Waddell & Reed Financial, Inc. (NYSE: WDR) today reported
first quarter 2020 net income1 of $22.0 million, or $0.32 per
diluted share, compared to net income of $15.9 million, or $0.23
per diluted share, during the prior quarter and net income of $32.1
million, or $0.42 per diluted share, during the first quarter of
2019.
Philip J. Sanders, Chief Executive Officer of Waddell & Reed
Financial, Inc. said, “The COVID-19 pandemic has required that we,
and the world, navigate an extraordinarily complex and rapidly
changing environment. In the midst of this, our Company has
proactively implemented a comprehensive business continuity plan
that allowed us to effectively respond to the crisis and ensure the
safety of our employees, clients, independent advisors, and
stakeholders in the communities where we live and work.”
Mr. Sanders continued, “Our strong financial profile with
significant liquidity will allow us to actively manage through this
acute global disruption while continuing to focus on our long-term
growth and competitive position.”
Highlights
- Effectively managed operations through COVID-19 pandemic:
achieved 98% of workforce working remotely by end of March,
continued to deliver investment insight updates to our clients, and
provided over 160 resources to help independent advisors navigate
the current market dynamics
- Balance sheet a continued source of strength
- Opportunistic deployment of liquidity via share buybacks at
attractive valuations and dividends, with $71 million returned to
shareholders and outstanding shares reduced by nearly 6%
- Continued flexibility for organic and inorganic growth
opportunities
- For Ivy Investments, assets under management were negatively
impacted given broader markets, but meaningful positives across
several operating dimensions:
- Reduced assets under management outflows versus prior quarter
driven by greater sales and lower redemptions
- Increased percentage of funds ranked in the top half of their
respective MorningStar universes1
- Significant progress in wealth management transformation
continued, with enhanced focus on recruiting and additional growth
opportunities
- Benefited from enterprise model of having both asset and wealth
management franchises, with lower net assets under management
redemptions in wealth management channel and organic growth in
advisory assets under administration
Financial Summary
The first quarter of 2020 included $11.0 million, or $0.12 per
share, of unrealized losses on our investment portfolio within the
investment and other (loss) income line compared to $3.0 million,
or $0.03 per share, of unrealized gains during the prior quarter
and $5.4 million, or $0.05 per share, of unrealized gains during
the first quarter of 2019. The fourth quarter of 2019 included
non-cash asset impairment charges of $12.8 million in connection
with certain assets held for sale, including real property related
to our corporate headquarters move and the elimination of our
internal aviation department, an $11.2 million non-cash charge
related to the annual revaluation of the pension plan liability and
$2.3 million in severance expense related to the outsourcing of our
transfer agency transactional processing operations. Excluding the
non-cash charges and severance expense, adjusted net income2 for
the fourth quarter of 2019 was $36.0 million and adjusted net
income per diluted share3 was $0.51.
Revenues totaled $263.7 million for the quarter, a decrease of
$6.3 million compared to the prior quarter and an increase of $4.3
million compared to the first quarter of 2019. Operating expenses
of $224.3 million decreased $16.9 million compared to the prior
quarter, which included a $12.8 million non-cash asset impairment
charge. Compared to the same quarter of 2019, operating expenses
increased slightly. The operating margin was 14.9% during the
current quarter, compared to 10.7% and 13.7% during the prior
quarter and the first quarter of 2019, respectively. The adjusted
operating margin3 during the prior quarter was 16.3%.
Assets under management ended the quarter at $56.0 billion, a
decrease of 20% compared to the prior quarter and a decrease of 22%
compared to the first quarter of 2019. For both comparative
periods, assets under management decreased primarily due to market
volatility and continued outflows. Average assets under management
were $66.1 billion during the current quarter, compared to $69.1
billion during the prior quarter and $70.1 billion during the first
quarter of 2019. Net outflows of $2.3 billion during the current
quarter were lower compared to net outflows of $3.4 billion in the
fourth quarter of 2019 and were higher compared to net outflows of
$1.8 billion in the first quarter of 2019. Sales of $2.5 billion
during the current quarter increased 63% and 1% compared to the
prior quarter and the first quarter of 2019, respectively.
