WisdomTree Announces Third Quarter 2010 Results
Company reports record AUM and record revenues
Second consecutive quarter of positive proforma operating income
$1.2 billion net inflows for the third quarter
NEW YORK--(BUSINESS WIRE)-- WisdomTree (Pink Sheets: WSDT), an exchange-traded fund ("ETF") sponsor and asset manager, today reported a GAAP net loss of $1.5 million in the third quarter of 2010, as compared to $1.9 million for the second quarter of 2010. Proforma operating income, which excludes stock-based compensation, depreciation and amortization, and interest and investment income, was $0.5 million in the third quarter, as compared $0.2 million in the second quarter.
WisdomTree CEO Jonathan Steinberg commented, "WisdomTree reported strong results for the third quarter, including record revenues with ETF assets up 32% for the quarter, having captured 3.5% of overall ETF industry inflows. Our business continues to perform well, generating our second consecutive quarter of positive operating income."
Mr. Steinberg continued, "WisdomTree continues on a strong growth path which has accelerated in the recent quarter, driven by the diversification of our product set in new asset classes, the lengthening performance track records of existing funds and the development of several strategic alliances."
Summary Financial Highlights
For the Three Months Ended % Change From
Sept. 30, Jun. 30, Sept. 30, Jun. 30, Sept. 30,
2010 2010 2009 2010 2009
ETF AUM (in millions) $8,260 $6,240 $4,902 32% 69%
Non-ETF AUM (in millions) 698 629 567 11% 23%
Total AUM (in millions) $8,958 $6,869 $5,469 30% 64%
ETF inflows (in millions) $1,161 $121 $558 860% 108%
Average ETF AUM (in $7,055 $6,760 $4,182 4% 69%
millions)
Average ETF advisory fee 0.56% 0.54% 0.53% 4% 6%
Revenues (in thousands) $10,058 $9,297 $5,716 8% 76%
Proforma operating income/ $459 $174 ($2,440) 164% -119%
(loss) (in thousands)
Net loss (in thousands) ($1,517) ($1,860) ($4,988) -18% -70%
Recent Business Highlights
On August 9, 2010, the Company launched the WisdomTree Emerging Markets Local Debt Fund (ELD). The Fund has approximately $375 million in assets as of October 27, 2010.
On September 8, 2010, Advisors Asset Management (AAM) announced a collaboration with WisdomTree to add the Company's ETFs to AAM's product platform and to serve as the external marketing agent for the WisdomTree ETFs in the Independent Broker-Dealer channel.
On October 25, 2010, the Company announced a collaboration with Mexico-based Compass Group to distribute WisdomTree ETFs throughout Latin America. The Company previously announced the approval of certain WisdomTree ETFs by the Chilean Pension Regulator Comision Clasificadora de Riesgo (CCR) as well as the listing of nine Funds on the Mexican stock exchange, Bolsa Mexicana De Valores (BMV).
On September 24, 2010, the Company launched the WisdomTree Dreyfus Commodity Currency Fund (CCX).
Assets Under Management and Performance
As of September 30, 2010, assets under management ("AUM") managed by WisdomTree or against WisdomTree Indexes was $9.0 billion, up 64% from September 30, 2009 and up 30% from June 30, 2010. ETF AUM was $8.3 billion, up 69% from September 30, 2009 and up 32% from June 30, 2010. Net inflows into WisdomTree ETFs were $1.2 billion in the third quarter, primarily in emerging market ETFs.
Approximately 79% of the $6.7 billion invested in WisdomTree's 34 equity ETFs on September 30, 2010 were in funds that, since their respective inceptions, have outperformed their competitive benchmarks through that date. 21 of WisdomTree's 34 equity ETFs have outperformed their competitive benchmarks since inception and through the third quarter of 2010. For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.
Third Quarter Financial Highlights
Revenues
Total revenues for the quarter increased 76.0% to a record $10.1 million as compared to the third quarter of last year and increased 8.2% from the second 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 revenue capture due to the mix of ETF inflows into our funds.
Expenses
Total expenses increased 7.8% to $11.6 million from $10.8 million in the third quarter of last year. This increase was primarily due to higher third party profit sharing, marketing and business development, and fund management and administration expenses partly offset by lower compensation and benefits expense. Excluding stock-based compensation and depreciation and amortization charges, proforma operating expenses increased 17.7% to $9.6 million from $8.2 million in the third quarter of last year.
