Waddell & Reed Financial, Inc. (NYSE: WDR) today reported first quarter net income of $47.4 million, or $0.55 per diluted share, compared to net income of $40.0 million, or $0.47 per diluted share, during the fourth quarter of 2011 and net income of $45.6 million, or $0.53 per diluted share, during the same period last year. Operating revenues of $307 million during the current quarter rose 5% compared to the previous quarter and 3% compared to the same period last year, and were 1% lower than our historical high-water mark set during the second quarter of 2011. Our operating margin improved by 190 basis points sequentially. Gross sales were $6.1 billion, a 22% increase compared to the previous quarter. Net flows of $1.3 billion showed meaningful improvement compared to $42 million during the fourth quarter of 2011. Business DiscussionManagement commentary “Momentum continued in the new year. Market action, plus emphasis on expense control, allowed for solid sequential quarter profit improvement,” said Hank Herrmann, Chairman and Chief Executive Officer of Waddell & Reed Financial, Inc. “The retail investor remains reticent, but we were able to record another quarter of reasonable organic growth considering the overall environment. Fund performance in the quarter was strong on both an absolute and relative basis.” Advisors channel Sales of $1.0 billion during the quarter rose 20% compared to the previous quarter and were essentially flat compared to the same period last year. Net inflows were $158 million compared to outflows of $114 million during the fourth quarter of 2011 and inflows of $66 million during the first quarter of 2011. Advisor productivity continues to improve, with gross revenue per advisor reaching $40,800 during the current quarter. This represents a sequential improvement of 5%, a year-over-year improvement of 4% and a new quarterly high level of productivity for our financial advisors. Continued improvements in productivity, along with the channel’s industry-low redemption rates, makes our Advisors channel an important and stable contributor to our business model.