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SEI Reports First-Quarter 2013 Financial Results

SEI Reports First-Quarter 2013 Financial Results 
Results Include Gain From Sale of SEI Asset Korea 
OAKS, PA -- (Marketwired) -- 04/24/13 --  SEI Investments Company
(NASDAQ: SEIC) today announced financial results for first-quarter
2013. Diluted earnings per share were $.41 in first-quarter 2013
compared to $.28 in first-quarter 2012. First-quarter 2013 includes a
gain of $.08 diluted earnings per share from the sale of SEI Asset
Korea, of which SEI owned approximately 56.1 percent.  


 
                                                                            
Consolidated Overview                             For the Three Months      
(In thousands, except earnings per share)           Ended March 31,         
                                               2013       2012        %     
                                            ---------- ---------- --------- 
                                                                            
Revenues                                    $  271,879 $  237,898        14%
Net Income attributable to SEI                  71,920     49,965        44%
Diluted Earnings Per Share                  $     0.41 $     0.28        46%

 
"The first quarter of 2013 continued the progress we made during 2012
across all of our businesses. A combination of new client
implementations, improved financial markets, and positive sales
activity contributed to our operating results during the quarter,"
said Alfred P. West, Jr., SEI Chairman and CEO. 
"Our results so far this year have been encouraging. SEI will
continue to execute against our long-term strategy, including a focus
on new client acquisition and development of the products and
services necessary for long-term success. As always, we are committed
to enhancing shareholder value."  
Summary of First-Quarter Results by Business Segment 


 
                                                                            
(In thousands)                                    For the Three Months      
                                                     Ended March 31,        
                                                2013       2012        %    
                                             ---------  -----
----  -------- 
Private Banks:                                                              
Revenues                                     $  98,746  $  87,988        12%
Expenses                                        96,298     87,517        10%
                                             ---------  ---------           
Operating Profit                             $   2,448  $     471       420%
  Gain on sale of subsidiary                    22,112         --       N/M 
                                             ---------  ---------           
Total Profit                                 $  24,560  $     471       N/M 
  Operating Margin (A)                               2%         1%          
                                                                            
Investment Advisors:                                                        
Revenues                                        55,191     49,468        12%
Expenses                                        31,625     29,301         8%
                                             ---------  ---------           
Operating Profit                                23,566     20,167        17%
Operating Margin                                    43%        41%          
                                                                            
Institutional Investors:                                                    
Revenues                                        63,162     53,317        18%
Expenses                                        31,509     28,100        12%
                                             ---------  ---------           
Operating Profit                                31,653     25,217        26%
Operating Margin                                    50%        47%          
                                                                            
Investment Managers:                                                        
Revenues                                        53,820     46,211        16%
Expenses                                        35,162     30,426        16%
                                             ---------  ---------           
Operating Profit                                18,658     15,785        18%
Operating Margin                                    35%        34%          
                                                                            
Investments in New Businesses:                                              
Revenues                                           960        914         5%
Expenses                                         3,738      3,698         1%
                                             ---------  ---------           
Operating Loss                                  (2,778)    (2,784)       -- 

 
(A) Percentage determined exclusive of gain on sale of subsidiary. 
First-Quarter Business Commentary: 


 
--  Revenues increased in first-quarter 2013 as compared to both
    first-quarter 2012 and fourth-quarter 2012. Gains were realized in all
    core business segments and all major product lines, including Asset
    management, administration, and distribution fees and Information
    processing and software servicing fees.
--  Net income attributable to SEI increased in first-quarter 2013 as
    compared to both first-quarter 2012 and fourth-quarter 2012. This was
    driven by the increase in first-quarter 2013 revenues when compared to
    both periods. Additionally, the previously disclosed sale of SEI Asset
    Korea was completed on March 28, 2013 resulting in a gain of $22.1
    million, or $.08 diluted earnings per share.
--  Our average assets under management, excluding LSV, increased $20.9
    billion, or 17 percent, to $145.0 billion in the first-quarter 2013,
    as compared to $124.1 billion during the first-quarter 2012, and
    increased $6.5 billion, or five percent, as compared to $138.5 billion
    during the fourth-quarter 2012. Ending asset balances for the
    first-quarter 2013 do not include assets related to SEI Asset Korea
    (see attached Ending and Average Asset Balances schedules for further
    details).
--  Sales events, net of client losses, during first-quarter 2013 totaled
    approximately $19.6 million and are expected to generate net
    annualized recurring revenues of approximately $16.8 million when
    contract values are fully realized.
--  Income from LSV increased in first-quarter 2013 to $27.8 million as
    compared to $27.3 million in first-quarter 2012 due to an increase in
    assets under management. Our ownership interest in LSV was
    approximately 39.8 percent in first-quarter 2013 and 41.2 percent in
    first-quarter 2012.
--  The effective tax rates were 34.9 percent in first-quarter 2013 and
    37.2 percent in first-quarter 2012 and 35.0 percent in fourth-quarter
    2012. The first-quarter 2013 tax rate was benefited by the
    reinstatement of the research and development tax credit partially
    offset by additional foreign taxes caused by the sale of SEI Asset
    Korea. The increase in the tax rate in the first-quarter 2012 was due
    to the expiration of the research and development tax credits. The
    fourth-quarter 2012 tax rate was benefited by state tax planning.
--  In firs
t-quarter 2013, we repurchased 1.3 million shares of our common
    stock for $36.2 million.

