Net Income up 19%, Revenues Increase 11%
OAKS, Pa., Feb. 1 - SEI Investments Company (Nasdaq: SEIC) today announced financial results for fourth-quarter 2005, reporting increases in revenues, net income and earnings per share, compared to the corresponding period for the prior year.
Consolidated Overview
(In thousands, except
earnings per share) For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
2005 2004 % 2005 2004 %
Revenues $203,587 $182,968 11% $773,007 $692,269 12%
Net Income Before
Taxes 80,335 67,453 19% 295,209 265,131 11%
Net Income 51,255 43,001 19% 188,344 169,021 11%
Diluted Earnings
Per Share $.50 $.41 22% $1.83 $1.60 14%
"We are satisfied with the results for both the quarter and the year, especially since we are in the heart of the build phase of our new strategies," said Alfred P. West, Jr., SEI Chairman and CEO.
"These investments promise to both transform our company, giving us even larger markets for growth, as well as provide our clients with increased opportunities for success. In the long run, we remain firm in our belief that what we are doing will position us to grow future revenues and profits more rapidly."
Summary of Fourth-Quarter and Year-to-Date Results by Business Segment
(In thousands) For the Three Month For the Twelve Month
Period Ended Period Ended
December 31, December 31,
2005 2004 % 2005 2004 %
Private Banking
and Trust:
Revenues $70,089 $72,468 (3%) $281,810 $290,605 (3%)
Operating Profit $23,920 $27,722 (14%) $100,093 $114,527 (13%)
Operating Margin 34% 38% 36% 39%
Investment Advisors:
Revenues 54,447 48,153 13% 205,652 180,351 14%
Operating Profit 29,724 26,379 13% 110,544 98,684 12%
Operating Margin 55% 55% 54% 55%
Enterprises:
Revenues 24,738 19,199 29% 87,677 69,816 26%
Operating Profit 12,044 8,880 36% 40,491 32,048 26%
Operating Margin 49% 46% 46% 46%
Money Managers:
Revenues 23,514 20,436 15% 87,595 76,907 14%
Operating Profit 4,233 4,206 1% 14,456 14,663 (1%)
Operating Margin 18% 21% 17% 19%
Investments in New
Businesses:
Revenues 30,799 22,712 36% 110,273 74,590 48%
Operating Loss (4,729) (6,559) 28% (19,733) (20,319) 3%
Operating Margin (15%) (29%) (18%) (27%)
Consolidated Segment
Totals:
Revenues $203,587 $182,968 11% $773,007 $692,269 12%
Operating Profit $65,192 $60,628 8% $245,851 $239,603 3%
Operating Margin 32% 33% 32% 35%
Fourth-Quarter Business Commentary:
-- Private Banking & Trust lagged year-ago levels on revenues and
profits.
-- The Investment Advisors, Enterprises, Money Managers and Investments
in New Businesses segments reported revenue gains versus year-ago
levels. This was fueled by stronger capital markets and, in most
segments, new sales.
-- Consolidated operating margins lagged year-ago levels, due primarily
to increased rate of investment and operational spending necessary to
deliver new company strategies and solutions, as well as costs
directly associated with new revenue.
-- During Fourth Quarter 2005, SEI recognized $4.25 million in expense as
part of a previously disclosed litigation settlement. This affected
all five Business Segments with approximately $1.8 million allocated
to Private Banking, $1.0 million to both Advisors and Investments in
New Business with the remainder spread between Enterprise and Money
Managers.
-- Assets under management grew by $10.0 billion during the Fourth
Quarter to $148.5 billion. This growth included $4.6 billion from the
unconsolidated affiliate and $5.4 billion from the business segments.
-- In the Fourth quarter, SEI purchased 910,000 shares of its common
stock for $35.1 million.
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EST on February 1, 2006. Investors may listen to the call at http://www.seic.com, or listen at http://www.earnings.com, a service of CCBN. The call may also be accessed at numerous financial services web sites including AOL, Motley Fool 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 815520.
