UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 3, 2005
Date of report (Date of earliest event reported)
SEI Investments Company
(Exact name of registrant as specified in its charter)
| Pennsylvania | 0-10200 | 23-1707341 | ||
| (State or other jurisdiction of incorporation) |
(Commission File No.) | (I.R.S. Employer Identification No.) |
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
(Address of principal executive offices) (Zip Code)
(610) 676-1000
(Registrants’ telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On Thursday, February 3, 2005, SEI Investments Company issued a press release announcing its financial and operating results for the fourth quarter and fiscal year ended December 31, 2004. A copy of the press release is furnished as Exhibit 99.1 and incorporated in this Item 2.02 by reference.
Item 9.01. Financial Statements and Exhibits.
| (c) | Exhibits. |
| 99.1 | Press Release dated February 3, 2005 of SEI Investments Company, financial and operating results for the fourth quarter and fiscal year ended December 31, 2004. | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SEI Investments Company | ||||
| Date: February 3, 2005 | By: | /s/ Dennis J. McGonigle | ||
| Dennis J. McGonigle | ||||
| Chief Financial Officer | ||||
3
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Press Release dated February 3, 2005 of SEI Investments Company, financial and operating results for fourth quarter and fiscal year ended December 31, 2004. |
4
Exhibit 99.1
For Immediate Release
| Contact: |
Mark Samuels, SVP | Murray Louis, VP | ||||||
| Voice: |
610.676.2024 | 610.676.1932 | ||||||
| |
msamuels@seic.com | mlouis@seic.com | ||||||
| Pages: |
Eight |
SEI Investments Reports Fourth-Quarter 2004 Results
Net Income Up 13%, Revenues Increase 12%
Oaks, PA—February 3, 2005—SEI Investments Company (NASDAQ:SEIC) today announced financial results for fourth-quarter 2004, reporting increases in revenues, net income and earnings per share, compared to the corresponding period for the prior year.
Consolidated Overview
| For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
|||||||||||||||||
| (In thousands, except earnings per share)
|
2004 |
2003 |
% |
2004 |
2003 |
% |
||||||||||||
| Revenues |
$ | 182,968 | $ | 163,807 | 12 | % | $ | 692,269 | $ | 636,233 | 9 | % | ||||||
| Net Income Before Taxes |
67,453 | 58,002 | 16 | % | 265,131 | 224,284 | 18 | % | ||||||||||
| Net Income |
43,001 | 38,223 | 13 | % | 169,021 | 142,981 | 18 | % | ||||||||||
| Diluted Earnings Per Share |
$ | .41 | $ | .36 | 14 | % | $ | 1.60 | $ | 1.32 | 21 | % | ||||||
“We continue to deliver growth in our revenue, net income and earnings per share”, said Alfred P. West, Jr., SEI Chairman and CEO.
“The quarter caps off what I believe to be a year of substantial progress for SEI. We delivered on our expectation of financial improvement and steady growth, generated increasing market acceptance of our new offerings and accelerated the build of our new solutions. While there is still considerable work to be done, I believe this year has taken us a long way towards a positive future.”
