EX-99.2 6 seic-earningsrelease33116e.htm PRESS RELEASE DATED APRIL 20, 2016
Exhibit 99.2
Investor Contact: Media Contact:
Nicole Vattimo Dana Grosser
SEI SEI
+1 610-676-4385 +1 610-676-2459
nvattimo@seic.com dgrosser@seic.com
Pages: 8
FOR IMMEDIATE RELEASE
SEI REPORTS FIRST-QUARTER 2016 FINANCIAL RESULTS
OAKS, Pa., April 20, 2016 -- SEI Investments Company (NASDAQ:SEIC) today announced financial results for the first-quarter 2016. Diluted earnings per share were $.47 in first-quarter 2016 compared to $.50 in first-quarter 2015. Diluted earnings per share in first-quarter 2016 and 2015 each reflect pre-tax gains of $2.8 million, or $.01 per share, from the sale of SEI Asset Korea.

Consolidated Overview |  |  |  |  |  |
(In thousands, except earnings per share) |  | For the Three Months Ended March 31, |  |
|  | 2016 |  | 2015 |  | %
Revenues |  |  | $334,263 |  |  |  | $325,444 |  |  | 3%
Net income |  | 77,497 |  |  | 84,611 |  |  | (8)%
Diluted earnings per share |  |  | $0.47 |  |  |  | $0.50 |  |  | (6)%

"Our results for the first quarter reflect the growing adoption of our platform solutions across our target markets and customer bases while we manage through capital market volatility," said Alfred P. West, Jr., SEI Chairman and CEO. "SEI's sales success during the quarter is a testament to the relevance of our offerings to our clients’ businesses.
"In all segments of our company, we are continuously investing in products and services that will position us well for the long term, while creating sustainable growth and increased shareholder value.”

Summary of First-Quarter Results by Business Segment

(In thousands) |  | For the Three Months Ended March 31, |  |
|  | 2016 |  | 2015 |  | %
Private Banks: |  |  |  |  |  |
Revenues |  |  | $113,361 |  |  |  | $111,213 |  |  | 2%
Expenses |  | 103,741 |  |  | 99,256 |  |  | 5%
Operating Profit |  | 9,620 |  |  | 11,957 |  |  | (20)%
Gain on sale of subsidiary |  | 2,791 |  |  | 2,791 |  |  | NM
Segment Profit |  | 12,411 |  |  | 14,748 |  |  | NM
Operating Margin (A) |  | 8 | % |  | 11 | % |  |
Investment Advisors: |  |  |  |  |  |
Revenues |  | 76,679 |  |  | 74,015 |  |  | 4%
Expenses |  | 44,774 |  |  | 39,059 |  |  | 15%
Operating Profit |  | 31,905 |  |  | 34,956 |  |  | (9)%
Operating Margin |  | 42 | % |  | 47 | % |  |
Institutional Investors: |  |  |  |  |  |
Revenues |  | 72,897 |  |  | 73,548 |  |  | (1)%
Expenses |  | 35,382 |  |  | 35,211 |  |  | —%
Operating Profit |  | 37,515 |  |  | 38,337 |  |  | (2)%
Operating Margin |  | 51 | % |  | 52 | % |  |
Investment Managers: |  |  |  |  |  |
Revenues |  | 69,918 |  |  | 65,367 |  |  | 7%
Expenses |  | 45,275 |  |  | 40,623 |  |  | 11%
Operating Profit |  | 24,643 |  |  | 24,744 |  |  | —%
Operating Margin |  | 35 | % |  | 38 | % |  |
Investments in New Businesses: |  |  |  |  |  |
Revenues |  | 1,408 |  |  | 1,301 |  |  | 8%
Expenses |  | 5,232 |  |  | 4,866 |  |  | 8%
Operating Loss |  | (3,824 | ) |  | (3,565 | ) |  | NM
Totals: |  |  |  |  |  |
Revenues |  |  | $334,263 |  |  |  | $325,444 |  |  | 3%
Expenses |  | 234,404 |  |  | 219,015 |  |  | 7%
Corporate overhead expenses |  | 13,047 |  |  | 13,359 |  |  | (2)%
Income from operations |  |  | $86,812 |  |  |  | $93,070 |  |  | (7)%

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

• | Revenue growth in the quarter was primarily driven by higher Asset management, administration, and distribution fees from improved cash flows from new and existing clients. The market volatility occurring during the second half of 2015 and early 2016 negatively impacted our asset-based fee revenues and partially offset our revenue growth.

