PR Newswire | Apr 21, 2021 04:02PM EDT

04/21 15:01 CDT

SEI Reports First-Quarter 2021 Financial Results OAKS, Pa., April 21, 2021

OAKS, Pa., April 21, 2021 /PRNewswire/ -- SEI Investments Company (NASDAQ:SEIC) today announced financial results for the first-quarter 2021. Diluted earnings per share were $0.89 in first-quarter 2021 compared to $0.72 in first-quarter 2020.

Consolidated Overview

(In thousands, except earnings per share)For the Three Months Ended March 31,

2021 2020 %



Revenues $455,686$414,76210%

Net income 129,470 109,242 19%

Diluted earnings per share $0.89 $0.72 24%

"Our first-quarter results reflect positive capital market performance. We continue to execute our business strategies across the company and invest in the strength and expansion of the solutions we bring to our target markets," said Alfred P. West, Jr., SEI Chairman and CEO. "We had solid sales results in processing and operational services, helping us offset the anticipated headwinds our asset management businesses face."

"Our long-term success is built on a strong foundation of advancing our suite of solutions, leading in our markets, effectively executing strategies, and soundly managing finances-all backed by a talented workforce. We will continue to drive our success forward for the benefit of our clients, employees, communities and shareholders."

Summary of First-Quarter Results by Business Segment

(In thousands) For the Three Months Ended March 31,

2021 2020 %

Private Banks:

Revenues $117,608 $113,221 4%

Expenses 110,724 110,653 -%

Operating Profit 6,884 2,568 168%

Operating Margin 6% 2%



Investment Advisors:

Revenues 113,294 102,321 11%

Expenses 55,027 52,432 5%

Operating Profit 58,267 49,889 17%

Operating Margin 51% 49%



Institutional Investors:

Revenues 84,499 79,203 7%

Expenses 39,158 38,267 2%

Operating Profit 45,341 40,936 11%

Operating Margin 54% 52%



Investment Managers:

Revenues 136,419 116,629 17%

Expenses 83,020 74,289 12%

Operating Profit 53,399 42,340 26%

Operating Margin 39% 36%



Investments in New Businesses:

Revenues 3,866 3,388 14%

Expenses 13,404 10,910 23%

Operating Loss (9,538) (7,522) NM



Totals:

Revenues $455,686 $414,762 10%

Expenses 301,333 286,551 5%

Corporate Overhead Expenses 21,516 17,983 20%

Income from Operations $132,837 $110,228 21%

First-Quarter Business Highlights:

* Revenues from Asset management, administration, and distribution fees increased primarily from higher assets under administration in our Investment Managers segment due to market appreciation and positive cash flows from new and existing clients. * Average assets under administration increased $142.4 billion, or 21%, to $821.6 billion in the first-quarter 2021, as compared to $679.2 billion during the first-quarter 2020 (see attached Average Asset Balances schedules for further details). * Average assets under management, excluding LSV, increased $43.2 billion, or 18%, to $280.4 billion in the first-quarter 2021, as compared to $237.2 billion during the first-quarter 2020 (see attached Average Asset Balances schedules for further details). * Net sales events in the Private Banks and Investment Managers segments during first-quarter 2021 were $17.5 million, and are expected to generate net annualized recurring revenues of approximately $13.0 million when contract values are completely realized. * Net sales events in asset management related businesses of the Investment Advisors and Institutional Investors segments and the Asset Management Distribution (AMD) business in the Private Banks segment during first-quarter 2021 were negative $12.7 million, mainly related to net losses in our legacy Institutional client base of $9.9 million and a single product use client in the AMD business line of the Private Banks segment. * The increase in operational expenses was primarily due to increased consulting costs related to our continued investments in new business opportunities, such as our One SEISM 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. * Earnings from LSV increased by $3.5 million, or 12%, to $33.4 million in first-quarter 2021, as compared to $29.9 million in first-quarter 2020. The increase in earnings was due to higher assets under management from market appreciation. Negative cash flows from existing clients and client losses partially offset the increase in earnings from LSV. * Stock-based compensation expense in first-quarter 2021 increased $2.8 million as compared to first-quarter 2020 due to equity awards in late 2020. * We recorded a net gain from investments of approximately $332 thousand during the first-quarter 2021 as compared to a net loss of approximately $4.0 million during the first-quarter 2020. * We capitalized $6.3 million of software development costs in first-quarter 2021 for continued enhancements to the SEI Wealth PlatformSM (SWP). Amortization expense related to SWP was $11.9 million in first-quarter 2021. * Effective tax rates were 22.6% in first-quarter 2021 and 21.5% in first-quarter 2020. The increase in our effective tax rate was due to decreased tax benefits associated with a lower volume of stock option exercises. * We repurchased 1.2 million shares of our common stock for $66.9 million during the first-quarter 2021. * Cash flow from operations was $136.6 million, or $0.94 per share, and free cash flow was $126.0 million during the first-quarter 2021.

