HENNESSY ADVISORS INC
For the period ended Mar 31, 2024. Filed May 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 8, 2024
HNNA$10.19-3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-08.
0001437749-24-003522
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001437749-24-015367
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 65 previous paragraphs and 74 current paragraphs.
31 unchanged; 28 reworded; 13 added; 6 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 9 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
On a total return basis, the Dow Jones Industrial Average was up 20.03% for the six months ended March 31, 2024. During the most recent quarter, equity prices advanced as investors increasingly felt that inflation would continue to moderate, the economy would continue to expand, and the employment outlook would remain strong. While the rate of inflation continues to be above the Federal Reserve’s stated 2% target, the market continues to anticipate that the Federal Reserve will cut rates during this calendar year, although at a slower pace compared to expectations at the end of 2023. Further, the prospect of rate cuts while the economy continues to expand has provided comfort to those who believed rate cuts would only occur once the economy started to contract. While revenue growth has outpaced earnings growth in recent quarters, consensus estimates for the quarter ended March 31, 2024, suggest the opposite. If the estimates hold true, strengthened earnings growth is an indicator that profit margins are stabilizing and, perhaps, even expanding.
Current report
Long-term U.S. bond yields increased during the three months ended March 31, 2024, as estimates for economic growth continued to be adjusted upward, albeit slightly. In addition, the unemployment rate, while higher than at the end of 2023, continued to demonstrate an economy that is stronger than many expected. The result of stronger economic data has been a ratcheting down of expectations regarding Federal Reserve interest rate cuts. While a few months ago, the market anticipated six rates cuts in 2024, the market is now pricing in fewer than two, according to Bloomberg. The market’s ability to rally in the face of higher 10-year rates and fewer short-term rate cuts suggests that a “soft landing” could be expected. The prospect of lower short-term rates while the economy continues to grow has likely fueled the recent rally. While investors had at one point anticipated more rate cuts in the near term, that was likely predicated on the fear of an economic recession.
Current report
Total revenue comprises investment advisory fees and shareholder service fees. Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, total revenue increased by 17.3%, from $5.9 million to $6.9 million, investment advisory fees increased by 18.4%, from $5.4 million to $6.4 million, and shareholder service fees increased by 4.8%, from $0.48 million to $0.50 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, total revenue increased by 8.5% from $12.1 million to $13.1 million, investment advisory fees increased by 9.1%, from $11.1 million to $12.1 million, and shareholder service fees increased by 1.1%, from $0.97 million to $0.98 million.
Current report
Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, total operating expenses increased by 9.9%, from $8.9 million to $9.7 million. As a percentage of total revenue, total operating expenses increased 0.9 percentage points to 74.4%.
Current report
In both periods, the dollar value increase in compensation and benefit expense was due to an increase in incentive-based compensation.
Current report
Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, general and administrative expense increased by 12.1%, from $2.8 million to $3.2 million. As a percentage of total revenue, general and administrative expense increased 0.8 percentage points to 24.4%.
Current report
Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, fund distribution and other expense increased by 52.3%, from $0.1 million to $0.2 million. As a percentage of total revenue, fund distribution and other expense increased 0.7 percentage points to 2.9%. The increase in fund distribution and other expense was primarily due to increased average daily net assets of the Hennessy Funds. Additionally, there was an increase in operating expenses relating to the Hennessy Stance ESG ETF, which had greater average daily net assets resulting from the purchase of assets related to the CCM Core Impact Fund in the current period.
Current report
Sub-Advisory Fees Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, sub-advisory fees expense increased by 12.5%, from $0.9 million to $1.0 million. As a percentage of total revenue, sub-advisory fees expense decreased 0.6 percentage points to 15.1%.
Current report
Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, sub-advisory fees expense increased by 3.1%, from $1.9 million to $2.0 million. As a percentage of total revenue, sub-advisory fees expense decreased 0.7 percentage points to 15.0%.
Current report
In both periods, the dollar value increase in sub-advisory fees expense was due to increased average daily net assets of the sub‑advised Hennessy Funds, the expense associated with new sub-advisory relationships relating to the Hennessy Stance ESG ETF that became effective on December 22, 2022, and the increase in assets of the Hennessy Stance ESG ETF as a result of the purchase of assets related to the management of the CCM Funds and subsequent reorganization of such assets into the Hennessy Stance ESG ETF.
