Exhibit 99.1

Envestnet Reports First Quarter 2012 Financial Results

Chicago, IL – May 9, 2012 – Envestnet (NYSE: ENV), a leading provider of technology-enabled wealth management solutions to investment advisors, today reported financial results for its first quarter ended March 31, 2012.

 

Key Financial Metrics    First Quarter      %  

(in millions except per share data)

   2012      2011      Change  

Revenues from AUM/A

   $ 28.3       $ 23.3         21

Total Revenues

   $ 32.6       $ 29.3         12

Adjusted EBITDA(1)

   $ 5.1       $ 6.2         -18

Adjusted Net Income per Share(1)

   $ 0.07       $ 0.09         -22

Financial results for the first quarter of 2012 compared to the first quarter of 2011:

 

   

Revenues from assets under management (AUM) or assets under administration (AUA) increased 21% to $28.3 million for the first quarter of 2012 from $23.3 million for the first quarter of 2011; total revenues, which includes licensing and professional services fees, increased 12% to $32.6 million for the first quarter of 2012 from $29.3 million for the first quarter of 2011.

 

   

Net income was $0.7 million, or $0.02 per diluted share, for the first quarter of 2012 compared to $1.4 million, or $0.04 per diluted share, for the first quarter of 2011.

 

   

Adjusted EBITDA(1) was $5.1 million for the first quarter of 2012 compared to $6.2 million for the first quarter of 2011.

 

   

Adjusted Net Income(1) was $2.2 million, or $0.07 per diluted share, for the first quarter of 2012 compared to $3.0 million, or $0.09 per diluted share, for the first quarter of 2011.

“During the first quarter, a growing number of advisors adopted Envestnet’s wealth management solutions, as we experienced positive net flows and strong conversion activity of new reporting clients,” said Jud Bergman, chief executive officer of Envestnet. “Having recently completed the acquisitions of Prima Capital and Tamarac, Envestnet is positioned better than ever to empower advisors to improve client outcomes and strengthen their advisory practices. We are helping advisors transform the wealth management industry to a transparent and unconflicted standard of care for investors.”

Key Operating Metrics as of and for the quarter ended March 31, 2012:

 

   

AUM/A of $80.4 billion, up 17% from March 31, 2011

 

   

Accounts (AUM/A only) of 364,236, up 13% from March 31, 2011

 

   

Advisors (AUM/A only) served totaled 14,386

 

   

Gross sales of AUM/A of $10.2 billion, resulting in net flows of $5.9 billion

The following table summarizes the changes in AUM and AUA for the quarter ended March 31, 2012:

 

In Millions Except Account Data

   12/31/11      Gross
Sales
     Redemp-
tions
    Net
Flows
     Market
Impact
     3/31/12  

Assets under Management (AUM)

   $ 22,936       $ 3,094       $ (1,531   $ 1,563       $ 1,585       $ 26,084   

Assets under Administration (AUA)

     47,148         7,119         (2,751     4,368         2,820         54,336   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total AUM/A

   $ 70,084       $ 10,213       $ (4,282   $ 5,931       $ 4,405       $ 80,420   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Fee-Based Accounts

     340,674         42,320         (18,758     23,562            364,236   

During the first quarter, the Company added $4.1 billion of conversions, which are included in the above AUM/A gross sales figures.


Review of Financial Results

Total revenues increased 12% to $32.6 million for the first quarter of 2012 from $29.3 million for the first quarter of 2011. The increase was primarily due to a 21% increase in revenues from assets under management or administration to $28.3 million from $23.3 million in the prior year period, partially offset by a previously expected reduction in licensing and professional services revenues.

Total operating expenses in the first quarter of 2012 increased 18% to $31.4 million from $26.7 million in the prior year period. Cost of revenues increased 14% to $11.5 million in the first quarter of 2012 from $10.1 million in the first quarter of 2011 due to the increase in revenue from AUM or AUA. Compensation and benefits increased 5% to $10.7 million in the first quarter of 2012 from $10.2 million in the prior year period. General and administration expenses increased 39% to $6.8 million in the first quarter of 2012 from $4.9 million in the prior year period.

Income from operations was $1.2 million for the first quarter of 2012 compared to $2.6 million for the first quarter of 2011. Net income was $0.7 million, or $0.02 per diluted share, for the first quarter of 2012 compared to $1.4 million, or $0.04 per diluted share, for the first quarter of 2011.

Adjusted EBITDA(1) in the first quarter of 2012 was $5.1 million, compared to $6.2 million in the prior year period, reflecting the previously expected reduction in licensing and professional services revenues. Adjusted Net Income(1) was $2.2 million, compared to $3.0 million in the first quarter of 2011. Adjusted Net Income Per Share(1) was $0.07 per diluted share, compared to $0.09 per diluted share in the first quarter of 2011.

