| 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
Date of Report (Date of earliest event reported)
October 19, 2004
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 Number) |
(IRS Employer Identification No.) |
| 1 Freedom Valley Drive Oaks, Pennsylvania |
19456 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code
(610) 676-1000
| 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 Tuesday, October 19, 2004, SEI Investments Company issued a press release announcing its unaudited financial and operating results for the fiscal quarter ended September 30, 2004. To clarify the information contained in the press release, during the quarter SEI realized one-time other income of $3.7 million. The majority, $3.1 million, reflects a gain on our previously described sale of a 3% interest in LSV Asset Management. 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, 2004 of SEI Investments Company, unaudited financial and operating results for the fiscal quarter ended September 30, 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: October 19, 2004 | By: | /s/ Dennis J. McGonigle | ||
| Dennis J. McGonigle | ||||
| Chief Financial Officer | ||||
3
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Press Release dated October 19, 2004 of SEI Investments Company, unaudited financial and operating results for the fiscal quarter ended September 30, 2004. |
4
Exhibit 99.1
For Immediate Release
| Contact: |
Mark Samuels, SVP |
Murray Louis, VP |
Larry Wexler | |||
| Voice: |
610.676.2024 |
610.676.1932 |
610.676.1440 | |||
| |
msamuels@seic.com |
mlouis@seic.com |
lwexler@seic.com | |||
| Pages: |
Eight |
SEI Investments Reports Third-Quarter 2004 Results
Net Income Up 28%; EPS Results Include One-Time Gain of $.02
Oaks, PA—October 19, 2004—SEI Investments Company (NASDAQ:SEIC) today announced financial results for third-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 |
For the Nine Months |
||||||||||||||||
| (In thousands, except earnings per share) | Ended September 30, |
Ended September 30, |
||||||||||||||||
| 2004 |
2003 |
% |
2004 |
2003 |
% |
|||||||||||||
| Revenues |
$ | 172,978 | $ | 163,360 | 6 | % | $ | 509,301 | $ | 472,426 | 8 | % | ||||||
| Net Income Before Taxes |
71,227 | 56,188 | 27 | % | 197,678 | 166,282 | 19 | % | ||||||||||
| Net Income |
45,407 | 35,399 | 28 | % | 126,020 | 104,758 | 20 | % | ||||||||||
| Diluted Earnings Per Share |
$ | .43 | $ | .33 | 30 | % | $ | 1.19 | $ | .97 | 23 | % | ||||||
“We continue to deliver growth in our revenue, net income and earnings per share”, said Alfred P. West, Jr., SEI Chairman and CEO. “At the same time, we are creating ever increasing market acceptance of our new offerings. This momentum is encouraging given we are in a time of accelerated investment in our new offerings.”
1
Summary of Third-Quarter 2004 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, |
||||||||||||||||||||
| 2004 |
2003 |
% |
2004 |
2003 |
% |
|||||||||||||||||
| Private Banking and Trust: |
||||||||||||||||||||||
| Revenues |
$ | 69,360 | $ | 76,044 | (9 | )% | $ | 218,137 | $ | 235,281 | (7 | )% | ||||||||||
| Operating Profit |
$ | 29,674 | $ | 27,925 | 6 | % | $ | 86,805 | $ | 94,962 | (9 | )% | ||||||||||
| Operating Margin |
43 | % | 37 | % | 40 | % | 40 | % | ||||||||||||||