• | Sales events, net of client losses, during first-quarter 2016 totaled approximately $38.6 million and are expected to generate net annualized recurring revenues of approximately $33.2 million when contract values are fully realized.

• | Our average assets under management, excluding LSV, increased $8.2 billion, or five percent, to $180.7 billion, as compared to $172.5 billion during the first-quarter 2015 (see attached Average Asset Balances schedules for further details).

• | Our average assets under administration increased $20.0 billion, or five percent, to $404.7 billion in the first-quarter 2016, as compared to $384.7 billion during the first-quarter 2015 (see attached Average Asset Balances schedules for further details).

• | Information processing and software servicing fees in our Private Banks segment increased $2.7 million in the first-quarter 2016 compared to the prior year period primarily due to increased assets from new and existing clients processed on the SEI Wealth Platform SM.

• | Our earnings from LSV decreased by $5.2 million, or 15 percent, to $29.2 million in first-quarter 2016 as compared to $34.3 million in first-quarter 2015. The decline in earnings was due to lower assets under management from unfavorable market conditions and reduced performance fees.

• | We capitalized $9.5 million and $8.0 million of software development costs in first-quarter 2016 and 2015, respectively, of which $7.6 million and $7.3 million are related to continued enhancements to the SEI Wealth Platform.

• | Amortization expense related to the SEI Wealth Platform increased to $11.0 million during the first-quarter 2016 as compared to $10.3 million during the first-quarter 2015 due to continued enhancements.

• | Although revenues increased in our Investment Advisors and Investment Managers segments, higher personnel and other operating costs mainly related to servicing new and existing clients and increased technology development spending in these segments caused operating margins to decline.

• | We recorded pre-tax gains of $2.8 million, or $.01 diluted earnings per share, from the sale of SEI Asset Korea in first-quarter 2016 and 2015.

• | Our effective tax rates were 35.2 percent in first-quarter 2016 and 35.4 percent in first-quarter 2015.

• | We repurchased 2.1 million shares of our common stock for $80.6 million during the first-quarter 2016.

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Earnings Conference Call
A conference call to review earnings is scheduled for 2 p.m. Eastern time on April 20, 2016. Investors may listen to the call at seic.com/investors. The call may also be accessed at many financial services websites, including Google Finance and Yahoo Finance. Investors may also listen to replays at these websites, or by telephone at (USA) 800-475-6701; (International) 320-365-3844, access code 391245.
About SEI
SEI (NASDAQ:SEIC) is a leading global provider of investment processing, investment management, and investment operations solutions that help corporations, financial institutions, financial advisors, and ultra-high-net-worth families create and manage wealth. As of March 31, 2016, through its subsidiaries and partnerships in which the company has a significant interest, SEI manages or administers $684 billion in mutual fund and pooled or separately managed assets, including $265 billion in assets under management and $419 billion in client assets under administration. For more information, visit 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.
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SEI INVESTMENTS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

|  | For the Three Months Ended March 31,
|  | 2016 |  | 2015
Asset management, admin. and distribution fees |  |  | $251,437 |  |  |  | $246,768 |
Information processing and software servicing fees |  | 73,399 |  |  | 70,653 |
Transaction–based and trade execution fees |  | 9,427 |  |  | 8,023 |
Total revenues |  | 334,263 |  |  | 325,444 |
Subadvisory, distribution and other asset mgmt costs |  | 39,195 |  |  | 38,517 |
Software royalties and other information processing costs |  | 7,748 |  |  | 7,509 |
Brokerage commissions |  | 7,108 |  |  | 5,972 |
Compensation, benefits and other personnel |  | 101,931 |  |  | 94,186 |
Stock-based compensation |  | 3,789 |  |  | 3,750 |
Consulting, outsourcing and professional fees |  | 38,506 |  |  | 35,628 |
Data processing and computer related |  | 15,718 |  |  | 13,400 |
Facilities, supplies and other costs |  | 15,997 |  |  | 17,059 |
Amortization |  | 11,012 |  |  | 10,358 |
Depreciation |  | 6,447 |  |  | 5,995 |
Total expenses |  | 247,451 |  |  | 232,374 |
Income from operations |  | 86,812 |  |  | 93,070 |
Net (loss) gain on investments |  | (126 | ) |  | 250 |
Interest and dividend income |  | 1,083 |  |  | 969 |
Interest expense |  | (114 | ) |  | (113 | )
Equity in earnings of unconsolidated affiliates |  | 29,192 |  |  | 34,033 |
Gain on sale of subsidiary |  | 2,791 |  |  | 2,791 |
Income before income taxes |  | 119,638 |  |  | 131,000 |
Income taxes |  | 42,141 |  |  | 46,389 |
Net income |  | 77,497 |  |  | 84,611 |
Basic earnings per common share |  |  | $0.48 |  |  |  | $0.51 |
Shares used to calculate basic earnings per share |  | 163,013 |  |  | 166,695 |
Diluted earnings per common share |  |  | $0.47 |  |  |  | $0.50 |
Shares used to calculate diluted earnings per share |  | 166,145 |  |  | 170,703 |

