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 2, 2004
(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 January 29, 2004 |
Item 12. Disclosure of Results of Operations and Financial Condition
On Thursday, January 29, 2004, SEI Investments Company issued a press release announcing its fourth quarter earnings for the fiscal quarter ending December 31, 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: February 2, 2004 |
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 January 29, 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 | |||
| E-Mail: |
msamuels@seic.com |
mlouis@seic.com |
lwexler@seic.com | |||
| Pages: |
Eight |
|||||
SEI Investments Reports Fourth-Quarter 2003 Results
Earnings Up 9%, Revenues Gain 8%
Oaks, PA—January 29, 2004—SEI Investments Company (NASDAQ:SEIC) today announced financial results for fourth-quarter 2003, reporting an increase in revenues, net income and earnings per share versus fourth-quarter 2002.
Consolidated Overview
| (In thousands, except earnings per share) | For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
||||||||||||||||
| 2003 |
2002 |
% |
2003 |
2002 |
% |
|||||||||||||
| Revenues |
$ | 163,807 | $ | 151,804 | 8 | % | $ | 636,233 | $ | 629,593 | 1 | % | ||||||
| Net Income Before Taxes |
58,002 | 55,603 | 4 | % | 224,284 | 223,048 | 1 | % | ||||||||||
| Net Income |
38,223 | 35,029 | 9 | % | 142,981 | 140,520 | 2 | % | ||||||||||
| Diluted Earnings Per Share |
$ | .36 | $ | .32 | 13 | % | $ | 1.32 | $ | 1.25 | 6 | % | ||||||
“I am pleased to report increases in revenues, net income and earnings per share,” said Alfred P. West, Jr., SEI Chairman and CEO.
“I believe 2003 was a year of progress for SEI. Our overall financial results demonstrated modest but steady improvement throughout the year and we made real gains in advancing our new financial wellness solutions to our markets. While there is still much work to be done and investments in our business to be made, the better results, growing market acceptance of our new strategies, and the improving business climate make us optimistic about our future.”
Summary of Fourth-Quarter 2003 and Year-to-Date Results by Business Segment
| (In thousands) | For the Three Month Period Ended December 31, |
For the Twelve Month Period Ended December 31, |
||||||||||||||||||||
| 2003 |
2002 |
% |
2003 |
2002 |
% |
|||||||||||||||||
| Private Banking and Trust: |
||||||||||||||||||||||
| Revenues* |
$ | 76,253 | $ | 80,390 | (5 | )% | $ | 311,534 | $ | 333,053 | (6 | )% | ||||||||||
| Operating Profit |
$ | 30,784 | $ | 36,231 | (15 | )% | $ | 125,746 | $ | 138,004 | (9 | )% | ||||||||||
| Operating Margin |
40 | % | 45 | % | 40 | % | 41 | % | ||||||||||||||
| Investment Advisors: |
||||||||||||||||||||||
| Revenues |
40,725 | 35,195 | 16 | % | 156,089 | 149,181 | 5 | % | ||||||||||||||
| Operating Profit |
23,959 | 19,546 | 23 | % | 85,681 | 78,009 | 10 | % | ||||||||||||||
| Operating Margin |
59 | % | 56 | % | 55 | % | 52 | % | ||||||||||||||
| Enterprises: |
||||||||||||||||||||||
| Revenues |
15,695 | 13,455 | 17 | % | 62,051 | 55,875 | 11 | % | ||||||||||||||
| Operating Profit |
7,922 | 5,154 | 54 | % | 29,366 | 21,836 | 34 | % | ||||||||||||||
| Operating Margin |
50 | % | 38 | % | 47 | % | 39 | % | ||||||||||||||
| Money Managers: |
||||||||||||||||||||||
| Revenues* |
15,451 | 12,253 | 26 | % | 55,274 | 46,446 | 19 | % | ||||||||||||||
| Operating Profit |
2,435 | 2,171 | 12 | % | 9,105 | 8,864 | 3 | % | ||||||||||||||
| Operating Margin |
16 | % | 18 | % | 16 | % | 19 | % | ||||||||||||||
| Investments in New Businesses: |
||||||||||||||||||||||
| Revenues |
15,683 | 10,511 | 49 | % | 51,285 | 45,038 | 14 | % | ||||||||||||||
| Operating Loss |
(4,094 | ) | (4,568 | ) | 10 | % | (18,102 | ) | (14,710 | ) | (23 | )% | ||||||||||
