SEI Reports Second-Quarter 2012 Financial Results
OAKS, PA -- (Marketwire) -- 07/18/12 -- SEI Investments Company (NASDAQ: SEIC) today announced financial results for second-quarter 2012. Diluted earnings per share were $.28 in second-quarter 2012 compared to $.29 in second-quarter 2011.
Consolidated Overview For the For the
(In thousands, except Three Months Six Months
earnings per share) Ended June 30, Ended June 30,
2012 2011 % 2012 2011 %
-------- -------- -- -------- -------- ---
Revenues $241,237 $237,760 1% $479,135 $470,253 2%
Net Income attributable to
SEI 49,555 53,603 (8%) 99,520 111,331 (11%)
Diluted Earnings Per Share $ 0.28 $ 0.29 (3%) $ 0.56 $ 0.59 (5%)
"Second-quarter 2012 results reflect continued solid sales activity and improving profits and margins across our core business segments," said Alfred P. West, Jr., SEI Chairman and CEO.
"Global financial market uncertainty and market volatility affected our results, particularly earnings from LSV. Despite this, we continue to see strong and growing interest in the solutions we offer from the markets we serve. We are confident we are on the right track and the investments we are making will enable us to significantly increase shareholder value."
Summary of Second-Quarter Results by Business Segment
For the Three Month For the Six Month
(In thousands) Period Period
Ended June 30, Ended June 30,
2012 2011 % 2012 2011 %
-------- -------- --- -------- -------- ---
Private Banks:
Revenues $ 88,303 $ 87,873 - $176,291 $174,582 1%
Expenses 84,886 86,274 (2%) 172,403 168,677 2%
-------- -------- -------- --------
Operating Profit $ 3,417 $ 1,599 114% $ 3,888 $ 5,905 (34%)
Operating Margin 4% 2% 2% 3%
Investment Advisors:
Revenues 49,375 49,768 (1%) 98,843 97,876 1%
Expenses 29,025 27,734 5% 58,326 54,774 6%
-------- -------- -------- --------
Operating Profit 20,350 22,034 (8%) 40,517 43,102 (6%)
Operating Margin 41% 44% 41% 44%
Institutional Investors:
Revenues 55,895 54,731 2% 109,212 107,916 1%
Expenses 28,740 27,406 5% 56,840 54,359 (5%)
-------- -------- -------- --------
Operating Profit 27,155 27,325 (1%) 52,372 53,557 (2%)
Operating Margin 49% 50% 48% 50%
Investment Managers:
Revenues 46,713 44,452 5% 92,924 87,893 6%
Expenses 30,163 29,282 3% 60,589 57,281 6%
-------- -------- -------- --------
Operating Profit 16,550 15,170 9% 32,335 30,612 6%
Operating Margin 35% 34% 35% 35%
Investments in New
Businesses:
Revenues 951 936 2% 1,865 1,986 (6%)
Expenses 3,684 2,920 26% 7,382 6,045 22%
-------- -------- -------- --------
Operating Loss (2,733) (1,984) 38% (5,517) (4,059) 36%
Operating Margin N/A N/A N/A N/A
Totals:
Revenues $241,237 $237,760 1% $479,135 $470,253 2%
Expenses 176,498 173,616 2% 355,540 341,136 4%
Corporate overhead
expenses 11,080 10,720 3% 22,162 21,368 4%
Noncontrolling
interest reflected in
segments (139) (533) N/A (454) (805) N/A
-------- -------- -------- --------
Income from operations $ 53,798 $ 53,957 - $101,887 $108,554 (6%)
Second-Quarter Business Commentary:
- Revenues increased in second-quarter 2012 as compared to both second-quarter 2011 and first-quarter 2012. This was driven by an increase in Asset management, administrative, and distribution fee revenues resulting from increased cash flows from new and existing clients and market appreciation in 2012, despite the market decline in second-quarter 2012.
- Our average assets under management, excluding LSV, increased $7.4 billion, or six percent, to $126.6 billion in the second-quarter 2012 as compared to $119.2 billion during the second-quarter 2011 and increased $2.5 billion, or 2 percent, as compared to $124.1 billion during the first-quarter 2012 (See attached Ending and Average Asset Balances schedules for further details).