Current report
Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, depreciation expense increased by 20.0%, from $0.11 million to $0.13 million. As a percentage of total revenue, depreciation expense remained the same at 0.9%.
Current report
Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, income tax expense increased by 40.2%, from $0.4 million to $0.6 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, income tax expense increased by 27.5%, from $0.8 million to $1.0 million.
Current report
In both periods, the increase in income tax expense was due to increased net operating income, as well as a higher effective income tax rate in the current period due to a greater exposure to state income tax liability based on the location of our fund shareholders.
Removed paragraphs (6)
Previous report
On a total return basis, the Dow Jones Industrial Average was up 13.09% for the three months ended December 31, 2023. During the most recent quarter, equity prices advanced as investors reacted positively to encouraging signs that inflation is moderating. While the rate of inflation continues to be above the Federal Reserve’s stated 2% target, the market increasingly seems to believe that the potential for slowing economic growth could bring inflation close to the Federal Reserve's stated goal. Notwithstanding this past quarter’s anemic revenue and earnings growth for S&P 500 companies, earnings broadly came in higher than consensus estimates, which may speak to the idea that companies are reining in expenses, which may in turn bolster margins in 2024.
Previous report
Long-term U.S. bond yields decreased meaningfully during the three months ended December 31, 2023, as encouraging inflation data pointed to the potential that the Federal Reserve could be done raising rates for the foreseeable future. While the Federal Reserve continues to indicate that it reserves the right to raise rates, the market believes that the Federal Reserve is more likely to cut rates in 2024 rather than raise them. According to Bloomberg, the market is pricing in six rates cuts in 2024. With the labor market continuing to show signs of strength, we expect investors to focus on any weakness as a signal that inflation could moderate further. Economic growth in 2024 is expected to be 1.3% versus an expectation of 2.4% in 2023, according to Bloomberg. Any unexpected strength in either the labor market or the economy at large could pose a risk to the market’s belief that lower rates are on the horizon.
Previous report
Total revenue comprises investment advisory fees and shareholder service fees. Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, total revenue remained flat at $6.1 million, investment advisory fees remained flat at $5.7 million, and shareholder service fees decreased by 2.4%, from $0.49 million to $0.48 million.
Previous report
Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, fund distribution and other expense increased by 56.8%, from $0.10 million to $0.15 million. As a percentage of total revenue, fund distribution and other expense increased 0.9 percentage points to 2.4%.
Previous report
Sub-Advisory Fees Expense: Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, sub-advisory fees expense decreased by 6.0%, from $1.0 million to $0.9 million. As a percentage of total revenue, sub-advisory fees expense decreased 1.0 percentage point to 14.8%. The decrease in sub-advisory fees expense was due to decreased average daily net assets of the sub‑advised Hennessy Funds, partly offset by the expense associated with new sub-advisory relationships relating to the Hennessy Stance ESG ETF that became effective on December 22, 2022.
Previous report
Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, income tax expense remained flat at $0.4 million.
Reworded paragraphs (28)
Previous wording
We derive our operating revenues from investment advisory fees paid to us by the Hennessy Funds and shareholder service fees paid to us by the Hennessy Mutual Funds. These fees are calculated as a percentage of the average daily net assets of each Hennessy Fund. The percentage amount of the investment advisory fees varies by fund. The percentage amount of the shareholder service fees is consistent across all Hennessy Mutual Funds, but shareholder service fees are charged on Investor Class shares only. The dollar amount of the fees we receive fluctuates with changes in the average net asset value of each Hennessy Fund, which are affected by each fund’s investment performance, purchases and redemptions of shares, general market conditions, and the success of our marketing, sales, and public relations efforts.
