Net Income Up 7%, Revenues Increase 12%
OAKS, Pa., July 20 /PRNewswire-FirstCall/ -- SEI Investments Company
(Nasdaq: SEIC) today announced financial results for second-quarter 2005,
reporting increases in revenues, net income and earnings per share, compared
to the corresponding period for the prior year.
Consolidated Overview
(In thousands,
except earnings For the For the
per share) Three Months Six Months
Ended June 30, Ended June 30,
2005 2004 % 2005 2004 %
Revenues $190,080 $169,162 12% $375,761 $336,323 12%
Net Income
Before Taxes 69,364 64,633 7% 138,197 126,451 9%
Net Income 44,184 41,204 7% 87,893 80,613 9%
Diluted Earnings
Per Share $.43 $.39 10% $.84 $.76 11%
"We continue to be satisfied with our quarterly results, especially since
we are in the heart of the investment and build phase of our new strategies,"
said Alfred P. West, Jr., SEI Chairman and CEO.
"The investments we are making will transform our company, giving us even
larger markets to grow within while providing our clients with increased
opportunities for success. In the long run, we are firm in our belief that we
are on the right path to more rapidly grow revenues and profits."
Summary of Second-Quarter and Year-to-Date Results by Business Segment
(In thousands) For the For the
Three Month Period Six Month Period
Ended June 30, Ended June 30,
2005 2004 % 2005 2004 %
Private Banking and Trust:
Revenues $71,547 $74,184 (4%) $143,928 $148,777 (3%)
Operating Profit $25,874 $29,628 (13%) $52,591 $57,131 (8%)
Operating Margin 36% 40% 37% 38%
Investment Advisors:
Revenues 49,340 43,048 15% 98,063 86,231 14%
Operating Profit 25,940 23,489 10% 51,842 47,310 10%
Operating Margin 53% 55% 53% 55%
Enterprises:
Revenues 20,700 16,035 29% 40,935 32,270 27%
Operating Profit 9,339 7,212 29% 18,726 15,056 24%
Operating Margin 45% 45% 46% 47%
Money Managers:
Revenues 21,230 19,044 11% 41,374 35,948 15%
Operating Profit 3,373 3,968 (15%) 6,861 6,884 --
Operating Margin 16% 21% 17% 19%
Investments in New Businesses:
Revenues 27,263 16,851 62% 51,461 33,097 55%
Operating Loss (4,737) (4,288) (10%) (10,873) (9,013) (21%)
Operating Margin (17%) (25%) (21%) (27%)
Consolidated Segment Totals:
Revenues $190,080 $169,162 12% $375,761 $336,323 12%
Operating Profit $59,789 $60,009 -- $119,147 $117,368 2%
Operating Margin 31% 35% 32% 35%
Second-Quarter Business Commentary:
-- Private Banking & Trust lagged year ago levels on revenues and
profits. This is primarily due to previously reported losses in the
mutual fund services business during the second half of 2004 and
increased investment and operational spending during 2005.
-- The Investment Advisors, Enterprises, Money Managers and Investments
in New Businesses segments reported revenue gains vs. year ago
levels. The Investment Advisors and Enterprises segment results for
2005 include an offsetting revenue and expense reclass of
approximately $2.8 million and $1.1 million respectively, that was
not reflected for the same period in 2004. This had no impact on
operating profit.
-- Consolidated operating margins lagged year ago levels, due primarily
to the previously announced increased rate of investment spending
necessary to deliver new company strategies and solutions. This was
reflected in most of the segment operating margins vs. year ago
levels.
-- Assets under management grew by $6.8 billion during the second
quarter to $130.7 billion.
-- In the second quarter, SEI purchased 1,132,000 shares of its common
stock for $40.3 million.
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EDT on July
20, 2005. Investors may listen to the call at http://www.seic.com, or listen
at http://www.earnings.com, a service of CCBN. The call may also be accessed
at numerous financial services web sites including AOL, Motley Fool 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
788945.
About SEI
SEI Investments (Nasdaq: SEIC) is a leading global provider of asset
management and investment technology solutions. The company's innovative
solutions help corporations, financial institutions, financial advisors, and
affluent families create and manage wealth. As of the period ending June 30,
2005, through our subsidiaries and partnerships in which we have a significant
interest, SEI administers $312.0 billion in mutual fund and pooled assets,
manages $130.7 billion in assets, and operates 22 offices in 12 countries.
