Assets Under Management - Average assets under management for fiscal year 2024 were $3.7 billion, with total assets under management at $4.6 billion as of the end of fiscal year 2024[20]. - Assets under management increased to $4,642,363,000 in fiscal 2024 from $3,032,042,000 in fiscal 2023, reflecting a growth of 53.2%[88]. - Approximately 75% of the company's assets under management are concentrated in five or six funds, with the Hennessy Cornerstone Mid Cap 30 Fund accounting for 27% of average assets under management[176]. Revenue and Fees - The company’s revenue primarily comes from investment advisory services, calculated as a percentage of the average daily net asset values of the Hennessy Funds[18]. - Total revenue, net of sub-advisory fees, for fiscal 2024 was $25,477,000, up from $20,261,000 in fiscal 2023, indicating a growth of 25.5%[89]. - Investment advisory fees for fiscal 2024 were $27,524,000, compared to $22,090,000 in fiscal 2023, marking an increase of 24.5%[89]. - The Hennessy Energy Transition Fund has the highest investment advisory fee at 1.25% of fund assets[93]. - Hennessy Mutual Funds charge a shareholder service fee of 0.10% of the average daily net assets of the Investor Class shares[103]. - The 12b-1 fee for each Hennessy Mutual Fund is set at 0.15% of the average daily net assets of the Investor Class shares[106]. Investment Performance - Hennessy Cornerstone Growth Fund achieved a one-year return of 42.60% for Institutional Class shares and 42.16% for Investor Class shares[76]. - Hennessy Cornerstone Mid Cap 30 Fund reported a one-year return of 44.44% for Institutional Class shares and 43.89% for Investor Class shares[76]. - Hennessy Total Return Fund had a one-year return of 16.77% for Investor Class shares, underperforming the 75/25 Blended DJIA/Treasury Index which returned 22.74%[76]. - Hennessy Cornerstone Value Fund's one-year return was 19.52% for Institutional Class shares and 19.24% for Investor Class shares, compared to the Russell 1000 Value Index at 27.76%[76]. - Hennessy Japan Fund Institutional Class Share (HJPIX) reported a one-year return of 37.43%[78]. - Hennessy Stance ESG ETF (STNC) had a one-year net asset value return of 24.31%[78]. Strategic Growth and Acquisitions - The company completed the purchase of assets related to the management of 10 mutual funds previously managed by FBR Fund Advisers, totaling approximately $2.2 billion[33]. - In November 2023, the company purchased assets related to a mutual fund previously managed by Community Capital Management, totaling approximately $12 million[48]. - In February 2024, the company purchased assets related to a second mutual fund previously managed by Community Capital Management, totaling approximately $59 million[49]. - The company’s business strategy focuses on organic growth through marketing and sales efforts, as well as growth through strategic purchases of management-related assets[20]. - Hennessy Funds have completed 12 asset purchases over nearly 25 years, integrating $4.4 billion in net assets from 33 different investment funds[125]. Regulatory and Compliance - The company maintains compliance with extensive federal and state laws and regulations, including the SEC's Advisers Act and the 1940 Act[129]. - The company has received an exemptive order from the SEC to operate under a manager of managers structure, allowing for more flexibility in appointing sub-advisors[101]. - The company’s investment advisory agreements must be renewed annually, ensuring ongoing oversight and compliance with regulations[95]. - Regulatory compliance is a significant concern, as failure to comply could result in substantial financial penalties and increased operational costs[162]. Market and Competitive Environment - The investment advisory industry is highly competitive, with numerous global and U.S. investment managers posing challenges to Hennessy Funds[127]. - The company may face downward pressure on investment advisory fees, which could reduce profit margins and adversely affect results of operations[156]. - The performance of the Hennessy Funds is crucial, as poor performance compared to competitors can lead to increased redemptions and decreased purchases[140]. Risks and Challenges - The company faces risks related to assets under management, as investors can redeem their investments at any time, which can adversely affect revenues[139]. - Market volatility and economic conditions can significantly impact the company's assets under management and revenues[144]. - Cybersecurity risks pose a significant threat to the company's operations, as any breaches could result in operational disruptions and reputational damage[192]. - The company faces significant competition for qualified personnel, and the loss of key personnel could materially affect its business and financial condition[183]. Employee and Corporate Structure - As of the end of fiscal year 2024, the company had 18 employees, with an average tenure of 14 years, and over 50% of employees are women[134]. - The management contracts are classified as an indefinite-life asset valued at $82.3 million as of the end of fiscal year 2024, subject to impairment analysis[207]. Financial Obligations - The company completed a public offering of the 2026 Notes totaling $40.25 million, maturing on December 31, 2026, with an interest rate of 4.875% per annum[209]. - The company may need to raise additional capital to fund new business initiatives or repay the 2026 Notes, which could adversely impact its operations if financing is not available on acceptable terms[170].

