☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-3487784 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
3 rd Floor WestNew York, New York | ||
(Address of principal executive offices) | (Zip Code) |
Title of each | Trading Symbol(s) | Name of each exchange on which | ||
Common Stock, $0.01 par value | WETF | The NASDAQ Stock Market LLC |
Large accelerated filer | Accelerated filer | |||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
ITEM 1. | BUSINESS |
GLOBAL RANKING | ||||||
Rank | ETP Sponsor | AUM (in billions) | ||||
1 | iShares | $ | 3,307 | |||
2 | Vanguard | $ | 2,212 | |||
3 | State Street | $ | 1,195 | |||
4 | Invesco | $ | 479 | |||
5 | Charles Schwab | $ | 272 | |||
6 | Nomura | $ | 236 | |||
7 | Xtrackers | $ | 199 | |||
8 | First Trust | $ | 152 | |||
9 | Lyxor | $ | 115 | |||
10 | Nikko AM | $ | 111 | |||
11 | Daiwa | $ | 106 | |||
12 | UBS | $ | 102 | |||
13 | Amundi | $ | 100 | |||
14 | JPMorgan | $ | 80 | |||
15 | WisdomTree | $ | 77 |
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||||
Period | (in thousands) | |||||||||||||||
October 1, 2021 to October 31, 2021 | — | $ | — | — | — | |||||||||||
November 1, 2021 to November 30, 2021 | — | $ | — | — | — | |||||||||||
December 1, 2021 to December 31, 2021 | — | $ | — | — | — | |||||||||||
Total | — | $ | — | — | $ | 17,685 | ||||||||||
Commodity & Currency: | 37bps | Leveraged & Inverse: | 87bps | |||||||
International Developed Market Equity: | 51bps | Fixed Income: | 20bps | |||||||
U.S. Equity: | 32bps | Alternatives: | 58bps | |||||||
Emerging Market Equity: | 49bps | Cryptocurrency: | 96bps |
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
GLOBAL ETPs (in millions) | ||||||||||||
Beginning of period assets | $ | 67,383 | $ | 63,532 | $ | 53,940 | ||||||
Assets acquired/(sold) | — | (778 | ) | — | ||||||||
Inflows/(outflows) | 4,660 | (22 | ) | 591 | ||||||||
Market appreciation/(depreciation) | 5,454 | 5,013 | 9,272 | |||||||||
Fund closures | (19 | ) | (362 | ) | (271 | ) | ||||||
End of period assets | $ | 77,478 | $ | 67,383 | $ | 63,532 | ||||||
Average assets during the period | $ | 73,436 | $ | 60,266 | $ | 59,667 | ||||||
Average advisory fee during the period | 0.41 | % | 0.40 | % | 0.44 | % | ||||||
Number of ETPs – end of the period | 329 | 309 | 349 | |||||||||
U.S. LISTED ETFs (in millions) | ||||||||||||
Beginning of period assets | $ | 38,517 | $ | 40,600 | $ | 35,486 | ||||||
Inflows/(outflows) | 4,950 | (1,253 | ) | (654 | ) | |||||||
Market appreciation/(depreciation) | 4,758 | (706 | ) | 5,858 | ||||||||
Fund closures | (15 | ) | (124 | ) | (90 | ) | ||||||
End of period assets | $ | 48,210 | $ | 38,517 | $ | 40,600 | ||||||
Average assets during the period | $ | 44,335 | $ | 34,133 | $ | 38,579 | ||||||
Number of ETPs—end of period | 75 | 67 | 80 | |||||||||
INTERNATIONAL LISTED ETPs (in millions) | ||||||||||||
Beginning of period assets | $ | 28,866 | $ | 22,932 | $ | 18,454 | ||||||
Assets acquired/(sold) | — | (778 | ) | — | ||||||||
Inflows/(outflows) | (290 | ) | 1,231 | 1,245 | ||||||||
Market appreciation/(depreciation) | 696 | 5,719 | 3,414 | |||||||||
Fund closures | (4 | ) | (238 | ) | (181 | ) | ||||||
End of period assets | $ | 29,268 | $ | 28,866 | $ | 22,932 | ||||||
Average assets during the period | $ | 29,100 | $ | 26,133 | $ | 21,088 | ||||||
Number of ETPs—end of period | 254 | 242 | 269 | |||||||||
PRODUCT CATEGORIES (in millions) | ||||||||||||
Commodity & Currency | ||||||||||||
Beginning of period assets | $ | 25,880 | $ | 20,073 | $ | 15,976 | ||||||
Inflows/(outflows) | (1,478 | ) | 471 | 1,118 | ||||||||
Market appreciation/(depreciation) | 196 | 5,336 | 2,979 | |||||||||
End of period assets | $ | 24,598 | $ | 25,880 | $ | 20,073 | ||||||
Average assets during the period | $ | 25,028 | $ | 23,737 | $ | 18,214 | ||||||
U.S. Equity | ||||||||||||
Beginning of period assets | $ | 18,367 | $ | 17,732 | $ | 13,211 | ||||||
Inflows/(outflows) | 1,542 | 765 | 1,446 | |||||||||
Market appreciation/(depreciation) | 3,951 | (130 | ) | 3,075 | ||||||||
End of period assets | $ | 23,860 | $ | 18,367 | $ | 17,732 | ||||||
Average assets during the period | $ | 21,265 | $ | 15,393 | $ | 15,847 | ||||||
International Developed Market Equity | ||||||||||||
Beginning of period assets | $ | 9,406 | $ | 13,018 | $ | 14,231 | ||||||
Inflows/(outflows) | 1,260 | (2,843 | ) | (3,452 | ) | |||||||
Market appreciation/(depreciation) | 1,228 | (769 | ) | 2,239 | ||||||||
End of period assets | $ | 11,894 | $ | 9,406 | $ | 13,018 | ||||||
Average assets during the period | $ | 10,745 | $ | 9,500 | $ | 13,190 |
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Emerging Market Equity | ||||||||||||
Beginning of period assets | $ | 8,539 | $ | 6,400 | $ | 5,202 | ||||||
Inflows/(outflows) | 2,041 | 1,700 | 618 | |||||||||
Market appreciation/(depreciation) | (205 | ) | 439 | 580 | ||||||||
End of period assets | $ | 10,375 | $ | 8,539 | $ | 6,400 | ||||||
Average assets during the period | $ | 10,619 | $ | 6,054 | $ | 5,704 | ||||||
Fixed Income | ||||||||||||
Beginning of period assets | $ | 3,308 | $ | 3,565 | $ | 2,230 | ||||||
Inflows/(outflows) | 1,131 | (281 | ) | 1,276 | ||||||||
Market appreciation/(depreciation) | (83 | ) | 24 | 59 | ||||||||
End of period assets | $ | 4,356 | $ | 3,308 | $ | 3,565 | ||||||
Average assets during the period | $ | 3,548 | $ | 3,540 | $ | 3,555 | ||||||
Leveraged & Inverse | ||||||||||||
Beginning of period assets | $ | 1,477 | $ | 1,133 | $ | 1,054 | ||||||
Inflows/(outflows) | 46 | 249 | (3 | ) | ||||||||
Market appreciation/(depreciation) | 254 | 95 | 82 | |||||||||
End of period assets | $ | 1,777 | $ | 1,477 | $ | 1,133 | ||||||
Average assets during the period | $ | 1,676 | $ | 1,302 | $ | 1,167 | ||||||
Cryptocurrency | ||||||||||||
Beginning of period assets | $ | 167 | $ | 1 | $ | — | ||||||
Inflows/(outflows) | 84 | 76 | 1 | |||||||||
Market appreciation/(depreciation) | 106 | 90 | — | |||||||||
End of period assets | $ | 357 | $ | 167 | $ | 1 | ||||||
Average assets during the period | $ | 312 | $ | 30 | $ | 1 | ||||||
Alternatives | ||||||||||||
Beginning of period assets | $ | 215 | $ | 358 | $ | 508 | ||||||
Inflows/(outflows) | 39 | (125 | ) | (162 | ) | |||||||
Market appreciation/(depreciation) | 7 | (18 | ) | 12 | ||||||||
End of period assets | $ | 261 | $ | 215 | $ | 358 | ||||||
Average assets during the period | $ | 224 | $ | 251 | $ | 440 | ||||||
Closed ETPs | ||||||||||||
Beginning of period assets | $ | 24 | $ | 1,252 | $ | 1,528 | ||||||
Assets sold | — | (778 | ) | — | ||||||||
Inflows/(outflows) | (5 | ) | (34 | ) | (251 | ) | ||||||
Market appreciation/(depreciation) | — | (54 | ) | 246 | ||||||||
Fund closures | (19 | ) | (362 | ) | (271 | ) | ||||||
End of period assets | $ | — | $ | 24 | $ | 1,252 | ||||||
Average assets during the period | $ | 19 | $ | 459 | $ | 1,549 | ||||||
Headcount | 241 | 217 | 208 |
Year Ended December 31, | Change | Percent Change | ||||||||||||||
2021 | 2020 | |||||||||||||||
AUM (in millions) | ||||||||||||||||
Average AUM | $ | 73,436 | $ | 60,266 | $ | 13,170 | 21.9 | % | ||||||||
Operating Revenues (in thousands) | ||||||||||||||||
Advisory fees (1) | $ | 298,052 | $ | 246,395 | $ | 51,657 | 21.0 | % | ||||||||
Other income | 6,266 | 3,517 | 2,749 | 78.2 | % | |||||||||||
Total revenues | $ | 304,318 | $ | 249,912 | $ | 54,406 | 21.8 | % | ||||||||
(1) | Advisory fees previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 to our Consolidated Financial Statements for additional information. |
( in thousands ) | Year Ended December 31, | Change | Percent Change | |||||||||||||
2021 | 2020 | |||||||||||||||
Compensation and benefits | $ | 88,163 | $ | 74,675 | $ | 13,488 | 18.1 | % | ||||||||
Fund management and administration (1) | 58,912 | 56,728 | 2,184 | 3.8 | % | |||||||||||
Marketing and advertising | 14,090 | 11,128 | 2,962 | 26.6 | % | |||||||||||
Sales and business development | 9,907 | 10,579 | (672 | ) | (6.4 | %) | ||||||||||
Contractual gold payments | 17,096 | 16,811 | 285 | 1.7 | % | |||||||||||
Professional and consulting fees | 7,616 | 4,902 | 2,714 | 55.4 | % | |||||||||||
Occupancy, communications and equipment | 4,629 | 6,427 | (1,798 | ) | (28.0 | %) | ||||||||||
Depreciation and amortization | 738 | 1,021 | (283 | ) | (27.7 | %) | ||||||||||
Third-party distribution fees | 7,176 | 5,219 | 1,957 | 37.5 | % | |||||||||||
Acquisition and disposition-related costs | — | 416 | (416 | ) | n/a | |||||||||||
Other | 6,933 | 6,924 | 9 | 0.1 | % | |||||||||||
Total operating expenses | $ | 215,260 | $ | 194,830 | $ | 20,430 | 10.5 | % | ||||||||
As a Percent of Revenues: | Year Ended December 31, | |||||||
2021 | 2020 | |||||||
Compensation and benefits | 28.9 | % | 29.8 | % | ||||
Fund management and administration (1) | 19.4 | % | 22.7 | % | ||||
Marketing and advertising | 4.6 | % | 4.5 | % | ||||
Sales and business development | 3.3 | % | 4.2 | % | ||||
Contractual gold payments | 5.6 | % | 6.7 | % | ||||
Professional and consulting fees | 2.5 | % | 2.0 | % | ||||
Occupancy, communications and equipment | 1.5 | % | 2.6 | % | ||||
Depreciation and amortization | 0.2 | % | 0.4 | % | ||||
Third-party distribution fees | 2.4 | % | 2.1 | % | ||||
Acquisition and disposition-related costs | n/a | 0.2 | % | |||||
Other | 2.3 | % | 2.8 | % | ||||
Total operating expenses | 70.7 | % | 78.0 | % | ||||
(1) | Fund management and administration expenses previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 to our Consolidated Financial Statements for additional information. |
Year Ended December 31, | Change | Percent Change | ||||||||||||||
( in thousands ) | 2021 | 2020 | ||||||||||||||
Interest expense | $ | (12,332 | ) | $ | (9,668 | ) | $ | (2,664 | ) | 27.6 | % | |||||
Gain/(loss) on revaluation of deferred consideration | 2,018 | (56,821 | ) | 58,839 | n/a | |||||||||||
Interest income | 2,009 | 744 | 1,265 | 170.0 | % | |||||||||||
Impairments | (16,156 | ) | (22,752 | ) | 6,596 | (29.0 | %) | |||||||||
Loss on extinguishment of debt | — | (2,387 | ) | 2,387 | n/a | |||||||||||
Other losses and gains, net | (7,926 | ) | 580 | (8,506 | ) | n/a | ||||||||||
Total other expenses, net | $ | (32,387 | ) | $ | (90,304 | ) | $ | 57,917 | (64.1 | %) | ||||||
Year Ended December 31, | ||||||||
As a Percent of Revenues: | 2021 | 2020 | ||||||
Interest expense | (4.1 | %) | (3.9 | %) | ||||
Gain/(loss) on revaluation of deferred consideration | 0.7 | % | (22.7 | %) | ||||
Interest income | 0.7 | % | 0.3 | % | ||||
Impairments | (5.3 | %) | (9.1 | %) | ||||
Loss on extinguishment of debt | — | (1.0 | %) | |||||
