OAKS, Pa., Jan. 27 /PRNewswire-FirstCall/ -- SEI Investments Company (Nasdaq: SEIC) today announced financial results for fourth-quarter 2009, reporting increases in revenues and net income attributable to SEI, and diluted earnings per share compared to fourth-quarter 2008. Diluted earnings per share were $0.24. Earnings were negatively affected by Structured Investment Vehicle (SIV)-related and accelerated Global Wealth Platform (GWP) amortization charges of approximately $0.04.
Consolidated Overview |
For the Three Months |
For the Twelve Months |
||||||
(In thousands, except earnings per share) |
Ended December 31, |
Ended December 31, |
||||||
2009 |
2008 |
% |
2009 |
2008 |
% |
|||
Revenues |
$283,995 |
$268,402 |
6% |
$1,060,548 |
$1,247,919 |
(15%) |
||
Net Income attributable to SEI |
45,837 |
9,649 |
375% |
174,335 |
139,254 |
25% |
||
Diluted Earnings Per Share |
$0.24 |
$0.05 |
380% |
$0.91 |
$0.71 |
28% |
||
"Our fourth-quarter results reflect both the improving capital markets and the cost reduction initiatives we put in place earlier in the year," said Alfred P. West, Jr., SEI Chairman and CEO.
"As the economic climate continues to improve, we believe we will have opportunities in all our segments to achieve growth in new business. At the same time, we are continuing to make key investments to give us even greater opportunities to grow. During these turbulent times we maintain our belief that what we are doing will significantly benefit our clients and SEI both today and in the future."
Summary of Fourth-Quarter and Year to Date Results
(In thousands) |
For the Three Month Period Ended December 31, |
For the Twelve Month Period Ended December 31, |
||||||
2009 |
2008 |
% |
2009 |
2008 |
% |
|||
Private Banks: |
||||||||
Revenues |
$89,119 |
$97,962 |
(9%) |
$361,273 |
$408,500 |
(12%) |
||
Expenses |
80,192 |
75,582 |
6% |
309,300 |
326,661 |
(5%) |
||
Operating Profit |
$8,927 |
$22,380 |
(60%) |
$51,973 |
$81,839 |
(36%) |
||
Operating Margin |
10% |
23% |
14% |
20% |
||||
Investment Advisors: |
||||||||
Revenues |
45,540 |
41,951 |
9% |
166,097 |
223,164 |
(26%) |
||
Expenses |
28,369 |
28,529 |
(1%) |
109,418 |
122,231 |
(10%) |
||
Operating Profit |
17,171 |
13,422 |
28% |
56,679 |
100,933 |
(44%) |
||
Operating Margin |
38% |
32% |
34% |
45% |
||||
Institutional Investors: |
||||||||
Revenues |
48,720 |
43,408 |
12% |
177,721 |
198,154 |
(10%) |
||
Expenses |
25,121 |
22,873 |
10% |
99,924 |
112,866 |
(11%) |
||
Operating Profit |
23,599 |
20,535 |
15% |
77,797 |
85,288 |
(9%) |
||
Operating Margin |
48% |
47% |
44% |
43% |
||||
Investment Managers: |
||||||||
Revenues |
37,093 |
35,966 |
3% |
139,004 |
147,968 |
(6%) |
||
Expenses |
24,915 |
23,536 |
6% |
93,074 |
101,078 |
(8%) |
||
Operating Profit |
12,178 |
12,430 |
(2%) |
45,930 |
46,890 |
(2%) |
||
Operating Margin |
33% |
35% |
33% |
32% |
||||
Investments in New Businesses: |
||||||||
Revenues |
990 |
1,356 |
(27%) |
4,492 |
6,865 |
(35%) |
||
Expenses |
2,836 |
2,973 |
(5%) |
11,625 |
15,795 |
(26%) |
||
Operating Loss |
(1,846) |
(1,617) |
14% |
(7,133) |
(8,930) |
(20%) |
||
Operating Margin |
n/a |
n/a |
n/a |
n/a |
||||
LSV: |
||||||||
Revenues |
62,533 |
47,759 |
31% |
211,961 |
263,268 |
(19%) |
||
Expenses (1) |
39,497 |
30,833 |
28% |
136,580 |
164,783 |
(17%) |
||
Operating Profit |
23,036 |
16,926 |
36% |
75,381 |
98,485 |
(23%) |
||
Operating Margin |
37% |
35% |
36% |
37% |
||||
Totals: |
||||||||
Revenues |
$283,995 |
$268,402 |
6% |
$1,060,548 |
$1,247,919 |
(15%) |
||
Expenses |
200,930 |
184,326 |
9% |
759,921 |
843,414 |
(10%) |
||
Corporate overhead expenses |
9,294 |
8,079 |
15% |
36,529 |
38,955 |
(6%) |
||
Noncontrolling interest reflected in segments |
(32,937) |
(23,518) |
40% |
(106,905) |
(138,079) |
(23%) |
||
LSV Employee Group Expenses |
1,820 |
1,820 |
0% |
7,296 |
7,280 |
0% |
||
$ 104,888 |
$ 97,695 |
7% |
$ 363,707 |
$ 496,349 |
(27%) |
|||
(1) Includes $32,350 and $23,200 for the three-month period ended December 31, 2009 and 2008, respectively, and $105,471 and $135,251 for the twelve-month period ended December 31, 2009 and 2008, respectively, of noncontrolling interest to the other partners of LSV.
