SEI Reports Fourth-Quarter 2009 Financial Results

OAKS, Pa., Jan. 27 /PRNewswire-FirstCall/ -- SEI Investments Company (Nasdaq: SEIC) today announced financial results for fourth-quarter 2009, reporting increases in revenues and net income attributable to SEI, and diluted earnings per share compared to fourth-quarter 2008.  Diluted earnings per share were $0.24.  Earnings were negatively affected by Structured Investment Vehicle (SIV)-related and accelerated Global Wealth Platform (GWP) amortization charges of approximately $0.04.  


Consolidated Overview      For the Three Months    For the Twelve Months

(In thousands, except
earnings per share)        Ended December 31,      Ended December 31,

                           2009     2008     %     2009       2008       %



Revenues                   $283,995 $268,402 6%    $1,060,548 $1,247,919 (15%)

Net Income attributable to
SEI                        45,837   9,649    375%  174,335    139,254    25%

Diluted Earnings Per Share $0.24    $0.05    380%  $0.91      $0.71      28%




"Our fourth-quarter results reflect both the improving capital markets and the cost reduction initiatives we put in place earlier in the year," said Alfred P. West, Jr., SEI Chairman and CEO.

"As the economic climate continues to improve, we believe we will have opportunities in all our segments to achieve growth in new business. At the same time, we are continuing to make key investments to give us even greater opportunities to grow.  During these turbulent times we maintain our belief that what we are doing will significantly benefit our clients and SEI both today and in the future."

Summary of Fourth-Quarter and Year to Date Results




               For the Three Month Period  For the Twelve Month Period Ended
(In thousands) Ended December 31,          December 31,

               2009      2008     %        2009       2008       %

Private Banks:

Revenues       $89,119   $97,962  (9%)     $361,273   $408,500   (12%)

Expenses       80,192    75,582   6%       309,300    326,661    (5%)

Operating
Profit         $8,927    $22,380  (60%)    $51,973    $81,839    (36%)

Operating
Margin         10%       23%               14%        20%



Investment
Advisors:

Revenues       45,540    41,951   9%       166,097    223,164    (26%)

Expenses       28,369    28,529   (1%)     109,418    122,231    (10%)

Operating
Profit         17,171    13,422   28%      56,679     100,933    (44%)

Operating
Margin         38%       32%               34%        45%



Institutional
Investors:

Revenues       48,720    43,408   12%      177,721    198,154    (10%)

Expenses       25,121    22,873   10%      99,924     112,866    (11%)

Operating
Profit         23,599    20,535   15%      77,797     85,288     (9%)

Operating
Margin         48%       47%               44%        43%



Investment
Managers:

Revenues       37,093    35,966   3%       139,004    147,968    (6%)

Expenses       24,915    23,536   6%       93,074     101,078    (8%)

Operating
Profit         12,178    12,430   (2%)     45,930     46,890     (2%)

Operating
Margin         33%       35%               33%        32%



Investments in
New
Businesses:

Revenues       990       1,356    (27%)    4,492      6,865      (35%)

Expenses       2,836     2,973    (5%)     11,625     15,795     (26%)

Operating Loss (1,846)   (1,617)  14%      (7,133)    (8,930)    (20%)

Operating
Margin         n/a       n/a               n/a        n/a



LSV:

Revenues       62,533    47,759   31%      211,961    263,268    (19%)

Expenses (1)   39,497    30,833   28%      136,580    164,783    (17%)

Operating
Profit         23,036    16,926   36%      75,381     98,485     (23%)

Operating
Margin         37%       35%               36%        37%



Totals:

Revenues       $283,995  $268,402 6%       $1,060,548 $1,247,919 (15%)

Expenses       200,930   184,326  9%       759,921    843,414    (10%)

Corporate
overhead
expenses       9,294     8,079    15%      36,529     38,955     (6%)

Noncontrolling
interest
reflected in
segments       (32,937)  (23,518) 40%      (106,905)  (138,079)  (23%)

LSV Employee
Group Expenses 1,820     1,820    0%       7,296      7,280      0%

               $ 104,888 $ 97,695 7%       $ 363,707  $ 496,349  (27%)






(1) Includes $32,350 and $23,200 for the three-month period ended December 31, 2009 and 2008, respectively, and $105,471 and $135,251 for the twelve-month period ended December 31, 2009 and 2008, respectively, of noncontrolling interest to the other partners of LSV.

