SEI Reports Fourth-Quarter 2015 Financial Results
Company Reports Five Percent Annual Growth in Revenues and Six Percent Annual Growth in Diluted Earnings Per Share
Tweet
Share
E-mailGet Alerts SEIC Hot Sheet
Price: $66.18 -0.63%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 1.4%
Revenue Growth %: +9.1%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 1.4%
Revenue Growth %: +9.1%
Join SI Premium – FREE
OAKS, PA -- (Marketwired) -- 01/27/16 -- SEI Investments Company (NASDAQ: SEIC) today announced financial results for the fourth-quarter 2015. Diluted earnings per share were $.48 in fourth-quarter 2015 compared to $.45 in fourth-quarter 2014. Earnings were favorably impacted by the outcome of a state tax petition related to prior years which reduced the effective tax rate. Diluted earnings per share in fourth-quarter 2014 reflect an after-tax charge of approximately $10.7 million, or $.06 per share, related to a write down of an equity investment in a wealth services firm based in China.
Consolidated Overview
(In thousands, except For the Three Months For the Twelve Months
earnings per share) Ended December 31, Ended December 31,
2015 2014 % 2015 2014 %
---------- ---------- -- ---------- ---------- --
Revenues $ 335,397 $ 322,757 4% $1,334,208 $1,266,005 5%
Net income 81,379 77,097 6% 331,655 318,713 4%
Diluted earnings per
share $ 0.48 $ 0.45 7% $ 1.96 $ 1.85 6%
"Our financial results for the fourth quarter cap a year of progress throughout our company and reflect the increased investment we are making to effectively serve our clients and support our growth," said Alfred P. West, Jr., SEI Chairman and CEO. "The markets we serve will continue to look for broad-based solutions to solve their complex issues. As a leader in all of our markets, we feel well positioned to capitalize on these opportunities.
"Our focus is unwavering on creating long-term sustainable growth and increased shareholder value. To do so, we never shirk from making the necessary investments."
Summary of Fourth-Quarter Results by Business Segment
For the Three Months For the Twelve Months
(In thousands) Ended December 31, Ended December 31,
2015 2014 % 2015 2014 %
-------- ---------- -- ---------- ---------- --
Private Banks:
Revenues $113,690 $ 111,959 2% $ 456,516 $ 441,467 3%
Expenses 102,775 99,975 3% 410,975 399,620 3%
-------- ---------- ---------- ----------
Operating Profit 10,915 11,984 (9)% 45,541 41,847 9%
Gain on sale of
subsidiary - - -% 2,791 5,582 NM
-------- ---------- ---------- ----------
Segment Profit 10,915 11,984 NM 48,332 47,429 NM
Operating Margin
(A) 10% 11% 10% 9%
Investment Advisors:
Revenues 78,614 72,872 8% 306,620 283,811 8%
Expenses 46,522 38,448 21% 171,968 146,500 17%
-------- ---------- ---------- ----------
Operating Profit 32,092 34,424 (7)% 134,652 137,311 (2)%
Operating Margin 41% 47% 44% 48%
Institutional
Investors:
Revenues 73,525 72,466 1% 297,568 284,677 5%
Expenses 37,189 36,044 3% 145,851 140,659 4%
-------- ---------- ---------- ----------
Operating Profit 36,336 36,422 -% 151,717 144,018 5%
Operating Margin 49% 50% 51% 51%
Investment Managers:
Revenues 68,154 64,211 6% 267,963 251,310 7%
Expenses 45,431 40,387 12% 172,094 159,176 8%
-------- ---------- ---------- ----------
Operating Profit 22,723 23,824 (5)% 95,869 92,134 4%
Operating Margin 33% 37% 36% 37%
Investments in New
Businesses:
Revenues 1,414 1,249 13% 5,541 4,740 17%
Expenses 5,808 5,063 15% 20,656 18,377 12%
-------- ---------- ---------- ----------
Operating Loss (4,394) (3,814) NM (15,115) (13,637) NM
Totals:
Revenues $335,397 $ 322,757 4% $1,334,208 $1,266,005 5%
Expenses 237,725 219,917 8% 921,544 864,332 7%
Corporate overhead
expenses 15,465 12,576 23% 54,451 48,889 11%
-------- ---------- ---------- ----------
Income from
operations $ 82,207 $ 90,264 (9)% $ 358,213 $ 352,784 2%
======== ========== ========== ==========
(A) Percentages determined exclusive of gain on sale of subsidiary.
Fourth-Quarter Business Highlights:
- Revenue growth in the quarter was primarily driven by higher Asset management, administration, and distribution fees from improved cash flows from new and existing clients and market appreciation of assets. The market volatility occurring during the second half of 2015 negatively impacted our asset-based fee revenues and partially offset our revenue growth.
