PR Newswire
OAKS, Pa., Oct. 23, 2018
OAKS, Pa., Oct. 23, 2018 /PRNewswire/ -- SEI Investments Company (NASDAQ: SEIC) today announced financial results for the third-quarter 2018. Diluted earnings per share were $0.80 in third-quarter 2018 compared to $0.63 in third-quarter 2017.
Consolidated Overview | ||||||||||||||||
(In thousands, except | For the Three Months | For the Nine Months | ||||||||||||||
2018 | 2017 | % | 2018 | 2017 | % | |||||||||||
Revenues | $408,682 | $386,018 | 6% | $1,219,110 | $1,118,333 | 9% | ||||||||||
Net income | 128,319 | 101,739 | 26% | 389,834 | 282,245 | 38% | ||||||||||
Diluted earnings per share | $0.80 | $0.63 | 27% | $2.41 | $1.74 | 39% |
"Our third-quarter results reflect our focus on growing our existing markets with market-leading solutions to our clients' most challenging issues, while continuing our expansion into new markets and the development of additional capabilities," said Alfred P. West, Jr., SEI Chairman and CEO.
"We are on the right track. Despite market challenges, we remain committed to investing in our future, executing effectively today to increase shareholder value over time."
Summary of Third-Quarter Results by Business Segment | ||||||||||||||||
(In thousands) | For the Three Months | For the Nine Months | ||||||||||||||
2018 | 2017 | % | 2018 | 2017 | % | |||||||||||
Private Banks: | ||||||||||||||||
Revenues | $118,449 | $118,499 | —% | $361,739 | $347,317 | 4% | ||||||||||
Expenses | 116,471 | 115,806 | 1% | 343,515 | 336,709 | 2% | ||||||||||
Operating Profit | 1,978 | 2,693 | (27)% | 18,224 | 10,608 | 72% | ||||||||||
Operating Margin | 2 | % | 2 | % | 5 | % | 3 | % | ||||||||
Investment Advisors: | ||||||||||||||||
Revenues | 102,550 | 94,318 | 9% | 301,632 | 275,302 | 10% | ||||||||||
Expenses | 53,287 | 50,585 | 5% | 158,792 | 147,504 | 8% | ||||||||||
Operating Profit | 49,263 | 43,733 | 13% | 142,840 | 127,798 | 12% | ||||||||||
Operating Margin | 48 | % | 46 | % | 47 | % | 46 | % | ||||||||
Institutional Investors: | ||||||||||||||||
Revenues | 83,466 | 80,411 | 4% | 252,391 | 235,483 | 7% | ||||||||||
Expenses | 40,497 | 40,003 | 1% | 122,617 | 117,499 | 4% | ||||||||||
Operating Profit | 42,969 | 40,408 | 6% | 129,774 | 117,984 | 10% | ||||||||||
Operating Margin | 51 | % | 50 | % | 51 | % | 50 | % | ||||||||
Investment Managers: | ||||||||||||||||
Revenues | 101,275 | 91,020 | 11% | 295,696 | 255,123 | 16% | ||||||||||
Expenses | 65,296 | 59,831 | 9% | 191,955 | 165,743 | 16% | ||||||||||
Operating Profit | 35,979 | 31,189 | 15% | 103,741 | 89,380 | 16% | ||||||||||
Operating Margin | 36 | % | 34 | % | 35 | % | 35 | % | ||||||||
Investments in New Businesses: | ||||||||||||||||
Revenues | 2,942 | 1,770 | 66% | 7,652 | 5,108 | 50% | ||||||||||
Expenses | 5,769 | 5,063 | 14% | 16,807 | 15,067 | 12% | ||||||||||
Operating Loss | (2,827) | (3,293) | NM | (9,155) | (9,959) | NM | ||||||||||
Totals: | ||||||||||||||||
Revenues | $408,682 | $386,018 | 6% | $1,219,110 | $1,118,333 | 9% | ||||||||||
Expenses | 281,320 | 271,288 | 4% | 833,686 | 782,522 | 7% | ||||||||||
Corporate overhead expenses | 14,942 | 15,493 | (4)% | 46,398 | 45,830 | 1% | ||||||||||
Income from operations | $112,420 | $99,237 | 13% | $339,026 | $289,981 | 17% |
Third-Quarter Business Highlights:
Earnings Conference Call
A conference call to review earnings is scheduled for 4:30 p.m. Eastern Time on Oct. 23, 2018. Investors may listen to the call at seic.com/ir-events. Investors may also listen to a replay by telephone at (USA) 800-475-6701; (International) 320-365-3844, access code 455754.