Earnings Conference Call

A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on April 21, 2021. 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: 1599078.

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 March 31, 2021, 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 $384 billion in assets under management and $836 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, * whether we will invest in the strength and expansion of our solutions, * our strategic priorities and the degree to which we will execute on them, * the elements of our long-term success, and * the degree to which our business will be successful and the beneficiaries of any such success.

We anticipate that we may deliver forward-looking statements during today's earnings call that include our current expectations as to:

* our ability to capture the opportunities inherent in significant change, * the timing and success of client implementations and conversions, * our ability to expand our relationships and revenue opportunities with new and existing clients, * our ability to leverage our technologies and scale our businesses, * the degree to which one-time and transaction-based revenues during the quarter will be repeated, * revenue that we believe will be generated by sales events that occurred during the quarter or when our unfunded backlog may fund, * the strategic initiatives and business segments that we will pursue and those in which we will invest, * the strength of our pipelines, * the momentum we may have with respect to our businesses, * the headwinds we will face and our strategies for how we may respond to these headwinds, * how we will manage our expenses and the degree to which our forecasted expenses will decline or increase, * when we integrate purchased assets into SWP and the timing of our ability to offer additional services to clients, * the organic and inorganic opportunities that will drive our growth, and * the success of our strategic investments.

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, 2020, filed with the Securities and Exchange Commission.

SEI INVESTMENTS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)



For the Three Months Ended March 31,

2021 2020



Asset management, admin. and distribution fees $367,646$331,853

Information processing and software servicing fees 88,040 82,909



Total revenues 455,686 414,762



Subadvisory, distribution and other asset mgmt. costs 50,164 45,337

Software royalties and other information processing costs5,742 7,447

Compensation, benefits and other personnel 137,221 131,481

Stock-based compensation 9,752 6,929

Consulting, outsourcing and professional fees 54,340 53,290

Data processing and computer related 25,721 22,704

Facilities, supplies and other costs 17,248 16,796

Amortization 14,352 13,077

Depreciation 8,309 7,473



Total expenses 322,849 304,534



Income from operations 132,837 110,228



Net gain (loss) on investments 332 (3,989)

Interest and dividend income 945 3,203

Interest expense (123) (152)

Equity in earnings of unconsolidated affiliate 33,350 29,907



Income before income taxes 167,341 139,197



Income taxes 37,871 29,955



Net income $129,470$109,242



Basic earnings per common share $0.90 $0.73



Shares used to calculate basic earnings per share 143,201 149,468



Diluted earnings per common share $0.89 $0.72



Shares used to calculate diluted earnings per share 145,306 152,368

SEI INVESTMENTS COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)



March 31, December 31,

2021 2020

Assets

Current Assets:

Cash and cash equivalents $782,582 $784,626

Restricted cash 3,101 3,101

Receivables from investment products 57,291 55,271

Receivables, net of allowance for doubtful accounts of $2,307 and $1,100 406,028 385,219

Securities owned 33,040 34,064

Other current assets 42,809 38,696

Total Current Assets 1,324,851 1,300,977



Property and Equipment, net of accumulated depreciation of $386,319 and 184,253 189,052 $378,639

Operating Lease Right-of-Use Assets 37,762 38,397

Capitalized Software, net of accumulated amortization of $505,112 and $491,739 263,964 270,977

