COLUMBUS, Ohio, Aug. 1,
2018 /PRNewswire/ -- Diamond Hill Investment Group, Inc.
(the "Company," "we," "our") (NASDAQ: DHIL) today reported
unaudited results for the quarter ended June 30, 2018 and
filed its Form 10-Q.
|
Three Months Ended
June 30,
|
|
|
|
2018
|
|
2017
|
|
Change
|
Revenue
|
$
|
35,927,715
|
|
|
$
|
35,542,541
|
|
|
1%
|
Net operating income
|
16,349,539
|
|
|
15,966,748
|
|
|
2%
|
Operating margin
|
46
|
%
|
|
45
|
%
|
|
|
Investment income,
net
|
3,565,669
|
|
|
3,024,729
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
(5,017,185)
|
|
|
(6,024,458)
|
|
|
(17)%
|
Net income
attributable to common shareholders
|
14,370,368
|
|
|
12,638,439
|
|
|
14%
|
Earnings per share
attributable to common shareholders - diluted
|
$
|
4.08
|
|
|
$
|
3.66
|
|
|
11%
|
|
|
|
|
|
|
|
Six Months Ended June
30,
|
|
|
|
2018
|
|
2017
|
|
Change
|
Revenue
|
$
|
73,709,717
|
|
|
$
|
70,581,614
|
|
|
4%
|
Net operating income
|
34,553,490
|
|
|
31,708,222
|
|
|
9%
|
Operating margin
|
47
|
%
|
|
45
|
%
|
|
|
Investment income,
net
|
2,005,946
|
|
|
6,905,973
|
|
|
|
Income tax
provision
|
(8,719,285)
|
|
|
(12,521,728)
|
|
|
(30)%
|
Net income
attributable to common shareholders
|
27,359,828
|
|
|
25,395,334
|
|
|
8%
|
Earnings per share
attributable to common shareholders - diluted
|
$
|
7.81
|
|
|
$
|
7.38
|
|
|
6%
|
|
As Of
|
|
June 30,
2018
|
|
December 31,
2017
|
|
June 30,
2017
|
Assets under
management (millions)
|
$
|
21,827
|
|
|
$
|
22,317
|
|
|
$
|
20,924
|
|
Book value per
share
|
$
|
58.62
|
|
|
$
|
49.69
|
|
|
$
|
49.37
|
|
Total outstanding
shares
|
3,532,634
|
|
|
3,470,428
|
|
|
3,457,775
|
|
|
For the Three Months
Ended June 30,
|
(in
millions)
|
2018
|
|
2017
|
AUM at beginning of
the period
|
$
|
21,929
|
|
|
$
|
20,333
|
|
Net cash inflows
(outflows)
|
|
|
|
proprietary funds
|
(362)
|
|
|
389
|
|
sub-advised funds
|
23
|
|
|
(54)
|
|
institutional accounts
|
(53)
|
|
|
(142)
|
|
|
(392)
|
|
|
193
|
|
Net market
appreciation and income
|
290
|
|
|
398
|
|
Increase (decrease)
during the period
|
(102)
|
|
|
591
|
|
AUM at end of the
period
|
$
|
21,827
|
|
|
$
|
20,924
|
|
|
|
|
|
|
Change in Assets
Under Management
|
|
For the Six Months
Ended June 30,
|
(in
millions)
|
2018
|
|
2017
|
AUM at beginning of
the period
|
$
|
22,317
|
|
|
$
|
19,381
|
|
Net cash inflows
(outflows)
|
|
|
|
proprietary funds
|
(174)
|
|
|
698
|
|
sub-advised funds
|
126
|
|
|
(132)
|
|
institutional accounts
|
(88)
|
|
|
(207)
|
|
|
(136)
|
|
|
359
|
|
Net market
appreciation (depreciation) and income
|
(354)
|
|
|
1,184
|
|
Increase (decrease)
during the period
|
(490)
|
|
|
1,543
|
|
AUM at end of the
period
|
$
|
21,827
|
|
|
$
|
20,924
|
|
About Diamond Hill:
We are an independent investment management firm with significant
employee ownership and $21.8 billion
in assets under management as of June 30, 2018. We
provide investment management services to institutions and
individuals through mutual funds, institutional separate
accounts, an exchange traded fund, and private investment
funds. Our entire investment team shares the same intrinsic
value investment philosophy focused on absolute returns, and our
interests are firmly aligned with our clients through significant
investment in its strategies. For more information visit
www.diamond-hill.com.
Use of Supplemental Data as Non-GAAP Performance
Measure
As supplemental information, we are providing
performance measures that are based on methodologies other than
U.S. generally accepted accounting principles ("non-GAAP").
We believe the non-GAAP measures below are useful measures of our
core business activities, are important metrics in estimating the
value of an asset management business and may enable more
appropriate comparison to our peers. These non-GAAP measures
should not be a substitute for financial measures calculated in
accordance with U.S. generally accepted accounting principles
("GAAP") and may be calculated differently by other
companies. The following schedule reconciles GAAP measures to
non-GAAP measures for the three and six months ended June 30,
2018 and 2017, respectively.
