☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Transition Period Fromtransition period fromto
incorporation or organization)
Identification No.)Blvd.Boulevard Code)code)
The Nasdaq Stock Market LLC and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulationand post such files). Yes ☒ No ☐Large accelerated filer ☐ Accelerated filer ☒☐ ☐ (Do not check if a smaller reporting company)☒ Smaller reporting company ☐☒ Emerging growth company ☐
PART I | ||||||
Item 1 | 1 | |||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2 | 14 | |||||
Item | 23 | |||||
PART II | ||||||
Item 2 | 24 | |||||
Item 6 | 25 | |||||
26 |
- 2 -
Item 1: | Unaudited Condensed Financial Statements |
December 31, | September 30, | |||||||
2017 | 2017 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 15,198 | $ | 15,700 | ||||
Investments in marketable securities, at fair value | 9 | 8 | ||||||
Investment fee income receivable | 4,767 | 4,325 | ||||||
Prepaid expenses | 362 | 1,614 | ||||||
Other accounts receivable | 500 | 584 | ||||||
|
|
|
| |||||
Total current assets | 20,836 | 22,231 | ||||||
|
|
|
| |||||
Property and equipment, net of accumulated depreciation of $968 and $922, respectively | 265 | 254 | ||||||
Management contracts | 75,686 | 74,628 | ||||||
Other assets | 152 | 145 | ||||||
|
|
|
| |||||
Total assets | $ | 96,939 | $ | 97,258 | ||||
|
|
|
| |||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accrued liabilities and accounts payable | $ | 3,132 | $ | 7,353 | ||||
Income taxes payable | 1,360 | 676 | ||||||
Deferred rent | 195 | 202 | ||||||
Current portion of long-term debt, net of discount and debt issuance costs | 4,228 | 4,228 | ||||||
|
|
|
| |||||
Total current liabilities | 8,915 | 12,459 | ||||||
|
|
|
| |||||
Long-term debt, net of discount and debt issuance costs and current portion | 20,671 | 21,728 | ||||||
Deferred income tax liability, net of deferred tax asset | 7,731 | 11,541 | ||||||
|
|
|
| |||||
Total liabilities | 37,317 | 45,728 | ||||||
|
|
|
| |||||
Commitments and Contingencies (Note 8) | ||||||||
Stockholders’ equity: | ||||||||
Common stock, no par value, 22,500,000 shares authorized: | 15,485 | 14,943 | ||||||
Retained earnings | 44,137 | 36,587 | ||||||
|
|
|
| |||||
Total stockholders’ equity | 59,622 | 51,530 | ||||||
|
|
|
| |||||
Total liabilities and stockholders’ equity | $ | 96,939 | $ | 97,258 | ||||
|
|
|
|
December 31, 2021 | September 30, 2021 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 54,502 | $ | 15,836 | |||
Investments in marketable securities, at fair value | 10 | 10 | |||||
Investment fee income receivable | 2,826 | 2,795 | |||||
Prepaid expenses | 563 | 788 | |||||
Other accounts receivable | 388 | 277 | |||||
Total current assets | 58,289 | 19,706 | |||||
Property and equipment, net of accumulated depreciation of $1,903 and $1,850, respectively | 315 | 311 | |||||
Operating lease right-of-use | 920 | 1,010 | |||||
Management contracts | 80,643 | 80,643 | |||||
Other assets | 246 | 235 | |||||
Total assets | $ | 140,413 | $ | 101,905 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accrued liabilities and accounts payable | $ | 2,464 | $ | 4,151 | |||
Operating lease liability | 361 | 359 | |||||
Income taxes payable | 848 | 1,050 | |||||
Total current liabilities | 3,673 | 5,560 | |||||
Notes payable, net of issuance costs | 38,662 | — | |||||
Long-term operating lease liability | 554 | 646 | |||||
Net deferred income tax liability | 13,007 | 12,437 | |||||
Total liabilities | 55,896 | 18,643 | |||||
Commitments and contingencies (Note 9 ) | 0 | 0 | |||||
Stockholders’ equity | |||||||
Common stock, 0 par value, 22,500,000 shares authorized; 7,478,048 shares issued and outstanding as of December 31, 2021, and 7,469,584 as of September 30, 2021 | 20,339 | 19,964 | |||||
Retained earnings | 64,178 | 63,298 | |||||
Total stockholders’ equity | 84,517 | 83,262 | |||||
Total liabilities and stockholders’ equity | $ | 140,413 | $ | 101,905 | |||
- 3 -
Unaudited Condensed Financial Statements
Hennessy Advisors, Inc.
