Exhibit 99.1
WESTWOOD HOLDINGS GROUP, INC. REPORTS FIRST QUARTER 2006 RESULTS AND
DECLARES QUARTERLY DIVIDEND
Dallas, April 27, 2006 - Westwood Holdings Group, Inc. (NYSE: WHG) today
reported 2006 first quarter revenues of $6.5 million, net income of $1.3 million
and earnings per diluted share of $0.23. This compares to revenues of $5.1
million, net income of $875,000 and earnings per diluted share of $0.16 in the
first quarter of 2005.
Revenues for the first quarter 2006 increased 28.1% compared to the first
quarter 2005, primarily as a result of increased average assets under
management. Assets under management were $5.4 billion as of March 31, 2006, an
increase of 31.4% compared to $4.1 billion on March 31, 2005. Average assets
under management for the first quarter of 2006 were $5.1 billion, an increase of
27.4% compared with 2005. The increase in period ending assets under management
was principally attributable to inflows of assets from new clients and the
market appreciation of assets under management, partially offset by the
withdrawal of assets by certain clients.
Total expenses for the first quarter 2006 were $4.5 million compared to $3.7
million for the first quarter 2005, an increase of approximately $807,000. The
primary driver of the increase was employee compensation and benefits costs,
which increased by approximately $593,000 due to higher restricted stock expense
as a result of additional grants in the third quarter of 2005, increased salary
expense due to increased headcount and salary increases and an increase in
incentive compensation expense. In the first quarter of 2006, Westwood recorded
a positive cumulative effect of a change in accounting principle of $39,000, net
of taxes, in order to comply with the requirements of FASB's Statement of
Financial Accounting Standards No. 123 Revised.
Westwood Trust contributed revenue of $1.9 million and net income of $245,000 in
the first quarter of 2006, compared to revenue of $1.7 million and net income of
$227,000 in the first quarter 2005. Westwood Trust assets under management as of
March 31, 2006 were $1.3 billion, an increase of 23.3% compared to March 31,
2005. Westwood Trust's Enhanced BalancedTM asset allocation strategies continued
to gain acceptance with small to mid-sized institutions and high net worth
individuals and provided clients with returns ahead of traditional balanced
account benchmarks.
Westwood also announced today that its Board of Directors has approved the
payment of a quarterly cash dividend of $0.09 per share, payable on July 3, 2006
to stockholders of record on June 15, 2006.
Brian O. Casey, Westwood's Chief Executive Officer, commented, "We are pleased
to see continued growth in our business as assets under management increased by
31.4% over the past year and 8.9% over the past quarter. This strong growth is a
result of the outstanding performance generated by our investment teams as well
as a number of new client account wins over the past year. All of our employees
support and contribute to the performance and service that we deliver to our
clients. Therefore, we are gratified that our stockholders have approved
proposals that will allow the Company to continue to offer equity-based awards
in lieu of increased cash compensation as a key component of our compensation
program. We strongly believe that this method of compensation ensures that the
interests of our employees, clients and stockholders are aligned."
About Westwood
- --------------
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 pension funds, public retirement
plans, endowments, foundations, the WHG Funds, a family of institutional,
no-load mutual funds, other mutual funds and clients of Westwood Trust. Westwood
Trust provides, to institutions and high net worth individuals, trust and
custodial services and participation in common trust funds that it sponsors.
Westwood Holdings Group, Inc. trades on the New York Stock Exchange under the
symbol "WHG." For more information, please visit the Company's website at
www.westwoodgroup.com.
Note on Forward-looking Statements
- ----------------------------------
Statements that are not purely historical facts, including statements about
anticipated or expected future revenue and earnings growth and profitability, as
well as other statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," "should," "could," "goal," "target,"
"designed," "on track," "continue," "comfortable with," "optimistic," "look
forward to" 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. These
forward-looking statements are subject to known and unknown risks, uncertainties
and other factors, which may cause actual results to be materially different
from those contemplated by the forward-looking statements. Such factors include
the risks and uncertainties referenced in our documents filed with, or furnished
to, the Securities and Exchange Commission, including without limitation those
identified under the caption "Risk Factors" in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. Readers are
cautioned not to place undue reliance on forward-looking statements.
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
THREE MONTHS ENDED
MARCH 31,
---------------------------
2006 2005
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REVENUES:
Advisory fees .................................. $ 4,179 $ 3,191
Trust fees ..................................... 1,898 1,703
Other revenues ................................. 434 188
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Total revenues ............................... 6,511 5,082
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EXPENSES:
Employee compensation and benefits ............. 3,191 2,598
Sales and marketing ............................ 188 82
Information technology ......................... 242 185
Professional services .......................... 353 319
General and administrative ..................... 494 477
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Total expenses ............................... 4,468 3,661
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Income before income taxes ....................... 2,043 1,421
Provision for income taxes ....................... 786 546
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Income before cumulative effect of
accounting change................................ 1,257 875
Cumulative effect of change in
accounting principle, net of
income taxes of $21 ............................. 39 -
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Net income ....................................... $ 1,296 $ 875
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Earnings per share:
Basic:
Continuing operations ........................ $ 0.23 $ 0.16
Cumulative effect of an accounting change .... - -
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Net income ................................... $ 0.23 $ 0.16
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Diluted:
Continuing operations ........................ $ 0.22 $ 0.16
Cumulative effect of an accounting change .... 0.01 -
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Net income ................................... $ 0.23 $ 0.16
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WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2006 AND DECEMBER 31, 2005
(in thousands, except par values and share amounts)
(unaudited)
MARCH 31, DECEMBER 31,
2006 2005
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ASSETS
Current Assets:
Cash and cash equivalents ................................................ $ 1,081 $ 1,897
Accounts receivable ...................................................... 2,838 2,452
Investments, at market value ............................................. 17,657 17,878
Other current assets ..................................................... 460 410
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Total current assets ................................................... 22,036 22,637
Goodwill ................................................................. 2,302 2,302
Deferred income taxes .................................................... 971 817
Property and equipment, net of accumulated depreciation of $586 and $523 . 1,496 1,554
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Total assets ........................................................... $ 26,805 $ 27,310
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities ................................. $ 702 $ 715
Dividends payable ........................................................ 539 539
Compensation and benefits payable ........................................ 878 2,980
Income taxes payable ..................................................... 849 694
Other current liabilities ................................................ 7 7
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Total current liabilities .............................................. 2,975 4,935
Deferred rent .............................................................. 794 816
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Total liabilities ...................................................... 3,769 5,751
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Stockholders' Equity:
Common stock, $0.01 par value, authorized 10,000,000 shares, issued and
outstanding 5,991,647 shares at March 31, 2006; issued and outstanding
5,986,647 shares at December 31, 2005 ................................... 60 60
Additional paid-in capital ............................................... 15,607 21,459
Unamortized stock compensation ........................................... - (6,572)
Retained earnings ........................................................ 7,369 6,612
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Total stockholders' equity ............................................. 23,036 21,559
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Total liabilities and stockholders' equity ................................. $ 26,805 $ 27,310
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SOURCE: Westwood Holdings Group, Inc.
CONTACT:
Westwood Holdings Group, Inc.
Bill Hardcastle
(214) 756-6900
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