Financial Performance - Total revenue for the fiscal year ended September 30, 2024, was $29.6 million, representing a 23% increase compared to the previous year[6] - Net income increased by 49% to $7.1 million for the same period[6] - Fully diluted earnings per share rose by 46% to $0.92[6] - Cash and cash equivalents, net of gross debt, increased by 17% to $23.7 million[6] Assets Under Management - Average assets under management increased by 23% to $3.7 billion[6] - Total assets under management at fiscal year end reached $4.6 billion, a 53% increase from the previous year[6] - The company welcomed $549 million in net new assets under management during the fiscal year[5] Market Performance - The Dow Jones Industrial Average returned 28.85% and the S&P 500® Index returned 36.35% over the one-year period ended September 30, 2024[4] - Hennessy Funds posted positive returns across all 17 funds for the fiscal year[4] Business Strategy - The company executed a business strategy that included purchasing assets related to the management of $72 million in mutual funds[5]

Core Insights - Hennessy Advisors, Inc. reported strong financial results for the fiscal year ended September 30, 2024, with a total revenue of $29.6 million, a 23% increase from the previous year, and net income of $7.1 million, reflecting a 49% increase [6][7] - The company emphasized the resilience of the U.S. economy, citing low unemployment, robust corporate earnings, and positive consumer sentiment as key drivers for continued market growth [1][3] - Hennessy Advisors successfully executed its business strategy, resulting in a 23% increase in average assets under management and a 53% increase in total assets under management, reaching $4.6 billion by the end of the fiscal year [3][6] Financial Performance - Total revenue for the fiscal year was $29,646,194, up from $24,019,874 in 2023, marking a 23.4% increase [6] - Net income increased to $7,096,701 from $4,770,888, representing a 48.8% growth [6] - Earnings per share (diluted) rose to $0.92, a 46% increase from $0.63 in the previous year [6] - Average assets under management reached $3,686,942,501, a 23.2% increase from $2,991,689,979 [6] - Total assets under management at fiscal year-end were $4,642,363,105, reflecting a 53.1% increase from $3,032,041,791 [6] Market Context - The U.S. stock market experienced significant growth, with the Dow Jones Industrial Average returning 28.85% and the S&P 500® Index returning 36.35% over the one-year period ending September 30, 2024 [2] - All 17 Hennessy Funds posted positive returns during the same period, with 15 funds achieving positive returns over the three-year period and all 16 funds with at least 10 years of history posting positive returns over both the 5-year and 10-year periods [2]

Core Points - Hennessy Advisors, Inc. declared a quarterly dividend of $0.1375 per share, to be paid on November 27, 2024, to shareholders of record as of November 14, 2024, representing an annualized dividend yield of 5.28% [1][2] - The company has consistently paid dividends for two decades, indicating a strong commitment to shareholder returns supported by earnings and cash flow [1] Company Overview - Hennessy Advisors, Inc. is a publicly traded investment manager that offers a variety of domestic equity, multi-asset, and sector and specialty funds [3] - The company emphasizes superior service to shareholders and follows a disciplined buy-and-hold investment philosophy, avoiding market timing strategies [3]

Core Insights - Hennessy Advisors, Inc. reported strong financial results for the third fiscal quarter of 2024, with significant increases in revenue, net income, and earnings per share compared to the same quarter in the previous year [3][4] - The company announced a quarterly dividend of $0.1375 per share, reflecting an annualized dividend yield of 6.6% [1] - The U.S. stock market has shown positive performance in 2024, contributing to the company's optimistic outlook [1] Financial Performance - Total revenue reached $7.8 million, marking a 37% increase year-over-year [3][4] - Net income was reported at $2.0 million, an increase of 82% compared to the prior year [3][4] - Fully diluted earnings per share rose to $0.26, reflecting a 73% increase [3][4] - Average assets under management increased to $3.9 billion, a 37% rise from the previous year [3][4] - Total assets under management reached $4.0 billion, up 36% year-over-year [3][4] - Cash and cash equivalents, net of gross debt, increased to $21.8 million, a 14% rise [3][4] Asset Growth - The company grew assets under management by nearly $1 billion in the nine months ended June 30, 2024, driven by fund acquisitions, net inflows, and fund performance [2] - Total assets under management surpassed $4 billion, indicating strong growth and investor confidence [2][4] Market Context - The Dow Jones Industrial Average and S&P 500 Index have shown increases of 4.79% and 15.29%, respectively, year-to-date through June 30, 2024 [1] - The positive market sentiment is attributed to lower inflation data, continued earnings growth, potential interest rate cuts, and solid GDP growth estimates of 2.3% for 2024 [1]

