SEI INVESTMENTS CO - FORM 8-K - EX-99.1 - PRESS RELEASE - OCTOBER 20, 2010

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EX-99.2 - PRESS RELEASE - OCTOBER 19, 2010 - SEI INVESTMENTS CO	dex992.htm

Exhibit 99.1

NEWS FROM SEI


Investor Contact:				Media Contact:
Murray Louis				Dana Grosser
SEI				SEI
(610) 676-1932				(610) 676-2459
mlouis@seic.com				dgrosser@seic.com
Pages: 10

FOR IMMEDIATE RELEASE

SEI REPORTS THIRD-QUARTER 2010 FINANCIAL RESULTS

OAKS, Pa., October 20, 2010 — SEI Investments Company (NASDAQ:SEIC) today announced financial results for third-quarter 2010, reporting an increase in net income attributable to SEI and diluted earnings per share compared to third-quarter 2009. Diluted earnings per share were $0.30. Effective January 1, 2010, company results reflect the deconsolidation of LSV Asset Management (LSV), returning to the equity method of accounting. This change in accounting treatment had no impact on net income attributable to SEI. Without LSV, revenues grew $3.7 million or two percent compared to third-quarter 2009 (see Proforma Consolidated Overview below).


Consolidated Overview (In thousands, except earnings per share)	For the Three Months Ended September 30,							For the Nine Months Ended September 30,
	2010		2009		%			2010		2009		%

Revenues	$	219,513	$	275,933		(20	%)	$	669,436	$	776,553		(14	%)
Net Income attributable to SEI		56,389		52,727		7	%		169,287		128,498		32	%
Diluted Earnings Per Share	$	0.30	$	0.27		11	%	$	0.89	$	0.67		33	%

“Compared to a year ago, our third-quarter results reflect improved capital markets, improved markets for our services, and the ongoing management of our costs,” said Alfred P. West, Jr., SEI Chairman and CEO.

“While our new sales activities are yielding positive results, lengthy sales and installation cycles remain a challenge for the short term. Longer term, we believe we are well positioned in all business segments to achieve growth. We continue to make key investments that will create growth opportunities for us and for our clients.”


Proforma Consolidated Overview (In thousands, except earnings per share)	For the Three Months Ended September 30,							For the Nine Months Ended September 30,
	2010		2009		%			2010		2009		%
	(Actual)		(Proforma)					(Actual)		(Proforma)

Revenues	$	219,513	$	215,773		2	%	$	669,436	$	627,125		7	%
Net Income attributable to SEI		56,389		52,727		7	%		169,287		128,498		32	%
Diluted Earnings Per Share	$	0.30	$	0.27		11	%	$	0.89	$	0.67		33	%

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,
	2010			2009			%			2010			2009			%
Private Banks:
Revenues	$	83,518		$	88,561			(6	%)	$	260,730		$	272,154			(4	%)
Expenses		73,463			79,549			(8	%)		229,674			229,108			—

Operating Profit	$	10,055		$	9,012			12	%	$	31,056		$	43,046			(28	%)
Operating Margin		12	%		10	%					12	%		16	%

Investment Advisors:
Revenues		43,422			43,467			—			135,283			120,557			12	%
Expenses		26,426			28,001			(6	%)		82,129			81,049			1	%

Operating Profit		16,996			15,466			10	%		53,154			39,508			35	%
Operating Margin		39	%		36	%					39	%		33	%

Institutional Investors:
Revenues		51,036			47,458			8	%		152,821			129,001			18	%
Expenses		25,940			27,369			(5	%)		78,896			74,803			5	%

Operating Profit		25,096			20,089			25	%		73,925			54,198			36	%
Operating Margin		49	%		42	%					48	%		42	%

Investment Managers:
Revenues		40,548			35,208			15	%		117,598			101,911			15	%
Expenses		25,763			23,047			12	%		75,918			68,159			11	%

Operating Profit		14,785			12,161			22	%		41,680			33,752			23	%
Operating Margin		36	%		35	%					35	%		33	%

Investments in New Businesses:
Revenues		989			1,079			(8	%)		3,004			3,502			(14	%)
Expenses		4,080			3,171			29	%		9,480			8,789			8	%

Operating Loss		(3,091	)		(2,092	)		(48	%)		(6,476	)		(5,287	)		(22	%)
Operating Margin		N/A			N/A						N/A			N/A

LSV:
Revenues		—			60,160			N/A			—			149,428			N/A
Expenses (1)		—			38,928			N/A			—			97,083			N/A

