Diamond Hill Investment Group, Inc. Reports Results For Second Quarter 2018

Diamond Hill Investment Group, Inc. Reports Results For Second Quarter 2018

PR Newswire

COLUMBUS, Ohio, Aug. 1, 2018 /PRNewswire/ -- Diamond Hill Investment Group, Inc.  (the "Company," "we," "our") DHIL today reported unaudited results for the quarter ended June 30, 2018 and filed its Form 10-Q.

Diamond Hill Investment Group logo

 



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.

 

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/diamond-hill-investment-group-inc-reports-results-for-second-quarter-2018-300690415.html

SOURCE Diamond Hill Investment Group, Inc.

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