Docoh
Loading...

SEIC SEI Investments

Filed: 28 Jan 21, 10:16am

Exhibit 99.1
seiexhibit991logoa291a.jpg

Investor Contact:                         Media Contact:
Lindsey Opsahl                        Leslie Wojcik
SEI                                SEI
+1 610-676-4052                        +1 610-676-4191
lopsahl@seic.com                        lwojcik@seic.com
Pages:        8

FOR IMMEDIATE RELEASE

SEI Reports Fourth-Quarter 2020 Financial Results

OAKS, Pa., Jan. 27, 2021 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the fourth-quarter 2020. Diluted earnings per share were $0.86 in fourth-quarter 2020 compared to $0.84 in fourth-quarter 2019.
Consolidated Overview
(In thousands, except earnings per share)For the Three Months Ended Dec. 31,For the Twelve Months Ended Dec. 31,
20202019%20202019%
Revenues$443,723 $423,225 5%$1,684,058 $1,649,885 2%
Net income125,882 128,737 (2)%447,286 501,426 (11)%
Diluted earnings per share$0.86 $0.84 2%$3.00 $3.24 (7)%
“Our financial results for 2020 reflect steady recovery from the pandemic’s impact on the markets we serve. The health and safety of our workforce continue to be a priority, and I want to thank all of our employees and the firms that support us for helping us stay safe and thrive,” said Alfred P. West, Jr., SEI Chairman and CEO.
“We’re living and operating in extraordinary times, but we are unwavering in our focus on executing our long-term strategy to be the provider of choice in the wealth and investment management markets. We believe we have made significant progress on our One SEI approach, making all of our assets available to all of our markets, delivering new, dynamic solutions and creating new opportunities. Our solutions, backed by our talented workforce, are what uniquely position us to capture growth opportunities that will lead to increased shareholder value. Despite 2020’s challenging environment, our investments and success in adding new clients and building our backlog of new revenue situate us well for the future.”




Summary of Fourth-Quarter Results by Business Segment
(In thousands)For the Three Months Ended Dec. 31,For the Twelve Months Ended Dec. 31,
20202019%20202019%
Private Banks:
Revenues$119,654 $118,675 1%$455,393 $470,276 (3)%
Expenses115,039 113,596 1%446,481 443,136 1%
Operating Profit4,615 5,079 (9)%8,912 27,140 (67)%
Operating Margin%%%%
Investment Advisors:
Revenues108,346 105,862 2%407,564 403,778 1%
Expenses51,813 53,939 (4)%205,913 208,508 (1)%
Operating Profit56,533 51,923 9%201,651 195,270 3%
Operating Margin52 %49 %49 %48 %
Institutional Investors:
Revenues82,318 80,503 2%317,627 322,062 (1)%
Expenses36,893 38,554 (4)%149,909 153,937 (3)%
Operating Profit45,425 41,949 8%167,718 168,125 —%
Operating Margin55 %52 %53 %52 %
Investment Managers:
Revenues129,647 114,759 13%489,462 440,796 11%
Expenses80,204 72,698 10%308,999 282,024 10%
Operating Profit49,443 42,061 18%180,463 158,772 14%
Operating Margin38 %37 %37 %36 %
Investments in New Businesses:
Revenues3,758 3,426 10%14,012 12,973 8%
Expenses15,180 8,997 69%52,871 29,660 78%
Operating Loss(11,422)(5,571)NM(38,859)(16,687)NM
Totals:
Revenues$443,723 $423,225 5%$1,684,058 $1,649,885 2%
Expenses299,129 287,784 4%1,164,173 1,117,265 4%
Corporate Overhead Expenses20,584 19,351 6%73,998 72,196 2%
Income from Operations$124,010 $116,090 7%$445,887 $460,424 (3)%


