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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Diamond Hill Investment Group Inc | NASDAQ:DHIL | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.02 | -0.01% | 151.90 | 147.77 | 162.00 | 154.60 | 150.52 | 153.67 | 16,662 | 22:39:16 |
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Ohio
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65-0190407
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(State of
incorporation)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PAGE
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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||
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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PART I:
|
FINANCIAL INFORMATION
|
ITEM 1:
|
Consolidated Financial Statements
|
|
3/31/2019
|
|
12/31/2018
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
82,132,927
|
|
|
$
|
84,430,059
|
|
Cash held by noncontrolling shareholders
|
10,016,227
|
|
|
—
|
|
||
Investments
|
164,791,720
|
|
|
203,488,217
|
|
||
Accounts receivable
|
17,402,023
|
|
|
20,290,283
|
|
||
Prepaid expenses
|
2,526,105
|
|
|
2,372,712
|
|
||
Property and equipment, net of depreciation
|
6,329,166
|
|
|
3,680,472
|
|
||
Deferred taxes
|
11,956,745
|
|
|
11,466,100
|
|
||
Total assets
|
$
|
295,154,913
|
|
|
$
|
325,727,843
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
12,298,154
|
|
|
$
|
15,561,491
|
|
Accrued incentive compensation
|
4,500,000
|
|
|
26,754,167
|
|
||
Income taxes payable
|
4,918,929
|
|
|
2,768,681
|
|
||
Deferred compensation
|
26,777,526
|
|
|
22,387,874
|
|
||
Total liabilities
|
48,494,609
|
|
|
67,472,213
|
|
||
Redeemable noncontrolling interest
|
36,249,454
|
|
|
62,679,687
|
|
||
Permanent Shareholders’ equity
|
|
|
|
||||
Common stock, no par value 7,000,000 shares authorized; 3,494,599 issued and outstanding at March 31, 2019 (inclusive of 232,200 unvested shares); 3,499,285 issued and outstanding at December 31, 2018 (inclusive of 211,575 unvested shares)
|
124,484,045
|
|
|
124,933,060
|
|
||
Preferred stock, undesignated, 1,000,000 shares authorized and unissued
|
—
|
|
|
—
|
|
||
Deferred equity compensation
|
(23,656,774
|
)
|
|
(22,008,054
|
)
|
||
Retained earnings
|
109,583,579
|
|
|
92,650,937
|
|
||
Total permanent shareholders’ equity
|
210,410,850
|
|
|
195,575,943
|
|
||
Total liabilities and shareholders’ equity
|
$
|
295,154,913
|
|
|
$
|
325,727,843
|
|
|
|
|
|
||||
Book value per share
|
$
|
60.21
|
|
|
$
|
55.89
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
REVENUES:
|
|
|
|
||||
Investment advisory
|
$
|
30,512,718
|
|
|
$
|
34,631,290
|
|
Mutual fund administration, net
|
2,066,655
|
|
|
3,150,712
|
|
||
Total revenue
|
32,579,373
|
|
|
37,782,002
|
|
||
OPERATING EXPENSES:
|
|
|
|
||||
Compensation and related costs
|
15,969,382
|
|
|
14,387,473
|
|
||
General and administrative
|
3,244,532
|
|
|
2,963,671
|
|
||
Sales and marketing
|
1,370,716
|
|
|
1,209,487
|
|
||
Mutual fund administration
|
861,040
|
|
|
1,017,419
|
|
||
Total operating expenses
|
21,445,670
|
|
|