About SEI
SEI (Nasdaq: SEIC) is a leading global provider of asset management services and investment technology solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of the period ending December 31, 2005, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $312.1 billion in mutual fund and pooled assets, manages $148.5 billion in assets, and operates 22 offices in 12 countries. For more information, visit http://www.seic.com.
Many of our responses 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 INCOME
(In thousands, except per share data)
Three Months Ended December 31,
2005 2004
Revenues $203,587 $182,968
Operating and development expenses 102,814 89,009
Sales and marketing expenses 35,581 33,331
General and administrative expenses 8,567 7,502
Income before interest and taxes 56,625 53,126
Equity in earnings of unconsolidated affiliate 21,000 14,169
Net loss on investments (132) (882)
Interest income 2,628 1,524
Interest expense (353) (484)
Other income 567 --
Income before taxes 80,335 67,453
Income taxes 29,080 24,452
Net income $51,255 $43,001
Diluted earnings per common share $.50 $.41
Shares used to calculate diluted
earnings per common share 101,872 105,340
Basic earnings per common share $.52 $.42
Shares used to calculate basic
earnings per common share 99,105 102,391
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Twelve Months Ended December 31,
2005 2004
Revenues $773,007 $692,269
Operating and development expenses 393,954 321,298
Sales and marketing expenses 133,202 131,368
General and administrative expenses 33,898 30,153
Income before interest and taxes 211,953 209,450
Equity in earnings of unconsolidated affiliate 74,818 45,711
Net gain on investments 87 3,848
Interest income 8,367 4,545
Interest expense (1,524) (2,112)
Other income 1,508 3,689
Income before taxes 295,209 265,131
Income taxes 106,865 96,110
Net income $188,344 $169,021
Diluted earnings per common share $1.83 $1.60
Shares used to calculate diluted
earnings per common share 103,138 105,866
Basic earnings per common share $1.88 $1.63
Shares used to calculate basic
earnings per common share 100,371 103,399
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
December 31, December 31,
2005 2004
Assets
Cash and short-term investments $130,378 $216,966
Restricted Cash 10,000 14,386
Receivables 128,545 108,795
Other current assets 37,053 15,532
Total current assets 305,976 355,679
Property and Equipment, net 114,505 113,640
Investments available for sale 54,632 39,817
Capitalized Software, net 116,670 55,830
Other assets 65,364 50,509
Total assets $657,147 $615,475
Liabilities
Current liabilities $167,470 $163,569
Long-term debt 9,000 14,389
Long-term deferred gain -- 1,472
Deferred income taxes 58,989 32,103
Shareholders' Equity 421,688 403,942
Total liabilities and shareholders' equity $657,147 $615,475
SEI Investments Business Segments
(In thousands)
Three Months ended Twelve Months ended
Dec. 31, Dec. 31,
2005 2004 2005 2004
Private Banking and Trust:
Revenues
Investment processing fees 57,511 58,627 230,179 225,229
Fund processing fees 3,928 4,889 17,295 30,177
Investment management fees 8,650 8,952 34,336 35,199
Total Revenues 70,089 72,468 281,810 290,605
Operating and development
expenses 37,191 34,165 145,846 135,465
Sales and marketing
expenses 8,978 10,581 35,871 40,613
Operating Profit 23,920 27,722 100,093 114,527
Operating Margin 34% 38% 36% 39%
Investment Advisors:
Revenues 54,447 48,153 205,652 180,351
Operating and development
expenses 18,760 15,729 70,371 53,853
Sales and marketing
expenses 5,963 6,045 24,737 27,814
Operating Profit 29,724 26,379 110,544 98,684
Operating Margin 55% 55% 54% 55%
