Edgar Filing: VALUE LINE INC

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q/A

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended October 31, 2002 Commission file number 0-11306

VALUE LINE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEW YORK 13-3139843
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

220 EAST 42ND STREET, NEW YORK, NEW YORK 10017-5891
---------------------------------------- -------------------------------
(address of principal executive offices) (zip code)

Registrant's telephone number including area code (212) 907-1500

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

YES _X_ NO ___

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

CLASS OUTSTANDING AT OCTOBER 31, 2002
----- --------------------------------
Common stock, $.10 par value 9,980,800 Shares
----------------

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PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALUE LINE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)

OCT. 31, APRIL 30,
2002 2002
------------ ------------

Assets
Current Assets:
Cash and cash equivalents (including short term investments
of $63,247 and $117,177, respectively) ....................... $ 63,673 $117,401
Trading securities ............................................ 904 3,624
Accounts receivable, net of allowance for doubtful accounts
of $83 and $73, respectively ................................. 2,485 2,072
Receivable from affiliates .................................... 2,604 2,467
Prepaid expenses and other current assets ..................... 1,280 1,204
Deferred income taxes ......................................... 575 575
-------- --------
Total current assets ......................................... 71,521 127,343
Long term securities available for sale ....................... 159,154 129,044
Property and equipment, net ................................... 7,946 8,491
Capitalized software and other intangible assets, net ......... 3,289 3,857
-------- --------
Total assets ................................................. $241,910 $268,735
======== ========
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities ...................... $ 2,378 $ 3,681
Payable to clearing broker .................................... -- 10,803
Accrued salaries .............................................. 1,806 1,859
Dividends payable ............................................. 2,495 2,495
Accrued taxes payable ......................................... 84 28
-------- --------
Total current liabilities .................................... 6,763 18,866
Unearned revenue .............................................. 38,003 40,639
Deferred income taxes ......................................... 8,100 13,225
Shareholders' Equity:
Common stock, $.10 par value; authorized 30,000,000 shares;
issued 10,000,000 shares ..................................... 1,000 1,000
Additional paid-in capital .................................... 982 975
Retained earnings ............................................. 176,294 173,760
Treasury stock, at cost (19,200 shares on 10/31/02,
and 19,875, on 4/30/02) ...................................... (369) (383)
Accumulated other comprehensive income, net of tax ............ 11,137 20,653
-------- --------
Total shareholders' equity ................................... 189,044 196,005
-------- --------
Total liabilities and shareholders' equity ................... $241,910 $268,735
======== ========

The accompanying notes and independent auditor's review report are an
integral part of these financial statements.

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALUE LINE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)

THREE MONTHS ENDED SIX MONTHS ENDED
OCTOBER 31, OCTOBER 31,
--------------------------- ---------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------

Revenues:
Investment periodicals and related
publications .................................... $ 13,139 $ 13,178 $ 26,243 $ 26,508
Investment management fees & svcs ................ 7,247 8,599 14,648 18,109
-------- -------- -------- --------
Total revenues .................................. 20,386 21,777 40,891 44,617
-------- -------- -------- --------
Expenses:
Advertising and promotion ........................ 4,647 4,496 10,002 10,087
Salaries and employee benefits ................... 4,973 5,886 10,675 11,770
Production and distribution ...................... 2,437 2,185 4,837 4,264
Office and administration ........................ 1,950 1,920 4,023 3,919
-------- -------- -------- --------
Total expenses .................................. 14,007 14,487 29,537 30,040
-------- -------- -------- --------
Income from operations ............................ 6,379 7,290 11,354 14,577
Income from securities transactions, net .......... 1,459 2,169 1,518 2,435
-------- -------- -------- --------
Income before income taxes ........................ 7,838 9,459 12,872 17,012
Provision for income taxes ........................ 3,314 3,944 5,348 6,898
-------- -------- -------- --------
Net income ...................................... $ 4,524 $ 5,515 $ 7,524 $ 10,114
======== ======== ======== ========
Earnings per share, basic & fully diluted ......... $ 0.45 $ 0.55 $ 0.75 $ 1.01
======== ======== ======== ========

The accompanying notes and independent auditor's review report are an
integral part of these financial statements.

