SEI Reports First-Quarter 2013 Financial Results OAKS,

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SEI Reports First-Quarter 2013 Financial Results

OAKS, PA--(Marketwired - Apr 24, 2013) - SEI Investments Company ( NASDAQ : SEIC ) today announced financial results for first-quarter 2013. Diluted earnings per share were $.41 in first-quarter 2013 compared to $.28 in first-quarter 2012. First-quarter 2013 includes a gain of $.08 diluted earnings per share from the sale of SEI Asset Korea, of which SEI owned approximately 56.1 percent. 

       
Consolidated Overview   For the Three Months  
(In thousands, except earnings per share)   Ended March 31,  
    2013   2012   %  
                   
Revenues   $ 271,879   $ 237,898   14 %
Net Income attributable to SEI     71,920     49,965   44 %
Diluted Earnings Per Share   $ 0.41   $ 0.28   46 %
                   

"The first quarter of 2013 continued the progress we made during 2012 across all of our businesses. A combination of new client implementations, improved financial markets, and positive sales activity contributed to our operating results during the quarter," said Alfred P. West, Jr., SEI Chairman and CEO.

"Our results so far this year have been encouraging. SEI will continue to execute against our long-term strategy, including a focus on new client acquisition and development of the products and services necessary for long-term success. As always, we are committed to enhancing shareholder value."

Summary of First-Quarter Results by Business Segment

       
(In thousands)   For the Three Months  
    Ended March 31,  
    2013     2012     %  
Private Banks:                      
Revenues   $ 98,746     $ 87,988     12 %
Expenses     96,298       87,517     10 %
Operating Profit   $ 2,448     $ 471     420 %
  Gain on sale of subsidiary     22,112       --     N/M  
Total Profit   $ 24,560     $ 471     N/M  
  Operating Margin (A)     2 %     1 %      
                       
Investment Advisors:                      
Revenues     55,191       49,468     12 %
Expenses     31,625       29,301     8 %
Operating Profit     23,566       20,167     17 %
Operating Margin     43 %     41 %      
                       
Institutional Investors:                      
Revenues     63,162       53,317     18 %
Expenses     31,509       28,100     12 %
Operating Profit     31,653       25,217     26 %
Operating Margin     50 %     47 %      
                       
Investment Managers:                      
Revenues     53,820       46,211     16 %
Expenses     35,162       30,426     16 %
Operating Profit     18,658       15,785     18 %
Operating Margin     35 %     34 %      
                       
Investments in New Businesses:                      
Revenues     960       914     5 %
Expenses     3,738       3,698     1 %
Operating Loss     (2,778 )     (2,784 )   --  

(A) Percentage determined exclusive of gain on sale of subsidiary.

First-Quarter Business Commentary:

  • Revenues increased in first-quarter 2013 as compared to both first-quarter 2012 and fourth-quarter 2012. Gains were realized in all core business segments and all major product lines, including Asset management, administration, and distribution fees and Information processing and software servicing fees.
  • Net income attributable to SEI increased in first-quarter 2013 as compared to both first-quarter 2012 and fourth-quarter 2012. This was driven by the increase in first-quarter 2013 revenues when compared to both periods. Additionally, the previously disclosed sale of SEI Asset Korea was completed on March 28, 2013 resulting in a gain of $22.1 million, or $.08 diluted earnings per share.
  • Our average assets under management, excluding LSV, increased $20.9 billion, or 17 percent, to $145.0 billion in the first-quarter 2013, as compared to $124.1 billion during the first-quarter 2012, and increased $6.5 billion, or five percent, as compared to $138.5 billion during the fourth-quarter 2012. Ending asset balances for the first-quarter 2013 do not include assets related to SEI Asset Korea (see attached Ending and Average Asset Balances schedules for further details). 
  • Sales events, net of client losses, during first-quarter 2013 totaled approximately $19.6 million and are expected to generate net annualized recurring revenues of approximately $16.8 million when contract values are fully realized.
  • Income from LSV increased in first-quarter 2013 to $27.8 million as compared to $27.3 million in first-quarter 2012 due to an increase in assets under management. Our ownership interest in LSV was approximately 39.8 percent in first-quarter 2013 and 41.2 percent in first-quarter 2012.
  • The effective tax rates were 34.9 percent in first-quarter 2013 and 37.2 percent in first-quarter 2012 and 35.0 percent in fourth-quarter 2012. The first-quarter 2013 tax rate was benefited by the reinstatement of the research and development tax credit partially offset by additional foreign taxes caused by the sale of SEI Asset Korea. The increase in the tax rate in the first-quarter 2012 was due to the expiration of the research and development tax credits. The fourth-quarter 2012 tax rate was benefited by state tax planning.
  • In first-quarter 2013, we repurchased 1.3 million shares of our common stock for $36.2 million.

