W.P. Stewart & Co., Ltd. Reports Second Half and Full Year 2011 Financial Results & Provides Corporate Update
W.P. Stewart & Co., Ltd.
12.04.2012 23:14
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NEW YORK, 2012-04-12 23:13 CEST (GLOBE NEWSWIRE) --
W.P. Stewart & Co., Ltd. Reports Second Half and Full Year 2011 Financial
Results & Provides Corporate Update, Including:
-- AUM of $1.6 Billion at March 31, 2012
-- Cash/Marketable Securities of $22.4 Million at April 12, 2012
Financial Results
Second Half Highlights
W.P. Stewart & Co., Ltd. ('W.P. Stewart' or the 'Company') today reported a net
loss on a GAAP basis of -$5.0 million, or -$1.05 per share (diluted) and -$1.05
per share (basic), for the six months ended December 31, 2011 compared to a
loss on a GAAP basis of -$6.6 million in the second half of 2010, or -$1.28 per
share (diluted) and -$1.28 per share (basic).
On a cash basis the Company reported a net loss of -$2.8 million, or -$0.59 per
share (diluted) and -$0.59 per share (basic), for the six months ended December
31, 2011 compared to a loss on a cash basis of -$2.0 million in the second half
of 2010 or -$0.40 per share (diluted) and -$0.40 per share (basic). The cash
basis results reflect adjustments to net income of $2.2 million and $4.6
million in the second half of 2011 and 2010, respectively, representing
non-cash income and expenses consisting of unrealized gains and losses,
non-cash compensation, depreciation, amortization, and other non-cash charges,
on a tax-effected basis.
The GAAP results above include the following charges (the 'Excluded Charges'):
-- In the second half of 2011, charges of $652,000 or $0.13 share (diluted),
on a tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the acquisition of Bowen
Asia Limited, as more fully described below, (2) ongoing NY State and
Federal tax audits, (3) tax services associated with the redomestication,
(4) placement fees and (5) other charges, and
-- An adjustment to tax assets and liabilities.
-- In the second half of 2010, charges of $2.6 million or $0.50 per share
(diluted), on a tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the reorganization of our
U.S. mutual fund, (2) the exploration of a strategic transaction that was
not completed and (3) the corporate restructuring of the Company and
certain of its formerly Bermuda-based subsidiaries that was concluded in
May 2010 as previously reported,
-- Severance payments and non-cash compensation charges related to employees
whose employment terminated during the period,
-- Other costs relating to corporate consolidation and cost rationalization
efforts, and
-- An adjustment to tax assets and liabilities.
Excluding these Excluded Charges, the net loss on a GAAP basis for the six
months ended December 31, 2011 was -$4.3 million, or -$0.92 per share (diluted)
compared to the net loss on a GAAP basis for the six months ended December 31,
2010 of -$4.0 million, or -$0.78 per share (diluted).
Full Year 2011 Highlights
For the year ended December 31, 2011 the net loss on a GAAP basis was -$8.0
million, or -$1.64 per share (diluted) and -$1.64 per share (basic), compared
to a loss on a GAAP basis of -$11.5 million in for the year ended December 31,
2010, or -$2.20 per share (diluted) and -$2.20 per share (basic).
On a cash basis the Company reported a net loss of -$3.3 million, or -$0.68 per
share (diluted) and -$0.68 per share (basic), for the year ended December 31,
2011 compared to a loss on a cash basis of -$2.7 million for the year ended
December 31, 2010, or -$0.51 per share (diluted) and -$0.51 per share (basic).
The cash basis results reflect adjustments to net income of $4.6 million and
$8.8 million in 2011 and 2010, respectively, representing non-cash income and
expenses consisting of unrealized gains and losses, non-cash compensation,
depreciation, amortization, and other non-cash charges, on a tax-effected
basis.
The GAAP results above include the following Excluded Charges:
-- In 2011, charges of $652,000 or $0.13 per share (diluted), on a
tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the acquisition of Bowen
Asia Limited, as more fully described below, (2) ongoing NY State and
Federal tax audits, (3) tax services associated with the redomestication,
(4) placement fees and (5) other charges, and
-- An adjustment to tax assets and liabilities.
-- In 2010, charges of $3.2 million or $0.61 per share (diluted), on a
tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the reorganization of our
U.S. mutual fund, (2) the exploration of a strategic transaction that was
not completed and (3) the corporate restructuring of the Company and
certain of its formerly Bermuda-based subsidiaries that was concluded in
May 2010 as previously reported,
-- Severance payments and non-cash compensation charges related to employees
whose employment terminated during the period,
-- Other costs relating to corporate consolidation and cost rationalization
efforts, and
-- An adjustment to tax assets and liabilities.
Excluding these Excluded Charges, the net loss on a GAAP basis for the year
ended December 31, 2011 was -$7.3 million, or -$1.51 per share (diluted)
compared to the net loss for the year ended December 31, 2010 of -$8.3 million,
or -$1.59 per share (diluted).
Included in this release are tables containing revenue and expense detail for
the six months and year ended December 31, 2011 with comparisons to prior
periods.
Second-Half & Full Year Business Commentary
-- The second-half of 2011 saw the Company impacted by the general aversion to
equities due to macroeconomic concerns regarding the sovereign debt crisis
in Europe and growth in the U.S. and China. A decrease in AUM related to
both the decrease in the S&P and client outflows.
As a result of that decrease and given the Company's practice of billing in
advance, revenues were $7.7 million for the six months ended December 31, 2011,
down 15% from $9.1 million for the same period in the prior year. Revenues were
$16.0 million for the full year ended December 31, 2011, compared to $19.7
million for 2010.
