GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Westwood Holdings Group Inc. Reports Operating Results (10-Q)

August 02, 2010 | About:
10qk

10qk

18 followers
Westwood Holdings Group Inc. (WHG) filed Quarterly Report for the period ended 2010-06-30.

Westwood Holdings Group Inc. has a market cap of $264.3 million; its shares were traded at around $36.23 with a P/E ratio of 23.37 and P/S ratio of 6.21. The dividend yield of Westwood Holdings Group Inc. stocks is 3.64%. Westwood Holdings Group Inc. had an annual average earning growth of 1.7% over the past 10 years.WHG is in the portfolios of Third Avenue Management, Chuck Royce of Royce& Associates, John Keeley of Keeley Fund Management, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Assets under management increased $1.5 billion to $9.7 billion at June 30, 2010, compared with $8.2 billion at June 30, 2009. The average of beginning and ending assets under management for the second quarter of 2010 was $10.1 billion compared to $7.7 billion for the second quarter of 2009, an increase of 32%. The year-over-year increase in period ending assets under management was due to market appreciation of assets under management and asset inflows from new and existing clients, partially offset by the withdrawal of assets by certain clients. The following table sets forth Westwood Managements and Westwood Trusts assets under management as of June 30, 2010 and 2009:

Total Revenues. Our total revenues increased by 32% to $13.2 million for the three months ended June 30, 2010 compared with $10.0 million for the three months ended June 30, 2009. Asset-based advisory fees increased by 42% to $10.2 million for the three months ended June 30, 2010 compared with $7.2 million for the three months ended June 30, 2009, as a result of increased average assets under management by Westwood Management due to market appreciation of assets and inflows from new and existing clients, partially offset by the withdrawal of assets by certain clients. Trust fees increased by 35% to $3.1 million for the three months ended June 30, 2010 compared with $2.3 million for the three months ended June 30, 2009 as a result of increased assets under management by Westwood Trust due to market appreciation of assets and inflows from new accounts. Net asset outflows from existing clients partially offset these increases. Other revenues, which generally consist of interest and investment

income, decreased to $(133,000) for the three months ended June 30, 2010 compared with $454,000 for the three months ended June 30, 2009. Other revenues are presented net and decreased primarily due to an increase of $896,000 in net unrealized losses on investments and a $154,000 decrease in dividends and interest income, partially offset by a decrease of $463,000 in realized losses from prior year sales of investments.

Employee Compensation and Benefits. Employee compensation and benefits costs generally consist of salaries, incentive compensation, equity-based compensation expense and benefits. Employee compensation and benefits costs increased by 25% to $7.4 million for the three months ended June 30, 2010 compared with $5.9 million for the three months ended June 30, 2009. The increase was primarily due to increases of $813,000 in incentive compensation expense as a result of higher pretax income, $410,000 in restricted stock expense due to $230,000 of expense related to performance-based grants and $180,000 related to additional employee restricted stock grants in February 2010 that were granted at a higher price compared to prior grants and $145,000 in salary expense due primarily to salary increases and increased average headcount. In the first quarter of 2010, we concluded that it was probable that we would meet the performance goal required in order for the applicable percentage of the performance-based restricted shares awarded to our Chief Investment Officer and Chief Executive Officer to vest. As a result, we recognized expense of approximately $235,000 and $701,000 in the first and second quarters, respectively, related to these performance-based restricted stock grants. We expect to recognize amounts in the third and fourth quarters of 2010 related to these performance-based restricted stock grants. We had 64 full-time employees as of June 30, 2010 compared to 63 full-time employees as of June 30, 2009.

Total Revenues. Our total revenues increased by 45% to $26.4 million for the six months ended June 30, 2010 compared with $18.2 million for the six months ended June 30, 2009. Asset-based advisory fees increased by 52% to $20.3 million for the six months ended June 30, 2010 compared with $13.3 million for the six months ended June 30, 2009, as a result of increased average assets under management by Westwood Management due to market appreciation of assets and inflows from new and existing clients, partially offset by the withdrawal of assets by certain clients. Trust fees increased by 29% to $6.1 million for the six months ended June 30, 2010 compared with $4.7 million for the six months ended June 30, 2009 as a result of increased assets under management by Westwood Trust due to market appreciation of assets and inflows from new accounts. Net asset outflows from existing clients partially offset these increases. Other revenues decreased to $(6,000) for the six months ended June 30, 2010 compared with $120,000 for the six months ended June 30, 2009. Other revenues are presented net and decreased primarily due to an increase of $434,000 in net unrealized losses on investments and a $186,000 decrease in dividends and interest income, partially offset by a decrease of $493,000 in realized losses primarily due to prior year sales of investments.

Employee Compensation and Benefits. Employee compensation and benefits costs increased by 34% to $14.2 million for the six months ended June 30, 2010 compared with $10.6 million for the six months ended June 30, 2009. The increase was primarily due to increases of $2,165,000 in incentive compensation expense as a result of higher pretax income, $817,000 in restricted stock expense due to $466,000 of expense related to performance-based grants and $351,000 related to additional employee restricted stock grants in February 2010 that were granted at a higher price compared to prior grants and $254,000 in salary expense due primarily to salary increases and increased average headcount. In the first quarter of 2010, we concluded that it was probable that we would meet the performance goal required in order for the applicable percentage of the performance-based restricted shares awarded to our Chief Investment Officer and Chief Executive Officer to vest. As a result, we recognized expense of approximately $235,000 and $701,000 in the first and second quarters, respectively, related to these performance-based restricted stock grants. We expect to recognize amounts in the third and fourth quarters of 2010 related to these performance-based restricted stock grants. We had 64 full-time employees as of June 30, 2010 compared to 63 full-time employees as of June 30, 2009.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.4/5 (5 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide