SEI Investments Reports First-Quarter 2007 Results
Net Income up 15%
OAKS, Pa., April 25 /PRNewswire-FirstCall/ -- SEI Investments Company (Nasdaq: SEIC) today announced financial results for first-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
(In thousands, except Ended March 31,
earnings per share) 2007 2006 %
Revenues $322,725 $277,133 16%
Net Income Before Taxes 100,919 86,740 16%
Net Income 63,377 54,906 15%
Diluted Earnings Per Share $.62 $.54 15%
"We are satisfied with our quarterly results, especially since we are shifting into the execution stage of our new strategies," said Alfred P. West, Jr., SEI Chairman and CEO.
"We continue to be encouraged by the successful beta of the global wealth platform. The investments we are making are on schedule and our transformation is well underway. In the long run, we remain firm in our belief that what we are doing will help us provide our clients with increased opportunities for success and allow us to grow our future revenues and profits more rapidly."
Summary of First-Quarter Results by Business Segment
(In thousands) For the Three Month Period Ended
March 31,
2007 2006 %
Private Banks
Revenues $97,738 $88,302 11%
Expenses 77,993 64,532 21%
Operating Profit $19,745 $23,770 (17%)
Operating Margin 20% 27%
Investment Advisors:
Revenues 61,563 55,297 11%
Expenses 29,374 26,217 12%
Operating Profit 32,189 29,080 11%
Operating Margin 52% 53%
Institutional Investors:
Revenues 46,629 38,528 21%
Expenses 28,173 24,450 15%
Operating Profit 18,456 14,078 31%
Operating Margin 40% 37%
Investment Managers:
Revenues 33,994 27,285 25%
Expenses 24,902 22,473 11%
Operating Profit 9,092 4,812 89%
Operating Margin 27% 18%
Investments in New Businesses:
Revenues 1,630 1,687 (3%)
Expenses 4,852 5,560 (13%)
Operating Loss (3,222) (3,873) 17%
Operating Margin n/a n/a
LSV
Revenues 81,171 66,034 23%
Expenses (1) 49,897 40,938 22%
Operating profit 31,274 25,096 25%
39% 38%
Consolidated Segment Totals:
Revenues $322,725 $277,133 16%
Expenses 215,191 184,170 17%
Operating Profit $107,534 $92,963 16%
Operating Margin 33% 34%
(1) Includes $42,672 and $34,293 for the three month period ended March
31, 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 month periods ended March 31, 2007 and 2006 are as follows:
Three months ended March 31,
2007 2006
Total operating profit from business segments $107,534 $92,963
Corporate overhead expenses (10,127) (9,922)
Minority interest reflected in segments 43,592 35,616
LSV Employee Group Expenses (1) (1,820) (1,806)
Income from operations $139,179 $116,851
(1) Includes $1,805 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.
First-Quarter Business Commentary:
-- First-quarter results reflect the consolidation of all of SEI's banking
business into the Private Banks segment. This consolidation has a
positive effect on revenue growth rates and a negative effect on
operating margins when compared to the Private Bank and Trust segment
as reported in prior years.
-- For the first time, year over year revenue comparisons reflect the
consolidation of LSV in both reporting periods; resulting in more
normal year over year revenue growth for the company.
-- The company's percentage ownership in LSV remained at 43 percent. In
the first-quarter 2007, the company recognized $31.3 million as its
portion of the earnings from LSV versus $25.1 million in first-quarter
2006.
-- All major business segments reported double digit revenue gains
versus year ago.
-- The Investment Advisors, Institutional Investors, Investment Managers
and LSV segments all realized double digit operating profit growth
versus year ago levels.
-- The tax rate for the first-quarter 2007 was just over 37%.
-- Assets under management grew by $8.5 billion during first-quarter 2007
to $190.0 billion.
-- In the first-quarter 2007, SEI purchased 743,400 shares of its common
stock for $45.3 million.
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EDT on April 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 870768.