  
Earnings Conference Call
 A conference call to review earnings is
scheduled for 2:00 PM ET on April 24, 2013. 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 291281. 
About SEI 
 SEI (NASDAQ: SEIC) is a leading global provider of
investment processing, fund processing, and investment management
business outsourcing solutions that help corporations, financial
institutions, financial advisors, and ultra-high-net-worth families
create and manage wealth. As of March 31, 2013, through its
subsidiaries and partnerships in which the company has a significant
interest, SEI manages or administers $495 billion in mutual fund and
pooled or separately managed assets, including $206 billion in assets
under management and $289 billion in client assets under
administration. 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)                                 
                                                                            
                                                     For the Three Months   
                                                        Ended March 31,     
                                                   ------------------------ 
                                                       2013         2012    
                                                   -----------  ----------- 
                                                                            
Asset management, admin. and distribution fees     $   198,633  $   172,954 
Information processing and software servicing fees      64,532       56,200 
Transaction-based and trade execution fees               8,714        8,744 
                                                   -----------  ----------- 
                                                                            
Total revenues                                         271,879      237,898 
                                                                            
Subadvisory, distribution and other asset mgmt                              
 costs                                                  27,934       28,003 
Software royalties and other information                                    
 processing costs                                        7,487        6,941 
Brokerage commissions                                    6,512        6,307 
Compensation, benefits and other personnel              88,610       78,543 
Stock-based compensation                                 5,293        4,033 
Consulting, outsourcing and professional fees           31,849       26,955 
Data processing and computer related                    12,058       11,465 
Facilities, supplies and other costs                    18,148       14,508 
Amortization                                             8,242        7,622 
Depreciation                                             5,704        5,432 
                                                   -----------  ----------- 
                                                                            
Total expenses                                         211,837      189,809 
                                                                            
Income from operations                                  60,042       48,089 
                                                                            
Net gain on investments                                    280        3,205 
Interest and dividend income                             1,053        1,487 
Interest expense                                          (113)        (161)
Equity in earnings of unconsolidated affiliates         27,588       27,330 
Gain on sale of subsidiary                              22,112           -- 
                                                   -----------  ----------- 
                                                                            
Net income before income taxes                         110,962       79,950 
                                                                            
Income taxes                                            38,692       29,715 
                                                   -----------  ----------- 
                                                                            
Net income                                              72,270       50,235 
                                                   -----------  ----------- 
                                                                            
Less: Net income attributable to the                                        
 noncontrolling interest                                  (350)        (270)
                                                   -----------  ----------- 
                                                                            
Net income attributable to SEI                     $    71,920  $    49,965 
                                                   ===========  =========== 
                                                                            
Diluted earnings per common share                  $      0.41  $      0.28 
                                                   ===========  =========== 
                                                                            
Shares used to calculate diluted earnings per                               
 share                                                 176,005      177,668 
                                                   ===========  =========== 
                                                                            
Basic earnings per common share                    $      0.42  $      0.28 
                                                   ===========  =========== 
                                                                            
Shares used to calculate basic earnings per share      172,598      176,348 
                                                   ===========  =========== 
                                                                            
                                                
                            
                                                                            
                           SEI INVESTMENTS COMPANY                          
                          CONDENSED BALANCE SHEETS                          
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                                                     March 31,  December 31,
                                                        2013        2012    
                                                    ----------- ------------
Assets                                                                      
                                                                            
Cash and short-term investments                     $   452,099 $    452,247
Restricted cash                                           5,500        6,000
Receivables, net                                        247,137      202,818
Securities owned                                         21,107       20,088
Other current assets                                     21,705       20,251
                                                    ----------- ------------
                                                                            
Total current assets                                    747,548      701,404
                                                                            
Property and equipment, net                             123,153      127,581
Marketable securities                                    78,148       81,778
Capitalized software, net                               305,352      307,490
Investment in unconsolidated affiliates                  77,165       77,398
Other assets, net                                        11,244       14,173
                                                    ----------- ------------
                                                                            
Total assets                                        $ 1,342,610 $  1,309,824
                                                    =========== ============
                                                                            
                                                                            
                                                                            