- Sales events, net of client losses, during fourth-quarter 2015 totaled approximately $27.2 million and are expected to generate net annualized recurring revenues of approximately $24.6 million when contract values are fully realized. For the year ended 2015, sales events, net of client losses, totaled approximately $124.0 million and are expected to generate new annualized recurring revenues of approximately $99.7 million when contract values are fully realized.
- Our average assets under management, excluding LSV, increased $14.3 billion, or eight percent, to $183.4 billion, as compared to $169.1 billion during the fourth-quarter 2014 (see attached Average Asset Balances schedules for further details).
- Our average assets under administration increased $35.5 billion, or ten percent, to $407.9 billion in the fourth-quarter 2015, as compared to $372.4 billion during the fourth-quarter 2014 (see attached Average Asset Balances schedules for further details).
- Our earnings from LSV decreased by $3.2 million, or nine percent, to $32.1 million in fourth-quarter 2015 as compared to $35.3 million in fourth-quarter 2014. The reduction in earnings was due to a decline in assets under management from market volatility, reduced performance fees and increased personnel expenses of LSV.
- Amortization expense related to the SEI Wealth Platform(SM) increased to $10.8 million during the fourth-quarter 2015 as compared to $10.0 million during the fourth-quarter 2014 due to continued enhancements.
- Although revenues increased in our Investment Advisors and Investment Managers segments, higher personnel and other operating costs mainly related to servicing new and existing clients and increased technology development spending in these segments caused operating margins to decline.
- Stock-based compensation expense during the fourth-quarter 2015 increased $1.9 million primarily from the acceleration of expense recognition for stock options that achieved performance vesting targets earlier than originally estimated.
- Corporate overhead expenses during the fourth-quarter 2015 include $1.6 million in costs attributable to the relocation of our London operations to a new facility. The cost of the new facility will be approximately $700 thousand higher per quarter than our previous facility. We expect this additional amount to be recognized in Corporate overhead expenses.
- Our effective tax rates were 29.3 percent in fourth-quarter 2015 and 33.3 percent in fourth-quarter 2014. The decrease in our tax rate was primarily related to a state tax petition related to prior years which resulted in a net refund of $3.7 million.
- We repurchased 1.5 million shares of our common stock for $77.5 million during the fourth-quarter 2015.
Earnings Conference Call A conference call to review earnings is scheduled for 2 p.m. Eastern time on January 27, 2016. 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 384303.
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 December 31, 2015, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $670 billion in mutual fund and pooled or separately managed assets, including $262 billion in assets under management and $408 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 For the Twelve Months
Ended December 31, Ended December 31,
---------------------- ----------------------
2015 2014 2015 2014
---------- ---------- ---------- ----------
Asset management, admin. and
distribution fees $ 254,410 $ 242,966 $1,010,511 $ 948,932
Information processing and
software servicing fees 72,128 70,437 290,893 285,463
Transaction-based and trade
execution fees 8,859 9,354 32,804 31,610
---------- ---------- ---------- ----------
Total revenues 335,397 322,757 1,334,208 1,266,005
Subadvisory, distribution
and other asset mgmt costs 40,443 38,798 160,062 149,791
Software royalties and other
information processing
costs 7,903 7,990 31,497 33,522
Brokerage commissions 6,525 6,785 24,388 23,002
Compensation, benefits and
other personnel 103,128 95,663 395,774 376,873
Stock-based compensation 5,836 3,982 17,312 13,463
Consulting, outsourcing and
professional fees 37,876 33,535 146,436 136,818
Data processing and computer
related 15,784 12,959 58,884 52,512
Facilities, supplies and
other costs 18,773 16,759 74,968 66,113
Amortization 10,824 10,068 42,630 38,679
Depreciation 6,098 5,954 24,044 22,448
---------- ---------- ---------- ----------
Total expenses 253,190 232,493 975,995 913,221
Income from operations 82,207 90,264 358,213 352,784
Net gain (loss) on
investments 88 565 (456) 614
Interest and dividend income 788 1,106 3,358 3,354
Interest expense (141) (116) (483) (458)
Equity in earnings of
unconsolidated affiliates 32,140 23,706 137,057 127,786
Gain on sale of subsidiary - - 2,791 5,582
---------- ---------- ---------- ----------
Income before income taxes 115,082 115,525 500,480 489,662
Income taxes 33,703 38,428 168,825 170,949
---------- ---------- ---------- ----------
