UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file Number _811-719_
The Value Line Special Situations Fund, Inc.
- ----------------------------------------------------------------
(Exact name of registrant as specified in charter)
220 East 42nd Street, New York, N.Y. 10017
- --------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-907-1500
Date of fiscal year end: December 31, 2003
-----------------
Date of reporting period: December 31, 2003
Item I. Reports to Stockholders.
- ------ ------------------------
A copy of the Annual Report to Stockholders for the period ended is
included with this Form.
Item 2. Code of Ethics
- ------- --------------
(a) The Registrant has adopted a Code of Ethics that applies to
its Principal Executive Officers and Principal Financial and
Accounting Officer.
(f) Pursuant to item 10(a), the Registrant is attaching as an
exhibit a copy of it's Code of Ethics that applies to it's
Principal Executive Officers and Principal Financial and
Accounting Officer.
Item 3. Audit Committee Financial Expert.
- ------- ---------------------------------
(a)(1) The Registrant has an Audit Committee Financial Expert serving
on its Audit Committee.
(2) The Registrant's Board has designated John W. Chandler, a member
of the Registrant's Audit Committee, as the Registrant's Audit Committee
Financial Expert. Mr. Chandler is an independent director who is a senior
consultant with Academic Search Consultation Service. He spent most of his
professional career at Williams College, where he served as a faculty member,
Dean of the Faculty, and President (1973-85). He also served as President of
Hamilton College (1968-73), and as President of the Association of American
Colleges and Universities (1985-90). He has previously served as Trustee
Emeritus and Chairman of the Board of Trustees of Duke University.
A person who is designated as an "audit committee financial expert" shall not
make such person an "expert" for any purpose, including without limitation under
Section 11 of the Securities Act of 1933 or under applicable fiduciary laws, as
a result of being designated or identified as an audit committee financial
expert. The designation or identification or a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services
- ------- --------------------------------------
(a) Audit Fees 2003 - $29,140; Audit Fees 2002 - $39,074
(b) Audit-Related fees - Non
(c) Tax Preparation Fees 2003 - $7,040; Tax Preparation Fees 2002 -
$7,554
(d) All Other Fees - None
(e) (1) Audit Committee Pre-Approval Policy. All services to be
performed for the Registrant by PricewaterhouseCoopers LLP must be
pre-approved by the audit committee. All services performed during
2003 and 2002 were pre-approved by the committee.
(e) (2) not applicable.
(f) Not applicable.
(g) Aggregate Non-Audit Fees 2003 - $7,040; Aggregate Non-Audit Fees
2002 - $7,554
(h) Not applicable.
Item 9. Controls and Procedures.
- ------- ------------------------
(a) The registrant's principal executive officer and principal
financial officer have concluded that the registrant's disclosure
controls and procedures (as defined in rule 30a-2(c) under the Act
(17 CFR 270.30a-2(c) ) based on their evaluation of these controls
and procedures as of the date within 90 days of 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.
Item 10. Exhibits.
- -------- ---------
(a) Code of Ethics for Principal Executive and Senior Financial
Officers attached hereto as Exhibit 100.COE.
(b) (1) Certification pursuant to Rule 30a-2 under the Investment
Company Act of 1940 (17 CFR 270.30a-2) attached hereto as
Exhibit 99.CERT.
(2) Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 attached hereto as Exhibit 99-906-CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.(Registrant)
The Value Line Special Situations Fund , Inc.
By /s/ Jean B. Buttner
------------------------
Jean B. Buttner, President
Date: March 8, 2004
---------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Jean B. Buttner
-------------------------------------------------------
Jean B. Buttner, President, Principal Executive Officer
By: /s/ David T. Henigson
-------------------------------------------------------------------------
David T. Henigson, Vice President, Treasurer, Principal Financial Officer
Date: March 8, 2004
---------------------
INVESTMENT ADVISER Value Line, Inc. -----------------
220 East 42nd Street ANNUAL REPORT
New York, NY 10017-5891 -----------------
December 31, 2003
DISTRIBUTOR Value Line Securities, Inc. -----------------
220 East 42nd Street
New York, NY 10017-5891
CUSTODIAN BANK State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
SHAREHOLDER State Street Bank and Trust Co.
SERVICING AGENT c/o BFDS
P.O. Box 219729
Kansas City, MO 64121-9729 THE VALUE LINE
SPECIAL
INDEPENDENT PricewaterhouseCoopers LLP SITUATIONS
AUDITORS 1177 Avenue of the Americas FUND, INC.
New York, NY 10036
LEGAL COUNSEL Peter D. Lowenstein, Esq.
Two Sound View Drive, Suite 100
Greenwich, CT 06830
DIRECTORS Jean Bernhard Buttner
John W. Chandler
Frances T. Newton
Francis C. Oakley
David H. Porter
Paul Craig Roberts
Marion N. Ruth
Nancy-Beth Sheerr
OFFICERS Jean Bernhard Buttner
CHAIRMAN AND PRESIDENT
Stephen E. Grant
VICE PRESIDENT
Nancy L. Bendig
VICE PRESIDENT
Brett Mitstifer
VICE PRESIDENT [LOGO]
David T. Henigson VALUE LINE
VICE PRESIDENT AND NO-LOAD
SECRETARY/TREASURER MUTUAL
Joseph Van Dyke FUNDS
ASSISTANT SECRETARY/TREASURER
Stephen La Rosa
ASSISTANT SECRETARY/TREASURER
THIS REPORT IS ISSUED FOR INFORMATION OF SHAREHOLDERS. IT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY A
CURRENTLY EFFECTIVE PROSPECTUS OF THE FUND (OBTAINABLE FROM THE DISTRIBUTOR).
#528236
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
TO OUR VALUE LINE SPECIAL
- --------------------------------------------------------------------------------
To Our Shareholders:
We are pleased to report that the Value Line Special Situations Fund earned a
total return of 29.60% in 2003, outperforming the total return of 28.68% for
the unmanaged Standard & Poor's 500 Index.(1)
Your Fund's long-term performance record remains strong as well. For the ten
years ending December 31, 2003, the total return of the Fund was 227.20%
(12.59% annualized), versus 185.61% for the S&P 500 (11.06% annualized). For
five years, the Fund's total return was 36.48% (6.42% annualized), versus
- -2.82% for the S&P 500 (-0.57% annualized).
We attribute the Fund's success to our disciplined approach to stock selection.
We aim to always stay with winners, those companies whose earnings momentum and
stock price momentum is strong relative to other companies. When momentum
falters, we don't hesitate to eliminate a position -- and with more than 350
holdings in the portfolio, we do not fall in love with any particular stock.
This approach enabled the Fund to hold up better than most growth funds in the
NASDAQ tumble of 2000-2002.
The portfolio is diversified across many different sectors and a variety of
company sizes. Top sectors represented are healthcare, financial services, and
technology. Small-capitalization companies represent about 30% of holdings;
mid-cap, about 50%; and large-cap, 20%. Only two individual holdings represent
as much as 1% of assets.
We will adhere to the disciplined investment approach that has served our
shareholders well in the past. Thank you for your confidence in us.
Sincerely,
/s/ Jean Bernhard Buttner
Jean Bernhard Buttner
CHAIRMAN and PRESIDENT
February 16, 2004
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(1) THE STANDARD & POOR'S 500 INDEX CONSISTS OF 500 STOCKS WHICH ARE TRADED ON
THE NEW YORK STOCK EXCHANGE, AMERICAN STOCK EXCHANGE AND THE NASDAQ
NATIONAL MARKET SYSTEM AND IS REPRESENTATIVE OF THE BROAD STOCK MARKET.
THIS IS AN UNMANAGED INDEX AND DOES NOT REFLECT CHARGES, EXPENSES OR
TAXES. IT IS NOT POSSIBLE TO DIRECTLY INVEST IN THIS INDEX.
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2
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
SITUATIONS FUND SHAREHOLDERS
- --------------------------------------------------------------------------------
ECONOMIC OBSERVATIONS
The U.S. economic recovery, which proceeded at an uninspiring pace in 2002 and
the first half of 2003, really took off during last year's third and fourth
quarters, when the nation's gross domestic product, buoyed by a strengthening
in both consumer spending and capital goods activity, rose at the fastest pace
in several years. What's more, early indications are that the economy will
continue to press forward at a solid gait in the opening half of 2004, with GDP
most likely increasing by more than 4%.
