NEW YORK--(BUSINESS WIRE)--WisdomTree (Pink Sheets: WSDT), an exchange-traded fund (“ETF”) sponsor and asset manager, today reported a GAAP net loss of $0.6 million for the fourth quarter of 2010 as compared to a GAAP net loss of $5.0 million in the fourth quarter of 2009 and a GAAP net loss of $1.5 million for the third quarter of 2010. Proforma operating income (which excludes stock-based compensation and depreciation and amortization expenses) was $1.7 million in the fourth quarter of 2010 as compared to a proforma loss of $1.4 million in the fourth quarter of 2009 and proforma income of $0.5 million in the third quarter of 2010. For the full year, GAAP net loss was $7.5 million as compared to a GAAP net loss of $21.2 million in 2009. Proforma operating income for the full year was $1.5 million as compared to a proforma loss of $10.7 million in 2009.
WisdomTree CEO Jonathan Steinberg commented, “2010 was a very successful year for WisdomTree. We had very strong operating performance and reached significant milestones in our growth initiatives. We continued our product diversification efforts by launching our first international fixed income ETF and we now have offerings in equities, currencies, fixed income and alternatives. We increased our market share of industry inflows with back-to-back quarters of over $1 billion in inflows. We surpassed $10 billion in assets under management, controlled costs and achieved operating income during the year. All of these accomplishments have helped increase shareholder value.”
Mr. Steinberg continued, “Building on these strong results, we will continue to focus on our corporate goals of achieving net income and listing our common stock on a national stock exchange. We will also continue to invest in growth initiatives to strengthen our position in the ETF industry.”
Summary Operating and Financial Highlights
For the Three Months Ended |
|
% Change From |
||||||||||
Dec. 31, |
Sept. 30, | Dec. 31, | Sept. 30, | Dec. 31, | ||||||||
Operating Highlights (in millions) |
2010 |
2010 |
2009 |
2010 |
2009 |
|||||||
ETF AUM | $9,891 | $8,260 | $5,979 | 20% |
65% |
|||||||
Non-ETF AUM | 751 | 698 | 689 | 8% | 9% | |||||||
Total AUM | $10,642 | $8,958 | $6,668 | 19% | 60% | |||||||
ETF inflows | $1,271 | $1,161 | $911 | 10% | 40% | |||||||
Average ETF AUM | $9,104 | $7,055 | $5,439 | 29% |
67% |
|||||||
Average ETF advisory fee | 0.57% | 0.56% | 0.54% | 2% | 6% | |||||||
Financial Highlights (in thousands) |
||||||||||||
Revenues | $13,413 | $10,130 | $7,731 | 32% | 74% | |||||||
Proforma operating income/(loss) | $1,725 | $531 | ($1,425) | 225% | -221% | |||||||
Net loss | ($580) | ($1,517) | ($5,032) | -62% | 89% |
For the Year Ended December 31, | |||||
2010 |
2009 |
% Change |
|||
Operating Highlights (in millions) |
|||||
ETF AUM | $9,891 | $5,979 | 65% | ||
Non ETF AUM | 751 | 689 | 9% | ||
Total AUM | $10,642 | $6,668 | 60% | ||
ETF inflows |
$3,135 |
$1,773 | 77% | ||
Average ETF AUM | $7,308 | $3,964 | 84% | ||
Average ETF advisory fee | 0.56% | 0.52% | 8% | ||
Financial Highlights (in thousands) |
|||||
Revenues | $41,612 | $22,095 | 88% | ||
Proforma operating income/(loss) | $1,520 | ($10,659) | na | ||
Net loss | ($7,549) | ($21,228) | 64% |
Recent Business Highlights
On January 5, 2011, the Company launched the WisdomTree Managed Futures Strategy Fund (WDTI).
On January 12, 2011, the Company surpassed the $10 billion milestone in total ETF assets under management.
Assets Under Management and Performance
As of December 31, 2010, assets under management (“AUM”) managed by WisdomTree or against WisdomTree Indexes was $10.6 billion, up 60% from December 31, 2009 and up 19% from September 30, 2010. ETF AUM was $9.9 billion, up 65% from December 31, 2009 and up 20% from September 30, 2010. Net inflows into WisdomTree ETFs were $1.3 billion in the fourth quarter and $3.1 billion for 2010, primarily in emerging market ETFs.