1
Summary of Fourth-Quarter and Year-to-Date Results by Business Segment
| For the Three Month Period Ended December 31, |
For the Twelve Month Period Ended December 31, |
|||||||||||||||||||||
| (In thousands)
|
2004 |
2003 |
% |
2004 |
2003 |
% |
||||||||||||||||
| Private Banking and Trust: |
||||||||||||||||||||||
| Revenues |
$ | 72,468 | $ | 76,253 | (5 | )% | $ | 290,605 | $ | 311,534 | (7 | )% | ||||||||||
| Operating Profit |
$ | 27,722 | $ | 30,784 | (10 | )% | $ | 114,527 | $ | 125,746 | (9 | )% | ||||||||||
| Operating Margin |
38 | % | 40 | % | 39 | % | 40 | % | ||||||||||||||
| Investment Advisors: |
||||||||||||||||||||||
| Revenues |
48,153 | 40,725 | 18 | % | 180,351 | 156,089 | 16 | % | ||||||||||||||
| Operating Profit |
26,379 | 23,959 | 10 | % | 98,684 | 85,681 | 15 | % | ||||||||||||||
| Operating Margin |
55 | % | 59 | % | 55 | % | 55 | % | ||||||||||||||
| Enterprises: |
||||||||||||||||||||||
| Revenues |
19,199 | 15,695 | 22 | % | 69,816 | 62,051 | 13 | % | ||||||||||||||
| Operating Profit |
8,880 | 7,922 | 12 | % | 32,048 | 29,366 | 9 | % | ||||||||||||||
| Operating Margin |
46 | % | 50 | % | 46 | % | 47 | % | ||||||||||||||
| Money Managers: |
||||||||||||||||||||||
| Revenues |
20,436 | 15,451 | 32 | % | 76,907 | 55,274 | 39 | % | ||||||||||||||
| Operating Profit |
4,206 | 2,435 | 73 | % | 14,663 | 9,105 | 61 | % | ||||||||||||||
| Operating Margin |
21 | % | 16 | % | 19 | % | 16 | % | ||||||||||||||
| Investments in New Businesses: |
||||||||||||||||||||||
| Revenues |
22,712 | 15,683 | 45 | % | 74,590 | 51,285 | 45 | % | ||||||||||||||
| Operating Loss |
(6,559 | ) | (4,094 | ) | (60 | )% | (20,319 | ) | (18,102 | ) | (12 | )% | ||||||||||
| Operating Margin |
(29 | )% | (26 | )% | (27 | )% | (35 | )% | ||||||||||||||
| Consolidated Segment Totals: |
||||||||||||||||||||||
| Revenues |
$ | 182,968 | $ | 163,807 | 12 | % | $ | 692,269 | $ | 636,233 | 9 | % | ||||||||||
| Operating Profit |
$ | 60,628 | $ | 61,006 | (1 | )% | $ | 239,603 | $ | 231,796 | 3 | % | ||||||||||
| Operating Margin |
33 | % | 37 | % | 35 | % | 36 | % | ||||||||||||||
Fourth-Quarter Business Commentary:
| • | Private Banking & Trust lagged year ago levels on revenues and profits. This is primarily due to previously reported client losses in the mutual fund services business. |
| • | The Investment Advisors, Enterprises, Money Managers and Investments in New Business segments reported revenue gains vs. year ago levels. |
| • | Profitability in these four segments tracked with their yearlong performances. The Investment Advisors, Enterprises and Money Managers segments posted gains. Investments in New Businesses continued to be impacted by investments in market expansion. |
| • | Assets under management grew by over $10 billion during the fourth quarter to $120 billion. |
| • | In the fourth quarter, SEI purchased 997,000 shares of its common stock for $38.2 million. |
2
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EST on February 3, 2005. Investors may listen to the call at www.seic.com, or listen at www.fulldisclosure.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 766037.
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 December 31, 2004, through our subsidiaries and partnerships in which we have a significant interest, SEI administers over $288 billion in mutual fund and pooled assets, manages over $120 billion in assets, and operates 22 offices in 11 countries. For more information, visit 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.
