Value Line Funds managed and/or distributed by EAM at April 30, 2022. The decrease in net assets was primarily due to fund shareholder redemptions and closing of two variable annuity funds.

26

Value Line Equity Funds experienced net inflows and the associated net asset outflows (redemptions less new sales) in fiscal 2024. Value Line Fixed Income Funds experienced net outflows during fiscal year 2024.

The following table shows the change in assets for the past three fiscal years including sales (inflows), redemptions (outflows), dividends and capital gain distributions, and market value changes. Inflows for sales, and outflows for redemptions reflect decisions of individual investors and/or their investment advisors. The table also illustrates the assets within the Value Line Funds broken down into equity funds, variable annuity funds (prior to fiscal 2024) and fixed income funds as of April 30, 2024, 2023 and 2022.

Asset Flows

27

As of April 30, 2024, four of six Value Line equity and hybrid mutual funds held an overall four or five star rating by Morningstar, Inc.

EAM Trust - Results of operations before distribution to interest holders

The gross fees and net income of EAM’s investment management operations during the twelve months ended April 30, 2024, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $24,383,000, 12b-1 fees and other fees of $6,584,000 and other net gains of $433,000. For the same period, total investment management fee waivers were $288,000 and 12b-1 fee waivers were $94,000. During the twelve months ended April 30, 2024, EAM's net income was $2,764,000 after giving effect to Value Line’s non-voting revenues interest of $11,900,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

The gross fees and net income of EAM’s investment management operations during the twelve months ended April 30, 2023, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $19,824,000, 12b-1 fees and other fees of $5,964,000 and other net gains of $142,000. For the same period, total investment management fee waivers were $164,000 and 12b-1 fee waivers were $105,000. During the twelve months ended April 30, 2023, EAM's net income was $1,468,000 after giving effect to Value Line’s non-voting revenues interest of $10,397,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

The gross fees and net income of EAM’s investment management operations during the twelve months ended April 30, 2022, before interest holder distributions, included total investment management fees earned from the Value Line Funds of $29,598,000, 12b-1 fees and other fees of $9,310,000 and other net losses of $20,000. For the same period, total investment management fee waivers were $547,000 and 12b-1 fee waivers were $644,000. During the twelve months ended April 30, 2022, EAM's net income was $4,284,000 after giving effect to Value Line’s non-voting revenues interest of $15,899,000, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.

As of April 30, 2024, one of the Value Line Funds has 12b-1 fees waivers in place, and five funds have partial investment management fee waivers in place. Although, under the terms of the EAM Declaration of Trust, the Company does not receive or share in the revenues from 12b-1 distribution fees, the Company could benefit from the fee waivers to the extent that the resulting reduction of expense ratios and enhancement of the performance of the Value Line Funds attracts new assets.

The Value Line equity and hybrid funds’ assets represent 99.1% and fixed income fund assets represent 0.9%, respectively, of total fund assets under management (“AUM”) as of April 30, 2024. At April 30, 2024, equity and hybrid AUM increased by 35.6% and fixed income AUM decreased by 12.8% as compared to last year at April 30, 2023.

The Value Line equity and hybrid funds’ assets represent 98.7% and fixed income fund assets represent 1.3%, respectively, of total fund assets under management (“AUM”) as of April 30, 2023. At April 30, 2023, equity and hybrid AUM decreased by 7.9% and fixed income AUM decreased by 8.1% as compared to last year at April 30, 2022.

28

EAM - The Company’s non-voting revenues and non-voting profits interests

The Company holds non-voting revenues and non-voting profits interests in EAM which entitle the Company to receive from EAM an amount ranging from 41% to 55% of EAM's investment management fee revenues from its mutual fund and separate accounts business, and 50% of EAM’s net profits, not less than 90% of which is distributed in cash every fiscal quarter.

The Company recorded income from its non-voting revenues interest and its non-voting profits interest in EAM as follows:

Operating expenses

Expenses within the Company are categorized into advertising and promotion, salaries and employee benefits, production and distribution, office and administration.

Operating expenses of $28,346,000 during the twelve months ended April 30, 2024, were 0.4% above those during the twelve months ended April 30, 2023. Operating expenses of $7,515,000 during the three months ended April 30, 2024, were 8.0% above those during the three months ended April 30, 2023.

Operating expenses of $28,225,000 during the twelve months ended April 30, 2023, were 5.0% below those during the twelve months ended April 30, 2022 as a result of cost controls in fiscal year 2023. Operating expenses of $6,961,000 during the three months ended April 30, 2023, were 3.4% below those during the three months ended April 30, 2022.