Approximately 77% of the $8.1 billion invested in WisdomTree’s 34 equity ETFs on December 31, 2010 were in funds that, since their respective inceptions, have outperformed their competitive benchmarks through that date. 19 of WisdomTree’s 34 equity ETFs have outperformed their competitive benchmarks since inception and through December 31, 2010. For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.
Fourth Quarter Financial Discussion
Revenues
Total revenues for the quarter increased 73.5% to a record $13.4 million as compared to the fourth quarter of 2009 and increased 32.4% from the third quarter of 2010. These increases were primarily due to higher average assets under management from strong net ETF inflows and positive market movement as well as higher average ETF advisory fees due to particularly strong inflows into our higher priced emerging market ETFs. Average ETF assets under management were $9.1 billion in the fourth quarter of 2010, as compared to $5.4 billion in the fourth quarter of 2009 and $7.1 billion in the third quarter of 2010.
Expenses
Total expenses increased 9.6% to $14.0 million from $12.8 million in the fourth quarter of 2009. This increase was primarily due to higher third party profit sharing and professional and consulting fees partly offset by lower other expenses. Excluding stock-based compensation and depreciation and amortization expenses, proforma operating expenses increased 27.7% to $11.7 million from $9.2 million in the fourth quarter of last year.
Compared to the third quarter of 2010, total expenses increased 20.1% from $11.6 million. This increase was primarily due to higher marketing and advertising, compensation and benefits, fund management administration expenses and professional and consulting fees. Excluding stock-based compensation and depreciation and amortization charges, proforma operating expenses increased 21.8% from $9.6 million in the third quarter.
- Compensation and benefits expense increased 3.3% to $4.9 million compared to the fourth quarter of 2009 and increased 12.0% compared to the third quarter of 2010. These increases were primarily due to higher accrued incentive compensation due to strong levels of ETF inflows as well as costs associated with increased headcount. Our headcount at the end of the fourth quarter of 2010 was 60 compared to 54 in the fourth quarter of 2009 and 56 at the end of the third quarter of 2010. Partly offsetting these increases was lower stock based compensation. Excluding stock based compensation, this expense increased 26.7% compared to the fourth quarter of 2009 and increased 20.0% from the third quarter of 2010.
- Fund management and administration expenses increased 9.3% to $4.0 million compared to the fourth quarter of 2009 and increased 12.5% compared to the third quarter of 2010. These increases were due to increased fund administrative and portfolio management expenses from higher average asset balances, particularly in the Company’s emerging market funds.
- Marketing and advertising expenses increased 7.9% to $1.4 million in the fourth quarter compared to the fourth quarter of 2009 and increased 86.6% compared to the third quarter of 2010. These increases were due to higher television and online advertising expenses partly offset by lower website related expenses.
- Professional and consulting fees increased 98.6% to $1.3 million in the fourth quarter compared to the fourth quarter of 2009 and 57.6% from the third quarter of 2010. These increases in both periods were primarily due to higher variable stock-based compensation expense as a result of an increase in the price of our common stock. Excluding stock based compensation, this expense increased to $0.5 million in the fourth quarter of 2010 compared to $0.1 million in the fourth quarter of 2009 and $0.3 million in the third quarter of 2010. These increases were primarily due to higher consulting and legal related fees.
- Other expense decreased 63.6% to $0.5 million in the fourth quarter compared to the fourth quarter of 2009. The fourth quarter of 2009 included a charge of $1.0 million as a result of the Company’s final issuance of common stock to Treasury Equity LLC for satisfaction of certain conditions related to the Company’s currency ETFs. This expense increased 15.1% compared to the third quarter of 2010 due to higher general administrative expenses.
- Third party sharing arrangements expense increased to $0.8 million in the fourth quarter of 2010 and increased 33.2% from $0.6 million in the third quarter of 2010. These increases were primarily due to higher average assets under management and revenues related to the Company’s Currency and Fixed Income ETFs. Third party sharing arrangements represents the amount paid to (or received from) the Bank of New York Mellon, after netting revenues and direct costs, for its collaboration with the Company’s Currency and Fixed Income ETFs.
