10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________________ to_________________

Commission file number: 1-9728

EPOCH HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	20-1938886
(State or other jurisdiction	(I.R.S. employer
of incorporation or organization)	identification no.)

640 Fifth Avenue, New York, NY 10019

(Address of principal executive offices)

212-303-7200

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o Accelerated Filer þ Non-Accelerated Filer o (Do not check if Smaller Reporting Company) Smaller Reporting Company o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes o No o

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o No þ

 As of May 5, 2009, there were 22,217,576 shares of the Company's common stock, $.01 par value per share, outstanding. 

EPOCH HOLDING CORPORATION

FORM 10-Q FOR THE FISCAL QUARTER ENDED MARCH 31, 2009 

TABLE OF CONTENTS 

		Page No.
	PART I. FINANCIAL  INFORMATION
Item 1.	Financial Statements.	3
	Condensed Consolidated Balance Sheets – March 31, 2009 (Unaudited) and June 30, 2008	3
	Condensed Consolidated Statements of Operations (Unaudited) – Three and Nine Months Ended March 31, 2009 and 2008	4
	Condensed Consolidated Statements of Changes in Stockholders' Equity – For the Year Ended June 30, 2008 and Nine Months Ended March 31, 2009 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Nine Months Ended March 31, 2009 and 2008	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7-16
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	17-35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	36
Item 4.	Controls and Procedures.	37
	PART II. OTHER INORMATION
Item 1.	Legal Proceedings.	38
Item 1a.	Risk Factors.	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	38
Item 6.	Exhibits.	39
Signature		40

Items other than those listed above have been omitted because they are not applicable.

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	March 31,
	2009			June 30,
	(Unaudited)			2008
ASSETS
Current assets:
Cash and cash equivalents	$	36,128		$	37,436
Accounts receivable		5,399			6,391
Prepaid and other current assets		998			926
Total current assets		42,525			44,753
Property and equipment, net of accumulated depreciation of $1,691 and $1,369, respectively		1,386			1,689
Security deposits		1,118			1,104
Deferred income taxes		2,528			2,844
Other investments (cost of $3,576 and $4,187, respectively) - (Note 5)		2,824			3,959
Total assets	$	50,381		$	54,349
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	687		$	884
Accrued compensation and benefits		1,849			5,630
Income taxes payable		—			1,447
Total current liabilities		2,536			7,961
Deferred rent		749			813
Subtenant security deposit		233			230
Total liabilities		3,518			9,004
Commitments and contingencies - (Note 6)
Stockholders' equity:
Preferred stock - (Note 7)		—			10
Common stock		225			203
Additional paid-in capital		57,014			50,047
(Accumulated deficit)/ retained earnings		(108	)		698
Unearned share-based compensation		(7,320	)		(5,302	)
Accumulated other comprehensive loss		(752	)		(228	)
Treasury stock, at cost - (Note 6)		(2,196	)		(83	)
Total stockholders' equity		46,863			45,345
Total liabilities and stockholders' equity	$	50,381		$	54,349

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2009			2008			2009		2008
Revenues:
Investment advisory and management fees	$	6,843		$	8,482		$	22,089	$	24,910
Performance fees		—			—			—		172
Total revenue		6,843			8,482			22,089		25,082
Operating expenses:
Employee related costs (excluding share-based compensation)		3,853			4,605			11,857		13,418
Share-based compensation		1,270			1,045			3,391		3,148
General, administrative and occupancy		821			1,266			3,368		3,992
Professional fees and services		493			725			1,670		2,064
Depreciation and amortization		111			104			322		315
Total operating expenses		6,548			7,745			20,608		22,937
Operating income		295			737			1,481		2,145
Other income (loss): - (Note 9)
Realized (losses) gains on investments		(197	)		295			3,971		3,712
Interest and other income		415			436			957		1,498
Total other income		218			731			4,928		5,210
Income before income taxes		513			1,468			6,409		7,355
Provision for income taxes - (Note 10)		239			793			2,579		2,036
Net income		274			675			3,830		5,319
Preferred stock dividends - (Note 11)		—			(115	)		—		(345	)
Net income available to common
stockholders for basic earnings per share	$	274		$	560		$	3,830	$	4,974
Earnings per share: - (Note 11)
Basic	$	0.01		$	0.03		$	0.17	$	0.25
Diluted	$	0.01		$	0.03		$	0.17	$	0.24
Weighted Average Shares Outstanding:
Basic		22,171			20,247			22,101		20,146
Diluted		22,171			20,291			22,101		21,885
Cash dividends declared per common share	$	0.03		$	0.025		$	0.21	$	0.05

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEAR ENDED JUNE 30, 2008 AND NINE MONTHS ENDED MARCH 31, 2009

(Dollars and shares in thousands, except per share data)

															(Accumulated						Accumulated
	Preferred Stock											Additional			Deficit)/			Unearned			Other								Total
	Series A Convertible						Common Stock					Paid-in			Retained			Share-Based			Comprehensive			Treasury Stock					Stockholders'
	Shares			Amount			Shares			Amount		Capital			Earnings			Compensation			Income (Loss)			Shares		Amount			Equity
Balances at June 30, 2007		10		$	10			19,935		$	199	$	43,852		$	(6,357	)	$	(4,763	)	$	2,502			—	$	—		$	35,443
Net income																9,036														9,036
Net unrealized gains on marketable securities																						864								864
Reclassification of realized gains included in net income																						(3,594	)							(3,594	)
Comprehensive income																														6,306
Issuance and forfeitures of restricted common stock								364			4		4,711			—			(4,380	)					—		—			335
Amortization of unearned share-based
compensation								—			—		—			—			3,841						—		—			3,841
Preferred stock dividends																(460	)													(460	)
Common stock dividends ($0.075 per share)																(1,521	)													(1,521	)
Income tax benefit from dividends paid on
unvested shares													43																	43
Net loss on sales of shares for employee withholding													(133	)																(133	)
Common shares repurchased								(9	)																9		(83	)		(83	)
Excess income tax benefit from vesting of
restricted shares													1,574																	1,574
Balances at June 30, 2008		10			10			20,290			203		50,047			698			(5,302	)		(228	)		9		(83	)		45,345
Net income																3,830														3,830
Net unrealized losses on other investments																						(1,278	)							(1,278	)
Reclassification of realized losses included in net income																						754								754
Comprehensive income - (Note 12)																														3,306
Issuance and forfeitures of restricted common stock								536			5		4,346			—			(4,051	)					—		—			300
Issuance and forfeitures of stock options													1,058						(1,058	)										—
Amortization of unearned share-based
compensation								—			—		—			—			3,091						—		—			3,091
Conversion of preferred stock - (Note 7)		(10	)		(10	)		1,667			17		(7	)																—
Common stock dividends ($0.21 per share)																(4,636	)													(4,636	)
Income tax benefit from dividends paid on
unvested shares													97																	97
Net loss on sales of shares for employee withholding													(223	)																(223	)
Common shares repurchased								(292	)																292		(2,113	)		(2,113	)
Excess income tax benefit from vesting of
restricted shares													1,696																	1,696
Balances at March 31, 2009 (unaudited)		—		$	—			22,201		$	225	$	57,014		$	(108	)	$	(7,320	)	$	(752	)		301	$	(2,196	)	$	46,863

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Nine Months Ended
	March 31,
	2009			2008
Cash flows from operating activities:
Net income	$	3,830		$	5,319
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Deferred income taxes		316			(112	)
Share-based compensation		3,391			3,148
Depreciation and amortization		322			315
Realized gains on investments		(3,971	)		(3,712	)
Loss from equity method investment		135			27
Excess income tax benefit from vesting of
restricted shares		(1,696	)		(353	)
Income tax benefit from payment of dividends on
unvested shares		(97	)		(27	)
Decrease/ (increase) in operating assets:
Accounts receivable		992			(10	)
Prepaid and other current assets		(272	)		227
(Decrease)/ increase in operating liabilities:
Accounts payable and accrued liabilities		(197	)		(4	)
Accrued compensation and benefits		(3,781	)		2,241
Income taxes payable		346			1,282
Deferred rent		(64	)		(64	)
Net cash (used in) provided by operating activities		(746	)		8,277
Cash flows from investing activities:
Proceeds from other transactions - (Note 9b)		4,938			375
Investments in Epoch managed funds and
other investments, net		(291	)		(3,520	)
Capital expenditures		(19	)		(86	)
Security deposits, net		(11	)		(21	)
Purchases and sales of short-term investments, net		—			21,850
Proceeds from sale of marketable securities		—			4,499
Net cash provided by investing activities		4,617			23,097
Cash flows from financing activities:
Common stock dividends paid		(4,636	)		(1,014	)
Repurchase of common stock		(2,113	)		—
Income tax benefit from the vesting of
restricted shares		1,696			353
Income tax benefit from payment of dividends on
unvested shares		97			27
Net loss on sale of shares for employee withholding		(223	)		—
Preferred stock dividends		—			(230	)
Net cash used in financing activities		(5,179	)		(864	)
Net (decrease) increase in cash and cash
equivalents during period		(1,308	)		30,510
Cash and cash equivalents at beginning of period		37,436			3,097
Cash and cash equivalents at end of period	$	36,128		$	33,607
Supplemental cash flow information:
Cash paid for income taxes	$	2,230		$	973

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

EPOCH HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2009 AND 2008

(Unaudited)

Note 1 - Organization

Business

Epoch Holding Corporation ("Epoch" or the "Company"), a Delaware corporation, is a holding company whose sole line of business is investment advisory and investment management services. The operations of the Company are conducted through its wholly-owned subsidiary, Epoch Investment Partners, Inc. ("EIP"). EIP is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"). EIP provides investment advisory and investment management services to retirement plans, mutual funds, endowments, foundations and high net worth individuals. Headquartered in New York, NY, the Company’s current product offerings include U.S. All Cap Value, U.S. Value, U.S. Smid (small/mid) Cap Value, U.S. Small Cap Value, U.S. Choice, Global Small Cap Value, Global Absolute Return, Global Choice, Global All Cap, International Small Cap, Balanced, and Global Equity Shareholder Yield.

Business segments

The Company's sole line of business is the investment advisory and investment management business. There are no other operating or reportable segments.

Note 2 – Summary of Significant Accounting Policies

Basis of presentation

The unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial condition and interim results of operations have been made. The results for the interim periods are not necessarily indicative of the results to be obtained for a full fiscal year.

The Company's unaudited condensed consolidated financial statements and the related notes should be read together with the consolidated financial statements and the related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2008.

Certain reclassifications have been made to prior period condensed consolidated financial statements to conform to the current period presentation.

Principles of consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of these condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Financial instruments with concentration of credit risk

The financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and other investments. Epoch invests its cash and cash equivalents with high-credit quality financial institutions in amounts which, at times, may be in excess of the FDIC insurance limits.

Cash equivalents

Cash equivalents are highly liquid investments in money market funds consisting of short-term securities of the U.S. government and its agencies with original maturities of 90 days or less.

7

Property and equipment

The costs of leasehold improvements are capitalized and such costs are amortized on a straight-line basis over the shorter of their estimated useful lives or lease term, as applicable. All other capital assets are recorded at cost and such costs are depreciated on a straight-line basis over their estimated useful lives. Generally, the useful lives are approximately 3 to 7 years for equipment, 1 to 3 years for purchased software, and 3 to 10 years for leasehold improvements and exclude option periods, if any. Repairs and maintenance costs are charged to expense as incurred. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation amounts are removed from the accounts and any resulting gain or loss is recognized in operations.

