Westwood Holdings Group, Inc. (NYSE: WHG) today reported first
quarter 2024 earnings. Significant items included:
-
SMidCap, SmallCap Value, MidCap Value, Platinum, Enhanced Balanced,
High Income, Credit Opportunities and Global Real Estate strategies
all beat their primary benchmarks.
-
SmidCap and Enhanced Balanced posted top quartile rankings.
- The
prospectus for our first actively-managed Exchange-Traded Funds
("ETFs") went effective in March and both ETFs were launched early
in the second quarter.
-
Quarterly revenues totaled $22.7 million versus the fourth
quarter's $23.2 million and $22.7 million a year ago. Comprehensive
income of $2.3 million compared with the fourth quarter's $2.6
million and $0.7 million in 2023's first quarter.
- Our
comprehensive income included a $2.3 million after tax gain
following a decrease in the fair value of contingent consideration
for our 2022 Salient acquisition.
-
Non-GAAP Economic Earnings of $3.0 million compared with the fourth
quarter's $3.6 million and $1.7 million in the first quarter of
2023.
-
Westwood held $46.6 million in cash and short-term investments as
of March 31, 2024, down $6.5 million from the fourth quarter.
Stockholders' equity totaled $121.8 million and we have no
debt.
- We
declared a cash dividend of $0.15 per common share, payable on
July 1, 2024 to stockholders of record on June 3,
2024.
Brian Casey, Westwood’s CEO, commented, "To promote
future growth, significant investments were made during the quarter
to facilitate the second quarter’s successful listing of two ETFs
and to build necessary infrastructure to launch Managed Investment
Solutions ("MIS") later this year. As noted above, many of our
products turned in performances ahead of their respective
benchmarks and our assets under management ("AUM") and assets under
advisement ("AUA") reached $17.2 billion, our highest level over
the past six years."
Revenues were comparable to the fourth quarter
and last year's first quarter.
Firmwide assets under management and advisement
totaled $17.2 billion, consisting of AUM of $16.2 billion and
AUA of $1.0 billion.
First quarter comprehensive income of $2.3
million compared to the fourth quarter's $2.6 million due to higher
employee compensation and benefits expense offset by changes in the
fair value of contingent consideration. Diluted earnings per share
("EPS") of $0.27 compared to $0.32 for the fourth quarter. Non-GAAP
Economic Earnings of $3.0 million, or $0.36 per share, compared
with $3.6 million, or $0.43 per share, in the fourth quarter.
First quarter comprehensive income of $2.3
million compared to last year's first quarter net income of $0.7
million due to changes in the fair value of contingent
consideration offset by higher income taxes. Diluted EPS of $0.27
compared with $0.09 per share for 2023's first quarter. Non-GAAP
Economic Earnings were $3.0 million, or $0.36 per share, compared
with $1.7 million, or $0.22 per share, in the first quarter of
2023.
Economic Earnings and Economic EPS are non-GAAP
performance measures and are explained and reconciled with the most
comparable GAAP numbers in the attached tables.
Westwood will host a conference call to discuss
first quarter 2024 results and other business matters at 4:30 p.m.
Eastern time today. To join the conference call,
please register here:
https://register.vevent.com/register/BI525615f3be7946a8be8bb4934ce4eb68
After registering, you will be provided with a
dial-in number containing a personalized PIN.
Webcast Link:
https://edge.media-server.com/mmc/p/ckyaak4u
ABOUT WESTWOOD HOLDINGS
GROUP
Westwood Holdings Group, Inc. is a focused
investment management boutique and wealth management firm.
Founded in 1983, Westwood offers a broad array of
investment solutions to institutional investors, private wealth
clients and financial intermediaries. The firm specializes in
several distinct investment capabilities: U.S. Value Equity,
Multi-Asset, Energy & Real Assets, Income Alternatives,
Tactical Absolute Return and Managed Investment Solutions, which
are available through separate accounts, the Westwood Funds® family
of mutual funds, exchange-traded funds ("ETFs") and other pooled
vehicles. Westwood benefits from significant, broad-based employee
ownership and trades on the New York Stock Exchange under the
symbol "WHG." Based in Dallas, Westwood also maintains offices in
Chicago, Houston and San Francisco.