- Stock-based compensation expense (which is included in the compensation and benefits, professional and consulting fees and other expenses discussion above) decreased 36.7% to $2.2 million compared to the fourth quarter of 2009. The fourth quarter of 2009 included a charge of $1.0 million as a result of the Company’s final issuance of common stock to Treasury Equity LLC for satisfaction of certain conditions related to the Company’s currency ETFs. In addition, fixed stock based compensation expense decreased as equity awards granted in prior years to employees and directors become fully vested. This expense increased 13.1% compared to the third quarter of 2010 primarily due to higher variable expense due to the increase in the Company’s stock price partly offset by lower fixed expense.
- Sales and business development expenses; occupancy, communication and equipment expenses; and depreciation and amortization expenses all had relatively small dollar value changes compared to both periods.
Full Year Results
Total revenues increased $19.5 million or 88.3% to $41.6 million for the year ended December 31, 2010 as compared to $22.1 million in 2009. This increase was primarily due to higher average assets under management from $3.1 billion of net ETF inflows, $778.1 million in positive market movement and higher average ETF advisory fees due to particularly strong inflows into our higher priced emerging market ETFs.
Total expenses increased $5.8 million or 13.5% to $49.2 million for the year ended December 31, 2010 as compared to $43.3 million in 2009. This increase was primarily due to higher third-party sharing arrangements and fund management and administration expenses due to higher average asset balances; higher incentive compensation due to our strong inflows; higher variable stock based compensation expense due to an increase in the price of the Company’s common stock; higher corporate consulting and corporate legal related expenses; higher marketing and advertising and headcount increases to support our growth; and higher general administrative expenses. Partly offsetting these increases was a decrease in other expenses due to the issuance of common stock to Treasury Equity LLC in 2009 and lower fixed stock based compensation.
Balance Sheet
As of December 31, 2010, WisdomTree had total assets of $29.1 million, which consisted primarily of cash and cash equivalents of $14.2 million and investments of $8.6 million. WisdomTree has no debt. There were approximately 115.3 million shares issued as of December 31, 2010. Fully diluted shares issued and outstanding were approximately 136.7 million as of December 31, 2010.
WisdomTree will discuss its results and operational highlights during a conference call on Friday, February 4, 2011 at 9:00 a.m. ET. The call-in number will be (888) 713-4213 passcode 97364398. Anyone outside the U.S. or Canada should call (617) 213- 4865, passcode 97364398. The slides used during the presentation will be available at www.wisdomtree.com/ir. For those unable to join the conference call at the scheduled time, an audio replay will be available on www.wisdomtree.com/ir.
About WisdomTree
WisdomTree® is a New York-based exchange-traded fund (“ETF”) sponsor and asset manager. WisdomTree currently offers 45 ETFs across Equities, Currency Income, Fixed Income and Alternatives asset classes. WisdomTree also licenses its indexes to third parties for proprietary products and offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. WisdomTree currently has approximately $10.1 billion in ETF assets under management. For more information, please visit www.wisdomtree.com. WisdomTree is the marketing name for WisdomTree Investments, Inc. and its wholly owned subsidiaries WisdomTree Asset Management, Inc. and WisdomTree Retirement Services, Inc.
WisdomTree Asset Management, Inc. is a registered investment advisor and is the investment advisor to the WisdomTree Trust and the WisdomTree ETFs. The WisdomTree Trust is a registered open-end investment company. Each WisdomTree ETF is a series of the WisdomTree Trust. WisdomTree Retirement Services, Inc. supports the use of the WisdomTree ETFs in retirement plans by financial professionals.
