Form: 8-K

Current report filing

July 21, 2003

Documents

Exhibit 99.1

 

NEWS FROM SEI INVESTMENTS

 

For Immediate Release

 

Contact:

    Mark Samuels, SVP    Murray Louis, VP    Larry Wexler

Voice:

    610.676.2024    610.676.1932    610.676.1440

E-Mail:

    msamuels@seic.com    mlouis@seic.com    lwexler@seic.com

Pages:

    Eight          

 

SEI Investments Reports Second-Quarter 2003 Earnings

 

 

Oaks, PA—July 17, 2003—SEI Investments Company (NASDAQ:SEIC) today announced financial results for second-quarter 2003, reporting a decrease in net income and an increase in earnings per share, compared to the corresponding period for the prior year.

 

Consolidated Overview

 

    

For the Three Months

Ended June 30,

    

For the Six Months

Ended June 30,

  
(In thousands, except earnings per share)     
     2003
    2002
    %
     2003
    2002
    %
  

Revenues

    $ 153,554    $ 158,851    (3 )%   $ 304,159    $ 318,066    (4 )%

Net Income Before Taxes

      54,399      56,760    (4 )%     110,094      110,730    (1 )%

Net Income

      34,271      35,759    (4 )%     69,359      69,760    (1 )%

Diluted Earnings Per Share

    $ .32    $ .31    3 %   $ .64    $ .61    5 %

 

“We’re beginning to see signs of improvement in the business climate and are guardedly optimistic,” said Alfred P. West, Jr., Chairman and CEO. “It seems that investors are starting to return to the capital markets and businesses are starting to make infrastructure investment decisions. This trend has a positive, albeit delayed, impact on our business and will enable us to implement the investment programs necessary to execute our new strategy and, at the same time, continue to provide growing shareholder value.”

 

1

Summary of Second-Quarter 2003 and Year-to-Date Results by Business Segment

 

(In thousands)    For the Three Month Period
Ended June 30,
              

For the Six Month Period

Ended June 30,

  
     2003
     2002
     %
               2003
     2002
     %
  

Private Banking and Trust:

                                                       

Revenues

    $ 77,619     $ 82,878     (6 )%             $ 154,514     $ 165,836     (7 )%

Operating Profit

    $ 33,436     $ 33,652     (1 )%             $ 67,037     $ 67,477     (1 )%

Operating Margin

      43 %     41 %                     43 %     41 %      

Investment Advisors:

                                                       

Revenues

      37,079       39,229     (5 )%               72,992       78,120     (7 )%

Operating Profit

      20,182       20,457     (1 )%               39,785       38,440     3 %

Operating Margin

      54 %     52 %                     55 %     49 %      

Enterprises:

                                                       

Revenues

      14,367       14,295     1 %               28,391       29,027     (2 )%

Operating Profit

      6,317       5,792     9 %               12,753       11,180     14 %

Operating Margin

      44 %     41 %                     45 %     39 %      

Money Managers:

                                                       

Revenues

      13,106       10,804     21 %               25,438       21,601     18 %

Operating Profit

      2,309       2,151     7 %               4,279       4,575     (6 )%

Operating Margin

      18 %     20 %                     17 %     21 %      

Investments in New Businesses:

                                                       

Revenues

      11,383       11,645     (2 )%               22,824       23,482     (3 )%

Operating Loss

      (5,150 )     (3,333 )   (55 )%               (9,596 )     (6,622 )   (45 )%

Operating Margin

      (45 )%     (29 )%                     (42 )%     (28 )%      

Consolidated Segment Totals:

                                                       

Revenues

    $ 153,554     $ 158,851     (3 )%             $ 304,159     $ 318,066     (4 )%

Operating Profit

    $ 57,094     $ 58,719     (3 )%             $ 114,258     $ 115,050     (1 )%

Operating Margin

      37 %     37 %                     38 %     36 %      

 

Second-Quarter Business Commentary:

 

  •   All four established business segments showed quarter over quarter revenue improvement.
  •   The combination of improving capital markets and new business development efforts resulted in assets under management growing by $7.5 billion quarter-over-quarter to an all time high of $85.7 billion.
  •   Private Banking & Trust year-over-year revenues were affected by losses in the mutual fund processing business.
  •   Money Managers segment continues to show strong business development momentum.
  •   SEI purchased 672,400 shares of its common stock for $18.3 million in the second-quarter 2003.

 

2

Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 PM EDST on July 17, 2003. Investors may listen to the call at www.seic.com, or listen at www.companyboardroom.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 690023.