Three Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
Revenue: | ||||||||
Investment advisory fees | $ | 12,672 | $ | 12,109 | ||||
Shareholder service fees | 1,141 | 1,185 | ||||||
|
|
|
| |||||
Total revenue | 13,813 | 13,294 | ||||||
|
|
|
| |||||
Operating expenses: | ||||||||
Compensation and benefits | 3,166 | 3,214 | ||||||
General and administrative | 1,515 | 1,395 | ||||||
Mutual fund distribution | 120 | 61 | ||||||
Sub-advisor fees | 2,532 | 2,289 | ||||||
Amortization and depreciation | 83 | 93 | ||||||
|
|
|
| |||||
Total operating expenses | 7,416 | 7,052 | ||||||
|
|
|
| |||||
Net operating income | 6,397 | 6,242 | ||||||
Interest expense | 263 | 266 | ||||||
Other income | (13 | ) | — | |||||
|
|
|
| |||||
Income before income tax expense | 6,147 | 5,976 | ||||||
Income tax (benefit) expense | (2,040 | ) | 1,980 | |||||
|
|
|
| |||||
Net income | $ | 8,187 | $ | 3,996 | ||||
|
|
|
| |||||
Earnings per share: | ||||||||
Basic | $ | 1.05 | $ | 0.52 | ||||
|
|
|
| |||||
Diluted | $ | 1.04 | $ | 0.52 | ||||
|
|
|
| |||||
Weighted average shares outstanding | ||||||||
Basic | 7,800,409 | 7,685,676 | ||||||
|
|
|
| |||||
Diluted | 7,842,707 | 7,756,053 | ||||||
|
|
|
|
Three Months Ended December 31, | ||||||||
2021 | 2020 | |||||||
Revenue | ||||||||
Investment advisory fees | $ | 7,938 | $ | 7,208 | ||||
Shareholder service fees | 596 | 581 | ||||||
Total revenue | 8,534 | 7,789 | ||||||
Operating expenses | ||||||||
Compensation and benefits | 2,262 | 2,104 | ||||||
General and administrative | 1,400 | 1,308 | ||||||
Mutual fund distribution | 155 | 121 | ||||||
Sub-advisory fees | 1,877 | 1,785 | ||||||
Depreciation | 53 | 62 | ||||||
Total operating expenses | 5,747 | 5,380 | ||||||
Net operating income | 2,787 | 2,409 | ||||||
Interest expense | 508 | — | ||||||
Other income | (2 | ) | (1 | ) | ||||
Income before income tax expense | 2,281 | 2,410 | ||||||
Income tax expense | 368 | 637 | ||||||
Net income | $ | 1,913 | $ | 1,773 | ||||
Earnings per share | ||||||||
Basic | $ | 0.26 | $ | 0.24 | ||||
Diluted | $ | 0.25 | $ | 0.24 | ||||
Weighted average shares outstanding | ||||||||
Basic | 7,472,680 | 7,357,883 | ||||||
Diluted | 7,522,686 | 7,367,128 | ||||||
Cash dividends declared per share | $ | 0.14 | $ | 0.14 | ||||
- 4 -
Unaudited Condensed Financial Statements
Three Months Ended December 31, 2017
Total | ||||||||||||||||
Common Stock | Retained | Stockholders’ | ||||||||||||||
Shares | Amount | Earnings | Equity | |||||||||||||
Balance at September 30, 2017 | 7,776,563 | $ | 14,943 | $ | 36,587 | $ | 51,530 | |||||||||
Net income | — | — | 8,187 | 8,187 | ||||||||||||
Dividends paid | — | — | (585 | ) | (585 | ) | ||||||||||
Employee and director restricted stock vested | 33,750 | — | — | — | ||||||||||||
Repurchase of vested employee restricted stock for tax withholding | (7,329 | ) | (65 | ) | (52 | ) | (117 | ) | ||||||||
Shares issued for auto-investments pursuant to the 2015 Dividend Reinvestment and Stock Purchase Plan | 16 | — | — | — | ||||||||||||
Shares issued for dividend reinvestment pursuant to the 2015 Dividend Reinvestment and Stock Purchase Plan | 530 | 9 | — | 9 | ||||||||||||
Stock-based compensation | — | 598 | — | 598 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Balance at December 31, 2017 | 7,803,530 | $ | 15,485 | $ | 44,137 | $ | 59,622 | |||||||||
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2021 | ||||||||||||||||
Total | ||||||||||||||||
Common Stock | Retained | Stockholders’ | ||||||||||||||
Shares | Amount | Earnings | Equity | |||||||||||||
Balance at September 30, 2021 | 7,469,584 | $ | 19,964 | $ | 63,298 | $ | 83,262 | |||||||||
Net income | — | — | 1,913 | 1,913 | ||||||||||||
Dividends paid | (1,027 | ) | (1,027 | ) | ||||||||||||
Employee restricted stock vested | 10,000 | — | 0 | 0 | ||||||||||||
Repurchase of vested employee restricted stock for tax withholding | (3,458 | ) | (31 | ) | (6 | ) | (37 | ) | ||||||||
Shares issued for auto-investments pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan | 193 | 2 | — | 2 | ||||||||||||
Shares Purchase Plan | 1,729 | 19 | — | 19 | ||||||||||||
Stock-based compensation | — | 388 | — | 388 | ||||||||||||
Employee restricted stock forfeiture | — | (3 | ) | (3 | ) | |||||||||||
Balance at December 31, 2021 | 7,478,048 | $ | 20,339 | $ | 64,178 | $ | 84,517 | |||||||||
Three Months Ended December 31, 2020 | ||||||||||||||||
Total | ||||||||||||||||
Common Stock | Retained | Stockholders’ | ||||||||||||||
Shares | Amount | Earnings | Equity | |||||||||||||
Balance at September 30, 2020 | 7,356,822 | $ | 18,705 | $ | 59,473 | $ | 78,178 | |||||||||
Net income | — | — | 1,773 | 1,773 | ||||||||||||
Dividends paid | — | — | (1,011 | ) | (1,011 | ) | ||||||||||
Shares issued for auto-investments pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan | 652 | 6 | — | 6 | ||||||||||||
Shares Purchase Plan | 2,165 | 19 | — | 19 | ||||||||||||
Stock-based compensation | — | 352 | — | 352 | ||||||||||||
Balance at December 31, 2020 | 7,359,639 | $ | 19,082 | $ | 60,235 | $ | 79,317 | |||||||||
- 5 -
Unaudited Condensed Financial Statements
Hennessy Advisors, Inc.