Current wording
We derive our operating revenues from investment advisory fees paid to us by the Hennessy Funds and shareholder service fees paid to us by the Hennessy Mutual Funds. These fees are calculated as a percentage of the average daily net assets of each applicable Hennessy Fund. The percentage amount of the investment advisory fees varies by fund. The percentage amount of the shareholder service fees is consistent across all Hennessy Mutual Funds, but shareholder service fees are charged on Investor Class shares only. The dollar amount of the fees we receive fluctuates with changes in the average net asset value of each Hennessy Fund, which are affected by each fund’s investment performance, purchases and redemptions of shares, general market conditions, and the success of our marketing, sales, and public relations efforts.
Previous wording
The Japanese equity market was up 8.00% in U.S. dollar terms over the three months ended December 31, 2023, as measured by the Tokyo Stock Price Index. During the period, Japanese equities traded higher as an emphasis on increasing shareholder value has taken root in Japan. Investors have applauded an increasing focus on corporate governance, capital allocation, and shareholder returns.
Current wording
The Japanese equity market was up 18.86% in U.S. dollar terms over the six months ended March 31, 2024, as measured by the Tokyo Stock Price Index. During the period, Japanese equities traded higher as investors cheered stronger corporate earnings, a weaker yen, and more shareholder friendly corporate governance.
Previous wording
For the twelve months ended December 31, 2023, all 17 Hennessy Funds generated positive returns. For the three‑year period ended December 31, 2023, 13 of the Hennessy Funds with at least three years of operating history posted positive annualized returns, with the exception of the Hennessy Japan Fund, the Hennessy Japan Small Cap Fund, and the Hennessy Large Cap Financial Fund. Over the longer term, all Hennessy Funds with at least ten years of operating history posted positive returns in each of the five-year and ten-year periods ended December 31, 2023.
Current wording
For the twelve months ended March 31, 2024, all 17 Hennessy Funds generated positive total returns. For the three‑year period ended March 31, 2024, nearly all of the 17 Hennessy Funds posted positive annualized total returns, with the exceptions of the Hennessy Japan Small Cap Fund, the Hennessy Small Cap Financial Fund, and the Hennessy Large Cap Financial Fund. Over the longer term, all of the Hennessy Funds with at least five or ten years of operating history posted positive returns in each of the five- and ten-year periods ended March 31, 2024.
Previous wording
We provide service to over 147,500 fund accounts nationwide, including accounts held by investors who employ financial advisors to assist them with investing as well as accounts held by retail investors who invest directly with us. We serve approximately 11,400 financial advisors who utilize the Hennessy Funds on behalf of their clients, including approximately 300 who purchased one of our Funds for the first time during the most recent quarter. Approximately 17% of such advisors own two or more Hennessy Funds, and over 400 advisors hold a position of over $500,000. While numbers have declined in recent years, we continue to focus significant efforts on financial advisors who own two or more Hennessy Funds or hold a position of over $500,000 in an effort to build and maintain brand loyalty among our top tier of advisors.
Current wording
We provide service to over 170,000 fund accounts nationwide, including accounts held by investors who employ financial advisors to assist them with investing as well as accounts held by retail investors who invest directly with us. We serve approximately 11,000 financial advisors who utilize the Hennessy Funds on behalf of their clients, including nearly 400 who purchased one of our Funds for the first time during the most recent quarter. Approximately 17% of such advisors own two or more Hennessy Funds, and nearly 500 advisors hold a position of over $500,000. While numbers have declined in recent years, we continue to focus significant efforts on building and maintaining brand loyalty among our top tier of advisors.
Previous wording
Total assets under management as of December 31, 2023, was $3.3 billion, an increase of $0.3 billion, or 9.0%, compared to December 31, 2022. The increase in total assets was attributable to market appreciation and the purchase of the assets related to the CCM Small/Mid-Cap Impact Value Fund, partly offset by net outflows of the Hennessy Funds.
Current wording
Total assets under management as of March 31, 2024, was $3.9 billion, an increase of $1.0 billion, or 35.5%, compared to March 31, 2023. The increase in total assets was attributable to market appreciation, net inflows into the Hennessy Funds, and the purchase of the assets related to the CCM Funds.
Previous wording
The principal asset on our balance sheet, the management contract asset, represents the capitalized costs incurred in connection with the purchase of the assets related to the management of investment funds. As of December 31, 2023, this asset had a net balance of $81.5 million, compared to $81.3 million as of September 30, 2023. The increase is related to costs associated with the CCM Transaction Agreement.
