Value Line, Inc. is a New York corporation headquartered in New York City and
formed in 1982. The Companys core business is producing investment periodicals
based on underlying research and making available copyright data, including
certain Proprietary Ranking System 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. Prior to December 23, 2010, (see “Asset Management and Mutual
Fund Distribution Businesses” below), the Company provided investment
management services to the Value Line Mutual Funds ("Value Line Funds"),
institutional and individual accounts and provided distribution, marketing,
and administrative services to the Value Line Funds. Since December 23, 2010,
EULAV Asset Management Trust (“EAM”) provides the investment management
services to the Value Line Funds accounts and provides distribution, marketing,
and administrative services to the Value Line Funds. Value Line holds substantial
non-voting revenues and non-voting profits interests in EAM.
The Company completed a restructuring of its asset management and mutual fund
distribution businesses (the “Restructuring Transaction”) on December
23, 2010 (the “Restructuring Date”) and executed the EAM Declaration
of Trust (the “EAM Declaration of Trust”). Pursuant to the EAM Declaration
of Trust, the Company received 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.
The business of EAM is managed by five individual trustees and a Delaware resident
trustee (collectively, the “Trustees”) and by its officers subject
to the direction of the Trustees.
Collectively, the holders of the voting profits interests in EAM are entitled
to receive 50% of the residual profits of the business, subject to temporary
adjustments in certain circumstances. Value Line holds a non-voting profits
interest representing 50% of residual profits, subject to temporary adjustments
in certain circumstances, and has no power to vote for the election, removal
or replacement of the trustees of EAM. Value Line also has a non-voting revenues
interest in EAM pursuant to which it is entitled to receive a portion of the
non-distribution revenues of the business ranging from 41% at non-distribution
fee revenue levels of $9 million or less to 55% at such revenue levels of $35
million or more. In the event the business is sold or liquidated, the first
$56.1 million of net proceeds (the value of the business at the time the Restructuring
Transaction was approved as determined by the directors of Value Line after
reviewing a valuation report by the directors’ financial advisors) plus
any additional capital contributions (Value Line or any holder of a voting profits
interest, at its discretion, may make future contributions to its capital account
in EAM), which contributions would increase its capital account but not its
percentage interest in operating profits, will be distributed in accordance
with capital accounts; 20% of the next $56.1 million will be distributed to
the holders of the voting profits interests and 80% to the holder of the non-voting
profits interests (currently, Value Line); and the excess will be distributed
45% to the holders of the voting profits interests and 55% to the holder of
the non-voting profits interest (Value Line). EAM has elected to be taxed as
a pass-through entity similar to a partnership.
Also, in connection with the Restructuring Transaction and pursuant to the EAM
Declaration of Trust, Value Line (1) granted each Fund use of the name “Value
Line” so long as EAM remains the Fund’s adviser and on the condition
that the Fund does not alter its investment objectives or fundamental policies
from those in effect on the date of the investment advisory agreement with EAM,
provided also that the Funds do not use leverage for investment purposes or
engage in short selling or other complex or unusual investment strategies that
create a risk profile similar to that of so-called hedge funds, (2) agreed to
provide EAM its proprietary Ranking System information without charge or expense
on as favorable basis as to Value Line’s best institutional customers
and (3) agreed to capitalize the business with $7 million of cash and cash equivalents
at inception.
EAM is organized as a Delaware statutory trust and has no fixed term. However,
in the event that control of the Company’s majority shareholder changes,
or in the event that the majority shareholder no longer beneficially owns 5%
or more of the voting securities of the Company, then the Company has the right,
but not the obligation, to buy the voting profits interests in EAM at a fair
market value to be determined by an independent valuation firm in accordance
with the terms of the EAM Declaration of Trust.
The investment periodicals and related publications offered by Value Line Publishing
LLC (“VLP”), a wholly-owned entity of the Company, cover a broad
spectrum of investments including stocks, mutual funds, ETFs, options and convertible
securities. The Company’s periodicals and related publications and services
are of interest to individual and professional investors, as well as to institutions
including municipal and university libraries and investment firms.
The services generally fall into four categories:
Comprehensive reference periodical publications
Targeted, niche periodical newsletters
Investment analysis software
Current and historical financial databases
The comprehensive research services (The Value Line Investment Survey, The Value
Line Investment Survey - Small and Mid-Cap, The Value Line 600, The Value Line
Small & Mid-Cap 300, and The Value Line Fund Advisor Plus) provide both
statistical and text coverage of a large number of investment securities, with
an emphasis placed on Value Line’s proprietary research, analysis and
statistical ranks. The Value Line Investment Survey is the Company’s flagship
service, published each week in print and daily on the web, and covering approximately
1,700 stocks.
The niche newsletters (Value Line Select®, Value Line Select: Dividend Income
& Growth, and The Value Line Special Situations Service®) provide information
on a less comprehensive basis for securities that the Company believes will
be of particular interest to subscribers. These services also make use of Value
Line’s proprietary statistical ranks. Value Line Select® is a targeted
service with an emphasis on Value Line’s proprietary in-depth research
analysis and statistical selections, highlighting a monthly stock with strong
return potential and reasonable risk. Value Line Select: Dividend Income &
Growth represents Value Lines targeted coverage of high dividend yielding stocks.
The Value Line Special Situations Service provides in-depth research analysis
on small and mid-cap stocks.
Value Line offers digital versions of most of its products through the Company’s
website, www.valueline.com. Subscribers to the print versions have, in some
cases, received free access to the corresponding digital versions, although
digital subscribers do not receive a free print edition. The most comprehensive
of the Company’s online efforts are The Value Line Research Center and
its variations, which allow subscribers to access most of the Company’s
research and publications at a packaged price via the Internet.
Investment analysis software (The Value Line Investment Analyzer and The Value
Line Mutual Fund Survey for Windows®) includes data sorting and filtering
tools. In addition, for institutional and professional subscribers, VLP offers
current and historical financial databases (DataFile, Estimates & Projections,
Convertibles and Mutual Funds) via online.