For more information, visit http://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)
Three Months Ended June 30,
2005 2004
Revenues $190,080 $169,162
Operating and development expenses 97,080 74,596
Sales and marketing expenses 33,211 34,557
General and administrative expenses 9,390 7,811
Income before interest and taxes 50,399 52,198
Equity in earnings of unconsolidated affiliate 17,636 10,680
Net gain on investments (78) 1,356
Interest income 1,784 904
Interest expense (377) (505)
Income before taxes 69,364 64,633
Income taxes 25,180 23,429
Net income $44,184 $41,204
Diluted earnings per common share $.43 $.39
Shares used to calculate diluted
earnings per common share 103,391 105,705
Basic earnings per common share $.44 $.40
Shares used to calculate basic
earnings per common share 100,786 103,425
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Six Months Ended June 30,
2005 2004
Revenues $375,761 $336,323
Operating and development expenses 191,507 153,328
Sales and marketing expenses 65,107 65,627
General and administrative expenses 17,119 15,597
Income before interest and taxes 102,028 101,771
Equity in earnings of unconsolidated affiliate 32,862 19,683
Net gain on investments 349 4,291
Interest income 3,760 1,837
Interest expense (802) (1,131)
Income before taxes 138,197 126,451
Income taxes 50,304 45,838
Net income $87,893 $80,613
Diluted earnings per common share $.84 $.76
Shares used to calculate diluted
earnings per common share 104,043 106,577
Basic earnings per common share $.87 $.77
Shares used to calculate basic
earnings per common share 101,281 104,151
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
June 30, December 31,
2005 2004
Assets
Cash and short-term investments $116,544 $216,966
Restricted Cash 10,047 14,386
Receivables 121,347 108,795
Other current assets 14,624 15,532
Total current assets 262,562 355,679
Property and Equipment, net 115,199 113,640
Investments available for sale 55,152 39,817
Capitalized Software, net 83,949 55,830
Other assets 57,874 50,509
Total assets $574,736 $615,475
Liabilities
Current liabilities $122,640 $163,569
Long-term debt 9,000 14,389
Long-term deferred gain -- 1,472
Deferred income taxes 43,137 32,103
Shareholders' Equity 399,959 403,942
Total liabilities and
shareholders' equity $574,736 $615,475
SEI Investments Business Segments
(In thousands)
Three Months ended Six Months ended
June 30, June 30,
2005 2004 2005 2004
Private Banking and Trust:
Revenues
Investment
processing fees 58,510 56,368 117,716 112,221
Fund processing fees 4,493 9,340 9,084 19,041
Investment management fees 8,544 8,476 17,128 17,515
Total Revenues 71,547 74,184 143,928 148,777
Operating and
development expenses 36,375 33,273 72,824 71,083
Sales and marketing
expenses 9,298 11,283 18,513 20,563
Operating Profit 25,874 29,628 52,591 57,131
Operating Margin 36% 40% 37% 38%
Investment Advisors:
Revenues 49,340 43,048 98,063 86,231
Operating and development
expenses 17,001 11,843 33,535 24,339
Sales and marketing
expenses 6,399 7,716 12,686 14,582
Operating Profit 25,940 23,489 51,842 47,310
Operating Margin 53% 55% 53% 55%
Enterprises:
Revenues 20,700 16,035 40,935 32,270
Operating and
development expenses 6,293 4,179 12,214 8,249
Sales and marketing
expenses 5,068 4,644 9,995 8,965
Operating Profit 9,339 7,212 18,726 15,056
Operating Margin 45% 45% 46% 47%
Money Managers:
Revenues 21,230 19,044 41,374 35,948
Operating and
development expenses 14,392 11,500 27,717 21,974
Sales and marketing
expenses 3,465 3,576 6,796 7,090
Operating Profit 3,373 3,968 6,861 6,884
