DGAP-News: W.P. Stewart&Co., Ltd. Announces June 30 Financial Results and Gives Corporate Update

W.P. Stewart&Co., Ltd.

21.12.2010 23:50
—————————————————————————

NEW YORK, 2010-12-21 23:50 CET (GLOBE NEWSWIRE) –W.P. Stewart&Co., Ltd. Announces June 30 Financial Results and Gives
Corporate Update, Including

— AUM of $1.7 Billion as of December 10, 2010
— Outperformance of Benchmark Year-to-Date and Three Years ending November
30, 2010

Six Month 2010 Financial Highlights

W.P. Stewart&Co., Ltd. (–W.P. Stewart– or the –Company–) today reported a net
loss of $4.9 million, or $0.92 per share (diluted) and $0.92 per share (basic),
for the six months ended 30 June 2010. This loss includes cash charges of
approximately $775,000 or $0.14 per share (diluted), on a tax-effected basis,
related to (a) professional fees incurred in connection with (1) the
exploration of a strategic transaction that was not completed and (2) the
corporate restructuring of the Company and certain of its formerly
Bermuda-based subsidiaries that was concluded in May 2010 as previously
reported and (b) severance payments made to employees terminated in connection
with the corporate restructuring. Excluding these cash charges, the six month
2010 net loss was $4.1 million, or $0.78 per share (diluted). These results
compare with a net loss in the first half of 2009 of $9.6 million, or $1.82 per
share (diluted) and $1.82 per share (basic). These prior year results include
cash and non-cash charges aggregating approximately $1.1 million, or $0.21 per
share (diluted), on a tax-effected basis, primarily relating to an adjustment
in the carrying value of an investment in an affiliate and the disposal of a
portion of leased space in New York during the period.

Net results on a cash basis for the six months ended June 30, 2010 were
-$600,000 (net loss of $4.9 million adjusted for $4.3 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 -$0.12 per share (diluted). In the same period of
the prior year, net results on a cash basis were -$5.8 million (net loss of
$9.6 million adjusted to include $3.8 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 -$1.11 per share (diluted).

For the six months ended June 30, 2010 there were 5,315,064 common shares
outstanding on a weighted average diluted basis (5,315,064 – weighted average
basic) compared to 5,252,472 common shares outstanding for the six months ended
June 30, 2009 on the same weighted average diluted basis (5,252,472 – weighted
average basic).

Included in this release are tables containing revenue and expense detail for
the six months ended June 30, 2010 with comparisons to the same period of the
prior year.

Investment Performance and Assets Under Management Update

The year-to-date performance for the W.P. Stewart U.S. Equity Composite (the
–Composite–) for the six months ended June 30, 2010, was -11.0%, pre-fee, and
-11.5%, post-fee, compared with -6.7% for the S&P 500. As of November 30, 2010,
year-to-date performance for the Composite was 9.1%, pre-fee, and 8.2%,
post-fee, compared with 7.9% for the S&P 500. For the three years ending
November 30, 2010, cumulative performance for the Composite was -0.5%, pre-fee,
and -3.7% post-fee, which was 11.0% ahead of the S&P 500 at -14.7% for the same
period. Interim monthly and quarterly performance for the Composite for 2010
are posted on the Company–s website at www.wpstewart.com.

In relation to the firm–s recent investment performance, Mark Phelps, CEO of
the Company, commented –Relative performance in the first half of the year was
always likely to be challenging as investors focused in the short-term on those
companies whose earnings rebounded from the lows recorded in 2009. In contrast,
the portfolio of investments held for our clients had not suffered such falls
to the same extent and so saw more modest recovery. As we moved into the second
half of the year, investors once again began to take note of those companies
with sustainable earnings growth and we recorded strong relative and absolute
performance more than making up for the shortfall seen in the first half.–

Assets under management (–AUM–) at December 10, 2010 were approximately $1.7
billion (preliminary), compared with approximately $1.4 billion at June 30,
2010 and $1.5 billion at December 31, 2009. In the attached tables a complete
breakdown of AUM flows for the periods ended June 30, 2010 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 $10.6 million for the six months ended June 30, 2010, up 10.4%
from $9.6 million for the same period of 2009.

