SEI Reports First-Quarter 2015 Financial Results OAKS,

New Post Public Reply Private Reply Replies (0) Message Board

News Desk 2018

Apr 22, 2015 at 8:45 AM

SEI Reports First-Quarter 2015 Financial Results

OAKS, PA--(Marketwired - Apr 22, 2015) - SEI Investments Company ( NASDAQ : SEIC ) today announced financial results for the first-quarter 2015. Diluted earnings per share were $.50 in first-quarter 2015 compared to $.43 in first-quarter 2014. Diluted earnings per share for first-quarter 2015 and 2014 reflect pre-tax gains of $2.8 million, or $.01 per share, and $5.6 million, or $.02 per share, respectively, from the sale of SEI Asset Korea.


Consolidated Overview
(In thousands, except earnings per share)	For the Three Months Ended March 31,
	2015		2014		%

Revenues	$	325,444	$	302,386	8%
Net income		84,611		74,820	13%
Diluted earnings per share	$	0.50	$	0.43	16%

"Our results for the first quarter demonstrate the success we are having in growing our company, increasing profitability, and expanding our customer base," said Alfred P. West, Jr., SEI Chairman and CEO. "SEI's business model, our ability to execute, and the completeness of our offerings enable us to manage through the mixed nature of global markets.

"Across our company, we are investing in products and services that position us well for long-term, sustainable growth as we work to meet the evolving needs of our clients and markets."

Summary of First-Quarter Results by Business Segment


(In thousands)		For the Three Months Ended March 31,
		2015			2014			%
Private Banks:
	Revenues	$	111,213		$	105,179		6%
	Expenses		99,256			100,190		(1)%
	Operating Profit		11,957			4,989		140%
	Gain on sale of subsidiary		2,791			5,582		NM
	Interest income		180			--		NM
	Total Profit		14,928			10,571		NM
	Operating Margin (A)		11	%		5	%

Investment Advisors:
	Revenues		74,015			66,424		11%
	Expenses		39,059			34,577		13%
	Operating Profit		34,956			31,847		10%
	Operating Margin		47	%		48	%

Institutional Investors:
	Revenues		73,548			68,657		7%
	Expenses		35,211			34,095		3%
	Operating Profit		38,337			34,562		11%
	Operating Margin		52	%		50	%

Investment Managers:
	Revenues		65,367			61,008		7%
	Expenses		40,623			39,184		4%
	Operating Profit		24,744			21,824		13%
	Operating Margin		38	%		36	%

Investments in New Businesses:
	Revenues		1,301			1,118		16%
	Expenses		4,866			4,249		15%
	Operating Loss		(3,565	)		(3,131	)	NM

Totals:
	Revenues	$	325,444		$	302,386		8%
	Expenses		219,015			212,295		3%
	Corporate overhead expenses		13,359			11,699		14%
	Income from operations	$	93,070		$	78,392		19%

(A)	Percentages determined exclusive of gain on sale of subsidiary and interest income.

First-Quarter Business Highlights:

Revenue growth was primarily driven by higher Asset management, administration, and distribution fees from market appreciation and improved cash flows from new and existing clients.
Our average assets under management, excluding LSV, increased $14.9 billion, or nine percent, to $172.5 billion in the first-quarter 2015, as compared to $157.6 billion during the first-quarter 2014 (see attached Average Asset Balances schedules for further details).
Our average assets under administration increased $48.7 billion, or 14 percent, to $384.7 billion in the first-quarter 2015, as compared to $336.0 billion during the first-quarter 2014 (see attached Average Asset Balances schedules for further details).
Revenue growth was also driven by increased Information processing and software servicing fees in our Private Banks segment. The increase was primarily attributable to higher fees from the growth in assets processed on the SEI Wealth Platform(SM) and increased non-recurring professional services fees.
Sales events, net of client losses, during first-quarter 2015 totaled approximately $30.9 million and are expected to generate net annualized recurring revenues of approximately $23.6 million when contract values are fully realized.
Income from LSV increased $2.1 million, or seven percent, to $34.3 million in first-quarter 2015 as compared to $32.2 million in first-quarter 2014 due to an increase in assets under management and an increase in performance fees earned by LSV.
We recorded pre-tax gains of $2.8 million, or $.01 diluted earnings per share, and $5.6 million, or $.02 diluted earnings per share, from the sale of SEI AK in first-quarter 2015 and 2014, respectively.
Amortization expense related to capitalized software was $10.3 million during the first-quarter 2015 as compared to $9.2 million during the first-quarter 2014 due to continued enhancements to the SEI Wealth Platform.
Our effective tax rates were 35.4 percent in first-quarter 2015 and 35.9 percent in first-quarter 2014.
In first-quarter 2015, we repurchased 1.5 million shares of our common stock for $65.3 million.