- Sales events, net of client losses, during second-quarter 2012 totaled approximately $20.3 million and are expected to generate net annualized recurring revenues of approximately $15.7 million when contract values are fully realized.
- Income from LSV decreased $6.8 million to $22.7 million in second-quarter 2012 as compared to $29.5 million in second-quarter 2011. The reduction in earnings was due to lower assets under management from market deprecation in second-quarter 2012 and a decrease in our ownership interest to 40 percent from 41 percent.
- Net income attributable to SEI includes gains from SIV securities of $1.1 million in second-quarter 2012 compared to losses of $1.9 million in second-quarter 2011 and a gain of $2.9 million in first-quarter 2012.
- The effective tax rates were 36.6 percent in the second-quarter 2012 and 34.7 percent in the second-quarter 2011. The increase in the tax rate was due to tax planning strategies which benefited the tax rate in second-quarter 2011.
- In the second-quarter 2012, SEI purchased 2.25 million shares of its common stock for $42.2 million.
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM ET on July 18, 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) 1-800-475-6701; (International) 320-365-3844, access code 254406.
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 June 30, 2012, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $424 billion in mutual fund and pooled or separately managed assets, including $182 billion in assets under management and $242 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)
Three Months Ended June
30,
--------------------------
2012 2011
------------ ------------
Asset management, admin. and distribution fees $ 176,613 $ 172,331
Information processing and software servicing
fees 57,254 56,035
Transaction-based and trade execution fees 7,370 9,394
------------ ------------
Total revenues 241,237 237,760
Subadvisory, distribution and other asset mgmt
costs 25,884 26,304
Software royalties and other information
processing costs 5,228 7,188
Brokerage commissions 5,634 6,599
Compensation, benefits and other personnel 80,531 72,613
Stock-based compensation 3,865 3,810
Consulting, outsourcing and professional fees 26,329 29,398
Data processing and computer related 11,659 11,610
Facilities, supplies and other costs 15,272 14,098
Amortization 7,407 6,792
Depreciation 5,630 5,391
------------ ------------
Total expenses 187,439 183,803
Income from operations 53,798 53,957
Net gain (loss) on investments 664 (1,948)
Interest and dividend income 1,440 1,436
Interest expense (113) (155)
Equity in earnings of unconsolidated affiliate 22,712 29,530
------------ ------------
Net income before income taxes 78,501 82,820
Income taxes 28,762 28,707
------------ ------------
Net income 49,739 54,113
------------ ------------
Less: Net income attributable to the
noncontrolling interest (184) (510)
------------ ------------
Net income attributable to SEI $ 49,555 $ 53,603
============ ============
Diluted earnings per common share $ 0.28 $ 0.29
============ ============
Shares used to calculate diluted earnings per
common share 175,913 187,020
============ ============
Basic earnings per common share $ 0.28 $ 0.29
============ ============
Shares used to calculate basic earnings per
common share 174,830 184,585
============ ============
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Six Months Ended June 30,
--------------------------
2012 2011
------------ ------------
Asset management, admin. and distribution fees $ 349,567 $ 339,835
Information processing and software servicing
fees 113,454 111,859
Transaction-based and trade execution fees 16,114 18,559
------------ ------------
Total revenues 479,135 470,253
Subadvisory, distribution and other asset mgmt
costs 54,351 52,600
Software royalties and other information
processing costs 11,705 14,205
Brokerage commissions 11,941 13,180
Compensation, benefits and other personnel 159,074 143,638
Stock-based compensation 7,898 7,542
Consulting, outsourcing and professional fees 53,284 55,396
Data processing and computer related 23,124 22,913
Facilities, supplies and other costs 29,780 28,200
Amortization 15,029 13,023
Depreciation 11,062 11,002
------------ ------------
Total expenses 377,248 361,699
Income from operations 101,887 108,554
Net gain on investments 3,869 5,330
Interest and dividend income 2,927 2,980
Interest expense (274) (359)
