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Share Name | Share Symbol | Market | Type |
---|---|---|---|
WisdomTree Investments Inc | NASDAQ:WETF | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 5.26 | 5.22 | 5.91 | 0 | 01:00:00 |
$15.1 million net income ($12.51 million net income, as adjusted), see “Non-GAAP Financial Measurements” for additional information.
$2.7 million of non-cash items, including a gain on revaluation of deferred consideration – gold payments of $2.8 million and other non-operating gains and charges.
$69.5 billion of ending AUM, an increase of 3.2% arising from net inflows and market appreciation.
$1.3 billion of net inflows, driven by inflows into our emerging markets equity products.
0.42% average global advisory fee, an increase of 1 basis point due to AUM mix shift.
$72.8 million of operating revenues, an increase of 8.6% due to higher average AUM and a higher average global advisory fee. 78.7% gross margin1, a 3.1 point increase from the previous quarter.
25.5% operating income margin, a 6.3 point increase primarily due to higher revenues.
$0.03 quarterly dividend declared, payable on May 26, 2021 to stockholders of record as of the close of business on May 12, 2021.
Update from Jarrett Lilien, WisdomTree President and COO
“We continue to deliver on our plan to invest in growth and our people, as well as drive efficiencies in the business. Our first quarter results make clear that we are executing well on all fronts. We generated strong organic growth with $1.3 billion of net inflows this quarter, and our assets under management are at a new record of just under $73 billion. Our thematic products, including cloud computing, artificial intelligence, battery technology and cybersecurity, have been a success with strong inflows across both our U.S. and European platforms.Overall, top-line growth led to one of our best all-around quarters, with strong revenues and expanding operating margins and net income. Our team remains focused and dedicated to exceptional execution. This, and the breadth and diversified mix of our business, gives us confidence that our momentum is sustainable.” |
Update from Jonathan Steinberg, WisdomTree CEO
“The takeaways from this quarter are simple: continued growth, momentum and strong execution. As I have said before, WisdomTree is operating with even greater speed, efficiency and inclusion in our new, remote-first orientation. Our results are clear evidence of this. In the crypto asset space, we have been laser focused on execution. In March, we filed for the WisdomTree Bitcoin Trust with the SEC. Earlier this month, we cross-listed our European-domiciled WisdomTree Bitcoin ETP (BTCW) in Germany, appointed Coinbase Custody as a custodian and received approval to passport BTCW in the European Union (EU), allowing for a wider audience to access and invest in the product. Just yesterday, we launched a physically backed Ethereum ETP (ETHW) in Europe. Additionally, we’ve made advancements in our blockchain initiatives. In the U.S., we filed for the WisdomTree Digital Short-Term Treasury Fund with the SEC, leveraging Securrency’s technology. We also invested in Securrency’s Series B funding round, as we believe their team is uniquely suited to lead in blockchain-based fintech and regtech going forward. Our ongoing financial commitment reaffirms the strength of our support and partnership in shaping the future of financial services with Securrency and our fellow investors.” |
OPERATING AND FINANCIAL HIGHLIGHTS
Three Months Ended | |||||||||||||||
Mar. 31, 2021 | Dec. 31, 2020 | Sept. 30, 2020 | June 30, 2020 | Mar. 31, 2020 | |||||||||||
Consolidated Operating Highlights ($ in billions): | |||||||||||||||
AUM | $ | 69.5 | $ | 67.4 | $ | 60.7 | $ | 57.7 | $ | 50.3 | |||||