Compared to the second quarter, total expenses increased 3.9% from $11.2 million in the second quarter. This increase was primarily due to higher marketing and business development and fund management administration expenses partly offset by lower compensation and benefits expense. Excluding stock-based compensation and depreciation and amortization charges, proforma operating expenses increased 5.2% from $9.1 million in the second quarter.
-- Compensation and benefits expense decreased 14.5% to $4.4 million
compared to the third quarter of last year and decreased 4.2% compared
to the second quarter of 2010 primarily due to lower stock-based
compensation. Excluding stock-based compensation, this expense increased
3.0% compared to the third quarter of last year due to higher headcount
and increased 3.0% from the second quarter of 2010 due to higher accrued
incentive compensation as a result of higher levels of net ETF inflows.
-- Fund management and administration expenses increased 7.6% to $3.6
million compared to the third quarter of last year. This increase was
due to increased fund administrative expenses from higher average asset
balances, particularly in the Company's emerging market funds, and legal
related expenses, partly offset by lower index related costs. Compared
to the second quarter of 2010, this expense increased 8.0% due to higher
legal fees as well as accounting fees associated with two funds launched
in the third quarter.
-- Marketing and business development expenses increased 35.8% to $1.5
million in the third quarter compared to the third quarter of last year
and 28.9% from the second quarter of 2010 primarily due to higher
advertising, client conferences and fees for website enhancements.
-- Professional fees increased 84.0% to $0.8 million in the third quarter
compared to the third quarter of last year and 12.4% from the second
quarter of 2010. These increases in both periods were primarily due to
higher variable stock-based compensation expense for advisors and higher
corporate consulting related expenses.
-- Occupancy, communications and equipment as well as depreciation and
amortization expenses remained relatively unchanged during the third and
second quarters of 2010 and third quarter of 2009.
-- Other expense increased 12.2% to $0.4 million in the third quarter
compared to the third quarter of last year primarily due to higher
administrative expenses. Expenses decreased 5.2% compared to the second
quarter of 2010 due to lower administrative expenses.
-- Third party profit sharing expense increased to $0.6 million from $0.1
million in the third quarter of last year. This increase is primarily
due to higher average assets under management and revenues related to
the Company's Currency and Fixed Income ETFs. Third party profit 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. This
expense remained unchanged in the third quarter compared to second
quarter of 2010.
-- Stock-based compensation expense decreased 23.3% to $2.0 million
compared to the third quarter of last year primarily due to lower fixed
expense as equity awards granted in prior years become fully vested.
This expense decreased 2.3% compared to the second quarter of 2010
primarily due to lower fixed expense partly offset by higher variable
expense due to the increase in the Company's stock price.
Year-to-Date Results
Total revenues more than doubled to $28.0 million during the first nine months of 2010 from $13.9 million in the comparable period in 2009, as a result of higher asset levels due to higher levels of net inflows, positive market conditions and higher average revenue capture.
Total expenses increased 15.1% to $35.2 million during the first nine months of 2010 from $30.6 million in the same period of last year. Excluding stock-based compensation and depreciation and amortization charges, proforma operating expenses increased 20.4% to $28.4 million from $23.6 million in the same period last year. This increase was primarily due to higher third-party profit sharing arrangements, marketing and business development, compensation and benefits, professional fees and fund management and administration expenses, all related to an increase in assets under management in the first nine months of 2010 as compared to 2009.
Balance Sheet
As of September 30, 2010, WisdomTree had total assets of $25.6 million, which consisted primarily of cash and cash equivalents of $11.8 million and investments of $8.3 million. WisdomTree has no debt. There were approximately 115.1 million shares issued as of September 30, 2010. Fully diluted shares issued and outstanding were approximately 136.9 million as of September 30, 2010.
Third Quarter 2010 Earnings Call Information
WisdomTree will discuss its results and operational highlights during a conference call on Friday, October 29, 2010 at 9:00 a.m. ET. The call-in number will be (888) 680-0893 passcode 52786616. Anyone outside the U.S. or Canada should call (617) 213-4859, passcode 52786616. 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(R) is an exchange-traded fund ("ETF") sponsor and asset manager using its own fundamentally weighted index methodology. 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. Approximately $9.5 billion in assets currently are managed by WisdomTree or are managed against WisdomTree Indexes. 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.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund's before investing. To obtain a prospectus containing this and other important information, please call 1-866-909-WISE (9473). Read the prospectus carefully before you invest.
There are risks involved with investing including the possible loss of principal. Past fund performance is not indicative of future fund results.
WisdomTree Funds are distributed by ALPS Distributors, Inc. Jonathan Steinberg is a registered representative of ALPS Distributors, Inc. ALPS Distributors, Inc. is not affiliated with Dreyfus, Advisors Asset Management or Compass Group.
