W.P. Stewart & Co., Ltd. Reports Fourth Quarter and Full Year 2009 Financial Results and Provides Corporate Update

W.P. Stewart & Co., Ltd. 

10.09.2010 18:05
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NEW YORK, Sept. 10, 2010 (GLOBE NEWSWIRE) -- W.P. Stewart & Co., Ltd. Reports
Fourth Quarter and Full Year 2009 Financial Results and Provides Corporate
Update, Including: 

-- Successful Completion of Corporation Restructuring 
-- Continued Streamlining of Business by Closing Broker-Dealer by Year End 
-- Completed Sale of Bermuda Office Building 
-- AUM of $1.4 Billion at 20 August 2010 
-- Cash/Marketable Securities of $29.3 Million at 20 August 2010 
-- Repurchase of Over 200,000 Shares 

Financial Results

Fourth Quarter Highlights

W.P. Stewart & Co., Ltd. ('W.P. Stewart' or the 'Company') today reported a net
loss of $3.7 million, or $0.70 per share (diluted) and $0.70 per share (basic),
for the fourth quarter ended 31 December 2009. This loss includes cash charges
of approximately $2.5 million or $0.47 per share (diluted), on a tax-effected
basis, related to (a) professional fees incurred in connection with (1) the
reorganization of our U.S. mutual fund, (2) the exploration of a strategic
transaction that was not completed and (3) the corporate restructuring of the
Company and certain of its formerly Bermuda-based subsidiaries that was
concluded in May 2010 as previously reported and (b) severance payments made to
employees terminated in connection with the corporate restructuring. This loss
also includes non-cash income of $2.8 million or $0.53 per share (diluted), on
a tax-effected basis, related to (a) a reversal of an over-accrual of fees paid
out expense relating to fees payable to solicitors and (b) an adjustment to tax
assets and liabilities. Excluding these cash charges and non-cash income, the
fourth quarter 2009 net loss was $4.0 million, or $0.76 per share (diluted).
These results compare with a net loss in the fourth quarter of 2008 of $6.6
million, or $1.26 per share (diluted) and $1.26 per share (basic). These prior
year results include cash and non-cash charges aggregating approximately
$297,000, or $0.06 per share (diluted), on a tax-effected basis, primarily
relating to an adjustment in the carrying value of an investment in an
affiliate and agreements with certain employees whose employment terminated
during the quarter. 

Net results on a cash basis for the quarter ended 31 December 2009 were -$4.5
million (net loss of $3.7 million adjusted for $0.8 million, representing
non-cash income and expenses consisting of unrealized gains and losses,
non-cash compensation, depreciation, amortization, the reversal of an
over-accrual of fees paid out and the effect of an adjustment to tax assets and
liabilities mentioned above and other non-cash charges, on a tax-effected
basis), or -$0.84 per share (diluted). In the same quarter of the prior year,
net results on a cash basis were -$4.0 million (net loss of $6.6 million
adjusted to include $2.6 million, representing non-cash income and expenses
consisting of unrealized gains and losses, non-cash compensation, depreciation,
amortization and other non-cash charges, on a tax-effected basis), or -$0.76
per share (diluted). 

For the quarter ended 31 December 2009 there were 5,323,141 common shares
outstanding on a weighted average diluted basis (5,323,141 - weighted average
basic) compared to 5,223,957 common shares outstanding for the quarter ended 31
December 2008 on the same weighted average diluted basis (5,223,957 - weighted
average basic). On 19 November 2008, the Company effected a one-for-ten share
consolidation of the Company's authorized and issued common shares pursuant to
which every ten common shares, par value $0.001 per share, were consolidated,
reclassified and converted into one new common share, par value $0.01 per
share. All share numbers and per share dollar figures for the quarter and year
ended 31 December 2009 are provided after giving effect to such share
consolidation and all prior period share numbers and per share data have been
restated to reflect the share consolidation. 

Full Year 2009 Highlights

For the year ended 31 December 2009, the net loss was $17.1 million, or $3.24
per share (diluted) and $3.24 per share (basic), on revenues of $19.7 million.
This loss includes cash and non-cash charges of approximately $3.7 million or
$0.71 per share (diluted), on a tax-effected basis, consisting of non-cash
charges of approximately $625,000 related to an adjustment in the carrying
value of an investment in an affiliate and cash charges of approximately $3.1
million primarily reflecting (a) the disposal of a portion of leased space in
New York, (b) professional fees related to the reorganization of our U.S.
mutual fund, the exploration of a strategic transaction not completed and the
corporate restructuring concluded in May 2010 and (c) severance payments made
to employees terminated in connection with the corporate restructuring. This
loss also includes non-cash income of $2.8 million or $0.53 per share
(diluted), on a tax-effected basis, related to (a) a reversal of an
over-accrual of fees paid out expense relating to fees payable to solicitors
and (b) an adjustment to tax assets and liabilities. Excluding these cash and
non-cash charges and non-cash income, the net loss for the year ended 31
December 2009 was $16.2 million, or $3.07 per share (diluted). For the year
ended 31 December 2008, the Company recorded a net loss of $49.3 million or
$10.09 per share (diluted) and $10.09 per share (basic), on revenues of $32.6
million. In 2008, results also include certain cash and non-cash charges
aggregating $24.7 million or $5.06 per share (diluted), on a tax-effected
basis, relating to an impairment of intangible assets and goodwill, agreements
with certain employees whose employment terminated during the year, and the
initiative to complete a strategic transaction, which initiative resulted in an
investment by funds managed by Arrow Capital Management LLC in the third
quarter of 2008. 