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

|  | March 31, |  | December 31,
|  | 2016 |  | 2015
Assets |  |  |  |
Current Assets: |  |  |  |
Cash and cash equivalents |  |  | $638,253 |  |  |  | $679,661 |
Restricted cash |  | 5,500 |  |  | 5,500 |
Receivables from investment products |  | 51,633 |  |  | 48,098 |
Receivables, net |  | 229,558 |  |  | 223,023 |
Securities owned |  | 21,264 |  |  | 21,235 |
Other current assets |  | 28,829 |  |  | 26,207 |
Total Current Assets |  | 975,037 |  |  | 1,003,724 |
Property and Equipment, net |  | 141,790 |  |  | 143,977 |
Capitalized software, net |  | 289,044 |  |  | 290,522 |
Investments available for sale |  | 78,356 |  |  | 81,294 |
Investments in affiliated funds, at fair value |  | 4,183 |  |  | 4,039 |
Investment in unconsolidated affiliates |  | 44,247 |  |  | 49,580 |
Deferred income taxes |  | 4,117 |  |  | — |
Other assets, net |  | 14,072 |  |  | 15,492 |
Total Assets |  |  | $1,550,846 |  |  |  | $1,588,628 |
Liabilities and Equity |  |  |  |
Current Liabilities: |  |  |  |
Accounts payable |  |  | $4,354 |  |  |  | $4,511 |
Accrued liabilities |  | 165,005 |  |  | 217,587 |
Deferred revenue |  | 2,936 |  |  | 2,385 |
Total Current Liabilities |  | 172,295 |  |  | 224,483 |
Deferred income taxes |  | 66,410 |  |  | 63,028 |
Other long-term liabilities |  | 11,676 |  |  | 11,397 |
Total Liabilities |  | 250,381 |  |  | 298,908 |
Shareholders' Equity: |  |  |  |
Common stock |  | 1,619 |  |  | 1,637 |
Capital in excess of par value |  | 912,506 |  |  | 910,513 |
Retained earnings |  | 408,684 |  |  | 402,860 |
Accumulated other comprehensive loss, net |  | (22,344 | ) |  | (25,290 | )
Total Shareholders' Equity |  | 1,300,465 |  |  | 1,289,720 |
Total Liabilities and Shareholders' Equity |  |  | $1,550,846 |  |  |  | $1,588,628 |

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SEI INVESTMENTS COMPANY
ENDING ASSET BALANCES
(In millions)
(Unaudited)

