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WisdomTree Announces Fourth Quarter 2018 Results

($11.6) million net loss, or $10.2 million net income, as adjusted

($0.08) diluted loss per share, or $0.06 EPS, as adjusted

Quarter includes $22.8 million of non-cash charges

Declares $0.03 quarterly dividend

NEW YORK, Feb. 01, 2019 (GLOBE NEWSWIRE) -- WisdomTree Investments, Inc. (WETF), an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager today reported a net loss of ($11.6) million or ($0.08) diluted loss per share in the fourth quarter.  Adjusted net income (a non-GAAP measure1) was $10.2 million1 or $0.06 diluted EPS1 (see “Fourth Quarter Financial Discussion” below).  This compares to net income of $0.2 million or $0.00 diluted EPS (as adjusted, $5.2 million1 or $0.04 diluted EPS1) in the fourth quarter of last year and net income of $22.0 million or $0.13 diluted EPS (as adjusted, $14.7 million1 or $0.09 diluted EPS1) in the third quarter of 2018.  

WisdomTree CEO and President Jonathan Steinberg said, “In 2018 we made considerable progress on key strategic initiatives of generating sustainable, diversified growth and becoming a leading product and solutions provider to financial intermediaries and institutions. Despite volatility in global capital markets and considerable investor de-risking during the quarter, WisdomTree generated positive annualized organic growth of 2%. The strategic benefits of completing our acquisition of ETF Securities were evident in the fourth quarter, as growth in our commodities products helped offset pressure from the global equity market selloff. In addition, our domestic fixed income product suite continued to scale, reaching over $2 billion of AUM at year end, up from under $500 million at the start of the year. We continued to build out our differentiated solutions program, which combined with our unique product set, allowed us to sign numerous distribution agreements with platforms and intermediaries. We anticipate this will drive stable, diversified organic growth in the years to come.”

Steinberg continued, “WisdomTree is well positioned to offer investors world class investment strategies and business solutions. We are seeing benefits from the investments made in our business and believe we are poised for the firm’s next wave of growth.”

  Three Months Ended
  Change From
  Dec. 31,
2018
  Sept. 30,
2018
  Dec. 31,
2017
  Sept. 30,
2018
  Dec. 31,
2017
Consolidated Operating Highlights ($, in billions):                                      
AUM $ 54.1     $ 59.1     $ 48.9       (8.5 %)     10.5 %
Net inflows/(outflows) $ 0.2     $ (1.3 )   $ 0.3       n/a       (8.6 %)
Average AUM $ 56.4     $ 59.5     $ 48.1       (5.1 %)     17.3 %
Average advisory fee   0.47 %     0.48 %     0.50 %     -0.01       -0.03  
                                       
                                       
Consolidated Financial Highlights ($, in millions, except per share amounts):                                      
Operating revenues $ 67.9     $ 72.6     $ 61.0       (6.5 %)     11.3 %
Net (loss)/income $ (11.6 )   $ 22.0     $ 0.2       n/a       n/a  
Diluted (loss)/earnings per share $ (0.08 )   $ 0.13     $ 0.00       n/a       n/a  
Operating income margin   17.4 %     29.9 %     8.6 %     -12.5       8.8  
Non-GAAP1                                      
Net income, as adjusted $ 10.2
    $ 14.7     $ 5.2       (30.3 %)     97.2 %
Diluted earnings per share, as adjusted $ 0.06     $ 0.09     $ 0.09     $ (0.03 )   $ (0.03 )
Operating income margin, as adjusted   21.9 %     30.5 %     16.5 %     -8.6       5.4
 
                                       

Recent Business Developments

U.S. Listed Product News

  • In December 2018, the Company declared final capital gains distributions for WisdomTree’s U.S. ETFs; and the Company announced the launch of the WisdomTree Yield Enhanced Global Aggregate Bond Fund (GLBY) on the NYSE Arca Exchange.  
  • In January 2019, the Company announced that eight U.S.-listed WisdomTree ETFs were added to BNY Mellon’s Pershing Fundvest® ETF, a no-transaction-fee ETF platform; and the Company announced that the WisdomTree IQCIO model portfolios will become available to advisors through the Lockwood Managed360 platform.

