SEI INVESTMENTS CO - FORM 10-Q - EX-99.1 - PRESS RELEASE

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EXCEL - IDEA: XBRL DOCUMENT - SEI INVESTMENTS CO	Financial_Report.xls
EX-31.1 - SECTION 302 CEO CERTIFICATION - SEI INVESTMENTS CO	seic-93014xex311.htm
EX-31.2 - SECTION 302 CFO CERTIFICATION - SEI INVESTMENTS CO	seic-93014xex312.htm
EX-32 - SECTION 906 CEO AND CFO CERTIFICATION - SEI INVESTMENTS CO	seic-93014xex32.htm
10-Q - FORM 10-Q - SEI INVESTMENTS CO	seic-93014x10q.htm

Exhibit 99.1

Investor Contact: Media Contact:

Nicole Vattimo Dana Grosser

SEI SEI

+1 610-676-4385 +1 610-676-2459

nvattimo@seic.com dgrosser@seic.com

Pages: 8

FOR IMMEDIATE RELEASE

SEI REPORTS THIRD-QUARTER 2014 FINANCIAL RESULTS

EPS Increases 29 Percent on Revenue Increase of 15 Percent

OAKS, Pa., October 22, 2014 -- SEI Investments Company (NASDAQ:SEIC) today announced financial results for the third-quarter 2014. Diluted earnings per share were $.49 in third-quarter 2014 compared to $.38 in third-quarter 2013. Our tax rate during third-quarter 2014 was 34.7 percent compared to 28.5 percent in third-quarter 2013. This differential in our tax rate equates to a positive impact of $.03 diluted earnings per share to our third-quarter 2013 earnings.



Consolidated Overview
(In thousands, except earnings per share)	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2014		2013		%	2014		2013		%

Revenues		$322,047		$280,655	15%	$	943,248	$	827,108	14%
Net income attributable to SEI	83,983		67,195		25%	241,616		222,609		9%
Diluted earnings per share		$0.49		$0.38	29%		$1.39		$1.26	10%

"Third-quarter results reflect ongoing progress across all of our business segments," said Alfred P. West, Jr., SEI Chairman and CEO. "SEI's continued success reflects our clients' recognition of the value of our solutions. Our financial results affirm the strength of our diversified portfolio of offerings, and, as always, we remain committed to long-term sustainable growth and increasing shareholder value."

Summary of Third-Quarter Results by Business Segment



(In thousands)	For the Three Months Ended September 30,							For the Nine Months Ended September 30,
	2014			2013			%	2014			2013			%
Private Banks:
Revenues		$110,147			$97,370		13%		$329,508			$291,258		13%
Expenses	100,498			95,579			5%	299,645			289,632			3%
Operating Profit	9,649			1,791			NM	29,863			1,626			NM
Gain on sale of subsidiary	—			—			—%	5,582			22,112			NM
Total Profit	9,649			1,791			NM		$35,445			$23,738		NM
Operating Margin (A)	9		%	2		%		9		%	1		%

Investment Advisors:
Revenues	74,469			61,393			21%	210,939			175,868			20%
Expenses	37,796			33,768			12%	108,052			98,291			10%
Operating Profit	36,673			27,625			33%	102,887			77,577			33%
Operating Margin	49		%	45		%		49		%	44		%

Institutional Investors:
Revenues	72,560			63,539			14%	212,211			190,385			11%
Expenses	35,495			33,058			7%	104,615			97,595			7%
Operating Profit	37,065			30,481			22%	107,596			92,790			16%
Operating Margin	51		%	48		%		51		%	49		%

Investment Managers:
Revenues	63,640			57,266			11%	187,099			166,542			12%
Expenses	40,156			37,763			6%	118,789			109,432			9%
Operating Profit	23,484			19,503			20%	68,310			57,110			20%
Operating Margin	37		%	34		%		37		%	34		%

Investments in New Businesses:
Revenues	1,231			1,087			13%	3,491			3,055			14%
Expenses	4,614			4,146			11%	13,314			11,774			13%
Operating Loss	(3,383		)	(3,059		)	NM	(9,823		)	(8,719		)	NM

Totals:
Revenues		$322,047			$280,655		15%		$943,248			$827,108		14%
Expenses	218,559			204,314			7%	644,415			606,724			6%
Corporate overhead expenses	12,990			14,402			(10)%	36,313			40,719			(11)%
NCI reflected in segments	—			—			—%	—			(289		)	NM
Income from operations		$90,498			$61,939		46%		$262,520			$179,954		46%

(A) Percentages determined exclusive of gain on sale of subsidiary.