Current wording
The principal asset on our balance sheet, the management contract asset, represents the capitalized costs incurred in connection with the purchase of the assets related to the management of investment funds. As of March 31, 2024, this asset had a net balance of $82.3 million, compared to $81.3 million as of September 30, 2023. The increase was due to the purchase of assets related to the management of the CCM Funds.
Previous wording
The 2026 Notes are the principal liability on our balance sheet at $39.2 million, net of issuance costs.
Current wording
The 2026 Notes are the principal liability on our balance sheet at $39.3 million, net of issuance costs.
Previous wording
The decrease in shareholder service fees was due to a decrease in the average daily net assets held in Investor Class shares of the Hennessy Mutual Funds. Assets held in Investor Class shares of the Hennessy Mutual Funds are subject to a shareholder service fee, whereas assets held in Institutional Class shares of the Hennessy Mutual Funds are not subject to a shareholder service fee.
Current wording
In both periods, the increase in investment advisory fees was due mainly to increased average daily net assets of the Hennessy Funds, and the increase in shareholder service fees was due to an increase in the average daily net assets held in Investor Class shares of the Hennessy Mutual Funds. Assets held in Investor Class shares of the Hennessy Mutual Funds are subject to a shareholder service fee, whereas assets held in Institutional Class shares of the Hennessy Mutual Funds are not subject to a shareholder service fee.
Previous wording
We collect investment advisory fees from each of the Hennessy Funds at differing annual rates. These annual rates range between 0.40% and 1.25% of average daily net assets. Average daily net assets of the Hennessy Funds for both the three months ended December 31, 2023 and 2022, was unchanged at $3.0 billion. The Hennessy Fund with the largest average daily net assets for the three months ended December 31, 2023, was the Hennessy Cornerstone Mid Cap 30 Fund, with $0.64 billion. We collect an investment advisory fee from the Hennessy Cornerstone Mid Cap 30 Fund at an annual rate of 0.74% of average daily net assets. The Hennessy Fund with the second largest average daily assets for the three months ended December 31, 2023, was the Hennessy Focus Fund, with $0.61 billion. We collect an investment advisory fee from the Hennessy Focus Fund at an annual rate of 0.90% of average daily net assets. However, we pay a sub‑advisory fee at an annual rate of 0.29% to the fund’s sub-advisor, which reduces the net operating profit contribution of the fund to our financial operations.
Current wording
We collect investment advisory fees from each of the Hennessy Funds at differing annual rates. These annual rates range between 0.40% and 1.25% of average daily net assets. Average daily net assets of the Hennessy Funds for the three months ended March 31, 2024, was $3.5 billion, which represents an increase of $0.5 billion, or 15.9%, compared to the three months ended March 31, 2023, and average daily net assets for the six months ended March 31, 2024, was $3.2 billion, which represents an increase of $0.2 billion, or 7.7%, compared to the six months ended March 31, 2023. The Hennessy Fund with the largest average daily net assets for the three and six months ended March 31, 2024, was the Hennessy Cornerstone Mid Cap 30 Fund, with $0.83 billion and $0.74 billion, respectively. We collect an investment advisory fee from the Hennessy Cornerstone Mid Cap 30 Fund at an annual rate of 0.74% of average daily net assets. The Hennessy Fund with the second largest average daily assets for the three and six months ended March 31, 2024, was the Hennessy Focus Fund, with $0.66 billion and $0.63 billion, respectively. We collect an investment advisory fee from the Hennessy Focus Fund at an annual rate of 0.90% of average daily net assets. However, we pay a sub‑advisory fee at an annual rate of 0.29% to the fund’s sub-advisor, which reduces the net operating profit contribution of the fund to our financial operations.
Previous wording
Total assets under management as of December 31, 2023, was $3.3 billion, an increase of $0.3 billion, or 9.0%, compared to December 31, 2022. The increase in total assets was attributable to market appreciation and the purchase of the assets related to the CCM Small/Mid Cap Impact Value Fund, partly offset by net outflows of the Hennessy Funds.