Other investments 

The Company holds investments in four Company-sponsored mutual funds—the Epoch Global Equity Shareholder Yield Fund (“EPSYX”), the Epoch U.S. All Cap Equity Fund (“EPACX”), the Epoch International Small Cap Fund (“EPIEX”), and the Epoch U.S. Large Cap Equity Fund (“EPLCX”). The Company also holds investments in the Epoch Global Absolute Return Fund, LLC and in a separate account of Epoch’s Global All Cap product. The Company intends to hold these investments for a period in excess of one year.

The investments in the Company-sponsored mutual funds and the separate account of Epoch's Global All Cap product are accounted for as available-for-sale securities. Any resulting change in market value is recorded as unrealized gain or loss in Accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

EIP is also the managing member of the Epoch Global Absolute Return Fund, LLC whose underlying assets consist of marketable securities. The Company's investment in this entity is accounted for using the equity method, under which EIP's share of the net earnings or losses from the limited liability company is reflected in Other income, as earned, and any distributions are reflected as reductions from the investment.

The Company periodically reviews the carrying value of these investments for impairment by evaluating the nature, duration and extent of any decline in fair value.  If the decline in value is determined to be other-than-temporary, the carrying value of the investment is written down to fair value through earnings. No impairment charges have been recognized during the periods presented.

Treasury stock

Treasury stock is accounted for under the cost method.

Revenue recognition

Investment advisory and management fees are recognized as services are provided, pursuant to specific terms contained in advisory or sub-advisory contracts between EIP and its clients. Such contracts generally call for revenue to be determined as a percentage of assets under management (“AUM”). Separate account fees are billed on a quarterly basis, in arrears, generally based on the account's asset value at the end of the quarter. Fees for services performed for mutual funds under advisory and sub-advisory contracts are calculated based upon the daily net asset values of the respective fund, and are generally received in arrears. Advance payments, if received, are deferred and recognized during the periods for which services are provided.

The Company also has certain contracts which contain “incentive clauses” that allow the Company to earn performance fees in the event that investment returns meet or exceed targeted amounts specified in the contracts. Revenues for these incentives are recognized only when such performance targets are met or exceeded at the end of the contract's year, typically at the end of each calendar year - the Company’s second fiscal quarter. Due to the inability to forecast financial markets, no revenues are recognized until the contract year ends, even when investment returns exceed the contractual targets within the contract year. 

Share-based compensation

The Company has issued restricted stock to employees and directors of the Company, and options to purchase shares of stock to employees of the Company in accordance with our Amended and Restated 2004 Omnibus Long-Term Incentive Compensation Plan. Share-based payments are accounted for in accordance with Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Compensation (“SFAS 123R”), using the fair value method.

The fair value of the Company's restricted stock awards is based on the closing price of the Company's common stock at the grant date.

The Company values stock options based upon the Black-Scholes option-pricing model. Implementation of the Black-Scholes option-pricing model requires the Company to make certain assumptions, including expected volatility, risk-free interest rate, expected dividend yield and expected life of the options. The Company utilized assumptions that it believed to be most appropriate at the time of the valuation.

Share-based compensation costs related to share and option awards are charged against income ratably over the requisite service period for the related equity award, with the initial charge generally recorded in the first full month following the grant.

8

Income taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standard No. 109, Accounting for Income Taxes (“SFAS 109”). SFAS 109 requires that deferred tax assets and liabilities arising from temporary differences between book and tax basis be recognized using the enacted statutory tax rates and laws that will be in effect when such differences are expected to reverse. Deferred tax assets are recognized for temporary differences that will result in deductible amounts in future years. Deferred tax liabilities are recognized for temporary differences that will result in taxable income in future years.  SFAS 109 requires a reduction in deferred tax assets if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Any potential interest and penalty associated with a tax contingency, should one arise, would be included as a component of income tax expense in the period in which the assessment arises.

Earnings per common share

Basic earnings per share (“EPS”) is calculated by dividing net earnings applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS includes the determinants of basic EPS and, in addition, reflects the dilutive effect, if any, of the common stock deliverable pursuant to stock options or, for the prior year’s fiscal periods presented, the common stock issuable upon the conversion of the convertible preferred stock.

Comprehensive income

Total comprehensive income is reported on the Condensed Consolidated Statement of Changes in Stockholders’ Equity and includes net income and, for investment securities available-for-sale, the change in unrealized gains (losses) and the reclassification of realized gains (losses) to net income.

Recently issued accounting standards

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. SFAS 157 was effective for the Company beginning July 1, 2008. SFAS 157 establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and to minimize the use of unobservable inputs when measuring fair value. The adoption of SFAS 157 did not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits certain financial assets and financial liabilities to be measured at fair value, using an instrument-by-instrument election. The initial effect of adopting SFAS 159 must be accounted for as a cumulative effect adjustment to opening retained earnings for the fiscal year of adoption. Retrospective application to fiscal years preceding the effective date is not permitted. SFAS 159 was effective for the Company beginning July 1, 2008. The adoption of SFAS 159 did not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

In June 2008, the FASB issued FASB Staff Position (“FSP”) EITF No. 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. FSP EITF No. 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and therefore need to be included in the earnings allocation in calculating earnings per share under the two-class method described in SFAS No. 128, Earnings per Share. FSP EITF No. 03-6-1 requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. FSP EITF No. 03-6-1 is effective for the Company beginning July 1, 2009; earlier application is not permitted. The Company does not expect the adoption of FSP EITF No. 03-6-1 to have a material effect on its consolidated financial position, results of operations or earnings per share.

In October 2008, the FASB issued FSP 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active. FSP 157-3 does not reinterpret or change SFAS 157’s existing principles but rather is intended to enhance comparability and consistency in fair value measurements of financial assets that trade in markets that are inactive. FSP 157-3 primarily re-asserts that when the market is inactive, management is not required to use thinly traded quotes or quotes reflecting distressed prices. Rather, management should look to other means to estimate fair value, such as the “income approach,” which discounts the estimated cash flows and results in a Level 3 (see Note 3) classification because the inputs are not observable. Revisions resulting from a change in the valuation technique or its application shall be accounted for as a change in accounting estimate. FSP 157-3 was effective immediately upon issuance. The Company does not currently own such investment instruments and, as such, the adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

9

In April 2009, the FASB released FSP No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP FAS No. 157-4”). FSP FAS No. 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157, when the volume and level of activity for the asset or liability have significantly decreased. It also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS No. 157-4 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company adopted FSP FAS No. 157-4 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

In April 2009, the FASB issued FSP No. 115-2 and No. 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP No. 115-2 and No. 124-2”). This standard provides guidance in determining whether impairments in debt securities are other than temporary, and modifies the presentation and disclosures surrounding such instruments. FSP No. 115-2 and No. 124-2 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company adopted FSP No. 115-2 and No. 124-2 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value of Financial Instruments. The FSP amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments to require an entity to provide disclosures about fair value of financial instruments in interim financial information. This FSP is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009.  The Company adopted FSP FAS No. 107-1 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

In April 2009, the SEC issued Staff Accounting Bulletin No. 111 (“SAB 111”) on Other-Than-Temporary Impairments. SAB 111 amends Topic 5.M. in the Staff Accounting Bulletin Series entitled Other-Than-Temporary Impairment of Certain Investments in Debt and Equity Securities (“Topic 5. M.”). SAB 111 maintains the SEC staff’s previous views related to equity securities and amends Topic 5.M. to exclude debt securities from its scope. The Company elected to adopt SAB 111 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

Note 3 – Fair Value Measurements

As discussed in Note 2, the Company adopted SFAS 157 at the beginning of its fiscal year commencing July 1, 2008. SFAS 157 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

· Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

· Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

· Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

An asset or liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

SFAS 157 allows three types of valuation approaches: a market approach, which uses observable prices and other relevant information that is generated by market transactions involving identical or comparable assets or liabilities; an income approach, which uses valuation techniques to convert future amounts to a single, discounted present value amount; and a cost approach, which is based on the amount that currently would be required to replace the service capacity of an asset.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

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Other investments

Other investments consist of investments in Company-sponsored investment vehicles, including mutual funds, an investment product separate account, and a limited liability company.

The investments in the mutual funds and in the separate account are accounted for as available-for-sale investments and valued under the market approach through the use of unadjusted quoted market prices available in an active market and are classified within Level 1 of the valuation hierarchy. The fair market value of these two investments at March 31, 2009 totals $2.5 million.

The investment in the Epoch Global Absolute Return Fund, LLC is accounted for under the equity method, whereby the Company records its percentage share of realized and unrealized earnings or losses and is included in the Condensed Consolidated Statement of Operations. Accordingly, SFAS 157 does not apply to this investment.

The following table presents, for each of the hierarchy levels previously described, the Company’s assets that are measured at fair value as of March 31, 2009 (in thousands):

	As of March 31, 2009
			Quoted Prices in
			Active Markets for		Significant Other		Significant
	Fair Value		Identical Assets		Observable Inputs		Unobservable Inputs
	Measurements		(Level 1)		(Level 2)		(Level 3)
Other investments:
Available-for-sale	$	2,481	$	2,481	$	—	$	—

At March 31, 2009, the Company did not hold any financial liabilities measured at fair value.

Financial Instruments that Approximate Fair Value

Cash and cash equivalents

Cash and cash equivalents include cash in checking and money market accounts, as well as highly liquid investments in money market funds consisting of short-term securities of the U.S. government and its agencies. Cash and cash equivalents totaled $36.1 million at March 31, 2009. Cash equivalents are stated at cost which approximates fair value due to their short maturity. Accordingly, SFAS 157 does not apply to cash and cash equivalents.

Security deposits

Security deposits are funds held in certificates of deposit as required by the lessors of the Company’s leased office premises. These instruments totaled  $1.1 million at March 31, 2009. These investments mature, and are renewed, in one year intervals, and accordingly are valued at cost plus accrued interest, which approximates fair value.

Other financial instruments

Accounts receivable, accounts payable and accrued liabilities are stated at cost which approximates fair value due to their short maturities.

Note 4 - Accounts Receivable

The Company's accounts receivable balances do not include an allowance for doubtful accounts for the periods presented and there have been no bad debt expenses recognized during the three and nine months ended March 31, 2009 and 2008, respectively. Management believes these receivables are fully collectible.

Significant customers and contracts

For the three months ended March 31, 2009, CI Investments Inc. (“CI”), a Canadian-owned investment management company, accounted for approximately 12% of consolidated revenues, while Genworth Financial Asset Management, Inc. (“Genworth”), an investment adviser, through its investments in the Epoch International Small Cap Fund (“EPIEX”) and the Epoch Global Equity Shareholder Yield Fund (“EPSYX”), as well as separate account mandates, accounted for approximately 10%.  For the nine months ended March 31, 2009, CI accounted for approximately 13% of consolidated revenues, while Genworth accounted for approximately 15% of consolidated revenues.

For the three months ended March 31, 2008, CI accounted for approximately 15% of consolidated revenues, while Genworth accounted for approximately 24%. For the nine months ended March 31, 2008, CI accounted for approximately 16% of consolidated revenues, while Genworth accounted for approximately 26%. The Company's services and relationships with these clients are important to the Company's ongoing growth strategy, and retention of these clients is significant to the ongoing results of operations of the Company.

