WisdomTree Announces Second Quarter 2015 Results
(Thomson Reuters ONE) -
Record net income up 128% year-over-year to $24.2 million or diluted EPS $0.18
Record revenues up 85% year-over-year to $81.6 million
Record U.S. pre-tax margin of 53.2%; Record consolidated pre-tax margin of 50.2%
$6.6 billion in net inflows for the quarter; $20.1 billion in first half 2015
Net inflow market share of 15.6% for the quarter
Declares $0.08 quarterly dividend
NEW YORK, July 31, 2015 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc.
(NASDAQ:WETF), an exchange-traded fund ("ETF") and exchange-traded product
("ETP") sponsor and asset manager today reported net income of $24.2 million for
the second quarter of 2015 or $0.18 per share on a fully diluted basis. This
compares to $10.6 million in the second quarter of 2014 and $12.1 million in the
first quarter of 2015.
WisdomTree CEO and President Jonathan Steinberg said, "Our innovative ETF
platform attracted $6.6 billion in inflows in the second quarter and more than
$20 billion in the first half of the year, making WisdomTree one of the fastest-
growing companies within the ETF and broader asset management industry in 2015
to date. We also delivered industry-leading operating margins and record
financial results, demonstrating the increasing scale and strength of our
business model."
Mr. Steinberg continued, "I am pleased with our strong execution in the second
quarter and excited about the investments and capabilities we are adding to
enhance our global ETF franchise and drive future growth."
Summary Operating and Financial Highlights
Three Months Ended Change From
Jun. 30, Mar. 31, Jun. 30, Mar. 31, Jun. 30,
Operating Highlights 2015 2015 2014 2015 2014
U.S. listed ETFs ($, in
billions):
AUM $ 61.3 $ 55.8 $ 35.5 9.9 % 72.7 %
Net inflows $ 6.6 $ 13.5 $ 0.3 (51.2 %) 1,875.4 %
Average AUM $ 61.2 $ 46.4 $ 34.1 31.8 % 79.1 %
Average advisory fee 0.53 % 0.52 % 0.51 % +.01 +.02
Market share of U.S. 15.6 % 24.4 % 0.6 % -8.8 +15.0
industry inflows
European listed ETPs ($,
in millions):
AUM $ 611.9 $ 334.1 $ 113.2 83.2 % 440.4 %
Net inflows $ 194.6 $ 174.2 $ 17.7 11.7 % 1,001.9 %
Average advisory fee 0.68 % 0.75 % 0.82 % -.07 -.14
Financial Highlights ($,
in millions, except per
share amounts):
Consolidated Results:
Total revenues $ 81.6 $ 60.1 $ 44.1 35.6 % 84.8 %
Pre-tax income $ 40.9 $ 21.0 $ 20.1 94.8 % 103.3 %
Net income $ 24.2 $ 12.1 $ 10.6 100.4 % 128.0 %
Diluted earnings per $ 0.18 $ 0.09 $ 0.08 $ 0.09 $ 0.10
share
Pre-tax margin 50.2 % 35.0 % 45.6 % +15.2 +4.6
U.S. listed ETFs:
Gross margin[1] (non- 86.4 % 83.2 % 82.4 % +3.2 +4.0
GAAP)
Pre-tax margin 53.2 % 38.3 % 49.4 % +14.9 +3.8
1 Gross margin is defined as total revenues less fund management and
administration expenses and third-party sharing arrangements.
Recent Business Developments
Personnel
* On June 15, 2015, the Company named Kurt MacAlpine Executive Vice President
and Head of Global Distribution
* On July 1, 2015, the Company announced plans for a Japan office and the
appointment of Jesper Koll as Chief Executive Officer of WisdomTree Japan
K.K.
* On July 23, 2015, the Company announced the expansion of its Japan
Management team with the appointment of Junichi Kamitsubo as Head of Sales
and Atsushi Yamamoto as Chief Compliance Officer of WisdomTree Japan K.K.