| Investment Advisors: |
||||||||||||||||||||||
| Revenues |
45,967 | 42,372 | 8 | % | 132,198 | 115,364 | 15 | % | ||||||||||||||
| Operating Profit |
24,995 | 21,937 | 14 | % | 72,305 | 61,722 | 17 | % | ||||||||||||||
| Operating Margin |
54 | % | 52 | % | 55 | % | 54 | % | ||||||||||||||
| Enterprises: |
||||||||||||||||||||||
| Revenues |
18,347 | 17,965 | 2 | % | 50,617 | 46,356 | 9 | % | ||||||||||||||
| Operating Profit |
8,112 | 8,691 | (7 | )% | 23,168 | 21,444 | 8 | % | ||||||||||||||
| Operating Margin |
44 | % | 48 | % | 46 | % | 46 | % | ||||||||||||||
| Money Managers: |
||||||||||||||||||||||
| Revenues |
20,523 | 14,201 | 45 | % | 56,471 | 39,823 | 42 | % | ||||||||||||||
| Operating Profit |
3,573 | 2,391 | 49 | % | 10,457 | 6,670 | 57 | % | ||||||||||||||
| Operating Margin |
17 | % | 17 | % | 19 | % | 17 | % | ||||||||||||||
| Investments in New Businesses: |
||||||||||||||||||||||
| Revenues |
18,781 | 12,778 | 47 | % | 51,878 | 35,602 | 46 | % | ||||||||||||||
| Operating Loss |
(4,747 | ) | (4,412 | ) | (8 | )% | (13,760 | ) | (14,008 | ) | 2 | % | ||||||||||
| Operating Margin |
(25 | )% | (35 | )% | (27 | )% | (39 | )% | ||||||||||||||
| Consolidated Segment Totals: |
||||||||||||||||||||||
| Revenues |
$ | 172,978 | $ | 163,360 | 6 | % | $ | 509,301 | $ | 472,426 | 8 | % | ||||||||||
| Operating Profit |
$ | 61,607 | $ | 56,532 | 9 | % | $ | 178,975 | $ | 170,790 | 5 | % | ||||||||||
| Operating Margin |
36 | % | 35 | % | 35 | % | 36 | % | ||||||||||||||
Third-Quarter Business Commentary:
| • | The Private Banking & Trust segment reported revenues that were less than both year ago and 2nd quarter levels. This is due primarily to the previously reported mutual fund client losses and secondarily to reduced one-time transaction-based revenues. |
| • | The Investment Advisors segment reported modest gains in revenues and profits vs. a year ago due to growth in assets under management. 3rd Quarter 2003 results included $2.8 million of one-time revenue and profits. |
| • | The Enterprises segment revenues and profits were essentially flat vs. a year ago due primarily to $2.8 million of one time revenue and profits reported in 3rd Quarter 2003. |
2
| • | Revenues in the Money Managers and Investments in New Businesses segments continue to show growth. As previously reported, these units continue to reinvest to take advantage of their expanding market opportunities. |
| • | Assets under management grew by over $9 billion to $109.8 billion. This growth came from continued growth in both LSV and SEI balances. |
| • | The company’s results reflect a $3.7 million one-time gain associated with the sale of a small portion of equity interest in LSV Asset Management. |
| • | In the third-quarter 2004, SEI purchased 719,000 shares of its common stock for $22.9 million. |
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EDST on October 19, 2004. Investors may listen to the call at www.seic.com, or listen at www.companyboardroom.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 747584.
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 September 30, 2004, SEI administers over $275 billion in mutual fund and pooled assets, manages over $109 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.