|  |  | Mar. 31, |  | Jun. 30, |  | Sept. 30, |  | Dec 31, |  | Mar. 31,
|  |  | 2015 |  | 2015 |  | 2015 |  | 2015 |  | 2016
Private Banks: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $19,296 |  |  |  | $19,686 |  |  |  | $18,243 |  |  |  | $18,150 |  |  |  | $18,370 |
Collective Trust Fund programs |  |  | 9 |  |  | 13 |  |  | 3 |  |  | 4 |  |  | 4 |
Liquidity funds |  |  | 5,551 |  |  | 5,280 |  |  | 5,469 |  |  | 5,835 |  |  | 5,521 |
Total assets under management |  |  |  | $24,856 |  |  |  | $24,979 |  |  |  | $23,715 |  |  |  | $23,989 |  |  |  | $23,895 |
Client assets under administration |  |  | 17,643 |  |  | 17,485 |  |  | 16,896 |  |  | 17,532 |  |  | 18,324 |
Total assets |  |  |  | $42,499 |  |  |  | $42,464 |  |  |  | $40,611 |  |  |  | $41,521 |  |  |  | $42,219 |
Investment Advisors: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $45,800 |  |  |  | $46,951 |  |  |  | $43,988 |  |  |  | $46,123 |  |  |  | $47,357 |
Collective Trust Fund programs |  |  | 8 |  |  | 8 |  |  | 9 |  |  | 7 |  |  | 7 |
Liquidity funds |  |  | 3,047 |  |  | 2,817 |  |  | 4,677 |  |  | 4,924 |  |  | 5,051 |
Total assets under management |  |  |  | $48,855 |  |  |  | $49,776 |  |  |  | $48,674 |  |  |  | $51,054 |  |  |  | $52,415 |
Institutional Investors: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $74,178 |  |  |  | $75,341 |  |  |  | $70,818 |  |  |  | $72,263 |  |  |  | $73,468 |
Collective Trust Fund programs |  |  | 94 |  |  | 93 |  |  | 96 |  |  | 96 |  |  | 97 |
Liquidity funds |  |  | 3,246 |  |  | 2,960 |  |  | 2,655 |  |  | 2,883 |  |  | 2,390 |
Total assets under management |  |  |  | $77,518 |  |  |  | $78,394 |  |  |  | $73,569 |  |  |  | $75,242 |  |  |  | $75,955 |
Investment Managers: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $25 |  |  |  | $24 |  |  |  | $59 |  |  |  | $66 |  |  |  | $72 |
Collective Trust Fund programs |  |  | 20,965 |  |  | 20,632 |  |  | 19,863 |  |  | 32,117 |  |  | 32,385 |
Liquidity funds |  |  | 1,091 |  |  | 1,007 |  |  | 848 |  |  | 832 |  |  | 733 |
Total assets under management |  |  |  | $22,081 |  |  |  | $21,663 |  |  |  | $20,770 |  |  |  | $33,015 |  |  |  | $33,190 |
Client assets under administration (A) |  |  | 372,116 |  |  | 381,963 |  |  | 376,133 |  |  | 390,282 |  |  | 400,579 |
Total assets |  |  |  | $394,197 |  |  |  | $403,626 |  |  |  | $396,903 |  |  |  | $423,297 |  |  |  | $433,769 |
Investments in New Businesses: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $756 |  |  |  | $779 |  |  |  | $752 |  |  |  | $764 |  |  |  | $803 |
Liquidity funds |  |  | 106 |  |  | 57 |  |  | 51 |  |  | 47 |  |  | 41 |
Total assets under management |  |  |  | $862 |  |  |  | $836 |  |  |  | $803 |  |  |  | $811 |  |  |  | $844 |
LSV Asset Management: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $84,123 |  |  |  | $86,334 |  |  |  | $76,958 |  |  |  | $78,335 |  |  |  | $78,390 |
Total: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs (B) |  |  |  | $224,178 |  |  |  | $229,115 |  |  |  | $210,818 |  |  |  | $215,701 |  |  |  | $218,460 |
Collective Trust Fund programs |  |  | 21,076 |  |  | 20,746 |  |  | 19,971 |  |  | 32,224 |  |  | 32,493 |
Liquidity funds |  |  | 13,041 |  |  | 12,121 |  |  | 13,700 |  |  | 14,521 |  |  | 13,736 |
Total assets under management |  |  |  | $258,295 |  |  |  | $261,982 |  |  |  | $244,489 |  |  |  | $262,446 |  |  |  | $264,689 |
Client assets under administration (C) |  |  | 389,759 |  |  | 399,448 |  |  | 393,029 |  |  | 407,814 |  |  | 418,903 |
Total assets |  |  |  | $648,054 |  |  |  | $661,430 |  |  |  | $637,518 |  |  |  | $670,260 |  |  |  | $683,592 |

(A) | Client assets under administration in the Investment Managers segment include $49.2 billion of assets balances that require limited services and therefore are at fee levels below our normal full service assets (as of March 31, 2016).

(B) | Equity/Fixed Income programs include $4.6 billion of assets invested in various asset allocation funds at March 31, 2016.

(C) | In addition to the numbers presented, SEI also administers an additional $11.2 billion in Funds of Funds assets (as of

March 31, 2016) on which SEI does not earn an administration fee. Client assets under administration as of March 31, 2016 do not reflect $1.3 billion in Funds of Funds assets that were reported at December 31, 2015.
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SEI INVESTMENTS COMPANY
AVERAGE ASSET BALANCES
(In millions)
(Unaudited)