Meanwhile, underpinned by the critical support of the Federal Reserve, which
continues to maintain its low-interest-rate policies, and boosted also by the
stimulative effects of last year's tax reduction and spending programs, the
U.S. economy should remain in forward gear throughout the year with GDP
maintaining that healthy pace of better than 4%. We currently expect the
business expansion to continue into 2005.
Inflation, meantime, remains muted, thanks, in part, to subdued labor costs.
Adequate supplies of raw materials are also helping to keep the costs of
production low. We note, though, that as the U.S. economy moves further along
the recovery trail over the next several years, some modest increases in
inflation may emerge. Absent a stronger long-term business recovery than we now
envision, or a further sharp rise in oil and gas prices stemming from an
escalating conflict in Iraq and elsewhere in the always contentious Middle
East, or some severe production cutbacks by the Organization of Petroleum
Exporting Countries (OPEC), inflation should generally remain in check through
the latter years of this decade. Long-term interest rates should increase
modestly over the next several years, but most likely not to the degree that
would bring the expansion to a halt.
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3
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
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COMPARISON OF A CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE VALUE LINE SPECIAL SITUATIONS FUND
AND THE S&P 500 STOCK INDEX*
(FROM 1/1/94 TO 12/31/03)
- --------------------------------------------------------------------------------
* THE STANDARD AND POOR'S 500 INDEX (S&P 500 INDEX) IS AN UNMANAGED INDEX THAT
IS REPRESENTATIVE OF THE LARGER-CAPITALIZATION STOCKS TRADED IN THE UNITED
STATES.
THE RETURN FOR THE INDEX DOES NOT REFLECT EXPENSES WHICH ARE DEDUCTED FROM THE
FUND'S RETURNS.
PERFORMANCE DATA:**
AVERAGE ANNUAL GROWTH OF AN ASSUMED
TOTAL RETURN INVESTMENT OF $10,000
---------------- ----------------------
1 year ended 12/31/03 .......... +29.60% $12,960
5 years ended 12/31/03 ......... +6.42% $13,648
10 years ended 12/31/03 ......... +12.59% $32,720
** THE PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE AND ARE NO GUARANTEE
OF FUTURE PERFORMANCE. THE AVERAGE ANNUAL TOTAL RETURNS AND GROWTH OF AN
ASSUMED INVESTMENT OF $10,000 INCLUDE DIVIDENDS REINVESTED AND CAPITAL
GAINS DISTRIBUTIONS ACCEPTED IN SHARES. THE INVESTMENT RETURN AND PRINCIPAL
VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTMENT, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN ITS ORIGINAL COST. THE PERFORMANCE DATA AND
GRAPH DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON
FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES.
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4
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
PORTFOLIO HIGHLIGHTS AT DECEMBER 31, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
VALUE PERCENTAGE
ISSUE SHARES (IN THOUSANDS) OF NET ASSETS
- ----------------------------------------------------------------------------------------------
Career Education Corp. ........................ 92,000 $3,686 1.2%
Varian Medical Systems, Inc. .................. 49,000 3,386 1.1
Chico's FAS, Inc. ............................. 74,000 2,734 0.9
Harman International Industries, Inc. ......... 34,000 2,515 0.8
Apollo Group, Inc. Class "A" .................. 34,750 2,363 0.8
Corinthian Colleges, Inc. ..................... 35,000 1,945 0.6
Henry Schein, Inc. ............................ 28,000 1,892 0.6
Family Dollar Stores, Inc. .................... 51,000 1,830 0.6
Coach, Inc. ................................... 48,000 1,812 0.6
Chelsea Property Group, Inc. .................. 32,000 1,754 0.6
FIVE LARGEST INDUSTRY CATEGORIES
VALUE PERCENTAGE
INDUSTRY (IN THOUSANDS) OF NET ASSETS
- --------------------------------------------------------------------
Medical Supplies ............... $26,949 8.7%
Retail - Special Lines ......... 14,991 4.8
Bank ........................... 14,953 4.8
R.E.I.T. ....................... 14,570 4.7
Educational Services ........... 11,638 3.8
FIVE LARGEST NET SECURITY PURCHASES*
COST
ISSUE (IN THOUSANDS)
- ----------------------------------------------------------
Satyam Computer Services Ltd. .......... $662
Petr-leo Brasileiro S.A. (ADR) ......... 644
Amkor Technology, Inc. ................. 632
Southwestern Energy Co. ................ 630
Andrew Corp. ........................... 630
FIVE LARGEST NET SECURITY SALES*
PROCEEDS
ISSUE (IN THOUSANDS)
- ----------------------------------- ---------------
Progressive Corp. ................. $1,170
Mattel, Inc. ...................... 1,132
Medtronic, Inc. ................... 1,085
Fiserv, Inc. ...................... 924
Forest Laboratories, Inc. ......... 853
* FOR THE SIX MONTH PERIOD ENDED 12/31/03
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5
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- ---------------------
COMMON STOCKS (94.9%)
ADVERTISING (0.4%)
28,500 Harte-Hanks, Inc. .......................... $620
17,000 R.H. Donnelley Corp.* ...................... 677
------
1,297
AEROSPACE/DEFENSE (0.6%)
21,000 Engineered Support Systems, Inc. ........... 1,156
20,000 United Defense Industries, Inc.* ........... 638
------
1,794
AIR TRANSPORT (0.2%)
10,000 FedEx Corp. ................................ 675
APPAREL (0.2%)
11,000 Columbia Sportswear Co.* ................... 600
AUTO & TRUCK (0.2%)
15,000 Navistar International Corp.* .............. 718
AUTO PARTS (1.5%)
8,300 Advance Auto Parts, Inc.* .................. 676
15,000 American Axle & Manufacturing
Holdings, Inc.* ............................ 606
19,000 Autoliv Inc. ............................... 715
17,000 Gentex Corp. ............................... 751
10,000 Johnson Controls, Inc. ..................... 1,161
12,000 Lear Corp. ................................. 736
------
4,645
BANK (4.8%)
12,500 Banco Ita- Holding Financeira
S.A. (ADR) ................................. 610
26,000 BancorpSouth, Inc. ......................... 617
25,000 Bank of Hawaii Corp. ....................... 1,055
33,900 BB&T Corp. ................................. 1,310
28,972 Charter One Financial, Inc. ................ 1,001
10,400 City National Corp. ........................ 646
18,000 Community First
Bankshares, Inc. ........................... 521
21,000 Compass Bancshares, Inc. ................... 825
37,000 Hibernia Corp. Class "A" ................... 870
VALUE
SHARES (IN THOUSANDS)
- -------------- ----------------
5,600 Hudson United Bancorp ...................... $ 207
10,000 ICICI Bank Ltd. (ADR) ...................... 172
6,400 M & T Bank Corp. ........................... 629
11,000 National Commerce
Financial Corp. ............................ 300
14,600 Popular, Inc. .............................. 656
4,000 R & G Financial Corp. Class "B" ............ 159
23,000 South Financial Group, Inc. (The) .......... 641
40,000 SouthTrust Corp. ........................... 1,309
22,000 UCBH Holdings, Inc. ........................ 857
17,000 United Bankshares, Inc. .................... 530
22,950 W Holding Company, Inc. .................... 427
13,000 Wells Fargo & Co. .......................... 766
17,000 Westamerica Bancorporation ................. 845
------
14,953
BANK -- CANADIAN (0.3%)
17,000 Bank of Montreal ........................... 702
7,000 Canadian Imperial Bank
of Commerce ................................ 350
-------
1,052
BANK -- MIDWEST (0.8%)
13,000 Associated Banc-Corp. ...................... 554
14,333 Commerce Bancshares, Inc. .................. 703
12,000 First Tennessee National Corp. ............. 529
18,000 Marshall & Ilsley Corp. .................... 689
-------
2,475
BEVERAGE --
ALCOHOLIC (0.3%)
11,000 Anheuser-Busch Companies, Inc. ............. 580
13,000 Constellation Brands, Inc.
