SEI INVESTMENTS CO - FORM 10-Q - EX-99.1 - PRESS RELEASE

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10-Q - FORM 10-Q - SEI INVESTMENTS CO	seic-9301510q.htm
EX-32 - SECTION 906 CEO AND CFO CERTIFICATION - SEI INVESTMENTS CO	seic-93015ex32.htm
EX-31.2 - SECTION 302 CFO CERTIFICATION - SEI INVESTMENTS CO	seic-93015ex312.htm
EX-31.1 - SECTION 302 CEO CERTIFICATION - SEI INVESTMENTS CO	seic-93015ex311.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: 8

FOR IMMEDIATE RELEASE

SEI REPORTS THIRD-QUARTER 2015 FINANCIAL RESULTS

Results Include $.02 Diluted Earnings per Share Charge for Asset Write Off

OAKS, Pa., October 21, 2015 -- SEI Investments Company (NASDAQ:SEIC) today announced financial results for the third-quarter 2015. Diluted earnings per share were $.47 in third-quarter 2015 compared to $.49 in third-quarter 2014. Third-quarter 2015 includes a charge against earnings of approximately $6.0 million, or $.02 diluted earnings per share, from the write off of certain assets related to the SEI Wealth Platform^SM.



Consolidated Overview
(In thousands, except earnings per share)	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2015		2014		%	2015		2014		%

Revenues		$335,622		$322,047	4%		$998,811		$943,248	6%
Net income	79,425		83,983		(5)%	250,276		241,616		4%
Diluted earnings per share		$0.47		$0.49	(4)%		$1.47		$1.39	6%

“Our third-quarter results reflect short-term challenges resulting from weakened capital markets, balanced by continued market acceptance of our broad solutions,” said Alfred P. West, Jr., SEI Chairman and CEO. “We are encouraged by the level of engagement of our target markets and feel the investments we are making in enhancing our technology platforms, operational capacity and investment products serve us well both for today and into the future.

“Despite the market headwinds we face, we are confident in our market positioning and in our ability to help our clients succeed by delivering outsourced enterprise platforms.”

Summary of Third-Quarter Results by Business Segment



(In thousands)	For the Three Months Ended September 30,							For the Nine Months Ended September 30,
	2015			2014			%	2015			2014			%
Private Banks:
Revenues		$116,280			$110,147		6%		$342,826			$329,508		4%
Expenses	104,217			100,498			4%	308,200			299,645			3%
Operating Profit	12,063			9,649			25%	34,626			29,863			16%
Gain on sale of subsidiary	—			—			—%	2,791			5,582			NM
Segment Profit	12,063			9,649			NM	37,417			35,445			NM
Operating Margin (A)	10		%	9		%		10		%	9		%

Investment Advisors:
Revenues	76,238			74,469			2%	228,006			210,939			8%
Expenses	45,530			37,796			20%	125,446			108,052			16%
Operating Profit	30,708			36,673			(16)%	102,560			102,887			—%
Operating Margin	40		%	49		%		45		%	49		%

Institutional Investors:
Revenues	74,515			72,560			3%	224,043			212,211			6%
Expenses	36,923			35,495			4%	108,662			104,615			4%
Operating Profit	37,592			37,065			1%	115,381			107,596			7%
Operating Margin	50		%	51		%		51		%	51		%

Investment Managers:
Revenues	67,162			63,640			6%	199,809			187,099			7%
Expenses	43,899			40,156			9%	126,663			118,789			7%
Operating Profit	23,263			23,484			(1)%	73,146			68,310			7%
Operating Margin	35		%	37		%		37		%	37		%

Investments in New Businesses:
Revenues	1,427			1,231			16%	4,127			3,491			18%
Expenses	5,179			4,614			12%	14,848			13,314			12%
Operating Loss	(3,752		)	(3,383		)	NM	(10,721		)	(9,823		)	NM

Totals:
Revenues		$335,622			$322,047		4%		$998,811			$943,248		6%
Expenses	235,748			218,559			8%	683,819			644,415			6%
Corporate overhead expenses	12,856			12,990			(1)%	38,986			36,313			7%
Income from operations		$87,018			$90,498		(4)%		$276,006			$262,520		5%

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

Third-Quarter Business Highlights:


•	Revenue growth was primarily driven by higher Asset management, administration, and distribution fees from improved cash flows from new and existing clients and the favorable market conditions which prevailed during the first six months of 2015. The recent market volatility during third-quarter 2015 negatively impacted our asset-based fee revenues and partially offset our revenue growth.