About SEI
Now in its 50th year of business, 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 Sept. 30, 2018, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers $920 billion in hedge, private equity, mutual fund and pooled or separately managed assets, including $339 billion in assets under management and $576 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, including our expectations as to the revenue that we believe will be generated by sales events that occurred during the quarter and the degree to which our current operations will create value perspectively. 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.
Investor Contact: | Media Contact: |
Lindsey Opsahl | Leslie Wojcik |
SEI | SEI |
+1 610-676-4052 | +1 610-676-4191 |
SEI INVESTMENTS COMPANY | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(In thousands, except per share data) | ||||||||||||
(Unaudited) | ||||||||||||
For the Three Months | For the Nine Months | |||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||
Asset management, admin. and distribution fees | $322,778 | $300,417 | $955,495 | $869,560 | ||||||||
Information processing and software servicing fees | 85,904 | 85,601 | 263,615 | 248,773 | ||||||||
Total revenues | 408,682 | 386,018 | 1,219,110 | 1,118,333 | ||||||||
Subadvisory, distribution and other asset mgmt. costs | 45,276 | 46,014 | 135,690 | 133,073 | ||||||||
Software royalties and other information processing costs | 7,767 | 11,005 | 24,462 | 34,295 | ||||||||
Compensation, benefits and other personnel | 127,480 | 118,421 | 379,132 | 336,919 | ||||||||
Stock-based compensation | 5,878 | 7,088 | 16,396 | 19,527 | ||||||||
Consulting, outsourcing and professional fees | 51,758 | 46,507 | 150,906 | 137,991 | ||||||||
Data processing and computer related | 21,754 | 19,792 | 63,478 | 57,107 | ||||||||
Facilities, supplies and other costs | 16,689 | 17,261 | 52,085 | 50,761 | ||||||||
Amortization | 12,405 | 13,745 | 36,420 | 38,332 | ||||||||
Depreciation | 7,255 | 6,948 | 21,515 | 20,347 | ||||||||
Total expenses | 296,262 | 286,781 | 880,084 | 828,352 | ||||||||
Income from operations | 112,420 | 99,237 | 339,026 | 289,981 | ||||||||
Net gain (loss) on investments | 89 | 645 | (460) | 1,036 | ||||||||
Interest and dividend income | 3,482 | 1,899 | 9,146 | 4,928 | ||||||||
Interest expense | (122) | (345) | (511) | (571) | ||||||||
Equity in earnings of unconsolidated affiliate | 41,726 | 39,333 | 123,406 | 109,213 | ||||||||
Income before income taxes | 157,595 | 140,769 | 470,607 | 404,587 | ||||||||
Income taxes | 29,276 | 39,030 | 80,773 | 122,342 | ||||||||
Net income | $128,319 | $101,739 | $389,834 | $282,245 | ||||||||
Basic earnings per common share | $0.82 | $0.64 | $2.48 | $1.78 | ||||||||
Shares used to calculate basic earnings per share | 156,283 | 157,902 | 157,086 | 158,439 | ||||||||
Diluted earnings per common share | $0.80 | $0.63 | $2.41 | $1.74 | ||||||||
Shares used to calculate diluted earnings per share | 160,511 | 161,148 | 162,053 | 161,866 | ||||||||
Dividends declared per common share | $— | $— | $0.30 | $0.28 |
SEI INVESTMENTS COMPANY | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
September 30, | December 31, | |||||
2018 | 2017 | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $741,965 | $744,247 | ||||
Restricted cash | 3,511 | 3,505 | ||||
Receivables from investment products | 54,403 | 56,666 | ||||
