Hennessy Advisors (HNNA) 10-Q 11 Feb 21 2021 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Dec. 31, 2020	Feb. 08, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Trading Symbol	HNNA
Entity Registrant Name	HENNESSY ADVISORS INC
Entity Central Index Key	0001145255
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Address, State or Province	CA
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common stock
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		7,360,342
Document Transition Report	false
Document Quarterly Report	true
Entity Address, Address Line One	7250 Redwood Boulevard, Suite 200
Entity Address, City or Town	Novato
Entity File Number	001-36423
Entity Tax Identification Number	68-0176227
City Area Code	415
Local Phone Number	899-1555
Entity Address, Postal Zip Code	94945

Balance Sheets

Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Current assets
Cash and cash equivalents	$ 9,954	$ 9,955
Investments in marketable securities, at fair value	9	9
Investment fee income receivable	2,688	2,403
Prepaid expenses	427	637
Other accounts receivable	324	378
Total current assets	13,402	13,382
Property and equipment, net of accumulated depreciation of $1,680 and $1,618, respectively	298	294
Operating lease right-of-use asset	183	276
Management contracts	80,643	80,643
Other assets	192	191
Total assets	94,718	94,786
Current liabilities
Accrued liabilities and accounts payable	2,080	3,813
Operating lease liability	220	330
Income taxes payable	1,272	949
Total current liabilities	3,572	5,092
Deferred income tax liability, net	11,829	11,516
Total liabilities	15,401	16,608
Commitments and contingencies (Note 8)
Stockholders' equity
Common stock, no par value, 22,500,000 shares authorized; 7,359,639 shares issued and outstanding as of December 31, 2020, and 7,356,822 as of September 30, 2020	19,082	18,705
Retained earnings	60,235	59,473
Total stockholders' equity	79,317	78,178
Total liabilities and stockholders' equity	$ 94,718	$ 94,786

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Statement of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 1,680	$ 1,618
Common stock, no par value	$ 0	$ 0
Common stock, shares authorized	22,500,000	22,500,000
Common stock, shares issued	7,359,639	7,356,822
Common stock, shares outstanding	7,359,639	7,356,822

Statements of Income

Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2020	Jun. 30, 2019
Revenue
Total revenue	$ 7,789	$ 10,244
Operating expenses
Compensation and benefits	2,104	2,513
General and administrative	1,308	1,492
Mutual fund distribution	121	139
Sub-advisory fees	1,785	2,316
Depreciation	62	53
Total operating expenses	5,380	6,513
Net operating income	2,409	3,731
Interest expense		187
Other income	(1)	(56)
Income before income tax expense	2,410	3,600
Income tax expense	637	972
Net income	$ 1,773	$ 2,628
Earnings per share
Basic	$ 0.24	$ 0.35
Diluted	$ 0.24	$ 0.35
Weighted average shares outstanding
Basic	7,357,883	7,501,147
Diluted	7,367,128	7,537,716
Cash dividends declared per share	$ 0.14	$ 0.14
Investment Advice [Member]
Revenue
Total revenue	$ 7,208	$ 9,449
Shareholder Service [Member]
Revenue
Total revenue	$ 581	$ 795

Statements of Changes in Stockh

Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Retained Earnings [Member]
Beginning balance at Sep. 30, 2019	$ 75,528	$ 17,673	$ 57,855
Beginning balance, Shares at Sep. 30, 2019		7,527,040
Net income	2,628		2,628
Dividends declared	(1,032)		(1,032)
Shares issued for auto-investments pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan	20	$ 20
Shares issued for auto-investments pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan, Shares		1,702
Shares issued for dividend reinvestment pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan	18	$ 18
Shares issued for dividend reinvestment pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan, Shares		1,596
Stock-based compensation	447	$ 447
Shares repurchased pursuant to stock buyback program	(685)	$ (128)	(557)
Shares repurchased pursuant to stock buyback program, Shares		(64,787)
Ending balance at Dec. 31, 2019	76,924	$ 18,030	58,894
Ending balance, shares at Dec. 31, 2019		7,465,551
Beginning balance at Sep. 30, 2020	78,178	$ 18,705	59,473
Beginning balance, Shares at Sep. 30, 2020		7,356,822
Net income	1,773		1,773
Dividends declared	(1,011)		(1,011)
Shares issued for auto-investments pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan	5	$ 6
Shares issued for auto-investments pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan, Shares		652
Shares issued for dividend reinvestment pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan	20	$ 19
Shares issued for dividend reinvestment pursuant to the 2018 Dividend Reinvestment and Stock Purchase Plan, Shares		2,165
Stock-based compensation	352	$ 352
Ending balance at Dec. 31, 2020	$ 79,317	$ 19,082	$ 60,235
Ending balance, shares at Dec. 31, 2020		7,359,639