Class "A"* ................................. 428
-------
1,008
BIOTECHNOLOGY (0.9%)
6,000 Gen-Probe, Inc.* ........................... 219
11,000 Invitrogen Corp.* .......................... 770
10,000 Martek Biosciences Corp.* .................. 650
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6
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
29,000 Medicines Company (The)* .................. $854
6,000 Telik, Inc.* .............................. 138
------
2,631
BUILDING
MATERIALS (0.5%)
28,000 Jacobs Engineering Group, Inc.* ........... 1,344
2,000 Simpson Manufacturing
Co., Inc.* ................................ 102
------
1,446
CANADIAN ENERGY (0.3%)
14,500 EnCana Corp. .............................. 572
8,000 Imperial Oil Ltd. ......................... 355
------
927
CHEMICAL --
DIVERSIFIED (0.4%)
14,000 3M Company ................................ 1,190
CHEMICAL --
SPECIALTY (1.0%)
26,000 Airgas, Inc. .............................. 558
24,000 Ecolab Inc. ............................... 657
30,000 Praxair, Inc. ............................. 1,146
5,000 Sigma-Aldrich Corp. ....................... 286
11,000 Valspar Corp. ............................. 544
------
3,191
COMPUTER &
PERIPHERALS (1.9%)
30,000 American Power Conversion
Corp. ..................................... 734
12,000 Avocent Corp.* ............................ 438
41,000 Dot Hill Systems Corp.* ................... 621
50,000 Lexar Media, Inc.* ........................ 871
39,000 Maxtor Corp.* ............................. 433
17,000 Mobility Electronics, Inc.* ............... 152
24,500 NetScreen Technologies, Inc.* ............. 606
19,000 SanDisk Corp.* ............................ 1,162
13,500 Zebra Technologies Corp.
Class "A"* ................................ 896
-------
5,913
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
COMPUTER SOFTWARE &
SERVICES (3.7%)
28,000 Accenture Ltd. Class "A"* ................. $ 737
46,000 Advanced Digital
Information Corp.* ........................ 644
24,000 Altiris, Inc.* ............................ 875
15,000 ANSYS, Inc.* .............................. 595
18,000 Anteon International Corp.* ............... 649
9,000 CACI International, Inc.
Class "A"* ................................ 438
36,000 Cognizant Technology Solutions
Corp. Class "A"* .......................... 1,643
21,000 Cognos Inc.* .............................. 643
9,000 Digital River, Inc.* ...................... 199
10,000 Fair, Issac & Co., Inc. ................... 492
29,000 Intergraph Corp.* ......................... 694
30,000 Magma Design Automation, Inc.* ............ 700
12,200 MicroStrategy Inc. Class "A"* ............. 640
36,000 Novell, Inc.* ............................. 379
28,500 Satyam Computer Services Ltd. ............. 836
28,000 Symantec Corp.* ........................... 970
5,000 Synopsys, Inc.* ........................... 169
-------
11,303
DIVERSIFIED
COMPANY (1.4%)
25,000 Acuity Brands, Inc. ....................... 645
10,000 American Standard
Companies, Inc.* .......................... 1,007
11,000 Ametek, Inc. .............................. 531
7,900 Danaher Corp. ............................. 725
11,000 ESCO Technologies, Inc.* .................. 480
9,600 Fortune Brands, Inc. ...................... 686
4,000 ITT Industries, Inc. ...................... 297
--------
4,371
DRUG (3.7%)
32,000 Adolor Corp.* ............................. 641
29,300 Amylin Pharmaceuticals, Inc.* ............. 651
14,000 Angiotech Pharmaceuticals, Inc.* .......... 644
15,000 Bradley Pharmaceuticals, Inc.* ............ 381
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7
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
11,000 Chiron Corp.* ............................ $627
23,000 Columbia Laboratories, Inc.* ............. 145
4,000 Endo Pharmaceuticals
Holdings, Inc.* .......................... 77
16,000 Eon Labs, Inc.* .......................... 815
20,000 Flamel Technologies S.A.
(ADR)* ................................... 536
24,000 Gilead Sciences, Inc.* ................... 1,395
36,000 Impax Laboratories, Inc.* ................ 518
15,000 Kos Pharmaceuticals, Inc.* ............... 646
14,500 MGI Pharma, Inc.* ........................ 597
29,250 Mylan Laboratories, Inc. ................. 739
13,000 Neurocrine Biosciences, Inc.* ............ 709
16,000 Pharmaceutical Resources, Inc.* .......... 1,042
20,000 Teva Pharmaceutical Industries
Ltd. (ADR) ............................... 1,134
------
11,297
EDUCATIONAL
SERVICES (3.8%)
34,750 Apollo Group, Inc. Class "A"* ............ 2,363
92,000 Career Education Corp.* .................. 3,686
35,000 Corinthian Colleges, Inc.* ............... 1,945
50,000 Education Management Corp.* .............. 1,552
24,000 ITT Educational Services, Inc.* .......... 1,127
10,000 Pumatech, Inc.* .......................... 40
8,500 Strayer Education, Inc. .................. 925
--------
11,638
ELECTRICAL
EQUIPMENT (0.6%)
24,000 FLIR Systems, Inc.* ...................... 876
22,000 Rockwell Automation, Inc. ................ 783
3,000 ROFIN-SINAR
Technologies, Inc.* ...................... 104
--------
1,763
ELECTRIC UTILITY --
EAST (0.2%)
9,500 Exelon Corp. ............................. 630
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
ELECTRIC UTILITY --
CENTRAL (0.3%)
4,000 ALLETE, Inc. ............................. $ 122
12,000 Entergy Corp. ............................ 686
-------
808
ELECTRONICS (1.5%)
10,200 Amphenol Corp. Class "A"* ................ 652
23,000 Cubic Corp. .............................. 529
34,000 Harman International
Industries, Inc. ......................... 2,515
21,000 Trimble Navigation Ltd.* ................. 782
------
4,478
ENTERTAINMENT (0.2%)
20,000 Fox Entertainment Group, Inc.
Class "A"* ............................... 583
ENTERTAINMENT
TECHNOLOGY (0.6%)
14,000 Avid Technology, Inc.* ................... 672
38,000 Scientific Games Corp.