Earnings Conference Call A conference call to review earnings is scheduled for 2 p.m. Eastern time on April 22, 2015. Investors may listen to the call at seic.com/investors . The call may also be accessed at many financial services websites, including Google Finance and Yahoo Finance. Investors may also listen to replays at these websites, or by telephone at (USA) 800-475-6701; (International) 320-365-3844, access code 358144.

About SEI SEI ( NASDAQ : SEIC ) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of March 31, 2015, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $648 billion in mutual fund and pooled or separately managed assets, including $258 billion in assets under management and $390 billion in client assets under administration. For more information, visit seic.com .

Many of the statements in this release may be considered "forward looking statements" and include discussions about future operations, strategies and financial results. Forward-looking statements are based upon estimates and assumptions that involve risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe our assumptions are reasonable, they could be inaccurate. Our actual future revenues and income could differ materially from our expected results. We have no obligation to publicly update or revise any forward-looking statements.


SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	For the Three Months Ended March 31,
	2015			2014

Asset management, admin. and distribution fees	$	246,768		$	225,071
Information processing and software servicing fees		70,653			69,178
Transaction-based and trade execution fees		8,023			8,137

Total revenues		325,444			302,386

Subadvisory, distribution and other asset mgmt costs		38,517			34,012
Software royalties and other information processing costs		7,509			8,553
Brokerage commissions		5,972			5,979
Compensation, benefits and other personnel		94,186			94,424
Stock-based compensation		3,750			2,823
Consulting, outsourcing and professional fees		35,628			34,933
Data processing and computer related		13,400			12,620
Facilities, supplies and other costs		17,059			15,852
Amortization		10,358			9,214
Depreciation		5,995			5,584

Total expenses		232,374			223,994

Income from operations		93,070			78,392

Net gain on investments		250			136
Interest and dividend income		969			777
Interest expense		(113	)		(113	)
Equity in earnings of unconsolidated affiliates		34,033			31,891
Gain on sale of subsidiary		2,791			5,582

Income before income taxes		131,000			116,665

Income taxes		46,389			41,845

Net income		84,611			74,820

Basic earnings per common share	$	0.51		$	0.44

Shares used to calculate basic earnings per share		166,695			169,306

Diluted earnings per common share	$	0.50		$	0.43

Shares used to calculate diluted earnings per share		170,703			173,828

SEI INVESTMENTS COMPANY
BALANCE SHEETS
(In thousands)
(Unaudited)

				March 31,			December 31,
				2015			2014
Assets
	Current Assets:
		Cash and cash equivalents		$	643,260		$	667,446
		Restricted cash			5,805			5,801
		Receivables from regulated investment companies			47,006			48,393
		Receivables, net			200,673			194,419
		Securities owned			21,192			21,175
		Other current assets			25,028			18,193
			Total Current Assets		942,964			955,427

	Property and Equipment, net				125,855			125,535
	Capitalized software, net				306,728			309,040
	Investments available for sale				74,222			77,609
	Investments in affiliated funds, at fair value				4,454			4,523
	Investment in unconsolidated affiliates				51,320			54,290
	Other assets, net				16,442			16,451
			Total Assets	$	1,521,985		$	1,542,875

Liabilities and Equity
	Current Liabilities:
		Accounts payable		$	6,050		$	10,588
		Accrued liabilities			152,227			207,429
		Deferred income taxes, net			1,298			1,414
		Deferred revenue			3,618			1,749
			Total Current Liabilities		163,193			221,180

	Deferred income taxes				63,742			63,755
	Other long-term liabilities				10,791			10,327
			Total Liabilities		237,726			295,262

	Shareholders' Equity:
		Common stock			1,661			1,667
		Capital in excess of par value			854,995			834,615
		Retained earnings			445,368			420,226
		Accumulated other comprehensive loss, net			(17,765	)		(8,895	)
			Total Shareholders' Equity		1,284,259			1,247,613
			Total Liabilities and Shareholders' Equity	$	1,521,985		$	1,542,875

SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)

		Mar. 31,		Jun. 30,		Sept. 30,		Dec 31,		Mar. 31,
		2014		2014		2014		2014		2015
Private Banks:
	Equity/Fixed Income programs	$	16,918	$	18,679	$	18,634	$	18,666	$	19,296
	Collective Trust Fund programs		14		12		11		8		9
	Liquidity funds		5,670		5,274		5,331		5,889		5,551
	Total assets under management	$	22,602	$	23,965	$	23,976	$	24,563	$	24,856
	Client assets under administration		15,641		15,347		16,288		16,741		17,643
	Total assets	$	38,243	$	39,312	$	40,264	$	41,304	$	42,499

Investment Advisors:
	Equity/Fixed Income programs	$	39,981	$	42,125	$	42,260	$	43,845	$	45,800
	Collective Trust Fund programs		13		13		9		9		8
	Liquidity funds		2,802		2,696		3,086		3,173		3,047
	Total assets under management	$	42,796	$	44,834	$	45,355	$	47,027	$	48,855

