HNNAZMEDIUM SIGNALOPPORTUNITY10-K

HNNAZ reported strong operational performance with 48% growth in operating income and cash flow, while executing a strategic expansion through ETF acquisitions and maintaining a robust balance sheet.

The company demonstrated significant operational leverage with operating income growing faster than the underlying AUM growth, suggesting improved fee margins or cost efficiency. The strategic acquisition of STF ETFs represents a meaningful expansion opportunity, though it requires shareholder approval and successful integration.

Comparing 2025-12-03 vs 2024-12-11View on EDGAR →
FINANCIAL ANALYSIS

The financial picture shows robust operational improvement with operating income and cash flow both surging nearly 50%, while net income grew a solid 40%. The balance sheet strengthened considerably with cash increasing 13% to $72.4M, debt declining 14%, and working capital improving despite higher current liabilities. Overall, this reflects a company generating strong cash flows, deleveraging, and building financial flexibility to fund growth initiatives like the ETF acquisitions.

FINANCIAL STATEMENT CHANGES
Operating Cash Flow
Cash Flow
+48.7%
$9.3M→$13.8M

Operating cash flow surged 48.7% — exceptional cash generation, highest quality earnings signal.

Operating Income
P&L
+48.2%
$8.9M→$13.1M

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Share Buybacks
Cash Flow
-42.9%
$4.8M→$2.7M

Buyback activity reduced 42.9% — capital being redeployed elsewhere or cash conservation underway.

Capital Expenditure
Cash Flow
+40.6%
$313K→$440K

Capital expenditure jumped 40.6% — major investment cycle underway; assess returns on deployment.

Net Income
P&L
+40.3%
$7.1M→$10.0M

Net income grew 40.3% — bottom-line growth signals improving overall business health.

Accounts Receivable
Balance Sheet
-26.6%
$2.8M→$2.1M

Receivables declined — improved collection efficiency or conservative revenue recognition.

Current Liabilities
Balance Sheet
+21.4%
$5.0M→$6.0M

Current liabilities rose 21.4% — increased short-term obligations, watch current ratio.

Total Debt
Balance Sheet
-14%
$30.2M→$26.0M

Debt reduced 14% — deleveraging strengthens balance sheet and reduces financial risk.

Cash & Equivalents
Balance Sheet
+13.3%
$63.9M→$72.4M

Cash grew 13.3% — improving liquidity position supports investment and shareholder returns.

Current Assets
Balance Sheet
+12.1%
$68.3M→$76.5M

Current assets grew 12.1% — improving short-term liquidity or inventory/receivables build.

LANGUAGE CHANGES
NEW — 2025-12-03
PRIOR — 2024-12-11
ADDED
Our average assets under management for fiscal year 2025 was $4.5 billion, and our total assets under management as of the end of fiscal year 2025 was $4.2 billion.
2015 In September, we completed a self-tender offer, under which we repurchased 1,500,000 shares of our common stock at $16.67 per share.
2025 In March, we signed a definitive agreement with STF Management, LP to purchase the assets related to the management of the STF Tactical Growth Income ETF (Nasdaq: TUGN) and the STF Tactical Growth ETF (Nasdaq: TUG) (together, the STF ETFs ).
Upon completion of the transaction, which is subject to the approval of the shareholders of each STF ETF, the assets of the STF Tactical Growth Income ETF and the STF Tactical Growth ETF will be reorganized to become newly created series of the Hennessy Funds called the Hennessy Tactical Growth and Income ETF and the Hennessy Tactical Growth ETF, respectively.
The Hennessy Equity and Income Fund seeks long-term capital growth and current income.
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REMOVED
Our average assets under management for fiscal year 2024 was $3.7 billion, and our total assets under management as of the end of fiscal year 2024 was $4.6 billion.
2016 In September, we purchased the assets related to the management of two mutual funds previously managed by Westport Advisers, LLC and reorganized the assets of such funds into the Hennessy Cornerstone Mid Cap 30 Fund.
The Hennessy Equity and Income Fund seeks income and long-term capital appreciation with reduced volatility of returns by investing up to 70% of its assets in common stock, preferred stock, and equity like instruments and its remaining assets in asset backed and mortgage backed securities and debt instruments, including high yield bonds.
The Hennessy Stance ESG ETF seeks long term growth of capital by combining environmental, social, and governance ( ESG ) and machine learning/artificial intelligence ( ML/AI ) in an ETF structure.
(1) The Russell 2000 Index comprises the smallest 2,000 companies in the Russell 3000 Index based on market capitalization and current index membership, representing approximately 7% of the total market capitalization of the Russell 3000 Index.
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