-- As the markets recovered in the fourth quarter of 2011, the general
attitude toward equities began to reverse with an increase in AUM through
market appreciation and new flows. However, this recovery began from a
lower AUM base.
-- At year end, the Company earned a performance fee for W.P. Stewart Holdings
Fund when that Luxembourg registered SICAV exceeded its high-water mark.
-- During 2011, the Company completed the ancillary work related to
redomestication and restructuring begun in 2009 and concluded in May 2010.
Total operating expenses for the six months ended December 31, 2011 were
$12.6 million, including $652,000 in Excluded Charges, on a tax-effected
basis, compared to $14.6 million, including $2.6 million in Excluded
Charges, on a tax-effected basis for the second half of 2010.
-- Cost control continues to be a primary focus. Total operating expenses for
the year ended December 31, 2011 were $23.8 million, including $652,000 in
Excluded Charges, on a tax-effected basis, this compares to total operating
expenses for the year ended December 31, 2010 of $29.1 million, including
$2.0 million in non-recurring charges on a tax-effected basis. The nature
of the Excluded Charges related to both years is described above.
-- A UCITS IV fund available to non-U.S. investors, with potential for
multiple classes was launched in Luxemburg in late 2011 for the Company's
Global and US products. The introduction of this structure represents a
significant investment in our continued growth.
-- In 2011, the Company added another year of relative outperformance to our
longer-term track records of 37 years for our US product and 8 years for
our Global product. Building upon the strong absolute and relative
performance of recent years, both strategies ranked in the top quartiles of
their respective PSN peer groups for the three-year period ending December
31, 2011.
Investment Performance and Assets Under Management Update
The performance for the W.P. Stewart U.S. Equity Composite (the 'Composite')
for the year ended December 31, 2011, was 3.2%, gross, and 2.2%, net, compared
with 2.1% for the S&P 500. For the three years ending December 31, 2011,
annualized performance for the Composite was 16.4%, gross, and 15.4%, net,
which was 1.3% ahead of the S&P 500 at 14.1% for the same period.
As of March 31, 2012, year-to-date performance for the Composite was 17.7%,
gross, and 17.5%, net, compared with 12.6% for the S&P 500. For the one year
period ending March 31, 2012, performance for the Composite was 20.2%, gross,
and 19.1%, net, compared with 8.5% for the S&P 500. For the three years ending
March 31, 2012, annualized performance for the Composite was 24.5%, gross, and
23.4%, net, compared with 23.4% for the S&P 500 for the same period.
Interim monthly and quarterly performance for the Composite for 2012 is posted
on the Company's website at www.wpstewart.com.
Assets under management ('AUM') at March 31, 2012 were approximately $1.6
billion (preliminary), compared with approximately $1.4 billion at December 31,
2011 and $1.6 billion at December 31, 2010. In the attached tables a complete
breakdown of AUM flows for the year ended December 31, 2011 with comparisons to
earlier periods is provided.
The Company releases composite portfolio investment returns on a monthly basis
and intends to release AUM data at least on a quarterly basis. The performance
returns are posted on the Company's website at www.wpstewart.com, usually
within one week of month-end and AUM quarterly updates will be posted usually
within one month of the quarter-end. A complete history of the performance of
the Composite is available on the Company's website. Performance results and
AUM data are subject to change on final reconciliation of all relevant data.
The Company had cash and marketable securities at December 31, 2011 of $21.5
million. The Company has no debt. As of April 12, 2012, the Company had cash
and marketable securities balances of approximately $22.4 million. In addition,
the joint venture company that owned the Company's headquarter building in
Bermuda completed its sale of the building in May 2010 and is expected to
shortly distribute its assets, including the proceeds of the sale, to its joint
venture partners, The Bank of Bermuda and the Company.
Other Items
For the six months and year ended December 31, 2011 non-cash compensation
expense related to the Company's restricted share issuances to employees was
approximately $2.1 million and $4.2 million, respectively. For the same periods
of the prior year, these non-cash compensation charges were approximately $3.0
million and $5.5 million, respectively. These non-cash compensation expenses
are included in 'employee compensation and benefits'.
The Company's provision/(benefit) for taxes for the six months ended December
31, 2011 was $65,796 versus $1.0 million in the comparable period of the
previous year, and was $114,507 versus $2.1 million for the years ended
December 31, 2011 and 2010, respectively. The Company is currently engaged in
audits with two taxing authorities.
Shareholders' equity at December 31, 2011 was approximately $19.5 million.
The Company has entered into an agreement to purchase all the outstanding
shares of Bowen Asia Limited, a Hong Kong private limited company, for a
nominal amount. The purchase is subject to certain closing conditions,
including approval of the Hong Kong Securities and Futures Commission. The
Company has agreed to provide Bowen with sufficient cash (whether by loan or
otherwise) in order that Bowen is able to make certain payments at the closing
of the transaction in an amount not to exceed $275,000. The Company had
previously indirectly held a minority interest in Bowen until December 2009
when it sold its interest for a nominal amount plus an option to purchase a
certain amount of shares for $1 under certain circumstances. At December 31,
2011, Bowen had approximately $35 million in assets under management. The
Company has been working closely with Bowen since 2004 on the Asian investments
in the Global portfolio.
Please see the tables included in this release for further detail on revenue
and expenses for the six months and full years ended December 31, 2011 and
2010.
W.P. Stewart & Co., Ltd. is an asset management company that has provided
research-intensive equity management services to clients throughout the world
since 1975. The Company is headquartered in New York, New York and has
additional operations or affiliates in Europe.
The Company's shares are currently traded on the Pink Sheets under the symbol
'WPSL'.