Net income 81,379 77,097 331,655 318,713
---------- ---------- ---------- ----------
Basic earnings per common
share $ 0.49 $ 0.46 $ 2.00 $ 1.89
========== ========== ========== ==========
Shares used to calculate
basic earnings per share 164,473 167,146 165,725 168,246
========== ========== ========== ==========
Diluted earnings per common
share $ 0.48 $ 0.45 $ 1.96 $ 1.85
========== ========== ========== ==========
Shares used to calculate
diluted earnings per share 168,461 171,326 169,598 172,565
========== ========== ========== ==========
SEI INVESTMENTS COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, December 31,
2015 2014
------------- -------------
Assets
Current Assets:
Cash and cash equivalents $ 679,661 $ 667,446
Restricted cash 5,500 5,801
Receivables from regulated investment
companies 48,098 48,393
Receivables, net 223,023 194,419
Securities owned 21,235 21,175
Other current assets 26,207 18,193
------------- -------------
Total Current Assets 1,003,724 955,427
Property and Equipment, net 143,977 125,535
Capitalized software, net 290,522 309,040
Investments available for sale 81,294 77,609
Investments in affiliated funds, at fair
value 4,039 4,523
Investment in unconsolidated affiliates 49,580 54,290
Other assets, net 15,492 16,451
------------- -------------
Total Assets $ 1,588,628 $ 1,542,875
============= =============
Liabilities and Equity
Current Liabilities:
Accounts payable $ 4,511 $ 10,588
Accrued liabilities 217,587 207,429
Deferred revenue 2,385 1,749
------------- -------------
Total Current Liabilities 224,483 219,766
Deferred income taxes 63,028 65,169
Other long-term liabilities 11,397 10,327
------------- -------------
Total Liabilities 298,908 295,262
Shareholders' Equity:
Common stock 1,637 1,667
Capital in excess of par value 910,513 834,615
Retained earnings 402,860 420,226
Accumulated other comprehensive loss, net (25,290) (8,895)
------------- -------------
Total Shareholders' Equity 1,289,720 1,247,613
------------- -------------
Total Liabilities and Shareholders'
Equity $ 1,588,628 $ 1,542,875
============= =============
SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)
Dec 31, Mar. 31, Jun. 30, Sept. 30, Dec 31,
2014 2015 2015 2015 2015
-------- -------- -------- --------- --------
Private Banks:
Equity/Fixed Income programs $ 18,666 $ 19,296 $ 19,686 $ 18,243 $ 18,150
Collective Trust Fund
programs 8 9 13 3 4
Liquidity funds 5,889 5,551 5,280 5,469 5,835
-------- -------- -------- --------- --------
Total assets under
management $ 24,563 $ 24,856 $ 24,979 $ 23,715 $ 23,989
Client assets under
administration 16,741 17,643 17,485 16,896 17,532
-------- -------- -------- --------- --------
Total assets $ 41,304 $ 42,499 $ 42,464 $ 40,611 $ 41,521
Investment Advisors:
Equity/Fixed Income programs $ 43,845 $ 45,800 $ 46,951 $ 43,988 $ 46,123
Collective Trust Fund
programs 9 8 8 9 7
Liquidity funds 3,173 3,047 2,817 4,677 4,924
-------- -------- -------- --------- --------
Total assets under
management $ 47,027 $ 48,855 $ 49,776 $ 48,674 $ 51,054
Institutional Investors:
Equity/Fixed Income programs $ 72,828 $ 74,178 $ 75,341 $ 70,818 $ 72,263
Collective Trust Fund
programs 95 94 93 96 96
Liquidity funds 2,929 3,246 2,960 2,655 2,883
-------- -------- -------- --------- --------
Total assets under
management $ 75,852 $ 77,518 $ 78,394 $ 73,569 $ 75,242
Investment Managers:
Equity/Fixed Income programs $ 27 $ 25 $ 24 $ 59 $ 66
Collective Trust Fund
programs 20,833 20,965 20,632 19,863 32,117
Liquidity funds 946 1,091 1,007 848 832
-------- -------- -------- --------- --------
Total assets under
management $ 21,806 $ 22,081 $ 21,663 $ 20,770 $ 33,015
Client assets under
administration (A) 355,890 372,116 381,963 376,133 390,282
-------- -------- -------- --------- --------
Total assets $377,696 $394,197 $403,626 $ 396,903 $423,297
Investments in New Businesses:
Equity/Fixed Income programs $ 736 $ 756 $ 779 $ 752 $ 764
Liquidity funds 98 106 57 51 47
-------- -------- -------- --------- --------
Total assets under
management $ 834 $ 862 $ 836 $ 803 $ 811
LSV Asset Management:
Equity/Fixed Income programs $ 82,665 $ 84,123 $ 86,334 $ 76,958 $ 78,335
Total:
Equity/Fixed Income programs
(B) $218,767 $224,178 $229,115 $ 210,818 $215,701
Collective Trust Fund
programs 20,945 21,076 20,746 19,971 32,224
Liquidity funds 13,035 13,041 12,121 13,700 14,521
-------- -------- -------- --------- --------
Total assets under
management $252,747 $258,295 $261,982 $ 244,489 $262,446
Client assets under
administration (C) 372,631 389,759 399,448 393,029 407,814
-------- -------- -------- --------- --------
Total assets $625,378 $648,054 $661,430 $ 637,518 $670,260
======== ======== ======== ========= ========
(A) Client assets under administration in the Investment Managers segment
include $50.3 billion of assets balances that require limited services
and therefore are at fee levels below our normal full service assets (as
of December 31, 2015).