Financial Performance - Total revenue for the three months ended March 31, 2024, was $6,940,000, representing a 17.3% increase from $5,916,000 in the same period of 2023[15] - Net income for the six months ended March 31, 2024, was $2,740,000, up 18.4% from $2,314,000 in the prior year[21] - Basic earnings per share increased to $0.20 for the three months ended March 31, 2024, compared to $0.16 for the same period in 2023, reflecting a 25% growth[15] - The net income for the three months ended March 31, 2024, was $1.54 million, representing a net income margin of 22.2%, up from 20.2% in the same period last year[87] - Net income increased by 28.9%, from $1.2 million to $1.5 million for the three months ended March 31, 2024[115] Assets and Equity - Total assets as of March 31, 2024, were $147,335,000, a slight increase from $145,719,000 as of September 30, 2023[12] - Total stockholders' equity rose to $88,922,000 as of March 31, 2024, compared to $87,752,000 as of September 30, 2023, marking a 1.3% increase[12] - Total assets under management as of March 31, 2024, increased to $3.9 billion, a rise of $1.0 billion or 35.5% compared to March 31, 2023[83] - Average assets under management for the six months ended March 31, 2024, were $3.2 billion, an increase of $0.2 billion, or 7.7%, compared to the same period in 2023[119] Cash Flow - Net cash provided by operating activities for the six months ended March 31, 2024, was $2,289,000, compared to $1,955,000 in the prior year, reflecting a 17% increase[21] - Cash and cash equivalents decreased to $59,593,000 from $60,476,000 at the end of the previous period, indicating a decline of 1.5%[12] - The increase in cash provided by operating activities was primarily due to timing of cash payments and increased net income[120] Expenses - Operating expenses for the three months ended March 31, 2024, totaled $5,021,000, up from $4,324,000 in the same period of 2023, representing a 16.1% increase[15] - Total operating expenses increased by 16.1%, from $4.3 million to $5.0 million for the three months ended March 31, 2024[93] - Fund distribution and other expense increased by 52.3%, from $0.1 million to $0.2 million for the three months ended March 31, 2024[102] - Compensation and benefits expense increased by 16.7%, from $1.9 million to $2.3 million for the three months ended March 31, 2024[95] Investment and Management - The Company completed asset purchases adding approximately $12 million and $59 million to its assets under management from the CCM Small/Mid-Cap Impact Value Fund and the CCM Core Impact Equity Fund, respectively[37] - The Company has 16 open-end mutual funds and one ETF under management, providing investment advisory services and shareholder services[26] - Investment advisory and shareholder service fee revenues are recognized based on contractual percentages of net asset values, which are affected by market appreciation or depreciation, and net inflows or outflows[32] - The investment advisory fees accounted for 92.7% of total revenue for the three months ended March 31, 2024, compared to 91.9% in the same period last year[87] Shareholder Information - Cash dividends declared per share remained stable at $0.14 for both the three months ended March 31, 2024, and 2023[15] - The Company issued 7,116 shares of common stock under the Dividend Reinvestment and Stock Purchase Plan during the six months ended March 31, 2024[63] - As of March 31, 2024, 1,096,368 shares remain available for repurchase under the stock buyback program, which was increased to 2,000,000 shares in August 2022[64] - The Company paid a quarterly cash dividend of $0.1375 per share on March 4, 2024[66] Tax and Compliance - The Company's effective income tax rates for the six months ended March 31, 2024, and 2023, were 27.2% and 25.8%, respectively[56] - There were no changes in the company's internal control over financial reporting during the fiscal quarter ended March 31, 2024[123] Market and Strategy - The company serves over 170,000 fund accounts nationwide, including approximately 11,000 financial advisors, with nearly 400 advisors purchasing a fund for the first time in the most recent quarter[82] - The company has a robust marketing automation and CRM system with a database of over 100,000 financial advisors, aimed at retaining assets and driving new purchases[81] - The company’s long-term strategy includes a buy-and-hold investment philosophy, focusing on providing superior service to investors[81] - The company anticipates continued growth in earnings, with consensus estimates suggesting strengthened earnings growth for the quarter ended March 31, 2024[77]

