Diamond Hill Investment Group, Inc. Reports 2015 Financial Results

Feb 25, 2016, 16:15 ET from Diamond Hill Investment Group, Inc.

COLUMBUS, Ohio, Feb. 25, 2016 /PRNewswire/ -- Diamond Hill Investment Group, Inc.  (the "Company," "we," "our") (NASDAQ: DHIL) today reported results for the year ended December 31, 2015.

 

Summary of Results of Operations

(in thousands, except per share figures)

Three Months Ended  December 31,

Year Ended

December 31,

2015

2014

% Change

2015

2014

% Change

Revenues:

    Investment advisory

$

28,021

$

24,509

14%

$

107,916

$

89,901

20%

    Mutual fund administration, net

4,281

3,962

8%

16,510

14,658

13%

    Total revenue

32,302

28,471

13%

124,426

104,559

19%

Operating expenses

15,039

10,240

47%

65,706

57,099

15%

Net operating income

17,263

18,231

(5)%

58,720

47,460

24%

Investment income (loss)

973

2,073

(737)

2,906

Income before taxes

18,236

20,304

(10)%

57,983

50,366

15%

Net income

$

11,655

$

12,553

(7)%

$

37,074

$

31,581

17%

Earnings per share - diluted

$

3.43

$

3.81

(10)%

$

11.03

$

9.67

14%

Operating profit margin

53

%

64

%

47

%

45

%

 

 

Selected Balance Sheet Data

(in thousands, except per share figures)

December 31,

2015

2014

Assets

    Cash equivalents and investment portfolio

$

109,966

$

81,205

    Accounts receivable

18,579

16,514

    Deferred taxes

9,206

5,659

    Other assets

7,436

4,331

    Total assets

$

145,187

$

107,709

Liabilities

39,873

33,390

Total shareholders' equity

105,314

74,319

Total liabilities and shareholders' equity

$

145,187

$

107,709

Book value per share(a)

$

30.84

$

22.40

Outstanding shares

3,414

3,318

 

(a) -

A $5 per share special dividend was paid in December 2015 and a $4 per share special dividend was paid in December 2014.

 

Change in Assets Under Management

For the Year Ended December 31,

(in millions)

2015

2014

AUM at beginning of the year

$

15,656

$

12,186

Net cash inflows (outflows)

    proprietary funds

1,916

1,618

    sub-advised funds

(6)

166

    institutional accounts

(443)

478

1,467

2,262

Net market appreciation (depreciation) and income

(282)

1,208

Increase during the year

1,185

3,470

AUM at end of the year

$

16,841

$

15,656

 

About Diamond Hill: We are an independent investment management firm with significant employee ownership and $16.8 billion in assets under management as of December 31, 2015.  We provide investment management services to institutions and individuals through mutual funds, institutional separate accounts, 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 Net Operating Income After Tax

As supplemental information, we are providing performance measures that are based on methodologies other than generally accepted accounting principles ("non-GAAP") for "Net Operating Income After Tax" that management uses as a benchmark in evaluating and comparing the period-to-period operating performance of the Company and subsidiaries.

The Company defines "net operating income after tax" as the Company's net operating income less income tax provision,  excluding investment related activity and the tax impact of the investment related activity. The Company believes that "net operating income after tax" provides a good representation of the Company's operating performance, as it excludes the impact of investment related activity on financial results. The amount of the investment portfolio and market fluctuations on the investments can change significantly from one period to another, which can distort the underlying earnings potential of a company. We also believe "net operating income after tax" is an important metric in estimating the value of an asset management business. This non-GAAP measure is provided in addition to net income and net operating income and is not a substitute for net income or net operating income and may not be comparable to non-GAAP performance measures of other companies.

 

 Year Ended December 31,

 (in thousands, except per share data)

2015

2014

 Net operating income, GAAP basis

$

58,720

$

47,460

 Non-GAAP adjustments:

    Tax provision excluding impact of investment income (loss)

(21,174)

(17,701)

 Net operating income after tax, non-GAAP basis

$

37,546

$

29,759

 Net operating income after tax per diluted share, non-GAAP basis

$

11.17

$

9.11

 

The tax provision excluding impact of investment related activity is calculated by applying the tax rate from the actual provision to net operating income.

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, and 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 such actual results or experiences to differ from results discussed in the forward-looking statements 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 U. S. Securities and Exchange Commission.

SOURCE Diamond Hill Investment Group, Inc.



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http://www.diamond-hill.com