Operating expenses of $29,725,000 during the twelve months ended April 30, 2022, were 9.5% below those during the twelve months ended April 30, 2021 as a result of cost controls in fiscal year 2022. Operating expenses of $7,205,000 during the three months ended April 30, 2022, were 18.9% below those during the three months ended April 30, 2021.

29

Advertising and promotion

During twelve months ended April 30, 2024, advertising and promotion expenses of $2,955,000 decreased 3.1% as compared to the prior fiscal year. During the twelve months ended April 30, 2024, decreases were primarily due to decreases in total sales commissions.

During twelve months ended April 30, 2023, advertising and promotion expenses of $3,049,000 decreased 5.4% as compared to the prior fiscal year. During the twelve months ended April 30, 2023, decreases were primarily due to decreases in media advertising expenses and direct mail campaigns, partially offset by the increases in renewal solicitation costs and institutional sales commissions.

During the twelve months ended April 30, 2022, advertising and promotion expenses of $3,223,000 decreased 13.9% as compared to the prior fiscal year. During the twelve months ended April 30, 2022, decreases were primarily due to a decline in direct mail campaigns and lower media marketing and lower institutional sales commissions. Total sales commissions decreased 8% during the twelve months ended April 30, 2022.

Salaries and employee benefits

During the twelve months ended April 30, 2024, salaries and employee benefits of $14,851,000 decreased 2.3% below the prior fiscal year, primarily due to decreases in salaries and employee benefits resulting from a reduced employee headcount in fiscal year 2024.

During the twelve months ended April 30, 2023, salaries and employee benefits of $15,203,000 decreased 12.2% below the prior fiscal year, primarily due to decreases in salaries and employee benefits resulting from a reduced employee headcount in fiscal year 2023, as well as reductions in payment for a profit sharing contribution and the company’s share of medical benefits.

During the twelve months ended April 30, 2022, salaries and employee benefits of $17,323,000 decreased 8.2% below the prior fiscal year, primarily due to decreases in salaries and employee benefits resulting from a reduced employee headcount in fiscal year 2022 along with a decrease in Profit Sharing employee benefits expense.

During the twelve months ended April 30, 2024, 2023 and 2022, the Company recorded profit sharing expenses of $411,000, $410,000 and $557,000, respectively.

Production and distribution

During the twelve months ended April 30, 2024, production and distribution expenses of $5,455,000 increased 4.7% above prior fiscal year primarily due to increases in third party software expenses associated with Advantage and an increase in paper costs. This increase was partially offset by decreases in production expenses to support the Company’s website and maintenance of the Company’s publishing application software and operating systems.

During the twelve months ended April 30, 2023, production and distribution expenses of $5,210,000 increased 4.1% above prior fiscal year. Increases in production support of the Company’s website and maintenance of the Company’s publishing and application software and operating systems were partially offset by lower paper and printing costs resulting from decreases in print circulation.

During the twelve months ended April 30, 2022, production and distribution expenses of $5,003,000 decreased 8.0% below the prior fiscal year, primarily due to decreases in service mailers and distribution expenses and a decrease in production support of the Company’s website, maintenance of the Company’s publishing and application software and operating systems.

30

Office and administration

During the twelve months ended April 30, 2024, office and administrative expenses of $5,085,000 increased 6.8% above the prior fiscal year, primarily due to an increases in restructuring costs related to outsourcing the mailing & distribution operations at VLDC and professional fees in connection with intellectual property, contractual, and other matters.

During the twelve months ended April 30, 2023, office and administrative expenses of $4,763,000 increased 14.1% above the prior fiscal year, primarily due to an increases in settlement costs and professional fees in connection with intellectual property, contractual, and other matters.

During the twelve months ended April 30, 2022, office and administrative expenses of $4,176,000 decreased 13.1% below the prior fiscal year, primarily due to a reversal of selected settlement reserves and favorable settlement of a disputed fee with a contractor and decreases in outside data processing (communication, server hosting backup, antivirus software).

Concentration

During the twelve months ended April 30, 2024, 32.2% of total publishing revenues of $37,487,000 were derived from a single customer. During the twelve months ended April 30, 2023, 33.9% of total publishing revenues of $39,695,000 were derived from a single customer. During the twelve months ended April 30, 2022, 33.0% of total publishing revenues of $40,525,000 were derived from a single customer.

