Company Quick10K Filing
Waddell & Reed
Price17.43 EPS2
Shares74 P/E9
MCap1,298 P/FCF15
Net Debt-91 EBIT187
TEV1,207 TEV/EBIT6
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-07-31
10-Q 2020-03-31 Filed 2020-05-01
10-K 2019-12-31 Filed 2020-02-21
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-03
10-K 2018-12-31 Filed 2019-02-22
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-10-27
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-02-24
10-Q 2016-09-30 Filed 2016-10-28
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-04-29
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-11-09
10-Q 2015-06-30 Filed 2015-07-31
10-Q 2015-03-31 Filed 2015-05-01
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-10-31
10-Q 2014-06-30 Filed 2014-08-01
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-02-28
10-Q 2013-09-30 Filed 2013-11-01
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-04-25
10-K 2012-12-31 Filed 2013-02-27
10-Q 2012-09-30 Filed 2012-11-02
10-Q 2012-06-30 Filed 2012-08-02
10-Q 2012-03-31 Filed 2012-05-03
10-K 2011-12-31 Filed 2012-02-29
10-Q 2011-09-30 Filed 2011-10-28
10-Q 2011-06-30 Filed 2011-07-29
10-Q 2011-03-31 Filed 2011-04-29
10-K 2010-12-31 Filed 2011-02-25
10-Q 2010-09-30 Filed 2010-10-29
10-Q 2010-06-30 Filed 2010-07-30
10-Q 2010-03-31 Filed 2010-04-29
10-K 2009-12-31 Filed 2010-02-26
8-K 2020-08-12 Regulation FD, Exhibits
8-K 2020-07-28 Earnings, Exhibits
8-K 2020-07-13 Regulation FD, Exhibits
8-K 2020-07-10 Officers
8-K 2020-06-10
8-K 2020-05-12
8-K 2020-04-29
8-K 2020-04-28
8-K 2020-04-09
8-K 2020-03-11
8-K 2020-02-18
8-K 2020-02-12
8-K 2020-02-04
8-K 2020-01-13
8-K 2019-12-11
8-K 2019-11-12
8-K 2019-11-01
8-K 2019-10-29
8-K 2019-10-10
8-K 2019-09-12
8-K 2019-08-12
8-K 2019-07-30
8-K 2019-07-11
8-K 2019-07-03
8-K 2019-06-19
8-K 2019-06-12
8-K 2019-06-10
8-K 2019-05-28
8-K 2019-05-10
8-K 2019-04-30
8-K 2019-04-23
8-K 2019-04-10
8-K 2019-03-12
8-K 2019-03-03
8-K 2019-02-12
8-K 2019-02-05
8-K 2019-01-11
8-K 2018-12-12
8-K 2018-11-12
8-K 2018-10-30
8-K 2018-10-10
8-K 2018-09-13
8-K 2018-08-09
8-K 2018-07-31
8-K 2018-07-12
8-K 2018-06-12
8-K 2018-05-10
8-K 2018-04-26
8-K 2018-04-19
8-K 2018-04-12
8-K 2018-04-12
8-K 2018-04-11
8-K 2018-03-12
8-K 2018-03-01
8-K 2018-02-13
8-K 2018-02-12
8-K 2018-01-30
8-K 2018-01-13
8-K 2018-01-11

WDR 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
Part II.Other Information
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.Exhibits
EX-31.1 wdr-20200630xex31d1.htm
EX-31.2 wdr-20200630xex31d2.htm
EX-32.1 wdr-20200630xex32d1.htm
EX-32.2 wdr-20200630xex32d2.htm

Waddell & Reed Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
1.61.31.00.60.30.02012201420172020
Assets, Equity
0.50.40.30.20.10.02012201420172020
Rev, G Profit, Net Income
0.20.10.0-0.0-0.1-0.22012201420172020
Ops, Inv, Fin

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Table of Contents


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                 to                                

Commission file number 001-13913

WADDELL & REED FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Delaware

51-0261715

(State or other jurisdiction

(I.R.S. Employer

of incorporation or organization)

Identification No.)

