Exhibit 99.1
Envestnet Reports Fourth Quarter and Full Year 2011 Financial Results
Chicago, IL – February 23, 2012 – Envestnet (NYSE: ENV), a leading provider of wealth management software and services to financial advisors, today reported financial results for its fourth quarter and full year ended December 31, 2011.
| Key Financial Metrics | Fourth Quarter | % | Full Year | % | ||||||||||||||||||||
| (in millions except per share data) |
2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
| Revenues from AUM/A |
$ | 24.6 | $ | 21.8 | 12 | % | $ | 99.2 | $ | 76.0 | 31 | % | ||||||||||||
| Total Revenues |
$ | 30.5 | $ | 27.6 | 11 | % | $ | 123.2 | $ | 98.1 | 26 | % | ||||||||||||
| Adjusted EBITDA(1) |
$ | 6.5 | $ | 5.5 | 18 | % | $ | 27.4 | $ | 18.1 | 51 | % | ||||||||||||
| Adjusted Net Income per Share(1) |
$ | 0.11 | $ | 0.08 | 38 | % | $ | 0.42 | $ | 0.27 | 56 | % | ||||||||||||
Financial results for the fourth quarter of 2011 compared to the fourth quarter of 2010:
| • | Revenues from assets under management (AUM) or assets under administration (AUA) increased 12% to $24.6 million for the fourth quarter of 2011 from $21.8 million for the fourth quarter of 2010; total revenues, which includes licensing and professional services fees, increased 11% to $30.5 million for the fourth quarter of 2011 from $27.6 million for the fourth quarter of 2010 |
| • | Net income attributable to common stockholders increased 111% to $1.8 million, or $0.06 per diluted share, for the fourth quarter of 2011 compared to $0.9 million, or $0.03 per diluted share, for the fourth quarter of 2010 |
| • | Adjusted EBITDA(1) increased 18% to $6.5 million for the fourth quarter of 2011 from $5.5 million for the fourth quarter of 2010 |
| • | Adjusted Net Income(1) increased 40% to $3.5 million, or $0.11 per diluted share, for the fourth quarter of 2011 from $2.5 million, or $0.08 per diluted share, for the fourth quarter of 2010 |
Financial results for full year 2011 compared to 2010:
| • | Revenues from AUM/A increased 31% to $99.2 million for 2011 from $76.0 million for 2010; total revenues, which includes licensing and professional services fees, increased 26% to $123.2 million for 2011 from $98.1 million for 2010 |
| • | Net income attributable to common stockholders was $7.6 million, or $0.23 per diluted share, for 2011 compared to a net loss attributable to common stockholders of $(1.0) million, or $(0.05) per diluted share, for 2010 |
| • | Adjusted EBITDA(1) increased 51% to $27.4 million for 2011 from $18.1 million for 2010 |
| • | Adjusted Net Income(1) increased to $13.8 million, or $0.42 per diluted share, for 2011 from $8.3 million, or $0.27 per diluted share, for 2010 |
“We delivered strong growth in revenue from assets under management or administration during 2011,” said Jud Bergman, founder and chief executive officer of Envestnet. “Deepening our existing advisor relationships will be core to our growth strategy in 2012, with opportunities to accelerate that growth through strategic activity that leverages our scale, expands our investment capabilities, and broadens the software tools that enable advisors to build their business efficiently.”
“We are helping advisors transform the wealth management industry to a fully-transparent, unconflicted fiduciary standard of care for investors. We plan to grow by continually empowering advisors to achieve excellence in portfolio and practice management through our integrated wealth management solutions,” concluded Mr. Bergman.