3
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| Three Months Ended December 31, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues |
$ | 182,968 | $ | 163,807 | ||||
| Operating and development expenses |
89,009 | 72,945 | ||||||
| Sales and marketing expenses |
33,331 | 29,856 | ||||||
| General and administrative expenses |
7,502 | 7,735 | ||||||
| Income before interest and taxes |
53,126 | 53,271 | ||||||
| Equity in earnings of unconsolidated affiliate |
14,169 | 7,698 | ||||||
| Net loss on investments |
(882 | ) | (3,254 | ) | ||||
| Interest income |
1,524 | 939 | ||||||
| Interest expense |
(484 | ) | (652 | ) | ||||
| Income before taxes |
67,453 | 58,002 | ||||||
| Income taxes |
24,452 | 19,779 | ||||||
| Net income |
$ | 43,001 | $ | 38,223 | ||||
| Diluted earnings per common share |
$ | .41 | $ | .36 | ||||
| Shares used to calculate diluted earnings per common share |
105,340 | 107,065 | ||||||
| Basic earnings per common share |
$ | .42 | $ | .36 | ||||
| Shares used to calculate basic earnings per common share |
102,391 | 104,999 | ||||||
4
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| Twelve Months Ended December 31, |
||||||||
| 2004 |
2003 |
|||||||
| Revenues |
$ | 692,269 | $ | 636,233 | ||||
| Operating and development expenses |
321,298 | 283,624 | ||||||
| Sales and marketing expenses |
131,368 | 120,813 | ||||||
| General and administrative expenses |
30,153 | 25,615 | ||||||
| Income before interest and taxes |
209,450 | 206,181 | ||||||
| Equity in earnings of unconsolidated affiliate |
45,711 | 22,461 | ||||||
| Net gain (loss) on investments |
3,848 | (6,927 | ) | |||||
| Interest income |
4,545 | 4,363 | ||||||
| Interest expense |
(2,112 | ) | (2,303 | ) | ||||
| Other income |
3,689 | 509 | ||||||
| Income before taxes |
265,131 | 224,284 | ||||||
| Income taxes |
96,110 | 81,303 | ||||||
| Net income |
$ | 169,021 | $ | 142,981 | ||||
| Diluted earnings per common share |
$ | 1.60 | $ | 1.32 | ||||
| Shares used to calculate diluted earnings per common share |
105,866 | 108,137 | ||||||
| Basic earnings per common share |
$ | 1.63 | $ | 1.36 | ||||
| Shares used to calculate basic earnings per common share |
103,399 | 105,173 | ||||||
5
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
| December 31, 2004 |
December 31, 2003 | |||||
| Assets |
||||||
| Cash and short-term investments |
$ | 216,966 | $ | 199,953 | ||
| Restricted Cash |
14,386 | 53,481 | ||||
| Receivables |
108,795 | 86,612 | ||||
| Other current assets |
15,532 | 12,367 | ||||
| Total current assets |
355,679 | 352,413 | ||||
| Property and Equipment, net |
113,640 | 113,064 | ||||
| Investments available for sale |
39,817 | 70,560 | ||||
| Capitalized Software, net |
55,830 | 21,115 | ||||
| Other assets |
50,509 | 35,477 | ||||
| Total assets |
$ | 615,475 | $ | 592,629 | ||
| Liabilities |
||||||
| Current liabilities |
$ | 163,569 | $ | 193,474 | ||
| Long-term debt |
14,389 | 23,944 | ||||
| Long-term deferred gain |
1,472 | — | ||||
| Deferred income taxes |
32,103 | 11,438 | ||||
| Shareholders’ Equity |
403,942 | 363,773 | ||||
| Total liabilities and shareholders’ equity |
$ | 615,475 | $ | 592,629 | ||
6
SEI Investments Business Segments
| Three Months ended Dec. 31, |
Twelve Months ended Dec. 31, |
|||||||||||||||
| (In thousands)
|
2004 |
2003 |
