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WisdomTree Announces Fourth Quarter And Year End 2012 Results

Stocks in this article: WETF

The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this press release. 

About WisdomTree

WisdomTree Investments, Inc. is a New York-based exchange-traded fund ("ETF") sponsor and asset manager.  WisdomTree currently offers 47 ETFs across Equities, Currency Income, Fixed Income and Alternatives asset classes. WisdomTree also licenses its indexes to third parties for proprietary products and promotes the use of WisdomTree ETFs in 401(k) plans. WisdomTree currently has approximately $20.7 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.

The WisdomTree Investments, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11269

 
 
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
                 
  Three Months Ended % Change From Year Ended
  Dec. 31, Sept. 30, Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, %
  2012 2012 2011 2012 2011 2012 2011 Change
              (Audited)  
Revenues                
ETF advisory fees  $ 23,379  $ 21,440  $ 16,025 9.0% 45.9%  $ 84,024  $ 64,366 30.5%
Other income  195  221  150 -11.8% 30.0%  774  794 -2.5%
                 
Total revenues  23,574  21,661  16,175 8.8% 45.7%  84,798  65,160 30.1%
                 
Expenses                
Compensation and benefits  6,165  5,734  4,722 7.5% 30.6%  23,233  19,634 18.3%
Fund management and administration  6,343  5,671  4,891 11.8% 29.7%  23,020  19,882 15.8%
Marketing and advertising  1,627  862  1,235 88.7% 31.7%  5,363  4,475 19.8%
Sales and business development  1,053  831  991 26.7% 6.3%  3,586  3,603 -0.5%
Professional and consulting fees  788  1,305  1,114 -39.6% -29.3%  4,603  4,307 6.9%
Occupancy, communication and equipment  369  374  281 -1.3% 31.3%  1,419  1,127 25.9%
Depreciation and amortization  82  79  67 3.8% 22.4%  307  267 15.0%
Third party sharing arrangements  1,300  1,194  1,217 8.9% 6.8%  5,468  5,651 -3.2%
Other  765  859  618 -10.9% 23.8%  2,976  2,243 32.7%
ETF shareholder proxy  --   --   --  n/a n/a  3,264  --  n/a
Litigation, net  (524)  219  150 n/a n/a  176  150 17.3%
Exchange listing and offering  353  --   --  n/a n/a  353  729 -51.6%
Total expenses  18,321  17,128  15,286 7.0% 19.9%  73,768  62,068 18.9%
                 
Income before provision for income taxes  5,253  4,533  889 15.9% 490.9%  11,030  3,092 256.7%
                 
Provision for income taxes  --   --   --       --   --   
                 
Net income  $ 5,253  $ 4,533  $ 889 15.9% 490.9%  $ 11,030  $ 3,092 256.7%
                 
                 
Net income per share - basic  $ 0.04  $ 0.04  $ 0.01      $ 0.09  $ 0.03  
                 
Net income per share - diluted  $ 0.04  $ 0.03  $ 0.01      $ 0.08  $ 0.02  
                 
Weighted average common shares - basic  124,202  123,214  114,863      122,138  114,132  
                 
Weighted average common shares - diluted  138,417  138,458  135,682      137,968  135,539  
 
 
 
WISDOMTREE INVESTMENTS, INC.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
           
  Three Months Ended Year Ended
  Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
  2012 2012 2011 2012 2011
           
Revenues          
ETF advisory fees  $ 23,379  $ 21,440  $ 16,025  $ 84,024  $ 64,366
Other income  195  221  150  774  794
           
Total revenues  23,574  21,661  16,175  84,798  65,160
           
Operating expenses          
Compensation and benefits  6,165  5,734  4,722  23,233  19,634
Fund management and administration  6,343  5,671  4,891  23,020  19,882
Marketing and advertising  1,627  862  1,235  5,363  4,475
Sales and business development  1,053  831  991  3,586  3,603
Professional and consulting fees  788  1,305  1,114  4,603  4,307
Occupancy, communication and equipment  369  374  281  1,419  1,127
Depreciation and amortization  82  79  67  307  267
Third party sharing arrangements  1,300  1,194  1,217  5,468  5,651
Other  765  859  618  2,976  2,243
Total proforma operating expenses  18,492  16,909  15,136  69,975  61,189
           
Proforma operating income  5,082  4,752  1,039  14,823  3,971
           
ETF shareholder proxy  --   --   --   3,264  -- 
Litigation, net  (524)  219  150  176  150
Exchange listing and offering  353  --   --   353  729
Income before provision for income taxes  5,253  4,533  889  11,030  3,092
           
Provision for income taxes  --   --   --   --   -- 
           
Net income  $ 5,253  $ 4,533  $ 889  $ 11,030  $ 3,092
 
 
 
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amount)
 
  December 31, December 31,
  2012 2011
  (Unaudited)  
     
ASSETS    
Current assets:    
Cash and cash equivalents  $ 41,246  $ 25,630
Accounts receivable 9,348 5,625
Other current assets  1,273  1,601
     
