UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended JulyOctober 31, 2007

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________________________________________________________ to ______________________________________________________________

Commission File Number: 0-11306

Value Inc LogoCalifornia Trust Logo
VALUE LINE, INC.
(Exact name of registrant as specified in its charter)

New York
 
13-3139843
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
220 East 42nd Street, New York, New York
 
10017-5891
(Address of principal executive offices) (Zip Code)

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

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 xNo o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o    Accelerated filer o   Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
        Yes o No x

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 JulyOctober 31, 2007
  
Common stock, $.10 par value
9,981,600 Shares
 

Part I - Financial Information
Item 1. Financial Statements

Value Line, Inc.
Consolidated Condensed Balance Sheets
(in thousands, except share amounts)

 
July 31,
 
Apr. 30,
 
 
2007
 
2007
  
October 31,
2007
 
Apr. 30,
2007
 
 
(unaudited)
    
(unaudited)
   
            
Assets            
Current Assets:            
Cash and cash equivalents (including short term investments of $20,782 and $20,165, respectively) $21,466 $20,605 
Cash and cash equivalents (including short term investments of $14,511 and $20,165, respectively) $15,161 $20,605 
Trading securities  17,156  15,849   19,734  15,849 
Securities available for sale  79,811  76,822   86,284  76,822 
Accounts receivable, net of allowance for doubtful accounts of $93 and $88, respectively  3,451  3,929 
Accounts receivable, net of allowance for doubtful accounts of $100 and $88, respectively  4,270  3,929 
Receivable from affiliates  2,841  2,794   2,957  2,794 
Prepaid expenses and other current assets  1,508  2,098   1,484  1,588 
Prepaid and refundable income taxes  370  510 
Deferred income taxes  139  139   153  139 
              
Total current assets  126,372  122,236   130,413  122,236 
              
Long term assets              
Property and equipment, net  4,807  4,923   4,867  4,923 
Capitalized software and other intangible assets, net  1,499  1,804   1,167  1,804 
              
Total long term assets  6,306  6,727   6,034  6,727 
              
Total assets $132,678 $128,963  $136,447 $128,963 
              
Liabilities and Shareholders' Equity              
Current Liabilities:
              
Accounts payable and accrued liabilities $3,920 $5,316  $3,963 $5,316 
Accrued salaries  1,410  1,545   1,325  1,545 
Dividends payable  2,995  2,995   2,995  2,995 
Accrued taxes payable  2,455  0   0  0 
Unearned revenue  27,661  28,552   25,734  28,552 
Deferred income taxes  8,951  8,654   10,524  8,654 
              
Total current liabilities  47,392  47,062   44,541  47,062 
              
Long term liabilities              
Unearned revenue  5,838  5,948   6,196  5,948 
Deferred charges  381  381   381  381 
              
Total long term liabilities  6,219  6,329   6,577  6,329 
              
Shareholders' Equity:              
Common stock, $.10 par value; authorized 30,000,000 shares; issued 10,000,000 shares  1,000  1,000   1,000  1,000 
Additional paid-in capital  991  991   991  991 
Retained earnings  60,331  57,383   63,696  57,383 
Treasury stock, at cost (18,400 shares on 7/31/07 and 4/30/07)  (354) (354)
Treasury stock, at cost (18,400 shares on 10/31/07 and 4/30/07)  (354) (354)
Accumulated other comprehensive income, net of tax  17,099  16,552   19,996  16,552 
              
Total shareholders' equity  79,067  75,572   85,329  75,572 
              
Total liabilities and shareholders' equity $132,678 $128,963  $136,447 $128,963 
       

The accompanying notes are an integral part of these consolidated condensed financial statements.

2
 
Part I - Financial Information
Item 1. Financial Statements

Value Line, Inc.
Consolidated Condensed Statements of Income
(in thousands, except share & per share amounts)
(unaudited)

 
Three months ended
  Three months ended Six months ended 
 
July 31,
  Oct. 31, Oct 31, 
 
2007
 
2006
  2007 2006 2007 2006 
                  
Revenues:                  
Investment periodicals and related publications $10,963 $11,541  $10,860 $11,374 $21,823 $22,915 
Licensing fees  1,653  1,811   1,792  1,767  3,445  3,578 
Investment management fees & services  8,185  8,039   8,458  7,604  16,643  15,643 
                    
Total revenues  20,801  21,391   21,110  20,745  41,911  42,136 
                    
Expenses:                    
Advertising and promotion  3,596  3,224   3,478  3,827  7,074  7,051 
Salaries and employee benefits  4,609  4,542   4,524  4,624  9,133  9,166 
Production and distribution  1,663  1,811   1,611  1,794  3,274  3,605 
Office and administration  1,968  1,945   2,081  1,439  4,049  3,384 
                    
Total expenses  11,836  11,522   11,694  11,684  23,530  23,206 
                    
Income from operations  8,965  9,869   9,416  9,061  18,381  18,930 
Income from securities transactions, net  701  593   885  645  1,586  1,238 
                    
Income before income taxes  9,666  10,462   10,301  9,706  19,967  20,168 
Provision for income taxes  3,723  4,191   3,942  3,797  7,665  7,988 
                    
Net income $5,943 $6,271  $6,359 $5,909 $12,302 $12,180 
                    
Earnings per share, basic & fully diluted $0.60 $0.63  $0.63 $0.59 $1.23 $1.22 
                    
             
Weighted average number of common shares  9,981,600  9,981,600   9,981,600  9,981,600  9,981,600  9,981,600 

The accompanying notes are an integral part of these consolidated condensed financial statements.

3

Part I - Financial Information
Item 1. Financial Statements

Value Line, Inc.
Consolidated Condensed Statements of Cash Flows
(in thousands)
(unaudited)

 
For the three months
   For the six months 
 
ended
   ended 
 
July 31,
 
July 31,
   
Oct 31,
 
Oct 31,
 
 
2007
 
2006
   
2007
 
2006
 
Cash flows from operating activities:
     
Cash flows from operating activities:
      
Net income $5,943 $6,271 Net income$12,302 $12,180 
              
Adjustments to reconcile net income to net cash provided by operating activities:       
Adjustments to reconcile net income to net cash provided by operating activities:
      
Depreciation and amortization  436  555 
Depreciation and amortization
 901  1,103 
(Gains)/losses on sales of trading securities and securities available for sale(Gains)/losses on sales of trading securities and securities available for sale (7) 66 
Unrealized losses/(gains) on trading securities  104  (3)Unrealized losses/(gains) on trading securities 41  (98)
Deferred income taxes  (36) - Deferred income taxes (32) (85)
              