Statements of Cash Flows

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities
Net income	$ 1,773	$ 2,628
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	62	53
Change in right-of-use asset and operating lease liability	(17)	(14)
Deferred income taxes	313	403
Stock-based compensation	352	447
Interest expense associated with debt issuance cost	0	13
Change in operating assets and liabilities
Investment fee income receivable	(285)	(193)
Prepaid expenses	210	105
Other accounts receivable	54	(57)
Other assets	(1)	0
Accrued liabilities and accounts payable	(1,733)	(2,796)
Income taxes payable	323	696
Net cash provided by operating activities	1,051	1,285
Cash flows from investing activities
Purchases of property and equipment	(66)	(34)
Payments related to management contracts	0	(710)
Net cash used in investing activities	(66)	(744)
Cash flows from financing activities
Principal payments on bank loan	0	(1,094)
Shares repurchased pursuant to stock buyback program	0	(685)
Proceeds from shares issued pursuant to the 2018 Dividend Reinvestment and Stock Repurchase Plan	6	38
Dividend payments	(992)	(1,032)
Net cash used in financing activities	(986)	(2,773)
Net decrease in cash and cash equivalents	(1)	(2,232)
Cash and cash equivalents at the beginning of the period	9,955	24,687
Cash and cash equivalents at the end of the period	9,954	22,455
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 0	$ 182

Basis of Financial Statement Pr

Basis of Financial Statement Presentation	3 Months Ended
	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Financial Statement Presentation	(1) Basis of Financial Statement Presentation The accompanying condensed balance sheet as of September 30, 2020, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of and for the three months ended December 31, 2020, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and include the accounts of Hennessy Advisors, Inc. (the “Company,” “we,” “us,” or “our”). Certain information and footnote disclosures in these unaudited interim condensed financial statements, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission for Quarterly Reports on Form 10-Q. Form 10-K The preparation of financial statements requires management to make estimates and assumptions. Making estimates requires management to exercise significant judgment. Accordingly, the actual results could differ substantially from those estimates. The Company’s operating activities consist primarily of providing investment advisory services to 16 open-end The Company’s operating revenues consist of contractual investment advisory and shareholder service fees paid to it by the Hennessy Funds. The Company earns investment advisory fees from each Hennessy Fund by, among other things: • acting as portfolio manager for the fund or overseeing the sub-advisor acting as portfolio manager for the fund, which includes managing the composition • performing a daily reconciliation of portfolio positions and cash for the fund; • monitoring the liquidity of the fund; • monitoring the fund’s compliance with its investment objectives and restrictions and federal securities laws; • monitoring compliance with federal securities laws, maintaining a compliance program (including a code of ethics), conducting ongoing reviews of the compliance programs of the fund’s service providers (including any sub-advisor), conducting on site visits to the fund’s service providers (including any sub-advisor) as feasible, monitoring incidents of abusive trading practices, reviewing fund expense accruals, payments, and fixed expense ratios, evaluating insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, managing regulatory examination compliance and responses, conducting employee compliance training, reviewing reports provided by service providers, and maintaining books and records; • if applicable, overseeing the selection and continued employment of the fund’s sub-advisor, reviewing the fund’s investment performance, and monitoring the sub-advisor’s adherence to the fund’s investment objectives, policies, and restrictions; • overseeing service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the fund; • maintaining in-house marketing and distribution departments on behalf of the fund; • preparing or directing the preparation of all regulatory filings for the fund, including writing and annually updating the fund’s prospectus and related documents; • preparing or reviewing a written summary of the fund’s performance during the most recent 12-month period for each annual report of the fund; • monitoring and overseeing the accessibility of the fund on third-party platforms; • paying the incentive compensation of the fund’s compliance officers and employing other staff such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives; • providing a quarterly compliance certification to the Board of Trustees of Hennessy Funds Trust (the “Funds’ Board of Trustees”); and • preparing or reviewing materials for the Funds’ Board of Trustees, presenting to or leading discussions with the Funds’ Board of Trustees, preparing or reviewing all meeting minutes, and arranging for training and education of the Funds’ Board of Trustees. The Company earns shareholder service fees from Investor Class shares of the Hennessy Funds by, among other things, maintaining a toll-free The Company waived a portion of its fees with respect to the Hennessy Cornerstone Large Growth Fund and the Hennessy BP Energy Fund through the expiration of each fund’s expense limitation agreement on November 30, 2019, and October 25, 2020, respectively. The Company continues to waive a portion of its fees with respect to the Hennessy BP Midstream Fund and the Hennessy Technology Fund to comply with contractual expense ratio limitations. The fee waivers are calculated daily by the Hennessy Funds’ accountants at U.S. Bank Global Fund Services, reviewed by management, and then charged to expense monthly as offsets to the Company’s revenues. Each waived fee is then deducted from investment advisory fee income and reduces the aggregate amount of advisory fees the Company receives from such fund in the subsequent month. To date, the Company has only waived fees based on contractual obligations, but the Company has the ability to waive fees at its discretion. Any decision to waive fees would apply only on a going-forward The Company’s contractual agreements for investment advisory and shareholder services prove that a contract exists with fixed and determinable fees, and the services are rendered daily. The collectability is deemed probable because the fees are received from the Hennessy Funds in the month subsequent to the month in which the services are provided. The Company is subject to risks and uncertainties as a result of the COVID-19 COVID-19 COVID-19

