<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)*
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
-----
Exchange Act of 1934 for the quarterly period ended September 30, 1996 or
------------------
Transition report pursuant to Section 13 or 15(d) of the Securities
-----
Exchange Act of 1934 for the transition period from _________ to _________
0-10200
- --------------------------------------------------------------------------------
(Commission File Number)
SEI CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1707341
- ----------------------------------- ----------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
680 East Swedesford Road, Wayne, Pennsylvania 19087-1658
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(610) 254-1000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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
--- ---
*APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
--- ---
*APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of September 30, 1996: 18,362,776 shares of common stock, par
value $.01 per share.
<PAGE>
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Item 1. Financial Statements
- ------- --------------------
Consolidated Balance Sheets
---------------------------
(In thousands)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------- -----------------
(unaudited)
<S> <C> <C>
Assets
- ------
Current assets:
Cash and cash equivalents $ 14,592 $ 10,256
Receivables, net of allowance for
doubtful accounts of $1,350 and $1,206 23,324 22,436
Receivables from regulated investment
companies 9,243 8,757
Deferred income taxes 1,176 2,584
Loans receivable available for sale 9,909 5,152
Prepaid expenses 4,973 4,890
-------- --------
Total current assets 63,217 54,075
-------- --------
Net assets of discontinued operations 10,024 6,046
-------- --------
Investments available for sale -- 6,205
-------- --------
Property and equipment, net of accumulated
depreciation and amortization of $62,228
and $61,513 37,788 24,299
-------- --------
Capitalized software, net of accumulated
amortization of $4,826 and $3,746 10,411 4,356
-------- --------
Other assets, net 10,630 6,366
-------- --------
Total Assets $132,070 $101,347
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
Consolidated Balance Sheets
---------------------------
(In thousands, except par value)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
(unaudited)
Liabilities and Shareholders' Equity
- ------------------------------------
<S> <C> <C>
Current liabilities:
Short-term borrowings $19,000 $ --
Accounts payable 5,768 6,252
Accrued compensation 10,535 13,724
Other accrued liabilities 23,053 19,115
Deferred revenue 4,975 5,795
------- -------
Total current liabilities 63,331 44,886
------- -------
Deferred income taxes 2,054 459
------- -------
Shareholders' equity:
Common stock, $.01 par value, 100,000 shares
authorized; 18,363 and 18,425 shares issued
and outstanding 184 184
Capital in excess of par value 53,373 48,207
Retained earnings 13,261 7,167
Cumulative translation adjustments (133) (58)
Unrealized holding gain on investments -- 502
-------- --------
Total shareholders' equity 66,685 56,002
-------- --------
Total Liabilities and Shareholders' Equity $132,070 $101,347
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
Consolidated Statements of Income
---------------------------------
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months
-----------------------------
Ended September 30,
-----------------------------
1996 1995
---- ----
<S> <C> <C>
Revenues $60,165 $56,478
Expenses:
Operating and development 30,320 28,824
Sales and marketing 16,952 14,736
General and administrative 3,918 4,298
------ ------
Income before interest and income taxes 8,975 8,620
Interest income, net (415) (54)
------ ------
Income before income taxes 9,390 8,674
Income taxes 3,484 3,731
------ ------
Net income $ 5,906 $ 4,943
====== ======
Earnings per common and common equivalent share
(primary and fully diluted) $ .31 $ .26
====== ======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
Consolidated Statements of Income
---------------------------------
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months
-----------------------------
Ended September 30,
-----------------------------
1996 1995
---- ----
<S> <C> <C>
Revenues $184,945 $165,714
Expenses:
Operating and development 98,541 84,754
Sales and marketing 50,823 42,414
General and administrative 10,050 12,900
-------- --------
Income from continuing operations before
interest and income taxes 25,531 25,646
Gain on sale of investments available for sale (1,097) --
Interest income, net (572) (436)
-------- --------
Income from continuing operations before
income taxes 27,200 26,082
Income taxes 10,608 10,694
-------- --------
Income from continuing operations 16,592 15,388
Loss from discontinued operations, net
of income tax benefit of $1,295 -- (1,942)
-------- --------
Net income $ 16,592 $ 13,446
======== ========
Earnings per share from continuing operations $ .86 $ .79
Loss per share from discontinued operations -- (.10)
-------- --------
Earnings per common and common equivalent share
(primary and fully diluted) $ .86 $ .69
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Consolidated Statements of Cash Flows
-------------------------------------
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months
------------------------
Ended September 30,
------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $16,592 $13,446
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 7,700 9,131
Discontinued operations (3,978) 1,384
Tax benefit on stock options exercised 2,034 1,473
Gain on sale of investments available for sale (1,097) --
Deferred income taxes 3,345 (284)
Other 242 (1,256)
Change in current assets and liabilities:
Decrease (increase) in
Receivables (888) (6,775)
Receivables from regulated investment companies (486) (1,541)
Loans receivable available for sale (4,757) (933)
Prepaid expenses (83) (744)
Increase (decrease) in
Accounts payable (484) 1,697
Accrued compensation (3,189) (3,936)
Other accrued liabilities 5,780 1,831
Deferred revenue (820) (895)
------ ------
Net cash provided by operating activities 19,911 12,598
------ ------
Cash flows from investing activities:
Additions to property and equipment (19,911) (6,554)
Additions to capitalized software (7,135) (1,853)
Deposit on property and equipment (2,138) --
Investment in joint venture (1,658) --
Investment in regulated investment companies (1,461) (100)
Proceeds from sale of investments available for sale 6,536 --
Purchase of investments available for sale -- (5,156)
Other 400 200
------ ------
Net cash used in investing activities (25,367) (13,463)
------ ------
Cash flows from financing activities:
Purchase and retirement of common stock (9,635) (18,378)
Proceeds from issuance of common stock 4,517 4,885
Proceeds from short-term borrowings 19,000 11,000
Payment of dividends (4,090) (3,396)
Other -- 667
------ ------
Net cash provided by (used in) financing activities 9,792 (5,222)
------ ------
Net increase (decrease) in cash and cash equivalents 4,336 (6,087)
Cash and cash equivalents, beginning of period 10,256 20,232
------ ------
Cash and cash equivalents, end of period $14,592 $14,145
====== =======
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
Notes to Consolidated Financial Statements
------------------------------------------
Note 1. Summary of Significant Accounting Policies
------------------------------------------
Nature of Operations
--------------------
SEI Corporation (the "Company") is organized around its two major
product lines: Investment Technology and Services and Asset Management.
