Waddell & Reed Financial, Inc. (NYSE: WDR) today reported
second quarter 2016 net income1 of $33.7 million, or $0.41 per
diluted share, compared to net income of $37.0 million, or $0.45
per diluted share, during the prior quarter and net income of $67.4
million, or $0.80 per diluted share, during the second quarter of
2015. Operating income was $53.8 million during the current quarter
and the operating margin was 16.8%, compared to $71.4 million and
22.1%, respectively during the prior quarter and $111.0 million and
28.2%, respectively during the same quarter in 2015.
The second quarter of 2016 included $24.1 million in charges
related to severance, accelerated amortization of deferred
acquisition costs (“DAC”) and Project E implementation costs.
Excluding these charges, adjusted net income2 was $48.9 million, or
$0.59 per diluted share, while adjusted operating income and the
adjusted operating margin were $77.9 million and 24.4%,
respectively. In addition to reporting results in accordance with
generally accepted accounting principles (“GAAP”), management
believes adjusting results to exclude items provides investors with
financial measures that better reflect the company’s core operating
performance and allow for more appropriate comparisons to prior
periods. However, non-GAAP financial measures should not be
considered a substitute for performance measures calculated in
accordance with GAAP. A schedule reconciling non-GAAP financial
measures to GAAP net income and earnings per diluted share is
provided below.
During the quarter the following charges were recorded:
- $7.1 million for severance and related
charges to U&D indirect costs (unaffiliated distribution $2.2
million; broker-dealer $4.9 million);
- $9.8 million for severance and related
charges to compensation and related costs;
- $5.9 million related to the accelerated
amortization of DAC to U&D direct costs (broker-dealer) due to
a share class conversion; and
- $1.3 million related to costs
associated with the implementation of technology to Project E to
U&D indirect costs (broker-dealer).
______________________________________
1 Net income represents net income attributable to Waddell &
Reed Financial, Inc.2 Non-GAAP adjusted results provide an
understanding of our business by excluding the effects of items
that do not reflect the ordinary results of our operations.
Adjusted Results Reconciliation to GAAP
(Amounts in thousands, except for per share data)
GAAP
Adjusted 2Q 16 Adj.
2Q 16 Operating Revenues:
Investment management fees $ 140,880 $ 140,880 Underwriting
and distribution fees 146,312 146,312 Shareholder service
fees 32,016
32,016 Total operating revenues
319,208
319,208
Operating Expenses: Underwriting and
distribution 181,245 (14,285 ) 166,960 Compensation and related
costs 58,341 (9,818 ) 48,523 General and administrative 19,276
19,276 Subadvisory fees 2,325 2,325 Depreciation
4,260
4,260 Total operating expenses
265,447 (24,103 )
241,344
Operating Income 53,761 (24,103 ) 77,864
Investment and other income/(loss) 687 687 Interest expense
(2,776 )
(2,776 ) Income before taxes 51,672 (24,103 ) 75,775 Provision for
taxes 18,101 8,937
27,038
Net Income
$ 33,571 (15,166 ) $ 48,737
Noncontrolling interests (124 )
(124 )
Net Income
Attributable to Waddell & Reed Financial, Inc.
$ 33,695 (15,166 ) $
48,861 Net income per share, basic and diluted:
0.41 (0.18 )
0.59 Weighted average shares outstanding - basic and
diluted 82,947 82,947
82,947 Operating margin
16.8 %
24.4 %
Business Discussion
As of June 30, 2016, assets under management declined 9%
sequentially to $86 billion due mainly to outflows from our
Institutional and unaffiliated distribution channels. Our
Institutional channel experienced three material redemptions during
the quarter that accounted for $4.9 billion of the $5.5 billion in
total outflows. Our unaffiliated distribution channel experienced
$3.9 billion in outflows of which the Asset Strategy funds
accounted for $2.6 billion.
“The company is not without challenges,” said Philip J. Sanders,
Chief Investment Officer and incoming Chief Executive Officer of
Waddell & Reed Financial, Inc. “Our top priorities are
improving investment performance, reigniting sales and executing on
our technology initiatives across the company.” Henry J. Herrmann,
Chairman and Chief Executive Officer added; “we have a strong
executive team that is united in its focus on achieving these
objectives and I am confident that Phil is the right person to lead
the organization through these difficult times.”