For more information, please visit the Company's website at
http://www.wpstewart.com, or call W.P. Stewart Investor Relations at
1-888-695-4092 (toll-free within the United States) or 1-212-750-8585 (outside
the United States) or e-mail to IRINFO@wpstewart.com. Statements made in this
release concerning our assumptions, expectations, beliefs, intentions, plans or
strategies are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause actual results to differ from those expressed or
implied in these statements. Such risks and uncertainties include, without
limitation, the effects of the Company's corporate reorganization, the adverse
effect from a decline or volatility in the securities markets, the general
downturn in the economy, the effects of economic, financial or political
events, a loss of client accounts, inability of the Company to attract or
retain qualified personnel, a challenge to our former U.S. tax status,
competition from other companies, changes in government policy or regulation, a
decline in the Company's products' performance, inability of the Company to
implement its operating strategy, the effects of the Company's delisting and
deregistration under the U.S. Securities Act of 1934, inability of the Company
to manage unforeseen costs and other effects related to legal proceedings or
investigations of governmental and self-regulatory organizations, industry
capacity and trends, changes in demand for the Company's services, changes in
the Company's business strategy or development plans and contingent
liabilities. The information in this release is as of the date of this release,
and will not be updated as a result of new information or future events or
developments.
SUMMARY of KEY COMPARATIVE STATISTICS
---------------------- ----------------------
For the Six Months For the Year Ending
Ending December 31 December 31
---------------------- ----------------------
2011 2010 2011 2010
---------------------- ----------------------
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-
Revenue (in $ 7.7 $ 9.1 -15.8% $ 16.0 $ 19.7 -18.9%
millions)
Total Operating $ 12.6 $ 14.6 -14.1% $ 23.8 $ 29.1 -18.4%
Expenses (in
millions)
AUM (in billions) $ 1.38 $ 1.63 -15.3% $ 1.38 $ 1.63 -15.3%
Average Gross
Management Fee -
Annualized
Including 0.98% 1.07% 1.00% 1.06%
Performance Fee
accounts2
Excluding 1.21% 1.27% 1.24% 1.27%
Performance Fee
accounts2
Common shares 4,752,763 5,155,550 4,845,922 5,234,651
outstanding
(weighted adv.
diluted & basic
basis)
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-
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GAAP BASIS
Net Income (in
millions)
Before Excluded $ (5.0) $ (6.6) 24.4% $ (8.0) $ (11.5) 30.9%
Charges1
Excluded $ (0.7) $ (2.6) 75.0% $ (0.7) $ (3.2) 79.6%
Charges1&3
Net of Excluded $ (4.3) $ (4.0) -8.4% $ (7.3) $ (8.3) 12.3%
Charges1
Earnings per Share
(Basic & Diluted)
Before Excluded $ (1.05) $ (1.28) 18.0% $ (1.64) $ (2.20) 25.5%
Charges1
Excluded $ (0.13) $ (0.50) 74.0% $ (0.13) $ (0.61) 78.7%
Charges1&3
Net of Excluded $ (0.92) $ (0.78) -17.9% $ (1.51) $ (1.59) 5.0%
Charges1
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-
CASH BASIS
Net Income (in
millions)
As Reported $ (5.0) $ (6.6) 24.4% $ (8.0) $ (11.5) 30.9%
Excluded Non-cash $ 2.2 $ 4.6 52.1% $ 4.6 $ 8.8 47.5%
Income &
Expenses4
Net of Non-cash $ (2.8) $ (2.0) -37.2% $ (3.3) $ (2.7) -23.4%
Income &
Expenses4
Earnings per Share
(Basic & Diluted)
As Reported $ (1.05) $ (1.28) 18.0% $ (1.64) $ (2.20) 25.5%
Excluded Non-cash $ (0.46) $ (0.88) 47.7% $ (0.96) $ (1.69) 43.2%
Income &
Expenses4
Net of Non-cash $ (0.59) $ (0.40) -47.5% $ (0.68) $ (0.51) -33.3%
Income &
Expenses4
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1 Excluded Charges: See prior descriptions and details in the Press Release
text
2 Performance fee based accounts, pay a lower quarterly base fee plus an
annual performance fee at year-end if earned
3 On a tax effected basis
4 Non-cash Income & Expenses: Consisting of unrealized gains and losses,
non-cash compensation, depreciation, amortization, and other non-cash
charges on a tax-effected basis
W.P. Stewart & Co., Ltd.
