Westwood Holdings Group, Inc. (NYSE: WHG) today reported fourth
quarter earnings. Significant items include:
- SmallCap Value, Select Equity, High Alpha, Dividend Select,
Enhanced Balanced, Total Return, Alternative Income and Select
Income strategies all beat their primary benchmarks.
- Strong investment performance came from Income Opportunity,
Alternative Income, SmallCap Value, High Income and Total Return
all posting top quartile rankings, and Westwood Salient Select
Income posted a top decile ranking.
- Quarterly revenues totaled $23.2 million versus the third
quarter's $21.9 million and $20.5 million a year ago. Comprehensive
income of $2.6 million compared with $3.4 million in the third
quarter and a net loss of $3.1 million in the fourth quarter
of 2022.
- Non-GAAP Economic Earnings of $5.2 million for the quarter
compared with $6.3 million in the third quarter and a loss of $0.7
million in the fourth quarter of 2022.
- Our annual comprehensive income totaled $9.5 million versus a
net loss of $4.6 million for the previous year, and included $5.3
million after taxes of life insurance proceeds and contingent
consideration fair value adjustments, both for Salient.
- Westwood held $53.1 million in cash and short-term investments
at December 31, 2023, up $4.6 million from September 30, 2023.
Stockholders' equity totaled $120.4 million as of December 31,
2023 and we continue to have no debt.
- We declared a cash dividend of $0.15 per common share, payable
on April 3, 2024 to stockholders of record on March 1,
2024.
Brian Casey, Westwood’s CEO, commented, "Several of
our strategies produced excellent results for our clients in the
fourth quarter by delivering top quartile performance. Several
SmidCap Value wins in the fourth quarter will be funded shortly and
our new business pipeline is growing nicely. Advisors in the
intermediary space are definitely taking more meetings and they had
a very busy January. Our wealth business has made several key hires
and is showing continuous progress in improving efficiency and
generating better margins. We are excited for the year ahead and
look forward to offering clients a new set of capabilities,
combining active asset allocation with passive investment
solutions, delivered by the creative and highly experienced Managed
Investment Solutions team that has just joined Westwood."
Revenues of $23.2 million increased $2.8 million
from 2022's fourth quarter thanks to higher average assets under
management ("AUM") following the acquisition of Salient Partners'
asset management business in November 2022 and the acquisition of
Broadmark Asset Management in early 2023. Revenues rose $1.3
million versus the third quarter on higher performance fees.
Firmwide assets under management and advisement
totaled $16.6 billion at year end, consisting of AUM of $15.5
billion and assets under advisement ("AUA") of $1.1 billion.
Fourth quarter net income of $2.6 million
compared to $4.4 million in the third quarter reflecting receipt of
life insurance proceeds in the third quarter and higher income
taxes in the fourth quarter, partially offset by higher revenues.
Diluted EPS of $0.32 compared to $0.41 per share for the third
quarter. Non-GAAP Economic Earnings were $5.2 million, or $0.63 per
share, compared to the third quarter's $6.3 million, or $0.77 per
share.
Fourth quarter net income of $2.6 million
compared to last year's fourth quarter net loss of $3.1 million due
to higher revenues and lower acquisition expenses, partially offset
by higher employee expenses and income taxes. Diluted EPS of $0.32
compared with $(0.40) per share for 2022's fourth quarter. Non-GAAP
Economic Earnings (Loss) of $5.2 million, or $0.63 per share,
compared to $(0.7) million, or $(0.09) per share, in the fourth
quarter of 2022.
2023 net income of $10.6 million compared to
2022's net loss of $4.6 million thanks to higher revenues, life
insurance proceeds, changes in the fair value of contingent
consideration and lower acquisition expenses, partially offset by
higher costs for employee compensation, information technology, and
general and administrative activities following the acquisition of
Salient Partners' asset management business in late 2022. Diluted
EPS was $1.17 per share compared with $(0.59) per share for 2022.
Economic EPS of $2.55 compared with $0.45 in 2022.
Economic Earnings (Loss) and Economic EPS are
non-GAAP performance measures that 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 2023 results and other business
matters at 4:30 p.m. Eastern time today. To join the conference
call, please register here:
https://edge.media-server.com/mmc/p/rbn4eokh
After registering, you will be provided with a
dial-in number containing a personalized PIN.
