Envestnet (NYSE:ENV), a leading provider of unified wealth management
technology and services to financial advisors, today reported financial
results for its fourth quarter and full year ended December 31, 2013.
Financial Results for the Fourth Quarter of 2013 Compared to the
Fourth Quarter of 2012:
Financial Results for the Full Year of 2013 Compared to the Full Year
"Envestnet is transforming wealth management and how advisors render
advice to their clients. We deliver unified wealth management solutions
to clients across the financial services industry, whether registered
investment advisors, broker dealers, or bank trust departments.
Envestnet's platform now supports more than 30,000 advisors and over
$500 billion in assets, demonstrating growing support among advisors."
said Jud Bergman, Chairman and CEO.
"We sustained our strong financial performance during the fourth
quarter, growing revenue and adjusted EBITDA by 67 percent and 53
percent, respectively, compared to last year. We believe Envestnet is
well positioned for meaningful growth in 2014 and beyond," concluded Mr.
Key Operating Metrics (AUM/A Only) as of and for the Quarter Ended
December 31, 2013:
The following table summarizes the changes in AUM and AUA for the
quarter ended December 31, 2013:
In Millions Except Account Data
During the fourth quarter, the Company added $6.4 billion of conversions
included in the above AUM/A gross sales figures, and an additional $12.2
billion of conversions in Licensing.
Review of Fourth Quarter 2013 Financial Results
Adjusted revenues increased 67% to $74.4 million for the fourth quarter
of 2013 from $44.6 million for the fourth quarter of 2012. The increase
was primarily due to an 83% increase in revenues from AUM or AUA to
$63.4 million from $34.7 million in the prior year period. Revenue from
Prudential's Wealth Management Solutions ("WMS") business, acquired by
the Company in July 2013, is included for the entire fourth quarter of
Total operating expenses in the fourth quarter of 2013 increased 72% to
$73.0 million from $42.4 million in the prior year period. Cost of
revenues increased 103% to $32.4 million in the fourth quarter of 2013
from $16.0 million in the fourth quarter of 2012 due to the increase in
revenue from AUM or AUA and additional cost from WMS, the revenues of
which have a higher cost profile than the Company's existing business.
Compensation and benefits increased 47% to $22.0 million in the fourth
quarter of 2013 from $14.9 million in the prior year period due to
higher personnel cost from WMS, as well as higher non-cash compensation
expense. General and administration expenses increased 73% to $14.0
million in the fourth quarter of 2013 from $8.1 million in the prior
year period primarily due to WMS.
Income from operations was $1.4 million for the fourth quarter of 2013
compared to $2.0 million for the fourth quarter of 2012. Net income was
$0.7 million, or $0.02 per diluted share, for the fourth quarter of 2013
compared to a net loss of ($0.2) million, or ($0.00) per diluted share,
for the fourth quarter of 2012. Adjusted EBITDA(1) in the
fourth quarter of 2013 was $11.0 million, compared to $7.2 million in
the prior year period. Adjusted Net Income(1) was $5.4
million, compared to $3.3 million in the fourth quarter of 2012.
Adjusted Net Income Per Share(1) was $0.15, compared to $0.10
in the fourth quarter of 2012.
At December 31, 2013, the Company had $49.9 million in cash and cash
equivalents with no debt.
The Company will host a conference call to discuss fourth quarter and
full year 2013 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
(877) 718-5101, or (719) 325-4784 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 7712350. 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
Envestnet, Inc. (NYSE:ENV) is a leading provider of unified wealth
management technology and services to investment advisors. Its
open-architecture platforms unify and fortify the wealth management
process, delivering unparalleled flexibility, accuracy, performance and
value. Envestnet solutions enable the transformation of wealth
management into a transparent, independent, objective and fully-aligned
standard of care, and empower advisors to deliver better results.
Envestnet's Advisor Suite® software empowers financial advisors to
better manage client outcomes and strengthen their practice. Envestnet
provides institutional-quality research and advanced portfolio solutions
through its Portfolio Management Consultants group, Envestnet | PMC®.
Envestnet | Tamarac provides leading rebalancing, reporting and practice
For more information on Envestnet, please visit www.envestnet.com.
(1) Non-GAAP Financial Measures
"Adjusted revenues" exclude the effect of purchase accounting on the
fair value of acquired deferred revenue. Under GAAP, we record at fair
value the acquired deferred revenue for contracts in effect at the time
the entities were acquired. Consequently, revenue related to acquired
entities for periods subsequent to the acquisition does not reflect the
full amount of revenue that would have been recorded by these entities
had they remained stand-alone entities.
"Adjusted EBITDA" represents net income before deferred revenue fair
value adjustment, interest income, interest expense, income tax
provision, depreciation and amortization, non-cash compensation expense,
restructuring charges and transaction costs, re-audit related expenses,
severance, imputed interest on contingent consideration liability, fair
market value adjustment to contingent consideration and litigation
"Adjusted net income" represents net income before deferred revenue fair
value adjustment, non-cash compensation expense, restructuring charges
and transaction costs, re-audit related expenses, severance,
amortization of acquired intangibles, imputed interest on contingent
consideration liability, fair market value adjustment to contingent
consideration, non-recurring tax items and litigation related expense.
Reconciling items are tax effected using the income tax rates noted in
the reconciliation table found on page 8 of this release.
"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
revenues or 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 conditions, changes to the Company's
previously reported financial information as a result of audit,
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
20, 2014 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.
provided by operating activities:
Note: AUM/A metrics include WMS, which added approximately $25 billion
in assets, 86,000 accounts and 3,100 advisors as of July 1, 2013.
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