Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

April 23, 2014


Exhibit 99.1



Investor Contact:                         Media Contact:
Nicole Vattimo                            Dana Grosser
SEI    SEI
+1 610-676-4385                        +1 610-676-2459
nvattimo@seic.com                         dgrosser@seic.com
Pages:        8

FOR IMMEDIATE RELEASE

SEI REPORTS FIRST-QUARTER 2014 FINANCIAL RESULTS
SEI Approves Increase In Stock Repurchase Program

OAKS, Pa., April 23, 2014 -- SEI Investments Company (NASDAQ:SEIC) today announced financial results for the first-quarter 2014. Diluted earnings per share were $.43 in first-quarter 2014 compared to $.41 in first-quarter 2013. Diluted earnings per share reflect pre-tax gains of $5.6 million, or $.02 per share, and $22.1 million, or $.08 per share, from the sale of SEI Asset Korea, in the first-quarter 2014 and 2013, respectively.

In addition, on Tuesday, April 22, 2014, SEI's Board of Directors approved an increase in its stock repurchase program by an additional $200 million, increasing the available authorization under the program to approximately $212 million.
Consolidated Overview
 
For the Three Months Ended March 31,
 
 
(In thousands, except earnings per share)
 
 
 
 
 
2014
 
2013
 
%
 
 
 
 
 
 
 
Revenues
 

$302,386

 

$271,879

 
11
%
Net income attributable to SEI
 
74,820

 
71,920

 
4
%
Diluted earnings per share
 

$0.43

 

$0.41

 
5
%
"First quarter results reflect continued progress across our company both in terms of financial results and the expanding market acceptance of our solutions," said Alfred P. West, Jr., SEI Chairman and CEO. “The continued implementation of our integrated business solutions contributed to increased assets under administration and assets under management during the quarter.

"These results reinforce our commitment to the implementation of SEI's long-term market strategies. We continue to invest in solutions we feel position us well for long-term success, sustainable growth, and increased shareholder value."





Summary of First-Quarter Results by Business Segment
(In thousands)
 
For the Three Months Ended March 31,
 
 
 
 
2014
 
2013
 
%
Private Banks:
 
 
 
 
 
 
   Revenues
 

$105,179

 

$98,746

 
7
 %
   Expenses
 
100,190

 
96,298

 
4
 %
   Operating Profit
 
4,989

 
2,448

 
104
 %
   Gain on sale of subsidiary
 
5,582

 
22,112

 
NM

   Total Profit
 
10,571

 
24,560

 
NM

   Operating Margin (A)
 
5
%
 
2
%
 
 
 
 
 
 
 
 
 
Investment Advisors:
 
 
 
 
 
 
   Revenues
 
66,424

 
55,191

 
20
 %
   Expenses
 
34,577

 
31,625

 
9
 %
   Operating Profit
 
31,847

 
23,566

 
35
 %
   Operating Margin
 
48
%
 
43
%
 
 
 
 
 
 
 
 
 
Institutional Investors:
 
 
 
 
 
 
   Revenues
 
68,657

 
63,162

 
9
 %
   Expenses
 
34,095

 
31,509

 
8
 %
   Operating Profit
 
34,562

 
31,653

 
9
 %
   Operating Margin
 
50
%
 
50
%
 
 
 
 
 
 
 
 
 
Investment Managers:
 
 
 
 
 
 
   Revenues
 
61,008

 
53,820

 
13
 %
   Expenses
 
39,184

 
35,162

 
11
 %
   Operating Profit
 
21,824

 
18,658

 
17
 %
   Operating Margin
 
36
%
 
35
%
 
 
 
 
 
 
 
 
 
Investments in New Businesses:
 
 
 
 
 
 
   Revenues
 
1,118

 
960

 
16
 %
   Expenses
 
4,249

 
3,738

 
14
 %
   Operating Loss
 
(3,131
)
 
(2,778
)
 