| Operating Margin |
(26 | )% | (43 | )% | (35 | )% | (33 | )% | ||||||||||||||
| Consolidated Segment Totals: |
||||||||||||||||||||||
| Revenues |
$ | 163,807 | $ | 151,804 | 8 | % | $ | 636,233 | $ | 629,593 | 1 | % | ||||||||||
| Segment Profit |
$ | 61,006 | $ | 58,534 | 4 | % | $ | 231,796 | $ | 232,003 | — | |||||||||||
| Segment Margin |
37 | % | 39 | % | 36 | % | 37 | % | ||||||||||||||
| * | Certain amounts for prior years have been reclassified to conform with current-year presentation. |
Fourth-Quarter Business Commentary:
| • | While showing improvement over 3rd quarter levels, The Private Banking & Trust segment’s declines vs. 4th quarter year-ago levels were due to previously reported losses in fund processing revenues as well as reduced levels of one-time revenues. |
| • | The Investment Advisors, Enterprises, Money Managers and Investments in New Businesses segments all posted solid gains vs. year-ago levels. Revenues from new relationships and the rising capital markets drove growth in these four segments. |
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| • | While the Investment Advisors and Enterprises segments were well above year ago levels, the segments were down vs. 3rd quarter, 2003 due to the one-time revenue events occurring (and previously reported) in 3rd quarter, 2003. |
| • | Assets under management ended the quarter at a new record high of $90.6 billion, an increase of more than $12 billion over the 4th quarter a year ago. This includes the effect of closing SEI’s repurchase agreement program, which resulted in a $5 billion reduction of assets under management. |
| • | In the 4th quarter 2003, SEI purchased 1,017,000 shares of its common stock for $29.6 million. For the year 2003, SEI purchased a total of 3,536,000 shares for $95.5 million. |
Earnings Conference Call
A conference call to review earnings is scheduled for 2:00 PM EST on January 29, 2004. Investors may listen to the call at www.seic.com, or at www.fulldisclosure.com, a service of CCBN Streetevents. The call may also be accessed at numerous financial services web sites such as AOL, Forbes, 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 716988.
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, 2003, SEI administers almost $254 billion in mutual fund and pooled assets, manages over $90 billion in assets, processes almost $50 trillion of investment transactions annually 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, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ | 163,807 | $ | 151,804 | ||||
| Operating and development expenses |
72,945 | 66,932 | ||||||
| Sales and marketing expenses |
29,856 | 26,338 | ||||||
| General and administrative expenses |
7,735 | 4,724 | ||||||
| Income before interest and taxes |
53,271 | 53,810 | ||||||
| Equity in earnings of unconsolidated affiliate |
7,698 | 4,009 | ||||||
| Net loss on investments |
(3,254 | ) | (2,934 | ) | ||||
| Interest income |
939 | 1,353 | ||||||
| Interest expense |
(652 | ) | (635 | ) | ||||
| Income before taxes |
58,002 | 55,603 | ||||||
| Income taxes |
19,779 | 20,574 | ||||||
| Net income |
$ | 38,223 | $ | 35,029 | ||||
| Diluted earnings per common share |
$ | .36 | $ | .32 | ||||
| Shares used to calculate diluted earnings per common share |
107,065 | 110,191 | ||||||
| Basic earnings per common share |
$ | .36 | $ | .33 | ||||
| Shares used to calculate basic earnings per common share |
104,999 | 106,355 | ||||||
4
SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| Twelve Months Ended December 31, |
||||||||
| 2003 |
2002 |
|||||||
| Revenues |
$ | 636,233 | $ | 629,593 | ||||
| Operating and development expenses |
283,624 | 270,869 | ||||||
| Sales and marketing expenses |
120,813 | 126,721 | ||||||
| General and administrative expenses |
