EX-99.1 2 seic-earningsreleaseex9911.htm PRESS RELEASE

Exhibit 99.1

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 Third-Quarter 2021 Financial Results

OAKS, Pa., Oct. 20, 2021 – SEI Investments Company (NASDAQ:SEIC) today announced financial results for the third-quarter 2021. Diluted earnings per share were $0.97 in third-quarter 2021 compared to $0.75 in third-quarter 2020.

Consolidated Overview
(In thousands, except earnings per share)						For the Three Months Ended September 30,																		For the Nine Months Ended September 30,
						2021						2020						%						2021						2020						%
Revenues						$485,322						$424,927						14%						$1,416,659						$1,240,335						14%
Net income						138,045						111,096						24%						401,293						321,404						25%
Diluted earnings per share						$0.97						$0.75						29%						$2.79						$2.14						30%

“Our results reflect positive markets entering the third-quarter, continued sales momentum and delivery across our business segments. As the financial services industry continues to experience unrelenting change, we continue to make strategic investments in our business, our solutions and workforce to drive growth,” said Alfred P. West, Jr., SEI Chairman and CEO.

“Our talented workforce is the key to our ability to serve our clients globally and create opportunities for our future. As we look forward, we will continue to capitalize on market opportunities to deliver long-term value to our shareholders, employees, clients and communities.”

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Summary of Third-Quarter Results by Business Segment

						For the Three Months Ended September 30,																		For the Nine Months Ended September 30,
(In thousands)
						2021						2020						%						2021						2020						%
Private Banks:
Revenues						$123,018						$114,792						7%						$364,302						$335,739						9%
Expenses						116,679						113,066						3%						345,057						331,442						4%
Operating Profit						6,339						1,726						NM						19,245						4,297						348%
Operating Margin						5		%				2		%										5		%				1		%
Investment Advisors:
Revenues						124,768						103,189						21%						357,458						299,218						19%
Expenses						62,107						51,519						21%						176,267						154,100						14%
Operating Profit						62,661						51,670						21%						181,191						145,118						25%
Operating Margin						50		%				50		%										51		%				48		%
Institutional Investors:
Revenues						85,759						79,583						8%						255,957						235,309						9%
Expenses						41,643						37,812						10%						122,696						113,016						9%
Operating Profit						44,116						41,771						6%						133,261						122,293						9%
Operating Margin						51		%				52		%										52		%				52		%
Investment Managers:
Revenues						147,412						123,846						19%						426,639						359,815						19%
Expenses						89,594						79,838						12%						257,609						228,795						13%
Operating Profit						57,818						44,008						31%						169,030						131,020						29%
Operating Margin						39		%				36		%										40		%				36		%
Investments in New Businesses:
Revenues						4,365						3,517						24%						12,303						10,254						20%
Expenses						12,820						13,315						(4)%						39,855						37,691						6%
Operating Loss						(8,455)						(9,798)						NM						(27,552)						(27,437)						NM
Totals:
Revenues						$485,322						$424,927						14%						$1,416,659						$1,240,335						14%
Expenses						322,843						295,550						9%						941,484						865,044						9%
Corporate Overhead Expenses						21,354						18,040						18%						65,192						53,414						22%
Income from Operations						$141,125						$111,337						27%						$409,983						$321,877						27%

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Third-Quarter Business Highlights:

•Revenues from Asset management, administration, and distribution fees increased from higher assets under management and administration due to market appreciation and positive cash flows from new and existing clients.

•Average assets under administration increased $116.9 billion, or 16%, to $855.7 billion in the third-quarter 2021, as compared to $738.8 billion during the third-quarter 2020 (see attached Average Asset Balances schedules for further details).

•Average assets under management, excluding LSV, increased $53.9 billion, or 22%, to $300.0 billion in the third-quarter 2021, as compared to $246.1 billion during the third-quarter 2020 primarily due to market appreciation (see attached Average Asset Balances schedules for further details).

•Net sales events in the Private Banks and Investment Managers segments during third-quarter 2021 were $19.4 million and are expected to generate net annualized recurring revenues of approximately $15.1 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 third-quarter 2021 were $6.9 million.

•The increase in operational expenses was primarily due to increased direct costs related to increased revenues, as well as increased personnel costs due to business growth and competitive labor markets.

•Earnings from LSV increased by $6.7 million, or 24%, to $35.0 million in third-quarter 2021, as compared to $28.3 million in third-quarter 2020. The increase in earnings was primarily 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 third-quarter 2021 increased $4.9 million as compared to third-quarter 2020 due to equity awards in late 2020 and from a change in estimate of the timing of when stock-option vesting targets would be achieved.

