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Waddell & Reed Financial, Inc. Reports Third Quarter Results
Overland Park, KS, October 27, 2020 — Waddell & Reed Financial, Inc. (NYSE: WDR) today reported third quarter 2020 net income1 of $30.5 million, or $0.48 per diluted share, compared to net income of $24.8 million, or $0.38 per diluted share, during the prior quarter and net income of $33.1 million, or $0.46 per diluted share, during the third quarter of 2019. The third quarter of 2019 included $3.1 million in severance expense related to the outsourcing of our transfer agency transactional processing operations. Excluding the severance expense, adjusted net income for the third quarter of 2019 was $35.4 million and adjusted net income per diluted share was $0.492.
|·||Strong financial performance, with 11.5% increase in revenues compared to the prior quarter due to higher average assets benefiting both Investment Management revenues and Wealth Management Advisory revenues|
|·||Continued execution of strategic initiatives in Asset Management, with average Assets Under Management (AUM) up 10% compared to the prior quarter|
|o||Both sales and redemptions improved vs. the same quarter in 2019, particularly in institutional and unaffiliated|
|o||Continued progress in strategic pricing evaluation, with 75% of AUM at or better than competitor median fees|
|·||Successful quarter for Wealth Management recruiting and asset growth|
|o||Net new Assets Under Administration3 (AUA) continue to improve, and net new Advisory AUA were positive for the 7th consecutive quarter|
|o||Since January 1, 2020, 32 advisors have affiliated with Waddell & Reed with combined prior firm AUA totaling over $1.9 billion|
|o||$474 thousand average trailing 12-month productivity per Advisor for the third quarter of 2020 improved 2% and 12% compared to the prior quarter and the third quarter of 2019, respectively|
|·||Robust balance sheet continued to support investment in strategic growth and meaningful capital return|
|o||$744.6 million in cash and investments at the end of the third quarter of 20204|
|o||$56.3 million was returned to shareholders in the third quarter of 2020, including $40.1 million of share repurchases|
|·||Hired two executives focused on strategic growth – one to lead the technology teams dedicated to leveraging technology as a strategic asset across the organization, and one to develop and lead strategies in support of best-in-class client and advisor experience, processes and procedures|
Philip J. Sanders, Chief Executive Officer of Waddell & Reed Financial, Inc. shared, “I am pleased with the progress in transforming our wealth management business this quarter with continued recruiting success, growth in advisory assets and further advancement of our technologies. At the same time, flows within our asset management business improved compared to the prior year, and our teams are seeing solid engagement across our distribution network.” Mr. Sanders continued, “While the operating environment remains challenging, we are as focused as ever on partnering with clients to help them realize their long-term financial goals through superior investment performance, advice and client service.”
1 Net income represents net income attributable to Waddell & Reed Financial, Inc.
2 See Non-GAAP Financial Measures section and Reconciliation of GAAP to Non-GAAP Financial Measures table
3 Net new advisory AUA are calculated as total client deposits and net transfers less client withdrawals. Client deposits include dividends and interest.
4 Excluding restricted cash
The following information was filed by Waddell Reed Financial Inc (WDR) on Tuesday, October 27, 2020 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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