Condensed Consolidated Statements of Financial Condition
December 31, December 31,
2011 2010
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Assets:
Cash and cash equivalents $ 18,076,603 $ 23,676,690
Fees receivable 119,443 204,718
Investments in unconsolidated affiliates 2,017,832 2,017,832
Receivables from affiliates, net 1,423,414 536,784
Investments, trading (cost $2,220,237 and 2,624,718 2,058,284
$1,719,847 for 2011 and 2010, respectively)
Investments, available for sale (cost $762,400 and 770,610 23,730
$12,400 for 2011 and 2010 respectively)
Furniture, equipment, software and leasehold 463,866 418,081
improvements (net of accumulated depreciation and
amortization of $1,525,021 and $3,570,177 for
2011 and 2010, respectively)
Income taxes receivable 1,338,184 4,795,996
Deferred income taxes receivable 413,176 437,392
Other assets 1,775,705 2,582,134
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$ 29,023,551 $ 36,751,641
=============================
Liabilities and Shareholders' Equity:
Liabilities:
Employee compensation and benefits payable $ 1,935,628 $ 2,633,827
Fees payable 356,613 163,898
Vendor payables 1,766,166 2,719,774
Accrued expenses and other liabilities 5,424,914 5,334,677
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9,483,321 10,852,176
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Shareholders' Equity:
Common shares, $0.01 par value (12,500,000 shares 50,192 53,790
authorized; 5,019,219 and 5,379,036 shares
issued, 5,016,719 and 5,376,536 shares
outstanding at December 31, 2011 and December
31, 2010 respectively)
Additional paid-in-capital 139,711,936 138,134,599
Accumulated other comprehensive income 584,196 566,310
Retained earnings/(deficit) (120,800,769) (112,849,909)
Common shares held in treasury, at cost, $0.01 (5,325) (5,325)
par value (2,500 shares at December 31, 2011 and
December 31, 2010)
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19,540,230 25,899,465
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$ 29,023,551 $ 36,751,641
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W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
For the Year Ended December 31,
----------------------------------------
2011 2010 %
----------------------------------------
Revenue:
Fees $ 15,846,034 $ 16,077,616 -1.44%
Commissions -- 781,623 -100.00%
Realized and unrealized gains/(losses) (65,975) 1,279,339 -105.16%
on investments
Interest and other 179,049 1,548,042 -88.43%
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15,959,108 19,686,620 -18.93%
----------------------------------------
Expenses:
Employee compensation and benefits 12,566,305 16,569,791 -24.16%
Fees paid out 2,023,905 1,666,712 21.43%
Commissions, clearance and trading -- 486,392 -100.00%
Research and administration 4,595,484 5,047,545 -8.96%
Marketing 1,557,360 1,360,920 14.43%
Depreciation and amortization 115,997 90,791 27.76%
Other operating 2,936,413 3,922,337 -25.14%
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23,795,464 29,144,488 -18.35%
----------------------------------------
Income/(loss) before taxes (7,836,356) (9,457,868) 17.14%
Provision/(benefit) for taxes 114,507 2,054,783 -94.43%
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Net income/(loss) $ (7,950,863) $ (11,512,651) 30.94%
========================================
Earnings/(loss) per share:
Basic earnings/(loss) per share $ (1.64) $ (2.20) 25.45%
========================================
Diluted earnings/(loss) per share $ (1.64) $ (2.20) 25.45%
========================================
W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
For the Six Months Ended December 31,
---------------------------------------
2011 2010 %
---------------------------------------
Revenue:
Fees $ 7,753,913 $ 7,714,586 0.51%
Commissions -- 412,024 -100.00%
Realized and unrealized gains/(losses) (142,201) 734,364 -119.36%
on investments
Interest and other 45,253 229,649 -80.29%
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7,656,965 9,090,623 -15.77%
---------------------------------------
Expenses:
Employee compensation and benefits 6,722,771 8,499,777 -20.91%
Fees paid out 1,212,983 751,695 61.37%
Commissions, clearance and trading 770 222,288 -99.65%
Research and administration 2,341,726 2,422,853 -3.35%
Marketing 815,805 762,920 6.93%
Depreciation and amortization 42,542 47,723 -10.86%
Other operating 1,445,923 1,942,009 -25.54%
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12,582,520 14,649,265 -14.11%
---------------------------------------
Income/(loss) before taxes (4,925,555) (5,558,642) 11.39%
Provision/(benefit) for taxes 65,796 1,045,254 -93.71%
---------------------------------------
Net income/(loss) $ (4,991,351) $ (6,603,896) 24.42%
=======================================
Earnings/(loss) per share:
Basic earnings/(loss) per share $ (1.05) $ (1.28) 17.97%
=======================================
Diluted earnings/(loss) per share $ (1.05) $ (1.28) 17.97%
=======================================
W.P. Stewart & Co., Ltd.
Net Flows of Assets Under Management*
(in millions)
------------------------------------
For the Six Months Ended For the Year Ended
---------------------------------------------------------
Dec. 31, Jun. 30, Dec. 31, Dec. 31, Dec. 31,
2011 2011 2010 2011 2010
---------------------------------------------------------
Existing Accounts:
Contributions $ 30 $ 60 $ 46 $ 90 $ 102
Withdrawals (97) (86) (47) (183) (96)
---------------------------------------------------------
Net Flows of Existing (67) (26) (1) (93) 6
Accounts
---------------------------------------------------------
Publicly Available
Funds:
Contributions 12 19 78 31 148
Withdrawals (49) (21) (60) (70) (109)
Direct Accounts Opened 11 8 4 19 40
Direct Accounts Closed (30) (102) (47) (132) (91)
---------------------------------------------------------
Net New Flows (56) (96) (25) (152) (12)
---------------------------------------------------------
Net Flows of Assets $ (123) $ (122) $ (26) $ (245) $ (6)
Under Management
=========================================================
* The table above sets forth the total net flows of assets under management for
the six months ended December 31, 2011, June 30, 2011 and December 31, 2010,
respectively, and for the years ended December 31, 2011 and 2010, respectively,
which include changes in net flows of existing accounts and net new flows (net
contributions to our publicly available funds and flows from new accounts minus
closed accounts). The table excludes total capital appreciation or depreciation
in assets under management with the exception of the amount attributable to
withdrawals and closed accounts.
CONTACT: IRINFO@wpstewart.comtelephone: 888-695-4092 (toll-free within the
U.S.)212-750-8585 (outside the U.S.)
News Source: NASDAQ OMX
12.04.2012 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
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---------------------------------------------------------------------------
Language: English
Company: W.P. Stewart & Co., Ltd.
Bermuda
Phone:
Fax:
E-mail:
Internet:
ISIN: BMG849221061
WKN:
End of Announcement DGAP News-Service
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W.P. Stewart & Co., Ltd.
