Diamond Hill Investment Group, Inc. Reports 2013 Financial Results

      Diamond Hill Investment Group, Inc. Reports 2013 Financial Results

PR Newswire

COLUMBUS, Ohio, Feb. 28, 2014

COLUMBUS, Ohio, Feb.28, 2014 /PRNewswire/ --Diamond Hill Investment Group,
Inc. (the "Company," "we," "us") (NASDAQ: DHIL) today reported results for
the year ended December31, 2013. We plan to file our 2013 Form 10-K on
Friday, March 7, 2014.



Summary of Results of Operations
(in thousands, except per share figures)
                     Three Months Ended            Year Ended
                     December 31,
                                                   December 31,
                     2013      2012      % Change  2013     2012      % Change
Revenues:
 Investment       $  19,180 $ 14,689  31%       $ 69,967 $ 57,783  21%
advisory
 Mutual fund         3,144    2,293   37%         11,465   8,874   29%
administration, net
 Total revenue       22,324   16,982  31%         81,432   66,657  22%
Operating expenses      12,890   10,435  24%         50,750   42,229  20%
Net operating income    9,434    6,547   44%         30,682   24,428  26%
 Investment          1,482    229                 4,950    1,654
income
Income before taxes     10,916   6,776   61%         35,632   26,082  37%
Net income           $  6,750  $ 4,825   40%       $ 22,155 $ 16,931  31%
Earnings per share - $  2.10   $ 1.53    37%       $ 6.94   $ 5.44    28%
diluted
Operating profit        42%      39%                 38%      37%
margin





Selected Balance Sheet Data
(in thousands, except per share figures)
                                December 31,
                                2013                        2012
Assets
 Cash equivalents and        $       51,833              $      24,375
investment portfolio
 Accounts receivable                 13,002                     10,439
 Deferred taxes                      8,063                      2,452
 Other assets                        2,455                      3,970
 Total assets                $       75,353              $      41,236
Liabilities                             30,410                     19,500
Total shareholders' equity              44,943                     21,736
Total liabilities and           $       75,353              $      41,236
shareholders' equity
Book value per share(a)         $       13.80               $      6.86
Outstanding shares                      3,257                      3,170
(a) - A $3 per share special dividend was paid in December 2013 and an $8 per
share special dividend was paid in December 2012.
                                Change in Assets Under Management
                                For the Year Ended December 31,
(in millions)                   2013                        2012
AUM at beginning of the year
                                $       9,429               $      8,671
Net cash inflows (outflows)
 proprietary funds                   713                        429
 sub-advised funds                   (758)                      (149)
 institutional accounts              (263)                      (499)
                                        (308)                      (219)
Net market appreciation and             3,065                      977
income
Increase during the year                2,757                      758
AUM at end of the year          $       12,186              $      9,429



About Diamond Hill:
We are an independent investment management firm with significant employee
ownership and $12 billion in assets under management as of January 31, 2014.
We provide investment management services to institutions and individuals
throughmutual 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 provide 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 subsidiaries.

The Company defines "net operating income after tax" as our net operating
income less income tax provision excluding investment income and the tax
impact related to the investment income. We believe that "net operating income
after tax" provides a good representation of our 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 may 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.



                                                       Year Ended December 31,
(in thousands, except per share data)                  2013         2012
Net operating income, GAAP basis
                                                       $  30,682    $  24,428
Non-GAAP adjustments:
 Tax provision excluding impact of investment          11,605       8,571
income
Net operating income after tax, non-GAAP basis        $  19,077    $  15,857
Net operating income after tax per diluted share,     $  5.97      $  5.10
non-GAAP basis



The tax provision excluding impact of investment income is calculated by
applying the tax rate calculated from the income statement 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, we 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, including the effects of implementation of the Budget
Control Act of 2011, the American Taxpayer Relief Act of 2012, 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 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.

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