Other losses and gains, net | (2.6 | %) | 0.2 | % | ||||
Total other expenses, net | (10.6 | %) | (36.1 | %) | ||||
Year Ended December 31, | Change | Percent Change | ||||||||||||||
2020 | 2019 | |||||||||||||||
AUM (in millions) | ||||||||||||||||
Average AUM | $ | 60,266 | $ | 59,667 | $ | 599 | 1.0 | % | ||||||||
Operating Revenues (in thousands) | ||||||||||||||||
Advisory fees (1) | $ | 246,395 | $ | 263,777 | $ | (17,382 | ) | (6.6 | %) | |||||||
Other income | 3,517 | 2,751 | 766 | 27.8 | % | |||||||||||
Total revenues | $ | 249,912 | $ | 266,528 | $ | (16,616 | ) | (6.2 | %) | |||||||
(1) | Advisory fees previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 to our Consolidated Financial Statements for additional information. |
(in thousands) | Year Ended December 31, | Change | Percent Change | |||||||||||||
2020 | 2019 | |||||||||||||||
Compensation and benefits | $ | 74,675 | $ | 80,761 | $ | (6,086 | ) | (7.5 | %) | |||||||
Fund management and administration (1) | 56,728 | 59,627 | (2,899 | ) | (4.9 | %) | ||||||||||
Marketing and advertising | 11,128 | 12,163 | (1,035 | ) | (8.5 | %) | ||||||||||
Sales and business development | 10,579 | 18,276 | (7,697 | ) | (42.1 | %) | ||||||||||
Contractual gold payments | 16,811 | 13,226 | 3,585 | 27.1 | % | |||||||||||
Professional and consulting fees | 4,902 | 5,641 | (739 | ) | (13.1 | %) | ||||||||||
Occupancy, communications and equipment | 6,427 | 6,302 | 125 | 2.0 | % | |||||||||||
Depreciation and amortization | 1,021 | 1,045 | (24 | ) | (2.3 | %) | ||||||||||
Third-party distribution fees | 5,219 | 6,968 | (1,749 | ) | (25.1 | %) | ||||||||||
Acquisition and disposition-related costs | 416 | 902 | (486 | ) | (53.9 | %) | ||||||||||
Other | 6,924 | 8,083 | (1,159 | ) | (14.3 | %) | ||||||||||
Total operating expenses | $ | 194,830 | $ | 212,994 | $ | (18,164 | ) | (8.5 | %) | |||||||
As a Percent of Revenues: | Year Ended December 31, | |||||||
2020 | 2019 | |||||||
Compensation and benefits | 29.8 | % | 30.2 | % | ||||
Fund management and administration (1) | 22.7 | % | 22.4 | % | ||||
Marketing and advertising | 4.5 | % | 4.6 | % | ||||
Sales and business development | 4.2 | % | 6.9 | % | ||||
Contractual gold payments | 6.7 | % | 5.0 | % | ||||
Professional and consulting fees | 2.0 | % | 2.1 | % | ||||
Occupancy, communications and equipment | 2.6 | % | 2.4 | % | ||||
Depreciation and amortization | 0.4 | % | 0.4 | % | ||||
Third-party distribution fees | 2.1 | % | 2.6 | % | ||||
Acquisition and disposition-related costs | 0.2 | % | 0.3 | % | ||||
Other | 2.8 | % | 3.0 | % | ||||
Total operating expenses | 78.0 | % | 79.9 | % | ||||
(1) | Fund management and administration expenses previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 to our Consolidated Financial Statements for additional information. |
Year Ended December 31, | Change | Percent Change | ||||||||||||||
(in thousands) | 2020 | 2019 | ||||||||||||||
Interest expense | $ | (9,668 | ) | $ | (11,240 | ) | $ | 1,572 | (14.0 | %) | ||||||
Loss on revaluation of deferred consideration | (56,821 | ) | (11,293 | ) | (45,528 | ) | 403.2 | % | ||||||||
Interest income | 744 | 3,332 | (2,588 | ) | (77.7 | %) | ||||||||||
Impairments | (22,752 | ) | (30,710 | ) | 7,958 | (25.9 | %) | |||||||||
Loss on extinguishment of debt | (2,387 | ) | — | (2,387 | ) | n/a | ||||||||||
Other gains and losses, net | 580 | (3,502 | ) | 4,082 | n/a | |||||||||||
Total other expenses, net | $ | (90,304 | ) | $ | (53,413 | ) | $ | (36,891 | ) | 69.1 | % | |||||
Year Ended December 31, | ||||||||
As a Percent of Revenues: | 2020 | 2019 | ||||||
Interest expense | (3.9 | %) | (4.2 | %) | ||||
Loss on revaluation of deferred consideration | (22.6 | %) | (4.2 | %) | ||||
Interest income | 0.3 | % | 1.3 | % | ||||
Impairments | (9.1 | %) | (11.6 | %) | ||||
Loss on extinguishment of debt | (1.0 | %) | — | |||||
Other gains and losses, net | 0.2 | % | (1.3 | %) | ||||
Total other expenses, net | (36.1 | %) | (20.0 | %) | ||||
(in thousands, except per share amounts) | Q4/21 | Q3/21 | Q2/21 | Q1/21 | Q4/20 | Q3/20 | Q2/20 | Q1/20 | ||||||||||||||||||||||||
Operating Revenues: | ||||||||||||||||||||||||||||||||
Advisory fees (1) | $ | 77,441 | $ | 76,400 | $ | 74,169 | $ | 70,042 | $ | 64,697 | $ | 63,028 | $ | 56,394 | $ | 62,276 | ||||||||||||||||
Other income | 1,734 | 1,712 | 1,606 | 1,214 | 954 | 721 | 918 | 924 | ||||||||||||||||||||||||
Total revenues | 79,175 | 78,112 | 75,775 | 71,256 | 65,651 | 63,749 | 57,312 | 63,200 | ||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||
Compensation and benefits | 23,178 | 22,027 | 20,331 | 22,627 | 20,827 | 19,098 | 17,455 | 17,295 | ||||||||||||||||||||||||
Fund management and administration (1) | 15,417 | 15,181 | 14,367 | 13,947 | 14,942 | 14,328 | 13,647 | 13,810 | ||||||||||||||||||||||||
Marketing and advertising | 4,565 | 2,925 | 3,594 | 3,006 | 3,715 | 2,996 | 1,949 | 2,468 | ||||||||||||||||||||||||
Sales and business development | 2,668 | 2,935 | 2,159 | 2,145 | 2,595 | 2,386 | 2,181 | 3,417 | ||||||||||||||||||||||||
Contractual gold payments | 4,262 | 4,250 | 4,314 | 4,270 | 4,449 | 4,539 | 4,063 | 3,760 | ||||||||||||||||||||||||
Professional and consulting fees | 2,099 | 1,583 | 1,921 | 2,013 | 1,322 | 950 | 1,357 | 1,273 | ||||||||||||||||||||||||
Occupancy, communications and equipment | 725 | 1,163 | 1,266 | 1,475 | 1,622 | 1,611 | 1,643 | 1,551 | ||||||||||||||||||||||||
Depreciation and amortization | 45 | 185 | 256 | 252 | 261 | 253 | 251 | 256 | ||||||||||||||||||||||||
Third-party distribution fees | 1,830 | 1,873 | 2,130 | 1,343 | 1,291 | 1,233 | 1,340 | 1,355 | ||||||||||||||||||||||||
Acquisition and disposition-related costs | — | — | — | — | — | — | 33 | 383 | ||||||||||||||||||||||||
Other | 1,823 | 1,787 | 1,752 | 1,571 | 1,720 | 1,611 | 1,596 | 1,997 | ||||||||||||||||||||||||
Total operating expenses | 56,612 | 53,909 | 52,090 | 52,649 | 52,744 | 49,005 | 45,515 | 47,565 | ||||||||||||||||||||||||
Operating income | 22,563 | 24,203 | 23,685 | 18,607 | 12,907 | 14,744 | 11,797 | 15,634 | ||||||||||||||||||||||||
Other Income/(Expenses): | ||||||||||||||||||||||||||||||||
Interest expense | (3,740 | ) | (3,729 | ) | (2,567 | ) | (2,296 | ) | (2,694 | ) | (2,511 | ) | (2,044 | ) | (2,419 | ) | ||||||||||||||||
(Loss)/gain on revaluation of deferred consideration | (3,048 | ) | 1,737 | 497 | 2,832 | (22,385 | ) | (8,870 | ) | (23,358 | ) | (2,208 | ) | |||||||||||||||||||
Interest income | 864 | 689 | 225 | 231 | 351 | 111 | 119 | 163 | ||||||||||||||||||||||||
Impairments | — | (15,853 | ) | — | (303 | ) | — | (3,080 | ) | — | (19,672 | ) | ||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | (2,387 | ) | — | |||||||||||||||||||||||
Other losses and gains, net | (1,368 | ) | (714 | ) | 49 | (5,893 | ) | 524 | 744 | 1,819 | (2,507 | ) | ||||||||||||||||||||
Income/(loss) before income taxes | 15,271 | 6,333 | 21,889 | 13,178 | (11,297 | ) | 1,138 | (14,054 | ) | (11,009 | ) | |||||||||||||||||||||
Income tax expense/(benefit) | 4,084 | 500 | 4,259 | (1,969 | ) | 2,200 | 1,408 | (804 | ) | (2,371 | ) | |||||||||||||||||||||
Net income/(loss) | $ | 11,187 | $ | 5,833 | $ | 17,630 | $ | 15,147 | ($ | 13,497 | ) | ($ | 270 | ) | ($ | 13,250 | ) | ($ | 8,638 | ) | ||||||||||||
Earnings/(loss) per share - basic | $ | 0.07 | $ | 0.04 | $ | 0.11 | $ | 0.09 | ($0.10 | ) | ($0.01 | ) | ($0.09 | ) | ($0.06 | ) | ||||||||||||||||
Earnings/(loss) per share - diluted | $ | 0.07 | $ | 0.04 | $ | 0.11 | $ | 0.09 | ($0.10 | ) | ($0.01 | ) | ($0.09 | ) | ($0.06 | ) | ||||||||||||||||
Dividends per common share | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||||||||||
(1) | Advisory fees and fund management and administration expenses previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 to our Consolidated Financial Statements for additional information. |
Q4/21 | Q3/21 | Q2/21 | Q1/21 | Q4/20 | Q3/20 | Q2/20 | Q1/20 | |||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||
Percent of Revenues | ||||||||||||||||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||||||||||
Advisory fees | 97.8 | % | 97.8 | % | 97.9 | % | 98.3 | % | 98.5 | % | 98.9 | % | 98.4 | % | 98.5 | % | ||||||||||||||||
Other income | 2.2 | % | 2.2 | % | 2.1 | % | 1.7 | % | 1.5 | % | 1.1 | % | 1.6 | % | 1.5 | % | ||||||||||||||||
Total revenues | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||||||
Compensation and benefits | 29.2 | % | 28.2 | % | 26.9 | % | 31.7 | % | 31.6 | % | 30.0 | % | 30.4 | % | 27.4 | % | ||||||||||||||||
Fund management and administration | 19.4 | % | 19.5 | % | 19.0 | % | 19.6 | % | 22.7 | % | 22.6 | % | 23.8 | % | 21.9 | % | ||||||||||||||||
Marketing and advertising | 5.8 | % | 3.7 | % | 4.7 | % | 4.2 | % | 5.7 | % | 4.7 | % | 3.4 | % | 3.9 | % | ||||||||||||||||
Sales and business development | 3.4 | % | 3.8 | % | 2.8 | % | 3.0 | % | 4.0 | % | 3.7 | % | 3.8 | % | 5.4 | % | ||||||||||||||||
Contractual gold payments | 5.4 | % | 5.4 | % | 5.7 | % | 6.0 | % | 6.8 | % | 7.1 | % | 7.1 | % | 5.9 | % | ||||||||||||||||
Professional and consulting fees | 2.7 | % | 2.0 | % | 2.5 | % | 2.8 | % | 2.0 | % | 1.5 | % | 2.4 | % | 2.0 | % | ||||||||||||||||
Occupancy, communications and equipment | 0.9 | % | 1.5 | % | 1.7 | % | 2.1 | % | 2.5 | % | 2.5 | % | 2.9 | % | 2.5 | % | ||||||||||||||||
Depreciation and amortization | 0.1 | % | 0.2 | % | 0.3 | % | 0.4 | % | 0.4 | % | 0.4 | % | 0.4 | % | 0.4 | % | ||||||||||||||||
Third-party distribution fees | 2.3 | % | 2.4 | % | 2.8 | % | 1.9 | % | 2.0 | % | 1.9 | % | 2.3 | % | 2.1 | % | ||||||||||||||||
Acquisition and disposition-related costs | n/a | n/a | n/a | n/a | n/a | n/a | 0.1 | % | 0.6 | % | ||||||||||||||||||||||
Other | 2.3 | % | 2.3 | % | 2.3 | % | 2.2 | % | 2.6 | % | 2.5 | % | 2.8 | % | 3.2 | % | ||||||||||||||||
Total operating expenses | 71.5 | % | 69.0 | % | 68.7 | % | 73.9 | % | 80.3 | % | 76.9 | % | 79.4 | % | 75.3 | % | ||||||||||||||||
Operating income | 28.5 | % | 31.0 | % | 31.3 | % | 26.1 | % | 19.7 | % | 23.1 | % | 20.6 | % | 24.7 | % | ||||||||||||||||
Other Income/(Expenses) | ||||||||||||||||||||||||||||||||
Interest expense | (4.8 | %) | (4.8 | %) | (3.5 | %) | (3.2 | %) | (4.1 | %) | (3.9 | %) | (3.6 | %) | (3.8 | %) | ||||||||||||||||
(Loss)/gain on revaluation of deferred consideration | (3.8 | %) | 2.2 | % | 0.7 | % | 4.0 | % | (34.1 | %) | (14.0 | %) | (40.7 | %) | (3.5 | %) | ||||||||||||||||
Interest income | 1.1 | % | 0.9 | % | 0.3 | % | 0.3 | % | 0.5 | % | 0.2 | % | 0.2 | % | 0.3 | % | ||||||||||||||||
Impairments | n/a | (20.3 | %) | n/a | (0.4 | %) | n/a | (4.8 | %) | n/a | (31.1 | %) | ||||||||||||||||||||
