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Note 2 - Investments | 3 Months Ended
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Jul. 31, 2019
Notes to Financial Statements |
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block] |
Note 2 - Investments:
Securities Available-for-Sale:
Investments held by the Company and its subsidiaries are classified as securities available-for-sale in accordance with FASB's ASC 320, Investments - Debt and Equity Securities. All of the Company's securities classified as available-for-sale were readily marketable or had a maturity of twelve months or less and are classified as current assets on the Consolidated Condensed Balance Sheets.
Equity Securities:
Equity securities classified as available-for-sale on the Consolidated Condensed Balance Sheets, consist of ETFs held for dividend yield that attempt to replicate the performance of certain equity indexes and ETFs that hold preferred shares primarily of financial institutions.
As of July 31, 2019 and April 30, 2019, the aggregate cost of the equity securities classified as available-for-sale, which consist of investments in the SPDR Series Trust S&P Dividend ETF (SDY), First Trust Value Line Dividend Index ETF (FVD), INVESCO Financial Preferred ETF (PGF), Select Utilities Select Sector SPDR ETF (XLU), First Trust Value Line 100 ETF (FVL), ProShares Trust S&P 500 Dividend Aristocrats ETF (NOBL) and iShares Select Dividend ETF (DVY) was $8,940,000 and $8,541,000, respectively, and the fair value was $11,112,000 and $10,622,000, respectively.
There were no sales or proceeds from sales of equity securities during the three months ended July 31, 2019 or July 31, 2018. The increase in gross unrealized gains on equity securities classified as available-for-sale of $90,000, net of deferred taxes of $19,000 was included in Shareholders' Equity on the Consolidated Condensed Balance Sheet at July 31, 2019. The increase in gross unrealized gains on equity securities classified as available-for-sale of $538,000, net of deferred taxes of $113,000 was included in Shareholders' Equity on the Consolidated Condensed Balance Sheet at July 31, 2018.
The changes in the value of equity securities investments are recorded in Other Comprehensive Income in the Consolidated Condensed Financial Statements. Realized gains and losses are recorded as of the trade date in the Consolidated Condensed Statements of Income when securities are sold, mature or are redeemed. As of July 31, 2019 and April 30, 2019, accumulated other comprehensive income included unrealized gains of $2,172,000 and $2,082,000, net of deferred taxes of $456,000 and $437,000, respectively.
The carrying value and fair value of securities available-for-sale at July 31, 2019 were as follows:
|  |  |  |  |  | Gross Unrealized |  |  |  |  |
($ in thousands) |  | Cost |  |  | Holding Gains |  |  | Fair Value |
ETFs - equities |  | $ | 8,940 |  |  | $ | 2,172 |  |  | $ | 11,112 |
The carrying value and fair value of securities available-for-sale at April 30, 2019 were as follows:
|  |  |  |  |  | Gross Unrealized |  |  |  |  |
($ in thousands) |  | Cost |  |  | Holding Gains |  |  | Fair Value |
ETFs - equities |  | $ | 8,541 |  |  | $ | 2,081 |  |  | $ | 10,622 |
Government Debt Securities (Fixed Income Securities):
Fixed income securities consist of certificates of deposits and securities issued by federal, state and local governments within the United States. The aggregate cost and fair value at July 31, 2019 of fixed income securities classified as available-for-sale were as follows:
|  | Amortized |  |  | Gross Unrealized |  |  |  |  |
($ in thousands) |  | Historical Cost |  |  | Holding Gains |  |  | Fair Value |
Maturity |  |  |  |  |  |  |  |  |  |  |  |
Due within 1 year |  | $ | 6,411 |  |  | $ | 35 |  |  | $ | 6,446 |
Due 1 year through 5 years |  |  | 5,000 |  |  |  | 27 |  |  |  | 5,027 |
Total investment in government debt securities |  | $ | 11,411 |  |  | $ | 62 |  |  | $ | 11,473 |
The aggregate cost and fair value at April 30, 2019 of fixed income securities classified as available-for-sale were as follows:
|  | Amortized |  |  | Gross Unrealized |  |  |  |  |
($ in thousands) |  | Historical Cost |  |  | Holding Gains |  |  | Fair Value |
Maturity |  |  |  |  |  |  |  |  |  |  |  |
Due within 1 year |  | $ | 6,913 |  |  | $ | 33 |  |  | $ | 6,946 |
Due 1 year through 5 years |  |  | 4,250 |  |  |  | 10 |  |  |  | 4,260 |
Total investment in government debt securities |  | $ | 11,163 |  |  | $ | 43 |  |  | $ | 11,206 |
Proceeds from maturities and sales of government debt securities classified as available-for-sale during the three months ended July 31, 2019 and July 31, 2018, were $2,973,000 and $1,637,000, respectively. The increase in gross unrealized gains of $18,000 on fixed income securities classified as available-for-sale net of deferred income tax of $4,000, was included in Shareholders' Equity on the Consolidated Condensed Balance Sheet as of July 31, 2019. The decrease in gross unrealized losses of $2,000 on fixed income securities classified as available-for-sale net of deferred income tax of $1,000, was included in Shareholders' Equity on the Consolidated Condensed Balance Sheet as of July 31, 2018. As of July 31, 2019 and April 30, 2019, accumulated other comprehensive income included unrealized gains of $61,000 and $43,000, net of deferred taxes of $13,000 and $9,000, respectively.