WISDOMTREE INVESTMENTS, INC. | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
For the Three Months Ended | % Change From | For the Year Ended | |||||||||||||||||||
Dec. 31, | Sept. 30, |
Dec. 31, |
Sept. 30, | Dec.31, | Dec. 31, | Dec.31, | % | ||||||||||||||
2010 |
2010 |
2009 |
2010 |
2009 |
2010 |
2009 |
Change |
||||||||||||||
(Audited) | |||||||||||||||||||||
Revenues | |||||||||||||||||||||
Advisory fees | $ | 13,111 | $ | 9,860 | $ | 7,428 | 33.0% | 76.5% | $ | 40,567 | $ | 20,812 | 94.9% | ||||||||
Other income | 302 | 270 | 303 | 11.9% | -0.3% | 1,045 | 1,283 | -18.6% | |||||||||||||
Total revenues | 13,413 | 10,130 | 7,731 | 32.4% | 73.5% | 41,612 | 22,095 | 88.3% | |||||||||||||
Expenses | |||||||||||||||||||||
Compensation and benefits | 4,933 | 4,405 | 4,775 | 12.0% | 3.3% | 19,193 | 18,943 | 1.3% | |||||||||||||
Fund management and administration | 4,014 | 3,569 | 3,674 | 12.5% | 9.3% | 14,286 | 13,387 | 6.7% | |||||||||||||
Marketing and advertising | 1,390 | 745 | 1,288 | 86.6% | 7.9% | 3,721 | 2,762 | 34.7% | |||||||||||||
Sales and business development | 758 | 766 | 813 | -1.0% | -6.8% | 2,730 | 2,495 | 9.4% | |||||||||||||
Professional and consulting fees | 1,253 | 795 | 631 | 57.6% | 98.6% | 3,779 | 1,780 | 112.3% | |||||||||||||
Occupancy, communication and equipment | 289 | 273 | 249 | 5.9% | 16.1% | 1,118 | 1,087 | 2.9% | |||||||||||||
Depreciation and amortization | 79 | 80 | 88 | -1.3% | -10.2% | 314 | 360 | -12.8% | |||||||||||||
Other | 466 | 405 | 1,281 | 15.1% | -63.6% | 1,724 | 2,420 | -28.8% | |||||||||||||
Third party sharing arrangements | 811 | 609 | (36) | 33.2% | -2352.8% | 2,296 | 89 | 2479.8% | |||||||||||||
Total expenses | 13,993 | 11,647 | 12,763 | 20.1% | 9.6% | 49,161 | 43,323 | 13.5% | |||||||||||||
Net loss | $ | (580) | $ | (1,517) | $ | (5,032) | -61.8% | -88.5% | $ | (7,549) | $ | (21,228) | -64.4% | ||||||||
Net loss per share - basic and diluted | $ | (0.01) | $ | (0.01) | $ | (0.05) | $ | (0.07) | $ | (0.21) | |||||||||||
Weighted average common shares - basic and diluted | 112,889 | 112,424 | 108,374 | 111,981 | 103,397 | ||||||||||||||||
WISDOMTREE INVESTMENTS, INC. | |||||||||||||||||||||
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
For the Three Months Ended | % Change From | For the Year Ended | |||||||||||||||||||
Dec. 31, | Sept. 30, | Dec.31, | Sept. 30, | Dec.31, | Dec. 31, | Dec.31, | % | ||||||||||||||
2010 |
2010 |
2009 |
2010 |
2009 |
2010 |
2009 |
Change |
||||||||||||||
Revenues | |||||||||||||||||||||
Advisory fees | $ | 13,111 | $ | 9,860 | $ | 7,428 | 33.0% | 76.5% | $ | 40,567 | $ | 20,812 | 94.9% | ||||||||
Other income | 302 | 270 | 303 | 11.9% | -0.3% | 1,045 | 1,283 | -18.6% | |||||||||||||
Total revenues | 13,413 | 10,130 | 7,731 | 32.4% | 73.5% | 41,612 | 22,095 | 88.3% | |||||||||||||
Operating expenses | |||||||||||||||||||||
Compensation and benefits | 3,557 | 2,963 | 2,807 | 20.0% | 26.7% | 12,648 | 11,026 | 14.7% | |||||||||||||
Fund management and administration | 4,014 | 3,569 | 3,674 | 12.5% | 9.3% | 14,286 | 13,387 | 6.7% | |||||||||||||
Marketing and advertising | 1,390 | 745 | 1,288 | 86.6% | 7.9% | 3,721 | 2,762 | 34.7% | |||||||||||||
Sales and business development | 758 | 766 | 813 | -1.0% | -6.8% | 2,730 | 2,495 | 9.4% | |||||||||||||
Professional and consulting fees | 453 | 319 | 130 | 42.0% | 248.5% | 1,769 | 688 | 157.1% | |||||||||||||
Occupancy, communication and equipment | 289 | 273 | 249 | 5.9% | 16.1% | 1,118 | 1,087 | 2.9% | |||||||||||||
Other | 416 | 355 | 231 | 17.2% | 80.1% | 1,524 | 1,220 | 24.9% | |||||||||||||
Third party sharing arrangements | 811 |
|
609 |
|
(36) | 33.2% | -2352.8% | 2,296 | 89 | 2479.8% | |||||||||||