 

About SEI

SEI Investments (NASDAQ:SEIC) is a leading global provider of asset management 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 June 30, 2003, SEI administers $235 billion in mutual fund and pooled assets, manages over $85 billion in assets, processes almost $50 trillion of investment transactions annually and operates 21 offices in 10 countries. For more information, visit 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.

 

3

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

 

    

Three Months Ended

June 30,

  
     2003
     2002
  

Revenues

    $ 153,554     $ 158,851  

Operating and development expenses

      68,204       68,187  

Sales and marketing expenses

      28,256       31,945  

General and administrative expenses

      4,835       5,972  
    
 

Income before interest and taxes

      52,259       52,747  

Equity in earnings of unconsolidated affiliate

      4,861       3,103  

Net loss on investments

      (4,076 )     —    

Interest income

      1,365       1,394  

Interest expense

      (519 )     (484 )

Other income

      509       —    
    
 

Income before taxes

      54,399       56,760  

Income taxes

      20,128       21,001  
    
 

Net income

    $ 34,271     $ 35,759  
    
 

Diluted earnings per common share

    $ .32     $ .31  
    
 

Shares used to calculate diluted earnings per common share

      108,001       114,302  
    
 

Basic earnings per common share

    $ .33     $ .33  
    
 

Shares used to calculate basic earnings per common share

      104,828       109,632  
    
 

 

4

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

 

    

Six Months Ended

June 30,

  
     2003
     2002
  

Revenues

    $ 304,159     $ 318,066  

Operating and development expenses

      134,756       136,923  

Sales and marketing expenses

      55,145       66,093  

General and administrative expenses

      10,486       11,681  
    
 

Income before interest and taxes

      103,772       103,369  

Equity in earnings of unconsolidated affiliate

      8,475       5,782  

Net loss on investments

      (4,182 )     —    

Interest income

      2,607       2,544  

Interest expense

      (1,087 )     (965 )

Other income

      509       —    
    
 

Income before taxes

      110,094       110,730  

Income taxes

      40,735       40,970  
    
 

Net income

    $ 69,359     $ 69,760  
    
 

Diluted earnings per common share

    $ .64     $ .61  
    
 

Shares used to calculate diluted earnings per common share

      108,783       114,643  
    
 

Basic earnings per common share

    $ .66     $ .64  
    
 

Shares used to calculate basic earnings per common share

      105,297       109,514  
    
 

 

5

SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)

 

    

June 30,

2003

   

December 31,

2002

Assets

              

Cash and short-term investments

    $ 156,812    $ 165,724

Restricted Cash

      10,000      10,000

Receivables

      78,499      74,642

Other current assets

      10,810      11,069
    
  

Total current assets

      256,121      261,435

Property and Equipment, net

      106,936      104,258

Investments available for sale

      57,383      62,433

Other assets

      45,223      36,021
    
  

Total assets

    $ 465,663    $ 464,147
    
  

Liabilities

              

Current liabilities

    $ 115,957    $ 134,247

Long-term debt

      29,162      33,500

Deferred income taxes

      6,207      6,393

Shareholders’ Equity

      314,337      290,007
    
  

Total liabilities and shareholders’ equity

    $ 465,663    $ 464,147
    
  

 

 

6

SEI Investments Business Segments

(In thousands)

 

    

Three Months

ended June 30,

    

Six Months

ended June 30,

  
     2003
     2002
     2003
     2002
  

Private Banking and Trust:

                                 

Revenues

    $ 77,619     $ 82,878     $ 154,514     $ 165,836  

Operating and development expenses

      35,251       38,839       70,392       77,263  

Sales and marketing expenses

      8,932       10,387       17,085       21,096  
    
 
 
 

Operating Profit

      33,436       33,652       67,037       67,477  

Operating Margin

      43 %     41 %     43 %     41 %

Investment Advisors:

                                 

Revenues

      37,079       39,229       72,992       78,120  

Operating and development expenses

      10,355       9,635       20,383       19,910  

Sales and marketing expenses

      6,542       9,137       12,824       19,770  
    
 
 
 

Operating Profit

      20,182       20,457       39,785       38,440  

Operating Margin

      54 %     52 %     55 %     49 %

Enterprises:

                                 

Revenues

      14,367       14,295       28,391       29,027  

Operating and development expenses

      3,503       4,252       7,065       8,870  

Sales and marketing expenses

      4,547       4,251       8,573       8,977  
    
 
 
 

Operating Profit

      6,317       5,792       12,753       11,180  

Operating Margin

      44 %     41 %     45 %     39 %

Money Managers:

                                 

