HENNESSY ADVISORS, INC. FIRST QUARTER EARNINGS INCREASE 48%

Novato, CA – January 27, 2005 – Hennessy Advisors, Inc. (OTCBB:HNNA) Chief Executive
Officer and President, Neil Hennessy, announced fully diluted earnings per share of $0.46 for the three months ended December 31, 2004, up from $0.31 in the prior comparable period, an increase of 48%. Growth in income is primarily attributable to increased mutual fund assets under management. Total mutual fund assets increased by 36%, growing $363 million to $1.376 billion at December 31, 2004, compared to $1.013 billion at December 31, 2003.

“I am extremely pleased with our financial results, particularly in light of increasing challenges in managing mutual funds and in managing a publicly traded company,” said Mr. Hennessy. “We anticipate that our investors will be pleased with our results. We will continue our commitment to grow assets under management for the benefit of our shareholders.”

Hennessy Advisors, Inc., located in Novato, CA, is the advisor to five no-load mutual funds. The Hennessy Funds employ superb, time-tested stock selection formulas and manage their funds with unwavering discipline and consistency. The company serves clients with integrity, honesty and candor, and their strategies and performance are fully disclosed.

Forward-Looking Statements

Statements in this press release regarding Hennessy Advisors, Inc.’s business, which are not historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of risks, uncertainties and other important factors that could cause the actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. These risks, uncertainties and other important factors are described in more detail in the “Risk Factors” section of the Company’s annual report on Form 10-KSB for the fiscal year ended September 30, 2004, filed December 14, 2004, with the U.S. Securities and Exchange Commission, including, without limitation, the “Risk Factors” section of Management’s Discussion and Analysis and Results of Operations. The following factors may affect the actual results of the Company:

- Continuing volatility in the equity markets may cause the levels of our assets under management to fluctuate significantly.
- Weak market conditions or loss of investor confidence in the mutual fund industry may lower our assets under management and reduce our revenues and income.
- We face strong competition from numerous and sometimes larger companies.
- Changes in the distribution channels on which we depend could reduce our revenues or hinder our growth.
- For the next several years, insurance costs are likely to increase materially and we may not be able to obtain the same types or amounts of coverage.
- For the next several years, professional service fees and compliance costs are likely to increase due to increased securities industry legislation.
- Changes in accounting regulations may also have adverse effects on our earnings per share.
- International conflicts and the ongoing threat of terrorism may adversely affect the general economy, financial and capital markets and our business.

Supplemental Information
Nothing in this section shall be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.