Loss on extinguishment of debt | n/a | n/a | n/a | n/a | n/a | n/a | (4.2 | %) | n/a | |||||||||||||||||||||||
Other losses and gains, net | (1.7 | %) | (0.9 | %) | 0.1 | % | (8.3 | %) | 0.8 | % | 1.2 | % | 3.2 | % | (4.0 | %) | ||||||||||||||||
Income/(loss) before income taxes | 19.3 | % | 8.1 | % | 28.9 | % | 18.5 | % | (17.2 | %) | 1.8 | % | (24.5 | %) | (17.4 | %) | ||||||||||||||||
Income tax expense/(benefit) | 5.2 | % | 0.6 | % | 5.6 | % | (2.8 | %) | 3.4 | % | 2.2 | % | (1.4 | %) | (3.7 | %) | ||||||||||||||||
Net income/(loss) | 14.1 | % | 7.5 | % | 23.3 | 21.3 | % | (20.6 | %) | (0.4 | %) | (23.1 | %) | (13.7 | %) | |||||||||||||||||
Q4/21 | Q3/21 | Q2/21 | Q1/21 | Q4/20 | Q3/20 | Q2/20 | Q1/20 | |||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
GLOBAL ETPs (in millions) | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 72,780 | $ | 73,941 | $ | 69,532 | $ | 67,383 | $ | 60,707 | $ | 57,616 | $ | 50,302 | $ | 63,532 | ||||||||||||||||
Assets sold | — | — | — | — | — | — | — | (778 | ) | |||||||||||||||||||||||
Inflows/(outflows) | 1,902 | 548 | 931 | 1,279 | 881 | (485 | ) | 129 | (547 | ) | ||||||||||||||||||||||
Market appreciation/(depreciation) | 2,811 | (1,709 | ) | 3,482 | 870 | 5,795 | 3,622 | 7,481 | (11,885 | ) | ||||||||||||||||||||||
Fund closures | (15 | ) | — | (4 | ) | — | — | (46 | ) | (296 | ) | (20 | ) | |||||||||||||||||||
End of period assets | $ | 77,478 | $ | 72,780 | $ | 73,941 | $ | 69,532 | $ | 67,383 | $ | 60,707 | $ | 57,616 | $ | 50,302 | ||||||||||||||||
Average assets during the period | $ | 75,990 | $ | 74,556 | $ | 73,621 | $ | 69,575 | $ | 64,053 | $ | 61,188 | $ | 55,705 | $ | 60,117 | ||||||||||||||||
Average advisory fee during the period | 0.40 | % | 0.41 | % | 0.40 | % | 0.41 | % | 0.40 | % | 0.41 | % | 0.41 | % | 0.42 | % | ||||||||||||||||
Number of ETPs – end of the period | 329 | 322 | 318 | 313 | 309 | 305 | 311 | 331 | ||||||||||||||||||||||||
U.S. LISTED ETFs (in millions) | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 44,742 | $ | 45,129 | $ | 42,163 | $ | 38,517 | $ | 33,310 | $ | 31,362 | $ | 28,920 | $ | 40,600 | ||||||||||||||||
Inflows/(outflows) | 1,865 | 612 | 1,130 | 1,343 | 919 | 575 | (1,474 | ) | (1,273 | ) | ||||||||||||||||||||||
Market appreciation/(depreciation) | 1,618 | (999 | ) | 1,836 | 2,303 | 4,288 | 1,373 | 4,030 | (10,397 | ) | ||||||||||||||||||||||
Fund closures | (15 | ) | — | — | — | — | — | (114 | ) | (10 | ) | |||||||||||||||||||||
End of period assets | $ | 48,210 | $ | 44,742 | $ | 45,129 | $ | 42,163 | $ | 38,517 | $ | 33,310 | $ | 31,362 | $ | 28,920 | ||||||||||||||||
Average assets during the period | $ | 46,943 | $ | 45,509 | $ | 44,183 | $ | 40,706 | $ | 35,926 | $ | 33,003 | $ | 30,652 | $ | 36,950 | ||||||||||||||||
Number of ETFs – end of the period | 75 | 73 | 73 | 68 | 67 | 67 | 67 | 77 | ||||||||||||||||||||||||
INTERNATIONAL LISTED ETPs (in millions) | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 28,038 | $ | 28,812 | $ | 27,369 | $ | 28,866 | $ | 27,397 | $ | 26,254 | $ | 21,382 | $ | 22,932 | ||||||||||||||||
Assets sold | — | — | — | — | — | — | — | (778 | ) | |||||||||||||||||||||||
Inflows/(outflows) | 37 | (64 | ) | (199 | ) | (64 | ) | (38 | ) | (1,060 | ) | 1,603 | 726 | |||||||||||||||||||
Market appreciation/(depreciation) | 1,193 | (710 | ) | 1,646 | (1,433 | ) | 1,507 | 2,249 | 3,451 | (1,488 | ) | |||||||||||||||||||||
Fund closures | — | — | (4 | ) | — | — | (46 | ) | (182 | ) | (10 | ) | ||||||||||||||||||||
End of period assets | $ | 29,268 | $ | 28,038 | $ | 28,812 | $ | 27,369 | $ | 28,866 | $ | 27,397 | $ | 26,254 | $ | 21,382 | ||||||||||||||||
Average assets during the period | $ | 29,047 | $ | 29,047 | $ | 29,438 | $ | 28,869 | $ | 28,127 | $ | 28,185 | $ | 25,053 | $ | 23,167 | ||||||||||||||||
Number of ETPs – end of the period | 254 | 249 | 245 | 245 | 242 | 238 | 244 | 254 | ||||||||||||||||||||||||
PRODUCT CATEGORIES | ||||||||||||||||||||||||||||||||
Commodity & Currency | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 23,826 | $ | 24,772 | $ | 23,657 | $ | 25,880 | $ | 25,177 | $ | 24,246 | $ | 19,819 | $ | 20,073 | ||||||||||||||||
Inflows/(outflows) | (251 | ) | (249 | ) | (318 | ) | (660 | ) | (296 | ) | (1,112 | ) | 1,302 | 577 | ||||||||||||||||||
Market appreciation/(depreciation) | 1,023 | (697 | ) | 1,433 | (1,563 | ) | 999 | 2,043 | 3,125 | (831 | ) | |||||||||||||||||||||
End of period assets | $ | 24,598 | $ | 23,826 | $ | 24,772 | $ | 23,657 | $ | 25,880 | $ | 25,177 | $ | 24,246 | $ | 19,819 | ||||||||||||||||
Average assets during the period | $ | 24,422 | $ | 24,853 | $ | 25,549 | $ | 25,289 | $ | 25,596 | $ | 25,938 | $ | 23,016 | $ | 20,399 | ||||||||||||||||
U.S. Equity | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 21,383 | $ | 21,285 | $ | 20,018 | $ | 18,367 | $ | 15,612 | $ | 13,997 | $ | 12,151 | $ | 17,732 | ||||||||||||||||
Inflows/(outflows) | 783 | 351 | 190 | 218 | 395 | 897 | (242 | ) | (285 | ) | ||||||||||||||||||||||
Market appreciation/(depreciation) | 1,694 | (253 | ) | 1,077 | 1,433 | 2,360 | 718 | 2,088 | (5,296 | ) | ||||||||||||||||||||||
End of period assets | $ | 23,860 | $ | 21,383 | $ | 21,285 | $ | 20,018 | $ | 18,367 | $ | 15,612 | $ | 13,997 | $ | 12,151 | ||||||||||||||||
Average assets during the period | $ | 22,963 | $ | 21,794 | $ | 20,982 | $ | 19,320 | $ | 17,070 | $ | 15,160 | $ | 13,325 | $ | 16,018 | ||||||||||||||||
International Developed Market Equity | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 11,178 | $ | 10,790 | $ | 9,988 | $ | 9,406 | $ | 8,618 | $ | 8,841 | $ | 8,663 | $ | 13,018 | ||||||||||||||||
Inflows/(outflows) | 440 | 404 | 399 | 17 | (191 | ) | (586 | ) | (965 | ) | (1,101 | ) | ||||||||||||||||||||
Market appreciation/(depreciation) | 276 | (16 | ) | 403 | 565 | 979 | 363 | 1,143 | (3,254 | ) | ||||||||||||||||||||||
End of period assets | $ | 11,894 | $ | 11,178 | $ | 10,790 | $ | 9,988 | $ | 9,406 | $ | 8,618 | $ | 8,841 | $ | 8,663 | ||||||||||||||||
Average assets during the period | $ | 11,523 | $ | 11,144 | $ | 10,524 | $ | 9,790 | $ | 8,927 | $ | 8,833 | $ | 8,784 | $ | 11,457 | ||||||||||||||||
Emerging Market Equity | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 10,666 | $ | 11,519 | $ | 10,477 | $ | 8,539 | $ | 5,979 | $ | 5,413 | $ | 4,600 | $ | 6,400 | ||||||||||||||||
Inflows/(outflows) | (3 | ) | (149 | ) | 531 | 1,662 | 1,399 | 257 | (25 | ) | 69 | |||||||||||||||||||||
Market appreciation/(depreciation) | (288 | ) | (704 | ) | 511 | 276 | 1,161 | 309 | 838 | (1,869 | ) | |||||||||||||||||||||
End of period assets | $ | 10,375 | $ | 10,666 | $ | 11,519 | $ | 10,477 | $ | 8,539 | $ | 5,979 | $ | 5,413 | $ | 4,600 | ||||||||||||||||
Average assets during the period | $ | 10,550 | $ | 11,038 | $ | 11,012 | $ | 9,875 | $ | 7,250 | $ | 5,917 | $ | 5,131 | $ | 5,919 |
Q4/21 | Q3/21 | Q2/21 | Q1/21 | Q4/20 | Q3/20 | Q2/20 | Q1/20 | |||||||||||||||||||||||||
Fixed Income | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 3,529 | $ | 3,440 | $ | 3,245 | $ | 3,308 | $ | 3,605 | $ | 3,507 | $ | 3,505 | $ | 3,565 | ||||||||||||||||
Inflows/(outflows) | 838 | 115 | 168 | 10 | (320 | ) | 76 | (53 | ) | 16 | ||||||||||||||||||||||
Market appreciation/(depreciation) | (11 | ) | (26 | ) | 27 | (73 | ) | 23 | 22 | 55 | (76 | ) | ||||||||||||||||||||
End of period assets | $ | 4,356 | $ | 3,529 | $ | 3,440 | $ | 3,245 | $ | 3,308 | $ | 3,605 | $ | 3,507 | $ | 3,505 | ||||||||||||||||
Average assets during the period | $ | 4,118 | $ | 3,502 | $ | 3,337 | $ | 3,236 | $ | 3,449 | $ | 3,581 | $ | 3,500 | $ | 3,630 | ||||||||||||||||
Leveraged & Inverse | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 1,666 | $ | 1,693 | $ | 1,521 | $ | 1,477 | $ | 1,423 | $ | 1,344 | $ | 890 | $ | 1,133 | ||||||||||||||||
Inflows/(outflows) | 11 | 42 | (2 | ) | (5 | ) | (125 | ) | (10 | ) | 302 | 82 | ||||||||||||||||||||
Market appreciation/(depreciation) | 100 | (69 | ) | 174 | 49 | 179 | 89 | 152 | (325 | ) | ||||||||||||||||||||||
End of period assets | $ | 1,777 | $ | 1,666 | $ | 1,693 | $ | 1,521 | $ | 1,477 | $ | 1,423 | $ | 1,344 | $ | 890 | ||||||||||||||||
Average assets during the period | $ | 1,764 | $ | 1,717 | $ | 1,666 | $ | 1,556 | $ | 1,429 | $ | 1,476 | $ | 1,161 | $ | 1,140 | ||||||||||||||||
Cryptocurrency | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 295 | $ | 229 | $ | 377 | $ | 167 | $ | 33 | $ | 15 | $ | 5 | $ | 1 | ||||||||||||||||
Inflows/(outflows) | 28 | 12 | 8 | 36 | 48 | 15 | 8 | 5 | ||||||||||||||||||||||||
Market appreciation/(depreciation) | 34 | 54 | (156 | ) | 174 | 86 | 3 | 2 | (1 | ) | ||||||||||||||||||||||
End of period assets | $ | 357 | $ | 295 | $ | 229 | $ | 377 | $ | 167 | $ | 33 | $ | 15 | $ | 5 | ||||||||||||||||
Average assets during the period | $ | 406 | $ | 277 | $ | 300 | $ | 264 | $ | 79 | $ | 27 | $ | 11 | $ | 2 | ||||||||||||||||
Alternatives | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 222 | $ | 198 | $ | 227 | $ | 215 | $ | 229 | $ | 225 | $ | 244 | $ | 358 | ||||||||||||||||
Inflows/(outflows) | 56 | 22 | (39 | ) | — | (26 | ) | (4 | ) | (29 | ) | (66 | ) | |||||||||||||||||||
Market appreciation/(depreciation) | (17 | ) | 2 | 10 | 12 | 12 | 8 | 10 | (48 | ) | ||||||||||||||||||||||
End of period assets | $ | 261 | $ | 222 | $ | 198 | $ | 227 | $ | 215 | $ | 229 | $ | 225 | $ | 244 | ||||||||||||||||
Average assets during the period | $ | 229 | $ | 214 | $ | 231 | $ | 223 | $ | 224 | $ | 226 | $ | 226 | $ | 328 | ||||||||||||||||
Closed ETPs | ||||||||||||||||||||||||||||||||
Beginning of period assets | $ | 15 | $ | 15 | $ | 22 | $ | 24 | $ | 31 | $ | 28 | $ | 425 | $ | 1,252 | ||||||||||||||||
Assets sold | — | — | — | — | — | — | — | (778 | ) | |||||||||||||||||||||||
Inflows/(outflows) | — | — | (6 | ) | 1 | (3 | ) | (18 | ) | (169 | ) | 156 | ||||||||||||||||||||
Market appreciation/(depreciation) | — | — | 3 | (3 | ) | (4 | ) | 67 | 68 | (185 | ) | |||||||||||||||||||||
Fund closures | (15 | ) | — | (4 | ) | — | — | (46 | ) | (296 | ) | (20 | ) | |||||||||||||||||||
End of period assets | $ | — | $ | 15 | $ | 15 | $ | 22 | $ | 24 | $ | 31 | $ | 28 | $ | 425 | ||||||||||||||||
Average assets during the period | $ | 15 | $ | 17 | $ | 20 | $ | 22 | $ | 29 | $ | 30 | $ | 551 | $ | 1,224 | ||||||||||||||||
Headcount | 241 | 235 | 227 | 227 | 217 | 211 | 214 | 210 |
a material impact on the carrying value of the deferred consideration and our reported financial results. We exclude this item when arriving at adjusted net income and diluted earnings per share as it is not core to our operating business. The item is not adjusted for income taxes as the obligation was assumed by a wholly-owned subsidiary of ours that is based in Jersey, a jurisdiction where we are subject to a zero percent tax rate. |