Institutional Investors:
	Equity/Fixed Income programs	$	69,194	$	71,598	$	72,006	$	72,828	$	74,178
	Collective Trust Fund programs		102		100		98		95		94
	Liquidity funds		2,505		2,414		2,891		2,929		3,246
	Total assets under management	$	71,801	$	74,112	$	74,995	$	75,852	$	77,518

Investment Managers:
	Equity/Fixed Income programs	$	68	$	64	$	64	$	27	$	25
	Collective Trust Fund programs		22,633		22,598		21,297		20,833		20,965
	Liquidity funds		782		802		1,018		946		1,091
	Total assets under management	$	23,483	$	23,464	$	22,379	$	21,806	$	22,081
	Client assets under administration (A)		326,735		337,492		346,841		355,890		372,116
	Total assets	$	350,218	$	360,956	$	369,220	$	377,696	$	394,197

Investments in New Businesses:
	Equity/Fixed Income programs	$	632	$	659	$	703	$	736	$	756
	Liquidity funds		49		38		118		98		106
	Total assets under management	$	681	$	697	$	821	$	834	$	862

LSV Asset Management:
	Equity/Fixed Income programs	$	77,973	$	82,026	$	81,536	$	82,665	$	84,123

Total:
	Equity/Fixed Income programs (B)	$	204,766	$	215,151	$	215,203	$	218,767	$	224,178
	Collective Trust Fund programs		22,762		22,723		21,415		20,945		21,076
	Liquidity funds		11,808		11,224		12,444		13,035		13,041
	Total assets under management	$	239,336	$	249,098	$	249,062	$	252,747	$	258,295

	Client assets under administration (C)		342,376		352,839		363,129		372,631		389,759
	Total assets	$	581,712	$	601,937	$	612,191	$	625,378	$	648,054


(A)	Client assets under administration in the Investment Managers segment include $48.9 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of March 31, 2015).
(B)	Equity/Fixed Income programs include $5.3 billion of assets invested in various asset allocation funds at March 31, 2015.
(C)	In addition to the numbers presented, SEI also administers an additional $6.7 billion in Funds of Funds assets (as of March 31, 2015) on which SEI does not earn an administration fee.

SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)

		1st Qtr.		2nd Qtr.		3rd Qtr.		4th Qtr.		1st Qtr.
		2014		2014		2014		2014		2015
Private Banks:
	Equity/Fixed Income programs	$	16,114	$	17,829	$	18,804	$	18,606	$	18,869
	Collective Trust Fund programs		14		12		12		10		8
	Liquidity funds		5,757		5,429		5,466		5,537		5,755
	Total assets under management	$	21,885	$	23,270	$	24,282	$	24,153	$	24,632
	Client assets under administration		15,366		15,069		15,707		16,451		17,504
	Total assets	$	37,251	$	38,339	$	39,989	$	40,604	$	42,136

Investment Advisors:
	Equity/Fixed Income programs	$	39,005	$	40,887	$	42,389	$	43,104	$	44,809
	Collective Trust Fund programs		13		13		11		9		9
	Liquidity funds		2,806		2,637		2,830		3,087		3,072
	Total assets under management	$	41,824	$	43,537	$	45,230	$	46,200	$	47,890

Institutional Investors:
	Equity/Fixed Income programs	$	67,697	$	70,706	$	72,010	$	72,771	$	73,760
	Collective Trust Fund programs		103		134		98		96		95
	Liquidity funds		2,571		2,664		2,883		2,973		3,021
	Total assets under management	$	70,371	$	73,504	$	74,991	$	75,840	$	76,876

Investment Managers:
	Equity/Fixed Income programs	$	68	$	68	$	64	$	64	$	27
	Collective Trust Fund programs		22,004		22,447		22,123		21,140		21,108
	Liquidity funds		738		824		962		904		1,066
	Total assets under management	$	22,810	$	23,339	$	23,149	$	22,108	$	22,201
	Client assets under administration		320,644		333,373		344,661		355,903		367,206
	Total assets	$	343,454	$	356,712	$	367,810	$	378,011	$	389,407

Investments in New Businesses:
	Equity/Fixed Income programs	$	623	$	640	$	688	$	731	$	755
	Liquidity funds		46		43		139		97		101
	Total assets under management	$	669	$	683	$	827	$	828	$	856

LSV Asset Management:
	Equity/Fixed Income programs	$	76,306	$	79,866	$	82,402	$	83,187	$	83,439

Total:
	Equity/Fixed Income programs	$	199,813	$	209,996	$	216,357	$	218,463	$	221,659
	Collective Trust Fund programs		22,134		22,606		22,244		21,255		21,220
	Liquidity funds		11,918		11,597		12,280		12,598		13,015
	Total assets under management	$	233,865	$	244,199	$	250,881	$	252,316	$	255,894

	Client assets under administration		336,010		348,442		360,368		372,354		384,710
	Total assets	$	569,875	$	592,641	$	611,249	$	624,670	$	640,604