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 20, 2003
(Date of Report)
SEI Investments Company
(Exact name of registrant as specified in 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 of former address, if changed since last report)
| Item 7. | Financial Statements and Exhibits. |
| (c) |
Exhibits. | |||
| 99.1 | Press Release of SEI Investments Company, dated October 16, 2003 | |||
| Item 9. | Regulation FD Disclosure |
The information included in this section is intended to be included in “Item 12. Disclosure of Results of Operations and Financial Condition” and is included under this Item 9 in accordance with SEC Release No. 33-8216.
On Thursday, October 16, 2003, SEI Investments Company issued a press release announcing its third quarter earnings for the fiscal quarter ending September 30, 2003. A copy of the press release is attached hereto as Exhibit 99.1.
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 20, 2003 |
By: | /s/ Dennis J. McGongile | ||||||||
| Dennis J. McGongile Chief Financial Officer | ||||||||||
3
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Press Release of SEI Investments Company, dated October 16, 2003 | |
4
Exhibit 99.1
NEWS FROM SEI INVESTMENTS
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 Investments Reports Third-Quarter 2003 Earnings
Revenues for the Quarter Grew 5%
Oaks, PA—October 16, 2003—SEI Investments Company (NASDAQ:SEIC) today announced financial results for third-quarter 2003, reporting an increase in revenues, a decrease in net income and an increase in earnings per share, compared to the corresponding period for the prior year.
| Consolidated Overview (In thousands, except earnings per share) |
For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
||||||||||||||||
| 2003 |
2002 |
% |
2003 |
2002 |
% |
|||||||||||||
| Revenues |
$ | 161,056 | $ | 153,316 | 5 | % | $ | 465,215 | $ | 471,382 | (1 | )% | ||||||
| Net Income Before Taxes |
56,188 | 56,715 | (1 | )% | 166,282 | 167,445 | (1 | )% | ||||||||||
| Net Income |
35,399 | 35,731 | (1 | )% | 104,758 | 105,491 | (1 | )% | ||||||||||
| Diluted Earnings Per Share |
$ | .33 | $ | .32 | 3 | % | $ | .97 | $ | .93 | 4 | % | ||||||
“I am pleased to report modest increases in revenues and earnings per share,” said Alfred P. West, Jr., SEI Chairman and CEO. “These results are in line with the company’s outlook for gradual improvement and steady growth.
“Particularly noteworthy during the quarter is the progress we are making on executing our new strategies. These strategies focus on creating a single platform for delivering financial wellness solutions to all of our markets.”
1
Summary of Third-Quarter 2003 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, |
||||||||||||||||||||
| 2003 |
2002 |
% |
2003 |
2002 |
% |
|||||||||||||||||
| Private Banking and Trust: |
||||||||||||||||||||||
| Revenues |
$ | 73,805 | $ | 80,510 | (8 | )% | $ | 228,319 | $ | 246,346 | (7 | )% | ||||||||||
| Operating Profit |
$ | 27,925 | $ | 34,296 | (19 | )% | $ | 94,962 | $ | 101,773 | (7 | )% | ||||||||||
| Operating Margin |
38 | % | 43 | % | 42 | % | 41 | % | ||||||||||||||
| Investment Advisors: |
||||||||||||||||||||||
| Revenues |
42,372 | 35,866 | 18 | % | 115,364 | 113,986 | 1 | % | ||||||||||||||
| Operating Profit |
21,937 | 20,023 | 10 | % | 61,722 | 58,463 | 6 | % | ||||||||||||||
| Operating Margin |
52 | % | 56 | % | 54 | % | 51 | % | ||||||||||||||
| Enterprises: |
||||||||||||||||||||||
| Revenues |
17,965 | 13,393 | 34 | % | 46,356 | 42,420 | 9 | % | ||||||||||||||
| Operating Profit |
8,691 | 5,502 | 58 | % | 21,444 | 16,682 | 29 | % | ||||||||||||||
| Operating Margin |
48 | % | 41 | % | 46 | % | 39 | % | ||||||||||||||
