Good day and thank you for standing by. Welcome to the Westwood Holdings Group Inc. First Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jill Meyer, Corporate Secretory. Please go ahead.

Thank you and welcome to our first quarter 2025 earnings conference call. The following discussion will include forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors which may cause actual results to be materially different from those contemplated by the forward-looking statements. Additional information concerning the factors that could cause such a difference is included in our press release issued earlier today, as well as in our Form 10-Q for the year ended March 31, 2025 that will be filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. You are cautioned not to place undue reliance on forward-looking statements. In addition, in accordance with SEC rules concerning non-GAAP financial measures, the reconciliation of our economic earnings and economic earnings per share to the most comparable GAAP measures is included at the end of our press release issued earlier today. On the call today, we have Brian Casey, our Chief Executive Officer, and Terry Forbes, our Chief Financial Officer. I will now turn the call over to Brian Casey.

Good afternoon, and thank you for joining us for Westwood's First Quarter 2024 Earnings Call. I am pleased to share our results and key developments from the past quester as well as our outlook for the remainder of the year. Before we dive into the details, I would like highlight a few key points that we will be discussing today. We successfully laughed the Westwood LBRTY Global Equity ETF, ticker symbol BFRE at the end of the quarter. Offering a distinctive approach to global equity investing that limits exposure to authoritarian regimes, while maintaining broad market exposure. Our first ETF, Westwood Salient Enhanced Midstream Income, ticker symbol MDST, reached its one-year anniversary with strong traction among income seeking investors, while our second ETF, Enhanced Energy Income, ticker symbol WEEI, is nearing its one-year anniversary. Asset levels in our first two ETFs now exceed $100 million. We won a significant sub advisory mandate with nearly $1 billion in small cap value, which funded on the second to last day of the quarter. The Texas Stock Exchange, TXSE, in which we are an investor, took a significant step forward with its Form One application for registration as a National Securities Exchange being publicly released by the SEC on April 4. We welcome two new Board members, Hale Hoak and Katherine Murray, whose extensive experience in finance, investment management and corporate governance will further strengthen our leadership team. The U.S. stock market hit record highs in February, but declined sharply through the quarter end, transforming what started as an optimistic period into one marked by concerns about potential policy changes and slowing economic growth. Despite strong corporate earnings growth in the fourth quarter of 2024, the S&P 500 fell about 8.5% in the latter part of the quarter, while the small cap Russell…

Thanks, Brian, and good afternoon, everyone. Today, we reported total revenues of $23.3 million for the first quarter of 2025 compared with $25.6 million in the fourth quarter and $22.7 million in the prior year's first quarter. Revenues decreased from the fourth quarter due to lower performance-based fees and increased from last year's first quarter due to higher average assets under management. Our first quarter income of $0.5 million or $0.05 per share compared with $2.1 million or $0.24 per share in the fourth quarter on lower revenues and higher operating expenses offset by lower income taxes and changes in the fair value of contingent consideration. Non-GAAP economic earnings were $2.5 million or $0.29 per share in the current quarter versus losses of $3.4 million or $0.39 per share in the fourth quarter. Our first quarter income of $0.5 million or $0.05 per share compared with last year's first quarter of $2.3 million or $0.27 per share due to changes in the fair value of contingent consideration 2024 offset by higher revenues and lower income taxes. Economic earnings for the quarter were $2.5 million or $0.29 per share compared with $3 million or $0.36 per share in the first quarter of 2024. Firm wide assets under management and advisement totaled $18 billion at quarter end, consisting of assets under management of $17 billion and assets under advisement of $1 billion. Assets under management consisted of institutional assets of $9 billion or 53% of the total wealth management assets of $4.1 billion or 24% percent of the total and mutual fund assets of $3.9 billion or 23% of the total. Over the quarter, our assets under management experienced net inflows of $0.6 billion and market depreciation of $0.3 billion and our assets under advisement experienced market depreciation of $8 million and net outflows of $1 million. Our financial position continues to be solid with cash and liquid investments at quarter end totaling $26.9 million and a debt free balance sheet. I'm happy to announce that our Board of Directors approved a regular cash dividend of $0.15 per common share payable on July 01, 2025 to stockholders of record on June 02, 2025. That brings our prepared comments to a close. We encourage you to review our investor presentation we have posted on our website reflecting quarterly highlights as well as discussion of our business, product development and longer-term trends in revenues and earnings. We thank you for your interest in our company and we'll open the line to questions.

Thank you. [Operator Instructions] We have a question from Macrae Sykes with Gabelli.

Good afternoon, gentlemen, and congratulations on that mandate win. That's great. My question is around that. Could you just give a little more color as to kind of the flows in that strategy? So what's the opportunity going forward as you manage this bucket? And then secondly, are you able to use that headline win as leverage for potentially other mandates as well? I'm just sort of curious as to what the expectations are for sales velocity with that headline. Thank you.

Thanks, Mac. We appreciate your question. That was a very nice win in our small cap product, and it is a sub advisory mandate for a large, well-recognized firm that we're excited to partner with. Certainly, anytime we see headlines like that, it does help us in our overall marketing. And our pipeline now is still over $1 billion with much of that in our SMid product and we continue to see a lot of growth there. Anything further, Mac?

Yes. One more thing. I apologize. On the MDST, nice growth there and you mentioned that you're qualified for some of the national platforms. Maybe you could just talk about that next step and expectations for growth in those two vehicles?

Sure. Well, we have been working really hard. We hired Chris Duran last year, and he has been terrific in getting us onto a number of platforms. And they all have a little bit different requirements and some depend on volume, some depend on assets under management, some depend on length of track record. And so we've really sorted through all of that and made some great progress. I think we're on 4 or 5 different platforms now, and we're in discussions to make it to some of the bigger platforms, including one of the wires. And if we're successful in doing that, we have the potential to have really exponential growth in that product. So we're super excited about it.

Great. Thank you.

That concludes today's question and answer session. I'd like to turn the call back to Brian Casey for closing remarks.

Well, great. Thank you. I appreciate everybody being on the call today. And just a reminder that first quarter is seasonally always a tough expense quarter as we have taxes associated with stock vesting, bonuses, four zero one, HSA matches and we also don't have the opportunity to earn performance fees like we did in the fourth quarter. But we're sure excited about our five primary pathways to growth, which include our traditional pipeline, which is over $1 billion and we anticipate further growth in our SMid product, our ETF business is growing and MDST is now on several platforms with more approvals in the process. And our MIS team, Managed Investment Solutions, had over 30 prospect meetings during the first quarter. Three of those prospective clients are very interested in talking further and seeking approval for an allocation to our MIS team. We continue to expand our private equity business. And lastly, our wealth business is adding technology, people and new processes to really strengthen our competitiveness. So thanks again for making time to join our call today. Please reach out to Terry or me or visit westwoodgroup.com to access our filings and for more information on Westwood. Have a great day and thanks for your time.

[Operator Closing Remarks].