Revenues

      13,106       10,804       25,438       21,601  

Operating and development expenses

      7,827       5,619       15,141       11,086  

Sales and marketing expenses

      2,970       3,034       6,018       5,940  
    
 
 
 

Operating Profit

      2,309       2,151       4,279       4,575  

Operating Margin

      18 %     20 %     17 %     21 %

Investments in New Businesses:

                                 

Revenues

      11,383       11,645       22,824       23,482  

Operating and development expenses

      11,268       9,842       21,775       19,794  

Sales and marketing expenses

      5,265       5,136       10,645       10,310  
    
 
 
 

Operating Loss

      (5,150 )     (3,333 )     (9,596 )     (6,622 )

Operating Margin

      (45 )%     (29 )%     (42 )%     (28 )%

Consolidated Segment Totals:

                                 

Revenues

    $ 153,554     $ 158,851     $ 304,159     $ 318,066  

Operating and development expenses

      68,204       68,187       134,756       136,923  

Sales and marketing expenses

      28,256       31,945       55,145       66,093  
    
 
 
 

Operating Profit

    $ 57,094     $ 58,719     $ 114,258     $ 115,050  

Operating Margin

      37 %     37 %     38 %     36 %

General and Administrative expenses

      4,835       5,972       10,486       11,681  

Income from Operations

    $ 52,259     $ 52,747     $ 103,772     $ 103,369  

Operating Margin

      34 %     33 %     34 %     32 %

 

7

SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

 

     June 30,
2002
    Sept. 30,
2002
    Dec. 31,
2002
    Mar. 31,
2003
    June 30,
2003

Private Banking & Trust

                                   

Equity/Fixed Income prgms.

    $ 2,842    $ 2,863    $ 3,332    $ 3,635    $ 3,879

Liquidity funds

      13,221      13,084      12,811      13,257      12,653
    
  
  
  
  

Total assets under mgmt.

      16,063      15,947      16,143      16,892      16,532

Client assets under admin.

      93,539      85,931      83,652      72,078      60,124
    
  
  
  
  

Total assets under admin.

    $ 109,602    $ 101,878    $ 99,795    $ 88,970    $ 76,656

Investment Advisors

                                   

Equity/Fixed Income prgms.

    $ 24,421    $ 21,876    $ 22,708    $ 22,287    $ 24,658

Liquidity funds

      1,385      1,340      1,444      1,558      1,434
    
  
  
  
  

Total assets under mgmt.

    $ 25,806    $ 23,216    $ 24,152    $ 23,845    $ 26,092

Enterprises

                                   

Equity/Fixed Income prgms.

    $ 10,837    $ 10,098    $ 11,107    $ 10,864    $ 12,100

Liquidity funds

      4,428      4,145      5,148      4,277      5,148
    
  
  
  
  

Total assets under mgmt.

    $ 15,265    $ 14,243    $ 16,255    $ 15,141    $ 17,248

Money Managers

                                   

Equity/Fixed Income prgms.

    $ 3,319    $ 4,040    $ 4,436    $ 5,072    $ 5,519

Liquidity funds

      1,006      1,086      1,350      1,151      900
    
  
  
  
  

Total assets under mgmt.

      4,325      5,126      5,786      6,223      6,419

Client assets under admin.

      75,370      71,256      74,523      74,964      82,359
    
  
  
  
  

Total assets under admin.

    $ 79,695    $ 76,382    $ 80,309    $ 81,187    $ 88,778

Investments in New Businesses

                                   

Equity/Fixed Income prgms.

    $ 7,844    $ 7,318    $ 7,544    $ 7,654    $ 8,626

Liquidity funds

      380      108      219      73      21
    
  
  
  
  

Total assets under mgmt.

      8,224      7,426      7,763      7,727      8,647

Client assets under admin.

      3,854      4,020      4,894      5,229      7,001
    
  
  
  
  

Total assets under admin.

    $ 12,078    $ 11,446    $ 12,657    $ 12,956    $ 15,648

Unconsolidated Affiliate

                                   

Equity/Fixed Income prgms

    $ 7,099    $ 6,255    $ 7,874    $ 8,391    $ 10,755

Consolidated

                                   

Equity/Fixed Income prgms.

    $ 56,362    $ 52,450    $ 57,001    $ 57,903    $ 65,537

Liquidity funds

      20,420      19,763      20,972      20,316      20,156
    
  
  
  
  

Total assets under mgmt.

      76,782      72,213      77,973      78,219      85,693

Client assets under admin.

      172,763      161,207      163,069      152,271      149,484
    
  
  
  
  

Total assets under admin.

    $ 249,545    $ 233,420    $ 241,042    $ 230,490    $ 235,177

 

8