Years Ended | ||||||||||||
Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||
Adjusted Net Income and Diluted Earnings per Share : | 2021 | 2020 | 2019 | |||||||||
Net income/(loss), as reported | $ | 49,797 | $ | (35,655 | ) | $ | (10,425 | ) | ||||
(Deduct)/add back: (Gain)/loss on revaluation of deferred consideration | (2,018 | ) | 56,821 | 11,293 | ||||||||
Add back: Impairments, net of income taxes | 12,247 | 21,998 | 30,710 | |||||||||
Deduct: Gain recognized from the sale of Canadian ETF business, including remeasurement of contingent consideration | (787 | ) | (2,877 | ) | — | |||||||
Add back: Unrealized loss on securities owned, at fair value, net of income taxes | 2,507 | — | — | |||||||||
Deduct: Unrealized gain recognized on investment in Securrency, net of income taxes | (284 | ) | — | — | ||||||||
Add back/(deduct): Tax (windfalls)/shortfalls upon vesting and exercise of stock-based compensation awards | (110 | ) | 691 | 1,219 | ||||||||
Deduct: Release of a deferred tax asset valuation allowance recognized on interest carryforwards arising from debt previously outstanding in the U.K. | — | (2,615 | ) | — | ||||||||
Add back: Loss on extinguishment of debt, net of income taxes | — | 1,910 | ||||||||||
Deduct: Gain arising from an adjustment to the estimated fair value of consideration received from the exit of investment in AdvisorEngine | — | (1,093 | ) | — | ||||||||
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 | — | 642 | — | |||||||||
Add back: Acquisition and disposition-related costs, net of income taxes | — | 383 | 787 | |||||||||
Add back: Severance expense, net of income taxes | — | — | 2,715 | |||||||||
Adjusted net income | $ | 61,352 | $ | 40,205 | $ | 36,299 | ||||||
Deduct: Income distributed to participating securities | (2,168 | ) | (2,216 | ) | (2,163 | ) | ||||||
Deduct: Undistributed income allocable to participating securities | (4,630 | ) | (2,214 | ) | (1,679 | ) | ||||||
Adjusted net income available to common stockholders | $ | 54,554 | $ | 35,775 | $ | 32,457 | ||||||
Weighted average diluted shares, excluding participating securities (See Note 21 to our Consolidated Financial Statements) | 145,055 | 148,688 | 151,975 | |||||||||
Adjusted earnings per share - diluted | $ | 0.38 | $ | 0.24 | $ | 0.21 | ||||||
December 31, 2021 | December 31, 2020 | |||||||
Balance Sheet Data (in thousands) : | ||||||||
Cash and cash equivalents | $ | 140,709 | $ | 73,425 | ||||
Securities owned, at fair value | 127,166 | 34,895 | ||||||
Accounts receivable | 31,864 | 29,455 | ||||||
Securities held-to-maturity | 308 | 451 | ||||||
Total: Liquid assets | 300,047 | 138,226 | ||||||
Less: Total current liabilities | (83,667 | ) | (73,999 | ) | ||||
Less: Regulatory capital requirement – certain international subsidiaries | (12,320 | ) | (10,745 | ) | ||||
Total: Available liquidity | $ | 204,060 | $ | 53,482 | ||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash Flow Data (in thousands) : | ||||||||||||
Operating cash flows | $ | 75,318 | $ | 47,136 | $ | 57,488 | ||||||
Investing cash flows | (99,632 | ) | 10,641 | (17,661 | ) | |||||||
Financing cash flows | 92,553 | (60,179 | ) | (43,566 | ) | |||||||
Foreign exchange rate effect | (955 | ) | 855 | 927 | ||||||||
Increase/(decrease) in cash and cash equivalents | $ | 67,284 | $ | (1,547 | ) | $ | (2,812 | ) | ||||
2021 Notes | 2020 Notes | |||
Maturity date (unless earlier converted, repurchased or redeemed) | June 15, 2026 | June 15, 2023 | ||
Interest rate | 3.25% | 4.25% | ||
Conversion price | $11.04 | $5.92 | ||
Conversion rate | 90.5797 | 168.9189 | ||
Redemption price | $14.35 | $7.70 |
1. | Consolidated Financial Statements page F-1. |
2. | Financial Statement Schedules |
Consolidated Financial Statements | ||||
F-2 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-9 | ||||
F-10 | ||||
F-12 |
Description of the Matter | At December 31, 2021, the Company recorded a current deferred consideration liability of $16,739,000 and a long-term deferred consideration liability of $211,323,000 and for the year ended December 31, 2021, the Company recorded a gain on the revaluation of deferred consideration of $2,018,000. As more fully described in Notes 2, 5 and 10 to the consolidated financial statements, deferred consideration represents an obligation of the Company for fixed payments of physical gold bullion to a third party into perpetuity that is carried at fair value. The Company values deferred consideration using a discounted cash flow model and the significant unobservable inputs used are the discount rate, the perpetual growth rate and the extrapolated forward-looking gold prices. |
Auditing the Company’s valuation of deferred consideration was complex due to the significant estimation required in determining the fair value of the current and long-term liability. In particular, the fair value estimate was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. | ||
How we addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s deferred consideration fair value process. This included controls over management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. | |
To test the estimated fair value of the deferred consideration liability, our audit procedures included, among others, reading the terms of the gold royalty agreement to make gold payments, evaluating the Company’s selection of its fair value methodology, testing the significant unobservable inputs used in the model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the Company to determine fair value. For example, we agreed underlying data used in management’s valuation model to source documents and/or publicly available data, such as the gold royalty agreement and third-party gold price projections. In addition, we involved our valuation specialists to assist in our evaluation of the Company’s valuation model, the discount rate, the perpetual growth rate and forward looking gold prices used by the Company, to calculate an independent estimate of the fair value of the Company’s deferred consideration liability which we compared to the Company’s fair value estimate and to assist in performing a sensitivity analysis of the significant unobservable inputs to evaluate the change in the fair value estimate that would result from changes in these inputs. | ||
ETFS Indefinite-Lived Intangible Assets – Assessment of Carrying Value | ||
Description of the Matter | At December 31, 2021, the Company held indefinite-lived intangible assets related to the right to manage assets under management through customary advisory agreements, which have no expiration date, in connection with the ETFS acquisition, with an aggregate carrying value of $601,247,000. As described in Notes 2 and 24 to the consolidated financial statements, these assets were assessed for impairment based upon a quantitative test. Indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values. The Company determined the fair value of its ETFS intangible assets using an income approach (discounted cash flow analysis) with significant unobservable inputs that included the weighted average cost of capital and projected revenue growth rates. | |
Auditing the Company’s quantitative impairment assessment for its ETFS indefinite-lived intangible assets was complex due to the significant unobservable inputs required in determining fair value. In particular, the fair value estimate of the ETFS indefinite-lived intangible assets was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. | ||
How we addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s indefinite-lived intangible asset impairment assessment process. This included controls around management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. |
To test the Company’s quantitative impairment assessment of ETFS indefinite-lived intangible assets, our audit procedures included, among others, evaluating the Company’s selection of its fair value methodology, testing the significant unobservable inputs used in the valuation model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the Company to determine fair value. For example, we agreed certain inputs used to calculate the weighted average cost of capital to market data. We compared the projected revenue growth rates to the Company’s historical results and to those of other guideline public companies in the same industry. In addition, we assessed the accuracy of the Company’s historical projections by comparing them to actual operating results. We involved our valuation specialists to assist in our evaluation of the Company’s valuation model, the weighted average cost of capital used by the Company and the comparability of the guideline public companies selected by the Company and to calculate an independent estimate of the indefinite-lived intangible assets which we compared to the Company’s fair value estimate. |
/s/ Ernst & Young LLP |
December 31, 2021 | December 31, 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 140,709 | $ | 73,425 | ||||
Securities owned, at fair value (including $18,526 and $23,932 invested in WisdomTree ETFs at December 31, | 127,166 | 34,895 | ||||||
Accounts receivable (including $25,628 and $26,884 due from related parties at December 31, 2021 and 2020, respectively) | 31,864 | 29,455 | ||||||
Prepaid expenses | 3,952 | 3,827 | ||||||
Other current assets | 276 | 259 | ||||||
Total current assets | 303,967 | 141,861 | ||||||
Fixed assets, net | 557 | 7,579 | ||||||
Indemnification receivable (Note 22) | 21,925 | 27,016 | ||||||
Securities held-to-maturity | 308 | 451 | ||||||
Deferred tax assets, net | 8,881 | 8,063 | ||||||
Investments (Note 8) | 14,238 | 8,112 | ||||||
Right of use assets—operating leases (Note 14) | 520 | 16,327 | ||||||
Goodwill (Note 24) | 85,856 | 85,856 | ||||||
Intangible assets (Note 24) | 601,247 | 601,247 | ||||||
Other noncurrent assets | 361 | 180 | ||||||
Total assets | $ | 1,037,860 | $ | 896,692 | ||||
�� | ||||||||
Liabilities and stockholders’ equity | ||||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Fund management and administration payable | $ | 20,661 | $ | 19,564 | ||||
Compensation and benefits payable | 32,782 | 22,803 | ||||||
Deferred consideration—gold payments (Note 10) | 16,739 | 17,374 | ||||||
Operating lease liabilities (Note 14) | 209 | 3,135 | ||||||
Income taxes payable | 3,979 | 916 | ||||||
Accounts payable and other liabilities | 9,297 | 10,207 | ||||||
Total current liabilities | 83,667 | 73,999 | ||||||