Fourth-Quarter Business Commentary:
- Fourth-quarter revenue results improved on a sequential quarter basis for all major segments, due primarily to improved capital markets.
- The fourth-quarter 2009 results include $7.7 million of amortization expense associated with a change in the useful life of previously capitalized software development costs for some components related to GWP. This charge was due to the replacement of these components with components contained in the most recent release of GWP that occurred in Q4 2009. The bulk of this expense is contained in the Private Banks segment ($5 million) and the Investment Advisors segment ($1.9 million), depressing fourth-quarter 2009 margins. This is the second half of charges first reported in third-quarter, 2009.
- The fourth-quarter 2009 results include losses of $4.0 million associated with SIV-related issues, whereas results in fourth-quarter 2008 included losses of $64.3 million. SEI has recognized cumulative losses of $189.1 million associated with these SIV-related issues through December 31, 2009. As previously reported, SEI has now purchased all SIVs owned by its money market funds and has no capital support agreements left in place. Additional information pertaining to SIV-related issues involving SEI-sponsored money market funds is contained in SEI's 2008 Form 10-K filed February 25, 2009 and SEI's 2009 third-quarter Form 10-Q filed November 3, 2009.
- Assets under management increased by $2.7 billion during the fourth-quarter 2009 to $158.8 billion, primarily due to market appreciation.
- In the fourth-quarter, SEI purchased 1,243,000 shares of its common stock for $22.1 million.
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM ET on January 27, 2010. 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 143992.
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 December 31, 2009, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $392 billion in mutual fund and pooled assets and manages $158 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from numerous offices worldwide. 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 INCOME |
||||
(In thousands, except per share data) |
||||
(Unaudited) |
||||
Three Months Ended December 31, |
||||
2009 |
2008 |
|||
Asset management, admin. and distribution fees |
$214,378 |
$191,247 |
||
Information processing and software servicing fees |
58,655 |
56,003 |
||
Transaction–based and trade execution fees |
10,962 |
21,152 |
||
Total revenues |
283,995 |
268,402 |
||
Commissions and fees |
37,434 |
41,296 |
||
Compensation, benefits and other personnel |
71,657 |
61,517 |
||
Consulting, outsourcing and professional fees |
21,660 |
24,208 |
||
Data processing and computer related |
11,476 |
11,500 |
||
Facilities, supplies and other costs |
16,429 |
19,920 |
||
Depreciation |
5,336 |
5,932 |
||
Amortization |
15,115 |
6,334 |
||
Total expenses |
179,107 |
170,707 |
||
Income from operations |
104,888 |
97,695 |
||
Net loss on investments |
(3,559) |
(64,631) |
||
Interest and dividend income |
1,736 |
2,995 |
||
Interest expense |
(860) |
(740) |
||
Other income |
- |
5,577 |
||
Income before taxes |
102,205 |
40,896 |
||
Income taxes |
25,636 |
9,961 |
||
Net income |
76,569 |
30,935 |
||
