W.P. Stewart & Co., Ltd. Announces First Quarter 2007 Financial Results

W.P. Stewart & Co., Ltd. Announces First Quarter 2007 Financial Results

June 22, 2007

     A loss of $0.04 per share after non-recurring charges
of $5.8 million or 
     $0.12 per share (diluted) compared with first quarter
2006 earnings of 
     $0.28 per share (diluted)

    Cash earnings were $0.14 per share (diluted) after
non-recurring charges of $1.6 million or $0.03 per share
(diluted) for the first quarter of 2007 compared with $0.32
per share (diluted) in the first quarter of 2006 - see GAAP
reconciliation statement below

    HAMILTON, Bermuda, May 3 /Xinhua-PRNewswire/ -- W.P.
Stewart & Co., Ltd. today reported a net loss of $1.8
million, or $0.04 per share (diluted) and $0.04 per share
(basic), for the first quarter ended 31 March 2007.  This
compares with net income in the first quarter of the prior
year of 
$12.7 million or $0.28 per share (diluted) and $0.28 per
share (basic).

    During the first quarter, the Company entered into
agreements with certain employees whose employment with the
Company terminated in the quarter. In accordance with the
terms of these agreements, the Company has incurred
one-time, non-recurring cash expenses of approximately
$1,600,000 and non-cash charges related to restricted
shares of approximately $4,200,000 in the first quarter of
2007. Combined, these one-time, non-recurring charges
equate to approximately $0.12 per share, diluted.

    Cash earnings for the quarter ended 31 March 2007 were
$6.4 million, or $0.14 per share (diluted), (net loss of
$1.8 million adjusted to include $8.2 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). In the same quarter of the prior year, cash
earnings were $14.5 million, or $0.32 per share (diluted),
(net income of $12.7 million adjusted for the inclusion of
$1.8 million representing expenses of non-cash
compensation, depreciation, amortization and other non-cash
charges, on a tax-effected basis).

    Commenting on the results for the quarter, Bill
Stewart, Chairman & Chief Executive Officer said:
"I indicated in February that we were in a classic
turnaround situation and that things could get worse before
getting better. Our financial results for this first quarter
are disappointing but not entirely surprising and certainly
not indicative of where our new management team hopes to
take the Company over the next several years. I am
optimistic that we are on the right track but there is a
lot of hard work yet to do."

    For the first quarter of 2007 there were 45,986,856
common shares outstanding on a weighted average diluted
basis compared to 45,941,269 common shares outstanding for
the first quarter of 2006 on the same weighted average
diluted basis.

    Performance

    Performance in the W.P. Stewart & Co., Ltd. U.S.
Equity Composite (the "Composite") for the first
quarter of 2007 was -0.7% pre-fee and -1.0% post-fee. This
compares with 0.6% for the S&P 500.

    For the twelve-month period ending 31 March 2007,
performance in the Composite was 6.7%, pre-fee and 5.6%,
post-fee. This compares with 11.8% for the S&P 500.

    In each of the three-, five- and ten-year periods ended
31 March 2007, performance of the W.P. Stewart U.S. Equity
Composite has exceeded the performance of the S&P 500
on a pre-fee basis. On a post-fee basis, performance
exceeded the S&P 500 for the ten-year period ended 31
March 2007 but fell slightly behind on a three- and
five-year basis. 

    Performance in the W.P. Stewart international portfolio
(ex United States) for the first quarter of 2007 was +2.2%,
pre-fee, and 2.1%, post-fee, compared to +4.1% for the MSCI
EAFE Index. Performance in the Global portfolio was -0.1%,
pre-fee, and -0.4%, post-fee, compared to +2.5% for the
MSCI World Index. 

    Commenting on this first quarter performance, Mark
Phelps, Managing Director - Global Investments, said:
"This performance in our U.S. portfolios is
disappointing but continues to reflect the hostile
environment for high quality large cap growth stocks in the
United States but I do believe that with the continuing
strong trend in 'look-through' earnings growth and
attractive valuations we can look forward to very good
returns over the next few years. It is right for us to
remain patient and true to our style. Performance in the
international and European portfolios is mixed but
generally positive and has been ahead of the respective
benchmarks over the past year or so."

