OAKS, Pa., Oct. 19 - SEI Investments Company (Nasdaq: SEIC) today announced financial results for third-quarter 2005, reporting increases in revenues, net income and earnings per share, compared to the corresponding period in 2004.
Consolidated Overview
(In thousands,
except earnings For the Three Months For the Nine Months
per share) Ended September 30, Ended September 30,
2005 2004 % 2005 2004 %
Revenues $193,659 $172,978 12% $569,420 $509,301 12%
Net Income Before Taxes 76,677 71,227 8% 214,874 197,678 9%
Net Income 49,196 45,407 8% 137,089 126,020 9%
Diluted Earnings Per Share $.48 $.43 12% $1.32 $1.19 11%
"We continue to be pleased with our results, 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 are firm in our belief that these investments will position us to grow future revenues and profits more rapidly."
Summary of Third-Quarter and Year-to-Date Results by Business Segment
(In thousands) For the For the
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
2005 2004 % 2005 2004 %
Private Banking and
Trust:
Revenues $67,793 $69,360 (2%) $211,721 $218,137 (3%)
Operating Profit $23,582 $29,674 (21%) $76,173 $86,805 (12%)
Operating Margin 35% 43% 36% 40%
Investment Advisors:
Revenues 53,142 45,967 16% 151,205 132,198 14%
Operating Profit 28,978 24,995 16% 80,820 72,305 12%
Operating Margin 55% 54% 53% 55%
Enterprises:
Revenues 22,004 18,347 20% 62,939 50,617 24%
Operating Profit 9,721 8,112 20% 28,447 23,168 23%
Operating Margin 44% 44% 45% 46%
Money Managers:
Revenues 22,707 20,523 11% 64,081 56,471 13%
Operating Profit 3,362 3,573 (6%) 10,223 10,457 (2%)
Operating Margin 15% 17% 16% 19%
Investments in New
Businesses:
Revenues 28,013 18,781 49% 79,474 51,878 53%
Operating Loss (4,131) (4,747) 13% (15,004) (13,760) (9%)
Operating Margin (15%) (25%) (19%) (27%)
Consolidated Segment
Totals:
Revenues $193,659 $172,978 12% $569,420 $509,301 12%
Operating Profit $61,512 $61,607 -- $180,659 $178,975 1%
Operating Margin 32% 36% 32% 35%
Third-Quarter Business Commentary:
-- Private Banking & Trust lagged year-ago levels on revenues and
profits, due primarily to previously reported losses in the mutual
fund services business during the 2nd half of 2004.
-- 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.
-- Assets under management grew by $7.9 billion during the 3rd quarter
to $138.5 billion. This growth included $5.5 billion from the
unconsolidated affiliate and $2.4 billion from the business segments.
-- In the 3rd quarter, SEI purchased 1,124,000 shares of its common
stock for $41.9 million.
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EDT on Wednesday, October 19, 2005. 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 798076.
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 September 30, 2005, through our subsidiaries and partnerships in which we have a significant interest, SEI administers $321.7 billion in mutual fund and pooled assets, manages $138.5 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 September 30,
2005 2004
Revenues $193,659 $172,978
Operating and development expenses 99,633 78,961
Sales and marketing expenses 32,514 32,410
General and administrative expenses 8,212 7,054
Income before interest and taxes 53,300 54,553
Equity in earnings of unconsolidated affiliate 20,956 11,859
Net (loss) gain on investments (130) 439
Interest income 1,979 1,184
Interest expense (369) (497)
Other income 941 3,689
Income before taxes 76,677 71,227
Income taxes 27,481 25,820
Net income $49,196 $45,407
Diluted earnings per common share $.48 $.43
Shares used to calculate diluted
earnings per common share 102,595 104,968
Basic earnings per common share $.49 $.44
Shares used to calculate basic
earnings per common share 99,814 102,904
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Nine Months Ended September 30,
2005 2004
Revenues $569,420 $509,301
Operating and development expenses 291,140 232,289
Sales and marketing expenses 97,621 98,037
General and administrative expenses 25,331 22,651
Income before interest and taxes 155,328 156,324
Equity in earnings of unconsolidated affiliate 53,818 31,542
Net gain on investments 219 4,730
Interest income 5,739 3,021
Interest expense (1,171) (1,628)
Other income 941 3,689
Income before taxes 214,874 197,678
Income taxes 77,785 71,658
Net income $137,089 $126,020
Diluted earnings per common share $1.32 $1.19
Shares used to calculate diluted
earnings per common share 103,560 106,041
Basic earnings per common share $1.36 $1.21
Shares used to calculate basic
earnings per common share 100,792 103,736
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
September 30, December 31,
2005 2004
Assets
Cash and short-term investments $133,709 $216,966
Restricted Cash 10,003 14,386
Receivables 118,872 108,795
Other current assets 13,788 15,532
Total current assets 276,372 355,679
Property and Equipment, net 115,049 113,640
