Form: 8-K

Current report filing

February 3, 2005

Documents

Exhibit 99.1

 

LOGO

 

For Immediate Release

 

Contact:        

    Mark Samuels, SVP    Murray Louis, VP          

Voice:

    610.676.2024    610.676.1932          

E-mail

    msamuels@seic.com    mlouis@seic.com          

Pages:

    Eight               

 

SEI Investments Reports Fourth-Quarter 2004 Results

 

Net Income Up 13%, Revenues Increase 12%

 

Oaks, PA—February 3, 2005—SEI Investments Company (NASDAQ:SEIC) today announced financial results for fourth-quarter 2004, reporting increases in revenues, net income and earnings per share, compared to the corresponding period for the prior year.

 

Consolidated Overview

 

    

For the Three Months

Ended December 31,

    

For the Twelve Months

Ended December 31,

  

(In thousands, except earnings per share)

 

    2004
    2003
    %
     2004
    2003
    %
  

Revenues

    $ 182,968    $ 163,807    12 %   $ 692,269    $ 636,233    9 %

Net Income Before Taxes

      67,453      58,002    16 %     265,131      224,284    18 %

Net Income

      43,001      38,223    13 %     169,021      142,981    18 %

Diluted Earnings Per Share

    $ .41    $ .36    14 %   $ 1.60    $ 1.32    21 %

 

“We continue to deliver growth in our revenue, net income and earnings per share”, said Alfred P. West, Jr., SEI Chairman and CEO.

 

“The quarter caps off what I believe to be a year of substantial progress for SEI. We delivered on our expectation of financial improvement and steady growth, generated increasing market acceptance of our new offerings and accelerated the build of our new solutions. While there is still considerable work to be done, I believe this year has taken us a long way towards a positive future.”

 

1

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

 

     For the Three Month Period
Ended December 31,
     For the Twelve Month Period
Ended December 31,
  

(In thousands)

 

    2004
     2003
     %
     2004
     2003
     %
  

Private Banking and Trust:

                                             

Revenues

    $ 72,468     $ 76,253     (5 )%   $ 290,605     $ 311,534     (7 )%

Operating Profit

    $ 27,722     $ 30,784     (10 )%   $ 114,527     $ 125,746     (9 )%

Operating Margin

      38 %     40 %           39 %     40 %      

Investment Advisors:

                                             

Revenues

      48,153       40,725     18 %     180,351       156,089     16 %

Operating Profit

      26,379       23,959     10 %     98,684       85,681     15 %

Operating Margin

      55 %     59 %           55 %     55 %      

Enterprises:

                                             

Revenues

      19,199       15,695     22 %     69,816       62,051     13 %

Operating Profit

      8,880       7,922     12 %     32,048       29,366     9 %

Operating Margin

      46 %     50 %           46 %     47 %      

Money Managers:

                                             

Revenues

      20,436       15,451     32 %     76,907       55,274     39 %

Operating Profit

      4,206       2,435     73 %     14,663       9,105     61 %

Operating Margin

      21 %     16 %           19 %     16 %      

Investments in New Businesses:

                                             

Revenues

      22,712       15,683     45 %     74,590       51,285     45 %

Operating Loss

      (6,559 )     (4,094 )   (60 )%     (20,319 )     (18,102 )   (12 )%

Operating Margin

      (29 )%     (26 )%           (27 )%     (35 )%      

Consolidated Segment Totals:

                                             

Revenues

    $ 182,968     $ 163,807     12 %   $ 692,269     $ 636,233     9 %

Operating Profit

    $ 60,628     $ 61,006     (1 )%   $ 239,603     $ 231,796     3 %

Operating Margin

      33 %     37 %           35 %     36 %      

 

Fourth-Quarter Business Commentary:

 

  •   Private Banking & Trust lagged year ago levels on revenues and profits. This is primarily due to previously reported client losses in the mutual fund services business.

 

  •   The Investment Advisors, Enterprises, Money Managers and Investments in New Business segments reported revenue gains vs. year ago levels.

 

  •   Profitability in these four segments tracked with their yearlong performances. The Investment Advisors, Enterprises and Money Managers segments posted gains. Investments in New Businesses continued to be impacted by investments in market expansion.

 

  •   Assets under management grew by over $10 billion during the fourth quarter to $120 billion.

 

  •   In the fourth quarter, SEI purchased 997,000 shares of its common stock for $38.2 million.

 

2

Earnings Conference Call

 

A conference call to review earnings is scheduled for 2:00 PM EST on February 3, 2005. Investors may listen to the call at www.seic.com, or listen at www.fulldisclosure.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 766037.