Less: Net income attributable to the noncontrolling interest |
(30,732) |
(21,286) |
||
Net income attributable to SEI |
$45,837 |
$9,649 |
||
Diluted earnings per common share |
$0.24 |
$0.05 |
||
Shares used to calculate diluted |
||||
earnings per common share |
191,414 |
192,030 |
||
Basic earnings per common share |
$0.24 |
$0.05 |
||
Shares used to calculate basic |
||||
earnings per common share |
190,329 |
190,858 |
||
SEI INVESTMENTS COMPANY |
||||
CONSOLIDATED STATEMENTS OF INCOME |
||||
(In thousands, except per share data) |
||||
(Unaudited) |
||||
Twelve Months Ended December 31, |
||||
2009 |
2008 |
|||
Asset management, admin. and distribution fees |
$773,186 |
$955,399 |
||
Information processing and software servicing fees |
231,807 |
229,807 |
||
Transaction–based and trade execution fees |
55,555 |
62,713 |
||
Total revenues |
1,060,548 |
1,247,919 |
||
Commissions and fees |
147,545 |
171,972 |
||
Compensation, benefits and other personnel |
289,178 |
309,870 |
||
Consulting, outsourcing and professional fees |
81,694 |
103,789 |
||
Data processing and computer related |
45,403 |
44,602 |
||
Facilities, supplies and other costs |
66,882 |
74,378 |
||
Depreciation |
21,531 |
22,032 |
||
Amortization |
44,608 |
24,927 |
||
Total expenses |
696,841 |
751,570 |
||
Income from operations |
363,707 |
496,349 |
||
Net loss on investments |
(4,926) |
(158,018) |
||
Interest and dividend income |
7,281 |
13,740 |
||
Interest expense |
(3,744) |
(3,418) |
||
Other income |
- |
5,577 |
||
Income before taxes |
362,318 |
354,230 |
||
Income taxes |
89,886 |
86,703 |
||
Net income |
272,432 |
267,527 |
||
Less: Net income attributable to the noncontrolling interest |
(98,097) |
(128,273) |
||
Net income attributable to SEI |
$174,335 |
$139,254 |
||
Diluted earnings per common share |
$0.91 |
$0.71 |
||
Shares used to calculate diluted |
||||
earnings per common share |
191,783 |
195,233 |
||
Basic earnings per common share |
$0.91 |
$0.73 |
||
Shares used to calculate basic |
||||
earnings per common share |
190,821 |
192,057 |
||
SEI INVESTMENTS COMPANY |
||||
CONDENSED BALANCE SHEETS |
||||
(In thousands) |
||||
(Unaudited) |
||||
December 31, 2009 |
December, 31 2008 |
|||
Assets |
||||
Cash and short-term investments |
$590,877 |
$416,643 |
||
Restricted cash |
20,000 |
14,000 |
||
Receivables |
212,451 |
208,209 |
||
Other current assets |
18,075 |
100,819 |
||
Total current assets |
841,403 |
739,671 |
||
Property and equipment, net |
146,053 |
148,124 |
||
Marketable securities |
181,897 |
86,693 |
||
Capitalized software, net |
278,656 |
270,606 |
||
Goodwill |
22,842 |
22,842 |
||
Intangible assets, net |
44,859 |
52,518 |
||
Other assets, net |
18,098 |
21,261 |
||
Total assets |
$1,533,808 |
$1,341,715 |
||
Liabilities |
||||
Current liabilities (1) |
$163,055 |
$329,894 |
||
Long-term debt |
247,152 |
24,332 |
||
Deferred income taxes |
86,257 |
104,548 |
||
Long-term liabilities |
5,726 |
4,067 |
||
Total SEI Investments Company shareholders’ equity |
909,723 |
769,152 |
||
Noncontrolling interest |
121,895 |
109,722 |
||
Total Equity |
1,031,618 |
878,874 |
||
Total liabilities and equity |
$1,533,808 |
$1,341,715 |
||
(1) Includes at December 31, 2008, an accrual of $173,983 related to money market funds support agreements.