19,578,050
|
|
||
NET OPERATING INCOME
|
11,133,703
|
|
|
18,203,952
|
|
||
Investment income (loss), net
|
14,284,877
|
|
|
(1,559,723
|
)
|
||
INCOME BEFORE TAXES
|
25,418,580
|
|
|
16,644,229
|
|
||
Income tax expense
|
(5,862,733
|
)
|
|
(3,702,100
|
)
|
||
NET INCOME
|
19,555,847
|
|
|
12,942,129
|
|
||
Net (income) loss attributable to redeemable noncontrolling interest
|
(2,623,205
|
)
|
|
47,332
|
|
||
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
$
|
16,932,642
|
|
|
$
|
12,989,461
|
|
Earnings per share attributable to common shareholders
|
|
|
|
||||
Basic
|
$
|
4.85
|
|
|
$
|
3.72
|
|
Diluted
|
$
|
4.84
|
|
|
$
|
3.72
|
|
Weighted average shares outstanding
|
|
|
|
||||
Basic
|
3,493,843
|
|
|
3,487,923
|
|
||
Diluted
|
3,496,534
|
|
|
3,491,938
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||||
|
Shares
Outstanding
|
|
Common
Stock
|
|
Deferred Equity
Compensation
|
|
Retained
Earnings
|
|
Total
|
|
Redeemable Noncontrolling Interest
|
|||||||||||
Balance at December 31, 2018
|
3,499,285
|
|
|
$
|
124,933,060
|
|
|
$
|
(22,008,054
|
)
|
|
$
|
92,650,937
|
|
|
$
|
195,575,943
|
|
|
$
|
62,679,687
|
|
Issuance of restricted stock grants
|
24,875
|
|
|
3,859,300
|
|
|
(3,859,300
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Amortization of restricted stock grants
|
—
|
|
|
—
|
|
|
1,521,974
|
|
|
—
|
|
|
1,521,974
|
|
|
—
|
|
|||||
Issuance of stock grants
|
24,048
|
|
|
3,655,296
|
|
|
—
|
|
|
—
|
|
|
3,655,296
|
|
|
—
|
|
|||||
Issuance of common stock related to 401k plan match
|
4,286
|
|
|
632,050
|
|
|
—
|
|
|
—
|
|
|
632,050
|
|
|
—
|
|
|||||
Forfeiture of restricted stock grants
|
(4,250
|
)
|
|
(688,606
|
)
|
|
688,606
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of common stock
|
(53,645
|
)
|
|
(7,907,055
|
)
|
|
—
|
|
|
—
|
|
|
(7,907,055
|
)
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
16,932,642
|
|
|
16,932,642
|
|
|
2,623,205
|
|
|||||
Net redemptions of Consolidated Funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,728,877
|
)
|
|||||
Net deconsolidations of Company sponsored investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,324,561
|
)
|
|||||
Balance at March 31, 2019
|
3,494,599
|
|
|
$
|
124,484,045
|
|
|
$
|
(23,656,774
|
)
|
|
$
|
109,583,579
|
|
|
$
|
210,410,850
|
|
|
$
|
36,249,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Three Months Ended March 31, 2018
|
|||||||||||||||||||||
|
Shares
Outstanding
|
|
Common
Stock
|
|
Deferred Equity
Compensation
|
|
Retained
Earnings
|
|
Total
|
|
Redeemable Noncontrolling Interest
|
|||||||||||
Balance at December 31, 2017
|
3,470,428
|
|
|
$
|
118,209,111
|
|
|
$
|
(19,134,963
|
)
|
|
$
|
73,369,672
|
|
|
$
|
172,443,820
|
|
|
$
|
20,076,806
|
|
Issuance of restricted stock grants
|
32,050
|
|
|
6,755,108
|
|
|
(6,755,108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Amortization of restricted stock grants
|
—
|
|
|
—
|
|
|
1,378,923
|
|
|
—
|
|
|
1,378,923
|
|
|
—
|
|
|||||
Issuance of stock grants
|
20,153
|
|
|
4,109,197
|
|
|
—
|
|
|
—
|
|
|
4,109,197
|
|
|
—
|
|
|||||
Issuance of common stock related to 401k plan match
|
2,253
|
