SEI Reports First-Quarter 2013 Financial Results
Results Include Gain From Sale of SEI Asset Korea
OAKS, PA -- (Marketwired) -- 04/24/13 -- SEI Investments Company (NASDAQ: SEIC) today announced financial results for first-quarter 2013. Diluted earnings per share were $.41 in first-quarter 2013 compared to $.28 in first-quarter 2012. First-quarter 2013 includes a gain of $.08 diluted earnings per share from the sale of SEI Asset Korea, of which SEI owned approximately 56.1 percent.
Consolidated Overview For the Three Months
(In thousands, except earnings per share) Ended March 31,
2013 2012 %
---------- ---------- ---------
Revenues $ 271,879 $ 237,898 14%
Net Income attributable to SEI 71,920 49,965 44%
Diluted Earnings Per Share $ 0.41 $ 0.28 46%
"The first quarter of 2013 continued the progress we made during 2012 across all of our businesses. A combination of new client implementations, improved financial markets, and positive sales activity contributed to our operating results during the quarter," said Alfred P. West, Jr., SEI Chairman and CEO.
"Our results so far this year have been encouraging. SEI will continue to execute against our long-term strategy, including a focus on new client acquisition and development of the products and services necessary for long-term success. As always, we are committed to enhancing shareholder value."
Summary of First-Quarter Results by Business Segment
(In thousands) For the Three Months
Ended March 31,
2013 2012 %
--------- --------- --------
Private Banks:
Revenues $ 98,746 $ 87,988 12%
Expenses 96,298 87,517 10%
--------- ---------
Operating Profit $ 2,448 $ 471 420%
Gain on sale of subsidiary 22,112 -- N/M
--------- ---------
Total Profit $ 24,560 $ 471 N/M
Operating Margin (A) 2% 1%
Investment Advisors:
Revenues 55,191 49,468 12%
Expenses 31,625 29,301 8%
--------- ---------
Operating Profit 23,566 20,167 17%
Operating Margin 43% 41%
Institutional Investors:
Revenues 63,162 53,317 18%
Expenses 31,509 28,100 12%
--------- ---------
Operating Profit 31,653 25,217 26%
Operating Margin 50% 47%
Investment Managers:
Revenues 53,820 46,211 16%
Expenses 35,162 30,426 16%
--------- ---------
Operating Profit 18,658 15,785 18%
Operating Margin 35% 34%
Investments in New Businesses:
Revenues 960 914 5%
Expenses 3,738 3,698 1%
--------- ---------
Operating Loss (2,778) (2,784) --
(A) Percentage determined exclusive of gain on sale of subsidiary.
First-Quarter Business Commentary:
- Revenues increased in first-quarter 2013 as compared to both first-quarter 2012 and fourth-quarter 2012. Gains were realized in all core business segments and all major product lines, including Asset management, administration, and distribution fees and Information processing and software servicing fees.
- Net income attributable to SEI increased in first-quarter 2013 as compared to both first-quarter 2012 and fourth-quarter 2012. This was driven by the increase in first-quarter 2013 revenues when compared to both periods. Additionally, the previously disclosed sale of SEI Asset Korea was completed on March 28, 2013 resulting in a gain of $22.1 million, or $.08 diluted earnings per share.
- Our average assets under management, excluding LSV, increased $20.9 billion, or 17 percent, to $145.0 billion in the first-quarter 2013, as compared to $124.1 billion during the first-quarter 2012, and increased $6.5 billion, or five percent, as compared to $138.5 billion during the fourth-quarter 2012. Ending asset balances for the first-quarter 2013 do not include assets related to SEI Asset Korea (see attached Ending and Average Asset Balances schedules for further details).
- Sales events, net of client losses, during first-quarter 2013 totaled approximately $19.6 million and are expected to generate net annualized recurring revenues of approximately $16.8 million when contract values are fully realized.
