PRESS RELEASE
Published on May 3, 2012
Exhibit 99.1
NEWS FROM SEI
| Investor Contact: | Media Contact: | |
| Murray Louis | Dana Grosser | |
| SEI | SEI | |
| +1 610-676-1932 | +1 610-676-2459 | |
| mlouis@seic.com | dgrosser@seic.com | |
| Pages: 8 |
FOR IMMEDIATE RELEASE
SEI REPORTS FIRST-QUARTER 2012 FINANCIAL RESULTS
OAKS, Pa., May 2, 2012 SEI Investments Company (NASDAQ:SEIC) today announced financial results for first-quarter 2012. Diluted earnings per share were $.28 in first-quarter 2012 compared to $.31 in first-quarter 2011.
| Consolidated Overview | For the Three Months | |||||||||||
| (In thousands, except earnings per share) | Ended March 31, | |||||||||||
| 2012 | 2011 | % | ||||||||||
| Revenues |
$ | 237,898 | $ | 232,493 | 2 | % | ||||||
| Net Income attributable to SEI |
49,965 | 57,728 | (13 | %) | ||||||||
| Diluted Earnings Per Share |
$ | 0.28 | $ | 0.31 | (10 | %) | ||||||
Strong new sales and improving revenues over fourth-quarter 2011 drove first-quarter 2012 results, said Alfred P. West, Jr., SEI Chairman and CEO.
Despite uncertainty in the financial markets, we are seeing buyers return to our markets. During 2012, we will continue to focus on sales results, improving productivity and service quality, and increasing profits. We are confident that the investments we are making will enable us to significantly increase shareholder value.
1
Summary of First-Quarter Results by Business Segment
| (In thousands) | For the Three Month Period | |||||||||||
| Ended March 31, | ||||||||||||
| 2012 | 2011 | % | ||||||||||
| Private Banks: |
||||||||||||
| Revenues |
$ | 87,988 | $ | 86,709 | 1 | % | ||||||
| Expenses |
87,517 | 82,403 | 6 | % | ||||||||
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|
|
|
|||||||||
| Operating Profit |
$ | 471 | $ | 4,306 | (89 | %) | ||||||
| Operating Margin |
1 | % | 5 | % | ||||||||
| Investment Advisors: |
||||||||||||
| Revenues |
49,468 | 48,108 | 3 | % | ||||||||
| Expenses |
29,301 | 27,040 | 8 | % | ||||||||
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|
|
|
|||||||||
| Operating Profit |
20,167 | 21,068 | (4 | %) | ||||||||
| Operating Margin |
41 | % | 44 | % | ||||||||
| Institutional Investors: |
||||||||||||
| Revenues |
53,317 | 53,185 | | |||||||||
| Expenses |
28,100 | 26,953 | 4 | % | ||||||||
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|
|
|
|||||||||
| Operating Profit |
25,217 | 26,232 | (4 | %) | ||||||||
| Operating Margin |
47 | % | 49 | % | ||||||||
| Investment Managers: |
||||||||||||
| Revenues |
46,211 | 43,441 | 6 | % | ||||||||
| Expenses |
30,426 | 27,999 | 9 | % | ||||||||
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|
|
|
|||||||||
| Operating Profit |
15,785 | 15,442 | 2 | % | ||||||||
| Operating Margin |
34 | % | 36 | % | ||||||||
| Investments in New Businesses: |
||||||||||||
| Revenues |
914 | 1,050 | (13 | %) | ||||||||
| Expenses |
3,698 | 3,125 | 18 | % | ||||||||
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|
|
|
|||||||||
| Operating Loss |
(2,784 | ) | (2,075 | ) | 34 | % | ||||||
| Operating Margin |
N/A | N/A | ||||||||||
| Totals: |
||||||||||||
| Revenues |
$ | 237,898 | $ | 232,493 | 2 | % | ||||||
| Expenses |
179,042 | 167,520 | 7 | % | ||||||||
| Corporate overhead expenses |
11,082 | 10,648 | 4 | % | ||||||||
| Noncontrolling interest reflected in segments |
(315 | ) | (272 | ) | N/A | |||||||
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|||||||||
| Income from operations |
$ | 48,089 | $ | 54,597 | (12 | %) | ||||||
2
First-Quarter Business Commentary:
| | Revenues increased in first-quarter 2012 as compared to first-quarter 2011 and to fourth-quarter 2011 due to an increase in Asset management, administrative, and distribution fee revenues from improved cash-flows and market appreciation in first-quarter 2012. Our average assets under management, excluding LSV, increased $9.6 billion, or eight percent, to $124.1 billion in the first-quarter 2012 as compared to $114.5 billion during the first-quarter 2011 (See attached Ending and Average Asset Balances schedules for further details). |
| | Sales events, net of client losses, during first-quarter 2012 totaled approximately $26.1 million and are expected to generate net annualized recurring revenues of approximately $23.5 million when contract values are fully realized. These sales events resulted in an increase in sales compensation expense when compared to first-quarter 2011 of $1.8 million. |
| | Total consolidated expenses in first-quarter 2012 include approximately an additional $1.8 million in fees for other asset management distribution costs and employee severance costs. |
| | Net income attributable to SEI includes gains from SIV securities of $2.9 million in first-quarter 2012 compared to gains of $6.9 million in first-quarter 2011. |
| | The effective tax rates were 37.2 percent in the first-quarter 2012, 37.1 percent in the first-quarter 2011 and 34.7 percent in the fourth-quarter 2011. The increase in the tax rate in the first-quarter 2012 as compared to the fourth-quarter 2011 was due to the expiration of the research and development tax credit in first-quarter 2012 and tax planning strategies which benefited the tax rate in fourth-quarter 2011. |
| | In the first-quarter 2012, SEI purchased 1.8 million shares of its common stock for $37.7 million. |
3
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM ET on May 2, 2012. Investors may listen to the call at www.seic.com/investors or listen at www.earnings.com, a service of Thomson Streetevents. The call may also be accessed at numerous financial services web sites including AOL and Yahoo. Investors may also listen to replays at these web sites, or by telephone at (USA) 1-877-777-1972; (International) 612-332-0636, access code 245414.
About SEI
SEI (NASDAQ:SEIC) is a leading global provider of investment processing, fund processing, and investment management business outsourcing solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of March 31, 2012, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $428 billion in mutual fund and pooled or separately managed assets, including $189 billion in assets under management and $239 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)
| Three Months Ended March 31, | ||||||||
| 2012 | 2011 | |||||||
| Asset management, admin. and distribution fees |
$ | 172,954 | $ | 167,504 | ||||
| Information processing and software servicing fees |
56,200 | 55,824 | ||||||
| Transactionbased and trade execution fees |
8,744 | 9,165 | ||||||
|
|
|
|
|
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| Total revenues |
237,898 | 232,493 | ||||||
| Subadvisory, distribution and other asset mgmt costs |
28,467 | 26,296 | ||||||
| Software royalties and other information processing costs |
6,477 | 7,017 | ||||||
| Brokerage commissions |
6,307 | 6,581 | ||||||
| Compensation, benefits and other personnel |
78,543 | 71,025 | ||||||
| Stock-based compensation |
4,033 | 3,732 | ||||||
| Consulting, outsourcing and professional fees |
26,955 | 25,998 | ||||||
| Data processing and computer related |
11,465 | 11,303 | ||||||
| Facilities, supplies and other costs |
14,508 | 14,102 | ||||||
| Amortization |
7,622 | 6,231 | ||||||
| Depreciation |
5,432 | 5,611 | ||||||
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|
|
|
|
|||||
| Total expenses |