Management Fee Revenue Analysis
Management fees declined 3% sequentially, while average assets
under management declined 5%. Fees declined at a lesser rate than
average assets under management due to an improvement in the
effective fee rate due to a mix-shift in the asset base that
increased the average fee rate. Compared to the same quarter last
year, management fees declined 24% due to a 26% decline in average
assets under management, which was partly offset by a mix-shift in
the asset base that increased the average fee rate.
Average assets under management were $90.8 billion during the
current quarter, compared to $95.7 billion during the prior quarter
and $123.5 billion during the second quarter of 2015. The effective
fee rate for the current quarter was 62.4 basis points compared to
60.8 basis points and 60.4 basis points during the first quarter of
2016 and second quarter of 2015, respectively.
Underwriting and Distribution Analysis
Underwriting and Distribution Revenues
Revenues were largely unchanged sequentially as lower sales and,
to a lesser extent, lower asset levels in our retail unaffiliated
channel were offset by higher advisory fee revenues in our
broker-dealer channel. Compared to the same period last year,
revenues declined 15% due to lower asset-based Rule 12b-1 service
and distribution fees across both channels driven by a decrease in
average assets under management.
Underwriting and Distribution Costs
The current quarter included charges for severance, accelerated
amortization of DAC and costs associated with the implementation of
Project E. These charges totaled $5.9 million in direct expenses
and $8.4 million in indirect expenses.
Direct costs rose 2% sequentially; however, excluding the above
referenced items, adjusted costs declined 2% due to lower
asset-based Rule 12b-1 service and distribution fees in the retail
unaffiliated channel and lower commissions. Indirect costs rose 9%;
however, excluding the above referenced items, adjusted costs
declined 9% due to workforce reductions, technology costs and
travel.
Compared to the second quarter of 2015, direct costs declined
14%; however, excluding the above referenced items, adjusted costs
declined 18% due to a decrease in assets under management and lower
sales volume. Indirect costs increased 17%; however, excluding the
above referenced items, adjusted costs declined 2% due to lower
advertising and sales meeting costs.
Compensation and Related Expense Analysis
Costs increased 10% compared to both the first quarter of 2016
and second quarter of 2015. The current quarter included severance
charges that totaled $9.8 million. Excluding these charges,
adjusted costs declined 8% compared to both the first quarter of
2016 and second quarter of 2015. The decline was due to lower base
salary and payroll taxes from the reduction in workforce and
certain employees having exceeded the social security wage base for
2016.
General and Administrative Expense Analysis
Costs were largely unchanged sequentially as lower dealer
servicing costs were offset by higher IT costs. Compared to the
same period last year, costs declined 31% due in lower dealer
servicing costs and IT costs, and to a lesser degree, a decline in
advertising costs.
Investment and Other Income
During the first quarter of 2016, we entered into a number of
total return swap contracts to serve as an economic hedge against
the market risk associated with our investments in sponsored funds.
We experienced a $9.6 million investment loss during the first
quarter prior to our hedging strategy being fully implemented.
During the current quarter, higher dividend income and gains on
redemptions of investments classified as available for sale were
largely offset by net losses experienced from our hedged investment
portfolio.
Unaudited Consolidated
Statement of Income
(Amounts in
thousands, except for per share data)
2015
2016 1st Qtr.
2nd Qtr. 3rd Qtr. 4th
Qtr. 1st Qtr. 2nd Qtr.
3rd Qtr.