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALUE LINE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

FOR THE SIX MONTHS ENDED
--------------------------
OCT. 31, OCT. 31,
2002 2001
------------ -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................................... $ 7,524 $ 10,114
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization .......................................... 1,629 1,527
Amortization of bond premiums .......................................... 23 --
Losses/(gains) on sales of trading securities and securities
held for sale ......................................................... 291 (1,365)
Unrealized losses on trading securities ................................ 125 386
Loss on disposal of equipment .......................................... -- 6
Changes in assets and liabilities:
Decrease in unearned revenue ........................................... (2,636) (3,071)
Decrease in deferred charges ........................................... (139) (139)
Decrease in accounts payable and accrued expenses ...................... (1,164) (830)
Decrease in accrued salaries ........................................... (53) (534)
Increase in accrued taxes payable ...................................... 56 2,541
(Increase)/decreasein prepaid expenses and other current assets ........ (76) 618
(Increase)/decrease in accounts receivable ............................. (413) 677
(Increase)/decrease in receivable from affiliates ...................... (137) 170
--------- ---------
Total adjustments ...................................................... (2,494) (14)
--------- ---------
NET CASH PROVIDED BY OPERATIONS .......................................... 5,030 10,100

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of long term securities ............................. 40,169 49,903
Purchases of long term securities ....................................... (4,108) (82)
Purchases of securities held to maturity ................................ (91,109) --
Proceeds from sales of trading securities ............................... 2,935 31,725
Purchases of trading securities ......................................... (1,160) (22,436)
Acquisition of property and equipment ................................... (146) (103)
Expenditures for capitalized software ................................... (370) (232)
--------- ---------
NET CASH (USED IN)/PROVIDED BY INVESTING ACTIVITIES ...................... (53,789) 58,775

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of treasury stock ................................... 21 12
Dividends paid .......................................................... (4,990) (4,989)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES .................................... (4,969) (4,977)
--------- ---------
Net (decrease)/increase in cash and cash equivalents ..................... (53,728) 63,898
Cash and cash equivalents at beginning of year ........................... 117,401 86,424
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................... $ 63,673 $ 150,322
========= =========

The accompanying notes and independent auditor's review report are an
integral part of these financial statements.

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALUE LINE, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED OCTOBER 31, 2002
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)

COMMON STOCK
--------------------
NUMBER ADDITIONAL
OF PAID-IN TREASURY
SHARES AMOUNT CAPITAL STOCK
----------- -------- ------------ ----------

Balance at April 30, 2002 ........... 9,980,125 $1,000 $975 ($ 383)
Comprehensive income
Net income .........................
Other comprehensive income,
net of tax:
Change in unrealized gains on
securities ......................
Comprehensive income ................
Exercise of stock options ........... 675 7 14
Dividends declared .................. --------- ------ ---- ------
Balance at October 31, 2002 ......... 9,980,800 $1,000 $982 ($ 369)
========= ====== ==== =====

[WIDE TABLE CONTINUED FROM ABOVE]

ACCUMULATED
OTHER
COMPREHENSIVE RETAINED COMPREHENSIVE
INCOME EARNINGS INCOME TOTAL
--------------- ------------ -------------- -----------

Balance at April 30, 2002 ........... $173,760 $ 20,653 $196,005
Comprehensive income
Net income ......................... $ 7,524 7,524 7,524
Other comprehensive income,
net of tax:
Change in unrealized gains on
securities ...................... (9,516) (9,516) (9,516)
-------
Comprehensive income ................ ($ 1,992)
=======
Exercise of stock options ........... 21
Dividends declared .................. (4,990) (4,990)
-------- -------- --------
Balance at October 31, 2002 ......... $176,294 $ 11,137 $189,044
======== ======== ========

The accompanying notes and independent auditor's review report are an
integral part of these financial statements.