Net inflows/(outflows) | $ | 1.3 | $ | 0.9 | $ | (0.5 | ) | $ | 0.1 | $ | (0.5 | ) | |||
Average AUM | $ | 69.6 | $ | 64.1 | $ | 61.2 | $ | 55.7 | $ | 60.2 | |||||
Average advisory fee | 0.42 | % | 0.41 | % | 0.42 | % | 0.41 | % | 0.42 | % | |||||
Consolidated Financial Highlights ($ in millions, except per share amounts): | |||||||||||||||
Operating revenues | $ | 72.8 | $ | 67.1 | $ | 64.6 | $ | 58.1 | $ | 63.9 | |||||
Net income/(loss) | $ | 15.1 | $ | (13.5 | ) | $ | (0.3 | ) | $ | (13.3 | ) | $ | (8.6 | ) | |
Diluted earnings/(loss) per share | $ | 0.09 | $ | (0.10 | ) | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.06 | ) | |
Operating income margin | 25.5 | % | 19.2 | % | 22.8 | % | 20.3 | % | 24.5 | % | |||||
As Adjusted (Non-GAAP1): | |||||||||||||||
Gross margin | 78.7 | % | 75.6 | % | 76.5 | % | 75.1 | % | 77.3 | % | |||||
Net income, as adjusted | $ | 12.5 | $ | 9.2 | $ | 11.0 | $ | 8.5 | $ | 11.2 | |||||
Diluted earnings per share, as adjusted | $ | 0.08 | $ | 0.06 | $ | 0.07 | $ | 0.05 | $ | 0.07 | |||||
Operating income margin, as adjusted | 25.5 | % | 19.2 | % | 22.8 | % | 20.4 | % | 25.1 | % |
RECENT BUSINESS DEVELOPMENTS
Company News
|
WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited)
Three Months Ended | |||||||||||||||||||
Mar. 31, 2021 | Dec. 31, 2020 | Sept. 30, 2020 | June 30, 2020 | Mar. 31, 2020 | |||||||||||||||
Operating Revenues: | |||||||||||||||||||
Advisory fees | $ | 71,616 | $ | 66,105 | $ | 63,919 | $ | 57,208 | $ | 62,950 | |||||||||
Other income | 1,214 | 954 | 721 | 918 | 924 | ||||||||||||||
Total revenues | 72,830 | 67,059 | 64,640 | 58,126 | 63,874 | ||||||||||||||
Operating Expenses: | |||||||||||||||||||
Compensation and benefits | 22,627 | 20,827 | 19,098 | 17,455 | 17,295 | ||||||||||||||
Fund management and administration | 15,521 | 16,350 | 15,219 | 14,461 | 14,485 | ||||||||||||||
Marketing and advertising | 3,006 | 3,715 | 2,996 | 1,949 | 2,468 | ||||||||||||||
Sales and business development | 2,145 | 2,595 | 2,386 | 2,181 | 3,417 | ||||||||||||||
Contractual gold payments | 4,270 | 4,449 | 4,539 | 4,063 | 3,760 | ||||||||||||||
Professional fees | 2,013 | 1,322 | 950 | 1,357 | 1,273 | ||||||||||||||
Occupancy, communications and equipment | 1,475 | 1,622 | 1,611 | 1,643 | 1,551 | ||||||||||||||
Depreciation and amortization | 252 | 261 | 253 | 251 | 256 | ||||||||||||||
Third-party distribution fees | 1,343 | 1,291 | 1,233 | 1,340 | 1,355 | ||||||||||||||
Acquisition and disposition-related costs | — | — | — | 33 | 383 | ||||||||||||||
Other | 1,571 | 1,720 | 1,611 | 1,596 | 1,997 | ||||||||||||||
Total operating expenses | 54,223 | 54,152 | 49,896 | 46,329 | 48,240 | ||||||||||||||
Operating income | 18,607 | 12,907 | 14,744 | 11,797 | 15,634 | ||||||||||||||
Other Income/(Expenses): | |||||||||||||||||||
Interest expense | (2,296 | ) | (2,694 | ) | (2,511 | ) | (2,044 | ) | (2,419 | ) | |||||||||
Gain/(loss) on revaluation of deferred consideration – gold payments | 2,832 | (22,385 | ) | (8,870 | ) | (23,358 | ) | (2,208 | ) | ||||||||||
Interest income | 231 | 351 | 111 | 119 | 163 | ||||||||||||||
Impairments | (303 | ) | — | (3,080 | ) | — | (19,672 | ) | |||||||||||
Loss on extinguishment of debt | — | — | — | (2,387 | ) | — | |||||||||||||
Other gains and losses, net | (5,893 | ) | 524 | 744 | 1,819 | (2,507 | ) | ||||||||||||
Income/(loss) before income taxes | 13,178 | (11,297 | ) | 1,138 | (14,054 | ) | (11,009 | ) | |||||||||||
Income tax (benefit)/expense | (1,969 | ) | 2,200 | 1,408 | (804 | ) | (2,371 | ) | |||||||||||
Net income/(loss) | $ | 15,147 | $ | (13,497 | ) | $ | (270 | ) | $ | (13,250 | ) | $ | (8,638 | ) | |||||
Earnings/(loss) per share – basic | $0.092 | ($0.10)2 | ($0.01)2 | ($0.09) | ($0.06) | ||||||||||||||
