SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 28, 2004
WESTWOOD HOLDINGS GROUP, INC.
(Exact name of registrant as specified in charter)
Delaware 001-31234 75-2969997
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 Crescent Court, Suite 1200
Dallas, Texas 75201
(Address of principal executive offices)
(214) 756-6900
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02: RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In accordance with Securities and Exchange Commission Release No. 34-47583, the
following information, which is being furnished pursuant to the requirements of
Item 2.02, "Results of Operations and Financial Condition," is being reported
under Item 7.01, "Regulation FD Disclosure."
On October 28, 2004, Westwood Holdings Group, Inc. issued a press release
entitled "Westwood Holdings Group, Inc. Reports Third Quarter 2004 Results and
Declares Quarterly Dividend," a copy of which is furnished with this Current
Report on Form 8-K as Exhibit 99.1. The information in this Current Report on
Form 8-K shall not be deemed to be "filed" for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that Section, nor shall it be deemed incorporated by reference in
any filing of the Company under the Securities Act of 1933, as amended.
ITEM 7.01: REGULATION FD DISCLOSURE
Westwood announced today that its Board of Directors has approved the payment of
a quarterly cash dividend of $0.08 per common share, payable on January 1, 2005
to stockholders of record on December 15, 2004.
ITEM 9.01: FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits: The following exhibit is furnished with this report:
Exhibit Number Description
99.1 Press Release dated October 28, 2004, entitled "Westwood
Holdings Group, Inc. Reports Third Quarter 2004 Results and
Declares Quarterly Dividend"
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 29, 2004
WESTWOOD HOLDINGS GROUP, INC.
By: /s/ Brian O. Casey
---------------------------
Brian O. Casey,
President and Chief Operating Officer
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
99.1 Press Release dated October 28, 2004, entitled "Westwood
Holdings Group, Inc. Reports Third Quarter 2004 Results
and Declares Quarterly Dividend"
Exhibit 99.1
Westwood Holdings Group, Inc. Reports Third Quarter 2004 Results
and Declares Quarterly Dividend
Dallas, October 28, 2004 - Westwood Holdings Group, Inc. (NYSE: WHG) today
reported 2004 third quarter revenues of $4.9 million, net income of $685,000,
and earnings per diluted share of $0.13. This compares to revenues of $5.3
million, net income of $1.3 million and earnings per diluted share of $0.24 in
the third quarter of 2003. For the nine months ended September 30, 2004,
Westwood reported revenues of $14.9 million and net income of $2.8 million, or
$0.51 per diluted share, compared to revenues of $15.4 million and net income of
$3.8 million, or $0.70 per diluted share, for the same 2003 period. The Company
realized non-recurring interest income in the third quarter of 2003 of
approximately $377,000 related to the final repayment of officer loans.
Total expenses for the 2004 third quarter were $3.8 million compared to $3.1
million for the 2003 third quarter, an increase of approximately $622,000.
Employee compensation and benefits costs increased by approximately $481,000
compared to the 2003 third quarter, primarily as a result of higher restricted
stock expense due to additional grants made in July 2004, a non-recurring
expense in the 2004 third quarter related to the termination of the Company's
deferred compensation plan as well as an expense related to the Company's
initial contribution to its broad-based profit sharing plan. The Company expects
to recognize a similar profit sharing expense in the fourth quarter of this
year. Professional services expenses increased by approximately $119,000 due
primarily to higher audit costs related to Sarbanes-Oxley compliance.
Assets under management were $3.8 billion as of September 30, 2004, an increase
of 3.8% compared to $3.6 billion on September 30, 2003. Average assets under
management for the third quarter of 2004 were $3.8 billion, a decrease of 4.5%
compared with the third quarter of 2003. The increase in period ending assets
under management was principally attributable to market appreciation of assets
under management, partially offset by the withdrawal of assets by certain
clients.
Susan M. Byrne, Westwood's founder and Chief Executive Officer commented, "In
the third quarter we continued to see the results of the solid investment team
we have built as we again generated superior investment performance for our
clients across our equity product lines. We also earned continued acceptance of
the Westwood Trust Enhanced Balanced product as asset inflows from new and
existing clients contributed to an approximate 25% year-over-year increase in
fee income at Westwood Trust for the first nine months of 2004."
Westwood also announced today that its Board of Directors has approved the
payment of a quarterly cash dividend of $0.08 per common share, payable on
January 1, 2005 to stockholders of record on December 15, 2004.
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 and foundations, 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 "Forward-Looking Statements and 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 Nine months ended
September 30, September 30,
-------------------- ------------------
2004 2003 2004 2003
---------- --------- --------- --------
REVENUES:
Advisory fees ....................... $3,171 $3,491 $9,840 $10,804
Trust fees .......................... 1,430 1,260 4,324 3,470
Other revenues ...................... 333 539 753 1,098
------- ------- ------- -------
Total revenues .................... 4,934 5,290 14,917 15,372
------- ------- ------- -------
EXPENSES:
Employee compensation and benefits .. 2,657 2,176 7,341 6,497
Sales and marketing ................. 113 130 361 451
Information technology .............. 172 214 504 597
Professional services ............... 376 258 847 676
General and administrative .......... 450 368 1,270 1,080
------- ------- ------- -------
Total expenses .................... 3,768 3,146 10,323 9,301
------- ------- ------- -------
Income before income taxes ............. 1,166 2,144 4,594 6,071
Provision for income tax expense ....... 481 825 1,804 2,303
------- ------- ------- -------
Net income ............................. $685 $1,319 $2,790 $3,768
======= ======= ======= =======
Earnings per share:
Basic ............................... $0.13 $0.24 $0.52 $0.70
Diluted ............................. $0.13 $0.24 $0.51 $0.70
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
.........
CONSOLIDATED BALANCE SHEETS
As of September 30, 2004 and December 31, 2003
(in thousands, except par values and share amounts)
(unaudited)
September 30, December 31,
2004 2003
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ASSETS
Current Assets:
Cash and cash equivalents .............................................. $ 5,301 $ 3,643
Accounts receivable .................................................... 1,999 1,931
Investments, at market value ........................................... 17,784 17,413
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Total current assets ............................................... 25,084 22,987
Goodwill ............................................................... 2,302 2,302
Other assets, net ...................................................... 2,891 948
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Total assets ....................................................... $ 30,277 $ 26,237
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities ............................... $ 1,422 $ 935
Dividends payable ...................................................... 4,778 167
Compensation and benefits payable ...................................... 2,312 2,776
Income taxes payable ................................................... 193 472
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Total current liabilities .......................................... 8,705 4,350
Other liabilities ...................................................... 840 34
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Total liabilities .................................................. 9,545 4,384
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Stockholders' Equity:
Common stock, $0.01 par value, authorized 10,000,000 shares, issued
5,756,147 and outstanding 5,755,845 shares at September 30, 2004; issued
5,550,472 and outstanding 5,550,119 shares at December 31, 2003 58 56
Additional paid-in capital ............................................. 16,928 12,952
Treasury stock, at cost - 302 shares at September 30, 2004 and 353
shares at December 31, 2003 ............................................ (5) (6)
Unamortized stock compensation ......................................... (5,277) (2,609)
Retained earnings ...................................................... 9,028 11,460
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Total stockholders' equity ......................................... 20,732 21,853
-------- --------
Total liabilities and stockholders' equity .................................. $ 30,277 $ 26,237
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SOURCE: Westwood Holdings Group, Inc.
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CONTACT:
Westwood Holdings Group, Inc.
Bill Hardcastle
(214) 756-6900