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

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8-K - FORM 8-K - SEI INVESTMENTS CO	form8-k1x29x2014.htm

Exhibit 99.1

Investor Contact: Media Contact:

Nicole Vattimo Dana Grosser

SEI SEI

+1 610-676-4385 +1 610-676-2459

nvattimo@seic.com dgrosser@seic.com

Pages: 9

FOR IMMEDIATE RELEASE

SEI REPORTS FOURTH-QUARTER 2013 FINANCIAL RESULTS

OAKS, Pa., January 29, 2014 -- SEI Investments Company (NASDAQ:SEIC) today announced financial results for the fourth-quarter 2013. Diluted earnings per share were $.37 in fourth-quarter 2013 compared to $.32 in fourth-quarter 2012.



Consolidated Overview	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
(In thousands, except earnings per share)	For the Three Months Ended December 31,						For the Twelve Months Ended December 31,
	2013		2012		%		2013		2012		%

Revenues	$	299,024	$	261,635	14	%	$	1,126,132	$	992,522	13	%
Net Income attributable to SEI	65,515		56,585		16	%	288,124		206,848		39	%
Diluted Earnings Per Share		$0.37		$0.32	16	%		$1.64		$1.18	39	%

"Improvement across all of our businesses continued during the fourth quarter both in our financial results, as well as the continued market acceptance of our solutions," said Alfred P. West, Jr., SEI Chairman and CEO. "We enter 2014 a stronger company thanks to the commitment of our clients and dedicated employees. The investments we have made in our products and services coupled with the strategic role we play in our selected markets sets us up well for the future.

"As always, our focus on creating long-term sustainable growth and increased shareholder value is unwavering."

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



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

	2013			2012			%		2013			2012			%
Private Banks:
Revenues		$105,880			$96,421		10	%		$397,138			$364,788		9	%
Expenses	102,767			93,389			10	%	392,399			357,001			10	%
Operating Profit	3,113			3,032			3	%	4,739			7,787			(39	)%
Gain on sale of subsidiary	—			—			—		22,112			—			NM
Total Profit	3,113			3,032			3	%	26,851			7,787			NM
Operating Margin (A)	3		%	3		%			1		%	2		%

Investment Advisors:
Revenues	65,384			52,476			25	%	241,252			202,703			19	%
Expenses	35,671			31,706			13	%	133,962			120,146			11	%
Operating Profit	29,713			20,770			43	%	107,290			82,557			30	%
Operating Margin	45		%	40		%			44		%	41		%

Institutional Investors:
Revenues	67,273			60,596			11	%	257,658			227,889			13	%
Expenses	35,623			30,052			19	%	133,218			116,546			14	%
Operating Profit	31,650			30,544			4	%	124,440			111,343			12	%
Operating Margin	47		%	50		%			48		%	49		%

Investment Managers:
Revenues	59,539			51,249			16	%	226,081			193,484			17	%
Expenses	39,545			34,814			14	%	148,977			127,525			17	%
Operating Profit	19,994			16,435			22	%	77,104			65,959			17	%
Operating Margin	34		%	32		%			34		%	34		%

Investments in New Businesses:
Revenues	948			893			6	%	4,003			3,658			9	%
Expenses	3,949			3,874			2	%	15,723			14,954			5	%
Operating Loss	(3,001		)	(2,981		)	NM		(11,720		)	(11,296		)	NM

Totals:
Revenues		$299,024			$261,635		14	%		$1,126,132			$992,522		13	%
Expenses	217,555			193,835			12	%	824,279			736,172			12	%
Corporate overhead expenses	13,014			11,929			9	%	53,733			45,759			17	%
Noncontrolling interest reflected in segments	—			(318		)	NM		(289		)	(975		)	NM
Income from operations		$68,455			$56,189		22	%		$248,409			$211,566		17	%

(A) Percentage determined exclusive of gain on sale of subsidiary.

Fourth-Quarter Business Commentary:


•	Revenues increased in fourth-quarter 2013 as compared to both fourth-quarter 2012 and third-quarter 2013. Revenue growth was primarily driven by higher Asset management, administration, and distribution fees from improved cash flows from new and existing clients and market appreciation.