Changes in assets and liabilities:       Changes in assets and liabilities:      
Purchase of trading securities  (1,411) - Purchase of trading securities (3,926) (1,103)
(Decrease) in unearned revenue  (1,001) (2,216)
(Decrease) in deferred charges  (6) (21)
Increase/(decrease) in accounts payable and accrued expenses  (1,390) (2,474)
Increase/(decrease) in accrued salaries  (135) (164)
Increase in accrued taxes payable  2,455  2,740 
(Increase)/decrease in prepaid expenses and other current assets  626  126 
Decrease/(increase) in accounts receivable  478  (923)
Decrease in unearned revenueDecrease in unearned revenue (2,570) (4,205)
Decrease in deferred chargesDecrease in deferred charges (12) (42)
Decrease in accounts payable and accrued expenses
Decrease in accounts payable and accrued expenses
 (1,341) (2,522)
Decrease in accrued salariesDecrease in accrued salaries (220) (169)
Decrease in accrued taxes payableDecrease in accrued taxes payable -  (475)
Decrease in prepaid expenses and other current assetsDecrease in prepaid expenses and other current assets 262  12 
(Increase) in accounts receivable(Increase) in accounts receivable (341) (738)
Decrease/(increase) in receivable from affiliates  (47) 276 Decrease/(increase) in receivable from affiliates (163) 332 
              
Total adjustments  73  (2,104)Total adjustments (7,408) (7,924)
              
Net cash provided by operations
  6,016  4,167 
Net cash provided by operations
 4,894  4,256 
              
Cash flows from investing activities:
       
Cash flows from investing activities:
      
      
Purchases and sales of securities classified as available for sale:        Purchases and sales of securities classified as available for sale:      
Purchases of equity securities  (4) - Purchases of equity securities (8) (10)
Proceeds from sales of equity securitiesProceeds from sales of equity securities -  6 
Proceeds from sales of fixed income securities  683  125 Proceeds from sales of fixed income securities 5,137  5,125 
Purchases of fixed income securities  (2,824) (5,937)Purchases of fixed income securities (9,270) (10,438)
Acquisition of property and equipment  (2) - Acquisition of property and equipment (176) (26)
Expenditures for capitalized software  (13) (117)Expenditures for capitalized software (32) (183)
              
Net cash (used in) investing activities
  (2,160) (5,929)
Net cash used in investing activities
Net cash used in investing activities
 (4,349) (5,526)
              
Cash flows from financing activities:
       
Cash flows from financing activities:
      
Dividends paid  (2,995) (2,495)Dividends paid (5,989) (4,990)
              
Net cash used in financing activities
  (2,995) (2,495)
Net cash used in financing activities
 (5,989) (4,990)
              
Net increase/(decrease) in cash and cash equivalents  861  (4,257)
Net decrease in cash and cash equivalentsNet decrease in cash and cash equivalents (5,444) (6,260)
Cash and cash equivalents at beginning of year
  20,605  15,331 
Cash and cash equivalents at beginning of year
 20,605  15,331 
              
Cash and cash equivalents at end of period
 $21,466 $11,074 
Cash and cash equivalents at end of period
$15,161 $9,071 

The accompanying notes are an integral part of these consolidated condensed financial statements.

4

Part I - Financial Information
Item 1. Financial Statements

Value Line, Inc.
Consolidated Condensed Statement of Changes in Shareholders' Equity
For the ThreeSix Months Ended JulyOctober 31, 2007
(in thousands, except share amounts)
(unaudited)

 Common stock              
              Accumulated   
 Number   Additional        Other   
 of   paid-in Treasury Comprehensive  Retained Comprehensive   
 shares Amount capital Stock income  earnings income Total  
Common stock
Number
of
shares
 Amount 
Additional paid-in
capital
 
Treasury
Stock
 
Comprehensive
income
 
Retained
earnings
 
Accumulated
Other Comprehensive
income
 Total 
                                    
Balance at April 30, 2007  9,981,600         $1,000         $991          ($354)                      $57,383          $16,552          $75,572   9,981,600 $1,000 $991 $(354)   $57,383 $16,552 $75,572 
                                      
Comprehensive income                                      
Net income          $5,943   5,943   5,943           $12,302 12,302   12,302 
Other comprehensive income, net of tax:                                      
Change in unrealized gains on securities, net of taxes           547     547 547            3,444   3,444 3,444 
                         
Comprehensive income          $6,490                   $15,746       
                    
Dividends declared               (2,995)   (2,995)             (5,989)   (5,989)
                    
Balance at July 31, 2007  9,981,600 $1,000 $991  ($354)    $60,331 $17,099 $79,067 
Balance at October 31, 2007  9,981,600 $1,000 $991 $(354)   $63,696 $19,996 $85,329 

The accompanying notes are an integral part of these consolidated condensed financial statements.

5
 
Part I - Financial Information
Item 1. Financial Statements

Value Line, Inc.
Consolidated Condensed Statement of Changes in Shareholders' Equity
For the ThreeSix Months Ended JulyOctober 31, 2006
(in thousands, except share amounts)
(unaudited)

 Common stock              
              Accumulated   
 Number   Additional        Other   
 of   paid-in Treasury Comprehensive  Retained Comprehensive   
 shares Amount capital Stock income  earnings income Total  
Common stock Number
of
shares
 Amount 
Additional
paid-in
capital
 
Treasury
Stock
 
Comprehensive
income
 
Retained
earnings
 
Accumulated
Other
Comprehensive
income
 Total 
                                    
Balance at April 30, 2006  9,981,600          $1,000          $991           ($354)                      $44,256          $16,042          $61,935   9,981,600 $1,000 $991 $(354)   $44,256 $16,042 $61,935 
                                      
Comprehensive income                                      
Net income          $6,271   6,271   6,271           $12,180 12,180   12,180 
Other comprehensive income, net of tax:                                      
Change in unrealized gains on securities, net of taxes           (2,140)    (2,140) (2,140)              (706)    (706) (706)
                                      
Comprehensive income             $4,131                        $11,474          
                                      
Dividends declared               (2,495)   (2,495)            (5,490)   (5,490)
                                        
Balance at July 31, 2006  9,981,600 $1,000 $991  ($354)    $48,032 $13,902 $63,571 
Balance at October 31, 2006  9,981,600 $1,000 $991 $(354)   $50,946 $15,336 $67,919 

The accompanying notes are an integral part of these consolidated condensed financial statements.
 
6

Value Line, Inc.
Notes to Consolidated Condensed Financial Statements

Note 1-Organization and Summary of Significant Accounting Policies:

The interim consolidated condensed financial statements of Value Line, Inc., together with its subsidiaries (collectively referred to as the “Company”), are unaudited. 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 20, 2007 for the fiscal year ended April 30, 2007. Results of operations covered by this report may not be indicative of the results of operations for the entire year.

Value Line, Inc. ("VLI") is incorporated in the State of New York. The Company's primary businesses are producing investment related periodical publications, licensing certain Value Line trademarks and Value Line proprietary ranking system information to third parties under written agreements for use in third party managed and marketed investment products, providing investment management and distribution services to the Value Line Funds, institutions and individual accounts and providing distribution, marketing, and administration services to the Value Line Funds. The name "Value Line" as used to describe the Company, its products, and its subsidiaries, is a registered trademark of the Company.