Conference Call

The Company will host a conference call to discuss first quarter 2012 financial results today at 5:00 p.m. ET. 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) 300-2318, or (719) 457-1509 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 9201314. 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. (NYSE: ENV) is a leading provider of technology-enabled wealth management solutions to investment 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, Envestnet | PMC. Envestnet | Tamarac provides leading rebalancing, reporting and practice management software. Envestnet | Prima provides institutional-quality research and due diligence on investment and fund managers. Envestnet | Vantage gives advisors an in-depth view of clients’ investments, empowering them to give holistic, personalized advice.

For more information on Envestnet, please visit www.envestnet.com.

(1) Non-GAAP Financial Measures

“Adjusted EBITDA” represents net income before interest income, interest expense, income tax provision, depreciation and amortization, non-cash stock-based compensation expense, gain on investments, other income, restructuring charges and transaction costs, severance, customer inducement costs, and litigation related expense.

“Adjusted net income” represents net income before non-cash stock-based compensation expense, restructuring expense and transaction costs, severance, amortization of acquired intangibles, customer inducement costs, imputed interest expense and litigation related expense. Reconciling items are tax effected using the income tax rates in effect on the applicable date.

 

2


“Adjusted net income per share” represents adjusted net income divided by the diluted number of weighted-average shares outstanding.

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).

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 May 9, 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

  

 

3


Envestnet, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share information)

(Unaudited)

 

     March 31,      December 31,  
     2012      2011  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 70,636       $ 64,909   

Fees receivable

     8,610         9,644   

Deferred tax assets, net

     146         192   

Prepaid expenses and other current assets

     3,137         4,040   
  

 

 

    

 

 

 

Total current assets

     82,529         78,785   
  

 

 

    

 

 

 

Property and equipment, net

     10,667         11,091   

Internally developed software, net

     3,487         3,524   

Intangible assets, net

     11,246         12,225   

Goodwill

     21,334         22,223   

Deferred tax assets, net

     6,726         6,692   

Other non-current assets

     3,165         3,162   
  

 

 

    

 

 

 

Total assets

   $ 139,154       $ 137,702   
  

 

 

    

 

 

 

Liabilities and Stockholders' Equity

     

Current liabilities:

     

Accrued expenses

   $ 13,186       $ 14,919   

Accounts payable

     2,266         1,974   

Note payable

     174         171   

Deferred revenue

     530         79   
  

 

 

    

 

 

 

Total current liabilities

     16,156         17,143   
  

 

 

    

 

 

 

Deferred rent liability

     1,492         1,414   

Lease incentive liability

     2,844         2,933   

Other non-current liabilities

     618         573   
  

 

 

    

 

 

 

Total liabilities

     21,110         22,063   

Stockholders’ equity

     118,044         115,639   
  

 

 

    

 

 

 

Total liabilities and stockholders' equity

   $ 139,154       $ 137,702   
  

 

 

    

 

 

 

 

4


Envestnet, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share information)

(Unaudited)

 

     Three Months Ended  
     March 31,  
     2012     2011  

Revenues:

    

Assets under management or administration

   $ 28,263      $ 23,271   

Licensing and professional services

     4,379        5,991   
  

 

 

   

 

 

 

Total revenues

     32,642        29,262   
  

 

 

   

 

 

 

Operating expenses:

    

Cost of revenues

     11,526        10,128   

Compensation and benefits

     10,685        10,146   

General and administration

     6,773        4,876   

Depreciation and amortization

     2,399        1,548   

Restructuring charges

     27        10   
  

 

 

   

 

 

 

Total operating expenses

     31,410        26,708   
  

 

 

   

 

 

 

Income from operations

     1,232        2,554   
  

 

 

   

 

 

 

Other income (expense):

    

Interest income

     9        26   

Interest expense

     (3     (211

Gain on investments

     —          3   
  

 

 

   

 

 

 

Total other income (expense)

     6        (182
  

 

 

   

 

 

 

Income before income tax provision

     1,238        2,372   
  

 

 

   

 

 

 

Income tax provision

     498        968   
  

 

 

   

 

 

 

Net income

   $ 740      $ 1,404   
  

 

 

   

 

 

 

Net income per share:

    

Basic

   $ 0.02      $ 0.04   
  

 

 

   

 

 

 

Diluted

   $ 0.02      $ 0.04   
  

 

 

   

 

 

 

Weighted average common shares outstanding:

    

Basic

     31,857,598        31,433,964   
  

 