Lease Commitments

On November 30, 2016, Value Line, Inc. received consent from the landlord at 551 Fifth Avenue, New York, NY to the terms of a new sublease agreement between Value Line, Inc. and ABM Industries, Incorporated commencing on December 1, 2016. Pursuant to the agreement Value Line leased from ABM 24,726 square feet of office space located on the second and third floors at 551 Fifth Avenue, New York, NY (“Building” or “Premises”) beginning on December 1, 2016 and ending on November 29, 2027. Base rent under the sublease agreement is $1,126,000 per annum during the first year with an annual increase in base rent of 2.25% scheduled for each subsequent year, payable in equal monthly installments on the first day of each month, subject to customary concessions in the Company’s favor and pass-through of certain increases in utility costs and real estate taxes over the base year. The Company provided a security deposit represented by a letter of credit in the amount of $469,000 in October 2016, which was reduced to $305,000 on October 3, 2021 and is to be 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 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 was $237,218 per annum. The Company provided a security deposit in cash in the amount of $32,146, which has been fully refunded. VLDC distributed Value Line’s print publications. The Company has outsourced to a U.S. facility the functions formerly performed at the Warehouse.

31

Investment gains / (losses)

During the twelve months ended April 30, 2024, the Company’s investment gains, primarily derived from dividend and interest income, investment gains recognized on sales of equity securities during the period and unrealized gains recognized on equity securities held at the end of the period in fiscal 2024, resulted in investment gains of $2,764,000. Proceeds from maturities and sales of government debt securities classified as available-for-sale during the twelve months ended April 30, 2024 and April 30, 2023, were $37,114,000 and $9,907,000, respectively. Proceeds from the sales of equity securities during the twelve months ended April 30, 2024 and April 30, 2023 were $1,129,000 and $4,706,000, respectively. There were no capital gain distributions from ETFs in fiscal 2024 or fiscal 2023.

During the twelve months ended April 30, 2023, the Company’s investment gains, primarily derived from dividend and interest income, investment gains recognized on sales of equity securities during the period and unrealized gains recognized on equity securities held at the end of the period in fiscal 2023, resulted in investment gains of $1,174,000. Proceeds from maturities and sales of government debt securities classified as available-for-sale during the twelve months ended April 30, 2023 and April 30, 2022, were $9,907,000 and $2,496,000, respectively. Proceeds from the sales of equity securities during the twelve months ended April 30, 2023 and April 30, 2022 were $4,706,000 and $12,039,000, respectively. There were no capital gain distributions from ETFs in Fiscal 2023 or 2022.

Effective income tax rate

The overall effective income tax rates, as a percentage of pre-tax ordinary income for the twelve months ended April 30, 2024, April 30, 2023 and April 30, 2022 were 24.50%, 24.00% and 22.25%, respectively. The increase in the effective tax rate during for the twelve months ended April 30, 2024 as compared to April 30, 2023, is primarily a result of an increase in the state and local tax rate from 3.25% to 3.72%.The increase in the effective tax rate during for the twelve months ended April 30, 2023 as compared to April 30, 2022, is primarily a result of the non-taxable revenue derived from forgiveness of the PPP loan by the SBA (see note 19) in fiscal 2022 partially offset by an increase in the state and local income taxes from 3.12% to 3.25% as a result of changes in state and local income tax allocation factors. The Company's annualized overall effective tax rate fluctuates due to a number of factors, in addition to changes in tax law, including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-income tax, the Company's geographic profit mix between tax jurisdictions, taxation method adopted by each locality, new interpretations of existing tax laws and rulings and settlements with tax authorities.

Liquidity and Capital Resources

The Company had working capital, defined as current assets less current liabilities, of $48,770,000 as of April 30, 2024 and $42,788,000 as of April 30, 2023. These amounts include short-term unearned revenue of $15,764,000 and $16,771,000 reflected in total current liabilities at April 30, 2024 and April 30, 2023, respectively. Cash and short-term securities were $68,345,000 and $62,064,000 as of April 30, 2024 and April 30, 2023, respectively.

32

The Company’s cash and cash equivalents include $4,136,000 and $7,240,000 at April 30, 2024 and April 30, 2023, respectively, invested primarily in commercial banks and in Money Market Funds at brokers, which operate under Rule 2a-7 of the 1940 Act and invest primarily in short-term U.S. government securities.

Cash from operating activities

The Company had cash inflows from operating activities of $17,932,000 during the twelve months ended April 30, 2024, compared to cash inflows from operations of $18,178,000 and $24,646,000 during the twelve months ended April 30, 2023 and 2022, respectively. The decrease in cash flows from fiscal 2023 to fiscal 2024 was a result of decreased interest income, the timing of receipts from accounts receivable and slowdown in the decline of unearned revenue. The decrease in cash flows from fiscal 2022 to fiscal 2023 is primarily attributable to lower pre-tax income and a decrease in cash receipts from EAM and the timing of receipts from copyright programs.