- Income from LSV increased in first-quarter 2013 to $27.8 million as compared to $27.3 million in first-quarter 2012 due to an increase in assets under management. Our ownership interest in LSV was approximately 39.8 percent in first-quarter 2013 and 41.2 percent in first-quarter 2012.
- The effective tax rates were 34.9 percent in first-quarter 2013 and 37.2 percent in first-quarter 2012 and 35.0 percent in fourth-quarter 2012. The first-quarter 2013 tax rate was benefited by the reinstatement of the research and development tax credit partially offset by additional foreign taxes caused by the sale of SEI Asset Korea. The increase in the tax rate in the first-quarter 2012 was due to the expiration of the research and development tax credits. The fourth-quarter 2012 tax rate was benefited by state tax planning.
- In first-quarter 2013, we repurchased 1.3 million shares of our common stock for $36.2 million.
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM ET on April 24, 2013. 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) 1-800-475-6701; (International) 320-365-3844, access code 291281.
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, 2013, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $495 billion in mutual fund and pooled or separately managed assets, including $206 billion in assets under management and $289 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.
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three Months
Ended March 31,
------------------------
2013 2012
----------- -----------
Asset management, admin. and distribution fees $ 198,633 $ 172,954
Information processing and software servicing fees 64,532 56,200
Transaction-based and trade execution fees 8,714 8,744
----------- -----------
Total revenues 271,879 237,898
Subadvisory, distribution and other asset mgmt
costs 27,934 28,003
Software royalties and other information
processing costs 7,487 6,941
Brokerage commissions 6,512 6,307
Compensation, benefits and other personnel 88,610 78,543
Stock-based compensation 5,293 4,033
Consulting, outsourcing and professional fees 31,849 26,955
Data processing and computer related 12,058 11,465
Facilities, supplies and other costs 18,148 14,508
Amortization 8,242 7,622
Depreciation 5,704 5,432
----------- -----------
Total expenses 211,837 189,809
Income from operations 60,042 48,089
Net gain on investments 280 3,205
Interest and dividend income 1,053 1,487
Interest expense (113) (161)
Equity in earnings of unconsolidated affiliates 27,588 27,330
Gain on sale of subsidiary 22,112 --
----------- -----------
Net income before income taxes 110,962 79,950
Income taxes 38,692 29,715
----------- -----------
Net income 72,270 50,235
----------- -----------
Less: Net income attributable to the
noncontrolling interest (350) (270)
----------- -----------
Net income attributable to SEI $ 71,920 $ 49,965
=========== ===========
Diluted earnings per common share $ 0.41 $ 0.28
=========== ===========
Shares used to calculate diluted earnings per
share 176,005 177,668
=========== ===========
Basic earnings per common share $ 0.42 $ 0.28
=========== ===========
Shares used to calculate basic earnings per share 172,598 176,348
=========== ===========
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
March 31, December 31,
2013 2012
----------- ------------
Assets
Cash and short-term investments $ 452,099 $ 452,247
Restricted cash 5,500 6,000
Receivables, net 247,137 202,818
Securities owned 21,107 20,088
Other current assets 21,705 20,251
----------- ------------
Total current assets 747,548 701,404
Property and equipment, net 123,153 127,581
Marketable securities 78,148 81,778
Capitalized software, net 305,352 307,490
Investment in unconsolidated affiliates 77,165 77,398