Redemptions were 3% lower compared to the prior quarter and
increased 12% compared to the first quarter of 2019.
Wealth management assets under administration ended the quarter
at $51.8 billion, a decrease of 14% and 8%, compared to the fourth
quarter of 2019 and the first quarter of 2019, respectively. For
both comparative periods, assets under administration decreased
primarily due to market volatility.
Revenues Analysis
Investment management fees decreased $5.5 million, or 5%,
compared to the fourth quarter of 2019 due to a 4% decrease in
average assets under management and one less day in the quarter,
partially offset by a higher effective management fee rate. The
effective management fee rate for the current quarter was 64.0
basis points and increased compared to the prior quarter’s rate due
to a reduction in fund fee waivers. Compared to the first quarter
of 2019, investment management fees declined $4.5 million, or 4%,
primarily due to lower average assets under management, partially
offset by one more day and a higher effective management fee rate
due to a reduction in fund fee waivers.
Underwriting and distribution fees increased slightly compared
to the prior quarter and increased $10.7 million, or 8%, compared
to the same quarter in 2019. For both comparative periods, the
increases were primarily driven by increased fee-based asset
allocation product revenues and higher commissionable sales,
partially offset by lower service and distribution fees from lower
asset levels.
Shareholder service fees decreased $1.5 million, or 6%, compared
to the fourth quarter of 2019 primarily due to a reduction in
reimbursements related to the outsourcing of our transfer agency
transactional processing operations and lower average assets.
Compared to the first quarter of 2019, shareholder service fees
declined $1.8 million, or 8%, primarily due to the outsourcing of
our transfer agency transactional processing operations, fewer
accounts and a decrease in average assets.
Operating Expenses Analysis
Distribution expenses increased $2.8 million, or 2%, compared to
the prior quarter and increased $10.2 million, or 9%, compared to
the first quarter of 2019 as a result of the increase in
underwriting and distribution revenue. For both comparative
periods, the expense increase is larger than the revenue increase
primarily due to an increase in the average advisor payout
rate.
Compensation and benefits expense decreased $4.4 million, or 7%,
compared to the prior quarter due to lower incentive compensation,
lower headcount and lower share-based compensation due to
mark-to-market adjustments of cash-settled restricted stock unit
awards, partially offset by the reset of payroll tax limits at the
beginning of the year. Compared to the first quarter of 2019,
compensation and benefits expense decreased $6.4 million, or 10%,
due to lower share-based compensation from a shift in grant dates
and mark-to-market adjustments of cash-settled restricted stock
unit awards, lower incentive compensation costs and lower
headcount.
General and administrative expenses decreased $11.5 million, or
38%, compared to the fourth quarter of 2019, due to a $12.8 million
non-cash asset impairment charge incurred during the prior quarter
and lower travel and meetings costs in the current quarter due to a
transition to virtual meetings. These decreases were partially
offset by increased strategic project spending, as well as the
shift of our transfer agency transactional processing operations
costs from technology expenses to general and administrative
expenses as a result of the outsourcing. Compared to the same
quarter in 2019, general and administrative expenses increased $3.9
million, or 26%, due to the transfer agency transactional
processing operations outsourcing costs shift, partially offset by
lower travel and meetings costs.
Technology costs decreased $2.4 million, or 15%, compared to the
prior quarter and decreased $2.8 million, or 17%, compared to the
first quarter of 2019. For both comparative periods, technology
costs decreased as costs related to the transfer agency
transactional processing operations outsourcing were shifted to
general and administrative expenses, partially offset by increased
consulting and software costs for new technologies.
Occupancy expenses decreased $0.4 million, or 8%, compared to
the prior quarter and decreased $2.0 million, or 30%, compared to
the first quarter of 2019. For both comparative periods, occupancy
costs decreased as a result of the planned transition of corporate
field offices to independent financial advisors associated with our
wealth manager.
Marketing and advertising expenses decreased $0.6 million, or
23%, compared to the prior quarter due to the timing of sponsorship
fees and fewer promotional items and remained flat compared to the
first quarter of 2019.
Depreciation expense declined slightly compared to the prior
quarter and declined $2.5 million, or 41%, compared to the first
quarter of 2019, primarily due to fully depreciated capitalized
development assets.