European Listed Product News

  • In November 2018, following the successful integration of the European exchange-traded commodity, currency and short-and-leveraged business (“ETFS”) of ETFS Capital Limited, the Company launched its “One Brand” advertising campaign, targeting institutional and intermediate investors. 
  • The Company announced the launch of the WisdomTree Artificial Intelligence ETF (WTAI) on the London Stock Exchange and the Borsa Italiana in December 2018, and on Xetra in January 2019.
  • In January 2019, WisdomTree Ireland Limited, a subsidiary established in Dublin to ensure WisdomTree can continue to offer its ETPs across the EU post-Brexit seamlessly, was authorized by the Central Bank of Ireland.  The Company also will continue to distribute its ETPs in the UK market via its existing UK subsidiary authorized by the UK Financial Conduct Authority. 

Canadian Listed Product News

  • In December 2018, the Company published its second annual ETF Industry & Market Outlook. In addition, the Company announced final 2018 annual capital gains distributions for certain ETFs.
  • In January 2019, the Company joined the Canadian ETF Association (CETFA).

Assets Under Management and Net Flows
U.S. listed ETF assets under management (“AUM”) was $35.5 billion at December 31, 2018, down 14.6% from September 30, 2018 due to market depreciation and net outflows.  International listed ETP AUM was $18.6 billion at December 31, 2018, up 5.8% from September 30, 2018 due to net inflows.

Fourth Quarter Financial Discussion

Included within our results for the fourth quarter of 2018 were the following items:

  • impairment charges of $17.1 million recognized on the following items: (i) $10.0 million on the intangible asset associated with the WisdomTree Continuous Commodity Index Fund (GCC); (ii) $3.8 million related to our ownership stake in Thesys Group, Inc.; and (iii) $3.3 million upon the expiration of our option to acquire the remaining equity interests in AdvisorEngine Inc. ("AdvisorEngine");
  • a loss on revaluation of deferred consideration of $5.4 million;
  • as part of our previously disclosed cost reduction initiatives, severance expense of $2.0 million, and an impairment of $0.3 million associated with the disposal of the fixed assets of our Japan office; and
  • acquisition-related costs of $1.0 million. 

The primary reason for the increase in our revenues and expenses this quarter as compared to the fourth quarter of 2017 is due to the ETFS acquisition, which was completed in April 2018.  We refer to the acquisition throughout this press release as the ETFS Acquisition.

Previously disclosed results for the fourth quarter of 2017 within our Consolidated Statements of Operations have been reclassified to conform with our current presentation.  These reclassifications had no effect on previously reported net income.

Operating Revenues

Advisory Fees

Advisory fees of $67.2 million increased 11.0% from the fourth quarter of 2017 primarily due to the ETFS Acquisition, partly offset by lower average AUM of our U.S. Business segment.  Advisory fees decreased 6.3% from the third quarter of 2018 primarily due to lower average AUM of our U.S. Business segment.

Our average global advisory fee was 0.47%, 0.48% and 0.50% during the fourth quarter of 2018, third quarter of 2018 and fourth quarter of 2017, respectively.  The change as compared to the third quarter of 2018 was due to a change in product mix.  The change as compared to the fourth quarter of 2017 was due to the ETFS Acquisition and a change in product mix.

Other Income 

Other income of $0.7 million increased 47.9% from the fourth quarter of 2017 primarily due to creation/redemption fees earned from the ETFS exchange-traded products.  Other income decreased 24.1% from the third quarter of 2018 primarily due to lower net creation/redemption fees. 