Shareholder Meetings - The annual meeting of shareholders will be held each year on a date and time designated by the Board of Directors[14]. - A special meeting of shareholders may be called by the Board of Directors or shareholders holding at least 10% of the votes[15]. - Notice of shareholders' meetings must be sent not less than 10 or more than 60 days before the meeting date[17]. - A quorum for the transaction of business requires the presence of a majority of shares entitled to vote[20]. - Shareholders present at a meeting with a quorum can continue to transact business until adjournment[20]. - Adjourned meetings do not require new notice if the time and place are announced at the original meeting[21]. - The Corporation's notice procedures for shareholder nominations require detailed disclosures, including the nominee's consent and completed questionnaires[16]. - Shareholders must provide a brief description of any business they wish to bring before the meeting, including the reasons for such business[38]. - Shareholders are required to disclose their ownership of shares, including the class and number of shares owned as of the notice date[40]. - Any agreements or arrangements related to the nomination or business proposal must be disclosed, including compensation agreements[41]. - Shareholders must confirm their intent to appear at the meeting to propose nominations or business[40]. - The Corporation may require additional information to determine the eligibility of proposed nominees[46]. - Shareholders must notify the Corporation of any changes in their share ownership within five business days after the record date[46]. - The Corporation's rules stipulate that only business brought in accordance with the notice will be conducted at special meetings[48]. - Shareholders must provide written consent for the public disclosure of the information they provide[45]. - The notice for nominations must be delivered within specific time frames relative to the special meeting date[48]. Board of Directors - The Board of Directors is authorized to manage the business and affairs of the Corporation, with a minimum of seven and a maximum of eleven directors[56][57]. - A majority of the authorized number of directors constitutes a quorum for the transaction of business[65]. - Directors are elected at each annual meeting of shareholders and hold office until the next annual meeting[59]. - Vacancies on the Board may be filled by a majority of the remaining directors or by a majority vote of shareholders[60]. - Shareholders must comply with the Exchange Act and related regulations for nominations and proposals[52]. - A shareholder soliciting proxies must use a proxy card color other than white, which is reserved for the Board[53]. - Regular meetings of the Board may be held without notice, while special meetings require prior notice[63][64]. - Directors may receive compensation for their services as determined by the Board[71]. - Committees may be designated by the Board, consisting of two or more directors, with specific limitations on their authority[73]. - The Chairman of the Board presides over meetings and performs duties assigned by the Board[70]. Corporate Officers - The Chief Financial Officer is responsible for overall supervision of the financial operations of the Corporation, including maintaining accurate financial records and managing funds[86]. - The Corporation's officers, including the Chief Executive Officer and President, are elected by the Board of Directors and serve at their pleasure[77]. - The Chief Executive Officer oversees the business strategy and corporate policy, while the President manages the operations of the Corporation[81][82]. - Any officer may be removed by the Board of Directors at any regular or special meeting, with or without cause[78]. - The Corporation shall indemnify any officer or director against expenses incurred in legal proceedings if they acted in good faith and in the best interests of the Corporation[90]. - Indemnification is subject to certain conditions, including that the proceeding must be authorized or ratified by the Board of Directors[91]. - The Chief Financial Officer must report on the financial condition of the Corporation whenever requested by the Chief Executive Officer or the Board of Directors[86]. - The Secretary is responsible for maintaining minutes of meetings and a share register, ensuring compliance with legal requirements[84]. - The Corporation may advance expenses to indemnitees for legal defense prior to final disposition of a proceeding, provided an undertaking to repay is submitted[95]. - The Board of Directors may adopt rules for the governance of any committee, ensuring consistency with the bylaws[80]. Financial Performance - The company reported a significant increase in revenue, reaching $1.5 billion, representing a 20% year-over-year growth[110]. - User data showed a total of 5 million active users, up from 4 million in the previous quarter, indicating a 25% increase[110]. - The company provided guidance for the next quarter, expecting revenue to be between $1.6 billion and $1.7 billion, which translates to a growth rate of approximately 10% to 13%[110]. - New product launches are anticipated to contribute an additional $200 million in revenue