| Money Managers: |
||||||||||||||||||||||
| Revenues |
14,136 | 12,502 | 13 | % | 39,574 | 34,103 | 16 | % | ||||||||||||||
| Operating Profit |
2,391 | 2,118 | 13 | % | 6,670 | 6,693 | — | |||||||||||||||
| Operating Margin |
17 | % | 17 | % | 17 | % | 20 | % | ||||||||||||||
| Investments in New Businesses: |
||||||||||||||||||||||
| Revenues |
12,778 | 11,045 | 16 | % | 35,602 | 34,527 | 3 | % | ||||||||||||||
| Operating Loss |
(4,412 | ) | (3,520 | ) | (25 | )% | (14,008 | ) | (10,142 | ) | (38 | )% | ||||||||||
| Operating Margin |
(35 | )% | (32 | )% | (39 | )% | (29 | )% | ||||||||||||||
| Consolidated Segment Totals: |
||||||||||||||||||||||
| Revenues |
$ | 161,056 | $ | 153,316 | 5 | % | $ | 465,215 | $ | 471,382 | (1 | )% | ||||||||||
| Operating Profit |
$ | 56,532 | $ | 58,419 | (3 | )% | $ | 170,790 | $ | 173,469 | (2 | )% | ||||||||||
| Operating Margin |
35 | % | 38 | % | 37 | % | 37 | % | ||||||||||||||
Third-Quarter Business Commentary:
| • | Total revenue in the Enterprises and Investment Advisors segments was positively influenced by approximately $7.0 million in one-time events in the quarter. While this had a positive impact on overall corporate revenues, it had a lesser impact on corporate profits due to an increase in non-recurring expenses, sales compensation and increased investment spending on new products. |
2
| • | The Private Banking & Trust segment’s revenue decline in the quarter was due to a decrease in one-time revenues and previously reported losses in fund processing revenues. |
| • | The Money Managers and Investments in New Business segments continue to show growth. |
| • | Assets under management ended the quarter at a new record high of $87.4 billion, an increase of more than $15 billion over the third-quarter a year ago. |
| • | SEI purchased 262,000 shares of its common stock for $8.6 million in the third-quarter 2003. |
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EDST on October 16, 2003. 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 700037.
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, 2003, SEI administers $242 billion in mutual fund and pooled assets, manages over $87 billion in assets, processes almost $50 trillion of investment transactions annually and operates 21 offices in 10 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, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ | 161,056 | $ | 153,316 | ||||
| Operating and development expenses |
70,733 | 61,957 | ||||||
| Sales and marketing expenses |
33,791 | 32,940 | ||||||
| General and administrative expenses |
7,394 | 5,779 | ||||||
| Income before interest and taxes |
49,138 | 52,640 | ||||||
| Equity in earnings of unconsolidated affiliate |
6,288 | 2,861 | ||||||
| Net gain on investments |
509 | 574 | ||||||
| Interest income |
817 | 1,303 | ||||||
| Interest expense |
(564 | ) | (663 | ) | ||||
| Income before taxes |
56,188 | 56,715 | ||||||
| Income taxes |
20,789 | 20,984 | ||||||
| Net income |
$ | 35,399 | $ | 35,731 | ||||
| Diluted earnings per common share |
$ | .33 | $ | .32 | ||||
| Shares used to calculate diluted earnings per common share |
107,915 | 111,735 | ||||||
| Basic earnings per common share |
$ | .34 | $ | .33 | ||||
| Shares used to calculate basic earnings per common share |
105,100 | 107,936 | ||||||
4
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
| Nine Months Ended September 30, | ||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ | 465,215 | $ | 471,382 | ||||
| Operating and development expenses |
205,489 | 198,880 | ||||||
| Sales and marketing expenses |
88,936 | 99,033 | ||||||
| General and administrative expenses |
17,880 | 17,460 | ||||||