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Note 5 – Other Investments

The Company’s Other investments at March 31, 2009 and June 30, 2008 are summarized as follows (in thousands):

	March 31, 2009									June 30, 2008
			Gross		Gross			Estimated				Gross		Gross			Estimated
	Cost		Unrealized		Unrealized			Fair		Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value		Basis		Gains		Losses			Value
Available-for-sale securities:
Other Investments:
Company-sponsored mutual funds	$	1,096	$	—	$	(410	)	$	686	$	830	$	—	$	(97	)	$	733
Epoch Global All Cap separate account		2,137		26		(368	)		1,795		2,879		156		(287	)		2,748
Total available-for-sale securities		3,233		26		(778	)		2,481		3,709		156		(384	)		3,481
Equity method investment:
Epoch Global Absolute Return Fund, LLC		343		—		—			343		478		—		—			478
	$	3,576	$	26	$	(778	)	$	2,824	$	4,187	$	156	$	(384	)	$	3,959

 Note 6 - Commitments and Contingencies

Employment agreements

The Company entered into a three-year employment agreement with its Chief Executive Officer in November 2007, effective January 1, 2008. The agreement calls for a base annual salary of $350 thousand and bonus compensation in accordance with the Company’s bonus and incentive compensation plans then in effect. The agreement also calls for certain payments in the event of termination. The payments could vary depending on the cause of termination and whether or not the Board of Directors elects to enforce a non-compete agreement. The agreement was reviewed and approved by the Company's Compensation Committee and the Board of Directors.

There are no employment contracts with any other employees or officers of the Company. There are written agreements with certain employees, which provide for sales commissions or bonuses, subject to the attainment of certain performance criteria or continuation of employment. Such commitments under the various agreements total approximately $0.5 million at March 31, 2009. Of this amount, approximately $0.2 million is included in accrued compensation and benefits in the Condensed Consolidated Balance Sheet at March 31, 2009. An additional $0.1 million will be accrued during the remainder of the fiscal year ending

June 30, 2009 and shortly thereafter. Approximately $0.2 million represents restricted stock awards to be issued during the remainder of the fiscal year ending June 30, 2009 and shortly thereafter. 

Legal matters

From time to time, the Company or its subsidiaries may become parties to claims, legal actions and complaints arising in the ordinary course of business. Management is not aware of any matters which would have a material adverse effect on its consolidated financial statements.

Common Stock Repurchase Plan

On June 24, 2008, the Company's Board of Directors approved the repurchase of up to a maximum of 250,000 shares, or just over 1%, of the Company’s then fully diluted outstanding Common Stock.  The repurchase plan called for the repurchases to be made in the open market and/or in privately negotiated transactions from time to time in compliance with applicable laws, rules and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended, subject to prevailing market and business conditions. The plan did not obligate the Company to purchase any particular number of shares, and could be suspended or discontinued at any time. The Company completed this repurchase plan by February 2009.

In March 2009, the Company’s Board of Directors authorized the Company to repurchase up to an additional 250,000 shares, pursuant to the same conditions.

During the three months ended March 31, 2009, the Company repurchased 82,599 shares at a weighted average price of $5.93. For the nine months ended March 31, 2009, the Company repurchased 263,900 shares at a weighted average price of $7.36. All shares repurchased are shown as Treasury stock at cost, in the Stockholders’ equity section of the Condensed Consolidated Balance Sheet.

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Employee Tax Withholding

To satisfy statutory employee tax withholding requirements related to the vesting of common shares, the Company purchases from employees, and then resells in the open market, shares utilized by employees to cover and pay for employee tax withholdings. At March 31, 2009, there were 28,065 shares held to be resold by the Company in the open market. These shares are shown as Treasury stock at cost in the Stockholders’ equity section of the Condensed Consolidated Balance Sheet. Any resulting gain or loss on resale is accounted for as an adjustment to Additional paid-in capital.

Note 7 – Conversion of Preferred Stock

On July 1, 2008, the holder of the 10,000 shares of Series A Convertible Preferred Stock (“the Preferred Stock”) outstanding, with a face value of $10,000,000, converted the Preferred Stock to 1,666,667 shares of Common Stock. Accordingly, the Series A Convertible Preferred Stock has been cancelled and the conversion eliminated the holder’s rights to receive the semi-annual dividends on the Preferred Stock.

Note 8 – Share-Based Compensation

The Company granted $2.1 million and $3.1 million in restricted stock awards to employees during the three months ended March 31, 2009 and 2008, respectively. For the three months ended March 31, 2009, a total of 336,753 shares were granted at a weighted average price of $6.13. For the three months ended March 31, 2008, a total of 278,697 shares were granted at a weighted average price of $11.15.

The Company granted $5.1 million and $5.6 million in restricted stock awards to employees and non-employee directors during the nine months ended March 31, 2009 and 2008, respectively. For the nine months ended March 31, 2009, a total of 613,686 shares were granted at a weighted average price of $8.23. For the nine months ended March 31, 2008, a total of 485,735 shares were granted at a weighted average price of $11.55. 

Employee share-based compensation expense for restricted stock is recognized as follows: 12.5% immediately, and the remaining 87.5% ratably over the three-year vesting period of those awards. Non-employee director awards are recognized over a one-year period. Neither employee nor director share awards are subject to performance-based accelerated vesting.

During the three months ended March 31, 2009 the Company issued options to purchase 630,060 shares of common stock to employees of the Company. These stock options vest and are recognized ratably over three years from the grant date and have a term of seven years. The options have an exercise price of $6.17. However, upon vesting, the options are exercisable only if the volume weighted average price of the Company’s common stock equals or exceeds $9.25 for a period of at least 20 trading days. Issuance of these awards will result in total stock compensation expense of approximately $1.1 million over the requisite service period.  The fair value of the option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used: dividend yield of 1.94%; expected volatility of 50%; risk free interest rate of 1.59%; an average weighted expected life of 4.0 years; and an estimated discount of 15% of calculated fair value due to the restriction on the exercise of the options.

Total unrecognized compensation costs at March 31, 2009, including unrecognized costs related to the quarter ended March 31, 2009 activity is as follows (in thousands):

	Unrecognized		Weighted Average
	Compensation		Recognition
Award	Cost		Period
Unvested Restricted Stock	$	6,320		2.1 years
Unvested Stock Options	$	1,000		2.8 years

Note 9 - Other Income

a) eStara transaction

During the fiscal year ended June 30, 2000, J Net Enterprises, Inc. (“J Net”), the predecessor company to Epoch, made an investment in eStara, Inc. ("eStara"), a technology-related company that provided conversion and tracking solutions to enhance on-line sales. During the fiscal year ended June 30, 2003, J Net’s management concluded its ability to recover its investment was remote and wrote down the remaining carrying value to zero. On October 2, 2006, eStara’s stockholders approved the acquisition of its stock by Art Technology Group, Inc. (NASDAQ ticker symbol “ARTG”). Under the terms of the agreement, ARTG acquired all of the outstanding common stock, preferred stock, and vested and unvested stock options of eStara.

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In exchange for the eStara preferred shares held, the Company received 2,431,577 common shares of ARTG and $267 thousand in cash. The common shares received from ARTG were subject to a lock-up agreement pursuant to which the shares were released to the Company in equal monthly installments over a period of 12 months, which commenced January 2007.

During the three and nine months ended March 31, 2008, the Company sold approximately 0.1 and 1.3  million shares of ARTG, respectively, and recorded realized gains of approximately $0.3 and $3.5 million, respectively. Upon sale, these gains were reclassified, in accordance with the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, from Accumulated other comprehensive income (loss), a separate component of stockholders’ equity, to Realized gains on investments on the Condensed Consolidated Statement of Operations. All of the remaining shares of ARTG were sold before the end of fiscal year ended June 30, 2008.

b) Strategic Data Corporation transaction

During the fiscal year ended June 30, 2000, J Net, the predecessor company to Epoch, made an investment in Strategic Data Corp. ("SDC"), a technology-related company that specialized in advertising optimization technology. During the fiscal year ended June 30, 2001, the carrying value of this investment was deemed to be impaired by J Net’s management and written down to zero.

On February 20, 2007, SDC’s stockholders approved the acquisition of its stock by Fox Interactive Media, Inc. (“FIM”). Under the terms of the agreement, FIM acquired all of the outstanding common stock, preferred stock, and vested and unvested stock options of SDC. As a result of the merger, the Company, as a holder of preferred stock of SDC, received an initial cash payment of approximately $2.2 million on March 22, 2007.

The SDC merger also called for contingent payments, upon the achievement of certain targets and milestones, payable over a period of approximately 3.5 years from the closing, as well as the release of an escrow fund. The Company’s share of additional contingent payments and escrow funds stemming from the acquisition, based upon the merger agreement, ranged from zero to approximately $15.4 million.

The first target measurement date was November 2007 and the Company accrued $344 thousand at that time. The Company received those proceeds during the quarter ended March 31, 2008. The second target measurement date was June 2008 and the Company accrued an additional $200 thousand at that time, the proceeds of which were received during the quarter ended September 30, 2008.

The merger agreement was subsequently amended during the quarter ended December 31, 2008 to provide for a final settlement of all contingent payments by December 31, 2008.  As such, additional payments totaling $4.7 million were received in December 2008. These payments represent the final contingent payments and are included in Realized gains on investments on the condensed consolidated statements of operations for the nine months ended March 31, 2009. There are no further rights to any payments.

Note 10 - Provision For Income Taxes

In calculating the provision for income taxes, the Company uses an estimate of the annual effective income tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the actual effective income tax rate is adjusted, as appropriate, based upon current facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter.

Valuation allowance release

The Company maintains valuation allowances against certain deferred tax assets, the benefit of which may not be utilized. The Company reviews its deferred tax asset valuation allowances on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the Company is considered, along with any other positive or negative evidence. Since future financial results may differ from previous estimates, periodic adjustments to the Company’s valuation allowances may be necessary.

In the three months ended September 30, 2007, based on the Company’s annual operating projections and the significant gains realized on sales of marketable securities, the Company concluded that it was more likely than not that the tax benefits from its tax basis on a previously impaired investment would be utilized in the future. As such, in the three months ended September 30, 2007, the Company released the entire valuation allowance of approximately $1.1 million attributable to this fully valued deferred tax asset, the tax effect of which was a credit to income tax expense. The effect of this valuation allowance release, together with the use of a projected annual effective tax rate, resulted in a net benefit from income taxes of approximately $0.4 million for the nine months ended March 31, 2008.   

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Note 11 – Earnings Per Share

Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the period.

Diluted earnings per share is computed by dividing net earnings, adjusted for the effect of dilutive securities, by the weighted average number of common and common equivalent shares outstanding during the period. The Company had 1,665,060 and 1,035,000 issued and outstanding stock options at

March 31, 2009 and 2008, respectively. The calculation of earnings per share excluded the issued and outstanding stock options for the three and nine months ended March 31, 2009, respectively, as the exercise price of the options was higher than the average market price of the common stock for the respective period. The conversion of those particular options, whose exercise price was higher than the average market price of the common stock during the respective period, would have an anti-dilutive effect.