Operating Margin 16% 21% 17% 19%
Investments in New Businesses:
Revenues 27,263 16,851 51,461 33,097
Operating and
development expenses 23,019 13,801 45,217 27,683
Sales and marketing
expenses 8,981 7,338 17,117 14,427
Operating Loss (4,737) (4,288) (10,873) (9,013)
Operating Margin (17%) (25%) (21%) (27%)
Consolidated Segment Totals:
Revenues $190,080 $169,162 $375,761 $336,323
Operating and
development expenses 97,080 74,596 191,507 153,328
Sales and marketing
expenses 33,211 34,557 65,107 65,627
Operating Profit $59,789 $60,009 $119,147 $117,368
Operating Margin 31% 35% 32% 35%
General and
Administrative expenses 9,390 7,811 17,119 15,597
Income from Operations $50,399 $52,198 $102,028 $101,771
Operating Margin 27% 31% 27% 30%
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30,
2004 2004 2004 2005 2005
Private Banking
and Trust:
Equity/Fixed
Income prgms. $2,900 $2,662 $2,780 $2,427 $2,495
Collective Trust
Fund prgm. 1,403 1,455 1,518 1,574 1,700
Liquidity funds 7,986 7,723 7,503 7,406 7,442
Total assets
under mgmt. $12,289 $11,840 $11,801 $11,407 $11,637
Client assets
under admin. 61,944 35,881 35,986 33,703 34,208
Total assets
under admin. $74,233 $47,721 $47,787 $45,110 $45,845
Investment Advisors:
Equity/Fixed
Income prgms. $25,021 $25,559 $27,706 $27,371 $27,883
Collective Trust
Fund prgm. 2,592 2,592 2,521 2,513 2,610
Liquidity
funds 1,103 1,081 1,026 1,113 1,018
Total assets
under mgmt. $28,716 $29,232 $31,253 $30,997 $31,511
Enterprises:
Equity/Fixed
Income
prgms. $13,616 $15,871 $17,283 $17,926 $18,273
Collective
Trust Fund
prgm. 924 1,031 1,023 994 1,001
Liquidity funds 3,482 3,869 3,406 2,976 2,836
Total assets
under mgmt. $18,022 $20,771 $21,712 $21,896 $22,110
Money Managers:
Equity/Fixed
Income prgms. $31 $25 $18 $12 $12
Collective Trust
Fund prgm. 7,066 7,226 7,097 7,634 8,108
Liquidity funds 202 226 208 182 167
Total assets
under mgmt. $7,299 $7,477 $7,323 $7,828 $8,287
Client assets
under admin. 113,644 123,651 124,648 127,247 139,822
Total assets
under admin. $120,943 $131,128 $131,971 $135,075 $148,109
Investments in
New Businesses:
Equity/Fixed
Income prgms. $12,030 $13,507 $15,566 $17,778 $19,137
Liquidity funds 239 169 179 225 255
Total assets
under mgmt. $12,269 $13,676 $15,745 $18,003 $19,392
Client assets
under admin. 7,028 6,096 7,003 6,253 7,296
Total assets
under admin. $19,297 $19,772 $22,748 $24,256 $26,688
Unconsolidated Affiliate:
Equity/Fixed
Income prgms. $21,462 $26,835 $32,556 $33,781 $37,740
Consolidated:
Equity/Fixed
Income prgms
(A,B) $75,060 $84,459 $95,909 $99,295 $105,540
Collective Trust
Fund prgm. 11,985 12,304 12,159 12,715 13,419
Liquidity
funds (B) 13,012 13,068 12,322 11,902 11,718
Total assets
under mgmt. $100,057 $109,831 $120,390 $123,912 $130,677
Client assets
under admin. 182,616 165,628 167,637 167,203 181,326
Total assets
under admin. $282,673 $275,459 $288,027 $291,115 $312,003
(A) Equity/Fixed Income programs include $2,117 of assets invested in
SEI's Asset Allocation Funds at 6/30/05
(B) In addition to the numbers presented, SEI also administers an
additional $5,068 in Funds of Funds assets (as of June 30, 2005) on
which SEI does not earn an administration fee.
SOURCE SEI Investments
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Related links:
http://www.seic.com
CONTACT:
Mark Samuels, SVP, +1-610-676-2024,
msamuels@seic.com; or Murray Louis, VP, +1-610-676-1932,
mlouis@seic.com, or Larry Wexler, Corp. PR, +1-610-676-1440,
lwexler@seic.com, all of SEI Investments
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