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SEI Investments Company--Form 8-K

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

October 19, 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 Wednesday, October 19, 2005, SEI Investments Company issued a press release announcing its financial and operating results for the third quarter ended September 30, 2005. 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 October 19, 2005 of SEI Investments Company relating to financial and operating results for the third quarter ended September 30, 2005.

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

By:		/s/ Dennis J. McGonigle
		Dennis J. McGonigle Chief Financial Officer

Date: October 19, 2005

EXHIBIT INDEX


Exhibit Number		Description

99.1		Press Release dated October 19, 2005 of SEI Investments Company, financial and operating results for the third quarter ended September 30, 2005.

Press Release

Exhibit 99.1

NEWS FROM SEI

For Immediate Release


Contact:	Mark Samuels, SVP	Murray Louis, VP	Larry Wexler
Voice:	610.676.2024	610.676.1932	610.676.1440
E-mail	msamuels@seic.com	mlouis@seic.com	lwexler@seic.com
Pages:	eight

SEI Reports Third-Quarter 2005 Results

Net Income up 8%, Revenues Increase 12%

OAKS, Pa., October 19, 2005 — SEI Investments Company (NASDAQ:SEIC) today announced financial results for third-quarter 2005, reporting increases in revenues, net income and earnings per share, compared to the corresponding period in 2004.


Consolidated Overview (In thousands, except earnings per share)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2005		2004		%		2005		2004		%
Revenues	$	193,659	$	172,978	12	%	$	569,420	$	509,301	12	%
Net Income Before Taxes		76,677		71,227	8	%		214,874		197,678	9	%
Net Income		49,196		45,407	8	%		137,089		126,020	9	%
Diluted Earnings Per Share	$	.48	$	.43	12	%	$	1.32	$	1.19	11	%

“We continue to be pleased with our results, especially since we are in the heart of the build phase of our new strategies”, said Alfred P. West, Jr., SEI Chairman and CEO.

“These investments promise to both transform our company, giving us even larger markets for growth, as well as provide our clients with increased opportunities for success. In the long run, we are firm in our belief that these investments will position us to grow future revenues and profits more rapidly.”

Summary of Third-Quarter and Year-to-Date Results by Business Segment


(In thousands)	For the Three Month Period Ended September 30,								For the Nine Month Period Ended September 30,
	2005			2004			%		2005			2004			%
Private Banking and Trust:
Revenues	$	67,793		$	69,360		(2	%)	$	211,721		$	218,137		(3	%)
Operating Profit	$	23,582		$	29,674		(21	%)	$	76,173		$	86,805		(12	%)
Operating Margin		35	%		43	%				36	%		40	%
Investment Advisors:
Revenues		53,142			45,967		16	%		151,205			132,198		14	%
Operating Profit		28,978			24,995		16	%		80,820			72,305		12	%
Operating Margin		55	%		54	%				53	%		55	%
Enterprises:
Revenues		22,004			18,347		20	%		62,939			50,617		24	%
Operating Profit		9,721			8,112		20	%		28,447			23,168		23	%
Operating Margin		44	%		44	%				45	%		46	%
Money Managers:
Revenues		22,707			20,523		11	%		64,081			56,471		13	%
Operating Profit		3,362			3,573		(6	%)		10,223			10,457		(2	%)
Operating Margin		15	%		17	%				16	%		19	%
Investments in New Businesses:
Revenues		28,013			18,781		49	%		79,474			51,878		53	%
Operating Loss		(4,131	)		(4,747	)	13	%		(15,004	)		(13,760	)	(9	%)
Operating Margin		(15	%)		(25	%)				(19	%)		(27	%)
Consolidated Segment Totals:
Revenues	$	193,659		$	172,978		12	%	$	569,420		$	509,301		12	%
Operating Profit	$	61,512		$	61,607		—		$	180,659		$	178,975		1	%
Operating Margin		32	%		36	%				32	%		35	%

Third-Quarter Business Commentary:

•

Private Banking & Trust lagged year-ago levels on revenues and profits, due primarily to previously reported losses in the mutual fund services business during the 2nd half of 2004.

•

The Investment Advisors, Enterprises, Money Managers and Investments in New Businesses segments reported revenue gains, versus year-ago levels. This was fueled by stronger capital markets and, in most segments, new sales.

•

Consolidated operating margins lagged year-ago levels, due primarily to increased rate of investment and operational spending necessary to deliver new company strategies and solutions, as well as costs directly associated with new revenue.

•

Assets under management grew by $7.9 billion during the 3rd quarter to $138.5 billion. This growth included $5.5 billion from the unconsolidated affiliate and $2.4 billion from the business segments.

