Form: 8-K

Current report filing

October 20, 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 Third-Quarter 2003 Earnings

 

Revenues for the Quarter Grew 5%

 

 

Oaks, PA—October 16, 2003—SEI Investments Company (NASDAQ:SEIC) today announced financial results for third-quarter 2003, reporting an increase in revenues, a decrease in net income and an increase in earnings per share, compared to the corresponding period for the prior year.

 

Consolidated Overview

(In thousands, except earnings per share)

   

For the Three Months

Ended September 30,

    

For the Nine Months

Ended September 30,

  
     2003
      2002
      %
     2003
      2002
      %
  

Revenues

    $ 161,056      $ 153,316      5 %   $ 465,215      $ 471,382      (1 )%

Net Income Before Taxes

      56,188        56,715      (1 )%     166,282        167,445      (1 )%

Net Income

      35,399        35,731      (1 )%     104,758        105,491      (1 )%

Diluted Earnings Per Share

    $ .33      $ .32      3 %   $ .97      $ .93      4 %

 

“I am pleased to report modest increases in revenues and earnings per share,” said Alfred P. West, Jr., SEI Chairman and CEO. “These results are in line with the company’s outlook for gradual improvement and steady growth.

 

“Particularly noteworthy during the quarter is the progress we are making on executing our new strategies. These strategies focus on creating a single platform for delivering financial wellness solutions to all of our markets.”

 

1

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

 

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

For the Nine Month Period

Ended September 30,

  
     2003
     2002
     %
     2003
     2002
     %
  

Private Banking and Trust:

                                             

Revenues

    $ 73,805     $ 80,510     (8 )%   $ 228,319     $ 246,346     (7 )%

Operating Profit

    $ 27,925     $ 34,296     (19 )%   $ 94,962     $ 101,773     (7 )%

Operating Margin

      38 %     43 %           42 %     41 %      

Investment Advisors:

                                             

Revenues

      42,372       35,866     18 %     115,364       113,986     1 %

Operating Profit

      21,937       20,023     10 %     61,722       58,463     6 %

Operating Margin

      52 %     56 %           54 %     51 %      

Enterprises:

                                             

Revenues

      17,965       13,393     34 %     46,356       42,420     9 %

Operating Profit

      8,691       5,502     58 %     21,444       16,682     29 %

Operating Margin

      48 %     41 %           46 %     39 %      

Money Managers:

                                             

Revenues

      14,136       12,502     13 %     39,574       34,103     16 %

Operating Profit

      2,391       2,118     13 %     6,670       6,693     —    

Operating Margin

      17 %     17 %           17 %     20 %      

Investments in New Businesses:

                                             

Revenues

      12,778       11,045     16 %     35,602       34,527     3 %

Operating Loss

      (4,412 )     (3,520 )   (25 )%     (14,008 )     (10,142 )       (38 )%

Operating Margin

      (35 )%     (32 )%           (39 )%     (29 )%      

Consolidated Segment Totals:

                                             

Revenues

    $ 161,056     $ 153,316     5 %   $ 465,215     $ 471,382     (1 )%

Operating Profit

    $ 56,532     $ 58,419     (3 )%   $ 170,790     $ 173,469     (2 )%

Operating Margin

      35 %     38 %           37 %     37 %      

 

Third-Quarter Business Commentary:

 

• Total revenue in the Enterprises and Investment Advisors segments was positively influenced by approximately $7.0 million in one-time events in the quarter. While this had a positive impact on overall corporate revenues, it had a lesser impact on corporate profits due to an increase in non-recurring expenses, sales compensation and increased investment spending on new products.

 

2

• The Private Banking & Trust segment’s revenue decline in the quarter was due to a decrease in one-time revenues and previously reported losses in fund processing revenues.

 

• The Money Managers and Investments in New Business segments continue to show growth.

 

• Assets under management ended the quarter at a new record high of $87.4 billion, an increase of more than $15 billion over the third-quarter a year ago.

 

• SEI purchased 262,000 shares of its common stock for $8.6 million in the third-quarter 2003.

 

Earnings Conference Call

 

A conference call to review earnings is scheduled for 2:00 PM EDST on October 16, 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 700037.