Three Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 8,187 | $ | 3,996 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Amortization and depreciation | 83 | 93 | ||||||
Deferred income taxes | (3,810 | ) | 1,170 | |||||
Stock-based compensation | 598 | 528 | ||||||
Unrealized gains on marketable securities | (1 | ) | — | |||||
Amortization of loan fee payments | (37 | ) | (37 | ) | ||||
Change in operating assets and liabilities: | ||||||||
Investment fee income receivable | (442 | ) | (313 | ) | ||||
Prepaid expenses | 1,252 | 640 | ||||||
Other accounts receivable | 84 | 69 | ||||||
Other assets | (7 | ) | — | |||||
Accrued liabilities and accounts payable | (4,221 | ) | (3,398 | ) | ||||
Income taxes payable | 684 | (383 | ) | |||||
Deferred rent | (7 | ) | 17 | |||||
|
|
|
| |||||
Net cash provided by operating activities | 2,363 | 2,382 | ||||||
|
|
|
| |||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (57 | ) | (32 | ) | ||||
Payments related to management contracts | (1,058 | ) | (51 | ) | ||||
|
|
|
| |||||
Net cash used in investing activities | (1,115 | ) | (83 | ) | ||||
|
|
|
| |||||
Cash flows from financing activities: | ||||||||
Principal payments on bank loan | (1,057 | ) | (1,057 | ) | ||||
Restricted stock units repurchased for employee tax withholding | (117 | ) | (168 | ) | ||||
Proceeds from shares issued pursuant to the 2015 Dividend Reinvestment and Stock Repurchase Plan | 9 | 2 | ||||||
Dividend payments | (585 | ) | (506 | ) | ||||
|
|
|
| |||||
Net cash used in financing activities | (1,750 | ) | (1,729 | ) | ||||
|
|
|
| |||||
Net (decrease) increase in cash and cash equivalents | (502 | ) | 570 | |||||
Cash and cash equivalents at the beginning of the period | 15,700 | 3,535 | ||||||
|
|
|
| |||||
Cash and cash equivalents at the end of the period | $ | 15,198 | $ | 4,105 | ||||
|
|
|
| |||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for: | ||||||||
Income taxes | $ | 19 | $ | 684 | ||||
|
|
|
| |||||
Interest | $ | 270 | $ | 270 | ||||
|
|
|
|
Three Months Ended December 31, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 1,913 | $ | 1,773 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
Depreciation | 53 | 62 | ||||||
Change in right-of-use | — | (17 | ) | |||||
Amortization of note issuance costs | 55 | — | ||||||
Deferred income taxes | 570 | 313 | ||||||
Employee restricted stock forfeiture | (3 | ) | — | |||||
Stock-based compensation | 388 | 352 | ||||||
Change in operating assets and liabilities | ||||||||
Investment fee income receivable | (31 | ) | (285 | ) | ||||
Prepaid expenses | 225 | 210 | ||||||
Other accounts receivable | (111 | ) | 54 | |||||
Other assets | (11 | ) | (1 | ) | ||||
Accrued liabilities and accounts payable | (1,687 | ) | (1,733 | ) | ||||
Income taxes payable | (202 | ) | 323 | |||||
Net cash provided by operating activities | 1,159 | 1,051 | ||||||
Cash flows from investing activities | ||||||||
Purchases of property and equipment | (57 | ) | (66 | ) | ||||
Net cash used in investing activities | (57 | ) | (66 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of notes , net of underwriting discount | 39,042 | — | ||||||
Payment of issuance costs on notes | (435 | ) | — | |||||
Repurchase of vested employee restricted stock for tax withholding | (37 | ) | — | |||||
Proceeds from shares issued pursuant to the 2018 Dividend Reinvestment and Stock Repurchase Plan | — | 6 | ||||||
Proceeds from shares issued pursuant to the 2021 Dividend Reinvestment and Stock Repurchase Plan | 2 | — | ||||||
Dividend payments | (1,008 | ) | (992 | ) | ||||
Net cash provided by (used in) financing activities | 37,564 | (986 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 38,666 | (1 | ) | |||||
Cash and cash equivalents at the beginning of the period | 15,836 | 9,955 | ||||||
Cash and cash equivalents at the end of the period | $ | 54,502 | $ | 9,954 | ||||
Supplemental disclosures of cash flow information | ||||||||
Cash paid for interest | $ | 387 | $ | 0 | ||||
Dividend reinvestment issued in shares | $ | 19 | $ | 19 |
- 6 -
Unaudited Condensed Financial Statements
(1) | Basis of Financial Statement Presentation |
2021.
- 7 -
- 8 -
Effective February 28, 2017, the606 — Revenue from Contracts with Customers.
(2) | Management Contracts Purchased |
2021, management performed a qualitative analysis and determined it was more likely than not that there continued to be 0 impairment.
(3) | Investment Advisory Agreements |
Company.
asset value.
investment advisory agreements.
- 10 -
(4) | Fair Value Measurements |
The Company has an outstanding bank loan with U.S. Bank National Association (“U.S. Bank”), as administrative agent and as a lender, and California Bank & Trust, as syndication agent and as a lender, which replaced and refinanced the bank loan previously entered into by the Company and U.S. Bank on October 26, 2012, and amended on November 1, 2013. Immediately prior to September 17, 2015, the Company’s bank loan with U.S. Bank had an outstanding principal balance of $23.0 million. On September 17, 2015, in anticipation of the repurchase of up to 1,500,000 shares of the Company’s common stock at $16.67 per share pursuant to itsself-tender offer, the Company entered into a new term loan agreement to fund in part itsself-tender offer, thereby increasing its total loan balance to $35.0 million (consisting of a $20.0 million promissory note to U.S. Bank and a $15.0 million promissory note to California Bank & Trust). Then, on September 19, 2016, the Company entered into an amendment to its term loan agreement with U.S. Bank and California Bank & Trust to allow it to consummate the purchase of assets related to the management of the Westport Fund and the Westport Select Cap Fund. In addition, the amendment revised one of the financial covenants in the term loan agreement. On November 16, 2017, the Company entered into an amendment to its term loan agreement with U.S. Bank and California Bank & Trust to revise the excess cash flow prepayment requirements. On November 30, 2017, the Company entered into an amendment to its term loan agreement with U.S. Bank and California Bank & Trust to allow it to consummate the purchases of the assets related to the management of the Rainier Large Cap Equity Fund, the Rainier Mid Cap Equity Fund, and the Rainier Small/Mid Cap Equity Fund.
The current term loan agreement requires 48 monthly payments in the amount of $364,583 plus interest based on, at the Company’s option:
(1) LIBOR plus a margin that ranges from 2.75% to 3.25%, depending on the Company’s ratio of consolidated debt to consolidated earnings before interest, taxes, depreciation and amortization (excluding, among other things, certainnon-cash gains and losses) (“EBITDA”); or
(2) the sum of (a) the highest of the prime rate set by U.S. Bank from time to time, the Federal Funds Rate plus 0.50%, orone-month LIBOR plus 1.00%, and (b) a margin that ranges from 0.25% to 0.75%, depending on the Company’s ratio of consolidated debt to consolidated EBITDA.
Beginning March 1, 2016, the Company elected to use aone-month LIBOR rate contract, which has been renewed each subsequent month. As of December 31, 2017, the effective rate is 4.111%, which is comprised of the LIBOR rate of 1.361% as of December 1, 2017, plus a margin of 2.75% based on the Company’s ratio of consolidated debt to consolidated EBITDA as of September 30, 2017. The Company intends to renew the LIBOR rate contract on a monthly basis provided that theLIBOR-based interest rate remains favorable to the primerate-based interest rate.