 

   

 

 

 

Diluted

     32,901,969        32,872,600   
  

 

 

   

 

 

 

 

5


Envestnet, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands, unaudited)

 

     Three Months Ended  
     March 31,  
     2012     2011  

OPERATING ACTIVITIES:

    

Net income

   $ 740      $ 1,404   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     2,399        1,548   

Amortization of customer inducements

     —          1,206   

Deferred rent and lease incentive

     (11     (69

Gain on investments

     —          (3

Deferred income taxes

     12        775   

Stock-based compensation

     795        816   

Interest expense

     3        211   

Changes in operating assets and liabilities:

    

Fees receivable

     1,034        567   

Prepaid expenses and other current assets

     903        (480

Accrued expenses

     (1,733     (1,212

Accounts payable

     292        349   

Deferred revenue

     451        (164

Other non-current liabilities

     45        60   
  

 

 

   

 

 

 

Net cash provided by operating activities

     4,930        5,008   
  

 

 

   

 

 

 

INVESTING ACTIVITIES:

    

Purchase of property and equipment

     (613     (1,419

Capitalization of internally developed software

     (346     (435

Proceeds from investments

     (3     15   

Goodwill adjustment

     889        —     
  

 

 

   

 

 

 

Net cash used in investing activities

     (73     (1,839
  

 

 

   

 

 

 

FINANCING ACTIVITIES:

    

Proceeds from exercise of stock options

     948        1,072   

Purchase of treasury stock

     (78     (94
  

 

 

   

 

 

 

Net cash provided by financing activities

     870        978   
  

 

 

   

 

 

 

INCREASE IN CASH AND CASH EQUIVALENTS

     5,727        4,147   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

     64,909        67,668   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 70,636      $ 71,815   
  

 

 

   

 

 

 

 

6


Envestnet, Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands, unaudited)

 

     Three Months Ended  
     March 31,  
     2012     2011  

Net income

   $ 740      $ 1,404   

Add (deduct):

    

Interest income

     (9     (26

Interest expense

     3        211   

Income tax provision

     498        968   

Depreciation and amortization

     2,399        1,548   

Stock-based compensation expense

     795        816   

Gain on investments

     —          (3

Restructuring charges and transaction costs

     644        10   

Severance

     5        57   

Customer inducement costs

     —          1,206   

Litigation related expense

     19        33   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 5,094      $ 6,224   
  

 

 

   

 

 

 

 

     Three Months Ended  
     March 31,  
     2012*      2011*  

Net income

   $ 740       $ 1,404   

Add:

     

Stock-based compensation expense

     475         488   

Restructuring charges and transaction costs

     386         6   

Severance

     3         34   

Amortization of acquired intangibles

     586         169   

Customer inducement costs

     —           721   

Imputed interest expense

     —           122   

Litigation related expense

     11         20   
  

 

 

    

 

 

 

Adjusted net income

   $ 2,201       $ 2,964   
  

 

 

    

 

 

 

Diluted number of weighted-average shares outstanding

     32,901,969         32,872,600   
  

 

 

    

 

 

 

Adjusted net income per share—diluted

   $ 0.07       $ 0.09   
  

 

 

    

 

 

 

 

* Adjustments are tax effected using an income tax rate of 40.2% for 2012 and 2011, respectively.

 

7


Envestnet, Inc.

Historical Assets, Accounts and Advisors

(in millions, except account and advisor data; unaudited)

 

     As of  
     March 31,
2011
     June 30,
2011
     September 30,
2011
     December 31,
2011
     March 31,
2012
 

Platform Assets

              

Assets Under Management (AUM)

   $ 15,635       $ 16,493       $ 15,560       $ 22,936       $ 26,084   

Assets Under Administration (AUA)

     53,115         54,261         50,607         47,148         54,336   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal AUM/A

     68,750         70,754         66,167         70,084         80,420   

Licensing

     83,538         68,531         61,571         69,514         76,235   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Platform Assets

   $ 152,288       $ 139,285       $ 127,738       $ 139,598       $ 156,655   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Platform Accounts

              

AUM

     71,396         77,302         83,073         124,636         134,294   

AUA

     252,260         254,995         254,100         216,038         229,942   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal AUM/A

     323,656         332,297         337,173         340,674         364,236   

Licensing

     601,512         572,612         572,791         588,038         588,936   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Platform Accounts

     925,168         904,909         909,964         928,712         953,172   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Advisors

              

AUM/A

     14,140         14,613         14,206         13,887         14,386   

Licensing

     7,895         6,201         5,522         5,709         5,351   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Advisors

     22,035         20,814         19,728         19,596         19,737   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

8