3
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| Three Months Ended September 30, |
||||||||
| 2004 |
2003 * |
|||||||
| Revenues |
$ | 172,978 | $ | 163,360 | ||||
| Operating and development expenses |
78,961 | 72,425 | ||||||
| Sales and marketing expenses |
32,410 | 34,403 | ||||||
| General and administrative expenses |
7,054 | 7,394 | ||||||
| Income before interest and taxes |
54,553 | 49,138 | ||||||
| Equity in earnings of unconsolidated affiliate |
11,859 | 6,288 | ||||||
| Net gain on investments |
439 | 509 | ||||||
| Interest income |
1,184 | 817 | ||||||
| Interest expense |
(497 | ) | (564 | ) | ||||
| Other income |
3,689 | — | ||||||
| Income before taxes |
71,227 | 56,188 | ||||||
| Income taxes |
25,820 | 20,789 | ||||||
| Net income |
$ | 45,407 | $ | 35,399 | ||||
| Diluted earnings per common share |
$ | .43 | $ | .33 | ||||
| Shares used to calculate diluted earnings per common share |
104,968 | 107,915 | ||||||
| Basic earnings per common share |
$ | .44 | $ | .34 | ||||
| Shares used to calculate basic earnings per common share |
102,904 | 105,100 | ||||||
| * | Certain amounts for prior years have been reclassified to conform to current-year presentation. |
4
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 * |
|||||||
| Revenues |
$ | 509,301 | $ | 472,426 | ||||
| Operating and development expenses |
232,289 | 210,679 | ||||||
| Sales and marketing expenses |
98,037 | 90,957 | ||||||
| General and administrative expenses |
22,651 | 17,880 | ||||||
| Income before interest and taxes |
156,324 | 152,910 | ||||||
| Equity in earnings of unconsolidated affiliate |
31,542 | 14,763 | ||||||
| Net gain (loss) on investments |
4,730 | (3,673 | ) | |||||
| Interest income |
3,021 | 3,424 | ||||||
| Interest expense |
(1,628 | ) | (1,651 | ) | ||||
| Other income |
3,689 | 509 | ||||||
| Income before taxes |
197,678 | 166,282 | ||||||
| Income taxes |
71,658 | 61,524 | ||||||
| Net income |
$ | 126,020 | $ | 104,758 | ||||
| Diluted earnings per common share |
$ | 1.19 | $ | .97 | ||||
| Shares used to calculate diluted earnings per common share |
106,041 | 108,494 | ||||||
| Basic earnings per common share |
$ | 1.21 | $ | 1.00 | ||||
| Shares used to calculate basic earnings per common share |
103,736 | 105,231 | ||||||
| * | Certain amounts for prior years have been reclassified to conform to current-year presentation. |
5
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
| September 30, 2004 |
December 31, 2003 | |||||
| Assets |
||||||
| Cash and short-term investments |
$ | 187,771 | $ | 199,953 | ||
| Restricted Cash |
61,450 | 53,481 | ||||
| Receivables |
105,981 | 86,612 | ||||
| Other current assets |
11,533 | 12,367 | ||||
| Total current assets |
366,735 | 352,413 | ||||
| Property and Equipment, net |
111,500 | 113,064 | ||||
| Investments available for sale |
56,866 | 70,560 | ||||
| Other assets |
90,168 | 56,592 | ||||
| Total assets |
$ | 625,269 | $ | 592,629 | ||
| Liabilities |
||||||
| Current liabilities |
$ | 190,440 | $ | 193,474 | ||
| Long-term debt |
15,778 | 23,944 | ||||
| Deferred income taxes |
21,810 | 11,438 | ||||
| Other long-term liabilities |
1,472 | — | ||||
| Shareholders’ Equity |
395,769 | 363,773 | ||||
| Total liabilities and shareholders’ equity |
$ | 625,269 | $ | 592,629 | ||
6
SEI Investments Business Segments
(In thousands)
| Three Months ended Sept. 30, |
