SEI INVESTMENTS CO - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - SEI INVESTMENT COMPANY--FORM 8-K - SEI INVESTMENTS CO	d245334d8k.htm

Exhibit 99.1

NEWS FROM SEI


Investor Contact:		Media Contact:
Murray Louis		Dana Grosser
SEI		SEI
(610) 676-1932		(610) 676-2459
mlouis@seic.com		dgrosser@seic.com
Pages: 8

FOR IMMEDIATE RELEASE

SEI REPORTS THIRD-QUARTER 2011 FINANCIAL RESULTS

OAKS, Pa., October 19, 2011 — SEI Investments Company (NASDAQ:SEIC) today announced financial results for third-quarter 2011. Diluted earnings per share were $.27 in third-quarter 2011 compared to $.30 in third-quarter 2010.


Consolidated Overview	For the Three Months							For the Nine Months
(In thousands, except earnings per share)	Ended September 30,							Ended September 30,
	2011		2010		%			2011		2010		%

Revenues	$	233,227	$	219,513		6	%	$	703,480	$	669,436		5	%
Net Income attributable to SEI		49,232		56,389		(13	%)		160,563		169,287		(5	%)
Diluted Earnings Per Share	$	0.27	$	0.30		(10	%)	$	0.86	$	0.89		(3	%)

“Our third-quarter results came in mixed versus year-ago and down versus second-quarter levels,” said Alfred P. West, Jr., SEI Chairman and CEO. “These results reflect our investments in new services, particularly the Global Wealth Platform, which we are preparing to launch in the US for our bank and advisor segments. Results were also impacted by the weakened capital markets experienced during the quarter.

“Despite the continued headwinds the market presents, we are confident in our market positioning across all businesses, and are working hard to improve results.”

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


(In thousands)	For the Three Month Period									For the Nine Month Period
	Ended September 30,									Ended September 30,
	2011			2010			%			2011			2010			%
Private Banks:
Revenues	$	87,697		$	83,518			5	%	$	262,279		$	260,730			1	%
Expenses		85,893			73,463			17	%		254,570			229,674			11	%

Operating Profit	$	1,804		$	10,055			(82	%)	$	7,709		$	31,056			(75	%)
Operating Margin		2	%		12	%					3	%		12	%

Investment Advisors:
Revenues		46,798			43,422			8	%		144,674			135,283			7	%
Expenses		28,051			26,426			6	%		82,825			82,129			1	%

Operating Profit		18,747			16,996			10	%		61,849			53,154			16	%
Operating Margin		40	%		39	%					43	%		39	%

Institutional Investors:
Revenues		52,216			51,036			2	%		160,132			152,821			5	%
Expenses		25,524			25,940			(2	%)		79,883			78,896			1	%

Operating Profit		26,692			25,096			6	%		80,249			73,925			9	%
Operating Margin		51	%		49	%					50	%		48	%

Investment Managers:
Revenues		45,585			40,548			12	%		133,478			117,598			14	%
Expenses		29,412			25,763			14	%		86,693			75,918			14	%

Operating Profit		16,173			14,785			9	%		46,785			41,680			12	%
Operating Margin		35	%		36	%					35	%		35	%

Investments in New Businesses:
Revenues		931			989			(6	%)		2,917			3,004			(3	%)
Expenses		2,429			4,080			(40	%)		8,474			9,480			(11	%)

Operating Loss		(1,498	)		(3,091	)		(52	%)		(5,557	)		(6,476	)		(14	%)
Operating Margin		N/A			N/A						N/A			N/A

Totals:
Revenues	$	233,227		$	219,513			6	%	$	703,480		$	669,436			5	%
Expenses		171,309			155,672			10	%		512,445			476,097			8	%
Corporate overhead expenses		11,155			8,981			24	%		32,523			28,639			14	%
Noncontrolling interest reflected in segments		(373	)		(279	)		N/A			(1,178	)		(956	)		N/A

Income from operations	$	51,136		$	55,139			(7	%)	$	159,690		$	165,656			(4	%)

Third-Quarter Business Commentary:

•

Revenues improved in third-quarter 2011 when compared to third-quarter 2010. Asset management, administration, and distribution fee revenues increased, primarily due to higher asset balances under management and administration from existing clients as a result of improved capital markets from third-quarter 2010.

•

Revenues declined in third-quarter 2011 from second-quarter 2011 due to the substantial weakness in the capital markets during the third-quarter. Assets under management, including assets managed by LSV, decreased $19.5 billion to $151.4 billion at September 30, 2011, as compared to $170.9 billion at June 30, 2011. LSV assets under management decreased $11.2 billion to $49.4 billion at September 30, 2011, as compared to $60.6 billion at June 30, 2011 (Please see attached Asset Balances schedule for details).

