0000909108-12-000017.txt : 20120227 0000909108-12-000017.hdr.sgml : 20120227 20120227084429 ACCESSION NUMBER: 0000909108-12-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20120227 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120227 DATE AS OF CHANGE: 20120227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIAMOND HILL INVESTMENT GROUP INC CENTRAL INDEX KEY: 0000909108 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [6282] IRS NUMBER: 650190407 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24498 FILM NUMBER: 12640238 BUSINESS ADDRESS: STREET 1: 325 JOHN H MCCONNELL BLVD STREET 2: SUITE 200 CITY: COLUMBUS STATE: OH ZIP: 43215 BUSINESS PHONE: 6142553333 MAIL ADDRESS: STREET 1: 325 JOHN H MCCONNELL BLVD STREET 2: SUITE 200 CITY: COLUMBUS STATE: OH ZIP: 43215 FORMER COMPANY: FORMER CONFORMED NAME: BANC STOCK GROUP INC DATE OF NAME CHANGE: 19971016 FORMER COMPANY: FORMER CONFORMED NAME: HEARTLAND GROUP OF COMPANIES INC DATE OF NAME CHANGE: 19940301 FORMER COMPANY: FORMER CONFORMED NAME: HEARTLAND FINANCIAL GROUP INC DATE OF NAME CHANGE: 19930714 8-K 1 x8k-0212.txt DIAMOND HILL INVESTMENT GROUP, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 8-K CURRENT REPORT _______________________ PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 27, 2012 Diamond Hill Investment Group, Inc. ------------------------------------------------------------------------------ (Exact Name of Registrant as Specified in its Charter) Ohio ------------------------------------------------------------------------------ (State or Other Jurisdiction of Incorporation) 000-24498 65-0190407 ------------------------------------------------------------------------------ (Commission File Number) (I.R.S. Employer Identification No.) 325 John H. McConnell Blvd, Suite 200, Columbus, Ohio 43215 ------------------------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (614) 255-3333 ------------------------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Item 2.02 Results of Operations and Financial Condition --------- --------------------------------------------- Registrant has reported its results of operations for the fiscal year ended December 31, 2011, as described in Registrant's press release dated February 24, 2012, a copy of which is filed herewith as Exhibit 99.1 and incorporated herein by reference. Item 9.01. Financial Statements and Exhibits --------- --------------------------------------------- Exhibit No. Document ----------- -------- 99.1 Press release issued by the Registrant dated February 24, 2012. 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 hereunto duly authorized. DIAMOND HILL INVESTMENT GROUP, INC. Date: February 27, 2012 By: /s/ James F. Laird ------------------------------- James F. Laird, Chief Financial Officer and Secretary EX-99 2 ex991-0212.txt PRESS RELEASE ^ Diamond Hill ------------ Investments FOR IMMEDIATE RELEASE: Investor Contact: James F. Laird-Chief Financial Officer 614-255-3353 (jlaird@diamond-hill.com) DIAMOND HILL INVESTMENT GROUP, INC. REPORTS 2011 FINANCIAL RESULTS Columbus, Ohio - February 24, 2012 - Diamond Hill Investment Group, Inc. (NASDAQ:DHIL) today reported results for the year ended December 31, 2011. The Company plans to file its 2011 Form 10-K on Friday, March 9, 2012 and we urge investors to read and consider the information in that filing. Whenever possible, we will post information on a Friday afternoon so that investors have a maximum amount of time to digest the information. Revenue increased 13% to $63.8 million for the year compared to 2010. Net operating income for the year was $23.0 million, an increase of 25% from 2010. Net income for the year was $14.3 million, or $4.86 per share, compared to $12.4 million, or $4.48 per share, in 2010. Excluding the corporate investment return, net operating income after tax increased 24% to $14.4 million for the year compared to $11.6 million in 2010. Assets under management ended the year at $8.7 billion as compared to $8.6 billion at the end of 2010. Operating profit margin increased to 36% for 2011 from 33% for 2010. The Company expects that its operating margin will fluctuate from year to year based on various factors including revenues; investment results; employee performance; staffing levels; development of investment strategies, products, or channels; and industry comparisons. Cash and Investment Portfolio - the Company had $23.4 million in cash and investments at the end of 2011, up from $17.3 million at the beginning of the year. Special Dividend - the Company paid a $5.00 per share dividend on December 19, 2011. The 2011 special dividend represents a qualified dividend for tax purposes. Further details regarding the tax character of all special dividends paid by the Company are available at the investor relations section of the Company's website. 2012 Annual Meeting of Shareholders - Diamond Hill announced that the 2012 Annual Shareholder meeting will be held April 25, 2012 at 2:00 pm Eastern Time along with an investor conference call. Summary of Results of Operations (in thousands, except per share figures) Three months ended December 31, 2011 2010 Change Revenues: Investment advisory $ 13,311 $ 13,619 -2% Mutual fund administration 1,879 1,897 -1% Total Revenue $ 15,190 $ 15,516 -2% Operating Expenses 8,873 9,272 -4% Net Operating Income 6,317 6,244 1% Investment Return 781 974 Net Income Before Taxes 7,098 7,218 -2% Net Income $ 4,453 $ 4,464 0% Earnings per share (diluted) $ 1.49 $ 1.60 -7% Operating profit margin 42% 40% New client investments, net of withdrawals $69,400 $908,000 Year ended December 31, 2011 2010 Change Revenues: Investment advisory $ 56,016 $ 49,249 14% Mutual fund administration 7,822 7,455 5% Total Revenue $ 63,838 $ 56,704 13% Operating Expenses 40,777 38,231 7% Net Operating Income 23,061 18,473 25% Investment Return (67) 1,205 Net Income Before Taxes 22,994 19,678 17% Net Income $ 14,353 $ 12,402 16% Earnings per share (diluted) $ 4.86 $ 4.48 8% Operating profit margin 36% 33% New client investments, net of withdrawals $3,200 $1,698,000 Selected Balance Sheet Data (in thousands, except per share figures) December 31, 2011 2010 Assets Cash equivalents and investment portfolio $ 23,451 $ 17,303 Accounts receivable 10,296 8,695 Deferred tax asset 2,083 874 Other assets 1,890 1,694 Total assets $ 37,720 $ 28,566 Liabilities 19,670 21,068 Total shareholders' equity 18,050 7,498 Total liabilities and shareholders' equity $ 37,720 $ 28,566 Book value per share (a) $ 6.03 $ 2.68 Outstanding shares 2,996 2,796 (a) - A $5 per share special dividend was paid in December 2011 and a $13 per share special dividend was paid in December 2010. Beacon Hill Fund Services - For the year ended December 31, 2011, Beacon Hill generated an operating loss of $470 thousand on revenue of $1.8 million compared to an operating loss of $540 thousand on revenue of $1.6 million for the year ended December 31, 2010. Assets Under Management - As of December 31, 2011, assets under management ("AUM") totaled $8.7 billion, a 1% increase in comparison to December 31, 2010. The following is a roll-forward of AUM activity for the years ended December 31, 2011 and 2010: Change in Assets Under Management For the Year Ended December 31, (in millions) 2011 2010 AUM at beginning of the year $ 8,623 $ 6,283 Net cash inflows (outflows) mutual funds 77 467 sub-advised mutual funds 21 714 separate accounts (74) 532 private investment funds (21) (15) 3 1,698 Net market appreciation and income 45 642 Increase during the year 48 2,340 AUM at end of the year $ 8,671 $ 8,623 About Diamond Hill: Diamond Hill is an independent investment management firm with significant employee ownership and $8.7 billion in assets under management as of December 31, 2011. The firm provides investment management services to institutions and individuals through mutual funds, institutional separate accounts, and private investment funds. Diamond Hill's entire investment team shares the same intrinsic value investment philosophy focused on absolute returns, and the firm's interests are firmly aligned with its clients through significant investment in its strategies.For more information on Diamond Hill, visit www.diamond-hill.com. Use of Supplemental Data as Non-GAAP Performance Measure Net Operating Income After Tax As supplemental information, we are providing performance measures that are based on methodologies other than generally accepted accounting principles ("non-GAAP") for "Net Operating Income After Tax" that management uses as benchmarks in evaluating and comparing the period-to-period operating performance of the Company and its subsidiaries. The Company defines "net operating income after tax" as the company's net operating income less income tax provision, excluding investment return and the tax impact related to the investment return. The Company believes that "net operating income after tax" provides a good representation of the Company's operating performance, as it excludes the impact of investment return on financial results. The amount of the investment portfolio and market fluctuations on the investments can change significantly from one period to another, which can distort the underlying earnings potential of a company. We also believe "net operating income after tax" is an important metric in estimating the value of an asset management business. This non-GAAP measure is provided in addition to net income and net operating income and is not a substitute for net income or net operating income and may not be comparable to non-GAAP performance measures of other companies. Year Ended December 31, (in thousands, except per share data) 2011 2010 Net operating income, GAAP basis $23,061 $18,473 Non-GAAP Adjustments: Tax provision excluding impact of investment return 8,667 6,830 Net operating income after tax, non-GAAP basis 14,394 11,643 Net operating income after tax per diluted share, non-GAAP basis $ 4.88 $ 4.21 Diluted weighted average shares outstanding, GAAP basis 2,952 2,768 The tax provision excluding impact of investment return is calculated by applying the tax rate calculated from the income statement to net operating income. The Company's management does not promote that investors consider the above non-GAAP financial measures alone, or as a substitute for, financial information prepared in accordance with GAAP. ------------------------------------- Throughout this press release, the Company may make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,and Section 21E of the Securities Exchange Act of 1934, as amended, relating to such matters as anticipated operating results, prospects for achieving the critical threshold of assets under management, technology developments, economic trends (including interest rates and market volatility), expected transactions and acquisitions and similar matters. The words "believe," "expect," "anticipate," "estimate," "should," "hope," "seek," "plan," "intend" and similar expressions identify forward-looking statements that speak only as of the date thereof. While the Company believes that the assumptions underlying its forward-looking statements are reasonable, investors are cautioned that any of the assumptions could prove to be inaccurate and accordingly, the actual results and experiences of the Company could differ materially from the anticipated results or other expectations expressed by the Company in its forward-looking statements. Factors that could cause such actual results or experiences to differ from results discussed in the forward-looking statements include, but are not limited to: the adverse effect from a decline in the securities markets; a decline in the performance of the Company's products; changes in interest rates; a general or prolonged downturn in the economy; changes in government policy and regulation, including monetary policy; changes in the Company's ability to attract or retain key employees; unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations; and other risks identified from time-to-time in the Company's other public documents on file with the U.S. Securities and Exchange Commission. ### 325 John H. McConnell Blvd, Suite 200, Columbus, Ohio 43215 614-255-3333 info@diamond-hill.com