The calculation of earnings per share excluded 510,000 and 500,000 issued and outstanding stock options for the three and nine months ended March 31, 2008, respectively, as the exercise price of these options was higher than the average market price of the common stock for the respective period.

For the three and nine months ended March 31, 2008, the 1,666,667 shares of common stock issuable upon conversion of the preferred stock had no effect on basic earnings per share, but was included in the calculation of diluted earnings per share for the nine months ended March 31, 2008. It was not included in the calculation of diluted earnings for the three months ended March 31, 2008 as its effect was anti-dilutive.

The preferred stock was converted into 1,666,667 common shares on July 1, 2008 which were, accordingly, included in the basic earnings per share calculation for the three and nine months ended March 31, 2009.

The following table presents the computation of basic and diluted earnings per share for the three and nine months ended March 31, 2009 and 2008, respectively (in thousands, except per share data):

	Three Months Ended					Nine Months Ended
	March 31,					March 31,
	2009		2008			2009		2008
Numerator:
Net income available to common stockholders:
Net income	$	274	$	675		$	3,830	$	5,319
Preferred stock dividends		—		(115	)		—		(345	)
Net income available to common stockholders
for basic earnings per share		274		560			3,830		4,974
Preferred stock dividends		—		—			—		345
Net income available to common stockholders
after assumed conversions, for diluted earnings per share	$	274	$	560		$	3,830	$	5,319
Denominator:
Average common shares outstanding		22,171		20,247			22,101		20,146
Common stock equivalents upon conversion of preferred stock		—		—			—		1,667
Net common stock equivalents assuming the exercise of
in-the-money stock options		—		44			—		72
Average common and common equivalent shares outstanding -
assuming dilution		22,171		20,291			22,101		21,885
Basic earnings per share	$	0.01	$	0.03		$	0.17	$	0.25
Diluted earnings per share	$	0.01	$	0.03		$	0.17	$	0.24

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Note 12 – Comprehensive Income

A summary of comprehensive income is as follows (in thousands):

	Three Months Ended						Nine Months Ended
	2009			2008			2009			2008
Net income	$	274		$	675		$	3,830		$	5,319
Other comprehensive income:
Change in unrealized (losses) gains on available-for-sale securities		(177	)		(384	)		(1,278	)		962
Reclassification of realized losses (gains) to net income		197			(263	)		754			(3,336	)
Comprehensive income	$	294		$	28		$	3,306		$	2,945

Note 13 – Special Cash Dividend

On December 19, 2008, the Board of Directors declared a special cash dividend of $0.12 per share on the Company’s common stock. The dividend was paid on January 15, 2009 to all shareholders of record at the close of business on December 31, 2008.  The aggregate dividend payment totaled approximately

$2.6 million.

Note 14 - Subsequent Events

Common dividends

On April 8, 2009, the Board of Directors declared a quarterly cash dividend on the Company's Common Stock of $0.03 per share payable on May 15, 2009 to all shareholders of record at the close of business on April 30, 2009.

The Company expects regular quarterly cash dividends to be paid in February, May, August and November of each fiscal year, and anticipates a total annual dividend of $0.12 per common share. However, the actual declaration of future cash dividends, and the establishment of record and payment dates, will be subject to final determination by the Board of Directors each quarter after its review of the Company's financial performance.

*****

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Set forth on the following pages is management's discussion and analysis of our financial condition and results of operations for the three and nine months ended March 31, 2009 and 2008. Such information should be read in conjunction with our unaudited condensed consolidated financial statements together with the notes to the unaudited condensed consolidated financial statements. When we use the terms the “Company,” “management,” “we,” “us,” and “our,” we mean Epoch Holding Corporation, a Delaware corporation, and its consolidated subsidiaries.

Forward-Looking Statements

Certain information included, or incorporated by reference in this Quarterly Report on Form 10-Q and other materials filed or to be filed by Epoch Holding Corporation (“Epoch" or the “Company") with the Securities and Exchange Commission (“SEC") contain statements that may be considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may," “might," “will," “should," “expect," “plan," “anticipate," “believe," “estimate," “predict," “potential" or “continue," and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about the Company, may include projections of the Company's future financial performance based on the Company's anticipated growth strategies and trends in the Company's business. These statements are only predictions based on the Company's current expectations and projections about future events. There are important factors that could cause the Company's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the risks and uncertainties outlined in “Factors Which May Affect Future Results.”

These risks and uncertainties are not exhaustive. Other sections of this Quarterly Report on Form 10-Q may include additional factors which could adversely impact the Company's business and financial performance. Moreover, the Company operates in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for the Company's management to predict all risks and uncertainties, nor can the Company assess the impact of all factors on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although the Company believes the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, level of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The Company is under no duty to update any of these forward-looking statements after the date of this Quarterly Report on Form 10-Q, nor to conform the Company's prior statements to actual results or revised expectations, and the Company does not intend to do so.

Forward-looking statements include, but are not limited to, statements about the Company’s:

· business strategies and investment policies,

· possible or assumed future results of operations and operating cash flows,

· competitive position,

· potential growth opportunities,

· recruitment and retention of the Company's key employees,

· expectations with respect to the economy, securities markets, the market for mergers and acquisitions activity, the market for asset management activity and other industry trends,

· potential operating performance, achievements, productivity improvements, efficiency and cost reduction efforts,

· expected tax rate, and

· effect from the impact of future legislation and regulation on the Company.

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Available Information

Reports the Company files electronically with the SEC via the SEC’s Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) may be accessed through the internet. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, at  www.sec.gov.

The Company maintains a website which contains current information on operations and other matters. The website address is www.eipny.com. Through the Investor Relations section of our website, and “Link to SEC Website” therein, we make available, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statement, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Also available free of charge on our website within the Investors Relations section is our Code of Ethics and Business Conduct and charters for the Audit, Nominating/Corporate Governance, and the Compensation committees of our board of directors.

Factors Which May Affect Future Results

There are numerous risks which may affect the results of operations of the Company. Factors which could affect the Company's success include, but are not limited to, the ability to attract and retain clients, performance of the financial markets and invested assets managed by the Company, retention of key employees, misappropriation of assets and information by employees, system failures, significant changes in regulations, the costs of compliance associated with existing regulations and the penalties associated with non-compliance, and the risks associated with the loss of key members of the management team.

In addition, the Company's ability to expand or alter its product offerings, whether through acquisitions or internal development is critical to its long-term success and has inherent risks. This success is dependent on the ability to identify and fund those products or acquisitions on terms which are favorable to the Company. There can be no assurance that any of these operating factors or acquisitions can be achieved or, if undertaken, they will be successful.

These and other risks related to our Company are discussed in greater detail under Part I, Item 1A. “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2008.

Critical Accounting Estimates and Policies

Our significant accounting estimates and policies are described in Note 2 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2008. The Company's Critical Accounting Estimates and Policies have not changed from those reported in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the fiscal year ended June 30, 2008.  

Stock options

During the three months ended March 31, 2009, the Company issued options to purchase shares of common stock to employees of the Company.

The Company values stock options based upon the Black-Scholes option-pricing model and recognizes this value as an expense over the requisite service period. Implementation of the Black-Scholes option-pricing model requires the Company to make certain assumptions, including expected volatility, risk-free interest rate, expected dividend yield and expected life of the options. The Company utilized assumptions that it believed to be most appropriate at the time of the valuation.

Overview

The Company, through its operating subsidiary Epoch Investment Partners, Inc. (“EIP”), provides investment advisory and investment management services to its clients primarily through separately managed accounts and commingled vehicles, such as mutual funds and private investment funds. The overall investment philosophy is focused on achieving a superior risk-adjusted return by investing in companies that generate free cash flow and are undervalued relative to the investment team’s fair value determinations. Security selection and portfolio construction are designed to protect capital in declining markets while participating in rising markets.

EIP is a registered investment adviser under the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”). It has one line of business, and that is to manage investment assets for retirement plans, mutual funds, endowments, foundations, and high net worth individuals. Revenues are generally derived as a percentage of assets under management (“AUM”). Therefore, among other factors, revenues are dependent on (i) performance of financial markets, (ii) the ability to maintain existing clients, and (iii) changes in the composition of AUM. The management team is led by William W. Priest. Mr. Priest has over 40 years of experience in the investment advisory business.

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Financial and Business Highlights

The three months ended March 31, 2009 was a period which saw nearly all equity markets experience double digit negative returns. Despite the persisting difficult financial market environment, the Company achieved several significant accomplishments.

ØThe Company experienced net AUM inflows in excess of $700 million. Management believes this positive result is reflective of its investment products’ above-benchmark performance, resulting in several new mandates, particularly in the U.S. Value and U.S. All Cap services. The global product set, including International Small Cap and the Global concentrated portfolios, experienced additional inflows, and the Global Equity Shareholder Yield Fund continued to outperform its respective benchmark.

Ø In March, the Company’s Global Equity Shareholder Yield Fund received the Lipper Fund Award for “best in class” over the past three years in the Global Multi-Cap Value Funds classification.

ØThe Company achieved positive operating results for the seventh consecutive quarter. The Company remains focused on expense management as it continues to monitor and assess its operating costs and their alignment with its business strategy.

ØCorporate liquidity remains strong. Cash balances were 72% of total assets as of March 31, 2009. Working capital increased by $3.2 million  to

$40.0 million. The Company’s current ratio is over 16, which is well above industry average. The Company is debt-free.

Ø The Board of Directorsauthorized the repurchase of up to an additional 250,000 shares, or just over 1%, of its fully diluted outstanding common stock. This authorization follows the recent completion of the previous 250,000 share repurchase program. The Company repurchased approximately 83,000 shares during the three months ended March 31, 2009.  As of March 31, 2009, the Company has repurchased approximately 273,000 shares to date.

	Three Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
Operating income	$	295		$	737		$	(442	)		(60)%
Operating margin		4	%		9	%

Operating margins were weaker when compared with the same period a year ago. The main driver of this was the decrease in revenue, stemming from a lower level of AUM. The Company finished the quarter ended March 31, 2009 with AUM of $5.7 billion, a 9% decrease from AUM of $6.2 billion at March 31, 2008.  The average assets under management for the three months ended March 31, 2009 was approximately $5.2 billion compared to approximately $6.3 billion for the three months ended March 31, 2008, a decrease of approximately 17%. The primary cause for this decrease was a significant decline in global equity markets from the prior year.  Global equity markets declined approximately 35-40% during the calendar year ended December 31, 2008, and approximately 10–15% in the quarter ended March 31, 2009.

Despite the market decline during the quarter, the Company’s AUM increased by 6% from the previous quarter. The increased AUM is the result of several new mandates, particularly in the Company’s U.S. Value and U.S. All Cap services. Net AUM inflows of $0.7 billion and $1.4 billion for the three and nine months ended March 31, 2009, respectively, helped to mitigate the impact of market depreciation.

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The Company continued to concentrate on expense management during the quarter ended March 31, 2009. Operating expenses declined by approximately $1.2 million, or 15%, in the current quarter compared with the same quarter a year ago. The reduction in employee related costs of $0.8 million was the primary reason for the decline.

	Three Months Ended March 31,				Change
(Dollars in thousands)	2009		2008		$			%
Net income	$	274	$	675	$	(401	)		(59)%

The Company’s decline in net income was primarily the result of the reduction in AUM and revenues due to market depreciation, partially offset by inflows from new and existing clients. A reduction in other income, including market losses on other investments and a decline in interest income in conjunction with lower interest rates, also contributed to the decline.