6300 Lamar Avenue

Overland Park, Kansas 66202

(Address, including zip code, of Registrant’s principal executive offices)

(913) 236-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $.01 par value

WDR

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes  No .

Shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date:

Class

Outstanding as of July 24, 2020

Class A common stock, $.01 par value

65,163,673

Table of Contents

WADDELL & REED FINANCIAL, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

Quarter Ended June 30, 2020

    

Page No.

Part I.

Financial Information

Item 1.

Financial Statements (unaudited)

Consolidated Balance Sheets at June 30, 2020 and December 31, 2019

3

Consolidated Statements of Income for the three and six months ended June 30, 2020 and June 30, 2019

4

Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and June 30, 2019

5

Consolidated Statements of Stockholders’ Equity and Redeemable Noncontrolling Interests for the three and six months ended June 30, 2020 and June 30, 2019

6

Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and June 30, 2019

7

Notes to the Unaudited Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

40

Item 4.

Controls and Procedures

40

Part II.

Other Information

Item 1A.

Risk Factors

40

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 6.

Exhibits

42

Signatures

43

2

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WADDELL & REED FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

June 30, 

2020

December 31, 

(Unaudited)

2019

Assets:

    

    

    

Cash and cash equivalents

$

156,710

 

151,815

Cash and cash equivalents - restricted

 

44,810

 

 

74,325

Investment securities

 

619,052

 

 

688,346

Receivables:

Funds and separate accounts

 

14,428

 

 

15,167

Customers and other

 

81,971

 

 

80,089

Prepaid expenses and other current assets

 

28,369

 

 

31,655

Total current assets

 

945,340

 

 

1,041,397

Property and equipment, net

 

31,928

 

 

34,726

Goodwill and identifiable intangible assets

 

145,869

 

 

145,869

Deferred income taxes

 

17,454

 

 

14,418

Other non-current assets

 

25,411

 

 

29,918

Total assets

$

1,166,002

 

1,266,328

Liabilities:

Accounts payable

$

19,909

 

20,123

Payable to investment companies for securities

 

37,403

 

 

36,883

Payable to third party brokers

 

14,367

 

 

17,123

Payable to customers

 

65,748

 

 

84,558

Short-term notes payable

94,962

Accrued compensation

 

49,076

 

 

79,507

Other current liabilities

 

61,789

 

 

71,001

Total current liabilities

 

343,254

 

 

309,195

Long-term debt

 

 

 

94,926

Accrued pension and postretirement costs

 

3,541

 

 

3,145

Other non-current liabilities

 

26,647

 

 

30,960

Total liabilities

 

373,442

 

 

438,226

Redeemable noncontrolling interests

25,857

19,205

Stockholders’ equity:

Preferred stock—$1.00 par value: 5,000 shares authorized; none issued

 

 

 

Class A Common stock—$0.01 par value: 250,000 shares authorized; 99,701 shares issued; 65,174 shares outstanding (68,847 at December 31, 2019)

 

997

 

 

997

Additional paid-in capital

 

289,439

 

 

312,693

Retained earnings

 

1,255,770

 

 

1,241,598

Cost of 34,527 common shares in treasury (30,854 at December 31, 2019)

 

(783,990)

 

 

(749,625)

Accumulated other comprehensive income

 

4,487

 

 

3,234

Total stockholders’ equity

 

766,703

 

 

808,897

Total liabilities, redeemable noncontrolling interests and stockholders’ equity

$

1,166,002

 

1,266,328

See accompanying notes to the unaudited consolidated financial statements.

3

Table of Contents

WADDELL & REED FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited, in thousands, except for per share data)

For the three months ended June 30, 

For the six months ended June 30, 

2020

2019

2020

2019

Revenues:

    

    

    

    

    

    

    

Investment management fees

$

95,824

 

112,870

$

201,043

 

222,632

Underwriting and distribution fees

 

123,633

 

133,495

260,576

 

259,740

Shareholder service fees

 

20,577

 

23,789

42,148

 

47,192

Total

 

240,034

 

270,154

503,767

 

529,564

Operating expenses:

Distribution

 

107,876

 

116,477

227,909

 