Other assets, net 11,244 14,173
----------- ------------
Total assets $ 1,342,610 $ 1,309,824
=========== ============
Liabilities
Current liabilities $ 148,727 $ 152,005
Deferred income taxes 85,386 93,458
Other Long-term liabilities 7,400 7,032
Total SEI Investments Company shareholders' equity 1,101,097 1,038,180
Noncontrolling interest -- 19,149
----------- ------------
Total Equity 1,101,097 1,057,329
Total liabilities and equity $ 1,342,610 $ 1,309,824
=========== ============
SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)
Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31,
2012 2012 2012 2012 2013
-------- -------- --------- -------- --------
Private Banks:
Equity/Fixed Income prgms. $ 17,180 $ 16,848 $ 17,960 $ 18,862 $ 12,446
Collective Trust Fund prgms. 435 335 147 11 9
Liquidity funds 5,549 5,063 5,342 6,008 5,143
-------- -------- --------- -------- --------
Total assets under mgmnt. $ 23,164 $ 22,246 $ 23,449 $ 24,881 $ 17,598
Client assets under admin. 10,916 10,719 11,611 12,178 12,970
-------- -------- --------- -------- --------
Total assets $ 34,080 $ 32,965 $ 35,060 $ 37,059 $ 30,568
Investment Advisors:
Equity/Fixed Income prgms. $ 29,722 $ 29,153 $ 30,864 $ 31,220 $ 34,166
Collective Trust Fund prgms. 1,199 705 370 14 15
Liquidity funds 1,643 1,880 1,868 2,514 2,094
-------- -------- --------- -------- --------
Total assets under mgmnt. $ 32,564 $ 31,738 $ 33,102 $ 33,748 $ 36,275
Institutional Investors:
Equity/Fixed Income prgms. $ 54,537 $ 55,548 $ 59,852 $ 62,160 $ 64,214
Collective Trust Fund prgms. 424 415 153 102 101
Liquidity funds 3,725 2,958 3,272 2,454 2,810
-------- -------- --------- -------- --------
Total assets under mgmnt. $ 58,686 $ 58,921 $ 63,277 $ 64,716 $ 67,125
Investment Managers:
Equity/Fixed Income prgms. $ 62 $ 61 $ 65 $ 67 $ 73
Collective Trust Fund prgms. 12,781 13,004 15,433 16,197 17,656
Liquidity funds 147 226 396 408 522
-------- -------- --------- -------- --------
Total assets under mgmnt. $ 12,990 $ 13,291 $ 15,894 $ 16,672 $ 18,251
Client assets under admin.
(A) 228,327 231,549 240,965 244,671 275,632
-------- -------- --------- -------- --------
Total assets $241,317 $244,840 $ 256,859 $261,343 $293,883
Investments in New Businesses:
Equity/Fixed Income prgms. $ 568 $ 551 $ 534 $ 513 $ 552
Liquidity funds 34 30 29 43 42
-------- -------- --------- -------- --------
Total assets under mgmnt. $ 602 $ 581 $ 563 $ 556 $ 594
LSV Asset Management:
Equity/Fixed Income prgms. $ 60,607 $ 54,922 $ 58,886 $ 60,947 $ 66,311
Total:
Equity/Fixed Income prgms
(B) (D) $162,676 $157,083 $ 168,161 $173,769 $177,762
Collective Trust Fund prgms. 14,839 14,459 16,103 16,324 17,781
Liquidity funds 11,098 10,157 10,907 11,427 10,611
-------- -------- --------- -------- --------
Total assets under mgmnt. $188,613 $181,699 $ 195,171 $201,520 $206,154
Client assets under admin.
(C) 239,243 242,268 252,576 256,849 288,602
-------- -------- --------- -------- --------
Total assets $427,856 $423,967 $ 447,747 $458,369 $494,756
(A) Client assets under administration in the Investment Managers segment include $54.1 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of March 31, 2013).
(B) Equity/Fixed Income programs include $3.3 billion of assets invested in various asset allocation funds at March 31, 2013.
(C) In addition to the numbers presented, SEI also administers an additional $4.9 billion in Funds of Funds assets (as of March 31, 2013) on which SEI does not earn an administration fee.
(D) Equity/Fixed Income programs in the Private Banks segment for 2012 included assets related to SEI Asset Korea which was sold in first-quarter 2013. Assets for SEI Asset Korea for the four quarters of 2012 were $6.6 billion, $6.3 billion. $6.6 billion and $7.0 billion respectively.
SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr.
2012 2012 2012 2012 2013
-------- -------- -------- -------- --------
Private Banks:
Equity/Fixed Income prgms. $ 17,116 $ 16,794 $ 17,527 $ 18,301 $ 19,197
Collective Trust Fund prgms. 436 396 230 66 11
Liquidity funds 5,581 5,115 5,401 5,229 5,556
-------- -------- -------- -------- --------
Total assets under mgmnt. $ 23,133 $ 22,305 $ 23,158 $ 23,596 $ 24,764
Client assets under admin. 10,211 10,631 10,867 11,783 12,860
-------- -------- -------- -------- --------
Total assets $ 33,344 $ 32,936 $ 34,025 $ 35,379 $ 37,624
Investment Advisors:
Equity/Fixed Income prgms. $ 28,426 $ 29,103 $ 30,032 $ 30,881 $ 33,189
Collective Trust Fund prgms. 1,238 984 532 158 14
Liquidity funds 2,015 1,806 1,886 2,176 2,085
-------- -------- -------- -------- --------
Total assets under mgmnt. $ 31,679 $ 31,893 $ 32,450 $ 33,215 $ 35,288
Institutional Investors:
Equity/Fixed Income prgms. $ 52,270 $ 54,998 $ 57,763 $ 61,304 $ 63,642
Collective Trust Fund prgms. 427 418 284 120 101
Liquidity funds 3,765 3,147 3,253 3,493 2,960
-------- -------- -------- -------- --------
Total assets under mgmnt. $ 56,462 $ 58,563 $ 61,300 $ 64,917 $ 66,703
Investment Managers:
Equity/Fixed Income prgms. $ 58 $ 63 $ 62 $ 68 $ 68
Collective Trust Fund prgms. 11,983 12,991 14,797 15,719 17,129
Liquidity funds 190 235 287 395 511
-------- -------- -------- -------- --------
Total assets under mgmnt. $ 12,231 $ 13,289 $ 15,146 $ 16,182 $ 17,708
Client assets under admin. 224,547 229,873 237,155 240,520 263,054
-------- -------- -------- -------- --------
Total assets $236,778 $243,162 $252,301 $256,702 $280,762
Investments in New Businesses:
Equity/Fixed Income prgms. $ 549 $ 550 $ 530 $ 518 $ 542
Liquidity funds 39 33 35 33 38
-------- -------- -------- -------- --------
Total assets under mgmnt. $ 588 $ 583 $ 565 $ 551 $ 580
LSV Asset Management:
Equity/Fixed Income prgms. $ 59,200 $ 55,994 $ 57,164 $ 59,383 $ 64,448
Total:
Equity/Fixed Income prgms (A) $157,619 $157,502 $163,078 $170,455 $181,086
Collective Trust Fund prgms. 14,084 14,789 15,843 16,063 17,255
Liquidity funds 11,590 10,336 10,862 11,326 11,150
-------- -------- -------- -------- --------
Total assets under mgmnt. $183,293 $182,627 $189,783 $197,844 $209,491
Client assets under admin. 234,758 240,504 248,022 252,303 275,914
-------- -------- -------- -------- --------
Total assets $418,051 $423,131 $437,805 $450,147 $485,405
(A) Equity/Fixed Income programs in the Private Banks segment for 2012 and 2013 included average assets related to SEI Asset Korea which was sold in first-quarter 2013. Average assets for SEI Asset Korea for the four quarters of 2012 were $6.8 billion, $6.4 billion, $6.5 billion and $6.8 billion respectively. Average assets for the first-quarter 2013 were $7.0 billion.
Investor Contact: Murray Louis SEI +1 610-676-1932 mlouis@seic.com Media Contact: Dana Grosser SEI +1 610-676-2459 dgrosser@seic.com
Source: SEI
Released April 24, 2013