All borrowings under the term loan agreement are secured by substantially all of the Company’s assets. The final installment of thethen-outstanding principal plus accrued interest is due September 17, 2019. As of December 31, 2017, the Company had $25.2 million currently outstanding under its term loan ($24.9 million net of debt issuance costs).
- 11 -
The term loan agreement includes certain reporting requirements and loan covenants requiring the maintenance of certain financial ratios. The Company was in compliance for the periods ended December 31, 2017 and 2016.
In connection with securing the financings discussed above, the Company incurred loan costs in the amount of $0.41 million. These costs were reclassified to offset debt liability per Accounting Standards Update (“ASU”)2015-03 as of March 31, 2017, and the balance is being amortized on a straight-line basis, which approximates the effective interest basis, over 48 months. Amortization expense during thethree-month periods ended December 31, 2017 and 2016, was $0.04 million for each period. The unamortized balance of the loan fees was $0.3 million as of December 31, 2017. The following is a reconciliation of the reclassification:
Gross Debt at December 31, 2017 | Debt Issuance Cost | Debt, Net of Issuance Cost, at December 31, 2017 | ||||||||||
(In thousands) | ||||||||||||
Current portion of debt | $ | 4,375 | $ | (147 | ) | $ | 4,228 | |||||
Long-term portion of debt | 20,781 | (110 | ) | 20,671 | ||||||||
|
|
|
|
|
| |||||||
Total Debt | $ | 25,156 | $ | (257 | ) | $ | 24,899 | |||||
|
|
|
|
|
| |||||||
Gross Debt at September 30, 2017 | Debt Issuance Cost | Debt, Net of Issuance Cost, at September 30, 2017 | ||||||||||
(In thousands) | ||||||||||||
Current portion of debt | $ | 4,375 | $ | (147 | ) | $ | 4,228 | |||||
Long-term portion of debt | 21,875 | (147 | ) | 21,728 | ||||||||
|
|
|
|
|
| |||||||
Total Debt | $ | 26,250 | $ | (294 | ) | $ | 25,956 | |||||
|
|
|
|
|
|
The Company’s effective income tax rates for the three months ended December 31, 2017 and 2016, were-33.2% and 33.1%, respectively.
The effective income tax rate for the three months ended December 31, 2016, was lower than the federal statutory rate of 35% due to the early adoption of ASU2016-09 (see further discussion in footnote 10), with a partial offset due to state taxes.
The effective income tax rate for the three months ended December 31, 2017, was a benefit due to the Tax Cuts and Jobs Act of 2017, with a slight offset due to state taxes. The Company was required to record aone-time,non-cash benefit to income taxes of approximately $4 million for the accountingre-measurement of its deferred tax liability to account for the future impact of a lower federal corporate income tax rate.
- 12 -
We are subject to income tax in the U.S. federal jurisdiction and multiple state jurisdictions. Our U.S. federal tax returns for 2014 and subsequent years remain open to examination. Generally, we are no longer subject to state examinations by tax authorities for years prior to fiscal 2014. For state tax jurisdictions with unfiled tax returns, the statute of limitations will remain open indefinitely.
Basic earnings per share is determined by dividing net earnings by the weighted average number of shares of common stock outstanding, while diluted earnings per share is determined by dividing net earnings by the weighted average number of shares of common stock outstanding adjusted for the dilutive effect of common stock equivalents.
All common stock equivalents were dilutive and therefore included in the diluted earnings per share calculation for the three months ended December 31, 2017 and 2016.
On January 26, 2017, the Company’s Board of Directors declared a3-for-2 stock split, which was effected on March 6, 2017, for shareholders of record as of February 10, 2017. All disclosures in this report relating to shares of common stock, restricted stock units, and per share data have been adjusted to reflect this stock split.
A quarterly cash dividend of $0.075 per share was paid on December 8, 2017, to shareholders of record as of November 15, 2017.
Amended and Restated 2013 Omnibus Incentive Plan
On March 26, 2014, the Company adopted, and the Company’s shareholders approved, the Amended and Restated 2013 Omnibus Incentive Plan (the “Omnibus Plan”). Under the Omnibus Plan, participants may be granted restricted stock units (“RSUs”), representing an unfunded, unsecured right to receive a share of the Company’s common stock on the date specified in the recipient’s award. The Company issues new shares of its common stock when it is required to deliver shares to an RSU recipient. The RSUs granted under the Omnibus Plan vest over four years, at a rate of 25% per year. The Company recognizesstock-based compensation expense on a straight-line basis over the four-year vesting term of each award. There were no RSUs granted under the Omnibus Plan during the three months ended December 31, 2017 or 2016.
- 13 -
RSU activity for the three months ended December 31, 2017, was as follows:
RSU Activity Three Months Ended December 31, 2017 | ||||||||
Number of RSUs | Weighted Avg. Fair Value Per Share at Each Date | |||||||
Non-vested Balance at September 30, 2017 | 358,291 | $ | 16.48 | |||||
Granted | — | — | ||||||
Vested (1) | (38,060 | ) | 15.72 | |||||
Forfeited | — | — | ||||||
|
|
|
| |||||
Non-vested Balance at December 31, 2017 | 320,231 | $ | 16.57 | |||||
|
|
|
|
RSU Compensation Three Months Ended December 31, 2017 | ||||
(In thousands) | ||||
Total expected compensation expense related to RSUs | $ | 12,490 | ||
Compensation expense recognized at reporting date | (7,183 | ) | ||
|
| |||
Unrecognized compensation expense related to RSUs at reporting date | $ | 5,307 | ||
|
|
As of December 31, 2017, there was $5.3 million of total RSU compensation expense related tonon-vested awards not yet recognized, which is expected to be recognized over a weighted-average vesting period of 2.7 years.
Dividend Reinvestment and Stock Purchase Plan
In March 2015, the Company established a Dividend Reinvestment and Stock Purchase Plan (the “DRSPP”) to provide shareholders and new investors with a convenient and economical means of purchasing shares of the Company’s common stock and reinvesting cash dividends paid on the Company’s common stock. Under the DRSPP, the Company issued 546 and 404 shares of common stock during the three months ended December 31, 2017 and 2016, respectively.