Webcast Link: :
https://register.vevent.com/register/BI67285b888a794244b24e58e42389eca5
ABOUT WESTWOOD HOLDINGS
GROUP
Westwood Holdings Group, Inc. is an investment
management boutique and wealth management firm.
Westwood offers a broad array of investment
solutions to institutional investors, private wealth clients and
financial intermediaries. The firm specializes in several distinct
investment capabilities including U.S. Value Equity, Multi-Asset,
Tactical Absolute Return, Energy & Real Assets and Income
Alternatives. In addition, the firm has recently begun to add
capabilities in Managed Investment Solutions and Exchange Traded
Funds (ETFs). Westwood’s strategies are made available through
separate accounts, the Westwood Funds® family of mutual 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 Chicago, Houston and San Francisco.
For more information on Westwood, please visit
westwoodgroup.com.
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,” “believe,” “expect,”
“could,” 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: the composition and market
value of our AUM; our ability to maintain our fee structure in
light of competitive fee pressures; our stockholder rights
agreement may make it more difficult for others to obtain control
over us, even if it would be beneficial to our stockholders; risks
associated with actions of activist stockholders; distributions to
our common stockholders have included and may in the future include
a return of capital; inclusion of foreign company investments in
our AUM; regulations adversely affecting the financial services
industry; our ability to maintain effective cyber security;
litigation risks; our ability to develop and market new investment
strategies successfully; our reputation and our relationships with
current and potential customers; our ability to attract and retain
qualified personnel; our ability to perform operational tasks; our
ability to select and oversee third-party vendors; our dependence
on the operations and funds of our subsidiaries; our ability to
maintain effective information systems; our ability to prevent
misuse of assets and information in the possession of our employees
and third-party vendors, which could damage our reputation and
result in costly litigation and liability for our clients and us;
our stock is thinly traded and may be subject to volatility; in
addition to our stockholder rights agreement, our organizational
documents contain provisions that may prevent or deter another
group from paying a premium over the market price to our
stockholders to acquire our stock; competition in the investment
management industry; our ability to avoid termination of client
agreements and the related investment redemptions; the significant
concentration of our revenues in a small number of customers; our
relationships with investment consulting firms; the impact of the
COVID-19 pandemic; our ability to identify and execute on our
strategic initiatives; our ability to declare and pay dividends;
our ability to fund future capital requirements on favorable terms;
our ability to properly address conflicts of interest; our ability
to maintain adequate insurance coverage; our ability to maintain an
effective system of internal controls; 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, 2022 and its quarterly report on Form 10-Q for
the quarters ended March 31, 2023, June 30, 2023 and September 30,
2023. 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.
SOURCE: Westwood Holdings Group, Inc.
(WHG-G)CONTACT:Westwood Holdings Group,
Inc.Terry ForbesChief Financial Officer and Treasurer(214)
756-6900
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)(in thousands, except
per share and share
amounts)(unaudited)
| |
Three Months Ended |
| |
December 31, 2023 |
|