226,271

Compensation and benefits (including share-based compensation of $12,532, $11,199, $22,515 and $23,892, respectively)

 

61,863

 

61,876

120,288

 

126,719

General and administrative

 

20,524

 

16,037

39,122

 

30,741

Technology

14,237

16,442

27,739

32,750

Occupancy

4,291

6,701

9,000

13,416

Marketing and advertising

1,119

2,399

3,015

4,363

Depreciation

 

3,209

 

5,228

6,722

 

11,229

Subadvisory fees

 

3,288

 

3,715

6,954

 

7,272

Total

 

216,407

 

228,875

440,749

 

452,761

Operating income

 

23,627

 

41,279

63,018

 

76,803

Investment and other income

 

15,148

 

9,025

7,403

 

18,478

Interest expense

 

(1,539)

 

(1,552)

(3,088)

 

(3,100)

Income before provision for income taxes

 

37,236

 

48,752

67,333

 

92,181

Provision for income taxes

 

9,412

 

14,190

19,045

 

24,861

Net income

27,824

 

34,562

48,288

 

67,320

Net income attributable to redeemable noncontrolling interests

3,000

614

1,478

1,318

Net income attributable to Waddell & Reed Financial, Inc.

$

24,824

33,948

$

46,810

66,002

Net income per share attributable to Waddell and Reed Financial, Inc. common shareholders, basic and diluted:

$

0.38

0.45

$

0.70

0.87

Weighted average shares outstanding, basic and diluted:

 

65,488

74,694

66,581

75,492

See accompanying notes to the unaudited consolidated financial statements.

4

Table of Contents

WADDELL & REED FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited, in thousands)

    

For the three months ended June 30, 

For the six months ended June 30, 

2020

    

2019

    

2020

    

2019

    

Net income

$

27,824

 

34,562

$

48,288

 

67,320

Other comprehensive income:

Unrealized gain on available for sale investment securities during the period, net of income tax expense of $1,195, $402, $435 and $919, respectively

 

3,783

 

 

1,281

 

1,353

 

 

2,939

Postretirement benefit, net of income tax benefit of $(16), $(28), $(34) and $(58), respectively

 

(51)

 

 

(95)

 

(100)

 

 

(189)

Comprehensive income

31,556

 

35,748

49,541

 

70,070

Comprehensive income attributable to redeemable noncontrolling interests

3,000

614

1,478

1,318

Comprehensive income attributable to Waddell & Reed Financial, Inc.

$

28,556

35,134

$

48,063

68,752

See accompanying notes to the unaudited consolidated financial statements.

5

Table of Contents

WADDELL & REED FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity and Redeemable Noncontrolling Interests

(Unaudited, in thousands)

For the three months ended June 30,

Accumulated

Redeemable

Additional

Other

Total 

Non

Common Stock

Paid-In

Retained

Treasury

Comprehensive

Stockholders’

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Stock

    

Income

    

Equity

    

Interests

Balance at March 31, 2019

 

99,701

$

997

 

290,872

 

1,211,566

 

(636,726)

 

1,895

 

868,604

 

12,936

Net income

 

 

 

 

33,948

 

 

 

33,948

 

614

Net subscription of redeemable noncontrolling interests in sponsored funds

1,565

Recognition of equity compensation

 

 

 

7,941

 

148

 

 

 

8,089

 

Net issuance/forfeiture of nonvested shares

 

 

 

(4,326)

 

 

4,326

 

 

 

Dividends accrued, $0.25 per share

 

 

 

 

(18,348)

 

 

(18,348)

Repurchase of common stock

 

(36,823)

 

(36,823)

 

Other comprehensive income

 

 

 

 

 

 

1,186

 

1,186

 

Balance at June 30, 2019

99,701

$

997

 

294,487

 

1,227,314

 

(669,223)

 

3,081

 

856,656

 

15,115

    

Balance at March 31, 2020

 

99,701

$

997

 

282,401

 

1,247,084

 

(765,579)

 

755

 

765,658

 

19,070

Net income

 

 

 

 

24,824

 

 

 

24,824

 

3,000

Net subscription of redeemable noncontrolling interests in sponsored funds

3,787

Recognition of equity compensation

 