Enterprises:
Revenues 24,738 19,199 87,677 69,816
Operating and development
expenses 6,568 5,582 25,578 19,333
Sales and marketing
expenses 6,126 4,737 21,608 18,435
Operating Profit 12,044 8,880 40,491 32,048
Operating Margin 49% 46% 46% 46%
Money Managers:
Revenues 23,514 20,436 87,595 76,907
Operating and development
expenses 15,341 12,394 58,774 47,885
Sales and marketing
expenses 3,940 3,836 14,365 14,359
Operating Profit 4,233 4,206 14,456 14,663
Operating Margin 18% 21% 17% 19%
Investments in New Businesses:
Revenues 30,799 22,712 110,273 74,590
Operating and development
expenses 24,954 21,139 93,385 64,762
Sales and marketing
expenses 10,574 8,132 36,621 30,147
Operating Loss (4,729) (6,559) (19,733) (20,319)
Operating Margin (15%) (29%) (18%) (27%)
Consolidated Segment Totals:
Revenues $203,587 $182,968 $773,007 $692,269
Operating and development
expenses 102,814 89,009 393,954 321,298
Sales and marketing
expenses 35,581 33,331 133,202 131,368
Operating Profit $65,192 $60,628 $245,851 $239,603
Operating Margin 32% 33% 32% 35%
General and Administrative
expenses 8,567 7,502 33,898 30,153
Income from Operations $56,625 $53,126 $211,953 $209,450
Operating Margin 28% 29% 27% 30%
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31,
2004 2005 2005 2005 2005
Private Banking and Trust:
Equity/Fixed Income
prgms. $2,780 $2,427 $2,495 $2,504 $2,363
Collective Trust
Fund prgm. 1,518 1,574 1,700 1,704 1,657
Liquidity funds 7,503 7,406 7,442 7,668 7,485
Total assets under
mgmt. $11,801 $11,407 $11,637 $11,876 $11,505
Client assets
under admin. 35,986 33,703 33,837 28,304 27,106
Total assets under
admin. $47,787 $45,110 $45,474 $40,180 $38,611
Investment Advisors:
Equity/Fixed Income
prgms. $27,706 $27,371 $27,883 $29,219 $29,800
Collective Trust
Fund prgm. 2,521 2,513 2,610 2,623 2,479
Liquidity funds 1,026 1,113 1,018 1,047 1,139
Total assets under
mgmt. $31,253 $30,997 $31,511 $32,889 $33,418
Enterprises:
Equity/Fixed Income
prgms. $17,283 $17,926 $18,273 $19,266 $21,377
Collective Trust
Fund prgm. 1,023 994 1,001 1,013 1,172
Liquidity funds 3,406 2,976 2,836 2,389 3,153
Total assets under
mgmt. $21,712 $21,896 $22,110 $22,668 $25,702
Money Managers:
Equity/Fixed Income
prgms. $18 $12 $12 $13 $11
Collective Trust Fund
prgm. 7,097 7,634 8,108 8,524 8,770
Liquidity funds 208 182 167 185 412
Total assets under
mgmt. $7,323 $7,828 $8,287 $8,722 $9,193
Client assets under
admin. 124,648 127,638 141,199 150,707 130,526
Total assets under
admin. $131,971 $135,466 $149,486 $159,429 $139,719
Investments in New
Businesses:
Equity/Fixed Income
prgms. $15,566 $17,774 $19,137 $18,873 $20,627
Liquidity funds 179 228 255 318 312
Total assets under
mgmt. $15,745 $18,002 $19,392 $19,191 $20,939
Client assets under
admin. 7,003 6,253 7,296 6,841 5,894
Total assets under
admin. $22,748 $24,255 $26,688 $26,032 $26,833
Unconsolidated Affiliate:
Equity/Fixed Income
prgms. $32,556 $33,781 $37,740 $43,192 $47,781
Consolidated:
Equity/Fixed Income
prgms (A,B) $95,909 $99,291 $105,540 $113,067 $121,959
Collective Trust
Fund prgm. 12,159 12,715 13,419 13,864 14,078
Liquidity funds (B) 12,322 11,905 11,718 11,607 12,501
Total assets under
mgmt. $120,390 $123,911 $130,677 $138,538 $148,538
Client assets under
admin. 167,637 167,594 182,332 185,852 163,526
Total assets $288,027 $291,505 $313,009 $324,390 $312,064
(A) Equity/Fixed Income programs include $2,635 of assets invested in
SEI's Asset Allocation Funds at 12/31/05
(B) In addition to the numbers presented, SEI also administers an
additional $11,118 in Funds of Funds assets (as of December 31, 2005) on
which SEI does not earn an administration fee.
