WisdomTree Announces Fourth Quarter and Year End 2010 Results
Company reports record AUM and record revenues; total AUM increased 19% from Q3 to $10.6 billion, up 60% for 2010
$1.3 billion net inflows for the fourth quarter; $3.1 billion net inflows for the year
Positive proforma operating income for the third consecutive quarter and full year
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 2010 2010 2009 2010 2009
millions)
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/ $1,725 $531 ($1,425) 225% -221%
(loss)
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(R) 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. Dec.31, Dec. 31, Dec.31, %
30,
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 4,933 4,405 4,775 12.0% 3.3% 19,193 18,943 1.3%
and benefits
Fund
management and 4,014 3,569 3,674 12.5% 9.3% 14,286 13,387 6.7%
administration
Marketing and 1,390 745 1,288 86.6% 7.9% 3,721 2,762 34.7%
advertising
Sales and
business 758 766 813 -1.0% -6.8% 2,730 2,495 9.4%
development
Professional
and consulting 1,253 795 631 57.6% 98.6% 3,779 1,780 112.3%
fees
Occupancy,
communication 289 273 249 5.9% 16.1% 1,118 1,087 2.9%
and equipment
Depreciation
and 79 80 88 -1.3% -10.2% 314 360 -12.8%
amortization
Other 466 405 1,281 15.1% -63.6% 1,724 2,420 -28.8%
Third party
sharing 811 609 (36) 33.2% -2352.8% 2,296 89 2479.8%
arrangements
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 $ (0.01) $ (0.01) $ (0.05) $ (0.07) $ (0.21)
and diluted
Weighted
average common 112,889 112,424 108,374 111,981 103,397
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 Year Ended
Dec. 31, Sept. 30, Dec.31, Sept. Dec.31, Dec. 31, Dec.31, %
30,
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 3,557 2,963 2,807 20.0% 26.7% 12,648 11,026 14.7%
and benefits
Fund
management and 4,014 3,569 3,674 12.5% 9.3% 14,286 13,387 6.7%
administration
Marketing and 1,390 745 1,288 86.6% 7.9% 3,721 2,762 34.7%
advertising
Sales and
business 758 766 813 -1.0% -6.8% 2,730 2,495 9.4%
development
Professional
and consulting 453 319 130 42.0% 248.5% 1,769 688 157.1%
fees
Occupancy,
communication 289 273 249 5.9% 16.1% 1,118 1,087 2.9%
and equipment
Other 416 355 231 17.2% 80.1% 1,524 1,220 24.9%
Third party
sharing 811 609 (36) 33.2% -2352.8% 2,296 89 2479.8%
arrangements
Total
operating 11,688 9,599 9,156 21.8% 27.7% 40,092 32,754 22.4%
expenses
Proforma
operating 1,725 531 (1,425) 224.9% -221.1% 1,520 (10,659) -114.3%
income /
(loss)
Stock-based 2,226 1,968 3,519 13.1% -36.7% 8,755 10,209 -14.2%
compensation
Depreciation
and 79 80 88 -1.3% -10.2% 314 360 -12.8%
amortization
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 2,128 (15,027 )
activities
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 2,757 (1,799 )
equivalents
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 December December 31, December
30, 31, 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 10,642,183 8,958,325 6,667,708 10,642,183 6,667,708
assets
Total ETFs (in
thousands)
Beginning of 8,260,293 6,240,452 4,901,755 5,978,605 3,180,133
period assets
Inflows/ 1,270,563 1,160,726 910,989 3,134,509 1,772,764
(outflows)
Market
appreciation/ 360,363 859,115 165,861 778,105 1,025,708
(depreciation)
End of period 9,891,219 8,260,293 5,978,605 9,891,219 5,978,605
assets
Average assets
during the 9,103,556 7,055,086 5,438,756 7,307,577 3,963,943
period
International
Developed
Markets ETFs
(in thousands)
Beginning of 1,900,133 1,674,335 1,794,248 1,953,363 1,339,002
period assets
Inflows/ 61,020 (19,740 ) 135,791 29,093 281,282
(outflows)
Market