Convertible notes (Note 12) | 318,624 | 166,646 | ||||||
Deferred consideration—gold payments (Note 10) | 211,323 | 212,763 | ||||||
Operating lease liabilities (Note 14) | 328 | 17,434 | ||||||
Other noncurrent liabilities (Note 22) | 21,925 | 27,016 | ||||||
Total liabilities | 635,867 | 497,858 | ||||||
Preferred stock — Series ANon-Voting Convertible, par value $0.01; 14.750 shares authorized, issued and outstanding; redemption value of $90,741 72,667 at December 31, 2021 and 2020, respectively) (Note 13) | 132,569 | 132,569 | ||||||
Contingencies (Note ) | 0 | |||||||
Stockholders’ equity | ||||||||
Preferred stock, par value $0.01; 2,000 shares authorized: | 0 | 0— | ||||||
Common stock, par value $0.01; 250,000 shares authorized; issued and outstanding: 145,107 and 148,716 at December 31, 2021 and 2020, respectively | 1,451 | 1,487 | ||||||
Additional paid-in capital | 289,736 | 317,075 | ||||||
Accumulated other comprehensive income | 682 | 1,102 | ||||||
Accumulated deficit | (22,445 | ) | (53,399 | ) | ||||
Total stockholders’ equity | 269,424 | 266,265 | ||||||
Total liabilities and stockholders’ equity | $ | 1,037,860 | $ | 896,692 | ||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Operating Revenues: | ||||||||||||
Advisory fees | $ | 298,052 | $ | 246,395 | $ | 263,777 | ||||||
Other income | 6,266 | 3,517 | 2,751 | |||||||||
Total revenues | 304,318 | 249,912 | 266,528 | |||||||||
Operating Expenses: | ||||||||||||
Compensation and benefits | 88,163 | 74,675 | 80,761 | |||||||||
Fund management and administration | 58,912 | 56,728 | 59,627 | |||||||||
Marketing and advertising | 14,090 | 11,128 | 12,163 | |||||||||
Sales and business development | 9,907 | 10,579 | 18,276 | |||||||||
Contractual gold payments (Note 10) | 17,096 | 16,811 | 13,226 | |||||||||
Professional and consulting fees | 7,616 | 4,902 | 5,641 | |||||||||
Occupancy, communications and equipment | 4,629 | 6,427 | 6,302 | |||||||||
Depreciation and amortization | 738 | 1,021 | 1,045 | |||||||||
Third-party distribution fees | 7,176 | 5,219 | 6,968 | |||||||||
Acquisition and disposition-related costs | 0 | 416 | 902 | |||||||||
Other | 6,933 | 6,924 | 8,083 | |||||||||
Total operating expenses | 215,260 | 194,830 | 212,994 | |||||||||
Operating income | 89,058 | 55,082 | 53,534 | |||||||||
Other Income/(Expenses): | ||||||||||||
Interest expense | (12,332 | ) | (9,668 | ) | (11,240 | ) | ||||||
Gain/(loss) on revaluation of deferred consideration—gold payments (Note 10) | 2,018 | (56,821 | ) | (11,293 | ) | |||||||
Interest income | 2,009 | 744 | 3,332 | |||||||||
Impairments (Note 25) | (16,156 | ) | (22,752 | ) | (30,710 | ) | ||||||
Loss on extinguishment of debt (Note 11) | 0 | (2,387 | ) | — | ||||||||
Other losses and gains, net | (7,926 | ) | 580 | (3,502 | ) | |||||||
Income/(loss) before income taxes | 56,671 | (35,222 | ) | 121 | ||||||||
Income tax expense | 6,874 | 433 | 10,546 | |||||||||
Net income/(loss) | $ | 49,797 | $ | (35,655 | ) | $ | (10,425 | ) | ||||
Earnings/(loss) per share—basic | $ | 0.31 | $ | (0.25 | ) | $ | (0.08 | ) | ||||
Earnings/(loss) per share—diluted | $ | 0.31 | $ | (0.25 | ) | $ | (0.08 | ) | ||||
Weighted-average common shares—basic | 143,847 | 148,682 | 151,823 | |||||||||
Weighted-average common shares—diluted | 161,263 | 148,682 | 151,823 | |||||||||
Cash dividends declared per common share | $ | 0.12 | $ | 0.12 | $ | 0.12 | ||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Net income/(loss) | $ | 49,797 | $ | (35,655 | ) | $ | (10,425 | ) | ||||
Other comprehensive (loss)/income | ||||||||||||
Reclassification of foreign currency translation adjustment to other losses and gains, net, upon the sale of WisdomTree Asset Management Canada, Inc. (“WTAMC” or “Canadian ETF business”) | 0 | (167 | ) | — | ||||||||
Reclassification of foreign currency translation adjustment to other losses and gains, net, upon the liquidation of WisdomTree Japan Inc. (Note 3) | 0 | — | (397 | ) | ||||||||
Foreign currency translation adjustment, net of income taxes | (420 | ) | 324 | 875 | ||||||||
Other comprehensive (loss)/income | (420 | ) | 157 | 478 | ||||||||
Comprehensive income/(loss) | $ | 49,377 | $ | (35,498 | ) | $ | (9,947 | ) | ||||
Common Stock | Additional Paid-In Capital | Accumulated Other | Accumulated Deficit | Total | ||||||||||||||||||||
Shares Issued | Par Value | Comprehensive Income/(Loss) | ||||||||||||||||||||||
Balance—January 1, 2019 | 153,202 | $ | 1,532 | $ | 363,655 | $ | 467 | $ | (7,319 | ) | $ | 358,335 | ||||||||||||
Restricted stock issued and vesting of restricted stock units, net | 2,347 | 22 | (22 | ) | — | — | — | |||||||||||||||||
Shares repurchased | (370 | ) | (1 | ) | (2,340 | ) | — | — | (2,341 | ) | ||||||||||||||
Exercise of stock options, net | 85 | — | 160 | — | — | 160 | ||||||||||||||||||
Stock-based compensation | — | — | 11,590 | — | — | 11,590 | ||||||||||||||||||
Other comprehensive income | — | — | — | 478 | — | 478 | ||||||||||||||||||
Dividends | — | — | (20,385 | ) | — | — | (20,385 | ) | ||||||||||||||||
Net loss | — | — | — | — | (10,425 | ) | (10,425 | ) | ||||||||||||||||
Balance—December 31, 2019 | 155,264 | $ | 1,553 | $ | 352,658 | $ | 945 | $ | (17,744 | ) | $ | 337,412 | ||||||||||||
Restricted stock issued and vesting of restricted stock units, net | 1,569 | 15 | (15 | ) | — | — | — | |||||||||||||||||
Shares repurchased | (8,234 | ) | (82 | ) | (31,115 | ) | — | — | (31,197 | ) | ||||||||||||||
Exercise of stock options, net | 117 | 1 | 291 | — | — | 292 | ||||||||||||||||||
Stock-based compensation | — | — | 11,706 | — | — | 11,706 | ||||||||||||||||||
Allocation of equity component related to convertible notes, net of issuance costs of $157 and deferred taxes of $1,239 | — | — | 3,663 | — | — | 3,663 | ||||||||||||||||||
Other comprehensive income | — | — | — | 157 | — | 157 | ||||||||||||||||||
Dividends | — | — | (20,113 | ) | — | — | (20,113 | ) | ||||||||||||||||
Net loss | — | — | — | — | (35,655 | ) | (35,655 | ) | ||||||||||||||||
Balance—December 31, 2020 | 148,716 | $ | 1,487 | $ | 317,075 | $ | 1,102 | $ | (53,399 | ) | $ | 266,265 | ||||||||||||
Reclassification of equity component related to convertible notes, net of deferred taxes of $1,022, upon the implementation of AccountingStandards Update 2020-06 (Note 12) | — | 0 | (3,682 | ) | 0 | 616 | (3,066 | ) | ||||||||||||||||
Balance—January 1, 2021 (as adjusted) | 148,716 | $ | 1,487 | $ | 313,393 | $ | 1,102 | $ | (52,783 | ) | $ | 263,199 | ||||||||||||
Restricted stock issued and vesting of restricted stock units, net | 1,369 | 13 | (13 | ) | 0 | 0 | 0 | |||||||||||||||||
Shares repurchased | (5,121 | ) | (51 | ) | (34,455 | ) | 0 | 0 | (34,506 | ) | ||||||||||||||
Exercise of stock options, net | 143 | 2 | 813 | 0 | 0 | 815 | ||||||||||||||||||
Stock-based compensation | — | 0 | 9,998 | 0 | 0 | 9,998 | ||||||||||||||||||
Other comprehensive loss | — | 0 | 0 | (420 | ) | 0 | (420 | ) | ||||||||||||||||
Dividends | — | 0 | 0 | 0 | (19,459 | ) | (19,459 | ) | ||||||||||||||||
Net income | — | 0 | 0 | 0 | 49,797 | 49,797 | ||||||||||||||||||
Balance—December 31, 2021 | 145,107 | $ | 1,451 | $ | 289,736 | $ | 682 | $ | (22,445 | ) | $ | 269,424 | ||||||||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income/(loss) | $ | 49,797 | $ | (35,655 | ) | $ | (10,425 | ) | ||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||||||
Advisory fees received in gold and other precious metals | (74,970 | ) | (62,416 | ) | (49,887 | ) | ||||||
Contractual gold payments | 17,096 | 16,811 | 13,226 | |||||||||
Impairments | 16,156 | 22,752 | 30,710 | |||||||||
Stock-based compensation | 9,998 | 11,706 | 11,590 | |||||||||
Unrealized losses | 3,781 | — | — | |||||||||
Amortization of issuance costs—convertible notes | 2,187 | 1,710 | — | |||||||||
(Gain)/loss on revaluation of deferred consideration—gold payments | (2,018 | ) | 56,821 | 11,293 | ||||||||
Amortization of right of use asset | 1,950 | 3,182 | 3,174 | |||||||||
Gain on sale—Canadian ETF business | (787 | ) | (2,877 | ) | — | |||||||
Depreciation and amortization | 738 | 1,021 | 1,045 | |||||||||
Deferred income taxes | 316 | (2,192 | ) | (349 | ) | |||||||
Loss on extinguishment of debt | 0 | 2,387 | — | |||||||||
Amortization of issuance costs—former credit facility | 0 | 1,328 | 2,888 | |||||||||
Paid-in-kind | 0 | — | (2,498 | ) | ||||||||
Other | (272 | ) | (990 | ) | (294 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||||
Securities owned, at fair value | (66 | ) | (14 | ) | 2,331 | |||||||
Accounts receivable | (3,506 | ) | (193 | ) | (19 | ) | ||||||
Prepaid expenses | (139 | ) | (159 | ) | 738 | |||||||
Gold and other precious metals | 57,417 | 45,087 | 35,886 | |||||||||
Other assets | (394 | ) | 107 | 172 | ||||||||
Fund management and administration payable | 1,348 | (2,264 | ) | (476 | ) | |||||||
Compensation and benefits payable | 10,242 | (3,804 | ) | 7,885 | ||||||||
Income taxes payable | 3,101 | (2,441 | ) | 4,524 | ||||||||
Securities sold, but not yet purchased, at fair value | 0 | (582 | ) | (1,116 | ) | |||||||
Operating lease liabilities | (15,560 | ) | (3,517 | ) | (3,587 | ) | ||||||
Accounts payable and other liabilities | (1,097 | ) | 1,328 | 677 | ||||||||
Net cash provided by operating activities | 75,318 | 47,136 | 57,488 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchase of securities owned, at fair value | (115,526 | ) | (36,444 | ) | (22,536 | ) | ||||||
Purchase of investments | (5,750 | ) | — | (8,112 | ) | |||||||
Purchase of fixed assets | (293 | ) | (472 | ) | (47 | ) | ||||||
Proceeds from the sale of securities owned, at fair value | 19,441 | 18,703 | 11,880 | |||||||||
Proceeds from the sale of Canadian ETF business, net, including receipt of contingent consideration | 2,360 | 2,774 | — | |||||||||
Proceeds from held-to-maturity | 136 | 16,488 | 3,244 | |||||||||
Proceeds from the sale of the Company’s financial interests in AdvisorEngine Inc. | 0 | 9,592 | — | |||||||||
Funding of notes receivable | 0 | — | (2,090 | ) | ||||||||
Net cash (used in)/provided by investing activities | (99,632 | ) | 10,641 | (17,661 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Shares repurchased | (34,506 | ) | (31,197 | ) | (2,341 | ) | ||||||
Dividends paid | (19,459 | ) | (20,113 | ) | (20,385 | ) | ||||||
Convertible notes issuance costs | (4,297 | ) | (5,411 | ) | — | |||||||
Repayment of debt | 0 | (179,000 | ) | (21,000 | ) | |||||||
Proceeds from the issuance of convertible notes (Note 12) | 150,000 | 175,250 | — | |||||||||
Proceeds from exercise of stock options | 815 | 292 | 160 | |||||||||