The Investment Technology and Services segment provides trust
accounting and management information services through the Company's
3000 product line, administration and distribution services to
proprietary mutual funds, and back office trust processing. Principal
markets for these products and services include trust departments of
large banks located in the United States. The Asset Management segment
provides investment solutions through various investment products
including the Company's Family of Funds, liquidity funds and services,
and consulting services. Principal markets for these products and
services include trust departments of large banks, investment advisors,
corporations, and money managers located in the United States and
Canada.
Summary Financial Information and Results of Operations
--------------------------------------------------------
In the opinion of the Company, the accompanying unaudited Consolidated
Financial Statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial
position as of September 30, 1996, the results of operations for the
three and nine months ended September 30, 1996 and 1995, and the cash
flows for the nine months ended September 30, 1996 and 1995.
Interim Financial Information
-----------------------------
While the Company believes that the disclosures presented are adequate
to make the information not misleading, these Consolidated Financial
Statements should be read in conjunction with the Consolidated
Financial Statements and the notes included in the Company's latest
annual report on Form 10-K.
Property and Equipment
----------------------
Property and equipment on the accompanying Consolidated Balance Sheets
consist of the following:
<TABLE>
<CAPTION>
Estimated
Useful Lives
September 30, 1996 December 31, 1995 (In Years)
------------------ ----------------- -------------
<S> <C> <C> <C>
Equipment $41,460,000 $43,469,000 3
Buildings, furniture and
fixtures 16,221,000 16,754,000 3 to 39
Leasehold improvements 9,968,000 9,814,000 Lease Term
Purchased software 8,560,000 7,220,000 3
Land 4,065,000 4,065,000 N/A
Construction in progress 19,742,000 4,490,000 N/A
---------- ----------
100,016,000 85,812,000
Less: Accumulated
depreciation and
amortization (62,228,000) (61,513,000)
---------- ----------
Property and equipment, net $37,788,000 $24,299,000
========== ==========
</TABLE>
Property and equipment are stated at cost, which includes interest on
funds borrowed to finance the construction of major acquisitions or
additions. Depreciation and amortization are computed using the
straight-line method over the estimated useful life of each asset.
Expenditures for renewals and betterments are capitalized, while
maintenance and repairs are charged to expense when incurred.
7
<PAGE>
In December 1994, the Company purchased 90 acres of land near its
present site for construction of the Company's new corporate campus.
All costs, including capitalized interest of $492,000, relating to the
construction are reflected in Construction in progress. This corporate
campus is expected to be completed in late 1996.
Capitalized Software
--------------------
The Company accounts for software development costs in accordance with
Statement of Financial Accounting Standards No. 86, "Accounting for the
Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed"
("SFAS 86"). Under SFAS 86, costs incurred to create a computer
software product are charged to research and development expense as
incurred until technological feasibility has been established. The
Company establishes technological feasibility upon completion of a
detail program design. At that point, computer software costs are
capitalized until the product is available for general release to
customers. The establishment of technological feasibility and the
ongoing assessment of recoverability of capitalized software
development costs require considerable judgment by management with
respect to certain external factors, including, but not limited to,
anticipated future revenues, estimated economic life, and changes in
technology. Amortization begins when the development is completed.
Capitalized software development costs are amortized on a product-by-
product basis using the straight-line method over the estimated
economic life of the product or enhancement, which is primarily three
years.
Earnings per Share
------------------
The Company utilizes the modified treasury stock method to compute
earnings per share since common share equivalents at the end of the
period exceeded 20 percent of the number of common shares outstanding.
Earnings per common and common equivalent share (primary earnings per
share) is computed using the weighted average number of common shares
and common share equivalents (stock options) outstanding. Earnings per
share, assuming full dilution (fully diluted earnings per share), is
based upon an increased number of shares that would be outstanding
assuming exercise of stock options when the Company's stock price at
the end of the period is higher than the average price within the
respective period. If the inclusion of common stock equivalents has an
anti-dilutive effect in the aggregate, it is excluded from the earnings
per share calculation. For the three months ended September 30, 1996
and 1995, the weighted average shares outstanding for primary earnings
per share were 19,113,000 and 19,344,000, respectively. For the nine
months ending September 30, 1996 and 1995, the weighted average shares
outstanding for primary earnings per share were 19,375,000 and
19,529,000, respectively. Shares used to calculate fully diluted
earnings per share were not materially different from those used for
primary earnings per share.
Statements of Cash Flows
------------------------
For purposes of the Consolidated Statements of Cash Flows, the Company
considers investment instruments purchased with an original maturity of
three months or less to be cash equivalents.
