Diamond Hill Investment Group, Inc. Reports 2012 Financial Results

      Diamond Hill Investment Group, Inc. Reports 2012 Financial Results

PR Newswire

COLUMBUS, Ohio, March 1, 2013

COLUMBUS, Ohio, March 1, 2013 /PRNewswire/ -- Diamond Hill Investment Group,
Inc. (the "Company") (NASDAQ:DHIL) today reported results for the year ended
December 31, 2012. The Company plans to file its 2012 Form 10-K on Friday,
March 8, 2013 and we urge investors to read and consider the information in
that filing. Whenever possible, we will post our report on a Friday afternoon
so that investors have a maximum amount of time to digest the information
contained therein.

Summary of Results of Operations
(in thousands, except per share figures)
                     Three Months Ended           Year Ended
                     December 31,         %       December 31,          %
                     2012        2011     Change  2012        2011      Change
Revenues:
 Investment advisory $        $     10%     $  57,783 $       3%
                     14,689      13,311                       56,016
 Mutual fund         2,282       1,879    21%     8,822       7,822     13%
 administration, net
 Total Revenue       16,971      15,190   12%     66,605      63,838    4%
Operating Expenses   10,424      8,873    17%     42,176      40,777    3%
Net Operating Income 6,547       6,317    4%      24,429      23,061    6%
 Investment Income   229         781              1,654       (67)
Net Income Before    6,776       7,098    -5%     26,083      22,994    13%
Taxes
Net Income           $       $     8%      $  16,931 $       18%
                     4,825        4,453                      14,353
Earnings per share  $      $     3%      $        $     12%
                     1.53          1.49         5.44       4.86
Operating profit     39%         42%              37%         36%
margin
Net client cash      $          $             $ (219,200) $   
flows                (298,500)   69,400                       3,200



Selected Balance Sheet Data
(in thousands, except per share figures)
                                            December 31,
                                            2012                 2011
Assets
             Cash equivalents and           $  24,375          $ 23,451
             investment portfolio
             Accounts receivable            10,439               10,296
             Deferred tax asset             2,452                2,083
             Other assets                   3,970                1,890
             Total assets                   $  41,236          $ 37,720
Liabilities                                 19,500               19,670
Total shareholders' equity                  21,736               18,050
Total liabilities and shareholders' equity  $  41,236          $ 37,720
Book value per share^(a)                   $    6.86        $   6.03
Outstanding shares                          3,170                2,996
(a) – An $8 per share special dividend was paid in December 2012 and a $5 per
share special dividend was paid in December 2011.

                                   Change in Assets Under Management
                                   For the Year Ended December 31,
(in millions)                      2012                  2011
AUM at beginning of the year       $           $          
                                    8,671                8,623
Net cash inflows (outflows)
       proprietary funds           429                   56
       sub-advised funds           (149)                 21
       institutional accounts      (499)                 (74)
                                   (219)                 3
Net market appreciation and income 977                   45
Increase during the year           758                   48
AUM at end of the year             $           $          
                                    9,429                8,671

About Diamond Hill:
Diamond Hill is an independent investment management firm with significant
employee ownership and $10.1 billion in assets under management as of January
31, 2013. The firm provides investment management services to institutions
and individuals throughmutual funds, institutional separate accounts, and
private investment funds. Diamond Hill's entire investment team shares the
same intrinsic value investment philosophy focused on absolute returns, and
the firm's interests are firmly aligned with its clients through significant
investment in its strategies. For more information on Diamond Hill, 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
benchmarks in evaluating and comparing the period-to-period operating
performance of Diamond Hill Investment Group, Inc. (the "Company") and its
subsidiaries.

The Company defines "net operating income after tax" as the Company's net
operating income less income tax provision excluding investment return and the
tax impact related to the investment return. 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 return 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 Ended December 31,
(in thousands, except per share data)  2012              2011
Net operating income, GAAP basis       $    24,429    $       
                                                           23,061
Non-GAAP adjustments:
Tax provision excluding impact of       8,572             8,667
investment income
Net operating income after tax,         $    15,857    $       
non-GAAP basis                                            14,394
Net operating income after tax per                        $         
share,                                   $      5.10  4.88
non-GAAP basis

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

The Company's 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 for achieving the
critical threshold of assets under management, technology developments,
economic trends (including interest rates and market volatility), expected
transactions and acquisitions 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 the Company believes that the assumptions
underlying its forward-looking statements are reasonable, investors are
cautioned that any of the assumptions could prove to be inaccurate and
accordingly, the actual results and experiences of the Company could differ
materially from the anticipated results or other expectations expressed by the
Company in its 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 the
Company's products; changes in interest rates; a general or prolonged downturn
in the economy; changes in government policy and regulation, including
monetary policy; changes in the Company's 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 the Company's other public documents on
file with the U.S. Securities and Exchange Commission.

SOURCE Diamond Hill Investment Group, Inc.

Website: http://www.diamond-hill.com
Contact: James F. Laird, Chief Financial Officer, +1-614-255-3353,
jlaird@diamond-hill.com
 
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