|
|
472,779
|
|
|
—
|
|
|
—
|
|
|
472,779
|
|
|
—
|
|
|||||
Shares withheld related to employee tax withholding
|
(2,427
|
)
|
|
(501,564
|
)
|
|
—
|
|
|
—
|
|
|
(501,564
|
)
|
|
—
|
|
|||||
Forfeiture of restricted stock grants
|
(3,500
|
)
|
|
(603,400
|
)
|
|
603,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
12,989,461
|
|
|
12,989,461
|
|
|
(47,332
|
)
|
|||||
Net subscriptions of consolidated funds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,186,193
|
|
|||||
New consolidations of Company sponsored investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,444,640
|
|
|||||
Balance at March 31, 2018
|
3,518,957
|
|
|
$
|
128,441,231
|
|
|
$
|
(23,907,748
|
)
|
|
$
|
86,359,133
|
|
|
$
|
190,892,616
|
|
|
$
|
41,660,307
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net Income
|
$
|
19,555,847
|
|
|
$
|
12,942,129
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation
|
282,565
|
|
|
285,823
|
|
||
Share-based compensation
|
2,154,024
|
|
|
1,851,702
|
|
||
Decrease in accounts receivable
|
1,714,531
|
|
|
347,488
|
|
||
Change in current income taxes
|
2,150,248
|
|
|
4,167,325
|
|
||
Change in deferred income taxes
|
(490,645
|
)
|
|
(492,725
|
)
|
||
Net (gains) losses on investments
|
(13,053,857
|
)
|
|
2,994,792
|
|
||
Net change in securities held by Consolidated Funds
|
18,908,654
|
|
|
(35,143,135
|
)
|
||
Decrease in accrued incentive compensation
|
(18,598,871
|
)
|
|
(13,729,303
|
)
|
||
Increase in deferred compensation
|
4,389,652
|
|
|
3,513,366
|
|
||
Other changes in assets and liabilities
|
(934,288
|
)
|
|
4,438,764
|
|
||
Net cash provided by (used in) operating activities
|
16,077,860
|
|
|
(18,823,774
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchase of property and equipment
|
(91,015
|
)
|
|
(144,948
|
)
|
||
Purchase of Company sponsored investments
|
(4,560,693
|
)
|
|
(3,143,561
|
)
|
||
Proceeds from sale of Company sponsored investments
|
2,683,935
|
|
|
1,148,162
|
|
||
Net cash used in investing activities
|
(1,967,773
|
)
|
|
(2,140,347
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Value of shares withheld related to employee tax withholding
|
—
|
|
|
(501,564
|
)
|
||
Net subscriptions received from redeemable noncontrolling interest holders
|
1,516,063
|
|
|
3,661,843
|
|
||
Repurchase of common stock
|
(7,907,055
|
)
|
|
—
|
|
||
Net cash (used in) provided by financing activities
|
(6,390,992
|
)
|
|
3,160,279
|
|
||
CASH
(a)
|
|
|
|
||||
Net change during the period
|
7,719,095
|
|
|
(17,803,842
|
)
|
||
At beginning of period
|
84,430,059
|
|
|
76,602,108
|
|
||
At end of period
|
$
|
92,149,154
|
|
|
$
|
58,798,266
|
|
Supplemental cash flow information:
|
|
|
|
||||
Income taxes paid
|
$
|
4,203,130
|
|
|
$
|
27,500
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
||||
Common stock issued as incentive compensation
|
$
|
3,655,296
|
|
|
$
|
4,109,197
|
|
Charitable donation of corporate investments
|
—
|
|
|
1,989,803
|
|
||
Net subscriptions (redemptions) of ETF shares for marketable securities
|
(3,244,940
|
)
|
|
1,524,340
|
|
|
Three Months Ended March 31, 2019
|
||||||||||
|