Fourth-Quarter Business Commentary:

    --  Fourth-quarter revenue results improved on a sequential quarter basis
        for all major segments, due primarily to improved capital markets.
    --  The fourth-quarter 2009 results include $7.7 million of amortization
        expense associated with a change in the useful life of previously
        capitalized software development costs for some components related to
        GWP. This charge was due to the replacement of these components with
        components contained in the most recent release of GWP that occurred in
        Q4 2009. The bulk of this expense is contained in the Private Banks
        segment ($5 million) and the Investment Advisors segment ($1.9 million),
        depressing fourth-quarter 2009 margins. This is the second half of
        charges first reported in third-quarter, 2009.
    --  The fourth-quarter 2009 results include losses of $4.0 million
        associated with SIV-related issues, whereas results in fourth-quarter
        2008 included losses of $64.3 million. SEI has recognized cumulative
        losses of $189.1 million associated with these SIV-related issues
        through December 31, 2009. As previously reported, SEI has now purchased
        all SIVs owned by its money market funds and has no capital support
        agreements left in place. Additional information pertaining to
        SIV-related issues involving SEI-sponsored money market funds is
        contained in SEI's 2008 Form 10-K filed February 25, 2009 and SEI's 2009
        third-quarter Form 10-Q filed November 3, 2009.
    --  Assets under management increased by $2.7 billion during the
        fourth-quarter 2009 to $158.8 billion, primarily due to market
        appreciation.
    --  In the fourth-quarter, SEI purchased 1,243,000 shares of its common
        stock for $22.1 million.


Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 PM ET on January 27, 2010.  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 143992.

About SEI

SEI (Nasdaq: SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of December 31, 2009, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $392 billion in mutual fund and pooled assets and manages $158 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from numerous offices worldwide.   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 INCOME

(In thousands, except per share data)

(Unaudited)



                                               Three Months Ended December 31,

                                               2009      2008



Asset management, admin. and distribution fees $214,378  $191,247

Information processing and software servicing
fees                                           58,655    56,003

Transaction–based and trade execution fees   10,962    21,152



Total revenues                                 283,995   268,402



Commissions and fees                           37,434    41,296

Compensation, benefits and other personnel     71,657    61,517

Consulting, outsourcing and professional fees  21,660    24,208

Data processing and computer related           11,476    11,500

Facilities, supplies and other costs           16,429    19,920

Depreciation                                   5,336     5,932

Amortization                                   15,115    6,334



Total expenses                                 179,107   170,707



Income from operations                         104,888   97,695



Net loss on investments                        (3,559)   (64,631)

Interest and dividend income                   1,736     2,995

Interest expense                               (860)     (740)

Other income                                   -         5,577



Income before taxes                            102,205   40,896



Income taxes                                   25,636    9,961



Net income                                     76,569    30,935



Less: Net income attributable to the
noncontrolling interest                        (30,732)  (21,286)



Net income attributable to SEI                 $45,837   $9,649



Diluted earnings per common share              $0.24     $0.05



Shares used to calculate diluted

earnings per common share                      191,414   192,030



Basic earnings per common share                $0.24     $0.05



Shares used to calculate basic

earnings per common share                      190,329   190,858







SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)



                                               Twelve Months Ended December 31,

                                               2009       2008



Asset management, admin. and distribution fees $773,186   $955,399

Information processing and software servicing
fees                                           231,807    229,807

Transaction–based and trade execution fees   55,555     62,713



Total revenues                                 1,060,548  1,247,919



Commissions and fees                           147,545    171,972

Compensation, benefits and other personnel     289,178    309,870

Consulting, outsourcing and professional fees  81,694     103,789

Data processing and computer related           45,403     44,602

Facilities, supplies and other costs           66,882     74,378

Depreciation                                   21,531     22,032

Amortization                                   44,608     24,927



Total expenses                                 696,841    751,570



Income from operations                         363,707    496,349



Net loss on investments                        (4,926)    (158,018)

Interest and dividend income                   7,281      13,740

Interest expense                               (3,744)    (3,418)

Other income                                   -          5,577



Income before taxes                            362,318    354,230



Income taxes                                   89,886     86,703



Net income                                     272,432    267,527



Less: Net income attributable to the
noncontrolling interest                        (98,097)   (128,273)