•

Diluted earnings per share declined versus both third-quarter 2010 and second-quarter 2011. The drop in earnings per share versus third-quarter 2010 was primarily the result of increased spending on new services, particularly Global Wealth Services. The comparison to second-quarter 2011 was due primarily to the weakened capital markets experienced during the third-quarter 2011.

•

Sales events, net of client losses, during third-quarter 2011 totaled $7.9 million and are expected to generate net annualized recurring revenues of approximately $3.6 million.

•

Net income attributable to SEI includes losses from SIV securities of $0.8 million in third-quarter 2011 compared to gains of $8.7 million in third-quarter 2010.

•

The effective tax rates were 33.8 percent for the third-quarter 2011 as compared to 37.8 percent for the third-quarter 2010. The decrease in the tax rate was due to tax planning strategies.

•

In the third-quarter 2011, SEI purchased 3.7 million shares of its common stock for $63.5 million.

•

In the third-quarter 2011, we made a $20.0 million payment on our outstanding debt. As of September 30, 2011, the remaining balance on our debt is $20.0 million.

Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 PM ET on October 19, 2011. 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 220311.

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 September 30, 2011, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $395 billion in mutual fund and pooled assets or separately managed assets, including $151 billion in assets under management and $244 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 September 30,
	2011			2010

Asset management, admin. and distribution fees	$	167,827		$	155,799
Information processing and software servicing fees		55,676			55,226
Transaction–based and trade execution fees		9,724			8,488


Total revenues		233,227			219,513

Subadvisory, distribution and other asset mgmt costs		24,613			25,237
Software royalties and other information processing costs		6,703			6,048
Brokerage commissions		7,026			6,570
Compensation, benefits and other personnel		71,198			64,694
Stock-based compensation		3,424			3,468
Consulting, outsourcing and professional fees		30,183			21,841
Data processing and computer related		12,316			10,167
Facilities, supplies and other costs		14,274			14,749
Amortization		7,008			5,998
Depreciation		5,346			5,602


Total expenses		182,091			164,374

Income from operations		51,136			55,139

Net (loss) gain on investments		(1,418	)		9,362
Interest and dividend income		1,400			1,621
Interest expense		(126	)		(336	)
Equity in earnings of unconsolidated affiliate		23,908			25,246


Income before taxes		74,900			91,032

Income taxes		25,256			34,311


Net income		49,644			56,721


Less: Net income attributable to noncontrolling interest		(412	)		(332	)


Net income attributable to SEI	$	49,232		$	56,389


Diluted earnings per common share	$	0.27		$	0.30


Shares used to calculate diluted earnings per common share		182,580			189,521


Basic earnings per common share	$	0.27		$	0.30


Shares used to calculate basic earnings per common share		181,718			187,964

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Nine Months Ended September 30,
	2011			2010

Asset management, admin. and distribution fees	$	507,662		$	463,511
Information processing and software servicing fees		167,535			175,148
Transaction–based and trade execution fees		28,283			30,777


Total revenues		703,480			669,436

Subadvisory, distribution and other asset mgmt costs		77,213			75,420
Software royalties and other information processing costs		20,908			18,496
Brokerage commissions		20,206			22,661
Compensation, benefits and other personnel		214,836			198,922
Stock-based compensation		10,966			16,403
Consulting, outsourcing and professional fees		85,579			65,250
Data processing and computer related		35,229			30,512
Facilities, supplies and other costs		42,474			41,829
Amortization		20,031			17,895
Depreciation		16,348			16,392


Total expenses		543,790			503,780

Income from operations		159,690			165,656

Net gain on investments		3,912			30,435
Interest and dividend income		4,380			4,823
Interest expense		(485	)		(1,222	)
Other income, net		—			1,070
Equity in earnings of unconsolidated affiliate		82,387			72,839


Income before taxes		249,884			273,601

Income taxes		88,087			103,183


Net income		161,797			170,418


Less: Net income attributable to the noncontrolling interest		(1,234	)		(1,131	)


Net income attributable to SEI	$	160,563		$	169,287


Diluted earnings per common share	$	0.86		$	0.89


Shares used to calculate diluted earnings per common share		186,032			190,694


Basic earnings per common share	$	0.87		$	0.90


Shares used to calculate basic earnings per common share		184,030			189,090

SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)