Operating Profit		—			21,232			N/A			—			52,345			N/A
Operating Margin		—			35	%					—			35	%

Totals:
Revenues	$	219,513		$	275,933			(20	%)	$	669,436		$	776,553			(14	%)
Expenses		155,672			200,065			(22	%)		476,097			558,991			(15	%)
Corporate overhead expenses		8,981			8,897			1	%		28,639			27,235			5	%
Noncontrolling interest reflected in segments		(279	)		(30,168	)		N/A			(956	)		(73,968	)		N/A
LSV Employee Group expenses		—			1,836			N/A			—			5,476			N/A

Income from operations	$	55,139		$	95,303			(42	%)	$	165,656		$	258,819			(36	%)

(1)	Includes $29,829 and $73,120 for the three and nine month periods ended September 30, 2009, of noncontrolling interest to the other partners of LSV.

Third-Quarter Business Commentary:

•

In January 2010, LSV was deconsolidated due to the adoption of newly issued accounting guidance. Our ownership interest in LSV was unchanged and our proportionate share in the earnings of LSV is reflected in “Equity in earnings of unconsolidated affiliate” on our Consolidated Statements of Operations. The deconsolidation of LSV had no impact on net income attributable to SEI or diluted earnings per share.

•

Revenues in third-quarter 2009 include $60.2 million from LSV. Excluding these revenues, revenues in third-quarter 2010 increased $3.7 million or two percent compared to third-quarter 2009. This increase was primarily due to higher average asset balances under management and administration from existing clients because of improved capital markets.

•

Stock-based compensation costs in third-quarter 2010 reflect the reversal of $6.3 million of previously recognized stock-based compensation costs and the acceleration of $3.1 million of stock-based compensation costs due to a change in management’s estimates of the attainment of certain performance vesting targets. The net effect of these two items was a reduction of $3.2 million of stock-based compensation costs in third-quarter 2010.

•

Third-quarter 2010 includes $2.1 million in costs associated with operational errors, of which, approximately $1.0 million is recognized in the Investment Advisors segment and $900K is recognized in the Investments in New Businesses segment. Also, third-quarter 2009 includes $2.2 million in costs associated with operational errors which was recognized in the Institutional Investors segment.

•

The third-quarter 2010 net income attributable to SEI and diluted earnings per share results include gains of $8.7 million associated with SIVs, whereas results in third-quarter 2009 included gains of $14.9 million. Additional information pertaining to SIVs is contained in SEI’s 2009 Form 10-K filed February 25, 2010.

•

Assets under management increased by $15.1 billion during the third-quarter 2010 to $164.0 billion at September 30, 2010, as compared to $148.9 billion at June 30, 2010, primarily due to market driven appreciation.

•

In the third-quarter 2010, SEI purchased 1,989,000 shares of its common stock for $38.6 million.

Proforma Consolidated Statement of Operations

The following proforma Consolidated Statements of Operations presents third quarter 2009 and Year to Date September 2009 for comparative purposes only as if LSV and LSV Employee Group was deconsolidated on January 1, 2009. This report is being provided for informational purposes only and is not a restatement or reclassification of previously filed reports. Our interest in LSV is presented as a single line item in the Consolidated Statements of Operations titled “Equity in earnings of unconsolidated affiliate.” For additional information, we refer you to Note 2 to the Consolidated Financial Statements included in our 2009 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2010.

SEI INVESTMENTS COMPANY

PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,
	As Reported SEI Consolidated 2010			Proforma SEI without LSV and LSVEG 2009			%

Total revenues		219,513			215,773			2	%
Total expenses		164,374			169,694			(3	%)


Income from operations		55,139			46,079			20	%

Net gain from investments		9,362			15,616			(40	%)
Interest, net		1,285			1,219			5	%
Equity in earnings of unconsolidated affiliate		25,246			21,240			19	%


Income before taxes		91,032			84,154			8	%

Income taxes		34,311			31,109			10	%


Net income		56,721			53,045			7	%


Less Net Income attributable to noncontrolling interest		(332	)		(318	)		4	%


Net income attributable to SEI	$	56,389		$	52,727			7	%


Diluted earnings per share	$	0.30		$	0.27			11	%


Diluted shares outstanding		189,521			192,325			(1	%)

SEI INVESTMENTS COMPANY

PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Nine Months Ended September 30,
	As Reported SEI Consolidated 2010			Proforma SEI without LSV and LSVEG 2009			%