 

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 December 31, 2004, through our subsidiaries and partnerships in which we have a significant interest, SEI administers over $288 billion in mutual fund and pooled assets, manages over $120 billion in assets, and operates 22 offices in 11 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 December 31,
  
     2004
     2003
  

Revenues

    $ 182,968     $ 163,807  

Operating and development expenses

      89,009       72,945  

Sales and marketing expenses

      33,331       29,856  

General and administrative expenses

      7,502       7,735  
    
 

Income before interest and taxes

      53,126       53,271  

Equity in earnings of unconsolidated affiliate

      14,169       7,698  

Net loss on investments

      (882 )     (3,254 )

Interest income

      1,524       939  

Interest expense

      (484 )     (652 )
    
 

Income before taxes

      67,453       58,002  

Income taxes

      24,452       19,779  
    
 

Net income

    $ 43,001     $ 38,223  
    
 

Diluted earnings per common share

    $ .41     $ .36  
    
 

Shares used to calculate diluted earnings per common share

      105,340       107,065  
    
 

Basic earnings per common share

    $ .42     $ .36  
    
 

Shares used to calculate basic earnings per common share

      102,391       104,999  
    
 

 

4

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

 

     Twelve Months Ended December 31,
  
     2004
     2003
  

Revenues

    $ 692,269     $ 636,233  

Operating and development expenses

      321,298       283,624  

Sales and marketing expenses

      131,368       120,813  

General and administrative expenses

      30,153       25,615  
    
 

Income before interest and taxes

      209,450       206,181  

Equity in earnings of unconsolidated affiliate

      45,711       22,461  

Net gain (loss) on investments

      3,848       (6,927 )

Interest income

      4,545       4,363  

Interest expense

      (2,112 )     (2,303 )

Other income

      3,689       509  
    
 

Income before taxes

      265,131       224,284  

Income taxes

      96,110       81,303  
    
 

Net income

    $ 169,021     $ 142,981  
    
 

Diluted earnings per common share

    $ 1.60     $ 1.32  
    
 

Shares used to calculate diluted earnings per common share

      105,866       108,137  
    
 

Basic earnings per common share

    $ 1.63     $ 1.36  
    
 

Shares used to calculate basic earnings per common share

      103,399       105,173  
    
 

 

 

5

SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)

 

     December 31,
2004
    December 31,
2003

Assets

              

Cash and short-term investments

    $ 216,966    $ 199,953

Restricted Cash

      14,386      53,481

Receivables

      108,795      86,612

Other current assets

      15,532      12,367
    
  

Total current assets

      355,679      352,413

Property and Equipment, net

      113,640      113,064

Investments available for sale

      39,817      70,560

Capitalized Software, net

      55,830      21,115

Other assets

      50,509      35,477
    
  

Total assets

    $ 615,475    $ 592,629
    
  

Liabilities

              

Current liabilities

    $ 163,569    $ 193,474

Long-term debt

      14,389      23,944

Long-term deferred gain

      1,472      —  

Deferred income taxes

      32,103      11,438

Shareholders’ Equity

      403,942      363,773
    
  

Total liabilities and shareholders’ equity

    $ 615,475    $ 592,629
    
  

 

 

6

SEI Investments Business Segments

 

     Three Months ended Dec. 31,
     Twelve Months ended Dec. 31,
  

(In thousands)

 

    2004
     2003
     2004
     2003
  

Private Banking and Trust:

                                 

Revenues

                                 

Investment processing fees

      58,627       57,169       225,229       229,044  

Fund processing fees

      4,889       9,845       30,177       43,464  

Investment management fees

      8,952       9,239       35,199       39,026  
    
 
 
 

Total Revenues

      72,468       76,253       290,605       311,534  

Operating and development expenses

      34,165       36,266       135,465       148,102  

Sales and marketing expenses

      10,581       9,203       40,613       37,686  
    
 
 
 

Operating Profit

      27,722       30,784       114,527       125,746  

Operating Margin

      38 %     40 %     39 %     40 %

Investment Advisors:

                                 

Revenues

      48,153       40,725       180,351       156,089  

Operating and development expenses

      15,729       10,448       53,853       41,471  

Sales and marketing expenses

      6,045       6,318       27,814       28,937  
    
 
 
 

Operating Profit

      26,379       23,959       98,684       85,681  

Operating Margin

      55 %     59 %     55 %     55 %

Enterprises:

                                 

Revenues

      19,199       15,695       69,816       62,051  

Operating and development expenses

      5,582       3,735       19,333       14,983  

Sales and marketing expenses

      4,737       4,038       18,435       17,702  
    
 
 
 

Operating Profit

      8,880       7,922       32,048       29,366  

Operating Margin

      46 %     50 %     46 %     47 %

Money Managers:

                                 

Revenues

      20,436       15,451       76,907       55,274  

Operating and development expenses

      12,394       9,214       47,885       32,852  

Sales and marketing expenses

      3,836       3,802       14,359       13,317  
    
 
 
 

Operating Profit

      4,206       2,435       14,663       9,105  

Operating Margin

      21 %     16 %     19 %     16 %

Investments in New Businesses:

                                 

Revenues

      22,712       15,683       74,590       51,285  

Operating and development expenses

      21,139       13,282       64,762       46,216  

Sales and marketing expenses

      8,132       6,495       30,147       23,171  
    
 
 