For more information on Westwood, please visit
westwoodgroup.com.
Forward-looking Statements
Statements in this press release that are not
purely historical facts, including, without limitation, statements
about our expected future financial position, results of operations
or cash flows, as well as other statements including without
limitation, words such as “anticipate,” “believe,” “expect,”
“could,” and other similar expressions, constitute forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Actual results and the timing of
some events could differ materially from those projected in or
contemplated by the forward-looking statements due to a number of
factors, including, without limitation: the composition and market
value of our AUM and AUA; our ability to maintain our fee structure
in light of competitive fee pressures; risks associated with
actions of activist stockholders; distributions to our common
stockholders have included and may in the future include a return
of capital; inclusion of foreign company investments in our AUM;
regulations adversely affecting the financial services industry;
our ability to maintain effective cyber security; litigation risks;
our ability to develop and market new investment strategies
successfully; our reputation and our relationships with current and
potential customers; our ability to attract and retain qualified
personnel; our ability to perform operational tasks; our ability to
select and oversee third-party vendors; our dependence on the
operations and funds of our subsidiaries; our ability to maintain
effective information systems; our ability to prevent misuse of
assets and information in the possession of our employees and
third-party vendors, which could damage our reputation and result
in costly litigation and liability for our clients and us; our
stock is thinly traded and may be subject to volatility;
competition in the investment management industry; our ability to
avoid termination of client agreements and the related investment
redemptions; the significant concentration of our revenues in a
small number of customers; we have made and may continue to make
business combinations as a part of our business strategy, which may
present certain risks and uncertainties; our relationships with
investment consulting firms; our ability to identify and execute on
our strategic initiatives; our ability to declare and pay
dividends; our ability to fund future capital requirements on
favorable terms; our ability to properly address conflicts of
interest; our ability to maintain adequate insurance coverage; our
ability to maintain an effective system of internal controls; and
the other risks detailed from time to time in Westwood’s SEC
filings, including, but not limited to, its annual report on Form
10-K for the year ended December 31, 2023 and its quarterly
report on Form 10-Q for the quarter ended March 31, 2024. You
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Except as required by law, Westwood is not obligated to publicly
release any revisions to these forward-looking statements to
reflect events or circumstances after the date of this press
release or to reflect the occurrence of unanticipated events.
SOURCE: Westwood Holdings Group, Inc.
(WHG-G)CONTACT:Westwood Holdings Group, Inc.Terry
ForbesChief Financial Officer and Treasurer(214) 756-6900
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME(in thousands, except per
share and share amounts)(unaudited)
| |
Three Months Ended |
|
| |
March 31, 2024 |
|
December 31, 2023 |
|
March 31, 2023 |
|
|
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Advisory fees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-based |
$ |
16,817 |
|
|
$ |
16,657 |
|
|
$ |
17,033 |
|
|
|
Performance-based |
|
— |
|
|
|
710 |
|
|
|
555 |
|
|
|
Trust fees |
|
5,113 |
|
|
|
5,124 |
|
|
|
5,031 |
|
|
|
Trust performance-based fees |
|
— |
|
|
|
349 |
|
|
|
— |
|
|
|
Other, net |
