OAKS, PA — (Marketwired) — 07/18/13 — SEI Investments Company (NASDAQ: SEIC) today announced financial results for second-quarter 2013. Diluted earnings per share were $.47 in second-quarter 2013 compared to $.28 in second-quarter 2012. Second-quarter 2013 includes income of $.16 diluted earnings per share from a litigation settlement payment related to a structured investment vehicle (SIV) security.
“During the second quarter of 2013, the Company continued to make strides in the development and successful implementation of our business strategies across all of our units. Our financial results reflect continued improvement in overall asset flows, implementation of new clients, and a continuation of solid sales activity,” said Alfred P. West, Jr., SEI Chairman and CEO.
“Despite our profit challenges in the Private Banks segment, we continue to be encouraged by our progress as we build and enhance our solutions for our markets. Our strong financial condition, the acceptance of our business solutions, and the overall size of our market opportunity bode well for our future. As always, we are committed to enhancing shareholder value over the long term.”
Summary of Second-Quarter Results by Business Segment
Revenues increased in second-quarter 2013 as compared to both second-quarter 2012 and first-quarter 2013. Revenue growth was primarily driven by higher Asset management, administration, and distribution fees from improved cash flows from new and existing clients and market appreciation.
Our average assets under management, excluding LSV, increased $14.2 billion, or 11 percent, to $140.9 billion in the second-quarter 2013, as compared to $126.6 billion during the second-quarter 2012, and decreased $4.1 billion, or three percent, as compared to $145.0 billion during the first-quarter 2013. Average asset balances for the second-quarter 2013 do not include assets related to SEI Asset Korea (see attached Ending and Average Asset Balances schedules for further details).
Net income attributable to SEI reflects income of $43.4 million, or approximately $.16 diluted earnings per share, from a settlement payment received pertaining to litigation related to the purchase of securities of Cheyne Finance LLC, a SIV security. SEI holds no SIV securities.
Sales events, net of client losses, during second-quarter 2013 totaled approximately $21.7 million and are expected to generate net annualized recurring revenues of approximately $19.8 million when contract values are fully realized.
During the second-quarter 2013 the Company recognized an incremental $5.3 million of stock-based compensation expense compared to the first-quarter 2013. This incremental expense reflects a change in the timing of vesting assumptions for previously issued equity options due to the earnings per share impact of the $43.4 million litigation settlement previously mentioned. The Private Banks segment recognized $1.6 million of this incremental expense. The Investment Advisors, Institutional Investors, and Investment Managers segments each recognized approximately $1.0 million.
Second-quarter 2013 results for Private Banks as compared to first-quarter 2013 and second-quarter 2012 reflect the sale of SEI Asset Korea at the end of first-quarter 2013. The Private Banks segment-s results reflect a reduction in revenue, expense, and profit, as compared to first-quarter 2013 of $2.9 million, $2.5 million, and $0.4 million, respectively. The Private Banks segment-s results reflect a reduction in revenue, expense, and profit, as compared to second-quarter 2012 of $2.7 million, $2.5 million, and $0.2 million, respectively.
Income from LSV increased in second-quarter 2013 to $27.8 million as compared to $22.7 million in second-quarter 2012 due to an increase in assets under management. Our ownership interest in LSV was approximately 39.3 percent in second-quarter 2013 and 39.8 percent in second-quarter 2012.
The effective tax rates were 35.5 percent in second-quarter 2013, 36.6 percent in second-quarter 2012, and 34.9 percent in first-quarter 2013. The second-quarter 2013 tax rate compared to the second-quarter 2012 tax rate was benefited by the reinstatement of the research and development tax credit in 2013 as well as the closure of prior year tax audits.
In second-quarter 2013, we repurchased 1.7 million shares of our common stock for $50.5 million.
A conference call to review earnings is scheduled for 2:00 PM ET on July 18, 2013. Investors may listen to the call at or listen at , 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 297755.
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 June 30, 2013, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $507 billion in mutual fund and pooled or separately managed assets, including $204 billion in assets under management and $303 billion in client assets under administration. For more information, visit .
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.
Murray Louis
SEI
+1 610-676-1932
Dana Grosser
SEI
+1 610-676-2459