Value Line Reports Mixed Q2 Results with Revenue Decline, Net Income Growth

Value Line, Inc. reported its financial results for the three months ended July 31, 2024, revealing a mixed performance in revenue and profitability compared to the same period in 2023. Total publishing revenues decreased to $8.884 million, down 8.8% from $9.743 million in the prior year. This decline was attributed to a 2.6% drop in revenues from investment periodicals and related publications, which totaled $6.287 million. The company noted that while new sales of print publications increased, conversion and renewal sales orders decreased.

Despite the revenue decline, net income rose to $5.887 million, a 21.2% increase from $4.859 million in the previous year. This growth in net income was supported by significant investment gains, which reached $1.709 million, up 126.4% from $755,000 in 2023. Additionally, income before income taxes increased to $7.797 million, a 22.6% rise from $6.359 million in the prior year.

Operating expenses for the quarter were $7.037 million, slightly higher than the $6.996 million reported in 2023. Notably, salaries and employee benefits decreased by 5.3% to $3.543 million, reflecting a reduced employee headcount. Advertising and promotion expenses increased by 11.4% to $860,000, primarily due to higher third-party telemarketing and sales consulting costs.

The company’s cash and cash equivalents saw a significant increase, rising to $15.628 million from $4.390 million as of April 30, 2024. Total assets also grew to $138.557 million, up from $136.035 million in the previous quarter. Shareholders' equity increased to $93.853 million, compared to $90.793 million at the end of April 2024.

Value Line's investment in Eulav Asset Management LLC (EAM) continues to be a key component of its financial strategy. The company reported non-voting revenues interest from EAM of $4.241 million, a substantial increase of 48.4% from $2.857 million in 2023. EAM's total assets under management reached $4.60 billion, marking a 32.6% increase from $3.47 billion a year earlier.

The effective income tax rate for the quarter was 24.50%, up from 23.87% in the previous year, primarily due to an increase in state and local income tax rates. The company declared dividends of $2.825 million, with a per-share dividend of $0.30, compared to $2.641 million and $0.28 per share in the same period last year.

Overall, while Value Line experienced a decline in publishing revenues, strategic investments and effective cost management contributed to improved net income and overall financial stability.