Diamond Hill(US:DHIL)2025-04-29 20:03Revenue and Income - Total revenue for the three months ended March 31, 2025, was $37.1 million, an increase from $36.3 million for the same period in 2024, representing a growth of 2.2%[45] - Investment advisory revenue for the three months ended March 31, 2025, was $35.3 million, compared to $34.4 million in the same period in 2024, reflecting a year-over-year increase of 2.8%[45] - Fund administration gross revenue increased to $6,642,148 in Q1 2025 from $5,718,610 in Q1 2024, representing a growth of 16.2%[51] - Fund administration net revenue decreased to $1,807,399 in Q1 2025 from $1,943,137 in Q1 2024, a decline of 7.0%[51] - Net investment income for Q1 2025 was $1,119,969, significantly lower than $9,365,678 in Q1 2024, a decrease of 88.1%[61] - Net income attributable to common shareholders for the three months ended March 31, 2025, was $10,362,263, a decrease from $13,015,933 in 2024, representing a decline of approximately 20.3%[88] - Basic and diluted earnings per share for the three months ended March 31, 2025, were both $3.77, down from $4.62 in 2024, indicating a decrease of approximately 18.4%[88] Assets and Liabilities - Accounts receivable from Proprietary Funds as of March 31, 2025, was $10.5 million, slightly up from $10.3 million as of December 31, 2024[37] - Cash and cash equivalents as of March 31, 2025, included $2.2 million in demand deposits and $22.9 million in money market mutual funds, compared to $1.3 million and $40.3 million respectively as of December 31, 2024[36] - Total investments as of March 31, 2025, were $158,809,737, a slight decrease from $159,752,981 as of December 31, 2024[59] - Total deferred equity compensation related to unvested restricted shares was $31.4 million as of March 31, 2025[74] - Deferred compensation liability decreased to $35.5 million as of March 31, 2025, down from $39.1 million as of December 31, 2024[77] - The present value of the operating lease liability as of March 31, 2025, was $6,281,315, with total undiscounted operating lease payments amounting to $8,674,190[81] Business Operations - The Company operates in a single business segment, providing investment advisory and fund administration services, with no single customer accounting for more than 10% of total revenue[33][35] - The Company recognizes revenue from investment advisory and fund administration fees based on assets under management (AUM), which are recorded as services are performed[44] - DHCM's investment advisory contracts have a single performance obligation, with fees based on AUM, which are subject to market fluctuations[46][47] - The Proprietary Funds pay DHCM fees for administrative services calculated using an annual rate multiplied by the average daily net assets of each fund share class[49] - The Company has not provided liquidity arrangements or guarantees to support DHMF's operations, limiting its exposure to the amount of its investment[31] Expenses and Taxation - Total lease and operating expenses for the three months ended March 31, 2025, were $223,455, compared to $201,595 for the same period in 2024, reflecting an increase of approximately 10.4%[81] - The effective income tax rate for the three months ended March 31, 2025, was 26.9%, compared to 26.3% for the same period in 2024[83] - The Company did not recognize any interest and penalties related to tax uncertainties during the three months ended March 31, 2025[87] - The Company has not recorded any valuation allowance for deferred tax assets as of March 31, 2025, indicating confidence in future taxable income generation[85] Financing and Credit - The Company has a committed Line of Credit Agreement allowing borrowing up to $25.0 million, with no borrowings outstanding as of March 31, 2025[69][70] - The maturity analysis of the Company's operating lease liability shows significant future cash outflows, with the largest payment of $4,870,011 due in 2030 and thereafter[81] Shareholder Information - On April 29, 2025, the Company approved a quarterly cash dividend of $1.50 per share, expected to reduce shareholders' equity by approximately $4.1 million[91] - The Company recorded $0.1 million of share-based payment expense related to the Employee Stock Purchase Plan for Q1 2025[75] Lease Information - The carrying value of the right-of-use asset for the office lease was approximately $3.4 million as of March 31, 2025[78] - As of March 31, 2025, the weighted average discount rate applied to the Company's lease liability was 6.5%[80]