Supplemental disclosures of cash paid/received during the nine months
ended September 30:
<TABLE>
<CAPTION>
1996 1995
---------- -----------
<S> <C> <C>
Interest paid $ 441,000 $ --
Interest and dividends received $ 610,000 $ 580,000
Income taxes paid $5,156,000 $10,010,000
</TABLE>
8
<PAGE>
Stock-Based Compensation Plans
------------------------------
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). The disclosure requirements of
SFAS 123 are effective for the Company's December 31, 1996 year-end
financial statements. However, these disclosures will include the
effects of all awards granted during the year ended December 31, 1995.
SFAS 123 establishes a fair value based method of accounting for stock-
based compensation plans. SFAS 123 requires that an employer's
financial statements include certain disclosures about stock-based
employee compensation arrangements regardless of the method used to
account for the plan. The required information, if the Company chooses
to continue to apply certain allowable accounting principles, will not
affect any adjustments to reported net income or earnings per share.
Management's Use of Estimates
-----------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Note 2. Discontinued Operations - In May 1995, the Company's Board of Directors
-----------------------
approved a plan of disposal for the SEI Capital Resources Division
("CR") and the SEI Defined Contribution Retirement Services Division
("DC"). CR provides investment performance evaluation services,
consulting services, and brokerage services to employee benefit plan
sponsors and investment advisors in the United States. DC provided
administrative and processing services, recordkeeping services, and
employee retirement planning materials for use by defined contribution
plans. The Company completed the transfer of DC's full service
recordkeeping operations to KPMG Peat Marwick during the first quarter
of 1996. For CR, the expected manner of disposal is the sale of
substantially all of the assets, although the Company has not entered
into any definitive agreements of sale.
CR and DC are being accounted for together as discontinued operations
with a measurement date of May 31, 1995. The accompanying Consolidated
Financial Statements reflect the operating results and balance sheet
items of the discontinued operations separately from continuing
operations. The Company expects that the purchase price of CR may not
be sufficient to avoid a loss in discontinued operations, which could
be material, during the period the sale is completed.
Loss from discontinued operations on the accompanying Consolidated
Statements of Income was:
<TABLE>
<CAPTION>
Five Months
-----------
Ended May 31, 1995
------------------
<S> <C>
Revenues $17,674,000
===========
Loss before income tax benefit $(3,237,000)
Income tax benefit 1,295,000
-----------
Loss $(1,942,000)
===========
</TABLE>
9
<PAGE>
The assets and liabilities of CR and DC have been reclassified on the
accompanying Consolidated Balance Sheets to separately identify them as
net assets or net liabilities of discontinued operations. A summary of
these net assets is as follows:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Current assets $ 4,647,000 $7,709,000
Property and equipment, net 773,000 1,257,000
Other assets 4,451,000 5,581,000
Current liabilities (6,834,000) (11,835,000)
Deferred income taxes (551,000) (421,000)
Loss from discontinued operations for the
period beginning June 1, 1995, net of
income tax benefit of $1,407,000 and
$462,000 7,538,000 3,755,000
---------- ---------
Net assets of discontinued operations $10,024,000 $6,046,000
========== =========
</TABLE>
Note 3. Receivables - Receivables on the accompanying Consolidated Balance
-----------
Sheets consist of the following:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Trade receivables $12,873,000 $14,474,000
Fees earned, not received 5,019,000 2,866,000
Fees earned, not billed 6,782,000 6,302,000
---------- -----------
24,674,000 23,642,000
Less: Allowance for doubtful accounts (1,350,000) (1,206,000)
---------- -----------
$23,324,000 $22,436,000
========== ===========
</TABLE>
Fees earned, not received represents brokerage commissions earned but
not yet collected. Fees earned, not billed represents cash receivables
earned but unbilled and result from timing differences between services
provided and contractual billing schedules.
Receivables from regulated investment companies on the accompanying
Consolidated Balance Sheets represents fees collected from the
Company's wholly owned subsidiaries, SEI Financial Services Company and
SEI Financial Management Corporation, for distribution, investment
advisory, and administration services provided by these subsidiaries to
various regulated investment companies.
Note 4. Loans Receivable Available for Sale - Loans receivable available for
-----------------------------------
sale represents loans which were purchased through the Company's Swiss
subsidiary, SEI Capital AG, which is based in Zurich. The Company
intends to sell these loans within a year from the balance sheet date.
These receivables are reported at the lower of cost or market, and any
difference between the purchase price and the related loan principal
amount is recognized as an adjustment of the yield over the life of the
loan using the effective interest method. Each loan receivable involves
various risks, including, but not limited to, country, interest rate,
credit, and liquidity risk. Management evaluates and monitors these
risks on a continuing basis to ensure that these loan receivables are
recorded at their realizable value. This evaluation is based upon
management's best estimates and the amounts the Company will ultimately
realize could differ from these estimates.
10
<PAGE>
Note 5. Investments Available for Sale - Investments available for sale consist
------------------------------
of mutual funds sponsored by the Company which were primarily invested
in equity securities. The Company accounts for investments pursuant to
Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" ("SFAS 115").
SFAS 115 requires that debt and equity securities classified as
available for sale be reported at market value. Unrealized holding
gains and losses on these investments are reported as a separate
component of Shareholders' equity. Realized gains and losses are
determined by the specific identification method and are reported
separately on the accompanying Consolidated Statements of Income.
At December 31, 1995, Investments available for sale had an aggregate
cost of $5,361,000 and an aggregate market value of $6,205,000 with
gross unrealized gains of $844,000. At that date, the unrealized
holding gains of $502,000 (net of income taxes of $342,000) were
reported as a separate component of Shareholders' equity on the
accompanying Consolidated Balance Sheets. There were no unrealized
losses as of December 31, 1995.