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALUE LINE, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED OCTOBER 31, 2001
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)

COMMON STOCK
--------------------
NUMBER ADDITIONAL
OF PAID-IN TREASURY
SHARES AMOUNT CAPITAL STOCK
----------- -------- ------------ ----------

Balance at April 30, 2001 ........... 9,978,925 $1,000 $963 ($ 406)
Comprehensive income
Net income .........................
Other comprehensive income,
net of tax:
Change in unrealized gains on
securities ......................
Comprehensive income ................
Exercise of stock options ........... 400 4 8
Dividends declared .................. --------- ------ ---- ------
Balance at October 31, 2001 ......... 9,979,325 $1,000 $967 ($ 398)
========= ====== ==== =====

[WIDE TABLE CONTINUED FROM ABOVE]

ACCUMULATED
OTHER
COMPREHENSIVE RETAINED COMPREHENSIVE
INCOME EARNINGS INCOME TOTAL
--------------- ------------ -------------- -----------

Balance at April 30, 2001 ........... $163,416 $ 35,233 $ 200,206
Comprehensive income
Net income ......................... $ 10,114 10,114 10,114
Other comprehensive income,
net of tax:
Change in unrealized gains on
securities ...................... (17,493) (17,493) (17,493)
--------
Comprehensive income ................ ($ 7,379)
========
Exercise of stock options ........... 12
Dividends declared .................. (4,990) (4,990)
-------- ---------- ---------
Balance at October 31, 2001 ......... $168,540 $ 17,740 $ 187,849
======== ========== =========

The accompanying notes and independent auditor's review report are an
integral part of these financial statements.

VALUE LINE, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SIGNIFICANT ACCOUNTING POLICIES -- NOTE 1:

In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of normal
recurring accruals except as noted below) considered necessary for a fair
presentation. This report should be read in conjunction with the financial
statements and footnotes contained in the Company's annual report on Form 10-K,
dated July 26, 2002 for the fiscal year ended April 30, 2002. Results of
operations covered by this report may not be indicative of the results of
operations for the entire year.

CASH AND CASH EQUIVALENTS:

The Company considers all cash held at banks and invested in the Value Line
money market funds with an original maturity of less than three months to be
cash and cash equivalents. As of October 31, 2002 and April 30, 2002, cash
equivalents included $62,825,000 and $116,885,000, respectively, invested in the
Value Line money market funds.

VALUATION OF SECURITIES:

The Company's long-term securities portfolio, which consists of shares in
various Value Line Mutual Funds and government debt securities, is accounted for
in accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities". The Value
Line Mutual Funds are valued at market with unrealized gains and losses on these
securities reported, net of applicable taxes, as a separate component of
Shareholders' Equity. Investments in government debt securities that are held to
maturity are carried at amortized cost. Realized gains and losses on sales of
the long term securities are recorded in earnings as of the trade date and are
determined on the identified cost method.

Trading securities, which consist of all other securities held by the
Company, are valued at market with realized and unrealized gains and losses
included in earnings.

ADVERTISING EXPENSES:

The Company expenses advertising costs as incurred.

EARNINGS PER SHARE, BASIC & FULLY DILUTED:

Earnings per share are based on the weighted average number of shares of
common stock outstanding during the period.

USE OF ESTIMATES:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.

MARKETABLE SECURITIES -- NOTE 2:

TRADING SECURITIES:

Securities held by the Company had an aggregate cost of $914,000 and a
market value of $904,000 at October 31, 2002, and an aggregate cost of
$3,508,000 and a market value of $3,624,000 at April 30, 2002.

LONG-TERM SECURITIES:
EQUITY SECURITIES AVAILABLE FOR SALE:

The aggregate cost of the long-term equity securities was $46,693,000 and
the market value was $63,826,000 at October 31, 2002. The aggregate cost of the
long-term equity securities at April 30, 2002 was $61,451,000 and the market
value was $93,226,000. For the six months ended October 31, 2002, the decrease
in gross unrealized appreciation on these securities of $14,640,000, net of
deferred taxes of $5,124,000, was included in shareholders' equity. During the
first six months of fiscal 2003, the Company sold various securities from its
long term equity securities portfolio. The proceeds from sales of equity

VALUE LINE, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

MARKETABLE SECURITIES -- NOTE 2 (CONTINUED):

securities were $18,984,000 and the related gain on these sales was $123,000.
This compares to proceeds of $ 49,903,000 and the related gain of $6,472,000 on
these sales from sales of long term equity securities for the six months ended
October 31, 2001.

