Value Line, Inc. (VALU) Earnings Call Transcript & Summary

Good morning. I think some of you are in the process of being admitted. So I'll give it another moment. This is the annual meeting of Value Line incorporated shareholders for 2026. I am Howard Brecher, the Chairman of the Board and CEO of the company, and I will lead the meeting. In just a moment, I'll make some comments on the excellent year that the company has had. And then after that, we will have the formal business of the meeting in which we check for a quorum and take our votes. Thank you very much for attending. . And told that the remote computer fees are operating, so we're going to begin. Speaking about the Value Line fiscal year that ended on April 30 of 2026 and for which you have our annual report and our proxy statement, it was an excellent year. Our earnings per share at the company improved by almost 5% and shareholders' dividends were increased for the 12th consecutive year. For that fiscal year ending April 30, 2026. The company earned net income of $21.630 million. Continuing. So the company net income of $21.630 million computed to $2.30 per share on a per share basis, that was up about 5% from fiscal 2025. Notably, retained earnings rose again. They were up almost $9.2 million or 8.1% and compared to a year earlier, reaching $122.578 million as of April 30, 2026, the highest level in the past 2 decades. Let me touch on a few major areas that your management is concentrating on now. On the marketing front, let me begin first about our original market of individual investors. Our publishing business for individual investors has continued advertising at a somewhat higher volume as results have been good in a steadily rising stock market. Getting consumers' attention is, of course, a battle for us as for most advertisers. We have a solid presence on well-established social media platforms and we have plans to reach additional audience this year through an investing podcast to be delivered on Spotify and other broadcast locations. As we seek to give our subscribers the benefit of fast delivery and the ability to customize their services, we encourage readers to consider our digital delivery or combination plans of print and digital, while we share with subscribers the operational savings of Internet delivery with them. When I say customized, I refer to the fact that our subscribers using additional services can search and sort filter by literally dozens and dozens of data fields so they can hone in on the stocks and exchange traded funds and the rest that interest them. Going on, let me speak about information technology, which is the heart of our business and so many others. As a publisher of data and research we run on information day in and day out. Taking that into account, we are continually updating and redesigning our software systems for greater efficiency and reliability as well as security. Security is always a priority in whichever direction we take. And we perform multiple professional tests of the security of our systems each year. Company hosts our information technology equipment at multiple secure data centers that quite geographically dispersed locations, which I'm not supposed to say exactly where they are, but there are many, many hundreds of miles between the key locations. A key use of our IT facilities is in generating our ranks and ratings, the unique proprietary recommendations and ordering of securities that Value Line has done for 95 years now. Our ultimate staff of statistical experts has achieved a great record in both 2025 and this entire year to date. Meanwhile, our deeply experienced portfolio managers have continued to guide readers to outsize success -- outsized success in the market. We have expanded the use of carefully constrained artificial intelligence methods in our processes. By using the AI methods, we're able to even more quickly gather and organize the latest and most accurate data with reduced risk of error or inconsistency. These revised processes in turn, support our highly talented staff our proprietary ranking system and one of the largest independent staffs in the world of analysts and data experts who work with our systems and our data and our method to recommend and select stocks, mutual funds and exchange-traded funds to our subscribers and many of whom, in turn use it for their portfolio management type of operations. Speaking of our own back office or support facilities. I want to say that the outsourcing of our distribution operations to United States domestic suppliers has been successful and continues to represent a cost saving as well. We also manage expenses by selectively reducing the frequency of mailing print publications in some instances, while providing the timelier investment information that we're able to give our customers through digital delivery. As I said, we emphasize digital delivery, which is available now on all of our subscriber services. And we call it share the benefit of those efficiencies with our subscribers through the combination print and digital delivery plans. Admittedly, the cost of paper and the specialty postage continue to be a headwind as we try to provide our loyal print readers of many years with the service that they want and rely upon. Before I give you some numbers, let me turn my page here, saving some of the best for last. Financial highlights. The company remains exceptionally strong in terms of balance sheet numbers, cash flow and all aspects of financial strength. That gives us the flexibility to continue our plans and to grow in good times and bad of markets and down. Our investment in EAM, EULAV asset management company, which is the distributor and adviser of the value line branded mutual funds. Our investment in EAM produced income to value line of nearly $19 million this fiscal year, and that represented a 3.6% increase over the year before. Retained earnings, which I mentioned, grew during the year by 8.1% to $122.6 million on April 30, 2026, a record high over the last 20 years. And liquid assets. I talked about flexibility liquid assets exceeded $86 million at year-end, a nearly 13% increase. That money is invested. It's not in a bank account but it's invested in a variety of equities, treasury bonds and other instruments, all of which are fully tradable and liquid at any time. And not incidentally, not coincidently, our management of the investment portfolio produced investment income and gains of $6,428 million nearly double the fiscal 2025 level and a nice contributor in steadying influence to our financial picture. And in the last 2 years alone, well over $20 million and dividends have been paid to shareholders, reflecting steady increases, and in fact, 12 increases -- 12 annual increases in dividends in a row, voted by your Board of Directors. So in conclusion of my report, a quality management and employee team from research and statistics sales, marketing, purchasing, IT, human resources and all the rest and brought us to continuing success even in the face of persistent inflation there in the economy. I want to thank the support of our employees, shareholders and partners, which has enabled us to enjoy another year of financial growth and increased dividend. With that background, I'm going to go into the official business of the meeting. We have the representative here of our stock transfer company which does a steady job throughout the year for us, which we appreciate. And so we'll go through the official business. And after that, I'm going to take a couple of questions, which, as we indicated, were submitted in advance of the meeting from shareholders. Let me introduced to you our Vice President and Principal Financial Officer, Stephen Anastasio, he's here with us on the meeting at 551 Fifth Avenue. And he will participate in going through with you the business of the meeting. The meeting was called to order this morning at the beginning at 10:34 a.m. by me. And again, if you -- a couple of people joined late I'm Howard Brecher, the Chairman and CEO at Value Line, and we welcome you to the annual meeting. The purpose of the meeting is set forth in the notice of meeting, which you all received. It was mailed August 19. Stephen Anastasio as Vice President and proxy, will also act as Secretary of this annual meeting. Steve, will you present the proof of the due calling of the meeting, please.

