WEEI Westwood Salient Enhanced Energy Income ETF

• Investment strategies beating their primary benchmarks included LargeCap Value, AllCap Value, Dividend Select, High Income, Credit Opportunities, Real Estate Income, MLP SMA, MLP High Conviction and MLP & Energy Infrastructure.
• MLP SMA, MLP High Conviction and MLP & Energy Infrastructure posted top quartile rankings.
• We launched our first two exchange-traded funds ("ETFs") in the quarter – the Westwood Salient Enhanced Midstream Income Fund (NYSE: MDST) and the Westwood Salient Enhanced Energy Income Fund (NASDAQ: WEEI). The funds’ net assets as of June 30, 2024 were $43 and $13 million, respectively. The funds are generating high distributable monthly income with annualized distribution rates as of June 27, 2024 of 10.7% for MDST and 11.4% for WEEI.
• Quarterly revenues totaled $22.7 million flat from the first quarter's $22.7 million and up from $21.9 million a year ago. Comprehensive loss of $2.2 million compared with the first quarter's income of $2.3 million and $2.9 million in 2023's second quarter.
• Our comprehensive loss included a $3.8 million after tax charge following an increase in the fair value of contingent consideration for our 2022 Salient acquisition due to an increased earnout valuation based on revised revenue expectations.
• Non-GAAP Economic Loss of $0.5 million compared with the first quarter's Economic Earnings of $3.0 million and $4.0 million in the second quarter of 2023, both driven primarily by contingent consideration revaluations.
• Westwood held $44.1 million in cash and short-term investments as of June 30, 2024, down $2.5 million from the first quarter. Stockholders' equity totaled $118.5 million and we have no debt.
• We declared a cash dividend of $0.15 per common share, payable on October 1, 2024 to stockholders of record on September 2, 2024.

Brian Casey, Westwood’s CEO, commented, "We are pleased with our continued progress during the second quarter. Our successful launch of two ETFs and additional wins in the traditional institutional business validate the work that we have been doing for the past several years. In addition, we continue to invest in our new Managed Investment Solutions ("MIS") offering and saw a significant turnaround in revenues from Salient and Broadmark products. While both the investment in MIS and the additional consideration to be paid for the Salient and Broadmark businesses were a drain on earnings in the quarter, they represent good news for our investors. We are proud to be a founding member of the Texas Stock Exchange, the only Texas-based publicly-traded asset management and wealth firm listed as a founder of the Texas Stock Exchange. There are great things happening in Texas and we are excited to be a part of the capital formation that will inspire new businesses in the years ahead.

We are also eagerly anticipating the coming launch of our MIS capability planned for the third quarter. We have already conducted many meetings with prospects, including several discussions with premier national consultants. The reception has been overwhelmingly positive so far and we are looking forward to securing new clients for MIS by year end."

Revenues were flat to the first quarter and up from last year's second quarter.

Firmwide assets under management and advisement totaled $16.8 billion, consisting of assets under management ("AUM") of $15.8 billion and assets under advisement ("AUA") of $1.0 billion.

Second quarter comprehensive loss of $2.2 million compared to the first quarter's income of $2.3 million due to changes in the fair value of contingent consideration and income taxes. Diluted earnings (loss) per share ("EPS") of $(0.27) compared to $0.27 for the first quarter. Non-GAAP Economic Loss of $0.5 million, or $0.06 per share, compared with Economic Earnings of $3.0 million, or $0.36 per share, in the first quarter.

Second quarter comprehensive loss of $2.2 million compared to last year's second quarter income of $2.9 million due to changes in the fair value of contingent consideration and income taxes. Diluted EPS of $(0.27) compared with $0.36 per share for 2023's second quarter. Non-GAAP Economic Losses were $0.5 million, or $0.06 per share, compared with Economic Earnings of $4.0 million, or $0.49 per share, in the second quarter of 2023.

Economic Earnings (Loss) and Economic EPS are non-GAAP performance measures and are explained and reconciled with the most comparable GAAP numbers in the attached tables.

Westwood will host a conference call to discuss second quarter 2024 results and other business matters at 4:30 p.m. Eastern time today. To join the conference call, please register here:

https://register.vevent.com/register/BI686aa6f159f6411798a220c88cb93b08

After registering, you will be provided with a dial-in number containing a personalized PIN.

Webcast Link: https://edge.media-server.com/mmc/p/8v6a2uhs

ABOUT WESTWOOD HOLDINGS GROUP

Westwood Holdings Group, Inc. is a focused investment management boutique and wealth management firm.