Earnings/(loss) per share – diluted | $0.09 | ($0.10)2 | ($0.01)2 | ($0.09) | ($0.06) | ||||||||||||||
Weighted average common shares – basic | 145,649 | 145,096 | 145,564 | 151,623 | 152,519 | ||||||||||||||
Weighted average common shares – diluted | 161,831 | 145,096 | 145,564 | 151,623 | 152,519 | ||||||||||||||
As Adjusted (Non-GAAP1) | |||||||||||||||||||
Total operating expenses | $ | 54,223 | $ | 54,152 | $ | 49,896 | $ | 46,296 | $ | 47,857 | |||||||||
Operating income | $ | 18,607 | $ | 12,907 | $ | 14,744 | $ | 11,830 | $ | 16,017 | |||||||||
Income before income taxes | $ | 15,583 | $ | 11,504 | $ | 13,242 | $ | 10,911 | $ | 14,358 | |||||||||
Income tax expense | $ | 3,079 | $ | 2,281 | $ | 2,205 | $ | 2,417 | $ | 3,134 | |||||||||
Net income | $ | 12,504 | $ | 9,223 | $ | 11,037 | $ | 8,494 | $ | 11,224 | |||||||||
Earnings per share – diluted | $ | 0.08 | $ | 0.06 | $ | 0.07 | $ | 0.05 | $ | 0.07 |
QUARTERLY HIGHLIGHTS
Operating Revenues
Operating Expenses
Other Income/(Expenses)
Income Taxes
CONFERENCE CALL
WisdomTree will discuss its results and operational highlights during a conference call on Friday, April 30, 2021 at 9:00 a.m. ET. The call-in number is (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.
ABOUT WISDOMTREE
WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe (collectively, “WisdomTree”), is an ETF and ETP sponsor and asset manager headquartered in New York. WisdomTree offers products covering equity, commodity, fixed income, leveraged and inverse, currency and alternative strategies. WisdomTree currently has approximately $72.9 billion in assets under management globally.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.
1 | See “Non-GAAP Financial Measurements.” | |
2 | Earnings/(loss) per share (“EPS”) is calculated pursuant to the two-class method as it results in a lower EPS amount as compared to the treasury stock method. |
Contact Information:
Corporate CommunicationsJessica Zaloom+1.917.267.3735 jzaloom@wisdomtree.com
WisdomTree Investments, Inc.Key Operating Statistics (Unaudited) | Three Months Ended | ||||||||||||||||||
Mar. 31,2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | |||||||||||||||
GLOBAL ETPs ($ in millions) | |||||||||||||||||||
Beginning of period assets | $ | 67,392 | $ | 60,710 | $ | 57,666 | $ | 50,347 | $ | 63,615 | |||||||||
Assets sold | — | — | — | — | (778 | ) | |||||||||||||
Inflows/(outflows) | 1,279 | 881 | (477 | ) | 126 | (536 | ) | ||||||||||||
Market appreciation/(depreciation) | 866 | 5,898 | 3,567 | 7,489 | (11,934 | ) | |||||||||||||
Fund closures | — | (97 | ) | (46 | ) | (296 | ) | (20 | ) | ||||||||||
End of period assets | $ | 69,537 | $ | 67,392 | $ | 60,710 | $ | 57,666 | $ | 50,347 | |||||||||
Average assets during the period | $ | 69,552 | $ | 64,125 | $ | 61,216 | $ | 55,708 | $ | 60,189 | |||||||||
Average advisory fee during the period | 0.42 | % | 0.41 | % | 0.42 | % | 0.41 | % | 0.42 | % | |||||||||
Revenue days | 90 | 92 | 92 | 91 | 91 | ||||||||||||||
Number of ETFs – end of the period | 313 | 309 | 305 | 311 | 331 | ||||||||||||||
U.S. LISTED ETFs ($ in millions) | |||||||||||||||||||
Beginning of period assets | $ | 38,517 | $ | 33,310 | $ | 31,362 | $ | 28,920 | $ | 40,600 | |||||||||
Inflows/(outflows) | 1,343 | 919 | 575 | (1,474 | ) | (1,273 | ) | ||||||||||||
Market appreciation/(depreciation) | 2,303 | 4,385 | 1,373 | 4,030 | (10,397 | ) | |||||||||||||
Fund closures | — | (97 | ) | — | (114 | ) | (10 | ) | |||||||||||
End of period assets | $ | 42,163 | $ | 38,517 | $ | 33,310 | $ | 31,362 | $ | 28,920 | |||||||||
Average assets during the period | $ | 40,673 | $ | 36,002 | $ | 32,984 | $ | 30,626 | $ | 36,940 | |||||||||
Average advisory fee during the period | 0.40 | % | 0.40 | % | 0.41 | % | 0.41 | % | 0.43 | % | |||||||||
Number of ETFs – end of the period | 68 | 67 | 67 | 67 | 77 | ||||||||||||||