Class "A"* ............................... 646
16,000 Take-Two Interactive
Software, Inc.* .......................... 461
------
1,779
ENVIRONMENTAL (0.6%)
22,000 Republic Services, Inc. .................. 564
24,000 Stericycle, Inc.* ........................ 1,121
------
1,685
FINANCIAL SERVICES --
DIVERSIFIED (2.3%)
21,000 CIT Group Inc. ........................... 755
36,000 Doral Financial Corp. .................... 1,162
34,000 Fremont General Corp. .................... 575
33,000 Friedman, Billings, Ramsey
Group, Inc. Class "A" .................... 762
13,100 Global Payments Inc. ..................... 617
24,000 Knight Trading Group, Inc.* .............. 351
9,000 Leucadia National Corp. .................. 415
19,000 ProAssurance Corp.* ...................... 611
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8
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
15,000 SLM Corp. .............................. $565
20,000 Willis Group Holdings Ltd. ............. 681
15,000 Wintrust Financial Corp. ............... 677
-----
7,171
FOOD PROCESSING (0.9%)
24,000 Dean Foods Co.* ........................ 789
13,200 Smucker (J.M.) Co. ..................... 598
20,500 United Natural Foods, Inc.* ............ 736
10,000 Wrigley (Wm.) Jr. Co. .................. 562
------
2,685
FOOD
WHOLESALERS (0.3%)
9,000 Performance Food Group Co.* ............ 325
17,000 SYSCO Corp. ............................ 633
------
958
FOREIGN ELECTRONICS/
ENTERTAINMENT (0.1%)
34,000 AU Optronics Corp. (ADR) ............... 405
FOREIGN
TELECOMMUNICATIONS (0.4%)
40,000 Alcatel S.A. (ADR) ..................... 514
23,300 Am-rica M-vil, S.A. de
C.V. (ADR) ............................. 637
------
1,151
FURNITURE/HOME
FURNISHINGS (0.5%)
5,000 HON INDUSTRIES Inc. .................... 217
22,000 Select Comfort Corp.* .................. 545
21,900 Tuesday Morning Corp.* ................. 662
------
1,424
GROCERY (0.2%)
11,000 Whole Foods Market, Inc. ............... 738
HEALTHCARE
INFORMATION
SYSTEMS (0.3%)
36,000 eResearch Technology, Inc.* ............ 915
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
HOME APPLIANCE (0.3%)
20,000 Toro Company (The) ..................... $ 928
HOTEL/GAMING (1.4%)
31,000 Alliance Gaming Corp.* ................. 764
18,000 Choice Hotels, Inc.* ................... 635
20,000 GTECH Holdings Corp. ................... 990
7,000 Harrah's Entertainment, Inc. ........... 348
32,000 Penn National Gaming, Inc.* ............ 739
23,000 Station Casinos, Inc. .................. 704
------
4,180
HOUSEHOLD
PRODUCTS (1.2%)
15,000 Church & Dwight Co., Inc. .............. 594
22,000 Energizer Holdings, Inc.* .............. 826
10,000 Procter & Gamble Co. (The) ............. 999
11,000 Scotts Company (The)
Class "A"* ............................. 651
23,000 Yankee Candle Company,
Inc. (The)* ............................ 628
------
3,698
HUMAN RESOURCES (0.0%)
4,000 Gevity HR, Inc. ........................ 89
INDUSTRIAL
SERVICES (1.4%)
25,000 Aaron Rents, Inc. ...................... 503
22,000 ARAMARK Corp. Class "B" ................ 603
15,000 C.H. Robinson Worldwide, Inc. .......... 569
14,000 Expeditors International of
Washington, Inc. ....................... 527
15,000 Iron Mountain, Inc.* ................... 593
2,000 Kroll Inc.* ............................ 52
44,000 Navigant Consulting, Inc.* ............. 830
28,000 Unova, Inc.* ........................... 643
------
4,320
INFORMATION
SERVICES (0.6%)
23,500 Alliance Data Systems Corp.* ........... 650
16,000 Arbitron, Inc.* ........................ 668
- --------------------------------------------------------------------------------
9
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
6,000 Dun & Bradstreet
Corporation (The)* ......................... $304
5,000 Moody's Corp. .............................. 303
------
1,925
INSURANCE -- LIFE (0.5%)
17,400 Delphi Financial Group, Inc. ............... 626
8,000 Prudential Financial, Inc. ................. 334
13,500 Torchmark Corp. ............................ 615
------
1,575
INSURANCE -- PROPERTY/
CASUALTY (2.3%)
24,750 Berkley (W.R.) Corp. ....................... 865
7,000 Everest Re Group, Ltd. ..................... 592
33,000 Fidelity National Financial, Inc. .......... 1,280
15,000 HCC Insurance Holdings, Inc. ............... 477
16,500 IPC Holdings, Ltd. ......................... 643
2,300 Markel Corp.* .............................. 583
48,000 Old Republic International Corp. ........... 1,217
17,400 RenaissanceRe Holdings Ltd. ................ 853
17,000 RLI Corp. .................................. 637
------
7,147
INTERNET (1.2%)
55,000 Akamai Technologies, Inc.* ................. 591
47,000 Ameritrade Holding Corp.* .................. 661
12,000 eBay, Inc.* ................................ 775
23,000 InfoSpace, Inc.* ........................... 530
20,000 Opsware, Inc.* ............................. 148
39,000 S1 Corporation* ............................ 314
30,000 SupportSoft, Inc.* ......................... 395
13,000 ValueClick, Inc.* .......................... 118
------
3,532
MACHINERY (0.9%)
20,000 Actuant Corp. Class "A"* ................... 724
11,000 Donaldson Co., Inc. ........................ 651
18,750 Graco Inc. ................................. 752
14,000 Smith (A.O.) Corp. ......................... 491
------
2,618
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
MANUFACTURED
HOUSING/RECREATIONAL
VEHICLE (0.7%)
19,000 Oshkosh Truck Corp. ........................ $ 970
5,000 Thor Industries, Inc. ...................... 281
13,600 Winnebago Industries, Inc. ................. 935
-------
2,186
MEDICAL SERVICES (3.3%)
32,250 aaiPharma, Inc.* ........................... 810
18,000 Apria Healthcare Group, Inc.* .............. 513
9,000 Centene Corp.* ............................. 252
11,000 Coventry Health Care, Inc.* ................ 709
16,000 DaVita Inc.* ............................... 624
10,500 Genesis HealthCare Corporation* ............ 239
22,000 Gentiva Health Services Inc.* .............. 278
17,000 Health Net, Inc.* .......................... 556
12,000 Kindred Healthcare, Inc.* .................. 624
30,000 Lincare Holdings, Inc.* .................... 901
17,000 Mid Atlantic Medical
Services, Inc.* ............................ 1,102
30,000 Odyssey HealthCare, Inc.* .................. 878
16,000 Renal Care Group, Inc.* .................... 659
50,000 Select Medical Corp.* ...................... 814
7,000 Triad Hospitals, Inc.* ..................... 233
3,000 United Surgical Partners
International, Inc.* ....................... 100
8,000 Wellpoint Health Networks, Inc.* ........... 776
-------
10,068
MEDICAL SUPPLIES (8.7%)
5,000 Abaxis, Inc.* .............................. 91
15,000 Advanced Medical Optics, Inc.* ............. 295
15,000 Advanced Neuromodulation
Systems, Inc.* ............................. 690
4,000 ALARIS Medical Systems, Inc.* .............. 61
13,000 Alcon, Inc. ................................ 787
36,000 Align Technology, Inc.* .................... 595
8,000 Bard (C.R.), Inc. .......................... 650
8,000 Bio-Rad Laboratories, Inc.