Total revenues		669,436			627,125			7	%
Total expenses		503,780			488,294			3	%


Income from operations		165,656			138,831			19	%

Net gain (loss) from investments		30,435			(1,367	)		N/A
Interest, net		3,601			3,795			(5	%)
Other income		1,070			—			N/A
Equity in earnings of unconsolidated affiliate		72,839			52,370			39	%


Income before taxes		273,601			193,629			41	%

Income taxes		103,183			64,250			61	%


Net income		170,418			129,379			32	%


Less Net Income attributable to noncontrolling interest		(1,131	)		(881	)		28	%


Net income attributable to SEI	$	169,287		$	128,498			32	%


Diluted earnings per share	$	0.89		$	0.67			33	%


Diluted shares outstanding		190,694			191,905			(1	%)

Earnings Conference Call

A conference call to review earnings is scheduled for 2:00 PM ET on October 20, 2010. Investors may listen to the call at www.seic.com/investors or listen at www.earnings.com, a service of Thomson Streetevents. The call may also be accessed at numerous financial services web sites including AOL 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 174401.

About SEI

SEI (NASDAQ:SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company’s innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of September 30, 2010, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $402 billion in mutual fund and pooled assets and manages $164 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from numerous offices worldwide. For more information, visit www.seic.com.

Many of the statements in this release 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 OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,
	2010			2009

Asset management, admin. and distribution fees	$	155,799		$	206,235
Information processing and software servicing fees		55,226			56,241
Transaction–based and trade execution fees		8,488			13,457


Total revenues		219,513			275,933

Subadvisory, distribution and other asset mgmt costs		21,900			21,998
Brokerage commissions and royalties		12,402			14,421
Compensation, benefits and other personnel		64,694			70,204
Stock based compensation		3,468			3,418
Consulting, outsourcing and professional fees		21,841			20,173
Data processing and computer related		10,167			11,235
Facilities, supplies and other costs		18,302			18,817
Amortization		5,998			15,042
Depreciation		5,602			5,322


Total expenses		164,374			180,630

Income from operations		55,139			95,303

Net gain on investments		9,362			15,616
Interest and dividend income		1,621			1,897
Interest expense		(336	)		(1,034	)
Equity in earnings of unconsolidated affiliate		25,246			—


Income before taxes		91,032			111,782

Income taxes		34,311			31,109


Net income		56,721			80,673


Less: Net income attributable to noncontrolling interest		(332	)		(27,946	)


Net income attributable to SEI	$	56,389		$	52,727


Diluted earnings per common share	$	0.30		$	0.27


Shares used to calculate diluted earnings per common share		189,521			192,325


Basic earnings per common share	$	0.30		$	0.28


Shares used to calculate basic earnings per common share		187,964			190,850

SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)


	Nine Months Ended September 30,
	2010			2009

Asset management, admin. and distribution fees	$	463,511		$	558,808
Information processing and software servicing fees		175,148			173,152
Transaction–based and trade execution fees		30,777			44,593


Total revenues		669,436			776,553

Subadvisory, distribution and other asset mgmt costs		66,826			62,466
Brokerage commissions and royalties		40,747			47,645
Compensation, benefits and other personnel		198,922			207,312
Stock based compensation		16,403			10,209
Consulting, outsourcing and professional fees		65,250			60,034
Data processing and computer related		30,512			33,927
Facilities, supplies and other costs		50,833			50,453
Amortization		17,895			29,493
Depreciation		16,392			16,195


Total expenses		503,780			517,734

Income from operations		165,656			258,819

Net gain (loss) on investments		30,435			(1,367	)
Interest and dividend income		4,823			5,545
Interest expense		(1,222	)		(2,884	)
Other income		1,070			—
Equity in earnings of unconsolidated affiliate		72,839			—


Income before taxes		273,601			260,113

Income taxes		103,183			64,250


Net income		170,418			195,863


Less: Net income attributable to the noncontrolling interest		(1,131	)		(67,365	)


Net income attributable to SEI	$	169,287		$	128,498


Diluted earnings per common share	$	0.89		$	0.67


Shares used to calculate diluted earnings per common share		190,694			191,905


Basic earnings per common share	$	0.90		$	0.67


Shares used to calculate basic earnings per common share		189,090			190,986

SEI INVESTMENTS COMPANY

CONDENSED BALANCE SHEETS

(In thousands)


	(Unaudited) September 30, 2010		December 31, 2009
Assets

Cash and short-term investments	$	451,778	$	590,877	(a)
Restricted cash		19,000		20,000
Receivables		171,709		212,451	(a)
Other current assets		19,930		18,075