September 30, 2023 |
|
December 31, 2022 |
|
REVENUES: |
|
|
|
|
|
|
Advisory fees: |
|
|
|
|
|
|
Asset-based |
$ |
16,657 |
|
|
$ |
16,902 |
|
|
$ |
13,441 |
|
|
Performance-based |
|
710 |
|
|
|
— |
|
|
|
1,018 |
|
|
Trust fees |
|
5,124 |
|
|
|
5,063 |
|
|
|
5,429 |
|
|
Trust performance-based |
|
349 |
|
|
|
— |
|
|
|
— |
|
|
Other, net |
|
389 |
|
|
|
(85 |
) |
|
|
568 |
|
|
Total revenues |
|
23,229 |
|
|
|
21,880 |
|
|
|
20,456 |
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
Employee compensation and benefits |
|
12,367 |
|
|
|
12,661 |
|
|
|
11,131 |
|
|
Sales and marketing |
|
810 |
|
|
|
676 |
|
|
|
677 |
|
|
Westwood mutual funds |
|
783 |
|
|
|
872 |
|
|
|
890 |
|
|
Information technology |
|
2,367 |
|
|
|
2,334 |
|
|
|
2,104 |
|
|
Professional services |
|
1,239 |
|
|
|
1,009 |
|
|
|
1,469 |
|
|
General and administrative |
|
2,933 |
|
|
|
3,298 |
|
|
|
2,488 |
|
|
(Gain) loss from change in fair value of contingent
consideration |
|
(113 |
) |
|
|
2,483 |
|
|
|
— |
|
|
Acquisition expenses |
|
— |
|
|
|
— |
|
|
|
5,505 |
|
|
Total expenses |
|
20,386 |
|
|
|
23,333 |
|
|
|
24,264 |
|
|
Net operating income (loss) |
|
2,843 |
|
|
|
(1,453 |
) |
|
|
(3,808 |
) |
|
Net change in unrealized appreciation (depreciation) on private
investments |
|
(18 |
) |
|
|
— |
|
|
|
(984 |
) |
|
Investment income |
|
561 |
|
|
|
247 |
|
|
|
173 |
|
|
Other income |
|
365 |
|
|
|
5,265 |
|
|
|
309 |
|
|
Income (loss) before income taxes |
|
3,751 |
|
|
|
4,059 |
|
|
|
(4,310 |
) |
|
Provision for income taxes |
|
1,168 |
|
|
|
(316 |
) |
|
|
(1,185 |
) |
|
Net income (loss) |
$ |
2,583 |
|
|
$ |
4,375 |
|
|
$ |
(3,125 |
) |
|
Total comprehensive income (loss) |
$ |
2,583 |
|
|
$ |
4,375 |
|
|
$ |
(3,125 |
) |
|
Less: Comprehensive income (loss) attributable to noncontrolling
interest |
|
7 |
|
|
|
1,019 |
|
|
|
— |
|
|
Comprehensive income (loss) attributable to Westwood Holdings
Group, Inc. |
$ |
2,576 |
|
|
$ |
3,356 |
|
|
$ |
(3,125 |
) |
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
Basic |
$ |
0.32 |
|
|
$ |
0.42 |
|
|
$ |
(0.40 |
) |
|
Diluted |
$ |
0.32 |
|
|
$ |
0.41 |
|
|
$ |
(0.40 |
) |
| |
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
Basic |
|
8,007,896 |
|
|
|
8,002,537 |
|
|
|
7,775,545 |
|
|
Diluted |
|
8,184,736 |
|
|
|
8,116,747 |
|
|
|
7,775,545 |
|
| |
|
|
|
|
|
|
Economic Earnings (Loss) |
$ |
5,181 |
|
|
$ |
6,263 |
|
|
$ |
(738 |
) |
|
Economic EPS |
$ |
0.63 |
|
|
$ |
0.77 |
|
|
$ |
(0.09 |
) |
| |
|
|
|
|
|
|
Dividends declared per share |
$ |
0.15 |
|
|
$ |
0.15 |
|
|
$ |
0.15 |
|
|
|
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)(in thousands, except
per share and share
amounts)(unaudited)
| |
Year Ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
REVENUES: |
|
|
|
|
Advisory fees: |
|
|
|
|
Asset-based |
$ |
67,391 |
|
|
$ |
46,685 |
|
|
Performance-based |
|
1,265 |
|
|
|
1,018 |
|
|
Trust fees |
|
20,242 |
|
|
|
21,686 |
|
|
Trust performance-based |
|
349 |
|
|
|
— |
|
|
Other, net |
|
534 |
|
|
|
(708 |
) |
|
Total revenues |
|
89,781 |
|
|
|
68,681 |
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
Employee compensation and benefits |
|
52,918 |
|
|
|
40,124 |
|
|
Sales and marketing |
|
2,990 |
|
|
|
2,003 |
|
|
Westwood mutual funds |
|
3,133 |
|
|
|
2,201 |
|
|
Information technology |
|
9,650 |
|
|
|
7,719 |
|
|
Professional services |
|
5,132 |
|
|
|
5,357 |
|
|
General and administrative |
|
12,512 |
|
|
|
9,057 |
|
|
(Gain) loss from change in fair value of contingent
consideration |
|
(2,768 |
) |
|
|
— |
|
|
Acquisition expenses |
|
209 |
|
|
|
7,093 |
|
|
Total expenses |
|
83,776 |
|
|
|
73,554 |
|
|
Net operating income (loss) |
|
6,005 |
|
|
|
(4,873 |
) |
|
Net change in unrealized appreciation (depreciation) on private
investments |
|
6 |
|
|
|
(1,495 |
) |
|