Total current assets  51,867  32,856
     
Fixed assets, net  480  597
Investments  11,036  9,056
Other noncurrent assets  42  58
     
Total assets  $ 63,425  $ 42,567
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES    
Current liabilities:    
Fund management and administration payable  $ 6,924  $ 10,035
Compensation and benefits payable  2,156  4,168
Accounts payable and other liabilities  3,272  2,360
     
Total current liabilities  12,352  16,563
     
Other noncurrent liabilities  13  151
     
Total liabilities  12,365  16,714
     
     
STOCKHOLDERS' EQUITY    
Common stock, par value $0.01; 250,000 shares authorized:    
issued: 126,554 and 116,703  1,265  1,167
outstanding: 125,272 and 115,392    
Additional paid-in capital  177,826  163,747
Accumulated deficit  (128,031)  (139,061)
     
Total stockholders' equity  51,060  25,853
     
Total liabilities and stockholders' equity  $ 63,425  $ 42,567
 
 
 
WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
     
     
  Twelve Months Ended
   December 31,   December 31, 
  2012 2011
  (Unaudited)  
Cash flows from operating activities    
Net income  $ 11,030  $ 3,092
Non-cash items included in net income:    
Depreciation and amortization  307  267
Stock-based compensation  7,437  7,141
Deferred rent  (140)  (154)
Accretion to interest income and other  194  135
Changes in operating assets and liabilities:    
Accounts receivable  (3,723)  (800)
Other assets  337  (950)
Fund management and administration payable  (3,111)  4,321
Compensation and benefits payable  (2,012)  530
Accounts payable and other liabilities  915  110
     
Net cash provided by operating activities  11,234  13,692
     
Cash flows from investing activities    
Purchase of fixed assets  (190)  (108)
Purchase of investments  (10,004)  (8,114)
Proceeds from the redemption of investments  7,836  7,542
     
Net cash used in investing activities  (2,358)  (680)
     
Cash flows from financing activities    
Net proceeds from sale of common stock  4,329  -- 
Shares repurchased  (2,261)  (2,153)
Proceeds from exercise of stock options  4,672  538
     
Net cash provided by/(used in) financing activities  6,740  (1,615)
     
Net increase in cash and cash equivalents  15,616  11,397
     
Cash and cash equivalents - beginning of period  25,630  14,233
     
Cash and cash equivalents - end of period  $ 41,246  $ 25,630
     
Supplemental disclosure of cash flow information    
Cash paid for income taxes  $ 33  $ 13
           
           
           
WisdomTree Investments, Inc.          
Key Operating Statistics (Unaudited)          
           
  Three Months Ended For the Year Ended
  December 31, September 30, December 31, December 31, December 31,
  2012 2012 2011 2012 2011
Total ETFs (in millions)          
Beginning of period assets  16,783  15,004  11,184  12,182  9,891
Inflows/(outflows)  1,059  1,036  756  4,732  3,899
Market appreciation/(depreciation)  444  743  242  1,372  (1,608)
End of period assets  18,286  16,783  12,182  18,286  12,182
           
Average assets during the period  17,068  15,769  11,836  15,554  11,739
           
ETF Industry and Market Share (in billions)          
ETF industry net inflows  55.4  51.8  43.9  185.4  117.6
WisdomTree market share of industry inflows 1.9% 2.0% 1.7% 2.6% 3.3%
           
International Developed Equity ETFs (in millions)        
Beginning of period assets  2,896  2,846  2,501  2,407  2,311
Inflows/(outflows)  620  (58)  (94)  1,000  471
Market appreciation/(depreciation)  216  108  --   325  (375)
End of period assets  3,732  2,896  2,407  3,732  2,407
           
Average assets during the period  3,022  2,859  2,496  2,854  2,634
           
Emerging Markets Equity ETFs (in millions)          
Beginning of period assets  6,542  5,430  3,230  3,613  3,780
Inflows/(outflows)  515  736  418  3,111  924
Market appreciation/(depreciation)  275  376  (35)  608  (1,091)
End of period assets  7,332  6,542  3,613  7,332  3,613
           
Average assets during the period  6,767  5,915  3,456  5,715  3,664
           
US Equity ETFs (in millions)          
Beginning of period assets  4,640  4,094  2,523  3,429  2,057
Inflows/(outflows)  (205)  363  586  610  1,255
Market appreciation/(depreciation)  (64)  183  320  332  117
End of period assets  4,371  4,640  3,429  4,371  3,429
           
Average assets during the period  4,522  4,393  2,973  4,252  2,507
           
Currency ETFs (in millions)          
Beginning of period assets  654  769  1,194  950  1,179
Inflows/(outflows)  (37)  (129)  (157)  (351)  (69)
Market appreciation/(depreciation)  (6)  14  (56)  12  (129)
Reclass to Int'l Fixed Income      (31)    (31)
End of period assets  611  654  950  611  950
           
