W.P. Stewart & Co., Ltd.
29.12.2011 22:14
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NEW YORK, 2011-12-29 22:13 CET (GLOBE NEWSWIRE) --
W.P. Stewart & Co., Ltd. Announces June 30 Financial Results and Gives
Corporate Update, Including:
-- AUM of $1.4 Billion as of November 30, 2011
-- Outperformance of Benchmark Year-to-Date and Three Years Ending November
30, 2011
Six Month 2011 Financial Highlights
W.P. Stewart & Co., Ltd. ('W.P. Stewart' or the 'Company') today reported its
financial results for the first half of 2011. Net results on a cash basis for
the six months ended June 30, 2011 were approximately -$508,000 (net loss of $3
million adjusted for $2.5 million, representing non-cash expenses consisting of
unrealized gains and losses, non-cash compensation, depreciation, amortization,
and other non-cash charges, on a tax-effected basis), or -$0.10 per share
(diluted). In the same period of the prior year, net results on a cash basis
were approximately -$614,000 (net loss of $4.9 million adjusted to include $4.3
million, representing non-cash expenses consisting of unrealized gains and
losses, non-cash compensation, depreciation, amortization and other non-cash
charges, on a tax-effected basis), or -$0.12 per share (diluted).
On a U.S. GAAP basis, the Company reported a net loss of $3.0 million, or $0.60
per share (diluted) and $0.60 per share (basic), for the six months ended June
30, 2011. These results compare with a net loss in the first half of 2010 of
$4.9 million, or $0.92 per share (diluted) and $0.92 per share (basic). These
prior year results included cash charges of approximately $775,000, or $0.14
per share (diluted), on a tax-effected basis, primarily related to (a)
professional fees incurred in connection with (1) the exploration of a
strategic transaction that was not completed and (2) the corporate
restructuring of the Company and certain of its formerly Bermuda-based
subsidiaries that was completed in May 2010 and (b) severance payments made to
employees terminated in connection with the corporate restructuring.
For the six months ended June 30, 2011 there were 4,939,242 common shares
outstanding on a weighted average diluted basis (4,939,242 - weighted average
basic) compared to 5,315,064 common shares outstanding for the six months ended
June 30, 2010 on the same weighted average diluted basis (5,315,064 - weighted
average basic).
Included in this release are tables containing revenue and expense detail for
the six months ended June 30, 2011 with comparisons to the same period of the
prior year.
Investment Performance and Assets Under Management Update
The year-to-date performance for the W.P. Stewart U.S. Equity Composite (the
'Composite') for the six months ended June 30, 2011, was 2.3%, pre-fee, and
1.8%, post-fee, compared with 6.0% for the S&P 500. As of November 30, 2011,
year-to-date performance for the Composite was 3.8%, pre-fee, and 2.9%,
post-fee, compared with 1.1% for the S&P 500. For the three years ending
November 30, 2011, annualized performance for the Composite was 16.4%, pre-fee,
and 15.3% post-fee, which was 1.2% ahead of the S&P 500 at 14.1% for the same
period. Interim monthly and quarterly performance for the Composite for 2011
are posted on the Company's website at www.wpstewart.com.
In relation to the firm's recent investment performance, Mark Phelps, CEO of
the Company, commented: 'Relative performance over the last one and three years
has been good as investors have focused on higher quality businesses in
difficult times. Looking forward we believe those companies will continue to
outperform as investors look for businesses that have their own engines of
growth over and above the modest economic recovery we see in the U.S.'
Assets under management ('AUM') at November 30, 2011 were approximately $1.4
billion (preliminary), compared with approximately $1.5 billion at June 30,
2011 and $1.6 billion at December 31, 2010. In the attached tables, a complete
breakdown of AUM flows for the periods ended June 30, 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.
Revenues and Other Financial Data
Fee revenue was $8.1 million for the six months ended June 30, 2011, down 3.2%
from $8.4 million for the same period of 2010.
Total revenue was $8.3 million for the six months ended June 30, 2011, down
21.7% from $10.6 million for the same period of 2010. However, the June 30,
2010 results included one time gains on an investment portfolio along with
commission revenue earned through W.P. Stewart Securities LLC, the firm's
broker dealer subsidiary. W.P. Stewart Securities LLC ceased operations on
December 1, 2010.
The average gross management fee, annualized, was 1.02% for the six months
ended June 30, 2011, compared to 1.06% for the six months ended June 30, 2010
on an annualized basis. Excluding performance fee based accounts, which pay a
lower quarterly base fee plus an annual performance fee at year-end if earned,
the average gross management fee was 1.26%, annualized, for the six months
ended June 30, 2011, compared to 1.27% in the comparable period of the prior
year on an annualized basis.
Total operating expenses for the six months ended June 30, 2011 were $11.2
million. For the same period of the prior year, total operating expenses were
$14.5 million, including $775,000 in cash charges, on a tax-effected basis,
primarily related to (a) professional fees incurred in connection with (1) the
exploration of a strategic transaction that was not completed and (2) the
corporate restructuring of the Company and certain of its formerly
Bermuda-based subsidiaries that was completed in May 2010 and (b) severance
payments made to employees terminated in connection with the corporate
restructuring.
For the six months ended June 30, 2011, non-cash compensation expense related
to the Company's restricted share issuances to employees was approximately $2.1
million. For the same period of the prior year, these non-cash compensation
charges were approximately $2.6 million. These non-cash compensation expenses
are included in 'employee compensation and benefits'.
The Company's provision/(benefit) for taxes for the six months ended June 30,
2011 was approximately $49,000 versus $1.0 million in the comparable period of
the prior year.
Please see the tables included in this release for further detail on revenue
and expenses for the six months ended June 30, 2011 with comparisons to the
same period of the prior year.
The Company had cash and marketable securities at June 30, 2011 of $24.9
million. The Company has no debt. As of December 12, 2011, the Company had cash
and marketable securities balances of approximately $22.7 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 will subsequently
distribute its assets, including the proceeds of the sale, to its joint venture
partners, The Bank of Bermuda and the Company.
Shareholders' equity at June 30, 2011 was approximately $22.7 million.
Other Items
From January through June 30, 2011, the Company repurchased 450,000 shares of
its common stock from an employee and funds managed by Arrow Capital Management
for an aggregate amount of $2,389,500. From July 1, 2011 through December 22,
2011, the Company purchased an additional 25,317 shares of its common stock
from employees for an aggregate amount of $165,320. The Company funded these
repurchases with cash on hand.
Earlier in December, the Company held its annual meeting of stockholders at the
Company's headquarters in New York. At the meeting, all of the members of the
Board of Directors were re-elected. Additionally, the re-appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors for the 2010
fiscal year was ratified and the appointment of Grant Thornton LLP as the
Company's independent auditors for the 2011 fiscal year was approved.
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.
W.P. Stewart & Co., Ltd.
Condensed Consolidated Statements of Financial Condition
June 30, December 31,
2011 2010
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(unaudited)
Assets:
Cash and cash equivalents $ 22,056,639 $ 23,676,690
Fees receivable 142,958 204,718
Investments in unconsolidated affiliates 2,017,832 2,017,832
Receivables from affiliates, net 286,731 536,784
Investments, trading (cost $1,190,401 at June 30, 2,855,289 2,058,284
2011 and $1,719,847 at December 31, 2010,
respectively)
Investments, available for sale (cost $12,400 at 29,090 23,730
June 30, 2011 and December 31, 2010 respectively)
Furniture, equipment, software and leasehold 481,978 418,081
improvements (net of accumulated depreciation and
amortization of $1,765,722 and $3,570,177 at June
30, 2011 and December 31, 2010, respectively)
Income taxes receivable 1,349,506 4,795,996
Deferred income taxes receivable 513,484 437,392
Other assets 1,497,794 2,582,134
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$ 31,231,301 $ 36,751,641
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Liabilities and Shareholders' Equity:
Liabilities:
Employee compensation and benefits payable $ 709,308 $ 2,633,827
Fees payable 80,850 163,898
Vendor payables 2,313,339 2,719,774
Accrued expenses and other liabilities 5,459,426 5,334,677
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8,562,923 10,852,176
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Shareholders' Equity:
Common shares, $0.01 par value (12,500,000 50,240 53,790
shares authorized; 5,024,036 and 5,379,036
shares issued, 5,021,536 and 5,376,536 shares
outstanding at June 30, 2011 and December 31,
2010 respectively)
Additional paid-in-capital 137,861,279 138,134,599
Accumulated other comprehensive income 571,602 566,310
Retained earnings/(deficit) (115,809,418) (112,849,909)
Common shares held in treasury, at cost, $0.01 (5,325) (5,325)
par value (2,500 shares at
December 31, 2010 and June 30, 2011)
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22,668,378 25,899,465
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$ 31,231,301 $ 36,751,641
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W.P. Stewart & Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
For the Six Months Ended June 30,
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2011 2010 %
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Revenue:
Fees (includes fees from affiliates of $ 8,092,121 $ 8,363,030 -3.24%
$499,666 and $461,776
for 2010 and 2009, respectively)
Commissions 0 369,599 -100.00%
Realized and unrealized gains/(losses) 76,226 544,975 -86.01%
on investments
Interest and other 133,796 1,318,393 -89.85%
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8,302,143 10,595,997 -21.65%
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Expenses:
Employee compensation and benefits 5,843,534 8,070,014 -27.59%
Fees paid out 810,922 915,017 -11.38%
Commissions, clearance and trading (770) 264,104 -100.29%
Research and administration 2,253,758 2,624,692 -14.13%
Marketing 741,555 598,000 24.01%
Depreciation and amortization 73,455 43,068 70.56%
Other operating 1,490,490 1,980,328 -24.74%
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11,212,944 14,495,223 -22.64%
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Income/(loss) before taxes (2,910,801) (3,899,226) -25.35%
Provision/(benefit) for taxes 48,711 1,009,529 -95.17%
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Net income/(loss) $ (2,959,512) $ (4,908,755) -39.71%
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Earnings/(loss) per share:
Basic earnings/(loss) per share $ (0.60) $ (0.92) -34.78%
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Diluted earnings/(loss) per share $ (0.60) $ (0.92) -34.78%
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W.P. Stewart & Co., Ltd.
Net Flows of Assets Under Management*
(in millions)
For the Three Months Ended For the Six Months
Ended
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Jun. 30, Mar. 31, Jun. 30, Jun. 30, Jun. 30,
2011 2011 2010 2011 2010
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Existing Accounts:
Contributions $ 22 $ 38 $ 42 $ 60 $ 56
Withdrawals (29) (57) (29) (86) (49)
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Net Flows of Existing (7) (19) 13 (26) 7
Accounts
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Publicly Available
Funds:
Contributions 5 14 24 19 70
Withdrawals (15) (6) (40) (21) (49)
Direct Accounts Opened 2 6 12 8 36
Direct Accounts Closed (43) (59) (15) (102) (44)
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Net New Flows (51) (45) (19) (96) 13
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Net Flows of Assets $ (58) $ (64) $ (6) $ (122) $ 20
Under Management
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* The table above sets forth the total net flows of assets under management for
the three months ended June 30, 2011, March 31, 2011 and June 30, 2010,
respectively, and for the six months ended June 30, 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: W.P. Stewart & Co., Ltd.
IRINFO@wpstewart.com
888-695-4092 (toll-free within the U.S.)
212-750-8585 (outside the U.S.)
News Source: NASDAQ OMX
29.12.2011 Dissemination of a Corporate News, transmitted by DGAP -
a company of EquityStory AG.
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Language: English
Company: W.P. Stewart & Co., Ltd.
Bermuda
Phone:
Fax:
E-mail:
Internet:
ISIN: BMG849221061
WKN:
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DGAP-News: W.P. Stewart & Co., Ltd. Announces June 30 Financial Results and Gives Corporate Update
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