2004 |
2003 |
||||||||||||
| Private Banking and Trust: |
||||||||||||||||
| Revenues |
||||||||||||||||
| Investment processing fees |
58,627 | 57,169 | 225,229 | 229,044 | ||||||||||||
| Fund processing fees |
4,889 | 9,845 | 30,177 | 43,464 | ||||||||||||
| Investment management fees |
8,952 | 9,239 | 35,199 | 39,026 | ||||||||||||
| Total Revenues |
72,468 | 76,253 | 290,605 | 311,534 | ||||||||||||
| Operating and development expenses |
34,165 | 36,266 | 135,465 | 148,102 | ||||||||||||
| Sales and marketing expenses |
10,581 | 9,203 | 40,613 | 37,686 | ||||||||||||
| Operating Profit |
27,722 | 30,784 | 114,527 | 125,746 | ||||||||||||
| Operating Margin |
38 | % | 40 | % | 39 | % | 40 | % | ||||||||
| Investment Advisors: |
||||||||||||||||
| Revenues |
48,153 | 40,725 | 180,351 | 156,089 | ||||||||||||
| Operating and development expenses |
15,729 | 10,448 | 53,853 | 41,471 | ||||||||||||
| Sales and marketing expenses |
6,045 | 6,318 | 27,814 | 28,937 | ||||||||||||
| Operating Profit |
26,379 | 23,959 | 98,684 | 85,681 | ||||||||||||
| Operating Margin |
55 | % | 59 | % | 55 | % | 55 | % | ||||||||
| Enterprises: |
||||||||||||||||
| Revenues |
19,199 | 15,695 | 69,816 | 62,051 | ||||||||||||
| Operating and development expenses |
5,582 | 3,735 | 19,333 | 14,983 | ||||||||||||
| Sales and marketing expenses |
4,737 | 4,038 | 18,435 | 17,702 | ||||||||||||
| Operating Profit |
8,880 | 7,922 | 32,048 | 29,366 | ||||||||||||
| Operating Margin |
46 | % | 50 | % | 46 | % | 47 | % | ||||||||
| Money Managers: |
||||||||||||||||
| Revenues |
20,436 | 15,451 | 76,907 | 55,274 | ||||||||||||
| Operating and development expenses |
12,394 | 9,214 | 47,885 | 32,852 | ||||||||||||
| Sales and marketing expenses |
3,836 | 3,802 | 14,359 | 13,317 | ||||||||||||
| Operating Profit |
4,206 | 2,435 | 14,663 | 9,105 | ||||||||||||
| Operating Margin |
21 | % | 16 | % | 19 | % | 16 | % | ||||||||
| Investments in New Businesses: |
||||||||||||||||
| Revenues |
22,712 | 15,683 | 74,590 | 51,285 | ||||||||||||
| Operating and development expenses |
21,139 | 13,282 | 64,762 | 46,216 | ||||||||||||
| Sales and marketing expenses |
8,132 | 6,495 | 30,147 | 23,171 | ||||||||||||
| Operating Loss |
(6,559 | ) | (4,094 | ) | (20,319 | ) | (18,102 | ) | ||||||||
| Operating Margin |
(29 | )% | (26 | )% | (27 | )% | (35 | )% | ||||||||
| Consolidated Segment Totals: |
||||||||||||||||
| Revenues |
$ | 182,968 | $ | 163,807 | $ | 692,269 | $ | 636,233 | ||||||||
| Operating and development expenses |
89,009 | 72,945 | 321,298 | 283,624 | ||||||||||||
| Sales and marketing expenses |
33,331 | 29,856 | 131,368 | 120,813 | ||||||||||||
| Operating Profit |
$ | 60,628 | $ | 61,006 | $ | 239,603 | $ | 231,796 | ||||||||
| Operating Margin |
33 | % | 37 | % | 35 | % | 36 | % | ||||||||
| General and Administrative expenses |
7,502 | 7,735 | 30,153 | 25,615 | ||||||||||||
| Income from Operations |
$ | 53,126 | $ | 53,271 | $ | 209,450 | $ | 206,181 | ||||||||
| Operating Margin |
29 | % | 33 | % | 30 | % | 32 | % | ||||||||
7
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
| Dec. 31, 2003 |
Mar. 31, 2004 |
Jun. 30, 2004 |
Sep. 30, 2004 |
Dec. 31, 2004 | |||||||||||
| Private Banking and Trust: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 2,717 | $ | 2,759 | $ | 2,900 | $ | 2,662 | $ | 2,780 | |||||