INTERNATIONAL LISTED ETPs ($ in millions) | |||||||||||||||||||
Beginning of period assets | $ | 28,875 | $ | 27,400 | $ | 26,304 | $ | 21,427 | $ | 23,015 | |||||||||
Assets sold | — | — | — | — | (778 | ) | |||||||||||||
Inflows/(outflows) | (64 | ) | (38 | ) | (1,052 | ) | 1,600 | 737 | |||||||||||
Market appreciation/(depreciation) | (1,437 | ) | 1,513 | 2,194 | 3,459 | (1,537 | ) | ||||||||||||
Fund closures | — | — | (46 | ) | (182 | ) | (10 | ) | |||||||||||
End of period assets | $ | 27,374 | $ | 28,875 | $ | 27,400 | $ | 26,304 | $ | 21,427 | |||||||||
Average assets during the period | $ | 28,879 | $ | 28,123 | $ | 28,232 | $ | 25,082 | $ | 23,249 | |||||||||
Average advisory fee during the period | 0.44 | % | 0.42 | % | 0.42 | % | 0.41 | % | 0.40 | % | |||||||||
Number of ETPs – end of the period | 245 | 242 | 238 | 244 | 254 | ||||||||||||||
PRODUCT CATEGORIES ($ in millions) | |||||||||||||||||||
Commodity & Currency | |||||||||||||||||||
Beginning of period assets | $ | 26,047 | $ | 25,122 | $ | 24,191 | $ | 19,748 | $ | 19,947 | |||||||||
Inflows/(outflows) | (624 | ) | (254 | ) | (1,106 | ) | 1,325 | 622 | |||||||||||
Market appreciation/(depreciation) | (1,389 | ) | 1,179 | 2,037 | 3,118 | (821 | ) | ||||||||||||
End of period assets | $ | 24,034 | $ | 26,047 | $ | 25,122 | $ | 24,191 | $ | 19,748 | |||||||||
Average assets during the period | $ | 25,555 | $ | 25,676 | $ | 25,878 | $ | 22,964 | $ | 20,302 | |||||||||
U.S. Equity | |||||||||||||||||||
Beginning of period assets | $ | 18,367 | $ | 15,612 | $ | 13,997 | $ | 12,151 | $ | 17,732 | |||||||||
Inflows/(outflows) | 218 | 395 | 897 | (241 | ) | (285 | ) | ||||||||||||
Market appreciation/(depreciation) | 1,434 | 2,360 | 718 | 2,087 | (5,296 | ) | |||||||||||||
End of period assets | $ | 20,019 | $ | 18,367 | $ | 15,612 | $ | 13,997 | $ | 12,151 | |||||||||
Average assets during the period | $ | 19,293 | $ | 17,050 | $ | 15,141 | $ | 13,302 | $ | 16,011 | |||||||||
Emerging Market Equity | |||||||||||||||||||
Beginning of period assets | $ | 8,539 | $ | 5,979 | $ | 5,413 | $ | 4,600 | $ | 6,400 | |||||||||
Inflows/(outflows) | 1,662 | 1,399 | 257 | (25 | ) | 69 | |||||||||||||
Market appreciation/(depreciation) | 276 | 1,161 | 309 | 838 | (1,869 | ) | |||||||||||||
End of period assets | $ | 10,477 | $ | 8,539 | $ | 5,979 | $ | 5,413 | $ | 4,600 | |||||||||
Average assets during the period | $ | 9,871 | $ | 7,249 | $ | 5,917 | $ | 5,129 | $ | 5,919 | |||||||||
Three Months Ended | |||||||||||||||||||
Mar. 31, 2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | |||||||||||||||
International Developed Market Equity | |||||||||||||||||||
Beginning of period assets | $ | 9,414 | $ | 8,621 | $ | 8,839 | $ | 8,659 | $ | 13,011 | |||||||||
Inflows/(outflows) | 17 | (191 | ) | (587 | ) | (965 | ) | (1,097 | ) | ||||||||||
Market appreciation/(depreciation) | 560 | 984 | 369 | 1,145 | (3,255 | ) | |||||||||||||
End of period assets | $ | 9,991 | $ | 9,414 | $ | 8,621 | $ | 8,839 | $ | 8,659 | |||||||||
Average assets during the period | $ | 9,793 | $ | 8,930 | $ | 8,835 | $ | 8,779 | $ | 11,453 | |||||||||
Fixed Income | |||||||||||||||||||
Beginning of period assets | $ | 3,324 | $ | 3,630 | $ | 3,530 | $ | 3,527 | $ | 3,585 | |||||||||
Inflows/(outflows) | 10 | (330 | ) | 76 | (53 | ) | 21 | ||||||||||||
Market appreciation/(depreciation) | (73 | ) | 24 | 24 | 56 | (79 | ) | ||||||||||||
End of period assets | $ | 3,261 | $ | 3,324 | $ | 3,630 | $ | 3,530 | $ | 3,527 | |||||||||
Average assets during the period | $ | 3,253 | $ | 3,472 | $ | 3,605 | $ | 3,523 | $ | 3,653 | |||||||||
Leveraged & Inverse | |||||||||||||||||||
Beginning of period assets | $ | 1,487 | $ | 1,430 | $ | 1,350 | $ | 896 | $ | 1,138 | |||||||||