WIS002846 (10/2011)
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
For the Three Months Ended % Change From For the Nine Months Ended
Sept. 30, Jun. 30, Sept. 30, Jun. Sept. Sept. 30, Sept. 30, %
30, 30,
2010 2010 2009 2010 2009 2010 2009 Change
Revenues
Advisory fees $ 9,860 $ 9,129 $ 5,536 8.0 % 78.1 % $ 27,456 $ 13,384 105.1 %
Other income 198 168 180 17.9 % 10.0 % 583 468 24.6 %
Total revenues 10,058 9,297 5,716 8.2 % 76.0 % 28,039 13,852 102.4 %
Expenses
Compensation 4,405 4,600 5,153 -4.2 % -14.5 % 14,260 14,168 0.6 %
and benefits
Fund
management and 3,569 3,306 3,317 8.0 % 7.6 % 10,272 9,713 5.8 %
administration
Marketing and
business 1,511 1,172 1,113 28.9 % 35.8 % 4,303 3,156 36.3 %
development
Professional 795 707 432 12.4 % 84.0 % 2,526 1,149 119.8 %
fees
Occupancy,
communication 273 289 283 -5.5 % -3.5 % 829 838 -1.1 %
and equipment
Depreciation
and 80 78 88 2.6 % -9.1 % 235 272 -13.6 %
amortization
Other 405 427 361 -5.2 % 12.2 % 1,258 1,139 10.4 %
Third party 609 636 62 -4.2 % 882.3 % 1,485 125 1088.0 %
profit sharing
Total expenses 11,647 11,215 10,809 3.9 % 7.8 % 35,168 30,560 15.1 %
Operating loss (1,589 ) (1,918 ) (5,093 ) -17.2 % -68.8 % (7,129 ) (16,708 ) -57.3 %
Interest and
investment 72 58 105 24.1 % -31.4 % 160 512 -68.8 %
income
Net loss $ (1,517 ) $ (1,860 ) $ (4,988 ) -18.4 % -69.6 % $ (6,969 ) $ (16,196 ) -57.0 %
Net loss per
share - basic $ (0.01 ) $ (0.02 ) $ (0.05 ) $ (0.06 ) $ (0.16 )
and diluted
Weighted
average common 112,424 111,765 101,857 111,675 101,720
shares - basic
and diluted
WISDOMTREE INVESTMENTS, INC
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
For the Three Months Ended % Change From For the Nine Months Ended
Sept. 30, Jun. 30, Sept. 30, Jun. Sept. Sept. 30, Sept. 30, %
30, 30,
2010 2010 2009 2010 2009 2010 2009 Change
Revenues
Advisory fees $ 9,860 $ 9,129 $ 5,536 8.0 % 78.1 % $ 27,456 $ 13,384 105.1 %
Other income 198 168 180 17.9 % 10.0 % 583 468 24.6 %
Total revenues 10,058 9,297 5,716 8.2 % 76.0 % 28,039 13,852 102.4 %
Operating
expenses
Compensation 2,963 2,878 2,877 3.0 % 3.0 % 9,091 8,220 10.6 %
and benefits
Fund
management and 3,569 3,306 3,317 8.0 % 7.6 % 10,272 9,713 5.8 %
administration
Marketing and
business 1,511 1,172 1,113 28.9 % 35.8 % 4,303 3,156 36.3 %
development
Professional 319 465 191 -31.4 % 67.0 % 1,316 558 135.8 %
fees
Occupancy,
communication 273 289 283 -5.5 % -3.5 % 829 838 -1.1 %
and equipment
Other 355 377 313 -5.8 % 13.4 % 1,108 989 12.0 %
Third party 609 636 62 -4.2 % 882.3 % 1,485 125 1088.0 %
profit sharing
Total
operating 9,599 9,123 8,156 5.2 % 17.7 % 28,404 23,599 20.4 %
expenses
Proforma
operating 459 174 (2,440 ) 163.8 % -118.8 % (365 ) (9,747 ) -96.3 %
income /
(loss)
Stock-based 1,968 2,014 2,565 -2.3 % -23.3 % 6,529 6,689 -2.4 %
compensation
Depreciation
and 80 78 88 2.6 % -9.1 % 235 272 -13.6 %
amortization
Interest and
investment (72 ) (58 ) (105 ) 24.1 % -31.4 % (160 ) (512 ) -68.8 %
income
Net loss $ (1,517 ) $ (1,860 ) $ (4,988 ) -18.4 % -69.6 % $ (6,969 ) $ (16,196 ) -57.0 %
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)
September 30, December 31,
2010 2009
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 11,790 $ 11,476
Investments 1,294 2,627
Accounts receivable 3,726 2,884
Other current assets 880 961
Total current assets 17,690 17,948
Fixed assets, net 829 977
Investments 6,963 6,693
Other noncurrent assets 78 85
Total assets $ 25,560 $ 25,703
