SEIC
$67.10
Sei Investments
$.70
1.05%
Earnings Details
3rd Quarter September 2017
Wednesday, October 25, 2017 4:01:00 PM
Tweet Share Watch
Summary

Sei Investments (SEIC) Recent Earnings

Sei Investments (SEIC) reported 3rd Quarter September 2017 earnings of $0.63 per share on revenue of $386.0 million. The consensus earnings estimate was $0.57 per share on revenue of $385.8 million. Revenue grew 8.8% on a year-over-year basis.

SEI Investments Company is a provider of investment processing, investment management and investment operations solutions that help financial institutions, financial advisors, institutional investors and investment managers create and manage wealth.

Results
Reported Earnings
$0.63
Earnings Whisper
-
Consensus Estimate
$0.57
Reported Revenue
$386.0 Mil
Revenue Estimate
$385.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

SEI Reports Third-Quarter 2017 Financial Results

SEI Investments Company (SEIC) today announced financial results for the third-quarter 2017. Diluted earnings per share were $0.63 in third-quarter 2017 compared to $0.53 in third-quarter 2016. In addition, on October 24, 2017, SEI’s Board of Directors approved an increase in its stock repurchase program by an additional $200.0 million, increasing the available authorization under the program to approximately $230.5 million. Since the beginning of calendar year 2017, the Company repurchased approximately 3.5 million shares at a cost of approximately $188.3 million.

Consolidated Overview
(In thousands, except
For the Three Months
For the Nine Months
earnings per share)
Ended September 30,
Ended September 30,
2017
2016
%
2017
2016
%
Revenues
$386,018
$354,641
9%
$1,118,333
$1,032,735
8%
Net income
101,739
86,704
17%
282,245
245,206
15%
Diluted earnings per share
$0.63
$0.53
19%
$1.74
$1.49
17%

"Our third-quarter results reflect continued growth and strategic progress across all of our businesses; even as we continue to invest in and advance our solutions for all our markets," said Alfred P. West, Jr., SEI Chairman and CEO.

"The continued adoption of our broad-based platforms, including the very successful implementation of the SEI Wealth Platform by Regions Bank and a large migration of Investment Advisors segment clients to the Platform, positions us well for the future. As always, we remain committed to long-term sustainable growth and increasing shareholder value."

Summary of Third-Quarter Results by Business Segment

(In thousands)
For the Three Months
For the Nine Months
Ended September 30,
Ended September 30,
2017
2016
%
2017
2016
%
Private Banks:
Revenues
$118,499
$115,952
2%
$347,317
$344,149
1%
Expenses
115,806
105,523
10%
336,709
312,126
8%
Operating Profit
2,693
10,429
(74)%
10,608
32,023
(67)%
Gain on sale of subsidiary
--
--
--
--
2,791
NM
Segment Profit
2,693
10,429
(74)%
10,608
34,814
NM
Operating Margin (A)
2
%
9
%
3
%
9
%
Investment Advisors:
Revenues
94,318
85,258
11%
275,302
243,820
13%
Expenses
50,585
45,080
12%
147,504
134,575
10%
Operating Profit
43,733
40,178
9%
127,798
109,245
17%
Operating Margin
46
%
47
%
46
%
45
%
Institutional Investors:
Revenues
80,411
76,222
5%
235,483
223,793
5%
Expenses
40,003
36,943
8%
117,499
108,875
8%
Operating Profit
40,408
39,279
3%
117,984
114,918
3%
Operating Margin
50
%
52
%
50
%
51
%
Investment Managers:
Revenues
91,020
75,672
20%
255,123
216,528
18%
Expenses
59,831
48,588
23%
165,743
140,831
18%
Operating Profit
31,189
27,084
15%
89,380
75,697
18%
Operating Margin
34
%
36
%
35
%
35
%
Investments in New Businesses:
Revenues
1,770
1,537
15%
5,108
4,445
15%
Expenses
5,063
5,348
(5)%
15,067
15,935
(5)%
Operating Loss
(3,293)
(3,811)
NM
(9,959)
(11,490)
NM
Totals:
Revenues
$386,018
$354,641
9%
$1,118,333
$1,032,735
8%
Expenses
271,288
241,482
12%
782,522
712,342
10%
Corporate overhead expenses
15,493
15,941
(3)%
45,830
42,840
7%
Income from operations
$99,237
$97,218
2%
$289,981
$277,553
4%
(A) Percentages determined exclusive of gain on sale of subsidiary.

Third-Quarter Business Highlights:

Revenue growth in the quarter was primarily driven by higher Asset management, administration, and distribution fees from market appreciation and positive cash flows from new and existing clients.