Available for Sale and Equity Securities 114,973 105,419

Investments in Affiliated Funds, at fair value 6,623 6,166

Investment in Unconsolidated Affiliate 51,743 98,433

Goodwill 64,489 64,489

Intangible Assets, net of accumulated amortization of $13,377 and $12,456 34,383 24,304

Deferred Contract Costs 33,430 33,781

Deferred Income Taxes 2,706 2,972

Other Assets, net 31,724 32,289

Total Assets $2,150,901$2,167,256



Liabilities and Equity

Current Liabilities:

Accounts payable $5,529 $7,766

Accrued liabilities 199,235 299,845

Current portion of long-term operating lease liabilities 9,813 8,579

Deferred revenue 1,335 1,085

Total Current Liabilities 215,912 317,275



Long-term Income Taxes Payable 803 803

Deferred Income Taxes 50,892 55,159

Long-term Operating Lease Liabilities 33,089 34,058

Other Long-term Liabilities 21,097 20,054

Total Liabilities 321,793 427,349



Shareholders' Equity:

Common stock, $0.01 par value, 750,000 shares authorized; 142,701 and 143,396 1,427 1,434 shares issued and outstanding

Capital in excess of par value 1,208,433 1,190,001

Retained earnings 634,651 565,270

Accumulated other comprehensive loss, net (15,403) (16,798)

Total Shareholders' Equity 1,829,108 1,739,907

Total Liabilities and Shareholders' Equity $2,150,901$2,167,256

ENDING ASSET BALANCES (In millions) (Unaudited)



Mar. 31, Jun. 30, Sept. 30, Dec. 31 Mar. 31,

2020 2020 2020 2020 2021

Private Banks:

Equity and fixed-income programs $21,160 $22,974 $23,499 $25,498 $25,098

Collective trust fund programs 5 5 6 6 7

Liquidity funds 4,143 4,291 3,718 3,778 3,793

Total assets under management $25,308 $27,270 $27,223 $29,282 $28,898

Client assets under administration 21,497 23,903 24,174 26,346 4,379

Total assets $46,805 $51,173 $51,397 $55,628 $33,277



Investment Advisors:

Equity and fixed-income programs $54,856 $59,958 $65,581 $71,247 $73,818

Collective trust fund programs 2 3 3 1 1

Liquidity funds 5,969 6,648 3,866 3,832 3,584

Total assets under management $60,827 $66,609 $69,450 $75,080 $77,403



Institutional Investors:

Equity and fixed-income programs $72,399 $80,257 $83,846 $90,869 $92,040

Collective trust fund programs 94 103 101 98 95

Liquidity funds 3,672 1,924 2,096 2,128 2,909

Total assets under management $76,165 $82,284 $86,043 $93,095 $95,044

Client assets under advisement 3,406 3,326 3,618 4,063 4,333

Total assets $79,571 $85,610 $89,661 $97,158 $99,377



Investment Managers:

Collective trust fund programs 48,226 58,178 63,277 75,214 78,304

Liquidity funds 392 664 389 424 449

Total assets under management $48,618 $58,842 $63,666 $75,638 $78,753

Client assets under administration (A)610,794 668,611 730,369 760,397 831,819

Total assets $659,412$727,453 $794,035 $836,035 $910,572



Investments in New Businesses:

Equity and fixed-income programs $1,484 $1,498 $1,572 $1,711 $1,777

Liquidity funds 152 194 169 162 289

Total assets under management $1,636 $1,692 $1,741 $1,873 $2,066

Client assets under advisement 1,056 1,193 1,179 1,299 1,355

Total assets $2,692 $2,885 $2,920 $3,172 $3,421



LSV Asset Management:

Equity and fixed-income programs (B) $70,851 $81,134 $82,051 $93,692 $101,565



Total:

Equity and fixed-income programs (C) $220,750$245,821 $256,549 $283,017 $294,298

Collective trust fund programs 48,327 58,289 63,387 75,319 78,407

Liquidity funds 14,328 13,721 10,238 10,324 11,024

Total assets under management $283,405$317,831 $330,174 $368,660 $383,729

Client assets under advisement 4,462 4,519 4,797 5,362 5,688

Client assets under administration (D)632,291 692,514 754,543 786,743 836,198

Total assets $920,158$1,014,864$1,089,514$1,160,765$1,225,615

Client assets under administration in the Investment Managers segment(A) include $54.6 billion of assets that are at fee levels below our normal full-service assets (as of March 31, 2021).