•

In the 3rd quarter, SEI purchased 1,124,000 shares of its common stock for $41.9 million.

Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 PM EDT on Wednesday, October 19, 2005. Investors may listen to the call at www.seic.com, or listen at www.earnings.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 798076.

About SEI

SEI (NASDAQ:SEIC) is a leading global provider of asset management services 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 September 30, 2005, through our subsidiaries and partnerships in which we have a significant interest, SEI administers $321.7 billion in mutual fund and pooled assets, manages $138.5 billion in assets, and operates 22 offices in 12 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.

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)


	Three Months Ended September 30,
	2005			2004
Revenues	$	193,659		$	172,978

Operating and development expenses		99,633			78,961
Sales and marketing expenses		32,514			32,410
General and administrative expenses		8,212			7,054


Income before interest and taxes		53,300			54,553

Equity in earnings of unconsolidated affiliate		20,956			11,859
Net (loss) gain on investments		(130	)		439
Interest income		1,979			1,184
Interest expense		(369	)		(497	)
Other income		941			3,689


Income before taxes		76,677			71,227

Income taxes		27,481			25,820


Net income	$	49,196		$	45,407


Diluted earnings per common share	$	.48		$	.43


Shares used to calculate diluted earnings per common share		102,595			104,968


Basic earnings per common share	$	.49		$	.44

Shares used to calculate basic earnings per common share		99,814			102,904

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)


	Nine Months Ended September 30,
	2005			2004
Revenues	$	569,420		$	509,301

Operating and development expenses		291,140			232,289
Sales and marketing expenses		97,621			98,037
General and administrative expenses		25,331			22,651


Income before interest and taxes		155,328			156,324

Equity in earnings of unconsolidated affiliate		53,818			31,542
Net gain on investments		219			4,730
Interest income		5,739			3,021
Interest expense		(1,171	)		(1,628	)
Other income		941			3,689


Income before taxes		214,874			197,678

Income taxes		77,785			71,658


Net income	$	137,089		$	126,020


Diluted earnings per common share	$	1.32		$	1.19


Shares used to calculate diluted earnings per common share		103,560			106,041


Basic earnings per common share	$	1.36		$	1.21


Shares used to calculate basic earnings per common share		100,792			103,736


SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)


	September 30, 2005		December 31, 2004
Assets

Cash and short-term investments	$	133,709	$	216,966
Restricted Cash		10,003		14,386
Receivables		118,872		108,795
Other current assets		13,788		15,532

Total current assets		276,372		355,679
Property and Equipment, net		115,049		113,640
Investments available for sale		51,999		39,817
Capitalized Software, net		100,430		55,830
Other assets		62,251		50,509

Total assets	$	606,101	$	615,475


Liabilities

Current liabilities	$	137,726	$	163,569
Long-term debt		9,000		14,389
Long-term deferred gain		—		1,472
Deferred income taxes		50,018		32,103
Shareholders’ Equity		409,357		403,942

Total liabilities and shareholders’ equity	$	606,101	$	615,475


SEI Investments Business Segments (In thousands)	Three Months ended Sep. 30,						Nine Months ended Sep. 30,
	2005			2004			2005			2004
Private Banking and Trust:
Revenues
Investment processing fees		54,952			54,381			172,668			166,602
Fund processing fees		4,283			6,247			13,367			25,288
Investment management fees		8,558			8,732			25,686			26,247

Total Revenues		67,793			69,360			211,721			218,137

Operating and development expenses		35,831			30,217			108,655			101,300
Sales and marketing expenses		8,380			9,469			26,893			30,032

Operating Profit		23,582			29,674			76,173			86,805
Operating Margin		35	%		43	%		36	%		40	%

Investment Advisors:
Revenues		53,142			45,967			151,205			132,198

Operating and development expenses		18,076			13,785			51,611			38,124
Sales and marketing expenses		6,088			7,187			18,774			21,769

Operating Profit		28,978			24,995			80,820			72,305
Operating Margin		55	%		54	%		53	%		55	%

Enterprises:
Revenues		22,004			18,347			62,939			50,617

Operating and development expenses		6,796			5,502			19,010			13,751
Sales and marketing expenses		5,487			4,733			15,482			13,698

Operating Profit		9,721			8,112			28,447			23,168
Operating Margin		44	%		44	%		45	%		46	%

Money Managers:
Revenues		22,707			20,523			64,081			56,471

Operating and development expenses		15,716			13,517			43,433			35,491
Sales and marketing expenses		3,629			3,433			10,425			10,523