Founded in 1983, Westwood offers a broad array of investment solutions to institutional investors, private wealth clients and financial intermediaries. The firm specializes in several distinct investment capabilities: U.S. Value Equity, Multi-Asset, Energy & Real Assets, Income Alternatives, Tactical Absolute Return and Managed Investment Solutions, which are available through separate accounts, the Westwood Funds® family of mutual funds, exchange-traded funds ("ETFs") and other pooled vehicles. Westwood benefits from significant, broad-based employee ownership and trades on the New York Stock Exchange under the symbol "WHG." Based in Dallas, Westwood also maintains offices in Chicago, Houston and San Francisco.

For more information on Westwood, please visit westwoodgroup.com.

Forward-looking Statements

Statements in this press release that are not purely historical facts, including, without limitation, statements about our expected future financial position, results of operations or cash flows, as well as other statements including without limitation, words such as “anticipate,” “believe,” “expect,” “could,” and other similar expressions, constitute 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. Actual results and the timing of some events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors, including, without limitation: the composition and market value of our AUM and AUA; our ability to maintain our fee structure in light of competitive fee pressures; risks associated with actions of activist stockholders; distributions to our common stockholders have included and may in the future include a return of capital; inclusion of foreign company investments in our AUM; regulations adversely affecting the financial services industry; our ability to maintain effective cyber security; litigation risks; our ability to develop and market new investment strategies successfully; our reputation and our relationships with current and potential customers; our ability to attract and retain qualified personnel; our ability to perform operational tasks; our ability to select and oversee third-party vendors; our dependence on the operations and funds of our subsidiaries; our ability to maintain effective information systems; our ability to prevent misuse of assets and information in the possession of our employees and third-party vendors, which could damage our reputation and result in costly litigation and liability for our clients and us; our stock is thinly traded and may be subject to volatility; competition in the investment management industry; our ability to avoid termination of client agreements and the related investment redemptions; the significant concentration of our revenues in a small number of customers; we have made and may continue to make business combinations as a part of our business strategy, which may present certain risks and uncertainties; our relationships with investment consulting firms; our ability to identify and execute on our strategic initiatives; our ability to declare and pay dividends; our ability to fund future capital requirements on favorable terms; our ability to properly address conflicts of interest; our ability to maintain adequate insurance coverage; our ability to maintain an effective system of internal controls; and the other risks detailed from time to time in Westwood’s SEC filings, including, but not limited to, its annual report on Form 10-K for the year ended December 31, 2023 and its quarterly report on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, Westwood is not obligated to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

SOURCE: Westwood Holdings Group, Inc.

(WHG-G)CONTACT:Westwood Holdings Group, Inc.Terry ForbesChief Financial Officer and Treasurer(214) 756-6900

WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(in thousands, except per share and share amounts)(unaudited)

WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(in thousands, except per share and share amounts)(unaudited)

WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except par value and share amounts)(unaudited)

WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)

WESTWOOD HOLDINGS GROUP, INC. AND SUBSIDIARIESReconciliation of Comprehensive Income (Loss) Attributable to Westwood Holdings Group, Inc. to Economic Earnings (Loss)(in thousands, except per share and share amounts)(unaudited)

As supplemental information, we are providing non-GAAP performance measures that we refer to as Economic Earnings (Loss) and Economic EPS. We provide these measures in addition to, not as a substitute for, Comprehensive income (loss) attributable to Westwood Holdings Group, Inc. and earnings (loss) per share, which are reported on a GAAP basis. Our management and Board of Directors review Economic Earnings (Loss) and Economic EPS to evaluate our ongoing performance, allocate resources, and review our dividend policy. We believe that these non-GAAP performance measures, while not substitutes for GAAP Comprehensive income (loss) attributable to Westwood Holdings Group, Inc. or earnings (loss) per share, are useful for management and investors when evaluating our underlying operating and financial performance and our available resources. We do not advocate that investors consider these non-GAAP measures without also considering financial information prepared in accordance with GAAP.

We define Economic Earnings (Loss) as Comprehensive income (loss) attributable to Westwood Holdings Group, Inc. plus non-cash equity-based compensation expense, amortization of intangible assets and deferred taxes related to goodwill. Although depreciation on fixed assets is a non-cash expense, we do not add it back when calculating Economic Earnings (Loss) because depreciation charges represent an allocation of the decline in the value of the related assets that will ultimately require replacement. Although gains and losses from changes in the fair value of contingent consideration are non-cash, we do not add or subtract those back when calculating Economic Earnings (Loss) because gains and losses on changes in the fair value of contingent consideration are considered regular following an acquisition. In addition, we do not adjust Economic Earnings (Loss) for tax deductions related to restricted stock expense or amortization of intangible assets. Economic EPS represents Economic Earnings (Loss) divided by diluted weighted average shares outstanding.

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