Principles of consolidation:
 
The consolidated condensed financial statements include the accounts of the Company and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Revenue Recognition:
 
Depending upon the product, subscriptionssubscription fulfillment is available in print, via internet access, and CD-ROM. The length of a subscription varies by product and offer received by the subscriber. Generally, subscriptions are available as trial subscriptions, annual subscriptions and/or multi-year subscriptions. Subscription revenues are recognized on a straight line basis over the life of the subscription. Accordingly, the amount of subscription fees to be earned by fulfilling subscriptions after the date of the balance sheet is shown as unearned revenue within current and long-term liabilities.

Licensing revenues are derived from licensing certain Value Line trademarks and Value Line proprietary ranking system information to third parties under written agreements for use in selecting securities for third party marketed products, including unit investment trusts, closed-end fund products and exchange traded funds. Value Line earns an asset based licensing fee as specified in the individual licensing agreements. Revenue is recognized monthly over the term of the agreement and will fluctuate as the market value of the underlying portfolio increases or decreases in value.

Investment management fees consist of management fees from the Value Line Mutual Funds ("Value Line Funds"), and from asset management clients. Investment management fees for the mutual funds are earned on a monthly basis as services are performed and the fee is calculated based on average daily net assets of the mutual funds in accordance with each fund's advisory agreement. Investment management fees for the asset management accounts are earned on a monthly basis as services are performed and the fee is calculated on assets in accordance with each of the management agreements (see note 6).

Service and distribution fees are received from the Value Line Funds in accordance with service and distribution plans under rule 12b-1 of the Investment Company Act of 1940. The plans are compensation plans, which means that the distributor’s fees under the plans are payable without regard to actual expenses incurred by the distributor. Expenses incurred by Value Line Securities, Inc. ("VLS") include payments to securities dealers, banks, financial institutions and other organizations which(including an allocation of VLI expenses), that provide distribution, marketing, and administrative services with respect to the distribution of the mutual funds’ shares. Service and distribution fees are received on a monthly basis and calculated on the average daily net assets of the respective mutual fund in accordance with each fund prospectus.

Valuation of Securities:
 
The Company's securities classified as available for sale consist of shares of the Value Line Funds and government debt securities accounted for in accordance with Statement of Financial Accounting Standards No.115, "Accounting for Certain Investments in Debt and Equity Securities". The securities available for sale and trading securities reflected in the consolidated condensed financial statements at fair value are valued at market with unrealized gains and losses on these securities reported, net of applicable taxes, as a separate component of Shareholders' Equity. Realized gains and losses on sales of the securities available for sale are recorded in earnings on trade date and are determined on the identified cost method.

The Company classifies its securities available for sale as current assets. It does so to properly reflect its liquidity and to recognize the fact that it has assets available for sale to fully satisfy its current liabilities should the need arise.

Market valuation of securities listed on a securities exchange is based on the closing sales prices on the last business day of each month. Valuation of open-ended mutual fund shares is based upon the publicly quoted net asset value of the shares. The market value of the Company's fixed maturity government debt obligations are determined utilizing publicly quoted market prices.

Advertising expenses:
       
The Company expenses advertising costs as incurred.
 
7

Value Line, Inc.
Notes to Consolidated Condensed Financial Statements

Reclassification:
 
Certain items in the prior year financial statements have been reclassified to conform to the current year presentation.

Income Taxes:

The Company computes its income tax provision in accordance with the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected in the consolidated condensed Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book values and the tax bases of particular assets and liabilities, using tax rates currently in effect for the years in which the differences are expected to reverse.

Earnings per share:

Earnings per share are based on the weighted average number of shares of common stock and common stock equivalents outstanding during each year.

Cash and Cash Equivalents:

For purposes of the consolidated condensed Statements of Cash Flows, the Company considers all cash held at banks and short term liquid investments with an original maturity of less than three months to be cash and cash equivalents. As of JulyOctober 31, 2007 and April 30, 2007, cash equivalents included $19,915,000$14,167,000 and $19,868,000, respectively, invested in the Value Line Cash Fund.

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.

Note 2-Investments:

Securities held by the Company are classified as Trading Securities and Available-for-Sale Securities. All securities held by Value Line Securities, Inc. ("VLS"),VLS, as a broker/dealer, are classified as trading securities. Securities held by the Company and its other subsidiaries, which are all held with the expectation that they may be sold in less than one year, are also classified as trading securities. All other investments not classified as trading securities are classified as available-for-sale securities.

Trading Securities:

Trading securities held by the Company at JulyOctober 31, 2007 had an aggregate cost of $17,527,000$20,042,000 and a market value of $17,156,000.$19,734,000. Trading securities held by the Company at April 30, 2007 had an aggregate cost of $16,115,000 and a market value of $15,849,000. There were no sales and no realized trading gains or losses during the first quartersix months of fiscal year 2008 or 2007. The net changes in unrealized losses of $104,000$41,000 for the period ended JulyOctober 31, 2007 and the net changes in unrealized gains of $3,000$98,000 for the period ended JulyOctober 31, 2006, respectively, were included in the Consolidated Condensed Statement of Income.

Securities Available for Sale:
Equity Securities:

The aggregate cost of the equity securities classified as available for sale, which consist of investments in the Value Line Funds, was $23,922,000$23,926,000 and the market value was $50,664,000$55,067,000 at JulyOctober 31, 2007. The aggregate cost of the equity securities classified as available for sale, which consist of investments in the Value Line Funds, was $23,917,000 and the market value was $49,719,000 at April 30, 2007. The total gains for equity securities with net gains included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheet are $26,791,000$31,142,000 and $25,859,000, net of deferred taxes of $9,431,000$10,962,000 and $9,102,000, as of JulyOctober 31, 2007 and April 30, 2007, respectively. TheAt October 31, 2007, there were no losses for equity securities included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheet. At April 30, 2007, the total losses for equity securities with net losses included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheet were $49,000 and $58,000, net of deferred tax benefit of $17,000 and $20,000, as of July 31, 2007 and April 30, 2007, respectively. $20,000.
During the threesix months ended JulyOctober 31, 2007 and 2006, there were no sales and no realized gains or losses on equity securities, for which unrealized gains and losses were included in Accumulated Other Comprehensive Income as of JulyOctober 31, 2007 or JulyOctober 31, 2006. The increase in gross unrealized gains on theseequity securities classified as available for sale of $941,000$5,340,000 and the decrease in gross unrealized gains of $3,302,000,$1,210,000, net of deferred taxes of $331,000$1,880,000 and $1,162,000,$426,000 at October 31, 2007 and 2006, respectively were included in Shareholders' Equity at July 31, 2007 and 2006, respectively.Equity.