Management Contracts Purchased

Management Contracts Purchased	3 Months Ended
	Dec. 31, 2020
Text Block [Abstract]
Management Contracts Purchased	(2) Management Contracts Purchased Throughout its history, the Company has completed 10 purchases of the assets related to the management of 30 different mutual funds, some of which were reorganized into already existing Hennessy Funds. In accordance with Financial Accounting Standards Board (“FASB”) guidance, the Company periodically reviews the carrying value of its management contracts asset to determine if any impairment has occurred. The fair value of the management contracts asset was estimated as of September 30, 2020, by applying the income approach and is based on management estimates and assumptions, including third-party valuations that utilize appropriate valuation techniques. It was determined there was impairment as of such date. As of December 31, 2020, management performed a qualitative analysis and determined it was more likely than not that there continued to be no impairment. Under Accounting Standards Codification 350 — Intangibles – Goodwill and Other, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. The Company reviews the useful life of the management contracts each reporting period to determine if they continue to have an indefinite useful life. The Company completed its most recent asset purchase on October 26, 2018, when it purchased the assets related to the management of the BP Capital TwinLine Energy Fund and the BP Capital TwinLine MLP Fund (the “BP Funds”),

Investment Advisory Agreements

Investment Advisory Agreements	3 Months Ended
	Dec. 31, 2020
Text Block [Abstract]
Investment Advisory Agreements	(3) Investment Advisory Agreements The Company has investment advisory agreements with Hennessy Funds Trust under which it provides investment advisory services to all classes of the 16 Hennessy Funds. The investment advisory agreements must be renewed annually (except in limited circumstances) by (a) the Funds’ Board of Trustees or the vote of a majority of the outstanding shares of the applicable Hennessy Fund and (b) the vote of a majority of the trustees of Hennessy Funds Trust who are not interested persons of the Hennessy Funds. If an investment advisory agreement is not renewed, it terminates automatically. There are two additional circumstances in which an investment advisory agreement terminates. First, an investment advisory agreement automatically terminates if the Company assigns them to another advisor (assignment includes “indirect assignment,” which is the transfer of the Company’s common stock in sufficient quantities deemed to constitute a controlling block). Second, an investment advisory agreement may be terminated prior to its expiration upon 60 days’ written notice by either the applicable Hennessy Fund or the Company. As provided in each investment advisory agreement, the Company receives investment advisory fees monthly based on a percentage of the applicable fund’s average daily net asset value. The Company has entered into sub-advisory sub-advisory sub-advisor sub-advisors sub-advisory In exchange for the sub-advisory sub-advisory sub-advisors Sub-advisory sub-advised