2


Fourth-Quarter Business Highlights:
Sales events, net of client losses, during fourth-quarter 2020 totaled approximately $8.8 million and are expected to generate net annualized recurring revenues of approximately $4.9 million when contract values are fully realized. For the year ended 2020, sales events, net of client losses, totaled $94.0 million and are expected to generate net annualized recurring revenues of approximately $68.6 million when contract values are fully realized.
Revenues from Asset management, administration, and distribution fees increased primarily from higher assets under administration in our Investment Managers segment due to sales of new business and market appreciation.
Our average assets under administration increased $108.2 billion, or 16%, to $779.7 billion in the fourth-quarter 2020, as compared to $671.5 billion during the fourth-quarter 2019 (see attached Average Asset Balances schedules for further details).
Our average assets under management, excluding LSV, increased $21.2 billion, or 9%, to $260.4 billion in the fourth-quarter 2020, as compared to $239.2 billion during the fourth-quarter 2019 (see attached Average Asset Balances schedules for further details).
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 $8.5 million, or 22%, to $30.6 million in fourth-quarter 2020 as compared to $39.1 million in fourth-quarter 2019. The decrease in earnings was primarily due to lower assets under management from market depreciation, negative cash flows from existing clients and client losses. LSV's revenues were $102.1 million in the fourth-quarter 2020, as compared to $126.5 million during the fourth-quarter of 2019.
Stock-based compensation expense in fourth-quarter 2020 decreased $2.5 million as compared to fourth-quarter 2019 primarily due to a change in our estimate of the timing of when stock option vesting targets would be achieved. We expect stock-based compensation expense during 2021 to be approximately $42.7 million as compared to $27.0 million during 2020 as a result of new options granted in fourth-quarter 2020 net of awards granted in the prior year.
We capitalized $5.5 million of software development costs in fourth-quarter 2020, which includes $5.0 million for continued enhancements to the SEI Wealth PlatformSM (SWP). Amortization expense related to capitalized software was $12.6 million in fourth-quarter 2020.
Our effective tax rates were 19.6% in fourth-quarter 2020 and 19.5% in fourth-quarter 2019.
We repurchased 1.8 million shares of our common stock for $99.1 million during the fourth-quarter 2020 at an average price of $54.36 per share. For the year ended 2020, we repurchased 8.0 million shares of our common stock for $424.7 million at an average price of $53.04 per share.
3


Earnings Conference Call
A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on Jan. 27, 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: 5584674.

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 Dec. 31, 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 $369 billion in assets under management and $787 billion in client assets under administration. For more information, visit seic.com.

This release contains, and the comments we expect to deliver during the earnings call referenced above will contain, 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 in today’s release 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,
our strategic priorities and the degree to which we will execute on them,
whether our solutions position us to capture growth opportunities or will lead to increased shareholder value, and
whether our investments and new clients and backlog of new revenue situate us well for the future.
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,
how we will manage our expenses,
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, 2019, filed with the Securities and Exchange Commission.
# # #

4


SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended Dec. 31,For the Twelve Months Ended Dec. 31,
2020201920202019
Asset management, admin. and distribution fees$353,610 $337,232 $1,345,649 $1,307,044 
Information processing and software servicing fees90,113 85,993 338,409 342,841 
Total revenues443,723 423,225 1,684,058 1,649,885 
Subadvisory, distribution and other asset mgmt. costs46,973 46,458 181,618 181,418 
Software royalties and other information processing costs7,109 7,274 28,937 29,993 
Compensation, benefits and other personnel135,902 131,004 527,509 517,917 
Stock-based compensation6,556 9,027 27,014 24,582 
Consulting, outsourcing and professional fees59,566 50,235 227,916 194,560 
Data processing and computer related24,681 22,544 96,328 88,058 
Facilities, supplies and other costs17,467 20,307 64,915 72,078 
Amortization13,558 13,012 52,975 51,419 
Depreciation7,901 7,274 30,959 29,436 
Total expenses319,713 307,135 1,238,171 1,189,461 
Income from operations124,010 116,090 445,887 460,424 
Net gain (loss) on investments1,024 1,053 (286)3,174 
Interest and dividend income986 3,845 6,568 16,582 
Interest expense(153)(153)(609)(630)
Equity in earnings of unconsolidated affiliate30,646 39,133 117,134 151,891 
Income before income taxes156,513 159,968 568,694 631,441 
Income taxes30,631 31,231 121,408 130,015 
Net income$125,882 $128,737 $447,286 $501,426 
Basic earnings per common share$0.87 $0.86 $3.05 $3.31 
Shares used to calculate basic earnings per share144,077 150,131 146,709 151,540 
Diluted earnings per common share$0.86 $0.84 $3.00 $3.24 
Shares used to calculate diluted earnings per share146,140 153,672 149,003 154,901 
Dividends declared per common share$0.37 $0.35 $0.72 $0.68 