8

Value Line, Inc.
Notes to Consolidated Condensed Financial Statements

Government Debt Securities:

Government debt securities consist of federal, state, and local government securities within the United States. The Company'sCompany’s investments in debt securities are classified as available for sale and valued at market value. The aggregate cost and fair value at JulyOctober 31, 2007 for government debt securities classified as available for sale were as follows:

   (In Thousands)   
 Historical   Gross Unrealized  (In Thousands) 
Maturity Cost Fair Value Holding Losses   
Historical
Cost
  Fair Value 
 Gross Unrealized
Holding Losses
 
Due in less than 2 years $16,202 $15,971  ($231) $11,755 $11,519 $ (236)
Due in 2 years or more  13,301  13,176  (125)  19,746  19,698  (48)
Total investment in debt securities $29,503 $29,147  ($356) $31,501 $31,217 $ (284)

The aggregate cost and fair value at April 30, 2007 for government debt securities classified as available for sale were as follows:

   (In Thousands)   
 Historical   Gross Unrealized  (In Thousands) 
Maturity Cost Fair Value Holding Losses  
 Historical
Cost
  Fair Value 
Gross Unrealized
Holding Losses
 
Due in less than 2 years $9,504 $9,324  ($180) $9,504 $9,324 $ (180)
Due in 2 years or more  17,857  17,779  (78)  17,857  17,779  (78)
Total investment in debt securities $27,361 $27,103  ($258) $27,361 $27,103 $ (258)

The unrealized losses of $356,000$284,000 and $258,000 in government debt securities net of deferred income tax benefits of $126,000$100,000 and $91,000, respectively, were included in Accumulated Other Comprehensive Income on the Consolidated Condensed Balance Sheets as of JulyOctober 31, 2007 and April 30, 2007, respectively.
 
The average yield on the Government debt securities classified as available for sale at JulyOctober 31, 2007 and April 30, 2007 was 3.63%3.30% and 3.54%, respectively.
 
Proceeds from sales of government debt securities classified as available for sale during the threesix months ended JulyOctober 31, 2007 and 2006 were $683,000$5,137,000 and $125,000,$5,125,000, respectively. There were no related gains or lossesThe company recognized a gain of $7,000 on the sales of government debt securities during the first quartersix months of fiscal 2008 or 2007.2008. A loss of $66,000 on sales of government debt securities was recognized during the six months ended October 31, 2006.
 
For the threesix months ended JulyOctober 31, 2007 and 2006, income from securities transactions also included $252,000$461,000 and $167,000$306,000 of dividend income and $552,000$1,152,000 and $423,000$899,000 of interest income. There was no interest expense during the first quartersix months of fiscal 2008 or 2007.

Note 3-Supplementary Cash Flow Information:

Cash payments for income taxes were $765,000$8,054,000 and $1,450,000$8,737,000 for the threesix months ended JulyOctober 31, 2007 and 2006, respectively.

Note 4-Employees' Profit Sharing and Savings Plan:

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 on 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 Condensed Statement of Income, was $270,000$480,000 and $320,000$663,000 for the threesix months ended JulyOctober 31, 2007 and 2006, respectively.
 
9

Value Line, Inc.
Notes to Consolidated Condensed Financial Statements

Note 5-Comprehensive Income:

The Company has adopted Financial Accounting Standards No. 130, "Reporting Comprehensive Income". 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 JulyOctober 31, 2007 and April 30, 2007, the Company held both equity securities and U.S. Government debt securities that are classified as Available for Sale on the Consolidated Condensed Balance Sheets. The change in valuation of these securities, net of deferred income taxes, has been recorded in Accumulated Other Comprehensive Income in the Company's Consolidated Condensed Balance Sheets.

The components of comprehensive income that are included in the Statement of Changes in Shareholders' Equity are as follows:

   (in thousands)    (in thousands) 
 Before Tax Net of  
Before
Tax
Amount
 
Tax
(Expense)
or Benefit
 
Net of
Tax
Amount
 
 Tax (Expense) Tax 
 Amount or Benefit Amount 
Three months ended July 31, 2007       
Six months ended October 31, 2007          
Unrealized Gains on Securities:                    
Change in Unrealized Holding Gains Arising during the period $843  ($296)$547  $5,314 $ (1,870)$3,444 
                    
Change in Other Comprehensive Income $843  ($296)$547  $5,314 $ (1,870)$3,444 
                    
Three months ended July 31, 2006          
Unrealized Gains on Securities:          
Six months ended October 31, 2006          
Unrealized Losses on Securities:          
Change in Unrealized Holding Losses Arising during the period  ($3,302)$1,162  ($2,140) $ (1,156)$408 $ (748)
Less: Reclassification of losses realized in net income $66 $ (24)$42 
                    
Change in Other Comprehensive Income  ($3,302)$1,162  ($2,140) $ (1,090)$384 $ (706)

Note 6-Related Party Transactions:

The Company acts as investment adviser and manager for fourteen open-ended investment companies, the Value Line Funds. The Company earns investment management fees based upon the average daily net asset values of the respective Value Line Funds. Service and distribution fees are received from the Value Line Funds in accordance with service and distribution plans under rule 12b-1 of the Investment Company Act of 1940. The plans are compensation plans, which means that the distributor’s fees under the plans are payable without regard to actual expenses incurred by the distributor, which means the distributor may earn a profit under the plan. Expenses incurred by VLS include payments to securities dealers, banks, financial institutions and other organizations which provide distribution, marketing, and administrative services (including payments by VLS to VLI for allocated compensation and administration expenses) with respect to the distribution of the mutual funds’ shares. Service and distribution fees are received on a monthly basis and calculated on the average daily net assets of the respective mutual fund in accordance with each fund's prospectus.

For the threesix months ended JulyOctober 31, 2007 and 2006, investment management fees and 12b-1 service and distribution fees amounted to $7,883,000$16,032,000 and $7,757,000,$15,088,000, respectively, which included fee waivers for certain of the Value Line Funds. These amounts included service and distribution fees of $1,669,000$3,537,000 and $2,107,000$3,873,000 earned by VLS in fiscal years 2008 and 2007, respectively. The related receivables from the funds for investment management fees and service and distribution fees included in Receivables from affiliates were $2,758,000$2,857,000 and $2,534,000 at JulyOctober 31, 2007 and April 30, 2007, respectively.

For the threesix months ended JulyOctober 31, 2007 and 2006, total management fee waivers were $60,000$117,000 and $65,000$128,000 respectively, and service and distribution fee waivers were $1,119,000$2,042,000 and $516,000,$1,314,000, respectively. The Company and its subsidiary, VLS, have no right to recoup the previously waived amounts of management fees and 12b-1 fees.

As of JulyOctober 31, 2007, the Company had $50,660,000$55,064,000 invested in the Value Line equity funds and $19,915,000$14,167,000 in the Value Line Cash Fund. Combined, this represents approximately 1.9%1.7% of total fund assets at JulyOctober 31, 2007. Purchases and redemptions routinely occur in the Value Line Cash Fund as part of business operations.