Liabilities                                                                 
                                                                            
Current liabilities                                 $   148,727 $    152,005
Deferred income taxes                                    85,386       93,458
Other Long-term liabilities                               7,400        7,032
                                                                            
Total SEI Investments Company shareholders' equity    1,101,097    1,038,180
Noncontrolling interest                                      --       19,149
                                                    ----------- ------------
Total Equity                                          1,101,097    1,057,329
                                                                            
Total liabilities and equity                        $ 1,342,610 $  1,309,824
                                                    =========== ============
                                                                            
                                                                            
                                                                            
                           SEI INVESTMENTS COMPANY                          
                            ENDING ASSET BALANCES                           
                                (In millions)                               
                                 (Unaudited)                                
                                                                            
                               Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31,
                                 2012     2012      2012     2012     2013  
                               -------- -------- --------- -------- --------
Private Banks:                                                              
Equity/Fixed Income prgms.     $ 17,180 $ 16,848 $  17,960 $ 18,862 $ 12,446
Collective Trust Fund prgms.        435      335       147       11        9
Liquidity funds                   5,549    5,063     5,342    6,008    5,143
                               -------- -------- --------- -------- --------
Total assets under mgmnt.      $ 23,164 $ 22,246 $  23,449 $ 24,881 $ 17,598
                                                                            
Client assets under admin.       10,916   10,719    11,611   12,178   12,970
                               -------- -------- --------- -------- --------
Total assets                   $ 34,080 $ 32,965 $  35,060 $ 37,059 $ 30,568
                                                                            
Investment Advisors:                                                        
  Equity/Fixed Income prgms.   $ 29,722 $ 29,153 $  30,864 $ 31,220 $ 34,166
  Collective Trust Fund prgms.    1,199      705       370       14       15
  Liquidity funds                 1,643    1,880     1,868    2,514    2,094
                               -------- -------- --------- -------- --------
  Total assets under mgmnt.    $ 32,564 $ 31,738 $  33,102 $ 33,748 $ 36,275
                                                                            
Institutional Investors:                                                    
  Equity/Fixed Income prgms.   $ 54,537 $ 55,548 $  59,852 $ 62,160 $ 64,214
  Collective Trust Fund prgms.      424      415       153      102      101
  Liquidity funds                 3,725    2,958     3,272    2,454    2,810
                               -------- -------- --------- -------- --------
  Total assets under mgmnt.    $ 58,686 $ 58,921 $  63,277 $ 64,716 $ 67,125
                                                                            
Investment Managers:                                                        
  Equity/Fixed Income prgms.   $     62 $     61 $      65 $     67 $     73
  Collective Trust Fund prgms.   12,781   13,004    15,433   16,197   17,656
  Liquidity funds                   147      226       396      408      522
                               -------- -------- --------- -------- --------
  Total assets under mgmnt.    $ 12,990 $ 13,291 $  15,894 $ 16,672 $ 18,251
                                                                            
  Client assets under admin.                                                
   (A)                          228,327  231,549   240,965  244,671  275,632
                               -------- -------- --------- -------- --------
  Total assets                 $241,317 $244,840 $ 256,859 $261,343 $293,883
                                                                            
Investments in New Businesses:                                              
  Equity/Fixed Income prgms.   $    568 $    551 $     534 $    513 $    552
  Liquidity funds                    34       30        29       43       42
                               -------- -------- --------- -------- --------
  Total assets under mgmnt.    $    602 $    581 $     563 $    556 $    594
                                                                            
LSV Asset Management:                                                       
  Equity/Fixed Income prgms.   $ 60,607 $ 54,922 $  58,886 $ 60,947 $ 66,311
                                                                            
Total:                                                                      
  Equity/Fixed Income prgms                                                 
   (B) (D)                     $162,676 $157,083 $
 168,161 $173,769 $177,762
  Collective Trust Fund prgms.   14,839   14,459    16,103   16,324   17,781
  Liquidity funds                11,098   10,157    10,907   11,427   10,611
                               -------- -------- --------- -------- --------
  Total assets under mgmnt.    $188,613 $181,699 $ 195,171 $201,520 $206,154
                                                                            
  Client assets under admin.                                                
   (C)                          239,243  242,268   252,576  256,849  288,602
                               -------- -------- --------- -------- --------
  Total assets                 $427,856 $423,967 $ 447,747 $458,369 $494,756

 
(A) Client assets under administration in the Investment Managers
segment include $54.1 billion of assets balances that require limited
services and therefore are at fee levels below our normal full
service assets (as of March 31, 2013). 
 (B) Equity/Fixed Income
programs include $3.3 billion of assets invested in various asset
allocation funds at March 31, 2013. 
 (C) In addition to the numbers
presented, SEI also administers an additional $4.9 billion in Funds
of Funds assets (as of March 31, 2013) on which SEI does not earn an
administration fee.
 (D) Equity/Fixed Income programs in the Private
Banks segment for 2012 included assets related to SEI Asset Korea
which was sold in first-quarter 2013. Assets for SEI Asset Korea for
the four quarters of 2012 were $6.6 billion, $6.3 billion. $6.6
billion and $7.0 billion respectively.  