12.04.2012 23:14
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NEW YORK, 2012-04-12 23:13 CEST (GLOBE NEWSWIRE) --
W.P. Stewart & Co., Ltd. Reports Second Half and Full Year 2011 Financial
Results & Provides Corporate Update, Including:
-- AUM of $1.6 Billion at March 31, 2012
-- Cash/Marketable Securities of $22.4 Million at April 12, 2012
Financial Results
Second Half Highlights
W.P. Stewart & Co., Ltd. ('W.P. Stewart' or the 'Company') today reported a net
loss on a GAAP basis of -$5.0 million, or -$1.05 per share (diluted) and -$1.05
per share (basic), for the six months ended December 31, 2011 compared to a
loss on a GAAP basis of -$6.6 million in the second half of 2010, or -$1.28 per
share (diluted) and -$1.28 per share (basic).
On a cash basis the Company reported a net loss of -$2.8 million, or -$0.59 per
share (diluted) and -$0.59 per share (basic), for the six months ended December
31, 2011 compared to a loss on a cash basis of -$2.0 million in the second half
of 2010 or -$0.40 per share (diluted) and -$0.40 per share (basic). The cash
basis results reflect adjustments to net income of $2.2 million and $4.6
million in the second half of 2011 and 2010, respectively, representing
non-cash income and expenses consisting of unrealized gains and losses,
non-cash compensation, depreciation, amortization, and other non-cash charges,
on a tax-effected basis.
The GAAP results above include the following charges (the 'Excluded Charges'):
-- In the second half of 2011, charges of $652,000 or $0.13 share (diluted),
on a tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the acquisition of Bowen
Asia Limited, as more fully described below, (2) ongoing NY State and
Federal tax audits, (3) tax services associated with the redomestication,
(4) placement fees and (5) other charges, and
-- An adjustment to tax assets and liabilities.
-- In the second half of 2010, charges of $2.6 million or $0.50 per share
(diluted), on a tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the reorganization of our
U.S. mutual fund, (2) the exploration of a strategic transaction that was
not completed and (3) the corporate restructuring of the Company and
certain of its formerly Bermuda-based subsidiaries that was concluded in
May 2010 as previously reported,
-- Severance payments and non-cash compensation charges related to employees
whose employment terminated during the period,
-- Other costs relating to corporate consolidation and cost rationalization
efforts, and
-- An adjustment to tax assets and liabilities.
Excluding these Excluded Charges, the net loss on a GAAP basis for the six
months ended December 31, 2011 was -$4.3 million, or -$0.92 per share (diluted)
compared to the net loss on a GAAP basis for the six months ended December 31,
2010 of -$4.0 million, or -$0.78 per share (diluted).
Full Year 2011 Highlights
For the year ended December 31, 2011 the net loss on a GAAP basis was -$8.0
million, or -$1.64 per share (diluted) and -$1.64 per share (basic), compared
to a loss on a GAAP basis of -$11.5 million in for the year ended December 31,
2010, or -$2.20 per share (diluted) and -$2.20 per share (basic).
On a cash basis the Company reported a net loss of -$3.3 million, or -$0.68 per
share (diluted) and -$0.68 per share (basic), for the year ended December 31,
2011 compared to a loss on a cash basis of -$2.7 million for the year ended
December 31, 2010, or -$0.51 per share (diluted) and -$0.51 per share (basic).
The cash basis results reflect adjustments to net income of $4.6 million and
$8.8 million in 2011 and 2010, respectively, representing non-cash income and
expenses consisting of unrealized gains and losses, non-cash compensation,
depreciation, amortization, and other non-cash charges, on a tax-effected
basis.
The GAAP results above include the following Excluded Charges:
-- In 2011, charges of $652,000 or $0.13 per share (diluted), on a
tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the acquisition of Bowen
Asia Limited, as more fully described below, (2) ongoing NY State and
Federal tax audits, (3) tax services associated with the redomestication,
(4) placement fees and (5) other charges, and
-- An adjustment to tax assets and liabilities.
-- In 2010, charges of $3.2 million or $0.61 per share (diluted), on a
tax-effected basis, primarily related to:
-- Professional fees incurred in connection with (1) the reorganization of our
U.S. mutual fund, (2) the exploration of a strategic transaction that was
not completed and (3) the corporate restructuring of the Company and
certain of its formerly Bermuda-based subsidiaries that was concluded in
May 2010 as previously reported,
-- Severance payments and non-cash compensation charges related to employees
whose employment terminated during the period,
-- Other costs relating to corporate consolidation and cost rationalization
efforts, and
-- An adjustment to tax assets and liabilities.
Excluding these Excluded Charges, the net loss on a GAAP basis for the year
ended December 31, 2011 was -$7.3 million, or -$1.51 per share (diluted)
compared to the net loss for the year ended December 31, 2010 of -$8.3 million,
or -$1.59 per share (diluted).
Included in this release are tables containing revenue and expense detail for
the six months and year ended December 31, 2011 with comparisons to prior
periods.
Second-Half & Full Year Business Commentary
-- The second-half of 2011 saw the Company impacted by the general aversion to
equities due to macroeconomic concerns regarding the sovereign debt crisis
in Europe and growth in the U.S. and China. A decrease in AUM related to
both the decrease in the S&P and client outflows.
As a result of that decrease and given the Company's practice of billing in
advance, revenues were $7.7 million for the six months ended December 31, 2011,
down 15% from $9.1 million for the same period in the prior year. Revenues were
$16.0 million for the full year ended December 31, 2011, compared to $19.7
million for 2010.
-- As the markets recovered in the fourth quarter of 2011, the general
attitude toward equities began to reverse with an increase in AUM through
market appreciation and new flows. However, this recovery began from a
lower AUM base.