Margins

Gross margin for our U.S. Business segment was 80.2%1 in the fourth quarter of 2018 as compared to 84.0%1 2 in the fourth quarter of 2017 and 82.3%1 in the third quarter of 2018.  The decline as compared to the prior periods was primarily due to lower revenue capture and lower average AUM, coupled with higher expenses associated with fourth quarter fund re-balances.  Gross margin for our International Business segment was 69.1%1 in the fourth quarter of 2018 as compared to 27.9%1 in the fourth quarter of 2017 and 71.3%1 in the second quarter of 2018.  The change in gross margin for our International Business segment from the fourth quarter of 2017 was due to the ETFS Acquisition.  The decline from the third quarter of 2018 was primarily due to higher seasonal expenses.

Operating income margin on a consolidated basis was 17.4% in the fourth quarter of 2018 (as adjusted 21.9%1) as compared to 8.6% in the fourth quarter of 2017 (as adjusted 16.5%1) and 29.9% in the third quarter of 2018 (as adjusted 30.5%1).

Operating Expenses

Total operating expenses were $56.0 million for the fourth quarter of 2018, essentially unchanged from the fourth quarter of 2017 and up 10.2% from the third quarter of 2018.  Operating expenses were essentially unchanged from the fourth quarter of 2017 as expenses associated with the ETFS acquired business were offset by lower compensation expense and acquisition-related costs.  The increase from the third quarter of 2018 was primarily due to higher compensation and sales and business development expenses.  

  • Compensation and benefits expense decreased 26.7% from the fourth quarter of 2017 to $18.8 million due to lower incentive compensation within our U.S. Business segment, partly offset by higher compensation of our International Business segment due to the ETFS Acquisition and severance expense of $2.0 million in our U.S. Business segment.  These expenses increased 7.4% from the third quarter of 2018 primarily due to the previously mentioned severance expense.  Headcount of our U.S. Business segment was 153, 151 and 162 and our International Business segment was 75, 76 and 42 at December 31, 2018, September 30, 2018 and December 31, 2017, respectively.

  • Fund management and administration expense increased 37.1% from the fourth quarter of 2017 to $15.9 million due to higher average AUM of our International Business segment primarily associated with the ETFS Acquisition.  These expenses increased 3.7% from the third quarter of 2018 due to higher seasonal expenses.  We had 85 U.S. listed ETFs and 452 International listed ETPs at the end of the quarter.

  • Marketing and advertising expense was essentially unchanged from the fourth quarter of 2017.  These expenses increased 13.4% from the third quarter of 2018 to $3.7 million due to higher levels of spending globally.

  • Sales and business development expense increased 31.0% and 32.5% from the fourth quarter of 2017 and third quarter of 2018, respectively, to $5.0 million due to higher spending on sales related activities globally.

  • Contractual gold payments expense of $2.9 million was essentially unchanged from the third quarter of 2018.  This expense was associated with the payment of 2,375 ounces of gold and was calculated using an average daily spot price of $1,229 and $1,213 per ounce, during the fourth quarter of 2018 and third quarter of 2018, respectively. 

  • Professional and consulting fees increased 98.2% and 47.6% from the fourth quarter of 2017 and third quarter of 2018, respectively, to $2.9 million largely due to higher spending on corporate consulting-related expenses.  

  • Occupancy, communications and equipment expense increased 17.6% from the fourth quarter of 2017 to $1.5 million due to office space associated with the ETFS Acquisition.  These expenses decreased 10.3% from the third quarter of 2018 due to lower real estate taxes. 

  • Third-party distribution fees increased 67.7% and 28.9% from the fourth quarter of 2017 and third quarter of 2018, respectively, to $1.8 million primarily due to higher fees paid for platform relationships and to our third-party marketing agent in Latin America. 

  • Acquisition-related costs decreased 79.1% from the fourth quarter of 2017 to $1.0 million.  These costs increased 121.1% from the third quarter of 2018.  Costs incurred during the fourth quarter of 2017 arose in connection with the ETFS Acquisition.  Costs incurred during the third and fourth quarters of 2018 included severance and costs associated with the integration of ETFS.      

  • Other expenses increased 17.6% from the fourth quarter of 2017 to $2.2 million primarily due to higher International Business segment office expenses associated with an increase in headcount from the ETFS Acquisition.  These expenses were essentially unchanged from the third quarter of 2018.

