OAKS, Pa., April 19, 2017 (GLOBE NEWSWIRE) -- SEI Investments Company (NASDAQ:SEIC) today announced financial results for the first-quarter 2017. Diluted earnings per share were $0.55 in first-quarter 2017 compared to $0.47 in first-quarter 2016. Diluted earnings per share in first-quarter 2016 reflect a pre-tax gain of $2.8 million, or $0.01 per share, from the sale of SEI Asset Korea. 
Consolidated Overview            
(In thousands, except earnings per share)   For the Three Months Ended March 31,    
      2017     2016   %
             
Revenues   $359,984     $334,263     8%  
Net income     88,737       77,497     15%  
Diluted earnings per share   $0.55     $0.47     17%  

"Our financial results for the quarter reflect new and existing client growth, our focus on expenses, and the necessary investments to expand and strengthen the solutions we bring to our target markets," said Alfred P. West, Jr., SEI Chairman and CEO.

"While we are committed to executing for clients in the short term, we remain focused on the long-term needs of our markets. Our advanced solutions are at the center of what will help our clients sustain their success, while helping us achieve sustainable growth and provide increased shareholder value."

Summary of First-Quarter Results by Business Segment
(In thousands)   For the Three Months Ended March 31,    
      2017     2016   %
Private Banks:            
Revenues   $112,634     $113,361     (1)%  
Expenses     108,550       103,741     5%  
Operating Profit     4,084       9,620     (58)%  
Gain on sale of subsidiary           2,791     NM  
Segment Profit     4,084       12,411     NM  
Operating Margin (A)     4 %     8 %    
                     
Investment Advisors:                    
Revenues     88,238       76,679     15%  
Expenses     47,539       44,774     6%  
Operating Profit     40,699       31,905     28%  
Operating Margin     46 %     42 %    
                     
Institutional Investors:                    
Revenues     77,004       72,897     6%  
Expenses     38,828       35,382     10%  
Operating Profit     38,176       37,515     2%  
Operating Margin     50 %     51 %    
                     
Investment Managers:                    
Revenues     80,487       69,918     15%  
Expenses     52,065       45,275     15%  
Operating Profit     28,422       24,643     15%  
Operating Margin     35 %     35 %    
             
Investments in New Businesses:            
Revenues     1,621       1,408     15%  
Expenses     4,880       5,232     (7)%  
Operating Loss     (3,259 )     (3,824 )   NM  
             
Totals:            
Revenues   $359,984     $334,263     8%  
Expenses     251,862       234,404     7%  
Corporate overhead expenses     14,605       13,047     12%  
Income from operations   $93,517     $86,812     8%  
                       

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

First-Quarter Business Highlights:

  • Revenue growth in the quarter was primarily driven by higher Asset management, administration, and distribution fees from market appreciation and improved cash flows from new and existing clients.
  • Sales events, net of client losses, during first-quarter 2017 totaled approximately $20.2 million and are expected to generate net annualized recurring revenues of approximately $17.2 million when contract values are fully realized.
  • Our average assets under management, excluding LSV, increased $20.7 billion, or 11 percent, to $201.4 billion, as compared to $180.7 billion during the first-quarter 2016. Our assets under management do not include advised assets (see attached Average Asset Balances schedules for further details).
  • Our average assets under administration increased $69.3 billion, or 17 percent, to $474.0 billion in the first-quarter 2017, as compared to $404.7 billion during the first-quarter 2016 (see attached Average Asset Balances schedules for further details).
  • Our earnings from LSV increased by $4.4 million, or 15 percent, to $33.6 million in first-quarter 2017 as compared to $29.2 million in first-quarter 2016. The increase in earnings was due to an increase in assets under management from market appreciation; however, our earnings were negatively impacted by increased personnel expenses of LSV.
  • We capitalized $16.9 million and $9.5 million of software development costs in first-quarter 2017 and 2016, respectively, of which $15.2 million and $7.6 million are related to continued enhancements to the SEI Wealth Platform. Our expenses related to maintenance and enhancements not eligible for capitalization have increased. A higher portion of these costs are recognized in personnel and consulting costs. These increased costs primarily impacted the Private Banks and Investment Advisors business segments.
  • Amortization expense related to the SEI Wealth Platform increased to $12.0 million during the first-quarter 2017 as compared to $11.0 million during the first-quarter 2016 due to continued enhancements.
  • Our operating expenses, primarily personnel costs, in our Investment Managers segment increased. These expenses primarily consist of operational and marketing costs and are mainly related to servicing existing clients and acquiring and implementing new clients.
  • During the first-quarter 2017, we adopted ASU 2016-09 which will cause volatility in our quarterly effective tax rate. Our effective tax rates were 31.0 percent in first-quarter 2017 and 35.2 percent in first-quarter 2016. Refer to our Form 10-Q for first-quarter 2017 for information regarding the impact of ASU 2016-09 on our effective tax rate.
  • We repurchased 1.1 million shares of our common stock for $55.4 million during the first-quarter 2017.

Earnings Conference CallA conference call to review earnings is scheduled for 4:30 p.m. Eastern time on Apr. 19, 2017. 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 422405.