(B) Equity and fixed-income programs include $2.4 billion of assets managed by LSV in which fees are based on performance only (as of March 31, 2021).

(C) Equity and fixed-income programs include $7.9 billion of assets invested in various asset allocation funds at March 31, 2021.

(D) In addition to the numbers presented, SEI also administers an additional $13.3 billion in Funds of Funds assets (as of March 31, 2021) on which SEI does not earn an administration fee.

AVERAGE ASSET BALANCES (In millions) (Unaudited)



1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr.

2020 2020 2020 2020 2021

Private Banks:

Equity and fixed-income programs $24,657 $22,229 $23,740 $24,284 $25,139

Collective trust fund programs 4 5 7 6 6

Liquidity funds 3,581 4,366 3,948 3,712 3,876

Total assets under management $28,242 $26,600 $27,695 $28,002 $29,021

Client assets under administration 24,840 23,819 25,295 25,368 4,317

Total assets $53,082 $50,419 $52,990 $53,370 $33,338



Investment Advisors:

Equity and fixed-income programs $64,933 $57,429 $64,479 $68,396 $73,239

Collective trust fund programs 3 3 3 2 1

Liquidity funds 3,284 6,923 4,569 3,788 3,619

Total assets under management $68,220 $64,355 $69,051 $72,186 $76,859



Institutional Investors:

Equity and fixed-income programs $79,926 $77,037 $82,830 $86,277 $91,349

Collective trust fund programs 86 100 102 102 96

Liquidity funds 2,342 2,476 2,120 2,271 2,621

Total assets under management $82,354 $79,613 $85,052 $88,650 $94,066

Client assets under advisement 3,760 3,362 3,565 3,746 4,146

Total assets $86,114 $82,975 $88,617 $92,396 $98,212



Investment Managers:

Collective trust fund programs 55,952 54,061 62,028 69,349 78,035

Liquidity funds 617 482 565 411 490

Total assets under management $56,569 $54,543 $62,593 $69,760 $78,525

Client assets under administration (A)654,386 649,012 713,528 754,350 817,330

Total assets $710,955 $703,555$776,121 $824,110 $895,855



Investments in New Businesses:

Equity and fixed-income programs $1,663 $1,468 $1,560 $1,634 $1,743

Liquidity funds 168 182 180 165 169

Total assets under management $1,831 $1,650 $1,740 $1,799 $1,912

Client assets under advisement 1,222 1,148 1,206 1,218 1,327

Total assets $3,053 $2,798 $2,946 $3,017 $3,239



LSV Asset Management:

Equity and fixed-income programs (B) $88,059 $80,395 $83,536 $88,182 $97,476



Total:

Equity and fixed-income programs (C) $259,238 $238,558$256,145 $268,773 $288,946

Collective trust fund programs 56,045 54,169 62,140 69,459 78,138

Liquidity funds 9,992 14,429 11,382 10,347 10,775

Total assets under management $325,275 $307,156$329,667 $348,579 $377,859

Client assets under advisement 4,982 4,510 4,771 4,964 5,473

Client assets under administration (D)679,226 672,831 738,823 779,718 821,647

Total assets $1,009,483$984,497$1,073,261$1,133,261$1,204,979

Average client assets under administration in the Investment Managers(A) segment during first-quarter 2021 include $53.8 billion that are at fee levels below our normal full-service assets.

(B) Equity and fixed-income programs include $2.2 billion of average assets managed by LSV in which fees are based on performance only during first-quarter 2021.

(C) Equity and fixed-income programs include $7.9 billion of average assets invested in various asset allocation funds during first-quarter 2021.

In addition to the numbers presented, SEI also administers an additional(D) $13.2 billion of average assets in Funds of Funds assets during first-quarter 2021 on which SEI does not earn an administration fee.

Investor Contact: Media Contact:

Lindsey Opsahl Leslie Wojcik

SEI SEI

+1 610-676-4052 +1 610-676-4191

lopsahl@seic.com lwojcik@seic.com

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SOURCE SEI Investments Company