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

 

April 27, 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, April 27, 2005, SEI Investments Company issued a press release announcing its financial and operating results for the first quarter ended March 31, 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 April 27, 2005 of SEI Investments Company, financial and operating results for the first quarter ended March 31, 2005.

 

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: April 27, 2005

  By:  

/s/ Dennis J. McGonigle


        Dennis J. McGonigle
        Chief Financial Officer

 

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EXHIBIT INDEX

 

Exhibit
Number


  

Description


99.1    Press Release dated April 27, 2005 of SEI Investments Company, financial and operating results for first quarter ended March 31, 2005.

 

4

Press Release

Exhibit 99.1

 

LOGO

 

For Immediate Release

 

Contact:

    

Mark Samuels, SVP

    

Murray Louis, VP

Voice:

    

610.676.2024

    

610.676.1932

E-mail

    

msamuels@seic.com

    

mlouis@seic.com

Pages:

    

Seven

      

 

SEI Investments Reports First-Quarter 2005 Results

 

Net Income and Revenues Increase 11%

 

OAKS, Pa., April 27, 2005 — SEI Investments Company (NASDAQ:SEIC) today announced financial results for first-quarter 2005, 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 March 31,


 

(In thousands, except earnings per share)

   2005

   2004

   %

 

Revenues

   $ 185,681    $ 167,161    11 %

Net Income Before Taxes

     68,833      61,818    11 %

Net Income

     43,709      39,409    11 %

Diluted Earnings Per Share

   $ .42    $ .37    14 %

 

“We are pleased with the quarter’s results, although we look at them in light of a longer journey we started over three years ago”, said Alfred P. West, Jr., SEI Chairman and CEO.

 

“We are certain the investments we are making will transform our company, giving us even larger markets to grow within while providing our clients with increased opportunities for success. As you read the segment reports, the revenue results are proof that these investments are already beginning to generate results. In the longer run, we are firm in our belief that we are on the right path to more rapidly grow future revenues and profits.”

 

1


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

 

     For the Three Month Period
Ended March 31,


 

(In thousands)

 

   2005

    2004

    %

 

Private Banking and Trust:

                      

Revenues

   $ 72,381     $ 74,593     (3 )%

Operating Profit

   $ 26,717     $ 27,503     (3 )%

Operating Margin

     37 %     37 %      

Investment Advisors:

                      

Revenues

     48,723       43,183     13 %

Operating Profit

     25,902       23,821     9 %

Operating Margin

     53 %     55 %      

Enterprises:

                      

Revenues

     20,235       16,235     25 %

Operating Profit

     9,387       7,844     20 %

Operating Margin

     46 %     48 %      

Money Managers:

                      

Revenues

     20,144       16,904     19 %

Operating Profit

     3,488       2,916     20 %

Operating Margin

     17 %     17 %      

Investments in New Businesses:

                      

Revenues

     24,198       16,246     49 %

Operating Loss

     (6,136 )     (4,725 )   (30 )%

Operating Margin

     (25 )%     (29 )%      

Consolidated Segment Totals:

                      

Revenues

   $ 185,681     $ 167,161     11 %

Operating Profit

   $ 59,358     $ 57,359     3 %

Operating Margin

     32 %     34 %      

 

First-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 during the second half of 2004.

 

    The Investment Advisors, Enterprises, Money Managers and Investments in New Businesses segments reported revenue gains vs. year ago levels. The Investment Advisors and Enterprises segment results for 2005 include an offsetting revenue and expense reclass of approximately $2.6 million and $0.6 million, respectively that was not reflected for the same period in 2004. This had no impact on operating profit.

 

2


    The Investment Advisors, Enterprises and Money Managers segments posted gains in profitability. Investments in New Businesses continued to be impacted by investments in market expansion and new product development.

 

    Assets under management grew by $3.5 billion during the first quarter to $123.9 billion.

 

    In the first quarter, SEI purchased 1,277,000 shares of its common stock for $46.9 million.

 

Earnings Conference Call

 

A conference call to review earnings is scheduled for 2:00 PM EST on April 27, 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 778819.

