================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
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 25, 2005
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 25, 2005, Westwood Holdings Group, Inc. issued a press release
entitled "Westwood Holdings Group, Inc. Reports Third Quarter 2005 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 $0.09 per common share, payable on January 2, 2006
to stockholders of record on December 15, 2005.
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 25, 2005, entitled "Westwood
Holdings Group, Inc. Reports Third Quarter 2005 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 25, 2005
WESTWOOD HOLDINGS GROUP, INC.
By: /s/ William R. Hardcastle, Jr.
-------------------------------
William R. Hardcastle, Jr.,
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
- ------- ----------------------------------------------------------------
99.1 Press Release dated October 25, 2005, entitled "Westwood
Holdings Group, Inc. Reports Third Quarter 2005 Results and
Declares Quarterly Dividend"
Exhibit 99.1
WESTWOOD HOLDINGS GROUP, INC. REPORTS THIRD QUARTER 2005 RESULTS AND DECLARES
QUARTERLY DIVIDEND
DALLAS, Oct. 25 /PRNewswire-FirstCall/ -- Westwood Holdings Group, Inc.
(NYSE: WHG) today reported 2005 third quarter revenues of $5.6 million, net
income of $814,000 and earnings per diluted share of $0.15. This compares to
revenues of $4.9 million, net income of $685,000 and earnings per diluted share
of $0.13 in the third quarter of 2004. For the nine months ended September 30,
2005, Westwood reported revenues of $15.9 million and net income of $2.6
million, or $0.48 per diluted share, compared to revenues of $14.9 million and
net income of $2.8 million, or $0.51 per diluted share, for the same 2004
period.
Revenues for the third quarter 2005 increased 12.6% compared to the third
quarter 2004 and increased by 6.5% for the nine months ended September 30, 2005
compared to the prior year period primarily as a result of increased average
assets under management. Assets under management were $4.6 billion as of
September 30, 2005, an increase of 20.4% compared to $3.8 billion on September
30, 2004. Average assets under management for the third quarter of 2005 were
$4.4 billion, an increase of 15.9% compared with the third quarter of 2004. The
increase in period ending assets under management was principally attributable
to market appreciation of assets under management and asset inflows from new
clients, partially offset by the withdrawal of assets by certain clients.
Total expenses for the third quarter of 2005 were $4.1 million compared to
$3.8 million for the third quarter of 2004, an increase of approximately
$353,000. The primary driver of the increase was employee compensation and
benefits costs, which increased by approximately $392,000 compared to the 2004
third quarter, primarily due to higher restricted stock expense and higher
incentive compensation expense. Offsetting this increase to some extent,
professional services costs decreased by approximately $61,000 primarily as a
result of lower professional fee accruals related to Sarbanes-Oxley compliance,
other consulting costs incurred in the prior year quarter and a decrease in
legal fees.
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 January 2,
2006 to stockholders of record on December 15, 2005.
Susan M. Byrne, Westwood's founder and Chief Executive Officer commented,
"We are beginning to see the results of three years of hard work and investment
by our employees and stockholders. Continuing strong relative and absolute
performance by our investment teams has been helpful in the continuing rollout
of new products. We are particularly pleased to add a SMidCap mutual fund in the
coming months on the heels of the excellent acceptance of our SMidCap
institutional product."
Brian O. Casey, Westwood's President and Chief Operating Officer added, "The
third quarter marks another period of sequential asset growth for Westwood. We
also recently completed the initial SEC filing for two new mutual funds, the WHG
SMidCap Fund and the WHG Income Opportunity Fund, which we expect to launch by
the end of this year. We view the mutual fund distribution channel to be
important to Westwood's future growth prospects and will offer an institutional
shareholder class so that the funds may be appropriately positioned for
consideration by institutional investors and 401(k) plans."
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 http://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,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
REVENUES:
Advisory fees $ 3,466 $ 3,171 $ 9,966 $ 9,840
Trust fees 1,773 1,430 5,144 4,324
Other revenues 315 333 779 753
Total revenues 5,554 4,934 15,889 14,917
EXPENSES:
Employee compensation
and benefits 3,049 2,657 8,328 7,341
Sales and marketing 110 113 337 361
Information technology 199 172 576 504
Professional services 315 376 908 847
General and administrative 448 450 1,360 1,270
Total expenses 4,121 3,768 11,509 10,323
Income before income taxes 1,433 1,166 4,380 4,594
Provision for income taxes 619 481 1,754 1,804
Net income $ 814 $ 685 $ 2,626 $ 2,790
Earnings per share:
Basic $ 0.15 $ 0.13 $ 0.48 $ 0.52
Diluted $ 0.15 $ 0.13 $ 0.48 $ 0.51
WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of September 30, 2005 and December 31, 2004
(in thousands, except par values and share amounts)
(unaudited)
September 30, December 31,
2005 2004
------------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 5,904 $ 720
Accounts receivable 2,252 1,832
Investments, at market value 16,089 18,632
Other current assets 408 414
Total current assets 24,653 21,598
Goodwill 2,302 2,302
Deferred income taxes 570 517
Property and equipment, net of
accumulated depreciation of
$454 and $250 1,635 1,860
Total assets $ 29,160 $ 26,277
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued
liabilities $ 721 $ 629
Dividends payable 5,028 460
Compensation and benefits payable 1,984 2,703
Income taxes payable 185 ---
Other current liabilities 7 17
Total current liabilities 7,925 3,809
Deferred rent 839 805
Total liabilities 8,764 4,614
Stockholders' Equity:
Common stock, $0.01 par value,
authorized 10,000,000 shares, issued and
outstanding 5,985,897 shares at September 30, 2005;
issued and outstanding 5,754,147 shares at
December 31, 2004 60 58
Additional paid-in capital 21,425 16,962
Unamortized stock compensation (7,230) (4,821)
Retained earnings 6,141 9,464
Total stockholders' equity 20,396 21,663
Total liabilities and stockholders'
equity $ 29,160 $ 26,277
CONTACT:
Investor Relations
214-756-6900