25,615 | 22,184 | ||||||
| Income before interest and taxes |
206,181 | 209,819 | ||||||
| Equity in earnings of unconsolidated affiliate |
22,461 | 12,652 | ||||||
| Net loss on investments |
(6,927 | ) | (2,360 | ) | ||||
| Interest income |
4,363 | 5,200 | ||||||
| Interest expense |
(2,303 | ) | (2,263 | ) | ||||
| Other income |
509 | — | ||||||
| Income before taxes |
224,284 | 223,048 | ||||||
| Income taxes |
81,303 | 82,528 | ||||||
| Net income |
$ | 142,981 | $ | 140,520 | ||||
| Diluted earnings per common share |
$ | 1.32 | $ | 1.25 | ||||
| Shares used to calculate diluted earnings per common share |
108,137 | 112,803 | ||||||
| Basic earnings per common share |
$ | 1.36 | $ | 1.30 | ||||
| Shares used to calculate basic earnings per common share |
105,173 | 108,330 | ||||||
5
SEI INVESTMENTS COMPANY
CONDENSED BALANCE SHEETS
(In thousands)
| December 31, 2003 |
December 31, 2002 | |||||
| Assets |
||||||
| Cash and short-term investments |
$ | 199,953 | $ | 165,724 | ||
| Restricted cash |
53,481 | 10,000 | ||||
| Receivables |
86,612 | 74,642 | ||||
| Other current assets |
12,367 | 11,069 | ||||
| Total current assets |
352,413 | 261,435 | ||||
| Property and equipment, net |
113,064 | 104,258 | ||||
| Investments available for sale |
70,560 | 62,433 | ||||
| Other assets |
56,592 | 36,021 | ||||
| Total assets |
$ | 592,629 | $ | 464,147 | ||
| Liabilities |
||||||
| Current liabilities |
$ | 193,474 | $ | 134,247 | ||
| Long-term debt |
23,944 | 33,500 | ||||
| Deferred income taxes |
11,438 | 6,393 | ||||
| Shareholders’ Equity |
363,773 | 290,007 | ||||
| Total liabilities and shareholders’ equity |
$ | 592,629 | $ | 464,147 | ||
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SEI Investments Business Segments
(In thousands)
| Three Months ended Dec. 31, |
Twelve Months ended Dec. 31, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Private Banking and Trust: |
||||||||||||||||
| Revenues |
||||||||||||||||
| Investment processing fees |
57,169 | 58,006 | 229,044 | 235,982 | ||||||||||||
| Fund processing fees |
9,845 | 12,156 | 43,464 | 55,852 | ||||||||||||
| Investment management fees |
9,239 | 10,228 | 39,026 | 41,219 | ||||||||||||
| Total Revenues |
76,253 | 80,390 | 311,534 | 333,053 | ||||||||||||
| Operating and development expenses |
36,266 | 37,011 | 148,102 | 153,185 | ||||||||||||
| Sales and marketing expenses |
9,203 | 7,148 | 37,686 | 41,864 | ||||||||||||
| Operating Profit |
30,784 | 36,231 | 125,746 | 138,004 | ||||||||||||
| Operating Margin |
40 | % | 45 | % | 40 | % | 41 | % | ||||||||
| Investment Advisors: |
||||||||||||||||
| Revenues |
40,725 | 35,195 | 156,089 | 149,181 | ||||||||||||
| Operating and development expenses |
10,448 | 9,225 | 41,471 | 37,528 | ||||||||||||
| Sales and marketing expenses |
6,318 | 6,424 | 28,937 | 33,644 | ||||||||||||
| Operating Profit |
23,959 | 19,546 | 85,681 | 78,009 | ||||||||||||
| Operating Margin |
59 | % | 56 | % | 55 | % | 52 | % | ||||||||
| Enterprises: |
||||||||||||||||
| Revenues |
15,695 | 13,455 | 62,051 | 55,875 | ||||||||||||
| Operating and development expenses |
3,735 | 4,171 | 14,983 | 17,188 | ||||||||||||
| Sales and marketing expenses |
4,038 | 4,130 | 17,702 | 16,851 | ||||||||||||
| Operating Profit |
7,922 | 5,154 | 29,366 | 21,836 | ||||||||||||
| Operating Margin |
50 | % | 38 | % | 47 | % | 39 | % | ||||||||
| Money Managers: |
||||||||||||||||
| Revenues |
15,451 | 12,253 | 55,274 | 46,446 | ||||||||||||
| Operating and development expenses |
9,214 | 6,407 | 32,852 | 24,021 | ||||||||||||
| Sales and marketing expenses |
3,802 | 3,675 | 13,317 | 13,561 | ||||||||||||
| Operating Profit |
2,435 | 2,171 | 9,105 | 8,864 | ||||||||||||
| Operating Margin |
16 | % | 18 | % | 16 | % | 19 | % | ||||||||
| Investments in New Businesses: |