Net results on a cash basis for the year ended 31 December 2009 were -$12.6
million (net loss of $17.1 million adjusted to include $4.5 million,
representing non-cash income and expenses consisting of unrealized gains and
losses, non-cash compensation, depreciation, amortization, the reversal of an
over-accrual of fees paid out and the effect of an adjustment to tax assets and
liabilities mentioned above and other non-cash charges, on a tax-effected
basis), or -$2.39 per share (diluted). In the same period of the prior year,
net results on a cash basis were -$14.2 million (net loss of $49.3 million
adjusted to include $35.1 million, representing non-cash income and expenses
consisting of unrealized gains and losses, non-cash compensation, depreciation,
amortization and other non-cash charges, including the impairment charge
referred to above, on a tax-effected basis), or -$2.91 per share (diluted). 

For the full year ended 31 December 2009 there were 5,278,126 common shares
outstanding on a weighted average diluted basis (5,278,126 - weighted average
basic) compared to 4,886,968 common shares outstanding for the year ended 31
December 2008 on the same weighted average diluted basis (4,886,968 - weighted
average basic). 

Included in this release are tables containing revenue and expense detail for
the three months and year ended 31 December 2009 with comparisons to prior
periods. 

Investment Performance and Assets Under Management Update

As previously reported, the performance for the W.P. Stewart U.S. Equity
Composite (the 'Composite') for the year ended 31 December 2009, was 34.7%,
pre-fee, and 33.7%, post-fee, compared with 26.5% for the S&P 500. Interim
monthly and quarterly performance for the Composite for 2010 are posted on the
Company's website at www.wpstewart.com. 

Assets under management ('AUM') at 20 August 2010 were approximately $1.4
billion (preliminary), compared with approximately $1.5 billion at 31 December
2009. In the attached tables a complete breakdown of AUM flows for the year
ended 31 December 2009 with comparisons to earlier periods is provided. 

The Company releases composite portfolio investment returns on a monthly basis
and intends to release AUM data at least on a quarterly basis. The performance
returns are posted on the Company's website at www.wpstewart.com, usually
within one week of month-end and AUM quarterly updates will be posted usually
within one month of the quarter-end. A complete history of the performance of
the Composite is available on the Company's website. Performance results and
AUM data are subject to change on final reconciliation of all relevant data. 

Revenues and Other Financial Data 

Revenues were $5.4 million for the quarter ended 31 December 2009, up 10.5%
from $4.9 million for the same quarter of 2008. Revenues were $19.7 million for
the full year ended 31 December 2009, compared to $32.6 million for 2008. 

The average gross management fee, annualized, was 1.07% for the quarter ended
31 December 2009 and 1.08% for the year ended 31 December 2009, compared to
1.11% and 1.08%, respectively, in each of the comparable periods of the prior
year on an annualized basis.  Excluding performance fee based accounts, which
pay a lower quarterly base fee plus an annual performance fee at year-end if
earned, the average gross management fee was 1.29%, annualized, for the quarter
ended 31 December 2009 and 1.29% for the year ended 31 December 2009, compared
to 1.31% and 1.27%, respectively, in each of the comparable periods of the
prior year on an annualized basis. 

Total operating expenses for the fourth quarter of 2009 were $10.3 million,
including $2.5 million in cash charges, on a tax-effected basis, related to (a)
professional fees incurred in the reorganization of our U.S. mutual fund, the
exploration of a strategic transaction not completed and the corporate
restructuring concluded in May 2010 as mentioned above and (b) severance
payments made to employees terminated in connection with the corporate
restructuring.  These expenses were somewhat offset by $1.5 million of non-cash
income included in fees paid out resulting from a reversal of an over-accrual
of certain fees payable to solicitors.  For the same quarter of the prior year,
total operating expenses were $12.6 million, including $297,000 in cash and
non-cash charges, on a tax-effected basis, primarily relating to an adjustment
in the carrying value of an investment in an affiliate and agreements with
certain employees whose employment terminated during the quarter.  Total
operating expenses for the year ended 31 December 2009 were $39.7 million,
including $3.7 million in charges (cash and non-cash), on a tax-effected basis,
relating to (a) an adjustment in the carrying value of an investment in an
affiliate, (b) the disposal of a portion of leased spaced in New York, (c)
professional fees incurred in the reorganization of our U.S. mutual fund, the
exploration of a strategic transaction and the corporate restructuring
concluded in May 2010, and (d) severance payments made to employees terminated
in connection with the corporate restructuring.  These expenses were somewhat
offset by $1.5 million of non-cash income included in fees paid out resulting
from a reversal of an over-accrual of certain fees payable to solicitors.  This
compares to total operating expenses for the year ended 31 December 2008 of
$83.1 million, including $24.7 million in charges (cash and non-cash), on a
tax-effected basis, relating to an impairment of intangible assets and
goodwill, agreements with certain employees whose employment terminated during
the year, and the initiative to complete the strategic transaction mentioned
above. 