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Fair Value Measurements	(4) Fair Value Measurements The Company applies Accounting Standards Codification 820 — Fair Value Measurement for all financial assets and liabilities, which establishes a framework for measuring fair value and expands disclosures about fair value measurements. The standard defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” It also establishes a fair value hierarchy consisting of the following three levels that prioritize the inputs to the valuation techniques used to measure fair value: • Level 1 – Unadjusted, quoted prices in active markets for identical assets or liabilities that an entity has the ability to access at the measurement date; • Level 2 – Other significant observable inputs (including, but not limited to, quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and model-derived • Level 3 – Significant unobservable inputs (including the entity’s own assumptions about what market participants would use to price the asset or liability based on the best available information) when observable inputs are not available. Based on the definitions, the following tables represent the Company’s assets categorized in the Level 1 to Level 3 hierarchies: December 31, 2020 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 6,054 $ — $ — $ 6,054 Mutual fund investments 9 — — 9 Total $ 6,063 $ — $ — $ 6,063 Amounts included in Cash and cash equivalents $ 6,054 $ — $ — $ 6,054 Investments in marketable securities 9 — — 9 Total $ 6,063 $ — $ — $ 6,063 September 30, 2020 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 6,053 $ — $ — $ 6,053 Mutual fund investments 9 — — 9 Total $ 6,062 $ — $ — $ 6,062 Amounts included in Cash and cash equivalents $ 6,053 $ — $ — $ 6,053 Investments in marketable securities 9 — — 9 Total $ 6,062 $ — $ — $ 6,062 There were no transfers between levels during the three months ended December 31, 2020, or the year ended September 30, 2020.

Leases

Leases	3 Months Ended
	Dec. 31, 2020
Leases [Abstract]
Leases	(5) Leases The Company determines if an arrangement is an operating lease at inception. Operating leases are included in operating lease right-of-use long-term long-term Right-of-use Operating lease right-of-use assets and liabilities operating lease right-of-use assets or operating lease The Company’s most significant leases are real estate leases of office facilities. The Company leases office space under non-cancelable month-to-month right-of-use December 31, 2020 (In thousands, Operating lease right-of-use $ 183 Operating lease liability $ 220 Weighted average remaining lease term years 0.5 Weighted average discount rate 2.28 % For the three months ended December 31, 2020, the Company’s lease payments related to its operating lease right-of-use The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet are as follows: December 31, 2020 (In thousands) Remainder of fiscal year 2021 undiscounted cash flows $ 227 Present value discount (7 ) Total operating lease liabilities $ 220

Accrued Liabilities and Account

Accrued Liabilities and Accounts Payable	3 Months Ended
	Dec. 31, 2020
Accrued Liabilities, Current [Abstract]
Accrued Liabilities and Accounts Payable	(6) Accrued Liabilities and Accounts Payable Details relating to accrued expenses reflected on the Company’s balance sheet are as follows: December 31, 2020 2019 (In thousands) Accrued bonus liabilities $ 901 $ 1,388 Accrued sub-advisor 617 793 Other accrued expenses 562 561 Total accrued liabilities and accounts payable $ 2,080 $ 2,742

Income Taxes

Income Taxes	3 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	(7) Income Taxes The Company’s effective income tax rates for the three months ended December 31, 2020 and 2019, were 26.4% and 27.0%, respectively. The effective income tax rate was lower for the three months ended December 31, 2020, due to changes in discrete items on the Company’s tax returns (mainly a reduction in disallowed executive compensation under Section 162(m) of the Internal Revenue Code). The Company is subject to income tax in the U.S. federal jurisdiction and multiple state jurisdictions. Following is a list of jurisdictions that the Company has identified as its major tax jurisdictions with the tax years that remain open and subject to examination by the appropriate governmental agencies marked: Tax Jurisdiction 2021 2020 2019 2018 2017 Federal United States X X X X X State California X X X X X Colorado X X X Connecticut X X X X X District of Columbia X X X X X Florida X X X X X Georgia X X X X X Illinois X X X X X Indiana X X Iowa X X X X Louisiana X X X Maryland X X X X X Massachusetts X X X X X Michigan X X X X X Minnesota X X X X X New Hampshire X X X X X New Jersey X X New York X X X X X North Carolina X X X X X Oregon X X X Pennsylvania X X X X Texas X X X X X Wisconsin X X X X X Total State Jurisdictions 22 22 19 17 16 For state tax jurisdictions with unfiled tax returns, the statutes of limitations remains open indefinitely.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	(8) Commitments and Contingencies The Company has no commitments and no significant contingencies with original terms in excess of one year other than operating leases, which are discussed in Note 5.