Product launches
* On May 28, 2015, the Company launched the WisdomTree Japan Dividend Growth
Fund (JDG)
* On June 4, 2015, the Company launched the WisdomTree International Hedged
SmallCap Dividend Fund (HDLS) and the WisdomTree Global ex-U.S. Hedged
Dividend Fund (DXUS)
* On June 6, 2015, the Company launched the WisdomTree Western Asset
Unconstrained Bond Fund (UBND)
* On July 9, 2015, the Company launched the WisdomTree International Hedged
Equity Fund (HDWM) and the WisdomTree Barclays U.S. Aggregate Bond Enhanced
Yield Fund (AGGY)
* On July 21, 2015, the Company launched the WisdomTree Strong Dollar U.S.
Equity Fund (USSD) and the WisdomTree Weak Dollar U.S. Equity Fund (USWD)
Other
* On June 9, 2015, the Company announced the cross-listing of 2 additional
ETFs on the Bolsa Mexicana de Valores: the WisdomTree Germany Hedged Equity
Fund (DXGE) and the WisdomTree U.S. Dividend Growth Fund (DGRW)
* On June 30, 2015, WisdomTree added four additional ETFs to Schwab ETF
OneSource(TM): the WisdomTree Europe Hedged SmallCap Equity Fund (EUSC), the
WisdomTree Germany Hedged Equity Fund (DXGE), the WisdomTree Japan Hedged
Dividend Growth Fund (JHDG), and the WisdomTree Japan Hedged SmallCap Equity
Fund (DXJS)
* On July 1, 2015, the Company announced the WisdomTree China ex-State-Owned
Enterprises Fund (CXSE), formerly the WisdomTree China Dividend ex-
Financials Fund (CHXF)
* WisdomTree Europe:
* Listed the WisdomTree Germany Equity UCITS ETF (DXGP) - GBP hedged - in
London on the London Stock Exchange on May 14, 2015; listed the
WisdomTree Japan Equity UCITS ETF (DXJ) and the WisdomTree Europe Equity
UCITS ETF (HEDJ) - both USD hedged - in London on the London Stock
Exchange, Italy on the Borsa Italiana and Germany on the Börse Xetra on
May 20, 2015, and Switzerland on the SIX Swiss Exchange on July
14, 2015; and announced it surpassed $500 Million in AUM on May 28, 2015
* Listed four Boost ETPs in London on the London Stock Exchange on April
14, 2015; listed eight ETPs in Germany on the Börse Xetra on June
30, 2015; and listed five ETPs in Italy on the Borsa Italiana
Assets Under Management and Net Inflows
U.S. listed ETF assets under management ("AUM") reached a record $61.3 billion
at June 30, 2015, up 56.1% from December 31, 2014, primarily due to record
inflows of $20.1 billion.
European listed AUM was $611.9 million, up 237.7% from $181.2 million at
December 31, 2014 primarily due to $368.8 million of net inflows.
Performance
In evaluating the performance of our U.S. listed equity, fixed income and
alternative ETFs against actively managed and index based mutual funds and ETFs,
90.4% of the $60.5 billion invested in our ETFs and 58% (32 of 55) of our ETFs
outperformed their comparable Morningstar average since inception as of June
30, 2015.
For more information about WisdomTree ETFs including standardized
performance, please click here or visit www.wisdomtree.com.
Second Quarter Financial Discussion
Revenues
Total revenues increased 84.8% from the second quarter of 2014 and 35.6%
compared to the first quarter of 2015 to a record $81.6 million primarily due to
higher average AUM from strong inflows. Revenues from our European listed ETPs
increased to $0.9 million from $0.2 million in the second quarter of 2014
primarily due to higher inflows from the launch of WisdomTree UCITS ETFs as well
as our Boost branded ETPs. The average advisory fee for our U.S. listed ETFs
increased to 0.53% as compared to 0.51% for the second quarter of 2014 and
0.52% in the first quarter of 2015 due to the change in the mix of our AUM.
Margins
Gross margin for our U.S. listed ETFs, which is our total revenues less fund
management and administration expenses and third party sharing arrangements, was
86.4% in the second quarter of 2015 as compared to 82.4% in the second quarter
of 2014 and 83.2% in the first quarter of 2015. The increase was primarily due
to higher average AUM.
Consolidated pre-tax margin was 50.2% in the second quarter of 2015. Pre-tax
margin for our U.S. listed ETFs was 53.2% on average U.S. listed AUM of $61.2
billion.
Expenses
Total expenses increased 69.3% from the second quarter of 2014 and 3.8% compared
to the first quarter of 2015 to $40.6 million. Included in the quarter was $2.9
million of expenses associated with our European listed ETPs.