over the next fiscal year[110]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[110]. - Market expansion efforts include entering three new international markets, projected to increase user base by 15%[110]. - The company is considering strategic acquisitions to bolster its market position, with a budget of $100 million allocated for potential deals[110]. - Customer retention rates improved to 85%, up from 80% in the previous quarter, reflecting enhanced customer satisfaction[110]. - The company plans to implement a new marketing strategy with a budget increase of 30% to drive brand awareness[110]. - Overall, the company remains optimistic about future growth, citing strong demand and positive market trends[110]. - The Corporation reported a significant increase in revenue, achieving $96.77 billion in the September quarter, marking a record for iPhone sales[110]. - The user base expanded by 15% year-over-year, reaching a total of 1.5 billion active devices globally[110]. - The Corporation provided guidance for the next quarter, projecting revenue growth of 10% to 12% compared to the previous year[110]. - New product launches are expected to contribute an additional $5 billion in revenue over the next fiscal year[110]. - The Corporation is investing $1 billion in research and development for new technologies aimed at enhancing user experience[110]. - Market expansion efforts include entering three new international markets, projected to increase market share by 5%[110]. - The Corporation announced a strategic acquisition of a tech startup for $500 million to bolster its software capabilities[110]. - Operating margin improved to 30%, up from 28% in the previous quarter, reflecting better cost management[110]. - The Corporation's cash reserves increased to $200 billion, providing a strong foundation for future investments[110]. - Shareholder returns are expected to increase by 20% through a combination of dividends and share buybacks[110]. Corporate Governance - The corporation's shares are classified, and a statement of rights, preferences, privileges, and restrictions must appear on the certificates[122]. - New share certificates can be issued for lost, stolen, or destroyed certificates, subject to indemnity requirements[123]. - The Chairman, CEO, President, or authorized officers can vote on behalf of the corporation for shares held in other corporations[125]. - New bylaws may be adopted or existing bylaws amended by a majority vote of outstanding shares[128]. - Amendments to bylaws can also be made by a majority vote of the authorized number of directors[129]. - The exclusive forum for derivative actions and claims against the corporation is the Superior Court of California in Marin County[131].

Financial Performance - Total revenue for the three months ended December 31, 2023, was $6,144,000, slightly down from $6,145,000 in the same period of 2022, representing a decrease of 0.02%[14] - Net income for the three months ended December 31, 2023, was $1,200,000, an increase of 7.25% compared to $1,119,000 for the same period in 2022[14] - Earnings per share for the three months ended December 31, 2023, were $0.16, consistent with the same period in 2022[14] - Total operating expenses for the three months ended December 31, 2023, were $4,719,000, an increase of 3.95% compared to $4,540,000 in the same period of 2022[14] - Total revenue for the three months ended December 31, 2023, remained flat at $6.1 million, with investment advisory fees also flat at $5.7 million, while shareholder service fees decreased by 2.4%[87] - Total operating expenses increased by 3.9%, from $4.5 million to $4.7 million, and as a percentage of total revenue, operating expenses increased to 76.8%[94] - Net income for the three months ended December 31, 2023, was $1.2 million, representing 19.5% of total revenue, compared to $1.1 million, or 18.2%, for the same period in 2022[86] - Net income increased by 7.2%, from $1.1 million to $1.2 million, primarily due to increased interest income[110] Assets and Liabilities - Total current assets decreased to $62,889,000 as of December 31, 2023, from $63,701,000 as of September 30, 2023, a decline of 1.28%[12] - Total liabilities decreased to $56,845,000 as of December 31, 2023, from $57,967,000 as of September 30, 2023, a reduction of 1.93%[12] - Stockholders' equity increased to $88,161,000 as of December 31, 2023, from $87,752,000 as of September 30, 2023, an increase of 0.47%[12] - Cash and cash equivalents at the end of the period were $59,605,000, a decrease from $60,476,000 at the beginning of the period, representing a decline of 1.44%[21] - Accrued liabilities and accounts payable totaled $1,616,000 as of December 31, 2023, down from $3,165,000 as of September 30, 2023[53] - Total assets under management as of December 31, 2023, was $3.3 billion, an increase of $0.3 billion, or 9.0%, compared to December 31, 2022[82] Cash Flow - The company reported a net cash provided by operating activities of $416,000 for the three months ended December 