Equity

Equity	3 Months Ended
	Dec. 31, 2020
Federal Home Loan Banks [Abstract]
Equity	(9) Equity Amended and Restated 2013 Omnibus Incentive Plan The Company has adopted, and the Company’s shareholders have approved, the Amended and Restated 2013 Omnibus Incentive Plan (the “Omnibus Plan”). Under the Omnibus Plan, participants may be granted RSUs, each of which represents 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 recognizes stock-based straight-line A summary of RSU activity is as follows: Three Months Ended December 31, 2020 Shares Weighted Average Grant Non-vested 322,181 $ 9.76 Granted — — Vested (1) (32,267 ) (10.89 ) Forfeited — — Non-vested 289,914 $ 9.64 (1) Additional information related to RSUs is as follows: December 31, 2020 (In thousands, except years) Total expected compensation expense related to RSUs $ 16,056 Recognized compensation expense related to RSUs (13,262 ) Unrecognized compensation expense related to RSUs $ 2,794 Weighted average remaining years to expense for RSUs 2.8 Dividend Reinvestment and Stock Purchase Plan In January 2018, the Company adopted 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 2,817 and 3,298 shares of common stock during the three months ended December 31, 2020 and 2019, respectively. The maximum number of shares that may be issued under the DRSPP was 1,550,000, of which 1,526,712 shares remained available for issuance as of December 31, 2020. As discussed in Note 12, in January 2021, the Company began offering to investors an updated Dividend Reinvestment and Stock Purchase Plan that replaced the DRSPP. Stock Buyback Program In August 2010, the Company adopted a stock buyback program. The program provides that the Company may repurchase up to 1,500,000 shares of its common stock and has no expiration date. Share repurchases may be made in the open market, in privately negotiated transactions, or otherwise. A total of 596,368 shares remains available for repurchase under the stock buyback program. The Company temporarily suspended repurchases under the stock buyback program as of March 24, 2020, so the Company did not repurchase any shares of its common stock pursuant to the stock buyback program during the three months ended December 31, 2020.

Earnings per Share and Dividend

Earnings per Share and Dividends per Share	3 Months Ended
	Dec. 31, 2020
Earnings Per Share [Abstract]
Earnings per Share and Dividends per Share	(10) Earnings per Share and Dividends per Share 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, which consist of restricted stock units (“RSUs”). For the three months ended December 31, 2020 and 2019, the Company excluded 227,410 and 184,871 common stock equivalents, respectively, from the diluted earnings per share calculations because they were not dilutive. In each case, the excluded common stock equivalents consisted of non-vested The Company paid a quarterly cash dividend of $0.1375 per share on December 2, 2020, to shareholders of record as of November 12, 2020.

Recently Issued and Adopted Acc

Recently Issued and Adopted Accounting Standards	3 Months Ended
	Dec. 31, 2020
Accounting Changes and Error Corrections [Abstract]
Recently Issued and Adopted Accounting Standards	(11) Recently Issued and Adopted Accounting Standards In August 2018, the FASB issued ASU No. 2018-13, See Note 5 for additional disclosure regarding the Company’s leases.

Subsequent Events

Subsequent Events	3 Months Ended
	Dec. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	(12) Subsequent Events In January 2021, the Company began offering to investors an updated Dividend Reinvestment and Stock Purchase Plan. The maximum number of shares that may be issued under the updated plan is 1,470,000 shares, of which 1,469,603 remain available for issuance.