* Compensation and benefits expense increased 147.2% from the second quarter
of 2014 to $18.7 million due to higher accrued incentive compensation due to
our record setting inflow levels, increased headcount related expenses to
support our growth and higher stock based compensation due to equity granted
as part of incentive compensation. Included in the quarter was $1.2 million
in compensation costs for employees associated with our European listed
ETPs.
This expense decreased 4.8% compared to the first quarter of 2015. Payroll
related taxes were higher in the first quarter due to bonus payments and
employees exercising stock options.
* Fund management and administration expense increased 43.4% from the second
quarter of 2014 and 10.2% from the first quarter of 2015 to $11.2 million.
This increase was primarily due to higher average AUM, inflow levels and
number of ETFs. We also incurred additional costs for our European listed
ETPs as a result of launching our WisdomTree UCITS ETFs in the fourth
quarter of 2014. We had 75 U.S. listed ETFs and 67 European listed ETPs at
the end of the quarter.
* Marketing and advertising expense increased 33.1% from the second quarter of
2014 and 17.9% from the first quarter of 2015 to $3.6 million primarily due
to higher levels of advertising related activities to support our growth.
* Sales and business development expense increased 20.2% from the second
quarter of 2014 and 9.3% from the first quarter to $2.1 million primarily
due to higher spending for sales related activities for both our U.S. and
European listed ETPs.
* Professional and consulting fees decreased 12.8% from the second quarter of
2014 to $1.6 million. In the second quarter of last year, we incurred fees
in connection with closing on our acquisition of Boost. This expense
increased 9.6% compared to the first quarter of 2015 primarily due to
headcount recruiting fees.
* Occupancy, communication and equipment expense was essentially unchanged at
$0.9 million as compared to the second quarter of 2014 and the first quarter
of 2015.
* Depreciation and amortization expense was also relatively unchanged at $0.2
million as compared to the second quarter of 2014 and first quarter of
2015.
* Third-party sharing arrangements expense increased to $0.5 million in the
second quarter of 2015 as compared to the second quarter of 2014 and first
quarter of 2015 primarily due to higher fees for our marketing agents in
Latin America and listing our ETFs on a third party platform.
* Other expenses increased 29.6% from the second quarter of 2014 and 22.2%
from the first quarter to $1.5 million primarily due to higher general and
administrative spending.
* Acquisition contingent payment expense was $0.3 million in the second
quarter. This represents the current expense accrual for expected payments
due to the former Boost shareholders related to our acquisition in April
2014 and is primarily driven by increased AUM derived from our European
business.
* Income tax expense was $16.8 million for the second quarter of 2015. The
effective tax rate on our U.S. listed ETF business was 39.1% in the second
quarter. The Company's overall effective tax rate was 41.0% due to the non-
deductibility of losses in our European ETP business. These losses may be
recognized in the future after the European business is profitable.
Balance Sheet
As of June 30, 2015, the Company had total assets of $265.2 million which
consisted primarily of cash and cash equivalents and investments of $210.5
million. There were approximately 136.3 million shares of common stock
outstanding as of June 30, 2015. Fully diluted weighted average shares
outstanding were 138.0 million for the second quarter.
Quarterly Dividend and Stock Buyback
The Company's Board of Directors declared a quarterly cash dividend of $0.08 per
share of the Company's common stock. The dividend will be paid on August
26, 2015 to stockholders of record as of the close of business on August
12, 2015. In addition, during the quarter, the Company purchased approximately
62,000 shares for $1.2 million in the second quarter of 2015.
Conference Call
WisdomTree will discuss its results and operational highlights during a
conference call on Friday, July 31, 2015 at 9:00 a.m. ET. The call-in number
will be (877) 303-7209. Anyone outside the U.S. or Canada should call (970)
315-0420. The slides used during the presentation will be available
at http://ir.wisdomtree.com. For those unable to join the conference call at
the scheduled time, an audio replay will be available
on http://ir.wisdomtree.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on our
management's beliefs and assumptions and on information currently available to
our management. Although we believe that the expectations reflected in these
forward-looking statements are reasonable, these statements relate to future
events or our future financial performance, and involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
these forward-looking statements. In some cases, you can identify forward-
looking statements by terminology such as "may," "will," "should," "expects,"
"intends," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions. You should not place undue
reliance on forward-looking statements because they involve known and unknown
risks, uncertainties and other factors, which are, in some cases, beyond our
control and which could materially affect results. Factors that may cause actual
results to differ materially from current expectations include, among
other things, the risks described below. If one or more of these or other risks
or uncertainties occur, or if our underlying assumptions prove to be incorrect,
actual events or results may vary significantly from those implied or projected
by the forward-looking statements. No forward-looking statement is a guarantee
of future performance. You should read this press release completely and with
the understanding that our actual future results may be materially different
from any future results expressed or implied by these forward-looking
statements.