Current wording
Total assets under management as of March 31, 2024, was $3.9 billion, an increase of $1.0 billion, or 35.5%, compared to March 31, 2023. The increase in total assets was attributable to market appreciation, net inflows into the Hennessy Funds, and the purchase of the assets related to the CCM Funds.
Previous wording
Redemptions as a percentage of assets under management decreased from an average of 3.4% per month during the three months ended December 31, 2022, to an average of 2.8% per month during the three months ended December 31, 2023.
Current wording
Redemptions as a percentage of assets under management decreased from an average of 3.0% per month during the three months ended March 31, 2023, to an average of 2.2% per month during the three months ended March 31, 2024. Redemptions as a percentage of assets under management decreased from an average of 3.2% per month during the six months ended March 31, 2023, to an average of 2.5% per month during the six months ended March 31, 2024.
Previous wording
Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, total operating expenses increased by 3.9%, from $4.5 million to $4.7 million. As a percentage of total revenue, total operating expenses increased 2.9 percentage points to 76.8%.
Current wording
Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, total operating expenses increased by 16.1%, from $4.3 million to $5.0 million. As a percentage of total revenue, total operating expenses decreased 0.8 percentage points to 72.3%.
Previous wording
The increase in operating expenses was due to increases in all expense categories other than sub-advisory fees, which decreased, and compensation and benefits, which remained flat.
Current wording
In both periods, the dollar value increase in operating expense was due to increases in all expense categories.
Previous wording
Compensation and Benefits Expense: Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, compensation and benefits expense remained flat at $1.9 million. As a percentage of total revenue, compensation and benefits expense increased 0.2 percentage points to 30.4%.
Current wording
Compensation and Benefits Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, compensation and benefits expense increased by 16.7%, from $1.9 million to $2.3 million. As a percentage of total revenue, compensation and benefits expense decreased 0.1 percentage points to 32.5%.
Previous wording
General and Administrative Expense: Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, general and administrative expense increased by 9.9%, from $1.6 million to $1.7 million. As a percentage of total revenue, general and administrative expense increased 2.6 percentage points to 28.1%.
Current wording
General and Administrative Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, general and administrative expense increased by 14.7%, from $1.3 million to $1.5 million. As a percentage of total revenue, general and administrative expense decreased 0.5 percentage points to 21.1%.
Previous wording
The increase in general and administrative expense was primarily due to increased professional services expense.
Current wording
In both periods, the increase in general and administrative expense was primarily due to increased commission expense on sales of our investment products.
Previous wording
The increase in fund distribution and other expense was primarily due to a full period of fees incurred by us for the operations of the Hennessy Stance ESG ETF in the current period. We began advising the Hennessy Stance ESG ETF on December 22, 2022, and therefore only a partial period of expenses related to its operations were incurred in the prior comparable period.
Current wording
Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, fund distribution and other expense increased by 54.2%, from $0.2 million to $0.4 million. As a percentage of total revenue, fund distribution and other expense increased 0.8 percentage points to 2.7%. The increase in fund distribution and other expense was primarily due to the additional expenses relating to the Hennessy Stance ESG ETF resulting from the purchase of assets related to the CCM Funds in the current period, and also due to increased average daily net assets of the Hennessy Funds. The increase can also be attributed to a full period of fees incurred by us for the operations of the Hennessy Stance ESG ETF in the current period. We began advising the Hennessy Stance ESG ETF on December 22, 2022, and therefore only a partial period of expenses related to its operations were incurred in the prior comparable period.
Previous wording
Depreciation Expense: Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, depreciation expense increased by 40.8%, from $0.05 million to $0.07 million. As a percentage of total revenue, depreciation expense increased 0.2 percentage points to 1.1%.
Current wording
Depreciation Expense: Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, depreciation expense increased by 1.8%, from $0.056 million to $0.057 million. As a percentage of total revenue, depreciation expense decreased 0.3 percentage points to 0.7%.
Previous wording
The increase in depreciation expense resulted from new fixed asset purchases, partially offset by the write-off of fully depreciated assets.
Current wording
In both periods, the dollar value increase in depreciation expense resulted from new fixed asset purchases, partially offset by the write-off of fully depreciated assets.