4th Qtr. Operating Revenues: Investment
management fees $ 182,105 $ 185,914 $ 175,218 $ 166,325 $ 144,778 $
140,880 Underwriting and distribution fees 166,978 171,508 165,130
160,382 146,658 146,312 Shareholder service fees
36,375 36,568
35,761 34,367
32,380 32,016
Total operating
revenues 385,458
393,990 376,109
361,074 323,816
319,208
Operating Expenses: Underwriting and distribution 195,420
195,762 189,065 189,534 173,836 181,245 Compensation and related
costs 53,495 52,829 46,157 48,271 52,940 58,341 General and
administrative 25,678 27,897 25,458 26,033 19,152 19,276
Subadvisory fees 2,387 2,394 2,305 2,048 2,093 2,325
Depreciation 4,034
4,064 4,117
3,831 4,362 4,260
Total operating
expenses 281,014
282,946 267,102
269,717 252,383
265,447
Operating Income 104,444 111,044 109,007 91,357 71,433
53,761 Investment and other income/(loss) 3,972 9 (16,872 ) 7,647
(10,218 ) 687 Interest expense (2,766 )
(2,765 ) (2,765 )
(2,772 ) (2,768 ) (2,776 )
Income before taxes
105,650 108,288 89,370 96,232 58,447 51,672 Provision for taxes
38,537 40,843
41,312
33,312 20,978 18,101
Net Income
$ 67,113 $ 67,445
$ 48,058 $ 62,920 $ 37,469
$ 33,571
Noncontrolling interests -
- -
- 501
(124 )
Net
Income Attributable to Waddell & Reed Financial, Inc.
$ 67,113 $ 67,445
$ 48,058 $ 62,920 $ 36,968
$ 33,695
Net income per share, basic and diluted:
0.80 0.80
0.58 0.76
0.45 0.41
Weighted average shares outstanding - basic
and diluted 83,581
84,079 83,469
82,873 82,104
82,947
Operating margin 27.1 %
28.2 % 29.0 % 25.3 %
22.1 % 16.8 %
Net Distribution Cost Analysis (Amounts in
thousands)
Retail Unaffiliated
Distribution1 1st Qtr. 2nd
Qtr. 3rd Qtr. 4th
Qtr. 1st Qtr. 2nd Qtr.
3rd Qtr. 4th Qtr. U&D
Revenues $ 52,142 $ 51,768 $ 47,040 $ 43,091 $ 35,923 $ 32,510
U&D Expenses - Direct (68,595 ) (66,947 ) (62,117 ) (57,119 )
(46,846 ) (42,452 ) U&D Expenses - Indirect (14,029 )
(13,972 ) (13,329 )
(14,614 ) (13,349 )
(14,939 ) Net
Distribution (Costs) ($30,482 )
($29,151 ) ($28,406 )
($28,642 ) ($24,272 ) ($24,881 )
Retail
Broker-Dealer2 U&D Revenues $ 114,836 $ 119,740 $
118,090 $ 117,291 $ 110,735 $ 113,802 U&D Expenses - Direct
(82,022 ) (85,177 ) (84,420 ) (83,413 ) (80,277 ) (87,740 ) U&D
Expenses - Indirect (30,774 ) (29,666 )
(29,199 ) (34,388 )
(33,364 ) (36,114 )
Net Distribution Excess/(Costs) $ 2,040
$ 4,897 $ 4,471
($510 ) ($2,906 )
($10,052 ) 1
Retail Unaffiliated Distribution was previously referred to as the
"Wholesale channel" 2 Retail Broker-Dealer was previously referred
to as the "Advisors channel"
Changes in Assets Under Management 2015
2016 (Amounts in millions)
1st Qtr.
2nd Qtr. 3rd Qtr.