 

 

6,688

 

19

 

 

 

6,707

 

Net issuance/forfeiture of nonvested shares

 

 

 

350

 

 

(350)

 

 

 

Dividends accrued, $0.25 per share

 

 

 

 

(16,157)

 

 

(16,157)

Repurchase of common stock

 

(18,061)

 

(18,061)

 

Other comprehensive income

 

 

 

 

 

 

3,732

 

3,732

 

Balance at June 30, 2020

99,701

$

997

 

289,439

 

1,255,770

 

(783,990)

 

4,487

 

766,703

 

25,857

For the six months ended June 30,

Accumulated

Redeemable

Additional

Other

Total 

Non

Common Stock

Paid-In

Retained

Treasury

Comprehensive

Stockholders’

Controlling

    

Shares

    

Amount

    

Capital

    

Earnings

    

Stock

    

Income

    

Equity

    

interest

Balance at December 31, 2018

 

99,701

$

997

 

311,264

 

1,198,445

 

(627,587)

 

331

 

883,450

 

11,463

Net income

 

 

 

 

66,002

 

 

 

66,002

 

1,318

Net subscription of redeemable noncontrolling interests in sponsored funds

2,334

Recognition of equity compensation

 

 

 

17,549

 

240

 

 

 

17,789

 

Net issuance/forfeiture of nonvested shares

 

 

 

(34,326)

 

 

34,326

 

 

 

Dividends accrued, $0.50 per share

 

 

 

 

(37,373)

 

 

(37,373)

Repurchase of common stock

 

(75,962)

 

(75,962)

 

Other comprehensive income

 

 

 

 

 

 

2,750

 

2,750

 

Balance at June 30, 2019

99,701

$

997

 

294,487

 

1,227,314

 

(669,223)

 

3,081

 

856,656

 

15,115

    

Balance at December 31, 2019

 

99,701

$

997

 

312,693

 

1,241,598

 

(749,625)

 

3,234

 

808,897

 

19,205

Net income

 

 

 

46,810

 

 

 

46,810

 

1,478

Net subscription of redeemable noncontrolling interests in sponsored funds

5,174

Recognition of equity compensation

 

 

14,381

 

90

 

 

 

14,471

 

Net issuance/forfeiture of nonvested shares

(37,635)

37,635

Dividends accrued, $0.50 per share

 

 

 

(32,728)

 

 

 

(32,728)

 

Repurchase of common stock

 

 

 

 

(72,000)

 

 

(72,000)

 

Other comprehensive income

 

 

 

 

 

1,253

 

1,253

 

Balance at June 30, 2020

99,701

$

997

 

289,439

 

1,255,770

 

(783,990)

 

4,487

 

766,703

 

25,857

See accompanying notes to the unaudited consolidated financial statements.

6

Table of Contents

WADDELL & REED FINANCIAL, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

    

For the six months ended June 30, 

2020

    

2019

    

Cash flows from operating activities:

Net income

$

48,288

 

67,320

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

 

6,349

 

 

11,543

Amortization of deferred sales commissions

 

772

 

 

1,049

Share-based compensation

 

22,515

 

 

23,892

Investments and derivatives loss (gain), net of collateral

 

17,726

 

 

(15,914)

Net purchases, maturities, and sales of trading and equity securities

 

6,057

 

 

(13,327)

Deferred income taxes

 

(3,436)

 

 

7,088

Net change in equity securities and trading debt securities held by consolidated sponsored funds

(5,846)

(8,973)

Other

1,304

588

Changes in assets and liabilities:

Customer and other receivables

 

(15,822)

 

 

69,484

Payable to investment companies for securities and payable to customers

 

(18,290)

 

 

(97,464)

Receivables from funds and separate accounts

 

739

 

 

(2,414)

Other assets

 

1,236

 

 

8,882

Accounts payable and payable to third party brokers

 

(6,744)

 

 

(7,434)

Other liabilities

 

(26,098)

 

 

(21,173)

Net cash provided by operating activities

$

28,750

 

 

23,147

Cash flows from investing activities:

Purchases of available for sale and equity method securities

(20,995)

(99,584)