About SEISEI (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 March 31, 2017, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers $779 billion in hedge, private equity, mutual fund and pooled or separately managed assets, including $297 billion in assets under management and $478 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 March 31,
      2017     2016
         
Asset management, admin. and distribution fees   $278,565     $251,437  
Information processing and software servicing fees     74,763       73,399  
Transaction-based and trade execution fees     6,656       9,427  
         
Total revenues     359,984       334,263  
         
Subadvisory, distribution and other asset mgmt costs     42,502       39,195  
Software royalties and other information processing costs     7,662       7,748  
Brokerage commissions     4,959       7,108  
Compensation, benefits and other personnel     108,943       101,931  
Stock-based compensation     6,180       3,789  
Consulting, outsourcing and professional fees     43,149       38,506  
Data processing and computer related     16,772       15,718  
Facilities, supplies and other costs     17,478       15,997  
Amortization     12,022       11,012  
Depreciation     6,800       6,447  
         
Total expenses     266,467       247,451  
         
Income from operations     93,517       86,812  
         
Net gain (loss) on investments     347       (126 )
Interest and dividend income     1,343       1,083  
Interest expense     (112 )     (114 )
Equity in earnings of unconsolidated affiliate     33,565       29,192  
Gain on sale of subsidiary           2,791  
         
Income before income taxes     128,660       119,638  
         
Income taxes     39,923       42,141  
         
Net income     88,737       77,497  
         
Basic earnings per common share   $0.56     $0.48  
         
Shares used to calculate basic earnings per share     159,091       163,013  
         
Diluted earnings per common share   $0.55     $0.47  
         
Shares used to calculate diluted earnings per share     162,742       166,145  
                 

SEI INVESTMENTS COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
    March 31,   December 31,
      2017     2016
Assets        
Current Assets:        
Cash and cash equivalents   $661,372     $695,701  
Restricted cash     3,500       3,500  
Receivables from investment products     51,453       61,761  
Receivables, net of allowance for doubtful accounts of $518 and $523     252,205       227,957  
Securities owned     21,372       21,339  
Other current assets     29,873       27,575  
Total Current Assets     1,019,775       1,037,833  
         
Property and Equipment, net of accumulated depreciation of $291,500 and $285,322     142,726       146,190  
Capitalized Software, net of accumulated amortization of $315,512 and $303,540     300,756       295,867  
Investments Available for Sale     89,262       84,033  
Investments in Affiliated Funds, at fair value     5,156       4,858  
Investment in Unconsolidated Affiliate     48,759       50,459  
Deferred Income Taxes     1,878       2,127  
Other Assets, net     16,240       15,456  
Total Assets   $1,624,552     $1,636,823  
         
Liabilities and Equity        
Current Liabilities:        
Accounts payable   $7,372     $5,966  
Accrued liabilities     167,061       240,525  
Deferred revenue     2,337       2,880  
Total Current Liabilities     176,770       249,371  
         
Deferred Income Taxes     69,379       69,693  
Other Long-term Liabilities     15,610       14,645  
Total Liabilities     261,759       333,709  
         
Shareholders' Equity:        
Common stock, $.01 par value, 750,000 shares authorized; 158,687 and 159,031 shares issued and outstanding     1,587       1,590  
Capital in excess of par value     976,007       955,461  
Retained earnings     420,712       384,018  
Accumulated other comprehensive loss, net     (35,513 )     (37,955 )
Total Shareholders' Equity     1,362,793       1,303,114  
Total Liabilities and Shareholders' Equity   $1,624,552     $1,636,823  
                 

ENDING ASSET BALANCES
(In millions)  (Unaudited)
 
      Mar. 31,   Jun. 30,   Sept. 30,   Dec 31,   Mar. 31,
        2016     2016     2016     2016     2017
Private Banks:                      
Equity and fixed-income programs     $18,370     $18,328     $18,668     $17,926     $19,034  
Collective trust fund programs       4       3       3       3       5  
Liquidity funds       5,521       4,848       4,034       4,230       3,903  
Total assets under management     $23,895     $23,179     $22,705     $22,159     $22,942  
Client assets under administration       18,324       18,537       19,269       19,255       20,760  
Total assets     $42,219     $41,716     $41,974     $41,414     $43,702  
                       
Investment Advisors:                      
Equity and fixed-income programs     $47,357     $50,016     $52,594     $52,847     $55,311  
Collective trust fund programs       7       5       5       5       5  
Liquidity funds       5,051       3,661       2,539       2,741       2,645  
Total assets under management     $52,415     $53,682     $55,138     $55,593     $57,961  
                       
Institutional Investors:                      
Equity and fixed-income programs     $73,468     $75,944     $78,701     $76,465     $80,136  
Collective trust fund programs       97       88       90       93       89  
Liquidity funds       2,390       2,526       2,612       2,903       2,759  
Total assets under management     $75,955     $78,558     $81,403     $79,461     $82,984  
Advised assets                               3,228  
Total assets     $75,955     $78,558     $81,403     $79,461     $86,212  
                       