Receivables, net of allowance for doubtful accounts of $666 and $695 | 327,614 | 282,706 | ||||
Securities owned | 28,945 | 21,526 | ||||
Other current assets | 37,113 | 31,158 | ||||
Total Current Assets | 1,193,551 | 1,139,808 | ||||
Property and Equipment, net of accumulated depreciation of $331,138 and $309,955 | 145,865 | 146,428 | ||||
Capitalized Software, net of accumulated amortization of $383,675 and $350,045 | 310,146 | 310,405 | ||||
Investments Available for Sale | 84,298 | 87,983 | ||||
Investments in Affiliated Funds, at fair value | 5,736 | 6,034 | ||||
Investment in Unconsolidated Affiliate | 44,682 | 59,492 | ||||
Goodwill | 64,489 | 52,990 | ||||
Intangible Assets, net of accumulated amortization of $4,169 and $1,552 | 32,591 | 28,578 | ||||
Deferred Contract Costs | 22,104 | — | ||||
Deferred Income Taxes | 2,224 | 2,767 | ||||
Other Assets, net | 33,642 | 18,884 | ||||
Total Assets | $1,939,328 | $1,853,369 | ||||
Liabilities and Equity | ||||||
Current Liabilities: | ||||||
Accounts payable | $9,161 | $5,268 | ||||
Accrued liabilities | 207,675 | 265,058 | ||||
Deferred revenue | 5,054 | 4,723 | ||||
Total Current Liabilities | 221,890 | 275,049 | ||||
Borrowings Under Revolving Credit Facility | — | 30,000 | ||||
Long-term Taxes Payable
| 770 | 10,629 | ||||
Deferred Income Taxes | 60,158 | 48,472 | ||||
Other Long-term Liabilities | 26,000 | 12,380 | ||||
Total Liabilities | 308,818 | 376,530 | ||||
Shareholders' Equity: | ||||||
Common stock, $.01 par value, 750,000 shares authorized; 155,475 and 157,069 | 1,555 | 1,571 | ||||
Capital in excess of par value | 1,101,237 | 1,027,709 | ||||
Retained earnings | 556,581 | 467,467 | ||||
Accumulated other comprehensive loss, net | (28,863) | (19,908) | ||||
Total Shareholders' Equity | 1,630,510 | 1,476,839 | ||||
Total Liabilities and Shareholders' Equity | $1,939,328 | $1,853,369 |
ENDING ASSET BALANCES | ||||||||||||||||
(In millions) (Unaudited) | ||||||||||||||||
Sept. 30, | Dec 31, | Mar. 31, | Jun. 30, | Sept. 30, | ||||||||||||
2017 | 2017 | 2018 | 2018 | 2018 | ||||||||||||
Private Banks: | ||||||||||||||||
Equity and fixed-income programs | $21,196 | $22,764 | $22,917 | $22,448 | $22,739 | |||||||||||
Collective trust fund programs | 4 | 4 | 4 | 4 | 4 | |||||||||||
Liquidity funds | 3,345 | 3,864 | 3,537 | 3,471 | 3,142 | |||||||||||
Total assets under management | $24,545 | $26,632 | $26,458 | $25,923 | $25,885 | |||||||||||
Client assets under administration | 22,107 | 22,980 | 22,411 | 22,435 | 23,394 | |||||||||||
Total assets | $46,652 | $49,612 | $48,869 | $48,358 | $49,279 | |||||||||||
Investment Advisors: | ||||||||||||||||
Equity and fixed-income programs | $59,455 | $61,908 | $62,176 | $62,227 | $63,958 | |||||||||||
Collective trust fund programs | 5 | 5 | 5 | 5 | 5 | |||||||||||
Liquidity funds | 2,327 | 2,414 | 2,399 | 3,101 | 3,182 | |||||||||||
Total assets under management | $61,787 | $64,327 | $64,580 | $65,333 | $67,145 | |||||||||||
Institutional Investors: | ||||||||||||||||
Equity and fixed-income programs | $85,763 | $87,587 | $85,607 | $83,687 | $85,248 | |||||||||||
Collective trust fund programs | 82 | 78 | 72 | 73 | 74 | |||||||||||
Liquidity funds | 3,699 | 2,937 | 2,727 | 2,594 | 2,544 | |||||||||||
Total assets under management | $89,544 | $90,602 | $88,406 | $86,354 | $87,866 | |||||||||||