Net investment income (loss) |
|
1,191 |
|
|
|
266 |
|
|
Other income |
|
6,241 |
|
|
|
907 |
|
|
Income (loss) before income taxes |
|
13,443 |
|
|
|
(5,195 |
) |
|
Income tax provision |
|
2,872 |
|
|
|
(567 |
) |
|
Net income (loss) |
$ |
10,571 |
|
|
$ |
(4,628 |
) |
|
Total comprehensive income (loss) |
$ |
10,571 |
|
|
$ |
(4,628 |
) |
|
Less: Comprehensive income (loss) attributable to noncontrolling
interest |
|
1,051 |
|
|
|
— |
|
|
Comprehensive income (loss) attributable to Westwood
Holdings Group, Inc. |
$ |
9,520 |
|
|
$ |
(4,628 |
) |
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
Basic |
$ |
1.20 |
|
|
$ |
(0.59 |
) |
|
Diluted |
$ |
1.17 |
|
|
$ |
(0.59 |
) |
| |
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
Basic |
|
7,964,423 |
|
|
|
7,844,363 |
|
|
Diluted |
|
8,112,139 |
|
|
|
7,844,363 |
|
| |
|
|
|
|
Economic Earnings |
$ |
20,717 |
|
|
$ |
3,564 |
|
|
Economic EPS |
$ |
2.55 |
|
|
$ |
0.45 |
|
| |
|
|
|
|
Dividends declared per share |
$ |
0.60 |
|
|
$ |
0.60 |
|
|
|
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands, except par value and share
amounts)(unaudited)
| |
December 31, 2023 |
|
December 31, 2022 |
|
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ |
20,422 |
|
|
$ |
23,859 |
|
|
Accounts receivable |
|
14,394 |
|
|
|
13,900 |
|
|
Investments, at fair value |
|
32,674 |
|
|
|
15,342 |
|
|
Income taxes receivable |
|
205 |
|
|
|
446 |
|
|
Other current assets |
|
4,543 |
|
|
|
4,645 |
|
|
Total current assets |
|
72,238 |
|
|
|
58,192 |
|
|
Investments |
|
7,247 |
|
|
|
4,455 |
|
|
Equity method investments |
|
4,284 |
|
|
|
6,574 |
|
|
Noncurrent investments at fair value |
|
241 |
|
|
|
3,027 |
|
|
Goodwill |
|
39,501 |
|
|
|
35,732 |
|
|
Deferred income taxes |
|
728 |
|
|
|
1,762 |
|
|
Operating lease right-of-use assets |
|
3,673 |
|
|
|
4,976 |
|
|
Intangible assets, net |
|
24,803 |
|
|
|
28,952 |
|
|
Property and equipment, net of accumulated depreciation of $10,078
and $9,277 |
|
1,444 |
|
|
|
1,828 |
|
|
Other long-term assets |
|
1,008 |
|
|
|
929 |
|
|
Total long-term assets |
|
82,929 |
|
|
|
88,235 |
|
|
Total assets |
$ |
155,167 |
|
|
$ |
146,427 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
$ |
6,130 |
|
|
$ |
5,678 |
|
|
Dividends payable |
|
1,692 |
|
|
|
1,745 |
|
|
Compensation and benefits payable |
|
9,539 |
|
|
|
8,689 |
|
|
Operating lease liabilities |
|
1,286 |
|
|
|
1,502 |
|
|
Total current liabilities |
|
18,647 |
|
|
|
17,614 |
|
|
Accrued dividends |
|
675 |
|
|
|
701 |
|
|
Contingent consideration |
|
10,133 |
|
|
|
12,901 |
|
|
Noncurrent operating lease liabilities |
|
3,266 |
|
|
|
4,563 |
|
|
Total long-term liabilities |
|
14,074 |
|
|
|
18,165 |
|
|
Total liabilities |
|
32,721 |
|
|
|
35,779 |
|
|
Stockholders’ Equity: |
|
|
|
|
Common stock, $0.01 par value, authorized 25,000,000
shares, issued 11,856,737 and outstanding 9,140,760 shares at
December 31, 2023; issued 11,527,544 and outstanding 8,881,831
shares at December 31, 2022 |
|
119 |
|
|
|
115 |
|
|
Additional paid-in capital |
|
201,622 |
|
|
|
199,914 |
|
|
Treasury stock, at cost – 2,715,977 shares at December 31, 2023;
2,645,713 shares at December 31, 2022 |
|
(85,990 |
) |
|
|
(85,128 |
) |
|
Retained earnings (accumulated deficit) |
|
4,650 |
|
|
|
(4,253 |
) |
|
Total Westwood Holdings Group, Inc. stockholders'
equity |
|
120,401 |
|
|
|
110,648 |
|
|
Noncontrolling interest in consolidated
subsidiary |
|
2,045 |
|
|
|
— |
|
|
Total equity |
|
122,446 |
|
|
|
110,648 |
|
|
Total liabilities and stockholders’ equity |
$ |
155,167 |
|
|
$ |
146,427 |
|
|
|
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(in
thousands)(unaudited)
| |
Year ended December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
Cash flows from operating activities: |
|
|
|
|
Net income (loss) |