Class "A"* ................................. 461
- --------------------------------------------------------------------------------
10
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
December 31, 2003
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
23,750 Biomet, Inc. .............................. $865
28,000 Boston Scientific Corp.* .................. 1,029
33,500 Cooper Companies, Inc. .................... 1,579
23,000 Dade Behring Holdings, Inc.* .............. 822
34,500 DENTSPLY International, Inc. .............. 1,558
13,000 Edwards Lifesciences Corp.* ............... 391
19,000 Fisher Scientific
International, Inc.* ...................... 786
11,000 Guidant Corp. ............................. 662
28,000 Henry Schein, Inc.* ....................... 1,892
17,000 IDEXX Laboratories, Inc.* ................. 787
31,500 Inamed Corp.* ............................. 1,514
11,000 Integra LifeSciences
Holdings Corp.* ........................... 315
22,000 Kyphon, Inc.* ............................. 546
44,888 Merit Medical Systems, Inc.* .............. 999
22,000 Patterson Dental Co.* ..................... 1,411
9,000 PolyMedica Corp. .......................... 237
17,000 Respironics, Inc.* ........................ 767
14,000 St. Jude Medical, Inc.* ................... 859
9,000 Stryker Corp. ............................. 765
19,000 Sybron Dental Specialties, Inc.* .......... 534
49,000 Varian Medical Systems, Inc.* ............. 3,386
23,000 Wright Medical Group, Inc.* ............... 700
13,000 Zimmer Holdings, Inc.* .................... 915
------
26,949
METALS & MINING --
DIVERSIFIED (0.2%)
10,000 Companhia Vale do Rio
Doce (ADR) ................................ 585
NATURAL GAS --
DISTRIBUTION (0.6%)
21,000 AGL Resources Inc. ........................ 611
16,000 Energen Corp. ............................. 657
21,000 UGI Corp. ................................. 712
--------
1,980
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
NATURAL GAS --
DIVERSIFIED (1.0%)
15,000 Equitable Resources, Inc. ................. $ 644
20,000 Patina Oil & Gas Corp. .................... 980
28,000 Southwestern Energy Co.* .................. 669
30,666 XTO Energy, Inc. .......................... 868
--------
3,161
NEWSPAPER (1.4%)
7,000 Gannett Co., Inc. ......................... 624
7,500 Knight-Ridder, Inc. ....................... 580
16,500 Lee Enterprises, Inc. ..................... 720
9,000 McClatchy Co. (The) Class "A" ............. 619
7,000 Scripps (E.W.) Co. Class "A" .............. 659
11,000 Tribune Co. ............................... 568
800 Washington Post Co. (The)
Class "B" ................................. 633
--------
4,403
OFFICE EQUIPMENT &
SUPPLIES (0.9%)
7,000 Diebold, Incorporated ..................... 377
30,000 Global Imaging Systems, Inc.* ............. 953
40,000 Moore Wallace Incorporated* ............... 749
30,000 Staples, Inc.* ............................ 819
--------
2,898
PACKAGING &
CONTAINER (0.7%)
12,000 Ball Corp. ................................ 715
17,000 CLARCOR Inc. .............................. 750
28,800 Jarden Corp.* ............................. 787
--------
2,252
PETROLEUM --
INTEGRATED (0.6%)
5,000 Denbury Resources Inc.* ................... 70
11,000 Murphy Oil Corp. .......................... 718
8,000 PetroChina Company Ltd. (ADR) ............. 456
24,000 Petr-leo Brasileiro S.A. (ADR) ............ 702
--------
1,946
- --------------------------------------------------------------------------------
11
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
PETROLEUM --
PRODUCING (1.8%)
8,400 Apache Corp. ................................. $681
4,500 Canadian Natural Resources Ltd. .............. 227
50,000 Chesapeake Energy Corp. ...................... 679
20,000 Evergreen Resources, Inc.* ................... 650
14,000 Pogo Producing Co. ........................... 676
28,000 Suncor Energy, Inc. .......................... 702
24,500 Ultra Petroleum Corp.* ....................... 603
29,000 Unit Corp.* .................................. 683
25,000 Westport Resources Corp.* .................... 747
------
5,648
PHARMACY (1.7%)
20,000 Accredo Health, Inc.* ........................ 632
15,000 AdvancePCS* .................................. 790
46,000 Caremark Rx, Inc.* ........................... 1,165
15,000 Express Scripts, Inc.* ....................... 996
20,000 Medco Health Solutions, Inc.* ................ 680
21,000 NeighborCare, Inc.* .......................... 415
15,600 Omnicare, Inc. ............................... 630
------
5,308
PRECISION
INSTRUMENT (0.7%)
13,500 Dionex Corp.* ................................ 621
12,000 Garmin Ltd. .................................. 654
12,700 Kronos Inc.* ................................. 503
13,000 Tektronix, Inc. .............................. 411
------
2,189
PUBLISHING (0.2%)
11,500 Meredith Corp. ............................... 561
R.E.I.T. (4.7%)
24,000 Capital Automotive REIT ...................... 768
14,161 Catellus Development Corp. ................... 342
12,000 CBL & Associates
Properties, Inc. ............................. 678
32,000 Chelsea Property Group, Inc. ................. 1,754
23,700 Corrections Corp. of America* ................ 683
226 Cross Timbers Royalty Trust .................. 6
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
19,000 Developers Diversified
Realty Corp. ................................. $ 638
29,000 Equity One, Inc. ............................. 490
7,000 Essex Property Trust, Inc. ................... 450
8,000 General Growth Properties, Inc. .............. 222
6,000 Heritage Property Investment
Trust, Inc. .................................. 171
20,000 Impac Mortgage Holdings, Inc. ................ 364
15,000 iStar Financial, Inc. ........................ 583
17,000 Macerich Company (The) ....................... 756
11,000 Mills Corporation (The) ...................... 484
13,000 Newcastle Investment Corp. ................... 352
14,500 Pan Pacific Retail Properties, Inc. .......... 691
17,000 Pennsylvania Real Estate
Investment Trust ............................. 617
21,000 ProLogis Trust ............................... 674
13,500 Public Storage, Inc. ......................... 586
9,000 Redwood Trust, Inc. .......................... 458
14,000 Regency Centers Corp. ........................ 558
14,000 Rouse Company (The) .......................... 658
13,000 Simon Property Group, Inc. ................... 602
15,000 Thornburg Mortgage, Inc. ..................... 408
13,000 Weingarten Realty Investors .................. 577
-------
14,570
RAILROAD (0.5%)
10,300 Canadian National Railway Co. ................ 652
15,000 CP Holders, Inc. ............................. 885
--------
1,537
RECREATION (1.1%)
10,000 Hasbro, Inc. ................................. 213
43,000 Marvel Enterprises, Inc.* .................... 1,252
30,000 SCP Pool Corp.* .............................. 980
25,000 Shuffle Master, Inc.* ........................ 866
--------
3,311
RESTAURANT (3.6%)
22,500 Applebee's International, Inc. ............... 884
39,000 Brinker International, Inc.* ................. 1,293
22,000 CBRL Group, Inc. ............................. 842
17,000 IHOP Corp. ................................... 654
- --------------------------------------------------------------------------------
12
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
25,000 McDonald's Corp. .......................... $621
14,500 P.F. Chang's China Bistro, Inc.* .......... 738
18,000 Panera Bread Co. - Class "A"* ............. 711
28,500 RARE Hospitality
International, Inc.* ...................... 697
57,800 Ruby Tuesday, Inc. ........................ 1,647
56,250 Sonic Corp.* .............................. 1,722
25,000 Starbucks Corp.* .......................... 826
16,000 Wendys International, Inc. ................ 628
------
11,263
RETAIL BUILDING
SUPPLY (0.9%)
14,000 Fastenal Co. .............................. 699
19,000 Lowe's Companies, Inc. .................... 1,052
28,000 Tractor Supply Co.* ....................... 1,089
--------
2,840
RETAIL -- SPECIAL
LINES (4.8%)
21,000 Aeropostale, Inc.* ........................ 576
5,000 AutoZone, Inc.* ........................... 426
25,000 Bed Bath & Beyond Inc.* ................... 1,084
13,000 Best Buy Co., Inc. ........................ 679
10,000 Bombay Company, Inc. (The)* ............... 81
74,000 Chico' s FAS, Inc.* ....................... 2,734
28,000 Claire's Stores, Inc. ..................... 528
48,000 Coach, Inc.* .............................. 1,812
7,000 CSK Auto Corp.* ........................... 131
8,000 Dick's Sporting Goods, Inc.* .............. 389
24,000 Fossil, Inc.* ............................. 672
25,000 Guitar Center, Inc.* ...................... 815
12,000 Insight Enterprises, Inc.* ................ 226
27,500 Movie Gallery, Inc.* ...................... 514
34,000 NBTY, Inc.* ............................... 913
24,000 PETsMART, Inc. ............................ 571
23,000 Pier 1 Imports, Inc. ...................... 503
38,000 Ross Stores, Inc. ......................... 1,004
15,000 Sports Authority, Inc. (The)* ............. 576
VALUE
SHARES (IN THOUSANDS)
- -------------- --------------
28,000 TJX Companies, Inc. (The) ................. $ 618
4,000 Williams-Sonoma, Inc.* .................... 139
--------
14,991
RETAIL STORE (0.9%)
25,000 Dollar General Corp. ...................... 525
51,000 Family Dollar Stores, Inc. ................ 1,830
10,000 Wal-Mart Stores, Inc. ..................... 530
--------
2,885
SECURITIES
BROKERAGE (0.4%)
8,000 Bear Stearns Companies,
Inc. (The) ................................ 640
8,000 Legg Mason, Inc. .......................... 617
--------
1,257
SEMICONDUCTOR (0.6%)
52,000 ATI Technologies, Inc.* ................... 786
19,000 OmniVision Technologies, Inc.* ............ 1,050
--------
1,836
SEMICONDUCTOR
CAPITAL
EQUIPMENT (0.2%)
33,000 Amkor Technology, Inc.* ................... 601
SHOE (0.7%)
18,000 Brown Shoe Company, Inc. .................. 683
26,800 K-Swiss Inc. Class "A" .................... 645
20,000 Reebok International Ltd. ................. 786
--------
2,114
TELECOMMUNICATION
SERVICES (1.4%)
11,000 At Road, Inc.* ............................ 146
17,000 CenturyTel, Inc. .......................... 554
17,000 Dycom Industries, Inc.* ................... 456
6,000 Evolving Systems, Inc.* ................... 80
8,500 Mobile TeleSystem OJSC (ADR) .............. 704
30,000 Nextel Communications, Inc.
