SEIC
$56.79
Sei Investments
$1.82
3.31%
Earnings Details
3rd Quarter September 2020
Wednesday, October 21, 2020 4:01:00 PM
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Summary

Sei Investments (SEIC) Recent Earnings

Sei Investments (SEIC) reported 3rd Quarter September 2020 earnings of $0.75 per share on revenue of $424.9 million. The consensus earnings estimate was $0.81 per share on revenue of $420.6 million. Revenue grew 2.1% on a year-over-year basis.

SEI Investments Company is a provider of investment processing, investment management and investment operations solutions that help financial institutions, financial advisors, institutional investors and investment managers create and manage wealth.

Results
Reported Earnings
$0.75
Earnings Whisper
-
Consensus Estimate
$0.81
Reported Revenue
$424.9 Mil
Revenue Estimate
$420.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

SEI Reports Third-Quarter 2020 Financial Results

OAKS, Pa., Oct. 21, 2020 /PRNewswire/ -- SEI Investments Company (NASDAQ: SEIC) today announced financial results for the third-quarter 2020. Diluted earnings per share were $0.75 in third-quarter 2020 compared to $0.86 in third-quarter 2019. On Tuesday, Oct. 20, 2020 the Board of Directors of SEI Investments Company approved an increase in its stock repurchase program by an additional $250 million, increasing the available authorization under the program to approximately $292 million.

Consolidated Overview














(In thousands, except
earnings per share)


For the Three Months
Ended September 30,




For the Nine Months
Ended September 30,





2020


2019


%


2020


2019


%














Revenues


$424,927


$416,254


2%


$1,240,335


$1,226,660


1%

Net income


111,096


132,168


(16)%


321,404


372,689


(14)%

Diluted earnings per share


$0.75


$0.86


(13)%


$2.14


$2.40


(11)%

"The pandemic continues, as does our focus on clients and our employees' health and safety. We are fortunate to have a strong global workforce that is resilient, engaged and dedicated to providing our clients best-in-class service, and committed to our company's growth. Words can't express our appreciation for their efforts, along with all of the healthcare and service providers who look after our health and well-being," said Alfred P. West, Jr., SEI Chairman and CEO.

"Our business continued to rebound during the quarter, as our markets adjusted to the current environment. Our financial results reflect our strong sales activity, while we invest in our strategic priorities. Our diverse and talented global workforce drives our ability to serve our clients and make an impact on our communities. Looking to the future, we will capitalize on the opportunities in our markets to deliver long-term value to our shareholders, employees and clients."

Summary of Third-Quarter Results by Business Segment



For the Three Months Ended
September 30,




For the Nine Months
Ended September 30,



(In thousands)









2020


2019


%


2020


2019


%

Private Banks:













Revenues


$114,792



$117,250



(2)%


$335,739



$351,601



(5)%

Expenses


113,066



110,788



2%


331,442



329,540



1%

Operating Profit


1,726



6,462



(73)%


4,297



22,061



(81)%

Operating Margin


2

%


6

%




1

%


6

%
















Investment Advisors:













Revenues


103,189



103,033



—%


299,218



297,916



—%

Expenses


51,519



51,509



—%


154,100



154,569



—%

Operating Profit


51,670



51,524



—%


145,118



143,347



1%

Operating Margin


50

%


50

%




48

%


48

%
















Institutional Investors:













Revenues


79,583



80,337



(1)%


235,309



241,559



(3)%

Expenses


37,812



37,268



1%


113,016



115,383



(2)%

Operating Profit


41,771



43,069



(3)%


122,293



126,176



(3)%

Operating Margin


52

%


54

%




52

%


52

%
















Investment Managers:













Revenues


123,846



112,186



10%


359,815



326,037



10%

Expenses


79,838



71,889



11%


228,795



209,326



9%

Operating Profit


44,008



40,297



9%


131,020



116,711



12%

Operating Margin


36

%


36

%




36

%


36

%
















Investments in New Businesses:













Revenues


3,517



3,448



2%


10,254



9,547



7%

Expenses


13,315



7,926



68%


37,691



20,663



82%

Operating Loss


(9,798)



(4,478)



NM


(27,437)



(11,116)



NM














Totals:













Revenues


$424,927



$416,254



2%


$1,240,335



$1,226,660



1%

Expenses


295,550



279,380



6%


865,044



829,481



4%

Corporate Overhead Expenses


18,040



16,237



11%


53,414



52,845



1%

Income from Operations


$111,337



$120,637



(8)%


$321,877



$344,334



(7)%

Third-Quarter Business Highlights:

  • Revenues from Asset management, administration, and distribution fees increased primarily from higher assets under administration due to positive cash flows from new and existing clients in our Investment Managers segment.
  • Our average assets under administration increased $84.8 billion, or 13%, to $738.8 billion in the third-quarter 2020, as compared to $654.0 billion during the third-quarter 2019 (see attached Average Asset Balances schedules for further details).
  • Our average assets under management, excluding LSV, increased $13.1 billion, or 6%, to $246.1 billion in the third-quarter 2020, as compared to $233.0 billion during the third-quarter 2019 (see attached Average Asset Balances schedules for further details).
  • Sales events, net of client losses, during third-quarter 2020 totaled approximately $27.9 million and are expected to generate net annualized recurring revenues of approximately $14.6 million when contract values are fully realized. For the nine months ended Sept. 30, 2020, sales events, net of client losses, totaled approximately $84.8 million and are expected to generate net annualized recurring revenues of approximately $63.5 million when contract values are fully realized.
  • The increase in our operational expenses was primarily due to increased consulting costs related to our continued investments in new business opportunities, such as our One SEI strategy and IT Services offering, as well as increased personnel costs to service new clients in our Investment Managers segment. This increase was partially offset by a decline in travel and promotional-related expenses, as our sales and client relationship personnel adapted to COVID-19 restrictions.
  • Our earnings from LSV decreased by $9.3 million, or 25%, to $28.3 million in third-quarter 2020, as compared to $37.6 million in third-quarter 2019. The decrease in earnings was due to lower assets under management from negative cash flows from existing clients, market depreciation and client losses.
  • We capitalized $5.4 million of software development costs in third-quarter 2020 for continued enhancements to the SEI Wealth PlatformSM (SWP). Amortization expense related to SWP was $10.9 million in third-quarter 2020.
  • Our effective tax rates were 21.4% in third-quarter 2020 and 18.9% in third-quarter 2019. The increase in our effective tax rate was due to decreased tax benefits associated with a lower volume of stock option exercises and a higher effective state tax rate.
  • We repurchased 2.1 million shares of our common stock for $108.7 million during the third-quarter 2020.

Earnings Conference Call
A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on Oct. 21, 2020. Investors may listen to the call at seic.com/ir-events. Investors may also listen to a replay by telephone at (USA) 866-207-1041; (International) 402-970-0847; Access Code: 4259639.

About SEI
After 50 years in business, SEI (NASDAQ:SEIC) remains a leading global provider of investment processing, investment management, and investment operations solutions designed to help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of Sept. 30, 2020, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers approximately $1 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including approximately $330 billion in assets under management and $755 billion in client assets under administration. For more information, visit seic.com.

This release contains forward-looking statements within the meaning or the rules and regulations of the Securities and Exchange Commission. In some cases you can identify forward-looking statements by terminology, such as ''may,'' ''will,'' ''expect,'' ''believe'' and ''continue'' or ''appear.'' Our forward-looking statements include our current expectations as to:

  • revenue that we believe will be generated by sales events that occurred during the quarter,
  • the rebound of our business,
  • whether and the degree to which we will invest in our strategic priorities, and
  • whether capitalizing on the opportunities in our markets will deliver long-term value for any of our shareholders, employees or clients.

