99.1 | Press Release dated July 26, 2017, entitled “Westwood Holdings Group, Inc. Reports Second Quarter 2017 Results; AUM From Global and Emerging Market Strategies Reaches Record $5.1 Billion”. |
99.1 | Press Release dated July 26, 2017, entitled “Westwood Holdings Group, Inc. Reports Second Quarter 2017 Results; AUM From Global and Emerging Market Strategies Reaches Record $5.1 Billion”. |
• | AUM in our global and emerging markets strategies reached a record $5.1 Billion. |
• | Revenues of $33.8 million increased $2.8 million from the second quarter of 2016 and $1.2 million from the first quarter of 2017. |
• | All U.S. value strategies provided strong absolute and relative returns, beating their respective benchmarks for the quarter. |
Three Months Ended | |||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | |||||||||
REVENUES: | |||||||||||
Advisory fees: | |||||||||||
Asset-based | $ | 24,496 | $ | 23,789 | $ | 22,666 | |||||
Performance-based | 1,031 | 386 | 409 | ||||||||
Trust fees | 7,917 | 7,795 | 7,643 | ||||||||
Other, net | 312 | 653 | 305 | ||||||||
Total revenues | 33,756 | 32,623 | 31,023 | ||||||||
EXPENSES: | |||||||||||
Employee compensation and benefits | $ | 15,557 | $ | 17,717 | $ | 15,108 | |||||
Sales and marketing | 513 | 477 | 687 | ||||||||
Westwood mutual funds | 909 | 863 | 831 | ||||||||
Information technology | 1,883 | 1,756 | 2,201 | ||||||||
Professional services | 1,318 | 1,496 | 1,158 | ||||||||
General and administrative | 2,993 | 2,544 | 2,526 | ||||||||
Total expenses | 23,173 | 24,853 | 22,511 | ||||||||
Income before income taxes | 10,583 | 7,770 | 8,512 | ||||||||
Provision for income taxes(1) | 3,687 | 1,706 | 2,851 | ||||||||
Net income | $ | 6,896 | $ | 6,064 | $ | 5,661 | |||||
Other comprehensive income: | |||||||||||
Foreign currency translation adjustments | 934 | 207 | 157 | ||||||||
Total comprehensive income | $ | 7,830 | $ | 6,271 | $ | 5,818 | |||||
Earnings per share: | |||||||||||
Basic | $ | 0.84 | $ | 0.75 | $ | 0.71 | |||||
Diluted | $ | 0.83 | $ | 0.73 | $ | 0.69 | |||||
Weighted average shares outstanding: | |||||||||||
Basic | 8,167,277 | 8,065,825 | 8,000,214 | ||||||||
Diluted | 8,316,508 | 8,311,382 | 8,172,923 | ||||||||
Economic Earnings | $ | 11,710 | $ | 10,607 | $ | 10,387 | |||||
Economic EPS | $ | 1.41 | $ | 1.28 | $ | 1.27 | |||||
Dividends declared per share | $ | 0.62 | $ | 0.62 | $ | 0.57 |
(1) | Our as adjusted tax rate for the first quarter of 2017 of 22.0% included a $1.0 million discrete tax benefit associated with the adoption of new accounting guidance related to stock–based compensation awards that vested during the first quarter of 2017. |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
REVENUES: | |||||||
Advisory fees: | |||||||
Asset-based | $ | 48,285 | $ | 44,481 | |||
Performance-based | 1,417 | 409 | |||||
Trust fees | 15,712 | 15,108 | |||||
Other, net | 965 | 154 | |||||
Total revenues | 66,379 | 60,152 | |||||
EXPENSES: | |||||||
Employee compensation and benefits | $ | 33,274 | $ | 31,602 | |||
Sales and marketing | 990 | 1,015 | |||||
Westwood mutual funds | 1,772 | 1,527 | |||||
Information technology | 3,639 | 4,165 | |||||
Professional services | 2,814 | 2,804 | |||||
General and administrative | 5,537 | 4,881 | |||||
Total expenses | 48,026 | 45,994 | |||||
Income before income taxes | 18,353 | 14,158 | |||||
Provision for income taxes(1) | 5,393 | 4,975 | |||||
Net income | $ | 12,960 | $ | 9,183 | |||
Other comprehensive income: | |||||||
Foreign currency translation adjustments | 1,141 | 1,460 | |||||
Total comprehensive income | $ | 14,101 | $ | 10,643 | |||
Earnings per share: | |||||||
Basic | $ | 1.60 | $ | 1.16 | |||
Diluted | $ | 1.56 | $ | 1.13 | |||
Weighted average shares outstanding: | |||||||
Basic | 8,118,327 | 7,931,331 | |||||
Diluted | 8,315,722 | 8,132,941 | |||||
Economic Earnings | $ | 22,318 | $ | 18,480 | |||
Economic EPS | $ | 2.68 | $ | 2.27 | |||
Dividends declared per share | $ | 1.24 | $ | 1.14 |
(1) | Our as adjusted tax rate for the first six months of 2017 of 29.4% included a $1.0 million discrete tax benefit associated with the adoption of new accounting guidance related to stock–based compensation awards that vested during the first quarter of 2017. |
June 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 43,143 | $ | 33,679 | |||
Accounts receivable | 23,061 | 23,429 | |||||
Investments, at fair value | 45,665 | 56,485 | |||||
Other current assets | 1,914 | 2,364 | |||||
Total current assets | 113,783 | 115,957 | |||||
Goodwill | 27,144 | 27,144 | |||||
Deferred income taxes | 10,491 | 10,903 | |||||