NM

 
 
 
 
 
 
 
Totals:
 
 
 
 
 
 
   Revenues
 

$302,386

 

$271,879

 
11
 %
   Expenses
 
212,295

 
198,332

 
7
 %
   Corporate overhead expenses
 
11,699

 
13,794

 
(15
)%
   Noncontrolling interest reflected in segments
 

 
(289
)
 
NM

   Income from operations
 

$78,392

 

$60,042

 
31
 %

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

2



First-Quarter Business Highlights:

Revenues increased in first-quarter 2014 as compared to both first-quarter 2013 and fourth-quarter 2013. 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.
Sales events, net of client losses, during first-quarter 2014 totaled approximately $23.1 million and are expected to generate net annualized recurring revenues of approximately $21.9 million when contract values are fully realized.
Our average assets under management, excluding LSV, increased $12.6 billion, or nine percent, to $157.6 billion in the first-quarter 2014, as compared to $145.0 billion during the first-quarter 2013, and increased $5.9 billion, or four percent, as compared to $151.7 billion during the fourth-quarter 2013. Average asset balances for the first-quarter 2013 include $7.0 billion in assets related to SEI Asset Korea (SEI AK), which was sold in first-quarter 2013 (see attached Ending and Average Asset Balances schedules for further details).
Our average assets under administration increased $60.1 billion, or 22 percent, to $336.0 billion in the first-quarter 2014, as compared to $275.9 billion during the first-quarter 2013, and increased $18.2 billion, or six percent, as compared to $317.8 billion during the fourth-quarter 2013 (see attached Ending and Average Asset Balances schedules for further details).
We recorded pre-tax gains of $5.6 million, or $.02 diluted earnings per share, and $22.1 million, or $.08 diluted earnings per share, from the sale of SEI AK in first-quarter 2014 and 2013, respectively. The operating results of SEI AK were included in the Private Banks business segment.
Income from LSV increased in first-quarter 2014 to $32.2 million as compared to $27.8 million in first-quarter 2013 due to an increase in assets under management from market appreciation and an increase in performance fees earned by LSV. Our ownership interest in LSV was approximately 39.3 percent in first-quarter 2014 and 39.8 percent in first-quarter 2013.
Amortization expense related to capitalized software increased to $9.2 million during the first-quarter 2014 as compared to $8.2 million during the first-quarter 2013 due to continued releases of the SEI Wealth PlatformSM.
The effective tax rates were 35.9 percent in first-quarter 2014, 34.9 percent in first-quarter 2013, and 35.2 percent in fourth-quarter 2013. Due to the expiration of the research and development tax credit on December 31, 2013, the first-quarter 2014 tax rate reflects no benefit for the tax credit, whereas the first-quarter 2013 tax rate reflects the benefit for 2012 and 2013. The increase in our tax rate was partially offset by an increase in the portion of pre-tax income in certain foreign jurisdictions which is taxed at a lower rate during the first-quarter 2014.
In first-quarter 2014, we repurchased 2.0 million shares of our common stock for $69.0 million.

3



Earnings Conference Call
A conference call to review earnings is scheduled for 1:00 p.m. ET on April 23, 2014. Investors may listen to the call at www.seic.com/investors. The call may also be accessed at the financial services sections of numerous web sites, including Google Finance and Yahoo Finance. 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 324787.

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, 2014, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $582 billion in mutual fund and pooled or separately managed assets, including $239 billion in assets under management and $343 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.