You should not place undue reliance on our forward-looking statements, as they are based on the current beliefs and expectations of our management and subject to significant risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe the assumptions upon which we base our forward-looking statements are reasonable, they could be inaccurate. Some of the risks and important factors that could cause actual results to differ from those described in our forward-looking statements can be found in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended Dec. 31, 2019, filed with the Securities and Exchange Commission.

Investor Contact: 

Media Contact:

Lindsey Opsahl 

Leslie Wojcik

SEI

SEI

+1 610-676-4052  

+1 610-676-4191

lopsahl@seic.com

 lwojcik@seic.com

 

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,



2020


2019


2020


2019










Asset management, admin. and distribution fees


$339,609



$330,943



$992,039



$969,812


Information processing and software servicing fees


85,318



85,311



248,296



256,848











Total revenues


424,927



416,254



1,240,335



1,226,660











Subadvisory, distribution and other asset mgmt. costs


45,126



44,978



134,645



134,960


Software royalties and other information processing costs


6,992



7,198



21,828



22,719


Compensation, benefits and other personnel


134,795



130,579



391,607



386,913


Stock-based compensation


6,467



5,453



20,458



15,555


Consulting, outsourcing and professional fees


57,949



48,789



168,350



144,325


Data processing and computer related


24,437



22,338



71,647



65,514


Facilities, supplies and other costs


16,679



15,926



47,448



51,771


Amortization


13,200



12,947



39,417



38,407


Depreciation


7,945



7,409



23,058



22,162











Total expenses


313,590



295,617



918,458



882,326











Income from operations


111,337



120,637



321,877



344,334











Net gain (loss) on investments


776



611



(1,310)



2,121


Interest and dividend income


1,009



4,167



5,582



12,737


Interest expense


(153)



(154)



(456)



(477)


Equity in earnings of unconsolidated affiliate


28,305



37,609



86,488



112,758











Income before income taxes


141,274



162,870



412,181



471,473











Income taxes


30,178



30,702



90,777



98,784











Net income


$111,096



$132,168



$321,404



$372,689











Basic earnings per common share


$0.76



$0.88



$2.18



$2.45











Shares used to calculate basic earnings per share


145,812



150,855



147,586



152,009











Diluted earnings per common share


$0.75



$0.86



$2.14



$2.40











Shares used to calculate diluted earnings per share


147,907



154,227



149,958



155,311











Dividends declared per common share


$—



$—



$0.35



$0.33


 

SEI INVESTMENTS COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)




September 30,


December 31,



2020


2019

Assets





Current Assets:





Cash and cash equivalents


$767,698



$841,446


Restricted cash


3,101



3,101


Receivables from investment products


51,644



54,165


Receivables, net of allowance for doubtful accounts of $1,310 and $1,201


378,170



340,358


Securities owned


35,820



33,486


Other current assets


38,475



32,289


Total Current Assets


1,274,908



1,304,845







Property and Equipment, net of accumulated depreciation of $370,072 and $353,453


180,531



160,859


Operating Lease Right-of-Use Assets


38,945



42,789


Capitalized Software, net of accumulated amortization of $479,159 and $442,677


278,226



296,068


Available for Sale and Equity Securities


116,564



116,917


Investments in Affiliated Funds, at fair value


5,207



5,988


Investment in Unconsolidated Affiliate


33,117



67,413


Goodwill


64,489



64,489


Intangible Assets, net of accumulated amortization of $11,536 and $8,773


25,225



27,987


Deferred Contract Costs


33,833



30,991


Deferred Income Taxes


2,065



2,822


Other Assets, net


32,507



30,202


Total Assets


$2,085,617



$2,151,370







Liabilities and Equity





Current Liabilities:





Accounts payable


$13,038



$4,423


Accrued liabilities


223,217



272,801


Current portion of long-term operating lease liabilities


8,445



9,156


Deferred revenue


5,815



7,185


Total Current Liabilities


250,515



293,565







Long-term Income Taxes Payable


803



803


Deferred Income Taxes


47,578



55,722


Long-term Operating Lease Liabilities


34,768



38,450


Other Long-term Liabilities


22,520



24,052


Total Liabilities


356,184



412,592







Shareholders' Equity:





Common stock, $0.01 par value, 750,000 shares authorized; 144,491 and 149,745
shares issued and outstanding


1,445



1,497


Capital in excess of par value


1,174,142



1,158,900


Retained earnings


581,244



601,885


Accumulated other comprehensive loss, net


(27,398)



(23,504)


Total Shareholders' Equity


1,729,433



1,738,778


Total Liabilities and Shareholders' Equity


$2,085,617



$2,151,370


 

ENDING ASSET BALANCES

(In millions)  (Unaudited)




Sept. 30,


Dec. 31,


Mar. 31,


Jun. 30,


Sept. 30,



2019


2019


2020


2020


2020

Private Banks:











Equity and fixed-income programs


$22,580



$23,851



$21,160



$22,974



$23,499


Collective trust fund programs


4



4



5



5



6


Liquidity funds


3,695



3,405



4,143



4,291



3,718


Total assets under management


$26,279



$27,260



$25,308



$27,270



$27,223


Client assets under administration


23,985



25,801



21,497



23,903



24,174


Total assets


$50,264



$53,061



$46,805



$51,173



$51,397













Investment Advisors:











Equity and fixed-income programs


$65,059



$67,895



$54,856



$59,958



$65,581


Collective trust fund programs


4



4



2



3



3


Liquidity funds


2,673



2,887



5,969



6,648



3,866


Total assets under management


$67,736



$70,786



$60,827



$66,609



$69,450













Institutional Investors:











Equity and fixed-income programs


$82,659



$84,291



$72,399



$80,257



$83,846


Collective trust fund programs


81



83



94



103



101


Liquidity funds


2,290



1,746



3,672



1,924



2,096


Total assets under management


$85,030



$86,120



$76,165



$82,284



$86,043


Client assets under advisement


4,467



3,948



3,406



3,326



3,618


Total assets


$89,497



$90,068



$79,571



$85,610



$89,661













Investment Managers:











Collective trust fund programs


53,169



58,070



48,226



58,178



63,277


Liquidity funds


477



479



392



664



389


Total assets under management


$53,646



$58,549



$48,618



$58,842



$63,666


Client assets under administration (A)


637,986



657,541



610,794



668,611



730,369


Total assets


$691,632



$716,090



$659,412



$727,453



$794,035













Investments in New Businesses:











Equity and fixed-income programs


$1,621



$1,688



$1,484



$1,498



$1,572


Liquidity funds


132



158



152



194



169


Total assets under management


$1,753



$1,846



$1,636



$1,692



$1,741


Client assets under advisement


825



1,343



1,056



1,193



1,179


Total assets


$2,578



$3,189



$2,692



$2,885



$2,920













LSV Asset Management:











Equity and fixed-income programs (B)


$100,295



$107,476



$70,851



$81,134



$82,051













Total:











Equity and fixed-income programs (C)


$272,214



$285,201



$220,750



$245,821



$256,549


Collective trust fund programs


53,258



58,161



48,327



58,289



63,387


Liquidity funds


9,267



8,675



14,328



13,721



10,238


Total assets under management


$334,739



$352,037



$283,405



$317,831



$330,174


Client assets under advisement


5,292



5,291



4,462



4,519



4,797


Client assets under administration (D)


661,971



683,342



632,291



692,514



754,543


Total assets


$1,002,002



$1,040,670



$920,158



$1,014,864



$1,089,514




(A)

Client assets under administration in the Investment Managers segment include $51.1 billion of assets that are at fee levels below our normal full-service assets (as of September 30, 2020).

(B) 

Equity and fixed-income programs include $1.6 billion of assets managed by LSV in which fees are based on performance only (as of September 30, 2020).