	(Unaudited) September 30, 2011		December 31, 2010
Assets

Cash and short-term investments	$	428,865	$	496,292
Restricted cash		4,000		4,000
Receivables, net		166,954		165,772
Securities owned		20,032		—
Other current assets		18,595		17,655


Total current assets		638,446		683,719

Property and equipment, net		133,115		140,568
Marketable securities		137,108		179,364
Capitalized software, net		305,589		294,332
Investment in unconsolidated affiliate		67,994		64,409
Other assets, net		21,455		14,831


Total assets	$	1,303,707	$	1,377,223


Liabilities

Current liabilities	$	132,973	$	127,600
Long-term debt		—		95,000
Deferred income taxes		90,682		92,253
Long-term liabilities		11,172		5,645

Total SEI Investments Company shareholders’ equity		1,053,590		1,041,570
Noncontrolling interest		15,290		15,155

Total Equity		1,068,880		1,056,725

Total liabilities and equity	$	1,303,707	$	1,377,223

SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

(Unaudited)


	Sep. 30, 2010		Dec. 31, 2010		Mar. 31, 2011		Jun. 30, 2011		Sept. 30, 2011
Private Banks:
Equity/Fixed Income prgms.	$	12,842	$	13,512	$	14,809	$	16,720	$	15,442
Collective Trust Fund prgms.		615		626		576		504		476
Liquidity funds		5,034		5,120		5,217		4,918		5,529

Total assets under mgmt.	$	18,491	$	19,258	$	20,602	$	22,142	$	21,447

Client assets under admin.		10,557		10,672		11,227		10,994		9,845

Total assets	$	29,048	$	29,930	$	31,829	$	33,136	$	31,292

Investment Advisors:
Equity/Fixed Income prgms.	$	26,091	$	27,680	$	28,296	$	28,410	$	24,757
Collective Trust Fund prgms.		2,028		1,820		1,618		1,499		1,392
Liquidity funds		2,253		1,641		1,551		1,651		2,653

Total assets under mgmt.	$	30,372	$	31,141	$	31,465	$	31,560	$	28,802

Institutional Investors:
Equity/Fixed Income prgms.	$	47,667	$	48,699	$	51,287	$	51,180	$	46,259
Collective Trust Fund prgms.		641		623		608		482		510
Liquidity funds		3,475		3,382		3,202		3,146		3,356

Total assets under mgmt.	$	51,783	$	52,704	$	55,097	$	54,808	$	50,125

Investment Managers:
Equity/Fixed Income prgms.	$	1	$	1	$	37	$	50	$	64
Collective Trust Fund prgms. (D)		1,582		1,353		1,154		898		830
Liquidity funds		423		313		139		179		195

Total assets under mgmt.	$	2,006	$	1,667	$	1,330	$	1,127	$	1,089

Client assets under admin. (A) (D)		233,976		239,903		246,022		247,906		233,686

Total assets	$	235,982	$	241,570	$	247,352	$	249,033	$	234,775

Investments in New Businesses:
Equity/Fixed Income prgms.	$	533	$	569	$	598	$	558	$	490
Liquidity funds		82		65		56		41		41

Total assets under mgmt.	$	615	$	634	$	654	$	599	$	531

LSV Asset Management
Equity/Fixed Income prgms.	$	54,492	$	60,058	$	62,369	$	60,626	$	49,444

Consolidated:
Equity/Fixed Income prgms (B)	$	141,626	$	150,519	$	157,396	$	157,544	$	136,456
Collective Trust Fund prgms. (D)		4,866		4,422		3,956		3,383		3,208
Liquidity funds		11,267		10,521		10,165		9,935		11,774

Total assets under mgmt.	$	157,759	$	165,462	$	171,517	$	170,862	$	151,438

Client assets under admin. (C) (D)		244,533		250,575		257,249		258,900		243,531

Total assets	$	402,292	$	416,037	$	428,766	$	429,762	$	394,969

(A)	Client assets under administration in the Investment Managers segment include $43.2 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of September 30, 2011).

(B)	Equity/Fixed Income programs include $2.2 billion of assets invested in various asset allocation funds at September 30, 2011.

(C)	In addition to the numbers presented, SEI also administers an additional $3.8 billion in Funds of Funds assets (as of September 30, 2011) on which SEI does not earn an administration fee.

(D)	Beginning in the third-quarter 2011, third-party collective trust fund assets in the Investment Manager segment were reclassed to Client assets under administration from Collective Trust Fund programs. Prior period amounts were reclassified to conform with current period presentation.

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