Total current assets		662,417		841,403

Property and equipment, net		144,026		146,053
Marketable securities		177,889		181,897
Capitalized software, net		289,604		278,656
Investment in unconsolidated affiliate		63,096		—
Goodwill		—		22,842
Intangible assets, net		—		44,859
Other assets, net		16,993		18,098


Total assets	$	1,354,025	$	1,533,808


Liabilities

Current liabilities	$	116,340	$	163,055	(b)
Long-term debt		120,000		247,152	(b)
Deferred income taxes		91,108		86,257
Long-term liabilities		5,836		5,726

Total SEI Investments Company shareholders’ equity		1,006,391		909,723
Noncontrolling interest		14,350		121,895

Total Equity		1,020,741		1,031,618

Total liabilities and equity	$	1,354,025	$	1,533,808

(a)	Includes $57,061 of cash and cash equivalents and $66,392 of receivables of LSV Asset Management.

(b)	Includes $20,552 of debt of LSV Employee Group of which $6,400 is included in Current liabilities and the remaining $14,152 is included in Long-term debt.

SEI INVESTMENTS COMPANY

ASSET BALANCES

(In millions)

(Unaudited)


	Sep. 30, 2009		Dec. 31, 2009		Mar. 31, 2010		Jun. 30, 2010		Sep. 30, 2010
Private Banks:
Equity/Fixed Income prgms.	$	12,479	$	12,690	$	12,635	$	11,769	$	12,842
Collective Trust Fund prgm.		1,098		1,067		1,023		640		615
Liquidity funds		6,524		6,035		5,329		5,175		5,034

Total assets under mgmt.	$	20,101	$	19,792	$	18,987	$	17,584	$	18,491

Client assets under admin.		10,941		11,213		11,429		10,335		10,557

Total assets	$	31,042	$	31,005	$	30,416	$	27,919	$	29,048

Investment Advisors:
Equity/Fixed Income prgms.	$	24,739	$	25,392	$	26,222	$	23,699	$	26,091
Collective Trust Fund prgm.		2,521		2,423		2,284		2,066		2,028
Liquidity funds		2,243		1,929		1,731		2,635		2,253

Total assets under mgmt.	$	29,503	$	29,744	$	30,237	$	28,400	$	30,372

Institutional Investors:
Equity/Fixed Income prgms.	$	43,672	$	44,322	$	45,891	$	43,506	$	47,667
Collective Trust Fund prgm.		707		684		657		643		641
Liquidity funds		4,624		3,370		3,198		2,558		3,475

Total assets under mgmt.	$	49,003	$	48,376	$	49,746	$	46,707	$	51,783

Investment Managers:
Equity/Fixed Income prgms.	$	4	$	4	$	2	$	1	$	1
Collective Trust Fund prgm.		7,075		7,428		7,639		7,366		7,781
Liquidity funds		528		412		447		428		423

Total assets under mgmt.	$	7,607	$	7,844	$	8,088	$	7,795	$	8,205

Client assets under admin. (A)		216,222		221,680		220,807		220,459		227,777

Total assets	$	223,829	$	229,524	$	228,895	$	228,254	$	235,982

Investments in New Businesses:
Equity/Fixed Income prgms.	$	473	$	520	$	534	$	496	$	533
Liquidity funds		93		75		72		74		82

Total assets under mgmt.	$	566	$	595	$	606	$	570	$	615

LSV Asset Management
Equity/Fixed Income prgms.	$	49,349	$	52,488	$	54,189	$	47,822	$	54,492

Consolidated:
Equity/Fixed Income prgms (B)	$	130,716	$	135,416	$	139,473	$	127,293	$	141,626
Collective Trust Fund prgm.		11,401		11,602		11,603		10,715		11,065
Liquidity funds		14,012		11,821		10,777		10,870		11,267

Total assets under mgmt.	$	156,129	$	158,839	$	161,853	$	148,878	$	163,958

Client assets under admin. (C)		227,163		232,893		232,236		230,794		238,334

Total assets	$	383,292	$	391,732	$	394,089	$	379,672	$	402,292

(A)	Client assets under administration in the Investment Managers segment include $59.6 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of September 30, 2010).

(B)	Equity/Fixed Income programs include $2,386 million of assets invested in various asset allocation funds at September 30, 2010.

(C)	In addition to the numbers presented, SEI also administers an additional $4,534 million in Funds of Funds assets (as of September 30, 2010) on which SEI does not earn an administration fee.

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