    Preliminary indications are that year-to-date
performance as of 30 April for the W.P. Stewart U.S. Equity
Composite was +2.7%, pre-fee, and +2.3%, post-fee; for the
international portfolio was +4.7%, pre-fee, and +4.3%,
post-fee, and for the Global portfolio was +4.7%, pre-fee,
and +4.3%, post-fee.

    Assets Under Management

    Assets under management (AUM) at quarter-end were
approximately $6.4 billion, compared with approximately
$8.1 billion at 31 December 2006, and approximately $9.4
billion at 31 March 2006.

    Total net outflows of AUM for the quarter ended 31
March 2007 were approximately $1,663 million, compared with
total net outflows of approximately $667 million and
approximately $237 million in the fourth quarter and in the
first quarter of 2006, respectively.

    In the quarter, net cash outflows from existing
accounts were approximately $239 million, compared with net
cash outflows of approximately $196 million and
approximately $31 million in the fourth quarter and in the
first quarter of 2006, respectively.

    Net outflows from our publicly-available funds and
flows from new accounts minus closed accounts were
approximately $1,424 million for the quarter compared to
approximately $471 million and approximately $206 million
in the fourth quarter and in the first quarter of 2006,
respectively.

    Net flows in April 2007 were negative approximately
$255 million.

    Look-Through Earning Power

    W.P. Stewart & Co., Ltd. concentrates its
investments in large, generally less cyclical, growing
businesses. Throughout most of the Company's history, the
growth in earning power behind clients' portfolios has
ranged from approximately 11% to 22% annually. Currently,
the "look-through" earning power behind our
clients' portfolios remains solidly positive with portfolio
earnings per share growth on a trailing four quarter basis
as at 31 March 2007 expected to have advanced at the high
end of the historical range. The Company's research
analysts expect "look-through" portfolio earnings
growth to be within the 12-15% range over the next few
years.
 
    Revenues and Profitability

    Revenues were $25.9 million for the quarter ended 31
March 2007, compared to $36.2 million for the same quarter
2006.

    The average gross management fee was 1.08%, annualized,
for the quarter ended 31 March 2007, compared to 1.14%,
annualized, for the same quarter of the prior year.
Excluding performance fee based accounts, the average gross
management fee was 1.22% for the quarter ended 31 March
2007, compared to 1.27%, annualized, for the same quarter
of the prior year.  

    Total operating expenses increased approximately $6.6
million, including the non-recurring charges of $5.8
million referenced above, to $27.9 million for the first
quarter 2007, from $21.2 million in the same quarter of the
prior year.  

    The advance in expenses substantially reflects non-cash
compensation expense related to the Company's restricted
share issuances to employees of approximately $6.8 million
for the first quarter of 2007, which includes $4.2 million
related to employees whose employment terminated in
February 2007. In the first quarter of 2006 these non-cash
compensation expenses were $280,000 after adjusting for a
reversal of approximately $500,000 related to the
forfeiture of previously issued restricted shares. This
non-cash compensation expense is included in "employee
compensation and benefits".

    We expect non-cash compensation expense related to
restricted share grants to be at least $14 million for
2007. 

    The Company's provision for taxes resulted in a tax
benefit of approximately $100,000 based on a pre-tax loss
of $1.9 million for the quarter ended 31 March 2007
compared with a tax provision of approximately $2.3 million
based on pre-tax income of $15.0 million in the comparable
quarter of the prior year. The provision/benefit for taxes
represents the Company's estimate of taxes on the
income/loss applicable to all jurisdictions and is
calculated at rates equal to the applicable statutory
income tax rate in each jurisdiction.

    Other Events

    The Company paid a dividend of $0.23 per common share
on 31 January 2007 to shareholders of record as of 17
January 2007, and further, paid a dividend of $0.15 per
common share on 27 April 2007 to shareholders of record as
of 13 April 2007. This latter payment reflects a change in
the dividend policy which was announced in a press release
on 29 March 2007. 

    Conference Call

    In conjunction with this first quarter 2007 earnings
release, W.P. Stewart & Co., Ltd. will host a
conference call on Thursday, 3 May 2007.  The conference
call will commence promptly at 9:15 a.m. (EDT). Those who
are interested in participating in the teleconference
should dial 1-800-922-9655 (within the United States) or
[phone] (outside the United States).  The conference
ID is "W.P. Stewart" or "8701547". To
listen to the live broadcast of the conference over the
Internet, simply visit our website at www.wpstewart.com and
click on the Investor Relations tab for a link to the
webcast.

