SEI Reports Second-Quarter 2007 Results

Revenues and Net Income up 20%

OAKS, Pa., July 25 /PRNewswire-FirstCall/ -- SEI Investments Company (Nasdaq: SEIC) today announced financial results for second-quarter 2007, 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     For the Six Months
    (In thousands, except       Ended June 30,          Ended June 30,
     earnings per share)
                               2007     2006     %     2007       2006    %

    Revenues                $343,258  $285,018  20%  $665,983  $562,151  18%
    Net Income Before Taxes  112,102    85,238  32%   213,021   171,978  24%
    Net Income                69,501    57,911  20%   132,878   112,817  18%
    Diluted Earnings Per
     Share                      $.34      $.29  17%      $.65      $.56  16%

"We are satisfied with our quarterly results, especially since we have shifted into the execution stage of our new strategies," said Alfred P. West, Jr., SEI Chairman and CEO.

"We are excited about the successful implementation this month of the first broad application of our global wealth platform. The platform is now in production and has surpassed our expectations both in the installation and early operating phases. All other key investments continue to be on schedule as we make steady progress in our transformation. In the long run, we remain firm in our belief that what we are doing will provide our clients with increased opportunities for success and allow us to grow our future revenues and profits more rapidly."

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

    (In thousands)        For the Three Month          For the Six Month
                          Period Ended June 30        Period Ended June 30
                           2007      2006      %      2007       2006    %
    Private Banks
       Revenues          $100,090   $90,816    10%  $197,828   $179,118   10%
       Expenses            80,829    68,622    18%   158,822    133,154   19%
       Operating Profit   $19,261   $22,194   (13%)  $39,006    $45,964  (15%)
       Operating Margin       19%       24%              20%        26%

    Investment Advisors:
       Revenues            65,446    55,232    18%   127,009    110,529   15%
       Expenses            30,919    28,993     7%    60,293     55,210    9%
       Operating Profit    34,527    26,239    32%    66,716     55,319   21%
       Operating Margin       53%       48%              53%        50%

    Institutional
     Investors:
       Revenues            48,911    38,523    27%    95,540     77,051   24%
       Expenses            30,181    26,154    15%    58,354     50,604   15%
       Operating Profit    18,730    12,369    51%    37,186     26,447   41%
       Operating Margin       38%       32%              39%        34%

    Investment Managers:
       Revenues            35,293    29,051    21%    69,287     56,336   23%
       Expenses            24,302    22,554     8%    49,204     45,027    9%
       Operating Profit    10,991     6,497    69%    20,083     11,309   78%
       Operating Margin       31%       22%              29%        20%

    Investments in New
     Businesses:
       Revenues             1,836     1,745     5%     3,466      3,432    1%
       Expenses             4,725     5,165    (9%)    9,577     10,725  (11%)
       Operating Loss      (2,889)   (3,420)   16%    (6,111)    (7,293)  16%
       Operating Margin       n/a       n/a              n/a        n/a

    LSV
       Revenues            91,682    69,651    32%   172,853    135,685   27%
       Expenses (1)        56,262    42,840    31%   106,159     83,778   27%
       Operating profit    35,420    26,811    32%    66,694     51,907   28%
       Operating Margin       39%       38%              39%        38%

    Consolidated Segment
     Totals:
       Revenues          $343,258  $285,018    20%  $665,983   $562,151   18%
       Expenses           227,218   194,328    17%   442,409    378,498   17%
       Operating Profit  $116,040   $90,690    28%  $223,574   $183,653   22%
       Operating Margin       34%       32%              34%        33%


    (1) Includes $48,861 and $36,573 for the three month period ended June 30,
        2007 and 2006, respectively, and $91,533 and $70,866 for the six month
        period ended June 30, 2007 and 2006, respectively, of minority
        interest to the other partners of LSV.


A reconciliation of the totals reported for the business segments to the applicable line items in the Consolidated Statements of Income for the three and six month periods ended June 30, 2007 and 2006 are as follows:

                                    Three months ended     Six months ended
                                         June 30,              June 30,
                                      2007        2006      2007      2006

    Total operating profit from
     business segments              $116,040    $90,690   $223,574  $183,653

    Corporate overhead expenses      (10,578)    (8,927)   (20,705)  (18,849)
    Minority interest reflected in
     segments                         50,033     38,199     93,625    73,815
    LSV Employee Group Expenses (1)   (1,820)    (1,805)    (3,640)   (3,611)

    Income from operations          $153,675   $118,157   $292,854  $235,008


    (1) Includes $1,806 for the three month period ending June 30, 2007 and
        2006, and $3,611 for the six month period ending June 30, 2007 and
        2006 of Amortization expense related to intangible assets.  The
        amortization is offset through Minority interest since SEI does not
        have any ownership in LSV Employee Group LLC.