Investment and Other (Loss) Income
Investment and other (loss) income declined $2.9 million
compared to the prior quarter primarily due to unrealized losses on
the investment portfolio, partially offset by the non-cash charge
related to the annual revaluation of the pension plan liability in
the prior quarter. Compared to the first quarter of 2019,
investment and other (loss) income declined $17.2 million due to a
change in unrealized losses on the corporate investment
portfolio.
The effective tax rate was 32.0% for the quarter compared to
28.3% in the prior quarter and 24.6% last year. The effective tax
rate for the quarter included additional items totaling $1.9
million primarily related to non-deductible share-based
compensation.
- Net income represents net income attributable to Waddell &
Reed Financial, Inc.
- As measured by number of funds
- See Non-GAAP Financial Measures section and Reconciliation of
GAAP to Non-GAAP Financial Measures table
Assets Under Management (in
millions)
Three Months Ended
Mar. 31,
Dec. 31,
Mar. 31,
Prior Qtr.
Year-over-Year Qtr.
2020
2019
2019
Change
%
Change
%
Unaffiliated 1
Beginning assets
$
26,264
$
25,857
$
24,977
$
407
2
%
$
1,287
5
%
Sales 2
1,581
854
1,593
727
85
%
(12
)
(1
)
%
Redemptions
(3,019
)
(2,502
)
(2,306
)
(517
)
(21
)
%
(713
)
(31
)
%
Net exchanges
326
278
276
48
17
%
50
18
%
Net Flows
(1,112
)
(1,370
)
(437
)
258
19
%
(675
)
(154
)
%
Market action
(4,908
)
1,777
2,966
(6,685
)
(376
)
%
(7,874
)
(265
)
%
Ending assets
$
20,244
$
26,264
$
27,506
$
(6,020
)
(23
)
%
$
(7,262
)
(26
)
%
Annualized organic growth rate
(16.9
)
%
(21.2
)
%
(7.0
)
%
Annualized redemption rate 3
50.9
%
39.3
%
35.7
%
Institutional
Beginning assets
$
3,096
$
3,677
$
3,655
$
(581
)
(16
)
%
$
(559
)
(15
)
%
Sales 2
43
32
141
11
34
%
(98
)
(70
)
%
Redemptions
(179
)
(874
)
(357
)
695
80
%
178
50
%
Net exchanges
—
—
—
—
NM
—
NM
%
Net Flows
(136
)
(842
)
(216
)
706
84
%
80
37
%
Market action
(533
)
261
614
(794
)
(304
)
%
(1,147
)
(187
)
%
Ending assets
$
2,427
$
3,096
$
4,053
$
(669
)
(22
)
%
$
(1,626
)
(40
)
%
Annualized organic growth rate
(17.6
)
%
(91.6
)
%
(23.6
)
%
Annualized redemption rate 3
24.9
%
104.1
%
36.6
%
Wealth Management
Beginning assets
$
40,598
$
39,248
$
37,177
$
1,350
3
%
$
3,421
9
%
Sales 2
895
662
754
233
35
%
141
19
%
Redemptions
(1,588
)
(1,535
)
(1,626
)
(53
)
(3
)
%
38
2
%
Net exchanges
(326
)
(278
)
(276
)
(48
)
(17
)
%
(50
)
(18
)
%
Net Flows
(1,019
)
(1,151
)
(1,148
)
132
11
%
129
11
%
Market action
(6,240
)
2,501
4,066
(8,741
)
(350
)
%
(10,306
)
(253
)
%
Ending assets
$
33,339
$
40,598
$
40,095
$
(7,259
)
(18
)
%
$
(6,756
)
(17
)
%
Annualized organic growth rate
(10.0
)
%
(11.7
)
%
(12.4
)
%
Annualized redemption rate 3
14.6
%
13.6
%
14.5
%
Consolidated Total
Beginning assets
$
69,958
$
68,782
$
65,809
$
1,176
2
%
$
4,149
6
%
Sales 2
2,519
1,548
2,488
971
63
%
31
1
%
Redemptions
(4,786
)
(4,911
)
(4,289
)
125
3
%
(497
)
(12
)
%
Net exchanges
—
—
—
—
—
—
—
Net Flows
(2,267
)
(3,363
)
(1,801
)
1,096
33
%
(466
)
(26
)
%
Market action
(11,681
)
4,539
7,646
(16,220
)
(357
)
%
(19,327
)
(253
)
%
Ending assets
$
56,010
$
69,958
$
71,654
$
(13,948
)
(20
)
%
$
(15,644
)
(22
)
%
Annualized organic growth rate
(13.0
)
%
(19.6
)
%
(10.9
)
%
Annualized redemption rate 3
28.5
%
27.7
%
23.9
%
- Unaffiliated includes National channel (home office and
wholesale), Defined Contribution Investment Only “DCIO”, Registered
Investment Advisor “RIA” and Variable Annuity “VA”.
