Hennessy Advisors, Inc. Reports 73% Increase in Quarterly Earnings Per Share and Announces Quarterly Dividend

Rhea-AI Summary

Hennessy Advisors, Inc. (HNNA) reported strong financial results for its third fiscal quarter of 2024, ending June 30. The company saw a 73% increase in quarterly earnings per share and announced a quarterly dividend of $0.1375 per share. Key highlights include:

- Total revenue of $7.8 million, up 37%
- Net income of $2.0 million, up 82%
- Fully diluted EPS of $0.26, up 73%
- Average assets under management of $3.9 billion, up 37%
- Total assets under management of $4.0 billion, up 36%

The company's growth is attributed to fund acquisitions, net inflows, and fund performance. CEO Neil Hennessy expressed optimism about the U.S. stock market's performance, citing positive factors such as lower inflation data and solid GDP growth estimates for 2024.

Positive

• 73% increase in quarterly earnings per share to $0.26
• 37% increase in total revenue to $7.8 million
• 82% increase in net income to $2.0 million
• 36% increase in total assets under management to $4.0 billion
• 14% increase in cash and cash equivalents, net of gross debt, to $21.8 million
• Growth in assets under management by nearly $1 billion in the nine months ended June 30, 2024

Negative

• None.

Insights

Financial Analyst

Hennessy Advisors' Q3 2024 results show impressive growth across key metrics. The 73% increase in EPS to $0.26 and 82% jump in net income to $2.0 million are particularly noteworthy. This growth is driven by a 37% increase in AUM to $3.9 billion, resulting from acquisitions, net inflows and strong fund performance. The company's ability to grow AUM by nearly $1 billion in 9 months demonstrates effective execution of their growth strategy. The 6.6% dividend yield is attractive for income-focused investors. However, it's important to monitor the sustainability of this high yield given the company's growth trajectory.

Market Research Analyst

Hennessy's performance aligns with broader market trends, as evidenced by the YTD gains in the Dow (4.79%) and S&P 500 (15.29%). The company's optimism about lower inflation, earnings growth and potential rate cuts reflects the current market sentiment. However, investors should be cautious about over-reliance on these factors, as economic conditions can shift rapidly. The 2.3% GDP growth estimate for 2024 suggests moderate economic expansion, which could support continued asset inflows. Hennessy's ability to attract $364 million in net inflows amid this environment is a positive indicator of their competitive positioning in the asset management industry.

Investment Strategist

Hennessy's strategy of combining organic growth with acquisitions is proving effective. The $72 million in fund acquisitions, coupled with $364 million in net inflows and $560 million from fund performance, demonstrates a well-rounded approach to AUM growth. This multi-pronged strategy could provide resilience in varying market conditions. The increase in cash and cash equivalents to $21.8 million (up 14%) strengthens their balance sheet and provides flexibility for future acquisitions or investments. Investors should watch for continued execution of this strategy and its impact on long-term profitability and market share in the competitive asset management industry.

NOVATO, Calif., Aug. 8, 2024 /PRNewswire/ -- Hennessy Advisors, Inc. (Nasdaq: HNNA) reported results for its third fiscal quarter of 2024, which ended June 30, 2024. The firm also announced a quarterly dividend of $0.1375 per share to be paid on September 5, 2024, to shareholders of record as of August 22, 2024, which represents an annualized dividend yield of 6.6%.*

"The U.S. stock market continues to perform well in 2024, with the Dow Jones Industrial Average up 4.79% and the S&P 500^® Index up 15.29% for the calendar year-to-date through June 30, 2024. Even the most persistent stock market naysayers seem to have come to a consensus that the markets will likely remain positive through the end of the year. Investors appear to be optimistic about lower inflation data, continued earnings growth, possible interest rate cuts, and solid 2.3% GDP growth estimates for 2024 – and rightly so in my opinion," said Neil Hennessy, Chairman and CEO. "We at Hennessy Funds are proud to manage a successful fund lineup. Our family of funds has delivered both recent solid returns and consistent long-term results," he added.