Advised assets | 3,626 | 3,942 | 4,185 | 4,544 | 4,131 | |||||||||||
Total assets | $93,170 | $94,544 | $92,591 | $90,898 | $91,997 | |||||||||||
Investment Managers: | ||||||||||||||||
Equity and fixed-income programs | $93 | $96 | $97 | $95 | $99 | |||||||||||
Collective trust fund programs | 46,087 | 49,340 | 45,062 | 45,213 | 46,934 | |||||||||||
Liquidity funds | 799 | 743 | 732 | 496 | 580 | |||||||||||
Total assets under management | $46,979 | $50,179 | $45,891 | $45,804 | $47,613 | |||||||||||
Client assets under administration (A) | 493,538 | 495,447 | 507,694 | 522,700 | 552,411 | |||||||||||
Total assets | $540,517 | $545,626 | $553,585 | $568,504 | $600,024 | |||||||||||
Investments in New Businesses: | ||||||||||||||||
Equity and fixed-income programs | $1,052 | $1,104 | $1,114 | $1,120 | $1,179 | |||||||||||
Liquidity funds | 71 | 53 | 72 | 106 | 162 | |||||||||||
Total assets under management | $1,123 | $1,157 | $1,186 | $1,226 | $1,341 | |||||||||||
Advised assets | 54 | 49 | 49 | 807 | 730 | |||||||||||
Total assets | $1,177 | $1,206 | $1,235 | $2,033 | $2,071 | |||||||||||
LSV Asset Management: | ||||||||||||||||
Equity and fixed-income programs (B) | $102,901 | $107,690 | $108,186 | $106,505 | $109,363 | |||||||||||
Total: | ||||||||||||||||
Equity and fixed-income programs (C) | $270,460 | $281,149 | $280,097 | $276,082 | $282,586 | |||||||||||
Collective trust fund programs | 46,178 | 49,427 | 45,143 | 45,295 | 47,017 | |||||||||||
Liquidity funds | 10,241 | 10,011 | 9,467 | 9,768 | 9,610 | |||||||||||
Total assets under management | $326,879 | $340,587 | $334,707 | $331,145 | $339,213 | |||||||||||
Advised assets | 3,680 | 3,991 | 4,234 | 5,351 | 4,861 | |||||||||||
Client assets under administration (D) | 515,645 | 518,427 | 530,105 | 545,135 | 575,805 | |||||||||||
Total assets | $846,204 | $863,005 | $869,046 | $881,631 | $919,879 |
(A) | Client assets under administration in the Investment Managers segment include $61.4 billion of assets that are at fee levels below our normal full service assets (as of September 30, 2018). |
(B) | Equity and fixed-income programs include $2.4 billion of assets managed by LSV in which fees are based on performance only (as of September 30, 2018). |
(C) | Equity and fixed-income programs include $5.7 billion of assets invested in various asset allocation funds at September 30, 2018. |
(D) | In addition to the numbers presented, SEI also administers an additional $10.1 billion in Funds of Funds assets (as of September 30, 2018) on which SEI does not earn an administration fee. |
AVERAGE ASSET BALANCES | ||||||||||||||||
(In millions) (Unaudited) | ||||||||||||||||
3rd Qtr. | 4th Qtr. | 1st Qtr. | 2nd Qtr. | 3rd Qtr. | ||||||||||||
2017 | 2017 | 2018 | 2018 | 2018 | ||||||||||||
Private Banks: | ||||||||||||||||
Equity and fixed-income programs | $20,699 | $21,748 | $23,412 | $22,870 | $22,516 | |||||||||||
Collective trust fund programs | 4 | 4 | 4 | 4 | 4 | |||||||||||
Liquidity funds | 3,555 | 3,584 | 3,720 | 3,516 | 3,376 | |||||||||||
Total assets under management | $24,258 | $25,336 | $27,136 | $26,390 | $25,896 | |||||||||||
Client assets under administration | 21,441 | 22,759 | 23,398 | 22,605 | 23,175 | |||||||||||
Total assets | $45,699 | $48,095 | $50,534 | $48,995 | $49,071 | |||||||||||
Investment Advisors: | ||||||||||||||||
Equity and fixed-income programs | $58,406 | $60,730 | $62,650 | $62,890 | $63,399 | |||||||||||