    The teleconference will be available for replay from
Thursday, 3 May 2007 at 12:00 noon (EDT) through Thursday,
10 May 2007 at 5:00 p.m. (EDT). To access the replay,
please dial 1-877-519-4471 (within the United States) or
[phone] (outside the United States). The PIN number
for accessing this replay is 8701547.

    You will be able to access a replay of the Internet
broadcast through Thursday, 10 May 2007, on the Company's
website at http://www.wpstewart.com. The Company will
respond to questions submitted by e-mail, following the
conference.

    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
[e-mail].

    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.



    W.P. Stewart & Co., Ltd.
    Unaudited Condensed Consolidated Statements of
Operations

                          For the Three Months Ended       
  % Change From
                        Mar. 31,     Dec. 31,     Mar. 31, 
Dec. 31,  Mar. 31,
                          2007         2006         2006   
  2006      2006

    Revenue:
      Fees           $21,061,944  $31,874,280  $27,187,308 
 -33.92%   -22.53%
      Commissions      4,459,454    5,686,392    8,260,794 
 -21.58%   -46.02%
      Realized and
       unrealized gains/
       (losses) on
       investments (1)  (21,201)    2,088,155       41,752 
-101.02%  -150.78%
      Interest and
       other (1)         440,328      101,107      756,325 
 335.51%   -41.78%

                      25,940,525   39,749,934   36,246,179 
 -34.74%   -28.43%


    Expenses:
      Employee
       compensation 
       and benefits   16,149,555   12,900,065    7,738,837 
  25.19%   108.68%
      Fees paid out    1,781,660    2,003,373    2,174,908 
 -11.07%   -18.08%
      Commissions,
       clearance and
       trading           787,965    1,159,174    1,642,079 
 -32.02%   -52.01%
      Research and 
       administration  3,392,907    3,348,373    3,629,544 
   1.33%    -6.52%
      Marketing        1,564,158    1,753,368    1,711,094 
 -10.79%    -8.59%
      Depreciation and
       amortization    1,438,229    1,727,325    1,575,794 
 -16.74%    -8.73%
      Other operating  2,737,124    3,093,667    2,762,137 
 -11.52%    -0.91%
                      27,851,598   25,985,345   21,234,393 
   7.18%    31.16%

    (Loss) / Income
      before taxes   (1,911,073)   13,764,589   15,011,786 
-113.88%  -112.73%

    Provision for
     taxes              (74,295)    2,138,009    2,347,675 
-103.47%  -103.16%

    Net (loss) / 
     income         $(1,836,778)  $11,626,580  $12,664,111 
-115.80%  -114.50%

    Earnings per
     share:

    Basic earnings
     per share           $(0.04)        $0.25        $0.28 
-116.00%  -114.29%

    Diluted earnings
     per share           $(0.04)        $0.25        $0.28 
-116.00%  -114.29%


    Note (1): Prior period amounts have been revised to
reflect presentation consistent with current period
reporting.



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

                                                    (in
millions)
    
                                             For the Three
Months Ended
                                           Mar. 31,    Dec.
31,   Mar. 31,  
                                             2007       
2006       2006
    
    Existing Accounts:
      Contributions                            $83      
$183       $329
      Withdrawals                            (322)     
(379)      (360)
    Net Flows of Existing Accounts           (239)     
(196)       (31)
    Publicly Available Funds:
      Contributions                             75        
18        34
      Withdrawals                            (119)      
(63)       (69)
    Direct Accounts Opened                     115        
34        57
    Direct Accounts Closed                 (1,495)     
(460)      (228)
    Net New Flows                          (1,424)     
(471)      (206)
    
    Net Flows of Assets Under Management  $(1,663)    
$(667)     $(237)


    * The table above sets forth the total net flows of
assets under management for the three months ended March
31, 2007, December 31, 2006 and March 31, 2006,
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.


    For more information, please contact: 

     Fred M. Ryan
     W.P. Stewart & Co.
     Tel: [phone]