4th Qtr. 1st Qtr. 2nd
Qtr. 3rd Qtr. 4th
Qtr. Retail Unaffiliated Distribution
Beginning assets $ 60,335 $ 59,412 $ 57,545 $ 49,320 $
45,641 $ 38,623 Sales* 3,870 3,239 2,768 2,341 2,144 1,526
Redemptions (6,259 ) (4,558 ) (5,569 ) (7,300 ) (7,680 ) (5,543 )
Net Exchanges 224 144
265 176
158 127
Net flows (2,165 ) (1,175 )
(2,536 ) (4,783 ) (5,378 ) (3,890 ) Market action 1,242
(692 ) (5,689 )
1,104 (1,640 )
464 Ending
assets $ 59,412 $ 57,545
$ 49,320 $ 45,641 $ 38,623
$ 35,197
Retail Broker-Dealer Beginning assets $
45,517 $ 46,385 $ 45,947 $ 42,215 $ 43,344 $ 42,142 Sales* 1,270
1,347 1,238 1,218 1,068 1,094 Redemptions (1,279 ) (1,279 ) (1,242
) (1,245 ) (1,197 ) (1,329 ) Net Exchanges (224 )
(144 ) (265 )
(176 ) (172 ) (163 )
Net flows (233 ) (76 )
(269 ) (203 ) (301 ) (398 ) Market action 1,101
(362 ) (3,463 )
1,332 (901 ) 517
Ending assets $
46,385 $ 45,947 $ 42,215
$ 43,344 $ 42,142
$ 42,261
Institutional Beginning assets $ 17,798 $ 17,097 $ 17,214 $
14,657 $ 15,414 $ 14,426 Sales* 300 1,203 465 773 453 190
Redemptions (1,460 ) (1,003 ) (1,817 ) (799 ) (1,068 ) (5,699 ) Net
Exchanges - -
- - 14
36
Net flows (1,160 ) 200 (1,352 ) (26 ) (601 )
(5,473 ) Market action 459 (83 )
(1,205 ) 783
(387 ) 40
Ending assets $ 17,097 $
17,214 $ 14,657 $ 15,414
$ 14,426 $ 8,993
Consolidated Total
Beginning assets $ 123,650 $ 122,894 $ 120,706 $ 106,192 $ 104,399
$ 95,191 Sales* 5,440 5,789 4,471 4,332 3,665 2,810 Redemptions
(8,998 ) (6,840 ) (8,628 ) (9,344 ) (9,945 ) (12,571 ) Net
Exchanges - -
- - -
-
Net flows (3,558 ) (1,051 ) (4,157 ) (5,012 )
(6,280 ) (9,761 ) Market action 2,802
(1,137 ) (10,357 )
3,219 (2,928 ) 1,021
Ending assets $ 122,894
$ 120,706 $ 106,192
$ 104,399 $ 95,191
$ 86,451 *
Sales is primarily gross sales (net of sales commissions). This
amount also includes net reinvested dividends & capital gains
and investment income.
Supplemental Information
Asset Manager 2015
2016
($ in millions)
1st Qtr. 2nd Qtr. 3rd
Qtr. 4th Qtr. 1st Qtr.
2nd Qtr. 3rd Qtr.
4th Qtr. Retail Unaffiliated Distribution AUM $
59,412 $ 57,545 $ 49,320 $ 45,641 $ 38,623 $ 35,197 Net flows $
(2,165 ) $ (1,175 ) $ (2,536 ) $ (4,783 ) $ (5,378 ) $ (3,890 )
Organic growth -14.4 % -7.9 % -17.6 % -38.8 % -47.1 % -40.3 %
Redemption Rate 42.9 % 31.0 % 41.2 % 59.3 % 77.7 % 61.3 %
Retail
Broker-Dealer AUM $ 46,385 $ 45,947 $ 42,215 $ 43,344 $ 42,142
$ 42,261 Net flows $ (233 ) $ (76 ) $ (269 ) $ (203 ) $ (301 ) $
(398 ) Organic growth -2.0 % -0.7 % -2.3 % -1.9 % -2.8 % -3.8 %
Redemption Rate 9.0 % 9.0 % 8.9 % 9.3 % 9.3 % 10.5 %
Institutional AUM $ 17,097 $ 17,214 $ 14,657 $ 15,414 $
14,426 $ 8,993 Net flows $ (1,160 ) $ 200 $ (1,352 ) $ (26 ) $ (601
) $ (5,473 ) Organic growth -26.1 % 4.7 % -31.4 % -0.7 % -15.6 %
-151.8 % Redemption Rate 33.7 % 23.2 %
45.4 % 20.5 % 29.9
% 198.9 %
Fund Rankings 1 Year 3
Years 5 Years Lipper
Funds ranked in top half 31% 42% 41% Assets
ranked in top half 16% 32% 42%
MorningStar Funds with 4/5
stars 17% 11% 8% Assets with 4/5 stars 15% 5%
4%
2015 2016
Broker-Dealer 1st Qtr. 2nd Qtr.