•We capitalized $7.2 million of software development costs in third-quarter 2021 for continued enhancements to the SEI Wealth PlatformSM. Amortization expense related to SWP was $12.0 million in third-quarter 2021.

•Effective tax rates were 21.7% in third-quarter 2021 and 21.4% in third-quarter 2020.

•We repurchased 2.0 million shares of our common stock for $119.9 million during the third-quarter 2021.

•Cash flow from operations was $158.9 million, or $1.12 per share, and free cash flow was $144.6 million during the third-quarter 2021.

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Earnings Conference Call

A conference call to review earnings is scheduled for 4:30 p.m. Eastern time on Oct. 20, 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: 4538998.

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 Sept. 30, 2021, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages, advises or administers approximately $1.3 trillion in hedge, private equity, mutual fund and pooled or separately managed assets, including approximately $392 billion in assets under management and $866 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 and the timing of such realization,

•whether we will have sales momentum,

•whether we will invest in our business, solutions, or workforce,

•our strategic priorities and commitments and the degree to which we will execute on them, and

•the degree to which we are able to capitalize on market opportunities and deliver long-term value to our shareholders, employees, clients and communities.

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 migrations, implementations and conversions,

•our ability to expand our relationships and revenue opportunities with new and existing clients,

•whether we will be able to take advantage of increasing sales demand,

•the timing of and our ability to integrate acquisition targets and the benefits we will receive from any of our acquisitions,

•the degree to which M&A activity in the industries in which we compete will affect our sales,

•the degree to which our technology is being adopted across both our existing client base and new 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, if at all,

•the strategic initiatives and business segments that we will pursue and those in which we will invest,

•the degree to which our One SEISM strategy will allow us to increase our growth opportunities,

•the competition for and cost of talent and the effect of these factors on our business,

•the amount of recurring sales we will generate,

•the strength of our pipelines and demand for our products and services,

•the degree to which the global COVID-19 pandemic is affecting our business,

•the momentum we may have with respect to our businesses,

•the elements of our long-term success,

•the degree to which our business will be successful and what parties will be beneficiaries of any such success,

•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, increase or normalize,

•when we integrate purchased assets into the SEI Wealth Platform 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 and benefits 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.

# # #

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SEI INVESTMENTS COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

						For the Three Months Ended September 30,												For the Nine Months Ended September 30,
						2021						2020						2021						2020
Asset management, admin. and distribution fees						$393,296						$339,609						$1,143,451						$992,039
Information processing and software servicing fees						92,026						85,318						273,208						248,296
Total revenues						485,322						424,927						1,416,659						1,240,335
Subadvisory, distribution and other asset mgmt. costs						55,619						45,126						161,610						134,645
Software royalties and other information processing costs						7,348						6,992						20,561						21,828
Compensation, benefits and other personnel						150,188						134,795						429,188						391,607
Stock-based compensation						11,318						6,467						31,173						20,458
Consulting, outsourcing and professional fees						55,868						57,949						165,657						168,350
Data processing and computer related						26,650						24,437						79,746						71,647
Facilities, supplies and other costs						14,124						16,679						49,851						47,448
Amortization						14,674						13,200						43,749						39,417
Depreciation						8,408						7,945						25,141						23,058
Total expenses						344,197						313,590						1,006,676						918,458
Income from operations						141,125						111,337						409,983						321,877
Net (loss) gain on investments						(575)						776						134						(1,310)
Interest and dividend income						892						1,009						2,715						5,582
Interest expense						(101)						(153)						(354)						(456)
Equity in earnings of unconsolidated affiliate						35,005						28,305						103,420						86,488
Income before income taxes						176,346						141,274						515,898						412,181
Income taxes						38,301						30,178						114,605						90,777
Net income						$138,045						$111,096						$401,293						$321,404
Basic earnings per common share						$0.98						$0.76						$2.83						$2.18
Shares used to calculate basic earnings per share						140,507						145,812						141,928						147,586
Diluted earnings per common share						$0.97						$0.75						$2.79						$2.14
Shares used to calculate diluted earnings per share						142,426						147,907						143,981						149,958
Dividends declared per common share						$—						$—						$0.37						$0.35

