Westwood(US:WHG)2020-08-02 11:39Financial Data and Key Metrics Changes - Total revenues for Q2 2020 were $15.9 million, down from $16.7 million in Q1 2020 and $21.7 million in Q2 2019, primarily due to lower average assets under management [51] - The net loss for Q2 2020 was $2.6 million or $0.33 per share, compared to net income of $1.1 million or $0.13 per share in Q1 2020 and a net income of $1.9 million or $0.22 per share in Q2 2019 [52][53] - Economic earnings for Q2 2020 were $0.2 million or $0.03 per share, down from $4.2 million or $0.50 per share in Q1 2020 and $4.8 million or $0.56 per share in Q2 2019 [52][53] Business Line Data and Key Metrics Changes - Firm-wide assets under management totaled $11.9 billion, with institutional assets at $6.2 billion (52%), wealth management assets at $4 billion (34%), and mutual fund assets at $1.7 billion (14%) [54] - The U.S. value equity products showed mixed performance, with small-cap and large-cap select strategies keeping pace during the quarter's upturn, while SMidCap and large-cap lagged due to multiple expansion [13][14] Market Data and Key Metrics Changes - Emerging markets faced high levels of uncertainty and volatility, with performance heavily influenced by the China and Hong Kong region, which accounted for about one-third of the quarter's returns [25] - The performance dispersion in U.S. equities driven by the largest index holdings was less apparent in emerging markets [25] Company Strategy and Development Direction - The company plans to restructure certain business areas to reduce operating expenses while continuing to invest in long-term growth initiatives [41] - The Westwood International Advisors office in Toronto will cease operations by the end of Q3 2020, as part of the strategic plan to eliminate unprofitable products [42] - The company is focusing on enhancing its wealth management foundation and integrating new technologies to better serve clients [30][31] Management's Comments on Operating Environment and Future Outlook - The path to recovery remains uncertain due to the ongoing COVID-19 pandemic, with infection trends worsening in key states [12] - Companies with high-quality franchises and strong balance sheets are expected to be in demand by investors [13] - The company remains financially strong with cash and short-term investments totaling $74.2 million and a debt-free balance sheet [55] Other Important Information - The company repurchased 407,697 shares of common stock for an aggregate purchase price of $8.1 million, with authority to repurchase an additional $10 million [55] - The company has launched an online portal and virtual events to engage clients during the pandemic [27] Q&A Session Summary Question: Future of Emerging Markets Operations - The company will discontinue operations in emerging markets by Q3 2020, with the Toronto office closing due to losses, and potential savings will be discussed in the next call [61] Question: Investment in Fintech - The investment in InvestCloud is expected to perform well given the current high valuations in the fintech sector, with the carrying value around $8 million [62]