Other Income/(Expenses)

  • Interest expense of $2.9 million was essentially unchanged from the third quarter of 2018.

  • We recognized a loss on revaluation of deferred consideration of ($5.4) million during the fourth quarter of 2018 as compared to a gain of $7.7 million recognized in the third quarter of 2018.  The loss arose in the current quarter as the price of gold increased when compared to the price of gold on September 30, 2018, the date on which the deferred consideration was last measured.  The magnitude of any gain or loss recognized is highly correlated to the magnitude of the change in the price of gold.

  • Interest income was essentially unchanged from the fourth quarter of 2017 and increased 11.3% from the third quarter of 2018 to $0.8 million primarily due to higher paid-in-kind (“PIK”) interest on a note receivable from AdvisorEngine.

  • We recognized impairment expense of $17.4 million during the fourth quarter of 2018 as further described in the “Fourth Quarter Financial Discussion” above.

  • Other gains/(losses), net were $0.4 million, ($0.4) million and $0.1 million during the fourth quarter of 2018, fourth quarter of 2017 and third quarter of 2018, respectively.  These gains and losses generally arise from the sale of gold earned from management fees paid by our physically-backed gold ETPs, foreign exchange fluctuations, securities owned and other miscellaneous items.

Income Taxes

Our estimated effective income tax rate benefit for the quarter ended December 31, 2018 of 8.2% resulted in an income tax benefit of $1.0 million.  Our tax rate differs from the federal statutory tax rate of 21% primarily due to the non-deductible loss on revaluation of deferred consideration and a valuation allowance applied to foreign net operating losses and capital losses, partly offset by a lower tax rate on foreign earnings and a tax windfall associated with the exercise of stock options. 

Our adjusted effective income tax rate was 22.6%1

Annual Results

Total operating revenues increased 20.1% to $274.1 million for the year ended December 31, 2018 primarily due to the ETFS Acquisition, partly offset by lower average AUM of our U.S. Business segment.  Total operating expenses increased 18.8% to $212.8 million primarily due to expenses associated with the ETFS acquired business, higher acquisition-related costs and higher third-party distribution fees.  These expenses were partly offset by lower compensation expense in our U.S. Business segment.

Other income/(expenses) for the year ended December 31, 2018 includes $8.0 million of interest expense, a gain on revaluation of deferred consideration of $12.2 million, interest income of $3.1 million, impairments of $17.4 million and other net losses of $0.2 million.  In addition, the prior year period includes a settlement gain of $6.9 million.

Balance Sheet

As of December 31, 2018, we had total assets of $902.6 million which consisted primarily of intangible assets and goodwill of $689.1 million and cash and securities owned of $106.8 million.  There were approximately 153.2 million shares of our common stock outstanding as of December 31, 2018. 

Quarterly Dividend

Our Board of Directors declared a quarterly cash dividend of $0.03 per share of our common stock. The dividend will be paid on February 27, 2019 to stockholders of record as of the close of business on February 13, 2019.

Conference Call

WisdomTree will discuss its results and operational highlights during a conference call on Friday, February 1, 2019 at 9:00 a.m. ET. The call-in number will be (877) 303-7209. Anyone outside the U.S. or Canada should call (970) 315-0420. The slides used during the presentation will be available at http://ir.wisdomtree.com. For those unable to join the conference call at the scheduled time, an audio replay will be available on http://ir.wisdomtree.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, the risks described below. If one or more of these or other risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this press release completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

In particular, forward-looking statements in this press release may include statements about:

  • anticipated trends, conditions and investor sentiment in the global markets and ETPs;

  • anticipated levels of inflows into and outflows out of our ETPs;

  • our ability to deliver favorable rates of return to investors;

  • our ability to develop new products and services;

  • our ability to maintain current vendors or find new vendors to provide services to us at favorable costs;

  • our ability to successfully expand our business into non-U.S. markets;

  • competition in our business; and

  • the effect of laws and regulations that apply to our business.