For the threesix months ended JulyOctober 31, 2007 and 2006, the Company was reimbursed $461,000$739,000 and $308,000,$533,000, respectively, for payments it made on behalf of and services it provided to the Parent. At JulyOctober 31, 2007, and April 30, 2007, Receivables from affiliates included a Receivable from the Parent of $71,000$41,000 and $243,000, respectively.

10
Value Line, Inc.
Notes to Consolidated Condensed Financial Statements
From time to time, the Parent has purchased additional shares of the Company in the market when and as the Parent has determined it to be appropriate. As stated several times in the past, the public is reminded that the Parent may make additional purchases from time to time in the future. For the quarter ended JulyOctober 31, 2007, the Parent did not not purchase any additional shares in the market.
 
10

Value Line, Inc.
Notes to Consolidated Condensed Financial Statements

Note 7-Federal, State and Local Income Taxes:

The Company computes its income tax provision 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:

 Three months ended July 31,  Six months ended October 31, 
 2007 2006  2007 2006 
 (in thousands)  (in thousands) 
Current:            
Federal $3,005 $3,346  $5,964 $6,332 
State and local  833  904   1,733  1,741 
  3,838  4,250   7,697  8,073 
Deferred:              
Federal  (114) (45)  (30) (47)
State and local  (1) (14)  (2) (38)
  (115) (59)  (32) (85)
Provision for income taxes $3,723 $4,191  $7,665 $7,988 

Deferred income 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 (liability)/assets are primarily a result of unrealized gains on the Company's available for sale securities portfolios.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

 Three months ended July 31,  Six months ended October 31, 
 2007 2006  2007 2006 
 (in thousands)  (in thousands) 
          
Tax expense at the U.S. statutory rate $3,383 $3,662        
Increase (decrease) in tax expense from:         6,988  7,059 
State and local income taxes, net of federal income tax benefit  541  579   1,125  1,107 
Effect of tax exempt income and dividend deductions  (166) (88)  (365) (168)
Other, net  (35) 38   (83) (10)
Provision for income taxes $3,723 $4,191  $7,665 $7,988 

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing arrangement which requires it to make tax payments to the Parent equal to the Company's liability as if it filed a separate return.
 
Note 8-Business Segments:

The Company operates two reportable business segments: Investment Periodicals, Publishing & Licensing and Investment Management. The Investment Periodicals, Publishing & Licensing segment produces investment related periodical publications (retail and institutional) in both print and electronic form, and receives licensing fees for Value Line proprietary ranking system information and Value Line trademarks. The Investment Management segment provides advisory services to the Value Line Funds, as well as institutional and individual accounts. 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 and income from securities transactions related to corporate assets, between the two reportable segments.
 
11

Value Line, Inc.
Notes to Consolidated Condensed Financial Statements

Disclosure of Reportable Segment Profit and Segment Assets (in thousands)

Disclosure of Reportable Segment Profit and Segment Assets (in thousands)
   
 Three months ended July 31, 2007 
 Investment     
 Periodicals, Investment Total 
 Publishing & Management   
 Licensing      Six months ended October 31, 2007 
        Investment Periodicals, Publishing & Licensing 
Investment
Management
   Total 
Revenues from external customers $12,616 $8,185 $20,801  $25,268 $16,643 $41,911 
Intersegment revenues  9  -  9   50  -  50 
Income from securities transactions  95  239  334   165  645  810 
Depreciation and amortization  414  18  432   857  36  893 
Segment operating profit  5,247  3,722  8,969   10,603  7,786  18,389 
Segment assets  18,724  81,371  100,095   16,737  86,403  103,140 
Expenditures for segment assets  15  -  15   208  -  208 

  Three months ended July 31, 2006 
  Investment     
  Periodicals, Investment Total 
  Publishing & Management   
  Licensing     
Revenues from external customers $13,352 $8,039 $21,391 
Intersegment revenues  25  -  25 
Income from securities transactions  36  243  279 
Depreciation and amortization  528  23  551 
Segment operating profit  5,439  4,434  9,873 
Segment assets  14,469  72,195  86,664 
Expenditures for segment assets  117  -  117 
           
Reconciliation of Reportable Segment Revenues, Operating Profit and Assets

  (in thousands) 
  2007 2006 
Revenues
     
Total revenues for reportable segments $20,810 $21,416 
Elimination of intersegment revenues  (9) (25)
Total consolidated revenues $20,801 $21,391 
        
Segment profit
       
Total profit for reportable segments  9,303  10,152 
Add: Income from securities transactions related to corporate assets  367  314 
Less: Depreciation related to corporate assets  (4) (4)
          Income before income taxes $
9,666
 $10,462 
        
Assets
       
Total assets for reportable segments  100,095  86,664 
Corporate assets  32,583  30,888 
Consolidated total assets $132,678 $117,552 
Value Line, Inc.
Notes to Consolidated Condensed Financial Statements
  Six months ended October 31, 2006 
  Investment Periodicals, Publishing & Licensing   Investment Management   Total 
Revenues from external customers $26,493 $15,643 $42,136 
Intersegment revenues  50  -  50 
Income from securities transactions  76  638  714 
Depreciation and amortization  1,055  40  1,095 
Segment operating profit  11,240  7,697  18,937 
Segment assets  13,330  75,453  88,783 
Expenditures for segment assets  209  -  209 

Reconciliation of Reportable Segment Revenues, Operating Profit and Assets
  (in thousands) 
  2007 2006 
Revenues
       
Total revenues for reportable segments $41,961 $42,186 
Elimination of intersegment revenues  (50) (50)
Total consolidated revenues $41,911 $42,136 
Segment profit
       
Total profit for reportable segments  19,199  19,651 
Add:   Income from securities transactions       
related to corporate assets  776  524 
Less:  Depreciation related to corporate assets  (8) (7)
Income before income taxes $19,967 $20,168 
Assets
       
Total assets for reportable segments  103,140  88,783 
Corporate assets  33,307  29,034 
Consolidated total assets $136,447 $117,817 
Note 9-Contingencies:

By letter dated June 15, 2005, the staff of the Securities and Exchange Commission informed the Company that it was conducting an informal inquiry. Thereafter, the staff has requested documents and information related to, among other things, trades for the Company’s and its affiliates’ proprietary accounts, execution of trades through VLS for the Value Line Funds and the fees collected by VLS from the Value Line Funds pursuant to a Service and Distribution Plan. The Company and its subsidiaries are cooperating with the inquiry. Management cannot determine the effect, if any, that the inquiry will have on the results of operations and financial condition.
12

 
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
     FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This report contains statements (including certain projections and business trends) accompanied by such phrases as “believe”, “estimate”, “expect”, “anticipate”, “will”, “intend” and other similar or negative expressions, that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to the following:

·dependence on key personnel;
·maintaining revenue from subscriptions for the Company’s products;
·protection of intellectual property rights;
·changes in market and economic conditions;
·fluctuations in the Company’s assets under management due to broadly based changes in the values of equity and debt securities, redemptions by investors and other factors;
·dependence on Value Line Funds for investment management and related fees;
·competition in the fields of publishing, licensing and investment management;
·the impact of government regulation on the Company’s business and the uncertainties of litigation and regulatory proceedings;
·terrorist attacks; and
·other risks and uncertainties, including but not limited to the risks described in Item 1A, “Risk Factors” of the Company’s annual report on Form 10-K for year ended April 30, 2007, and other risks and uncertainties from time to time.

