Westwood Holdings Group Posts 1Q 2009 Results, Declares Quarterly Dividend

Apr 26, 2009 (Close-Up Media via COMTEX) -- WHG | Quote | Chart | News | PowerRating -- Westwood Holdings Group, Inc. has reported 2009 first quarter revenues of $8.2 million, net income of $1.2 million and earnings per diluted share of $0.19.

In a release on Apri 21, the Company noted this compares to revenues of $9.1 million, net income of $2.0 million and earnings per diluted share of $0.31 in the first quarter of 2008. Cash earnings for the first quarter of 2009 were $2.7 million compared to $3.2 million for the first quarter of 2008. Cash earnings per share ("Cash EPS") for the first quarter of 2009 were $0.41 per diluted share compared to $0.50 per diluted share for the first quarter of 2008. (Cash earnings and Cash EPS are non-GAAP financial measures that are explained and reconciled with the most comparable GAAP financial measures in the attached tables.)

Brian Casey, Westwood's President & CEO commented, "Despite the very tough market conditions encountered in the first quarter, we were able to maintain year-end asset levels primarily due to strong inflows. Our business model, with its transparent, employee/shareholder partnership, allows for continued stability during a period of extreme volatility. While many firms have had to cut their dividend and reduce headcount, our Board today declared a dividend that maintains an annual rate of $1.20 per share. In addition, over the past twelve months, we have added eight employees, which we believe enhance our team's capabilities and capacity to support the long-term success of the firm. Investments over the past three years to build our own family of mutual funds, the WHG Funds, have proven to be very rewarding. Our relative performance has been excellent and we have experienced steady inflows. In a decidedly negative quarter for equity markets, assets under management in the WHG Funds increased 13 percent during the first quarter compared to year-end 2008 assets. We believe that the current market upheaval creates many opportunities for firms like Westwood that are client-focused, financially secure, ethically strong and with a demonstrated track record over many market cycles. We are committed to delivering superior investment results, serving our clients attentively and seeking opportunities to grow our business successfully."

Assets under management were $7.2 billion as of March 31, a 4 percent decrease versus assets under management of $7.5 billion at March 31, 2008. Average assets under management for the first quarter were $7.2 billion, a decrease of 6 percent compared with $7.7 billion for the first quarter of 2008. The year-over-year decrease in period ending assets under management was primarily due to market depreciation. Primarily as a result of lower average assets under management, revenues declined by 10 percent versus the first quarter of 2008.

Total expenses for the first quarter were $6.3 million compared with $6.1 million for the first quarter of 2008. Cash expenses for the first quarter were $4.8 million compared with $4.9 million for the first quarter of 2008. (An explanation and reconciliation of cash expenses to total expenses is included in the attached tables.) The primary drivers of the increase in total expenses were: an increase of $274,000 in non-cash restricted stock expense due to additional restricted stock grants made in February 2009 and 2008 as well as the higher price at which these shares were granted compared to prior grants; an increase of $187,000 in salary expense due to increased headcount; and an increase in WHG mutual funds expense of $143,000 due primarily to expenses related to future opportunities for additional mutual fund assets that we believe will be realized later in 2009. These increases were offset by a decrease in incentive compensation expense of $435,000 due to lower pretax income and a $112,000 decrease in financial advisory expense at Westwood Trust due to lower subadvised assets under management.

Westwood Trust contributed revenue of $2.4 million and net income of $319,000 in the first quarter of 2009, compared to revenue of $2.8 million and net income of $427,000 in the first quarter of 2008. Westwood Trust's assets under management as of March 31, were $1.5 billion, a decrease of 14 percent versus $1.7 billion as of March 31, 2008. The decrease in assets under management was primarily due to market depreciation, partially offset by net inflows from new and existing clients.

The WHG Funds, consisting of WHG LargeCap Value, WHG SMidCap, WHG SmallCap Value, WHG Income Opportunity and WHG Balanced, held $285 million in assets under management as of March 31, an increase of approximately 15 percent versus March 31, 2008. WHG SMidCap and WHG Income Opportunity are currently rated by Morningstar, Inc. as 5-stars and 4-stars, respectively. The WHG LargeCap Value and WHG Balanced funds will be rated by Morningstar when they complete their three year track record later this year.

Westwood also announced that its Board of Directors declared a quarterly cash dividend of $0.30 per common share payable on July 1, to stockholders of record on June 15.

Westwood Holdings Group, Inc. manages investment assets and provides services for its clients through two subsidiaries, Westwood Management Corp. and Westwood Trust. Westwood Management Corp. is a registered investment advisor and provides investment advisory services to corporate and public retirement plans, endowments, foundations, the WHG Funds, other mutual funds and clients of Westwood Trust.

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