Investment advisory
|
|
Mutual fund
administration, net
|
|
Total revenue
|
||||||
Proprietary funds
|
$
|
23,579,877
|
|
|
$
|
2,066,655
|
|
|
$
|
25,646,532
|
|
Sub-advised funds and institutional accounts
|
6,932,841
|
|
|
—
|
|
|
6,932,841
|
|
|||
|
$
|
30,512,718
|
|
|
$
|
2,066,655
|
|
|
$
|
32,579,373
|
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
Investment advisory
|
|
Mutual fund
administration, net |
|
Total revenue
|
||||||
Proprietary funds
|
$
|
27,305,199
|
|
|
$
|
3,150,712
|
|
|
$
|
30,455,911
|
|
Sub-advised funds and institutional accounts
|
7,326,091
|
|
|
—
|
|
|
7,326,091
|
|
|||
|
$
|
34,631,290
|
|
|
$
|
3,150,712
|
|
|
$
|
37,782,002
|
|
|
As of March 31, 2019
|
||||||
|
AUM subject to variable rate fees
|
|
Unearned variable rate fees
|
||||
Contractual Period Ending:
|
|
|
|
||||
Quarter Ending September 30, 2019
|
$
|
36,224,545
|
|
|
$
|
670,128
|
|
Quarter Ending December 31, 2019
|
59,818,522
|
|
|
394,812
|
|
||
Quarter Ending March 31, 2020
|
12,607,612
|
|
|
—
|
|
||
Quarter Ending September 30, 2021
|
268,417,205
|
|
|
4,911,623
|
|
||
Total
|
$
|
377,067,884
|
|
|
$
|
5,976,563
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Mutual fund administration:
|
|
|
|
||||
Administration revenue, gross
|
$
|
5,402,728
|
|
|
$
|
6,607,337
|
|
Fund related expense
|
(3,349,541
|
)
|
|
(3,468,325
|
)
|
||
Revenue, net of related expenses
|
2,053,187
|
|
|
3,139,012
|
|
||
DHCM C-Share financing:
|
|
|
|
||||
Broker commission advance repayments
|
65,212
|
|
|
96,478
|
|
||
Broker commission amortization
|
(51,744
|
)
|
|
(84,778
|
)
|
||
Financing activity, net
|
13,468
|
|
|
11,700
|
|
||
Mutual fund administration revenue, net
|
$
|
2,066,655
|
|
|
$
|
3,150,712
|
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
Fair value investments:
|
|
|
|
||||
Securities held in Consolidated Funds
(a)
|
$
|
78,997,408
|
|
|
$
|
153,730,480
|
|
Company sponsored investments
|
39,533,699
|
|
|
33,418,088
|
|
||
Company sponsored equity method investments
|
46,260,613
|
|
|
16,339,649
|
|
||
Total Investments
|
$
|
164,791,720
|
|
|
$
|
203,488,217
|
|
|
As of
|
||
|
March 31, 2019
|
||
Total assets
|
$
|
171,333,153
|
|
Total liabilities
|
34,730,660
|
|
|
Net assets
|
136,602,493
|
|
|
DHCM's portion of net assets
|
46,260,613
|
|
|
|
|
||
|
For the Three Months Ended
|
||
|
March 31, 2019
|
||
Investment income
|
$
|
1,373,481
|
|
Expenses
|
291,103
|
|
|
Net realized gains
|
398,296
|
|
|
Net change in unrealized appreciation
|
8,205,267
|
|
|
Net income
|
9,685,941
|
|
|
DHCM's portion of net income
|
3,415,624
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||
Cash equivalents
|
$
|
68,572,210
|
|
$
|
—
|
|
$
|
—
|
|
$
|
68,572,210
|
|
Fair value investments
|
|
|
|
|
||||||||
Securities held in Consolidated Funds
(a)
|
16,967,373
|
|
62,030,035
|
|
—
|
|
$
|
78,997,408
|
|
|||
Company sponsored investments
|
39,533,699
|
|
—
|
|
—
|
|
$
|
39,533,699
|
|
|
Shares
|
|
Weighted-Average
Grant Date Price
per Share
|
|||
Outstanding Restricted Stock as of December 31, 2018
|
214,575
|
|
|
$
|
177.22
|
|
Grants issued
|
24,875
|
|
|
155.15