"We are both pleased with our product performance and encouraged by the flows into our funds. In the nine months ended June 30, 2024, we have grown assets under management by nearly $1 billion, due to our three-pronged effort of fund acquisitions of $72 million, net inflows of $364 million, and fund performance of $560 million," said Teresa Nilsen, President and COO. "With our total assets under management over $4 billion, we are notably increasing net income, earnings per share, and cash flow over prior periods," she added.

Summary Highlights (compared to the prior comparable quarter ended June 30, 2023):

• Total revenue of $7.8 million, an increase of 37%.
• Net income of $2.0 million, an increase of 82%.
• Fully diluted earnings per share of $0.26, an increase of 73%.
• Average assets under management, upon which revenue is earned, of $3.9 billion, an increase of 37%.
• Total assets under management of $4.0 billion, an increase of 36%.
• Cash and cash equivalents, net of gross debt, of $21.8 million, an increase of 14%.

		Three Months Ended June 30,				Change
		2024		2023		Amount		Percent
Total Revenue		$              7,784,523		$                 5,701,330		$         2,083,193		36.5 %
Net Income		2,029,527		1,116,039		913,488		81.9 %
Earnings Per Share (Diluted)		0.26		0.15		0.11		73.3 %
Weighted Average Number of Shares Outstanding (Diluted)		7,732,068		7,605,689		126,379		1.7 %
Average Fund Assets Under Management		3,893,131,722		2,850,912,822		1,042,218,900		36.6 %
		As of June 30,
		2024		2023
Total Fund Assets Under Management		$         4,027,830,779		$           2,964,013,210		$   1,063,817,569		35.9 %
Cash and Cash Equivalents, Net of Gross Debt Balance		21,767,015		19,149,184		2,617,831		13.7 %

* Based on the closing stock price of $8.34 on August 7, 2024, and an annualized dividend of $0.55 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 funds. Hennessy Advisors, Inc. is committed to providing superior service to shareholders and employing a consistent and disciplined approach to investing based on a buy‑and‑hold philosophy that rejects the idea of market timing.

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.

Forward-Looking Statements
This press release contains "forward-looking statements" for which Hennessy Advisors, Inc. claims the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. Forward‑looking statements relate to expectations and projections about future events based on currently available information. Forward‑looking statements are not a guarantee of future performance or results and are not necessarily accurate indications of the times at which, or means by which, such performance or results may be achieved. Forward‑looking statements are subject to risks, uncertainties, and assumptions, including those described in the sections entitled "Risk Factors" and elsewhere in the reports that Hennessy Advisors, Inc. files with the Securities and Exchange Commission. Unforeseen developments could cause actual performance or results to differ substantially from those expressed in, or suggested by, the forward‑looking statements. Hennessy Advisors, Inc. management does not assume responsibility for the accuracy or completeness of the forward-looking statements and undertakes no responsibility to update any such statement after the date of this press release to conform to actual results or to changes in expectations.

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SOURCE Hennessy Advisors, Inc.

FAQ

What was Hennessy Advisors' (HNNA) earnings per share for Q3 2024?

Hennessy Advisors reported fully diluted earnings per share of $0.26 for Q3 2024, representing a 73% increase from the same quarter in the previous year.

How much did Hennessy Advisors' (HNNA) total revenue increase in Q3 2024?

Hennessy Advisors' total revenue increased by 37% to $7.8 million in Q3 2024 compared to the same quarter in the previous year.

What is the quarterly dividend announced by Hennessy Advisors (HNNA) for Q3 2024?

Hennessy Advisors announced a quarterly dividend of $0.1375 per share, to be paid on September 5, 2024, to shareholders of record as of August 22, 2024.

How much did Hennessy Advisors' (HNNA) assets under management grow in Q3 2024?

Hennessy Advisors' total assets under management grew to $4.0 billion, representing a 36% increase compared to the same period in the previous year.