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 March 31, 2007, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $382.4 billion in mutual fund and pooled assets and manages $190.0 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 March 31,
2007 2006
Asset Management, admin. and
distribution fees $256,398 $213,712
Information processing and
software servicing fees 54,232 50,246
Transaction-based and trade execution fees 12,095 13,175
Total Revenues 322,725 277,133
Commissions and Fees 42,637 35,638
Compensation, benefits and other personnel 84,278 75,679
Consulting, outsourcing and professional fees 20,879 18,078
Data processing and computer related 10,767 8,598
Facilities, supplies and other costs 17,560 15,035
Depreciation and amortization 7,425 7,254
Total Expenses 183,546 160,282
Income from operations 139,179 116,851
Minority Interest (40,734) (32,956)
Net loss on investments (316) (242)
Interest income 4,051 2,654
Interest expense (1,261) (1,155)
Other income -- 1,588
Income before taxes 100,919 86,740
Income taxes 37,542 31,834
Net income $63,377 $54,906
Diluted earnings per common share $.62 $.54
Shares used to calculate diluted
earnings per common share 102,351 101,311
Basic earnings per common share $.64 $.56
Shares used to calculate basic
earnings per common share 98,957 98,758
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
March 31, December 31,
2007 2006
Assets
Cash and short-term investments $271,485 $286,948
Restricted Cash 10,250 10,250
Receivables 250,869 244,599
Securities owned 16,558 16,431
Other current assets 30,293 28,245
Total current assets 579,455 586,473
Property and Equipment, net 134,435 130,732
Investments available for sale 75,560 71,690
Capitalized Software, net 197,044 180,014
Goodwill 22,842 22,842
Intangible asset 65,922 67,836
Other assets 21,456 20,118
Total assets $1,096,714 $1,079,705
Liabilities
Current liabilities $148,355 $196,127
Long-term debt 62,719 67,538
Deferred income taxes 79,871 76,148
Other long term liabilities 10,091 --
Minority Interest 117,269 109,380
Shareholders' Equity 678,409 630,512
Total liabilities and
shareholders' equity $1,096,714 $1,079,705
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31,
2006 2006 2006 2006 2007
Private Banks:
Equity/Fixed
Income prgms. $14,322 $14,517 $15,055 $16,806 $18,196
Collective Trust
Fund prgm. 1,581 1,459 1,460 1,251 1,148
Liquidity funds 7,139 7,627 7,707 8,513 8,241
Total assets
under mgmt. $23,042 $23,603 $24,222 $26,570 $27,585
Client assets
under admin. 19,775 19,210 15,001 14,738 14,864
Total assets $42,817 $42,813 $39,223 $41,308 $42,449
Investment Advisors:
Equity/Fixed
Income prgms. $31,815 $30,948 $32,205 $34,096 $35,225
Collective
Trust Fund
prgm. 2,482 2,473 2,425 2,480 2,491
Liquidity funds 1,017 1,306 1,263 1,421 1,404
Total assets
under mgmt. $35,314 $34,727 $35,893 $37,997 $39,120
Institutional
Investors:
Equity/Fixed
Income prgms. $32,083 $32,709 $34,674 $37,720 $39,504
Collective
Trust Fund
prgm. 1,157 1,147 1,150 1,081 1,078
Liquidity funds 4,076 3,823 4,167 3,371 5,072
Total assets
under mgmt. $37,316 $37,679 $39,991 $42,172 $45,654
Investment Managers:
Equity/Fixed
Income prgms. $33 $34 $34 $30 $29
Collective
Trust Fund
prgm. 9,096 8,923 9,009 8,675 8,300
Liquidity funds 505 363 253 215 178
Total assets
under mgmt. $9,634 $9,320 $9,296 $8,920 $8,507
Client assets
under admin. 151,688 153,406 161,000 170,344 177,520
Total assets $161,322 $162,726 $170,296 $179,264 $186,027
Investments in
New Businesses:
Equity/Fixed
Income prgms. $617 $626 $685 $805 $843
Liquidity funds 67 49 64 53 43
Total assets
under admin $684 $675 $749 $858 $886
LSV Asset
Management
Equity/Fixed
Income prgms. $54,128 $55,687 $58,785 $64,970 $68,225
Consolidated:
Equity/Fixed
Income
prgms (A,B) $132,998 $134,521 $141,438 $154,427 $162,022
Collective
Trust Fund
prgm. 14,316 14,002 14,044 13,487 13,017
Liquidity
funds (B) 12,804 13,168 13,454 13,573 14,938
Total assets
under mgmt. $160,118 $161,691 $168,936 $181,487 $189,977
Client assets
under admin. 171,463 172,616 176,001 185,082 192,384
Total assets $331,581 $334,307 $344,937 $366,569 $382,361
(A) Equity/Fixed Income programs include $3,646 of assets invested in
SEI's Asset Allocation Funds at 3/31/07
(B) In addition to the numbers presented, SEI also administers an
additional $9,115 in Funds of Funds assets (as of March 31, 2007) on
which SEI does not earn an administration fee.
SOURCE SEI Investments Company
Released April 25, 2007