Net cash provided by/(used in) financing activities | 92,553 | (60,179 | ) | (43,566 | ) | |||||||
(Decrease)/Increase in cash flow due to changes in foreign exchange rate | (955 | ) | 855 | 927 | ||||||||
Net increase/(decrease) in cash and cash equivalents | 67,284 | (1,547 | ) | (2,812 | ) | |||||||
Cash and cash equivalents—beginning of year | 73,425 | 74,972 | 77,784 | |||||||||
Cash and cash equivalents—end of year | $ | 140,709 | $ | 73,425 | $ | 74,972 | ||||||
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 |
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for taxes | $ | 8,456 | $ | 10,131 | $ | 10,060 | ||||||
Cash paid for interest | $ | 9,898 | $ | 7,088 | $ | 8,037 | ||||||
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Operating Revenues: | ||||||||
Advisory fees (previously reported) | $ | 250,182 | $ | 265,652 | ||||
Amounts collected on behalf of third parties | (3,787 | ) | (1,875 | ) | ||||
Advisory fees (as corrected) | $ | 246,395 | $ | 263,777 | ||||
Total revenues (previously reported) | $ | 253,699 | $ | 268,403 | ||||
Amounts collected on behalf of third parties | (3,787 | ) | (1,875 | ) | ||||
Total revenues (as corrected) | $ | 249,912 | $ | 266,528 | ||||
Operating Expenses: | ||||||||
Fund management and administration (previously reported) | $ | 60,515 | $ | 61,502 | ||||
Amounts collected on behalf of third parties | (3,787 | ) | (1,875 | ) | ||||
Fund management and administration (as corrected) | $ | 56,728 | $ | 59,627 | ||||
Total operating expenses (previously reported) | $ | 198,617 | $ | 214,869 | ||||
Amounts collected on behalf of third parties | (3,787 | ) | (1,875 | ) | ||||
Total operating expenses (as corrected) | $ | 194,830 | $ | 212,994 | ||||
Year Ended December 31, 2020 | Year Ended December 31, 2019 | |||||||
Consolidated Statements of Cash Flows: | ||||||||
Cash Flows from Operating Activities | ||||||||
Net cash provided by operating activities (previously reported) | $ | 29,395 | $ | 46,832 | ||||
Reclassification of net cash flows from securities purchases and sales | 17,741 | 10,656 | ||||||
Net cash provided by operating activities (currently reported) | $ | 47,136 | $ | 57,488 | ||||
Cash Flows from Investing Activities | ||||||||
Net cash provided by/(used in) investing activities (previously reported) | $ | 28,382 | $ | (7,005 | ) | |||
Purchases of securities owned, at fair value | (36,444 | ) | (22,536 | ) | ||||
Proceeds from the sale of securities owned, at fair value | 18,703 | 11,880 | ||||||
Net cash provided by/(used in) investing activities (currently reported) | $ | 10,641 | $ | (17,661 | ) | |||
Equipment | 5 years | |||
Furniture and fixtures | 15 years |
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
WTAMC | $ | 0 | $ | 428 | $ | 2,786 | ||||||
WisdomTree Japan Inc. (“WTJ”) (1) | 0 | — | 550 | |||||||||
Total | $ | 0 | $ | 428 | $ | 3,336 | ||||||
(1) | WTJ also recognized an impairment expense of $572 in connection with the termination of its office lease during the year ended December 31, 2019 (Note 25). |
Level 1 – | Quoted prices for identical instruments in active markets. | |||
Level 2 – | Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | |||
Level 3 – | Instruments whose significant drivers are unobservable. |
December 31, 2021 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Cash equivalents | $ | 11,488 | $ | 11,488 | $ | 0 | $ | 0 | ||||||||
Securities owned, at fair value | ||||||||||||||||
ETFs | 18,812 | 18,812 | 0 | 0 | ||||||||||||
Pass-through GSEs | 106,245 | 24,720 | 81,525 | 0 | ||||||||||||
Corporate bonds | 2,109 | 0 | 2,109 | 0 | ||||||||||||
Total | $ | 138,654 | $ | 55,020 | $ | 83,634 | $ | 0 | ||||||||
Non-recurring fair value measurements: | ||||||||||||||||
Securrency, Inc. – Series A convertible preferred stock (1) | $ | 8,488 | $ | 0 | $ | 0 | $ | 8,488 | ||||||||
Liabilities: | ||||||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Deferred consideration (Note 10) | $ | 228,062 | $ | 0 | $ | 0 | $ | 228,062 | ||||||||
(1) | Fair value of $8,488 and $8,349 determined on June 9, 2021 and March 8, 2021, respectively (Note 8 ). |
December 31, 2020 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Cash equivalents | $ | 660 | $ | 660 | $ | — | $ | — | ||||||||
Securities owned, at fair value | ||||||||||||||||
ETFs | 24,165 | 24,165 | — | — | ||||||||||||
Pass-through GSEs | 8,613 | — | 8,613 | — | ||||||||||||
Corporate bonds | 2,117 | — | 2,117 | — | ||||||||||||
Total | $ | 35,555 | $ | 24,825 | $ | 10,730 | $ | — | ||||||||
Non-recurring fair value measurements: | ||||||||||||||||
AdvisorEngine Inc. (“AdvisorEngine”) – Financial interests (1) | $ | — | $ | — | $ | — | $ | — | ||||||||
Thesys Group, Inc. (“Thesys”) – Series Y Preferred Stock (1) | — | — | — | — | ||||||||||||
Total | $ | — | $ | — | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Recurring fair value measurements: | ||||||||||||||||
Deferred consideration (Note 10) | $ | 230,137 | $ | — | $ | — | $ | 230,137 | ||||||||
Non-recurring fair value measurements: | ||||||||||||||||
Convertible notes (2) | $ | 170,191 | $ | — | $ | 170,191 | $ | — | ||||||||
(1) | The fair value of the AdvisorEngine financial interests of $9,592 was determined on May 4, 2020, the date on which these financial interests were sold. Thesys was written down to 0on September 30, 2020. |
(2) | Fair value of $145,847 and $24,344 determined for convertible notes issued on June 16, 2020 and August 13, 2020, respectively (Note 12). |
Years Ended December 31, | ||||||||
2021 | 2020 | |||||||
Deferred consideration (Note 10) | ||||||||
Beginning balance | $ | $ | ||||||
Net realized losses (1) | 17,096 | 16,811 | ||||||
Net unrealized (gains)/losses (2) | (2,018 | ) | 56,821 | |||||
Settlements | (17,153 | ) | (16,519 | ) | ||||
Ending balance | $ | 228,062 | $ | 230,137 | ||||
(1) | Recorded as contractual gold payments expense on the Company’s Consolidated Statements of Operations. |
(2) | Recorded as gain/(loss) on revaluation of deferred consideration – gold payments on the Company’s Consolidated Statements of Operations. |
December 31, 2021 | December 31, 2020 | |||||||
Securities Owned | ||||||||
Trading securities | $ | 127,166 | $ | 34,895 | ||||
December 31, 2021 | December 31, 2020 | |||||||
Debt instruments: Pass-through GSEs (amortized cost) | $ | 308 | $ | 451 | ||||
December 31, | ||||||||
2021 | 2020 | |||||||
Cost/amortized cost | $ | 308 | $ | 451 | ||||
Gross unrealized gains | 13 | 30 | ||||||
Gross unrealized losses | 0 | (12 | ) | |||||
Fair value | $ | 321 | $ | 469 | ||||
December 31, | ||||||||
2021 | 2020 | |||||||
Due within one year | $ | 0 | $ | — | ||||
Due one year through five years | 0 | — | ||||||
Due five years through ten years | 0 | — | ||||||
Due over ten years | 308 | 451 | ||||||
Total | $ | 308 | $ | 451 | ||||
December 31, 2021 | December 31, 2020 | |||||||||||||||
Carrying Value | Cost | Carrying Value | Cost | |||||||||||||
Securrency, Inc. – Series A convertible preferred stock | $ | 8,488 | $ | 8,112 | $ | 8,112 | $ | 8,112 | ||||||||
Securrency, Inc. – Series B convertible preferred stock | 5,500 | 5,500 | — | — | ||||||||||||
Subtotal – Securrency, Inc. | $ | 13,988 | $ | 13,612 | $ | 8,112 | $ | 8,112 | ||||||||
Onramp Invest, LLC – Simple Agreement for Future Equity | 250 | 250 | — | — | ||||||||||||
$ | 14,238 | $ | 13,862 | $ | 8,112 | $ | 8,112 | |||||||||
Inputs | ||||||||
June 9, 2021 | March 8, 2021 | |||||||
Expected volatility | 50 | % | 55 | % | ||||
Time to exit (in years) | 4.75 | 5.00 |
December 31, | ||||||||
2021 | 2020 | |||||||
Equipment | $ | 784 | $ | 2,836 | ||||
Furniture and fixtures | 0 | 2,225 | ||||||
Leasehold improvements | 0 | 11,012 | ||||||
Less: accumulated depreciation and amortization | (227 | ) | (8,494 | ) | ||||
Total | $ | $ | ||||||
December 31, 2021 | December 31, 2020 | |||||||
Forward-looking gold price (low) – per ounce | $ | 1,833 | $ | 1,903 | ||||
Forward-looking gold price (high) – per ounce | $ | 2,705 | $ | 2,662 | ||||
Forward-looking gold price (weighted average) – per ounce | $ | 2,106 | $ | 2,117 | ||||
Discount rate | 9.0 | % | 9.0 | % | ||||
Perpetual growth rate | 1.0 | % | 0.9 | % |
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Contractual gold payments | $ | 17,096 | $ | 16,811 | $ | 13,226 | ||||||
Contractual gold payments – gold ounces paid | 9,500 | 9,500 | 9,500 | |||||||||
Gain/(loss) on revaluation of deferred consideration – gold payments (1) | $ | 2,018 | $ | (56,821 | ) | $ | (11,293 | ) |
(1) | Gains on revaluation of deferred consideration – gold payments result from a decrease in spot gold prices, a decrease in the forward-looking price of gold, a decrease in the perpetual growth rate and an increase in the discount rate used to compute the present value of the annual payment obligations. Losses on revaluation of deferred consideration – gold payments result from an increase in spot gold prices, an increase in the forward-looking price of gold, an increase in the perpetual growth rate and a decrease in the discount rate used to compute the present value of the annual payment obligations. |
2021 Notes | 2020 Notes | |||
Maturity date (unless earlier converted, repurchased or redeemed) | June 15, 2026 | June 15, 2023 | ||
Interest rate | 3.25% | 4.25% | ||
Conversion price | $11.04 | $5.92 | ||
Conversion rate | 90.5797 | 168.9189 | ||
Redemption price | $14.35 | $7.70 |
• | Conversion Holders may convert at their option at any time prior to the close of business on the business day immediately preceding March 15, 2026 and March 15, 2023 in respect of the 2021 Notes and 2020 Notes, respectively, only under the following circumstances: (i) if the last reported sale price of the Company’s common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; (ii) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sales price of the Company’s common stock and the conversion rate on each such trading day; (iii) upon a notice of redemption delivered by the Company in accordance with the terms of the indentures but only with respect to the Convertible Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events. On or after March 15, 2026 and March 15, 2023 in respect of the 2021 Notes and 2020 Notes, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. |
December 31, 2021 | December 31, 2020 | |||||||||||||||
2021 Notes | 2020 Notes | Total | ||||||||||||||
Principal amount | $ | 150,000 | $ | 175,000 | $ | 325,000 | $ | 175,000 | ||||||||
Plus: Premium | 0 | 250 | 250 | 250 | ||||||||||||
Gross proceeds | 150,000 | 175,250 | 325,250 | 175,250 | ||||||||||||