Any forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Results of Operations

Net income for the first quartersix months ended JulyOctober 31, 2007 of $5,943,000$12,302,000 or $0.60$1.23 per share was $328,000$122,000 or 5% below1% above net income of $6,271,000$12,180,000 or $0.63$1.22 per share for the first quartersix months of the prior fiscal year. Net income of $6,359,000 for the second quarter of fiscal 2008 was 7.6% above net income of $5,909,000 for the second quarter last fiscal year. Operating income of $8,965,000$18,381,000 for the threesix months ended JulyOctober 31, 2007 was $904,000$549,000 or 9%3% below operating income of $9,869,000$18,930,000 last fiscal year. Operating income of $9,416,000 for the second quarter of fiscal 2008 was 4% above operating income of $9,061,000 for the second quarter last fiscal year. The Company’s income from securities transactions of $701,000$1,586,000 for the threesix months ended JulyOctober 31, 2007 was 18%28% above last year’s. Shareholders’ equity of $79,067,000$85,329,000 at JulyOctober 31, 2007 was 24%26% higher than shareholders’ equity of $63,571,000$67,919,000 at JulyOctober 31, 2006.
Operating revenues

Three Months Ended July 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07 
Investment periodicals and related publications $10,963 $11,541  -5.0%
Licensing Fees $1,653 $1,811  -8.7%
Investment management fees and services $8,185 $8,039  1.8%
Total Operating Revenues $20,801 $21,391  -2.8%
Operating revenues
        
Six Months Ended October 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07 
Investment periodicals and related publications $21,823 $22,915  -4.8%
Licensing Fees $3,445 $3,578  -3.7%
Investment management fees and services $16,643 $15,643  6.4%
           
Total Operating Revenues $41,911 $42,136  -0.5%
 
13
 
Investment periodicals and related publications revenues

The investment periodicals and related publications revenues were down 5% for the first threesix months ended JulyOctober 31, 2007 as compared to the first quarter of the prior fiscal year.six months ended October 31, 2006. As a percentage of total operating revenues, investment periodicals and related publications revenues have fallen from 54%54.4% during the first quartersix months of fiscal 2007 to 52.7%52.1% during the first quartersix months of fiscal 2008. While the Company continues to bring in new subscribers through various marketing channels, primarily direct mail and the Internet, total product line circulation continues to decline. Factors that have contributed to the decline in the investment periodicals and related publications revenues include the increasing amount of competition in the form of free and paid investment research on the Internet and research provided by brokerage firms at no cost to their clients.
 
Within investment periodicals and related publications are subscription revenues to print and electronic products.
        
Six Months Ended October 31, 2007 2006 
Percentage
 Change
 
(in thousands)     FY 08 vs. 07 
Print publication revenues $15,788 $17,358  -9.0%
Electronic publication revenues* $6,035 $5,557  8.6%
Total Investment periodicals and related publications revenue $21,823 $22,915  -4.8%
           
Unearned Revenues (Short and Long Term) $31,930 $33,521  -4.7%

Three Months Ended July 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07 
        
Print publication revenues $7,984 $8,786  -9.1%
Electronic publication revenues $2,979 $2,755  8.1%
Total Investment periodicals and related publications revenue $10,963 $11,541  -5.0%
           
Unearned Revenues (Short and Long Term) $33,499 $35,510  -5.7%
* Retail business is down, Institutional Sales are up.
 
Value Line’s electronic publications revenues are derivedderive 46% from institutional accounts and 54% from retail subscribers. For the threesix months ended JulyOctober 31, 2007, institutional revenues increased $332,000$688,000 or 33%, while revenues from retail subscribers were down $108,000$210,000 or 6% as compared to the first quarter of the prior fiscal year.six months ended October 31, 2006. The decrease in electronic retail publications revenues is attributable to the decrease in circulation within the Company’s software products. Circulation of The Value Line Investment Analyzer decreased 24%13%, which resulted in a $122,000$281,000 decline in revenues from this product, partially offset by an increase in the circulation and revenues from the online subscription to The Value Line Investment Survey.

Licensing revenues

Licensing fee revenues have declined $158,000$133,000 for the threesix months ended JulyOctober 31, 2007 as compared to the first quarter of the prior fiscal yearsix months ended October 31, 2006 primarily due to the volatility in the equity markets and the conversion of three closed-end funds traded on the American Stock Exchange, to open-end Exchange Traded Funds. These three conversions, initiated in part as a result of the actions of companies that invest in closed-end funds for the purpose of instigatingencouraging trust action to eliminate discount NAV pricing, resulted in the withdrawal of assets that in turn, lowered the Company’s asset based licensing fees for the first quartersix months of fiscal 2008. As of JulyOctober 31, 2007, total third party sponsored assets attributable to the licensing business represent $5.6$6.1 billion in various products. The Company believes the growth of the business is dependent upon the desire of third party marketers to use the Value Line trademarks and proprietary research for their products, signing new licensing agreements, and the marketplace’s acceptance of new products. Value Line believes it was an early entrant into this new market five years ago and today the market has somewhat matured and the Company and its third party sponsors face more competition in the marketplace.
14

Investment management fees and distribution services revenues

The investment management fees and distribution services revenues were up $146,000$1,000,000 for the threesix months ended JulyOctober 31, 2007 as compared to the first quarter last fiscal year.six months ended October 31, 2006. While management fees for the first quarter six months
14
of fiscal year 2008 were up $564,000$1,280,000 as compared to the first quartersix months of fiscal year 2007 there was a net decrease of $438,000$336,000 in distribution services revenues due to 12b-1 fee waivers for certain of the Value Line Funds. For the threesix months ended JulyOctober 31, 2007 and 2006, 12b-1 fee waivers were $1,119,000$2,042,000 and $516,000,$1,314,000, respectively. For the threesix months ended JulyOctober 31, 2007 and 2006, total management fee waivers were $60,000$117,000 and $65,000,$128,000, respectively. The Company and its subsidiary, VLS, have no right to recoup the previously waived amounts of management fees and 12b-1 fees.

The table below illustrates the total fund assets for the threesix months ended JulyOctober 31, 2007 as compared to the first quartersix months last fiscal year. The second table shows the two channels through which the equity funds are available. Shares of Value Line Strategic Asset Management Trust (“SAM”) and Value Line Centurion Fund are available to the public only through the purchase of certain variable annuity and variable life insurance contracts issued by The Guardian Insurance & Annuity Company, Inc. (“GIAC”).