Collective trust fund programs | 5 | 5 | 5 | 5 | 5 | |||||||||||
Liquidity funds | 2,335 | 2,235 | 2,290 | 2,429 | 2,958 | |||||||||||
Total assets under management | $60,746 | $62,970 | $64,945 | $65,324 | $66,362 | |||||||||||
Institutional Investors: | ||||||||||||||||
Equity and fixed-income programs | $84,520 | $86,573 | $87,207 | $85,045 | $84,885 | |||||||||||
Collective trust fund programs | 80 | 80 | 77 | 72 | 74 | |||||||||||
Liquidity funds | 3,177 | 3,052 | 2,905 | 2,621 | 2,469 | |||||||||||
Total assets under management | $87,777 | $89,705 | $90,189 | $87,738 | $87,428 | |||||||||||
Advised assets | 3,552 | 3,796 | 4,383 | 4,301 | 4,263 | |||||||||||
Total assets | $91,329 | $93,501 | $94,572 | $92,039 | $91,691 | |||||||||||
Investment Managers: | ||||||||||||||||
Equity and fixed-income programs | $92 | $99 | $96 | $109 | $95 | |||||||||||
Collective trust fund programs | 44,824 | 47,772 | 49,243 | 45,646 | 45,856 | |||||||||||
Liquidity funds | 952 | 843 | 834 | 649 | 555 | |||||||||||
Total assets under management | $45,868 | $48,714 | $50,173 | $46,404 | $46,506 | |||||||||||
Client assets under administration (A) | 486,158 | 494,201 | 506,951 | 522,679 | 541,063 | |||||||||||
Total assets | $532,026 | $542,915 | $557,124 | $569,083 | $587,569 | |||||||||||
Investments in New Businesses: | ||||||||||||||||
Equity and fixed-income programs | $1,016 | $1,079 | $1,105 | $1,090 | $1,148 | |||||||||||
Liquidity funds | 55 | 54 | 70 | 95 | 146 | |||||||||||
Total assets under management | $1,071 | $1,133 | $1,175 | $1,185 | $1,294 | |||||||||||
Advised assets | 73 | 50 | 50 | 813 | 777 | |||||||||||
Total assets | $1,144 | $1,183 | $1,225 | $1,998 | $2,071 | |||||||||||
LSV Asset Management: | ||||||||||||||||
Equity and fixed-income programs (B) | $100,244 | $106,112 | $109,904 | $108,380 | $109,527 | |||||||||||
Total: | ||||||||||||||||
Equity and fixed-income programs (C) | $264,977 | $276,341 | $284,374 | $280,384 | $281,570 | |||||||||||
Collective trust fund programs | 44,913 | 47,861 | 49,329 | 45,727 | 45,939 | |||||||||||
Liquidity funds | 10,074 | 9,768 | 9,819 | 9,310 | 9,504 | |||||||||||
Total assets under management | $319,964 | $333,970 | $343,522 | $335,421 | $337,013 | |||||||||||
Advised assets | 3,625 | 3,846 | 4,433 | 5,114 | 5,040 | |||||||||||
Client assets under administration (D) | 507,599 | 516,960 | 530,349 | 545,284 | 564,238 | |||||||||||
Total assets | $831,188 | $854,776 | $878,304 | $885,819 | $906,291 |
(A) | Average client assets under administration in the Investment Managers segment during Q3 2018 include $59.6 billion that are at fee levels below our normal full service assets. |
(B) | Equity and fixed-income programs include $2.4 billion of average assets managed by LSV in which fees are based on performance only during Q3 2018. |
(C) | Equity and fixed-income programs include $5.6 billion of average assets invested in various asset allocation funds during Q3 2018. |
(D) | In addition to the numbers presented, SEI also administers an additional $10.1 billion of average assets in Funds of Funds assets during Q3 2018 on which SEI does not earn an administration fee. |
View original content:http://www.prnewswire.com/news-releases/sei-reports-third-quarter-2018-financial-results-300736499.html
SOURCE SEI Investments Company
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