Sure. The copy of the printed notice of the meeting dated .

Youare muted for the moment. Mark, if you can arrange for Steve to speak.

Can you hear me now, Howard? .

Why am I muted?

Now Mark, I can hear him. Okay. I present the following a copy. My name is Stephen Anastasio, the Vice President and Treasurer of Value Line, a Principal Financial Officer. I present the following: a copy of the printed notice of meeting dated August 19, 2026, setting forth the time place on purpose of the meeting. A complete list, which are at the desk of the inspectors of election of the holders of the common stock of the company as of the close of business on August 11, the record date fixed by the Board of Directors for shareholders entitled to notice and to vote at this meeting which list shows that 9,387,957 shares of common stock were then outstanding and entitled to vote at this meeting. . An Affidavit of Dominic Vaca, Employee of Equiniti Trust Company, LLC, the company's transfer agent as successor to AST, showing that on August 26, 2026, Dominic Vaca caused to be mailed the notice of Internet availability of proxy materials, including the notice of meeting, proxy statement, form of proxy, annual report and proxy cards to each shareholder of record on the record date.

Thank you, Steve. I note for the minutes that a copy of the printed notice and the certificate of mailing will be retained with the records of the company. Next pursuant to the authority vested by the Business Corporation Law. I appoint Tamara Cajuste and Stephen Anastasio as inspectors of election. Inspectors have executed prior to the meeting in the oath of office, which will also be filed with the minutes of the company. I ask now that the inspectors take a poll of the stock represented at the meeting in person or by proxy and present the report, including the presence of a quorum, I did see the certificate at the beginning of the meeting, and I confirm to the presence of a quorum Steve, go ahead.

Is there anyone present who wishes to present the proxy at this point?