Basis of Financial Statement _2

Basis of Financial Statement Presentation (Policies)	3 Months Ended
	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Revenue Recognition	The accompanying condensed balance sheet as of September 30, 2020, which has been derived from audited financial statements, and the unaudited interim condensed financial statements as of and for the three months ended December 31, 2020, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and include the accounts of Hennessy Advisors, Inc. (the “Company,” “we,” “us,” or “our”). Certain information and footnote disclosures in these unaudited interim condensed financial statements, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to rules and regulations of the Securities and Exchange Commission for Quarterly Reports on Form 10-Q. Form 10-K The preparation of financial statements requires management to make estimates and assumptions. Making estimates requires management to exercise significant judgment. Accordingly, the actual results could differ substantially from those estimates. The Company’s operating activities consist primarily of providing investment advisory services to 16 open-end The Company’s operating revenues consist of contractual investment advisory and shareholder service fees paid to it by the Hennessy Funds. The Company earns investment advisory fees from each Hennessy Fund by, among other things: • acting as portfolio manager for the fund or overseeing the sub-advisor acting as portfolio manager for the fund, which includes managing the composition • performing a daily reconciliation of portfolio positions and cash for the fund; • monitoring the liquidity of the fund; • monitoring the fund’s compliance with its investment objectives and restrictions and federal securities laws; • monitoring compliance with federal securities laws, maintaining a compliance program (including a code of ethics), conducting ongoing reviews of the compliance programs of the fund’s service providers (including any sub-advisor), conducting on site visits to the fund’s service providers (including any sub-advisor) as feasible, monitoring incidents of abusive trading practices, reviewing fund expense accruals, payments, and fixed expense ratios, evaluating insurance providers for fidelity bond, D&O/E&O insurance, and cybersecurity insurance coverage, managing regulatory examination compliance and responses, conducting employee compliance training, reviewing reports provided by service providers, and maintaining books and records; • if applicable, overseeing the selection and continued employment of the fund’s sub-advisor, reviewing the fund’s investment performance, and monitoring the sub-advisor’s adherence to the fund’s investment objectives, policies, and restrictions; • overseeing service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the fund; • maintaining in-house marketing and distribution departments on behalf of the fund; • preparing or directing the preparation of all regulatory filings for the fund, including writing and annually updating the fund’s prospectus and related documents; • preparing or reviewing a written summary of the fund’s performance during the most recent 12-month period for each annual report of the fund; • monitoring and overseeing the accessibility of the fund on third-party platforms; • paying the incentive compensation of the fund’s compliance officers and employing other staff such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives; • providing a quarterly compliance certification to the Board of Trustees of Hennessy Funds Trust (the “Funds’ Board of Trustees”); and • preparing or reviewing materials for the Funds’ Board of Trustees, presenting to or leading discussions with the Funds’ Board of Trustees, preparing or reviewing all meeting minutes, and arranging for training and education of the Funds’ Board of Trustees. The Company earns shareholder service fees from Investor Class shares of the Hennessy Funds by, among other things, maintaining a toll-free The Company waived a portion of its fees with respect to the Hennessy Cornerstone Large Growth Fund and the Hennessy BP Energy Fund through the expiration of each fund’s expense limitation agreement on November 30, 2019, and October 25, 2020, respectively. The Company continues to waive a portion of its fees with respect to the Hennessy BP Midstream Fund and the Hennessy Technology Fund to comply with contractual expense ratio limitations. The fee waivers are calculated daily by the Hennessy Funds’ accountants at U.S. Bank Global Fund Services, reviewed by management, and then charged to expense monthly as offsets to the Company’s revenues. Each waived fee is then deducted from investment advisory fee income and reduces the aggregate amount of advisory fees the Company receives from such fund in the subsequent month. To date, the Company has only waived fees based on contractual obligations, but the Company has the ability to waive fees at its discretion. Any decision to waive fees would apply only on a going-forward The Company’s contractual agreements for investment advisory and shareholder services prove that a contract exists with fixed and determinable fees, and the services are rendered daily. The collectability is deemed probable because the fees are received from the Hennessy Funds in the month subsequent to the month in which the services are provided. The Company is subject to risks and uncertainties as a result of the COVID-19 COVID-19 COVID-19

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Assets Categorized on Basis of Various Levels	Based on the definitions, the following tables represent the Company’s assets categorized in the Level 1 to Level 3 hierarchies: December 31, 2020 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 6,054 $ — $ — $ 6,054 Mutual fund investments 9 — — 9 Total $ 6,063 $ — $ — $ 6,063 Amounts included in Cash and cash equivalents $ 6,054 $ — $ — $ 6,054 Investments in marketable securities 9 — — 9 Total $ 6,063 $ — $ — $ 6,063 September 30, 2020 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 6,053 $ — $ — $ 6,053 Mutual fund investments 9 — — 9 Total $ 6,062 $ — $ — $ 6,062 Amounts included in Cash and cash equivalents $ 6,053 $ — $ — $ 6,053 Investments in marketable securities 9 — — 9 Total $ 6,062 $ — $ — $ 6,062

Leases (Tables)

Leases (Tables)	3 Months Ended
	Dec. 31, 2020
Leases [Abstract]
Detailed Information About In Operating Lease Right Of Use Assets Lease Liabilities and Others	The classification of the Company’s operating lease right-of-use December 31, 2020 (In thousands, Operating lease right-of-use $ 183 Operating lease liability $ 220 Weighted average remaining lease term years 0.5 Weighted average discount rate 2.28 %
Schedule Of Operating Lease Maturities	The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet are as follows: December 31, 2020 (In thousands) Remainder of fiscal year 2021 undiscounted cash flows $ 227 Present value discount (7 ) Total operating lease liabilities $ 220

