Document

10-Q/A 1 seic-3312022form10xqa.htm FORM 10-Q/A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 10-Q/A

________________________________________

Amendment No. 1


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_________to ________

Commission File Number: 0-10200

________________________________________

SEI INVESTMENTS COMPANY

(Exact Name of Registrant as Specified in its Charter)

________________________________________


Pennsylvania						23-1707341
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

1 Freedom Valley Drive, Oaks, Pennsylvania 19456-1100

(Address of Principal Executive Offices) (Zip Code)

(610) 676-1000

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SEIC

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant

was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

The number of shares outstanding of the registrant’s common stock, as of the close of business on April 21, 2022:


Common Stock, $0.01 par value						137,265,550

Explanatory Note:

We are filing this Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) to our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on April 25, 2022 (“Original Form 10-Q) solely to revise the discussion captioned “Liquidity and Capital Resources” of Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. In the Original Form 10-Q, the amount reported as the Company’s “amount of the credit facility available for corporate purposes” as of April 21, 2022 was incorrectly reported as $359.4 million instead of $288.7 million due to a clerical error. Furthermore, the amount of the Company’s cash and cash equivalents considered free and immediately accessible for other general corporate purposes of $359.4 million as of April 21, 2022 should have been reported in the Original Form 10-Q and is now included in this Amendment No. 1.

This Amendment No. 1 does not reflect events occurring after the filing of the Original Form 10-Q on April 25, 2022 and no attempt has been made in this Amendment No. 1 to modify or update other disclosures as presented in the Original Form 10-Q. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Form 10-Q and our filings with the SEC subsequent to the filing of the Original Form 10-Q.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(In thousands, except asset balances and per share data)

This discussion reviews and analyzes the consolidated financial condition, the consolidated results of operations and other key factors that may affect future performance. This discussion should be read in conjunction with the Consolidated Financial Statements, the Notes to the Consolidated Financial Statements and the Annual Report on Form 10-K for the year ended December 31, 2021.

Liquidity and Capital Resources


	Three Months Ended March 31,
	2022		2021
Net cash provided by operating activities	$	260,427	$	136,573
Net cash used in investing activities	(31,760)		(30,656)
Net cash used in financing activities	(146,652)		(109,512)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5,591)		1,551
Net increase (decrease) in cash, cash equivalents and restricted cash	76,424		(2,044)
Cash, cash equivalents and restricted cash, beginning of period	831,758		787,727
Cash, cash equivalents and restricted cash, end of period	$	908,182	$	785,683

The credit facility provides for borrowings up to $325.0 million and is scheduled to expire in April 2026 (See Note 6 to the Consolidated Financial Statements). In November 2021, we borrowed $40.0 million under the credit facility for the funding of an acquisition (See Note 12 to the Consolidated Financial Statements). We made a principal payment of $10.0 million in February 2022 against the outstanding balance of the credit facility.

As of April 21, 2022, we had outstanding letters of credit of $6.3 million which reduced the amount available under the credit facility. These letters of credit were primarily issued for the expansion of the corporate headquarters and are due to expire in late 2022. As of April 21, 2022, the amount of the credit facility available for corporate purposes was $288.7 million.

The availability of the credit facility is subject to compliance with certain covenants set forth in the agreement. The credit facility contains covenants which restrict our ability to engage in transactions with affiliates other than wholly-owned subsidiaries or to incur liens or certain types of indebtedness as defined in the agreement. In the event of a default under the credit facility, we would also be restricted from paying dividends on, or repurchasing, our common stock. Currently, our ability to borrow from the credit facility is not limited by any covenant of the agreement (See Note 6 to the Consolidated Financial Statements).

The credit facility contains terms that utilize the London InterBank Offered Rate (LIBOR) as a potential component of the interest rate to be applied to any borrowings; however, an alternative reference rate is included under the agreement which provides for a specified replacement rate upon a LIBOR cessation event. At the time of a LIBOR cessation event, the replacement rate, the Secured Overnight Financing Rate (SOFR), self-executes without the need for negotiations or a formal amendment process.