| Key Operating Metrics | December 31, | % | ||||||||||
| (assets in billions) |
2011 | 2010 | Change | |||||||||
| Assets under management (AUM) |
$ | 22.9 | $ | 14.5 | 58 | % | ||||||
| Assets under administration (AUA) |
$ | 47.1 | $ | 49.2 | -4 | % | ||||||
| Accounts (AUM/A) |
340,674 | 306,825 | 11 | % | ||||||||
| Advisors (AUM/A) |
13,887 | 13,833 | 0 | % | ||||||||
Key Operating Metrics as of and for the quarter ended December 31, 2011:
| • | AUM of $22.9 billion, up 58% from December 31, 2010 |
| • | AUA of $47.1 billion, down 4% from December 31, 2010 |
| • | Advisors (AUM/A only) served totaled 13,887 |
| • | Gross sales of AUM/A of $7.3 billion, resulting in net flows of $2.4 billion |
The following table summarizes the changes in AUM and AUA for the quarter ended December 31, 2011:
| In Millions Except Account Data |
9/30/11 | Gross Sales |
Redemp- tions |
Net Flows |
Market Impact |
FundQuest | 12/31/11 | |||||||||||||||||||||
| Assets under Management (AUM) |
$ | 15,560 | $ | 1,916 | $ | (1,256 | ) | $ | 660 | $ | 891 | $ | 5,825 | $ | 22,936 | |||||||||||||
| Assets under Administration (AUA) |
50,607 | 5,332 | (3,564 | ) | 1,768 | 2,074 | (7,301 | ) | 47,148 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total AUM/A |
$ | 66,167 | $ | 7,248 | $ | (4,820 | ) | $ | 2,428 | $ | 2,965 | $ | (1,476 | ) | $ | 70,084 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Fee-Based Accounts |
337,173 | 32,659 | (19,104 | ) | 13,555 | (10,054 | ) | 340,674 | ||||||||||||||||||||
During the fourth quarter, the Company added $2.1 billion of conversions, which are included in the above AUM/A gross sales figures. The Company added an additional $0.1 billion in conversions under licensing agreements.
On December 13, 2011, the Company closed on its acquisition of FundQuest. At that time, $5.8 billion of FundQuest assets previously reported by the Company as AUA were reclassified to AUM. Also during the fourth quarter, one of FundQuest’s clients with $1.5 billion in assets transitioned to licensing for a flat fee and is no longer reflected in the Company’s AUA at December 31, 2011.
Review of Financial Results
The Company’s financial results for 2011 reflect the consolidation of FundQuest for the period December 13, 2011 through December 31, 2011. In connection with the acquisition, the platform services agreement between FundQuest and the Company terminated on December 13, 2011. The termination of the agreement resulted in the elimination of the customer inducement asset and liability previously reflected on the Company’s balance sheet. The acquisition did not have a material impact on the Company’s non-GAAP financial measures for the quarter and year ended December 31, 2011.
Total revenues increased 11% to $30.5 million for the fourth quarter of 2011 from $27.6 million for the fourth quarter of 2010. The increase was primarily due to a 12% increase in revenues from assets under management or administration to $24.6 million from $21.8 million in the prior year period.
Total operating expenses in the fourth quarter of 2011 increased 10% to $28.1 million from $25.7 million in the prior year period. After certain non-GAAP adjustments(2) included in our Adjusted EBITDA reconciliation, total operating expenses increased 7% compared to the prior year. Cost of revenues increased 11% to $10.4 million in the fourth quarter of 2011 from $9.3 million in the fourth quarter of 2010 due to the increase in revenue from AUM or AUA. Compensation and benefits decreased 2% to $9.6 million in the fourth quarter of 2011 from $9.8 million in the prior year period. General and administration expenses increased 22% to $6.0 million in the fourth quarter of 2011 from $5.0 million in the prior year period.
2
Income from operations was $2.5 million for the fourth quarter of 2011 compared to $1.9 million for the fourth quarter of 2010. Net income attributable to common stockholders was $1.8 million, or $0.06 per diluted share, for the fourth quarter of 2011 compared to $0.9 million, or $0.03 per diluted share, for the fourth quarter of 2010.
Adjusted EBITDA(1) in the fourth quarter of 2011 was $6.5 million, up 18% from $5.5 million in the prior year period, reflecting expanding margins. Adjusted Operating Income(1) was $5.1 million, up 18% from $4.3 million in the prior year period. Adjusted Net Income(1) was $3.5 million, compared to $2.5 million in the fourth quarter of 2010. Adjusted Net Income Per Share(1) was $0.11 per diluted share, compared to $0.08 per diluted share in the fourth quarter of 2010.