•	Sales events, net of client losses, during third-quarter 2015 totaled approximately $20.8 million and are expected to generate net annualized recurring revenues of approximately $19.5 million when contract values are fully realized.


•	Despite the unfavorable market conditions during third-quarter 2015, our average assets under management, excluding LSV, increased $4.4 billion, or three percent, to $172.8 billion, as compared to $168.5 billion during the third-quarter 2014 (see attached Average Asset Balances schedules for further details).


•	Our average assets under administration increased $37.4 billion, or ten percent, to $397.8 billion in the third-quarter 2015, as compared to $360.4 billion during the third-quarter 2014 (see attached Average Asset Balances schedules for further details).


•	Our earnings from LSV decreased by $4.6 million, or 12 percent, to $33.6 million in third-quarter 2015 as compared to $38.2 million in third-quarter 2014. The reduction in earnings was due to lower assets under management from market volatility in third-quarter 2015 as well as reduced performance fees earned by LSV.

•

We wrote off approximately $6.0 million, or $0.02 diluted earnings per share, in previously capitalized software development costs and purchased software related to the SEI Wealth Platform in the third-quarter 2015. The expense associated with this write off impacted the Private Banks segment by $3.6 million and the Investment Advisors segment by $2.4 million, and is reflected in Facilities, supplies and other costs on the Consolidated Statement of Operations.


•	Amortization expense related to the SEI Wealth Platform was $10.8 million during the third-quarter 2015 as compared to $9.8 million during the third-quarter 2014 due to continued enhancements.


•	Our operating expenses related to personnel costs in our Investment Advisors and Investment Managers segments increased. These increased operational costs are mainly related to servicing new and existing clients.


•	Our effective tax rates were 34.1 percent in third-quarter 2015 and 34.7 percent in third-quarter 2014.


•	We repurchased 1.7 million shares of our common stock for $85.8 million during the third-quarter 2015.

Earnings Conference Call

A conference call to review earnings is scheduled for 2 p.m. Eastern time on October 21, 2015. Investors may listen to the call at seic.com/investors. The call may also be accessed at many financial services websites, including Google Finance and Yahoo Finance. Investors may also listen to replays at these websites, or by telephone at (USA) 800-475-6701; (International) 320-365-3844, access code 371051.

About SEI

SEI (NASDAQ:SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of September 30, 2015, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $638 billion in mutual fund and pooled or separately managed assets, including $245 billion in assets under management and $393 billion in client assets under administration. For more information, visit 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 September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014

Asset management, admin. and distribution fees		$252,585			$244,704			$756,101			$705,966
Information processing and software servicing fees	74,413			70,020			218,765			215,026
Transaction–based and trade execution fees	8,624			7,323			23,945			22,256

Total revenues	335,622			322,047			998,811			943,248

Subadvisory, distribution and other asset mgmt costs	40,230			39,737			119,619			110,993
Software royalties and other information processing costs	8,028			8,562			23,594			25,532
Brokerage commissions	6,460			5,119			17,863			16,217
Compensation, benefits and other personnel	99,461			94,316			292,646			281,210
Stock-based compensation	3,867			3,786			11,476			9,481
Consulting, outsourcing and professional fees	35,963			34,946			108,560			103,283
Data processing and computer related	15,173			13,555			43,100			39,553
Facilities, supplies and other costs	22,477			16,136			56,195			49,354
Amortization	10,837			9,813			31,806			28,611
Depreciation	6,108			5,579			17,946			16,494