SEI INVESTMENTS COMPANY |
||||||
ASSET BALANCES |
||||||
(In millions) |
||||||
(Unaudited) |
||||||
Dec. 31, |
Mar. 31, |
Jun. 30, |
Sep. 30, |
Dec. 31, |
||
2008 |
2009 |
2009 |
2009 |
2009 |
||
Private Banks: |
||||||
Equity/Fixed Income prgms. |
$10,573 |
$9,679 |
$10,892 |
$12,479 |
$12,690 |
|
Collective Trust Fund prgm. |
1,145 |
1,198 |
1,176 |
1,098 |
1,067 |
|
Liquidity funds |
9,194 |
8,929 |
7,581 |
6,524 |
6,035 |
|
Total assets under mgmt. |
$20,912 |
$19,806 |
$19,649 |
$20,101 |
$19,792 |
|
Client assets under admin. |
10,622 |
9,920 |
10,143 |
10,941 |
11,213 |
|
Total assets |
$31,534 |
$29,726 |
$29,792 |
$31,042 |
$31,005 |
|
Investment Advisors: |
||||||
Equity/Fixed Income prgms. |
$21,631 |
$18,832 |
$21,705 |
$24,739 |
$25,392 |
|
Collective Trust Fund prgm. |
2,606 |
2,716 |
2,621 |
2,521 |
2,423 |
|
Liquidity funds |
3,436 |
3,458 |
2,469 |
2,243 |
1,929 |
|
Total assets under mgmt. |
$27,673 |
$25,006 |
$26,795 |
$29,503 |
$29,744 |
|
Institutional Investors: |
||||||
Equity/Fixed Income prgms. |
$34,966 |
$32,565 |
$36,955 |
$43,672 |
$44,322 |
|
Collective Trust Fund prgm. |
942 |
791 |
755 |
707 |
684 |
|
Liquidity funds |
4,582 |
3,802 |
3,462 |
4,624 |
3,370 |
|
Total assets under mgmt. |
$40,490 |
$37,158 |
$41,172 |
$49,003 |
$48,376 |
|
Investment Managers: |
||||||
Equity/Fixed Income prgms. |
$8 |
$3 |
$3 |
$4 |
$4 |
|
Collective Trust Fund prgm. |
5,974 |
6,917 |
6,794 |
7,075 |
7,428 |
|
Liquidity funds |
869 |
898 |
505 |
528 |
412 |
|
Total assets under mgmt. |
$6,851 |
$7,818 |
$7,302 |
$7,607 |
$7,844 |
|
Client assets under admin. (A) |
234,628 |
221,798 |
213,930 |
216,222 |
221,680 |
|
Total assets |
$241,479 |
$229,616 |
$221,232 |
$223,829 |
$229,524 |
|
Investments in New Businesses: |
||||||
Equity/Fixed Income prgms. |
$519 |
$472 |
$473 |
$473 |
$520 |
|
Liquidity funds |
153 |
157 |
133 |
93 |
75 |
|
Total assets under mgmt. |
$672 |
$629 |
$606 |
$566 |
$595 |
|
LSV Asset Management |
||||||
Equity/Fixed Income prgms. |
$37,714 |
$32,308 |
$40,210 |
$49,349 |
$52,488 |
|
Consolidated: |
||||||
Equity/Fixed Income prgms (B) |
$105,411 |
$93,859 |
$110,238 |
$130,716 |
$135,416 |
|
Collective Trust Fund prgm. |
10,667 |
11,622 |
11,346 |
11,401 |
11,602 |
|
Liquidity funds |
18,234 |
17,244 |
14,150 |
14,012 |
11,821 |
|
Total assets under mgmt. |
$134,312 |
$122,725 |
$135,734 |
$156,129 |
$158,839 |
|
Client assets under admin. (C) |
245,250 |
231,718 |
224,073 |
227,163 |
232,893 |
|
Total assets |
$379,562 |
$354,443 |
$359,807 |
$383,292 |
$391,732 |
|
(A) Client assets under administration in the Investment Managers segment include $59,169 of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of December 31, 2009).
(B) Equity/Fixed Income programs include $2,339 of assets invested in various asset allocation funds at December 31, 2009.
(C) In addition to the numbers presented, SEI also administers an additional $8,473 in Funds of Funds assets (as of December 31, 2009) on which SEI does not earn an administration fee.
SOURCE SEI Investments Company
Share this article