Conference Call
The Company will host a conference call to discuss fourth quarter 2011 financial results today at 5:00 p.m. ET. Prior to the conference call, the Company will post supplemental financial information that will be discussed during the call and live webcast. This information and the live webcast can be accessed from the Company’s investor relations website at http://ir.envestnet.com/. The conference call can also be accessed live over the phone by dialing (888) 539-3694, or (719) 457-2689 for international callers. A replay will be available beginning one hour after the call and can be accessed from the Company’s investor relations website, or by dialing (877) 870-5176, or (858) 384-5517 for international callers; the conference ID is 7194293. The dial-in replay will be available for one week and the webcast replay will be available for one month following the date of the conference call.
About Envestnet
Envestnet, Inc. is a leading provider of wealth management software and services to financial advisors. Envestnet’s Advisor Suite software empowers advisors to better manage client outcomes and strengthen their practice. Envestnet offers advanced portfolio solutions through its Portfolio Management Consultants group (“PMC”). Envestnet Reporting Solutions also gives advisors an in-depth view of clients’ various investments, empowering them to give holistic, personalized advice. Envestnet is headquartered in Chicago with offices in: New York, New York; Denver, Colorado; Sunnyvale, California; Boston, Massachusetts; Landis, North Carolina; and Trivandrum, India. For more information on Envestnet, please go to http://www.envestnet.com or call our toll free number: (855) 769-0806.
(1) Non-GAAP Financial Measures
“Adjusted EBITDA” represents net income (loss) before interest income, interest expense, income tax provision (benefit), depreciation and amortization, non-cash stock-based compensation expense, unrealized gain (loss) on investments, other income, restructuring charges and transaction costs, severance, bad debt expense, customer inducement costs and impairment, and litigation related expense.
“Adjusted operating income” represents income (loss) from operations before non-cash stock-based compensation expense, restructuring charges and transaction costs, severance, amortization of acquired intangibles, bad debt expense, customer inducement costs and impairment, contract settlement charges and litigation related expense.
“Adjusted net income” represents net income (loss) before non-cash stock-based compensation expense, restructuring expense and transaction costs, severance, amortization of acquired intangibles, bad debt expense, customer inducement costs and impairment, contract settlement charges, contract settlement – reversal of deferred taxes, other income, imputed interest expense and litigation related expense. Reconciling items are tax effected using the income tax rates in effect on the applicable date.
“Adjusted net income per share” represents adjusted net income attributable to common stockholders divided by the diluted number of weighted-average shares outstanding.
3
See reconciliation of Non-GAAP Financial Measures at the end of this press release. These measures should not be viewed as a substitute for net income determined in accordance with United States generally accepted accounting principles (GAAP).
(2) Adjustments include stock-based compensation expense, restructuring charges and transaction costs, severance, impairment of customer inducement asset and litigation related expense. See the Reconciliation of Non-GAAP Financial Measures – Adjusted EBITDA table for 2011 and 2010 amounts.
Cautionary Statement Regarding Forward-Looking Statements
The forward-looking statements made in this press release and its attachments concerning, among other things, Envestnet, Inc.’s (the “Company”) expected financial performance and outlook, its strategic operational plans and growth strategy are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and the Company’s actual results could differ materially from the results expressed or implied by such forward-looking statements. Furthermore, reported results should not be considered as an indication of future performance. The potential risks, uncertainties and other factors that could cause actual results to differ from those expressed by the forward-looking statements in this press release include, but are not limited to, difficulty in sustaining rapid revenue growth, which may place significant demands on the Company’s administrative, operational and financial resources, fluctuations in the Company’s revenue, the concentration of nearly all of the Company’s revenues from the delivery of investment solutions and services to clients in the financial advisory industry, the Company’s reliance on a limited number of clients for a material portion of its revenue, the renegotiation of fee percentages or termination of the Company’s services by its clients, the Company’s ability to identify potential acquisition candidates, complete acquisitions and successfully integrate acquired companies, the impact of market and economic conditions on the Company’s revenues, compliance failures, regulatory actions against the Company, the failure to protect the Company’s intellectual property rights, the Company’s inability to successfully execute the conversion of its clients’ assets from their technology platform to the Company’s technology platform in a timely and accurate manner, general economic, political and regulatory conditions, as well as management’s response to these factors. More information regarding these and other risks, uncertainties and factors is contained in the Company’s filings with the Securities and Exchange Commission (“SEC”) which are available on the SEC’s website at www.sec.gov or the Company’s Investor Relations website at http://ir.envestnet.com/. You are cautioned not to unduly rely on these forward-looking statements, which speak only as of the date of this press release. All information in this press release and its attachments is as of February 23, 2012 and, unless required by law, the Company undertakes no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this press release or to report the occurrence of unanticipated events.
