NOVATO, Calif., Feb. 12, 2019 /PRNewswire/ -- Hennessy
Advisors, Inc. (NASDAQ:HNNA) reported results for its first
fiscal quarter of 2019, which ended December
31, 2018, and also announced a quarterly dividend.
Summary Highlights (compared to prior comparable quarter
ended December 31, 2017):
- Fully diluted earnings per share decreased 63% to $0.39.
- Our effective tax rate increased from negative
33% to 29%, an increase of 62 percentage points.
Note: The Tax Cuts and Jobs Act of 2017, which was passed
during our first fiscal quarter of 2018, required us to reassess
our deferred tax liability to account for the future impact of a
lower corporate tax rate. As a result, we recorded a large,
one-time adjustment in our first fiscal quarter of 2018 that
created a tax benefit of approximately $4.2
million, which translated to $0.54 in earnings per share.
- Total revenue decreased 16% to $11.6
million.
- Total assets under management decreased 29% to $4.9 billion.
- Average assets under management, upon which revenue is earned,
decreased 17% to $5.6 billion.
Our Board of Directors also declared a quarterly dividend of
$0.11 per share, which will be paid
on March 5, 2019, to shareholders of
record as of February 19, 2019.
"While quarterly earnings are down in line with the decline in
mutual fund assets under management, the underlying financials of
our company remain quite strong. The impact of the Tax Cuts and
Jobs Act included a one‑time, significant favorable impact on
earnings per share in 2018, making comparisons with 2019 more
difficult," said Teresa Nilsen,
President and Chief Operating Officer. "We remain confident in the
long-term outlook for organic growth, and we believe that the
current market volatility will produce more opportunities for
strategic acquisitions," she added.
"This quarter presented multiple headwinds for the market, which
developed into a perfect storm within the asset management
industry," said Neil Hennessy,
Chairman and Chief Executive Officer. "Rising interest rates, the
impact of trade tariffs on global markets, algorithmic buying and
selling by passively managed index funds, and a partial U.S.
government shutdown each contributed to investor fear and market
volatility. Unfortunately, these headlines are overshadowing what I
believe are solid fundamentals driving economic growth: low
unemployment, strong consumer and corporate spending, and a robust
banking and financial system," he added. "Recessions come about
when money stops flowing, like it did in October 2008. Since employment remains strong, we
believe people will continue to spend, save, and invest, and
that is good for the long-term stability of the markets. We will
continue to navigate the company through these volatile times using
our disciplined and time-tested investing strategies, and I believe
once this correction is over, we will be in a strong position to
take advantage of rising markets and what I feel should be a
continued long-term rise in the bull market," said
Mr. Hennessy.
Hennessy Advisors,
Inc.
|
Financial
Highlights
|
Period to
Period
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
First
Quarter
|
Dec. 31,
2018
|
Dec. 31,
2017
|
$
Change
|
%
Change
|
Total
Revenue
|
$
11,644,176
|
$
13,812,840
|
|
$
(2,168,664)
|
-15.7%
|
Net
Income
|
$
3,066,825
|
$
8,186,684
|
*
|
$
(5,119,859)
|
-62.5%
|
Earnings Per Share
(Diluted)
|
$
0.39
|
$
1.04
|
*
|
$
(0.65)
|
-62.5%
|
Weighted Average
Number of
|
|
|
|
|
|
Shares Outstanding
(Diluted)
|
7,916,870
|
7,842,707
|
|
74,163
|
0.9%
|
Mutual Fund Average
Assets
|
|
|
|
|
|
Under
Management
|
$
5,584,795,216
|
$
6,756,849,836
|
|
$
(1,172,054,620)
|
-17.3%
|
|
|
|
|
|
|
At Period Ending
Date
|
Dec. 31,
2018
|
Dec. 31,
2017
|
$
Change
|
%
Change
|
Mutual Fund Total
Assets
|
|
|
|
|
|
Under
Management
|
$
4,887,546,767
|
$
6,923,993,186
|
|
$
(2,036,446,419)
|
-29.4%
|
*The December 31, 2017, net income
number includes a tax benefit of approximately $4.2 million, which translated to $0.54 in diluted earnings per share.
About Hennessy Advisors, Inc.
Hennessy Advisors, Inc.
is a publicly traded investment manager offering a broad range of
domestic equity, multi-asset, and sector and specialty mutual
funds. Hennessy Advisors, Inc. is committed to its consistent and
repeatable investment process, combining time-tested stock
selection strategies with a highly disciplined, team‑managed
approach, and to superior service to shareholders.
Supplemental Information
Nothing in this press release
shall be considered a solicitation to buy or an offer to sell a
security to any person in any jurisdiction where such offer,
solicitation, purchase, or sale would be unlawful under the
securities laws of such jurisdiction.
Available Topic Expert(s): For information on the listed
expert(s), click appropriate link.
Neil J. Hennessy
http://www.profnetconnect.com/neil_hennessy
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SOURCE Hennessy Advisors, Inc.