WisdomTree Investments
WisdomTree Announces Second Quarter 2009 Results
Thursday 30 July 2009
$281 million net inflows for the quarter
Assets under management increase 30% from Q1
New York, NY – (BUSINESS WIRE) – Thursday, July 30, 2009 – WisdomTree (Pink Sheets: WSDT - News), an industry leading index developer and exchange-traded fund (“ETF”) sponsor, today reported a net loss of $5.2 million in the second quarter of 2009, a 13.5% improvement from a net loss of $6.0 million in the first quarter. Proforma operating net loss, which excludes stock-based compensation, depreciation and amortization, and interest and investment income, was $3.3 million in the quarter, a 17.3% improvement from a net loss of $4.0 million in the first quarter.
WisdomTree CEO
Assets Under Management and Performance
As of June 30, 2009, assets under management (“AUM”) tied to the WisdomTree indexes were $4.1 billion and ETF AUM was $3.7 billion, up 30% and 32% respectively from March 31, 2009. Net inflows into WisdomTree ETFs were $281 million in the second quarter.
WisdomTree’s fundamentally weighted ETFs experienced relatively strong investment performance through the second quarter. Approximately 70% of the $3.3 billion invested in WisdomTree’s 42 equity ETFs on June 30, 2009 were in funds that, since their respective inceptions, have outperformed their benchmarks through that date. 23 of WisdomTree’s 42 equity ETFs outperformed their comparable benchmarks since inception through the second quarter. For complete performance information on all WisdomTree ETFs, please visit www.wisdomtree.com.
Recent Business Activity
- On May 6, 2009, the Company launched the WisdomTree Dreyfus Emerging Currency Fund (CEW), the industry’s first and only basket of emerging market currencies in an ETF.
- In July, 2009, The Wall Street Journal named the WisdomTree SmallCap Earnings Fund (EES) a “Category King,” ranking the fund in the top ten best performing small-cap funds out of 768 small-cap mutual funds and ETFs for one-year performance through June 30, 2009.
- WisdomTree intends to launch the WisdomTree CEF Fixed Income Fund. This ETF will be designed to provide investors with exposure to closed-end funds that invest in fixed income securities.
Second Quarter Financial Highlights
Comparison to the first quarter of 2009
Revenues
Total revenues for the second quarter increased 20.2% to $4.4 million as compared to $3.7 million in the first quarter. Average ETF assets under management increased 16.1% primarily due to $602 million of market appreciation as well $281 million of net inflows. The average advisory fee earned during the second quarter was 0.51%, up from 0.50% in the first quarter primarily due to higher inflows into the Company’s emerging market ETFs.
Expenses
Total expenses decreased slightly to $9.8 million from $9.9 million in the first quarter primarily due to lower compensation related expenses, partly offset by higher marketing costs. Excluding stock-based compensation and depreciation and amortization charges, proforma operating expenses were essentially unchanged at $7.7 million.
Incremental margins on the operating results was approximately 93%. This was primarily a result of the cost reduction actions the Company initiated in the second half of 2008 to lower its overall operating expense base.
- Compensation and benefits expense decreased 10.3% to $4.3 million from $4.8 million in the first quarter. Excluding stock-based compensation, compensation and benefits expense decreased 4.4% to $2.6 million from $2.7 million. The decrease was primarily due to lower payroll taxes which are usually higher in the first quarter due to incentive compensation payments.
- Fund management and administration expenses were essentially unchanged at $3.2 million. Higher transaction related fees due to the annual rebalancing of our equity ETFs as well as portfolio management fees due to higher average asset balances were offset by lower fund administration fees.
- Marketing and business development increased 24.5% to $1.1 million from $0.9 million in the first quarter. This increase was primarily due to the initiation of television advertising in June to support the Company’s India (EPI) ETF.
- Professional fees increased 36.6% to $0.4 million from $0.3 million. Excluding stock based compensation, professional fees declined 40.4% to $0.1 million from $0.2 million primarily due to lower legal and other advisory fees.
- Occupancy, communications and equipment expense remained essentially flat at $0.3 million.
- Other expenses remained essentially flat at $0.4 million. Fees to Dreyfus for the Company’s Currency and Fixed Income ETF collaboration slightly increased.
Year-to-Date Results
Total revenues decreased 30.3% to $8.1 million during the first six months of 2009 from $11.7 million in the comparable period in 2008. The lower assets levels were primarily due to the significant drop off in market capitalization levels as result of the credit crisis and downturn in the economy which began in the second half of 2008 and into the first half of 2009.
Total expenses decreased 31.9% to $19.8 million during the first six months of 2009 from $29.0 million in the same period of last year. Excluding stock-based compensation and depreciation and amortization charges, proforma operating expenses decreased 34.3% to $15.4 million from $23.5 million in the same period last year. This decrease was primarily due to lower marketing and compensation related expenses due to cost reduction actions initiated by management in the second half of 2008.
Balance Sheet
As of June 30, 2009, WisdomTree had total assets of $25.1 million which consisted primarily of cash and cash equivalents of $9.3 million, and investments of $11.4 million. WisdomTree has no debt. There were approximately 106.9 million shares issued as of June 30, 2009. Fully diluted shares issued and outstanding were approximately 128.3 million as of June 30, 2009.
The Company’s audited 2008 financial statements is available under the investor relations sections of the Company’s and Pink Sheets website.
About WisdomTree
WisdomTree® is a leading ETF sponsor and innovative index developer using its own fundamentally weighted index methodology. WisdomTree also licenses its indexes to third parties for proprietary products and offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. Approximately $5.7 billion in assets currently are managed against the WisdomTree Indexes by WisdomTree and third parties under license from WisdomTree. For more information, please visit www.wisdomtree.com
or www.wisdomtree401k.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.
Media Contact:
Stuart Bell
WisdomTree Investments, Inc.
(917) 267-3702
sbell@wisdomtree.com
WisdomTree Investor Relations Contacts:
KCSA Strategic Communications
Jeffrey Goldberger / Todd Fromer
+1 212.896.1249 / +1 212.896.1215
jgoldberger@kcsa.com / tfromer@kcsa.com