Total operating expenses | 11,688 | 9,599 | 9,156 | 21.8% | 27.7% | 40,092 | 32,754 | 22.4% | |||||||||||||
Proforma operating income / (loss) | 1,725 | 531 | (1,425) | 224.9% | -221.1% | 1,520 | (10,659) | -114.3% | |||||||||||||
Stock-based compensation | 2,226 | 1,968 | 3,519 | 13.1% | -36.7% | 8,755 | 10,209 | -14.2% | |||||||||||||
Depreciation and amortization | 79 | 80 | 88 | -1.3% | -10.2% | 314 | 360 | -12.8% | |||||||||||||
Net loss | $ | (580) | $ | (1,517) | $ | (5,032) | -61.8% | -88.5% | $ | (7,549) | $ | (21,228) | -64.4% | ||||||||
WISDOMTREE INVESTMENTS, INC. | ||||||||
CONSOLIDATED BALANCE SHEET | ||||||||
(in thousands, except per share amount) | ||||||||
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 14,233 | $ | 11,476 | ||||
Investments | 1,295 | 2,627 | ||||||
Accounts receivable | 4,825 | 2,884 | ||||||
Other current assets | 642 | 961 | ||||||
Total current assets | 20,995 | 17,948 | ||||||
Fixed assets, net | 756 | 977 | ||||||
Investments | 7,300 | 6,693 | ||||||
Other noncurrent assets | 91 | 85 | ||||||
Total assets | $ | 29,142 | $ | 25,703 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Fund management and administration payable | $ | 5,714 | $ | 5,055 | ||||
Compensation and benefits payable | 3,638 | 2,587 | ||||||
Accounts payable and other liabilities | 2,263 | 1,603 | ||||||
Total current liabilities | 11,615 | 9,245 | ||||||
Other noncurrent liabilities | 292 | 430 | ||||||
Total liabilities | 11,907 | 9,675 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock, par value $0.01; 250,000 shares authorized: | ||||||||
issued: 115,291 and 114,535 | 1,152 | 1,145 | ||||||
outstanding: 113,132 and 110,106 | ||||||||
Additional paid-in capital | 158,236 | 149,487 | ||||||
Accumulated deficit | (142,153 | ) | (134,604 | ) | ||||
Total stockholders' equity | 17,235 | 16,028 | ||||||
Total liabilities and stockholders' equity | $ | 29,142 | $ | 25,703 | ||||
WISDOMTREE INVESTMENTS, INC. | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(in thousands) | ||||||||||
(Unaudited) | ||||||||||
For the Year Ended | ||||||||||
December 31, | December 31, | |||||||||
2010 | 2009 | |||||||||
Cash flows from operating activities | ||||||||||
Net loss | $ | (7,549 | ) | $ | (21,228 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||
Depreciation, amortization and other | 314 | 583 | ||||||||
Stock-based compensation | 8,755 | 10,209 | ||||||||
Deferred rent | (105 | ) | (185 | ) | ||||||
Accretion to interest income | 4 | (68 | ) | |||||||
Net change in operating assets and liabilities: | ||||||||||
Accounts receivable | (1,941 | ) | (1,354 | ) | ||||||
Other assets | 313 | (45 | ) | |||||||
Fund management and administration payable | 659 | (3,911 | ) | |||||||
Compensation and benefits payable | 1,051 | 575 | ||||||||
Accounts payable and other liabilities | 627 | 397 | ||||||||
Net cash provided by (used in) operating activities | 2,128 | (15,027 | ) | |||||||
Cash flows from investing activities | ||||||||||
Purchase of fixed assets | (93 | ) | (295 | ) | ||||||
Purchase of investments | (6,935 | ) | (7,290 | ) | ||||||
Proceeds from the redemption of investments | 7,656 | 15,825 | ||||||||
Net cash provided by investing activities | 628 | 8,240 | ||||||||
Cash flows from financing activities | ||||||||||
Net proceeds from sale of common stock | 4,988 | |||||||||
Proceeds from exercise of stock options | 1 | -- | ||||||||
Net cash provided by financing activities | 1 | 4,988 | ||||||||
Net increase (decrease) in cash and cash equivalents | 2,757 | (1,799 | ) | |||||||
Cash and cash equivalents - beginning of period | 11,476 | 13,275 | ||||||||
Cash and cash equivalents - end of period | $ | 14,233 | $ | 11,476 | ||||||