Previous wording
Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, interest expense increased from $0.56 million to $0.57 million. The increase in interest expense was due to the manner in which interest expense is calculated under accounting principles generally accepted in the United States. The issuance costs related to the 2026 Notes that have been capitalized are amortized over time and therefore increase the carrying amount of the 2026 Notes. As the carrying amount of the 2026 Notes increases, the interest expense on the 2026 Notes for financial statement purposes also increases.
Current wording
In both periods, the increase in interest expense was due to the manner in which interest expense is calculated under accounting principles generally accepted in the United States. The issuance costs related to the 2026 Notes that have been capitalized are amortized over time and therefore increase the carrying amount of the 2026 Notes. As the carrying amount of the 2026 Notes increases, the interest expense on the 2026 Notes for financial statement purposes also increases.
Previous wording
Interest income consists of interest earned on cash and cash equivalents. Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, interest income increased from $0.47 million to $0.79 million.
Current wording
Interest income consists of interest earned on cash and cash equivalents. Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, interest income increased from $0.58 million to $0.77 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, interest income increased from $1.0 million to $1.6 million.
Previous wording
The increase in interest income resulted from increased interest rates, as well as an increased cash balance.
Current wording
In both periods, the increase in interest income resulted from increased interest rates.
Previous wording
Comparing the three months ended December 31, 2022, to the three months ended December 31, 2023, net income increased by 7.2%, from $1.1 million to $1.2 million.
Current wording
Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, net income increased by 28.9%, from $1.2 million to $1.5 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, net income increased by 18.4%, from $2.3 million to $2.7 million.
Previous wording
The increase in net income was primarily due to increased interest income in the current period.
Current wording
In both periods, the increase in net income was primarily due to increased revenue, and additionally due to increased interest income in the current period.
Previous wording
Our total assets under management as of December 31, 2023, was $3.3 billion, an increase of $0.3 billion, or 9.0%, compared to December 31, 2022. The primary sources of our revenue, liquidity, and cash flow are our investment advisory fees and shareholder service fees, which are based on and generated by our average assets under management. Our average assets under management for both the three months ended December 31, 2023 and 2022, was unchanged at $3.0 billion. As of December 31, 2023, we had cash and cash equivalents of $59.6 million.
Current wording
Our total assets under management as of March 31, 2024, was $3.9 billion, an increase of $1.0 billion, or 35.5%, compared to March 31, 2023. The primary sources of our revenue, liquidity, and cash flow are our investment advisory fees and shareholder service fees, which are based on and generated by our average assets under management. Our average assets under management for the six months ended March 31, 2024, was $3.2 billion, an increase of $0.2 billion, or 7.7%, compared to the six months ended March 31, 2023. As of March 31, 2024, we had cash and cash equivalents of $59.6 million.
Previous wording
The increase in cash provided by operating activities of $0.4 million was primarily due to timing of cash payments and also due to increased net income in the current period.
Current wording
The increase in cash provided by operating activities of $0.3 million was primarily due to timing of cash payments and also due to increased net income in the current period.
Previous wording
The decrease in cash used in investing activities of $0.1 million was due to the costs associated with the purchase of assets related to the management of an ETF that was reorganized into the Hennessy Stance ESG ETF in the prior comparable period.
Current wording
The increase in cash used in investing activities of $0.6 million was due to the costs associated with the purchase of assets related to the management of the CCM Funds in the current period.
Previous wording
The increase in cash used in financing activities of $0.01 million was due the increased dollar amount of dividends paid as a result of having more shares outstanding in the current period than in the prior comparable period.
Current wording
The increase in cash used in financing activities of $0.02 million was due to the increased dollar amount of dividends paid as a result of having more shares outstanding in the current period than in the prior comparable period.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, compensation and benefits expense increased by 8.7%, from $3.8 million to $4.1 million. As a percentage of total revenue, compensation and benefits expense remained flat at 31.4%.
Current report — wording carried from elsewhere
Comparing the three months ended March 31, 2023, to the three months ended March 31, 2024, interest expense increased from $0.56 million to $0.57 million. Comparing the six months ended March 31, 2023, to the six months ended March 31, 2024, interest expense increased from $1.13 million to $1.14 million.