Accrued Liabilities and Accou_2

Accrued Liabilities and Accounts Payable (Table)	3 Months Ended
	Dec. 31, 2020
Accrued Liabilities, Current [Abstract]
Schedule of accrued liabilities	Details relating to accrued expenses reflected on the Company’s balance sheet are as follows: December 31, 2020 2019 (In thousands) Accrued bonus liabilities $ 901 $ 1,388 Accrued sub-advisor 617 793 Other accrued expenses 562 561 Total accrued liabilities and accounts payable $ 2,080 $ 2,742

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Summary of Federal and State Jurisdiction Tax	The Company is subject to income tax in the U.S. federal jurisdiction and multiple state jurisdictions. Following is a list of jurisdictions that the Company has identified as its major tax jurisdictions with the tax years that remain open and subject to examination by the appropriate governmental agencies marked: Tax Jurisdiction 2021 2020 2019 2018 2017 Federal United States X X X X X State California X X X X X Colorado X X X Connecticut X X X X X District of Columbia X X X X X Florida X X X X X Georgia X X X X X Illinois X X X X X Indiana X X Iowa X X X X Louisiana X X X Maryland X X X X X Massachusetts X X X X X Michigan X X X X X Minnesota X X X X X New Hampshire X X X X X New Jersey X X New York X X X X X North Carolina X X X X X Oregon X X X Pennsylvania X X X X Texas X X X X X Wisconsin X X X X X Total State Jurisdictions 22 22 19 17 16

Equity (Tables)

Equity (Tables)	3 Months Ended
	Dec. 31, 2020
Federal Home Loan Banks [Abstract]
Schedule of Non-Vested Restricted Stock Units Activity	A summary of RSU activity is as follows: Three Months Ended December 31, 2020 Shares Weighted Average Grant Non-vested 322,181 $ 9.76 Granted — — Vested (1) (32,267 ) (10.89 ) Forfeited — — Non-vested 289,914 $ 9.64 (1)
Schedule of Non-Vested Restricted Stock Units Compensation	Additional information related to RSUs is as follows: December 31, 2020 (In thousands, except years) Total expected compensation expense related to RSUs $ 16,056 Recognized compensation expense related to RSUs (13,262 ) Unrecognized compensation expense related to RSUs $ 2,794 Weighted average remaining years to expense for RSUs 2.8

Basis of Financial Statement _3

Basis of Financial Statement Presentation - Additional Information (Detail)	3 Months Ended
	Dec. 31, 2020Funds
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of Hennessy funds to which company provides investment advisory services	16

Management Contracts Purchased

Management Contracts Purchased - Additional Information (Detail)	Dec. 31, 2020USD ($)Funds	Sep. 30, 2020USD ($)
Contracts In Progress Costs And Earnings [Line Items]
Number of mutual funds | Funds	30
Management contracts impairment amount | $	$ 0	$ 0

Investment Advisory Agreements

Investment Advisory Agreements - Additional Information (Detail)	3 Months Ended
	Dec. 31, 2020Funds
Investment Schedule [Abstract]
Number of Hennessy funds to which company provides investment advisory services	16
Notice period for termination of agreement	60 days

Fair Value Measurements - Asset

Fair Value Measurements - Assets Categorized on Basis of Various Levels (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market fund deposits	$ 6,054	$ 6,053
Mutual fund investments	9	9
Total	6,063	6,062
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market fund deposits	6,054	6,053
Mutual fund investments	9	9
Total	$ 6,063	$ 6,062

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended
	Dec. 31, 2020	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Transfer from fair value level 1 to level 2	$ 0	$ 0
Transfer from fair value level 2 to level 1	0	0
Transfer into (out of) level 3	$ 0	$ 0

Leases - Schedule Of Operating

Leases - Schedule Of Operating Lease Maturities (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020
Operating lease right-of-use  assets	$ 183	$ 276
Operating lease liability	$ 220	$ 330
Weighted average remaining lease term	6 months
Weighted average discount rate	2.28%

Leases - Detailed Information A

Leases - Detailed Information About In Operating Lease Right Of Use Assets Lease Liabilities and Others (Detail) $ in Thousands	Dec. 31, 2020USD ($)
Remainder of fiscal year 2021 undiscounted cash flows	$ 227
Present value discount	(7)
Total operating lease liabilities	$ 220