Earnings Conference Call A conference call to review earnings is scheduled for 2:00 PM ET on April 24, 2013. Investors may listen to the call at www.seic.com/investors or listen at www.earnings.com , a service of Thomson Streetevents. The call may also be accessed at numerous financial services web sites including AOL and Yahoo. Investors may also listen to replays at these web sites, or by telephone at (USA) 1-800-475-6701; (International) 320-365-3844, access code 291281.

About SEI SEI ( NASDAQ : SEIC ) is a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of March 31, 2013, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $495 billion in mutual fund and pooled or separately managed assets, including $206 billion in assets under management and $289 billion in client assets under administration. For more information, visit www.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,  
    2013     2012  
                 
Asset management, admin. and distribution fees   $ 198,633     $ 172,954  
Information processing and software servicing fees     64,532       56,200  
Transaction-based and trade execution fees     8,714       8,744  
                 
Total revenues     271,879       237,898  
                 
Subadvisory, distribution and other asset mgmt costs     27,934       28,003  
Software royalties and other information processing costs     7,487       6,941  
Brokerage commissions     6,512       6,307  
Compensation, benefits and other personnel     88,610       78,543  
Stock-based compensation     5,293       4,033  
Consulting, outsourcing and professional fees     31,849       26,955  
Data processing and computer related     12,058       11,465  
Facilities, supplies and other costs     18,148       14,508  
Amortization     8,242       7,622  
Depreciation     5,704       5,432  
                 
Total expenses     211,837       189,809  
                 
Income from operations     60,042       48,089  
                 
Net gain on investments     280       3,205  
Interest and dividend income     1,053       1,487  
Interest expense     (113 )     (161 )
Equity in earnings of unconsolidated affiliates     27,588       27,330  
Gain on sale of subsidiary     22,112       --  
                 
Net income before income taxes     110,962       79,950  
                 
Income taxes     38,692       29,715  
                 
Net income     72,270       50,235  
                 
Less: Net income attributable to the noncontrolling interest     (350 )     (270 )
                 
Net income attributable to SEI   $ 71,920     $ 49,965  
                 
Diluted earnings per common share   $ 0.41     $ 0.28  
                 
Shares used to calculate diluted earnings per share     176,005       177,668  
                 
Basic earnings per common share   $ 0.42     $ 0.28  
                 
Shares used to calculate basic earnings per share     172,598       176,348  
                 
                 
                 
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
 
    March 31,   December 31,
    2013   2012
Assets            
             
Cash and short-term investments   $ 452,099   $ 452,247
Restricted cash     5,500     6,000
Receivables, net     247,137     202,818
Securities owned     21,107     20,088
Other current assets     21,705     20,251
             
Total current assets     747,548     701,404
             
Property and equipment, net     123,153     127,581
Marketable securities     78,148     81,778
Capitalized software, net     305,352     307,490
Investment in unconsolidated affiliates     77,165     77,398
Other assets, net     11,244     14,173
             
Total assets   $ 1,342,610   $ 1,309,824
             
             
             
Liabilities            
             
Current liabilities   $ 148,727   $ 152,005
Deferred income taxes     85,386     93,458
Other Long-term liabilities     7,400     7,032
             