|  |  | 1st Qtr. |  | 2nd Qtr. |  | 3rd Qtr. |  | 4th Qtr. |  | 1st Qtr.
|  |  | 2015 |  | 2015 |  | 2015 |  | 2015 |  | 2016
Private Banks: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $18,869 |  |  |  | $19,872 |  |  |  | $19,080 |  |  |  | $18,603 |  |  |  | $17,644 |
Collective Trust Fund programs |  |  | 8 |  |  | 12 |  |  | 6 |  |  | 3 |  |  | 3 |
Liquidity funds |  |  | 5,755 |  |  | 5,256 |  |  | 5,443 |  |  | 5,511 |  |  | 5,661 |
Total assets under management |  |  |  | $24,632 |  |  |  | $25,140 |  |  |  | $24,529 |  |  |  | $24,117 |  |  |  | $23,308 |
Client assets under administration |  |  | 17,504 |  |  | 17,823 |  |  | 17,504 |  |  | 17,775 |  |  | 17,248 |
Total assets |  |  |  | $42,136 |  |  |  | $42,963 |  |  |  | $42,033 |  |  |  | $41,892 |  |  |  | $40,556 |
Investment Advisors: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $44,809 |  |  |  | $47,027 |  |  |  | $45,992 |  |  |  | $46,044 |  |  |  | $45,175 |
Collective Trust Fund programs |  |  | 9 |  |  | 8 |  |  | 9 |  |  | 8 |  |  | 7 |
Liquidity funds |  |  | 3,072 |  |  | 2,819 |  |  | 3,523 |  |  | 4,784 |  |  | 5,009 |
Total assets under management |  |  |  | $47,890 |  |  |  | $49,854 |  |  |  | $49,524 |  |  |  | $50,836 |  |  |  | $50,191 |
Institutional Investors: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $73,760 |  |  |  | $75,426 |  |  |  | $73,568 |  |  |  | $72,463 |  |  |  | $71,779 |
Collective Trust Fund programs |  |  | 95 |  |  | 94 |  |  | 93 |  |  | 96 |  |  | 98 |
Liquidity funds |  |  | 3,021 |  |  | 3,354 |  |  | 2,843 |  |  | 3,109 |  |  | 2,834 |
Total assets under management |  |  |  | $76,876 |  |  |  | $78,874 |  |  |  | $76,504 |  |  |  | $75,668 |  |  |  | $74,711 |
Investment Managers: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $27 |  |  |  | $25 |  |  |  | $24 |  |  |  | $59 |  |  |  | $66 |
Collective Trust Fund programs |  |  | 21,108 |  |  | 21,387 |  |  | 20,449 |  |  | 30,960 |  |  | 30,784 |
Liquidity funds |  |  | 1,066 |  |  | 1,010 |  |  | 978 |  |  | 960 |  |  | 832 |
Total assets under management |  |  |  | $22,201 |  |  |  | $22,422 |  |  |  | $21,451 |  |  |  | $31,979 |  |  |  | $31,682 |
Client assets under administration |  |  | 367,206 |  |  | 378,347 |  |  | 380,247 |  |  | 390,080 |  |  | 387,421 |
Total assets |  |  |  | $389,407 |  |  |  | $400,769 |  |  |  | $401,698 |  |  |  | $422,059 |  |  |  | $419,103 |
Investments in New Businesses: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $755 |  |  |  | $784 |  |  |  | $776 |  |  |  | $788 |  |  |  | $757 |
Liquidity funds |  |  | 101 |  |  | 75 |  |  | 49 |  |  | 47 |  |  | 48 |
Total assets under management |  |  |  | $856 |  |  |  | $859 |  |  |  | $825 |  |  |  | $835 |  |  |  | $805 |
LSV Asset Management: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $83,439 |  |  |  | $87,409 |  |  |  | $80,656 |  |  |  | $79,634 |  |  |  | $74,699 |
Total: |  |  |  |  |  |  |  |  |  |  |
Equity/Fixed Income programs |  |  |  | $221,659 |  |  |  | $230,543 |  |  |  | $220,096 |  |  |  | $217,591 |  |  |  | $210,120 |
Collective Trust Fund programs |  |  | 21,220 |  |  | 21,501 |  |  | 20,557 |  |  | 31,067 |  |  | 30,892 |
Liquidity funds |  |  | 13,015 |  |  | 12,514 |  |  | 12,836 |  |  | 14,411 |  |  | 14,384 |
Total assets under management |  |  |  | $255,894 |  |  |  | $264,558 |  |  |  | $253,489 |  |  |  | $263,069 |  |  |  | $255,396 |
Client assets under administration (A) |  |  | 384,710 |  |  | 396,170 |  |  | 397,751 |  |  | 407,855 |  |  | 404,669 |
Total assets |  |  |  | $640,604 |  |  |  | $660,728 |  |  |  | $651,240 |  |  |  | $670,924 |  |  |  | $660,065 |

(A) Client assets under administration during first-quarter 2016 do not reflect $1.3 billion in Funds of Funds assets that were reported during fourth-quarter 2015.
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