Sign in

You're signed outSign in or to get full access.

WI

Wright Investors Service Holdings, Inc. (IWSH)·Q2 2017 Earnings Summary

Executive Summary

  • Q2 2017 revenue of $1.322M declined 9.1% YoY (vs $1.454M in Q2 2016) and 1.6% QoQ (vs $1.344M in Q1 2017); net loss narrowed YoY to $(0.477)M (EPS $(0.03)) from $(0.842)M (EPS $(0.04)) on lower non-operating charges, but widened QoQ from $(0.402)M (EPS $(0.02)) as operating losses increased .
  • Operating loss was $(0.445)M in Q2 2017, worse QoQ vs $(0.364)M in Q1, reflecting higher operating expenses vs the slightly lower revenue base; YoY operating loss improved slightly from $(0.474)M in Q2 2016 .
  • Adjusted EBITDA was $(0.243)M in Q2 2017 vs $(0.223)M in Q2 2016 and $(0.208)M in Q1 2017; operating segment contributed $0.168M while corporate costs offset $(0.411)M .
  • No formal guidance and no earnings call transcript were available for Q2; near-term stock narrative hinges on visible cost controls and asset flows/AUM growth, with microcap OTC status implying limited sell-side coverage and liquidity .

What Went Well and What Went Wrong

What Went Well

  • YoY net loss improved: Q2 2017 net loss $(0.477)M vs $(0.842)M in Q2 2016, aided by the absence of the prior-year LLC loss and slightly lower operating loss .
  • Operating segment profitability: Q2 2017 operating segment Adjusted EBITDA of $0.168M demonstrates segment-level earnings power despite corporate overhead .
  • Management’s ongoing cost discipline: CEO emphasized operating cost reductions and focus on increasing AUM; “We are committed to our focus on increasing assets under management… and will continue to identify new operating efficiencies” (Harvey Eisen, CEO) .

What Went Wrong

  • Revenue declines persisted: Q2 2017 revenue fell to $1.322M (−9.1% YoY; −1.6% QoQ), with declines across investment management and advisory categories versus the prior-year quarter .
  • QoQ margin deterioration: Operating loss rose to $(0.445)M in Q2 vs $(0.364)M in Q1; net loss widened to $(0.477)M vs $(0.402)M QoQ, indicating pressure despite cost actions .
  • Adjusted EBITDA more negative YoY/QoQ: Q2 2017 Adjusted EBITDA $(0.243)M vs $(0.223)M in Q2 2016 and $(0.208)M in Q1 2017, reflecting limited operating leverage at current scale .

Financial Results

Income Statement and Margins

Metric (Units)Q2 2016Q1 2017Q2 2017
Revenues ($USD Thousands)1,454 1,344 1,322
Operating Loss ($USD Thousands)(474) (364) (445)
Net Loss ($USD Thousands)(842) (402) (477)
EPS ($USD)$(0.04) $(0.02) $(0.03)
Operating Margin (%)−32.6% (calc from revenue/operating loss) −27.1% (calc) −33.7% (calc)
Net Income Margin (%)−57.9% (calc from revenue/net loss) −29.9% (calc) −36.1% (calc)

Revenue by Category

Revenue Category ($USD Thousands)Q2 2016Q1 2017Q2 2017
Investment management services583 492 533
Other investment advisory services708 669 593
Financial research and related data163 183 196
Total Revenue1,454 1,344 1,322

Adjusted EBITDA and Segment Mix

Adjusted EBITDA ($USD Thousands)Q2 2016Q1 2017Q2 2017
Operating Segment157 172 168
Corporate(380) (380) (411)
Total Adjusted EBITDA(223) (208) (243)

EBITDA Reconciliation (Selected)

EBITDA ($USD Thousands)Q2 2016Q2 2017
Net loss(842) (477)
Interest expense and other income, net30 15
Income tax expense10 17
Depreciation & amortization163 109
EBITDA(639) (336)
Adjusted EBITDA(223) (243)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
None providedQ2 2017N/ANo formal quantitative guidance issued in press releaseMaintained silence

Earnings Call Themes & Trends

No Q2 2017 earnings call transcript was found for IWSH during the period reviewed [SearchDocuments: earnings-call-transcript 2017-06-01 to 2017-08-31].

TopicPrevious Mentions (Q4 2016 & Q1 2017)Current Period (Q2 2017)Trend
Operating cost discipline2016: “Operating results have improved primarily due to reduced operating costs” (CEO) ; Q1: “reduced operating costs… totaling $288,000 or 14%” (CEO) Operating loss slightly improved YoY (−$445k vs −$474k), but worsened QoQ (−$445k vs −$364k) Mixed (YoY modest improvement, QoQ deterioration)
AUM growth focusCEO reiterated focus on increasing AUM in Q1 No AUM update provided in Q2 press release Neutral (focus maintained; disclosure limited)
Non-GAAP framework (EBITDA/Adj. EBITDA)2016 and Q1 reconciliations provided Q2 reconciliation provided; Adj. EBITDA remained negative (−$243k) Stable usage; limited improvement
Software implementation costsNot highlighted in 2016/Q1 tables except relocation/severance Noted at $38k in Q2; absent in prior-year period Incremental cost in Q2
Segment profitability vs corporate overheadOperating segment Adj. EBITDA positive in Q1 ($172k) Operating segment $168k; corporate $(411)k, net Adj. EBITDA $(243)k Persistent corporate drag

Management Commentary

  • Harvey Eisen, Chairman & CEO (Q1 2017): “Our operating results have improved primarily due to reduced operating costs at both the corporate level and at the operating segment totaling $288,000 or 14%. We are committed to our focus on increasing assets under management… and will continue to identify new operating efficiencies and opportunities to invest in revenue generating activities.”
  • Non-GAAP framing (Q2 2017 press release): Management provided detailed EBITDA and Adjusted EBITDA reconciliations and clarified EBITDA’s role as a supplemental performance measure and Adjusted EBITDA’s exclusion of non-cash stock compensation and non-recurring items .

Q&A Highlights

  • No Q2 2017 earnings call transcript or Q&A session was available during the review window [SearchDocuments: earnings-call-transcript 2017-06-01 to 2017-08-31].

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 2017 EPS and Revenue was unavailable; retrieval attempts returned errors due to data limits. As a result, results vs consensus cannot be assessed for this microcap OTC issuer [GetEstimates error].
  • Investors should rely on company-reported figures and monitor subsequent filings for any coverage changes or guidance.

Key Takeaways for Investors

  • Revenue contracted 9.1% YoY and 1.6% QoQ in Q2 2017; category mix shows advisory revenue down YoY with modest growth in financial research .
  • YoY net loss narrowed materially (−$477k vs −$842k) as prior-year LLC losses did not recur; EPS improved to $(0.03) from $(0.04) .
  • QoQ profitability weakened: operating loss and net loss both increased vs Q1, indicating limited operating leverage at current revenue levels .
  • Segment-level strength persists: operating segment Adj. EBITDA positive ($168k), but corporate overhead remains a significant drag (−$411k), keeping consolidated Adj. EBITDA negative .
  • No formal guidance or call limits visibility; near-term stock moves likely tied to evidence of AUM inflows, additional cost actions, and updates on software/efficiency initiatives .
  • Monitor expense lines: compensation/benefits and other operating costs totaled $1.767M in Q2 vs $1.708M in Q1; tighter cost control could re-align margins even without top-line acceleration .
  • Absent consensus estimates, traders should anchor on sequential trends and any subsequent disclosures to gauge trajectory and potential catalysts.