|
|
|
Grants vested
|
—
|
|
|
—
|
|
|
Grants forfeited
|
(4,250
|
)
|
|
162.03
|
|
|
Total Outstanding Restricted Stock as of March 31, 2019
|
235,200
|
|
|
$
|
175.16
|
|
Nine Months
Remaining In |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
$
|
5,501,114
|
|
|
$
|
6,146,135
|
|
|
$
|
4,865,576
|
|
|
$
|
3,878,442
|
|
|
$
|
1,641,414
|
|
|
$
|
1,624,093
|
|
|
$
|
23,656,774
|
|
|
Shares Issued
|
|
Grant Date Value
|
|||
March 31, 2019
|
24,048
|
|
|
$
|
3,655,296
|
|
March 31, 2018
|
20,153
|
|
|
4,109,197
|
|
|
March 31,
2019 |
|
March 31,
2018 |
||||
Three Months Ended
|
$
|
252,073
|
|
|
$
|
256,290
|
|
Future Minimum Lease Payments
|
||||||||||||||||||||||||||
Nine Months
Remaining In |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
$
|
439,762
|
|
|
$
|
614,721
|
|
|
$
|
624,179
|
|
|
$
|
624,179
|
|
|
$
|
624,179
|
|
|
$
|
780,223
|
|
|
$
|
3,707,243
|
|
|
Three Months Ended March 31, 2019
|
||
Uncertain tax positions, as of January 1, 2019
|
$
|
2,982,337
|
|
Gross addition for tax positions of the current year
|
—
|
|
|
Gross additions for tax positions of prior years
|
—
|
|
|
Reductions of tax positions of prior years for:
|
|
||
Lapses of applicable statutes of limitations
|
—
|
|
|
Settlements during the period
|
(2,331,711
|
)
|
|
Changes in judgment/excess reserve
|
—
|
|
|
Uncertain tax positions, as of March 31, 2019
|
$
|
650,626
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Net Income
|
$
|
19,555,847
|
|
|
$
|
12,942,129
|
|
Less: Net income attributable to redeemable noncontrolling interest
|
(2,623,205
|
)
|
|
47,332
|
|
||
Net income attributable to common shareholders
|
$
|
16,932,642
|
|
|
$
|
12,989,461
|
|
|
|
|
|
||||
Weighted average number of outstanding shares - Basic
|
3,493,843
|
|
|
3,487,923
|
|
||
Dilutive impact of restricted stock units
|
2,691
|
|
|
4,015
|
|
||
Weighted average number of outstanding shares - Diluted
|
3,496,534
|
|
|
3,491,938
|
|
||
|
|
|
|
||||
Earnings per share attributable to common shareholders
|
|
|
|
||||
Basic
|
$
|
4.85
|
|
|
$
|
3.72
|
|
Diluted
|
$
|
4.84
|
|
|
$
|
3.72
|
|
ITEM 2:
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Assets Under Management
|
|||||||||
|
As of March 31,
|
|||||||||
(in millions, except percentages)
|
2019
|
|
2018
|
|
% Change
|
|||||
Proprietary funds
|
$
|
14,623
|
|
|
$
|
15,717
|
|
|
(7
|
)%
|
Sub-advised funds
|
1,601
|
|
|
1,576
|
|
|
2
|
%
|
||
Institutional accounts
|
4,656
|
|
|
4,636
|
|
|
—
|
%
|
||
Total AUM
|
$
|
20,880
|
|
|
$
|
21,929
|
|
|
(5
|
)%
|
|
Assets Under Management
by Investment Strategy
|
|||||||||
|
As of March 31,
|
|||||||||
(in millions, except percentages)
|
2019
|
|
2018
|
|
% Change
|
|||||
Small Cap
|
$
|
954
|
|
|
$
|
1,429
|
|
|
(33
|
)%
|
Small-Mid Cap
|
3,025
|
|
|
3,399
|
|
|
(11
|
)%
|
||
Mid Cap
|
249
|
|
|
127
|
|
|
96
|
%
|
||
Large Cap
|
10,686
|
|
|
10,767
|
|
|
(1
|
)%
|
||
All Cap Select
|
477
|
|
|
467
|
|
|
2
|
%
|
||
Long-Short
|
3,959
|
|
|
4,794
|
|
|
(17
|
)%
|
||
Global/International
|
21
|
|
|
17
|
|
|
24
|
%
|
||
Short Duration Fixed Income
|
621
|
|
|
370
|
|
|
68
|
%
|
||
Core Fixed Income