GOVERNMENT DEBT SECURITIES HELD TO MATURITY:

It is anticipated that the Company's investments in debt securities will be
held to maturity and are valued at amortized cost. The amortized cost and
aggregate fair value at October 31, 2002 were $95,328,000 and $97,530,000 for
U.S. government debt securities, which mature as follows:

(IN THOUSANDS)
AMORTIZED GROSS UNREALIZED
COST FAIR VALUE HOLDING GAINS
---------------------------------------------------------------------------------------------

Due in 1-2 years ............................ 4,402 4,429 27
Due in 2-5 years ............................ 90,926 93,101 2,175
---------------------------------------
Total investment in debt securities ......... $95,328 $97,530 $2,202
=======================================

The average yield on the long term debt securities held at October 31, 2002 was
3.79%. Proceeds from sales of long term fixed income securities during the six
months ended October 31, 2002 were $21,185,000 and the related gain on sales was
$406,000. There were no sales of long term fixed income securities during fiscal
2002.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -- NOTE 3:

Cash payments for income taxes were $5,292,000 and $4,352,000 during the
six months ended October 31, 2002 and 2001, respectively.

EMPLOYEES' PROFIT SHARING AND SAVINGS PLAN -- NOTE 4:

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
upon the salaries of eligible employees and the amount of consolidated net
operating income as defined in the Plan. The estimated profit sharing plan
contribution, which is included as an expense in salaries and employee benefits
in the Consolidated Statement of Income for the six months ended October 31,
2002 and 2001, was $445,000 and $750,000, respectively.

COMPREHENSIVE INCOME -- NOTE 5:

Statement no. 130 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 historically has not been recognized in the calculation of net
income.

At October 31, 2002 and 2001, the Company held long term equity securities
classified as available-for-sale. For the six months ended October 31, 2002
decreases in gross unrealized gains on these securities were $14,640,000 and the
decreases in related deferred taxes were $5,124,000. The increase during the
first six months of fiscal 2001 in gross unrealized gains on these securities
and the related deferred taxes was $26,912,000 and $9,419,000, respectively.

RELATED PARTY TRANSACTIONS -- NOTE 6:

The Company acts as investment adviser and manager for fifteen open-ended
investment companies, the Value Line Family of Funds. The Company earns
investment management fees based upon the average daily net asset values of the
respective funds. Effective October 1, 2000, the Company received

VALUE LINE, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

RELATED PARTY TRANSACTIONS -- NOTE 6 (CONTINUED):

service and distribution fees under rule 12b-1 of the Investment Company Act of
1940 (rule 12b-1) from all but two of the fifteen mutual funds for which Value
Line is the adviser. Effective September 18, 2002, the Company began receiving
service and distibution fees under rule 12b-1 from the remaining two funds, for
which Value Line, Inc. is the adviser. The Company also earns brokerage
commission income, net of clearing fees, on securities transactions executed by
Value Line Securities, Inc. on behalf of the funds that are cleared on a fully
disclosed basis through non-affiliated brokers. For the six months ended October
31, 2002 and 2001, investment management fees, 12b-1 service and distribution
fees and brokerage commission income, net of clearing fee amounted to
$13,802,000 and $17,035,000, respectively. These amounts include service and
distribution fees of $3,242,000 and $3,259,000, respectively. The related
receivables from the funds for management advisory fees and 12b-1 service fees
included in Receivable from affiliates were $2,464,000 and $2,417,000 at October
31, 2002 and April 30, 2002, respectively.