Average assets during the period  632  694  1,120  772  1,480
           
International Fixed Income ETFs (in millions)          
Beginning of period assets  1,904  1,698  1,493  1,506  564
Inflows/(outflows)  190  148  (34)  491  1,022
Market appreciation/(depreciation)  24  58  16  121  (111)
Reclass from Currency      31    31
End of period assets  2,118  1,904  1,506  2,118  1,506
           
Average assets during the period  1,990  1,749  1,536  1,770  1,297
           
Alternative Strategy ETFs (in millions)          
Beginning of period assets  147  167  243  277  -- 
Inflows/(outflows)  (24)  (24)  37  (129)  296
Market appreciation/(depreciation)  (1)  4  (3)  (26)  (19)
End of period assets  122  147  277  122  277
           
Average assets during the period  135  159  255  191  157
           
Average ETF assets during the period          
Emerging markets equity ETFs 39% 38% 29% 37% 31%
US equity ETFs 26% 28% 25% 27% 21%
International developed equity ETFs 18% 18% 21% 19% 22%
International fixed income ETFs 12% 11% 13% 11% 12%
Currency ETFs  4% 4% 10% 5% 13%
Alternative strategy ETFs 1% 1% 2% 1% 1%
Total 100% 100% 100% 100% 100%
           
Average ETF advisory fee during the period          
Alternative strategy ETFs 0.94% 0.94% 0.95% 0.95% 0.95%
Emerging markets equity ETFs 0.67% 0.67% 0.68% 0.67% 0.70%
International fixed income ETFs 0.55% 0.55% 0.55% 0.55% 0.55%
International developed equity ETFs 0.54% 0.54% 0.54% 0.54% 0.54%
Currency ETFs  0.50% 0.50% 0.49% 0.50% 0.49%
US equity ETFs 0.35% 0.35% 0.35% 0.35% 0.34%
Blended total 0.54% 0.54% 0.54% 0.54% 0.55%
           
Number of ETFs - end of the period          
International developed equity ETFs  18  18  18  18  18
US equity ETFs  11  12  12  11  12
Currency ETFs   5  7  7  5  7
International fixed income ETFs  5  5  4  5  4
Emerging markets equity ETFs  5  5  4  5  4
Alternative strategy ETFs  2  2  2  2  2
Total  46  49  47  46  47
           
Headcount 70 70 65 70 65
           
Note: Previously issued statistics may be restated due to trade adjustments
Source: Investment Company Institute, Bloomberg, WisdomTree
 
 
Non-GAAP Financial Measurements
 
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. The non-GAAP financial measurements included in this release include proforma operating income, proforma expenses and proforma pre-tax operating margin. Our management reviews these non-GAAP financial measurements 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, do not replace nor are superior to GAAP financial measurements and are unlikely to be comparable to similar measures presented by other companies. These non-GAAP financial measurements should be considered in the context with our GAAP results. We have disclosed our results excluding certain non-operating items including (1) our patent litigation with Research Affiliates LLC; (2) expenses for the WisdomTree ETF shareholder proxy solicitation; (3) advisory costs related to the preparation of our Form 10 for the initial listing of our common stock on NASDAQ; and (4) advisory and other related fees associated with the secondary offering of our common stock in November 2012. Management excludes these items when measuring our financial performance as they are not directly related to our core business of being an ETF sponsor and asset manager.
 
 
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,
  2012 2012 2011 2012 2011
GAAP total expenses  $ 18,321  $ 17,128  $ 15,286  $ 73,768  $ 62,068
           
Less ETF shareholder proxy  --   --   --   (3,264)  -- 
Less patent litigation  524  (219)  (150)  (176)  (150)
Less initial exchange listing and offering  (353)  --   --   (353)  (729)
           
Proforma operating expenses  $ 18,492  $ 16,909  $ 15,136  $ 69,975  $ 61,189
           
           
GAAP net income  $ 5,253  $ 4,533  $ 889  $ 11,030  $ 3,092
           
Add ETF shareholder proxy  --   --   --   3,264  -- 
Add patent litigation  (524)  219  150  176  150
Add initial exchange listing and offering  353  --   --   353  729
           
Proforma operating income  $ 5,082  $ 4,752  $ 1,039  $ 14,823  $ 3,971
           
           
GAAP net income  $ 5,253  $ 4,533  $ 889  $ 11,030  $ 3,092
Divide GAAP total revenue  23,574  21,661  16,175  84,798  65,160
           
GAAP pre-tax margin 22.3% 20.9% 5.5% 13.0% 4.7%
           
           
Proforma pre-tax net income  $ 5,082  $ 4,752  $ 1,039  $ 14,823  $ 3,971
Divide GAAP total revenue  23,574  21,661  16,175  84,798  65,160
           
Proforma pre-tax operating margin 21.6% 21.9% 6.4% 17.5% 6.1%
CONTACT: WisdomTree Investments, Inc.
         Stuart Bell / Jessica Zaloom
         +1.917.267.3702 / +1.917.267.3735
         sbell@wisdomtree.com / jzaloom@wisdomtree.com

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