    Second-Quarter Business Commentary:

    -- All major business segments reported double digit revenue gains versus
       year ago.
    -- The Investment Advisors, Institutional Investors, Investment Managers
       and LSV segments all realized substantial operating profit growth
       versus year ago levels.
    -- The company's percentage ownership in LSV remained at approximately 43
       percent. In the second-quarter 2007, the company recognized $35.4
       million as its portion of the earnings from LSV versus $26.8 million in
       second-quarter 2006.
    -- In the second-quarter 2007, SEI recognized a one-time pre-tax gain of
       $3.0 million from the sale of its remaining ownership in a joint
       venture.
    -- The tax rate for the second-quarter 2007 was approximately 38% vs. 32%
       for the second-quarter 2006.
    -- Assets under management grew by $9 billion during second-quarter to
       $199 billion.
    -- In the second-quarter 2007, SEI purchased 2,682,800 shares of its
       common stock for $79.4 million.
    -- In the second-quarter 2007, SEI declared and paid a 2 for 1 stock
       split.  All per-share information has been adjusted to reflect the
       split.

Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 PM EDT on July 25, 2007. Investors may listen to the call at www.seic.com, 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 879867.

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 June 30, 2007, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $407 billion in mutual fund and pooled assets and manages $199 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from more than 20 offices in over a dozen 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.



                           SEI INVESTMENTS COMPANY
                      CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share data)
                                 (unaudited)
                                                Three Months Ended June 30,
                                                    2007              2006

    Asset Management, admin. and distribution
     fees                                         $276,653          $222,369
    Information processing and software
     servicing fees                                 55,414            52,410
    Transaction-based and trade execution fees      11,191            10,239

    Total Revenues                                 343,258           285,018

    Commissions and Fees                            43,036            35,773
    Compensation, benefits and other personnel      88,552            74,795
    Consulting, outsourcing and professional fees   22,617            19,787
    Data processing and computer related            10,227             9,330
    Facilities, supplies and other costs            17,700            19,900
    Depreciation and amortization                    7,451             7,276

    Total Expenses                                 189,583           166,861

    Income from operations                         153,675           118,157

    Minority Interest                              (47,242)          (35,171)
    Net (loss) gain on investments                    (997)              602
    Interest income                                  4,882             3,098
    Interest expense                                (1,168)           (1,448)
    Other income                                     2,952                --

    Income before taxes                            112,102            85,238

    Income taxes                                    42,601            27,327

    Net income                                     $69,501           $57,911


    Diluted earnings per common share                 $.34              $.29

    Shares used to calculate diluted
     earnings per common share                     203,604           202,526

    Basic earnings per common share                   $.35              $.29

    Shares used to calculate basic
     earnings per common share                     197,314           196,990



                           SEI INVESTMENTS COMPANY
                      CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share data)
                                 (unaudited)

                                                  Six Months Ended June 30,
                                                    2007              2006

    Asset Management, admin. and distribution
     fees                                         $533,051          $436,081
    Information processing and software
     servicing fees                                109,646           102,656
    Transaction-based and trade execution fees      23,286            23,414

    Total Revenues                                 665,983           562,151

    Commissions and Fees                            85,673            71,411
    Compensation, benefits and other personnel     172,830           150,474
    Consulting, outsourcing and professional fees   43,496            37,865
    Data processing and computer related            20,994            17,928
    Facilities, supplies and other costs            35,260            34,935
    Depreciation and amortization                   14,876            14,530

    Total Expenses                                 373,129           327,143

    Income from operations                         292,854           235,008

    Minority Interest                              (87,976)          (68,127)
    Net (loss) gain on investments                  (1,313)              360
    Interest income                                  8,933             5,752
    Interest expense                                (2,429)           (2,603)
    Other income                                     2,952             1,588

    Income before taxes                            213,021           171,978

    Income taxes                                    80,143            59,161

    Net income                                    $132,878          $112,817


    Diluted earnings per common share                 $.65              $.56

    Shares used to calculate diluted
     earnings per common share                     204,153           202,574

    Basic earnings per common share                   $.67              $.57

    Shares used to calculate basic
     earnings per common share                     197,614           197,254



                           SEI INVESTMENTS COMPANY
                           CONDENSED BALANCE SHEETS
                                (In thousands)