$ |
10,571 |
|
|
$ |
(4,628 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: |
|
|
|
|
Depreciation |
|
670 |
|
|
|
687 |
|
|
Amortization of intangible assets |
|
4,149 |
|
|
|
1,889 |
|
|
Net change in unrealized (appreciation) depreciation on
investments |
|
(839 |
) |
|
|
2,136 |
|
|
Stock-based compensation expense |
|
6,518 |
|
|
|
6,001 |
|
|
Deferred income taxes |
|
1,036 |
|
|
|
(916 |
) |
|
Non-cash lease expense |
|
1,103 |
|
|
|
1,110 |
|
|
Loss on asset disposition |
|
69 |
|
|
|
— |
|
|
Gain on remeasurement of lease liabilities |
|
(119 |
) |
|
|
— |
|
|
Fair value change of contingent consideration |
|
(2,768 |
) |
|
|
— |
|
|
Gain on insurance settlement |
|
(5,000 |
) |
|
|
— |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
Net (purchases) sales of investments – trading securities |
|
(16,609 |
) |
|
|
48,977 |
|
|
Accounts receivable |
|
135 |
|
|
|
(313 |
) |
|
Other current assets |
|
660 |
|
|
|
(1,842 |
) |
|
Accounts payable and accrued liabilities |
|
(447 |
) |
|
|
1,251 |
|
|
Compensation and benefits payable |
|
851 |
|
|
|
(861 |
) |
|
Income taxes payable |
|
241 |
|
|
|
(687 |
) |
|
Other liabilities |
|
(1,433 |
) |
|
|
(1,314 |
) |
|
Net cash provided by (used in) operating activities |
|
(1,212 |
) |
|
|
51,490 |
|
|
Cash flows from investing activities: |
|
|
|
|
Acquisitions, net of cash acquired |
|
(741 |
) |
|
|
(33,419 |
) |
|
Insurance settlement proceeds |
|
5,000 |
|
|
|
— |
|
|
Purchases of property and equipment |
|
(147 |
) |
|
|
(320 |
) |
|
Net cash provided by (used in) investing activities |
|
4,112 |
|
|
|
(33,739 |
) |
|
Cash flows from financing activities: |
|
|
|
|
Purchases of treasury stock |
|
— |
|
|
|
(2,851 |
) |
|
Restricted stock returned for payment of taxes |
|
(863 |
) |
|
|
(627 |
) |
|
Cash dividends |
|
(5,474 |
) |
|
|
(5,625 |
) |
|
Net cash used in financing activities |
|
(6,337 |
) |
|
|
(9,103 |
) |
|
Effect of currency rate changes on cash |
|
— |
|
|
|
5 |
|
|
Net increase (decrease) in cash and cash
equivalents |
|
(3,437 |
) |
|
|
8,653 |
|
|
Cash and cash equivalents, beginning of
period |
|
23,859 |
|
|
|
15,206 |
|
|
Cash and cash equivalents, end of period |
$ |
20,422 |
|
|
$ |
23,859 |
|
| |
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
Cash paid during the period for income taxes |
$ |
1,594 |
|
|
$ |
1,858 |
|
|
Right-of-use assets obtained in exchange for operating lease
liabilities |
$ |
173 |
|
|
$ |
1,217 |
|
|
Accrued dividends |
$ |
2,368 |
|
|
$ |
2,446 |
|
|
Acquired contingent consideration |
$ |
— |
|
|
$ |
12,901 |
|
|
|
WESTWOOD HOLDINGS GROUP, INC. AND
SUBSIDIARIESReconciliation of Comprehensive Income
(Loss) Attributable to Westwood Holdings Group, Inc. to Economic
Earnings (Loss)(in thousands, except per share and
share amounts)(unaudited)
As supplemental information, we are providing
non-GAAP performance measures that we refer to as Economic Earnings
(Loss) and Economic EPS. We provide these measures in addition to,
not as a substitute for, Comprehensive income (loss) attributable
to Westwood Holdings Group, Inc. and earnings (loss) per share,
which are reported on a GAAP basis. Our management and Board of
Directors review Economic Earnings (Loss) and Economic EPS to
evaluate our ongoing performance, allocate resources, and review
our dividend policy. We believe that these non-GAAP performance
measures, while not substitutes for GAAP Comprehensive income
(loss) attributable to Westwood Holdings Group, Inc. or earnings
(loss) per share, are useful for management and investors when
evaluating our underlying operating and financial performance and
our available resources. We do not advocate that investors consider
these non-GAAP measures without also considering financial
information prepared in accordance with GAAP.