•

Our average assets under management, excluding LSV, increased $13.2 billion, or ten percent, to $151.7 billion in the fourth-quarter 2013, as compared to $138.5 billion during the fourth-quarter 2012, and increased $7.8 billion, or five percent, as compared to $143.9 billion during the third-quarter 2013. Average asset balances for the fourth-quarter 2012 include $6.8 billion in assets related to SEI Asset Korea, which was sold in first-quarter 2013 (see attached Ending and Average Asset Balances schedules for further details).


•	Revenue growth was also driven by increased Information processing and software servicing fees in our Private Banks segment. The increase was attributable to new business, higher one-time project revenue from new and existing bank clients, and increased fees earned from our mutual fund trading solution.


•	Sales events, net of client losses, during fourth-quarter 2013 totaled approximately $21.1 million and are expected to generate net annualized recurring revenues of approximately $17.3 million when contract values are fully realized.


•	Income from LSV increased in fourth-quarter 2013 to $32.1 million as compared to $25.0 million in fourth-quarter 2012 due to an increase in assets under management. Our ownership interest in LSV was approximately 39.3 percent in fourth-quarter 2013 and 39.8 percent in fourth-quarter 2012.


•	Net income attributable to SEI in fourth-quarter 2012 included a gain of $5.3 million from the sale of our last remaining SIV security, the senior notes issued by Gryphon.

•

Stock-based compensation expense in fourth-quarter 2013 increased by $6.9 million as compared to fourth-quarter 2012. This incremental expense reflects a change in our estimate of the timing of when stock option vesting targets will be achieved. The Private Banks segment recognized $2.0 million of this incremental expense. The Investment Advisors, Institutional Investors, and Investment Managers segments each recognized approximately $1.2 million in expense.


•	Corporate overhead costs increased in fourth-quarter 2013 as compared to fourth-quarter 2012 primarily due to $1.2 million in increased stock-based compensation expense.


•	The effective tax rates were 35.2 percent in fourth-quarter 2013, 35.0 percent in fourth-quarter 2012, and 28.5 percent in third-quarter 2013. The third-quarter 2013 tax rate was benefited by Pennsylvania Tax Law changes that resulted in a reduction of the deferred tax liability which had accumulated during prior years.


•	In fourth-quarter 2013, we repurchased 1.9 million shares of our common stock for $64.7 million.

Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 p.m. ET on January 29, 2014. Investors may listen to the call at www.seic.com/investors. The call may also be accessed at the financial services sections of numerous web sites, including Google Finance and Yahoo Finance. 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 317077.

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 December 31, 2013, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $559 billion in mutual fund and pooled or separately managed assets, including $232 billion in assets under management and $327 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)



	For the Three Months Ended December 31,
	2013			2012

Asset management, admin. and distribution fees		$220,585			$190,980
Information processing and software servicing fees	70,085			61,835
Transaction–based and trade execution fees	8,354			8,820

Total revenues	299,024			261,635

Subadvisory, distribution and other asset mgmt costs	33,194			26,606
Software royalties and other information processing costs	8,343			7,385
Brokerage commissions	6,358			6,406
Compensation, benefits and other personnel	92,817			90,441
Stock-based compensation	10,868			3,959
Consulting, outsourcing and professional fees	32,732			29,230
Data processing and computer related	14,373			11,744
Facilities, supplies and other costs	17,333			16,067
Amortization	9,104			7,845
Depreciation	5,447			5,763

Total expenses	230,569			205,446

Income from operations	68,455			56,189

Net gain on investments	21			6,490
Interest and dividend income	828			1,279
Interest expense	(113		)	(115		)
Equity in earnings of unconsolidated affiliates	31,872			23,701

Net income before income taxes	101,063			87,544

Income taxes	35,548			30,570

Net income	65,515			56,974

Less: Net income attributable to the noncontrolling interest	—			(389		)

Net income attributable to SEI		$65,515			$56,585

Diluted earnings per common share		$0.37			$0.32

Shares used to calculate diluted earnings per share	174,766			174,540

Basic earnings per common share		$0.39			$0.33

Shares used to calculate basic earnings per share	170,113			172,574

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)



	For the Twelve Months Ended December 31,
	2013			2012

Asset management, admin. and distribution fees		$831,720			$723,630
Information processing and software servicing fees	261,691			236,190
Transaction–based and trade execution fees	32,721			32,702