Total SEI Investments Company shareholders' equity     1,101,097     1,038,180
Noncontrolling interest     --     19,149
Total Equity     1,101,097     1,057,329
             
Total liabilities and equity   $ 1,342,610   $ 1,309,824
             
             
             
SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)
 
    Mar. 31,   Jun. 30,   Sept. 30,   Dec. 31,   Mar. 31,
    2012   2012   2012   2012   2013
Private Banks:                              
Equity/Fixed Income prgms.   $ 17,180   $ 16,848   $ 17,960   $ 18,862   $ 12,446
Collective Trust Fund prgms.     435     335     147     11     9
Liquidity funds     5,549     5,063     5,342     6,008     5,143
Total assets under mgmnt.   $ 23,164   $ 22,246   $ 23,449   $ 24,881   $ 17,598
                               
Client assets under admin.     10,916     10,719     11,611     12,178     12,970
Total assets   $ 34,080   $ 32,965   $ 35,060   $ 37,059   $ 30,568
                               
Investment Advisors:                              
  Equity/Fixed Income prgms.   $ 29,722   $ 29,153   $ 30,864   $ 31,220   $ 34,166
  Collective Trust Fund prgms.     1,199     705     370     14     15
  Liquidity funds     1,643     1,880     1,868     2,514     2,094
  Total assets under mgmnt.   $ 32,564   $ 31,738   $ 33,102   $ 33,748   $ 36,275
                               
Institutional Investors:                              
  Equity/Fixed Income prgms.   $ 54,537   $ 55,548   $ 59,852   $ 62,160   $ 64,214
  Collective Trust Fund prgms.     424     415     153     102     101
  Liquidity funds     3,725     2,958     3,272     2,454     2,810
  Total assets under mgmnt.   $ 58,686   $ 58,921   $ 63,277   $ 64,716   $ 67,125
                               
Investment Managers:                              
  Equity/Fixed Income prgms.   $ 62   $ 61   $ 65   $ 67   $ 73
  Collective Trust Fund prgms.     12,781     13,004     15,433     16,197     17,656
  Liquidity funds     147     226     396     408     522
  Total assets under mgmnt.   $ 12,990   $ 13,291   $ 15,894   $ 16,672   $ 18,251
                               
  Client assets under admin. (A)     228,327     231,549     240,965     244,671     275,632
  Total assets   $ 241,317   $ 244,840   $ 256,859   $ 261,343   $ 293,883
                               
Investments in New Businesses:                              
  Equity/Fixed Income prgms.   $ 568   $ 551   $ 534   $ 513   $ 552
  Liquidity funds     34     30     29     43     42
  Total assets under mgmnt.   $ 602   $ 581   $ 563   $ 556   $ 594
                               
LSV Asset Management:                              
  Equity/Fixed Income prgms.   $ 60,607   $ 54,922   $ 58,886   $ 60,947   $ 66,311
                               
Total:                              
  Equity/Fixed Income prgms (B) (D)   $ 162,676   $ 157,083   $ 168,161   $ 173,769   $ 177,762
  Collective Trust Fund prgms.     14,839     14,459     16,103     16,324     17,781
  Liquidity funds     11,098     10,157     10,907     11,427     10,611
  Total assets under mgmnt.   $ 188,613   $ 181,699   $ 195,171   $ 201,520   $ 206,154
                                 
  Client assets under admin. (C)     239,243     242,268     252,576     256,849     288,602
  Total assets   $ 427,856   $ 423,967   $ 447,747   $ 458,369   $ 494,756

(A) Client assets under administration in the Investment Managers segment include $54.1 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of March 31, 2013). (B) Equity/Fixed Income programs include $3.3 billion of assets invested in various asset allocation funds at March 31, 2013. (C) In addition to the numbers presented, SEI also administers an additional $4.9 billion in Funds of Funds assets (as of March 31, 2013) on which SEI does not earn an administration fee. (D) Equity/Fixed Income programs in the Private Banks segment for 2012 included assets related to SEI Asset Korea which was sold in first-quarter 2013. Assets for SEI Asset Korea for the four quarters of 2012 were $6.6 billion, $6.3 billion. $6.6 billion and $7.0 billion respectively.