- Sales consist of gross sales and includes net reinvested
dividends, capital gains and investment income.
- Excludes Money Market.
MorningStar Fund Rankings 1
1 Year
3 Years
5 Years
Funds ranked in top half
52
%
50
%
37
%
Assets ranked in top half
63
%
60
%
37
%
MorningStar Ratings 1
Overall
3 Years
5 Years
Funds with 4/5 stars
31
%
25
%
29
%
Assets with 4/5 stars
43
%
33
%
40
%
- Based on class I share, which reflects the largest
concentration of sales and assets.
Three Months Ended
Wealth Management
Mar. 31,
Dec. 31,
Mar. 31,
Prior Qtr.
Year-over-Year Qtr.
(in millions)
2020
2019
2019
Change
%
Change
%
Assets under administration (AUA)
Advisory assets
$
23,192
$
26,947
$
23,671
$
(3,755
)
(14
)
%
$
(479
)
(2
)
%
Non-advisory assets
28,644
33,148
32,418
(4,504
)
(14
)
%
(3,774
)
(12
)
%
Total assets under administration
51,836
60,095
56,089
(8,259
)
(14
)
%
(4,253
)
(8
)
%
Net new advisory assets 1
$
356
$
261
$
220
$
95
36
%
$
136
62
%
Net new non-advisory assets 1, 2
(697
)
(859
)
(820
)
162
19
%
123
15
%
Total net new AUA 1, 2
(341
)
(598
)
(600
)
257
43
%
259
43
%
Annualized advisory AUA growth 3
5.3
%
4.2
%
4.2
%
Annualized AUA growth 3
(2.3
)
%
(4.2
)
%
(4.7
)
%
Advisors and advisor associates
1,316
1,327
1,367
(11
)
(1
)
%
(51
)
(4
)
%
Avg. trailing 12-month revenue per advisor
4 (in thousands)
$
462
$
438
$
400
$
24
5
%
$
62
16
%
- Net new assets are calculated as total client deposits and net
transfers less client withdrawals.
- Excludes activity related to products held outside of our
wealth management platform. These assets represent less than 10% of
total AUA.
- Annualized growth is calculated as annualized quarterly net new
assets divided by beginning AUA.
- Production per Advisor is calculated as trailing 12- month
Total underwriting and distribution fees less “other” underwriting
and distribution fees divided by the average number of Advisors.
“Other” underwriting and distribution fees predominantly includes
fees paid by Advisors for programs and services.
Unaudited Consolidated Statements of
Income (in thousands, except per share data and margin)
Three Months Ended
Mar. 31,
Dec. 31,
Mar. 31,
Prior Qtr.
Year-over-Year Qtr.
