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WisdomTree Announces Fourth Quarter And Year End 2013 Results

Stocks in this article: WETF

Record net income more than triples from year ago quarter and for the year

Diluted EPS $0.12 for the quarter and $0.37 for the year

Record revenues up 83% from year ago quarter and 76% for the year

$2.3 billion net inflows in quarter and record $14.3 billion for the year

NEW YORK, Jan. 31, 2014 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (Nasdaq:WETF), an exchange-traded fund ("ETF") sponsor and asset manager, today reported net income of $16.5 million for the fourth quarter of 2013, or $0.12 per share on a fully diluted basis. This compares to $5.3 million in the fourth quarter of 2012 and $15.0 million in the third quarter of 2013. For the full year, net income was $51.5 million, or $0.37 per share on a fully diluted basis. This compares to $11.0 million in 2012.

WisdomTree CEO and President Jonathan Steinberg commented, "2013 was a year of transformational growth, stellar operating performance and record financial results for WisdomTree. Powered by $14.3 billion in net inflows, our revenues are up 76% for the year, and with the growth of our business we are demonstrating the scale, efficiency and earnings power of our operating model."

Mr. Steinberg continued, "We also continued to invest in our business to position WisdomTree for future growth. During the course of the year we bolstered our product set in important categories like domestic equities, domestic fixed income and currency hedged equities. In total, 15 new products launched in 2013 provide investment solutions for a strengthening U.S. dollar, as well as rising interest rates."

Mr. Steinberg concluded, "We also made important strides at the business level, including the announcement last quarter of a new fund administration and custody services relationship with State Street Bank and Trust Company, a global leader with the infrastructure to support our growth. Today, we announced expansion plans for the European ETF market. As we continue into 2014 with strong momentum, I am excited about the significant opportunities for WisdomTree's expansion and development."

Summary Operating and Financial Highlights
           
  Three Months Ended Change From
  Dec. 31, Sep. 30, Dec. 31, Sep. 30, Dec. 31,
Operating Highlights ($, in billions): 2013 2013 2012 2013 2012
ETF AUM $34.9 $31.4 $18.3 11.3% 90.8%
ETF net inflows $2.3 $1.2 $1.1 99.0% 117.9%
Average ETF AUM $33.1 $30.5 $17.1 8.6% 93.9%
Average ETF advisory fee 0.51% 0.51% 0.54% -- (0.03)
Market share of industry inflows 3.9% 2.2% 1.9% +1.7 +2.0
           
Financial Highlights ($, in millions, except per share amounts):          
Total revenues $43.2 $39.6 $23.6 8.9% 83.1%
Net income $16.5 $15.0 $5.3 10.1% 213.6%
Diluted earnings per share  $0.12 $0.11 $0.04 $0.01 $0.08
Gross margin 1 (non-GAAP) 78% 77% 68% +.10 +10.0
Pre-tax margin 38% 38% 22% -- +16.0
           
  Year Ended    
  Dec. 31, Dec. 31,      
Operating Highlights ($, in billions): 2013 2012 Change    
ETF AUM $34.9 $18.3 90.8%    
ETF net inflows $14.3 $4.7 202.7%    
Average ETF AUM $28.5 $15.6 83.1%    
Average ETF advisory fee 0.52% 0.54% (0.02)    
Market share of industry inflows 8.0% 2.6% +5.4    
           
Financial Highlights ($, in millions, except per share amounts):          
Total revenues $149.5 $84.8 76.3%    
Net income $51.5 $11.0 367.2%    
Diluted earnings per share $0.37 $0.08 $0.29    
Gross margin 1 (non-GAAP) 76% 66% +10.0    
Pre-tax margin 34% 17% +17.0    
           
[1] Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements. 

Recent Business Developments

  • On November 4, 2013 WisdomTree announced the Chilean pension regulator approved the sale of three additional WisdomTree ETFs in Chile
  • On November 7, 2013, WisdomTree announced the launch of the WisdomTree Korea Hedged Equity Fund (DXKW)
  • On December 4, 2013, WisdomTree announced the WisdomTree SmallCap Dividend Fund (DES) surpassed $1 billion in assets
  • On December 18, 2013, WisdomTree announced the launch of the WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU)
  • On December 18, 2013, WisdomTree announced the launch of the WisdomTree Japan Interest Rate Strategy Fund (JGBB)
  • On December 18, 2013, WisdomTree announced the launch of Rising Rates Bond ETFs based on leading Fixed Income benchmarks: WisdomTree Barclays U.S. Aggregate Bond Zero Duration Fund (AGZD), WisdomTree Barclays U.S. Aggregate Bond Negative Duration Fund (AGND), WisdomTree BofA Merrill Lynch High Yield Bond Zero Duration Fund (HYZD), WisdomTree BofA Merrill Lynch High Yield Bond Negative Duration Fund (HYND)
  • On January 31, 2014, WisdomTree announced the launch of a platform for European ETF operations through a majority investment in Boost ETP, expected to close in the first half of 2014

Assets Under Management, Net Inflows and Market Share

ETF assets under management ("AUM") were $34.9 billion at December 31, 2013, up 90.8% from $18.3 billion at December 31, 2012, and up 11.3% from $31.4 billion at September 30, 2013. Net inflows for the fourth quarter of 2013 were $2.3 billion as compared to $1.1 billion in the fourth quarter of 2012 and $1.2 billion in the third quarter of 2013. For the year, net inflows were $14.3 billion as compared to $4.7 billion in 2012. WisdomTree's market share of industry net inflows was 3.9% in the fourth quarter of 2013 as compared to 1.9% in the fourth quarter of 2012 and 2.2% in the third quarter of 2013. For the full year, WisdomTree's market share was 8.0% as compared to 2.6% in 2012.

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