Third-Quarter Business Highlights:

•

Revenues increased in third-quarter 2014 as compared to both third-quarter 2013 and second-quarter 2014. Revenue growth was primarily driven by higher Asset management, administration, and distribution fees from market appreciation and improved cash flows from new and existing clients. Our average assets under management, excluding LSV, increased $24.6 billion, or 17 percent, to $168.5 billion in the third-quarter 2014, as compared to $143.9 billion during the third-quarter 2013, and increased $4.1 billion, or three percent, as compared to $164.3 billion during the second-quarter 2014.


•	Our average assets under administration increased $54.0 billion, or 18 percent, to $360.4 billion in the third-quarter 2014, as compared to $306.4 billion during the third-quarter 2013, and increased $11.9 billion, or three percent, as compared to $348.4 billion during the second-quarter 2014 (see attached Ending and Average Asset Balances schedules for further details).


•	Revenue growth was also driven by increased information processing fees in our Private Banks segment. The increase was primarily attributable to higher fees from the growth in assets processed on the SEI Wealth Platform^SM.


•	Sales events, net of client losses, during third-quarter 2014 totaled approximately $27.5 million and are expected to generate net annualized recurring revenues of approximately $25.6 million when contract values are fully realized.


•	All four core business segments realized revenue and profit margin growth as compared to third-quarter 2013 results. Operating margins in all four core business segments improved primarily from increased recurring revenues generated from the higher levels of assets under management and administration.


•	Income from LSV increased $6.9 million, or 22 percent, to $38.2 million in third-quarter 2014 as compared to $31.3 million in third-quarter 2013 due to an increase in assets under management from market appreciation and an increase in performance fees earned by LSV.


•	Stock-based compensation expense during the third-quarter 2014 decreased by $7.3 million primarily due to the acceleration of expense recognition during the comparable period of 2013 for stock options that achieved performance vesting targets earlier than originally estimated.


•	Amortization expense related to capitalized software increased to $9.8 million during the third-quarter 2014 as compared to $8.8 million during the third-quarter 2013 due to continued releases of the SEI Wealth Platform^SM.


•	The effective tax rates were 34.7 percent in third-quarter 2014, 28.5 percent in third-quarter 2013, and 35.7 percent in second-quarter 2014. Our third-quarter 2013 tax rate benefited by a one-time adjustment due to a Pennsylvania Tax Law change enacted on July 18, 2013.


•	In third-quarter 2014, we repurchased 2.0 million shares of our common stock for $75.2 million.

Earnings Conference Call

A conference call to review earnings is scheduled for 2 p.m. Eastern time on October 22, 2014. Investors may listen to the call at seic.com/investors. The call may also be accessed at many financial services websites, including Google Finance and Yahoo Finance. Investors may also listen to replays at these websites, or by telephone at (USA) 800-475-6701; (International) 320-365-3844, access code 339136.

About SEI

SEI (NASDAQ:SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of September 30, 2014, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $612 billion in mutual fund and pooled or separately managed assets, including $249 billion in assets under management and $363 billion in client assets under administration. For more information, visit 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)



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013

Asset management, admin. and distribution fees		$244,704			$208,780			$705,966			$611,135
Information processing and software servicing fees	70,020			64,606			215,026			191,606
Transaction–based and trade execution fees	7,323			7,269			22,256			24,367

Total revenues	322,047			280,655			943,248			827,108

Subadvisory, distribution and other asset mgmt costs	39,737			31,209			110,993			88,795
Software royalties and other information processing costs	8,562			7,541			25,532			22,912
Brokerage commissions	5,119			5,519			16,217			18,291
Compensation, benefits and other personnel	94,316			89,311			281,210			264,636
Stock-based compensation	3,786			11,097			9,481			26,997
Consulting, outsourcing and professional fees	34,946			33,367			103,283			98,667
Data processing and computer related	13,555			12,654			39,553			37,028
Facilities, supplies and other costs	16,136			13,573			49,354			47,280
Amortization	9,813			8,829			28,611			25,498
Depreciation	5,579			5,616			16,494			17,050