| Contacts | ||
| Investor Relations |
Media Relations | |
| investor.relations@envestnet.com |
mediarelations@envestnet.com | |
| (312) 827-3940 |
4
Envestnet, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share information)
(Unaudited)
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 64,909 | $ | 67,668 | ||||
| Fees receivable |
9,644 | 9,135 | ||||||
| Deferred tax assets, net |
192 | 107 | ||||||
| Prepaid expenses and other current assets |
4,040 | 2,026 | ||||||
|
|
|
|
|
|||||
| Total current assets |
78,785 | 78,936 | ||||||
|
|
|
|
|
|||||
| Property and equipment, net |
11,091 | 9,713 | ||||||
| Internally developed software, net |
3,524 | 3,621 | ||||||
| Intangible assets, net |
12,225 | 1,330 | ||||||
| Goodwill |
22,223 | 2,031 | ||||||
| Deferred tax assets, net |
6,692 | 13,649 | ||||||
| Customer inducements |
— | 30,400 | ||||||
| Other non-current assets |
3,162 | 2,188 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 137,702 | $ | 141,868 | ||||
|
|
|
|
|
|||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities: |
||||||||
| Accrued expenses |
$ | 14,919 | $ | 12,859 | ||||
| Accounts payable |
1,974 | 1,707 | ||||||
| Customer inducements payable |
— | 1,000 | ||||||
| Note payable |
171 | 159 | ||||||
| Deferred revenue |
79 | 232 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
17,143 | 15,957 | ||||||
|
|
|
|
|
|||||
| Deferred rent liability |
1,414 | 1,244 | ||||||
| Lease incentive liability |
2,933 | 2,771 | ||||||
| Customer inducements payable |
— | 18,806 | ||||||
| Note payable |
— | 159 | ||||||
| Other non-current liabilities |
573 | 612 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
22,063 | 39,549 | ||||||
|
|
|
|
|
|||||
| Stockholders’ equity |
||||||||
| Preferred stock |
— | — | ||||||
| Common stock, par value $0.005, 500,000,000 shares authorized as of December 31, 2011 and 2010, respectively; 43,515,899 and 43,068,371 shares issued as of December 31, 2011 and 2010, respectively; 31,810,726 and 31,368,822 shares outstanding as of December 31, 2011 and 2010, respectively |
218 | 215 | ||||||
| Additional paid-in capital |
163,584 | 157,778 | ||||||
| Accumulated deficit |
(37,742 | ) | (45,347 | ) | ||||
| Treasury stock at cost, 11,705,173 and 11,699,549 shares as of December 31, 2011 and 2010, respectively |
(10,421 | ) | (10,327 | ) | ||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
115,639 | 102,319 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 137,702 | $ | 141,868 | ||||
|
|
|
|
|
|||||
5
Envestnet, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share information)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: |
||||||||||||||||
| Assets under management or administration |
$ | 24,567 | $ | 21,839 | $ | 99,236 | $ | 75,951 | ||||||||
| Licensing and professional services |
5,975 | 5,764 | 23,942 | 22,101 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
30,542 | 27,603 | 123,178 | 98,052 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating expenses: |
||||||||||||||||
| Cost of revenues |
10,357 | 9,321 | 42,831 | 31,444 | ||||||||||||
| Compensation and benefits |
9,612 | 9,837 | 40,305 | 37,027 | ||||||||||||
| General and administration |
6,047 | 4,962 | 21,856 | 21,607 | ||||||||||||
| Depreciation and amortization |
1,700 | 1,493 | 6,376 | 5,703 | ||||||||||||
| Restructuring charges |
381 | 46 | 434 | 961 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
28,097 | 25,659 | 111,802 | 96,742 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
2,445 | 1,944 | 11,376 | 1,310 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other income (expense): |