Operating Profit		3,362			3,573			10,223			10,457
Operating Margin		15	%		17	%		16	%		19	%

Investments in New Businesses:
Revenues		28,013			18,781			79,474			51,878

Operating and development expenses		23,214			15,940			68,431			43,623
Sales and marketing expenses		8,930			7,588			26,047			22,015

Operating Loss		(4,131	)		(4,747	)		(15,004	)		(13,760	)
Operating Margin		(15	%)		(25	%)		(19	%)		(27	%)

Consolidated Segment Totals:
Revenues	$	193,659		$	172,978		$	569,420		$	509,301

Operating and development expenses		99,633			78,961			291,140			232,289
Sales and marketing expenses		32,514			32,410			97,621			98,037

Operating Profit	$	61,512		$	61,607		$	180,659		$	178,975
Operating Margin		32	%		36	%		32	%		35	%

General and Administrative expenses		8,212			7,054			25,331			22,651

Income from Operations	$	53,300		$	54,553		$	155,328		$	156,324
Operating Margin		28	%		32	%		27	%		31	%

SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)


	Sep. 30, 2004		Dec. 31, 2004		Mar. 31, 2005		Jun. 30, 2005		Sep. 30, 2005
Private Banking and Trust:
Equity/Fixed Income prgms.	$	2,662	$	2,780	$	2,427	$	2,495	$	2,504
Collective Trust Fund prgm.		1,455		1,518		1,574		1,700		1,704
Liquidity funds		7,723		7,503		7,406		7,442		7,668

Total assets under mgmt.	$	11,840	$	11,801	$	11,407	$	11,637	$	11,876

Client assets under admin.		35,881		35,986		33,703		34,208		28,675

Total assets under admin.	$	47,721	$	47,787	$	45,110	$	45,845	$	40,551

Investment Advisors:
Equity/Fixed Income prgms.	$	25,559	$	27,706	$	27,371	$	27,883	$	29,219
Collective Trust Fund prgm.		2,592		2,521		2,513		2,610		2,623
Liquidity funds		1,081		1,026		1,113		1,018		1,047

Total assets under mgmt.	$	29,232	$	31,253	$	30,997	$	31,511	$	32,889

Enterprises:
Equity/Fixed Income prgms.	$	15,871	$	17,283	$	17,926	$	18,273	$	19,266
Collective Trust Fund prgm.		1,031		1,023		994		1,001		1,013
Liquidity funds		3,869		3,406		2,976		2,836		2,389

Total assets under mgmt.	$	20,771	$	21,712	$	21,896	$	22,110	$	22,668

Money Managers:
Equity/Fixed Income prgms.	$	25	$	18	$	12	$	12	$	13
Collective Trust Fund prgm.		7,226		7,097		7,634		8,108		8,524
Liquidity funds		226		208		182		167		185

Total assets under mgmt.	$	7,477	$	7,323	$	7,828	$	8,287	$	8,722

Client assets under admin.		123,651		124,648		127,247		139,822		147,647

Total assets under admin.	$	131,128	$	131,971	$	135,075	$	148,109	$	156,369

Investments in New Businesses:
Equity/Fixed Income prgms.	$	13,507	$	15,566	$	17,778	$	19,137	$	18,873
Liquidity funds		169		179		225		255		318

Total assets under mgmt.	$	13,676	$	15,745	$	18,003	$	19,392	$	19,191

Client assets under admin.		6,096		7,003		6,253		7,296		6,841

Total assets under admin.	$	19,772	$	22,748	$	24,256	$	26,688	$	26,032

Unconsolidated Affiliate:
Equity/Fixed Income prgms.	$	26,835	$	32,556	$	33,781	$	37,740	$	43,192

Consolidated:
Equity/Fixed Income prgms (A,B)	$	84,459	$	95,909	$	99,295	$	105,540	$	113,067
Collective Trust Fund prgm.		12,304		12,159		12,715		13,419		13,864
Liquidity funds (B)		13,068		12,322		11,902		11,718		11,607

Total assets under mgmt.	$	109,831	$	120,390	$	123,912	$	130,677	$	138,538

Client assets under admin.		165,628		167,637		167,203		181,326		183,163

Total assets under admin.	$	275,459	$	288,027	$	291,115	$	312,003	$	321,701

(A)

Equity/Fixed Income programs include $2,370 of assets invested in SEI’s Asset Allocation Funds at 9/30/05

(B)

In addition to the numbers presented, SEI also administers an additional $4,800 in Funds of Funds assets (as of September 30, 2005) on which SEI does not earn an administration fee.