 

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 March 31, 2005, through our subsidiaries and partnerships in which we have a significant interest, SEI administers $291.1 billion in mutual fund and pooled assets, manages $123.9 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 March 31,

 
     2005

    2004

 

Revenues

   $ 185,681     $ 167,161  

Operating and development expenses

     94,427       78,732  

Sales and marketing expenses

     31,896       31,070  

General and administrative expenses

     7,729       7,786  
    


 


Income before interest and taxes

     51,629       49,573  

Equity in earnings of unconsolidated affiliate

     15,226       9,003  

Net gain on investments

     427       2,935  

Interest income

     1,976       933  

Interest expense

     (425 )     (626 )
    


 


Income before taxes

     68,833       61,818  

Income taxes

     25,124       22,409  
    


 


Net income

   $ 43,709     $ 39,409  
    


 


Diluted earnings per common share

   $ .42     $ .37  
    


 


Shares used to calculate diluted earnings per common share

     104,695       107,449  
    


 


Basic earnings per common share

   $ .43     $ .38  
    


 


Shares used to calculate basic earnings per common share

     101,776       104,878  
    


 


 

 

4


SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)

 

     March 31,
2005


   December 31,
2004


Assets

             

Cash and short-term investments

   $ 158,473    $ 216,966

Restricted Cash

     12,083      14,386

Receivables

     119,317      108,795

Other current assets

     14,211      15,532
    

  

Total current assets

     304,084      355,679

Property and Equipment, net

     115,043      113,640

Investments available for sale

     42,056      39,817

Capitalized Software, net

     67,672      55,830

Other assets

     54,404      50,509
    

  

Total assets

   $ 583,259    $ 615,475
    

  

Liabilities

             

Current liabilities

   $ 134,320    $ 163,569

Long-term debt

     9,000      14,389

Long-term deferred gain

     —        1,472

Deferred income taxes

     36,312      32,103

Shareholders’ Equity

     403,627      403,942
    

  

Total liabilities and shareholders’ equity

   $ 583,259    $ 615,475
    

  

 

5


SEI Investments Business Segments

(In thousands)

 

     Three Months ended Mar. 31,

 
     2005

    2004

 

Private Banking and Trust:

                

Revenues

                

Investment processing fees

     59,206       55,853  

Fund processing fees

     4,591       9,701  

Investment management fees

     8,584       9,039  
    


 


Total Revenues

     72,381       74,593  

Operating and development expenses

     36,449       37,810  

Sales and marketing expenses

     9,215       9,280  
    


 


Operating Profit

     26,717       27,503  

Operating Margin

     37 %     37 %

Investment Advisors:

                

Revenues

     48,723       43,183  

Operating and development expenses

     16,534       12,496  

Sales and marketing expenses

     6,287       6,866  
    


 


Operating Profit

     25,902       23,821  

Operating Margin

     53 %     55 %

Enterprises:

                

Revenues

     20,235       16,235  

Operating and development expenses

     5,921       4,070  

Sales and marketing expenses

     4,927       4,321  
    


 


Operating Profit

     9,387       7,844  

Operating Margin

     46 %     48 %

Money Managers:

                

Revenues

     20,144       16,904  

Operating and development expenses

     13,325       10,474  

Sales and marketing expenses

     3,331       3,514  
    


 


Operating Profit

     3,488       2,916  

Operating Margin

     17 %     17 %

Investments in New Businesses:

                

Revenues

     24,198       16,246  

Operating and development expenses

     22,198       13,882  

Sales and marketing expenses

     8,136       7,089  
    


 


Operating Loss

     (6,136 )     (4,725 )

Operating Margin

     (25 )%     (29 )%

Consolidated Segment Totals:

                

Revenues

   $ 185,681     $ 167,161  

Operating and development expenses

     94,427       78,732  

Sales and marketing expenses

     31,896       31,070  
    


 


Operating Profit

   $ 59,358     $ 57,359  

Operating Margin

     32 %     34 %

General and Administrative expenses

     7,729       7,786  

Income from Operations

   $ 51,629     $ 49,573  

Operating Margin

     28 %     30 %

 

6


SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

 

     Mar. 31,
2004


   Jun. 30,
2004


   Sep. 30,
2004


   Dec. 31,
2004


   Mar. 31,
2005


Private Banking and Trust:

                                  

Equity/Fixed Income prgms.