|
58
|
|
|
48
|
|
|
21
|
%
|
||
Long Duration Fixed Income
|
54
|
|
|
—
|
|
|
NM
|
|
||
Corporate Credit
|
874
|
|
|
689
|
|
|
27
|
%
|
||
High Yield
|
76
|
|
|
44
|
|
|
73
|
%
|
||
(Less: Investments in affiliated funds)
(a)
|
(174
|
)
|
|
(222
|
)
|
|
(22
|
)%
|
||
Total AUM
|
$
|
20,880
|
|
|
$
|
21,929
|
|
|
(5
|
)%
|
|
|
|
|
|
Change in Assets
Under Management
|
||||||
|
For the Three Months Ended
March 31, |
||||||
(in millions)
|
2019
|
|
2018
|
||||
AUM at beginning of the period
|
$
|
19,108
|
|
|
$
|
22,317
|
|
Net cash inflows (outflows)
|
|
|
|
||||
proprietary funds
|
(309
|
)
|
|
187
|
|
||
sub-advised funds
|
59
|
|
|
104
|
|
||
institutional accounts
|
(209
|
)
|
|
(35
|
)
|
||
|
(459
|
)
|
|
256
|
|
||
Net market appreciation (depreciation) and income
|
2,231
|
|
|
(644
|
)
|
||
Increase (decrease) during the period
|
1,772
|
|
|
(388
|
)
|
||
AUM at end of the period
|
$
|
20,880
|
|
|
$
|
21,929
|
|
|
Three Months Ended
March 31, |
||||||||
(in thousands, except per share amounts and percentages)
|
2019
|
|
2018
|
|
% Change
|
||||
Total revenue
|
$
|
32,579
|
|
|
$
|
37,782
|
|
|
(14)%
|
Net operating income
|
$
|
11,134
|
|
|
$
|
18,204
|
|
|
(39)%
|
Net operating income, as adjusted
(a)
|
$
|
13,546
|
|
|
$
|
17,689
|
|
|
(23)%
|
Net income attributable to common shareholders
|
$
|
16,933
|
|
|
$
|
12,989
|
|
|
30%
|
Earnings per share attributable to common shareholders (Diluted)
|
$
|
4.84
|
|
|
$
|
3.72
|
|
|
30%
|
Operating profit margin
|
34
|
%
|
|
48
|
%
|
|
|
||
Operating profit margin, as adjusted
(a)
|
42
|
%
|
|
47
|
%
|
|
|
|
Three Months Ended
March 31, |
|
|
|||||||
(in thousands, except percentages)
|
2019
|
|
2018
|
|
% Change
|
|||||
Investment advisory
|
$
|
30,513
|
|
|
$
|
34,631
|
|
|
(12
|
)%
|
Mutual fund administration, net
|
2,066
|
|
|
3,151
|
|
|
(34
|
)%
|
||
Total
|
$
|
32,579
|
|
|
$
|
37,782
|
|
|
(14
|
)%
|
|
Class A & C
|
|
Class I
|
|
Class Y
|
6/1/2017 - 2/27/2018
|
0.23%
|
|
0.18%
|
|
0.08%
|
2/28/2018 - 3/31/19
|
0.21%
|
|
0.17%
|
|
0.05%
|
|
Three Months Ended
March 31, |
|
|
|||||||
(in thousands, except percentages)
|
2019
|
|
2018
|
|
% Change
|
|||||
Compensation and related costs, excluding deferred compensation expense
|
$
|
13,557
|
|
|
$
|
14,902
|
|
|
(9
|
)%
|
Deferred compensation expense (benefit)
|
2,412
|
|
|
(515
|
)
|
|
NM
|
|
||
General and administrative
|
3,245
|
|
|
2,964
|
|
|
9
|
%
|
||
Sales and marketing
|
1,371
|
|
|
1,210
|
|
|
13
|
%
|
||
Mutual fund administration
|
861
|
|
|
1,017
|
|
|
(15
|
)%
|
||
Total
|
$
|
21,446
|
|
|
$
|
19,578
|
|
|
10
|
%
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
Corporate Investments:
|
|
|
|
||||
Diamond Hill Core Bond Fund
|
$
|
38,235,523
|
|
|
$
|
37,197,134
|
|
Diamond Hill High Yield Fund
|
27,628,562
|
|
|
25,931,879
|
|
||
Diamond Hill Mid Cap Fund
|
17,086,085
|
|
|
15,035,251
|
|
||
Diamond Hill Research Opportunities Fund
|
14,177,063
|
|
|
12,912,291
|
|
||
Diamond Hill Valuation-Weighted 500 ETF
(a)
|
—
|
|
|
11,497,699
|
|
||
Diamond Hill Global Fund
|
9,490,570
|
|
|
8,482,790
|
|
||
Diamond Hill International Equity Fund, L.P.
