Market Overview

Westwood Holdings Group, Inc. Reports Fourth Quarter and Fiscal Year 2016 Results


Launches Tax-Efficient Strategy

DALLAS, Feb. 08, 2017 (GLOBE NEWSWIRE) -- Westwood Holdings Group, Inc. (NYSE: WHG) today reported fourth quarter revenues of $31.1 million, down $0.5 million compared with revenues of $31.6 million in the fourth quarter of 2015, primarily as a result of lower quarter-over-quarter performance-based advisory fees. Assets Under Management ("AUM") totaled $21.2 billion at December 31, 2016 versus $20.8 billion at December 31, 2015.

Fourth quarter net income was $7.6 million compared with $4.7 million for the fourth quarter of 2015, which included a net non-cash charge of $1.0 million related to acceleration of stock-based compensation expense for a particular grant and a $0.8 million tax charge for uncertain tax positions related to prior years. Diluted earnings per share ("Diluted EPS") of $0.92 compared to $0.58 for the fourth quarter of 2015. Non-GAAP Economic Earnings for the quarter increased 16% to $12.0 million, up from $10.4 million in the fourth quarter of 2015. Non-GAAP Economic Earnings per share ("Economic EPS") rose 13% to $1.45 from $1.28 in the fourth quarter of 2015.

Total revenues for fiscal 2016 were $123.0 million, 6% lower than $130.9 million in 2015. The decrease was primarily due to a $7.8 million decline in asset-based advisory fees reflecting lower average AUM in 2016 coupled with a $2.1 million decrease in performance-based advisory fees, partially offset by a $1.5 million increase in Trust fees due to a full year of revenue reported by Woodway.

Net income for 2016 totaled $22.6 million, a 17% decrease from the prior year's $27.1 million, primarily due to the decrease in total revenues. Diluted EPS of $2.77 compared with $3.33 for 2015. Economic EPS of $5.03 decreased 12% from $5.71 in 2015.

Highlights of our fourth quarter include:

  • Launch of a new tax-efficient, high conviction select equity strategy for high-net-worth individuals.
  • Strong performance of our Emerging Markets and Global Convertible Securities strategies.
  • Declaration of a 9% increase in the quarterly cash dividend rate to $0.62 per common share.

Brian Casey, Westwood's President & CEO, commented, "We were very pleased with the performance of our Emerging Markets products, especially our Emerging Markets SmidCap product, which outperformed its benchmark by over 700 basis points in 2016, and we celebrated the three-year anniversary of our LargeCap concentrated strategy with performance well ahead of its benchmark over the three-year period. We are optimistic about the year ahead as weaker market correlations signal a shift to an environment that favors active management. At the end of the year, we introduced a new strategy for our private wealth clients that includes our highest conviction ideas and is designed to be tax efficient.  We have high expectations for this strategy and remain committed to our time-tested investment philosophy of focusing on quality businesses with strong balance sheets and attractive valuations, which we believe will produce superior risk-adjusted returns over the long term."

Westwood's Board of Directors declared a quarterly cash dividend of $0.62 per common share, payable on April 3, 2017 to stockholders of record on March 10, 2017.  At year end, Westwood had $90.2 million in cash and investments, stockholders' equity of $146.1 million, and no debt.

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 fourth quarter and fiscal year 2016 results and other business matters at 4:30 p.m. Eastern time today.  To join the conference call, dial 877-303-6235 (U.S. and Canada) or 631-291-4837 (international).  The conference call can also be accessed via our Investor Relations page at and will be available for replay through February 15, 2017 by dialing 855-859-2056 (U.S. and Canada) or 404-537-3406 (international) and entering the passcode 53551712.

About Westwood

Westwood Holdings Group, Inc. provides investment management services to institutional investors, private wealth clients and financial intermediaries. With $21.2 billion in assets under management (as of December 31, 2016), our firm offers a range of investment strategies including U.S. equities, Master Limited Partnerships (MLPs), Multi-Asset, Global and Emerging Markets equities, and Global Convertible securities portfolios. Access to these strategies is available through separate accounts, the Westwood Funds® family of mutual funds, UCITS funds 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 Toronto, Boston, Omaha and Houston.

For more information on Westwood, please visit

For more information on the Westwood Funds®, please visit

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," "forecast," "believe," "plan," "estimate," "expect," "intend," "should," "could," "goal," "may," "target," "designed," "on track," "comfortable with," "optimistic" 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: regulations adversely affecting the financial services industry; the composition and market value of our assets under management; competition in the investment management industry; our investments in foreign companies; our ability to develop and market new investment strategies successfully; our ability to pursue and properly integrate acquired businesses; litigation risks; our ability to retain qualified personnel; our relationships with current and potential customers; our ability to properly address conflicts of interest; our ability to maintain adequate insurance coverage; our ability to maintain effective information systems; our ability to maintain effective cyber security; our ability to maintain an effective system of internal controls; our ability to maintain our fee structure in light of competitive fee pressures; our relationships with investment consulting firms; the significant concentration of our revenues in a small number of customers; 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, 2015 and its quarterly reports on Form 10-Q for the quarters ended March 31, 2016, June 30, 2016, and September 30, 2016. 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.


(in thousands, except per share and share amounts)
  Three Months Ended
  December 31,
  September 30,
  December 31,
Advisory fees:          
Asset-based $ 23,564     $ 23,447     $ 22,948  
Performance-based     226     492  
Trust fees 7,515     7,690     7,751  
Other, net 13     414     375  
Total revenues 31,092     31,777     31,566  
Employee compensation and benefits $ 14,270     $ 15,637     $ 16,055  
Sales and marketing 496     408     529  
Westwood mutual funds 873     755     842  
Information technology 1,696     1,874     1,647  
Professional services 915     1,903     1,336  
General and administrative 2,043     2,147     2,569  
Total expenses 20,293     22,724     22,978  
Income before income taxes 10,799     9,053     8,588  
Provision for income taxes 3,222     3,166     3,901  
Net income $ 7,577     $ 5,887     $ 4,687  
Other comprehensive income (loss):          
Foreign currency translation adjustments (606 )   (453 )   (916 )
Total comprehensive income $ 6,971     $ 5,434     $ 3,771  
Earnings per share:          
Basic $ 0.95     $ 0.74     $ 0.60  
Diluted $ 0.92     $ 0.72     $ 0.58  
Weighted average shares outstanding:          
Basic 7,988,558   7,995,680   7,813,142
Diluted 8,261,274   8,179,956   8,124,268
Economic Earnings $ 12,014     $ 10,615     $ 10,391  
Economic EPS $ 1.45     $ 1.30     $ 1.28  
Dividends declared per share $ 0.62     $ 0.57     $ 0.57  

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