In particular, forward-looking statements in this press release may include
statements about:
* anticipated trends, conditions and investor sentiment in the global markets
and ETPs;
* anticipated levels of inflows into and outflows out of our ETPs;
* our ability to deliver favorable rates of return to investors;
* our ability to develop new products and services;
* our ability to maintain current vendors or find new vendors to provide
services to us at favorable costs;
* our ability to successfully expand our business into non-U.S. markets;
* timing of payment of our cash income taxes;
* competition in our business; and
* the effect of laws and regulations that apply to our business.
Our business is subject to many risks and uncertainties, including without
limitation:
* Recent historical growth may not provide an accurate representation of the
growth we may experience in the future, which may make it difficult to
evaluate our future prospects.
* Challenging global market conditions associated with declining prices of
securities can adversely affect our business by reducing the market value of
the assets we manage or causing customers to sell their fund shares and
trigger redemptions.
* Fluctuations in the amount and mix of our AUM may negatively impact revenue
and operating margin.
* We derive a substantial portion of our revenue from a limited number of
products - in particular two funds, the WisdomTree Europe Hedged Equity Fund
and the WisdomTree Japan Hedged Equity Fund - and, as a result, our
operating results are particularly exposed to the performance of those
funds, investor sentiment toward the strategies pursued by those funds and
our ability to maintain the AUM of those funds.
* Most of our AUM are held in our U.S. listed ETFs that invest in foreign
securities and we therefore have substantial exposure to foreign market
conditions and are subject to currency exchange rate risks.
* We derive a substantial portion of our revenue from international hedged
equity ETFs and are exposed to the market-specific political and economic
risks, as well as general investor sentiment regarding monetary policy of
those markets.
* We derive a substantial portion of our revenue from products invested in
securities of Japanese and European companies and are exposed to the market-
specific political and economic risks, as well as general investor sentiment
regarding future growth of those markets and currency fluctuations.
* We derive a significant portion of our revenue from products invested in
emerging markets and are exposed to the market-specific political and
economic risks as well as general investor sentiment regarding future growth
of those markets.
* Many of our ETPs and ETFs have a limited track record, and poor investment
performance could cause our revenue to decline.
* We depend on third parties to provide many critical services to operate our
business and our ETPs and ETFs. The failure of key vendors to adequately
provide such services could materially affect our operating business and
harm our customers.
Other factors, such as general economic conditions, including currency exchange
rate fluctuations, also may have an effect on the results of our operations. For
a more complete description of the risks noted above and other risks that could
cause our actual results to differ from our current expectations, please see the
section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2014.
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., through its subsidiaries in the U.S. and Europe
(collectively, "WisdomTree"), is an exchange-traded fund ("ETF") and exchange-
traded product ("ETP") sponsor and asset manager headquartered in New York.
WisdomTree offers products covering equities, fixed income, currencies,
commodities and alternative strategies. WisdomTree currently has approximately
$63.2 billion in assets under management globally.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its
subsidiaries worldwide.
The full release, including all financial tables, is available in the
attachment.
Contact Information:
WisdomTree Investments, Inc.
Stuart Bell / Jessica Zaloom
+1.917.267.3702 / +1.917.267.3735
sbell(at)wisdomtree.com / jzaloom(at)wisdomtree.com
Full WisdomTree Earnings:
http://hugin.info/160012/R/1942694/702906.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: WisdomTree Investments, Inc. via GlobeNewswire
[HUG#1942694]
Unternehmensinformation / Kurzprofil:
Datum: 31.07.2015 - 13:30 Uhr
Sprache: Deutsch
News-ID 410730
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contact information:
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