Hennessy Advisors(US:HNNA)2025-05-07 20:15Financial Performance - Total revenue for the three months ended March 31, 2025, was $9,276,000, representing a 33.7% increase from $6,940,000 in the same period of 2024[14]. - Net income for the six months ended March 31, 2025, was $5,417,000, up 97.5% from $2,740,000 in the prior year[14]. - Basic earnings per share for the three months ended March 31, 2025, was $0.33, compared to $0.20 for the same period in 2024, reflecting a 65% increase[14]. - Total revenue for the six months ended March 31, 2025, increased by 45.1% to $19.0 million from $13.1 million in the same period of 2024[90]. - Net income for the three months ended March 31, 2025, was $2.6 million, representing a 67.8% increase from $1.5 million in the same period of 2024[90]. - Net income for the six months ended March 31, 2024, increased by 97.7%, from $2.7 million to $5.4 million, attributed to revenue growth[114]. Assets and Equity - Cash and cash equivalents increased to $67,562,000 as of March 31, 2025, from $63,922,000 at September 30, 2024, marking a 2.5% growth[11]. - Total assets rose to $155,533,000 as of March 31, 2025, compared to $152,099,000 as of September 30, 2024, indicating a 2.4% increase[11]. - Total stockholders' equity increased to $95,203,000 as of March 31, 2025, from $91,311,000 at September 30, 2024, representing a 4.3% growth[11]. - Total assets under management as of March 31, 2025, was $4.3 billion, an increase of $0.4 billion, or 10.5%, compared to March 31, 2024[80]. - Average assets under management for the six months ended March 31, 2025, was $4.8 billion, an increase of $1.5 billion, or 47.3%, compared to the six months ended March 31, 2024[85]. Operating Expenses - Operating expenses for the three months ended March 31, 2025, totaled $5,825,000, a 16% increase from $5,021,000 in the same period of 2024[14]. - Total operating expenses for the three months ended March 31, 2025, increased by 16.0% to $5.8 million, but as a percentage of total revenue, it decreased to 62.8%[95]. - Compensation and benefits expense for the three months ended March 31, 2025, increased by 18.7% to $2.7 million, with a decrease in percentage of total revenue to 28.8%[97]. Cash Flows - Cash flows from operating activities for the six months ended March 31, 2025, were $5,979,000, compared to $2,289,000 in the prior year, reflecting a significant increase[20]. - Net cash provided by operating activities for the six months ended March 31, 2025, was $5.979 million, an increase of $3.7 million compared to the prior period[86]. - The increase in cash provided by operating activities was primarily due to increased net income in the current period[86]. Investment Advisory Services - The Company serves as the investment advisor to 16 open-end mutual funds and one ETF, providing investment advisory services and shareholder services[24]. - Investment advisory and shareholder service fee revenues are calculated daily based on contractual percentages of net asset values of each Hennessy Fund[28]. - The Company recognizes revenues when obligations related to investment advisory and shareholder services are satisfied, with fees affected by changes in net asset values[28]. Dividends and Shareholder Information - Dividends paid during the six months ended March 31, 2025, totaled $2,102,000, slightly up from $2,076,000 in the same period of 2024[20]. - A quarterly cash dividend of $0.1375 per share was paid on March 6, 2025[59]. - The Company has 1,517,046 shares available for issuance under the Dividend Reinvestment and Stock Purchase Plan as of March 31, 2025[56]. Compliance and Governance - The Company maintains a compliance program and conducts ongoing reviews of the compliance programs of the fund's service providers[30]. - The investment advisory agreements must be renewed annually and are subject to termination under specific circumstances, ensuring ongoing compliance and oversight[36]. Lease and Liabilities - The Company renewed its office lease in Novato, California for an additional three years, creating a right-of-use asset of $1.1 million[45]. - As of March 31, 2025, the operating lease right-of-use assets amounted to $848,000, with current and long-term operating lease liabilities of $348,000 and $516,000, respectively[46]. - The total undiscounted cash flows for future maturities of the Company's operating lease liabilities are projected to be $926,000[46]. Notes and Interest - The fair value of the 2026 Notes was approximately $39.8 million as of March 31, 2025, based on the last trading price of the notes[42]. - The 2026 Notes, with an aggregate principal amount of $40.25 million, bear interest at 4.875% per annum and mature on December 31, 2026[81]. - Interest income decreased from $0.8 million to $0.7 million for the three months ended March 31, 2024, compared to the same period in 2025, attributed to decreased interest rates[111]. - Interest expense increased from $0.568 million to $0.572 million for the three months ended March 31, 2024, compared to the same period in 2025, due to the amortization of capitalized issuance costs[112].