Equity in earnings of unconsolidated affiliate 50,042 58,479
------------ ------------
Net income before income taxes 158,451 174,984
Income taxes 58,477 62,831
------------ ------------
Net income 99,974 112,153
------------ ------------
Less: Net income attributable to the
noncontrolling interest (454) (822)
------------ ------------
Net income attributable to SEI $ 99,520 $ 111,331
------------ ------------
Diluted earnings per common share $ 0.56 $ 0.59
============ ============
Shares used to calculate diluted earnings per
common share 176,791 187,757
============ ============
Basic earnings per common share $ 0.57 $ 0.60
============ ============
Shares used to calculate basic earnings per
common share 175,589 185,186
============ ============
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2012 2011
------------- -------------
Assets
Cash and short-term investments $ 347,494 $ 420,986
Restricted cash 6,000 6,000
Receivables, net 202,594 167,909
Securities owned 21,057 20,949
Other current assets 18,265 19,107
------------- -------------
Total current assets 595,410 634,951
Property and equipment, net 135,011 129,548
Marketable securities 134,491 139,333
Capitalized software, net 312,815 309,133
Investment in unconsolidated affiliate 63,553 60,954
Other assets, net 23,582 20,640
------------- -------------
Total assets $ 1,264,862 $ 1,294,559
============= =============
Liabilities
Current liabilities $ 105,383 $ 151,073
Deferred income taxes 91,819 93,751
Other Long-term liabilities 10,632 8,276
Total SEI Investments Company shareholders'
equity 1,040,102 1,025,316
Noncontrolling interest 16,926 16,143
------------- -------------
Total Equity 1,057,028 1,041,459
Total liabilities and equity $ 1,264,862 $ 1,294,559
============= =============
SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)
Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30,
2011 2011 2011 2012 2012
--------- --------- --------- --------- ---------
Private Banks:
Equity/Fixed Income
prgms. $ 16,720 $ 15,442 $ 16,435 $ 17,180 $ 16,848
Collective Trust Fund
prgms. 504 476 450 435 335
Liquidity funds 4,918 5,529 5,553 5,549 5,063
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 22,142 $ 21,447 $ 22,438 $ 23,164 $ 22,246
Client assets under
admin. 10,994 9,845 10,355 10,916 10,719
--------- --------- --------- --------- ---------
Total assets $ 33,136 $ 31,292 $ 32,793 $ 34,080 $ 32,965
Investment Advisors:
Equity/Fixed Income
prgms. $ 28,410 $ 24,757 $ 26,639 $ 29,722 $ 29,153
Collective Trust Fund
prgms. 1,499 1,392 1,298 1,199 705
Liquidity funds 1,651 2,653 2,505 1,643 1,880
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 31,560 $ 28,802 $ 30,442 $ 32,564 $ 31,738
Institutional Investors:
Equity/Fixed Income
prgms. $ 51,180 $ 46,259 $ 49,051 $ 54,537 $ 55,548
Collective Trust Fund
prgms. 482 510 492 424 415
Liquidity funds 3,146 3,356 3,888 3,725 2,958
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 54,808 $ 50,125 $ 53,431 $ 58,686 $ 58,921
Investment Managers:
Equity/Fixed Income
prgms. $ 50 $ 64 $ 57 $ 62 $ 61
Collective Trust Fund
prgms. 10,372 10,896 11,255 12,781 13,004
Liquidity funds 179 195 152 147 226
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 10,601 $ 11,155 $ 11,464 $ 12,990 $ 13,291
Client assets under
admin. (A) 238,432 223,620 221,198 228,327 231,549
--------- --------- --------- --------- ---------
Total assets $ 249,033 $ 234,775 $ 232,662 $ 241,317 $ 244,840
Investments in New
Businesses:
Equity/Fixed Income
prgms. $ 558 $ 490 $ 515 $ 568 $ 551
Liquidity funds 41 41 37 34 30
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 599 $ 531 $ 552 $ 602 $ 581
LSV Asset Management
Equity/Fixed Income
prgms. $ 60,626 $ 49,444 $ 53,712 $ 60,607 $ 54,922
Consolidated:
Equity/Fixed Income
prgms (B) $ 157,544 $ 136,456 $ 146,409 $ 162,676 $ 157,083
Collective Trust Fund
prgms. 12,857 13,274 13,495 14,839 14,459
Liquidity funds 9,935 11,774 12,135 11,098 10,157
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 180,336 $ 161,504 $ 172,039 $ 188,613 $ 181,699
Client assets under
admin. (C) 249,426 233,465 231,553 239,243 242,268
--------- --------- --------- --------- ---------
Total assets $ 429,762 $ 394,969 $ 403,592 $ 427,856 $ 423,967
(A) Client assets under administration in the Investment Managers segment
include $38.4 billion of assets balances that require limited services
and therefore are at fee levels below our normal full service assets (as
of June 30, 2012).