The average gross management fee, annualized, was 1.06% for the six months
ended June 30, 2010, compared to 1.09% for the six months ended June 30, 2009
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 1.27%, annualized, for the six months
ended June 30, 2010, compared to 1.29% in the comparable period of the prior
year on an annualized basis.

Total operating expenses for the six months ended June 30, 2010 were $14.5
million, including approximately $775,000 in cash charges, on a tax-effected
basis, related to (a) professional fees incurred in connection with 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. For the same period of the prior year, total operating expenses
were $20.2 million, including $1.1 million 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 the disposal of a portion of leased space
in New York during the period.

For the six months ended June 30, 2010, non-cash compensation expense related
to the Company–s restricted share issuances to employees was approximately $2.5
million. For the same period of the prior year, these non-cash compensation
charges were approximately $3.2 million. These non-cash compensation expenses
are included in –employee compensation and benefits.–

The Company–s provision/(benefit) for taxes for the six months ended June 30,
2010 was $1.0 million versus -$1.1 million in the comparable period of the
prior year.

Please see the tables included in this release for further detail on revenue
and expenses for the six months ended June 30, 2010 with comparisons to the
same period of the prior year.

The Company had cash andmarketable securities at June 30, 2010 of $29.8
million. The Company has no debt. As of December 10, 2010, the Company had cash
and marketable securities balances of approximately $27.3 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 June 30, 2010 was approximately $29.9 million.

Other Items

From January through December 15, 2010, the Company repurchased 287,133 shares
of its common stock from employees or former employees for an aggregate amount
of $1,469,098. The Company funded these repurchases with cash on hand.

Mark Phelps further commented, –The Company has been through a challenging
period over the past couple of years, but the bulk of the corporate
restructuring is now behind us and looking forward into 2011 we are focused
once again on growing the business.–

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

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

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

W.P. Stewart&Co., Ltd.
Condensed Consolidated Statements of Financial Condition

June 30, December 31,
2010 2009
—————————–
(unaudited)

Assets:Cash and cash equivalents $ 27,439,189 $ 21,407,458
Fees receivable 347,898 755,093
Receivable from clearing broker 479 13,039
Investments in unconsolidated affiliates (net of 2,018,063 1,757,919
accumulated amortization
of $617,790 at December 31, 2009)
Receivables from affiliates, net 505,357 476,830
Investments, trading (cost $2,239,984 at June 30, 2,293,715 3,311,434
2010 and $2,785,735 at
December 31, 2009, respectively)
Investments, available for sale (cost $96,518 at 48,652 8,484,910
June 30, 2010 and $7,968,192 at
December 31, 2009, respectively)
Furniture, equipment, software and leasehold 461,055 663,607
improvements (net of accumulated depreciation
and amortization of $3,522,455 and $7,862,722 at
June 30, 2010 and December 31, 2009,
respectively)
Interest receivable on shareholders– notes 17,709 17,709
Income taxes receivable 3,786,417 6,995,505
Deferred income taxes receivable 397,964 363,555
Other assets 2,261,165 3,061,412
—————————–

$ 39,577,663 $ 47,308,471
=============================

Liabilities and Shareholders– Equity:
Liabilities:
Employee compensation and benefits payable $ 2,322,756 $ 4,642,976
Fees payable 136,356 97,755
Vendor payables 3,214,518 5,011,748
Accrued expenses and other liabilities 4,049,759 3,892,192
—————————–
9,723,389 13,644,671
—————————–

