Waddell & Reed Financial, Inc. (NYSE: WDR) today reported second quarter net income of $41.7 million, or $0.48 per diluted share, compared to net income of $47.4 million, or $0.55 per diluted share, during the first quarter of 2012 and net income of $50.0 million, or $0.58 per diluted share, during the same period last year.
The second quarter of 2012 included a pre-tax charge of $5.0 million ($3.1 million net of taxes, or $0.04 per diluted share) to general and administrative expenses to reflect an impairment of certain capitalized software development costs. Our ongoing assessment and changes to our enterprise information technology infrastructure and software resulted in the decision to discontinue the usage of certain capitalized software. Excluding the charge discussed above, general and administrative costs during the quarter would have been $20.0 million, net income $44.9 million, and earnings per diluted share $0.52. We believe supplementing our discussion with these non-GAAP measures provides a more meaningful comparison to other periods. A detailed reconciliation of non-GAAP measures to reported GAAP numbers is included in the table below.
Reconciliation to GAAP Unaudited Condensed Statement of Income
|(Amounts in thousands, except for per share data)||(GAAP)||Adjustments||(Non-GAAP)|
|Total Operating Revenues||$||308,208||$||-||$||308,208|
|General and administrative||25,095||(5,047||)||20,048|
|All other operating expenses||214,641||-||214,641|
|Total Operating Expenses||239,736||(5,047||)||234,689|
|Non-operating income (expenses)||(1,553||)||-||(1,553||)|
|Income before provision for income taxes||66,919||5,047||71,966|
|Provision for income taxes||25,201||1,903||27,104|
|Net income per share||0.48||0.04||0.52|
|Weighted average shares outstanding - diluted||86,095||86,095||86,095|
Operating revenues of $308 million rose 0.5% sequentially, while operating income of $68.5 million declined 5.8%. Excluding the charge for the write-off (discussed above), operating income would have been $73.5 million, an improvement of 1.2% compared to the first quarter. Our operating margin was 22.2% for the quarter. Excluding the charge for the write-off (discussed above), our adjusted operating margin during the quarter was 23.9%, a 20 basis point improvement compared to the previous quarter.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV