Westwood Holdings Group, Inc. Reports First Quarter 2025 Results

About this update from Westwood Holdings Group Inc

Exceptional sales performance drives positive flows in Institutional and Intermediary channels Strategic ETF platform expansion continues with launch of LBRTY Global Equity ETF (NYSE:BFRE) One-year anniversary of Westwood Salient Enhanced Midstream Income (MDST) with an annualized distribution rate of 10.5% DALLAS, April 30, 2025 (GLOBE NEWSWIRE) -- Westwood Holdings Group, Inc. (NYSE: WHG) today reported first quarter 2025 earnings. Significant items included: Brian Casey, Westwood’s CEO, commented, "We are extremely pleased with our strong start to 2025, delivering exceptional results across our business. Our Institutional channel achieved remarkable success, highlighted by winning a significant nearly $1 billion sub-advisory mandate in our Small Cap Value strategy. Our Intermediary channel recorded its best sales quarter since 2022, with particular strength in our energy offerings. Our ETF business continues to gain momentum, with our flagship MDST ETF reaching its one-year anniversary with a 10.5% annualized distribution rate, while we successfully launched our innovative Westwood LBRTY Global Equity ETF. With our diverse product lineup, robust pipeline, and continued focus on high-quality investments, we are well-positioned to navigate market uncertainties and deliver long-term value to our clients and shareholders." Revenues decreased from the fourth quarter due to lower performance-based fees and increased from last year's first quarter due to higher average assets under management ("AUM"). Firmwide assets under management and advisement totaled $18.0 billion, consisting of AUM of $17.0 billion and assets under advisement ("AUA") of $1.0 billion. First quarter income of $0.5 million compared to the fourth quarter's $2.1 million on lower revenues and higher operating expenses, offset by lower income taxes and changes in the fair value of contingent consideration. Diluted earnings per share ("EPS") of $0.05 compared to $0.24 for the fourth quarter. Non-GAAP Economic Earnings of $2.5 million, or $0.29 per share, compared with $3.4 million, or $0.39 per share, in the fourth quarter. First quarter income of $0.5 million compared to last year's first quarter of $2.3 million due to changes in the fair value of contingent consideration in 2024 offset by higher revenues and lower income taxes. Diluted EPS of $0.05 compared with $0.27 per share for 2024's first quarter. Non-GAAP Economic Earnings were $2.5 million, or $0.29 per share, compared with $3.0 million, or $0.36 per share, in the first quarter of 2024. 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 first quarter 2025 results and other business matters at 4:30 p.m. Eastern time today. To join the conference call, please register here: https://register-conf.media-server.com/register/BI848844d99e514a3ba97ad4fbad4288af After registering, you will be provided with a dial-in number containing a personalized PIN. To view the webcast, please register here: https://edge.media-server.com/mmc/p/i4pd6rdr Once registered, an email will be sent with important details for this conference call, as well as a unique Registrant ID. ABOUT WESTWOOD HOLDINGS GROUP Westwood Holdings Group (NYSE: WHG) is a boutique asset management firm that offers a diverse array of actively-managed and outcome-oriented investment strategies, along with white-glove trust and wealth services, to institutional, intermediary and private wealth clients. For over 40 years, Westwood’s client-first approach has fostered strong, long-term client relationships due to our unwavering commitment to delivering bespoke investment strategies with a vehicle-optimized approach, exceptional counsel and unparalleled client service. Our flexible and agile approach to investing allows us to adapt to constantly changing markets, while continually seeking innovative strategies that meet our investors’ short and long-term needs. Our team at Westwood comes from varied backgrounds and life experiences, which reflects our origins as a woman-founded firm. We are committed to incorporating diverse insights and knowledge into all aspects of our services and solutions. Our culture and approach to our business reflect our core values - integrity, reliability, responsiveness, adaptability, teamwork and driving results - and underpin our constant pursuit of excellence. 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 and AUA; our ability to maintain our fee structure in light of competitive fee pressures; 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; 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; we have made and may continue to make business combinations as a part of our business strategy, which may present certain risks and uncertainties; our relationships with investment consulting firms; 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, 2024 and its quarterly report on Form 10-Q for the quarter ended March 31, 2025. 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 Forbes Chief Financial Officer and Treasurer (214) 756-6900 WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share and share amounts) (unaudited) WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share amounts) (unaudited) WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES Reconciliation of Income Attributable to Westwood Holdings Group, Inc. to Economic Earnings (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 and Economic EPS. We provide these measures in addition to, not as a substitute for, income attributable to Westwood Holdings Group, Inc. and earnings per share, which are reported on a GAAP basis. Our management and Board of Directors review Economic Earnings 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 income attributable to Westwood Holdings Group, Inc. or earnings 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 as income 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 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 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 for tax deductions related to restricted stock expense or amortization of intangible assets. Economic EPS represents Economic Earnings divided by diluted weighted average shares outstanding.

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