- 14 -
As discussed in the Subsequent Events footnote, in January 2018, the Company adopted an updated Dividend Reinvestment and Stock Purchase Plan.
The Company’s headquarters is located in leased office space under a singlenon-cancelable operating lease at 7250 Redwood Boulevard, Suite 200, Novato, California 94945. The lease expires June 30, 2021, with onefive-year extension available thereafter.
The Company also has office space under a singlenon-cancelable operating lease at 101 Federal Street, Suite 1900, Boston, Massachusetts 02110. The initial term of the lease expired on November 30, 2015, but automatically renews for successiveone-year periods unless either party terminates the lease by providing at least three months’ notice of termination to the other party prior to the next renewal date.
The Company also has office space under a singlenon-cancelable operating lease at 1340 Environ Way, #305, Chapel Hill, North Carolina 27517. The initial term of the lease expired on November 30, 2014, but automatically renews for successive three-month periods unless either party terminates the lease by providing at least two months’ notice of termination to the other party prior to the next renewal date.
As of December 31, 2017, there were no material changes in the leasing arrangements that would have a significant effect on future minimum lease payments reported in the Company’s Annual Report onForm 10-K for the fiscal year ended September 30, 2017.
(9) Fair Value Measurements
- 15 -
Fair Value Measurements at December 31, 2017 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Money market fund deposits | $ | 12,845 | $ | — | $ | — | $ | 12,845 | ||||||||
Mutual fund investments | 9 | — | — | 9 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 12,854 | $ | — | $ | — | $ | 12,854 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Amounts included in: | ||||||||||||||||
Cash and cash equivalents | $ | 12,845 | $ | — | $ | — | $ | 12,845 | ||||||||
Investments in marketable securities | 9 | — | — | 9 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 12,854 | $ | — | $ | — | $ | 12,854 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Fair Value Measurements at September 30, 2017 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Money market fund deposits | $ | 13,832 | $ | — | $ | — | $ | 13,832 | ||||||||
Mutual fund investments | 8 | — | — | 8 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 13,840 | $ | — | $ | — | $ | 13,840 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Amounts included in: | ||||||||||||||||
Cash and cash equivalents | $ | 13,832 | $ | — | $ | — | $ | 13,832 | ||||||||
Investments in marketable securities | 8 | — | — | 8 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 13,840 | $ | — | $ | — | $ | 13,840 | ||||||||
|
|
|
|
|
|
|
|
December 31, 2021 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Money market fund deposits | $ | 50,597 | $ | — | $ | — | $ | 50,597 | ||||||||
Mutual fund investments | 10 | — | — | 10 | ||||||||||||
Total | $ | 50,607 | $ | $ | $ | 50,607 | ||||||||||
Amounts included in: | ||||||||||||||||
Cash and cash equivalents | $ | 50,597 | $ | $ | $ | 50,597 | ||||||||||
Investments in marketable securities | 10 | — | — | 10 | ||||||||||||
Total | $ | 50,607 | $ | $ | $ | 50,607 | ||||||||||
September 30, 2021 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Money market fund deposits | $ | 11,554 | $ | — | $ | $ | 11,554 | |||||||||
Mutual fund investments | 10 | — | — | 10 | ||||||||||||
Total | $ | 11,564 | $ | $ | $ | 11,564 | ||||||||||
Amounts included in: | ||||||||||||||||
Cash and cash equivalents | $ | 11,554 | $ | $ | $ | 11,554 | ||||||||||
Investments in marketable securities | 10 | — | — | 10 | ||||||||||||
Total | $ | 11,564 | $ | $ | $ | 11,564 | ||||||||||
(5) | Leases |
In November 2015,
December 31, 2021 | ||||
(In thousands, except years and percentages) | ||||
Operating lease right-of-use | $ | 920 | ||
Current operating lease liability | $ | 361 | ||
Long-term operating lease liability | $ | 554 | ||
Weighted average remaining lease term | 2.6 | |||
Weighted average discount rate | 0.90 | % |
In March 2016, the FASB issued ASU2016-09 “Compensation - Stock Compensation (Topic 718): Improvementare as follows:
December 31, 2021 | ||||
(In thousands) | ||||
Remainder of fiscal year 2022 | $ | 273 | ||
Fiscal year 2023 | 374 | |||
Fiscal year 2024 | 286 | |||
Total undiscounted cash flows | 933 | |||
Present value discount | (18 | ) | ||
Total operating lease liabilities | $ | 915 | ||
(6) | Accrued Liabilities and Accounts Payable |
December 31, 2021 | September 30, 2021 | |||||||
(In thousands) | ||||||||
Accrued bonus liabilities | $ | 801 | $ | 2,738 | ||||
Accrued sub-advisor fees | 623 | 628 | ||||||
Other accrued expenses | 1,040 | 785 | ||||||
Total accrued liabilities and accounts payable | $ | 2,464 | $ | 4,151 | ||||
(7) | Debt Outstanding |
(8) | Income Taxes |
(9) | Commitments and Contingencies |
(10) | Equity |
- 16 -
We elected to early adopt ASU2016-09, using a modified retrospective approach. As a result of early adoption of ASU2016-09, an income tax benefit of approximately $0.2 million was recognized as a discrete eventCompany’s common stock on the date specified in the quarterly period ended December 31, 2016.
