Westwood Holdings Group, Inc. (NYSE: WHG) today reported second quarter 2012 revenues of $20.1 million, net income of $2.2 million and earnings per diluted share of $0.30. This compares to revenues of $18.9 million, net income of $3.7 million and earnings per diluted share of $0.52 in the second quarter of 2011. Economic Earnings were $5.2 million compared to $6.7 million for the second quarter of 2011. Economic Earnings per share (“Economic EPS”) were $0.72 per diluted share compared to $0.94 per diluted share for the second quarter of 2011. (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.)
Several significant items impacted second quarter 2012 pretax results:
- Performance fees recorded for our Master Limited Partnership (“MLP”) strategy totaled approximately $1.2 million versus $1.0 million for the second quarter of 2011.
- A gain of approximately $899,000 related to the sale of 100,000 shares of Teton Advisors, Inc.
- One-time recruiting and legal fees related to hiring Westwood International Advisors (“WIA”) team members were approximately $1.4 million.
- Amortization of WIA bonus awards totaled approximately $1.2 million.
- Ongoing expenses related to WIA operations aggregated approximately $1.3 million. No revenues were contributed by WIA this quarter.
Assets under management were $13.2 billion as of June 30, 2012, down 6% compared to $13.9 billion as of June 30, 2011 primarily due to asset outflows from certain clients and market depreciation, partially offset by asset inflows from new and existing clients. Mutual fund assets, now comprising eight Westwood Funds
, totaled $1.5 billion as of June 30, 2012, an increase of 15% compared to $1.3 billion as of June 30, 2011.
Brian Casey, Westwood’s President & CEO, commented, “In a volatile quarter for financial markets, our ongoing asset management business essentially kept pace with the first quarter of 2012 as well as with the second quarter of 2011. Several significant items were recorded during the quarter, including yet another MLP strategy performance fee, a gain on selling a portion of our Teton Advisors share position, as well as one-time and ongoing expenses associated with the launch of Westwood International Advisors (“WIA”), each of which are positive developments for Westwood. WIA costs certainly impacted our financial results in the short term however we remain confident that WIA’s Emerging Markets and Global Equity strategies will fuel significant long-term growth for Westwood.”