||||||||||||||||
| Interest income |
12 | 30 | 77 | 149 | ||||||||||||
| Interest expense |
(165 | ) | (243 | ) | (786 | ) | (564 | ) | ||||||||
| Other income |
— | — | 1,100 | — | ||||||||||||
| Other expense |
(1,183 | ) | — | (1,183 | ) | — | ||||||||||
| Gain (loss) on investments |
— | 5 | (4 | ) | 12 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other income (expense) |
(1,336 | ) | (208 | ) | (796 | ) | (403 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income tax provision |
1,109 | 1,736 | 10,580 | 907 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income tax (benefit) provision |
(720 | ) | 869 | 2,975 | 1,533 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) |
1,829 | 867 | 7,605 | (626 | ) | |||||||||||
| Less preferred stock dividends |
— | — | — | (422 | ) | |||||||||||
| Less net income allocated to participating preferred stock |
— | — | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) attributable to common stockholders |
$ | 1,829 | $ | 867 | $ | 7,605 | $ | (1,048 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) per share attributable to common stockholders: |
||||||||||||||||
| Basic |
$ | 0.06 | $ | 0.03 | $ | 0.24 | $ | (0.05 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
$ | 0.06 | $ | 0.03 | $ | 0.23 | $ | (0.05 | ) | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding: |
||||||||||||||||
| Basic |
31,803,862 | 31,366,044 | 31,643,390 | 20,805,911 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
32,539,215 | 32,979,172 | 32,863,834 | 20,805,911 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
6
Envestnet, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands, unaudited)
| Year Ended | ||||||||
| December 31, | ||||||||
| 2011 | 2010 | |||||||
| OPERATING ACTIVITIES: |
||||||||
| Net income (loss) |
$ | 7,605 | $ | (626 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
6,376 | 5,703 | ||||||
| Amortization of customer inducements |
4,568 | 3,238 | ||||||
| Deferred rent and lease incentive |
332 | 58 | ||||||
| Provision for doubtful accounts |
— | 2,668 | ||||||
| Loss (gain) on investments |
4 | (12 | ) | |||||
| Impairment of customer inducement asset |
1,357 | — | ||||||
| Deferred income taxes |
2,162 | 1,215 | ||||||
| Stock-based compensation |
3,062 | 1,731 | ||||||
| Interest expense |
786 | 564 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Fees receivable |
1,940 | (3,718 | ) | |||||
| Prepaid expenses and other current assets |
(1,988 | ) | (599 | ) | ||||
| Other non-current assets |
(1,006 | ) | (52 | ) | ||||
| Customer inducements |
(1,000 | ) | (11,300 | ) | ||||
| Accrued expenses |
802 | 2,437 | ||||||
| Accounts payable |
267 | (185 | ) | |||||
| Deferred revenue |
(507 | ) | 208 | |||||
| Other non-current liabilities |
(39 | ) | 137 | |||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
24,721 | 1,467 | ||||||
|
|
|
|
|
|||||
| INVESTING ACTIVITIES: |
||||||||
| Purchase of property and equipment |
(4,798 | ) | (4,169 | ) | ||||
| Capitalization of internally developed software |
(1,482 | ) | (1,340 | ) | ||||
| Repayment of notes payable |
(162 | ) | — | |||||
| Proceeds from repayment of notes receivable |
— | 985 | ||||||
| Increase in notes receivable |
— | (90 | ) | |||||
| Proceeds from investments |
28 | 30 | ||||||
| Acquisition of businesses, net of cash acquired |
(23,719 | ) | (917 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(30,133 | ) | (5,501 | ) | ||||
|
|
|
|
|
|||||
| FINANCING ACTIVITIES: |
||||||||
| Proceeds from exercise of stock options |
2,747 | 1,925 | ||||||