5


SEI INVESTMENTS COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Dec. 31,Dec. 31,
20202019
Assets
Current Assets:
Cash and cash equivalents$784,626 $841,446 
Restricted cash3,101 3,101 
Receivables from investment products55,271 54,165 
Receivables, net of allowance for doubtful accounts of $1,100 and $1,201385,219 340,358 
Securities owned34,064 33,486 
Other current assets38,696 32,289 
Total Current Assets1,300,977 1,304,845 
Property and Equipment, net of accumulated depreciation of $378,639 and $353,453189,052 160,859 
Operating Lease Right-of-Use Assets38,397 42,789 
Capitalized Software, net of accumulated amortization of $491,739 and $442,677270,977 296,068 
Investments Available for Sale105,419 116,917 
Investments in Affiliated Funds, at fair value6,166 5,988 
Investment in Unconsolidated Affiliate98,433 67,413 
Goodwill64,489 64,489 
Intangible Assets, net of accumulated amortization of $12,456 and $8,77324,304 27,987 
Deferred Contract Costs33,781 30,991 
Deferred Income Taxes2,972 2,822 
Other Assets, net32,289 30,202 
Total Assets$2,167,256 $2,151,370 
Liabilities and Equity
Current Liabilities:
Accounts payable$7,766 $4,423 
Accrued liabilities299,845 272,801 
Current portion of long-term operating lease liabilities8,579 9,156 
Deferred revenue1,085 7,185 
Total Current Liabilities317,275 293,565 
Long-term Taxes Payable803 803 
Deferred Income Taxes55,159 55,722 
Long-term Operating Lease Liabilities34,058 38,450 
Other Long-term Liabilities20,054 24,052 
Total Liabilities427,349 412,592 
Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 143,396 and 149,745 shares issued and outstanding1,434 1,497 
Capital in excess of par value1,190,001 1,158,900 
Retained earnings565,270 601,885 
Accumulated other comprehensive loss, net(16,798)(23,504)
Total Shareholders' Equity1,739,907 1,738,778 
Total Liabilities and Shareholders' Equity$2,167,256 $2,151,370 

6


ENDING ASSET BALANCES
(In millions) (Unaudited)
Dec. 31,Mar. 31,Jun. 30,Sept. 30,Dec. 31,
20192020202020202020
Private Banks:
Equity and fixed-income programs$23,851 $21,160 $22,974 $23,499 $25,498 
Collective trust fund programs
Liquidity funds3,405 4,143 4,291 3,718 3,778 
Total assets under management$27,260 $25,308 $27,270 $27,223 $29,282 
Client assets under administration25,801 21,497 23,903 24,174 26,346 
Total assets$53,061 $46,805 $51,173 $51,397 $55,628 
Investment Advisors:
Equity and fixed-income programs$67,895 $54,856 $59,958 $65,581 $71,247 
Collective trust fund programs
Liquidity funds2,887 5,969 6,648 3,866 3,832 
Total assets under management$70,786 $60,827 $66,609 $69,450 $75,080 
Institutional Investors:
Equity and fixed-income programs$84,291 $72,399 $80,257 $83,846 $90,869 
Collective trust fund programs83 94 103 101 98 
Liquidity funds1,746 3,672 1,924 2,096 2,128 
Total assets under management$86,120 $76,165 $82,284 $86,043 $93,095 
Client assets under advisement3,948 3,406 3,326 3,618 4,063 
Total assets$90,068 $79,571 $85,610 $89,661 $97,158 
Investment Managers:
Collective trust fund programs$58,070 $48,226 $58,178 $63,277 $75,214 
Liquidity funds479 392 664 389 424 
Total assets under management$58,549 $48,618 $58,842 $63,666 $75,638 
Client assets under administration (A)657,541 610,794 668,611 730,369 760,397 
Total assets$716,090 $659,412 $727,453 $794,035 $836,035 
Investments in New Businesses:
Equity and fixed-income programs$1,688 $1,484 $1,498 $1,572 $1,711 
Liquidity funds158 152 194 169 162 
Total assets under management$1,846 $1,636 $1,692 $1,741 $1,873 
Client assets under advisement
1,343 1,056 1,193 1,179 1,299 
Total assets$3,189 $2,692 $2,885 $2,920 $3,172 
LSV Asset Management:
Equity and fixed-income programs (B)$107,476 $70,851 $81,134 $82,051 $93,692 
Total:
Equity and fixed-income programs (C)$285,201 $220,750 $245,821 $256,549 $283,017 
Collective trust fund programs58,161 48,327 58,289 63,387 75,319 
Liquidity funds8,675 14,328 13,721 10,238 10,324 
Total assets under management$352,037 $283,405 $317,831 $330,174 $368,660 
Client assets under advisement5,291 4,462 4,519 4,797 5,362 
Client assets under administration (D)683,342 632,291 692,514 754,543 786,743 
Total assets$1,040,670 $920,158 $1,014,864 $1,089,514 $1,160,765 
(A)Client assets under administration in the Investment Managers segment include $54.3 billion of assets that are at fee levels below our normal full-service assets (as of Dec. 31, 2020).
(B)Equity and fixed-income programs include $2.0 billion of assets managed by LSV in which fees are based on performance only (as of Dec. 31, 2020).
(C)Equity and fixed-income programs include $7.9 billion of assets invested in various asset allocation funds at Dec. 31, 2020.
(D)In addition to the numbers presented, SEI also administers an additional $12.9 billion in Funds of Funds assets (as of
Dec. 31, 2020 on which SEI does not earn an administration fee.
7