-- At year end, the Company earned a performance fee for W.P. Stewart Holdings
Fund when that Luxembourg registered SICAV exceeded its high-water mark.
-- During 2011, the Company completed the ancillary work related to
redomestication and restructuring begun in 2009 and concluded in May 2010.
Total operating expenses for the six months ended December 31, 2011 were
$12.6 million, including $652,000 in Excluded Charges, on a tax-effected
basis, compared to $14.6 million, including $2.6 million in Excluded
Charges, on a tax-effected basis for the second half of 2010.
-- Cost control continues to be a primary focus. Total operating expenses for
the year ended December 31, 2011 were $23.8 million, including $652,000 in
Excluded Charges, on a tax-effected basis, this compares to total operating
expenses for the year ended December 31, 2010 of $29.1 million, including
$2.0 million in non-recurring charges on a tax-effected basis. The nature
of the Excluded Charges related to both years is described above.
-- A UCITS IV fund available to non-U.S. investors, with potential for
multiple classes was launched in Luxemburg in late 2011 for the Company's
Global and US products. The introduction of this structure represents a
significant investment in our continued growth.
-- In 2011, the Company added another year of relative outperformance to our
longer-term track records of 37 years for our US product and 8 years for
our Global product. Building upon the strong absolute and relative
performance of recent years, both strategies ranked in the top quartiles of
their respective PSN peer groups for the three-year period ending December
31, 2011.
Investment Performance and Assets Under Management Update
The performance for the W.P. Stewart U.S. Equity Composite (the 'Composite')
for the year ended December 31, 2011, was 3.2%, gross, and 2.2%, net, compared
with 2.1% for the S&P 500. For the three years ending December 31, 2011,
annualized performance for the Composite was 16.4%, gross, and 15.4%, net,
which was 1.3% ahead of the S&P 500 at 14.1% for the same period.
As of March 31, 2012, year-to-date performance for the Composite was 17.7%,
gross, and 17.5%, net, compared with 12.6% for the S&P 500. For the one year
period ending March 31, 2012, performance for the Composite was 20.2%, gross,
and 19.1%, net, compared with 8.5% for the S&P 500. For the three years ending
March 31, 2012, annualized performance for the Composite was 24.5%, gross, and
23.4%, net, compared with 23.4% for the S&P 500 for the same period.
Interim monthly and quarterly performance for the Composite for 2012 is posted
on the Company's website at www.wpstewart.com.
Assets under management ('AUM') at March 31, 2012 were approximately $1.6
billion (preliminary), compared with approximately $1.4 billion at December 31,
2011 and $1.6 billion at December 31, 2010. In the attached tables a complete
breakdown of AUM flows for the year ended December 31, 2011 with comparisons to
earlier periods is provided.
The Company releases composite portfolio investment returns on a monthly basis
and intends to release AUM data at least on a quarterly basis. The performance
returns are posted on the Company's website at www.wpstewart.com, usually
within one week of month-end and AUM quarterly updates will be posted usually
within one month of the quarter-end. A complete history of the performance of
the Composite is available on the Company's website. Performance results and
AUM data are subject to change on final reconciliation of all relevant data.
The Company had cash and marketable securities at December 31, 2011 of $21.5
million. The Company has no debt. As of April 12, 2012, the Company had cash
and marketable securities balances of approximately $22.4 million. In addition,
the joint venture company that owned the Company's headquarter building in
Bermuda completed its sale of the building in May 2010 and is expected to
shortly distribute its assets, including the proceeds of the sale, to its joint
venture partners, The Bank of Bermuda and the Company.
Other Items
For the six months and year ended December 31, 2011 non-cash compensation
expense related to the Company's restricted share issuances to employees was
approximately $2.1 million and $4.2 million, respectively. For the same periods
of the prior year, these non-cash compensation charges were approximately $3.0
million and $5.5 million, respectively. These non-cash compensation expenses
are included in 'employee compensation and benefits'.
The Company's provision/(benefit) for taxes for the six months ended December
31, 2011 was $65,796 versus $1.0 million in the comparable period of the
previous year, and was $114,507 versus $2.1 million for the years ended
December 31, 2011 and 2010, respectively. The Company is currently engaged in
audits with two taxing authorities.
Shareholders' equity at December 31, 2011 was approximately $19.5 million.
The Company has entered into an agreement to purchase all the outstanding
shares of Bowen Asia Limited, a Hong Kong private limited company, for a
nominal amount. The purchase is subject to certain closing conditions,
including approval of the Hong Kong Securities and Futures Commission. The
Company has agreed to provide Bowen with sufficient cash (whether by loan or
otherwise) in order that Bowen is able to make certain payments at the closing
of the transaction in an amount not to exceed $275,000. The Company had
previously indirectly held a minority interest in Bowen until December 2009
when it sold its interest for a nominal amount plus an option to purchase a
certain amount of shares for $1 under certain circumstances. At December 31,
2011, Bowen had approximately $35 million in assets under management. The
Company has been working closely with Bowen since 2004 on the Asian investments
in the Global portfolio.
Please see the tables included in this release for further detail on revenue
and expenses for the six months and full years ended December 31, 2011 and
2010.
W.P. Stewart & Co., Ltd. is an asset management company that has provided
research-intensive equity management services to clients throughout the world
since 1975. The Company is headquartered in New York, New York and has
additional operations or affiliates in Europe.
The Company's shares are currently traded on the Pink Sheets under the symbol
'WPSL'.
