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Diamond Hill Investment Group, Inc. Reports Results For Third Quarter 2013



  Diamond Hill Investment Group, Inc. Reports Results For Third Quarter 2013

PR Newswire

COLUMBUS, Ohio, Nov. 1, 2013

COLUMBUS, Ohio, Nov. 1, 2013 /PRNewswire/ -- Diamond Hill Investment Group,
Inc. (the "Company") (NASDAQ: DHIL) today reported unaudited results for the
quarter ended September 30, 2013 and filed its Form 10-Q. 

 

                                 Three Months Ended September 30,
                                 2013             2012            Change
Revenue                          $20,779,915      $16,859,607     23%
    Net operating income         7,469,601        6,030,220       24%
    Operating margin             36%              36%
Investment income                913,551          620,600
Net income                       5,361,736        4,166,786       29%
Earnings per share - diluted     $1.67            $1.32           27%
                                 Nine Months Ended September 30,
                                 2013             2012            Change
Revenue                          $59,029,185      $49,634,682     19%
    Net operating income         21,248,907       17,881,289      19%
    Operating margin             36%              36%
Investment income                3,466,935        1,423,899
Net income                       15,404,014       12,106,236      27%
Earnings per share - diluted     $4.84            $3.91           24%

                                 As Of
                                 September 30, December 31, 2012 September 30,
                                 2013                            2012
Assets under management          $11,040       $9,429            $9,681
(millions)
Book value per share ^(a)        $14.01        $6.86             $12.94
Total outstanding shares         3,263,677     3,169,987         3,160,768

(a)    – An $8 per share special dividend was paid in December 2012.

 

                                      Change in Assets Under Management
                                      For the Three Months Ended September 30,
(in millions)                         2013                 2012
AUM at beginning of the period        $                    $                  
                                        10,427                 9,164
Net cash inflows (outflows)
       proprietary funds              78                   161
       sub-advised funds              57                   (42)
       institutional accounts         (50)                 (191)
                                      85                   (72)
Net market appreciation and income    528                  589
Increase during the period            613                  517
AUM at end of the period              $                    $                  
                                        11,040                 9,681
                                      Change in Assets Under Management
                                      For the Nine Months Ended September 30,
(in millions)                         2013                 2012
AUM at beginning of the period        $                    $                  
                                          9,429                8,671
Net cash inflows (outflows)
       proprietary funds              437                  368
       sub-advised funds              (762)                (117)
       institutional accounts         (225)                (171)
                                      (550)                80
Net market appreciation and income    2,161                930
Increase during the period            1,611                1,010
AUM at end of the period              $                    $                  
                                        11,040                 9,681

 

About Diamond Hill:
Diamond Hill is an independent investment management firm with significant
employee ownership and $11.0 billion in assets under management as of
September 30, 2013.  The firm provides investment management services to
institutions and individuals through mutual 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 the Company and its subsidiaries.

The Company defines "net operating income after tax" as the Company's net
operating income less its income tax provision, excluding investment income
and the tax impact related to the investment income. 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
income 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 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.

 

                             Three Months Ended        Nine Months Ended
                            September 30,             September 30, 
 (in thousands, except per  2013         2012         2013       2012
share data) 
 Net operating income, GAAP $            $            $          $            
basis                       7,470              6,030   21,249          17,881
 Non-GAAP adjustments: 
 Tax provision excluding
impact of investment        2,692        2,252        8,006      6,668
income 
 Net operating income after $            $            $          $            
tax, non-GAAP basis         4,778              3,778   13,243          11,213
 Net operating income after $            $            $          $            
tax per share,              1.49                       4.16               
 non-GAAP basis                          1.20                    3.62

 

The tax provision excluding impact of investment income is calculated by
applying the tax rate calculated from the income statement 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 (the
"Exchange Act"), relating to such matters as anticipated operating results,
prospects for achieving the critical threshold of AUM, technological
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; changes in national and
local economic and political conditions, including the effects of
implementation of the American Taxpayer Relief Act of 2012 and the Jumpstart
Our Business Startups Act of 2012 and the continuing economic uncertainty in
various parts of the world; 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 ("SEC").

SOURCE Diamond Hill Investment Group, Inc.

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