For the six months ended October 31, 2002 and 2001, the Company was
reimbursed $256,000 and $272,000, respectively, for payments it made on behalf
of and services it provided to Arnold Bernhard and Company, Inc. ("Parent"). At
October 31, 2002 and April 30, 2002, Receivable from Affiliates included a
receivable from the Parent of $45,000 and $47,000 respectively.

FEDERAL, STATE AND LOCAL INCOME TAXES -- NOTE 7:

The Company computes its tax in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes".

The provision for income taxes includes the following:

SIX MONTHS ENDED
OCTOBER 31,
2002 2001
--------- ---------
(IN THOUSANDS)
Current:
Federal ................. $4,427 $5,925
State and local ......... 1,056 1,108
------ ------
5,483 7,033
Deferred:
Federal ................. (181) (135)
State and local ......... 46 --
------ ------
(135) (135)
------ ------
$5,348 $6,898
====== ======

Deferred taxes 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 deferred tax
asset/(liability) are primarily a result of unrealized gains on the Company's
trading and long term securities portfolios.

BUSINESS SEGMENTS -- NOTE 8:

The Company operates two reportable business segments: Publishing and
Investment Management Services. The publishing segment produces investment
related periodicals in both print and electronic form. The investment management
segment provides advisory services to mutual funds, institutional and individual
clients as well as brokerage services for the Value Line family of mutual funds.
The segments are differentiated by the products and services they offer.

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. The Company allocates all
revenues and expenses, except for depreciation related to corporate assets,
between the two reportable segments.

VALUE LINE, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

BUSINESS SEGMENTS -- NOTE 8 (CONTINUED):

DISCLOSURE OF REPORTABLE SEGMENT PROFIT AND SEGMENT ASSETS
(IN THOUSANDS)

SIX MONTHS ENDED OCTOBER 31, 2002
---------------------------------------
INVESTMENT
MANAGEMENT
PUBLISHING SERVICES TOTAL
------------ ----------- ----------

Revenues from external customers ............ $26,243 $ 14,648 $ 40,891
Intersegment revenues ....................... 88 -- 88
Income from securities transactions ......... 74 1,444 1,518
Depreciation and amortization ............... 1,547 46 1,593
Segment operating profit .................... 7,057 4,333 11,390
Segment assets .............................. 18,528 222,474 241,002
Expenditures for segment assets ............. 481 35 516

SIX MONTHS ENDED OCTOBER 31, 2001
---------------------------------------
INVESTMENT
MANAGEMENT
PUBLISHING SERVICES TOTAL
------------ ----------- ----------

Revenues from external customers ............ $26,508 $ 18,109 $ 44,617
Intersegment revenues ....................... 111 -- 111
Income from securities transactions ......... 74 2,361 2,435
Depreciation and amortization ............... 1,490 20 1,510
Segment operating profit .................... 7,928 6,666 14,594
Segment assets .............................. 18,599 227,420 246,019
Expenditures for segment assets ............. 322 13 335

RECONCILIATION OF REPORTABLE SEGMENT REVENUES,
OPERATING PROFIT AND ASSETS (IN THOUSANDS)

SIX MONTHS ENDED OCTOBER 31,
2002 2001
----------- ------------

Revenues
Total revenues for reportable segments ................. $ 40,979 $ 44,728
Elimination of intersegment revenues ................... (88) (111)
-------- --------
Total consolidated revenues ........................... $ 40,891 $ 44,617
======== ========
Segment profit
Total profit for reportable segments ................... $ 12,908 $ 17,029
Less: Depreciation related to corporate assets ......... (36) (17)
-------- --------
Income before income taxes ............................ $ 12,872 $ 17,012
======== ========
Assets
Total assets for reportable segments ................... $241,002 $246,019
Corporate assets ....................................... 908 1,165
-------- --------
Consolidated total assets ............................. $241,910 $247,184
======== ========

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
Value Line, Inc.
New York, NY

We have reviewed the accompanying consolidated balance sheet of Value Line, Inc.
and its subsidiaries as of October 31, 2002 and the related consolidated
statements of income for the three month and six month periods ended October 31,
2002 and October 31, 2001 and the consolidated statement of changes in
stockholders' equity, and consolidated statement of cash flows for the six month
periods ended October 31, 2002 and 2001. All information included in these
financial statements is the representation of the Company's management.