In the second quarter of 1996, the Company sold all of its investments
available for sale. The aggregate cost of these investments just prior
to sale was $5,439,000. Total proceeds from the disposition of these
investments were $6,536,000, resulting in a realized gain of
$1,097,000. This gain is reflected in Gain on sale of investments
available for sale on the accompanying Consolidated Statements of
Income.
Note 6. Debt - The Company has a line of credit agreement (the "Agreement")
----
with its principal lending institution which provides for borrowing of
up to $50,000,000. The Agreement ends on May 31, 1997, at which time
the outstanding principal balance, if any, becomes payable unless the
Agreement is extended. The line of credit, when utilized, accrues
interest at the Prime rate or three-tenths percent above the London
Interbank Offered Rate. The Company is obligated to pay a commitment
fee equal to one-tenth percent per annum on the average daily unused
portion of the commitment. The line of credit is secured by the common
stock of the Company's wholly owned subsidiaries. Certain other
covenants under the Agreement require the Company to maintain specified
levels of net worth, prohibit unsecured borrowings, and place certain
restrictions on investments.
The maximum month-end amount of debt outstanding for the nine months
ended September 30, 1996 and for the year ended December 31, 1995 was
$20,000,000 and $11,000,000, respectively. The weighted average balance
of debt outstanding during 1996 and 1995 was $11,104,000 and
$3,206,000, respectively.
Interest expense for the three and nine months ended September 30, 1996
was $255,000 and $512,000, respectively, based on a weighted average
interest rate of approximately six percent during 1996. Interest
expense for the three and nine months ended September 30, 1995 was
$173,000 based on a weighted average interest rate of approximately 6.6
percent during 1995.
Note 7. Common Stock Buyback - The Board of Directors has authorized the
--------------------
purchase of the Company's common stock on the open market or through
private transactions of up to an aggregate of $175,729,000. Through
September 30, 1996, a total of 13,227,000 shares at an aggregate cost
of $165,368,000 have been purchased and retired. The Company purchased
487,000 shares at a cost of $8,766,000 during the third quarter of
1996.
The Company immediately retires its common stock when purchased. Upon
retirement, the Company reduces Capital in excess of par value for the
average capital per share outstanding and the remainder is charged
against Retained earnings. If the Company reduces its Retained earnings
to zero, any subsequent purchases of common stock will be charged
entirely to Capital in excess of par value.
11
<PAGE>
Note 8. Dividend - On May 21, 1996, the Board of Directors declared a cash
--------
dividend of $.12 per share on the Company's common stock, which was
paid on June 28, 1996 to shareholders of record on June 12, 1996.
The Board of Directors has indicated its intention to pay future
dividends on a semiannual basis.
Note 9. Segment Information - The Company defines its business segments to
-------------------
reflect the Company's focus around two core product lines: Investment
Technology and Services and Asset Management. The Investment Technology
and Services segment consists of the Company's trust technology and
proprietary mutual fund businesses. The Asset Management segment
consists of the Company's liquidity management, asset management, and
mutual fund businesses.
The following tables highlight certain unaudited financial information
from continuing operations about each of the Company's segments for the
three and nine months ended September 30, 1996 and 1995. Prior-period
business segment information has been restated to conform with current-
period presentation.
<TABLE>
<CAPTION>
Investment
Technology and Asset General
Services Management and Admin. Consolidated
-------- ---------- ---------- ------------
For the Three-Month Period Ended September 30, 1996
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $40,076,000 $20,089,000 $60,165,000
========== ========== ==========
Operating profit $11,577,000 $ 1,316,000 $12,893,000
========== ==========
General and administrative expenses $3,918,000 3,918,000
=========
Interest income, net (415,000)
----------
Income before income taxes $ 9,390,000
==========
Depreciation and amortization $ 1,684,000 $ 587,000 $ 49,000 $ 2,320,000
========== ========== ========= ==========
Capital expenditures $ 1,599,000 $ 202,000 $6,722,000 $ 8,523,000
========== ========== ========= ==========
<CAPTION>
For the Three-Month Period Ended September 30, 1995
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $39,638,000 $16,840,000 $56,478,000
========== ========== ==========
Operating profit $11,266,000 $ 1,652,000 $12,918,000
========== ==========
General and administrative expenses $4,298,000 4,298,000
=========
Interest income, net (54,000)
----------
Income before income taxes $ 8,674,000
==========
Depreciation and amortization $ 2,556,000 $ 610,000 $ 79,000 $ 3,245,000
========== ========== ========= ==========
Capital expenditures $ 445,000 $ 1,384,000 $ 527,000 $ 2,356,000
========== ========== ========= ==========
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Investment
Technology and Asset General
Services Management and Admin. Consolidated
-------- ---------- ---------- ------------
For the Nine-Month Period Ended September 30, 1996
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $128,927,000 $56,018,000 $184,945,000
============ =========== ============
Operating profit $ 32,579,000 $ 3,002,000 $ 35,581,000
============ ===========
General and administrative expenses $10,050,000 10,050,000
===========
Gain on sale of investments available
for sale (1,097,000)
Interest income, net (572,000)
------------
Income from continuing operations
before income taxes $ 27,200,000
============
Depreciation and amortization $ 5,825,000 $ 1,718,000 $ 157,000 $ 7,700,000
============ =========== =========== ============
Capital expenditures $ 4,328,000 $ 301,000 $15,282,000 $ 19,911,000
============ =========== =========== ============
For the Nine-Month Period Ended September 30, 1995
--------------------------------------------------------------------
Revenues $115,166,000 $50,548,000 $165,714,000
============ =========== ============
Operating profit $ 32,698,000 $ 5,848,000 $ 38,546,000
============ ===========
General and administrative expenses $12,900,000 12,900,000
===========
Interest income, net (436,000)
------------
Income from continuing operations
before income taxes $ 26,082,000
============
Depreciation and amortization $ 7,158,000 $ 1,736,000 $ 237,000 $ 9,131,000
============ =========== =========== ============
Capital expenditures $ 2,470,000 $ 1,973,000 $ 2,111,000 $ 6,554,000
============ =========== =========== ============
</TABLE>
13
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
- -------------
The Company operates primarily in two business segments: Investment Technology
and Services and Asset Management. Financial information for each of these
segments is reflected in Note 9 of the Notes to Consolidated Financial
Statements.