3rd Qtr. 4th Qtr. 1st
Qtr. 2nd Qtr. 3rd
Qtr. 4th Qtr. AUA* (in billions) $ 53.7
$ 53.6 $ 49.4 $ 51.0 $
49.9 $ 50.5 AUA* fee
based accounts (in billions) $ 18.0 $ 18.3 $ 17.0 $ 17.6 $ 17.4 $
17.8 # Advisors 1,745 1,780 1,795 1,819 1,803 1,799 Advisor
productivity (in thousands) $ 65.9 $ 67.9 $ 66.3 $ 64.9 $ 61.3 $
63.1 U&D revenues (in thousands) $ 114,836 $
119,740 $ 118,090 $ 117,291 $ 110,735
$ 113,802 *
AUA represent Assets Under Administration
Unaudited Balance Sheet Information Schedule
of Selected Items
Jun. 30, 2016 (Amounts in
millions) Cash & cash equivalents (unrestricted) $467.5
Investment securities 361.6
Total assets 1,406.2
Long-term debt 189.5
Total liabilities 577.8
Redeemable noncontrolling interests 10.9
Stockholders' equity 817.5 Shares
outstanding 82.9 million shares Quarter
ended Year-to-Date Jun. 30, 2016 Jun. 30,
2016 ($ in thousands) Shares repurchased
Number of shares 1,075,826 2,201,497 Total cost $21,863 $47,461
Dividend paid Rate per share $0.46 $0.92 Total paid
$38,501 $76,616
Capital returned to stockholders
$60,364 $124,077 In April 2016, we granted
2,213,850 shares of restricted stock
pursuant to our stock incentive plan.
Unaudited Consolidated
Statement of Income
(Amounts in thousands, except for per share data)
Six Months Ended Jun-15
Jun-16 % Change Operating
Revenues: Investment management fees $ 368,019 $ 285,658 -22.4
% Underwriting and distribution fees 338,486 292,970 -13.4 %
Shareholder service fees 72,943
64,396 -11.7 % Total
operating revenues 779,448
643,024 -17.5 %
Operating
Expenses: Underwriting and distribution 391,182 355,081 -9.2 %
Compensation and related costs 106,324 111,281 4.7 % General and
administrative 53,575 38,428 -28.3 % Subadvisory fees 4,781 4,418
-7.6 % Depreciation 8,098
8,622 6.5 % Total
operating expenses 563,960
517,830 -8.2 %
Operating
Income 215,488 125,194 -41.9 % Investment and other income
3,981 (9,531 ) -339.4 % Interest expense
(5,531 ) (5,544 ) 0.2 % Income
before taxes 213,938 110,119 -48.5 % Provision for taxes
79,380 39,079
-50.8 %
Net Income $ 134,558
$ 71,040 -47.2 %
Noncontrolling interests -
377 N/A
Net Income
Attributable to Waddell & Reed Financial, Inc.
$ 134,558 $ 70,663
-47.5 % Net income per share, basic and diluted
1.61 0.86
-46.7 % Weighted average shares outstanding - basic and diluted
83,831 82,526
Operating margin
27.6 % 19.5 %
Net
Distribution Cost Analysis
(Amounts in thousands)
Six Months Ended
Retail Unaffiliated Distribution1 Jun-15
Jun-16 % Change U&D
Revenues $ 103,910 $ 68,433 -34.1 % U&D Expenses - Direct
(135,542 ) (89,298 ) -34.1 % U&D Expenses - Indirect
(28,001 ) (28,288 ) 1.0 % Net
Distribution (Costs) ($59,633 )
($49,153 ) -17.6 %
Retail
Broker-Dealer2 U&D Revenues $ 234,576 $ 224,537 -4.3
% U&D Expenses - Direct (167,199 ) (168,017 ) 0.5 % U&D
Expenses - Indirect (60,440 ) (69,478 )
15.0 % Net Distribution Excess/(Costs) $ 6,937
($12,958 ) -286.8 % 1
Retail Unaffiliated Distribution was previously referred to as the
"Wholesale channel" 2 Retail Broker-Dealer was previously referred
to as the "Advisors channel"
Changes in Assets Under Management Six
Months Ended (Amounts in millions)
Jun-15
Jun-16 % Change Retail Unaffiliated
Distribution Beginning assets $
60,335 $ 45,641 -24.4 % Sales* 7,110 3,671 -48.4 % Redemptions
(10,816 ) (13,224 ) 22.3 % Net Exchanges 367
285 N/M
Net flows
(3,339 ) (9,268 ) 177.6 % Market action 549
(1,176 ) -314.2 % Ending assets $
57,545 $ 35,197 -38.8 %
Retail Broker-Dealer Beginning assets $ 45,517
$ 43,344 -4.8 % Sales* 2,616 2,161 -17.4 % Redemptions (2,558 )
(2,525 ) -1.3 % Net Exchanges (367 )
(335 ) N/M
Net flows (309 ) (699 )
126.2 % Market action 739 (384 )
-152.0 % Ending assets $ 45,947
$ 42,261 -8.0 %
Institutional
Channel Beginning assets $ 17,798 $ 15,414 -13.4 % Sales* 1,504
643 -57.2 % Redemptions (2,464 ) (6,767 ) 174.6 % Net Exchanges
0 50 N/M