Total expenses	248,604			231,549			722,805			680,728

Income from operations	87,018			90,498			276,006			262,520

Net (loss) gain on investments	(756		)	(478		)	(544		)	49
Interest and dividend income	846			750			2,570			2,248
Interest expense	(115		)	(115		)	(342		)	(342		)
Equity in earnings of unconsolidated affiliates	33,595			37,963			104,917			104,080
Gain on sale of subsidiary	—			—			2,791			5,582

Income before income taxes	120,588			128,618			385,398			374,137

Income taxes	41,163			44,635			135,122			132,521

Net income	79,425			83,983			250,276			241,616

Basic earnings per common share		$0.48			$0.50			$1.51			$1.43

Shares used to calculate basic earnings per share	165,579			167,925			166,142			168,612

Diluted earnings per common share		$0.47			$0.49			$1.47			$1.39

Shares used to calculate diluted earnings per share	169,255			172,905			169,977			173,700

SEI INVESTMENTS COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)



	September 30,			December 31,
	2015			2014
Assets
Current Assets:
Cash and cash equivalents		$647,589			$667,446
Restricted cash	6,319			5,801
Receivables from regulated investment companies	45,792			48,393
Receivables, net	217,696			194,419
Securities owned	21,225			21,175
Other current assets	29,206			18,193
Total Current Assets	967,827			955,427

Property and Equipment, net	142,352			125,535
Capitalized software, net	294,380			309,040
Investments available for sale	75,650			77,609
Investments in affiliated funds, at fair value	3,944			4,523
Investment in unconsolidated affiliates	42,294			54,290
Other assets, net	17,082			16,451
Total Assets		$1,543,529			$1,542,875

Liabilities and Equity
Current Liabilities:
Accounts payable		$4,002			$10,588
Accrued liabilities	153,280			207,429
Deferred income taxes, net	176			1,414
Deferred revenue	4,457			1,749
Total Current Liabilities	161,915			221,180

Deferred income taxes	59,597			63,755
Other long-term liabilities	12,253			10,327
Total Liabilities	233,765			295,262

Shareholders' Equity:
Common stock	1,646			1,667
Capital in excess of par value	892,549			834,615
Retained earnings	435,915			420,226
Accumulated other comprehensive loss, net	(20,346		)	(8,895		)
Total Shareholders' Equity	1,309,764			1,247,613
Total Liabilities and Shareholders' Equity		$1,543,529			$1,542,875

SEI INVESTMENTS COMPANY

ENDING ASSET BALANCES

(In millions)

(Unaudited)



	Sept. 30,		Dec 31,		Mar. 31,		Jun. 30,		Sept. 30,
	2014		2014		2015		2015		2015
Private Banks:
Equity/Fixed Income programs		$18,634		$18,666		$19,296		$19,686		$18,243
Collective Trust Fund programs	11		8		9		13		3
Liquidity funds	5,331		5,889		5,551		5,280		5,469
Total assets under management		$23,976		$24,563		$24,856		$24,979		$23,715
Client assets under administration	16,288		16,741		17,643		17,485		16,896
Total assets		$40,264		$41,304		$42,499		$42,464		$40,611

Investment Advisors:
Equity/Fixed Income programs		$42,260		$43,845		$45,800		$46,951		$43,988
Collective Trust Fund programs	9		9		8		8		9
Liquidity funds	3,086		3,173		3,047		2,817		4,677
Total assets under management		$45,355		$47,027		$48,855		$49,776		$48,674

Institutional Investors:
Equity/Fixed Income programs		$72,006		$72,828		$74,178		$75,341		$70,818
Collective Trust Fund programs	98		95		94		93		96
Liquidity funds	2,891		2,929		3,246		2,960		2,655
Total assets under management		$74,995		$75,852		$77,518		$78,394		$73,569

Investment Managers:
Equity/Fixed Income programs		$64		$27		$25		$24		$59
Collective Trust Fund programs	21,297		20,833		20,965		20,632		19,863
Liquidity funds	1,018		946		1,091		1,007		848
Total assets under management		$22,379		$21,806		$22,081		$21,663		$20,770
Client assets under administration (A)	346,841		355,890		372,116		381,963		376,133
Total assets		$369,220		$377,696		$394,197		$403,626		$396,903