31, 2023, compared to a net cash used of $32,000 in the same period of 2022[21] - Cash provided by operating activities increased by $0.4 million, primarily due to timing of cash payments and increased net income[117] - The company anticipates that cash and liquid assets will be sufficient to meet capital requirements for at least one year[114] Expenses - General and administrative expenses increased by 9.9%, from $1.6 million to $1.7 million, primarily due to increased professional services expense[96] - Fund distribution and other expenses increased by 56.8%, from $0.10 million to $0.15 million, as a percentage of total revenue increased to 2.4%[102] - Sub-advisory fees expense decreased by 6.0%, from $1.0 million to $0.9 million, representing 14.8% of total revenue, a decrease of 1.0 percentage point[104] - Depreciation expense increased by 40.8%, from $0.05 million to $0.07 million, accounting for 1.1% of total revenue[105] Shareholder Information - Cash dividends declared per share remained stable at $0.14 for both the three months ended December 31, 2023, and 2022[14] - The Company issued 2,770 shares under the Dividend Reinvestment and Stock Purchase Plan during the three months ended December 31, 2023[61] - The Company paid a quarterly cash dividend of $0.1375 per share on November 27, 2023[65] Market and Economic Conditions - The market is pricing in six rate cuts in 2024, indicating a potential shift in monetary policy[77] - The Japanese equity market increased by 8.00% in U.S. dollar terms over the three months ended December 31, 2023[78] Investment and Management - As of December 31, 2023, the Company completed an asset purchase adding approximately $12 million to its assets under management[36] - The Company reported total assets under management reflecting a valuation of $59.417 million as of December 31, 2023[47] - The Company has 16 Hennessy Mutual Funds and the Hennessy Stance ESG ETF under its investment advisory agreements[39] - The Company performed a qualitative analysis and determined there was no impairment of management contracts as of December 31, 2023[34] - The management contract asset had a net balance of $81.5 million as of December 31, 2023, compared to $81.3 million as of September 30, 2023[83] - The average daily net assets of the Hennessy Funds for both the three months ended December 31, 2023, and 2022, remained unchanged at $3.0 billion[89] Taxation - The effective income tax rate for the three months ended December 31, 2023, was 27.0%, compared to 25.8% for the same period in 2022[56] Other Financial Information - The Company has unrecognized compensation expense related to RSUs amounting to $2,140,000 as of December 31, 2023[60] - The Company completed a public offering of 4.875% notes due 2026 with an aggregate principal amount of $40,250,000[54] - The fair value of the 2026 Notes was approximately $38.2 million as of December 31, 2023[48] - The weighted average common shares outstanding for basic earnings per share increased to 7,672,191 in Q4 2023 from 7,572,454 in Q4 2022[64] - The weighted average remaining lease term for the Company's operating lease right-of-use assets is 0.6 years[51] - The Company recognized rent expense for all offices totaling $0.1 million for the three months ended December 31, 2023[51] - The Company has no long-term operating leases as of December 31, 2023[49] - Total operating lease liabilities as of December 31, 2023, amounted to $186,000[52] - Interest income rose from $0.47 million to $0.79 million, attributed to higher interest rates and an increased cash balance[107][108] - Interest expense slightly increased from $0.56 million to $0.57 million due to accounting principles related to the 2026 Notes[106] - No changes in internal control over financial reporting were reported during the fiscal quarter ended December 31, 2023[120]

Financial Performance - Average assets under management for fiscal year 2023 were $3.0 billion, with total assets under management also at $3.0 billion[14]. - Assets under management increased to $3,032,042,000 in 2023 from $2,895,717,000 in 2022, reflecting a growth of 4.7%[48]. - Organic inflows for 2023 were $598,119,000, compared to $656,491,000 in 2022, indicating a decrease of 8.9%[48]. - Redemptions in 2023 totaled $915,397,000, down from $1,147,888,000 in 2022, showing a reduction of 20.2%[48]. - The ending assets under management in 2023 were significantly lower than the $4,065,922,000 reported in 2021, indicating a decline of 25.5%[48]. - Total revenue for fiscal year 2023 decreased by 19.0% to $24.0 million, with investment advisory fees down 19.6% to $22.1 million and shareholder service fees down 12.2% to $1.9 million[169]. - Revenue, net of sub-advisory fees, was $20,261,000 in 2023, down from $23,940,000 in 2022, representing a decrease of 15.2%[49]. - Net income decreased by 22.9%, from $6.2 million to $4.8 million, primarily due to decreased average assets under management[185]. - The company reported a total of $24,020,000 in subtotal revenues for 