189,809 | 177,896 | ||||||
| Income from operations |
48,089 | 54,597 | ||||||
| Net gain on investments |
3,205 | 7,278 | ||||||
| Interest and dividend income |
1,487 | 1,544 | ||||||
| Interest expense |
(161 | ) | (204 | ) | ||||
| Equity in earnings of unconsolidated affiliate |
27,330 | 28,949 | ||||||
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|
|
|
|
|||||
| Net income before income taxes |
79,950 | 92,164 | ||||||
| Income taxes |
29,715 | 34,124 | ||||||
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|
|
|
|||||
| Net income |
50,235 | 58,040 | ||||||
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|
|
|||||
| Less: Net income attributable to the noncontrolling interest |
(270 | ) | (312 | ) | ||||
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|
|
|
|
|||||
| Net income attributable to SEI |
$ | 49,965 | $ | 57,728 | ||||
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|
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| Diluted earnings per common share |
$ | 0.28 | $ | 0.31 | ||||
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|
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| Shares used to calculate diluted earnings per common share |
177,668 | 188,495 | ||||||
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| Basic earnings per common share |
$ | 0.28 | $ | 0.31 | ||||
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|
|||||
| Shares used to calculate basic earnings per common share |
176,348 | 185,787 | ||||||
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5
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
| March 31, 2012 |
December 31, 2011 |
|||||||
| Assets |
||||||||
| Cash and short-term investments |
$ | 388,127 | $ | 420,986 | ||||
| Restricted cash |
6,000 | 6,000 | ||||||
| Receivables, net |
182,093 | 167,909 | ||||||
| Securities owned |
21,053 | 20,949 | ||||||
| Other current assets |
20,066 | 19,107 | ||||||
|
|
|
|
|
|||||
| Total current assets |
617,339 | 634,951 | ||||||
| Property and equipment, net |
136,431 | 129,548 | ||||||
| Marketable securities |
140,675 | 139,333 | ||||||
| Capitalized software, net |
311,229 | 309,133 | ||||||
| Investment in unconsolidated affiliate |
66,691 | 60,954 | ||||||
| Other assets, net |
21,261 | 20,640 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 1,293,626 | $ | 1,294,559 | ||||
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|
|
|
|
|||||
| Liabilities |
||||||||
| Current liabilities |
$ | 118,877 | $ | 151,073 | ||||
| Deferred income taxes |
92,477 | 93,751 | ||||||
| Other Long-term liabilities |
10,832 | 8,276 | ||||||
| Total SEI Investments Company shareholders equity |
1,054,544 | 1,025,316 | ||||||
| Noncontrolling interest |
16,896 | 16,143 | ||||||
|
|
|
|
|
|||||
| Total Equity |
1,071,440 | 1,041,459 | ||||||
| Total liabilities and equity |
$ | 1,293,626 | $ | 1,294,559 | ||||
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|
|
|
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6
SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)
| Mar. 31, 2011 |
Jun. 30, 2011 |
Sept. 30, 2011 |
Dec. 31, 2011 |
Mar. 31, 2012 |
||||||||||||||||
| Private Banks: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 14,809 | $ | 16,720 | $ | 15,442 | $ | 16,435 | $ | 17,180 | ||||||||||
| Collective Trust Fund prgms. |
576 | 504 | 476 | 450 | 435 | |||||||||||||||
| Liquidity funds |
5,217 | 4,918 | 5,529 | 5,553 | 5,549 | |||||||||||||||
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|
|
|
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|
|
|||||||||||
| Total assets under mgmt. |
$ | 20,602 | $ | 22,142 | $ | 21,447 | $ | 22,438 | $ | 23,164 | ||||||||||