Results of Operations
- ---------------------
Third Quarter Ended September 30, 1996 Compared to Third Quarter Ended September
30, 1995
The Company's results of operations for the third quarter of 1996 included
revenues of $60,165,000, compared to $56,478,000 for the same period of 1995, an
increase of seven percent from the prior year's corresponding quarter. Net
income for the third quarter of 1996 was $5,906,000, compared to $4,943,000 in
the same period of 1995. Earnings per share for the three months ended
September 30, 1996 was $.31, compared to $.26 in the corresponding period of
1995, an increase of 19 percent. The Company continues to make substantial
investments in the sales and marketing of its core asset management business,
along with additional investments to expand its asset management business
internationally. In addition, the Company continues to invest in trust
technology, primarily in its open architecture system. Fund balances continued
to expand during the third quarter of 1996. Total fund balances at September
30, 1996 were $77.8 billion compared to $58.2 billion at September 30, 1995, an
increase of 34 percent. Included in these totals are proprietary fund balances
of $54.4 billion at September 30, 1996 and $38.7 billion at September 30, 1995,
an increase of 41 percent.
Investment Technology and Services - Revenues from Investment Technology and
- ----------------------------------
Services for the three months ended September 30, 1996 and 1995 were $40,076,000
and $39,638,000, respectively.
<TABLE>
<CAPTION>
INVESTMENT TECHNOLOGY AND SERVICES REVENUES
-------------------------------------------
3RD QTR 3RD QTR DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ -------
<S> <C> <C> <C> <C>
Trust systems and services $26,299,000 $27,131,000 $ (832,000) (3%)
Proprietary fund services 13,777,000 12,507,000 1,270,000 10%
----------- ----------- ----------
Total $40,076,000 $39,638,000 $ 438,000 1%
=========== =========== ==========
</TABLE>
Proprietary fund services revenue increased 10 percent from the prior-year
period due to an increase in average proprietary fund balances over the past
year despite the loss of two proprietary fund complexes in the first quarter of
1996. Proprietary fund services revenue growth in the third quarter of 1996
reflects the Company entering into a new contract with one of its largest non-
bank proprietary clients. This new contract reduces the Company's gross
administration fee received on asset balances which is offset by an equal
reduction in direct proprietary fund marketing expense. As a result, margins
are unaffected. Average proprietary fund balances increased $15.6 billion or 43
percent from $36.4 billion during the third quarter of 1995 to $52.0 billion
during the third quarter of 1996. This increase in proprietary fund balances
was the result of growth in existing fund complexes and the commencement of new
fund complexes during the past year. Trust systems and services revenue
declined slightly from the prior-year period as decreases in trust processing
fees were partially offset by an increase in one-time implementation fees. The
increase in one-time implementation fees was a result of mergers among various
bank clients. Revenues should continue to expand for the remainder of 1996 due
to continued growth in fund balances from proprietary funds. However, future
revenue increases could be partially offset by the loss of bank clients as a
result of continued mergers among banks.
14
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT TECHNOLOGY AND SERVICES EXPENSES
-------------------------------------------
3RD QTR 3RD QTR DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ -------
<S> <C> <C> <C> <C>
Operating and development $21,073,000 $21,230,000 $(157,000) (1%)
Sales and marketing $ 7,426,000 $ 7,142,000 $ 284,000 4%
</TABLE>
Operating and development expense was relatively flat from the prior period as
an increase in consulting expense was offset by a decrease in direct proprietary
fund marketing expense relating to the new contract with one of the Company's
largest non-bank proprietary clients. The increase in consulting expense
reflects the Company's significant investment in its open architecture system
and advanced client service technology. The Company expects investments in its
trust technology to continue for the remainder of 1996 and into 1997. The four
percent increase in sales and marketing expense was due primarily to an increase
in promotion and personnel expenses. Operating profit from Investment
Technology and Services for the three months ended September 30, 1996 was
$11,577,000, an increase of three percent from the $11,266,000 reported in the
corresponding quarter of 1995. Operating margins were 29 percent for the three
months ended September 30, 1996, compared to 28 percent for the same period of
1995.
Asset Management-Revenues from Asset Management for the three months ended
- ----------------
September 30, 1996 and 1995 were $20,089,000 and $16,840,000, respectively.
<TABLE>
<CAPTION>
ASSET MANAGEMENT REVENUES
-------------------------
3RD QTR 3RD QTR DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ -------
<S> <C> <C> <C> <C>
Liquidity services $ 5,191,000 $ 5,678,000 $ (487,000) (9%)
Mutual fund services 6,496,000 4,579,000 1,917,000 42%
Asset management services 3,580,000 3,549,000 31,000 1%
Brokerage and consulting
services 4,822,000 3,034,000 1,788,000 59%
----------- ----------- ----------
Total $20,089,000 $16,840,000 $3,249,000 19%
=========== =========== ==========
</TABLE>
Liquidity services revenue decreased 9 percent from the prior-year period due to
assets being transferred from higher-fee liquidity products to lower-fee
liquidity products. Overall, average fund balances increased in the Company's
liquidity products from the prior year. Mutual fund services revenue increased
42 percent due to an increase in average fund balances from the Company's Family
of Funds over the past year. This increase was partially due to clients
transferring their assets from separate accounts under the Customized Asset
Management Service ("CAMS") product into the Company's own mutual funds in
addition to an increase in basis points earned on these funds. In addition,
assets and fees increased from the Company's asset management business through
registered investment advisors. The 59 percent increase in brokerage and
consulting services revenue is due primarily to an internal reclassification of
bank-related brokerage services.