Investments available for sale 51,999 39,817
Capitalized Software, net 100,430 55,830
Other assets 62,251 50,509
Total assets $606,101 $615,475
Liabilities
Current liabilities $137,726 $163,569
Long-term debt 9,000 14,389
Long-term deferred gain -- 1,472
Deferred income taxes 50,018 32,103
Shareholders' Equity 409,357 403,942
Total liabilities and
shareholders' equity $606,101 $615,475
SEI Investments Business Segments
(In thousands)
Three Months ended Nine Months ended
Sep. 30, Sep. 30,
2005 2004 2005 2004
Private Banking and Trust:
Revenues
Investment processing fees 54,952 54,381 172,668 166,602
Fund processing fees 4,283 6,247 13,367 25,288
Investment management fees 8,558 8,732 25,686 26,247
Total Revenues 67,793 69,360 211,721 218,137
Operating and development
expenses 35,831 30,217 108,655 101,300
Sales and marketing
expenses 8,380 9,469 26,893 30,032
Operating Profit 23,582 29,674 76,173 86,805
Operating Margin 35% 43% 36% 40%
Investment Advisors:
Revenues 53,142 45,967 151,205 132,198
Operating and
development expenses 18,076 13,785 51,611 38,124
Sales and marketing
expenses 6,088 7,187 18,774 21,769
Operating Profit 28,978 24,995 80,820 72,305
Operating Margin 55% 54% 53% 55%
Enterprises:
Revenues 22,004 18,347 62,939 50,617
Operating and development
expenses 6,796 5,502 19,010 13,751
Sales and marketing
expenses 5,487 4,733 15,482 13,698
Operating Profit 9,721 8,112 28,447 23,168
Operating Margin 44% 44% 45% 46%
Money Managers:
Revenues 22,707 20,523 64,081 56,471
Operating and development
expenses 15,716 13,517 43,433 35,491
Sales and marketing
expenses 3,629 3,433 10,425 10,523
Operating Profit 3,362 3,573 10,223 10,457
Operating Margin 15% 17% 16% 19%
Investments in New Businesses:
Revenues 28,013 18,781 79,474 51,878
Operating and development
expenses 23,214 15,940 68,431 43,623
Sales and marketing
expenses 8,930 7,588 26,047 22,015
Operating Loss (4,131) (4,747) (15,004) (13,760)
Operating Margin (15%) (25%) (19%) (27%)
Consolidated Segment Totals:
Revenues $193,659 $172,978 $569,420 $509,301
Operating and development
expenses 99,633 78,961 291,140 232,289
Sales and marketing
expenses 32,514 32,410 97,621 98,037
Operating Profit $61,512 $61,607 $180,659 $178,975
Operating Margin 32% 36% 32% 35%
General and Administrative
expenses 8,212 7,054 25,331 22,651
Income from Operations $53,300 $54,553 $155,328 $156,324
Operating Margin 28% 32% 27% 31%
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30,
2004 2004 2005 2005 2005
Private Banking and Trust:
Equity/Fixed Income
prgms. $2,662 $2,780 $2,427 $2,495 $2,504
Collective Trust Fund
prgm. 1,455 1,518 1,574 1,700 1,704
Liquidity funds 7,723 7,503 7,406 7,442 7,668
Total assets under
mgmt. $11,840 $11,801 $11,407 $11,637 $11,876
Client assets under
admin. 35,881 35,986 33,703 34,208 28,675
Total assets under
admin. $47,721 $47,787 $45,110 $45,845 $40,551
Investment Advisors:
Equity/Fixed Income
prgms. $25,559 $27,706 $27,371 $27,883 $29,219
Collective Trust
Fund prgm. 2,592 2,521 2,513 2,610 2,623
Liquidity funds 1,081 1,026 1,113 1,018 1,047
Total assets under
mgmt. $29,232 $31,253 $30,997 $31,511 $32,889
Enterprises:
Equity/Fixed Income
prgms. $15,871 $17,283 $17,926 $18,273 $19,266
Collective Trust
Fund prgm. 1,031 1,023 994 1,001 1,013
Liquidity funds 3,869 3,406 2,976 2,836 2,389
Total assets under
mgmt. $20,771 $21,712 $21,896 $22,110 $22,668
Money Managers:
Equity/Fixed Income
prgms. $25 $18 $12 $12 $13
Collective Trust
Fund prgm. 7,226 7,097 7,634 8,108 8,524
Liquidity funds 226 208 182 167 185
Total assets under
mgmt. $7,477 $7,323 $7,828 $8,287 $8,722
Client assets under
admin. 123,651 124,648 127,247 139,822 147,647
Total assets under
admin. $131,128 $131,971 $135,075 $148,109 $156,369
Investments in New
Businesses:
Equity/Fixed Income
prgms. $13,507 $15,566 $17,778 $19,137 $18,873
Liquidity funds 169 179 225 255 318
Total assets under
mgmt. $13,676 $15,745 $18,003 $19,392 $19,191
Client assets under
admin. 6,096 7,003 6,253 7,296 6,841
Total assets under
admin. $19,772 $22,748 $24,256 $26,688 $26,032
Unconsolidated Affiliate:
Equity/Fixed Income
prgms. $26,835 $32,556 $33,781 $37,740 $43,192
Consolidated:
Equity/Fixed Income
prgms. (A,B) $84,459 $95,909 $99,295 $105,540 $113,067
Collective Trust
Fund prgm. 12,304 12,159 12,715 13,419 13,864
Liquidity funds (B) 13,068 12,322 11,902 11,718 11,607
Total assets under
mgmt. $109,831 $120,390 $123,912 $130,677 $138,538
Client assets under
admin. 165,628 167,637 167,203 181,326 183,163
Total assets under
admin. $275,459 $288,027 $291,115 $312,003 $321,701
(A) Equity/Fixed Income programs include $2,370 of assets invested in
SEI's Asset Allocation Funds at 9/30/05
(B) In addition to the numbers presented, SEI also administers an
additional $4,800 in Funds of Funds assets (as of September 30, 2005)
on which SEI does not earn an administration fee.