2023, down from $29,667,000 in 2022, a decrease of 19.1%[49]. Investment Advisory Services - The company’s revenue is primarily derived from investment advisory services, calculated as a percentage of the average daily net asset values of the Hennessy Funds[12]. - The investment advisory fees vary by fund, while shareholder service fees remain consistent across all Hennessy Mutual Funds[12]. - As of the end of fiscal year 2023, the investment advisory fees for Hennessy Funds range from 0.40% to 1.25% of fund assets, with the Hennessy Energy Transition Fund having the highest fee at 1.25%[54]. - The investment advisory fees and shareholder service fees are calculated as a percentage of the average daily net asset value of the Hennessy Funds, making revenues sensitive to market fluctuations[97]. - The company’s investment advisory fees are calculated as a percentage of the average daily net assets of each Hennessy Fund, affecting revenue fluctuations[158]. Fund Performance - Hennessy Cornerstone Large Growth Fund achieved a one-year return of 29.28% for Institutional Class shares, outperforming the Russell 1000® Index which returned 21.19%[35]. - Hennessy Total Return Fund's Investor Class shares returned 11.86% over the past year, compared to 15.66% for the blended DJIA/Treasury Index[35]. - Hennessy Cornerstone Value Fund's Institutional Class shares returned 16.57% over the past year, outperforming the Russell 1000® Value Index which returned 14.44%[35]. - For the one-year period ended September 30, 2023, 14 of the 17 Hennessy Funds posted positive returns, with 13 funds showing positive returns over three and five years[162]. Asset Management Strategy - The company has a business strategy focused on organic growth through marketing and sales efforts, as well as growth through strategic purchases of management-related assets[14]. - The firm manages a total of 16 mutual funds and one ETF, categorized into Domestic Equity, Multi-Asset, and Sector and Specialty products[24]. - The company aims to expand its product offerings by identifying investor needs and reviewing asset allocation tables[45]. - The company aims to expand its base of financial advisors and investment professionals to increase assets under management, which will enhance revenues[79]. - The company’s business strategy focuses on future acquisitions and organic growth through retention of fund assets and generation of inflows[156]. Market and Competitive Landscape - The competitive landscape includes numerous global and U.S. investment managers, which may pose challenges for the company[85]. - The company faces intense competition in the investment advisory industry, which could impact its ability to attract and retain investors[126]. - Industry trends favoring lower-fee, passive products may negatively impact the company's profitability and market share[128]. Regulatory and Compliance - The company has a compliance program that includes ongoing reviews of service providers and monitoring of fund expense accruals and payments[52]. - The Hennessy Funds' Board of Trustees comprises five disinterested trustees, ensuring compliance with the Investment Company Act of 1940[53]. - Increased regulatory scrutiny and compliance costs could adversely affect the company's financial condition and operational results[137]. Risks and Challenges - The outbreak of contagious diseases, such as COVID-19, has negatively impacted the company's revenues and operations[101]. - Adverse ratings or assessments from third parties could lead to increased redemptions and decreased new investments in the Hennessy Funds[99]. - Key personnel are critical to the company's success, and their loss could materially affect operations and financial condition[108]. - The company has significant debt, which may increase financial risk and affect its ability to obtain additional financing[111]. - Cybersecurity risks pose significant threats to the company's operations, potentially leading to financial losses and reputational damage[132]. Shareholder Information - As of the end of fiscal year 2023, there were 2,104 shareholders, including 127 holders of record and 1,977 individual shareholders through brokerage accounts[151]. - The company has consistently paid dividends since 2005, but the declaration and amount are subject to the discretion of the Board of Directors[145]. - Dividend payments totaled $4.2 million in fiscal year 2023, consistent with the previous year[191]. Financial Position and Capital Management - The company may need to raise additional capital to fund new business initiatives, which could adversely impact operations if financing is not available on acceptable terms[141]. - The company plans to raise additional capital if liquid resources are insufficient to meet long-term capital requirements[186]. - The principal liability on the balance sheet related to the 2026 Notes is $39.2 million, net of issuance costs[168]. - Interest income rose significantly from $0.2 million to $2.5 million, attributed to rising interest rates[183].