| Client assets under admin. |
11,227 | 10,994 | 9,845 | 10,355 | 10,916 | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 31,829 | $ | 33,136 | $ | 31,292 | $ | 32,793 | $ | 34,080 | ||||||||||
| Investment Advisors: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 28,296 | $ | 28,410 | $ | 24,757 | $ | 26,639 | $ | 29,722 | ||||||||||
| Collective Trust Fund prgms. |
1,618 | 1,499 | 1,392 | 1,298 | 1,199 | |||||||||||||||
| Liquidity funds |
1,551 | 1,651 | 2,653 | 2,505 | 1,643 | |||||||||||||||
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|
|||||||||||
| Total assets under mgmt. |
$ | 31,465 | $ | 31,560 | $ | 28,802 | $ | 30,442 | $ | 32,564 | ||||||||||
| Institutional Investors: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 51,287 | $ | 51,180 | $ | 46,259 | $ | 49,051 | $ | 54,537 | ||||||||||
| Collective Trust Fund prgms. |
608 | 482 | 510 | 492 | 424 | |||||||||||||||
| Liquidity funds |
3,202 | 3,146 | 3,356 | 3,888 | 3,725 | |||||||||||||||
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|
|||||||||||
| Total assets under mgmt. |
$ | 55,097 | $ | 54,808 | $ | 50,125 | $ | 53,431 | $ | 58,686 | ||||||||||
| Investment Managers: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 37 | $ | 50 | $ | 64 | $ | 57 | $ | 62 | ||||||||||
| Collective Trust Fund prgms. |
8,841 | 10,372 | 10,896 | 11,255 | 12,781 | |||||||||||||||
| Liquidity funds |
139 | 179 | 195 | 152 | 147 | |||||||||||||||
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|
|||||||||||
| Total assets under mgmt. |
$ | 9,017 | $ | 10,601 | $ | 11,155 | $ | 11,464 | $ | 12,990 | ||||||||||
| Client assets under admin. (A) |
238,335 | 238,432 | 223,620 | 221,198 | 228,327 | |||||||||||||||
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|
|||||||||||
| Total assets |
$ | 247,352 | $ | 249,033 | $ | 234,775 | $ | 232,662 | $ | 241,317 | ||||||||||
| Investments in New Businesses: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 598 | $ | 558 | $ | 490 | $ | 515 | $ | 568 | ||||||||||
| Liquidity funds |
56 | 41 | 41 | 37 | 34 | |||||||||||||||
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|
|||||||||||
| Total assets under mgmt. |
$ | 654 | $ | 599 | $ | 531 | $ | 552 | $ | 602 | ||||||||||
| LSV Asset Management |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 62,370 | $ | 60,626 | $ | 49,444 | $ | 53,712 | $ | 60,607 | ||||||||||
| Consolidated: |
||||||||||||||||||||
| Equity/Fixed Income prgms (B) |
$ | 157,397 | $ | 157,544 | $ | 136,456 | $ | 146,409 | $ | 162,676 | ||||||||||
| Collective Trust Fund prgms. |
11,643 | 12,857 | 13,274 | 13,495 | 14,839 | |||||||||||||||
| Liquidity funds |
10,165 | 9,935 | 11,774 | 12,135 | 11,098 | |||||||||||||||
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|||||||||||
| Total assets under mgmt. |
$ | 179,205 | $ | 180,336 | $ | 161,504 | $ | 172,039 | $ | 188,613 | ||||||||||
| Client assets under admin. (C) |
249,562 | 249,426 | 233,465 | 231,553 | 239,243 | |||||||||||||||
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| Total assets |
$ | 428,767 | $ | 429,762 | $ | 394,969 | $ | 403,592 | $ | 427,856 | ||||||||||
| (A) | Client assets under administration in the Investment Managers segment include $38.5 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of March 31, 2012). |
| (B) | Equity/Fixed Income programs include $2.6 billion of assets invested in various asset allocation funds at March 31, 2012. |
| (C) | In addition to the numbers presented, SEI also administers an additional $4.6 billion in Funds of Funds assets (as of March 31, 2012) on which SEI does not earn an administration fee. |
7
SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)
| 1st Qtr 2011 |
2nd Qtr 2011 |
3rd Qtr 2011 |
4th Qtr 2011 |
1st Qtr 2012 |
||||||||||||||||
| Private Banks: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 14,170 | $ | 16,176 | $ | 16,592 | $ | 16,624 | $ | 17,116 | ||||||||||
| Collective Trust Fund prgms. |
593 | 543 | 505 | 464 | 436 | |||||||||||||||
| Liquidity funds |
5,058 | 4,909 | 5,210 | 5,401 | 5,581 | |||||||||||||||
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|
|||||||||||
| Total assets under mgmt. |
$ | 19,821 | $ | 21,628 | $ | 22,307 | $ | 22,489 | $ | 23,133 | ||||||||||
| Client assets under admin. |
10,921 | 11,114 | 10,364 | 10,290 | 10,211 | |||||||||||||||
|
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|
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|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 30,742 | $ | 32,742 | $ | 32,671 | $ | 32,779 | $ | 33,344 | ||||||||||
| Investment Advisors: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 27,841 | $ | 28,502 | $ | 26,658 | $ | 26,094 | $ | 28,426 | ||||||||||
| Collective Trust Fund prgms. |
1,687 | 1,544 | 1,442 | 1,314 | 1,238 | |||||||||||||||
| Liquidity funds |
1,580 | 1,576 | 2,224 | 2,499 | 2,015 | |||||||||||||||
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|
|
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|
|||||||||||
| Total assets under mgmt. |
$ | 31,108 | $ | 31,622 | $ | 30,324 | $ | 29,907 | $ | 31,679 | ||||||||||
| Institutional Investors: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 50,392 | $ | 51,567 | $ | 49,115 | $ | 48,504 | $ | 52,270 | ||||||||||
| Collective Trust Fund prgms. |
608 | 554 | 505 | 500 | 427 | |||||||||||||||
| Liquidity funds |
3,418 | 3,515 | 3,416 | 3,461 | 3,765 | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets under mgmt. |
$ | 54,418 | $ | 55,636 | $ | 53,036 | $ | 52,465 | $ | 56,462 | ||||||||||
| Investment Managers: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 1 | $ | 38 | $ | 52 | $ | 65 | $ | 58 | ||||||||||
| Collective Trust Fund prgms. |
8,288 | 9,560 | 11,292 | 10,773 | 11,983 | |||||||||||||||
| Liquidity funds |
210 | 165 | 200 | 219 | 190 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets under mgmt. |
$ | 8,499 | $ | 9,763 | $ | 11,544 | $ | 11,057 | $ | 12,231 | ||||||||||
| Client assets under admin. |
237,376 | 241,423 | 236,953 | 224,633 | 224,547 | |||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 245,875 | $ | 251,186 | $ | 248,497 | $ | 235,690 | $ | 236,778 | ||||||||||
| Investments in New Businesses: |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 579 | $ | 561 | $ | 525 | $ | 515 | $ | 549 | ||||||||||
| Liquidity funds |
61 | 42 | 42 | 42 | 39 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets under mgmt. |
$ | 640 | $ | 603 | $ | 567 | $ | 557 | $ | 588 | ||||||||||
| LSV Asset Management |
||||||||||||||||||||
| Equity/Fixed Income prgms. |
$ | 62,212 | $ | 63,000 | $ | 54,679 | $ | 54,021 | $ | 59,200 | ||||||||||
| Consolidated: |
||||||||||||||||||||
| Equity/Fixed Income prgms |
$ | 155,195 | $ | 159,844 | $ | 147,621 | $ | 145,823 | $ | 157,619 | ||||||||||
| Collective Trust Fund prgms. |
11,176 | 12,201 | 13,744 | 13,051 | 14,084 | |||||||||||||||
| Liquidity funds |
10,327 | 10,207 | 11,092 | 11,622 | 11,590 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets under mgmt. |
$ | 176,698 | $ | 182,252 | $ | 172,457 | $ | 170,496 | $ | 183,293 | ||||||||||
| Client assets under admin. |
248,297 | 252,537 | 247,317 | 234,923 | 234,758 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total assets |
$ | 424,995 | $ | 434,789 | $ | 419,774 | $ | 405,419 | $ | 418,051 | ||||||||||
8