AVERAGE ASSET BALANCES
(In millions) (Unaudited)
4th Qtr.1st Qtr.2nd Qtr.3rd Qtr.4th Qtr.
20192020202020202020
Private Banks:
Equity and fixed-income programs$23,106 $24,657 $22,229 $23,740 $24,284 
Collective trust fund programs
Liquidity funds3,581 3,581 4,366 3,948 3,712 
Total assets under management$26,691 $28,242 $26,600 $27,695 $28,002 
Client assets under administration24,930 24,840 23,819 25,295 25,368 
Total assets$51,621 $53,082 $50,419 $52,990 $53,370 
Investment Advisors:
Equity and fixed-income programs$66,371 $64,933 $57,429 $64,479 $68,396 
Collective trust fund programs
Liquidity funds2,673 3,284 6,923 4,569 3,788 
Total assets under management$69,048 $68,220 $64,355 $69,051 $72,186 
Institutional Investors:
Equity and fixed-income programs$83,304 $79,926 $77,037 $82,830 $86,277 
Collective trust fund programs82 86 100 102 102 
Liquidity funds2,106 2,342 2,476 2,120 2,271 
Total assets under management$85,492 $82,354 $79,613 $85,052 $88,650 
Client assets under advisement4,106 3,760 3,362 3,565 3,746 
Total assets$89,598 $86,114 $82,975 $88,617 $92,396 
Investment Managers:
Collective trust fund programs$55,499 $55,952 $54,061 $62,028 $69,349 
Liquidity funds642 617 482 565 411 
Total assets under management$56,141 $56,569 $54,543 $62,593 $69,760 
Client assets under administration (A)646,592 654,386 649,012 713,528 754,350 
Total assets$702,733 $710,955 $703,555 $776,121 $824,110 
Investments in New Businesses:
Equity and fixed-income programs$1,649 $1,663 $1,468 $1,560 $1,634 
Liquidity funds145 168 182 180 165 
Total assets under management$1,794 $1,831 $1,650 $1,740 $1,799 
Client assets under advisement1,044 1,222 1,148 1,206 1,218 
Total assets$2,838 $3,053 $2,798 $2,946 $3,017 
LSV Asset Management:
Equity and fixed-income programs (B)$104,814 $88,059 $80,395 $83,536 $88,182 
Total:
Equity and fixed-income programs (C)$279,244 $259,238 $238,558 $256,145 $268,773 
Collective trust fund programs55,589 56,045 54,169 62,140 69,459 
Liquidity funds9,147 9,992 14,429 11,382 10,347 
Total assets under management$343,980 $325,275 $307,156 $329,667 $348,579 
Client assets under advisement5,150 4,982 4,510 4,771 4,964 
Client assets under administration (D)671,522 679,226 672,831 738,823 779,718 
Total assets$1,020,652 $1,009,483 $984,497 $1,073,261 $1,133,261 
(A)    Average client assets under administration in the Investment Managers segment during fourth-quarter 2020 include $53.3 billion that are at fee levels below our normal full-service assets.
(B)    Equity and fixed-income programs include $1.8 billion of average assets managed by LSV in which fees are based on performance only during fourth-quarter 2020.
(C)    Equity and fixed-income programs include $7.9 billion of average assets invested in various asset allocation funds during fourth-quarter 2020.
(D)    In addition to the numbers presented, SEI also administers an additional $12.3 billion of average assets in Funds of Funds assets during fourth-quarter 2020 on which SEI does not earn an administration fee.
8