Investments in New Businesses:
Equity/Fixed Income programs		$703		$736		$756		$779		$752
Liquidity funds	118		98		106		57		51
Total assets under management		$821		$834		$862		$836		$803

LSV Asset Management:
Equity/Fixed Income programs		$81,536		$82,665		$84,123		$86,334		$76,958

Total:
Equity/Fixed Income programs (B)		$215,203		$218,767		$224,178		$229,115		$210,818
Collective Trust Fund programs	21,415		20,945		21,076		20,746		19,971
Liquidity funds	12,444		13,035		13,041		12,121		13,700
Total assets under management		$249,062		$252,747		$258,295		$261,982		$244,489

Client assets under administration (C)	363,129		372,631		389,759		399,448		393,029
Total assets		$612,191		$625,378		$648,054		$661,430		$637,518


(A)	Client assets under administration in the Investment Managers segment include $49.3 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of September 30, 2015).


(B)	Equity/Fixed Income programs include $4.7 billion of assets invested in various asset allocation funds at September 30, 2015.


(C)	In addition to the numbers presented, SEI also administers an additional $6.4 billion in Funds of Funds assets (as of

September 30, 2015) on which SEI does not earn an administration fee.

SEI INVESTMENTS COMPANY

AVERAGE ASSET BALANCES

(In millions)

(Unaudited)



	3rd Qtr.		4th Qtr.		1st Qtr.		2nd Qtr.		3rd Qtr.
	2014		2014		2015		2015		2015
Private Banks:
Equity/Fixed Income programs		$18,804		$18,606		$18,869		$19,872		$19,080
Collective Trust Fund programs	12		10		8		12		6
Liquidity funds	5,466		5,537		5,755		5,256		5,443
Total assets under management		$24,282		$24,153		$24,632		$25,140		$24,529
Client assets under administration	15,707		16,451		17,504		17,823		17,504
Total assets		$39,989		$40,604		$42,136		$42,963		$42,033

Investment Advisors:
Equity/Fixed Income programs		$42,389		$43,104		$44,809		$47,027		$45,992
Collective Trust Fund programs	11		9		9		8		9
Liquidity funds	2,830		3,087		3,072		2,819		3,523
Total assets under management		$45,230		$46,200		$47,890		$49,854		$49,524

Institutional Investors:
Equity/Fixed Income programs		$72,010		$72,771		$73,760		$75,426		$73,568
Collective Trust Fund programs	98		96		95		94		93
Liquidity funds	2,883		2,973		3,021		3,354		2,843
Total assets under management		$74,991		$75,840		$76,876		$78,874		$76,504

Investment Managers:
Equity/Fixed Income programs		$64		$64		$27		$25		$24
Collective Trust Fund programs	22,123		21,140		21,108		21,387		20,449
Liquidity funds	962		904		1,066		1,010		978
Total assets under management		$23,149		$22,108		$22,201		$22,422		$21,451
Client assets under administration	344,661		355,903		367,206		378,347		380,247
Total assets		$367,810		$378,011		$389,407		$400,769		$401,698

Investments in New Businesses:
Equity/Fixed Income programs		$688		$731		$755		$784		$776
Liquidity funds	139		97		101		75		49
Total assets under management		$827		$828		$856		$859		$825

LSV Asset Management:
Equity/Fixed Income programs		$82,402		$83,187		$83,439		$87,409		$80,656

Total:
Equity/Fixed Income programs		$216,357		$218,463		$221,659		$230,543		$220,096
Collective Trust Fund programs	22,244		21,255		21,220		21,501		20,557
Liquidity funds	12,280		12,598		13,015		12,514		12,836
Total assets under management		$250,881		$252,316		$255,894		$264,558		$253,489

Client assets under administration	360,368		372,354		384,710		396,170		397,751
Total assets		$611,249		$624,670		$640,604		$660,728		$651,240

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