Cash from investing activities

The Company’s cash outflows from investing activities of $10,048,000 during the twelve months ended April 30, 2024, compared to cash outflows from investing activities of $26,116,000 and cash outflows of $3,389,000 for the twelve months ended April 30, 2023 and April 30, 2022, respectively. Cash outflows for the twelve months ended April 30, 2024 and April 30, 2023, were primarily due to the Company’s decision to invest in additional fixed income securities, primarily United States government obligations, in fiscal 2024 and 2023.

Cash from financing activities

During the twelve months ended April 30, 2024, the Company’s cash outflows from financing activities were $11,084,000 and compared to cash outflows from financing activities of $14,175,000 and $10,889,000 for the twelve months ended April 30, 2023 and 2022, respectively. Cash outflows for financing activities included $523,000, $4,704,000 and $2,484,000 for the repurchase of 12,057 shares, 75,303 shares and 53,327 shares of the Company’s common stock under the July 2021, March 2022, May 2022 & October 2022 board approved common stock repurchase programs, during fiscal years 2024, 2023 and 2022, respectively. During fiscal 2020, the Company applied for and received an SBA loan under the Paycheck Protection Program in the amount of $2,331,000. The obligation to repay the SBA loan under the Paycheck Protection Program was forgiven during fiscal 2022. Quarterly regular dividend payments of $0.28 per share during fiscal 2024 aggregated $10,561,000. Quarterly regular dividend payments of $0.25 per share during fiscal 2023 aggregated $9,471,000. Quarterly regular dividend payments of $0.22 per share during fiscal 2022 aggregated $8,405,000.

At April 30, 2024 there were 9,428,379 common shares outstanding as compared to 9,458,605 common shares outstanding at April 30, 2023. The Company expects financing activities to continue to include use of cash for dividend payments for the foreseeable future.

Management believes that the Company’s cash and other liquid asset resources used in its business together with the proceeds from the SBA loan and the future cash flows from operations and from the Company’s non-voting revenues and non-voting profits interests in EAM will be sufficient to finance current and forecasted liquidity needs for the next twelve months and beyond next year. Management does not anticipate making any additional borrowings during the next twelve months. As of April 30, 2024, retained earnings and liquid assets were $104,249,000 and $68,345,000, respectively. As of April 30, 2023, retained earnings and liquid assets were $95,979,000 and $62,064,000, respectively.

Seasonality

Our publishing revenues are comprised of subscriptions which are generally annual subscriptions. Our cash flows from operating activities are minimally seasonal in nature, primarily due to the timing of customer payments made for orders and subscription renewals.

33

Recent Accounting Pronouncements

In 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes (Topic740): Simplifying the Accounting for Income Taxes” as part of its initiative to reduce complexity in the accounting standards.  The standard eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also clarifies and simplifies other aspects of the accounting for income taxes including interim-period accounting for enacted changes in tax laws. The Company adopted this guidance effective May 1, 2021.  The adoption of this standard did not have a material impact on the Company’s financial statements.

In November 2023, the FASB issued Accounting Standards Update 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis. ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. We are evaluating the impact of ASU 2023-07 on disclosures in our Consolidated Financial Statements.

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid. ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others. Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction. ASU 2023-09 also requires entities to disclose net income taxes paid or received to federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold. ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted. We are evaluating the impact of ASU 2023-09 on disclosures in our Consolidated Financial Statements.

Critical Accounting Estimates and Policies

The Company prepares its consolidated financial statements in accordance with Generally Accepted Accounting Principles as in effect in the United States (U.S. “GAAP”). The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent, and the Company evaluates its estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies reflect the significant judgments and estimates used in the preparation of its Consolidated Financial Statements:

Investment in EAM Trust

The Company accounts for its investment in EAM using the equity method of accounting. The value of its investment in EAM is the fair value of the contributed capital at inception, plus the Company’s share of non-voting revenues and non-voting profits from EAM, less distributions received from EAM. The Company evaluates its investment in EAM on a regular basis for other-than-temporary impairment, which requires significant judgment and includes quantitative and qualitative analysis of identified events or circumstances that impact the fair value of the investment.

Should the fair value of the investment fall below its carrying value, the Company will determine whether the investment is other-than-temporarily impaired, which includes assessing the severity and duration of the impairment and the likelihood of recovery. If the investment is considered to be other-than-temporarily impaired, the Company will write down the investment to its fair value. Since the inception of EAM, the Company has not recognized any other-than-temporary impairment in the investment.

Contractual Obligations

We are a party to lease contracts which will result in cash payments to lessors in future periods. Operating lease liabilities are included in our Consolidated Balance Sheets. Estimated payments of these liabilities in each of the next four fiscal years (in thousands): $1,429 in 2025; $1,461 in 2026; $1,493 in 2027 and $882 in 2028 totaling $5,265.

34