Three Months Ended July 31, 2007 2006 
Percentage
Change
 
       
Six Months Ended October 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07      FY 08 vs. 07 
       
Equity funds $3,331,770 $3,008,524  10.7% $3,656,441 $3,119,941  17.2%
Fixed income funds $279,712 $305,182  -8.3% $278,999 $305,465  -8.7%
Money Market funds $197,976 $172,535  14.7% $159,810 $175,448  -8.9%
          
Total net assets $3,809,458 $3,486,241  9.3% $4,095,250 $3,600,854  13.7%
              
Equity fund assets sold through GIAC $891,707 $928,105  -3.9% $948,673 $929,258  2.1%
All other equity fund assets $2,440,063 $2,080,419  17.3% $2,707,768 $2,190,683  23.6%
Total Equity fund net assets $3,331,770 $3,008,524  10.7% $3,656,441 $3,119,941  17.2%

The Company believes that the 17.3%23.6% growth in equity funds for the first quartersix months of fiscal 2008, excluding SAM and Centurion Funds sold through GIAC, has been in large part due to the superior performance for certain Value Line Funds at various intervals in terms of short, mid and long-term returns. As of JuneSeptember 30, 2007, 80% of the equity funds, excluding SAM and Centurion, had four or five star ratings by Morningstar, Inc. The largest distribution channel for the Value Line Funds remains the fund supermarket platforms such as, but not limited to, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and National City Bank.

Expenses

Advertising and promotion

        
Six Months Ended October 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07 
Advertising and promotion $7,074 $7,051  0.3%
Three Months Ended July 31, 2007 2006 
Percentage
 Change
 
(in thousands)     FY 08 vs. 07 
        
Advertising and promotion $3,596 $3,224  11.5%
15

Advertising and promotion expenses for the threesix months ended JulyOctober 31, 2007 increased $372,000$23,000 as compared to the first quarter of last fiscal year.six months ended October 31, 2006. The primary increase is within the fees paid to third party intermediaries, such as, but not limited to, Charles Schwab & Co., Inc. to market the Value Line Funds. This expense will fluctuate based on assets invested in the Value Line Funds by clients of the intermediaries, the change in market value of such assets, and the addition of any new intermediary selling agreements. The Company anticipates third party intermediary expenses will continue to increase as assets continue to grow and more shareholders come into the Value Line Funds through intermediaries rather than direct accounts. Costs associated with direct mail remained substantially the same,decreased 4% below last fiscal year, while the overall number of pieces mailed increased year to year. The Company also increased its expenditures in print media promoting the Value Line Funds in select markets. For the threesix months ended JulyOctober 31, 2007 media advertising expenses were up $121,000$301,000 as there was no media advertising during the first quarter of last fiscal year.six months ended October 31, 2006.
15
 
Salary and employee benefits

Three Months Ended July 31, 2007 2006 
Percentage
Change
 
       
Six Months Ended October 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07      FY 08 vs. 07 
          
Salaries and employee benefits $4,609 $4,542  1.5% $9,133 $9,166  -0.4%

Over the past several years, the Company has increased productivity by the combination of roles and responsibilities along with selective outsourcing. Some duplication of effort has been eliminated and certain tasks, such as data entry, have been outsourced to third party vendors that the Company believes can provide better controls and results at a favorable cost.

Production and distribution

Three Months Ended July 31, 2007 2006 
Percentage
Change
 
       
Six Months Ended October 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07      FY 08 vs. 07 
          
Production and distribution $1,663 $1,811  -8.2% $3,274 $3,605  -9.2%
 
Production and distribution expenses for the threesix months ended JulyOctober 31, 2007 were $148,000$331,000 below expenses for the first quarter ofsix months ended October 31, 2006. Amortized software costs decreased $196,000 below last fiscal year.year due to a decrease of capitalized projects and costs. In addition, the decline in expenses was due to lower demand for paper, printing and mailing costs that resulted primarily from a decrease in circulation of the print products. The decline in expenses was primarily due to lower demand for paper, printing and mailing costs that resulted primarily from a decrease in circulation of the print products. Partially offsetting the savings during the first quartersix months of fiscal 2008 was an increase in the cost of paper and an increase in postage rates.

Office and administration

Three Months Ended July 31, 2007 2006 Percentage Change 
       
Six Months Ended October 31, 2007 2006 
Percentage
Change
 
(in thousands)     FY 08 vs. 07      FY 08 vs. 07 
          
Office and administration $1,968 $1,945  1.2% $4,049 $3,384  19.7%
 
Office and administration expenses for the threesix months ended JulyOctober 31, 2007 were $23,000$665,000 above expenses for the first quarter of last fiscal year.six months ended October 31, 2006. During the first quartersix months of fiscal year 2008 professional fees significantly decreased as compared to the first quartersix months of fiscal year 2007. Professional fees can fluctuate year to year based on the level of activity requiring the use of outside professional consultants. Within Occupancy, during the last fiscal quarter of fiscal 2007, the Company extendedamended its lease in midtown New York extending the lease expiration date to May 2013 on negotiated terms in place of the Company’s renewal option at market rate, which resulted in significantly higher rent as a result of market conditions.
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Income from securities transactions, net
 
For the threesix months ended JulyOctober 31, 2007 the Company’s income from securities transactions, net, is $108,000$348,000 higher than income for the first quarter of last fiscal year.six months ended October 31, 2006. Income from securities transactions, net, includes dividend and interest income of $804,000$1,614,000 at JulyOctober 31, 2007 that is $214,000$409,000 or 36.5%34% higher than income of $590,000$1,205,000 for the first quarter of last fiscal yearsix months ended October 31, 2006 due to an increase in interest rates. Capital losses,gains, for the threesix months ended JulyOctober 31, 2007 were $104,000$7,000 as compared to capital gainslosses of $3,000$66,000 during the first quarter of fiscal year 2007.six months ended October 31, 2006.
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Liquidity and Capital Resources

The Company had working capital of $78,980,000$85,872,000 as of JulyOctober 31, 2007 and $62,484,000$67,102,000 as of JulyOctober 31, 2006. Cash and short-term securities totaled $101,277,000$121,179,000 as of JulyOctober 31, 2007 and $79,498,000$102,663,000 as of JulyOctober 31, 2006.

Cash from operating activities

The Company’s cash flow from operations of $6,016,000$4,894,000 for the threesix months ended JulyOctober 31, 2007 was 44%15% above cash flow from operations of $4,167,000$4,256,000 for the threesix months ended JulyOctober 31, 2006. The primary change was the purchase of additional fixed income debt securities within VLS, the Company’s broker/dealer subsidiary,company’s trading portfolio, which was partially offset by the slowing decline in unearned revenues and the timing of payments of accounts payable and accrued expenses within the Company.expenses.