|
802 |
|
|
|
389 |
|
|
|
108 |
|
|
|
Total revenues |
|
22,732 |
|
|
|
23,229 |
|
|
|
22,727 |
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
14,711 |
|
|
|
12,367 |
|
|
|
14,202 |
|
|
|
Sales and marketing |
|
628 |
|
|
|
810 |
|
|
|
740 |
|
|
|
Westwood mutual funds |
|
721 |
|
|
|
783 |
|
|
|
732 |
|
|
|
Information technology |
|
2,290 |
|
|
|
2,367 |
|
|
|
2,383 |
|
|
|
Professional services |
|
1,489 |
|
|
|
1,239 |
|
|
|
1,529 |
|
|
|
General and administrative |
|
2,901 |
|
|
|
2,933 |
|
|
|
3,046 |
|
|
|
(Gain) loss from change in fair value of contingent
consideration |
|
(2,949 |
) |
|
|
(113 |
) |
|
|
(1,060 |
) |
|
|
Acquisition expenses |
|
— |
|
|
|
— |
|
|
|
209 |
|
|
|
Total expenses |
|
19,791 |
|
|
|
20,386 |
|
|
|
21,781 |
|
|
|
Net operating income |
|
2,941 |
|
|
|
2,843 |
|
|
|
946 |
|
|
|
Net change in unrealized appreciation (depreciation) on
private investments |
|
— |
|
|
|
(18 |
) |
|
|
— |
|
|
|
Net investment income |
|
455 |
|
|
|
561 |
|
|
|
172 |
|
|
|
Other income |
|
185 |
|
|
|
365 |
|
|
|
372 |
|
|
|
Income before income taxes |
|
3,581 |
|
|
|
3,751 |
|
|
|
1,490 |
|
|
|
Income tax provision |
|
1,415 |
|
|
|
1,168 |
|
|
|
776 |
|
|
|
Net income |
$ |
2,166 |
|
|
$ |
2,583 |
|
|
$ |
714 |
|
|
|
Total comprehensive income |
$ |
2,166 |
|
|
$ |
2,583 |
|
|
$ |
714 |
|
|
|
Less: Comprehensive income attributable to noncontrolling
interest |
|
(130 |
) |
|
|
7 |
|
|
|
21 |
|
|
|
Comprehensive income attributable to Westwood Holdings
Group, Inc. |
$ |
2,296 |
|
|
$ |
2,576 |
|
|
$ |
693 |
|
|
|
Earnings per Westwood Holdings Group, Inc.
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.28 |
|
|
$ |
0.32 |
|
|
$ |
0.09 |
|
|
|
Diluted |
$ |
0.27 |
|
|
$ |
0.32 |
|
|
$ |
0.09 |
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
8,099,028 |
|
|
|
8,007,896 |
|
|
|
7,853,921 |
|
|
|
Diluted |
|
8,392,496 |
|
|
|
8,184,736 |
|
|
|
7,968,504 |
|
|
|
Economic Earnings |
$ |
3,012 |
|
|
$ |
3,554 |
|
|
$ |
1,718 |
|
|
|
Economic EPS |
$ |
0.36 |
|
|
$ |
0.43 |
|
|
$ |
0.22 |
|
|
|
Dividends declared per share |
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
|
|
|
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except par value and share
amounts)(unaudited)
| |
March 31, 2024 |
|
December 31, 2023 |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
25,888 |
|
|
$ |
20,422 |
|
|
|
Accounts receivable |
|
15,178 |
|
|
|
14,394 |
|
|
|
Investments, at fair value |
|
20,667 |
|
|
|
32,674 |
|
|
|
Prepaid income taxes |
|
— |
|
|
|
205 |
|
|
|
Other current assets |
|
4,750 |
|
|
|
4,543 |
|
|
|
Total current assets |
|
66,483 |
|
|
|
72,238 |
|
|
|
Investments |
|
7,247 |
|
|
|
7,247 |
|
|
|
Equity method investments |
|
4,519 |
|
|
|
4,284 |
|
|
|
Noncurrent investments at fair value |
|
241 |
|
|
|
241 |
|
|
|
Goodwill |
|
39,501 |
|
|
|
39,501 |
|
|
|
Deferred income taxes |
|
1,570 |
|
|
|
726 |
|
|
|
Operating lease right-of-use assets |
|
3,404 |
|
|
|
3,673 |
|
|
|
Intangible assets, net |
|
23,761 |
|
|
|
24,803 |
|
|
|
Property and equipment, net of accumulated depreciation of $9,421
and $10,078 |
|
1,272 |
|
|
|
1,444 |
|
|
|
Other long-term assets |
|
1,044 |
|
|
|
1,010 |
|
|
|
Total long-term assets |
|
82,559 |
|
|
|
82,929 |
|
|
|
Total assets |
$ |
149,042 |
|
|
$ |
155,167 |
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
6,846 |
|
|
$ |
6,130 |
|
|
|
Dividends payable |
|
1,384 |
|
|
|
1,692 |
|
|
|
Compensation and benefits payable |
|
2,949 |
|
|
|
9,539 |
|
|
|
Operating lease liabilities |
|
1,406 |
|
|
|
1,286 |
|
|
|
Income taxes payable |
|
2,035 |
|
|
|
— |
|
|
|
Total current liabilities |
|
14,620 |
|
|
|
18,647 |
|
|
|
Accrued dividends |
|
663 |
|
|
|
675 |
|
|
|
Contingent consideration |
|
7,184 |
|
|
|
10,133 |
|
|
|
Noncurrent operating lease liabilities |
|
2,820 |
|
|
|
3,266 |
|
|
|
Total long-term liabilities |
|
10,667 |
|
|
|
14,074 |
|
|
|
Total liabilities |
|