 

Operating Loss

      (6,559 )     (4,094 )     (20,319 )     (18,102 )

Operating Margin

      (29 )%     (26 )%     (27 )%     (35 )%

Consolidated Segment Totals:

                                 

Revenues

    $ 182,968     $ 163,807     $ 692,269     $ 636,233  

Operating and development expenses

      89,009       72,945       321,298       283,624  

Sales and marketing expenses

      33,331       29,856       131,368       120,813  
    
 
 
 

Operating Profit

    $ 60,628     $ 61,006     $ 239,603     $ 231,796  

Operating Margin

      33 %     37 %     35 %     36 %

General and Administrative expenses

      7,502       7,735       30,153       25,615  

Income from Operations

    $ 53,126     $ 53,271     $ 209,450     $ 206,181  

Operating Margin

      29 %     33 %     30 %     32 %

 

7

SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

 

     Dec. 31,
2003
    Mar. 31,
2004
    Jun. 30,
2004
    Sep. 30,
2004
    Dec. 31,
2004

Private Banking and Trust:

                                   

Equity/Fixed Income prgms.

    $ 2,717    $ 2,759    $ 2,900    $ 2,662    $ 2,780

Collective Trust Fund prgm.

      1,326      1,357      1,403      1,455      1,518

Liquidity funds

      8,424      8,312      7,986      7,723      7,503
    
  
  
  
  

Total assets under mgmt.

    $ 12,467    $ 12,428    $ 12,289    $ 11,840    $ 11,801

Client assets under admin.

      61,285      62,775      61,944      35,881      35,986
    
  
  
  
  

Total assets under admin.

    $ 73,752    $ 75,203    $ 74,233    $ 47,721    $ 47,787

Investment Advisors:

                                   

Equity/Fixed Income prgms.

    $ 24,150    $ 25,295    $ 25,021    $ 25,559    $ 27,706

Collective Trust Fund prgm.

      2,481      2,454      2,592      2,592      2,521

Liquidity funds

      1,131      1,095      1,103      1,081      1,026
    
  
  
  
  

Total assets under mgmt.

    $ 27,762    $ 28,844    $ 28,716    $ 29,232    $ 31,253

Enterprises:

                                   

Equity/Fixed Income prgms.

    $ 13,324    $ 13,303    $ 13,616    $ 15,871    $ 17,283

Collective Trust Fund prgm.

      776      783      924      1,031      1,023

Liquidity funds

      3,443      3,802      3,482      3,869      3,406
    
  
  
  
  

Total assets under mgmt.

    $ 17,543    $ 17,888    $ 18,022    $ 20,771    $ 21,712

Money Managers:

                                   

Equity/Fixed Income prgms.

    $ 41    $ 39    $ 31    $ 25    $ 18

Collective Trust Fund prgm

      6,630      6,727      7,066      7,226      7,097

Liquidity funds

      271      146      202      226      208
    
  
  
  
  

Total assets under mgmt.

    $ 6,942    $ 6,912    $ 7,299    $ 7,477    $ 7,323

Client assets under admin.

      96,103      107,015      113,644      123,651      124,648
    
  
  
  
  

Total assets under admin.

    $ 103,045    $ 113,927    $ 120,943    $ 131,128    $ 131,971

Investments in New Businesses:

                                   

Equity/Fixed Income prgms.

    $ 9,993    $ 11,296    $ 12,030    $ 13,507    $ 15,566

Liquidity funds

      225      240      239      169      179
    
  
  
  
  

Total assets under mgmt.

    $ 10,218    $ 11,536    $ 12,269    $ 13,676    $ 15,745

Client assets under admin.

      5,855      6,631      7,028      6,096      7,003
    
  
  
  
  

Total assets under admin.

    $ 16,073    $ 18,167    $ 19,297    $ 19,772    $ 22,748

Unconsolidated Affiliate:

                                   

Equity/Fixed Income prgms.

    $ 15,666    $ 18,444    $ 21,462    $ 26,835    $ 32,556

Consolidated:

                                   

Equity/Fixed Income prgms (A,B)

    $ 65,891    $ 71,136    $ 75,060    $ 84,459    $ 95,909

Collective Trust Fund prgm.

      11,213      11,321      11,985      12,304      12,159

Liquidity funds (B)

      13,494      13,595      13,012      13,068      12,322
    
  
  
  
  

Total assets under mgmt.

    $ 90,598    $ 96,052    $ 100,057    $ 109,831    $ 120,390

Client assets under admin.

      163,243      176,421      182,616      165,628      167,637
    
  
  
  
  

Total assets under admin.

    $ 253,841    $ 272,473    $ 282,673    $ 275,459    $ 288,027
(A) Equity/Fixed Income programs include $1,836 of assets invested in SEI’s Asset Allocation Funds at 12/31/04.
(B) In addition to the numbers presented, SEI also administers an additional $9,023 in Funds of Funds assets (as of December 31, 2004) on which SEI does not earn an administration fee.

 

8