 

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 September 30, 2003, SEI administers $242 billion in mutual fund and pooled assets, manages over $87 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 September 30,
  
     2003
     2002
  

Revenues

    $ 161,056     $ 153,316  

Operating and development expenses

      70,733       61,957  

Sales and marketing expenses

      33,791       32,940  

General and administrative expenses

      7,394       5,779  
    
 

Income before interest and taxes

      49,138       52,640  

Equity in earnings of unconsolidated affiliate

      6,288       2,861  

Net gain on investments

      509       574  

Interest income

      817       1,303  

Interest expense

      (564 )     (663 )
    
 

Income before taxes

      56,188       56,715  

Income taxes

      20,789       20,984  
    
 

Net income

    $ 35,399     $ 35,731  
    
 

Diluted earnings per common share

    $ .33     $ .32  
    
 

Shares used to calculate diluted earnings per common share

      107,915       111,735  
    
 

Basic earnings per common share

    $ .34     $ .33  
    
 

Shares used to calculate basic earnings per common share

      105,100       107,936  
    
 

 

4

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

 

     Nine Months Ended September 30,  
     2003
     2002
  

Revenues

    $ 465,215     $ 471,382  

Operating and development expenses

      205,489       198,880  

Sales and marketing expenses

      88,936       99,033  

General and administrative expenses

      17,880       17,460  
    
 

Income before interest and taxes

      152,910       156,009  

Equity in earnings of unconsolidated affiliate

      14,763       8,643  

Net loss on investments

      (3,673 )     574  

Interest income

      3,424       3,847  

Interest expense

      (1,651 )     (1,628 )

Other income

      509       —    
    
 

Income before taxes

      166,282       167,445  

Income taxes

      61,524       61,954  
    
 

Net income

    $ 104,758     $ 105,491  
    
 

Diluted earnings per common share

    $ .97     $ .93  
    
 

Shares used to calculate diluted earnings per common share

      108,494       113,674  
    
 

Basic earnings per common share

    $ 1.00     $ .97  
    
 

Shares used to calculate basic earnings per common share

      105,231       108,988  
    
 

 

5

SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)

 

    

September 30,

2003

    December 31,
2002

Assets

              

Cash and short-term investments

    $ 192,607    $ 165,724

Restricted Cash

      10,484      10,000

Receivables

      84,065      74,642

Other current assets

      10,011      11,069
    
  

Total current assets

      297,167      261,435

Property and Equipment, net

      109,167      104,258

Investments available for sale

      64,220      62,433

Other assets

      49,899      36,021
    
  

Total assets

    $ 520,453    $ 464,147
    
  

Liabilities

              

Current liabilities

    $ 132,041    $ 134,247

Long-term debt

      26,535      33,500

Deferred income taxes

      7,301      6,393

Shareholders’ Equity

      354,576      290,007
    
  

Total liabilities and shareholders’ equity

    $ 520,453    $ 464,147
    
  

 

6

SEI Investments Business Segments

(In thousands)

 

     Three Months ended Sept. 30,
      Nine Months ended Sept. 30,
  
     2003
     2002
      2003
         2002    
  

Private Banking and Trust:

                                  

Revenues

    $ 73,805     $ 80,510      $ 228,319     $ 246,346  

Operating and development expenses

      36,254       33,854        106,646       111,117  

Sales and marketing expenses

      9,626       12,360        26,711       33,456  
    
 
  
 

Operating Profit

      27,925       34,296        94,962       101,773  

Operating Margin

      38 %     43 %      42 %     41 %

Investment Advisors:

                                  

Revenues

      42,372       35,866        115,364       113,986  

Operating and development expenses

      10,640       8,393        31,023       28,303  

Sales and marketing expenses

      9,795       7,450        22,619       27,220  
    
 
  
 

Operating Profit

      21,937       20,023        61,722       58,463  

Operating Margin

      52 %     56 %      54 %     51 %

Enterprises:

                                  

Revenues

      17,965       13,393        46,356       42,420  

Operating and development expenses

      4,183       4,147        11,248       13,017  

Sales and marketing expenses

      5,091       3,744        13,664       12,721  
    
 
  
 

Operating Profit

      8,691       5,502        21,444       16,682  

Operating Margin

      48 %     41 %      46 %     39 %

Money Managers:

                                  

Revenues

      14,136       12,502        39,574       34,103  

Operating and development expenses

      8,497       6,528        23,638       17,614  

Sales and marketing expenses

      3,248       3,856        9,266       9,796  
    
 
  
 

Operating Profit

      2,391       2,118        6,670       6,693  

Operating Margin

      17 %     17 %      17 %     20 %

Investments in New Businesses:

                                  

Revenues

      12,778       11,045        35,602       34,527  

Operating and development expenses

      11,159       9,035        32,934       28,829  

Sales and marketing expenses

      6,031       5,530        16,676       15,840  
    
 
  
 

Operating Loss

      (4,412 )     (3,520 )      (14,008 )     (10,142 )

Operating Margin

      (35 )%     (32 )%      (39 )%     (29 )%

Consolidated Segment Totals:

                                  

Revenues

    $ 161,056     $ 153,316      $ 465,215     $ 471,382  

Operating and development expenses

      70,733       61,957        205,489       198,880  

Sales and marketing expenses

      33,791       32,940        88,936       99,033  
    
 
  
 

Operating Profit

    $ 56,532     $ 58,419      $ 170,790     $ 173,469  

Operating Margin

      35 %     38 %      37 %     37 %

General and Administrative expenses

      7,394       5,779        17,880       17,460  

Income from Operations

    $ 49,138     $ 52,640      $ 152,910     $ 156,009  

Operating Margin

      31 %     34 %      33 %     33 %

 

7

SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

 

    

Sept. 30,

2002

     

Dec. 31,

2002

     

Mar. 31,

2003

     

June 30,

2003

     

Sept. 30,

2003

Private Banking & Trust

                                           

Equity/Fixed Income prgms.

    $ 2,863      $ 3,332      $ 3,635      $ 3,879      $ 3,880

Liquidity funds

      13,084        12,811        13,257        12,653        11,026
    
    
    
    
    

Total assets under mgmt.

      15,947        16,143        16,892        16,532        14,906

Client assets under admin.

      85,931        83,652        72,078        60,124        61,174
    
    
    
    
    

Total assets under admin.

    $ 101,878      $ 99,795      $ 88,970      $ 76,656      $ 76,080

Investment Advisors

                                           

Equity/Fixed Income prgms.

    $ 21,876      $ 22,708      $ 22,287      $ 24,658      $ 25,020

Liquidity funds

      1,340        1,444        1,558        1,434        1,252
    
    
    
    
    

Total assets under mgmt.

    $ 23,216      $ 24,152      $ 23,845      $ 26,092      $ 26,272

Enterprises

                                           

Equity/Fixed Income prgms.

    $ 10,098      $ 11,107      $ 10,864      $ 12,100      $ 12,790

Liquidity funds

      4,145        5,148        4,277        5,148        4,861
    
    
    
    
    

Total assets under mgmt.

    $ 14,243      $ 16,255      $ 15,141      $ 17,248      $ 17,651

Money Managers

                                           

Equity/Fixed Income prgms.

    $ 4,040      $ 4,436      $ 5,072      $ 5,519      $ 6,177

Liquidity funds

      1,086        1,350        1,151        900        1,036
    
    
    
    
    

Total assets under mgmt.

      5,126        5,786        6,223        6,419        7,213

Client assets under admin.

      71,256        74,523        74,964        82,359        88,458
    
    
    
    
    

Total assets under admin.

    $ 76,382      $ 80,309      $ 81,187      $ 88,778      $ 95,671

Investments in New Businesses

                                           

Equity/Fixed Income prgms.

    $ 7,318      $ 7,544      $ 7,654      $ 8,626      $ 8,874

Liquidity funds

      108        219        73        21        52
    
    
    
    
    

Total assets under mgmt.

      7,426        7,763        7,727        8,647        8,926

Client assets under admin.

      4,020        4,894        5,229        7,001        5,319
    
    
    
    
    

Total assets under admin.

    $ 11,446      $ 12,657      $ 12,956      $ 15,648      $ 14,245

Unconsolidated Affiliate

                                           

Equity/Fixed Income prgms

    $ 6,255      $ 7,874      $ 8,391      $ 10,755      $ 12,435

Consolidated

                                           

Equity/Fixed Income prgms.

    $ 52,450      $ 57,001      $ 57,903      $ 65,537      $ 69,176

Liquidity funds

      19,763        20,972        20,316        20,156        18,227
    
    
    
    
    

Total assets under mgmt.

      72,213        77,973        78,219        85,693        87,403

Client assets under admin.

      161,207        163,069        152,271        149,484        154,951
    
    
    
    
    

Total assets under admin.

    $ 233,420      $ 241,042      $ 230,490      $ 235,177      $ 242,354

 

8