25,287 |
|
|
|
32,721 |
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, authorized 25,000,000 shares, issued
12,125,042 and 11,856,737, respectively and
outstanding 9,330,762 and 9,140,760, respectively |
|
122 |
|
|
|
119 |
|
|
|
Additional paid-in capital |
|
201,899 |
|
|
|
201,622 |
|
|
|
Treasury stock, at cost – 2,794,280 and 2,715,977,
respectively |
|
(86,930 |
) |
|
|
(85,990 |
) |
|
|
Retained earnings |
|
6,749 |
|
|
|
4,650 |
|
|
|
Total Westwood Holdings Group, Inc. stockholders’
equity |
|
121,840 |
|
|
|
120,401 |
|
|
|
Noncontrolling interest in consolidated
subsidiary |
|
1,915 |
|
|
|
2,045 |
|
|
|
Total liabilities and stockholders’ equity |
$ |
149,042 |
|
|
$ |
155,167 |
|
|
|
|
|
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(in
thousands)(unaudited)
| |
Three Months Ended March 31, |
|
| |
2024 |
|
2023 |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net income |
$ |
2,166 |
|
|
$ |
714 |
|
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
174 |
|
|
|
176 |
|
|
|
Amortization of intangible assets |
|
1,042 |
|
|
|
1,021 |
|
|
|
Net change in unrealized (appreciation)
depreciation on investments |
|
(632 |
) |
|
|
(369 |
) |
|
|
Stock-based compensation expense |
|
1,515 |
|
|
|
1,748 |
|
|
|
Deferred income taxes |
|
(844 |
) |
|
|
(136 |
) |
|
|
Non-cash lease expense |
|
269 |
|
|
|
320 |
|
|
|
Loss on asset disposition |
|
— |
|
|
|
69 |
|
|
|
Fair value change of contingent
consideration |
|
(2,949 |
) |
|
|
(1,060 |
) |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Net (purchases) sales of trading
securities |
|
12,404 |
|
|
|
47 |
|
|
|
Accounts receivable |
|
(784 |
) |
|
|
(657 |
) |
|
|
Other current assets |
|
(242 |
) |
|
|
(17 |
) |
|
|
Accounts payable and accrued
liabilities |
|
719 |
|
|
|
141 |
|
|
|
Compensation and benefits payable |
|
(6,591 |
) |
|
|
(5,612 |
) |
|
|
Income taxes payable |
|
2,240 |
|
|
|
881 |
|
|
|
Other liabilities |
|
(354 |
) |
|
|
(445 |
) |
|
|
Net cash
provided by (used in) operating activities |
|
8,133 |
|
|
|
(3,179 |
) |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Acquisition, net of cash acquired |
|
— |
|
|
|
(1,168 |
) |
|
|
Purchases of property and equipment |
|
(3 |
) |
|
|
(84 |
) |
|
|
Net cash
used in investing activities |
|
(3 |
) |
|
|
(1,252 |
) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Restricted stock returned for payment of taxes |
|
(940 |
) |
|
|
(837 |
) |
|
|
Cash dividends |
|
(1,724 |
) |
|
|
(1,840 |
) |
|
|
Net cash
used in financing activities |
|
(2,664 |
) |
|
|
(2,677 |
) |
|
|
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
5,466 |
|
|
|
(7,108 |
) |
|
|
Cash and cash equivalents, beginning of period |
|
20,422 |
|
|
|
23,859 |
|
|
|
Cash and cash equivalents, end of period |
$ |
25,888 |
|
|
$ |
16,751 |
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Cash paid during the period for income taxes |
$ |
9 |
|
|
$ |
32 |
|
|
|
Accrued dividends |
$ |
2,047 |
|
|
$ |
1,972 |
|
|
|
Additional operating lease right-of-use assets |
$ |
— |
|
|
$ |
1,217 |
|
|
| |
|
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESReconciliation of Comprehensive Income
Attributable to Westwood Holdings Group, Inc. to Economic
Earnings(in thousands, except per share and share
amounts)(unaudited)
As supplemental information, we are providing
non-GAAP performance measures that we refer to as Economic Earnings
and Economic EPS. We provide these measures in addition to, not as
a substitute for, Comprehensive income attributable to Westwood
Holdings Group, Inc. and earnings per share, which are reported on
a GAAP basis. Our management and Board of Directors review Economic
Earnings and Economic EPS to evaluate our ongoing performance,
allocate resources, and review our dividend policy. We believe that
these non-GAAP performance measures, while not substitutes for GAAP
Comprehensive income attributable to Westwood Holdings Group, Inc.