Business Environment

As an investment management and advisory firm, our results of operations can be directly impacted by global market, political, and economic trends. The business environment is influenced by several factors, including business profitability, investor confidence, unemployment, and financial market transparency. These factors can directly affect capital appreciation or depreciation, which in turn, impacts our investment advisory and management business.

Overall economic activity continued to remain weak across the country and throughout the world during the quarter ended March 31, 2009.U.S. gross domestic product shrank at a 6.1% annual pace during the quarter ended March 31, 2009 and, having fallen at a 6.3% rate in the previous quarter, marked the worst two-quarter performance for the GDP in a half century. Retail sales and lending activity continued to remain weak throughout the quarter.  Housing continued plummeting and business investment plunged as firms slashed plans to expand in the backdrop of a deepening recession. Oil and commodity prices continued their decline as capacity utilization continued to decrease.Lastly, the rate of unemployment climbed higher, reaching 8.5% by the end of the quarter, the highest level in a quarter century. The Federal Reserve and foreign central banks and governments around the world continued to provide additional liquidity and stability to the financial markets to mitigate the negative economic impact related to the credit markets. The U.S. federal government also put in place a fiscal stimulus plan that supplements the interest rate and other actions taken by the Federal Reserve over the previous several months.

During the quarter, stocks around the world continued to endure a period of remarkable volatility and continue to record large declines.Inall, U.S. and global markets declined by approximately 10-15% during the quarter ended March 31, 2009.In particular, the Dow Jones Industrial Average,(1) NASDAQ Composite Index(2) and the S&P 500,(3) assuming dividend reinvestment, decreased during the quarter ended March 31, 2009 by 12%, 3% and 11%, respectively. On a broad basis, developed global markets, as represented by the MSCI World index,(4) decreased by 12%.

(1)  Dow Jones Industrial Average is a trademark of Dow Jones & Company, which is not affiliated with Epoch.

(2)  NASDAQ Composite Index is a trademark of the NASDAQ Stock Market, Inc., which is not affiliated with Epoch.

(3)  S&P 500 is a trademark of Standard & Poor’s, a division of the McGraw-Hill Companies, Inc., which is not affiliated with Epoch.

(4)  MSCI World Index is a trademark of MSCI Inc., which is not affiliated with Epoch.

Company impact and outlook

As the sharp sell-off in the equity markets continued to impact the value of assets under management, by nearly $0.4 billion during the quarter, the Company continued to achieve positive net inflows of approximately $0.7 billion. While the quarter was difficult to all investors, the Company believes it is well positioned for the future as a result of its proven investment philosophy and above average risk-adjusted performance. Its investment strategies, which emphasize a free cash flow analytical approach to the evaluation of equities, should continue to produce superior returns at a lower risk for our clients. The Company believes that free cash flow will be the analytical tool of choice because share price performance will depend on which companies show operational efficiencies, have capital expense under control and can properly manage their cash flow at a time when lending to fund growth or operations has tightened. The emphasis on cash flow analysis has become increasingly relevant, as the use of accounting measures alone has proven to inadequately capture issues surrounding the financial condition of many companies, particularly in the financial sector.

In the midst of this challenging environment, the Company continues to place a priority on its expense management, ensuring that operating costs are monitored, assessed and aligned with its business strategy.

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Assets Under Management and Flows (“AUM”)

The following table sets forth the changes in our AUM for the periods presented (dollars in millions): 

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2009			2008			2009			2008
Beginning of period assets	$	5,348		$	6,682		$	6,634		$	6,001
Net inflows/(outflows)		712			123			1,366			723
Market (depreciation)/ appreciation		(391	)		(608	)		(2,331	)		(527	)
End of period assets	$	5,669		$	6,197		$	5,669		$	6,197

A significant portion of the net inflows during the three months ended March 31, 2009 transpired during the latter half of the period.

For both the three months and nine months ended March 31, 2009 and 2008, approximately 55% of investment advisory and management fees were earned from services to mutual funds under advisory and sub-advisory contracts whose fees are calculated based upon daily net asset values, and approximately 45% of fees were earned from services provided for separate accounts whose fees are calculated based upon asset values at the end of the quarter.

No material impact to revenues or operating results arose during the periods presented as a result of differences between the average daily AUM for the funds where our fees are calculated based upon daily net asset values and the quarter-ending AUM for those funds.

The charts on the following page show the Company's products as a percentage of AUM as of March 31, 2009 and 2008, respectively:

21

22

The table and charts that follow set forth the amount of AUM by distribution channel:

Assets Under Management By Distribution Channel

(dollars in millions)

	As of March 31,				Change
Distribution Channel:	2009		2008		$			%
Sub-advised	$	2,788	$	2,738	$	50			1.8%
Institutional		2,663		3,167		(504	)		(15.9)%
High net worth		218		292		(74	)		(25.3)%
Total AUM	$	5,669	$	6,197	$	(528	)		(8.5)%

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24

Results of operations - three months ended March 31, 2009 and 2008

For the three months ended March 31, 2009, the Company recorded net income of $0.3 million, a decrease of $0.4 million from the same period a year ago. Basic earnings per share were $0.01 per share for the three months ended March 31, 2009, compared to $0.03 per share for the same period a year ago.

The primary drivers for the change in financial results were as follows:

Ø Management fee revenue decreased by $1.6 million, or 19%, during the three months ended March 31, 2009 compared with the same period a year ago. This decrease was caused by the significant decline in the global equity markets, and its related impact on AUM, partially offset by net inflows from new and existing clients.

Ø Other income decreased by $0.5 million in the current quarter compared with the same period a year ago. The prior year comparable period included

$0.3 million in realized gains from the sale of marketable securities. During the current period, the Company realized $0.2 million in losses on other investments.

Ø Offsetting these reductions in net income was a $1.2 million decline in operating expenses. The decline in employee related costs, particularly incentive compensation, was the primary reason for this overall change. A 35% decrease in general, administrative and occupancy costs also contributed to the overall operating expense decline.

	Three Months Ended
	March 31,				Change
(Dollars in thousands)	2009		2008		$			%
Revenues
Investment advisory and management fees	$	6,843	$	8,482	$	(1,639	)		(19)%

The decrease in revenues was attributable to the decrease in AUM compared with the same period a year ago. The Company finished the quarter ended March 31, 2009 with AUM of $5.7 billion, a 9% decrease from AUM of $6.2 billion at March 31, 2008.  The average AUM for the three months ended March 31, 2009 was approximately $5.2 billion compared to approximately $6.3 billion for the three months ended March 31, 2008, a decrease of approximately 17%. The primary cause for this decrease was a significant decline in global equity markets from the prior year.  Global equity markets declined approximately 35-40% during the calendar year ended December 31, 2008, and approximately 10–15% in the quarter ended March 31, 2009.  This was partly offset by net AUM inflows from new and existing clients of $0.7 billion during the three months ended March 31, 2009 and over $1.7 billion since March 31, 2008.

For the three months ended March 31, 2009, CI Investments Inc. (“CI”), a Canadian-owned investment management company, accounted for approximately 12% of revenues, while Genworth Financial Asset Management, Inc. (“Genworth”), an investment adviser, through its investments in the Epoch International Small Cap Fund (“EPIEX”) and the Epoch Global Equity Shareholder Yield Fund (“EPSYX”), as well as separate account mandates, accounted for approximately 10% of revenues.

For the three months ended March 31, 2008, CI accounted for approximately 15% of revenues, while Genworth accounted for approximately 24% of revenues.

	Three Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
Employee related costs (excluding share-
based compensation)	$	3,853		$	4,605		$	(752	)		(16)%
As a percent of total revenue		56	%		54	%

Expenses in this category include salaries, benefits, severance, incentive compensation, signing bonuses and commission expenses. These expenses declined from the same period a year ago, primarily as a result of a reduction in incentive compensation, stemming from the reduction in AUM and revenues. Employee headcount was nearly unchanged from the comparable period a year ago.

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	Three Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$		%
Share-based compensation	$	1,270		$	1,045		$	225		22%
As a percent of total revenue		19	%		12	%

The Company believes that share-based compensation promotes unity in the workplace and a common objective with shareholders. Employee share-based compensation expense for restricted stock is recognized as follows: 12.5% immediately, and the remaining 87.5% ratably over the three-year service period of those awards. Employee share-based compensation expense for stock options is recognized ratably over the three-year service period from the grant date.

The Company traditionally has issued share awards to certain senior executives during the first three months following the fiscal year and to other employees during the first three months following the calendar year. Effective in the three months ended March 31, 2009, the Company began issuing share awards to all employees during the first three months following the calendar year. The increase in share based compensation during the three months ended March 31, 2009 incorporates a six month stub period for those senior executives.

In the three months ended March 31, 2009 and 2008, a total of 336,753 and 278,697 shares of restricted stock, respectively, were issued to employees. The value of these awards was $2.1 million and $3.1 million, respectively. The increase in the number of shares issued reflects a lower price at which shares were granted compared to the prior year. A total of 42,097 and 34,836 shares of the awards issued in the three months ended March 31, 2009 and 2008, respectively, or approximately 12.5%, were immediately vested. The remaining 87.5% of the shares vest over the subsequent three years. During the three months ended March 31, 2009 and 2008, a total of 19,778 and 161,426 shares, or $0.1 million and $0.4 million respectively, were forfeited by terminated employees.

During the three months ended March 31, 2009 the Company issued options to purchase 630,060 shares of common stock  to employees of the Company. These stock options vest and are recognized ratably over three years from the grant date and have a term of seven years. The options have an exercise price of $6.17. However, upon vesting, the options are exercisable only if the volume weighted average price of the Company’s common stock equals or exceeds $9.25 for a period of at least 20 trading days. Issuance of these awards will result in total stock compensation expense of $1.1 million over the requisite service period.

During the three months ended March 31, 2009 and March 31, 2008,no shares were granted to directors of the Company. Share grants to directors generally transpire in the three months ended September 30. All director stock awards vest over one year. Director share-based compensation expense is recognized ratably over the one-year vesting period of those awards. 

	Three Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
General, administrative and occupancy	$	821		$	1,266		$	(445	)		(35)%
As a percent of total revenue		12	%		15	%

General, administrative and occupancy expenses consist primarily of office rents, as well as expenses for travel and entertainment, advertising and marketing, information technology, utilities, and other office related expenses. Decreases in travel-related expenses and market data services as a result of the Company’s expense management and cost control efforts were the main reasons for the decrease. 

	Three Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
Professional fees and services	$	493		$	725		$	(232	)		(32)%
As a percent of total revenue		7	%		9	%

These expenses consist primarily of outside legal fees for general corporate legal affairs, independent accountants' fees, consulting fees, employee placement fees and other professional services. A decline in employee placement fees was the primary cause of the decline in professional fees and services. The prior year period included placements fees for certain senior level employees.

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	Three Months Ended
	March 31,				Change
(Dollars in thousands)	2009		2008		$			%
Other income	$	218	$	731	$	(513	)		(70)%

Other income includes interest income, dividend income, realized gains and losses on investments, and rental income from subleased office space. The prior year period included realized gains of $0.3 million from the sales of marketable securities, $0.3 million of interest income and $0.1 million of sublease income. The current period includes $0.1 million of interest income and $0.1 million of sublease income. Significantly lower interest rates during the three months ended March 31, 2009 caused interest income to decline when compared to the same period a year ago.