Less: Unamortized discount (1) | 0 | 0 | 0 | (4,207 | ) | |||||||||||
Less: Unamortized issuance costs (1) | (3,833 | ) | (2,793 | ) | (6,626 | ) | (4,397 | ) | ||||||||
Carrying amount | $ | 146,167 | $ | 172,457 | $ | 318,624 | $ | 166,646 | ||||||||
Effective interest rate (2) | 3.83 | % | 5.26 | % | 4.60 | % | 6.29 | % | ||||||||
(1) | Unamortized discount was reduced by $ 4,207 and unamortized issuance costs increased by $119 upon the early adoption of ASU2020-06 on January 1, 2021. The discount previously arose from the bifurcation of the conversion option which occurred prior to the adoption of ASU2020-06. The unamortized issuance costs are reported net of the unamortized premium. |
(2) | Includes amortization of the issuance costs and premium. The effective interest rate prior to January 1, 2021 also included amortization of the discount arising from the bifurcation of the conversion option. |
December 31, 2021 | December 31, 2020 | |||||||
Issuance of Preferred Shares | $ | 132,750 | $ | 132,750 | ||||
Less: Issuance costs | (181 | ) | (181 | ) | ||||
Preferred Shares – carrying value | $ | 132,569 | $ | 132,569 | ||||
Cash dividends declared per share | $ | 0.12 | $ | 0.12 | ||||
Years Ended December 31, | ||||||||
2021 | 2020 | |||||||
Lease cost: | ||||||||
Operating lease cost | $ | 1,950 | $ | 3,182 | ||||
Short-term lease cost | 1,058 | 1,227 | ||||||
Total lease cost | $ | 3,008 | $ | 4,409 | ||||
Other information: | ||||||||
Cash paid for amounts included in the measurement of operating liabilities (operating leases) | $ | 15,560 | $ | 3,517 | ||||
Right-of-use | n/a | n/a | ||||||
Weighted-average remaining lease term (in years) – operating leases | 1.5 | 8.6 | ||||||
Weighted-average discount rate – operating leases | 4.4 | % | 6.3 | % | ||||
2022 | $ | 358 | ||
2023 | 196 | |||
2024 | 0 | |||
2025 | 0 | |||
2026 | 0 | |||
2027 and thereafter | 0 | |||
Total future minimum lease payments (undiscounted) | $ | 554 | ||
Amounts recognized in the Company’s Consolidated Balance Sheets | ||||
Lease liability – short term | $ | 209 | ||
Lease liability – long term | 328 | |||
Subtotal | 537 | |||
Difference between undiscounted and discounted cash flows | 17 | |||
Total future minimum lease payments (undiscounted) | $ | 554 | ||
December 31, 2021 | December 31, 2020 | |||||||
Carrying Amount – Assets (Securrency) | ||||||||
Preferred stock – Series A Shares | $ | 8,488 | $ | 8,112 | ||||
Preferred stock – Series B Shares | 5,500 | — | ||||||
Subtotal – Securrency | $ | 13,988 | $ | 8,112 | ||||
Carrying Amount – Assets (Onramp) | ||||||||
SAFE | 250 | — | ||||||
Total (Note 8) | $ | 14,238 | $ | 8,112 | ||||
Maximum exposure to loss | $ | 14,238 | $ | 8,112 | ||||
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues from contracts with customers: | ||||||||||||
Advisory fees (1) | $ | 298,052 | $ | 246,395 | $ | 263,777 | ||||||
Other | 6,266 | 3,517 | 2,751 | |||||||||
Total operating revenues | $ | 304,318 | $ | 249,912 | $ | 266,528 | ||||||
(1) | Advisory fees previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 for additional information. |
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues from contracts with customers: | ||||||||||||
United States | $ | 179,016 | $ | 142,074 | $ | 170,827 | ||||||
Jersey (1) | 114,623 | 103,061 | 88,547 | |||||||||
Ireland | 10,679 | 4,412 | 4,714 | |||||||||
Canada (Note 3) | 0 | 365 | 2,440 | |||||||||
Total operating revenues | $ | 304,318 | $ | 249,912 | $ | 266,528 | ||||||
(1) | Advisory fees previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 for additional information. |
December 31, | ||||||||
2021 | 2020 | |||||||
Receivable from WTT | $ | 15,987 | $ | 13,030 | ||||
Receivable from ManJer Issuers | 6,460 | 11,693 | ||||||
Receivable from WMAI and WTI | 3,181 | 2,125 | ||||||
Receivable from WTCS | 0 | 36 | ||||||
Total | $ | 25,628 | $ | 26,884 | ||||
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Advisory services provided to WTT | $ | 178,511 | $ | 141,079 | $ | 169,483 | ||||||
Advisory services provided to ManJer Issuers (1) | 108,862 | 94,199 | 80,349 | |||||||||
Advisory services provided to WMAI and WTI | 10,679 | 10,124 | 10,499 | |||||||||
Advisory services provided to WTCS | 0 | 628 | 1,006 | |||||||||
Advisory services provided to WTAMC | 0 | 365 | 2,440 | |||||||||
Total | $ | 298,052 | $ | 246,395 | $ | 263,777 | ||||||
(1) | Advisory fees previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 for additional information. |
Stock options: | Generally issued for terms of ten years and may vest after at least one year of service and have an exercise price equal to the Company’s stock price on the grant date. The Company estimates the fair value of stock options (whengranted) using the Black-Scholes option pricing model. | |
RSAs/RSUs: | Awards are valued based on the Company’s stock price on grant date and generally vest ratably over three years. | |
PRSUs: | These awards cliff vest three years from the grant date and contain a market condition whereby the number of PRSUs ultimately vesting is tied to how the Company’s total shareholder return (“TSR”) compares to a peer group of other publicly traded asset managers over the three-year period. A Monte Carlo simulation is used to value these awards. |
The number of PRSUs vesting ranges from 0% to 200% of the target number of PRSUs granted, as follows: | ||
• If the relative TSR is below the 25 th percentile, then 0% of the target number of PRSUs granted will vest;• If the relative TSR is at the 25th percentile, then 50% of the target number of PRSUs granted will vest; and • If the relative TSR is above the 25th percentile, then linear scaling is applied such that the percent of the target number of PRSUs vesting is 100% at the 50th percentile and capped at 200% of the target number of PRSUs granted for performance at the 85th percentile (or 100th percentile for grants made during 2019 and 2020). • If the Company’s TSR is negative, the target number of PRSUs vesting is capped at 100 % regardless of the relative TSR percentile. |
December 31, 2021 | ||||||||
Unrecognized Stock- Based Compensation | Weighted-Average Remaining Vesting Period (Years) | |||||||
Employees and directors | $ | 8,825 | 1.23 |
Options | Weighted-Average Exercise Price | |||||||
Outstanding January 1, 2019 | 570,537 | $ | 4.36 | |||||
Granted | — | — | ||||||
Forfeitures/expirations | (1 | ) | 6.50 | |||||
Exercised | (85,000 | ) | 0.70 | |||||
Outstanding at December 31, 2019 | 485,536 | $ | 4.80 | |||||
Granted | — | — | ||||||
Forfeitures/expirations | (63,536 | ) | 2.49 | |||||
Exercised | (117,000 | ) | 4.81 | |||||
Outstanding at December 31, 2020 | 305,000 | $ | 5.68 | |||||
Granted | 0 | 0 | ||||||
Forfeitures/expirations | (162,500 | ) | 5.72 | |||||
Exercised | (142,500 | ) | 5.64 | |||||
Outstanding at December 31, 2021 | 0 | $ | 0 | |||||
RSAs | RSUs | PRSUs (1) | ||||||||||||||||||||||
Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||||||||||
Unvested Balance at January 1, 2019 | 1,957,102 | $ | 11.47 | 9,494 | $ | 11.52 | — | $ | — | |||||||||||||||
Granted | 2,794,703 | 6.16 | 35,283 | 6.45 | 270,872 | (2) | 6.24 | |||||||||||||||||
Vested | (1,053,980 | ) | 11.25 | (5,499 | ) | 9.85 | — | — | ||||||||||||||||
Forfeited | (453,267 | ) | 9.09 | — | — | (38,262 | ) | 6.24 | ||||||||||||||||
Unvested Balance at December 31, 2019 | 3,244,558 | $ | 7.29 | 39,278 | 7.20 | 232,610 | $ | 6.24 | ||||||||||||||||
Granted | 1,653,186 | 3.80 | 32,901 | 3.82 | 117,013 | (2) | 3.11 | |||||||||||||||||
Vested | (1,206,879 | ) | 8.13 | (27,130 | ) | 7.45 | — | — | ||||||||||||||||
Forfeited | (110,122 | ) | 4.79 | (5,641 | ) | 5.39 | (8,311 | ) | 6.24 | |||||||||||||||
Unvested Balance at December 31, 2020 | 3,580,743 | $ | 5.38 | 39,408 | $ | 4.46 | 341,312 | $ | 5.17 | |||||||||||||||
Granted | 1,642,266 | 5.46 | 31,170 | 5.43 | 257,043 | (2) | 6.49 | |||||||||||||||||
Vested | (1,897,699 | ) | 5.78 | (15,136 | ) | 4.73 | — | — | ||||||||||||||||
Forfeited | (288,405 | ) | 5.11 | (452 | ) | 5.37 | (47,669 | ) | 5.74 | |||||||||||||||
Unvested Balance at December 31, 2021 | 3,036,905 | $ | 5.20 | 54,990 | $ | 4.93 | 550,686 | $ | 5.73 | |||||||||||||||
(1) | Represents the target number of PRSUs granted and outstanding. The number of PRSUs that ultimately vest ranges from 0% to 200% of this amount. |
(2) | A Monte Carlo simulation was used to value these awards using the following assumptions for the Company and the peer group: (i) beginning 90-day average stock prices; (ii) valuation date stock prices; (iii) correlation coefficients based upon the price data used to calculate the historical volatilities; and (iv) the following additional assumptions: |
Granted in 2021 | Granted in 2020 | Granted in 2019 | ||||||||||
Historical stock price volatility (low) | 34 | % | 21 | % | 22 | % | ||||||
Historical stock price volatility (high) | 57 | % | 36 | % | 42 | % | ||||||
Historical stock price volatility (average) | 44 | % | 26 | % | 28 | % | ||||||
Risk free interest rate | 0.17 | % | 1.47 | % | 2.56 | % | ||||||
Expected dividend yield | 0.00 | % | 0.0 | % | 0.0 | % |
Years Ended December 31, | ||||||||||
2021 | 2020 | 2019 | ||||||||
$ | 1,080 | $ | 974 | $ | 966 | |||||
Years Ended December 31, | ||||||||||||
Basic Earnings/(Loss) per Share | 2021 | 2020 | 2019 | |||||||||
Net income/(loss) | $ | 49,797 | $ | (35,655 | ) | $ | (10,425 | ) | ||||
Less: Income distributed to participating securities | (2,168 | ) | (2,216 | ) | (2,163 | ) | ||||||
Less: Undistributed income allocable to participating securities | (3,378 | ) | — | — | ||||||||
Net income/(loss) available to common stockholders – Basic EPS | $ | 44,251 | $ | (37,871 | ) | $ | (12,588 | ) | ||||
Weighted average common shares (in thousands) | 143,847 | 148,682 | 151,823 | |||||||||
Basic income/(loss) per share | $ | 0.31 | $ | (0.25 | ) | $ | (0.08 | ) | ||||
Years Ended December 31, | ||||||||||||
Diluted Earnings/(Loss) per Share | 2021 | 2020 | 2019 | |||||||||
Net income/(loss) available to common stockholders | $ | 44,251 | $ | (37,871 | ) | $ | (12,588 | ) | ||||
Add back: Undistributed income allocable to participating securities | 3,378 | — | — | |||||||||
Less: Reallocation of undistributed income allocable to participating securities considered potentially dilutive | (3,353 | ) | — | — | ||||||||
Net income/(loss) available to common stockholders – Diluted EPS | $ | 44,276 | $ | (37,871 | ) | $ | (12,588 | ) | ||||
Weighted Average Diluted Shares (in thousands ): | ||||||||||||
Weighted average common shares | 143,847 | 148,682 | 151,823 | |||||||||