4



SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
For the Three Months Ended March 31,
 
 
 
2014
 
2013
 
 
 
 
 
 
 
Asset management, admin. and distribution fees
 

$225,071

 

$198,633

 
Information processing and software servicing fees
 
69,178

 
64,532

 
Transaction–based and trade execution fees
 
8,137

 
8,714

 
 
 
 
 
 
 
Total revenues
 
302,386

 
271,879

 
 
 
 
 
 
 
Subadvisory, distribution and other asset mgmt costs
 
34,012

 
27,934

 
Software royalties and other information processing costs
 
8,553

 
7,487

 
Brokerage commissions
 
5,979

 
6,512

 
Compensation, benefits and other personnel
 
94,424

 
88,610

 
Stock-based compensation
 
2,823

 
5,293

 
Consulting, outsourcing and professional fees
 
34,933

 
31,849

 
Data processing and computer related
 
12,620

 
12,058

 
Facilities, supplies and other costs
 
15,852

 
18,148

 
Amortization
 
9,214

 
8,242

 
Depreciation
 
5,584

 
5,704

 
 
 
 
 
 
 
Total expenses
 
223,994

 
211,837

 
 
 
 
 
 
 
Income from operations
 
78,392

 
60,042

 
 
 
 
 
 
 
Net gain on investments
 
136

 
280

 
Interest and dividend income
 
777

 
1,053

 
Interest expense
 
(113
)
 
(113
)
 
Equity in earnings of unconsolidated affiliates
 
31,891

 
27,588

 
Gain on sale of subsidiary
 
5,582

 
22,112

 
 
 
 
 
 
 
Income before income taxes
 
116,665

 
110,962

 
 
 
 
 
 
 
Income taxes
 
41,845

 
38,692

 
 
 
 
 
 
 
Net income
 
74,820

 
72,270

 
 
 
 
 
 
 
Less: Net income attributable to the noncontrolling interest
 

 
(350
)
 
 
 
 
 
 
 
Net income attributable to SEI
 

$74,820

 

$71,920

 
 
 
 
 
 
 
Basic earnings per common share
 

$0.44

 

$0.42

 
 
 
 
 
 
 
Shares used to calculate basic earnings per share
 
169,306

 
172,598

 
 
 
 
 
 
 
Diluted earnings per common share
 

$0.43

 

$0.41

 
 
 
 
 
 
 
Shares used to calculate diluted earnings per share
 
173,828

 
176,005

 




5



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

 
 
March 31,
 
December 31,
 
 
2014
 
2013
Assets
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
 

$545,552

 

$578,273

Restricted cash
 
5,500

 
5,500

Receivables from regulated investment companies
 
43,272

 
39,364

Receivables, net
 
207,724

 
186,664

Securities owned
 
21,153

 
21,133

Other current assets
 
19,432

 
16,166

Total Current Assets
 
842,633

 
847,100

 
 
 
 
 
Property and equipment, net
 
121,039

 
118,995

Capitalized software, net
 
312,866

 
312,615

Investments available for sale
 
81,660

 
83,323

Trading securities
 
4,914

 
4,849

Investment in unconsolidated affiliates
 
61,756

 
61,370

Other assets, net
 
14,113

 
10,917

Total Assets
 

$1,438,981

 

$1,439,169

 
 
 
 
 
Liabilities and Equity
 
 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
 

$8,373

 

$16,235

Accrued liabilities
 
141,664

 
188,123

Deferred income taxes, net
 
1,604

 
1,653

Deferred revenue
 
2,078

 
1,977

Total Current Liabilities
 
153,719

 
207,988

 
 
 
 
 
Deferred income taxes
 
71,578

 
66,572

Other long-term liabilities
 
9,312

 
8,607

Total Liabilities
 
234,609

 
283,167

 
 
 
 
 
Shareholders' Equity:
 
 
 
 
Common stock
 
1,691

 
1,692

Capital in excess of par value
 
758,645

 
721,219

Retained earnings
 
444,022

 
431,604

Accumulated other comprehensive income, net
 
14

 
1,487

Total Shareholders' Equity
 
1,204,372

 
1,156,002

Total Liabilities and Shareholders' Equity
 

$1,438,981

 

$1,439,169




6



SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)
 
 
 
Mar. 31,
 
Jun. 30,
 
Sept. 30,
 
Dec 31,
 
Mar. 31,
 
 
 