or earnings per share, are useful for management and investors when
evaluating our underlying operating and financial performance and
our available resources. We do not advocate that investors consider
these non-GAAP measures without also considering financial
information prepared in accordance with GAAP.
We define Economic Earnings as Comprehensive
income attributable to Westwood Holdings Group, Inc. plus non-cash
equity-based compensation expense, amortization of intangible
assets and deferred taxes related to goodwill. Although
depreciation on fixed assets is a non-cash expense, we do not add
it back when calculating Economic Earnings because depreciation
charges represent an allocation of the decline in the value of the
related assets that will ultimately require replacement. Although
gains and losses from changes in the fair value of contingent
consideration are non-cash, we do not add or subtract those back
when calculating Economic Earnings because gains and losses on
changes in the fair value of contingent consideration are
considered regular following an acquisition. In addition, we do not
adjust Economic Earnings for tax deductions related to restricted
stock expense or amortization of intangible assets. Economic EPS
represents Economic Earnings divided by diluted weighted average
shares outstanding.
| |
Three Months Ended |
|
| |
March 31, 2024 |
|
December 31, 2023 |
|
March 31, 2023 |
|
|
Comprehensive income attributable to Westwood Holdings
Group, Inc. |
$ |
2,296 |
|
|
$ |
2,576 |
|
|
$ |
693 |
|
|
|
Stock-based compensation expense |
|
1,515 |
|
|
|
1,407 |
|
|
|
1,748 |
|
|
|
Intangible amortization |
|
1,042 |
|
|
|
1,043 |
|
|
|
1,021 |
|
|
|
Tax benefit from goodwill amortization |
|
125 |
|
|
|
125 |
|
|
|
125 |
|
|
|
Tax impact of adjustments to GAAP comprehensive income |
|
(1,966 |
) |
|
|
(1,597 |
) |
|
|
(1,869 |
) |
|
|
Economic Earnings |
$ |
3,012 |
|
|
$ |
3,554 |
|
|
$ |
1,718 |
|
|
|
Earnings per share |
$ |
0.27 |
|
|
$ |
0.31 |
|
|
$ |
0.09 |
|
|
|
Stock-based compensation expense |
|
0.18 |
|
|
|
0.17 |
|
|
|
0.21 |
|
|
|
Intangible amortization |
|
0.13 |
|
|
|
0.13 |
|
|
|
0.13 |
|
|
|
Tax benefit from goodwill amortization |
|
0.01 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
Tax impact of adjustments to GAAP comprehensive income |
|
(0.23 |
) |
|
|
(0.20 |
) |
|
|
(0.23 |
) |
|
|
Economic EPS |
$ |
0.36 |
|
|
$ |
0.43 |
|
|
$ |
0.22 |
|
|
|
Diluted weighted average shares |
|
8,392,496 |
|
|
|
8,184,736 |
|
|
|
7,968,504 |
|
|
Westwood Salient Enhance... (NYSE:MDST)
Graphique Historique de l'Action
De Nov 2024 à Déc 2024
Westwood Salient Enhance... (NYSE:MDST)
Graphique Historique de l'Action
De Déc 2023 à Déc 2024
