Diamond Hill(US:DHIL)2023-08-02 16:00Revenue Performance - Total revenue for the three months ended June 30, 2023, was $33.35 million, a decrease of 14.5% compared to $39.02 million for the same period in 2022[43]. - Revenue from Diamond Hill Funds for the six months ended June 30, 2023, was $46.10 million, down from $58.29 million in the same period of 2022, representing a decline of 21%[43]. - Total revenue for the six months ended June 30, 2023, was $67,341 million, a 17% decrease from $81,278 million in 2022[109]. - Revenue for the three months ended June 30, 2023, decreased by $5.7 million or 15% to $33,351 million, primarily due to an 11% decrease in average AUM and AUA[111]. - Total revenue for the three months ended June 30, 2023, was $33.4 million, a decrease of 15% from $39.0 million in the same period of 2022, primarily due to a 13% decrease in average AUM and AUA[116]. Investment Performance - The net investment income for the three months ended June 30, 2023, was $6,276,708, a significant recovery from a loss of $17,677,873 in the same period of 2022[58]. - The Company achieved a net market appreciation of $1,242 million during the three months ended June 30, 2023, despite net outflows[106]. - The Company had $6.3 million in investment income for the three months ended June 30, 2023, compared to a loss of $17.7 million in the same period of 2022, indicating a significant recovery in investment performance[114]. Assets and Liabilities - As of June 30, 2023, accounts receivable from the Funds amounted to $8.7 million, slightly down from $9.3 million as of December 31, 2022[35]. - Cash and cash equivalents as of June 30, 2023, included $1.1 million in demand deposits and $37.6 million in money market mutual funds, compared to $2.8 million and $60.4 million respectively at the end of 2022[34]. - Total investments as of June 30, 2023, were valued at $163,210,138, an increase from $145,675,711 as of December 31, 2022, indicating a growth of approximately 12.0%[56]. - The Company’s equity method investments included net assets of $45,144,021 as of June 30, 2023, with DHCM's portion being $27,673,694[60]. - As of June 30, 2023, total outstanding restricted stock was 203,984 shares, with a weighted-average grant date price of $166.27 per share[71]. Income and Earnings - The Company recorded a net income attributable to common shareholders of $22.1 million for the six months ended June 30, 2023, compared to $13.5 million for the same period in 2022, representing a 63.5% increase[85]. - Basic earnings per share for the six months ended June 30, 2023, was $7.39, up from $4.27 in the same period of 2022, reflecting a 73.5% increase[85]. - Net income attributable to common shareholders for the three months ended June 30, 2023, was $9,432 million, a 114% increase compared to $4,413 million in 2022[109]. - The company reported a net income of $24.3 million for the six months ended June 30, 2023, with adjustments for non-cash items totaling $5.9 million in share-based compensation[145]. Expenses and Operating Margins - Total expenses for the three months ended June 30, 2023, increased by 36% to $25.6 million from $18.8 million in the same period of 2022[118]. - Operating profit margin for the six months ended June 30, 2023, was 28%, down from 48% in the same period of 2022, primarily due to a 17% decrease in revenues[125]. - The operating profit margin for the three months ended June 30, 2023, was 23%, down from 52% in the same period of 2022[112]. - The Company reported operating expenses of $48,613,000 for the six months ended June 30, 2023, compared to $41,953,000 for the same period in 2022, indicating a 16% increase[158]. Cash Flow and Liquidity - The Company experienced a net cash outflow of $103 million for the three months ended June 30, 2023, compared to a net outflow of $515 million in the same period of 2022[106]. - Cash and cash equivalents, investments, and accounts receivable represented $166.8 million as of June 30, 2023, indicating a strong liquidity position[138]. - Cash flows used in investing activities totaled $1.4 million for the six months ended June 30, 2023, primarily due to purchases of Company-sponsored investments of $5.8 million[148]. - The company anticipates cash flows from operating activities will continue to be its primary source of working capital in the near future[144]. Dividends and Shareholder Returns - The Company approved a quarterly cash dividend of $1.50 per share on August 3, 2023, expected to reduce shareholders' equity by approximately $4.4 million[88]. - DHIL expects to pay a regular quarterly dividend of $1.50 per share, with a total of $9.0 million paid in dividends for the first two quarters of 2023[141]. - The Board approved a regular quarterly dividend of $1.50 per share for the third quarter of 2023, expected to reduce shareholders' equity by approximately $4.4 million[141]. Tax and Regulatory Matters - The effective income tax rate for the six months ended June 30, 2023, was 26.6%, down from 32.5% in the same period of 2022[80]. - The effective non-GAAP tax rate for the three months ended June 30, 2023, was 29.2%, compared to 23.5% for the same period in 2022[159]. Market and Risk Assessment - The company continues to evaluate its market risk exposures, with no significant changes reported since December 31, 2022[163]. - The company believes that the adjustments made for non-GAAP measures help in understanding its core operating results and improve comparability from period to period[159].