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WisdomTree Announces First Quarter 2014 Results

Pre-Tax Income of $16.5 Million; Doubles From Year Ago Quarter

$0.12 Diluted Pretax EPS

Revenues Increase 46% From Year Ago Quarter

NEW YORK, May 2, 2014 (GLOBE NEWSWIRE) --WisdomTree Investments, Inc. (Nasdaq:WETF), an exchange-traded product ("ETP") sponsor and asset manager, today reported pre-tax income of $16.5 million or $0.12 per share on a fully diluted basis. This compares to $7.9 million in the first quarter of 2013 and $16.5 million in the fourth quarter of 2013. Included in the quarter were $1.3 million, or $0.01 per diluted EPS, of costs associated with our acquisition of U.K.-based ETP provider Boost and non-recurring costs for transitioning our fund accounting and administration services. The Company also recorded a non-recurring tax benefit of $13.7 million resulting in net income of $30.2 million for the first quarter of 2014. 1

WisdomTree CEO and President Jonathan Steinberg said, "WisdomTree's powerful operating model produced strong financial results in the first quarter on a base of $33.9 billion in average ETF assets. Even against the backdrop of a challenging market environment for some of our largest exposures, we increased revenues and earnings year over year, demonstrating the scale and strength of our business."

Mr. Steinberg continued, "We completed important initiatives, including a seamless transition in back office fund accounting, administration and custody services. We also completed our investment to establish WisdomTree Europe and look forward to building out a platform of Boost and WisdomTree products for the world's second largest ETF market. We continue to invest strategically to make WisdomTree even more competitive for the future."
Summary Operating and Financial Highlights
  Three Months Ended Change From
  Mar. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31,
Operating Highlights ($, in billions): 2014 2013 2013 2013 2013
ETF AUM $33.9 $34.9 $25.1 (2.9%) 35.0%
ETF net inflows/(outflows) ($0.5) $2.3 $5.9 ($2.8) ($6.4)
Average ETF AUM $33.9 $33.1 $21.9 2.3% 54.4%
Average ETF advisory fee 0.51% 0.51% 0.54% -- (0.03)
Market share of industry inflows -- 3.9% 11.3% (3.9) (11.3)
Revenue days 90 92 90 (2.0) --
Financial Highlights ($, in millions, except per share amounts):          
Total revenues $42.9 $43.2 $29.3 (0.6%) 46.3%
Pre-tax income $16.5 $16.5 $7.9 0.0% 109.8%
Net income $30.2 $16.5 $7.9 83.3% 284.6%
Diluted pre-tax earnings per share $0.12 $0.12 $0.06 -- $0.06
Gross margin 2 (non-GAAP) 78.6% 78.2% 71.6% +0.4 +7.0
Pre-tax margin 38.4% 38.2% 26.8% +0.2 +11.6

1 Please see section titled "Taxes."

2 Gross margin is defined as total revenues less fund management and administration expenses and third-party sharing arrangements.

Recent Business Developments
  • On May 1, 2014, WisdomTree announced the WisdomTree MidCap Dividend Fund (DON) surpassed $1 billion in assets
  • On April 29, 2014, WisdomTree announced 10 additional ETFs became available for sale in Japan
  • On April 21, 2014, WisdomTree announced the Mexican pension funds investment regulator approved 6 WisdomTree ETFs for sale to Mexican pension funds
  • On April 17, 2014, WisdomTree announced it completed an investment to create WisdomTree Europe
  • On April 8, 2014, WisdomTree announced the launch of a suite of currency hedged Japan Sector ETFs
  • On April 7, 2014, WisdomTree announced the WisdomTree Europe Hedged Equity Fund (HEDJ) surpassed $1 billion in assets
  • On March 20, 2014, WisdomTree announced it received three awards from "Most innovative ETF issuer of the year," "ETF of the year" (WisdomTree Japan Hedged Equity Fund (DXJ)) and "Best new currency ETF of 2013"(WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU))
  • On February 26, 2014, WisdomTree announced the Peruvian pension funds investment regulator approved 12 WisdomTree ETFs for sale to Peruvian pension funds
  • On February 17, 2014, WisdomTree announced the WisdomTree Europe SmallCap Dividend Fund (DFE) surpassed $1 billion in assets
  • On February 2, 2014, WisdomTree announced the launch of the WisdomTree Bloomberg Floating Rate Treasury Fund (USFR)

Assets Under Management and Net Inflows

ETF assets under management ("AUM") were $33.9 billion at March 31, 2014, up 35.0% from $25.1 billion at March 31, 2013, and down 2.9% from $34.9 billion at December 31, 2013. AUM decreased from December 31, 2013 due to net outflows of $0.5 billion primarily in our emerging markets equity, currency and fixed income focused ETFs as well as in our Japan Hedged Equity ETF (DXJ). We also had negative market movement of $0.5 billion, primarily in those same funds. 

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