Total revenues	1,126,132			992,522

Subadvisory, distribution and other asset mgmt costs	121,989			106,048
Software royalties and other information processing costs	31,255			26,722
Brokerage commissions	24,649			23,889
Compensation, benefits and other personnel	357,453			335,296
Stock-based compensation	37,865			15,736
Consulting, outsourcing and professional fees	131,399			109,828
Data processing and computer related	51,401			46,617
Facilities, supplies and other costs	64,613			60,976
Amortization	34,602			33,258
Depreciation	22,497			22,586

Total expenses	877,723			780,956

Income from operations	248,409			211,566

Net gain on investments	659			14,067
Interest and dividend income	3,248			5,696
Interest expense	(535		)	(504		)
Equity in earnings of unconsolidated affiliates	118,076			98,671
Gain on sale of subsidiary	22,112			—
Other income	43,429			—

Net income before income taxes	435,398			329,496

Income taxes	146,924			121,462

Net income	288,474			208,034

Less: Net income attributable to the noncontrolling interest	(350		)	(1,186		)

Net income attributable to SEI		$288,124			$206,848

Diluted earnings per common share		$1.64			$1.18

Shares used to calculate diluted earnings per share	175,718			175,872

Basic earnings per common share		$1.68			$1.19

Shares used to calculate basic earnings per share	171,561			174,295

SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)



	December 31,		December 31,
	2013		2012
Assets

Cash and short-term investments		$578,273		$452,247
Restricted cash	5,500		6,000
Receivables, net	226,028		202,818
Securities owned	21,133		20,088
Other current assets	16,166		20,251

Total current assets	847,100		701,404

Property and equipment, net	118,995		127,581
Investments available for sale	83,323		75,869
Trading securities	4,849		5,909
Capitalized software, net	312,615		307,490
Investment in unconsolidated affiliates	61,370		77,398
Other assets, net	10,917		14,173

Total assets		$1,439,169		$1,309,824



Liabilities

Current liabilities		$207,988		$152,005
Deferred income taxes	66,572		93,458
Other long-term liabilities	8,607		7,032

Total SEI Investments Company shareholders’ equity	1,156,002		1,038,180
Noncontrolling interest	—		19,149
Total Equity	1,156,002		1,057,329

Total liabilities and equity		$1,439,169		$1,309,824

SEI INVESTMENTS COMPANY

ENDING ASSET BALANCES

(In millions)

(Unaudited)



	Dec. 31,		Mar. 31,		Jun. 30,		Sept. 30,		Dec. 31,
	2012		2013		2013		2013		2013
Private Banks:
Equity/Fixed Income prgms.		$18,862		$12,446		$12,876		$14,305		$15,472
Collective Trust Fund prgms.	11		9		10		11		14
Liquidity funds	6,008		5,143		5,048		5,167		5,685
Total assets under mgmnt.		$24,881		$17,598		$17,934		$19,483		$21,171
Client assets under admin.	12,178		12,970		13,122		14,101		15,272
Total assets		$37,059		$30,568		$31,056		$33,584		$36,443

Investment Advisors:
Equity/Fixed Income prgms.		$31,220		$34,166		$34,447		$36,203		$38,574
Collective Trust Fund prgms.	14		15		14		14		11
Liquidity funds	2,514		2,094		2,145		2,779		2,846
Total assets under mgmnt.		$33,748		$36,275		$36,606		$38,996		$41,431

Institutional Investors:
Equity/Fixed Income prgms.		$62,160		$64,214		$61,927		$64,429		$66,548
Collective Trust Fund prgms.	102		101		106		107		109
Liquidity funds	2,454		2,810		2,901		3,125		2,644
Total assets under mgmnt.		$64,716		$67,125		$64,934		$67,661		$69,301

Investment Managers:
Equity/Fixed Income prgms.		$67		$73		$75		$75		$69
Collective Trust Fund prgms.	16,197		17,656		18,197		19,868		22,377
Liquidity funds	408		522		542		678		718
Total assets under mgmnt.		$16,672		$18,251		$18,814		$20,621		$23,164
Client assets under admin. (A)	244,671		275,632		289,807		295,959		311,992
Total assets		$261,343		$293,883		$308,621		$316,580		$335,156