Class "A"* ................................ 842
- --------------------------------------------------------------------------------
13
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
VALUE
SHARES (IN THOUSANDS)
- ------------------ --------------
15,000 NTL Inc.* ............................... $ 1,046
8,500 Vimpel-Communications, Open
Joint Stock Co. (ADR)* .................. 625
--------
4,453
TELECOMMUNICATIONS
EQUIPMENT (1.0%)
47,000 Andrew Corp.* ........................... 541
44,000 Aspect Communications Corp.* ............ 694
53,000 Avaya, Inc.* ............................ 686
12,000 Comtech Telecommunications
Corp.* .................................. 346
4,000 Ditech Communications Corp.* ............ 76
10,000 Marvell Technology Group Ltd.* .......... 379
11,000 Silicon Laboratories Inc.* .............. 475
381 Sirenza Microdevices, Inc.* ............. 2
2,540 VL Dissolution Corp. .................... 2
--------
3,201
THRIFT (3.7%)
37,000 BankAtlantic Bancorp, Inc.
Class "A" ............................... 703
43,000 Brookline Bancorp, Inc. ................. 660
18,500 First BanCorp ........................... 732
13,000 FirstFed Financial Corp.* ............... 565
39,000 Flagstar Bancorp, Inc. .................. 835
11,000 Golden West Financial Corp. ............. 1,135
14,500 GreenPoint Financial Corp. .............. 512
28,000 Hudson City Bancorp, Inc. ............... 1,069
42,666 New York Community Bancorp,
Inc. .................................... 1,623
63,000 Sovereign Bancorp, Inc. ................. 1,496
32,000 Washington Federal, Inc. ................ 909
17,000 Webster Financial Corp. ................. 780
16,000 Westcorp ................................ 585
--------
11,604
TIRE & RUBBER (0.0%)
2,000 Carlisle Companies, Inc. ................ 122
VALUE
SHARES (IN THOUSANDS)
- ------------------ --------------
TOILETRIES/
COSMETICS (0.6%)
11,000 Avon Products, Inc. ..................... $ 742
28,000 Nu Skin Enterprises, Inc.
Class "A" ............................... 479
16,500 Regis Corp. ............................. 652
--------
1,873
TRUCKING/TRANSPORTATION
LEASING (1.3%)
19,000 Arkansas Best Corp. ..................... 596
8,000 Hunt (J.B.) Transport Services,
Inc.* ................................... 216
38,000 Landstar System, Inc.* .................. 1,446
31,250 Werner Enterprises, Inc. ................ 609
32,847 Yellow Roadway Corp.* ................... 1,188
--------
4,055
WIRELESS
NETWORKING (0.3%)
26,000 Alvarion Ltd.* .......................... 300
10,000 Research In Motion Ltd.* ................ 669
--------
969
--------
TOTAL COMMON STOCKS
AND TOTAL INVESTMENT
SECURITIES (94.9%)
(COST $201,555,000).......................................... $293,925
========
- --------------------------------------------------------------------------------
14
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
VALUE
PRINCIPAL (IN THOUSANDS
AMOUNT EXCEPT PER SHARE
(IN THOUSANDS) AMOUNT)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (4.6%)
U.S. TREASURY
OBLIGATIONS (1.6%)
$ 5,000 United States Treasury Bills
1.01%, due 3/24/04
(Cost $4,988,000) ................................. $ 4,988
--------
REPURCHASE
AGREEMENTS (3.0%)
(INCLUDING ACCRUED INTEREST)
9,200 Collateralized by $8,843,000
U.S. Treasury Bonds 5.50%,
due 8/15/28, with a value of
$9,392,000 (with UBS
Warburg LLC, 0.84%, dated
12/31/03, due 1/2/04, delivery
value $9,200,429)
(Cost $9,200,000) ................................ 9,200
-------
TOTAL SHORT-TERM INVESTMENTS
(COST $14,188,000) ............................................ 14,188
-------
CASH AND OTHER ASSETS IN
EXCESS OF LIABILITIES (0.5%) .................................. 1,712
-------
NET ASSETS (100.0%) ............................................. $309,825
========
NET ASSET VALUE, OFFERING
AND REDEMPTION PRICE PER
OUTSTANDING SHARE
($309,824,705 divided by 14,865,441 SHARES
OUTSTANDING) .................................................. $ 20.84
========
* NON-INCOME PRODUCING.
(ADR) AMERICAN DEPOSITORY RECEIPTS.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
15
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES STATEMENT OF OPERATIONS
AT DECEMBER 31, 2003 FOR THE YEAR ENDED DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS
EXCEPT PER
SHARE AMOUNT) (IN THOUSANDS)
-------------- ---------------
ASSETS: INVESTMENT INCOME:
Investment securities, at value Dividends (Net of foreign withholding
(Cost - $201,555) ........................... $293,925 taxes of $17) ........................... $ 2,296
Short-term investments Interest and other ......................... 280
(Cost - $14,188) ............................ 14,188 -------
Cash ........................................... 55 Total Income ............................ 2,576
Receivable for securities sold ................. 3,038 -------
Receivable for capital shares sold ............. 358 EXPENSES:
Dividends receivable ........................... 180 Advisory fee ............................... 1,999
Prepaid insurance expense ...................... 6 Service and distribution plan fees ......... 666
--------- Transfer agent ............................. 142
TOTAL ASSETS ............................. 311,750 Custodian fees ............................. 77
--------- Auditing and legal fees .................... 61
LIABILITIES: Printing ................................... 59
Payable for securities purchased ............... 1,203 Postage .................................... 39
Payable for capital shares repurchased ......... 408 Insurance, dues and other .................. 28
Accrued expenses: Registration fees .......................... 27
Advisory fee ................................ 195 Telephone .................................. 20
Service and distribution plan fees Directors' fees and expenses ............... 20
payable .................................. 65 -------
Other ....................................... 54 Total Expenses Before Custody
--------- Credits .............................. 3,138
TOTAL LIABILITIES ........................ 1,925 Less: Custody Credits ................... (1)
--------- ---------
NET ASSETS ..................................... $309,825 Net Expenses ............................ 3,137
========= --------
NET ASSETS CONSIST OF: NET INVESTMENT LOSS ........................ (561)
Capital stock, at $1.00 par value --------
(authorized 100,000,000, outstanding NET REALIZED AND UNREALIZED GAIN ON
14,865,441 shares) .......................... $ 14,865 INVESTMENTS:
Additional paid-in capital ..................... 217,470 Net Realized Gain ....................... 9,733
Undistributed net investment income ............ 34 Change in Net Unrealized
Accumulated net realized loss on Appreciation ......................... 60,911
investments ................................. (14,914) --------
Net unrealized appreciation of NET REALIZED GAIN AND CHANGE IN NET
investments ................................. 92,370 UNREALIZED APPRECIATION ON
--------- INVESTMENTS ............................. 70,644
NET ASSETS ..................................... $309,825 --------
========= NET INCREASE IN NET ASSETS FROM
NET ASSET VALUE, OFFERING AND OPERATIONS .............................. $70,083
REDEMPTION PRICE PER OUTSTANDING ========
SHARE ($309,824,705 - 14,865,441
SHARES OUTSTANDING) ......................... $ 20.84
=========
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
16
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
- --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2003 2002
-------------- -------------
(IN THOUSANDS)
OPERATIONS:
Net investment loss ..................................................... $ (561) $ (790)
Net realized gain (loss) on investments ................................. 9,733 (14,704)
Change in net unrealized appreciation ................................... 60,911 (26,726)
---------- ----------
Net increase (decrease) in net assets from operations ................... 70,083 (42,220)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares ............................................ 360,186 546,946
Cost of shares repurchased .............................................. (362,838) (524,161)
---------- ----------
Net (decrease) increase from capital share transactions ................. (2,652) 22,785
---------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS .................................. 67,431 (19,435)
NET ASSETS:
Beginning of year ....................................................... 242,394 261,829
---------- ----------
End of year (including undistributed net investment income of $34,000 and
$0, respectively) ..................................................... $ 309,825 $ 242,394
========== ==========
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
17
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Value Line Special Situations Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company whose primary investment objective is long-term
growth of capital. The Fund invests primarily in a broadly diversified list of
"special situations."