Our business is subject to many risks and uncertainties, including without limitation:

  • Net outflows in our two largest ETFs – the WisdomTree Europe Hedged Equity Fund and the WisdomTree Japan Hedged Equity Fund – have had, and in the future could continue to have, a negative impact on our revenues.

  • Over the last few years, we have expanded our business globally. This expansion subjects us to increased operational, regulatory, financial and other risks.

  • Declining prices of securities, precious metals and other commodities can adversely affect our business by reducing the market value of the assets we manage or causing customers to sell their fund shares and trigger redemptions.

  • Fluctuations in the amount and mix of our AUM, whether caused by disruptions in the financial markets or otherwise, may negatively impact revenues and operating margins, and may impede our ability to refinance our debt upon maturity, increase the cost of borrowing or result in our debt being called prior to maturity.

  • We derive a substantial portion of our revenues from a limited number of products, and as a result, our operating results are particularly exposed to the performance of these products and our ability to maintain the AUM of these products, as well as investor sentiment toward investing in the funds’ strategies and market-specific and political and economic risk.

  • A significant portion of our AUM is held in our U.S. listed ETFs that invest in foreign securities and we therefore have substantial exposure to foreign market conditions and are subject to foreign currency exchange rate risks.

  • Many of our ETPs and ETFs have a limited track record, and poor investment performance could cause our revenues to decline.

  • We depend on third parties to provide many critical services to operate our business and our ETPs and ETFs. The failure of key vendors to adequately provide such services could materially affect our operating business and harm our customers.

Other factors, such as general economic conditions, including currency exchange rate fluctuations, also may have an effect on the results of our operations. For a more complete description of the risks noted above and other risks that could cause our actual results to differ from our current expectations, please see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.

The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Therefore, these forward-looking statements do not represent our views as of any date other than the date of this press release.

About WisdomTree

WisdomTree Investments, Inc., through its subsidiaries in the U.S., Europe and Canada (collectively, “WisdomTree”), is an ETF and ETP sponsor and asset manager headquartered in New York. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. WisdomTree currently has approximately $57.6 billion in assets under management globally.

WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.

_______________________________________
1  
See “Non-GAAP Financial Measurements.”
2  Gross margin is now calculated as total operating revenues, less fund management and administration expenses.  Gross margin percentage is calculated as gross margin divided by total operating revenues.  See “Non-GAAP Financial Measurements” below for additional information.  Amounts previously reported as gross margin for the U.S. Business segment have been restated to conform with our current presentation.     

Contact Information:

Investor Relations   
WisdomTree Investments, Inc.   
Jason Weyeneth, CFA        
+1.917.267.3858  
jweyeneth@wisdomtree.com                          

Media Relations
WisdomTree Investments, Inc.
Jessica Zaloom
+1.917.267.3735
jzaloom@wisdomtree.com 

WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

                                                         
  Three Months Ended
  % Change From
  Years Ended
  Dec. 31,
2018
  Sept. 30,
2018
  Dec. 31,
2017
  Sept. 30,
2018
  Dec. 31,
2017
  Dec. 31,
2018
  Dec. 31,
2017
  %
Change
Operating Revenues:                                                        
Advisory fees $ 67,191     $ 71,679     $ 60,515       -6.3 %     11.0 %   $ 271,104     $ 226,692       19.6 %
Other income   676       891       457       -24.1 %     47.9 %     3,012       1,603       87.9 %
Total revenues    67,867       72,570       60,972     -6.5 %   11.3      274,116       228,295
    20.1  %
Operating Expenses:                                                        
Compensation and benefits   18,838
      17,544       25,706     7.4
%     -26.7 %     74,515       81,493       -8.6 %
Fund management and administration   15,861       15,292       11,570       3.7 %     37.1 %     56,686       42,144       34.5 %
Marketing and advertising   3,672       3,239       3,726       13.4 %     -1.4 %     13,884       14,402       -3.6 %
Sales and business development   5,036       3,801       3,843       32.5 %     31.0 %     17,153       13,811       24.2 %
Contractual gold payments   2,917       2,880             1.3 %      n/a       8,512              n/a  
Professional and consulting fees   2,854       1,934       1,440       47.6 %     98.2 %     7,984       5,254       52.0 %
Occupancy, communications and equipment   1,544       1,722       1,313       -10.3 %     17.6 %     6,203       5,415       14.6 %
Depreciation and
amortization
  303       306       353       -1.0 %     -14.2 %     1,301       1,395       -6.7 %
Third-party distribution fees   1,813       1,407       1,081       28.9 %     67.7 %     6,611       3,393       94.8 %
Acquisition-related costs   1,008
      456       4,832      121.1 %     -79.1 %     11,454       4,832     137.0 %
Other   2,202       2,281       1,873       -3.5 %     17.6 %     8,534       7,068       20.7 %
Total expenses   56,048       50,862       55,737      10.2 %   0.6 %     212,837       179,207     18.8 %
Operating income   11,819       21,708       5,235       -45.6 %   125.8 %     61,279       49,088       24.8 %
Other Income/(Expenses):                                                        
Interest expense   (2,859 )     (2,747 )           4.1 %      n/a       (7,962 )            n/a  
(Loss)/gain on revaluation of deferred consideration – gold payments   (5,410 )     7,732              n/a        n/a       12,220              n/a  
Interest income   800       719       862       11.3 %     -7.2 %     3,093       2,861       8.1 %
Impairments   (17,386 )                  n/a        n/a       (17,386 )            n/a  
Settlement gain                      n/a        n/a             6,909        n/a  
Other gains and losses, net   439       118       (448 )   272.0 %      n/a       (205 )     (666 )     -69.2 %
(Loss)/income before taxes   (12,597 )     27,530       5,649       n/a       n/a       51,039        58,192     -12.3 %
Income tax (benefit)/expense   (1,033 )     5,481       5,411     n/a       n/a       14,406       30,993       -53.5 %
Net (loss)/income $ (11,564 )   $ 22,049     $ 238       n/a       n/a     $ 36,633     $ 27,199       34.7 %
(Loss)/earnings per share – basic $ (0.08 )   $ 0.13     $ 0.00                 $ 0.23     $ 0.20        
(Loss)/earnings per share – diluted $ (0.08 )   $ 0.13     $ 0.00                 $ 0.23     $ 0.20        
Weighted average common shares – basic   151,083       150,892       134,800                   146,645       134,614        
Weighted average common shares – diluted   151,083       166,622       136,568                   158,415       136,003        


WISDOMTREE INVESTMENTS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
(Unaudited)

The following tables set forth the pre-tax operating results for the Company’s U.S. Business and International Business segments.    