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SEI INVESTMENTS COMPANY

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

						September 30,						December 31,
						2021						2020
Assets
Current Assets:
Cash and cash equivalents						$793,883						$784,626
Restricted cash						351						3,101
Receivables from investment products						59,808						55,271
Receivables, net of allowance for doubtful accounts of $2,669 and $1,100						442,187						385,219
Securities owned						31,770						34,064
Other current assets						42,615						38,696
Total Current Assets						1,370,614						1,300,977
Property and Equipment, net of accumulated depreciation of $400,679 and $378,639						183,802						189,052
Operating Lease Right-of-Use Assets						35,145						38,397
Capitalized Software, net of accumulated amortization of $531,923 and $491,739						250,280						270,977
Available for Sale and Equity Securities						140,079						105,419
Investments in Affiliated Funds, at fair value						6,893						6,166
Investment in Unconsolidated Affiliate						39,872						98,433
Goodwill						64,489						64,489
Intangible Assets, net of accumulated amortization of $15,768 and $12,456						31,992						24,304
Deferred Contract Costs						34,263						33,781
Deferred Income Taxes						2,148						2,972
Other Assets, net						32,224						32,289
Total Assets						$2,191,801						$2,167,256
Liabilities and Equity
Current Liabilities:
Accounts payable						$10,772						$7,766
Accrued liabilities						231,043						299,845
Current portion of long-term operating lease liabilities						10,412						8,579
Deferred revenue						1,235						1,085
Total Current Liabilities						253,462						317,275
Long-term Income Taxes Payable						803						803
Deferred Income Taxes						47,434						55,159
Long-term Operating Lease Liabilities						29,857						34,058
Other Long-term Liabilities						22,157						20,054
Total Liabilities						353,713						427,349
Shareholders' Equity:
Common stock, $0.01 par value, 750,000 shares authorized; 139,305 and 143,396 shares issued and outstanding						1,393						1,434
Capital in excess of par value						1,228,085						1,190,001
Retained earnings						629,153						565,270
Accumulated other comprehensive loss, net						(20,543)						(16,798)
Total Shareholders' Equity						1,838,088						1,739,907
Total Liabilities and Shareholders' Equity						$2,191,801						$2,167,256

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ENDING ASSET BALANCES

(In millions) (Unaudited)

						Sept. 30,						Dec. 31						Mar. 31,						Jun. 30,						Sept. 30,
						2020						2020						2021						2021						2021
Private Banks:
Equity and fixed-income programs						$23,499						$25,498						$25,098						$26,264						$25,618
Collective trust fund programs						6						6						7						7						6
Liquidity funds						3,718						3,778						3,793						3,654						3,988
Total assets under management						$27,223						$29,282						$28,898						$29,925						$29,612
Client assets under administration						24,174						26,346						4,379						4,412						4,675
Total assets						$51,397						$55,628						$33,277						$34,337						$34,287
Investment Advisors:
Equity and fixed-income programs						$65,581						$71,247						$73,818						$78,052						$78,560
Collective trust fund programs						3						1						1						1						—
Liquidity funds						3,866						3,832						3,584						3,550						3,477
Total Platform assets under management						$69,450						$75,080						$77,403						$81,603						$82,037
Platform-only assets (E)						10,506						11,862						12,538						13,566						13,728
Total Platform assets (E)						$79,956						$86,942						$89,941						$95,169						$95,765
Institutional Investors:
Equity and fixed-income programs						$83,846						$90,869						$92,040						$93,010						$89,441
Collective trust fund programs						101						98						95						5						5
Liquidity funds						2,096						2,128						2,909						2,516						2,599
Total assets under management						$86,043						$93,095						$95,044						$95,531						$92,045
Client assets under advisement						3,618						4,063						4,333						4,566						4,698
Total assets						$89,661						$97,158						$99,377						$100,097						$96,743
Investment Managers:
Collective trust fund programs						63,277						75,214						78,304						87,012						87,488
Liquidity funds						389						424						449						473						568
Total assets under management						$63,666						$75,638						$78,753						$87,485						$88,056
Client assets under administration (A)						730,369						760,397						831,819						875,942						861,605
Total assets						$794,035						$836,035						$910,572						$963,427						$949,661
Investments in New Businesses:
Equity and fixed-income programs						$1,572						$1,711						$1,777						$1,924						$1,964
Liquidity funds						169						162						289						191						202
Total assets under management						$1,741						$1,873						$2,066						$2,115						$2,166
Client assets under advisement						1,179						1,299						1,355						1,422						1,378
Total assets						$2,920						$3,172						$3,421						$3,537						$3,544
LSV Asset Management:
Equity and fixed-income programs (B)						$82,051						$93,692						$101,565						$102,404						$97,604
Total:
Equity and fixed-income programs (C)						$256,549						$283,017						$294,298						$301,654						$293,187
Collective trust fund programs						63,387						75,319						78,407						87,025						87,499
Liquidity funds						10,238						10,324						11,024						10,384						10,834
Total assets under management						$330,174						$368,660						$383,729						$399,063						$391,520
Client assets under advisement						4,797						5,362						5,688						5,988						6,076
Client assets under administration (D)						754,543						786,743						836,198						880,354						866,280
Platform-only assets						10,506						11,862						12,538						13,566						13,728
Total assets						$1,100,020						$1,172,627						$1,238,153						$1,298,971						$1,277,604

(A)Client assets under administration in the Investment Managers segment include $12.3 billion of assets that are at fee levels below our normal full-service assets (as of September 30, 2021).