Supplemental disclosure of cash flow information | ||||||||||
Cash paid for income taxes | $ | 11 | $ | 3 | ||||||
Non-cash investing and financing activities: | ||||||||||
Cashless exercise of stock options | $ | 517 | $ | 81 | ||||||
WisdomTree Investments, Inc. | ||||||||||||||||||
Key Operating Statistics (Unaudited) | ||||||||||||||||||
For the Three Months Ended | For the Year Ended | |||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||
2010 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||
Total assets under management (in thousands) | ||||||||||||||||||
ETFs | 9,891,219 | 8,260,293 | 5,978,605 | 9,891,219 | 5,978,605 | |||||||||||||
Non-ETFs | 750,964 | 698,032 | 689,103 | 750,964 | 689,103 | |||||||||||||
End of period assets | 10,642,183 | 8,958,325 | 6,667,708 | 10,642,183 | 6,667,708 | |||||||||||||
Total ETFs (in thousands) | ||||||||||||||||||
Beginning of period assets | 8,260,293 | 6,240,452 | 4,901,755 | 5,978,605 | 3,180,133 | |||||||||||||
Inflows/(outflows) | 1,270,563 | 1,160,726 | 910,989 | 3,134,509 | 1,772,764 | |||||||||||||
Market appreciation/(depreciation) | 360,363 | 859,115 | 165,861 | 778,105 | 1,025,708 | |||||||||||||
End of period assets | 9,891,219 | 8,260,293 | 5,978,605 | 9,891,219 | 5,978,605 | |||||||||||||
Average assets during the period | 9,103,556 | 7,055,086 | 5,438,756 | 7,307,577 | 3,963,943 | |||||||||||||
International Developed Markets ETFs (in thousands) | ||||||||||||||||||
Beginning of period assets | 1,900,133 | 1,674,335 | 1,794,248 | 1,953,363 | 1,339,002 | |||||||||||||
Inflows/(outflows) | 61,020 | (19,740 | ) | 135,791 | 29,093 | 281,282 | ||||||||||||
Market appreciation/(depreciation) | 101,485 | 245,538 | 23,324 | 80,182 | 333,079 | |||||||||||||
End of period assets | 2,062,638 | 1,900,133 | 1,953,363 | 2,062,638 | 1,953,363 | |||||||||||||
Average assets during the period | 1,981,025 | 1,794,013 | 1,896,356 | 1,901,919 | 1,470,998 | |||||||||||||
International Emerging Markets ETFs (in thousands) | ||||||||||||||||||
Beginning of period assets | 2,796,264 | 1,728,388 | 1,118,413 | 1,430,965 | 384,242 | |||||||||||||
Inflows/(outflows) | 868,384 | 706,844 | 232,308 | 1,911,259 | 649,847 | |||||||||||||
Market appreciation/(depreciation) | 115,241 | 361,032 | 80,244 | 437,665 | 396,876 | |||||||||||||
End of period assets | 3,779,889 | 2,796,264 | 1,430,965 | 3,779,889 | 1,430,965 | |||||||||||||
Average assets during the period | 3,341,884 | 2,152,550 | 1,297,459 | 2,202,169 | 793,044 | |||||||||||||
International Sector ETFs (in thousands) | ||||||||||||||||||
Beginning of period assets | 247,026 | 189,876 | 322,145 | 358,187 | 246,501 | |||||||||||||
Inflows/(outflows) | (11,094 | ) | 19,623 | 34,154 | (116,657 | ) | 58,413 | |||||||||||
Market appreciation/(depreciation) | 13,149 | 37,527 | 1,888 | 7,551 | 53,273 | |||||||||||||
End of period assets | 249,081 | 247,026 | 358,187 | 249,081 | 358,187 | |||||||||||||
Average assets during the period | 257,922 | 217,668 | 338,336 | 258,690 | 257,344 | |||||||||||||
US ETFs (in thousands) | ||||||||||||||||||
Beginning of period assets | 1,778,776 | 1,406,331 | 1,271,172 | 1,329,597 | 986,568 | |||||||||||||
Inflows/(outflows) | 118,313 | 211,148 | (2,514 | ) | 486,572 | 136,949 | ||||||||||||
Market appreciation/(depreciation) | 159,795 | 161,297 | 60,939 | 240,715 | 206,080 | |||||||||||||
End of period assets | 2,056,884 | 1,778,776 | 1,329,597 | 2,056,884 | 1,329,597 | |||||||||||||
Average assets during the period | 1,916,521 | 1,540,154 | 1,272,642 | 1,592,141 | 1,083,545 | |||||||||||||
Currency/Fixed Income ETFs (in thousands) | ||||||||||||||||||
Beginning of period assets | 1,538,094 | 1,241,522 | 395,777 | 906,493 | 223,820 | |||||||||||||