Total expenses	231,549			218,716			680,728			647,154

Income from operations	90,498			61,939			262,520			179,954

Net (loss) gain on investments	(478		)	535			49			638
Interest and dividend income	750			679			2,248			2,420
Interest expense	(115		)	(195		)	(342		)	(422		)
Equity in earnings of unconsolidated affiliates	37,963			31,028			104,080			86,204
Gain on sale of subsidiary	—			—			5,582			22,112
Other income	—			—			—			43,429

Income before income taxes	128,618			93,986			374,137			334,335

Income taxes	44,635			26,791			132,521			111,376

Net income	83,983			67,195			241,616			222,959

Less: Net income attributable to the noncontrolling interest	—			—			—			(350		)

Net income attributable to SEI		$83,983			$67,195			$241,616			$222,609

Basic earnings per common share		$0.50			$0.39			$1.43			$1.29

Shares used to calculate basic earnings per share	167,925			171,308			168,612			172,043

Diluted earnings per common share		$0.49			$0.38			$1.39			$1.26

Shares used to calculate diluted earnings per share	172,905			176,043			173,700			176,036

SEI INVESTMENTS COMPANY

BALANCE SHEETS

(In thousands)

(Unaudited)



	September 30,			December 31,
	2014			2013
Assets
Current Assets:
Cash and cash equivalents		$577,914			$578,273
Restricted cash	5,500			5,500
Receivables from regulated investment companies	46,533			39,364
Receivables, net	211,228			186,664
Securities owned	21,173			21,133
Other current assets	21,028			16,166
Total Current Assets	883,376			847,100

Property and Equipment, net	128,775			118,995
Capitalized software, net	310,368			312,615
Investments available for sale	81,084			83,323
Trading securities	4,908			4,849
Investment in unconsolidated affiliates	63,858			61,370
Other assets, net	13,410			10,917
Total Assets		$1,485,779			$1,439,169

Liabilities and Equity
Current Liabilities:
Accounts payable		$6,512			$16,235
Accrued liabilities	148,839			188,123
Deferred income taxes, net	1,868			1,653
Deferred revenue	1,098			1,977
Total Current Liabilities	158,317			207,988

Deferred income taxes	71,552			66,572
Other long-term liabilities	11,270			8,607
Total Liabilities	241,139			283,167

Shareholders' Equity:
Common stock	1,671			1,692
Capital in excess of par value	805,197			721,219
Retained earnings	440,767			431,604
Accumulated other comprehensive (loss) income, net	(2,995		)	1,487
Total Shareholders' Equity	1,244,640			1,156,002
Total Liabilities and Shareholders' Equity		$1,485,779			$1,439,169

SEI INVESTMENTS COMPANY

ENDING ASSET BALANCES

(In millions)

(Unaudited)



	Sept. 30,		Dec 31,		Mar. 31,		Jun. 30,		Sept. 30,
	2013		2013		2014		2014		2014
Private Banks:
Equity/Fixed Income programs		$14,305		$15,472		$16,918		$18,679		$18,634
Collective Trust Fund programs	11		14		14		12		11
Liquidity funds	5,167		5,685		5,670		5,274		5,331
Total assets under management		$19,483		$21,171		$22,602		$23,965		$23,976
Client assets under administration	14,101		15,272		15,641		15,347		16,288
Total assets		$33,584		$36,443		$38,243		$39,312		$40,264

Investment Advisors:
Equity/Fixed Income programs		$36,203		$38,574		$39,981		$42,125		$42,260
Collective Trust Fund programs	14		11		13		13		9
Liquidity funds	2,779		2,846		2,802		2,696		3,086
Total assets under management		$38,996		$41,431		$42,796		$44,834		$45,355

Institutional Investors:
Equity/Fixed Income programs		$64,429		$66,548		$69,194		$71,598		$72,006
Collective Trust Fund programs	107		109		102		100		98
Liquidity funds	3,125		2,644		2,505		2,414		2,891
Total assets under management		$67,661		$69,301		$71,801		$74,112		$74,995