(B)Equity and fixed-income programs include $2.3 billion of assets managed by LSV in which fees are based on performance only (as of September 30, 2021).

(C)Equity and fixed-income programs include $7.8 billion of assets invested in various asset allocation funds at September 30, 2021.

(D)In addition to the numbers presented, SEI also administers an additional $13.7 billion in Funds of Funds assets (as of

September 30, 2021) on which SEI does not earn an administration fee.

(E)    Platform assets under management and Platform-only assets combined are total Platform assets in the Investment Advisors segment.

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AVERAGE ASSET BALANCES

(In millions) (Unaudited)

						3rd Qtr.						4th Qtr.						1st Qtr.						2nd Qtr.						3rd Qtr.
						2020						2020						2021						2021						2021
Private Banks:
Equity and fixed-income programs						$23,740						$24,284						$25,139						$26,056						$26,232
Collective trust fund programs						7						6						6						7						6
Liquidity funds						3,948						3,712						3,876						3,833						3,916
Total assets under management						$27,695						$28,002						$29,021						$29,896						$30,154
Client assets under administration						25,295						25,368						4,317						4,405						4,476
Total assets						$52,990						$53,370						$33,338						$34,301						$34,630
Investment Advisors:
Equity and fixed-income programs						$64,479						$68,396						$73,239						$76,839						$79,602
Collective trust fund programs						3						2						1						1						—
Liquidity funds						4,569						3,788						3,619						3,370						3,403
Total Platform assets under management						$69,051						$72,186						$76,859						$80,210						$83,005
Platform-only assets (E)						10,501						11,214						12,206						13,292						13,863
Total Platform assets (E)						$79,552						$83,400						$89,065						$93,502						$96,868
Institutional Investors:
Equity and fixed-income programs						$82,830						$86,277						$91,349						$93,458						$91,965
Collective trust fund programs						102						102						96						68						5
Liquidity funds						2,120						2,271						2,621						2,681						2,742
Total assets under management						$85,052						$88,650						$94,066						$96,207						$94,712
Client assets under advisement						3,565						3,746						4,146						4,516						4,658
Total assets						$88,617						$92,396						$98,212						$100,723						$99,370
Investment Managers:
Collective trust fund programs						62,028						69,349						78,035						84,553						89,441
Liquidity funds						565						411						490						469						532
Total assets under management						$62,593						$69,760						$78,525						$85,022						$89,973
Client assets under administration (A)						713,528						754,350						817,330						853,810						851,183
Total assets						$776,121						$824,110						$895,855						$938,832						$941,156
Investments in New Businesses:
Equity and fixed-income programs						$1,560						$1,634						$1,743						$1,870						$1,958
Liquidity funds						180						165						169						236						205
Total assets under management						$1,740						$1,799						$1,912						$2,106						$2,163
Client assets under advisement						1,206						1,218						1,327						1,406						1,423
Total assets						$2,946						$3,017						$3,239						$3,512						$3,586
LSV Asset Management:
Equity and fixed-income programs (B)						$83,536						$88,182						$97,476						$103,583						$99,924
Total:
Equity and fixed-income programs (C)						$256,145						$268,773						$288,946						$301,806						$299,681
Collective trust fund programs						62,140						69,459						78,138						84,629						89,452
Liquidity funds						11,382						10,347						10,775						10,589						10,798
Total assets under management						$329,667						$348,579						$377,859						$397,024						$399,931
Client assets under advisement						4,771						4,964						5,473						5,922						6,081
Client assets under administration (D)						738,823						779,718						821,647						858,215						855,659
Platform-only assets						10,501						11,214						12,206						13,292						13,863
Total assets						$1,083,762						$1,144,475						$1,217,185						$1,274,453						$1,275,534

(A)    Average client assets under administration in the Investment Managers segment during third-quarter 2021 include $12.5 billion that are at fee levels below our normal full-service assets.

(B)    Equity and fixed-income programs include $2.4 billion of average assets managed by LSV in which fees are based on performance only during third-quarter 2021.

(C)    Equity and fixed-income programs include $7.8 billion of average assets invested in various asset allocation funds during third-quarter 2021.

(D)    In addition to the numbers presented, SEI also administers an additional $13.6 billion of average assets in Funds of Funds assets during third-quarter 2021 on which SEI does not earn an administration fee.

(E)    Platform assets under management and Platform-only assets combined are total Platform assets in the Investment Advisors segment.

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