Investments in New Businesses:
Equity/Fixed Income prgms.		$513		$552		$572		$594		$619
Liquidity funds	43		42		29		26		46
Total assets under mgmnt.		$556		$594		$601		$620		$665

LSV Asset Management:
Equity/Fixed Income prgms.		$60,947		$64,958		$65,417		$71,149		$76,189

Total:
Equity/Fixed Income prgms (B) (D)		$173,769		$176,409		$175,314		$186,755		$197,471
Collective Trust Fund prgms.	16,324		17,781		18,327		20,000		22,511
Liquidity funds	11,427		10,611		10,665		11,775		11,939
Total assets under mgmnt.		$201,520		$204,801		$204,306		$218,530		$231,921
Client assets under admin. (C)	256,849		288,602		302,929		310,060		327,264
Total assets		$458,369		$493,403		$507,235		$528,590		$559,185


(A)	Client assets under administration in the Investment Managers segment include $53.7 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of Dec. 31, 2013).


(B)	Equity/Fixed Income programs include $4.4 billion of assets invested in various asset allocation funds at Dec. 31, 2013.


(C)	In addition to the numbers presented, SEI also administers an additional $6.0 billion in Funds of Funds assets (as of

Dec. 31, 2013) on which SEI does not earn an administration fee.


(D)	Equity/Fixed Income programs in the Private Banks segment at Dec. 31, 2012 included $7.0 billion in assets related to SEI Asset Korea, which was sold in first-quarter 2013.

SEI INVESTMENTS COMPANY

AVERAGE ASSET BALANCES

(In millions)

(Unaudited)



	4th Qtr.		1st Qtr.		2nd Qtr.		3rd Qtr.		4th Qtr.
	2012		2013		2013		2013		2013
Private Banks:
Equity/Fixed Income programs		$18,301		$19,197		$12,959		$13,696		$14,901
Collective Trust Fund programs	66		11		10		11		11
Liquidity funds	5,229		5,556		5,093		5,142		5,218
Total assets under management		$23,596		$24,764		$18,062		$18,849		$20,130
Client assets under administration	11,783		12,860		13,183		13,760		14,702
Total assets		$35,379		$37,624		$31,245		$32,609		$34,832

Investment Advisors:
Equity/Fixed Income programs		$30,881		$33,189		$34,831		$35,618		$37,520
Collective Trust Fund programs	158		14		14		14		13
Liquidity funds	2,176		2,085		2,028		2,520		2,785
Total assets under management		$33,215		$35,288		$36,873		$38,152		$40,318

Institutional Investors:
Equity/Fixed Income programs		$61,304		$63,642		$63,466		$63,153		$65,750
Collective Trust Fund programs	120		101		105		107		110
Liquidity funds	3,493		2,960		2,975		3,091		2,720
Total assets under management		$64,917		$66,703		$66,546		$66,351		$68,580

Investment Managers:
Equity/Fixed Income programs		$68		$68		$75		$76		$75
Collective Trust Fund programs	15,719		17,129		18,205		19,259		21,345
Liquidity funds	395		511		500		613		592
Total assets under management		$16,182		$17,708		$18,780		$19,948		$22,012
Client assets under administration	240,520		263,054		286,018		292,627		303,131
Total assets		$256,702		$280,762		$304,798		$312,575		$325,143

Investments in New Businesses:
Equity/Fixed Income programs		$518		$542		$567		$584		$613
Liquidity funds	33		38		34		27		33
Total assets under management		$551		$580		$601		$611		$646

LSV Asset Management:
Equity/Fixed Income programs		$59,383		$63,997		$66,781		$69,463		$75,240

Total:
Equity/Fixed Income programs (A)		$170,455		$180,635		$178,679		$182,590		$194,099
Collective Trust Fund programs	16,063		17,255		18,334		19,391		21,479
Liquidity funds	11,326		11,150		10,630		11,393		11,348
Total assets under management		$197,844		$209,040		$207,643		$213,374		$226,926
Client assets under administration	252,303		275,914		299,201		306,387		317,833
Total assets		$450,147		$484,954		$506,844		$519,761		$544,759


(A)	Equity/Fixed Income programs in the Private Banks segment for fourth-quarter 2012 and first-quarter 2013 included average assets of $6.8 billion and $7.0 billion, respectively, related to SEI Asset Korea, which was sold in first-quarter 2013.

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