                                                  June 30,        December 31,
                                                    2007              2006
    Assets

    Cash and short-term investments               $246,292          $286,948
    Restricted Cash                                 10,250            10,250
    Receivables                                    272,965           244,599
    Securities owned                                16,302            16,431
    Other current assets                            35,092            28,245

         Total current assets                      580,901           586,473

    Property and Equipment, net                    136,267           130,732
    Investments available for sale                  79,463            71,690
    Capitalized Software, net                      214,154           180,014
    Goodwill                                        22,842            22,842
    Intangible asset                                64,007            67,836
    Other assets                                    21,130            20,118

         Total assets                           $1,118,764        $1,079,705



    Liabilities

    Current liabilities                           $146,469          $196,127
    Long-term debt                                  57,822            67,538
    Deferred income taxes                           90,333            76,148
    Other long-term liabilities                     11,619                --
    Minority Interest                              127,513           109,380

    Shareholders' Equity                           685,008           630,512

         Total liabilities and
          shareholders' equity                  $1,118,764        $1,079,705



                           SEI INVESTMENTS COMPANY
                                ASSET BALANCES
                                (In millions)
                                 (unaudited)

                              Jun. 30, Sep. 30,  Dec. 31,  Mar. 31,  Jun. 30,
                                2006     2006      2006      2007      2007
    Private Banks:
       Equity/Fixed Income
        prgms.                $14,517  $15,055   $16,806   $18,196   $20,666
       Collective Trust Fund
        prgm.                   1,459    1,460     1,251     1,148     1,078
       Liquidity funds          7,627    7,707     8,513     8,241     8,224
       Total assets under
        mgmt.                 $23,603  $24,222   $26,570   $27,585   $29,968

       Client assets under
        admin.                 19,210   15,001    14,738    14,864    15,019
       Total assets           $42,813  $39,223   $41,308   $42,449   $44,987

    Investment Advisors:
       Equity/Fixed Income
        prgms.                $30,948  $32,205   $34,096   $35,225   $36,923
       Collective Trust Fund
        prgm.                   2,473    2,425     2,480     2,491     2,334
       Liquidity funds          1,306    1,263     1,421     1,404     1,400
       Total assets under
        mgmt.                 $34,727  $35,893   $37,997   $39,120   $40,657

    Institutional Investors:
       Equity/Fixed Income
        prgms.                $32,709  $34,674   $37,720   $39,504   $40,771
       Collective Trust Fund
        prgm.                   1,147    1,150     1,081     1,078       895
       Liquidity funds          3,823    4,167     3,371     5,072     4,128
       Total assets under
        mgmt.                 $37,679  $39,991   $42,172   $45,654   $45,794

    Investment Managers:
       Equity/Fixed Income
        prgms.                    $34      $34       $30       $29       $32
       Collective Trust Fund
        prgm.                   8,923    9,009     8,675     8,300     7,990
       Liquidity funds            363      253       215       178       271
       Total assets under
        mgmt.                  $9,320   $9,296    $8,920    $8,507    $8,293

       Client assets under
        admin.                153,406  161,000   170,344   180,745   192,931
       Total assets          $162,726 $170,296  $179,264  $189,252  $201,224

    Investments in New
     Businesses:
       Equity/Fixed Income
        prgms.                   $626     $685      $805      $843      $887
       Liquidity funds             49       64        53        43        43
       Total assets under
        mgmt.                    $675     $749      $858      $886      $930

    LSV Asset Management
       Equity/Fixed Income
        prgms.                $55,687  $58,785   $64,970   $68,225   $73,100

    Consolidated:
       Equity/Fixed Income
        prgms (A)            $134,521 $141,438  $154,427  $162,022  $172,379
       Collective Trust Fund
        prgm.                  14,002   14,044    13,487    13,017    12,297
       Liquidity funds         13,168   13,454    13,573    14,938    14,066
       Total assets under
        mgmt.                $161,691 $168,936  $181,487  $189,977  $198,742

       Client assets under
        admin. (B)            172,616  176,001   185,082   195,609   207,950
       Total assets          $334,307 $344,937  $366,569  $385,586  $406,692

    (A) Equity/Fixed Income programs include $3,821 of assets invested in
        SEI's Asset Allocation Funds at June 30, 2007.
    (B) In addition to the numbers presented, SEI also administers an
        additional $5,872 in Funds of Funds assets (as of June 30, 2007) on
        which SEI does not earn an administration fee.

SOURCE SEI Investments Company