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Diamond Hill Investment Group, Inc. Reports Results For Second Quarter 2014

COLUMBUS, Ohio, July 30, 2014 /PRNewswire/ -- Diamond Hill Investment Group, Inc. (the "Company," "we," "us") (NASDAQ: DHIL) today reported unaudited results for the quarter ended June 30, 2014 and filed its Form 10-Q.

 


Three Months Ended June 30,




2014



2013



Change

Revenue

$

25,440,213



$

19,914,101



28%

    Net operating income

9,673,605



7,151,691



35%

    Operating margin

38

%


36

%



Investment income

1,321,914



728,725




Net income

6,928,034



4,711,545



47%

Earnings per share - diluted

$

2.12



$

1.45



46%










Six Months Ended June 30,




2014



2013



Change

Revenue

$

48,629,309



$

38,289,476



27%

    Net operating income

18,245,390



13,779,305



32%

    Operating margin

38

%


36

%



Investment income

1,838,442



2,553,384




Net income

12,677,633



10,042,277



26%

Earnings per share - diluted

$

3.90



$

3.12



25%









 


As Of


June 30, 2014


December 31, 2013


June 30, 2013

Assets under management (millions)

$

14,204



$

12,186



$

10,427


Book value per share (a)

$

19.61



$

13.80



$

12.06


Total outstanding shares

3,306,084



3,257,247



3,261,594


 

(a) - A $3 per share special dividend was paid in December 2013.

 


Change in Assets Under Management


For the Three Months Ended June 30,

(in millions)

2014



2013


AUM at beginning of the period

$

12,986



$

10,574


Net cash inflows (outflows)






    proprietary funds

482



218


    sub-advised funds

66



(782)


    institutional accounts

65



(142)



613



(706)


Net market appreciation and income

605



559


Increase (decrease) during the period

1,218



(147)


AUM at end of the period

$

14,204



$

10,427









Change in Assets Under Management


For the Six Months Ended June 30,

(in millions)

2014



2013


AUM at beginning of the period

$

12,186



$

9,429


Net cash inflows (outflows)






    proprietary funds

847



360


    sub-advised funds

99



(819)


    institutional accounts

226



(175)



1,172



(634)


Net market appreciation and income

846



1,632


Increase during the period

2,018



998


AUM at end of the period

$

14,204



$

10,427


 

About Diamond Hill:
We are an independent investment management firm with significant employee ownership and $14.2 billion in assets under management as of June 30, 2014.  We provide investment management services to institutions and individuals through mutual 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.

 


Three Months Ended June 30,


Six Months Ended June 30,

(in thousands, except per share data)

2014


2013


% Change


2014


2013


% Change

Net operating income, GAAP basis

$

9,674


$

7,152


35%


$

18,245


$

13,779


32%

Non-GAAP adjustments:












   Tax provision excluding impact of investment income

(3,579)


(2,876)


24%


(6,728)


(5,307)


27%

Net operating income after tax, non-GAAP basis

$

6,095


$

4,276


43%


$

11,517


$

8,472


36%













Net operating income after tax per diluted share, non-GAAP basis

$

1.87


$

1.32


42%


$

3.54


$

2.63


35%

 

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.

 

SOURCE Diamond Hill Investment Group, Inc.

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