We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquires of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of April 30, 2002 and the related
consolidated statements of income, changes in stockholders equity, and cash
flows for the year then ended (not presented herein), and in our report dated
July 18, 2002, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of April 30, 2002 is fairly stated in
all material respects.

/s/ Horowitz & Ullmann, P.C.

December 13, 2002
New York, NY

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

LIQUIDITY AND CAPITAL RESOURCES

The Company had liquid resources, which were used in its business, of
$223,912,000 at October 31, 2002. In addition to $64,758,000 of working capital,
the Company had long-term securities with a market value of $159,154,000, that,
although classified as non-current assets, are also readily marketable should
the need arise.

The Company's cash flow from operations of $5,030,000 for the first six
months of fiscal 2003 was lower than cash flow of $10,100,000 for the same
period last fiscal year. The decrease in cash flow from operations was largely
attributable to lower net earnings that resulted primarily from a decrease in
investment management fees and services revenues. In addition, the cash provided
by operations for the first six months of last fiscal year was approximately
$2.5 million higher as a result of the postponement of the Company's estimated
federal income tax payment for the second quarter of fiscal 2002 in accordance
with the Internal Revenue Service's disaster relief due to the September 11,
2001 terrorists' attacks. Net cash outflows from investing activities during the
first six months of fiscal 2003 were $53,789,000 due largely to the Company's
decision to re-deploy its cash holdings into government securities with higher
yields than the cash instruments.

From time to time, the Company's Parent has purchased additional shares of
Value Line, Inc. in the market when, and as the Parent has determined it to be
appropriate. The Company understands that the Parent may make additional
purchases from time to time in the future.

Management believes that the Company's cash and other liquid asset
resources used in its business together with the future cash flows from
operations will be sufficient to finance current and forecasted operations.
Management anticipates no borrowing for fiscal year 2003.

OPERATING RESULTS

Net income of $7,524,000 or $0.75 per share for the first six months of
fiscal 2003 compared to net income of $10,114,000 or $1.01 per share for the
same period last fiscal year. Net income for the second quarter of fiscal 2003
was $4,524,000 or $.45 per share as compared to $5,515,000 or $.55 per share for
the three months ended October 31, 2001. Revenues of $40,891,000 for the six
months ended October 31, 2002 were 8% below revenues of $44,617,000 in fiscal
2002. The decline in net income during the six months ended October 31, 2002 was
largely the result of the lower level of revenues, primarily resulting from a
19% decline in investment management fees and services revenues that resulted
from a decrease in average net asset values in the Value Line mutual funds. The
change in net asset values in the Value Line mutual funds was largely
attributable to the overall decline in the financial markets with the NASDAQ
index falling 21% during the six months ended October 31, 2002, representing a
74% decline from its all time high.

As of October 31, 2002, total circulation for the Company's investment
publications rose 13% above the level at October 31, 2001. Combined circulation
of The Value Investment Survey, THE VALUE LINE INVESTMENT SURVEY FOR WINDOWS,
THE VALUE LINE RESEARCH CENTER, AND THE VALUE LINE 600 was 8% higher than the
prior year's circulation. Subscription revenues of $26,243,000 for the six
months ended October 31, 2002 were 1% below revenues for the same period of the
prior fiscal year. Subscription revenues of $13,139,000 for the second quarter
of fiscal 2003 were approximately equal to last year's revenues for the three
months ended October 31, 2001. Investment management fees and services revenues
of $14,648,000 for the six months ended October 31, 2002 were 19% below the
prior fiscal year's revenues of $18,109,000. The change in total subscription
and investment management fees and services revenues was primarily attributable
to the continued difficult financial market conditions.