For more information, please visit the Company's website at
http://www.wpstewart.com, or call W.P. Stewart Investor Relations at
1-888-695-4092 (toll-free within the United States) or 1-212-750-8585 (outside
the United States) or e-mail to IRINFO@wpstewart.com. Statements made in this
release concerning our assumptions, expectations, beliefs, intentions, plans or
strategies are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause actual results to differ from those expressed or
implied in these statements. Such risks and uncertainties include, without
limitation, the effects of the Company's corporate reorganization, the adverse
effect from a decline or volatility in the securities markets, the general
downturn in the economy, the effects of economic, financial or political
events, a loss of client accounts, inability of the Company to attract or
retain qualified personnel, a challenge to our former U.S. tax status,
competition from other companies, changes in government policy or regulation, a
decline in the Company's products' performance, inability of the Company to
implement its operating strategy, the effects of the Company's delisting and
deregistration under the U.S. Securities Act of 1934, inability of the Company
to manage unforeseen costs and other effects related to legal proceedings or
investigations of governmental and self-regulatory organizations, industry
capacity and trends, changes in demand for the Company's services, changes in
the Company's business strategy or development plans and contingent
liabilities. The information in this release is as of the date of this release,
and will not be updated as a result of new information or future events or
developments.
SUMMARY of KEY COMPARATIVE STATISTICS
---------------------- ----------------------
For the Six Months For the Year Ending
Ending December 31 December 31
---------------------- ----------------------
2011 2010 2011 2010
---------------------- ----------------------
--------------------------------------------------------------------------------
-
Revenue (in $ 7.7 $ 9.1 -15.8% $ 16.0 $ 19.7 -18.9%
millions)
Total Operating $ 12.6 $ 14.6 -14.1% $ 23.8 $ 29.1 -18.4%
Expenses (in
millions)
AUM (in billions) $ 1.38 $ 1.63 -15.3% $ 1.38 $ 1.63 -15.3%
Average Gross
Management Fee -
Annualized
Including 0.98% 1.07% 1.00% 1.06%
Performance Fee
accounts2
Excluding 1.21% 1.27% 1.24% 1.27%
Performance Fee
accounts2
Common shares 4,752,763 5,155,550 4,845,922 5,234,651
outstanding
(weighted adv.
diluted & basic
basis)
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
-
GAAP BASIS
Net Income (in
millions)
Before Excluded $ (5.0) $ (6.6) 24.4% $ (8.0) $ (11.5) 30.9%
Charges1
Excluded $ (0.7) $ (2.6) 75.0% $ (0.7) $ (3.2) 79.6%
Charges1&3
Net of Excluded $ (4.3) $ (4.0) -8.4% $ (7.3) $ (8.3) 12.3%
Charges1
Earnings per Share
(Basic & Diluted)
Before Excluded $ (1.05) $ (1.28) 18.0% $ (1.64) $ (2.20) 25.5%
Charges1
Excluded $ (0.13) $ (0.50) 74.0% $ (0.13) $ (0.61) 78.7%
Charges1&3
Net of Excluded $ (0.92) $ (0.78) -17.9% $ (1.51) $ (1.59) 5.0%
Charges1
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
-
CASH BASIS
Net Income (in
millions)
As Reported $ (5.0) $ (6.6) 24.4% $ (8.0) $ (11.5) 30.9%
Excluded Non-cash $ 2.2 $ 4.6 52.1% $ 4.6 $ 8.8 47.5%
Income &
Expenses4
Net of Non-cash $ (2.8) $ (2.0) -37.2% $ (3.3) $ (2.7) -23.4%
Income &
Expenses4
Earnings per Share
(Basic & Diluted)
As Reported $ (1.05) $ (1.28) 18.0% $ (1.64) $ (2.20) 25.5%
Excluded Non-cash $ (0.46) $ (0.88) 47.7% $ (0.96) $ (1.69) 43.2%
Income &
Expenses4
Net of Non-cash $ (0.59) $ (0.40) -47.5% $ (0.68) $ (0.51) -33.3%
Income &
Expenses4
--------------------------------------------------------------------------------
-
1 Excluded Charges: See prior descriptions and details in the Press Release
text
2 Performance fee based accounts, pay a lower quarterly base fee plus an
annual performance fee at year-end if earned
3 On a tax effected basis
4 Non-cash Income & Expenses: Consisting of unrealized gains and losses,
non-cash compensation, depreciation, amortization, and other non-cash
charges on a tax-effected basis
W.P. Stewart & Co., Ltd.