Investment Managers:
Equity/Fixed Income programs		$75		$69		$68		$64		$64
Collective Trust Fund programs	19,868		22,377		22,633		22,598		21,297
Liquidity funds	678		718		782		802		1,018
Total assets under management		$20,621		$23,164		$23,483		$23,464		$22,379
Client assets under administration (A)	295,959		311,992		326,735		337,492		346,841
Total assets		$316,580		$335,156		$350,218		$360,956		$369,220

Investments in New Businesses:
Equity/Fixed Income programs		$594		$619		$632		$659		$703
Liquidity funds	26		46		49		38		118
Total assets under management		$620		$665		$681		$697		$821

LSV Asset Management:
Equity/Fixed Income programs		$71,149		$76,189		$77,973		$82,026		$81,536

Total:
Equity/Fixed Income programs (B)		$186,755		$197,471		$204,766		$215,151		$215,203
Collective Trust Fund programs	20,000		22,511		22,762		22,723		21,415
Liquidity funds	11,775		11,939		11,808		11,224		12,444
Total assets under management		$218,530		$231,921		$239,336		$249,098		$249,062

Client assets under administration (C)	310,060		327,264		342,376		352,839		363,129
Total assets		$528,590		$559,185		$581,712		$601,937		$612,191


(A)	Client assets under administration in the Investment Managers segment include $52.5 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of September 30, 2014).


(B)	Equity/Fixed Income programs include $5.1 billion of assets invested in various asset allocation funds at September 30, 2014.


(C)	In addition to the numbers presented, SEI also administers an additional $6.7 billion in Funds of Funds assets (as of

September 30, 2014) on which SEI does not earn an administration fee.

SEI INVESTMENTS COMPANY

AVERAGE ASSET BALANCES

(In millions)

(Unaudited)



	3rd Qtr.		4th Qtr.		1st Qtr.		2nd Qtr.		3rd Qtr.
	2013		2013		2014		2014		2014
Private Banks:
Equity/Fixed Income programs		$13,696		$14,901		$16,114		$17,829		$18,804
Collective Trust Fund programs	11		11		14		12		12
Liquidity funds	5,142		5,218		5,757		5,429		5,466
Total assets under management		$18,849		$20,130		$21,885		$23,270		$24,282
Client assets under administration	13,760		14,702		15,366		15,069		15,707
Total assets		$32,609		$34,832		$37,251		$38,339		$39,989

Investment Advisors:
Equity/Fixed Income programs		$35,618		$37,520		$39,005		$40,887		$42,389
Collective Trust Fund programs	14		13		13		13		11
Liquidity funds	2,520		2,785		2,806		2,637		2,830
Total assets under management		$38,152		$40,318		$41,824		$43,537		$45,230

Institutional Investors:
Equity/Fixed Income programs		$63,153		$65,750		$67,697		$70,706		$72,010
Collective Trust Fund programs	107		110		103		134		98
Liquidity funds	3,091		2,720		2,571		2,664		2,883
Total assets under management		$66,351		$68,580		$70,371		$73,504		$74,991

Investment Managers:
Equity/Fixed Income programs		$76		$75		$68		$68		$64
Collective Trust Fund programs	19,259		21,345		22,004		22,447		22,123
Liquidity funds	613		592		738		824		962
Total assets under management		$19,948		$22,012		$22,810		$23,339		$23,149
Client assets under administration	292,627		303,131		320,644		333,373		344,661
Total assets		$312,575		$325,143		$343,454		$356,712		$367,810

Investments in New Businesses:
Equity/Fixed Income programs		$584		$613		$623		$640		$688
Liquidity funds	27		33		46		43		139
Total assets under management		$611		$646		$669		$683		$827

LSV Asset Management:
Equity/Fixed Income programs		$69,463		$75,240		$76,306		$79,866		$82,402

Total:
Equity/Fixed Income programs		$182,590		$194,099		$199,813		$209,996		$216,357
Collective Trust Fund programs	19,391		21,479		22,134		22,606		22,244
Liquidity funds	11,393		11,348		11,918		11,597		12,280
Total assets under management		$213,374		$226,926		$233,865		$244,199		$250,881

Client assets under administration	306,387		317,833		336,010		348,442		360,368
Total assets		$519,761		$544,759		$569,875		$592,641		$611,249

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