	Three Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
Provision for income taxes	$	239		$	793		$	(554	)		(70)%
Effective income tax rate		46.6	%		54.0	%

In calculating the provision for income taxes, the Company uses an estimate of the annual effective income tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the effective income tax rate is adjusted, as appropriate, based upon current facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter.

Results of operations - nine months ended March 31, 2009 and 2008

For the nine months ended March 31, 2009, the Company recorded net income of $3.8 million, a decrease of $1.5 million from the same period a year ago. Basic earnings per share were $0.17 per share for the nine months ended March 31, 2009, compared with $0.25 per share for the same period a year ago.

The primary factors for the change in operating results were as follows:

Ø Operating revenues declined by $3.0 million. This decrease was driven by the significant 35-40% decline in the global equity markets and a corresponding decrease in AUM, partially offset by net inflows of nearly $1.4 billion during the nine months ended March 31, 2009, $0.7 million of which was received in the three months ended March 31, 2009.

Ø Provision for income taxes increased by $0.5 million. The comparable period a year ago included the release of a $1.1 million tax valuation allowance, the tax benefit of which was $0.4 million.

Ø Offsetting these decreases to net income was a decline in total operating expenses of $2.3 million, or 10%, during the nine months ended March 31, 2009. While nearly all expenses declined during the current period, it was the decline in employee incentive compensation that was the primary reason for this overall change.

	Nine Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
Operating income	$	1,481		$	2,145		$	(664	)		(31)%
Operating margin		7	%		9	%

Operating income decreased by $0.7 million during the nine months ended March 31, 2009 compared with the same period a year ago. Decreases in operating revenue as a result of the weakness in financial markets were partially offset by a 10% decrease in operating expenses, most notably in employee incentive compensation and general, administrative and occupancy costs.

27

	Nine Months Ended March 31,				Change
(Dollars in thousands)	2009		2008		$			%
Net income	$	3,830	$	5,319	$	(1,489	)		(28)%

Net income also declined for the nine months ended March 31, 2009 when compared with the same period a year ago. The reason for the decline is a direct result of the continued financial weakness in the equity markets, causing operating revenues to decline by 12%.

	Nine Months Ended
	March 31,				Change
(Dollars in thousands)	2009		2008		$			%
Revenues
Investment advisory and management fees	$	22,089	$	24,910	$	(2,821	)		(11)%
Performance fees		-		172		(172	)		(100)%
Total operating revenues	$	22,089	$	25,082	$	(2,993	)		(12)%

The decrease in revenues was attributable to lower levels in AUM during the nine months ended March 31, 2009 compared with the same period a year ago. The average assets under management for the nine months ended March 31, 2009 was approximately $5.6 billion compared to approximately $6.3 billion for the nine months ended March 31, 2008, a decrease of approximately 11%.This was primarily the result of the significant global equity market decline of approximately 35-40% from a year ago, partially offset by net AUM inflows from new and existing clients of nearly $1.4 billion during the nine months ended March 31, 2009 and over $1.7 billion since March 31, 2008.

For the nine months ended March 31, 2009, CI accounted for approximately 13% of revenues, while Genworth accounted for approximately 15% of revenues. For the nine months ended March 31, 2008, CI accounted for approximately 16% of revenues, while Genworth accounted for approximately 26% of revenues.

	Nine Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
Employee related costs (excluding share-
based compensation)	$	11,857		$	13,418		$	(1,561	)		(12)%
As a percent of total revenue		54	%		53	%

Employee related costs declined from the same period a year ago, primarily as a result of a reduction in incentive compensation. Headcount levels for the nine months ended March 31, 2009 were virtually unchanged from the similar period a year ago.

	Nine Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$		%
Share-based compensation	$	3,391		$	3,148		$	243		8%
As a percent of total revenue		15	%		13	%

In the nine months ended March 31, 2009 and 2008, a total of 575,066 and 450,131 shares of restricted stock, respectively, were issued to employees. The value of these awards was $4.7 million and $5.1 million, respectively. The increase in the number of shares issued reflects a lower price at which shares were granted compared to the prior year. A total of 71,886 and 56,266 shares of the awards issued in the nine months ended March 31, 2009 and 2008, respectively, or approximately 12.5%, were immediately vested. The remaining 87.5% of the shares vest over the subsequent three years. During the nine months ended March 31, 2009 and 2008, a total of 76,946 and 162,875 shares, $0.3 million and $0.4 million respectively, were forfeited by terminated employees.

During the nine months ended March 31, 2009 the Company issued options to purchase 630,060 shares of stock to employees of the Company. These stock options vest and are recognized ratably over three years and have a term of seven years. The options have an exercise price of $6.17. However, upon vesting, the options are exercisable only if the volume weighted average price of the Company’s common stock equals or exceeds $9.25 for a period of at least 20 trading days. Issuance of these awards will result in total stock compensation expense of $1.1 million over the requisite service period.

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During the nine months ended March 31, 2009 and March 31, 2008,38,620 and 35,604 shares of restricted stock, respectively, were granted to directors of the Company. All director stock awards vest over one year. Director share-based compensation expense is recognized ratably over the one-year vesting period. 

	Nine Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
General, administrative and occupancy	$	3,368		$	3,992		$	(624	)		(16)%
As a percent of total revenue		15	%		16	%

Decreases in information technology costs and travel related expenses, two of the primary focuses of the Company’s cost control efforts, were the main reasons for the decrease in general, administrative and occupancy costs.

	Nine Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$			%
Professional fees and services	$	1,670		$	2,064		$	(394	)		(19)%
As a percent of total revenue		8	%		8	%

A decrease in employee placement fees was the primary cause for the decline in professional fees and services. The prior year period included placements fees for certain senior level employees. A decrease in legal fees also contributed to the overall decline from the same period a year ago as the prior period includes certain legal expenses incurred in the origination of new investment vehicles.

	Nine Months Ended
	March 31,				Change
(Dollars in thousands)	2009		2008		$			%
Other income	$	4,928	$	5,210	$	(282	)		(5)%

The prior year period included realized gains of $3.5 million from the sales of marketable securities, realized gains of $0.3 million from the Strategic Data Corporation transaction, and approximately $1.0 million of interest income. The current period includes realized gains of $4.7 million from the Strategic Data Corporation transaction, losses on investments of $0.6 million, and approximately $0.5 million of interest income. Significantly lower interest rates during the nine months ended March 31, 2009 caused interest income to decline compared to the same period a year ago. 

	Nine Months Ended
	March 31,						Change
(Dollars in thousands)	2009			2008			$		%
Provision for income taxes	$	2,579		$	2,036		$	543		27%
Effective income tax rate		40.2	%		27.7	%

In calculating the provision for income taxes, the Company uses an estimate of the annual effective income tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the effective income tax rate is adjusted, as appropriate, based upon current facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter.

The comparable period a year ago included the release of a tax valuation allowance, the tax benefit of which was $0.4 million.

29

Liquidity and Capital Resources

The Company’s operating cash flows are primarily influenced by the timing and receipt of investment management fees, and the payment of operating expenses, including incentive compensation to employees. Investment management fees are generally collected within 90 days of billing. The Company traditionally has paid cash incentive compensation during the first three months following the fiscal year to certain senior executives, and to other employees during the first three months following the calendar year. Beginning with the current fiscal quarter ending March 31, 2009, the Company has begun to pay incentive compensation to all employees during the first three months following the calendar year, incorporating a six month stub period for those senior executives.

Investing cash flows are principally influenced by activities to acquire property and equipment, re-investment of earnings from investments in Company-sponsored products, and proceeds from other transactions.

Financing cash flows are predominately influenced by the payment of common stock dividends and repurchase of the Company’s common stock.  The Company makes dividend payments on its common stock on a quarterly basis.

The Company remains committed to growing its business in this challenging market environment and expects that its main uses of cash will be to invest in new products, enhance its distribution network, acquire shares of its common stock, enhance technology infrastructure and pay the operating expenses of the business, which are predominantly variable in nature and therefore fluctuate with revenue and assets under management. Accordingly, the Company continues to look for opportunities to prudently reduce its variable costs and discretionary spending wherever possible.

Sources of Liquidity

Sources of funds for the Company's operations are derived from investment advisory and investment management fees, interest on the Company's cash and cash equivalents, and sublease income. As of March 31, 2009, the Company had $36.1 million of cash and cash equivalents and $5.4 million of accounts receivable to fund its business growth strategy. Given the availability of these funds, the Company does not maintain or anticipate a need for an external source of liquidity.

At March 31, 2009, accounts payable and accrued liabilities, which consist of accrued professional fees, trade payables and other liabilities, were $0.7 million. Accrued compensation and benefits, which consist primarily of accrued incentive compensation, were $1.9 million. The decrease in accrued incentive compensation results from payments made during the period.

There is no debt and management does not foresee any reason to incur debt unless a significant business opportunity warrants such action. The Company's business does not require it to maintain significant capital balances. Management believes that the sources of liquidity described above will be sufficient to meet the Company’s operating needs for the foreseeable future and will enable it to continue to implement its growth objectives.

A summary of cash flow data for the nine months ended March 31, 2009 and 2008, respectively, is as follows (in thousands):

	Nine Months Ended
	March 31,
	2009			2008
Cash flows (used in) provided by:
Operating activities	$	(746	)	$	8,277
Investing activities		4,617			23,097
Financing activities		(5,179	)		(864	)
Net (decrease) increase in cash and cash equivalents		(1,308	)		30,510
Cash and cash equivalents at beginning of year		37,436			3,097
Cash and cash equivalents at end of the period	$	36,128		$	33,607
Percent of total assets		72	%		70	%

Cash Flows from Operating Activities

Net cash used in operating activities of $0.7 million during the nine months ended March 31, 2009 reflects the payment of employee incentive compensation during the current quarter as well as an increase in excess tax benefits recognized on share-based compensation. The difference from the prior comparable period primarily reflects the timing of incentive compensation payments for certain senior executives.

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When a restricted stock award vests, the market price on the date the stock vests to the employee may be higher than the original grant-date fair market value of the award. If so, the difference between the cumulative amount that has been recognized through the Condensed Consolidated Statements of Operations and the vesting amount results in an excess tax benefit. Excess tax benefits reduce income taxes payable and increase additional paid-in capital in the period they are recognized, and are reflected as cash used in operating activites and as cash provided by financing activities on the Statements of Cash Flows. Excess tax benefits recognized during the nine months ended March 31, 2009 and 2008 were approximately $1.7 million and $0.4 million, respectively.

The remaining fluctuation from the prior year stems from the change in net income as well as timing differences in the cash settlement of assets and liabilities, particularly the payment of income taxes.

Cash Flows from Investing Activities

Cash flows from investing activities totaled $4.6 million and $23.1 million for the nine months ended March 31, 2009 and March 31, 2008, respectively. Prior year investing activities included $21.9 million of proceeds from the sale of short-term investments as well as $4.5 million of proceeds from the sale of shares of marketable securities. During August and September 2007, in response to increasing credit quality concerns present in the fixed income securities market, the Company liquidated all of its short-term investments. Proceeds from these liquidations were then invested in cash and cash equivalents. No gains or losses were realized from these liquidations.

During the nine months ended March 31, 2009, the Company received $4.9 million representing the final installment payments from the Strategic Data transaction.