We define Economic Earnings (Loss) as
Comprehensive income (loss) attributable to Westwood Holdings
Group, Inc. plus non-cash equity-based compensation expense,
amortization of intangible assets and deferred taxes related to
goodwill. Although depreciation on fixed assets is a non-cash
expense, we do not add it back when calculating Economic Earnings
(Loss) because depreciation charges represent an allocation of the
decline in the value of the related assets that will ultimately
require replacement. Although gains and losses from changes in the
fair value of contingent consideration are non-cash, we do not add
or subtract those back when calculating Economic Earnings (Loss)
because gains and losses on changes in the fair value of contingent
consideration are considered regular following an acquisition. In
addition, we do not adjust Economic Earnings (Loss) for tax
deductions related to restricted stock expense or amortization of
intangible assets. Economic EPS represents Economic Earnings (Loss)
divided by diluted weighted average shares outstanding.
| |
Three Months Ended |
| |
December 31,2023 |
|
September 30,2023 |
|
December 31,2022 |
|
Comprehensive income (loss) attributable to Westwood
Holdings Group, Inc. |
$ |
2,576 |
|
$ |
3,356 |
|
$ |
(3,125 |
) |
|
Stock-based compensation expense |
|
1,407 |
|
|
1,739 |
|
|
1,591 |
|
|
Intangible amortization |
|
1,073 |
|
|
1,043 |
|
|
671 |
|
|
Tax benefit from goodwill amortization |
|
125 |
|
|
125 |
|
|
125 |
|
|
Economic Earnings (Loss) |
$ |
5,181 |
|
$ |
6,263 |
|
$ |
(738 |
) |
|
Earnings (loss) per share |
$ |
0.31 |
|
$ |
0.41 |
|
$ |
(0.40 |
) |
|
Stock-based compensation expense |
|
0.17 |
|
|
0.21 |
|
|
0.20 |
|
|
Intangible amortization |
|
0.13 |
|
|
0.13 |
|
|
0.09 |
|
|
Tax benefit from goodwill amortization |
|
0.02 |
|
|
0.02 |
|
|
0.02 |
|
|
Economic EPS |
$ |
0.63 |
|
$ |
0.77 |
|
$ |
(0.09 |
) |
|
Diluted weighted average shares |
|
8,184,736 |
|
|
8,116,747 |
|
|
7,775,545 |
|
| |
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
Comprehensive income (loss) attributable to Westwood
Holdings Group, Inc. |
$ |
9,520 |
|
$ |
(4,628 |
) |
|
Stock-based compensation expense |
|
6,518 |
|
|
6,001 |
|
|
Intangible amortization |
|
4,179 |
|
|
1,889 |
|
|
Tax benefit from goodwill amortization |
|
500 |
|
|
302 |
|
|
Economic Earnings |
$ |
20,717 |
|
$ |
3,564 |
|
|
Earnings (loss) per share |
$ |
1.17 |
|
$ |
(0.59 |
) |
|
Stock-based compensation expense |
|
0.80 |
|
|
0.77 |
|
|
Intangible amortization |
|
0.52 |
|
|
0.24 |
|
|
Tax benefit from goodwill amortization |
|
0.06 |
|
|
0.04 |
|
|
Economic EPS |
$ |
2.55 |
|
$ |
0.45 |
|
|
Diluted weighted average shares |
|
8,112,139 |
|
|
7,844,363 |
|
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