(B) Equity/Fixed Income programs include $2.6 billion of assets invested in
various asset allocation funds at June 30, 2012.
(C) In addition to the numbers presented, SEI also administers an additional
$4.6 billion in Funds of Funds assets (as of June 30, 2012) on which SEI
does not earn an administration fee.
SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)
2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr. 2nd Qtr.
2011 2011 2011 2012 2012
--------- --------- --------- --------- ---------
Private Banks:
Equity/Fixed Income
prgms. $ 16,176 $ 16,592 $ 16,624 $ 17,116 $ 16,794
Collective Trust Fund
prgms. 543 505 464 436 396
Liquidity funds 4,909 5,210 5,401 5,581 5,115
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 21,628 $ 22,307 $ 22,489 $ 23,133 $ 22,305
Client assets under
admin. 11,114 10,364 10,290 10,211 10,631
--------- --------- --------- --------- ---------
Total assets $ 32,742 $ 32,671 $ 32,779 $ 33,344 $ 32,936
Investment Advisors:
Equity/Fixed Income
prgms. $ 28,502 $ 26,658 $ 26,094 $ 28,426 $ 29,103
Collective Trust Fund
prgms. 1,544 1,442 1,314 1,238 984
Liquidity funds 1,576 2,224 2,499 2,015 1,806
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 31,622 $ 30,324 $ 29,907 $ 31,679 $ 31,893
Institutional Investors:
Equity/Fixed Income
prgms. $ 51,567 $ 49,115 $ 48,504 $ 52,270 $ 54,998
Collective Trust Fund
prgms. 554 505 500 427 418
Liquidity funds 3,515 3,416 3,461 3,765 3,147
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 55,636 $ 53,036 $ 52,465 $ 56,462 $ 58,563
Investment Managers:
Equity/Fixed Income
prgms. $ 38 $ 52 $ 65 $ 58 $ 63
Collective Trust Fund
prgms. 9,560 11,292 10,773 11,983 12,991
Liquidity funds 165 200 219 190 235
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 9,763 $ 11,544 $ 11,057 $ 12,231 $ 13,289
Client assets under
admin. 241,423 236,953 224,633 224,547 229,873
--------- --------- --------- --------- ---------
Total assets $ 251,186 $ 248,497 $ 235,690 $ 236,778 $ 243,162
Investments in New
Businesses:
Equity/Fixed Income
prgms. $ 561 $ 525 $ 515 $ 549 $ 550
Liquidity funds 42 42 42 39 33
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 603 $ 567 $ 557 $ 588 $ 583
LSV Asset Management
Equity/Fixed Income
prgms. $ 63,000 $ 54,679 $ 54,021 $ 59,200 $ 55,994
Consolidated:
Equity/Fixed Income
prgms $ 159,844 $ 147,621 $ 145,823 $ 157,619 $ 157,502
Collective Trust Fund
prgms. 12,201 13,744 13,051 14,084 14,789
Liquidity funds 10,207 11,092 11,622 11,590 10,336
--------- --------- --------- --------- ---------
Total assets under mgmt. $ 182,252 $ 172,457 $ 170,496 $ 183,293 $ 182,627
Client assets under
admin. 252,537 247,317 234,923 234,758 240,504
--------- --------- --------- --------- ---------
Total assets $ 434,789 $ 419,774 $ 405,419 $ 418,051 $ 423,131
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 July 18, 2012