| Collective Trust Fund prgm. |
1,326 | 1,357 | 1,403 | 1,455 | 1,518 | ||||||||||
| Liquidity funds |
8,424 | 8,312 | 7,986 | 7,723 | 7,503 | ||||||||||
| Total assets under mgmt. |
$ | 12,467 | $ | 12,428 | $ | 12,289 | $ | 11,840 | $ | 11,801 | |||||
| Client assets under admin. |
61,285 | 62,775 | 61,944 | 35,881 | 35,986 | ||||||||||
| Total assets under admin. |
$ | 73,752 | $ | 75,203 | $ | 74,233 | $ | 47,721 | $ | 47,787 | |||||
| Investment Advisors: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 24,150 | $ | 25,295 | $ | 25,021 | $ | 25,559 | $ | 27,706 | |||||
| Collective Trust Fund prgm. |
2,481 | 2,454 | 2,592 | 2,592 | 2,521 | ||||||||||
| Liquidity funds |
1,131 | 1,095 | 1,103 | 1,081 | 1,026 | ||||||||||
| Total assets under mgmt. |
$ | 27,762 | $ | 28,844 | $ | 28,716 | $ | 29,232 | $ | 31,253 | |||||
| Enterprises: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 13,324 | $ | 13,303 | $ | 13,616 | $ | 15,871 | $ | 17,283 | |||||
| Collective Trust Fund prgm. |
776 | 783 | 924 | 1,031 | 1,023 | ||||||||||
| Liquidity funds |
3,443 | 3,802 | 3,482 | 3,869 | 3,406 | ||||||||||
| Total assets under mgmt. |
$ | 17,543 | $ | 17,888 | $ | 18,022 | $ | 20,771 | $ | 21,712 | |||||
| Money Managers: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 41 | $ | 39 | $ | 31 | $ | 25 | $ | 18 | |||||
| Collective Trust Fund prgm |
6,630 | 6,727 | 7,066 | 7,226 | 7,097 | ||||||||||
| Liquidity funds |
271 | 146 | 202 | 226 | 208 | ||||||||||
| Total assets under mgmt. |
$ | 6,942 | $ | 6,912 | $ | 7,299 | $ | 7,477 | $ | 7,323 | |||||
| Client assets under admin. |
96,103 | 107,015 | 113,644 | 123,651 | 124,648 | ||||||||||
| Total assets under admin. |
$ | 103,045 | $ | 113,927 | $ | 120,943 | $ | 131,128 | $ | 131,971 | |||||
| Investments in New Businesses: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 9,993 | $ | 11,296 | $ | 12,030 | $ | 13,507 | $ | 15,566 | |||||
| Liquidity funds |
225 | 240 | 239 | 169 | 179 | ||||||||||
| Total assets under mgmt. |
$ | 10,218 | $ | 11,536 | $ | 12,269 | $ | 13,676 | $ | 15,745 | |||||
| Client assets under admin. |
5,855 | 6,631 | 7,028 | 6,096 | 7,003 | ||||||||||
| Total assets under admin. |
$ | 16,073 | $ | 18,167 | $ | 19,297 | $ | 19,772 | $ | 22,748 | |||||
| Unconsolidated Affiliate: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 15,666 | $ | 18,444 | $ | 21,462 | $ | 26,835 | $ | 32,556 | |||||
| Consolidated: |
|||||||||||||||
| Equity/Fixed Income prgms (A,B) |
$ | 65,891 | $ | 71,136 | $ | 75,060 | $ | 84,459 | $ | 95,909 | |||||
| Collective Trust Fund prgm. |
11,213 | 11,321 | 11,985 | 12,304 | 12,159 | ||||||||||
| Liquidity funds (B) |
13,494 | 13,595 | 13,012 | 13,068 | 12,322 | ||||||||||
| Total assets under mgmt. |
$ | 90,598 | $ | 96,052 | $ | 100,057 | $ | 109,831 | $ | 120,390 | |||||
| Client assets under admin. |
163,243 | 176,421 | 182,616 | 165,628 | 167,637 | ||||||||||
| Total assets under admin. |
$ | 253,841 | $ | 272,473 | $ | 282,673 | $ | 275,459 | $ | 288,027 | |||||
| (A) | Equity/Fixed Income programs include $1,836 of assets invested in SEI’s Asset Allocation Funds at 12/31/04. |
| (B) | In addition to the numbers presented, SEI also administers an additional $9,023 in Funds of Funds assets (as of December 31, 2004) on which SEI does not earn an administration fee. |
8