<TABLE>
<CAPTION>
ASSET MANAGEMENT EXPENSES
-------------------------
3RD QTR 3RD QTR DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ -------
<S> <C> <C> <C> <C>
Operating and development $9,247,000 $7,594,000 $1,653,000 22%
Sales and marketing $9,526,000 $7,594,000 $1,932,000 25%
</TABLE>
15
<PAGE>
Operating and development expense increased 22 percent due to an increase in
direct expenses relating to the increase in brokerage and consulting services
revenues. The 25 percent increase in sales and marketing expense was due
primarily to investments made in expanding the Company's asset management
business internationally. The Asset Management segment recorded an operating
profit of $1,316,000 for the three months ended September 30, 1996 compared to
an operating profit of $1,652,000 in the corresponding period of 1995. The
decline in operating profit is primarily attributable to investments the Company
has made to strengthen its sales and marketing efforts in its core asset
management business, along with additional investments to expand its asset
management business internationally. These investments include personnel,
promotion, and travel expenses to open the Company's distribution channels in
non-U.S. markets. The Company expects these investments to continue for the
remainder of 1996 and into 1997.
Other Income and Expenses - General and administrative expenses for the three
- -------------------------
months ended September 30, 1996 and 1995 were $3,918,000 and $4,298,000,
respectively. General and administrative expenses declined nine percent
primarily due to decreases in personnel expense in corporate overhead areas.
Interest income for the three months ended September 30, 1996 and 1995 was
$415,000 and $54,000, respectively. The majority of interest expense relating
to the borrowings under the short-term line of credit have been capitalized and
recorded in Construction in progress (See Note 1 of the Notes to Consolidated
Financial Statements).
Nine Months Ended September 30, 1996 Compared to Nine Months Ended September 30,
1995
The Company's results of operations for the nine months ended September 30, 1996
included revenues from continuing operations of $184,945,000, compared to
$165,714,000 for the same period of 1995, an increase of 12 percent from the
prior period. Approximately $5.6 million of this increase was due to the
Company's recognition of one-time trust services revenue relating to a
contractual settlement received from a client in the first quarter of 1996.
Income from continuing operations for the first nine months of 1996 was
$16,592,000, compared to $15,388,000 in the same period of 1995. Earnings per
share from continuing operations for the nine months ended September 30, 1996
was $.86, compared to $.79 for the same period of 1995.
Investment Technology and Services - Revenues from Investment Technology and
- ----------------------------------
Services for the nine months ended September 30, 1996 and 1995 were $128,927,000
and $115,166,000, respectively.
<TABLE>
<CAPTION>
INVESTMENT TECHNOLOGY AND SERVICES REVENUES
-------------------------------------------
NINE MONTHS NINE MONTHS DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ -------
<S> <C> <C> <C> <C>
Trust systems and services $ 85,926,000 $ 82,009,000 $ 3,917,000 5%
Proprietary fund services 43,001,000 33,157,000 9,844,000 30%
------------ ------------ -----------
Total $128,927,000 $115,166,000 $13,761,000 12%
============ ============ ===========
</TABLE>
Proprietary fund services revenue increased 30 percent from the prior-year
period due to an increase in average proprietary fund balances over the past
year despite the loss of two proprietary fund complexes in the first quarter of
1996. Average proprietary fund balances increased $15.5 billion or 48 percent
from $32.3 billion during the first nine months of 1995 to $47.8 billion during
the first nine months of 1996. This increase in proprietary fund balances was
the result of growth in existing fund complexes and the commencement of new fund
complexes during the past year. Trust systems revenue increased five percent
from the prior-year period due to a $5.6 million one-time contractual obligation
received from a client in the first quarter of 1996 which more than offset a
decline in trust processing fees. Revenues should continue to expand for the
remainder of 1996 due to continued growth in fund balances from proprietary
funds. However, future revenue increases could be partially offset by the loss
of bank clients as a result of continued mergers among banks.
16
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT TECHNOLOGY AND SERVICES EXPENSES
-------------------------------------------
NINE MONTHS NINE MONTHS DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ ------
<S> <C> <C> <C> <C>
Operating and development $71,796,000 $60,329,000 $11,467,000 19%
Sales and marketing $24,552,000 $22,139,000 $ 2,413,000 11%
</TABLE>
The 19 percent increase in operating and development expense was primarily due
to an increase in consulting and outsourcing expense, along with an increase in
direct expense related to the growth in proprietary fund balances. The increase
in consulting expense reflects the Company's significant investment in its open
architecture system and advanced client service technology. The Company expects
investments in its trust technology to continue for the remainder of 1996 and
into 1997. The increase in outsourcing expense reflects the Company's
commitment to focus on its core competencies. The 11 percent increase in sales
and marketing expense was due primarily to increases in promotion and personnel
expenses. Operating profit from Investment Technology and Services for the nine
months ended September 30, 1996 was $32,579,000 compared to the $32,698,000
reported in the corresponding period of 1995. Operating margins were 25 percent
for the nine months ended September 30, 1996, compared to 28 percent for the
same period of 1995. The decline in operating margins is attributable to the
Company's substantial investment in trust technology and lower margins from its
proprietary mutual fund business.