Nine Months ended Sept. 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
| Private Banking and Trust: * |
||||||||||||||||
| Revenues |
||||||||||||||||
| Investment processing fees |
54,381 | 56,085 | 166,602 | 171,875 | ||||||||||||
| Fund processing fees |
6,247 | 10,048 | 25,288 | 33,619 | ||||||||||||
| Investment management fees |
8,732 | 9,911 | 26,247 | 29,787 | ||||||||||||
| Total Revenues |
69,360 | 76,044 | 218,137 | 235,281 | ||||||||||||
| Operating and development expenses |
30,217 | 37,946 | 101,300 | 111,836 | ||||||||||||
| Sales and marketing expenses |
9,469 | 10,173 | 30,032 | 28,483 | ||||||||||||
| Operating Profit |
29,674 | 27,925 | 86,805 | 94,962 | ||||||||||||
| Operating Margin |
43 | % | 37 | % | 40 | % | 40 | % | ||||||||
| Investment Advisors: |
||||||||||||||||
| Revenues |
45,967 | 42,372 | 132,198 | 115,364 | ||||||||||||
| Operating and development expenses |
13,785 | 10,640 | 38,124 | 31,023 | ||||||||||||
| Sales and marketing expenses |
7,187 | 9,795 | 21,769 | 22,619 | ||||||||||||
| Operating Profit |
24,995 | 21,937 | 72,305 | 61,722 | ||||||||||||
| Operating Margin |
54 | % | 52 | % | 55 | % | 54 | % | ||||||||
| Enterprises: |
||||||||||||||||
| Revenues |
18,347 | 17,965 | 50,617 | 46,356 | ||||||||||||
| Operating and development expenses |
5,502 | 4,183 | 13,751 | 11,248 | ||||||||||||
| Sales and marketing expenses |
4,733 | 5,091 | 13,698 | 13,664 | ||||||||||||
| Operating Profit |
8,112 | 8,691 | 23,168 | 21,444 | ||||||||||||
| Operating Margin |
44 | % | 48 | % | 46 | % | 46 | % | ||||||||
| Money Managers: * |
||||||||||||||||
| Revenues |
20,523 | 14,201 | 56,471 | 39,823 | ||||||||||||
| Operating and development expenses |
13,517 | 8,497 | 35,491 | 23,638 | ||||||||||||
| Sales and marketing expenses |
3,433 | 3,313 | 10,523 | 9,515 | ||||||||||||
| Operating Profit |
3,573 | 2,391 | 10,457 | 6,670 | ||||||||||||
| Operating Margin |
17 | % | 17 | % | 19 | % | 17 | % | ||||||||
| Investments in New Businesses: |
||||||||||||||||
| Revenues |
18,781 | 12,778 | 51,878 | 35,602 | ||||||||||||
| Operating and development expenses |
15,940 | 11,159 | 43,623 | 32,934 | ||||||||||||
| Sales and marketing expenses |
7,588 | 6,031 | 22,015 | 16,676 | ||||||||||||
| Operating Loss |
(4,747 | ) | (4,412 | ) | (13,760 | ) | (14,008 | ) | ||||||||
| Operating Margin |
(25 | )% | (35 | )% | (27 | )% | (39 | )% | ||||||||
| Consolidated Segment Totals: |
||||||||||||||||
| Revenues |
$ | 172,978 | $ | 163,360 | $ | 509,301 | $ | 472,426 | ||||||||
| Operating and development expenses |
78,961 | 72,425 | 232,289 | 210,679 | ||||||||||||
| Sales and marketing expenses |
32,410 | 34,403 | 98,037 | 90,957 | ||||||||||||
| Operating Profit |
$ | 61,607 | $ | 56,532 | $ | 178,975 | $ | 170,790 | ||||||||
| Operating Margin |
36 | % | 35 | % | 35 | % | 36 | % | ||||||||
| General and Administrative expenses |
7,054 | 7,394 | 22,651 | 17,880 | ||||||||||||
| Income from Operations |
$ | 54,553 | $ | 49,138 | $ | 156,324 | $ | 152,910 | ||||||||
| Operating Margin |
32 | % | 30 | % | 31 | % | 32 | % | ||||||||
| * | Certain amounts for prior years have been reclassified to conform to current-year presentation. |
7
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
| Sept. 30, 2003 |
Dec. 31, 2003 |
Mar. 31, 2004 |
Jun. 30, 2004 |
Sep. 30, 2004 | |||||||||||