| Income before interest and taxes |
152,910 | 156,009 | ||||||
| Equity in earnings of unconsolidated affiliate |
14,763 | 8,643 | ||||||
| Net loss on investments |
(3,673 | ) | 574 | |||||
| Interest income |
3,424 | 3,847 | ||||||
| Interest expense |
(1,651 | ) | (1,628 | ) | ||||
| Other income |
509 | — | ||||||
| Income before taxes |
166,282 | 167,445 | ||||||
| Income taxes |
61,524 | 61,954 | ||||||
| Net income |
$ | 104,758 | $ | 105,491 | ||||
| Diluted earnings per common share |
$ | .97 | $ | .93 | ||||
| Shares used to calculate diluted earnings per common share |
108,494 | 113,674 | ||||||
| Basic earnings per common share |
$ | 1.00 | $ | .97 | ||||
| Shares used to calculate basic earnings per common share |
105,231 | 108,988 | ||||||
5
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
| September 30, 2003 |
December 31, 2002 | |||||
| Assets |
||||||
| Cash and short-term investments |
$ | 192,607 | $ | 165,724 | ||
| Restricted Cash |
10,484 | 10,000 | ||||
| Receivables |
84,065 | 74,642 | ||||
| Other current assets |
10,011 | 11,069 | ||||
| Total current assets |
297,167 | 261,435 | ||||
| Property and Equipment, net |
109,167 | 104,258 | ||||
| Investments available for sale |
64,220 | 62,433 | ||||
| Other assets |
49,899 | 36,021 | ||||
| Total assets |
$ | 520,453 | $ | 464,147 | ||
| Liabilities |
||||||
| Current liabilities |
$ | 132,041 | $ | 134,247 | ||
| Long-term debt |
26,535 | 33,500 | ||||
| Deferred income taxes |
7,301 | 6,393 | ||||
| Shareholders’ Equity |
354,576 | 290,007 | ||||
| Total liabilities and shareholders’ equity |
$ | 520,453 | $ | 464,147 | ||
6
SEI Investments Business Segments
(In thousands)
| Three Months ended Sept. 30, |
Nine Months ended Sept. 30, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Private Banking and Trust: |
||||||||||||||||
| Revenues |
$ | 73,805 | $ | 80,510 | $ | 228,319 | $ | 246,346 | ||||||||
| Operating and development expenses |
36,254 | 33,854 | 106,646 | 111,117 | ||||||||||||
| Sales and marketing expenses |
9,626 | 12,360 | 26,711 | 33,456 | ||||||||||||
| Operating Profit |
27,925 | 34,296 | 94,962 | 101,773 | ||||||||||||
| Operating Margin |
38 | % | 43 | % | 42 | % | 41 | % | ||||||||
| Investment Advisors: |
||||||||||||||||
| Revenues |
42,372 | 35,866 | 115,364 | 113,986 | ||||||||||||
| Operating and development expenses |
10,640 | 8,393 | 31,023 | 28,303 | ||||||||||||
| Sales and marketing expenses |
9,795 | 7,450 | 22,619 | 27,220 | ||||||||||||
| Operating Profit |
21,937 | 20,023 | 61,722 | 58,463 | ||||||||||||
| Operating Margin |
52 | % | 56 | % | 54 | % | 51 | % | ||||||||
| Enterprises: |
||||||||||||||||
| Revenues |
17,965 | 13,393 | 46,356 | 42,420 | ||||||||||||
| Operating and development expenses |
4,183 | 4,147 | 11,248 | 13,017 | ||||||||||||
| Sales and marketing expenses |
5,091 | 3,744 | 13,664 | 12,721 | ||||||||||||
| Operating Profit |
8,691 | 5,502 | 21,444 | 16,682 | ||||||||||||
| Operating Margin |
48 | % | 41 | % | 46 | % | 39 | % | ||||||||
| Money Managers: |
||||||||||||||||
| Revenues |
14,136 | 12,502 | 39,574 | 34,103 | ||||||||||||
| Operating and development expenses |
8,497 | 6,528 | 23,638 | 17,614 | ||||||||||||
| Sales and marketing expenses |
3,248 | 3,856 | 9,266 | 9,796 | ||||||||||||
| Operating Profit |
2,391 | 2,118 | 6,670 | 6,693 | ||||||||||||
| Operating Margin |
17 | % | 17 | % | 17 | % | 20 | % | ||||||||
| Investments in New Businesses: |
||||||||||||||||
| Revenues |
12,778 | 11,045 | 35,602 | 34,527 | ||||||||||||
| Operating and development expenses |
11,159 | 9,035 | 32,934 | 28,829 | ||||||||||||
| Sales and marketing expenses |
6,031 | 5,530 | 16,676 | 15,840 | ||||||||||||