Sales events, net of client losses, during third-quarter 2017 totaled approximately $24.2 million and are expected to generate net annualized recurring revenues of approximately $17.1 million when contract values are fully realized.

Our average assets under management, excluding LSV, increased $23.7 billion, or 12 percent, to $218.9 billion, as compared to $195.2 billion during the third-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 $52.1 billion, or 11 percent, to $507.6 billion in the third-quarter 2017, as compared to $455.5 billion during the third-quarter 2016 (see attached Average Asset Balances schedules for further details).

Our earnings from LSV increased by $6.8 million, or 21 percent, to $39.3 million in third-quarter 2017 as compared to $32.6 million in third-quarter 2016. The increase in earnings was due to an increase in assets under management from market appreciation and increased performance fees; however, our earnings were negatively impacted by increased personnel expenses of LSV.

We capitalized $15.3 million and $13.6 million of software development costs in third-quarter 2017 and 2016, respectively, of which $12.6 million and $11.3 million are related to continued enhancements to the SEI Wealth PlatformSM. The remaining amounts of the Company’s software development costs capitalized during the third quarter of 2017 and 2016 are related to an application for the Investment Managers segment. 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 $12.8 million during the third-quarter 2017 as compared to $11.3 million during the third-quarter 2016 due to continued enhancements. In addition, we are currently reassessing the remaining useful life of certain components and functionality of the Platform. Refer to our third-quarter 2017 Form 10-Q for additional information.

The direct costs associated with our investment management programs increased in our Private Banks, Investment Advisors and Institutional Investors segments. These costs primarily relate to fees charged by investment advisory firms for day-to-day portfolio management of SEI-sponsored investment products.

Our operating expenses, primarily personnel costs, in our Investment Advisors and Investment Managers segments increased. These expenses primarily consist of operational and marketing costs and are mainly related to servicing existing clients and acquiring and implementing new clients.

We acquired Archway Technology Partners, LLC (Archway), a provider of operating technologies and services to the family office industry, during the third-quarter 2017. The results of operations of Archway are included in our Investment Managers business segment. The segment’s third quarter-2017 results were negatively impacted by approximately $476 thousand from the acquisition. Refer to our third-quarter 2017 Form 10-Q for additional information regarding the financial impact of the Archway acquisition.

We adopted Accounting Standards Update (ASU) 2016-09 in 2017 which will cause volatility in our quarterly effective tax rate. Our effective tax rates were 27.7 percent in third-quarter 2017 and 33.8 percent in third-quarter 2016. Refer to our third-quarter 2017 Form 10-Q for additional information regarding the impact of ASU 2016-09 on our effective tax rate.

Our tax rate in third-quarter 2017 was also favorably impacted by the expiration of the statute of limitations pertaining to various federal tax items.

We repurchased 1.2 million shares of our common stock for $68.2 million during the third-quarter 2017.

Earnings Conference Call A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on Oct. 25, 2017. Investors may listen to the call at seic.com, Investors section, Events and Webcasts. Investors may also listen to a replay by telephone at (USA) 800-475-6701; (International) 320-365-3844, access code 431994.

