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TheStreet Open House

WisdomTree Announces Second Quarter 2014 Results

Stocks in this article: WETF

Pre-Tax Income of $20.1 Million, Increases 65% From Year Ago Quarter

$0.15 Diluted Pre-Tax EPS; $0.08 Diluted Net Income EPS

NEW YORK, Aug. 1, 2014 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (Nasdaq:WETF), an exchange-traded product ("ETP") sponsor and asset manager, today reported pre-tax income of $20.1 million or $0.15 per share on a fully diluted basis. This compares to $12.2 million in the second quarter of 2013 and $16.5 million in the first quarter of 2014. Included in the quarter was a pre-tax loss of $1.6 million, or $0.01 per diluted EPS, associated with its European listed ETP business which was acquired in April 2014. The Company recorded income tax expense of $9.5 million (however, the Company does not currently pay income taxes because of its net operating loss carryforward) and net income of $10.6 million or $0.08 per diluted EPS in the second quarter.

WisdomTree CEO and President Jonathan Steinberg said, "WisdomTree reached record assets under management ("AUM") levels in the second quarter driven by continued inflows in European-focused equity ETFs where we made market share gains, inflows in our India ETF and inflows in domestic equities. Even despite Japan-related outflows, we ended the quarter with $300 million in net inflows."

Mr. Steinberg continued, "We recorded top line revenue growth of 18% with a 77% increase in pre-tax income in our US business despite the challenging flows this quarter. We are clearly demonstrating the efficiency, power and potential of our business model. Since the first quarter, we showed a nearly 5% improvement in our gross margin to 82.4% for our US business. Including our new European entity, we reported a record 45.6% pretax margin on a base of $34 billion in average AUM. Our business and our balance sheet have never been stronger. With $141 million in cash and investments, WisdomTree is in a position of strength to invest for future growth."

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