Cash Flows from Financing Activities

Cash flows from financing activities primarily reflect the payment of common stock dividends, share buy-backs and the recognition of excess tax benefits on share-based compensation. Cash used for financing activities totaled $5.2 million and $0.9 million for the nine months ended March 31, 2009 and March 31, 2008, respectively. The Company initiated the payment of common stock dividends in the quarter ended December 31, 2007 and the share buy-back program in June 2008.

Dividends paid during the nine months ended March 31, 2009 were approximately $4.6 million. During the same period, the Company repurchased 263,900 shares under our authorized repurchase program for approximately $2.1 million.

Working Capital

The Company's working capital and current ratio (current assets divided by current liabilities) for the nine months ended March 31, 2009 and recent fiscal year ended June 30, 2008 is set forth in the table below ( in thousands):

	March 31,		June 30,		Increase/			Percent
	2009		2008		(Decrease)			Change
Current Assets	$	42,525	$	44,753	$	(2,228	)		(5)%
Current Liabilities		2,536		7,961		(5,425	)		(68)%
Working Capital	$	39,989	$	36,792	$	3,197			9%
Current Ratio		16.8		5.6		11.2

Preferred Stock Dividends

As a result of the November 7, 2006 preferred stock issuance, the Company began paying semi-annual dividends on newly issued Series A Convertible Preferred Stock (“the Preferred Stock”), payable December 31 and June 30 of each year. The semi-annual dividend payments were approximately

$230 thousand, each June and December.

On July 1, 2008, the holder of the 10,000 shares of the Preferred Stock outstanding, with a face value of $10,000,000, converted the Preferred Stock to 1,666,667 shares of Common Stock. Accordingly, the Series A Convertible Preferred Stock has been cancelled and the conversion eliminates the holder’s rights to receive the semi-annual dividends on the Preferred Stock.

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Quarterly Common Stock Dividends

The Company commenced declaring and paying a quarterly cash dividend on its common stock in the quarter ended December 31, 2007.

On July 9, 2008, the Board of Directors declared a 20% increase in the quarterly per share dividend rate on the Company’s common stock, from $0.025 per share to $0.03 per share.

Quarterly dividends were paid in August and November 2008 as well as February 2009.

On April 8, 2009, the Board of Directors declared a quarterly cash dividend payable on May 15, 2009 to all shareholders of record at the close of business on April 30, 2009. The Company expects regular quarterly cash dividends going forward to be paid in February, May, August and November of each fiscal year, and anticipates a total annual dividend of $0.12 per common share. However, the actual declaration of future cash dividends, and the establishment of record and payment dates, will be subject to final determination by the Board of Directors each quarter after its review of the Company's financial performance, as well as general business conditions, capital requirements, and any contractual, legal and regulatory restrictions.

Special Common Stock Dividend

As a result of the Company’s strong cash position and debt free balance sheet, the Board of Directors declared a special cash dividend on December 19, 2008 of $0.12 per share. The dividend was paid on January 15, 2009 to all shareholders of record at the close of business on December 31, 2008. The aggregate dividend payment totaled approximately $2.6 million.

This dividend represented a small portion of the Company’s cash balances, the remainder of which is being utilized to achieve key business objectives in growing its business, and providing a reserve for any unstable economic conditions.

Common Stock Repurchase Plan

On June 24, 2008, the Company's Board of Directors approved the repurchase of up to a maximum of 250,000 shares, or just over 1%, of the Company’s then fully diluted outstanding Common Stock.  The repurchase plan called for the repurchases to be made in the open market and/or in privately negotiated transactions from time to time in compliance with applicable laws, rules and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended, subject to prevailing market and business conditions. The plan did not obligate the Company to purchase any particular number of shares, and could be suspended or discontinued at any time. The Company completed this repurchase by February 2009.

In March 2009, the Company’s Board of Directors authorized the Company to repurchase up to an additional 250,000 shares, pursuant to the same conditions.

During the three months ended March 31, 2009, the Company repurchased 82,599 shares at a weighted average price of $5.93. For the nine months ended March 31, 2009, the Company repurchased 263,900 shares at a weighted average price of $7.36. All shares repurchased are shown as Treasury stock at cost, in the Stockholders’ equity section of the Condensed Consolidated Balance Sheet.

Contractual Obligations

The Company's headquarters and operations are located in New York, New York. Business is conducted at a location with approximately 13,000 square feet under a long-term lease that expires in September 2015. During December 2008, in an effort to consolidate marketing efforts and reduce costs, the Company closed its two-employee marketing office in Sherman Oaks, California. The office lease at the California location expired in January 2009.

The Company is also the primary party to another lease in New York, New York with approximately 8,500 square feet, which expires in November 2010. In January 2002, a sublease agreement was executed with an unrelated third party for this property. While the Company remains responsible under terms of the original lease, the subtenant has assumed those responsibilities and is performing its obligations under the sublease agreement. Proceeds from the sublease, net of profit sharing with the landlord, more than offset the Company’s obligations under this lease.

The subtenant has performed its obligations under the sublease agreement and the Company is not aware of any credit issues with the subtenant. As of March 31, 2009, the remaining future minimum payments under this lease total $0.8 million. Future minimum receipts from the subtenant, net of profit sharing with the landlord, slightly exceed $0.8 million as of March 31, 2009.

The Company entered into a three-year employment agreement with its Chief Executive Officer in November 2007, effective January 1, 2008. The agreement calls for a base annual salary of $350 thousand and bonus compensation in accordance with the Company’s bonus and incentive compensation plans then in effect. The agreement also calls for certain payments in the event of termination. The payments could vary depending on the cause of termination and whether or not the Board of Directors elects to enforce a non-compete agreement. The agreement was reviewed and approved by the Company's Compensation Committee and the Board of Directors.

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Summary of Contractual Obligations

The following table summarizes all contractual obligations, including the aforementioned office leases (in thousands):

				Payments Due in
				Fiscal Years Ended June 30,
	Remaining
	Payments in								2014 and
	2009			2010-2011			2012-2013		thereafter		Total
Primary New York operations	$	244		$	1,680		$	1,434	$	1,613	$	4,971
Subleased New York lease		120			681			—		—		801
Other operating leases		14			54			10		—		78
Total obligations		378			2,415			1,444		1,613		5,850
Sublease income, net		(143	)		(669	)		—		—		(812	)
Net obligations	$	235		$	1,746		$	1,444	$	1,613	$	5,038

Off-Balance Sheet Arrangements

As of March 31, 2009 the Company had no off-balance sheet arrangements. 

Significant Transactions

 eStara transaction

During the fiscal year ended June 30, 2000, J Net Enterprises, Inc. (“J Net”), the predecessor company to Epoch, made an investment in eStara, Inc. ("eStara"), a technology-related company that provided conversion and tracking solutions to enhance on-line sales. During the fiscal year ended June 30, 2003, J Net’s management concluded its ability to recover its investment was remote and wrote down the remaining carrying value to zero. On October 2, 2006, eStara’s stockholders approved the acquisition of its stock by Art Technology Group, Inc. (NASDAQ ticker symbol “ARTG”). Under the terms of the agreement, ARTG acquired all of the outstanding common stock, preferred stock, and vested and unvested stock options of eStara.

In exchange for the eStara preferred shares held, the Company received 2,431,577 common shares of ARTG and $267 thousand in cash. The common shares received from ARTG were subject to a lock-up agreement pursuant to which the shares were released to the Company in equal monthly installments over a period of 12 months, which commenced January 2007.

During the three and nine months ended March 31, 2008, the Company sold approximately 0.1 and 1.3  million shares of ARTG, respectively, and recorded realized gains of approximately $0.3 and $3.5 million, respectively. Upon sale, these gains were reclassified, in accordance with the provisions of SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, from Accumulated other comprehensive income (loss), a separate component of stockholders’ equity, to Realized gains on investments on the Condensed Consolidated Statement of Operations. All of the remaining shares of ARTG were sold before the end of fiscal year ended June 30, 2008.

Strategic Data Corporation transaction

During the fiscal year ended June 30, 2000, J Net, the predecessor company to Epoch, made an investment in Strategic Data Corp. ("SDC"), a technology-related company that specialized in advertising optimization technology. During the fiscal year ended June 30, 2001, the carrying value of this investment was deemed to be impaired by J Net’s management and written down to zero.

On February 20, 2007, SDC’s stockholders approved the acquisition of its stock by Fox Interactive Media, Inc. (“FIM”). Under the terms of the agreement, FIM acquired all of the outstanding common stock, preferred stock, and vested and unvested stock options of SDC. As a result of the merger, the Company, as a holder of preferred stock of SDC, received an initial cash payment of approximately $2.2 million on March 22, 2007.

The SDC merger also called for contingent payments, upon the achievement of certain targets and milestones, payable over a period of approximately 3.5 years from the closing, as well as the release of an escrow fund. The Company’s share of additional contingent payments and escrow funds stemming from the acquisition, based upon the merger agreement, ranged from zero to approximately $15.4 million.

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The first target measurement date was November 2007 and the Company accrued $344 thousand at that time. The Company received those proceeds during the quarter ended March 31, 2008. The second target measurement date was June 2008 and the Company accrued an additional $200 thousand at that time, the proceeds of which were received during the quarter ended September 30, 2008.

The merger agreement was subsequently amended during the quarter ended December 31, 2008 to provide for a final settlement of all contingent payments by December 31, 2008.  As such, additional payments totaling $4.7 million were received in December 2008. These payments represent the final contingent payments and are included in Realized gains on investments on the condensed consolidated statements of operations for the nine months ended March 31, 2009. There are no further rights to any payments.

New Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements required under other accounting pronouncements, but does not change existing guidance as to whether or not an instrument is carried at fair value. SFAS 157 was effective for the Company beginning July 1, 2008. SFAS 157 establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and to minimize the use of unobservable inputs when measuring fair value. The adoption of SFAS 157 did not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits certain financial assets and financial liabilities to be measured at fair value, using an instrument-by-instrument election. The initial effect of adopting SFAS 159 must be accounted for as a cumulative effect adjustment to opening retained earnings for the fiscal year of adoption. Retrospective application to fiscal years preceding the effective date is not permitted. SFAS 159 was effective for the Company beginning July 1, 2008. The adoption of SFAS 159 did not have a material effect on the Company’s consolidated financial position, results of operations, or cash flows.

In June 2008, the FASB issued FASB Staff Position (“FSP”) EITF No. 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities. FSP EITF No. 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and therefore need to be included in the earnings allocation in calculating earnings per share under the two-class method described in SFAS No. 128, Earnings per Share. FSP EITF No. 03-6-1 requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents as a separate class of securities in calculating earnings per share. FSP EITF No. 03-6-1 is effective for the Company beginning July 1, 2009; earlier application is not permitted. The Company does not expect the adoption of FSP EITF No. 03-6-1 to have a material effect on its consolidated financial position, results of operations or earnings per share.

