SEI Investments Company (Nasdaq: SEIC) today announced financial results for first-quarter 2008, reporting increases in revenues, and decreases in net income and earnings per share compared to first-quarter 2007. Net income during the first-quarter was negatively affected by a $25.8 million non-cash pre-tax charge (approximately $.08 per share post-tax). This charge is in addition to a fourth-quarter 2007 pre-tax charge of $25.1 million.
These charges are related to previously- disclosed support agreements covering holdings of structured investment products by SEI-sponsored money market funds. This current period charge increases the accrual for these support agreements to $50.9 million.
"We continue to be satisfied with the progress we are making, even in the face of difficulties created by the capital and credit markets," said Alfred P. West, Jr., SEI Chairman and CEO.
"We generated a high level of sales events across most of our businesses, realized further acceptance of our new strategies, continued to operate and expand our Global Wealth Platform, and made good progress on our other key investments. The current market environment will make growth in revenues and profits, in the short-term, challenging. In the long run, we remain firm in our belief that what we are doing will provide our clients with increased opportunities for success and allow us to grow our future revenues and profits more rapidly."
First-Quarter Business Commentary:
-- The Private Banking, Institutional Investor and Investment Manager segments generated gains in first-quarter 2008 revenues and operating profits versus first-quarter, 2007.
-- The Investment Advisors and LSV segments were directly affected by the weakening capital markets resulting in first-quarter 2008 revenues and operating profits declining from first-quarter 2007 levels.
-- All major segments were negatively affected by the first-quarter 2008 retreat of capital markets resulting in a general weakness versus fourth-quarter 2007 levels.
-- The Global Wealth Platform was placed into service during the third-quarter 2007. First-quarter 2008 expenses reflect an increase of approximately $3.5 million for amortization versus first-quarter 2007 levels. The amortization is primarily recognized in the Private Banks and Investment Advisors segments.
-- The company's percentage ownership in LSV remained at approximately 43 percent. In the first-quarter 2008, the company recognized $30.0 million as its portion of the earnings from LSV versus $31.3 million in the first-quarter 2007.
-- Assets under management declined by $12.1 billion during first-quarter 2008 to $184.6 billion, principally due to market depreciation.
-- In the first-quarter 2008 SEI purchased 1,963,000 shares of its common stock for $50.9 million.
-- The first-quarter 2008 results include a $25.8 million non-cash charge related to money market funds support agreements. This charge is in addition to a fourth-quarter 2007 charge of $25.1 million. Additional information about the capital support agreements is contained in SEI's 2007 Form 10-K filed February 26, 2008. -- SEI Investments Company
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