Operating expenses of $29,537,000 for the six months ended October 31, 2002
were comparable to last year's expenses of $30,040,000. Total advertising and
promotional expenses of $10,002,000 were approximately 1% below the prior year's
expenses. Salaries and employee benefits expenses of

$10,675,000 were 9% below expenses of $11,770,000 recorded in the prior fiscal
year. Production and distribution costs of $4,837,000 for the six months ended
October 31, 2002 were 13% above last year's expenses of $4,264,000. The increase
in production and distribution expenses resulted from an increase in
subscription circulation, an increase in U.S. postal rates, amortization costs
for new product development expenditures, and expenses related to restocking
product user guides. Office and administrative expenses of $4,023,000 were 3%
higher than last year's expenses of $3,919,000. The net increase in
administrative expenses compared to last year's resulted primarily from higher
insurance fees and depreciation expenses offset in part by a decline in rent
expenses.

The Company's securities portfolios produced a gain of $1,518,000 for the
first six months of fiscal 2003 versus a gain of $2,435,000 for the same period
last fiscal year. The Company's trading portfolio produced losses of $945,000
during the six months ended October 31, 2002 versus losses of $5,140,000 during
the same period last fiscal year. Income from securities transactions for the
six months ended October 31, 2002 also included dividend and interest income of
$1,947,000 and capital gains of $529,000 from sales of securities from the
Company's long-term portfolio. This compares to dividend and interest income of
$1,470,000 and capital gains of $6,472,000 from sales of securities from the
Company's long-term portfolio for the same period last fiscal year.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURES PURSUANT TO RULE 307

(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Exchange Act Rule 13a - 14(c)), based on
their evaluation of these controls and procedures as of a date within
90 days of the filing date of this report, are appropriately designed
to ensure that material information relating to the registrant is made
known to such officers and are operating effectively.

(b) The registrant's principal executive officer and principal financial
officer have determined that there have been no significant changes in
the registrant's internal controls or in other factors that could
significantly affect these controls subsequent to the date of their
evaluation, including corrective actions with regard to significant
deficiencies and material weaknesses.

VALUE LINE, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Form 10Q report for the period ended October 31,
2002 to be signed on its behalf by the undersigned thereunto duly authorized.

VALUE LINE, INC.
(REGISTRANT)

Date: December 16, 2002 By: /S/ JEAN BERNHARD BUTTNER
-----------------------------------
Jean Bernhard Buttner
Chairman & Chief Executive Officer

Date: December 16, 2002 By: /S/ STEPHEN R. ANASTASIO
-----------------------------------
Stephen R. Anastasio
Chief Accounting Officer

Date: December 16, 2002 By: /S/ DAVID T. HENIGSON
-----------------------------------
David T. Henigson
Vice President and Treasurer

CERTIFICATIONS

I, Jean Bernhard Buttner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Value Line, Inc;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: December 16, 2002 By: /S/ JEAN BERNHARD BUTTNER
----------------------------------
Jean Bernhard Buttner
Chairman & Chief Executive Officer

CERTIFICATIONS

I, David T. Henigson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Value Line, Inc;

b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and

Date: December 16, 2002 By: /S/ DAVID T. HENIGSON
----------------------------
David T. Henigson
Vice President and Treasurer

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In accordance with 18 U.S.C. Section 1350, the undersigned hereby certify, in
the indicated capacities with respect to Value Line, Inc. (the "Issuer"), that
the quarterly report on Form 10-Q for the quarter ended October 31, 2002 of the
issuer fully complies with the requirements of section 13(a) of the Securities
Exchange Act of 1934 and that the information contained in the quarterly report
on Form 10-Q fairly presents, in all material respects, the financial condition
and results of operations of the issuer. This certification is not to be deemed
to be filed pursuant to the Securities Exchange Act of 1934 and does not
constitute a part of the quarterly report on Form 10-Q of the issuer
accompanying this certification.

Date: December 16, 2002 By: /S/ JEAN BERNHARD BUTTNER
----------------------------------
Jean Bernhard Buttner
Chairman & Chief Executive Officer

Date: December 16, 2002 By: /S/ DAVID T. HENIGSON
----------------------------------
David T. Henigson
Vice President and Treasurer

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