Exhibit 99.1

 

 

News Release

 

Waddell & Reed Financial, Inc. Reports Second Quarter Results

 

Overland Park, KS, July 30, 2019

— Waddell & Reed Financial, Inc. (NYSE: WDR) today reported second quarter 2019 net income(1) of $33.9 million, or $0.45 per diluted share, compared to net income of $32.1 million, or $0.42 per diluted share, during the prior quarter and net income of $44.5 million, or $0.55 per diluted share, during the second quarter of 2018.  The second quarter of 2019 included an income tax charge related to shortfalls from the vesting of restricted shares of $2.4 million ($0.03 per diluted share).  In addition, both the first and second quarters of 2019 included a benefit from unrealized gains on our seed and corporate investment portfolios of approximately $0.06 per diluted share.

 

Revenues of $270.2 million during the quarter increased $10.7 million compared to the prior quarter and decreased $25.2 million compared to the second quarter of 2018.  Operating expenses of $228.9 million increased $5.0 million compared to the prior quarter and declined $8.2 million compared to the same quarter in 2018.  The operating margin was 15.3% during the current quarter, compared to 13.7% during the prior quarter and 19.7% during the second quarter of 2018.

 

Assets under management ended the quarter at $71.9 billion, a slight increase compared to the prior quarter and a decrease of 9% compared to the second quarter of 2018.  Average assets under management were $71.4 billion during the current quarter, compared to $70.1 billion during the prior quarter and $80.0 billion during the second quarter of 2018.  Net outflows of $2.4 billion during the current quarter were higher compared to net outflows of $1.8 billion in the first quarter of 2019 and improved compared to net outflows of $3.1 billion in the second quarter of 2018.  Sales of $2.1 billion during the current quarter declined 14% and 27% compared to the prior quarter and the second quarter of 2018, respectively. Increased volatility in the equity markets during the quarter again led to slower sales in key products as investors preferred lower-risk fixed income and money market funds.  Redemptions increased slightly compared to the prior quarter and improved 26% compared to the second quarter of 2018, as the prior year included elevated, event-driven institutional redemptions.

 

Wealth management assets under administration ended the quarter at $57.4 billion, a 2% increase compared to the first quarter of 2019, and a slight increase compared to the same quarter in 2018. For both comparative periods, assets under administration increased due to market appreciation. Average productivity per associated independent financial advisor (“Advisor”), measured as average trailing twelve-month revenue per Advisor, was $408 thousand for the current quarter, rising 2% compared to the prior quarter and 30% compared to the same quarter in the prior year.

 

“This quarter we announced a number of significant, strategic actions, all aimed at accelerating our business transformation and enabling long-term organizational agility and effectiveness.  Throughout this journey, we remain focused on the key activities that will drive shareholder value over the long-term, while ensuring we’re delivering on our commitments to our clients and employees every day,” said Philip J. Sanders, Chief Executive Officer of Waddell & Reed Financial, Inc.

 

Revenues Analysis

 

Investment management fees increased $3.1 million, or 3%, compared to the first quarter of 2019, primarily due to a 2% increase in average assets under management and one additional day in the quarter. The effective management fee rate of 63.4 basis points declined slightly compared to the prior quarter. Compared to the second quarter of 2018, investment

 


The following information was filed by Waddell Reed Financial Inc (WDR) on Tuesday, July 30, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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