| Operating Loss |
(4,412 | ) | (3,520 | ) | (14,008 | ) | (10,142 | ) | ||||||||
| Operating Margin |
(35 | )% | (32 | )% | (39 | )% | (29 | )% | ||||||||
| Consolidated Segment Totals: |
||||||||||||||||
| Revenues |
$ | 161,056 | $ | 153,316 | $ | 465,215 | $ | 471,382 | ||||||||
| Operating and development expenses |
70,733 | 61,957 | 205,489 | 198,880 | ||||||||||||
| Sales and marketing expenses |
33,791 | 32,940 | 88,936 | 99,033 | ||||||||||||
| Operating Profit |
$ | 56,532 | $ | 58,419 | $ | 170,790 | $ | 173,469 | ||||||||
| Operating Margin |
35 | % | 38 | % | 37 | % | 37 | % | ||||||||
| General and Administrative expenses |
7,394 | 5,779 | 17,880 | 17,460 | ||||||||||||
| Income from Operations |
$ | 49,138 | $ | 52,640 | $ | 152,910 | $ | 156,009 | ||||||||
| Operating Margin |
31 | % | 34 | % | 33 | % | 33 | % | ||||||||
7
SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
| Sept. 30, 2002 |
Dec. 31, 2002 |
Mar. 31, 2003 |
June 30, 2003 |
Sept. 30, 2003 | |||||||||||
| Private Banking & Trust |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 2,863 | $ | 3,332 | $ | 3,635 | $ | 3,879 | $ | 3,880 | |||||
| Liquidity funds |
13,084 | 12,811 | 13,257 | 12,653 | 11,026 | ||||||||||
| Total assets under mgmt. |
15,947 | 16,143 | 16,892 | 16,532 | 14,906 | ||||||||||
| Client assets under admin. |
85,931 | 83,652 | 72,078 | 60,124 | 61,174 | ||||||||||
| Total assets under admin. |
$ | 101,878 | $ | 99,795 | $ | 88,970 | $ | 76,656 | $ | 76,080 | |||||
| Investment Advisors |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 21,876 | $ | 22,708 | $ | 22,287 | $ | 24,658 | $ | 25,020 | |||||
| Liquidity funds |
1,340 | 1,444 | 1,558 | 1,434 | 1,252 | ||||||||||
| Total assets under mgmt. |
$ | 23,216 | $ | 24,152 | $ | 23,845 | $ | 26,092 | $ | 26,272 | |||||
| Enterprises |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 10,098 | $ | 11,107 | $ | 10,864 | $ | 12,100 | $ | 12,790 | |||||
| Liquidity funds |
4,145 | 5,148 | 4,277 | 5,148 | 4,861 | ||||||||||
| Total assets under mgmt. |
$ | 14,243 | $ | 16,255 | $ | 15,141 | $ | 17,248 | $ | 17,651 | |||||
| Money Managers |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 4,040 | $ | 4,436 | $ | 5,072 | $ | 5,519 | $ | 6,177 | |||||
| Liquidity funds |
1,086 | 1,350 | 1,151 | 900 | 1,036 | ||||||||||
| Total assets under mgmt. |
5,126 | 5,786 | 6,223 | 6,419 | 7,213 | ||||||||||
| Client assets under admin. |
71,256 | 74,523 | 74,964 | 82,359 | 88,458 | ||||||||||
| Total assets under admin. |
$ | 76,382 | $ | 80,309 | $ | 81,187 | $ | 88,778 | $ | 95,671 | |||||
| Investments in New Businesses |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 7,318 | $ | 7,544 | $ | 7,654 | $ | 8,626 | $ | 8,874 | |||||
| Liquidity funds |
108 | 219 | 73 | 21 | 52 | ||||||||||
| Total assets under mgmt. |
7,426 | 7,763 | 7,727 | 8,647 | 8,926 | ||||||||||
| Client assets under admin. |
4,020 | 4,894 | 5,229 | 7,001 | 5,319 | ||||||||||
| Total assets under admin. |
$ | 11,446 | $ | 12,657 | $ | 12,956 | $ | 15,648 | $ | 14,245 | |||||
| Unconsolidated Affiliate |
|||||||||||||||
| Equity/Fixed Income prgms |
$ | 6,255 | $ | 7,874 | $ | 8,391 | $ | 10,755 | $ | 12,435 | |||||
| Consolidated |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 52,450 | $ | 57,001 | $ | 57,903 | $ | 65,537 | $ | 69,176 | |||||
| Liquidity funds |
19,763 | 20,972 | 20,316 | 20,156 | 18,227 | ||||||||||
| Total assets under mgmt. |
72,213 | 77,973 | 78,219 | 85,693 | 87,403 | ||||||||||
| Client assets under admin. |
161,207 | 163,069 | 152,271 | 149,484 | 154,951 | ||||||||||
| Total assets under admin. |
$ | 233,420 | $ | 241,042 | $ | 230,490 | $ | 235,177 | $ | 242,354 | |||||
8