Asset Management-Revenues from Asset Management for the nine months ended
- ----------------
September 30, 1996 and 1995 were $56,018,000 and $50,548,000, respectively.
<TABLE>
<CAPTION>
ASSET MANAGEMENT REVENUES
-------------------------
NINE MONTHS NINE MONTHS DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ ------
<S> <C> <C> <C> <C>
Liquidity services $15,393,000 $16,673,000 $(1,280,000) (8%)
Mutual fund services 18,191,000 13,769,000 4,422,000 32%
Asset management services 10,407,000 11,230,000 (823,000) (7%)
Brokerage and consulting
services 12,027,000 8,876,000 3,151,000 36%
----------- ----------- -----------
Total $56,018,000 $50,548,000 $ 5,470,000 11%
=========== =========== ===========
</TABLE>
Liquidity services revenue decreased eight percent from the prior-year period
due to assets being transferred from higher-fee liquidity products to lower-fee
liquidity products. Mutual fund services revenue increased 32 percent due to an
increase in average fund balances from the Company's Family of Funds over the
past year. This increase was partially due to clients transferring their assets
from separate accounts under the Customized Asset Management Service ("CAMS")
product into the Company's own mutual funds along with an increase in basis
points earned on these funds. The seven percent decrease in asset management
services revenue is due primarily to a decrease in fund balances from the
Company's International Collective Trust, along with the CAMS transfer of assets
to the Company's Family of Funds. The 36 percent increase in brokerage and
consulting services revenue is due primarily to an internal reclassification of
bank-related brokerage services.
<TABLE>
<CAPTION>
ASSET MANAGEMENT EXPENSES
-------------------------
NINE MONTHS NINE MONTHS DOLLAR PERCENT
1996 1995 CHANGE CHANGE
---- ---- ------ ------
<S> <C> <C> <C> <C>
Operating and development $26,745,000 $24,425,000 $2,320,000 9%
Sales and marketing $26,271,000 $20,275,000 $5,996,000 30%
</TABLE>
17
<PAGE>
Operating and development expense increased nine percent due to an increase in
direct expenses relating to the increase in brokerage and consulting services
revenues. The 30 percent increase in sales and marketing expense was due
primarily to increases in personnel and travel expense, along with significant
investments in expanding the Company's asset management business
internationally. The Asset Management segment recorded an operating profit of
$3,002,000 for the nine months ended September 30, 1996 compared to an operating
profit of $5,848,000 in the corresponding period of 1995. The decline in
operating profit is primarily attributable to investments the Company has made
to strengthen its sales and marketing efforts in its core asset management
business, along with additional investments to expand its asset management
business internationally. These investments include personnel, promotion, and
travel expenses to open the Company's distribution channels in non-U.S. markets.
The Company expects these investments to continue for the remainder of 1996 and
into 1997.
Other Income and Expenses - General and administrative expenses for the nine
- -------------------------
months ended September 30, 1996 and 1995 were $10,050,000 and $12,900,000,
respectively. General and administrative expenses declined 22 percent primarily
due to decreases in personnel expense in corporate overhead areas.
Gain on sale of investments available for sale for the nine months ended
September 30, 1996 was $1,097,000. The realized gain is a result of the
Company's disposition of all of its investments classified as Investments
available for sale at an amount greater than original cost (See Note 5 of the
Notes to Consolidated Financial Statements). There were no realized gains or
losses for the nine months ended September 30, 1995.
Interest income for the nine months ended September 30, 1996 and 1995 was
$572,000 and $436,000, respectively. The majority of interest expense relating
to the borrowings under the short-term line of credit have been capitalized and
recorded in Construction in progress (See Note 1 of the Notes to Consolidated
Financial Statements).
Liquidity and Capital Resources - The Company's ability to generate cash
- -------------------------------
adequate to meet its needs results primarily from cash flow from operations and
its borrowing capacity. The Company has a line of credit agreement which
provides for borrowings of up to $50,000,000. At September 30, 1996, the
Company's sources of liquidity consisted primarily of cash and cash equivalents
of $14,592,000, of which $5,000,000 is appropriated for use by the Company's
Swiss subsidiary, and the unused balance on the line of credit of $31,000,000.
The availability of the line of credit is subject to the Company's compliance
with certain covenants set forth in the agreement.
Cash flow provided by operations for the nine months ended September 30, 1996
was $19,911,000 compared to $12,598,000 for the nine months ended September 30,
1995. The increase in operating cash flow is primarily due to an increase in
accounts receivable collections during the current nine-month period compared to
the corresponding nine-month period of 1995.
Capital expenditures, including capitalized software development costs, for the
nine months ended September 30, 1996 and 1995 were $27,046,000 and $8,407,000,
respectively. The increase in capital expenditures is primarily the result of
expenditures made by the Company for its new corporate campus, along with an
increase in capitalized software development costs. The corporate campus is
expected to be completed in 1996 at a total estimated cost of $31,800,000,
including $4,065,000 for the cost of the land which the Company purchased in
1994. Construction in progress related to the corporate campus was $19,742,000
at September 30, 1996. The Company believes that anticipated long-term
borrowing arrangements will provide adequate funds for all future costs relating
to the construction of, and the move to, this corporate campus. The increase in
capitalized software development costs relates primarily to the Company's
investment in its open architecture and advanced client service technology
projects. Capitalized software development costs relating to these projects are
expected to continue for the remainder of 1996 and into 1997. In the second
quarter of 1996, the Company received $6,536,000 from the sale of all of its
investments classified as Investments available for sale (See Note 5 of the
Notes to Consolidated Financial Statements). The Company has purchased 527,000
shares of its common stock at a cost of $9,635,000 during 1996.