(B) Equity/Fixed Income programs include $4.7 billion of assets invested in
various asset allocation funds at December 31, 2015.
(C) In addition to the numbers presented, SEI also administers an additional
$11.0 billion in Funds of Funds assets (as of December 31, 2015) on
which SEI does not earn an administration fee.
SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)
4th Qtr. 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.
2014 2015 2015 2015 2015
-------- -------- -------- -------- --------
Private Banks:
Equity/Fixed Income programs $ 18,606 $ 18,869 $ 19,872 $ 19,080 $ 18,603
Collective Trust Fund
programs 10 8 12 6 3
Liquidity funds 5,537 5,755 5,256 5,443 5,511
-------- -------- -------- -------- --------
Total assets under management $ 24,153 $ 24,632 $ 25,140 $ 24,529 $ 24,117
Client assets under
administration 16,451 17,504 17,823 17,504 17,775
-------- -------- -------- -------- --------
Total assets $ 40,604 $ 42,136 $ 42,963 $ 42,033 $ 41,892
Investment Advisors:
Equity/Fixed Income programs $ 43,104 $ 44,809 $ 47,027 $ 45,992 $ 46,044
Collective Trust Fund
programs 9 9 8 9 8
Liquidity funds 3,087 3,072 2,819 3,523 4,784
-------- -------- -------- -------- --------
Total assets under management $ 46,200 $ 47,890 $ 49,854 $ 49,524 $ 50,836
Institutional Investors:
Equity/Fixed Income programs $ 72,771 $ 73,760 $ 75,426 $ 73,568 $ 72,463
Collective Trust Fund
programs 96 95 94 93 96
Liquidity funds 2,973 3,021 3,354 2,843 3,109
-------- -------- -------- -------- --------
Total assets under management $ 75,840 $ 76,876 $ 78,874 $ 76,504 $ 75,668
Investment Managers:
Equity/Fixed Income programs $ 64 $ 27 $ 25 $ 24 $ 59
Collective Trust Fund
programs 21,140 21,108 21,387 20,449 30,960
Liquidity funds 904 1,066 1,010 978 960
-------- -------- -------- -------- --------
Total assets under management $ 22,108 $ 22,201 $ 22,422 $ 21,451 $ 31,979
Client assets under
administration 355,903 367,206 378,347 380,247 390,080
-------- -------- -------- -------- --------
Total assets $378,011 $389,407 $400,769 $401,698 $422,059
Investments in New Businesses:
Equity/Fixed Income programs $ 731 $ 755 $ 784 $ 776 $ 788
Liquidity funds 97 101 75 49 47
-------- -------- -------- -------- --------
Total assets under management $ 828 $ 856 $ 859 $ 825 $ 835
LSV Asset Management:
Equity/Fixed Income programs $ 83,187 $ 83,439 $ 87,409 $ 80,656 $ 79,634
Total:
Equity/Fixed Income programs $218,463 $221,659 $230,543 $220,096 $217,591
Collective Trust Fund
programs 21,255 21,220 21,501 20,557 31,067
Liquidity funds 12,598 13,015 12,514 12,836 14,411
-------- -------- -------- -------- --------
Total assets under management $252,316 $255,894 $264,558 $253,489 $263,069
Client assets under
administration 372,354 384,710 396,170 397,751 407,855
-------- -------- -------- -------- --------
Total assets $624,670 $640,604 $660,728 $651,240 $670,924
======== ======== ======== ======== ========
Investor Contact: Nicole Vattimo SEI +1 610-676-4385 [email protected] Media Contact: Dana Grosser SEI +1 610-676-2459 [email protected]
Source: SEI
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Midday movers: Meta, IBM, Caterpillar fall; Chipotle rises
- Southern Copper Corp. (SCCO) Tops Q1 EPS by 20c
- Deutsche Bank (DB) Tops Q1 EPS by 1c
Create E-mail Alert Related Categories
Press ReleasesRelated Entities
Dividend, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