In October 2008, the FASB issued FSP 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active. FSP 157-3 does not reinterpret or change SFAS 157’s existing principles but rather is intended to enhance comparability and consistency in fair value measurements of financial assets that trade in markets that are inactive. FSP 157-3 primarily re-asserts that when the market is inactive, management is not required to use thinly traded quotes or quotes reflecting distressed prices. Rather, management should look to other means to estimate fair value, such as the “income approach,” which discounts the estimated cash flows and results in a Level 3 classification because the inputs are not observable. Revisions resulting from a change in the valuation technique or its application shall be accounted for as a change in accounting estimate. FSP 157-3 was effective immediately upon issuance. The Company does not currently own such investment instruments and, as such, the adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

In April 2009, the FASB released FSP No. 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP FAS No. 157-4”). FSP FAS No. 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157, when the volume and level of activity for the asset or liability have significantly decreased. It also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS No. 157-4 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company adopted FSP FAS No. 157-4 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

In April 2009, the FASB issued FSP No. 115-2 and No. 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP No. 115-2 and No. 124-2”). This standard provides guidance in determining whether impairments in debt securities are other than temporary, and modifies the presentation and disclosures surrounding such instruments. FSP No. 115-2 and No. 124-2 is effective for interim periods ending after June 15, 2009, but early adoption is permitted for interim periods ending after March 15, 2009. The Company adopted FSP No. 115-2 and No. 124-2 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

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In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (APB) 28-1, Interim Disclosures about Fair Value of Financial Instruments. The FSP amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments to require an entity to provide disclosures about fair value of financial instruments in interim financial information. This FSP is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009.  The Company adopted FSP FAS No. 107-1 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

In April 2009, the SEC issued Staff Accounting Bulletin No. 111 (“SAB 111”) on Other-Than-Temporary Impairments.  SAB 111 amends Topic 5.M. in the Staff Accounting Bulletin Series entitled Other-Than-Temporary Impairment of Certain Investments in Debt and Equity Securities (“Topic 5. M.”). SAB 111 maintains the SEC staff’s previous views related to equity securities and amends Topic 5.M. to exclude debt securities from its scope. The Company elected to adopt SAB 111 during the quarter ended March 31, 2009. The adoption of this pronouncement had no effect on its consolidated financial position, results of operations, or cash flows.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk. 

Market Risk

The Company’s predominant exposure to market risk is directly related to its role as an investment adviser for the mutual funds and separate accounts the Company manages. Changes in value of assets managed will impact the level of management and performance fee revenues. Approximately 55% of the Company’s revenue is derived from daily net asset values, while the remaining 45% of revenue is derived from market values of AUM at the end of the quarter. Declines in equity security market prices could cause revenues to decline because of lower investment management fees by causing:

• the value of AUM to decrease.

• the returns realized on AUM to decrease (impacting performance fees).

• clients to withdraw funds in favor of investments in markets that they perceive to offer greater opportunity.

Underperformance of client accounts relative to competing products could exacerbate these factors.

The management of market risk on behalf of our clients, and the impact on fees to the Company, is a significant focus for us and we use a variety of risk measurement techniques to identify and manage market risk.

Other investments

The Company is exposed to fluctuations in the market price of Other investments presented on its Condensed Consolidated Balance Sheets. The total fair value of Other investments as of March 31, 2009 and June 30, 2008 was $2.8 million and $4.0 million, respectively. The Company does not hedge its market risk related to these securities and does not intend to do so in the future.

At March 31, 2009, the Company performed sensitivity analysis to assess the potential loss in the fair value of these market-risk sensitive securities. The following table represents the estimated impact on the Company’s financial position assuming a hypothetical 10% decline in associated market indices (dollars in thousands):

						Estimated Fair
						Value After
			Hypothetical			Hypothetical		Decrease in
	Fair Value at		Percentage			Percentage		Stockholders'
	March 31, 2009		Decline			Change		Equity (1)
Other investments	$	2,824		10	%	$	2,603	$	221

1)  Investments in the Epoch mutual funds and the separate account of Epoch's Global All-Cap Product are classified as available-for-sale securities. Unrealized gains or losses on available-for-sale securities are excluded from earnings and recorded in other comprehensive income (loss) as a separate component of stockholders’ equity until realized. The investment in the Epoch Global Absolute Return Fund, LLC is accounted for using the equity method, under which the Company's share of net realized and unrealized earnings or losses from the limited liability company is reflected in income.

Cash and cash equivalents

Cash and cash equivalents are exposed to market risk due to changes in interest rates, which impacts interest income. The Company consistently monitors the quality of the institution where its cash is deposited, the balance of which, at times, may be in excess of the FDIC insurance limits. Presently, the Company neither participates in hedging activities nor does it have any derivative financial instruments.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. 

The Company has established and maintains disclosure controls and other procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), that are designed to provide reasonable assurance that material information relating to Epoch Holding Corporation and its subsidiaries on a consolidated basis is recorded, processed, accumulated, summarized and communicated accurately to management, including its principal executive officer and principal financial and accounting officer, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can only provide reasonable, not absolute assurance that the objectives of the disclosure controls and procedures are met.

For the quarter ended March 31, 2009, management, with the participation of the Company's principal executive officer and principal financial and accounting officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures. Based on such evaluation, the Company's principal executive officer and principal financial and accounting officer have concluded that the Company's disclosure controls and procedures were effective during the period covered by this Quarterly Report on Form 10-Q.

The Company has also established and maintains internal control over financial reporting as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States. In the ordinary course of business, the Company routinely enhances its internal controls and procedures for financial reporting by either upgrading its current systems or implementing new systems. During the quarter ended March 31, 2009, there was no change in the Company’s internal controls over financial reporting (as defined in Rule 13a-5(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, the Company or its subsidiaries may become parties to claims, legal actions and complaints arising in the ordinary course of business. Management is not aware of any claims which would have a material adverse effect on its consolidated financial position, liquidity, or results of operations.

Item 1a. Risk Factors.

See Part I. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Business Environment” in this report for a discussion of the conditions in the financial markets and economic conditions affecting our business. This discussion updates, and should be read together with the risk factor entitled “Negative performance of the securities markets could reduce our revenues” in our annual report on Form 10-K for the year ended

June 30, 2008.

In addition, for further discussion of our potential risks and uncertainties, see information under the heading “Risk Factors” in our annual report on Form 10-K for the year ended June 30, 2008.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(c) Purchases of Equity Securities by the Issuer.

On June 24, 2008, the Company’s Board of Directors approved the repurchase of up to a maximum of 250,000 shares, or just over 1%, of the Company’s then fully diluted outstanding Common Stock. The repurchase plan called for the repurchases to be made in the open market and/or in privately negotiated transactions from time to time in compliance with applicable laws, rules and regulations, including Rule 10b-18 under the Securities Exchange Act of 1934, as amended, subject to prevailing market and business conditions. The plan did not obligate the Company to purchase any particular number of shares, and could be suspended or discontinued at any time. The Company completed this repurchase plan by February 2009.

In March 2009, the Company’s Board of Directorsauthorized the Company to repurchase up to an additional 250,000 shares pursuant to the same conditions. This authorization follows the recent completion of the previously announced 250,000 share repurchase program.

The table below displays information with respect to the treasury shares the Company purchased under the repurchase plans discussed above during the three months ended March 31, 2009.

					Total Number of		Maximum Number
			Average		Shares Purchased		of Shares that May
	Total Number		Price		as Part of Publicly		Yet Be Purchased
	of Shares		Paid Per		Announced Plans		Under Outstanding
Period	Purchased		Share		or Programs		Plans or Programs
January 1, 2009 - January 31, 2009		6,600	$	7.56		6,600		53,199
February 1, 2009 - February 28, 2009		53,199	$	6.18		53,199		-
March 1, 2009 - March 31, 2009		22,800	$	4.89		22,800		227,200
		82,599				82,599

To satisfy statutory employee tax withholding requirements related to the vesting of common shares from employee stock awards, the Company purchases, and then resells in the open market, shares to cover and pay for employee tax withholdings. At March 31, 2009, there were 28,065 shares held in treasury to be resold by the Company in the open market. 

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Item 6. Exhibits.

3.1	Certificate of Incorporation of the Registrant, as amended. (B)
3.2	Amended and Restated By-Laws of Epoch Holding Corporation (as adopted April 2, 2008). (C)
10.1	Employment Agreement by and between Epoch Holding Corporation and William W. Priest, dated as of  November 28, 2007 and effective as of January 1, 2008. (D)
10.2	1992 Incentive and Non-qualified Stock Option Plan. (E)
10.40	Indemnification Agreement. (F)
10.40	Stockholders Agreement dated as of June 2, 2004 among J Net Enterprises, Inc. and certain of its stockholders. (A)
10.41	Registration Rights Agreement dated as of June 2, 2004 among J Net Enterprises, Inc. and certain of its stockholders. (A)
10.44	Amendment to 2004 Omnibus Long-Term Incentive Compensation Plan. (G)
10.45	Office lease between Vornado 640 Fifth Avenue LLC (Landlord) and Epoch Investment Partners, Inc. (Tenant). (H)
10.46	Form of Restricted Stock Agreement. (I)
10.47	Office lease between 680 Fifth Avenue Associates, L.P. (Landlord) and JNet Enterprises (Tenant). (I)
10.48	Office sublease between J Net Enterprises, Inc. (Tenant) and The Game Show Network (subtenant). (I)
10.49	Form of Nonqualified Stock Option Agreement. (J)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. (J)
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002. (J)
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (J)

(A)	Incorporated by reference to Registrant's Form 8-K dated June 3, 2004.
(B)	Incorporated by reference to Registrant's Form 8-K dated December 7, 2004.
(C)	Incorporated by reference to Registrant's Form 8-K dated April 2, 2008.
(D)	Incorporated by reference to Registrant's Form 8-K dated November 28, 2007.
(E)	Incorporated by reference to Registrant's 1992 Proxy Statement.
(F)	Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003.
(G)	Incorporated by reference to Registrant's 2008 Proxy Statement.
(H)	Incorporated by reference to Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 2005.
(I)	Incorporated by reference to Registrant's Annual Report on Form 10-K/A for the fiscal year ended June 30, 2006.
(J)	Filed herewith.

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Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

	EPOCH HOLDING CORPORATION
	(Registrant)
	By:	/s/ Adam Borak
		Chief Financial Officer
Date: May 11, 2009		(Principal Financial and Accounting Officer)

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EX-10.49

EX-31.1

Exhibit 31.1

CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER

OF EPOCH HOLDING CORPORATION

I, William W. Priest, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Epoch Holding Corporation (the “Registrant”) for the quarter ended March 31, 2009; and

(2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and

(3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; and

(4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation;

(d) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 11, 2009	By:	/s/ William W. Priest
		William W. Priest
		Chief Executive Officer
		(Principal Executive Officer)

A signed original of this written statement required by Section 302 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-31.2

Exhibit 31.2

CERTIFICATE OF CHIEF FINANCIAL OFFICER

OF EPOCH HOLDING CORPORATION

I, Adam Borak, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Epoch Holding Corporation (the “Registrant”) for the quarter ended March 31, 2009; and

(2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and

(3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; and

(4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-5(f)) for the registrant and we have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation;

(d) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 11, 2009	By:	/s/ Adam Borak
		Adam Borak
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 302 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT

TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report for Epoch Holding Corporation (the “Company") on Form 10-Q for the period ended March  31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), William W. Priest, Chief Executive Officer of the Company, and Adam Borak, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of their knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

Date: May 11, 2009	By:	/s/ William W. Priest
		William W. Priest
		Chief Executive Officer
		(Principal Executive Officer)

Date: May 11, 2009	By:	/s/ Adam Borak
		Adam Borak
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.