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Fund management and administration payable $ 5,815 $ 5,055
Compensation and benefits payable 2,181 2,587
Accounts payable and other liabilities 1,615 1,603
Total current liabilities 9,611 9,245
Other noncurrent liabilities 360 430
Total liabilities 9,971 9,675
STOCKHOLDERS' EQUITY
Common stock, par value $0.01; 250,000 shares
authorized:
issued: 115,134 and 114,535 1,151 1,145
outstanding:112,551 and 110,106
Additional paid-in capital 156,011 149,487
Accumulated deficit (141,573 ) (134,604 )
Total stockholders' equity 15,589 16,028
Total liabilities and stockholders' equity $ 25,560 $ 25,703
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the Nine Months Ended
September 30, September 30,
2010 2009
Cash flows from operating activities
Net loss $ (6,969 ) $ (16,196 )
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation, amortization and other 235 272
Stock-based compensation 6,529 6,689
Deferred rent (70 ) (161 )
Accretion to interest income (6 ) (56 )
Net change in operating assets and liabilities:
Accounts receivable (842 ) (671 )
Other assets 88 (86 )
Fund management and administration payable 760 (2,420 )
Compensation and benefits payable (406 ) (324 )
Accounts payable and other liabilities 12 47
Net cash used in operating activities (669 ) (12,906 )
Cash flows from investing activities
Purchase of fixed assets (87 ) (293 )
Purchase of investments (6,114 ) (7,292 )
Proceeds from the redemption of investments 7,183 15,556
Net cash provided by investing activities 982 7,971
Cash flows from financing activities
Proceeds from exercise of stock options 1 --
Net cash provided by financing activities 1 --
Net increase (decrease) in cash and cash 314 (4,935 )
equivalents
Cash and cash equivalents - beginning of period 11,476 13,275
Cash and cash equivalents - end of period $ 11,790 $ 8,340
Supplemental disclosure of cash flow information
Cash paid for income taxes $ 11 $ 3
Non-cash investing and financing activities:
Cashless exercise of stock options $ 60 $ --
WisdomTree
Investments,
Inc.
Key Operating
Statistics
(Unaudited)
For the Three Months Ended For the Nine Months
Ended
September June 30, September September September
30, 30, 30, 30,
2010 2010 2009 2010 2009
Total assets
under
management (in
thousands)
ETFs 8,260,293 6,240,452 4,901,755 8,260,293 4,901,755
Non-ETFs 698,032 628,702 567,627 698,032 567,627
End of period 8,958,325 6,869,154 5,469,382 8,958,325 5,469,382
assets
Total ETFs (in
thousands)
Beginning of 6,240,452 6,712,983 3,663,004 5,978,605 3,180,133
period assets
Inflows/ 1,160,726 120,981 558,437 1,863,946 861,774
(outflows)
Market
appreciation/ 859,115 (593,512 ) 680,314 417,742 859,848
(depreciation)
End of period 8,260,293 6,240,452 4,901,755 8,260,293 4,901,755
assets
Average assets
during the 7,055,086 6,760,290 4,181,938 6,708,918 3,472,338
period
International
Developed
Markets ETFs
(in thousands)
Beginning of 1,674,335 1,994,636 1,323,791 1,953,363 1,339,002
period assets
Inflows/ (19,740 ) (38,449 ) 203,782 (31,927 ) 145,491
(outflows)
Market
appreciation/ 245,538 (281,852 ) 266,675 (21,303 ) 309,755
(depreciation)
End of period 1,900,133 1,674,335 1,794,248 1,900,133 1,794,248
assets
Average assets
during the 1,794,013 1,906,595 1,510,082 1,956,532 1,329,212
period
International
Emerging
Markets ETFs
(in thousands)
Beginning of 1,728,388 1,737,792 758,549 1,430,965 384,242
period assets
Inflows/ 706,844 106,441 197,203 1,042,876 417,539
(outflows)