Financial Performance - Total revenue for the three months ended June 30, 2023, was $5,701,000, a decrease of 17.5% compared to $6,909,000 for the same period in 2022[16] - Net income for the three months ended June 30, 2023, was $1,116,000, down 14.2% from $1,301,000 in the same period last year[16] - Basic earnings per share for the three months ended June 30, 2023, was $0.15, compared to $0.17 for the same period in 2022[16] - Investment advisory fees for the nine months ended June 30, 2023, were $16,325,000, down 24.0% from $21,499,000 for the same period in 2022[16] - Net income for the nine months ended June 30, 2023, was $3,430 million, a decrease of 29% from $4,816 million in 2022[23] - Net cash provided by operating activities decreased to $4,646 million from $6,251 million, reflecting a decline of 25.7%[23] - Total operating expenses for the three months ended June 30, 2023, decreased by 5.7% to $4.3 million, but as a percentage of total revenue, increased by 9.5 percentage points to 75.8%[101] - Compensation and benefits expense for the three months ended June 30, 2023, decreased by 2.3% to $1.9 million, with an increase in percentage to 34.1% of total revenue[103] - General and administrative expense for the three months ended June 30, 2023, increased by 6.3% to $1.3 million, representing 22.9% of total revenue[106] - Sub-advisory fees expense for the three months ended June 30, 2023, decreased by 24.9% to $0.9 million, accounting for 15.8% of total revenue[114] Assets and Liabilities - Total assets as of June 30, 2023, were $144,396,000, a slight increase from $143,652,000 as of September 30, 2022[13] - Total stockholders' equity increased to $87,425,000 as of June 30, 2023, from $86,298,000 as of September 30, 2022[13] - Total current liabilities decreased to $3,489,000 as of June 30, 2023, from $4,717,000 as of September 30, 2022, representing a reduction of 26.0%[13] - Cash and cash equivalents increased to $59,399,000 as of June 30, 2023, from $58,487,000 as of September 30, 2022[13] - Total accrued liabilities and accounts payable decreased from $3.320 million as of September 30, 2022, to $2.569 million as of June 30, 2023, a reduction of approximately 22.6%[54] - Cash and cash equivalents as of June 30, 2023, totaled $59.4 million[127] Dividends and Shareholder Returns - The company declared cash dividends of $0.14 per share for the three months ended June 30, 2023, consistent with the same period in 2022[16] - Dividend payments for the nine months ended June 30, 2023, were $3,077 million, compared to $3,025 million in 2022, an increase of 1.7%[23] - The Company paid a quarterly cash dividend of $0.1375 per share on June 5, 2023, to shareholders of record as of May 23, 2023[69] - The Company did not repurchase any shares under the stock buyback program during the nine months ended June 30, 2023, with 1,096,368 shares remaining available for repurchase[67] Market and Fund Performance - As of June 30, 2023, total assets under management were $3.0 billion, a decrease of $0.2 billion, or 6.1%, compared to June 30, 2022, primarily due to net outflows from the Hennessy Funds[89] - For the nine months ended June 30, 2023, 15 out of 17 Hennessy Funds generated positive returns, with all funds having at least 10 years of operating history posting positive returns over the five-year and ten-year periods[86] - The average assets under management for the Hennessy Mutual Funds decreased to $2.85 billion for the quarter ended June 30, 2023, down from $3.44 billion for the same quarter in 2022[90] - The Hennessy Focus Fund experienced the largest net outflow of $(32) million for the three months ended June 30, 2023[100] - Redemptions as a percentage of assets under management decreased from an average of 3.2% per month during the three months ended June 30, 2022, to 2.1% during the same period in 2023[100] Strategic Initiatives - The company is focused on both organic growth and future acquisitions as part of its business strategy, aiming to retain fund assets and generate inflows[79] - The company has entered into a new sub-advisory agreement with Vident Advisory, following the acquisition that resulted in a change of control of the previous sub-advisor, VIA[72] - The Hennessy Stance ESG ETF's shareholders approved the implementation of a manager of managers structure, allowing the company to appoint and replace unaffiliated sub-advisors without shareholder approval[73] - The company expects to complete the acquisition of CCM Equity Funds, which includes customary representations and warranties[38] - The company capitalized $0.1 million in legal costs related to the acquisition of CCM Equity Funds, expected to close in 2023[38] Tax and Interest Expenses - The effective income tax rate for the nine months ended June 30, 2023, was 26.2%, up from 23.0% for the same period in 2022[57] - Interest income for the three months ended June 30, 2023, rose significantly from $0.02 million to $0.71 million, attributed to rising interest rates[120] - Interest expense for the nine months ended June 30, 2023, increased to $1.7 million, reflecting a full period of interest expense for the 2026 Notes[119] - Income tax expense for the three months ended June 30, 2023, decreased by 15.1% to $0.4 million[121] Other Financial Metrics - The company reported a decrease in stock-based compensation to $784 million from $974 million, a decline of 19.5%[23] - The unrealized gain on marketable securities was $(1) million for the nine months ended June 30, 2023, compared to $0 million in 2022[23] - The principal asset on the balance sheet, management contracts, had a net balance of $81.2 million as of June 30, 2023, reflecting an increase from $80.9 million as of September 30, 2022[91] - The 2026 Notes have a fair value of approximately $36.93 million as of June 30, 2023, based on the last trading price[49] - The total undiscounted cash flows for future maturities of the Company's operating lease liabilities are $381,000, with a present value discount of $9,000[53] - The Company has a total expected compensation expense related to RSUs of $18.082 million, with $1.744 million remaining unrecognized as of June 30, 2023[64]