Inflows/(outflows) | 233,940 | 242,851 | 511,250 | 824,242 | 646,273 | |||||||||||||
Market appreciation/(depreciation) | (29,307 | ) | 53,721 | (534 | ) | 11,992 | 36,400 | |||||||||||
End of period assets | 1,742,727 | 1,538,094 | 906,493 | 1,742,727 | 906,493 | |||||||||||||
Average assets during the period | 1,606,204 | 1,350,701 | 633,963 | 1,352,658 | 359,012 | |||||||||||||
Average ETF assets during the period | ||||||||||||||||||
International developed markets ETFs | 22 | % | 25 | % | 35 | % | 26 | % | 37 | % | ||||||||
International emerging markets ETFs | 37 | % | 31 | % | 24 | % | 30 | % | 20 | % | ||||||||
International sector ETFs | 3 | % | 3 | % | 6 | % | 4 | % | 7 | % | ||||||||
US ETFs | 21 | % | 22 | % | 23 | % | 22 | % | 27 | % | ||||||||
Currency/Fixed Income ETFs | 17 | % | 19 | % | 12 | % | 18 | % | 9 | % | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Average ETF advisory fee during the period | ||||||||||||||||||
International developed markets ETFs | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | 0.55 | % | ||||||||
International emerging markets ETFs | 0.76 | % | 0.76 | % | 0.76 | % | 0.76 | % | 0.76 | % | ||||||||
International sector ETFs | 0.58 | % | 0.58 | % | 0.58 | % | 0.58 | % | 0.58 | % | ||||||||
US ETFs | 0.34 | % | 0.34 | % | 0.34 | % | 0.34 | % | 0.33 | % | ||||||||
Currency/Fixed Income ETFs | 0.50 | % | 0.49 | % | 0.46 | % | 0.49 | % | 0.44 | % | ||||||||
Blended total | 0.57 | % | 0.56 | % | 0.54 | % | 0.56 | % | 0.52 | % | ||||||||
Number of ETFs - end of the period | ||||||||||||||||||
International developed markets ETFs | 14 | 14 | 15 | 14 | 15 | |||||||||||||
International emerging markets ETFs | 4 | 4 | 4 | 4 | 4 | |||||||||||||
International sector ETFs | 4 | 4 | 11 | 4 | 11 | |||||||||||||
US ETFs | 12 | 12 | 13 | 12 | 13 | |||||||||||||
Currency/Fixed Income ETFs | 10 | 10 | 9 | 10 | 9 | |||||||||||||
Total | 44 | 44 | 52 | 44 | 52 | |||||||||||||
Note: Previously issued statistics may be restated due to trade adjustments | ||||||||||||||||||
GAAP to Non-GAAP Reconciliation |
In an effort to provide additional information regarding our results as determined by GAAP, we also disclose certain non-GAAP information which we believe provides useful and meaningful information. Our management reviews this non-GAAP financial measurement when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-GAAP measurements so as to share this perspective of management. Non-GAAP measurements do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. These non-GAAP financial measures should be considered in the context with our GAAP results. |
We have disclosed our results excluding certain non-operating items. We consider stock-based compensation, depreciation and amortization and interest and investment income as non-operating items. Management excludes these costs when measuring our financial performance as they are non-cash charges or not directly related to our business of being an index developer and ETF sponsor. As the company is currently incurring net losses, management focuses on its cash related expenses of being an index developer and ETF sponsor in measuring the financial health of its business and making related decisions. However, stock-based compensation has been and will continue to be for the foreseeable future, a significant recurring expense in our business and stock-based compensation is an important part of our employees' compensation and impacts their performance. |
WISDOMTREE INVESTMENTS, INC. | |||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||
GAAP to NON-GAAP RECONCILIATION | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec.31, | Dec. 31, | Dec.31, | |||||||||||||||||