Market
appreciation/ 361,032 (115,845 ) 162,661 322,423 316,632
(depreciation)
End of period 2,796,264 1,728,388 1,118,413 2,796,264 1,118,413
assets
Average assets
during the 2,152,550 1,763,321 887,388 1,741,283 624,905
period
International
Sector ETFs (in
thousands)
Beginning of 189,876 228,356 222,085 358,187 246,501
period assets
Inflows/ 19,623 (947 ) 52,241 (105,564 ) 24,258
(outflows)
Market
appreciation/ 37,527 (37,533 ) 47,819 (5,597 ) 51,386
(depreciation)
End of period 247,026 189,876 322,145 247,026 322,145
assets
Average assets
during the 217,668 214,148 268,661 258,946 230,347
period
US ETFs (in
thousands)
Beginning of 1,406,331 1,468,279 1,039,480 1,329,597 986,568
period assets
Inflows/ 211,148 85,148 42,970 368,259 139,462
(outflows)
Market
appreciation/ 161,297 (147,096 ) 188,722 80,920 145,142
(depreciation)
End of period 1,778,776 1,406,331 1,271,172 1,778,776 1,271,172
assets
Average assets
during the 1,540,154 1,506,111 1,163,833 1,484,014 1,020,513
period
Currency/Fixed
Income ETFs (in
thousands)
Beginning of 1,241,522 1,283,920 319,099 906,493 223,820
period assets
Inflows/ 242,851 (31,212 ) 62,241 590,302 135,024
(outflows)
Market
appreciation/ 53,721 (11,186 ) 14,437 41,299 36,933
(depreciation)
End of period 1,538,094 1,241,522 395,777 1,538,094 395,777
assets
Average assets
during the 1,350,701 1,370,115 351,974 1,268,143 267,361
period
Average ETF
assets during
the period
International
developed 25 % 29 % 37 % 29 % 38 %
markets ETFs
International
emerging 31 % 26 % 21 % 26 % 18 %
markets ETFs
International 3 % 3 % 6 % 4 % 7 %
sector ETFs
US ETFs 22 % 22 % 28 % 22 % 29 %
Currency/Fixed 19 % 20 % 8 % 19 % 8 %
Income ETFs
Total 100 % 100 % 100 % 100 % 100 %
Average ETF
advisory fee
during the
period
International
developed 0.55 % 0.55 % 0.54 % 0.55 % 0.54 %
markets ETFs
International
emerging 0.76 % 0.75 % 0.76 % 0.76 % 0.75 %
markets ETFs
International 0.58 % 0.58 % 0.58 % 0.58 % 0.58 %
sector ETFs
US ETFs 0.34 % 0.34 % 0.33 % 0.34 % 0.33 %
Currency/Fixed 0.49 % 0.48 % 0.44 % 0.47 % 0.44 %
Income ETFs
Blended total 0.56 % 0.54 % 0.53 % 0.54 % 0.51 %
Number of ETFs
- end of the
period
International
developed 14 14 14 14 14
markets ETFs
International
emerging 4 4 4 4 4
markets ETFs
International 4 4 11 4 11
sector ETFs
US ETFs 12 12 13 12 13
Currency/Fixed 10 8 9 10 9
Income ETFs
Total 44 42 51 44 51
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 Nine Months Ended
Sept. 30, Jun. 30, Sept. 30, Sept. 30, Sept. 30,
2010 2010 2009 2010 2009
GAAP expenses as $ 11,647 $ 11,215 $ 10,809 $ 35,168 $ 30,560
reported
Less stock-based
compensation
included in
Compensation and (1,442 ) (1,722 ) (2,276 ) (5,169 ) (5,948 )
benefits
Professional (476 ) (242 ) (241 ) (1,210 ) (591 )
fees
Other (50 ) (50 ) (48 ) (150 ) (150 )
Total
stock-based (1,968 ) (2,014 ) (2,565 ) (6,529 ) (6,689 )
compensation
expenses
Less
depreciation and (80 ) (78 ) (88 ) (235 ) (272 )
amortization
Proforma
operating $ 9,599 $ 9,123 $ 8,156 $ 28,404 $ 23,599
expenses
GAAP net loss, $ (1,517 ) $ (1,860 ) $ (4,988 ) $ (6,969 ) $ (16,196 )
as reported
Add back
stock-based 1,968 2,014 2,565 6,529 6,689
compensation
Add back
depreciation and 80 78 88 235 272
amortization
Less interest
and investment (72 ) (58 ) (105 ) (160 ) (512 )
income
Proforma
operating income $ 459 $ 174 $ (2,440 ) $ (365 ) $ (9,747 )
/ (loss)
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.
Source: WisdomTree
Released October 28, 2010