Dilutive effect of common stock equivalents, excluding participating securities | 1,208 | — | — | |||||||||
Weighted average diluted shares, excluding participating securities (in thousands) | 145,055 | 148,682 | 151,823 | |||||||||
Diluted income/(loss) per share | $ | 0.31 | $ | (0.25 | ) | $ | (0.08 | ) | ||||
Years Ended December 31, | ||||||||||||
Reconciliation of Weighted Average Diluted Shares (in thousands) | 2021 | 2020 | 2019 | |||||||||
Weighted average diluted shares as disclosed on the Consolidated Statements of Operations | 161,263 | 148,682 | (1) | 151,823 | (1) | |||||||
Less: Participating securities: | ||||||||||||
Weighted average shares of common stock issuable upon conversion of the Preferred Shares (Note 13) | (14,750 | ) | — | — | ||||||||
Potentially dilutive restricted stock awards | (1,458 | ) | — | — | ||||||||
Weighted average diluted shares used to calculate diluted earnings/(loss) per share as disclosed in the table above | 145,055 | 148,682 | (1) | 151,823 | (1) | |||||||
(1) | Excludes 15,122 and 15,002 participating securities for the years ended December 31, 2020 and 2019, respectively, as the Company reported a net loss for those periods. Also excludes 6 and 152 potentially dilutive common stock equivalents for the years ended December 31, 2020 and 2019, respectively, as the Company reported a net loss for those periods (shares herein are reported in thousands). |
Year Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
U.S. | $ | 15,986 | $ | (5,187 | ) | $ | 6,774 | |||||
Foreign | 40,685 | (30,035 | ) | (6,653 | ) | |||||||
Total | $ | 56,671 | $ | (35,222 | ) | $ | 121 | |||||
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Current: | ||||||||||||
Federal | $ | 5,857 | $ | 3,670 | $ | 10,311 | ||||||
State and local | 1,538 | 832 | 2,271 | |||||||||
Foreign | (837 | ) | (1,877 | ) | (1,687 | ) | ||||||
$ | 6,558 | $ | 2,625 | $ | 10,895 | |||||||
Deferred: | ||||||||||||
Federal | $ | (1,217 | ) | $ | 60 | $ | (246 | ) | ||||
State and local | (251 | ) | 13 | (54 | ) | |||||||
Foreign | 1,784 | (2,265 | ) | (49 | ) | |||||||
$ | 316 | $ | (2,192 | ) | $ | (349 | ) | |||||
Income tax expense | $ | 6,874 | $ | 433 | $ | 10,546 | ||||||
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
U.S. federal statutory income tax | $ | 11,901 | $ | (7,397 | ) | $ | 25 | |||||
Decrease in unrecognized tax benefits, net | (5,014 | ) | (5,661 | ) | (3,893 | ) | ||||||
Foreign operations | (3,211 | ) | (3,342 | ) | (3,561 | ) | ||||||
Change in tax-related indemnification assets, net | 1,053 | 1,189 | 740 | |||||||||
Non-deductible executive compensation | 881 | 399 | 1,608 | |||||||||
Stock-based compensation tax shortfalls | 647 | 1,485 | 1,198 | |||||||||
(Gain)/loss on revaluation of deferred consideration(1) | (424 | ) | 11,929 | 2,378 | ||||||||
Blended state income tax rate, net of federal benefit | 526 | (171 | ) | 237 | ||||||||
Change in valuation allowance – Capital losses | 5 | 4,448 | 7,555 | |||||||||
Change in valuation allowance – Foreign net operating losses (“NOLs”) and interest carryforwards | 0 | (2,018 | ) | 3,997 | ||||||||
Non-taxable gain on sale – Canadian ETF business | 0 | (740 | ) | — | ||||||||
Other differences, net | 510 | 312 | 262 | |||||||||
Income tax expense | $ | 6,874 | $ | 433 | $ | 10,546 | ||||||
(1) | The (gain)/loss on revaluation is not adjusted for income taxes as the obligation was assumed by a wholly-owned subsidiary that is based in Jersey, a jurisdiction where the Company is subject to a zero percent tax rate. |
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Federal | $ | 4,258 | $ | 4,470 | $ | 6,990 | ||||||
State and local | 1,020 | 1,353 | 1,818 | |||||||||
Foreign | 3,178 | 4,308 | 1,252 | |||||||||
$ | 8,456 | $ | 10,131 | $ | 10,060 | |||||||
December 31, | ||||||||
2021 | 2020 | |||||||
Deferred tax assets: | ||||||||
Capital losses | $ | 16,601 | $ | 16,596 | ||||
Accrued expenses | 4,993 | 3,507 | ||||||
NOLs – Foreign | 1,934 | 2,167 | ||||||
Stock-based compensation | 1,359 | 1,922 | ||||||
Goodwill and intangible assets | 1,276 | 1,466 | ||||||
Unrealized losses | 614 | — | ||||||
Interest carryforwards | 437 | 2,235 | ||||||
NOLs – U.S. | 382 | 510 | ||||||
Outside basis differences | 122 | 122 | ||||||
Operating lease liabilities | 0 | 4,953 | ||||||
Other | 376 | 111 | ||||||
Deferred tax assets | 28,094 | 33,589 | ||||||
Deferred tax liabilities: | ||||||||
Fixed assets and prepaid assets | 257 | 1,261 | ||||||
Foreign currency translation adjustment | 181 | 293 | ||||||
Unremitted earnings – International subsidiaries | 118 | 138 | ||||||
Allocated equity component of Convertible Notes | 0 | 1,022 | ||||||
Right of use assets – operating leases | 0 | 3,927 | ||||||
Deferred tax liabilities | 556 | 6,641 | ||||||
Total deferred tax assets less deferred tax liabilities | 27,538 | 26,948 | ||||||
Less: Valuation allowance | (18,657 | ) | (18,885 | ) | ||||
Deferred tax assets, net | $ | 8,881 | $ | 8,063 | ||||
Total | Unrecognized Tax Benefits | Interest and Penalties | ||||||||||
Balance on January 1, 2020 | $ | 32,101 | $ | 25,998 | $ | 6,103 | ||||||
Decrease - Lapse of statute of limitations (1) | (5,981 | ) | (4,620 | ) | (1,361 | ) | ||||||
Increases | 320 | — | 320 | |||||||||
Foreign currency translation (2) | 576 | 472 | 104 | |||||||||
Balance at December 31, 2020 | $ | 27,016 | $ | 21,850 | $ | 5,166 | ||||||
Decrease - Lapse of statute of limitations (1) | (5,171 | ) | (3,559 | ) | (1,612 | ) | ||||||
Increases | 173 | — | 173 | |||||||||
Foreign currency translation (2) | (93 | ) | (73 | ) | (20 | ) | ||||||
Balance at December 31, 2021 | $ | 21,925 | $ | 18,218 | $ | 3,707 | ||||||
(1) | Recorded as an income tax benefit along with an equal and offsetting amount recorded in other losses and gains, net, to recognize a reduction in the indemnification asset. |
(2) | The gross unrecognized tax benefits were accrued in British pounds. |
Total | ||||
Balance at January 1, 2021 | $ | 85,856 | ||
Changes | 0 | |||
Balance at December 31, 2021 | $ | 85,856 | ||
Advisory Agreements (ETFS) | ||||
Balance at January 1, 2021 | $ | 601,247 | ||
Changes | 0 | |||
Balance at December 31, 2021 | $ | 601,247 | ||
Years Ended December 31, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Lease termination – New York office (Note 14) | $ | 9,277 | $ | — | $ | — | ||||||
Fixed assets – New York office (Note 9 ) | 6,576 | — | — | |||||||||
Lease termination – London office (Note 14) | 303 | — | — | |||||||||
AdvisorEngine – Financial interests | 0 | 19,672 | $ | 30,138 | ||||||||
Thesys – Series Y Preferred | 0 | 3,080 | — | |||||||||
WisdomTree Japan | 0 | — | 572 | |||||||||
Total | $ | 16,156 | $ | 22,752 | $ | 30,710 | ||||||
Three Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31 | Sept. 30 | June 30 | Mar. 31 | Dec. 31 | Sept. 30 | June 30 | Mar. 31 | |||||||||||||||||||||||||
2021 | 2021 | 2021 | 2021 | 2020 | 2020 | 2020 | 2020 | |||||||||||||||||||||||||
Total revenues (1) | $ | 79,175 | $ | 78,112 | $ | 75,775 | $ | 71,256 | $ | 65,651 | $ | 63,749 | $ | 57,312 | $ | 63,200 | ||||||||||||||||
Operating income | $ | 22,563 | $ | 24,203 | $ | 23,685 | $ | 18,607 | $ | 12,907 | $ | 14,744 | $ | 11,797 | $ | 15,634 | ||||||||||||||||
Income/(loss) before income taxes | $ | 15,271 | $ | 6,333 | $ | 21,889 | $ | 13,178 | ($ | 11,297 | ) | $ | 1,138 | ($ | 14,054 | ) | ($ | 11,009 | ) | |||||||||||||
Net income/(loss) | $ | 11,187 | $ | 5,833 | $ | 17,630 | $ | 15,147 | ($ | 13,497 | ) | ($ | 270 | ) | ($ | 13,250 | ) | ($ | 8,638 | ) | ||||||||||||
Earnings/(loss) per share – basic | $ | 0.07 | $ | 0.04 | $ | 0.11 | $ | 0.09 | ($ | 0.10 | ) | ($ | 0.01 | ) | ($ | 0.09 | ) | ($ | 0.06 | ) | ||||||||||||
Earnings/(loss) per share – diluted | $ | 0.07 | $ | 0.04 | $ | 0.11 | $ | 0.09 | ($ | 0.10 | ) | ($ | 0.01 | ) | ($ | 0.09 | ) | ($ | 0.06 | ) | ||||||||||||
Dividends per common share | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||||||||||
Unusual or Infrequent Items: | ||||||||||||||||||||||||||||||||
(Loss)/gain on revaluation of deferred consideration (Note 12) | ($ | 3,048 | ) | $ | 1,737 | $ | 497 | $ | 2,832 | ($ | 22,385 | ) | ($ | 8,870 | ) | ($ | 23,358 | ) | ($ | 2,208 | ) | |||||||||||
Impairments (Note 25) | — | (15,853 | ) | — | ($ | 303 | ) | — | ($ | 3,080 | ) | — | ($ | 19,672 | ) | |||||||||||||||||
Loss on extinguishment of debt (Note 13) | — | — | — | — | — | — | ($ | 2,387 | ) | — |
(1) | Advisory fees previously reported have been revised due to an immaterial error correction. These revisions had no effect on previously reported net income. See Note 2 for additional information. |
Exhibit Number | Description | |
3.2 | ||
3.3 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
4.5 | ||
4.6 | ||
4.7 | ||
4.8 | ||
4.9 | ||
4.10 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 |
Exhibit Number | Description | |
10.5 | ||
10.6 | ||
10.7 | ||
10.8 | ||
10.9(a) | ||
10.9(b) | ||
10.10 | ||
10.11 | ||
10.12 | ||
10.13 | ||
10.14 | ||
10.15 | ||
10.16 | ||
Exhibit Number | Description | |
32.1 | ||
101 | Financial Statements from the Annual Report on Form 10-K of the Company are attached to this report, formatted in XBRL pursuant to Rule 405 of RegulationS-T: (i) Consolidated Balance Sheets at December 31, 2021 and December 31, 2020; (ii) Consolidated Statements of Operations for the years ended December 31, 2021, December 31, 2020 and December 31, 2019; (iii) Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2021, December 31, 2020 and December 31, 2019; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2021, December 31, 2020 and December 31, 2019; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2021, December 31, 2020 and December 31, 2019 and (vi) Notes to the Consolidated Financial Statements. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 (1) | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) |
WISDOMTREE INVESTMENTS, INC. | ||||||
By: | /s/ J ONATHAN STEINBERG | |||||
Jonathan Steinberg | ||||||
Chief Executive Officer and Director |
Signature | Title | |
/s/ J ONATHAN STEINBERG | Chief Executive Officer and Director | |
Jonathan Steinberg | (Principal Executive Officer) | |
/s/ B RYAN EDMISTON | Chief Financial Officer | |
Bryan Edmiston | (Principal Financial Officer and Principal Accounting Officer) | |
/s/ F RANK SALERNO | Non-Executive Chairman of the Board | |
Frank Salerno | ||
/s/ A NTHONY BOSSONE | Director | |
Anthony Bossone | ||
/s/ S MITA CONJEEVARAM | Director | |
Smita Conjeevaram | ||
/s/ S USAN COSGROVE | Director | |
Susan Cosgrove | ||
/s/ W IN NEUGER | Director | |
Win Neuger | ||
Director | ||
Harold Singleton III |