(11) Asset Purchaserecipient’s award. The Company issues new shares of Two Rainier U.S. Funds
On December 1, 2017,its common stock when it is required to deliver shares to an RSU recipient. The RSUs granted under the Omnibus Plan vest over four years at a rate of 25% per year. The Company completedrecognizes
Three Months Ended December 31, 2021 | ||||||||
Shares | Weighted Average Grant Date Fair Value per Share | |||||||
Non-vested balance at beginning of period | 323,810 | $ | 8.87 | |||||
Granted | 0 | 0 | ||||||
Vested (1) | (41,353 | ) | (9.37 | ) | ||||
Forfeited | (1,906 | ) | (8.95 | ) | ||||
Non-vested balance at end of period | 280,551 | $ | 8.79 | |||||
(1) | Represents partially vested RSUs for which the Company already has recognized the associated compensation expense but has not yet issued to employees the related shares of common stock. |
December 31, 2021 | ||||
(In thousands, except years) | ||||
Total expected compensation expense related to RSUs | $ | 17,169 | ||
Recognized compensation expense related to RSUs | (14,703 | ) | ||
Unrecognized compensation expense related to RSUs | $ | 2,466 | ||
Weighted average remaining years to expense for RSUs | 2.8 | |||
(11) | Earnings per Share and Dividends per Share |
(12) | Recently Issued and Adopted Accounting Standards |
(13) | Subsequent Events |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
“seek”“seek,” and similar expressions, as well as statements in the future tense. We have based these forward-looking statements on our current expectations and projections about future events, based on information currently available to us.- 17 -entitledtitled “Risk Factors” and elsewhere in our Annual Report on2017, filed with the Securities and Exchange Commission.2021. Unforeseen developments could cause actual performance or results to differ substantially from those expressed in or suggested by the forward-looking statements. Management does not assume responsibility for the accuracy or completeness of these forward-looking statements. There is no regulation requiring an update of any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations.financialbusiness conditions, including those related to theIn addition, while domestic economic conditions currently are relatively favorable, further increases in short-term interest rates, policy changes from the administration in Washington, D.C., and developments in international financial markets could influence economic and financial conditions significantly. Notwithstanding the variability in our economic and regulatory environments, we remain focused on the investment performance of the Hennessy Funds and on providing(i)(a) the identification, completion, and integration of future acquisitions and (ii)(b) organic growth, through both the retention of the mutual fund assets we currently manage and the generation of inflows into the mutual funds we manage. The success of our business strategy may be influenced by the factors discussed in the section entitledtitled “Risk Factors” and elsewhere in our Annual Report on2017.2021. All statements regarding our business strategy, as well as statements regarding market trends and risks and assumptions about changes in the marketplace, are forward-looking by their nature.
- 18 -
U.S. equity markets posted strong gains in
2022.
indicated that it will likely raise interest rates in 2022
We seek to provideHennessy Funds posted positive annualized returns in each of the
Each of
- 19 -
appreciation.
Total Assets Under Management | ||||||||||||||||||||
At Each Quarter End, December 31, 2016, through December 31, 2017 | ||||||||||||||||||||
12/31/2016 | 3/31/2017 | 6/30/2017 | 9/30/2017 | 12/31/2017 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Beginning assets under management | $ | 6,698,519 | $ | 6,592,589 | $ | 6,635,802 | $ | 6,526,756 | $ | 6,612,812 | ||||||||||
Acquisition inflows | — | — | — | — | 121,831 | |||||||||||||||
Organic inflows | 327,308 | 376,440 | 249,043 | 197,671 | 324,132 | |||||||||||||||
Redemptions | (647,952 | ) | (554,606 | ) | (496,768 | ) | (393,988 | ) | (480,832 | ) | ||||||||||
Market appreciation | 214,714 | 221,379 | 138,679 | 282,373 | 346,050 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ending assets under management | $ | 6,592,589 | $ | 6,635,802 | $ | 6,526,756 | $ | 6,612,812 | $ | 6,923,993 | ||||||||||
|
|
|
|
|
|
|
|
|
|
2020:
Fiscal Quarter Ended | ||||||||||||||||||||
December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Beginning assets under management | $ | 4,065,922 | $ | 4,117,560 | $ | 4,023,364 | $ | 3,832,551 | $ | 3,564,597 | ||||||||||
Acquisition inflows | — | — | — | — | — | |||||||||||||||
Organic inflows | 147,461 | 94,871 | 301,731 | 208,253 | 213,502 | |||||||||||||||
Redemptions | (240,160 | ) | (222,467 | ) | (351,897 | ) | (369,846 | ) | (401,160 | ) | ||||||||||
Market appreciation (depreciation) | 99,626 | 75,958 | 144,362 | 352,406 | 455,612 | |||||||||||||||
Ending assets under management | $ | 4,072,849 | $ | 4,065,922 | $ | 4,117,560 | $ | 4,023,364 | $ | 3,832,551 | ||||||||||
Fiscal Quarter Ended | ||||||||||||||||||||
December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Investor Class | $ | 2,365,152 | $ | 2,385,204 | $ | 2,505,402 | $ | 2,378,675 | $ | 2,308,369 | ||||||||||
Institutional Class | 1,734,121 | 1,717,046 | 1,646,013 | 1,539,714 | 1,477,001 | |||||||||||||||
Total | $ | 4,099,273 | $ | 4,102,250 | $ | 4,151,415 | $ | 3,918,389 | $ | 3,785,370 | ||||||||||
The principal liability on our balance sheet is the bank debt incurred in connection with the purchaseat $38.7 million, net of assets related to the managementissuance costs.