Net income attributable to SEI                 $174,335   $139,254



Diluted earnings per common share              $0.91      $0.71



Shares used to calculate diluted

earnings per common share                      191,783    195,233



Basic earnings per common share                $0.91      $0.73



Shares used to calculate basic

earnings per common share                      190,821    192,057





SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)





                                (Unaudited)

                                December 31, 2009  December, 31 2008



Assets



Cash and short-term investments $590,877           $416,643

Restricted cash                 20,000             14,000

Receivables                     212,451            208,209

Other current assets            18,075             100,819



Total current assets            841,403            739,671



Property and equipment, net     146,053            148,124

Marketable securities           181,897            86,693

Capitalized software, net       278,656            270,606

Goodwill                        22,842             22,842

Intangible assets, net          44,859             52,518

Other assets, net               18,098             21,261



Total assets                    $1,533,808         $1,341,715







Liabilities



Current liabilities (1)         $163,055           $329,894

Long-term debt                  247,152            24,332

Deferred income taxes           86,257             104,548

Long-term liabilities           5,726              4,067



Total SEI Investments Company
shareholders’ equity          909,723            769,152

Noncontrolling interest         121,895            109,722

Total Equity                    1,031,618          878,874



Total liabilities and equity    $1,533,808         $1,341,715






(1)  Includes at December 31, 2008, an accrual of $173,983 related to money market funds support agreements.


SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

(Unaudited)

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

                               2008     2009     2009     2009     2009

Private Banks:

Equity/Fixed Income prgms.     $10,573  $9,679   $10,892  $12,479  $12,690

Collective Trust Fund prgm.    1,145    1,198    1,176    1,098    1,067

Liquidity funds                9,194    8,929    7,581    6,524    6,035

Total assets under mgmt.       $20,912  $19,806  $19,649  $20,101  $19,792



Client assets under admin.     10,622   9,920    10,143   10,941   11,213

Total assets                   $31,534  $29,726  $29,792  $31,042  $31,005



Investment Advisors:

Equity/Fixed Income prgms.     $21,631  $18,832  $21,705  $24,739  $25,392

Collective Trust Fund prgm.    2,606    2,716    2,621    2,521    2,423

Liquidity funds                3,436    3,458    2,469    2,243    1,929

Total assets under mgmt.       $27,673  $25,006  $26,795  $29,503  $29,744



Institutional Investors:

Equity/Fixed Income prgms.     $34,966  $32,565  $36,955  $43,672  $44,322

Collective Trust Fund prgm.    942      791      755      707      684

Liquidity funds                4,582    3,802    3,462    4,624    3,370

Total assets under mgmt.       $40,490  $37,158  $41,172  $49,003  $48,376



Investment Managers:

Equity/Fixed Income prgms.     $8       $3       $3       $4       $4

Collective Trust Fund prgm.    5,974    6,917    6,794    7,075    7,428

Liquidity funds                869      898      505      528      412

Total assets under mgmt.       $6,851   $7,818   $7,302   $7,607   $7,844



Client assets under admin. (A) 234,628  221,798  213,930  216,222  221,680

Total assets                   $241,479 $229,616 $221,232 $223,829 $229,524



Investments in New Businesses:

Equity/Fixed Income prgms.     $519     $472     $473     $473     $520

Liquidity funds                153      157      133      93       75

Total assets under mgmt.       $672     $629     $606     $566     $595



LSV Asset Management

Equity/Fixed Income prgms.     $37,714  $32,308  $40,210  $49,349  $52,488



Consolidated:

Equity/Fixed Income prgms (B)  $105,411 $93,859  $110,238 $130,716 $135,416

Collective Trust Fund prgm.    10,667   11,622   11,346   11,401   11,602

Liquidity funds                18,234   17,244   14,150   14,012   11,821

Total assets under mgmt.       $134,312 $122,725 $135,734 $156,129 $158,839



Client assets under admin. (C) 245,250  231,718  224,073  227,163  232,893

Total assets                   $379,562 $354,443 $359,807 $383,292 $391,732












(A)  Client assets under administration in the Investment Managers segment include $59,169 of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of December 31, 2009).

(B)  Equity/Fixed Income programs include $2,339 of assets invested in various asset allocation funds at December 31, 2009.

(C)  In addition to the numbers presented, SEI also administers an additional $8,473 in Funds of Funds assets (as of December 31, 2009) on which SEI does not earn an administration fee.

SOURCE SEI Investments Company