The average yield on the Government debt securities classified as available-for-sale at July 31, 2019 and April 30, 2019 was 2.41% and 2.09%, respectively.
Income from Securities Transactions:
Income from securities transactions was comprised of the following:
|  | Three Months Ended July 31, |
($ in thousands) |  | 2019 |  |  | 2018 |
Dividend income |  | $ | 70 |  |  | $ | 67 |
Interest income |  |  | 71 |  |  |  | 35 |
Other |  |  | - |  |  |  | 12 |
Total income from securities transactions, net |  | $ | 141 |  |  | $ | 114 |
Investment in Unconsolidated Entities:
Equity Method Investment:
As of July 31, 2019 and April 30, 2019, the Company's investment in EAM Trust on the Consolidated Condensed Balance Sheets was $58,971,000 and $58,625,000, respectively.
The value of VLI’s investment in EAM at July 31, 2019 and April 30, 2019 reflects the fair value of contributed capital of $55,805,000 at inception which included $ 5,820,000 of cash and liquid securities in excess of working capital requirements contributed to EAM’s capital account by VLI, plus VLI's share of non-voting revenues and non-voting profits from EAM less distributions, made quarterly to VLI by EAM, during the period subsequent to its initial investment through the dates of the Consolidated Condensed Balance Sheets.
It is anticipated that EAM will have sufficient liquidity and earn enough profit to conduct its current and future operations so the management of EAM will not need additional funding.
The Company monitors its Investment in EAM Trust for impairment to determine whether an event or change in circumstances has occurred that may have a significant adverse effect on the fair value of the investment. Impairment indicators include, but are not limited to the following: (a) a significant deterioration in the earnings performance, asset quality, or business prospects of the investee, (b) a significant adverse change in the regulatory, economic, or technological environment of the investee, (c) a significant adverse change in the general market condition of the industry in which the investee operates, or (d) factors that raise significant concerns about the investee’s ability to continue as a going concern such as negative cash flows, working capital deficiencies, or noncompliance with statutory capital and regulatory requirements. EAM did not record any impairment losses for its assets during the fiscal years 2020 or 2019.
The components of EAM’s investment management operations, provided to the Company by EAM, were as follows:
|  | Three Months Ended July 31, |
($ in thousands) (unaudited) |  | 2019 |  |  | 2018 |
Investment management fees earned from the Value Line Funds, net of waivers shown below |  | $ | 5,147 |  |  | $ | 4,109 |
12b-1 fees and other fees, net of waivers shown below |  | $ | 1,979 |  |  | $ | 1,704 |
Other income |  | $ | 53 |  |  | $ | 71 |
Investment management fee waivers and reimbursements |  | $ | 109 |  |  | $ | 111 |
12b-1 fee waivers |  | $ | 173 |  |  | $ | 159 |
Value Line’s non-voting revenues interest |  | $ | 2,588 |  |  | $ | 1,968 |
EAM's net income (1) |  | $ | 566 |  |  | $ | 606 |
( 1 ) Represents EAM's net income, after giving effect to Value Line’s non-voting revenues interest, but before distributions to voting profits interest holders and to the Company in respect of its 50% non-voting profits interest.
|  | July 31, |  |  | April 30, |
($ in thousands) |  | 2019 |  |  | 2019 |
|  | (unaudited) |  |  |  |  |
EAM's total assets |  | $ | 61,366 |  |  | $ | 60,683 |
EAM's total liabilities (1) |  |  | (4,478 | ) |  |  | (3,547 | )
EAM's total equity |  | $ | 56,888 |  |  | $ | 57,136 |
( 1 ) At July 31, 2019 and April 30, 2019, EAM's total liabilities included a payable to VLI for its accrued non-voting revenues interest and non-voting profits interest of $2,843,000 and $2,420,000, respectively.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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