appreciation/ 101,485 245,538 23,324 80,182 333,079
(depreciation)
End of period 2,062,638 1,900,133 1,953,363 2,062,638 1,953,363
assets
Average assets
during the 1,981,025 1,794,013 1,896,356 1,901,919 1,470,998
period
International
Emerging
Markets ETFs
(in thousands)
Beginning of 2,796,264 1,728,388 1,118,413 1,430,965 384,242
period assets
Inflows/ 868,384 706,844 232,308 1,911,259 649,847
(outflows)
Market
appreciation/ 115,241 361,032 80,244 437,665 396,876
(depreciation)
End of period 3,779,889 2,796,264 1,430,965 3,779,889 1,430,965
assets
Average assets
during the 3,341,884 2,152,550 1,297,459 2,202,169 793,044
period
International
Sector ETFs (in
thousands)
Beginning of 247,026 189,876 322,145 358,187 246,501
period assets
Inflows/ (11,094 ) 19,623 34,154 (116,657 ) 58,413
(outflows)
Market
appreciation/ 13,149 37,527 1,888 7,551 53,273
(depreciation)
End of period 249,081 247,026 358,187 249,081 358,187
assets
Average assets
during the 257,922 217,668 338,336 258,690 257,344
period
US ETFs (in
thousands)
Beginning of 1,778,776 1,406,331 1,271,172 1,329,597 986,568
period assets
Inflows/ 118,313 211,148 (2,514 ) 486,572 136,949
(outflows)
Market
appreciation/ 159,795 161,297 60,939 240,715 206,080
(depreciation)
End of period 2,056,884 1,778,776 1,329,597 2,056,884 1,329,597
assets
Average assets
during the 1,916,521 1,540,154 1,272,642 1,592,141 1,083,545
period
Currency/Fixed
Income ETFs (in
thousands)
Beginning of 1,538,094 1,241,522 395,777 906,493 223,820
period assets
Inflows/ 233,940 242,851 511,250 824,242 646,273
(outflows)
Market
appreciation/ (29,307 ) 53,721 (534 ) 11,992 36,400
(depreciation)
End of period 1,742,727 1,538,094 906,493 1,742,727 906,493
assets
Average assets
during the 1,606,204 1,350,701 633,963 1,352,658 359,012
period
Average ETF
assets during
the period
International
developed 22 % 25 % 35 % 26 % 37 %
markets ETFs
International
emerging 37 % 31 % 24 % 30 % 20 %
markets ETFs
International 3 % 3 % 6 % 4 % 7 %
sector ETFs
US ETFs 21 % 22 % 23 % 22 % 27 %
Currency/Fixed 17 % 19 % 12 % 18 % 9 %
Income ETFs
Total 100 % 100 % 100 % 100 % 100 %
Average ETF
advisory fee
during the
period
International
developed 0.55 % 0.55 % 0.55 % 0.55 % 0.55 %
markets ETFs
International
emerging 0.76 % 0.76 % 0.76 % 0.76 % 0.76 %
markets ETFs
International 0.58 % 0.58 % 0.58 % 0.58 % 0.58 %
sector ETFs
US ETFs 0.34 % 0.34 % 0.34 % 0.34 % 0.33 %
Currency/Fixed 0.50 % 0.49 % 0.46 % 0.49 % 0.44 %
Income ETFs
Blended total 0.57 % 0.56 % 0.54 % 0.56 % 0.52 %
Number of ETFs
- end of the
period
International
developed 14 14 15 14 15
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 10 9 10 9
Income ETFs
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 $ 13,993 $ 11,647 $ 12,763 $ 49,161 $ 43,323
reported
Less stock-based
compensation
included in
Compensation and (1,376 ) (1,442 ) (1,968 ) (6,545 ) (7,917 )
benefits
Professional and (800 ) (476 ) (501 ) (2,010 ) (1,092 )
consulting fees
Other (50 ) (50 ) (1,050 ) (200 ) (1,200 )
Total stock-based
compensation (2,226 ) (1,968 ) (3,519 ) (8,755 ) (10,209 )
expenses
Less depreciation (79 ) (80 ) (88 ) (314 ) (360 )
and amortization
Proforma operating $ 11,688 $ 9,599 $ 9,156 $ 40,092 $ 32,754
expenses
GAAP net loss, as $ (580 ) $ (1,517 ) $ (5,032 ) $ (7,549 ) $ (21,228 )
reported
Add back
stock-based 2,226 1,968 3,519 8,755 10,209
compensation
Add back
depreciation and 79 80 88 314 360
amortization
Proforma operating $ 1,725 $ 531 $ (1,425 ) $ 1,520 $ (10,659 )
income / (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 Investments, Inc.
Released February 3, 2011