(C) 

Equity and fixed-income programs include $7.5 billion of assets invested in various asset allocation funds at September 30, 2020.

(D) 

In addition to the numbers presented, SEI also administers an additional $11.5 billion in Funds of Funds assets (as of September 30, 2020) on which SEI does not earn an administration fee.

 

AVERAGE ASSET BALANCES

(In millions) (Unaudited)




3rd Qtr.


4th Qtr.


1st Qtr.


2nd Qtr.


3rd Qtr.



2019


2019


2020


2020


2020

Private Banks:











Equity and fixed-income programs


$22,432



$23,106



$24,657



$22,229



$23,740


Collective trust fund programs


4



4



4



5



7


Liquidity funds


3,625



3,581



3,581



4,366



3,948


Total assets under management


$26,061



$26,691



$28,242



$26,600



$27,695


Client assets under administration


23,717



24,930



24,840



23,819



25,295


Total assets


$49,778



$51,621



$53,082



$50,419



$52,990













Investment Advisors:











Equity and fixed-income programs


$64,761



$66,371



$64,933



$57,429



$64,479


Collective trust fund programs


5



4



3



3



3


Liquidity funds


2,580



2,673



3,284



6,923



4,569


Total assets under management


$67,346



$69,048



$68,220



$64,355



$69,051













Institutional Investors:











Equity and fixed-income programs


$82,398



$83,304



$79,926



$77,037



$82,830


Collective trust fund programs


80



82



86



100



102


Liquidity funds


2,287



2,106



2,342



2,476



2,120


Total assets under management


$84,765



$85,492



$82,354



$79,613



$85,052


Client assets under advisement


3,797



4,106



3,760



3,362



3,565


Total assets


$88,562



$89,598



$86,114



$82,975



$88,617













Investment Managers:











Collective trust fund programs


52,587



55,499



55,952



54,061



62,028


Liquidity funds


460



642



617



482



565


Total assets under management


$53,047



$56,141



$56,569



$54,543



$62,593


Client assets under administration (A)


630,328



646,592



654,386



649,012



713,528


Total assets


$683,375



$702,733



$710,955



$703,555



$776,121













Investments in New Businesses:











Equity and fixed-income programs


$1,609



$1,649



$1,663



$1,468



$1,560


Liquidity funds


142



145



168



182



180


Total assets under management


$1,751



$1,794



$1,831



$1,650



$1,740


Client assets under advisement


842



1,044



1,222



1,148



1,206


Total assets


$2,593



$2,838



$3,053



$2,798



$2,946













LSV Asset Management:











Equity and fixed-income programs (B)


$100,094



$104,814



$88,059



$80,395



$83,536













Total:











Equity and fixed-income programs (C)


$271,294



$279,244



$259,238



$238,558



$256,145


Collective trust fund programs


52,676



55,589



56,045



54,169



62,140


Liquidity funds


9,094



9,147



9,992



14,429



11,382


Total assets under management


$333,064



$343,980



$325,275



$307,156



$329,667


Client assets under advisement


4,639



5,150



4,982



4,510



4,771


Client assets under administration (D)


654,045



671,522



679,226



672,831



738,823


Total assets


$991,748



$1,020,652



$1,009,483



$984,497



$1,073,261




(A) 

Average client assets under administration in the Investment Managers segment during third-quarter 2020 include $50.4 billion that are at fee levels below our normal full-service assets.

(B) 

Equity and fixed-income programs include $1.6 billion of average assets managed by LSV in which fees are based on performance only during third-quarter 2020.

(C) 

Equity and fixed-income programs include $7.5 billion of average assets invested in various asset allocation funds during third-quarter 2020.

(D) 

In addition to the numbers presented, SEI also administers an additional $11.4 billion of average assets in Funds of Funds assets during third-quarter 2020 on which SEI does not earn an administration fee.

 

Cision View original content:http://www.prnewswire.com/news-releases/sei-reports-third-quarter-2020-financial-results-301157297.html

SOURCE SEI Investments Company