   $ 2,759    $ 2,900    $ 2,662    $ 2,780    $ 2,427

Collective Trust Fund prgm.

     1,357      1,403      1,455      1,518      1,574

Liquidity funds

     8,312      7,986      7,723      7,503      7,406
    

  

  

  

  

Total assets under mgmt.

   $ 12,428    $ 12,289    $ 11,840    $ 11,801    $ 11,407

Client assets under admin.

     62,775      61,944      35,881      35,986      33,703
    

  

  

  

  

Total assets under admin.

   $ 75,203    $ 74,233    $ 47,721    $ 47,787    $ 45,110

Investment Advisors:

                                  

Equity/Fixed Income prgms.

   $ 25,295    $ 25,021    $ 25,559    $ 27,706    $ 27,371

Collective Trust Fund prgm.

     2,454      2,592      2,592      2,521      2,513

Liquidity funds

     1,095      1,103      1,081      1,026      1,113
    

  

  

  

  

Total assets under mgmt.

   $ 28,844    $ 28,716    $ 29,232    $ 31,253    $ 30,997

Enterprises:

                                  

Equity/Fixed Income prgms.

   $ 13,303    $ 13,616    $ 15,871    $ 17,283    $ 17,926

Collective Trust Fund prgm.

     783      924      1,031      1,023      994

Liquidity funds

     3,802      3,482      3,869      3,406      2,976
    

  

  

  

  

Total assets under mgmt.

   $ 17,888    $ 18,022    $ 20,771    $ 21,712    $ 21,896

Money Managers:

                                  

Equity/Fixed Income prgms.

   $ 39    $ 31    $ 25    $ 18    $ 12

Collective Trust Fund prgm.

     6,727      7,066      7,226      7,097      7,634

Liquidity funds

     146      202      226      208      182
    

  

  

  

  

Total assets under mgmt.

   $ 6,912    $ 7,299    $ 7,477    $ 7,323    $ 7,828

Client assets under admin.

     107,015      113,644      123,651      124,648      127,247
    

  

  

  

  

Total assets under admin.

   $ 113,927    $ 120,943    $ 131,128    $ 131,971    $ 135,075

Investments in New Businesses:

                                  

Equity/Fixed Income prgms.

   $ 11,296    $ 12,030    $ 13,507    $ 15,566    $ 17,778

Liquidity funds

     240      239      169      179      225
    

  

  

  

  

Total assets under mgmt.

   $ 11,536    $ 12,269    $ 13,676    $ 15,745    $ 18,003

Client assets under admin.

     6,631      7,028      6,096      7,003      6,253
    

  

  

  

  

Total assets under admin.

   $ 18,167    $ 19,297    $ 19,772    $ 22,748    $ 24,256

Unconsolidated Affiliate:

                                  

Equity/Fixed Income prgms.

   $ 18,444    $ 21,462    $ 26,835    $ 32,556    $ 33,781

Consolidated:

                                  

Equity/Fixed Income prgms (A,B)

   $ 71,136    $ 75,060    $ 84,459    $ 95,909    $ 99,295

Collective Trust Fund prgm.

     11,321      11,985      12,304      12,159      12,715

Liquidity funds (B)

     13,595      13,012      13,068      12,322      11,902
    

  

  

  

  

Total assets under mgmt.

   $ 96,052    $ 100,057    $ 109,831    $ 120,390    $ 123,912

Client assets under admin.

     176,421      182,616      165,628      167,637      167,203
    

  

  

  

  

Total assets under admin.

   $ 272,473    $ 282,673    $ 275,459    $ 288,027    $ 291,115

(A) Equity/Fixed Income programs include $2,043 of assets invested in SEI’s Asset Allocation Funds at 3/31/05
(B) In addition to the numbers presented, SEI also administers an additional $8,830 in Funds of Funds assets (as of March 31, 2005) on which SEI does not earn an administration fee.

 

7