Three Months Ended December 31, 2017, Compared to Three Months Ended December 31, 2016
Three Months Ended December 31, | ||||||||||||||||
2017 | 2016 | |||||||||||||||
Amounts | Percent of Total Revenue | Amounts | Percent of Total Revenue | |||||||||||||
(In thousands, except percentages) | ||||||||||||||||
Revenue: | ||||||||||||||||
Investment advisory fees | $ | 12,672 | 91.7 | % | $ | 12,109 | 91.1 | % | ||||||||
Shareholder service fees | 1,141 | 8.3 | 1,185 | 8.9 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenue | 13,813 | 100.0 | 13,294 | 100.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating expenses: | ||||||||||||||||
Compensation and benefits | 3,166 | 22.9 | 3,214 | 24.2 | ||||||||||||
General and administrative | 1,515 | 11.0 | 1,395 | 10.5 | ||||||||||||
Mutual fund distribution | 120 | 0.9 | 61 | 0.5 | ||||||||||||
Sub-advisor fees | 2,532 | 18.3 | 2,289 | 17.2 | ||||||||||||
Amortization and depreciation | 83 | 0.6 | 93 | 0.6 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating expenses | 7,416 | 53.7 | 7,052 | 53.0 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Net operating income | 6,397 | 46.3 | 6,242 | 47.0 | ||||||||||||
Interest expense | 263 | 1.8 | 266 | 2.0 | ||||||||||||
Other income | (13 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Income before income tax expense | 6,147 | 44.5 | 5,976 | 45.0 | ||||||||||||
Income tax (benefit) expense | (2,040 | ) | (14.8 | ) | 1,980 | 14.9 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | $ | 8,187 | 59.3 | % | $ | 3,996 | 30.1 | % | ||||||||
|
|
|
|
|
|
|
|
Revenuesrevenue:
Three Months Ended December 31, | ||||||||||||||||
2021 | 2020 | |||||||||||||||
Amount | Percent of Total Revenue | Amount | Percent of Total Revenue | |||||||||||||
(In thousands, except percentages) | ||||||||||||||||
Revenue | ||||||||||||||||
Investment advisory fees | $ | 7,938 | 93.0 | % | $ | 7,208 | 92.5 | % | ||||||||
Shareholder service fees | 596 | 7.0 | 581 | 7.5 | ||||||||||||
Total revenue | 8,534 | 100.0 | 7,789 | 100.0 | ||||||||||||
Operating expenses | ||||||||||||||||
Compensation and benefits | 2,262 | 26.5 | 2,104 | 27.0 | ||||||||||||
General and administrative | 1,400 | 16.4 | 1,308 | 16.8 | ||||||||||||
Mutual fund distribution | 155 | 1.8 | 121 | 1.6 | ||||||||||||
Sub-advisory fees | 1,877 | 22.0 | 1,785 | 22.9 | ||||||||||||
Depreciation | 53 | 0.6 | 62 | 0.8 | ||||||||||||
Total operating expenses | 5,747 | 67.3 | 5,380 | 69.1 | ||||||||||||
Net operating income | 2,787 | 32.7 | 2,409 | 30.9 | ||||||||||||
Interest expense | 508 | 6.0 | — | — | ||||||||||||
Other income | (2 | ) | (0.0 | ) | (1 | ) | (0.0 | ) | ||||||||
Income before income tax expense | 2,281 | 26.7 | 2,410 | 30.9 | ||||||||||||
Income tax expense | 368 | 4.3 | 637 | 8.1 | ||||||||||||
Net income | $ | 1,913 | 22.4 | % | $ | 1,773 | 22.8 | % | ||||||||
Investment advisory fees increased 4.6% from the prior comparable period2020, to $12.7 million in the three months ended December 31, 2017.2021, total revenue increased by 9.6%, from $7.8 million to $8.5 million, investment advisory fees increased by 10.1%, from $7.2 million to $7.9 million, and shareholder service fees increased by 2.6%, from $0.58 million to $0.60 million. The increase in investment advisory fees were mainlywas due to increased average daily net assets of the Hennessy Funds.
- 21 -
Funds, which was attributable to market appreciation.
Shareholder service fees decreased 3.7% from the prior comparable period to $1.1 million in the three months ended December 31, 2017. The decrease in shareholder service fees was due to a change in the composition of average daily net assets. Assets held in Institutional Class shares of the Hennessy Funds are not subject to a shareholder service fee, whereas assets held in Investor Class shares of the Hennessy Funds are subject to a shareholder service fee. The average daily net assets held in Institutional Class shares increased, while the average daily net assets held in Investor Class shares decreased versus the prior comparable period.
The Company collects investment advisory fees from each of the Hennessy Funds at differing rates. These range between an annual rate of 0.40% and 0.90% of average daily net assets.2020. The Hennessy Fund with the largest average daily net assets for the three months ended December 31, 2017,2021, was the Hennessy Focus Fund, with $2.76$1.2 billion. The Company collectsWe collect an investment advisory fee from the Hennessy Focus Fund at an annual rate of 0.90% of average daily net assets. However, the Company payswe pay asub-advisor
However, we pay a
Three Months Ended December 31, 2021 | ||||
Fund Name | Amount | |||
Hennessy Japan Small Cap Fund | $ | 6 million | ||
Hennessy Large Cap Financial Fund | $ | 5 million | ||
Hennessy Energy Transition Fund | $ | 2 million |
Three Months Ended December 31, 2021 | ||||
Fund Name | Amount | |||
Hennessy Focus Fund | $ | (46) million | ||
Hennessy Gas Utility Fund | $ | (26) million | ||
Hennessy Cornerstone Mid Cap 30 Fund | $ | (13) million |
- 22 -
2021.
Total operating expenses increased 5.2% to $7.4 million in
Compensation and Benefits Expense: Compensation and benefits expense decreased 1.5% to $3.17 million in the three months ended December 31, 2017,2021, compensation and benefits expense increased by 7.5%, from $3.21$2.1 million in the prior comparable period. The decrease is primarily due to a decrease in the Company’sincentive-based compensation expense.$2.3 million. As a percentage of total revenue, compensation and benefits expense decreased 1.30.5 percentage points to 22.9% for26.5%. The dollar value increase in compensation and benefits expense was due to an increase in
General and Administrative Expense: General and administrative expense increased 8.6% to $1.5 million in the three months ended December 31, 2017,2021, general and administrative expense increased by 7.0%, from $1.3 million to $1.4 million in the prior comparable period. The increase resulted from increased sales and distribution-related costs in the current period versus the prior comparable period.million. As a percentage of total revenue, general and administrative expense increased 0.5 percentage points to 11.0% in the three months ended December 31, 2017, compared to 10.5% in the prior comparable period.
Mutual Fund Distribution Expense: Mutual fund distribution expense increased 96.7% to $0.1 million in the three months ended December 31, 2017, from $0.06 million in the prior comparable period. As a percentage of total revenue, mutual fund distribution expense increaseddecreased 0.4 percentage points to 0.9% for16.4%. The dollar value increase in general and administrative expense was due to the three months ended December 31, 2017, comparedreturn to 0.5% in the prior comparable period ended December 31, 2016.
The increase in In addition, some financial institutions charge a minimum fee if the average daily net assets of a Hennessy Fund held by such an institution are less than a threshold amount. In such cases, we pay the minimum fee.