2020
2019
2019
Change
%
Change
%
Revenues:
Investment management fees
$
105,219
$
110,706
$
109,762
$
(5,487
)
(5
)
%
$
(4,543
)
(4
)
%
Underwriting and distribution fees
136,943
136,309
126,245
634
0
%
10,698
8
%
Shareholder service fees
21,571
23,056
23,403
(1,485
)
(6
)
%
(1,832
)
(8
)
%
Total
263,733
270,071
259,410
(6,338
)
(2
)
%
4,323
2
%
Operating expenses:
Distribution1
120,033
117,225
109,794
2,808
2
%
10,239
9
%
Compensation and benefits (including
share-based compensation of $9,983, $11,142 and $12,693,
respectively)
58,425
62,816
64,843
(4,391
)
(7
)
%
(6,418
)
(10
)
%
General and administrative
18,598
30,061
14,704
(11,463
)
(38
)
%
3,894
26
%
Technology
13,502
15,950
16,308
(2,448
)
(15
)
%
(2,806
)
(17
)
%
Occupancy
4,709
5,143
6,715
(434
)
(8
)
%
(2,006
)
(30
)
%
Marketing and advertising
1,896
2,467
1,964
(571
)
(23
)
%
(68
)
(3
)
%
Depreciation
3,513
3,767
6,001
(254
)
(7
)
%
(2,488
)
(41
)
%
Subadvisory fees
3,666
3,777
3,557
(111
)
(3
)
%
109
3
%
Total
224,342
241,206
223,886
(16,864
)
(7
)
%
456
0
%
Operating income
39,391
28,865
35,524
10,526
36
%
3,867
11
%
Investment and other (loss) income
(7,745
)
(4,804
)
9,453
(2,941
)
(61
)
%
(17,198
)
(182
)
%
Interest expense
(1,549
)
(1,533
)
(1,548
)
(16
)
(1
)
%
(1
)
(0
)
%
Income before provision for income
taxes
30,097
22,528
43,429
7,569
34
%
(13,332
)
(31
)
%
Provision for income taxes
9,633
6,382
10,671
3,251
51
%
(1,038
)
(10
)
%
Net income
20,464
16,146
32,758
4,318
27
%
(12,294
)
(38
)
%
Net income (loss) attributable to
redeemable noncontrolling interests
(1,522
)
210
705
(1,732
)
(825
)
%
(2,227
)
(316
)
%
Net income attributable to Waddell
& Reed Financial, Inc.
$
21,986
$
15,936
$
32,053
$
6,050
38
%
$
(10,067
)
(31
)
%
Net income per share, basic and
diluted:
$
0.32
$
0.23
$
0.42
Weighted average shares outstanding -
basic and diluted
67,675
69,896
76,299
Operating margin
14.9
%
10.7
%
13.7
%
1Distribution expense
Unaffiliated
23,624
23,392
23,300
Wealth Management
96,409
93,833
86,494
$
120,033
$
117,225
$
109,794
Underwriting and distribution fees
(in thousands)
For the three months ended
Mar. 31, 2020
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
77,118
$
77,118
Rule 12b-1 service and distribution
fees
15,276
14,589
29,865
Sales commissions on front-end load mutual
funds and variable annuity products
451
11,958
12,409
Sales commissions on other products
—
8,699
8,699
Other revenues
135
8,717
8,852
Total underwriting and distribution
fees
$
15,862
$
121,081
$
136,943
For the three months ended
Dec. 31, 2019
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
75,382
$
75,382
Rule 12b-1 service and distribution
fees
15,860
15,609
31,469
Sales commissions on front-end load mutual
funds and variable annuity products
431
11,639
12,070
Sales commissions on other products
—
8,187
8,187
Other revenues
48
9,153
9,201
Total underwriting and distribution
fees
$
16,339
$
119,970
$
136,309
For the three months ended
Mar. 31, 2019
Unaffiliated
Wealth Management
Total
Fee-based asset allocation product
revenues
$
—
$
65,230
$
65,230
Rule 12b-1 service and distribution
fees
16,465
15,405
31,870
Sales commissions on front-end load mutual
funds and variable annuity products
443
12,015
12,458
Sales commissions on other products
—
7,606
7,606
Other revenues
92
8,989
9,081
Total underwriting and distribution
fees
$
17,000
$
109,245
$
126,245
Unaudited Condensed Balance Sheet
(in thousands)
Mar. 31,
Dec. 31,
2020
2019
Assets
Cash & cash equivalents
(unrestricted)
$
160,316
$
151,815
Investment securities
605,780
688,346
Other assets
222,771
245,572
Property and equipment, net
33,017
34,726
Goodwill and intangible assets
145,869
145,869
Total assets
$
1,167,753
$
1,266,328
Liabilities, redeemable noncontrolling
interests and equity
Short-term notes payable
$
94,944
$
—
Long-term debt
—
94,926
Other liabilities
288,081
343,300
