Value Line, Inc., (NASDAQ: VALU) reported results for the third fiscal quarter ended January 31, 2012.
During the nine months ended January 31, 2012, the Company’s net income of $5,835,000, or $0.59 per share, compared to net income of $34,841,000, or $3.49 per share, for the nine months ended January 31, 2011. Net income of $1,844,000 for the third quarter of fiscal 2012 compared to net income of $31,437,000 for the third quarter of fiscal 2011. The net income of the Company during the three and nine months ended January 31, 2011 included $50,510,000 of pre-tax accounting (non-cash) gain from deconsolidation of the former Value Line subsidiaries, EULAV Asset Management LLC (“EAM LLC”) and EULAV Securities, Inc. (“ESI”), that performed the operations of the investment management business prior to deconsolidation of these subsidiaries. The Company received substantial non-voting revenues and non-voting profits interests upon the formation of EULAV Asset Management Trust (“EAM”) on December 23, 2010, to provide the investment management services to the Value Line Family of Mutual Funds (“Restructuring Transaction”).
Following the Restructuring Transaction, the Company no longer engages, through subsidiaries, in the investment management or mutual fund distribution businesses. During the three and nine months ended January 31, 2012, the Company recorded income from its non-voting revenues and non-voting profits interests in EAM of $1,456,000 and $4,371,000, respectively, and $724,000 from December 23, 2010 through January 31, 2011, without incurring any directly related expenses.
Income from operations of $4,979,000 for the nine months ended January 31, 2012 was $586,000 or 11% below income from operations of $5,565,000 for the nine months ended January 31, 2011. Income from operations of $1,823,000 for the third quarter of fiscal 2012 compared to income from operations of $229,000 for the third quarter of fiscal 2011. The net income and income from operations included restructuring expenses of $1,302,000 and $3,764,000 for the three and nine months ended January 31, 2011, respectively, and non-cash postemployment compensation expense of $1,770,000.
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