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W. P. Stewart & Co., Ltd. To Take Non-Cash Charge Against Earnings And Announces Date For Fourth Quarter And Full-Year 2005 Earnings Release
In June of 1999, the Company consummated its acquisition of all of the outstanding capital stock of NSMM. NSMM operated as an investment adviser for certain clients throughout the world, and W.P. Stewart served as a sub-adviser for all of the related client accounts.
The final net purchase price of the NSMM acquisition aggregated approximately $17 million and was classified as customer related intangible assets, subject to a 20-year amortization. The $12.5 million impairment represents the remaining unamortized balance.
Late in the fourth quarter of 2005, W.P. Stewart was instructed to liquidate certain NSMM accounts as a result of a third-party business transaction impacting the related clients. This resulted in an outflow of approximately $200 million in assets under management ("AUM") but was not related in any way to performance. The fees on the $200 million supported the NSMM customer related intangible assets (per Financial Accounting Standards Board - SFAS No.142).
As a result of these circumstances, there will be reductions recorded of approximately $12.5 million in Intangible Assets and Retained Earnings in the Company accounts, as of 31 December 2005 and, accordingly, there will be no future amortization of intangibles related to the NSMM acquisition.
Subsequent to the notice of redemption/liquidation, one of the parties in the third-party transaction opened a new account and has begun to fund the account. A detailed review of AUM flows will be available in an earnings press release on Tuesday, 31 January 2006.
In conjunction with the fourth quarter and full-year 2005 earnings release, W.P. Stewart & Co., Ltd. will host a conference call on Tuesday, 31 January 2006. The conference call will commence promptly at 9:15am (EST) and will conclude at 10:00am (EST). Those who are interested in participating in the teleconference should dial 1-800-370-0898 (within the United States) or +973-409-9260 (outside the United States). The conference ID is "W.P. Stewart".
To listen to the live broadcast of the conference over the Internet, simply log on to our website at http://www.wpstewart.com and click on the Investor Relations tab for a link to the webcast.
This teleconference will be available for replay from Tuesday, 31 January 2006 at 12:00 noon (EST) through Wednesday, 1 February 2006 at 5:00 p.m. (EST). To access the replay, please dial 1-877-519-4471 (within the United States) or + 973-341-3080 (outside the United States). The PIN number for accessing this replay is 6898586.
You will be able to access a replay of the Internet broadcast through Tuesday, 7 February 2006 on the Company's website at http://www.wpstewart.com. The Company will respond to questions submitted by e-mail, following the conference.
The Company
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 Hamilton, Bermuda and has additional operations or affiliates in the United States, Europe and Asia.
The Company's shares are listed for trading on the New York Stock Exchange (NYSE: WPL) and on the Bermuda Stock Exchange (BSX: WPS).
For more information, please visit the Company's website at http://www.wpstewart.com, or call W.P. Stewart Investor Relations (Fred M. Ryan) at 1-888-695-4092 (toll-free within the United States) or + 441-295-8585 (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 adverse effect from a decline or volatility in the securities markets, a 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 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, 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.
SOURCE W.P. Stewart & Co., Ltd.
-0- 01/12/2006
/CONTACT: Fred Ryan, +1-441-295-8585 for W.P. Stewart & Co., Ltd./
/FCMN Contact: denise@wpstewart.com/
/Web site: http://www.wpstewart.com /
(WPL)