Sub-Advisory Fees Expense: Comparing the
three months ended March 31, 2019, to the three months ended March 31, 2020, sub-advisory fees expense decreased by 10.8%, from $2.3 million to $2.0 million. As a percentage of total
revenue, sub-advisory fees expense increased 1.1 percentage points to 22.6%.
Comparing the
six months ended March 31, 2019, to the six months ended March 31, 2020, sub-advisory fees expense decreased by 7.9%, from $4.7 million to $4.3 million. As a percentage of total revenue, sub-advisory fees expense increased 1.4 percentage points to 22.6%.
In both periods, the dollar
value decrease in sub-advisory fees expense was due to decreased average daily net assets held in the sub-advised Hennessy Funds. Although the dollar value decreased, sub-advisory fees expense increased as a percentage of total revenue due to a larger decreases in average daily net assets held by the Hennessy Funds that we internally manage than in average daily net assets of the
sub-advised Hennessy Funds.
Depreciation Expense: Comparing the three months ended
March 31, 2019, to the three months ended March 31, 2020, depreciation expense increased by 13.0%, from $0.05 million to $0.06 million. As a percentage of total revenue, depreciation expense increased 0.2 percentage points
to 0.7%.
Comparing the six months ended March 31, 2019, to the six months ended March 31, 2020, depreciation expense increased
by 4.6%, from $0.114 million to $0.109 million. As a percentage of total revenue, depreciation expense remained the same at 0.6%.
In both periods, the increase in depreciation expense was a result of a higher fixed asset purchase base.
Interest Expense
Comparing the three
months ended March 31, 2019, to the three months ended March 31, 2020, interest expense decreased by 13.0% from $0.30 million to $0.26 million. Comparing the six months ended March 31, 2019, to the six months ended
March 31, 2020, interest expense decreased by 26.6% from $0.61 million to $0.45 million.
In both periods, the decrease in
interest expense was due primarily to the decrease in the Companys principal loan balance, which the Company repaid in full on March 26, 2020.
Income Tax Expense
Comparing the three
months ended March 31, 2019, to the three months ended March 31, 2020, income tax expense decreased by 5.7%, from $0.84 million to $0.80 million. Comparing the six months ended March 31, 2019, to the six months ended
March 31, 2020, income tax expense decreased by 17.8%, from $2.1 million to $1.8 million.
In both periods, the decrease in
income tax expense was due primarily to lower net operating income in the current period, partially offset by a higher effective income tax rate due to changes in state apportionment factors.
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