Condensed Consolidated Statements of Financial Condition
December 31, December 31,
2011 2010
-----------------------------
Assets:
Cash and cash equivalents $ 18,076,603 $ 23,676,690
Fees receivable 119,443 204,718
Investments in unconsolidated affiliates 2,017,832 2,017,832
Receivables from affiliates, net 1,423,414 536,784
Investments, trading (cost $2,220,237 and 2,624,718 2,058,284
$1,719,847 for 2011 and 2010, respectively)
Investments, available for sale (cost $762,400 and 770,610 23,730
$12,400 for 2011 and 2010 respectively)
Furniture, equipment, software and leasehold 463,866 418,081
improvements (net of accumulated depreciation and
amortization of $1,525,021 and $3,570,177 for
2011 and 2010, respectively)
Income taxes receivable 1,338,184 4,795,996
Deferred income taxes receivable 413,176 437,392
Other assets 1,775,705 2,582,134
-----------------------------
$ 29,023,551 $ 36,751,641
=============================
Liabilities and Shareholders' Equity:
Liabilities:
Employee compensation and benefits payable $ 1,935,628 $ 2,633,827
Fees payable 356,613 163,898
Vendor payables 1,766,166 2,719,774
Accrued expenses and other liabilities 5,424,914 5,334,677
-----------------------------
9,483,321 10,852,176
-----------------------------
Shareholders' Equity:
Common shares, $0.01 par value (12,500,000 shares 50,192 53,790
authorized; 5,019,219 and 5,379,036 shares
issued, 5,016,719 and 5,376,536 shares
outstanding at December 31, 2011 and December
31, 2010 respectively)
Additional paid-in-capital 139,711,936 138,134,599
Accumulated other comprehensive income 584,196 566,310
Retained earnings/(deficit) (120,800,769) (112,849,909)
Common shares held in treasury, at cost, $0.01 (5,325) (5,325)
par value (2,500 shares at December 31, 2011 and
December 31, 2010)
-----------------------------
19,540,230 25,899,465
-----------------------------
$ 29,023,551 $ 36,751,641
=============================
W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
For the Year Ended December 31,
----------------------------------------
2011 2010 %
----------------------------------------
Revenue:
Fees $ 15,846,034 $ 16,077,616 -1.44%
Commissions -- 781,623 -100.00%
Realized and unrealized gains/(losses) (65,975) 1,279,339 -105.16%
on investments
Interest and other 179,049 1,548,042 -88.43%
----------------------------------------
15,959,108 19,686,620 -18.93%
----------------------------------------
Expenses:
Employee compensation and benefits 12,566,305 16,569,791 -24.16%
Fees paid out 2,023,905 1,666,712 21.43%
Commissions, clearance and trading -- 486,392 -100.00%
Research and administration 4,595,484 5,047,545 -8.96%
Marketing 1,557,360 1,360,920 14.43%
Depreciation and amortization 115,997 90,791 27.76%
Other operating 2,936,413 3,922,337 -25.14%
----------------------------------------
23,795,464 29,144,488 -18.35%
----------------------------------------
Income/(loss) before taxes (7,836,356) (9,457,868) 17.14%
Provision/(benefit) for taxes 114,507 2,054,783 -94.43%
----------------------------------------
Net income/(loss) $ (7,950,863) $ (11,512,651) 30.94%
========================================
Earnings/(loss) per share:
Basic earnings/(loss) per share $ (1.64) $ (2.20) 25.45%
========================================
Diluted earnings/(loss) per share $ (1.64) $ (2.20) 25.45%
========================================
W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
For the Six Months Ended December 31,
---------------------------------------
2011 2010 %
---------------------------------------
Revenue:
Fees $ 7,753,913 $ 7,714,586 0.51%
Commissions -- 412,024 -100.00%
Realized and unrealized gains/(losses) (142,201) 734,364 -119.36%
on investments
Interest and other 45,253 229,649 -80.29%
---------------------------------------
7,656,965 9,090,623 -15.77%
---------------------------------------
Expenses:
Employee compensation and benefits 6,722,771 8,499,777 -20.91%
Fees paid out 1,212,983 751,695 61.37%
Commissions, clearance and trading 770 222,288 -99.65%
Research and administration 2,341,726 2,422,853 -3.35%
Marketing 815,805 762,920 6.93%
Depreciation and amortization 42,542 47,723 -10.86%
Other operating 1,445,923 1,942,009 -25.54%
---------------------------------------
12,582,520 14,649,265 -14.11%
---------------------------------------
Income/(loss) before taxes (4,925,555) (5,558,642) 11.39%
Provision/(benefit) for taxes 65,796 1,045,254 -93.71%
---------------------------------------
Net income/(loss) $ (4,991,351) $ (6,603,896) 24.42%
=======================================
Earnings/(loss) per share:
Basic earnings/(loss) per share $ (1.05) $ (1.28) 17.97%
=======================================
Diluted earnings/(loss) per share $ (1.05) $ (1.28) 17.97%
=======================================
W.P. Stewart & Co., Ltd.
Net Flows of Assets Under Management*
(in millions)
------------------------------------
For the Six Months Ended For the Year Ended
---------------------------------------------------------
Dec. 31, Jun. 30, Dec. 31, Dec. 31, Dec. 31,
2011 2011 2010 2011 2010
---------------------------------------------------------
Existing Accounts:
Contributions $ 30 $ 60 $ 46 $ 90 $ 102
Withdrawals (97) (86) (47) (183) (96)
---------------------------------------------------------
Net Flows of Existing (67) (26) (1) (93) 6
Accounts
---------------------------------------------------------
Publicly Available
Funds:
Contributions 12 19 78 31 148
Withdrawals (49) (21) (60) (70) (109)
Direct Accounts Opened 11 8 4 19 40
Direct Accounts Closed (30) (102) (47) (132) (91)
---------------------------------------------------------
Net New Flows (56) (96) (25) (152) (12)
---------------------------------------------------------
Net Flows of Assets $ (123) $ (122) $ (26) $ (245) $ (6)
Under Management
=========================================================
* The table above sets forth the total net flows of assets under management for
the six months ended December 31, 2011, June 30, 2011 and December 31, 2010,
respectively, and for the years ended December 31, 2011 and 2010, respectively,
which include changes in net flows of existing accounts and net new flows (net
contributions to our publicly available funds and flows from new accounts minus
closed accounts). The table excludes total capital appreciation or depreciation
in assets under management with the exception of the amount attributable to
withdrawals and closed accounts.
CONTACT: IRINFO@wpstewart.comtelephone: 888-695-4092 (toll-free within the
U.S.)212-750-8585 (outside the U.S.)
News Source: NASDAQ OMX
12.04.2012 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: W.P. Stewart & Co., Ltd.
Bermuda
Phone:
Fax:
E-mail:
Internet:
ISIN: BMG849221061
WKN:
End of Announcement DGAP News-Service
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