2013
 
2013
 
2013
 
2013
 
2014
Private Banks:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$12,446

 

$12,876

 

$14,305

 

$15,472

 

$16,918

Collective Trust Fund programs
 
 
9

 
10

 
11

 
14

 
14

Liquidity funds
 
 
5,143

 
5,048

 
5,167

 
5,685

 
5,670

Total assets under management
 
 

$17,598

 

$17,934

 

$19,483

 

$21,171

 

$22,602

Client assets under administration
 
 
12,970

 
13,122

 
14,101

 
15,272

 
15,641

Total assets
 
 

$30,568

 

$31,056

 

$33,584

 

$36,443

 

$38,243

 
 
 
 
 
 
 
 
 
 
 
 
Investment Advisors:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$34,166

 

$34,447

 

$36,203

 

$38,574

 

$39,981

Collective Trust Fund programs
 
 
15

 
14

 
14

 
11

 
13

Liquidity funds
 
 
2,094

 
2,145

 
2,779

 
2,846

 
2,802

Total assets under management
 
 

$36,275

 

$36,606

 

$38,996

 

$41,431

 

$42,796

 
 
 
 
 
 
 
 
 
 
 
 
Institutional Investors:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$64,214

 

$61,927

 

$64,429

 

$66,548

 

$69,194

Collective Trust Fund programs
 
 
101

 
106

 
107

 
109

 
102

Liquidity funds
 
 
2,810

 
2,901

 
3,125

 
2,644

 
2,505

Total assets under management
 
 

$67,125

 

$64,934

 

$67,661

 

$69,301

 

$71,801

 
 
 
 
 
 
 
 
 
 
 
 
Investment Managers:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$73

 

$75

 

$75

 

$69

 

$68

Collective Trust Fund programs
 
 
17,656

 
18,197

 
19,868

 
22,377

 
22,633

Liquidity funds
 
 
522

 
542

 
678

 
718

 
782

Total assets under management
 
 

$18,251

 

$18,814

 

$20,621

 

$23,164

 

$23,483

Client assets under administration (A)
 
 
275,632

 
289,807

 
295,959

 
311,992

 
326,735

Total assets
 
 

$293,883

 

$308,621

 

$316,580

 

$335,156

 

$350,218

 
 
 
 
 
 
 
 
 
 
 
 
Investments in New Businesses:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$552

 

$572

 

$594

 

$619

 

$632

Liquidity funds
 
 
42

 
29

 
26

 
46

 
49

Total assets under management
 
 

$594

 

$601

 

$620

 

$665

 

$681

 
 
 
 
 
 
 
 
 
 
 
 
LSV Asset Management:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$64,958

 

$65,417

 

$71,149

 

$76,189

 

$77,973

 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs (B)
 
 

$176,409

 

$175,314

 

$186,755

 

$197,471

 

$204,766

Collective Trust Fund programs
 
 
17,781

 
18,327

 
20,000

 
22,511

 
22,762

Liquidity funds
 
 
10,611

 
10,665

 
11,775

 
11,939

 
11,808

Total assets under management
 
 

$204,801

 

$204,306

 

$218,530

 

$231,921

 

$239,336

 
 
 
 
 
 
 
 
 
 
 
 
Client assets under administration (C)
 
 
288,602

 
302,929

 
310,060

 
327,264

 
342,376

Total assets
 
 

$493,403

 

$507,235

 

$528,590

 

$559,185

 

$581,712

(A)
Client assets under administration in the Investment Managers segment include $51.3 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of March 31, 2014).
(B)
Equity/Fixed Income programs include $4.7 billion of assets invested in various asset allocation funds at March 31, 2014.
(C)
In addition to the numbers presented, SEI also administers an additional $6.2 billion in Funds of Funds assets (as of
March 31, 2014) on which SEI does not earn an administration fee.



7



SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)
 
 
 
1st Qtr.
 