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements.
(A) SECURITY VALUATION. Securities listed on a securities exchange are valued
at the closing sales prices on the date as of which the net asset value is
being determined. Securities traded on the NASDAQ Stock Market are valued at
the NASDAQ Official Closing Price. In the absence of closing sales prices for
such securities and for securities traded in the over-the-counter market, the
security is valued at the midpoint between the latest available and
representative asked and bid prices. Short-term instruments with maturities of
60 days or less at the date of purchase are valued at amortized cost, which
approximates market value. Short-term instruments with maturities greater than
60 days at the date of purchase are valued at the midpoint between the latest
available and representative asked and bid prices, and commencing 60 days prior
to maturity such securities are valued at amortized cost. Securities for which
market quotations are not readily available or that are not readily marketable
and all other assets of the Fund are valued at fair value as the Board of
Directors may determine in good faith.
(B) REPURCHASE AGREEMENTS. In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Fund has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
(C) FEDERAL INCOME TAXES. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies, including the distribution requirements of the Tax Reform Act of
1986, and to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax or excise tax provision is required.
(D) SECURITY TRANSACTIONS AND DISTRIBUTIONS. Security transactions are
accounted for on the date the securities are purchased or sold. Interest income
is accrued as earned. Realized gains and losses on sales of securities are
calculated for financial accounting and federal income tax purposes on the
identified cost basis. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
(E) REPRESENTATIONS AND INDEMNIFICATIONS. In the normal course of business the
Fund enters into contracts that contain a variety of representations and
warranties which provide general indemnifications. The Fund's maximum exposure
under these arrangements is unknown, as this would involve future claims that
may be made against the Fund that have not yet occurred. However, based on
experience, the Fund expects the risk of loss to be remote.
- --------------------------------------------------------------------------------
18
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
2. CAPITAL SHARE TRANSACTIONS
Transactions in capital stock were as follows (in thousands except per share
amounts):
YEAR YEAR
ENDED ENDED
DECEMBER 31, DECEMBER 31,
2003 2002
-------------- -------------
Shares sold ..................... 20,726 31,210
Shares repurchased .............. (20,932) (29,954)
------- -------
Net (decrease) increase ......... (206) 1,256
======= =======
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of investment securities, excluding short-term securities,
were as follows:
YEAR ENDED
DECEMBER 31,
2003
---------------
(IN THOUSANDS)
PURCHASES:
Investment Securities ......... $129,848
========
SALES:
Investment Securities ......... $125,347
========
4. INCOME TAXES
At December 31, 2003, information on the tax components of capital is as
follows:
(IN THOUSANDS)
Cost of investments for tax purposes ......... $215,713
========
Gross tax unrealized appreciation ............ $93,850
Gross tax unrealized depreciation ............ (1,450)
--------
Net tax unrealized appreciation
on investments ............................ $92,400
========
Capital loss carryforward, expires
December 31, 2009 ......................... $ 3,241
December 31, 2010 ......................... 11,670
--------
Total capital loss carryforward .............. $14,911
========
Net realized gains/losses differ for financial statement and tax purposes
primarily due to differing treatments of wash sales and distributions received
from R.E.I.T.s.
To the extent future capital gains are offset by capital losses, the Fund does
not anticipate distributing any such gains to the shareholders.
Permanent book-tax differences relating to the current year are reclassified
within the composition of net asset accounts. During 2003, the Fund
reclassified $594,000 from accumulated net investment loss to additional
paid-in-capital and $17,000 from accumulated net realized gain on investments
to additional paid-in-capital.
- --------------------------------------------------------------------------------
19
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003
- --------------------------------------------------------------------------------
5. INVESTMENT ADVISORY CONTRACT, MANAGEMENT FEES, AND TRANSACTIONS WITH
AFFILIATES
An advisory fee of $1,999,000 was paid or payable to Value Line, Inc., the
Fund's investment adviser (the "Adviser"), for the year ended December 31,
2003. This was computed at the rate of 3/4 of 1% of the average daily net
assets during the year and paid monthly. The Adviser provides research,
investment programs, supervision of the investment portfolio and pays costs of
administrative services, office space, equipment and compensation of
administrative, bookkeeping and clerical personnel necessary for managing the
affairs of the Fund. The Adviser also provides persons, satisfactory to the
Fund's Board of Directors, to act as officers and employees of the Fund and
pays their salaries and wages. The Fund bears all other costs and expenses.
The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant to
Rule 12b-1 under the Investment Company Act of 1940, for the payment of certain
expenses incurred by Value Line Securities, Inc. (the "Distributor"), a
wholly-owned subsidiary of the Adviser, in advertising, marketing and
distributing the Fund's shares and for servicing the Fund's shareholders at an
annual rate of 0.25% of the Fund's average daily net assets. For the year ended
December 31, 2003, fees amounting to $666,000 were paid or payable to the
Distributor under this Plan.
Certain officers and directors of the Adviser and its wholly owned subsidiary,
Value Line Securities, Inc. (the Fund's distributor and a registered
broker/dealer), are also officers and directors of the Fund. During the year
ended December 31, 2003, the Fund paid brokerage commissions totaling $157,000
to the distributor which clears its transactions through unaffiliated brokers.
For the year ended December 31, 2003, the Fund's expenses were reduced by
$1,000 under a custody credit agreement with the Custodian.
The Value Line, Inc. Profit Sharing and Savings Plan at December 31, 2003,
owned 72,033 shares of the Fund's capital stock, representing 0.5% of the
outstanding shares.
- --------------------------------------------------------------------------------
20
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT EACH YEAR:
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------
2003 2002 2001 2000 1999
===========================================================================
NET ASSET VALUE, BEGINNING OF YEAR $ 16.08 $ 18.95 $ 23.55 $ 27.09 $ 17.70
---------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment loss (.04) (.05) (.09) (.19) (.04)
Net gains or losses on securities
(both realized and unrealized) 4.80 (2.82) (4.07) (1.64) 10.83
---------------------------------------------------------------------------
Total from investment operations 4.76 (2.87) (4.16) (1.83) 10.79
---------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from net realized gains -- -- (.44) (1.71) (1.40)
---------------------------------------------------------------------------
NET ASSET VALUE, END OF YEAR $ 20.84 $ 16.08 $ 18.95 $ 23.55 $ 27.09
===========================================================================
TOTAL RETURN 29.60% -15.15% -17.65% -6.78% 61.66%
===========================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in thousands) $ 309,825 $ 242,394 $ 261,829 $ 388,264 $ 421,031
Ratio of expenses to average
net assets (1) 1.18% 1.20% 1.14% 1.01% .89%
Ratio of net investment loss to
average net assets (0.21)% (.31)% (.39)% (.68)% (.22)%
Portfolio turnover rate 52% 66% 88% 78% 85%
(1) RATIOS REFLECT EXPENSES GROSSED UP FOR CUSTODY CREDIT ARRANGEMENT. THE
RATIOS OF EXPENSES TO AVERAGE NET ASSETS NET OF CUSTODY CREDITS WOULD NOT
HAVE CHANGED.
SEE NOTES TO FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
21
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Value Line Special Situations
Fund, Inc. (the "Fund") at December 31, 2003, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 2003 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
February 19, 2004
- --------------------------------------------------------------------------------
22
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------
MANAGEMENT INFORMATION
The following table sets forth information on each Director and officer of the
Fund. Each Director serves as a director or trustee of each of the 14 Value
Line Funds and oversees a total of 15 portfolios. Each Director serves until
his or her successor is elected and qualified.