Inflows/(outflows) | (4 | ) | (118 | ) | (9 | ) | 312 | 12 | |||||||||||
Market appreciation/(depreciation) | 45 | 175 | 89 | 142 | (254 | ) | |||||||||||||
End of period assets | $ | 1,528 | $ | 1,487 | $ | 1,430 | $ | 1,350 | $ | 896 | |||||||||
Average assets during the period | $ | 1,564 | $ | 1,436 | $ | 1,482 | $ | 1,169 | $ | 1,147 | |||||||||
Alternatives | |||||||||||||||||||
Beginning of period assets | $ | 214 | $ | 229 | $ | 225 | $ | 244 | $ | 358 | |||||||||
Inflows/(outflows) | — | (26 | ) | (4 | ) | (29 | ) | (66 | ) | ||||||||||
Market appreciation/(depreciation) | 13 | 11 | 8 | 10 | (48 | ) | |||||||||||||
End of period assets | $ | 227 | $ | 214 | $ | 229 | $ | 225 | $ | 244 | |||||||||
Average assets during the period | $ | 223 | $ | 224 | $ | 226 | $ | 226 | $ | 328 | |||||||||
Closed ETPs | |||||||||||||||||||
Beginning of period assets | $ | — | $ | 87 | $ | 121 | $ | 522 | $ | 1,444 | |||||||||
Assets sold | — | — | — | — | (778 | ) | |||||||||||||
Inflows/(outflows) | — | 6 | (1 | ) | (198 | ) | 188 | ||||||||||||
Market appreciation/(depreciation) | — | 4 | 13 | 93 | (312 | ) | |||||||||||||
Fund closures . | — | (97 | ) | (46 | ) | (296 | ) | (20 | ) | ||||||||||
End of period assets | $ | — | $ | — | $ | 87 | $ | 121 | $ | 522 | |||||||||
Average assets during the period | $ | — | $ | 88 | $ | 132 | $ | 616 | $ | 1,376 | |||||||||
Headcount | 227 | 217 | 211 | 214 | 210 |
Note: Previously issued statistics may be restated due to fund closures and trade adjustments Source: WisdomTree
WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts)
Mar. 31, 2021 | Dec. 31, 2020 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 62,302 | $ | 73,425 | |||
Securities owned, at fair value | 34,771 | 34,895 | |||||
Accounts receivable | 30,341 | 29,455 | |||||
Income taxes receivable | 126 | — | |||||
Prepaid expenses | 4,187 | 3,827 | |||||
Other current assets | 237 | 259 | |||||
Total current assets | 131,964 | 141,861 | |||||
Fixed assets, net | 7,432 | 7,579 | |||||
Securities held-to-maturity | 411 | 451 | |||||
Deferred tax assets, net | 6,215 | 8,063 | |||||
Investments | 13,849 | 8,112 | |||||
Right of use assets – operating leases | 15,841 | 16,327 | |||||
Goodwill | 85,856 | 85,856 | |||||
Intangible assets | 601,247 | 601,247 | |||||
Other noncurrent assets | 180 | 180 | |||||
Total assets | $ | 862,995 | $ | 869,676 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
LIABILITIES | |||||||
Current liabilities: | |||||||
Fund management and administration payable | $ | 17,980 | $ | 19,564 | |||
Compensation and benefits payable | 8,568 | 22,803 | |||||
Deferred consideration – gold payments | 15,637 | 17,374 | |||||
Operating lease liabilities | 2,958 | 3,135 | |||||
Income taxes payable | — | 916 | |||||
Accounts payable and other liabilities | 11,415 | 10,207 | |||||
Total current liabilities | 56,558 | 73,999 | |||||
Convertible notes | 171,163 | 166,646 | |||||
Deferred consideration – gold payments | 211,509 | 212,763 | |||||
Operating lease liabilities | 17,012 | 17,434 | |||||
Total liabilities | 456,242 | 470,842 | |||||
Preferred stock – Series A Non-Voting Convertible, par value $0.01; 14.750 shares authorized, issued and outstanding | 132,569 | 132,569 | |||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock, par value $0.01; 250,000 shares authorized: | |||||||
Issued and outstanding: 149,811 and 148,716 at March 31, 2021 and December 31, 2020, respectively . | 1,498 | 1,487 | |||||
Additional paid-in capital | 314,274 | 317,075 | |||||
Accumulated other comprehensive income | 985 | 1,102 | |||||
Accumulated deficit . | (42,573 | ) | (53,399 | ) | |||
Total stockholders’ equity | 274,184 | 266,265 | |||||
Total liabilities and stockholders’ equity | $ | 862,995 | $ | 869,676 | |||
WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)