 
 
SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)
 
    1st Qtr.   2nd Qtr.   3rd Qtr.   4th Qtr.   1st Qtr.
    2012   2012   2012   2012   2013
Private Banks:                              
Equity/Fixed Income prgms.   $ 17,116   $ 16,794   $ 17,527   $ 18,301   $ 19,197
Collective Trust Fund prgms.     436     396     230     66     11
Liquidity funds     5,581     5,115     5,401     5,229     5,556
Total assets under mgmnt.   $ 23,133   $ 22,305   $ 23,158   $ 23,596   $ 24,764
                               
Client assets under admin.     10,211     10,631     10,867     11,783     12,860
Total assets   $ 33,344   $ 32,936   $ 34,025   $ 35,379   $ 37,624
                               
Investment Advisors:                              
  Equity/Fixed Income prgms.   $ 28,426   $ 29,103   $ 30,032   $ 30,881   $ 33,189
  Collective Trust Fund prgms.     1,238     984     532     158     14
  Liquidity funds     2,015     1,806     1,886     2,176     2,085
  Total assets under mgmnt.   $ 31,679   $ 31,893   $ 32,450   $ 33,215   $ 35,288
                               
Institutional Investors:                              
  Equity/Fixed Income prgms.   $ 52,270   $ 54,998   $ 57,763   $ 61,304   $ 63,642
  Collective Trust Fund prgms.     427     418     284     120     101
  Liquidity funds     3,765     3,147     3,253     3,493     2,960
  Total assets under mgmnt.   $ 56,462   $ 58,563   $ 61,300   $ 64,917   $ 66,703
                               
Investment Managers:                              
  Equity/Fixed Income prgms.   $ 58   $ 63   $ 62   $ 68   $ 68
  Collective Trust Fund prgms.     11,983     12,991     14,797     15,719     17,129
  Liquidity funds     190     235     287     395     511
  Total assets under mgmnt.   $ 12,231   $ 13,289   $ 15,146   $ 16,182   $ 17,708
                               
  Client assets under admin.     224,547     229,873     237,155     240,520     263,054
  Total assets   $ 236,778   $ 243,162   $ 252,301   $ 256,702   $ 280,762
                               
Investments in New Businesses:                              
  Equity/Fixed Income prgms.   $ 549   $ 550   $ 530   $ 518   $ 542
  Liquidity funds     39     33     35     33     38
  Total assets under mgmnt.   $ 588   $ 583   $ 565   $ 551   $ 580
                               
LSV Asset Management:                              
  Equity/Fixed Income prgms.   $ 59,200   $ 55,994   $ 57,164   $ 59,383   $ 64,448
                               
Total:                              
  Equity/Fixed Income prgms (A)   $ 157,619   $ 157,502   $ 163,078   $ 170,455   $ 181,086
  Collective Trust Fund prgms.     14,084     14,789     15,843     16,063     17,255
  Liquidity funds     11,590     10,336     10,862     11,326     11,150
  Total assets under mgmnt.   $ 183,293   $ 182,627   $ 189,783   $ 197,844   $ 209,491
                               
  Client assets under admin.     234,758     240,504     248,022     252,303     275,914
  Total assets   $ 418,051   $ 423,131   $ 437,805   $ 450,147   $ 485,405

(A) Equity/Fixed Income programs in the Private Banks segment for 2012 and 2013 included average assets related to SEI Asset Korea which was sold in first-quarter 2013. Average assets for SEI Asset Korea for the four quarters of 2012 were $6.8 billion, $6.4 billion, $6.5 billion and $6.8 billion respectively. Average assets for the first-quarter 2013 were $7.0 billion. 

Investor Contact: Murray Louis SEI +1 610-676-1932 mlouis@seic.com Media Contact: Dana Grosser SEI +1 610-676-2459 dgrosser@seic.com

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