2nd Qtr.
 
3rd Qtr.
 
4th Qtr.
 
1st Qtr.
 
 
 
2013
 
2013
 
2013
 
2013
 
2014
Private Banks:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$19,197

 

$12,959

 

$13,696

 

$14,901

 

$16,114

Collective Trust Fund programs
 
 
11

 
10

 
11

 
11

 
14

Liquidity funds
 
 
5,556

 
5,093

 
5,142

 
5,218

 
5,757

Total assets under management
 
 

$24,764

 

$18,062

 

$18,849

 

$20,130

 

$21,885

Client assets under administration
 
 
12,860

 
13,183

 
13,760

 
14,702

 
15,366

Total assets
 
 

$37,624

 

$31,245

 

$32,609

 

$34,832

 

$37,251

 
 
 
 
 
 
 
 
 
 
 
 
Investment Advisors:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$33,189

 

$34,831

 

$35,618

 

$37,520

 

$39,005

Collective Trust Fund programs
 
 
14

 
14

 
14

 
13

 
13

Liquidity funds
 
 
2,085

 
2,028

 
2,520

 
2,785

 
2,806

Total assets under management
 
 

$35,288

 

$36,873

 

$38,152

 

$40,318

 

$41,824

 
 
 
 
 
 
 
 
 
 
 
 
Institutional Investors:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$63,642

 

$63,466

 

$63,153

 

$65,750

 

$67,697

Collective Trust Fund programs
 
 
101

 
105

 
107

 
110

 
103

Liquidity funds
 
 
2,960

 
2,975

 
3,091

 
2,720

 
2,571

Total assets under management
 
 

$66,703

 

$66,546

 

$66,351

 

$68,580

 

$70,371

 
 
 
 
 
 
 
 
 
 
 
 
Investment Managers:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$68

 

$75

 

$76

 

$75

 

$68

Collective Trust Fund programs
 
 
17,129

 
18,205

 
19,259

 
21,345

 
22,004

Liquidity funds
 
 
511

 
500

 
613

 
592

 
738

Total assets under management
 
 

$17,708

 

$18,780

 

$19,948

 

$22,012

 

$22,810

Client assets under administration
 
 
263,054

 
286,018

 
292,627

 
303,131

 
320,644

Total assets
 
 

$280,762

 

$304,798

 

$312,575

 

$325,143

 

$343,454

 
 
 
 
 
 
 
 
 
 
 
 
Investments in New Businesses:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$542

 

$567

 

$584

 

$613

 

$623

Liquidity funds
 
 
38

 
34

 
27

 
33

 
46

Total assets under management
 
 

$580

 

$601

 

$611

 

$646

 

$669

 
 
 
 
 
 
 
 
 
 
 
 
LSV Asset Management:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs
 
 

$63,997

 

$66,781

 

$69,463

 

$75,240

 

$76,306

 
 
 
 
 
 
 
 
 
 
 
 
Total:
 
 
 
 
 
 
 
 
 
 
 
Equity/Fixed Income programs (A)
 
 

$180,635

 

$178,679

 

$182,590

 

$194,099

 

$199,813

Collective Trust Fund programs
 
 
17,255

 
18,334

 
19,391

 
21,479

 
22,134

Liquidity funds
 
 
11,150

 
10,630

 
11,393

 
11,348

 
11,918

Total assets under management
 
 

$209,040

 

$207,643

 

$213,374

 

$226,926

 

$233,865

 
 
 
 
 
 
 
 
 
 
 
 
Client assets under administration
 
 
275,914

 
299,201

 
306,387

 
317,833

 
336,010

Total assets
 
 

$484,954

 

$506,844

 

$519,761

 

$544,759

 

$569,875

(A)
Equity/Fixed Income programs in the Private Banks segment for first-quarter 2013 includes $7.0 billion in assets related to SEI Asset Korea, which was sold in first-quarter 2013.



8