Westwood Holdings Group Inc. Files 2023 10-K

TL;DR

<b>Westwood Holdings Group Inc. reported a substantial decline in net income and EPS for 2023 compared to 2022, with significant losses in the latter half of the year.</b>

AI Summary

WESTWOOD HOLDINGS GROUP INC (WHG) filed a Annual Report (10-K) with the SEC on March 7, 2024. Total revenues for 2023 were $68,684,000. Net income for 2023 was $1,774,000, a significant decrease from $9,683,000 in 2022. Basic earnings per common share for 2023 were $0.23, down from $1.23 in 2022. The company reported a net loss of $3,125,000 in Q4 2023. Total assets were $101,997,608 as of December 31, 2023.

Why It Matters

For investors and stakeholders tracking WESTWOOD HOLDINGS GROUP INC, this filing contains several important signals. The sharp decrease in net income and earnings per share from 2022 to 2023 indicates a significant downturn in profitability for Westwood Holdings Group Inc. The substantial net losses in the third and fourth quarters of 2023 suggest ongoing operational challenges or market headwinds impacting the company's financial performance.

Risk Assessment

Risk Level: high — WESTWOOD HOLDINGS GROUP INC shows elevated risk based on this filing. The company experienced a significant drop in net income from $9,683,000 in 2022 to $1,774,000 in 2023, and a decline in basic EPS from $1.23 to $0.23, alongside substantial net losses in Q3 and Q4 2023, indicating a deteriorating financial performance.

Analyst Insight

Investors should closely monitor Westwood Holdings Group Inc.'s strategies to reverse the declining profitability and address the significant losses reported in the latter half of 2023.

Revenue Breakdown

Key Numbers

• 68,684,000 — Total Revenues (Year ended December 31, 2023)
• 1,774,000 — Net Income (Year ended December 31, 2023)
• 0.23 — Basic Earnings Per Common Share (Year ended December 31, 2023)
• 101,997,608 — Total Assets (As of December 31, 2023)
• 9,683,000 — Net Income (Year ended December 31, 2022)
• 1.23 — Basic Earnings Per Common Share (Year ended December 31, 2022)

Key Players & Entities

• WESTWOOD HOLDINGS GROUP INC (company) — Filer
• 2023-12-31 (date) — Fiscal year end
• 2024-03-07 (date) — Filing date
• DALLAS (location) — Business address city
• TX (location) — Business address state
• 75201 (postal_code) — Business address zip
• 2147566900 (phone_number) — Business phone

FAQ

Risk Factors

• Deterioration in Financial Performance [high — financial]: The company experienced a significant decline in net income and earnings per share in 2023 compared to 2022, with substantial net losses reported in the third and fourth quarters.

Key Financial Figures

• $0.01 — ch registered: Common Stock, par value $0.01 per share WHG New York Stock Exchange
• $15.5 billion — t collectively had AUM of approximately $15.5 billion and AUA of approximately $1.1 billion a
• $1.1 billion — $15.5 billion and AUA of approximately $1.1 billion at December 31, 2023. We were incorpora
• $1.2 million — dditional 32% interest in Broadmark for $1.2 million (net of cash acquired), increasing our
• $10 million — tment strategy and generally range from $10 million to $25 million. Westwood Management als
• $25 million — and generally range from $10 million to $25 million. Westwood Management also provides advi
• $1 billion — ncluding four strategies each with over $1 billion in AUM: LargeCap Value, Income Opportun
• $4.1 billion — 2023, AUM in the Westwood Funds totaled $4.1 billion. Trust General Westwood Trust provid
• $1 million — on AUM. Clients generally have at least $1 million in investable assets. Fiduciary Servic

Filing Documents

• whg-20231231.htm (10-K) — 2257KB
• exhibit2312023consent.htm (EX-23.1) — 2KB
• exhibit2322023consent.htm (EX-23.2) — 2KB
• exhibit311ceocertification.htm (EX-31.1) — 10KB
• exhibit312cfocertification.htm (EX-31.2) — 11KB
• exhibit321ceocertification.htm (EX-32.1) — 6KB
• exhibit322cfocertification.htm (EX-32.2) — 5KB
• whgcompensationrecoverypol.htm (EX-97) — 42KB
• image_0.jpg (GRAPHIC) — 28KB
• whg-20231231_g1.jpg (GRAPHIC) — 64KB
• 0001165002-24-000022.txt (&nbsp;) — 11814KB
• whg-20231231.xsd (EX-101.SCH) — 82KB
• whg-20231231_cal.xml (EX-101.CAL) — 85KB
• whg-20231231_def.xml (EX-101.DEF) — 504KB
• whg-20231231_lab.xml (EX-101.LAB) — 1091KB
• whg-20231231_pre.xml (EX-101.PRE) — 860KB
• whg-20231231_htm.xml (XML) — 1454KB

Risk Factors

Item 1A. Risk Factors 11

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 19

Cybersecurity

Item 1C. Cybersecurity 19

Properties

Item 2. Properties 21

Legal Proceedings

Item 3. Legal Proceedings 21

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 21 PART II:

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22

Reserved

Item 6. Reserved 23

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 37

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 37

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 37

Controls and Procedures

Item 9A. Controls and Procedures 37

Other Information

Item 9B. Other Information 39

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 39 PART III:

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 39

Executive Compensation

Item 11. Executive Compensation 39

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 39

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 39

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services 39 PART IV:

Exhibits, Financial Statement Schedules

Item 15. Exhibits, Financial Statement Schedules 40 i PART I

Business

Item 1. Business. Unless the context otherwise requires, the term "we," "us," "our," "Westwood," or "Westwood Holdings Group" when used in this Form 10-K ("Report") and in the Annual Report to the Stockholders refers to Westwood Holdings Group, Inc., a Delaware corporation, and its consolidated subsidiaries taken as a whole. This Report contains some forward-looking statements within the meaning of the federal securities laws. 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, those set forth under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 1A. Risk Factors." General We manage investment assets and provide services for our clients through our subsidiaries, Westwood Management Corp., Westwood Advisors, L.L.C. and Salient Advisors, L.P. (each of which is a registered investment adviser ("RIA") registered with the Securities and Exchange Commission and referred to hereinafter together as "Westwood Management") and Westwood Trust ("Westwood Wealth Management"). Westwood Management, founded in 1983, provides investment advisory services to institutional investors, a family of mutual funds called the Westwood Funds, other mutual funds, individual investors and clients of Westwood Trust. Westwood Trust, founded as a state-chartered trust company in 1974, provides trust, custodial and investment management services through the use of commingled funds and individual securities to institutions and high net worth individuals. Our revenues are generally derived from fees based on a percentage of assets under management ("AUM") and assets under advisement ("AUA"). Westwood Management and Westwood Trust collectively had AUM of approximately $15.5 billion and AUA of approximately $1.1 billion at December 31, 2023. We were incorporated under the laws of the State of Del

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View this 10-K filing on SEC EDGAR