2010 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
GAAP expenses as reported | $ | 13,993 | $ | 11,647 | $ | 12,763 | $ | 49,161 | $ | 43,323 | |||||||||||
Less stock-based compensation included in | |||||||||||||||||||||
Compensation and benefits | (1,376 | ) | (1,442 | ) | (1,968 | ) | (6,545 | ) | (7,917 | ) | |||||||||||
Professional and consulting fees | (800 | ) | (476 | ) | (501 | ) | (2,010 | ) | (1,092 | ) | |||||||||||
Other | (50 | ) | (50 | ) | (1,050 | ) | (200 | ) | (1,200 | ) | |||||||||||
Total stock-based compensation expenses | (2,226 | ) | (1,968 | ) | (3,519 | ) | (8,755 | ) | (10,209 | ) | |||||||||||
Less depreciation and amortization | (79 | ) | (80 | ) | (88 | ) | (314 | ) | (360 | ) | |||||||||||
Proforma operating expenses | $ | 11,688 | $ | 9,599 | $ | 9,156 | $ | 40,092 | $ | 32,754 | |||||||||||
GAAP net loss, as reported | $ | (580 | ) | $ | (1,517 | ) | $ | (5,032 | ) | $ | (7,549 | ) | $ | (21,228 | ) | ||||||
Add back stock-based compensation | 2,226 | 1,968 | 3,519 | 8,755 | 10,209 | ||||||||||||||||
Add back depreciation and amortization | 79 | 80 | 88 | 314 | 360 | ||||||||||||||||
Proforma operating income / (loss) | $ | 1,725 | $ | 531 | $ | (1,425 | ) | $ | 1,520 | $ | (10,659 | ) | |||||||||
Forward Looking Statements
Statements in this Press Release regarding WisdomTree Investments, Inc. that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only as of the date made. We have no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect unanticipated events or circumstances occurring after the date of such statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors, some of which are listed below, that could cause actual results or outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. In assessing the forward-looking statements contained herein, readers are urged to carefully read the following risks and considerations:
- Our ability to become profitable is dependent upon our ability to increase our assets under management and to control our expenses.
- Changes in the equity markets have a direct impact on our assets under management. A downturn in the equity markets can result in a significant reduction in assets under management, which, in turn, directly reduces our revenues.
- The mix of our assets under management could be subject to significant fluctuations and could adversely affect our revenues.
- Poor investment performance of our ETFs is likely to lead to a reduction in our assets under management and a reduction in our revenues.
- If our reputation is harmed we could suffer losses in revenue.
- The asset management industry is highly competitive and most of our competitors are larger companies with greater resources.
- We rely very heavily on third-party vendors, such as BNY Mellon, Standard & Poor’s, and Bloomberg, to provide us with services that are very important to our business. If any of those vendors decided to terminate their relationship with us, we might experience a disruption in our ability to do business while we retain an alternative vendor.
- A failure in our operational systems or infrastructure, or those of the third-party vendors, could disrupt our operations, damage our reputation, and reduce our revenues.
- Our business is subject to extensive regulation, and compliance failures and changes in regulation could adversely affect us.
- We depend on key personnel and the loss of such personnel could disrupt our ability to develop new product and conduct our business.
- Our principal stockholders, including our directors and officers, control a large percentage of our shares of common stock and can control our corporate actions.
Past performance is no indication of future results.