Sub-Advisor FeeHennessy Funds; and
- 23 -
Amortization and Depreciation Expense: Amortization and depreciation expense decreased 10.8% to $0.08 million in the three months ended December 31, 2017,2021, interest expense increased by 100.0% from $0.09$0 to $0.5 million. The increase in interest expense was due to our issuance of $40.25 million in the prior comparable period. The decrease is a result2026 Notes on October 20, 2021, for which we made our first interest payment on December 31, 2021.
Interest Expense: Interest expense decreased 1.1%recognition of a portion of the uncertain tax position related to $0.263 million ina California tax refund. During the period ended December 31, 2021, management determined that the position is certain as the apportionment method has been audited, the tax refund has been received, and there have been no further inquiries received from the state tax jurisdiction.
Income Tax Expense: The provision fornet income tax expense decreased 203.0% to a benefit of $2.0 million in the three months ended December 31, 2017, from an expense of $2.0 million in the prior comparable period. This decrease iswas due to the Tax Cuts and Jobs Act of 2017 that was signed into law on December 22, 2017. The Company was required to record aone-time,non-cash benefit to income taxes of approximately $4 million for the accountingre-measurement of the Company’s deferred tax liability based on the lower federal corporate income tax rate. As a percentage of total revenue, income tax expense decreased 29.7 percentage points to-14.8% for the three months ended December 31, 2017, compared to 14.9% in the prior comparable period.
Net Income
Net income increased by 104.9% to $8.2 million in the three months ended December 31, 2017, from $4.0 million in the prior comparable period, primarily as a result of the reductiondecrease in income tax expense discusseddescribed above. As a percentage of total revenue, net income increased 29.2 percentage points to 59.3% for the three months ended December 31, 2017, compared to 30.1% in the prior comparable period.
- 24 -
2021.
Total
For the Three Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
(Unaudited, in thousands) | ||||||||
Cash flow data: | ||||||||
Operating cash flows | $ | 2,363 | $ | 2,382 | ||||
Investing cash outflows | (1,115 | ) | (83 | ) | ||||
Financing cash outflows | (1,750 | ) | (1,729 | ) | ||||
|
|
|
| |||||
Net (decrease) increase in cash and cash equivalents | $ | (502 | ) | $ | 570 | |||
|
|
|
|
cash:
For the Three Months Ended December 31, | ||||||||
2021 | 2020 | |||||||
(In thousands) | ||||||||
Net cash provided by operating activities | $ | 1,159 | $ | 1,051 | ||||
Net cash used in investing activities | (57 | ) | (66 | ) | ||||
Net cash provided by (used in) financing activities | 37,564 | (986 | ) | |||||
Net increase (decrease) in cash and cash equivalents | $ | 38,666 | $ | (1 | ) | |||
increased net income.
current period.
- 25 -
The Company has an outstanding bank loan with U.S. Bank, as administrative agent and as a lender, and California Bank & Trust, as syndication agent and as a lender, which replaced and refinanced the bank loan previously entered into by the Company and U.S. Bank2026 Notes on October 26, 2012, and amended on November 1, 2013. Immediately prior to September 17, 2015, the Company’s bank loan with U.S. Bank had an outstanding principal balance20, 2021.
Item |
An analysis of our market risk was provided in Item 7A of the Company’s Annual Report on Form10-K for the year ended September 30, 2017. There were no material changes to the Company’s market risk during the three months ended December 31, 2017.
Controls and Procedures |
An
effective as of the end of the period covered by this report.
- 27 -
Period October1-31, 2017(1) November1-30, 2017 December1-31, 2017 Total (2) purchasedrepurchased shares from employees to pay forunderlying vested restricted stock units (“RSUs”) vested duringfrom an employee to satisfy tax withholding obligations arising in connection with the three-month periodvesting of RSUs. The stock repurchase is presented in the following table for the three months ended December 31, 2017:2021: Total number of
shares purchased Average price
paid per share Total number of
shares purchased
as part of publicly
announced plans
or programs (3) Maximum number of
shares that may
yet be purchased
under the plans or
programs (3) (a) (b) (c) (d) 7,329 $ 15.95 0 1,363,211 0 $ 0.00 0 1,363,211 0 $ 0.00 0 1,363,211 7,329 $ 15.95 0 1,363,211
Shares Purchased
Paid per Share
Purchased as Part of
Publicly Announced
Plans or Programs
Shares that May Yet Be
Purchased Under the
Plans or Programs — — — 596,368 — — — 596,368 3,458 $ 10.60 — 596,368 (1) Therepurchasedunder our stock buyback program. We announced the stock buyback program in October 2017 were repurchased according toAugust 2010, and the applicable employee’s instructions to pay for the vesting of RSUs granted on October 1, 2013, and October 15, 2014, and wereprogram has no expiration date. We did not purchasedrepurchase any shares pursuant to the stock buyback program described below.during the three months ended December 31, 2021.(2) total shares repurchased were purchased at a weighted average price of $15.95 per share.(3)The share repurchases related to the RSUsin December 2021 were not completed pursuant to a plan or program and are therefore not subject to a maximum per a plan or program. The Company has adopted a stock buyback program, which it announced August 5, 2010. Pursuant to the program, the Company is authorized to purchase a maximum of 1,500,000 shares. The program has no expiration date.- 28 -listinglist of all exhibits to this Quarterly Report on31.1 Rule 13a-14a Certification of the ChiefPrincipal Executive Officer.31.2 Rule 13a-14a Certification of the ChiefPrincipal Financial Officer.32.1 Written Statement of the ChiefPrincipal Executive Officer, Pursuant to 18 U.S.C. §1350.§ 1350.32.2 Written Statement of the ChiefPrincipal Financial Officer, Pursuant to 18 U.S.C. §1350.§ 1350.101 Financial statements from the Quarterly Report on Form 2017,2021, filed on January 25, 2018,February 10, 2022, formatted in XBRL: (i) the Condensed Balance Sheets; (ii) the Condensed Statements of Income; (iii) the Condensed Statements of Changes in Stockholders’ Equity; (iv) the Condensed Statements of Cash Flows; and (v) the Notes to Unaudited Condensed Financial Statements.104 The cover page for the Company’s Quarterly Report on Form - 29 -
HENNESSY ADVISORS, INC. | ||||||
Date: | By: | /s/ Teresa M. Nilsen | ||||
Teresa M. Nilsen President
|
- 30 -