The Company's operating cash flow, borrowing capacity of short and long-term
debt, and liquidity should provide adequate funds for continuing operations,
continued investment in new products and equipment, its common stock repurchase
program, and the completion of its new corporate campus.
18
<PAGE>
PART II. OTHER INFORMATION
- -------- -----------------
Item 6. Exhibits and Reports on Report 8-K
- ------- ----------------------------------
(a) The following is a list of exhibits filed as part of the Form 10-Q.
Exhibit 11. Earnings per share calculations.
Exhibit 27. Financial Data Schedule.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the three-month period
ended September 30, 1996.
19
<PAGE>
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 CORPORATION
Date November 14, 1996 By /s/ HENRY H. GREER
---------------------- ---------------------------
Henry H. Greer
President, Chief Operating
Officer and Chief
Financial Officer
20
<PAGE>
SEI CORPORATION AND SUBSIDIARIES
--------------------------------
EXHIBIT 11-EARNINGS PER SHARE CALCULATION
-----------------------------------------
FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30,
----------------------------------------------
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Earnings per common and common
equivalent share (Primary EPS):
Net income $ 5,906,000 $ 4,943,000
=========== ===========
Weighted average number of
shares issued and outstanding 18,396,000 18,377,000
Dilutive effect (excess of
number of shares issuable over
number of shares assumed to be
repurchased with the proceeds,
using the average market price
during the period) of
outstanding options 717,000 967,000
----------- -----------
Adjusted weighted average number
of shares outstanding 19,113,000 19,344,000
=========== ===========
Earnings per common and common
equivalent share $ .31 $ .26
=========== ===========
</TABLE>
21
<PAGE>
SEI CORPORATION AND SUBSIDIARIES
--------------------------------
EXHIBIT 11-EARNINGS PER SHARE CALCULATION
-----------------------------------------
FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30,
----------------------------------------------
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Earnings per common and common
equivalent share, assuming full dilution
(Fully diluted EPS):
Net income $ 5,906,000 $ 4,943,000
=========== ===========
Weighted average number of
shares issued and outstanding 18,396,000 18,377,000
Dilutive effect (excess of
number of shares issuable over
number of shares assumed to be
repurchased with the proceeds,
using the higher of the average market price
or ending price during the period) of
outstanding options 858,000 970,000
----------- -----------
Adjusted weighted average number
of shares outstanding, assuming full dilution 19,254,000 19,347,000
=========== ===========
Earnings per common and common
equivalent share, assuming full dilution $ .31 $ .26
=========== ===========
</TABLE>
22
<PAGE>
SEI CORPORATION AND SUBSIDIARIES
--------------------------------
EXHIBIT 11-EARNINGS PER SHARE CALCULATION
-----------------------------------------
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30,
---------------------------------------------
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Earnings per common and common
equivalent share (Primary EPS):
Income from continuing operations $16,592,000 $15,388,000
=========== ===========
Net income $16,592,000 $13,446,000
=========== ===========
Weighted average number of
shares issued and outstanding 18,523,000 18,674,000
Dilutive effect (excess of
number of shares issuable over
number of shares assumed to be
repurchased with the proceeds,
using the average market price
during the period) of
outstanding options 852,000 855,000
----------- -----------
Adjusted weighted average number
of shares outstanding 19,375,000 19,529,000
=========== ===========
Earnings per common and common
equivalent share from continuing operations $ .86 $ .79
=========== ===========
Earnings per common and common
equivalent share $ .86 $ .69
=========== ===========
</TABLE>
23
<PAGE>
SEI CORPORATION AND SUBSIDIARIES
--------------------------------
EXHIBIT 11-EARNINGS PER SHARE CALCULATION
-----------------------------------------
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30,
---------------------------------------------
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Earnings per common and common
equivalent share, assuming full dilution
(Fully diluted EPS):
Income from continuing operations $16,592,000 $15,388,000
=========== ===========
Net income $16,592,000 $13,446,000
=========== ===========
Weighted average number of
shares issued and outstanding 18,523,000 18,674,000
Dilutive effect (excess of
number of shares issuable over
number of shares assumed to be
repurchased with the proceeds,
using the higher of the average market price
or ending price during the period) of
outstanding options 942,000 901,000
----------- -----------
Adjusted weighted average number
of shares outstanding, assuming full dilution 19,465,000 19,575,000
=========== ===========
Earnings per common and common
equivalent share from continuing
operations, assuming full dilution $ .85 $ .79
=========== ===========
Earnings per common and common
equivalent share, assuming full dilution $ .85 $ .69
=========== ===========
</TABLE>
24
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 14,592
<SECURITIES> 0
<RECEIVABLES> 24,674
<ALLOWANCES> (1,350)
<INVENTORY> 0
<CURRENT-ASSETS> 63,217
<PP&E> 100,016
<DEPRECIATION> (62,228)
<TOTAL-ASSETS> 132,070
<CURRENT-LIABILITIES> 63,331
<BONDS> 0
0
0
<COMMON> 184
<OTHER-SE> 66,501
<TOTAL-LIABILITY-AND-EQUITY> 132,070
<SALES> 0
<TOTAL-REVENUES> 185,089
<CGS> 0
<TOTAL-COSTS> 149,364
<OTHER-EXPENSES> 8,953
<LOSS-PROVISION> 144
<INTEREST-EXPENSE> (572)
<INCOME-PRETAX> 27,200
<INCOME-TAX> 10,608
<INCOME-CONTINUING> 16,592
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,592
<EPS-PRIMARY> .86
<EPS-DILUTED> .86
</TABLE>