Three Months Ended | ||||||||
Mar. 31, 2021 | Mar. 31, 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income/(loss) | $ | 15,147 | $ | (8,638 | ) | |||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | ||||||||
Advisory fees received in gold, other precious metals and bitcoin | (19,757 | ) | (13,860 | ) | ||||
Contractual gold payments | 4,270 | 3,760 | ||||||
Stock-based compensation | 3,143 | 3,239 | ||||||
Deferred income taxes | 2,904 | 4,526 | ||||||
(Gain)/loss on revaluation of deferred consideration – gold payments . | (2,832 | ) | 2,208 | |||||
Amortization of right of use asset | 697 | 798 | ||||||
Amortization of issuance costs - convertible notes | 429 | — | ||||||
Impairments | 303 | 19,672 | ||||||
Depreciation and amortization | 252 | 256 | ||||||
Gain on sale – Canadian ETF business | — | (2,877 | ) | |||||
Amortization of issuance costs - former credit facility | — | 723 | ||||||
Other | (235 | ) | (31 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Securities owned, at fair value | 124 | (2,942 | ) | |||||
Accounts receivable | 290 | 5,850 | ||||||
Prepaid expenses | (362 | ) | (616 | ) | ||||
Gold, other precious metals and bitcoin | 14,166 | 9,838 | ||||||
Other assets | 5 | 139 | ||||||
Fund management and administration payable | (1,470 | ) | 537 | |||||
Compensation and benefits payable | (14,245 | ) | (22,688 | ) | ||||
Income taxes receivable/payable | (1,028 | ) | (2,032 | ) | ||||
Securities sold, but not yet purchased, at fair value | — | (112 | ) | |||||
Operating lease liabilities | (918 | ) | (926 | ) | ||||
Accounts payable and other liabilities | 982 | 542 | ||||||
Net cash provided by/(used in) operating activities | 1,865 | (2,634 | ) | |||||
Cash flows from investing activities: | ||||||||
Purchase of investments | (5,500 | ) | — | |||||
Purchase of fixed assets | (103 | ) | (50 | ) | ||||
Proceeds from held-to-maturity securities maturing or called prior to maturity | 38 | 6,030 | ||||||
Proceeds from sale of Canadian ETF business, net | — | 2,774 | ||||||
Net cash (used in)/provided by investing activities | (5,565 | ) | 8,754 | |||||
Cash flows from financing activities: | ||||||||
Dividends paid | (4,937 | ) | (5,136 | ) | ||||
Shares repurchased | (2,630 | ) | (1,495 | ) | ||||
Repayment of debt | — | (5,000 | ) | |||||
Proceeds from exercise of stock options | 379 | 240 | ||||||
Net cash used in financing activities | (7,188 | ) | (11,391 | ) | ||||
Decrease in cash flows due to changes in foreign exchange rate | (235 | ) | (1,272 | ) | ||||
Decrease in cash and cash equivalents | (11,123 | ) | (6,543 | ) | ||||
Cash and cash equivalents – beginning of year | 73,425 | 74,972 | ||||||
Cash and cash equivalents – end of period | $ | 62,302 | $ | 68,429 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for taxes | $ | 1,278 | $ | 1,147 | ||||
Cash paid for interest | $ | — | $ | 2,312 | ||||
Non-GAAP Financial Measurements
In an effort to provide additional information regarding our results as determined by GAAP, we also disclose certain non-GAAP information which we believe provides useful and meaningful information. Our management reviews these non-GAAP financial measurements when evaluating our financial performance and results of operations; therefore, we believe it is useful to provide information with respect to these non-GAAP measurements so as to share this perspective of management. Non-GAAP measurements do not have any standardized meaning, do not replace nor are superior to GAAP financial measurements and are unlikely to be comparable to similar measures presented by other companies. These non-GAAP financial measurements should be considered in the context with our GAAP results. The non-GAAP financial measurements contained in this press release include:
WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIESGAAP to NON-GAAP RECONCILIATION (CONSOLIDATED)(in thousands)(Unaudited)
Three Months Ended | |||||||||||||||||||
Adjusted Net Income and Diluted Earnings per Share: | Mar. 31,2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | ||||||||||||||
Net income/(loss), as reported | $ | 15,147 | $ | (13,497 | ) | $ | (270 | ) | $ | (13,250 | ) | $ | (8,638 | ) | |||||
Deduct/Add back: (Gain)/loss on revaluation of deferred consideration | (2,832 | ) | 22,385 | 8,870 | 23,358 | 2,208 | |||||||||||||
Deduct: Unrealized gain recognized on our investment in Securrency, net of income taxes | (179 | ) | — | — | — | — | |||||||||||||
Add back: Impairments, net of income taxes (where applicable) | 245 | — | 2,326 | — | 19,672 | ||||||||||||||
Add back: Tax shortfalls upon vesting and exercise of stock-based compensation awards | 123 | 21 | 50 | 119 | 501 | ||||||||||||||
Add back: Interest expense from the amortization of discount arising from the bifurcation of the conversion option embedded in the convertible notes, net of income taxes | — | 314 | 286 | 42 | — | ||||||||||||||
Deduct: Gain arising from an adjustment to the estimated fair value of consideration received from the exit of investment in AdvisorEngine | — | — | (225 | ) | (868 | ) | — | ||||||||||||
Add back: Loss on extinguishment of debt, net of income taxes | — | — | — | 1,910 | — | ||||||||||||||
Deduct: Release of a deferred tax asset valuation allowance recognized on interest carryforwards arising from debt previously outstanding in the United Kingdom | — | — | — | (2,842 | ) | — | |||||||||||||
Deduct: Gain recognized upon the sale of Canadian ETF business | — | — | — | — | (2,877 | ) | |||||||||||||
Add back: Acquisition and disposition-related costs, net of income taxes | — | — | — | 25 | 358 | ||||||||||||||
Adjusted net income | $ | 12,504 | $ | 9,223 | $ | 11,037 | $ | 8,494 | $ | 11,224 | |||||||||
Weighted average common shares - diluted | 161,831 | 161,138 | 160,876 | 166,634 | 167,561 | ||||||||||||||
Adjusted earnings per share - diluted | $ | 0.08 | $ | 0.06 | $ | 0.07 | $ | 0.05 | $ | 0.07 | |||||||||
Three Months Ended | |||||||||||||||||||
Gross Margin and Gross Margin Percentage: | Mar. 31,2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | ||||||||||||||
Operating revenues | $ | 72,830 | $ | 67,059 | $ | 64,640 | $ | 58,126 | $ | 63,874 | |||||||||
Less: Fund management and administration | (15,521 | ) | (16,350 | ) | (15,219 | ) | (14,461 | ) | (14,485 | ) | |||||||||
Gross margin | $ | 57,309 | $ | 50,709 | $ | 49,421 | $ | 43,665 | $ | 49,389 | |||||||||
Gross margin percentage | 78.7 | % | 75.6 | % | 76.5 | % | 75.1 | % | 77.3 | % | |||||||||
Three Months Ended | |||||||||||||||||||
Adjusted Operating Income and Adjusted OperatingIncome Margin: | Mar. 31,2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | ||||||||||||||
Operating revenues | $ | 72,830 | $ | 67,059 | $ | 64,640 | $ | 58,126 | $ | 63,874 | |||||||||
Operating income | $ | 18,607 | $ | 12,907 | $ | 14,744 | $ | 11,797 | $ | 15,634 | |||||||||
Add back: Acquisition and disposition-related costs, before income taxes | — | — | — | 33 | 383 | ||||||||||||||
Adjusted operating income | $ | 18,607 | $ | 12,907 | $ | 14,744 | $ | 11,830 | $ | 16,017 | |||||||||
Adjusted operating income margin | 25.5 | % | 19.2 | % | 22.8 | % | 20.4 | % | 25.1 | % | |||||||||
Three Months Ended | |||||||||||||||||||
Adjusted Total Operating Expenses: | Mar. 31,2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | ||||||||||||||
Total operating expenses | $ | 54,223 | $ | 54,152 | $ | 49,896 | $ | 46,329 | $ | 48,240 | |||||||||
Deduct: Acquisition and disposition-related costs, before income taxes | — | — | — | (33 | ) | (383 | ) | ||||||||||||