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in thousands, except
percentages and per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Total
revenue
|
$
|
35,928
|
|
|
$
|
35,543
|
|
|
$
|
73,710
|
|
|
$
|
70,582
|
|
|
|
|
|
|
|
|
|
Net operating income,
GAAP basis
|
$
|
16,350
|
|
|
$
|
15,967
|
|
|
$
|
34,553
|
|
|
$
|
31,708
|
|
Non-GAAP
adjustment:
|
|
|
|
|
|
|
|
Gains (losses) on
deferred compensation plan investments,
net(1)
|
456
|
|
|
436
|
|
|
(60)
|
|
|
1,021
|
|
Net operating income,
as adjusted, non-GAAP basis(2)
|
16,806
|
|
|
16,403
|
|
|
34,493
|
|
|
32,729
|
|
Non-GAAP
adjustment:
|
|
|
|
|
|
|
|
Tax provision on net
operating income, as adjusted, non-GAAP
basis(3)
|
(4,234)
|
|
|
(5,203)
|
|
|
(8,226)
|
|
|
(10,613)
|
|
Net operating income,
as adjusted, after tax, non-GAAP basis(4)
|
$
|
12,572
|
|
|
$
|
11,200
|
|
|
$
|
26,267
|
|
|
$
|
22,116
|
|
|
|
|
|
|
|
|
|
Net operating income,
as adjusted after tax per diluted share, non-
GAAP basis(5)
|
$
|
3.57
|
|
|
$
|
3.25
|
|
|
$
|
7.49
|
|
|
$
|
6.43
|
|
Diluted weighted
average shares outstanding, GAAP basis
|
3,520
|
|
|
3,449
|
|
|
3,505
|
|
|
3,441
|
|
|
|
|
|
|
|
|
|
Operating profit
margin, GAAP basis
|
46
|
%
|
|
45
|
%
|
|
47
|
%
|
|
45
|
%
|
Operating profit
margin, as adjusted, non-GAAP basis(6)
|
47
|
%
|
|
46
|
%
|
|
47
|
%
|
|
46
|
%
|
|
(1)
Gains (losses) on deferred compensation plan investments,
net: The gain (loss) on deferred compensation plan investments,
which increases (decreases) deferred compensation expense included
in operating income, is removed from operating income in the
calculation because it is offset by an equal amount in investment
income (loss) below net operating income on the income statement,
and thus has no impact on net income attributable to the
Company.
|
(2) Net
operating income, as adjusted: This non-GAAP measure was
calculated by taking the Company's net operating income adjusted to
exclude the impact on compensation expense of gains and losses on
investments in the deferred compensation plan.
|
(3) Tax
provision on net operating income, as adjusted: This non-GAAP
measure represents the tax provision excluding the impact of
investment related activity and is calculated by applying the tax
rate from the actual tax provision to net operating income, as
adjusted.
|
(4) Net
operating income, as adjusted, after tax: This non-GAAP
measure was calculated by taking the net operating income, as
adjusted, less the tax provision on net operating income, as
adjusted.
|
(5) Net
operating income, as adjusted after tax per diluted share: This
non-GAAP measure was calculated by dividing the net operating
income, as adjusted after tax, by diluted weighted average shares
outstanding.
|
(6)
Operating profit margin, as adjusted: This non-GAAP measure
was calculated by dividing the net operating income, as adjusted,
by total revenue.
|
Our management does not promote that investors consider the
above non-GAAP financial measures alone, or as a substitute for,
financial information prepared in accordance with GAAP.
Throughout this press release, the Company may make
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, Section 21E of the
Securities Exchange Act of 1934, as amended, relating to such
matters as anticipated operating results, prospects and levels of
assets under management, technological developments, economic
trends (including interest rates and market volatility), expected
transactions and similar matters. The words "believe," "expect,"
"anticipate," "estimate," "should," "hope," "seek," "plan,"
"intend" and similar expressions identify forward-looking
statements that speak only as of the date thereof. While we believe
that the assumptions underlying our forward-looking statements are
reasonable, investors are cautioned that any of the assumptions
could prove to be inaccurate and, accordingly, our actual results
and experiences could differ materially from the anticipated
results or other expectations expressed in our forward-looking
statements. Factors that could cause our actual results to
differ materially from the results referred to in the
forward-looking statements we make in this Quarterly Report on Form
10-Q and in our press releases are discussed under "Item 1A. Risk
Factors" and elsewhere in the 2017 Annual Report and include, but
are not limited to: the adverse effect from a decline in the
securities markets; a decline in the performance of our products;
changes in interest rates; changes in national and local economic
and political conditions, the continuing economic uncertainty
in various parts of the world; changes in government policy and
regulation, including monetary policy; changes in our ability to
attract or retain key employees; unforeseen costs and other effects
related to legal proceedings or investigations of governmental and
self-regulatory organizations; and other risks identified from
time-to-time in other public documents on file with the SEC.
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SOURCE Diamond Hill Investment Group, Inc.