||||||||||||||||
| Revenues |
15,683 | 10,511 | 51,285 | 45,038 | ||||||||||||
| Operating and development expenses |
13,282 | 10,118 | 46,216 | 38,947 | ||||||||||||
| Sales and marketing expenses |
6,495 | 4,961 | 23,171 | 20,801 | ||||||||||||
| Operating Loss |
(4,094 | ) | (4,568 | ) | (18,102 | ) | (14,710 | ) | ||||||||
| Operating Margin |
(26 | )% | (43 | )% | (35 | )% | (33 | )% | ||||||||
| Consolidated: |
||||||||||||||||
| Revenues |
$ | 163,807 | $ | 151,804 | $ | 636,233 | $ | 629,593 | ||||||||
| Operating and development expenses |
72,945 | 66,932 | 283,624 | 270,869 | ||||||||||||
| Sales and marketing expenses |
29,856 | 26,338 | 120,813 | 126,721 | ||||||||||||
| General and Administrative expenses |
7,735 | 4,724 | 25,615 | 22,184 | ||||||||||||
| Income from Operations |
$ | 53,271 | $ | 53,810 | $ | 206,181 | $ | 209,819 | ||||||||
| Operating Margin |
33 | % | 35 | % | 32 | % | 33 | % | ||||||||
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SEI INVESTMENTS COMPANY
ASSET BALANCES
(In millions)
| Dec. 31, 2002 |
Mar. 31, 2003 |
June 30, 2003 |
Sept. 30, 2003 |
Dec. 31, 2003 | |||||||||||
| Private Banking & Trust: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 3,332 | $ | 3,635 | $ | 3,879 | $ | 3,880 | $ | 4,043 | |||||
| Liquidity funds |
12,811 | 13,257 | 12,653 | 11,026 | 8,424 | ||||||||||
| Total assets under mgmt. |
16,143 | 16,892 | 16,532 | 14,906 | 12,467 | ||||||||||
| Client assets under admin. |
83,652 | 72,078 | 60,124 | 61,174 | 61,285 | ||||||||||
| Total assets under admin. |
$ | 99,795 | $ | 88,970 | $ | 76,656 | $ | 76,080 | $ | 73,752 | |||||
| Investment Advisors: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 22,708 | $ | 22,287 | $ | 24,658 | $ | 25,020 | $ | 26,631 | |||||
| Liquidity funds |
1,444 | 1,558 | 1,434 | 1,252 | 1,131 | ||||||||||
| Total assets under mgmt. |
$ | 24,152 | $ | 23,845 | $ | 26,092 | $ | 26,272 | $ | 27,762 | |||||
| Enterprises: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 11,107 | $ | 10,864 | $ | 12,100 | $ | 12,790 | $ | 14,100 | |||||
| Liquidity funds |
5,148 | 4,277 | 5,148 | 4,861 | 3,443 | ||||||||||
| Total assets under mgmt. |
$ | 16,255 | $ | 15,141 | $ | 17,248 | $ | 17,651 | $ | 17,543 | |||||
| Money Managers: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 4,436 | $ | 5,072 | $ | 5,519 | $ | 6,177 | $ | 6,671 | |||||
| Liquidity funds |
1,350 | 1,151 | 900 | 1,036 | 271 | ||||||||||
| Total assets under mgmt. |
5,786 | 6,223 | 6,419 | 7,213 | 6,942 | ||||||||||
| Client assets under admin. |
74,523 | 74,964 | 82,359 | 88,458 | 96,103 | ||||||||||
| Total assets under admin. |
$ | 80,309 | $ | 81,187 | $ | 88,778 | $ | 95,671 | $ | 103,045 | |||||
| Investments in New Businesses: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 7,544 | $ | 7,654 | $ | 8,626 | $ | 8,874 | $ | 10,185 | |||||
| Liquidity funds |
219 | 73 | 21 | 52 | 33 | ||||||||||
| Total assets under mgmt. |
7,763 | 7,727 | 8,647 | 8,926 | 10,218 | ||||||||||
| Client assets under admin. |
4,894 | 5,229 | 7,001 | 5,319 | 5,855 | ||||||||||
| Total assets under admin. |
$ | 12,657 | $ | 12,956 | $ | 15,648 | $ | 14,245 | $ | 16,073 | |||||
| Unconsolidated Affiliate: |
|||||||||||||||
| Equity/Fixed Income prgms |
$ | 7,874 | $ | 8,391 | $ | 10,755 | $ | 12,435 | $ | 15,666 | |||||
| Consolidated: |
|||||||||||||||
| Equity/Fixed Income prgms. |
$ | 57,001 | $ | 57,903 | $ | 65,537 | $ | 69,176 | $ | 77,296 | |||||
| Liquidity funds |
20,972 | 20,316 | 20,156 | 18,227 | 13,302 | ||||||||||
| Total assets under mgmt. |
77,973 | 78,219 | 85,693 | 87,403 | 90,598 | ||||||||||
| Client assets under admin. |
163,069 | 152,271 | 149,484 | 154,951 | 163,243 | ||||||||||
| Total assets under admin. |
$ | 241,042 | $ | 230,490 | $ | 235,177 | $ | 242,354 | $ | 253,841 | |||||
8