|
1,162,949
|
|
|
1,057,445
|
|
||
Total Corporate Investments
|
107,780,752
|
|
|
112,114,489
|
|
||
Deferred Compensation Plan Investments in the Funds
|
26,777,526
|
|
|
22,387,874
|
|
||
Total investments held by DHCM
|
134,558,278
|
|
|
134,502,363
|
|
||
Redeemable noncontrolling interest in Consolidated Funds
|
30,233,442
|
|
|
68,985,854
|
|
||
Total Investment Portfolio
|
$
|
164,791,720
|
|
|
$
|
203,488,217
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||
|
Cash flow attributable to Diamond Hill Investment Group, Inc.
|
|
Cash flow attributable to Consolidated Funds
|
|
Eliminations
|
|
As reported on the Consolidated Statement of Cash Flows
|
||||||||
Cash flows from Operating Activities:
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
16,932,642
|
|
|
$
|
6,224,058
|
|
|
$
|
(3,600,853
|
)
|
|
$
|
19,555,847
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
282,565
|
|
|
—
|
|
|
—
|
|
|
282,565
|
|
||||
Share-based compensation
|
2,154,024
|
|
|
—
|
|
|
—
|
|
|
2,154,024
|
|
||||
Net (gains)/losses on investments
|
(10,430,652
|
)
|
|
(6,224,058
|
)
|
|
3,600,853
|
|
|
(13,053,857
|
)
|
||||
Net change in securities held by Consolidated Funds
|
—
|
|
|
18,908,654
|
|
|
—
|
|
|
18,908,654
|
|
||||
Other changes in assets and liabilities
|
(13,612,378
|
)
|
|
1,843,005
|
|
|
—
|
|
|
(11,769,373
|
)
|
||||
Net cash provided by (used in) operating activities
|
(4,673,799
|
)
|
|
20,751,659
|
|
|
—
|
|
|
16,077,860
|
|
||||
Net cash used in investing activities
|
(2,423,904
|
)
|
|
—
|
|
|
456,131
|
|
|
(1,967,773
|
)
|
||||
Net cash provided by (used in) financing activities
|
(7,907,055
|
)
|
|
1,972,194
|
|
|
(456,131
|
)
|
|
(6,390,992
|
)
|
||||
Net change during the period
|
(15,004,758
|
)
|
|
22,723,853
|
|
|
—
|
|
|
7,719,095
|
|
||||
Cash at beginning of period
(a)
|
84,430,059
|
|
|
—
|
|
|
—
|
|
|
84,430,059
|
|
||||
Cash at end of period
(a)
|
$
|
69,425,301
|
|
|
$
|
22,723,853
|
|
|
$
|
—
|
|
|
$
|
92,149,154
|
|
|
Three Months Ended
March 31, |
||||||
(in thousands, except percentages and per share data)
|
2019
|
|
2018
|
||||
Total revenue
|
$
|
32,579
|
|
|
$
|
37,782
|
|
|
|
|
|
||||
Net operating income, GAAP basis
|
$
|
11,134
|
|
|
$
|
18,204
|
|
Non-GAAP adjustment:
|
|
|
|
||||
Gains (losses) on deferred compensation plan investments, net
(1)
|
2,412
|
|
|
(515
|
)
|
||
Net operating income, as adjusted, non-GAAP basis
(2)
|
13,546
|
|
|
17,689
|
|
||
Non-GAAP adjustment:
|
|
|
|
||||
Tax provision on net operating income, as adjusted, non-GAAP basis
(3)
|
(3,484
|
)
|
|
(3,923
|
)
|
||
Net operating income, as adjusted, after tax, non-GAAP basis
(4)