Intangible assets, net | 20,414 | 21,394 | |||||
Property and equipment, net of accumulated depreciation of $5,089 and $4,590 | 4,100 | 4,280 | |||||
Total assets | $ | 175,932 | $ | 179,678 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 2,973 | $ | 2,641 | |||
Dividends payable | 6,491 | 6,679 | |||||
Compensation and benefits payable | 9,774 | 17,200 | |||||
Income taxes payable | 1,989 | 3,148 | |||||
Total current liabilities | 21,227 | 29,668 | |||||
Accrued dividends | 1,269 | 1,767 | |||||
Deferred rent | 2,112 | 2,174 | |||||
Total liabilities | 24,608 | 33,609 | |||||
Stockholders’ Equity: | |||||||
Common stock, $0.01 par value, authorized 25,000,000 shares, issued 9,994,408 and outstanding 8,893,466 shares at June 30, 2017; issued 9,801,938 and outstanding 8,810,375 shares at December 31, 2016 | 100 | 98 | |||||
Additional paid-in capital | 172,096 | 162,730 | |||||
Treasury stock, at cost - 1,100,942 shares at June 30, 2017; 991,563 shares at December 31, 2016 | (50,868 | ) | (44,353 | ) | |||
Accumulated other comprehensive loss | (3,146 | ) | (4,287 | ) | |||
Retained earnings | 33,142 | 31,881 | |||||
Total stockholders’ equity | 151,324 | 146,069 | |||||
Total liabilities and stockholders’ equity | $ | 175,932 | $ | 179,678 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 12,960 | $ | 9,183 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 479 | 494 | |||||
Amortization of intangible assets | 980 | 980 | |||||
Unrealized gains on trading investments | (378 | ) | (425 | ) | |||
Stock based compensation expense | 8,065 | 8,083 | |||||
Deferred income taxes | 437 | (72 | ) | ||||
Excess tax benefits from stock based compensation | — | (165 | ) | ||||
Other non-cash, net | — | 276 | |||||
Changes in operating assets and liabilities: | |||||||
Net sales (purchases) of investments- trading securities | 11,198 | 27,945 | |||||
Accounts receivable | 531 | (1,188 | ) | ||||
Other current assets | 455 | 981 | |||||
Accounts payable and accrued liabilities | 266 | (375 | ) | ||||
Compensation and benefits payable | (6,940 | ) | (11,384 | ) | |||
Income taxes payable | (1,178 | ) | (3,889 | ) | |||
Other liabilities | (53 | ) | 166 | ||||
Net cash provided by operating activities | 26,822 | 30,610 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (245 | ) | (994 | ) | |||
Net cash used in investing activities | (245 | ) | (994 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Purchases of treasury stock | — | (4,421 | ) | ||||
Purchase of treasury stock under employee stock plans | (1,326 | ) | (614 | ) | |||
Restricted stock returned for payment of taxes | (5,189 | ) | (3,696 | ) | |||
Excess tax benefits from stock based compensation | — | 165 | |||||
Payment of contingent consideration in acquisition | — | (5,562 | ) | ||||
Cash dividends | (11,674 | ) | (10,282 | ) | |||
Net cash used in financing activities | (18,189 | ) | (24,410 | ) | |||
Effect of currency rate changes on cash | 1,076 | 1,178 | |||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 9,464 | 6,384 | |||||
Cash and cash equivalents, beginning of period | 33,679 | 22,740 | |||||
Cash and cash equivalents, end of period | $ | 43,143 | $ | 29,124 | |||
Supplemental cash flow information: | |||||||
Cash paid during the period for income taxes | $ | 5,539 | $ | 8,783 | |||
Common stock issued for acquisition | $ | — | $ | 3,734 | |||
Accrued dividends | $ | 7,760 | $ | 7,160 | |||
Accrued purchase of property and equipment | $ | 52 | $ | 332 | |||
Tenant allowance included in Property and equipment | $ | — | $ | 1,128 |
Three Months Ended | |||||||||||
June 30, 2017 | March 31, 2017 | June 30, 2016 | |||||||||
Net Income | $ | 6,896 | $ | 6,064 | $ | 5,661 | |||||
Add: Stock based compensation expense | 4,168 | 3,897 | 4,080 | ||||||||
Add: Intangible amortization | 490 | 490 | 490 | ||||||||
Add: Tax benefit from goodwill amortization | 156 | 156 | 156 | ||||||||
Economic Earnings | $ | 11,710 | $ | 10,607 | $ | 10,387 | |||||
Diluted weighted average shares | 8,316,508 | 8,311,382 | 8,172,923 | ||||||||
Economic EPS | $ | 1.41 | $ | 1.28 | $ | 1.27 |
Six Months Ended June 30, | |||||||
2017 | 2016 | ||||||
Net Income | $ | 12,960 | $ | 9,183 | |||
Add: Stock based compensation expense | 8,065 | 8,083 | |||||
Add: Intangible amortization | 980 | 980 | |||||
Add: Tax benefit from goodwill amortization | 313 | 234 | |||||
Economic Earnings | $ | 22,318 | $ | 18,480 | |||
Diluted weighted average shares | 8,315,722 | 8,132,941 | |||||
Economic EPS | $ | 2.68 | $ | 2.27 |
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