Leases - Additional Information

Leases - Additional Information (Detail)	3 Months Ended
	Dec. 31, 2020USD ($)
Right of use assets payments	$ 112,432
General and Administrative Expense [Member]
Operating lease rent payments	$ 95,360

Accrued Liabilities and Accou_3

Accrued Liabilities and Accounts Payable - Summary of accrued expenses reflected on the company's balance sheet (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accrued Liabilities, Current [Abstract]
Accrued bonus liabilities	$ 901	$ 1,388
Accrued sub-advisor fees	617	793
Other accrued expenses	562	561
Total accrued liabilities and accounts payable	$ 2,080	$ 2,742

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail)	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Effective tax rates	26.40%	27.00%

Income Taxes - Summary of Feder

Income Taxes - Summary of Federal and State Jurisdiction Tax (Detail) - USD ($)	3 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	$ 22	$ 22	$ 19	$ 17	$ 16
United States [Member]
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
California [Member]
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
COLORADO
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0			0
CONNECTICUT
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
DISTRICT OF COLUMBIA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
FLORIDA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
GEORGIA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
ILLINOIS
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
INDIANA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0
IOWA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0
LOUISIANA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0
MARYLAND
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
Massachusetts [Member]
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
MICHIGAN
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
MINNESOTA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
NEW HAMPSHIRE
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
NEW JERSEY
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0
NEW YORK
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
North Carolina [Member]
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
OREGON
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0
PENNSYLVANIA
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0
Texas [Member]
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	0	0	0	0	0
WISCONSIN
Investments, Owned, Federal Income Tax Note [Line Items]
Tax Jurisdiction	$ 0	$ 0	$ 0	$ 0	$ 0

Equity - Additional Information

Equity - Additional Information (Detail) - shares	1 Months Ended	3 Months Ended
	Aug. 31, 2010	Dec. 31, 2020	Dec. 31, 2019	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum common stock issuable under plan		22,500,000		22,500,000
Stock buyback program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for issuance under plan		596,368
Repurchase of common stock shares	1,500,000
Dividend Reinvestment and Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued during period shares		2,817	3,298
Maximum common stock issuable under plan		1,550,000
Shares available for issuance under plan		1,526,712
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Rate of restricted stock units vest under plan		25.00%

Equity - Schedule of Non-Vested

Equity - Schedule of Non-Vested Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs) [Member]	3 Months Ended
	Dec. 31, 2020$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested Beginning Balance, Number of Restricted Share Units | shares	322,181
Granted, Number of Restricted Share Units | shares	0
Vested, Number of Restricted Share Units | shares	(32,267)
Forfeited, Number of Restricted Share Units | shares	0
Non-vested Ending Balance, Number of Restricted Share Units | shares	289,914
Non-vested Beginning Balance, Weighted Avg. Fair Value Per Share at Each Date | $ / shares	$ 9.76
Granted, Weighted Avg. Fair Value Per Share at Each Date | $ / shares	0
Vested, Weighted Avg. Fair Value per Share at Each Date | $ / shares	(10.89)
Forfeited, Weighted Avg. Fair Value per Share at Each Date | $ / shares	0
Non-vested Ending Balance, Weighted Avg. Fair Value Per Share at Each Date | $ / shares	$ 9.64

Equity - Schedule of Non-Vest_2

Equity - Schedule of Non-Vested Restricted Stock Units Compensation (Detail) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total expected compensation expense related to RSUs	$ 352	$ 447
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total expected compensation expense related to RSUs	16,056
Recognized compensation expense related to RSUs	(13,262)
Unrecognized compensation expense related to RSUs	$ 2,794
Weighted average remaining years to expense for RSUs	2 years 9 months 18 days

Earnings per Share and Divide_2

Earnings per Share and Dividends per Share - Additional Information (Detail) - $ / shares	Jun. 09, 2020	Dec. 31, 2020	Dec. 31, 2019
Weighted Average Amounts Used In Calculating Earnings Per Share [Line Items]
Dividends paid	$ 0.1375
Restricted Stock Units (RSUs) [Member]
Weighted Average Amounts Used In Calculating Earnings Per Share [Line Items]
Stock options excluded from diluted earnings per share		227,410	184,871

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Dividend Reinvestment and Stock Purchase Plan [Member]	Jan. 31, 2021shares
Subsequent Event [Line Items]
Stock repurchased during period, shares	1,470,000
Common stock shares available for issuance under the plan	1,469,603