| Private Banking & Trust: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 2,615 | $ | 2,717 | $ | 2,759 | $ | 2,900 | $ | 2,662 | |||||
| Collective Trust Fund prgm |
1,265 | 1,326 | 1,357 | 1,403 | 1,455 | ||||||||||
| Liquidity funds |
11,026 | 8,424 | 8,312 | 7,986 | 7,723 | ||||||||||
| Total assets under mgmt. |
14,906 | 12,467 | 12,428 | 12,289 | 11,840 | ||||||||||
| Client assets under admin. |
61,174 | 61,285 | 62,775 | 61,944 | 35,881 | ||||||||||
| Total assets under admin. |
$ | 76,080 | $ | 73,752 | $ | 75,203 | $ | 74,233 | $ | 47,721 | |||||
| Investment Advisors: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 22,376 | $ | 24,150 | $ | 25,295 | $ | 25,021 | $ | 25,559 | |||||
| Collective Trust Fund prgm |
2,644 | 2,481 | 2,454 | 2,592 | 2,592 | ||||||||||
| Liquidity funds |
1,252 | 1,131 | 1,095 | 1,103 | 1,081 | ||||||||||
| Total assets under mgmt. |
$ | 26,272 | $ | 27,762 | $ | 28,844 | $ | 28,716 | $ | 29,232 | |||||
| Enterprises: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 12,049 | $ | 13,324 | $ | 13,303 | $ | 13,616 | $ | 15,871 | |||||
| Collective Trust Fund prgm |
741 | 776 | 783 | 924 | 1,031 | ||||||||||
| Liquidity funds |
4,861 | 3,443 | 3,802 | 3,482 | 3,869 | ||||||||||
| Total assets under mgmt. |
$ | 17,651 | $ | 17,543 | $ | 17,888 | $ | 18,022 | $ | 20,771 | |||||
| Money Managers: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 37 | $ | 41 | $ | 39 | $ | 31 | $ | 25 | |||||
| Collective Trust Fund prgm |
6,140 | 6,630 | 6,727 | 7,066 | 7,226 | ||||||||||
| Liquidity funds |
1,036 | 271 | 146 | 202 | 226 | ||||||||||
| Total assets under mgmt. |
7,213 | 6,942 | 6,912 | 7,299 | 7,477 | ||||||||||
| Client assets under admin. |
88,458 | 96,103 | 107,015 | 113,644 | 123,651 | ||||||||||
| Total assets under admin. |
$ | 95,671 | $ | 103,045 | $ | 113,927 | $ | 120,943 | $ | 131,128 | |||||
| Investments in New Businesses: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 8,682 | $ | 9,993 | $ | 11,296 | $ | 12,030 | $ | 13,507 | |||||
| Liquidity funds |
244 | 225 | 240 | 239 | 169 | ||||||||||
| Total assets under mgmt. |
8,926 | 10,218 | 11,536 | 12,269 | 13,676 | ||||||||||
| Client assets under admin. |
5,319 | 5,855 | 6,631 | 7,028 | 6,096 | ||||||||||
| Total assets under admin. |
$ | 14,245 | $ | 16,073 | $ | 18,167 | $ | 19,297 | $ | 19,772 | |||||
| Unconsolidated Affiliate: |
|||||||||||||||
| Equity/Fixed Income prgms |
$ | 12,435 | $ | 15,666 | $ | 18,444 | $ | 21,462 | $ | 26,835 | |||||
| Consolidated: |
|||||||||||||||
| Equity/Fixed Income prgms (A) |
$ | 58,194 | $ | 65,891 | $ | 71,136 | $ | 75,060 | $ | 84,459 | |||||
| Collective Trust Fund prgm |
10,790 | 11,213 | 11,321 | 11,985 | 12,304 | ||||||||||
| Liquidity funds |
18,419 | 13,494 | 13,595 | 13,012 | 13,068 | ||||||||||
| Total assets under mgmt. |
87,403 | 90,598 | 96,052 | 100,057 | 109,831 | ||||||||||
| Client assets under admin. (B) |
154,951 | 163,243 | 176,421 | 182,616 | 165,628 | ||||||||||
| Total assets under admin. |
$ | 242,354 | $ | 253,841 | $ | 272,473 | $ | 282,673 | $ | 275,459 | |||||
| (A) | Equity/Fixed Income programs include $1,566 of assets invested in SEI’s Asset Allocation Funds at 9/30/04 |
| (B) | In addition to the numbers presented, SEI also administers an additional $6,909 in Funds of Funds assets |
(as of September 30, 2004) on which SEI does not earn an administration fee.
8