|
$
|
10,062
|
|
|
$
|
13,766
|
|
|
|
|
|
|
|
||
Net operating income, as adjusted after tax per diluted share, non-GAAP basis
(5)
|
$
|
2.88
|
|
|
$
|
3.94
|
|
Diluted weighted average shares outstanding, GAAP basis
|
3,497
|
|
|
3,492
|
|
||
|
|
|
|
||||
Operating profit margin, GAAP basis
|
34
|
%
|
|
48
|
%
|
||
Operating profit margin, as adjusted, non-GAAP basis
(6)
|
42
|
%
|
|
47
|
%
|
ITEM 3:
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4:
|
Controls and Procedures
|
PART II:
|
OTHER INFORMATION
|
ITEM 1:
|
Legal Proceedings
|
ITEM 1A:
|
Risk Factors
|
ITEM 2:
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of Shares Purchased for Employee Tax Withholdings
(a)
|
|
Total Number
of Shares
Purchased
as part of Publicly
Announced Program
(b)
|
|
Average Price
Paid Per Share Purchased Under the Program
|
|
Purchase Price of Shares
Purchased
Under the Program
|
|
Aggregate Purchase Price Yet To Be Purchased Under the Program
|
||||||||
January 1, 2019 through
January 31, 2019
|
—
|
|
|
21,299
|
|
|
$
|
155.28
|
|
|
$
|
3,307,974
|
|
|
$
|
39,462,777
|
|
February 1, 2019 through
February 28, 2019
|
—
|
|
|
16,748
|
|
|
$
|
145.22
|
|
|
$
|
2,432,669
|
|
|
$
|
37,030,108
|
|
March 1, 2019 through
March 31, 2019
|
—
|
|
|
15,598
|
|
|
$
|
138.86
|
|
|
$
|
2,166,412
|
|
|
$
|
34,863,696
|
|
Total
|
—
|
|
|
53,645
|
|
|
|
|
|
$
|
7,907,055
|
|
|
|
(a)
|
The Company regularly withholds shares for tax payments due upon employee Restricted Stock vestings. During the quarter ended
March 31, 2019
,
no
shares for employee tax withholdings were purchased.
|
(b)
|
The Company's current share repurchase program was announced on September 25, 2018. Our board of directors authorized management to repurchase up to $50,000,000 of the Company’s common shares in the open market and in private transactions in accordance with applicable securities laws. The Company’s share repurchase program will expire in September 2020.
|
ITEM 3:
|
Defaults Upon Senior Securities
|
ITEM 4:
|
Mine Safety Disclosures
|
ITEM 5:
|
Other Information
|
ITEM 6:
|
Exhibits
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
Section 1350 Certifications.
(Furnished herewith)
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
Date
|
|
Title
|
|
Signature
|
|
|
|
|
|
May 1, 2019
|
|
Chief Executive Officer and President
|
|
/s/ Christopher M. Bingaman
|
|
|
|
|
Christopher M. Bingaman
|
|
|
|
|
|
May 1, 2019
|
|
Chief Financial Officer and Treasurer
|
|
/s/ Thomas E. Line
|
|
|
|
|
Thomas E. Line
|
1 Year Diamond Hill Investment Chart |
1 Month Diamond Hill Investment Chart |
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