PRINCIPAL
OCCUPATION
LENGTH OF DURING THE OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE POSITION TIME SERVED PAST 5 YEARS HELD BY DIRECTOR
==================================================================================================================
INTERESTED DIRECTORS*
- ---------------------
Jean Bernhard Buttner Chairman of the Since 1983 Chairman, President and Value Line, Inc.
Age 69 Board of Directors Chief Executive Officer of
and President Value Line, Inc. (the
"Adviser") and Value Line
Publishing, Inc.; Chairman
and President of each of the
14 Value Line Funds and
Value Line Securities, Inc.
(the "Distributor").
- ------------------------------------------------------------------------------------------------------------------
Marion N. Ruth Director Since 2000 Real Estate Executive: Value Line, Inc.
5 Outrider Road President, Ruth Realty (real
Rolling Hills, CA 90274 estate broker); Director of the
Age 68 Adviser since October 2000.
- ------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS
- ------------------------
John W. Chandler Director Since 1991 Consultant, Academic Search None
1611 Cold Spring Rd. Consultation Service, Inc.;
Williamstown, MA 01267 Trustee Emeritus and
Age 80 Chairman (1993-1994) of the
Board of Trustees of Duke
University; President
Emeritus, Williams College.
- ------------------------------------------------------------------------------------------------------------------
Frances T. Newton Director Since 2000 Customer Support Analyst, None
4921 Buckingham Drive Duke Power Company.
Charlotte, NC 28209
Age 62
- ------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
23
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
Management of the Fund
- --------------------------------------------------------------------------------
PRINCIPAL
OCCUPATION
LENGTH OF DURING THE OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE POSITION TIME SERVED PAST 5 YEARS HELD BY DIRECTOR
=======================================================================================================
Francis C. Oakley Director Since 2000 Professor of History, Berkshire Life
54 Scott Hill Road Williams College, 1961 to Insurance Company
Williamstown, MA 01267 2002; President Emeritus of America
Age 72 since 1994 and President,
1985-1994; Chairman
(1993-1997) and Interim
President (2002) of the
American Council of
Learned Societies.
- -------------------------------------------------------------------------------------------------------
David H. Porter Director Since 1997 Visiting Professor of None
5 Birch Run Drive Classics, Williams College,
Saratoga Springs, NY 12866 since 1999; President
Age 68 Emeritus, Skidmore College
since 1999 and President,
1987-1998.
- -------------------------------------------------------------------------------------------------------
Paul Craig Roberts Director Since 1983 Chairman, Institute for A. Schulman Inc.
169 Pompano St. Political Economy. (plastics)
Panama City Beach, FL 32413
Age 64
- -------------------------------------------------------------------------------------------------------
Nancy-Beth Sheerr Director Since 1996 Senior Financial Advisor, None
1409 Beaumont Drive Hawthorne, since January
Gladwyne, PA 19035 2001; Chairman, Radcliffe
Age 54 College Board of Trustees,
1990-1999.
- -------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
24
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
Management of the Fund
- --------------------------------------------------------------------------------
PRINCIPAL
OCCUPATION
LENGTH OF DURING THE OTHER DIRECTORSHIPS
NAME, ADDRESS, AND AGE POSITION TIME SERVED PAST 5 YEARS HELD BY DIRECTOR
===========================================================================================================
OFFICERS
- --------
Stephen E. Grant Vice President Since 1997 Portfolio Manager with the --
Age 50 Adviser.
Brett Mitstifer Vice President Since 2003 Portfolio Manager with the --
Age 41 Adviser since 2003;
Executive Vice President,
Hovey, Youngman Associates
(investment management),
2000-2003; Portfolio
Manager, Bankers Trust,
1997-2000.
- -----------------------------------------------------------------------------------------------------------
Nancy L. Bendig Vice President Since 2003 Portfolio Manager with the --
Age 48 Adviser since 2003 and from
1993 to 1999; Portfolio
Manager-First Vice
President, Avatar Associates
(investment management),
1999-2003.
- -----------------------------------------------------------------------------------------------------------
David T. Henigson Vice President, Since 1994 Director, Vice President and --
Age 46 Secretary and Compliance Officer of the
Treasurer Adviser; Director and
Vice President of the
Distributor; Vice President,
Secretary and Treasurer of
each of the 14 Value Line
Funds.
- -----------------------------------------------------------------------------------------------------------
* MRS. BUTTNER IS AN "INTERESTED PERSON" AS DEFINED IN THE INVESTMENT COMPANY
ACT OF 1940 BY VIRTUE OF HER POSITIONS WITH THE ADVISER AND HER INDIRECT
OWNERSHIP OF A CONTROLLING INTEREST IN THE ADVISER; MRS. RUTH IS AN
INTERESTED PERSON BY VIRTUE OF BEING A DIRECTOR OF THE ADVISER.
UNLESS OTHERWISE INDICATED, THE ADDRESS FOR EACH OF THE ABOVE IS 220 EAST 42ND
STREET, NEW YORK, NY 10017.
- --------------------------------------------------------------------------------
25
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
- --------------------------------------------------------------------------------
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26
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
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(This page has been left blank intentionally.)
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27
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
THE VALUE LINE FAMILY OF FUNDS
- --------------------------------------------------------------------------------
1950 -- THE VALUE LINE FUND seeks long-term growth of capital. Current income
is a secondary objective.
1952 -- VALUE LINE INCOME AND GROWTH FUND'S primary investment objective is
income, as high and dependable as is consistent with reasonable risk. Capital
growth to increase total return is a secondary objective.
1956 -- THE VALUE LINE SPECIAL SITUATIONS FUND seeks long-term growth of
capital. No consideration is given to current income in the choice of
investments.
1972 -- VALUE LINE LEVERAGED GROWTH INVESTORS' sole investment objective is to
realize capital growth.
1979 -- THE VALUE LINE CASH FUND, a money market fund, seeks to secure as high
a level of current income as is consistent with maintaining liquidity and
preserving capital. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
1981 -- VALUE LINE U.S. GOVERNMENT SECURITIES FUND
seeks maximum income without undue risk to capital. Under normal conditions, at
least 80% of the value of its net assets will be invested in securities issued
or guaranteed by the U.S. Government and its agencies and instrumentalities.
1983 -- VALUE LINE CENTURION FUND* seeks long-term growth of capital.
1984 -- THE VALUE LINE TAX EXEMPT FUND seeks to provide investors with the
maximum income exempt from federal income taxes while avoiding undue risk to
principal. The Fund offers investors a choice of two portfolios: The Money
Market Portfolio and The National Bond Portfolio. The fund may be subject to
state and local taxes and the Alternative Minimum Tax (if applicable).
1985 -- VALUE LINE CONVERTIBLE FUND seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by the Value Line Convertible Ranking System.
1986 -- VALUE LINE AGGRESSIVE INCOME TRUST seeks to maximize current income.
1987 -- VALUE LINE NEW YORK TAX EXEMPT TRUST seeks to provide New York
taxpayers with the maximum income exempt from New York State, New York City and
federal income taxes while avoiding undue risk to principal. The Trust may be
subject to state and local taxes and the Alternative Minimum Tax (if
applicable).
1987 -- VALUE LINE STRATEGIC ASSET MANAGEMENT TRUST* seeks to achieve a high
total investment return consistent with reasonable risk.
1993 -- VALUE LINE EMERGING OPPORTUNITIES FUND invests primarily in common
stocks or securities convertible into common stock, with its primary objective
being long-term growth of capital.
1993 -- VALUE LINE ASSET ALLOCATION FUND seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the asset mix.
* ONLY AVAILABLE THROUGH THE PURCHASE OF GUARDIAN INVESTOR, A TAX DEFERRED
VARIABLE ANNUITY, OR VALUEPLUS, A VARIABLE LIFE INSURANCE POLICY.
FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE VALUE LINE FUNDS, INCLUDING
CHARGES AND EXPENSES, SEND FOR A PROSPECTUS FROM VALUE LINE SECURITIES, INC.,
220 EAST 42ND STREET, NEW YORK, NEW YORK 10017-5891 OR CALL 1-800-243-2729, 24
HOURS A DAY, 7 DAYS A WEEK, OR VISIT US AT WWW.VALUELINE.COM. READ THE
PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
- --------------------------------------------------------------------------------
28