| Proceeds from issuance of preferred stock |
— | 1,525 | ||||||
| Net proceeds from issuance of common stock |
— | 42,066 | ||||||
| Purchase of treasury stock |
(94 | ) | (3,993 | ) | ||||
| Preferred stock dividends |
— | (1,346 | ) | |||||
|
|
|
|
|
|||||
| Net cash provided by financing activities |
2,653 | 40,177 | ||||||
|
|
|
|
|
|||||
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(2,759 | ) | 36,143 | |||||
|
|
|
|
|
|||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
67,668 | 31,525 | ||||||
|
|
|
|
|
|||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ | 64,909 | $ | 67,668 | ||||
|
|
|
|
|
|||||
7
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures
(in thousands, unaudited)
| Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net income (loss) |
$ | 1,829 | $ | 867 | $ | 7,605 | $ | (626 | ) | |||||||
| Add (deduct): |
||||||||||||||||
| Interest income |
(12 | ) | (30 | ) | (77 | ) | (149 | ) | ||||||||
| Interest expense |
165 | 243 | 786 | 564 | ||||||||||||
| Income tax (benefit) provision |
(720 | ) | 869 | 2,975 | 1,533 | |||||||||||
| Depreciation and amortization |
1,700 | 1,493 | 6,376 | 5,703 | ||||||||||||
| Stock-based compensation expense |
703 | 623 | 3,062 | 1,731 | ||||||||||||
| Unrealized (gain) loss on investments |
— | (5 | ) | 4 | (12 | ) | ||||||||||
| Other income |
— | — | (1,100 | ) | — | |||||||||||
| Restructuring charges and transaction costs |
689 | 46 | 1,054 | 961 | ||||||||||||
| Severance |
25 | 133 | 698 | 570 | ||||||||||||
| Impairment of customer inducement asset |
— | — | 174 | — | ||||||||||||
| Contract settlement charges |
1,183 | — | 1,183 | — | ||||||||||||
| Bad debt expense |
— | — | — | 2,668 | ||||||||||||
| Customer inducement costs |
948 | 1,308 | 4,568 | 3,239 | ||||||||||||
| Litigation related expense |
13 | — | 128 | 1,933 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 6,523 | $ | 5,547 | $ | 27,436 | $ | 18,115 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Three Months Ended December 31, |
Year Ended December 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Income from operations |
$ | 2,445 | $ | 1,944 | $ | 11,376 | $ | 1,310 | ||||||||
| Add: |
||||||||||||||||
| Stock-based compensation expense |
703 | 623 | 3,062 | 1,731 | ||||||||||||
| Restructuring charges and transaction costs |
689 | 46 | 1,054 | 961 | ||||||||||||
| Severance |
25 | 133 | 698 | 570 | ||||||||||||
| Impairment of customer inducement asset |
— | — | 174 | — | ||||||||||||
| Amortization of acquired intangibles |
295 | 283 | 935 | 1,116 | ||||||||||||
| Bad debt expense |
— | — | — | 2,668 | ||||||||||||
| Customer inducement costs |
948 | 1,308 | 4,568 | 3,239 | ||||||||||||
| Litigation related expense |
13 | — | 128 | 1,933 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted operating income |
$ | 5,118 | $ | 4,337 | $ | 21,995 | $ | 13,528 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
8
Envestnet, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(In thousands, except share and per share information; unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2011* | 2010* | 2011* | 2010* | |||||||||||||
| Net income (loss) |
$ | 1,829 | $ | 867 | $ | 7,605 | $ | (626 | ) | |||||||
| Add (deduct): |
||||||||||||||||
| Stock-based compensation expense |
420 | 388 | 1,831 | 1,077 | ||||||||||||
| Restructuring charges and transaction costs |
412 | 29 | 630 | 598 | ||||||||||||
| Severance |
15 | 82 | 417 | 355 | ||||||||||||
| Amortization of acquired intangibles |
176 | 176 | 559 | 694 | ||||||||||||
| Impairment of customer inducement asset |