Redeemable noncontrolling interests
19,070
19,205
Total stockholders’ equity
765,658
808,897
Liabilities, redeemable noncontrolling
interests and equity
$
1,167,753
$
1,266,328
Shares outstanding
66,655
68,847
Unaudited Condensed Cash Flow (in
thousands)
Three Months Ended
Mar. 31,
Dec. 31,
Mar. 31,
2020
2019
2019
Cash provided by (used in):
Operating activities
$
29,276
$
89,382
$
(17,497
)
Investing activities
27,694
11,309
(13,933
)
Financing activities
(69,371
)
(52,838
)
(59,513
)
Net change during period
$
(12,401
)
$
47,853
$
(90,943
)
Three Months Ended
Mar. 31,
Dec. 31,
Mar. 31,
(in thousands, except number of
shares)
2020
2019
2019
Shares repurchased
Number of shares
3,807,438
2,315,326
2,226,325
Total cost
$
53,939
$
37,542
$
39,139
Dividend paid
Rate per share
$
0.25
$
0.25
$
0.25
Total paid
$
17,119
$
17,731
$
19,348
Capital returned to
stockholders
$
71,058
$
55,273
$
58,487
Non-GAAP Financial Measures
“Adjusted net income attributable to Waddell & Reed
Financial, Inc.,” “adjusted net income per share, basic and
diluted,” “adjusted operating expenses,” “adjusted operating
income,” and “adjusted operating margin” are non-GAAP financial
measures that are not presented in accordance with U.S. generally
accepted accounting principles (GAAP). We believe that these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding charges and
gains that are not indicative of our core operating results, and
allow management and investors to better evaluate our performance
between periods and compared to other companies in our
industry.
These non-GAAP financial measures should not be considered a
substitute for financial measures presented in accordance with GAAP
and you should not rely on non-GAAP financial measures alone as
measures of our performance.
A reconciliation of these non-GAAP financial measures to the
comparable GAAP financial measures is included in the table
below.
Reconciliation of GAAP to non-GAAP
Financial Measures (in thousands)
Three Months Ended
Mar. 31,
Dec. 31,
Mar. 31,
2020
2019
2019
Net income attributable to Waddell &
Reed Financial, Inc. (GAAP)
$
21,986
$
15,936
$
32,053
Adjustments
Severance
—
2,320
—
Non-cash asset impairments
—
12,841
—
Pension revaluation
—
11,217
—
Tax effect of adjustments
—
(6,331
)
—
Adjusted net income attributable to
Waddell & Reed Financial, Inc. (non-GAAP)
$
21,986
$
35,983
$
32,053
Weighted average shares outstanding -
basic and diluted
67,675
69,896
76,299
Adjusted net income per share, basic and
diluted (non-GAAP):
$
0.32
$
0.51
$
0.42
Operating expenses (GAAP)
$
224,342
$
241,206
$
223,886
Adjustments
Severance
—
2,320
—
Non-cash asset impairments
—
12,841
—
Adjusted operating expenses (non-GAAP)
224,342
226,045
223,886
Operating income (GAAP)
$
39,391
$
28,865
$
35,524
Adjustments
Severance
—
2,320
—
Non-cash asset impairments
—
12,841
—
Adjusted operating income (non-GAAP)
$
39,391
$
44,026
$
35,524
Operating revenue
$
263,733
$
270,071
$
259,410
Adjusted operating margin (non-GAAP)
14.9
%
16.3
%
13.7
%
Earnings Conference Call
Stockholders, members of the investment community and the
general public are invited to listen to a live Web cast of our
earnings release conference call today at 10:00 a.m. Eastern.
During this call, Philip J. Sanders, CEO, will review our quarterly
results. Live access to the teleconference will be available on the
“Investor Relations” section of our Web site at ir.waddell.com. A
Web cast replay will be made available shortly after the conclusion
of the call and accessible for seven days.
Web Site Resources
We invite you to visit the Investor Relations section of our Web
site at ir.waddell.com. Under the “Investor Information” tab you
will find a link to presentations as well as to data tables, which
include supplemental information schedules.
Past performance is no guarantee of future results. Please
invest carefully.