The majority of excess cash reserves are primarily placed in accounts located in the United States that invest entirely in SEI-sponsored money market mutual funds denominated in the U.S. dollar. We also utilize demand deposit accounts or money market accounts at several well-established financial institutions located in the United States. Accounts used to manage these excess cash reserves do not impose any restrictions or limitations that would prevent us from being able to access such cash amounts immediately. As of April 21, 2022, the amount of cash and cash equivalents considered free and immediately accessible for other general corporate purposes was $359.4 million.

Cash and cash equivalents include accounts managed by subsidiaries that are used in their operations or to cover specific business and regulatory requirements. The availability of this cash for other purposes beyond the operations of these subsidiaries may be limited. We therefore do not include accounts of foreign subsidiaries in the calculation of free and immediately accessible cash for other general corporate purposes. A portion of the undistributed earnings of foreign subsidiaries are deemed repatriated. Any subsequent transfer of available cash related to the repatriated earnings of foreign subsidiaries could significantly increase free and immediately accessible cash.

Cash flows from operations increased $123.9 million in the first three months of 2022 compared to the first three months of 2021 primarily from the increase in net income and the positive impact from the change in the Company's working capital accounts.

Net cash used in investing activities includes:

•Purchases, sales and maturities of marketable securities. Purchases, sales and maturities of marketable securities in the first three months of 2022 and 2021 were as follows:


	Three Months Ended March 31,
	2022		2021
Purchases	$	(49,333)	$	(51,524)
Sales and maturities	35,445		42,446
Net investing activities from marketable securities	$	(13,888)	$	(9,078)

See Note 5 to the Consolidated Financial Statements for more information related to marketable securities.

•The capitalization of costs incurred in developing computer software. We capitalized $6.6 million of software development costs in the first three months of 2022 as compared to $6.4 million in the first three months of 2021. The majority of our software development costs are related to significant enhancements for the expanded functionality of the SEI Wealth Platform.

•Capital expenditures. Capital expenditures in the first three months of 2022 were $9.3 million as compared to $4.2 million in the first three months of 2021. Expenditures in 2022 and 2021 include capital outlays for purchased software and equipment for data center operations. We continue to evaluate improvements to our information technology infrastructure which, if implemented, will result in additional expenditures for purchased software and equipment for data center operations.

Net cash used in financing activities includes:

•Principal repayments on revolving credit facility. In November 2021, we borrowed $40.0 million for the funding of an acquisition. We made a principal payment of $10.0 million in February 2022 against the outstanding balance of the credit facility and intend to repay the entire remaining balance during 2022.

•The repurchase of common stock. Our Board of Directors has authorized the repurchase of common stock through multiple authorizations. Currently, there is no expiration date for the common stock repurchase program. We had total capital outlays of $100.2 million during the first three months of 2022 and $71.2 million during the first three months of 2021 for the repurchase of common stock.

•Proceeds from the issuance of common stock. We received $19.9 million in proceeds from the issuance of common stock during the first three months of 2022 as compared to $15.5 million during the first three months of 2021. The increase in proceeds is primarily attributable to a higher level of stock option exercise activity.

•Dividend payments. Cash dividends paid were $55.5 million in the first three months of 2022 as compared to $53.1 million in the first three months of 2021.

Item 6. Exhibits.

The following is a list of exhibits filed as part of the Form 10-Q/A.



31.3			Rule 13a-15(e)/15d-15(e) Certification of Chief Executive Officer.

31.4			Rule 13a-15(e)/15d-15(e) Certification of Chief Financial Officer.

32.1			Section 1350 Certifications.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SEI INVESTMENTS COMPANY

Date:

April 29, 2022

By:

/s/ Dennis J. McGonigle

Dennis J. McGonigle

Chief Financial Officer

SEC Form 10-Q/A filed by SEI Investments Company (Amendment)