About SEI SEI (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, 2017, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers $845 billion in hedge, private equity, mutual fund and pooled or separately managed assets, including $325 billion in assets under management and $516 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
For the Nine Months
Ended September 30,
Ended September 30,
2017
2016
2017
2016
Asset management, admin. and distribution fees
$299,890
$271,930
$866,945
$785,642
Information processing and software servicing fees
80,922
76,443
233,501
224,834
Transaction-based and trade execution fees
5,206
6,268
17,887
22,259
Total revenues
386,018
354,641
1,118,333
1,032,735
Subadvisory, distribution and other asset mgmt costs
45,578
42,586
131,368
122,651
Software royalties and other information processing costs
7,463
7,519
22,837
22,944
Brokerage commissions
3,978
4,864
13,163
17,065
Compensation, benefits and other personnel
118,421
103,137
336,919
307,350
Stock-based compensation
7,088
4,066
19,527
12,044
Consulting, outsourcing and professional fees
46,507
43,631
137,991
121,712
Data processing and computer related
18,449
16,581
53,104
48,081
Facilities, supplies and other costs
18,604
17,075
54,764
50,194
Amortization
13,745
11,388
38,332
33,684
Depreciation
6,948
6,576
20,347
19,457
Total expenses
286,781
257,423
828,352
755,182
Income from operations
99,237
97,218
289,981
277,553
Net gain on investments
645
196
1,036
320
Interest and dividend income
1,899
1,026
4,928
3,142
Interest expense
(345)
(115)
(571)
(416)
Equity in earnings of unconsolidated affiliate
39,333
32,565
109,213
92,042
Gain on sale of subsidiary
--
--
--
2,791
Income before income taxes
140,769
130,890
404,587
375,432
Income taxes
39,030
44,186
122,342
130,226
Net income
$101,739
$86,704
$282,245
$245,206
Basic earnings per common share
$0.64
$0.54
$1.78
$1.51
Shares used to calculate basic earnings per share
157,902
160,916
158,439
161,908
Diluted earnings per common share
$0.63
$0.53
$1.74
$1.49
Shares used to calculate diluted earnings per share
161,148
163,925
161,866
165,053
Dividends declared per common share
$--
$--
$0.28
$0.26
SEI INVESTMENTS COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30,
December 31,
2017
2016
Assets
Current Assets:
Cash and cash equivalents
$684,971
$695,701
Restricted cash
3,503
3,500
Receivables from investment products
50,961
61,761
Receivables, net of allowance for doubtful accounts of $699 and $523
273,535
227,957
Securities owned
21,469
21,339
Other current assets
30,537
27,575
Total Current Assets
1,064,976
1,037,833
Property and Equipment, net of accumulated depreciation of $302,901 and $285,322
148,106
146,190
Capitalized Software, net of accumulated amortization of $340,864 and $303,540
307,116
295,867
Investments Available for Sale
82,252
84,033
Investments in Affiliated Funds, at fair value
5,738
4,858
Investment in Unconsolidated Affiliate
42,225
50,459
Intangible Assets, net
82,263
--
Deferred Income Taxes
1,676
2,127
Other Assets, net
17,045
15,456
Total Assets
$1,751,397
$1,636,823
Liabilities and Equity
Current Liabilities:
Accounts payable
$4,429
$5,966
Accrued liabilities
185,368
240,525
Deferred revenue
3,134
2,880
Total Current Liabilities
192,931
249,371
Borrowings Under Revolving Credit Facility
40,000
--
Deferred Income Taxes
69,704
69,693
Other Long-term Liabilities
16,221
14,645
Total Liabilities
318,856
333,709
Shareholders’ Equity:
Common stock, $.01 par value, 750,000 shares authorized; 157,405 and 159,031
1,574
1,590
shares issued and outstanding
Capital in excess of par value
1,002,909
955,461
Retained earnings
448,356
384,018
Accumulated other comprehensive loss, net
(20,298)
(37,955)
Total Shareholders’ Equity
1,432,541
1,303,114
Total Liabilities and Shareholders’ Equity
$1,751,397
$1,636,823
ENDING ASSET BALANCES
(In millions)
(Unaudited)
Sept. 30,
Dec 31,
Mar. 31,
Jun. 30,
Sept. 30,
2016
2016
2017
2017
2017
Private Banks:
Equity and fixed-income programs
$18,668
$17,926
$19,034
$20,185
$21,196
Collective trust fund programs
3
3
5
4
4
Liquidity funds
4,034
4,230
3,903
3,589
3,345
Total assets under management
$22,705
$22,159
$22,942
$23,778
$24,545
Client assets under administration
19,269
19,255
20,760
20,951
22,107
Total assets
$41,974
$41,414
$43,702
$44,729
$46,652
Investment Advisors:
Equity and fixed-income programs
$52,594
$52,847
$55,311
$57,358
$59,455
Collective trust fund programs
5
5
5
5
5
Liquidity funds
2,539
2,741
2,645
2,451
2,327
Total assets under management
$55,138
$55,593
$57,961
$59,814
$61,787
Institutional Investors:
Equity and fixed-income programs (E)
$78,701
$76,465
$78,954
$81,723
$84,939
Collective trust fund programs
90
93
89
80
82
Liquidity funds