 
                                                                            
                                                                            
                           SEI INVESTMENTS COMPANY                          
                           AVERAGE ASSET BALANCES                           
                                (In millions)                               
                                 (Unaudited)                                
                                                                            
                                1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr.
                                  2012     2012     2012     2012     2013  
                                -------- -------- -------- -------- --------
Private Banks:                                                              
Equity/Fixed Income prgms.      $ 17,116 $ 16,794 $ 17,527 $ 18,301 $ 19,197
Collective Trust Fund prgms.         436      396      230       66       11
Liquidity funds                    5,581    5,115    5,401    5,229    5,556
                                -------- -------- -------- -------- --------
Total assets under mgmnt.       $ 23,133 $ 22,305 $ 23,158 $ 23,596 $ 24,764
                                                                            
Client assets under admin.        10,211   10,631   10,867   11,783   12,860
                                -------- -------- -------- -------- --------
Total assets                    $ 33,344 $ 32,936 $ 34,025 $ 35,379 $ 37,624
                                                                            
Investment Advisors:                                                        
  Equity/Fixed Income prgms.    $ 28,426 $ 29,103 $ 30,032 $ 30,881 $ 33,189
  Collective Trust Fund prgms.     1,238      984      532      158       14
  Liquidity funds                  2,015    1,806    1,886    2,176    2,085
                                -------- -------- -------- -------- --------
  Total assets under mgmnt.     $ 31,679 $ 31,893 $ 32,450 $ 33,215 $ 35,288
                                                                            
Institutional Investors:                                                    
  Equity/Fixed Income prgms.    $ 52,270 $ 54,998 $ 57,763 $ 61,304 $ 63,642
  Collective Trust Fund prgms.       427      418      284      120      101
  Liquidity funds                  3,765    3,147    3,253    3,493    2,960
                                -------- -------- -------- -------- --------
  Total assets under mgmnt.     $ 56,462 $ 58,563 $ 61,300 $ 64,917 $ 66,703
                                                                            
Investment Managers:                                                        
  Equity/Fixed Income prgms.    $     58 $     63 $     62 $     68 $     68
  Collective Trust Fund prgms.    11,983   12,991   14,797   15,719   17,129
  Liquidity funds                    190      235      287      395      511
                                -------- -------- -------- -------- --------
  Total assets under mgmnt.     $ 12,231 $ 13,289 $ 15,146 $ 16,182 $ 17,708
                                                                            
  Client assets under admin.     224,547  229,873  237,155  240,520  263,054
                                -------- -------- -------- -------- --------
  Total assets                  $236,778 $243,162 $252,301 $256,702 $280,762
                                                                            
Investments in New Businesses:                                              
  Equity/Fixed Income prgms.    $    549 $    550 $    530 $    518 $    542
  Liquidity funds                     39       33       35       33       38
                                -------- -------- -------- -------- --------
  Total assets under mgmnt.     $    588 $    583 $    565 $    551 $    580
                                                                            
LSV Asset Management:                                                       
  Equity/Fixed Income prgms.    $ 59,200 $ 55,994 $ 57,164 $ 59,383 $ 64,448
                                                                            
Total:                                                                      
  Equity/Fixed Income prgms (A) $157,619 $157,502 $163,078 $170,455 $181,086
  Collective Trust Fund prgms.    14,084   14,789   15,843   16,063   17,255
  Liquidity fund
s                 11,590   10,336   10,862   11,326   11,150
                                -------- -------- -------- -------- --------
  Total assets under mgmnt.     $183,293 $182,627 $189,783 $197,844 $209,491
                                                                            
  Client assets under admin.     234,758  240,504  248,022  252,303  275,914
                                -------- -------- -------- -------- --------
  Total assets                  $418,051 $423,131 $437,805 $450,147 $485,405

 
(A) Equity/Fixed Income programs in the Private Banks segment for 2012
and 2013 included average assets related to SEI Asset Korea which was
sold in first-quarter 2013. Average assets for SEI Asset Korea for
the four quarters of 2012 were $6.8 billion, $6.4 billion, $6.5
billion and $6.8 billion respectively. Average assets for the
first-quarter 2013 were $7.0 billion.    
Investor Contact: 
Murray Louis 
SEI 
+1 610-676-1932 
mlouis@seic.com  
Media Contact:
Dana Grosser
SEI
+1 610-676-2459
dgrosser@seic.com