— | — | 104 | — | ||||||||||||
| Bad debt expense |
— | — | — | 2,668 | ||||||||||||
| Customer inducement costs |
567 | 814 | 2,732 | 2,015 | ||||||||||||
| Contract settlement charges |
1,183 | — | 1,183 | — | ||||||||||||
| Contract settlement—reversal of deferred taxes |
(1,187 | ) | — | (1,187 | ) | — | ||||||||||
| Other income |
— | — | (658 | ) | — | |||||||||||
| Imputed interest expense |
97 | 158 | 461 | 340 | ||||||||||||
| Litigation related expense |
8 | — | 77 | 1,202 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted net income |
3,520 | 2,514 | 13,754 | 8,323 | ||||||||||||
| Less: Preferred stock dividends |
— | — | — | (422 | ) | |||||||||||
| Less: Net income allocated to participating preferred stock |
— | — | — | (2,069 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted net income attributable to common stockholders |
$ | 3,520 | $ | 2,514 | $ | 13,754 | $ | 5,832 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Basic number of weighted-average shares outstanding |
31,803,862 | 31,366,044 | 31,643,390 | 20,805,911 | ||||||||||||
| Effect of dilutive shares: |
||||||||||||||||
| Options to purchase common stock |
711,986 | 1,269,535 | 974,192 | 992,753 | ||||||||||||
| Restricted stock |
598 | — | 34,757 | — | ||||||||||||
| Common warrants |
22,769 | 343,593 | 211,495 | 154,364 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted number of weighted-average shares outstanding |
32,539,215 | 32,979,172 | 32,863,834 | 21,953,028 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted net income per share |
$ | 0.11 | $ | 0.08 | $ | 0.42 | $ | 0.27 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Adjustments, excluding bad debt expense, contract settlement charges and contract settlement—reversal of deferred taxes, are tax effected using an income tax rate of 40.2% and 37.8% for 2011 and 2010, respectively. |
Envestnet, Inc.
Historical Assets, Accounts and Advisors
(in millions, except account and advisor data; unaudited)
| As of | ||||||||||||||||||||
| December 31, 2010 |
March 31, 2011 |
June 30, 2011 |
September 30, 2011 |
December 31, 2011 |
||||||||||||||||
| Platform Assets |
||||||||||||||||||||
| Assets Under Management (AUM) |
$ | 14,486 | $ | 15,635 | $ | 16,493 | $ | 15,560 | $ | 22,936 | ||||||||||
| Assets Under Administration (AUA) |
49,202 | 53,115 | 54,261 | 50,607 | 47,148 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Subtotal AUM/A |
63,688 | 68,750 | 70,754 | 66,167 | 70,084 | |||||||||||||||
| Licensing |
75,668 | 83,538 | 68,531 | 61,571 | 69,514 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Platform Assets |
$ | 139,356 | $ | 152,288 | $ | 139,285 | $ | 127,738 | $ | 139,598 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Platform Accounts |
||||||||||||||||||||
| AUM |
65,663 | 71,396 | 77,302 | 83,073 | 124,636 | |||||||||||||||
| AUA |
241,162 | 252,260 | 254,995 | 254,100 | 216,038 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Subtotal AUM/A |
306,825 | 323,656 | 332,297 | 337,173 | 340,674 | |||||||||||||||
| Licensing |
603,950 | 601,512 | 572,612 | 572,791 | 588,038 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Platform Accounts |
910,775 | 925,168 | 904,909 | 909,964 | 928,712 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Advisors |
||||||||||||||||||||
| AUM/A |
13,833 | 14,140 | 14,613 | 14,206 | 13,887 | |||||||||||||||
| Licensing |
7,746 | 7,895 | 6,201 | 5,522 | 5,709 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Advisors |
21,579 | 22,035 | 20,814 | 19,728 | 19,596 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
9