Adjusted total operating expenses | $ | 54,223 | $ | 54,152 | $ | 49,896 | $ | 46,296 | $ | 47,857 | |||||||||
Three Months Ended | |||||||||||||||||||
Adjusted Income Before Income Taxes: | Mar. 31,2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | ||||||||||||||
Income/(loss) before income taxes | $ | 13,178 | $ | (11,297 | ) | $ | 1,138 | $ | (14,054 | ) | $ | (11,009 | ) | ||||||
Deduct/Add back: (Gain)/loss on revaluation of deferred consideration | (2,832 | ) | 22,385 | 8,870 | 23,358 | 2,208 | |||||||||||||
Add back: Loss recognized upon reduction of a tax-related indemnification asset | 5,171 | — | — | — | 5,981 | ||||||||||||||
Deduct: Unrealized gain recognized on our investment in Securrency, before income taxes | (237 | ) | — | — | — | — | |||||||||||||
Add back: Impairments, before income taxes | 303 | — | 3,080 | — | 19,672 | ||||||||||||||
Add back: Interest expense from the amortization of discount arising from the bifurcation of the conversion option embedded in the convertible notes, before income taxes | — | 416 | 379 | 55 | — | ||||||||||||||
Deduct: Gain arising from an adjustment to the estimated fair value of consideration received from the exit of investment in AdvisorEngine | — | — | (225 | ) | (868 | ) | — | ||||||||||||
Add back: Loss on extinguishment of debt, before income taxes | — | — | — | 2,387 | — | ||||||||||||||
Deduct: Gain recognized upon sale of Canadian ETF business | — | — | — | — | (2,877 | ) | |||||||||||||
Add back: Acquisition and disposition-related costs, before income taxes | — | — | — | 33 | 383 | ||||||||||||||
Adjusted income before income taxes | $ | 15,583 | $ | 11,504 | $ | 13,242 | $ | 10,911 | $ | 14,358 | |||||||||
Three Months Ended | |||||||||||||||||||
Adjusted Income Tax Expense and Adjusted Effective Income Tax Rate: | Mar. 31,2021 | Dec. 31,2020 | Sept. 30,2020 | June 30,2020 | Mar. 31,2020 | ||||||||||||||
Adjusted income before income taxes (above) | $ | 15,583 | $ | 11,504 | $ | 13,242 | $ | 10,911 | $ | 14,358 | |||||||||
Income tax (benefit)/expense | $ | (1,969 | ) | $ | 2,200 | $ | 1,408 | $ | (804 | ) | $ | (2,371 | ) | ||||||
Add back: Tax benefit arising from reduction of a tax-related indemnification asset | 5,171 | — | — | — | 5,981 | ||||||||||||||
Deduct: Tax shortfalls upon vesting and exercise of stock-based compensation awards | (123 | ) | (21 | ) | (50 | ) | (119 | ) | (501 | ) | |||||||||
Deduct: Tax expense on unrealized gain recognized on our investment in Securrency | (58 | ) | — | — | — | — | |||||||||||||
Add back: Tax benefit arising from impairments . | 58 | — | 754 | — | — | ||||||||||||||
Add back: Tax benefit arising from the amortization of discount associated with the bifurcation of the conversion option embedded in the convertible notes | — | 102 | 93 | 13 | — | ||||||||||||||
Add back: Tax benefit arising from loss on extinguishment of debt | — | — | — | 477 | — | ||||||||||||||
Add back: Release of a deferred tax asset valuation allowance recognized on interest carryforwards arising from debt previously outstanding in the United Kingdom | — | — | — | 2,842 | — | ||||||||||||||
Add back: Tax benefit arising from acquisition and disposition-related costs | — | — | — | 8 | 25 | ||||||||||||||
Adjusted income tax expense | $ | 3,079 | $ | 2,281 | $ | 2,205 | $ | 2,417 | $ | 3,134 | |||||||||
Adjusted effective income tax rate | 19.8 | % | 19.8 | % | 16.7 | % | 22.2 | % | 21.8 | % | |||||||||
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
Our business is subject to many risks and uncertainties, including without limitation:
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, see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020.
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.
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