Investment Managers:                      
Equity and fixed-income programs     $72     $73     $79     $81     $84  
Collective trust fund programs       32,385       33,841       35,962       36,991       40,646  
Liquidity funds       733       750       812       667       911  
Total assets under management     $33,190     $34,664     $36,853     $37,739     $41,641  
Client assets under administration (A)       400,579       419,139       451,204       448,708       457,356  
Total assets     $433,769     $453,803     $488,057     $486,447     $498,997  
                       
Investments in New Businesses:                      
Equity and fixed-income programs     $803     $820     $850     $884     $931  
Liquidity funds       41       37       53       61       79  
Total assets under management     $844     $857     $903     $945     $1,010  
Advised assets                               85  
Total assets     $844     $857     $903     $945     $1,095  
                       
LSV Asset Management:                      
Equity and fixed-income programs     $78,390     $78,352     $83,863     $87,248     $90,611  
                       
Total:                      
Equity and fixed-income programs (B)     $218,460     $223,533     $234,755     $235,451     $246,107  
Collective trust fund programs       32,493       33,937       36,060       37,092       40,745  
Liquidity funds       13,736       11,822       10,050       10,602       10,297  
Total assets under management     $264,689     $269,292     $280,865     $283,145     $297,149  
Advised assets (C)                               3,313  
Client assets under administration (D)       418,903       437,676       470,473       467,963       478,116  
Total assets     $683,592     $706,968     $751,338     $751,108     $778,578  
                                           

(A) Client assets under administration in the Investment Managers segment include $47.4 billion of assets that require limited services and therefore are at fee levels below our normal full service assets (as of March 31, 2017).(B) Equity and fixed-income programs include $5.0 billion of assets invested in various asset allocation funds at March 31, 2017. (C) Assets for which SEI acts as an advisor to the accounts. These assets were excluded in previous periods.  (D) In addition to the numbers presented, SEI also administers an additional $10.1 billion in Funds of Funds assets (as of March 31, 2017) on which SEI does not earn an administration fee.
 
 
AVERAGE ASSET BALANCES
(In millions) (Unaudited)
 
      1st Qtr.   2nd Qtr.   3rd Qtr.   4th Qtr.   1st Qtr.
        2016     2016     2016     2016     2017
Private Banks:                      
Equity and fixed-income programs     $17,644     $18,504     $18,650     $17,945     $18,498  
Collective trust fund programs       3       3       3       3       4  
Liquidity funds       5,661       5,118       4,386       4,030       4,051  
Total assets under management     $23,308     $23,625     $23,039     $21,978     $22,553  
Client assets under administration       17,248       18,436       19,039       19,010       20,223  
Total assets     $40,556     $42,061     $42,078     $40,988     $42,776  
                       
Investment Advisors:                      
Equity and fixed-income programs     $45,175     $48,783     $51,924     $52,267     $54,446  
Collective trust fund programs       7       6       5       5       5  
Liquidity funds       5,009       4,061       2,694       2,638       2,559  
Total assets under management     $50,191     $52,850     $54,623     $54,910     $57,010  
                       
Institutional Investors:                      
Equity and fixed-income programs     $71,779     $74,984     $77,583     $77,040     $77,852  
Collective trust fund programs       98       96       90       92       90  
Liquidity funds       2,834       2,868       2,751       2,766       2,891  
Total assets under management     $74,711     $77,948     $80,424     $79,898     $80,833  
Advised assets                               3,125  
Total assets     $74,711     $77,948     $80,424     $79,898     $83,958  
                       
Investment Managers:                      
Equity and fixed-income programs     $66     $72     $73     $79     $75  
Collective trust fund programs       30,784       33,021       35,257       36,170       39,081  
Liquidity funds       832       701       874       813       860  
Total assets under management     $31,682     $33,794     $36,204     $37,062     $40,016  
Client assets under administration       387,421       415,237       436,459       446,666       453,766  
Total assets     $419,103     $449,031     $472,663     $483,728     $493,782  
                       
Investments in New Businesses:                      
Equity and fixed-income programs     $757     $811     $845     $851     $909  
Liquidity funds       48       39       44       60       63  
Total assets under management     $805     $850     $889     $911     $972  
Advised assets                               82  
Total assets     $805     $850     $889     $911     $1,054  
                       
LSV Asset Management:                      
Equity and fixed-income programs     $74,699     $79,733     $83,373     $84,676     $90,274  
                       
Total:                      
Equity and fixed-income programs     $210,120     $222,887     $232,448     $232,858     $242,054  
Collective trust fund programs       30,892       33,126       35,355       36,270       39,180  
Liquidity funds       14,384       12,787       10,749       10,307       10,424  
Total assets under management     $255,396     $268,800     $278,552     $279,435     $291,658  
Advised assets                               3,207  
Client assets under administration       404,669       433,673       455,498       465,676       473,989  
Total assets     $660,065     $702,473     $734,050     $745,111     $768,854  
                                           

 
Investor / Media Contact:Dana GrosserSEI+1 610-676-2459dgrosser@seic.com

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