About the Company
Through its subsidiaries, Waddell & Reed Financial, Inc. has
provided investment management and wealth management services to
clients throughout the United States since 1937. Today, we
distribute our investment products through the unaffiliated channel
under the IVY INVESTMENTS® brand (encompassing broker/dealer,
retirement, and registered investment advisors), our wealth
management channel (through independent financial advisors
associated with WADDELL & REED, INC.), and our institutional
channel (including defined benefit plans, pension plans, endowments
and subadvisory relationships). For more information, visit
ir.waddell.com.
Forward-Looking Statements
This press release contains “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, which reflect the current views and assumptions of
management with respect to future events regarding our business and
industry in general. These forward-looking statements include all
statements, other than statements of historical fact, regarding our
financial position, business strategy and other plans and
objectives for future operations, including statements with respect
to revenues and earnings, the amount and composition of assets
under management and assets under administration, distribution
sources, expense levels, redemption rates, stock repurchases and
the financial markets and other conditions. These statements are
generally identified by the use of such words as “may,” “could,”
“should,” “would,” “believe,” “anticipate,” “forecast,” “estimate,”
“expect,” “intend,” “plan,” “project,” “outlook,” “will,”
“potential” and similar statements of a future or forward-looking
nature. Readers are cautioned that any forward-looking information
provided by us or on our behalf is not a guarantee of future
performance. Actual results may differ materially from those
contained in these forward-looking statements as a result of
various factors, including but not limited to the impact of the
COVID-19 pandemic and related economic conditions, as well as the
factors discussed below. If one or more events related to these or
other risks, contingencies or uncertainties materialize, or if our
underlying assumptions prove to be incorrect, actual results may
differ materially from those forecasted or expected. Certain
important factors that could cause actual results to differ
materially from our expectations are disclosed in the “Risk
Factors” section of our Annual Report on Form 10-K for the year
ended December 31, 2019, which include, without limitation:
- The loss of existing distribution relationships or inability to
access new distribution relationships;
- A reduction in assets under our management on short notice,
through increased redemptions in our distribution channels or our
Funds, particularly those Funds with a high concentration of
assets, or investors terminating their relationship with us or
shifting their funds to other types of accounts with different rate
structures;
- The adverse ruling or resolution of any litigation, regulatory
investigations and proceedings, or securities arbitrations by a
federal or state court or regulatory body;
- Changes in our business model, operations and procedures,
including our methods of distributing our proprietary products, as
a result of evolving fiduciary standards;
- The introduction of legislative or regulatory proposals or
judicial rulings that change the independent contractor
classification of our financial advisors at the federal or state
level for employment tax or other employee benefit purposes;
- A decline in the securities markets or in the relative
investment performance of our Funds and other investment portfolios
and products as compared to competing funds;
- Our inability to reduce expenses rapidly enough to align with
declines in our revenues due to various factors, including fee
pressure, the level of our assets under management or our business
environment;
- Non-compliance with applicable laws or regulations and changes
in current legal, regulatory, accounting, tax or compliance
requirements or governmental policies;
- Our inability to attract and retain senior executive management
and other key personnel to conduct our wealth management and
investment management business;
- A failure in, or breach of, our operational or security systems
or our technology infrastructure, or those of third parties on
which we rely; and
- Our inability to implement new information technology and
systems, or our inability to complete such implementation in a
timely or cost effective manner.
The foregoing factors should not be construed as exhaustive and
should be read together with other cautionary statements included
in this and other reports and filings we make with the Securities
and Exchange Commission, including the information in Item 1
“Business” and Item 1A “Risk Factors” of Part I and Item 7
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” of Part II to our Annual Report on Form 10‑
K for the year ended December 31, 2019 and as updated in our
quarterly reports on Form 10-Q for the year ending December 31,
2020. All forward-looking statements speak only as of the date on
which they are made and we undertake no duty to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent
required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200428005219/en/
Investor Contact: Mike Daley, Vice
President, Chief Accounting Officer & Investor Relations, (913)
236-1795, mdaley1@waddell.com
Mutual Fund Investor Contact: Call
(888) WADDELL, or visit www.waddell.com or
www.ivyinvestments.com.
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