...
U.S. Business Segment
  Three Months Ended   % Change From   Years Ended
  Dec. 31,   Sept. 30,   Dec. 31,   Sept. 30,   Dec. 31,   Dec. 31,   Dec. 31,   %
   2018     2018     2017    2018
  2017
   2018     2017    Change
Operating Revenues:                              
Advisory fees $ 45,633     $ 50,216     $ 57,605     -9.1 %   -20.8 %   $ 204,298     $ 217,021     -5.9 %
Other income   126       173       147     -27.2 %   -14.3 %     608       520     16.9 %
Total revenues   45,759       50,389       57,752     -9.2 %   -20.8 %     204,906       217,541     -5.8 %
Operating Expenses:                                                        
Compensation and benefits   14,370       13,040       23,132     10.2 %   -37.9 %     58,307       71,079     -18.0 %
Fund management and administration   9,038       8,915       9,247     1.4 %   -2.3 %     35,728       35,524     0.6 %
Marketing and   2,704       2,469       3,169     9.5 %   -14.7 %     11,003       12,286     -10.4 %
advertising                                                        
Sales and business development   3,747       2,778       3,427     34.9 %   9.3 %     13,426       12,079     11.2 %
Professional and consulting fees   2,166       1,544       1,190     40.3 %   82.0 %     6,169       4,321     42.8 %
Occupancy, communications and equipment   1,205       1,423       1,178     -15.3 %   2.3 %     5,162       4,895     5.5 %
Depreciation and amortization   280       282       339     -0.7 %   -17.4 %     1,215       1,347     -9.8 %
Third-party distribution fees   1,789       1,398       1,072     28.0 %   66.9 %     6,457       3,374     91.4 %
Acquisition-related costs   72       247       4,832     -70.9 %   -98.5 %     8,289       4,832     71.5 %
Other   1,617       1,678       1,734     -3.6 %   -6.7 %     6,674       6,605     1.0 %
Total expenses   36,988       33,774       49,320     9.5 %   -25.0 %     152,430       156,342     -2.5 %
Operating income   8,771       16,615       8,432     -47.2 %   4.0 %     52,476       61,199     -14.3 %
Other Income/(Expenses):                                                        
Interest expense   (197 )     (196 )         0.5 %     n/a       (566 )           n/a  
Interest income   800       719       862     11.3 %   -7.2 %     3,093       2,861     8.1 %
Impairments   (17,386 )                 n/a       n/a       (17,386 )           n/a  
Settlement gain                     n/a       n/a             6,909       n/a  
Other gains and losses, net   266       318       (470 )   -16.4 %     n/a       292       (432 )     n/a  
(Loss)/income before taxes $ (7,746 )   $ 17,456     $ 8,824     n/a     n/a     $ 37,909     $ 70,537     -46.3 %
Operating income margin   19.2 %     33.0 %     15.3 %                 25.6 %     28.1 %      
                                                         
                                                         
                                                         
International Business Segment
  Three Months Ended 
  % Change From   Years Ended
  Dec. 31,   Sept. 30,   Dec. 31,   Sept. 30,   Dec. 31,   Dec. 31,   Dec. 31,   %
  2018   2018   2017   2018   2017   2018      2017    Change
Operating Revenues:                              
Advisory fees $ 21,558     $ 21,463     $ 2,910     0.4 %   640.8 %   $ 66,806     $ 9,671     590.8 %
Other income   550       718       310     -23.4 %   77.4 %     2,404       1,083     122.0 %
Total revenues   22,108       22,181       3,220     -0.3 %   586.6 %     69,210       10,754     543.6 %
Operating Expenses:                                                        
Compensation and benefits   4,468       4,504       2,574     -0.8
%   73.6
%     16,208       10,414     55.6 %
Fund management and administration   6,823       6,377       2,323     7.0 %   193.7 %     20,958       6,620     216.6 %
Marketing and advertising   968       770       557     25.7 %   73.8 %     2,881       2,116     36.2 %
Sales and business development   1,289       1,023       416     26.0 %   209.9 %     3,727       1,732     115.2 %
Contractual gold payments   2,917       2,880           1.3 %   n/a       8,512           n/a  
Professional and consulting fees   688       390       250     76.4 %   175.2 %     1,815       933     94.5 %
Occupancy, communications and equipment   339       299       135     13.4 %   151.1 %     1,041       520     100.2 %
Depreciation and amortization   23       24       14     -4.2 %   64.3 %     86       48     79.2 %
Third-party distribution fees   24       9       9     166.7 %   166.7 %     154       19     710.5 %
Acquisition-related costs   936
      209           347.8 %   n/a       3,165
          n/a  
Other   585       603       139     -3.0 %   320.9 %     1,860       463     301.7 %
Total expenses   19,060       17,088       6,417     11.5 %   197.0 %     60,407       22,865     164.2 %
Operating income/(loss)   3,048       5,093       (3,197 )   -40.2 %   n/a       8,803       (12,111 )   n/a   
Other Income/(Expenses):                                                        
Interest expense   (2,662 )     (2,551 )         4.4 %   n/a       (7,396 )         n/a  
(Loss)/gain on revaluation of deferred consideration – gold payments   (5,410 )     7,732           n/a     n/a       12,220           n/a  
Other gains and losses, net   173