Net flows (960 ) (6,074 ) 532.7 % Market action
376 (347 ) -192.3
% Ending assets $ 17,214 $ 8,993
-47.8 %
Consolidated Total Beginning assets $
123,650 $ 104,399 -15.6 % Sales* 11,230 6,475 -42.3 % Redemptions
(15,838 ) (22,516 ) 42.2 % Net Exchanges -
- N/M
Net flows
(4,608 ) (16,041 ) 248.1 % Market action 1,664
(1,907 ) -214.6 % Ending assets $
120,706 $ 86,451 -28.4 %
* Sales is primarily gross sales (net of sales commissions).
This amount also includes net reinvested dividends & capital
gains and investment income.
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 9:00 a.m.
Eastern. During this call, Henry J. Herrmann, Chairman and CEO,
will review our quarterly results. Live access to the
teleconference will be available on the “Investor Relations”
section of our Web site at www.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 www.waddell.com. Under the “Investor Info” 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
Waddell & Reed, Inc., founded in 1937, is one of the oldest
mutual fund complexes in the United States, having introduced the
Waddell & Reed Advisors Group of Mutual Funds in 1940. Today,
we distribute our investment products through the retail
unaffiliated distribution channel (encompassing broker/dealer,
retirement, and registered investment advisors), our retail
broker-dealer channel (our network of financial advisors), and our
Institutional channel (including defined benefit plans, pension
plans and endowments, and our subadvisory partnership with
Mackenzie in Canada).
Through its subsidiaries, Waddell & Reed Financial, Inc.
provides investment management and financial planning services to
clients throughout the United States and internationally. Waddell
& Reed Investment Management Company serves as investment
advisor to the Waddell & Reed Advisors Group of Mutual Funds,
Ivy Funds Variable Insurance Portfolios and InvestEd Portfolios,
while Ivy Investment Management Company serves as investment
advisor to Ivy Funds and investment advisor and global distributor
to the Ivy Global Investors SICAV, an umbrella UCITS fund range
domiciled in Luxembourg. Waddell & Reed, Inc. serves as
principal underwriter and distributor to the Waddell & Reed
Advisors Group of Mutual Funds, Ivy Funds Variable Insurance
Portfolios and InvestEd Portfolios, while Ivy Distributors, Inc.
serves as principal underwriter and distributor to Ivy Funds.
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, distribution sources, expense levels, redemption
rates 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 those
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, 2015, which include, without limitation:
- The loss of existing distribution
channels or inability to access new distribution channels;
- 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;
- 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;
- The ability of mutual fund and other
investors to redeem their investments without prior notice or on
short notice;
- Our inability to reduce expenses
rapidly enough to align with declines in our revenues, 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
broker-dealer, fund management and investment advisory
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, 2015 and as updated in our
quarterly reports on Form 10-Q for the year ending December 31,
2016. 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.
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Waddell & Reed, Inc.Investor
Contact:Nicole Russell, 913-236-1880VP, Investor
Relationsnrussell@waddell.comorMutual
Fund Investor Contact:888-WADDELLor visitwww.waddell.com or
www.ivyfunds.com
Waddell and Reed Financial (NYSE:WDR)
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From Mar 2024 to Apr 2024
Waddell and Reed Financial (NYSE:WDR)
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From Apr 2023 to Apr 2024