Shareholders– Equity:
Common shares, $0.01 par value (12,500,000 shares 54,448 55,875
authorized; 5,444,820 and 5,587,464
shares issued, 5,442,320 and 5,584,964 shares
outstanding at June 30, 2010 and
December 31, 2009, respectively)
Additional paid-in-capital 135,735,428 134,021,928
Accumulated other comprehensive income 492,738 1,164,630
Retained earnings/(deficit) (106,246,013) (101,337,258)
Common shares held in treasury, at cost, $0.01 (5,325) (5,325)
par value (2,500 shares at
June 30, 2010 and December 31, 2009)
—————————–
30,031,276 33,899,850

Less: notes receivable for common shares (177,002) (236,050)
—————————–

29,854,274 33,663,800
—————————–

$ 39,577,663 $ 47,308,471
=============================
W.P. Stewart&Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations

For the Six Months Ended June 30,
—————————————
2010 2009 %
—————————————

Revenue:
Fees (includes fees from affiliates of $ 8,363,030 $ 8,056,487 3.80%
$499,666 and $461,776
for 2010 and 2009, respectively)
Commissions 369,599 693,588 -46.71%
Realized and unrealized gains/(losses) 544,975 169,499 221.52%
on investments
Interest and other 1,318,393 677,026 94.73%
—————————————

10,595,997 9,596,600 10.41%
—————————————

Expenses:
Employee compensation and benefits 8,070,014 10,332,413 -21.90%
Fees paid out 915,017 528,278 73.21%
Commissions, clearance and trading 264,104 398,103 -33.66%
Research and administration 2,624,692 4,608,515 -43.05%
Marketing 598,000 677,694 -11.76%
Depreciation and amortization 43,068 376,271 -88.55%
Other operating 1,980,328 3,326,805 -40.47%
—————————————
14,495,223 20,248,079 -28.41%
—————————————

Income/(loss) before taxes(3,899,226) (10,651,479) -63.39%

Provision/(benefit) for taxes 1,009,529 (1,084,576) -193.08%
—————————————

Net income/(loss) $ (4,908,755) $ (9,566,903) -48.69%
=======================================

Earnings/(loss) per share:

Basic earnings/(loss) per share $ (0.92) $ (1.82) -49.45%
=======================================

Diluted earnings/(loss) per share $ (0.92) $ (1.82) -49.45%
=======================================

W.P. Stewart&Co., Ltd.
Net Flows of Assets Under
Management*

(in millions)

For the Three Months Ended For the Six Months
Ended
——————————————————
Jun. 30, Mar. 31, Jun. 30, Jun. 30, Jun. 30,
2010 2010 2009 2010 2009
——————————————————

Existing Accounts:
Contributions $ 42 $ 14 $ 26 $ 56 $ 51
Withdrawals (29) (20) (27) (49) (59)
——————————————————
Net Flows of Existing 13 (6) (1) 7 (8)
Accounts
——————————————————
Publicly Available Funds:
Contributions 24 46 7 70 11
Withdrawals (40) (9) (4) (49) (26)
Direct Accounts Opened 12 24 12 36 12
Direct Accounts Closed (15) (29) (44) (44) (153)
——————————————————
Net New Flows (19) 32 (29) 13 (156)
——————————————————

Net Flows of Assets Under $ (6) $ 26 $ (30) $ 20 $ (164)
Management
======================================================* The table above sets forth the total net flows of assets under management for
the three months ended June 30, 2010, March 31, 2010 and June 30, 2009,
respectively, and for the six months ended June 30, 2010 and 2009, respectively,
which include changes in net flows of existing accounts and net new flows (net
contributions to our publicly available funds and flows from new accounts minus
closed accounts). The table excludes total capital appreciation or depreciation
in assets under management with the exception of the amount attributable to
withdrawals and closed accounts.

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

21.12.2010 Dissemination of a Corporate News, transmitted by DGAP –
a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

DGAP–s Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

—————————————————————————

Language: English
Company: W.P. Stewart&Co., Ltd.

Bermuda
Phone:
Fax:
E-mail:
Internet:
ISIN: BMG849221061
WKN:

End of Announcement DGAP News-Service

—————————————————————————