For the quarter and year ended 31 December 2009 non-cash compensation expense
related to the Company's restricted share issuances to employees was
approximately $2.0 million and $7.0 million, respectively.  For the same
periods of the prior year, these non-cash compensation charges were
approximately $2.6 million and $12.7 million, respectively. These non-cash
compensation expenses are included in 'employee compensation and benefits'. 

The Company's provision/(benefit) for taxes for each of the quarters ended 31
December 2009 and 2008 was -$1.1 million, and was -$2.9 million versus -$1.2
million for the years ended 31 December 2009 and 2008, respectively. 

Please see the tables included in this release for further detail on revenue
and expenses for the fourth quarter and full year ended 31 December 2009 and
2008. 

The Company had cash and marketable securities at 31 December 2009 of $33.2
million. The Company has no debt. As of 20 August 2010, the Company had cash
and marketable securities balances of approximately $29.3 million.  In
addition, the joint venture company that owned the Company's headquarter
building in Bermuda completed its sale of the building in May 2010 and will
subsequently distribute its assets, including the proceeds of the sale, to its
joint venture partners, The Bank of Bermuda and the Company. 

Shareholders' equity at 31 December 2009 was approximately $33.7 million. 

Corporate Update

The Company previously reported the completion of its corporate restructuring
in May 2010 and subsequently announced some changes to its management in June
2010.  The restructuring was another step in the Company's path of simplifying
its corporate structure and reducing its underlying cost base, the results of
which will not be reflected in reduced expenses until the latter half of 2010. 
Nevertheless, the Company believes other previously implemented cost savings
efforts will be reflected in the results for the first half of the year, such
results to be reported by the Company at a future date. 

The Company continues to evaluate ways to streamline its operations while
continuing to provide its clients with the high quality service it has always
strived to deliver.  The Company is currently working with Pershing Advisor
Solutions LLC ('PAS') to enter into a relationship whereby PAS and its
affiliate Pershing LLC would provide prime brokerage and brokerage related
services to the Company and its clients.  It is anticipated that this
arrangement will be effective by the end of the current year whereupon the
Company's affiliated broker-dealer, W.P. Stewart Securities LLC ('WPSSL') would
cease operations.  Pershing currently serves as the clearing broker for WPSSL
and as custodian for many of the Company's clients. 

From January through August 2010, the Company repurchased 233,199 shares of its
common stock from employees or former employees for an aggregate amount of
$1,165,995.  The Board of Directors also recently approved a stock repurchase
program of up to 10% of the currently outstanding common shares from time to
time in the discretion of the Board's Executive Committee, whether in open
market or privately negotiated transactions.  The Company has approximately 5.4
million shares of common stock outstanding. Any repurchased shares will be
cancelled or held in treasury for general corporate purposes.  The Company
intends to fund any repurchases with cash on hand. 

W.P. Stewart & Co., Ltd. is an asset management company that has provided
research-intensive equity management services to clients throughout the world
since 1975.  The Company is headquartered in New York, New York and has
additional operations or affiliates in Europe. 

The Company's shares are currently traded on the Pink Sheets under the symbol
'WPSL'. 

For more information, please visit the Company's website at
http://www.wpstewart.com, or call W.P. Stewart Investor Relations at
1-888-695-4092 (toll-free within the United States) or 1-212-750-8585 (outside
the United States) or e-mail to IRINFO@wpstewart.com.  Statements made in this
release concerning our assumptions, expectations, beliefs, intentions, plans or
strategies are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause actual results to differ from those expressed or
implied in these statements.  Such risks and uncertainties include, without
limitation, the effects of the Company's corporate reorganization, the adverse
effect from a decline or volatility in the securities markets, the general
downturn in the economy, the effects of economic, financial or political
events, a loss of client accounts, inability of the Company to attract or
retain qualified personnel, a challenge to our former U.S. tax status,
competition from other companies, changes in government policy or regulation, a
decline in the Company's products' performance, inability of the Company to
implement its operating strategy, the effects of the Company's delisting and
deregistration under the U.S. Securities Act of 1934, inability of the Company
to manage unforeseen costs and other effects related to legal proceedings or
investigations of governmental and self-regulatory organizations, industry
capacity and trends, changes in demand for the Company's services, changes in
the Company's business strategy or development plans and contingent
liabilities.  The information in this release is as of the date of this
release, and will not be updated as a result of new information or future
events or developments. 

Please see attachment for financial tables.

CONTACT:  W.P. Stewart & Co., Ltd.
          888-695-4092 (toll-free within the U.S.)
          212-750-8585 (outside the U.S.)
          IRINFO@wpstewart.com

News Source: NASDAQ OMX



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Language:     English
Company:      W.P. Stewart & Co., Ltd.
              
               
              Bermuda
Phone:        
Fax:          
E-mail:       
Internet:     
ISIN:         BMG849221061
WKN:          
 
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