2,612
2,903
2,759
2,468
3,699
Total assets under management
$81,403
$79,461
$81,802
$84,271
$88,720
Advised assets
--
--
3,228
4,255
4,450
Total assets
$81,403
$79,461
$85,030
$88,526
$93,170
Investment Managers:
Equity and fixed-income programs
$79
$81
$84
$92
$93
Collective trust fund programs
35,962
36,991
40,646
42,662
46,087
Liquidity funds
812
667
911
999
799
Total assets under management
$36,853
$37,739
$41,641
$43,753
$46,979
Client assets under administration (A)
451,204
448,708
457,356
476,543
493,538
Total assets
$488,057
$486,447
$498,997
$520,296
$540,517
Investments in New Businesses:
Equity and fixed-income programs
$850
$884
$931
$997
$1,052
Liquidity funds
53
61
79
46
71
Total assets under management
$903
$945
$1,010
$1,043
$1,123
Advised assets
--
--
85
69
54
Total assets
$903
$945
$1,095
$1,112
$1,177
LSV Asset Management:
Equity and fixed-income programs
$83,863
$87,248
$90,611
$94,774
$101,893
Total:
Equity and fixed-income programs (B)
$234,755
$235,451
$244,925
$255,129
$268,628
Collective trust fund programs
36,060
37,092
40,745
42,751
46,178
Liquidity funds
10,050
10,602
10,297
9,553
10,241
Total assets under management
$280,865
$283,145
$295,967
$307,433
$325,047
Advised assets (C)
--
--
3,313
4,324
4,504
Client assets under administration (D)
470,473
467,963
478,116
497,494
515,645
Total assets
$751,338
$751,108
$777,396
$809,251
$845,196
(A) Client assets under administration in the Investment Managers segment include $48.1 billion of assets that require limited services and therefore are at fee levels below our normal full service assets (as of September 30, 2017).
(B) Equity and fixed-income programs include $5.5 billion of assets invested in various asset allocation funds at September 30, 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 $11.1 billion in Funds of Funds assets (as of September 30, 2017) on which SEI does not earn an administration fee.
(E) Ending asset balance for Institutional Investors as of Mar. 31, 2017 were revised from $80.1 billion to $79.0 billion.
AVERAGE ASSET BALANCES
(In millions) (Unaudited)
3rd Qtr.
4th Qtr.
1st Qtr.
2nd Qtr.
3rd Qtr.
2016
2016
2017
2017
2017
Private Banks:
Equity and fixed-income programs
$18,650
$17,945
$18,498
$19,610
$20,699
Collective trust fund programs
3
3
4
5
4
Liquidity funds
4,386
4,030
4,051
3,677
3,555
Total assets under management
$23,039
$21,978
$22,553
$23,292
$24,258
Client assets under administration
19,039
19,010
20,223
21,166
21,441
Total assets
$42,078
$40,988
$42,776
$44,458
$45,699
Investment Advisors:
Equity and fixed-income programs
$51,924
$52,267
$54,446
$56,319
$58,406
Collective trust fund programs
5
5
5
5
5
Liquidity funds
2,694
2,638
2,559
2,390
2,335
Total assets under management
$54,623
$54,910
$57,010
$58,714
$60,746
Institutional Investors:
Equity and fixed-income programs
$77,583
$77,040
$77,852
$80,561
$83,696
Collective trust fund programs
90
92
90
85
80
Liquidity funds
2,751
2,766
2,891
2,861
3,177
Total assets under management
$80,424
$79,898
$80,833
$83,507
$86,953
Advised assets
--
--
3,125
3,687
4,376
Total assets
$80,424
$79,898
$83,958
$87,194
$91,329
Investment Managers:
Equity and fixed-income programs
$73
$79
$75
$84
$92
Collective trust fund programs
35,257
36,170
39,081
41,615
44,824
Liquidity funds
874
813
860
937
952
Total assets under management
$36,204
$37,062
$40,016
$42,636
$45,868
Client assets under administration
436,459
446,666
453,766
470,701
486,158
Total assets
$472,663
$483,728
$493,782
$513,337
$532,026
Investments in New Businesses:
Equity and fixed-income programs
$845
$851
$909
$954
$1,016
Liquidity funds
44
60
63
64
55
Total assets under management
$889
$911
$972
$1,018
$1,071
Advised assets
--
--
82
73
73
Total assets
$889
$911
$1,054
$1,091
$1,144
LSV Asset Management:
Equity and fixed-income programs
$83,373
$84,676
$90,274
$93,094
$99,279
Total:
Equity and fixed-income programs
$232,448
$232,858
$242,054
$250,622
$263,188
Collective trust fund programs
35,355
36,270
39,180
41,710
44,913
Liquidity funds
10,749
10,307
10,424
9,929
10,074
Total assets under management
$278,552
$279,435
$291,658
$302,261
$318,175
Advised assets
--
--
3,207
3,760
4,449
Client assets under administration
455,498
465,676
473,989
491,867
507,599
Total assets
$734,050
$745,111
$768,854
$797,888
$830,223
Investor Contact: Media Contact:
Lindsey Opsahl
Dana Grosser
SEI
SEI
+1 610-676-4052
+1 610-676-2459
lopsahl@seic.com
dgrosser@seic.com

View original content:http://www.prnewswire.com/news-releases/sei-reports-third-quarter-2017-financial-results-300543353.html

SOURCE SEI Investments Company

https://rt.prnewswire.com/rt.gif?NewsItemId=PH25787&Transmission_Id=201710251601PR_NEWS_USPR_____PH25787&DateId=20171025