Cash from investing activities

The Company’s cash outflow from investing activities of $2,160,000$4,349,000 for the threesix months ended JulyOctober 31, 2007 was 64%21% below cash outflow from investing activities of $5,929,000$5,526,000 for the threesix months ended JulyOctober 31, 2006 due to the maturity of fixed income securities and the redeployment of cash holdings into fixed income securities classified as available for sale to trading securities and cash during the first quartersix months of fiscal 2008.

Cash from financing activities

The Company’s net cash outflow from financing activities of $2,995,000$5,989,000 for the threesix months ended JulyOctober 31, 2007 increased 20% as compared to the first quartersix months of the prior fiscal year due to the payment of a higher quarterly dividend per common share of $0.30 in fiscal 2008 as compared to $0.25 in fiscal 2007.
 
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 does not anticipate any borrowing in fiscal 2008. 

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Critical Accounting Estimates and Policies

The Company’s Critical Accounting Estimates and Policies have not changed from those reported in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Form 10-K for the fiscal year ended April 30, 2007.
 
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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market Risk Disclosures

The Company’s Consolidated Balance Sheet includes a substantial amount of assets whose fair values are subject to market risks. The Company’s significant market risks are primarily associated with interest rates and equity prices. The following sections address the significant market risks associated with the Company’s business activities.

Interest Rate Risk

The Company’s strategy has been to acquire highly liquid debt securities with extremely low credit risk. Despite this strategy management recognizes and accepts the possibility that losses may occur. To limit the price fluctuation in these securities from interest rate changes, the Company’s management invests primarily in short-term obligations maturing in 1 to 5 years.

The fair values of the Company’s fixed maturity investments will fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally translate into decreases and increases in fair values of those instruments. Additionally, fair values of interest rate sensitive instruments may be affected by prepayment options, relative values of alternative investments, and other general market conditions.

The following table summarizes the estimated effects of hypothetical increases and decreases in interest rates on assets that are subject to interest rate risk. It is assumed that the changes occur immediately and uniformly to each category of instrument containing interest rate risks. The hypothetical changes in market interest rates do not reflect what could be deemed best or worst case scenarios. Variations in market interest rates could produce significant changes in the timing of repayments due to prepayment options available. For these reasons, actual results might differ from those reflected in the table. Dollars are in thousands.

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  Estimated Fair Value after 
  Hypothetical Change in Interest Rates 
    
  (bp = basis points) 
            
    6 mos. 6 mos. 1 yr. 1 yr. 
  Fair 50bp 50bp 100bp 100bp 
Fixed Income Securities Value increase decrease increase decrease 
            
As of July 31, 2007
Investments in securities with fixed maturities
 $46,303 $45,846 $46,567 $45,425 $46,633 
                 
As of April 30, 2007
Investments in securities with fixed maturities
 $42,952 $42,357 $43,074 $41,900 $43,054 
  
Estimated Fair Value after                   
Hypothetical Change in Interest Rates
 
    
  (bp = basis points) 
    
Fixed Income Securities
 
Fair
Value
 
6 mos.
50bp
increase
 
6 mos.
50bp
decrease
 
1 yr.
100bp
increase
 
1 yr.
100bp
decrease
 
            
As of October 31, 2007           
Investments in securities with fixed maturities $50,951 $50,161 $51,040 $49,578 $51,018 
                 
As of April 30, 2007                
Investments in securities with fixed maturities $42,952 $42,357 $43,074 $41,900 $43,054 

Management regularly monitors the maturity structure of the Company’s investments in debt securities in order to maintain an acceptable price risk associated with changes in interest rates.

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Equity Price Risk

The carrying values of investments subject to equity price risks are based on quoted market prices or management’s estimates of fair value as of the balance sheet dates. Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market price of a security may result from perceived changes in the underlying economic characteristics of the issuer, the relative price of alternative investments and general market conditions. Furthermore, amounts realized in the sale of a particular security may be affected by the relative quantity of the security being sold.

Value Line invests a significant level of its assets in equity securities, primarily the Value Line Funds. Each mutual fund invests in a variety of equity positions.

The table below summarizes Value Line’s equity price risks as of JulyOctober 31, 2007 and April 30, 2007 and shows the effects of a hypothetical 30% increase and a 30% decrease in market prices as of those dates. The selected hypothetical changes do not reflect what could be considered the best or worst case scenarios. Dollars are in thousands.

     Estimated  
     Fair Value after Hypothetical Percentage
   Hypothetical Hypothetical Increase (Decrease) in
Equity Securities Fair Value Price Change Change in Prices Shareholders’ Equity 
Fair Value
 
Hypothetical
Price Change
 
Estimated
Fair Value after
Hypothetical
Change in Prices
 
Hypothetical Percentage
Increase (Decrease) in
Shareholders’ Equity
 
As of July 31, 2007 $50,664 30% increase $65,863 12.49%
As of October 31, 2007  55,068  30% increase $71,588  12.58%
   30% decrease $35,464 (12.49)%     30% decrease  $38,547  (12.58)%
                     
As of April 30, 2007 $49,719 30% increase $64,635 12.83%  
49,719
  
30% increase
 
$
64,635
  
12.83
%
   30% decrease $34,803 (12.83)%     30% decrease  
$
34,803
  
(12.83
)%
 
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Item 4. CONTROLS AND PROCEDURES

(a)The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief FinancialPrincipal Accounting Officer, as appropriate, to allow timely decisions regarding disclosure.

The Company’s management has evaluated, with the participation of the Company’s Chief Executive Officer and Chief FinancialPrincipal Accounting Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief FinancialPrincipal Accounting Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b)The registrant’s principal executive officer and principal financialaccounting officer have determined that there have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
 
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Part II - Other Information
 
Item 1. Legal Proceedings

Refer to Note 9 (Contingencies) of the consolidated condensed financial statements for discussion of legal proceedings.
 
Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in Item 1A - Risk Factors in the Company’s Annual Report on Form 10-K for the year ended April 30, 2007.
 
Item 6. Exhibits

31.1 Certificate of Chief Executive Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certificate of Chief FinancialPrincipal Accounting Officer Required Under Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Joint CEO/CFOChief Executive Officer/Principal Accounting Officer Certificate Required Under Section 906 of the Sarbanes-Oxley Act of 2002.

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VALUE LINE, INC.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q report for the period ended JulyOctober 31, 2007 to be signed on its behalf by the undersigned thereunto duly authorized.

 Value Line, Inc. 
 (Registrant) 
   
Date: SeptemberDecember 14, 2007By:s/Jean Bernhard Buttner 
  Jean Bernhard Buttner 
  Chairman & Chief Executive Officer 
    
Date: SeptemberDecember 14, 2007By:s/Mitchell E. AppelStephen R. Anastasio 
  Mitchell E. AppelStephen R. Anastasio 
  Chief FinancialTreasurer, Principal Accounting Officer 

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