Houlihan Lokey Reports Second Quarter Fiscal 2022 Financial Results
Houlihan Lokey reported strong financial results for the second quarter of fiscal 2022, achieving revenues of $537 million, a significant increase from $276 million in the same period last year. The diluted EPS stood at $1.65, up from $0.70 the previous year. Adjusted EPS was $1.71, reflecting robust growth. The company announced a dividend of $0.43 per share for the third quarter and increased its share repurchase program to $250 million. Additionally, Corporate Finance revenues surged 259%, while Financial Restructuring revenues decreased 34%.
- Revenues increased by 94% year-over-year to $537 million.
- Diluted EPS rose from $0.70 to $1.65 year-over-year.
- Adjusted EPS increased to $1.71 from $0.75 year-over-year.
- Corporate Finance revenues surged by 259% compared to the previous year.
- Dividend of $0.43 per share announced for Q3 2022.
- Financial Restructuring revenues decreased by 34% year-over-year.
– Second Quarter Fiscal 2022 Revenues of
– Second Quarter Fiscal 2022 Diluted EPS of
– Adjusted Second Quarter Fiscal 2022 Diluted EPS of
– Announces Dividend of
Net income was
“We are beginning our third fiscal quarter with record year-to-date results and the completion of the largest acquisition in the firm’s history. I want to welcome our new colleagues from GCA to the
Selected Financial Data
(In thousands, except per share data) |
|
||||||||||||||||
Three Months Ended |
|
Six Months Ended |
|||||||||||||||
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
|||||||||
Revenues |
$ |
537,272 |
|
|
$ |
275,736 |
|
|
|
$ |
909,994 |
|
|
$ |
486,872 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits |
333,374 |
|
|
177,249 |
|
|
|
565,678 |
|
|
314,370 |
|
|
||||
Non-compensation |
46,579 |
|
|
31,612 |
|
|
|
79,321 |
|
|
63,037 |
|
|
||||
Operating income |
157,319 |
|
|
66,875 |
|
|
|
264,995 |
|
|
109,465 |
|
|
||||
Other (income)/expense, net |
853 |
|
|
(196 |
) |
|
|
752 |
|
|
(1,357 |
) |
|
||||
Income before provision for income taxes |
156,466 |
|
|
67,071 |
|
|
|
264,243 |
|
|
110,822 |
|
|
||||
Provision for income taxes |
43,583 |
|
|
18,281 |
|
|
|
65,400 |
|
|
15,932 |
|
|
||||
Net income attributable to |
$ |
112,883 |
|
|
$ |
48,790 |
|
|
|
$ |
198,843 |
|
|
$ |
94,890 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share |
$ |
1.65 |
|
|
$ |
0.70 |
|
|
|
$ |
2.90 |
|
|
$ |
1.39 |
|
|
Revenues
For the second quarter ended
Expenses
The Company’s employee compensation and benefits expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis.
|
|
|
Adjusted (Non-GAAP) * |
||||||||||||
|
Three Months Ended |
||||||||||||||
($ in thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Expenses: |
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits |
$ |
333,374 |
|
|
$ |
177,249 |
|
|
$ |
330,421 |
|
|
$ |
175,090 |
|
% of Revenues |
62.0 |
% |
|
64.3 |
% |
|
61.5 |
% |
|
63.5 |
% |
||||
Non-compensation |
$ |
46,579 |
|
|
$ |
31,612 |
|
|
$ |
43,327 |
|
|
$ |
28,730 |
|
% of Revenues |
8.7 |
% |
|
11.5 |
% |
|
8.1 |
% |
|
10.4 |
% |
||||
Provision for Income Taxes |
$ |
43,583 |
|
|
$ |
18,281 |
|
|
$ |
45,311 |
|
|
$ |
19,655 |
|
% of Pre-Tax Income |
27.9 |
% |
|
27.3 |
% |
|
27.9 |
% |
|
27.3 |
% |
||||
∗ Adjusted figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
|
|
|
Adjusted (Non-GAAP) * |
||||||||||||
|
Six Months Ended |
||||||||||||||
($ in thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Expenses: |
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits |
$ |
565,678 |
|
|
$ |
314,370 |
|
|
$ |
559,646 |
|
|
$ |
307,050 |
|
% of Revenues |
62.2 |
% |
|
64.6 |
% |
|
61.5 |
% |
|
63.1 |
% |
||||
Non-compensation |
$ |
79,321 |
|
|
$ |
63,037 |
|
|
$ |
75,005 |
|
|
$ |
58,739 |
|
% of Revenues |
8.7 |
% |
|
12.9 |
% |
|
8.2 |
% |
|
12.1 |
% |
||||
Provision for Income Taxes |
$ |
65,400 |
|
|
$ |
15,932 |
|
|
$ |
75,155 |
|
|
$ |
32,376 |
|
% of Pre-Tax Income |
24.7 |
% |
|
14.4 |
% |
|
27.4 |
% |
|
26.4 |
% |
||||
∗ Adjusted figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
Employee compensation and benefits expenses were
Non-compensation expenses were
The provision for income taxes was
Segment Reporting for the Second Fiscal Quarter
Corporate Finance
CF revenues were
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
($ in thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Corporate Finance |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
388,410 |
|
|
$ |
108,049 |
|
|
$ |
598,401 |
|
|
$ |
196,020 |
|
# of Managing Directors |
126 |
|
|
125 |
|
|
126 |
|
|
125 |
|
||||
# of Closed transactions (1) |
134 |
|
|
53 |
|
|
218 |
|
|
88 |
|
||||
Financial Restructuring
FR revenues decreased (34)% to
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
($ in thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Financial Restructuring |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
83,184 |
|
|
$ |
125,391 |
|
|
$ |
181,959 |
|
|
$ |
214,011 |
|
# of Managing Directors |
51 |
|
|
47 |
|
|
51 |
|
|
47 |
|
||||
# of Closed transactions (1) |
20 |
|
|
30 |
|
|
44 |
|
|
59 |
|
||||
Financial and Valuation Advisory
FVA revenues increased
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
($ in thousands) |
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Financial and Valuation Advisory |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
65,678 |
|
|
$ |
42,296 |
|
|
$ |
129,634 |
|
|
$ |
76,841 |
|
# of Managing Directors |
37 |
|
|
31 |
|
|
37 |
|
|
31 |
|
||||
# of Fee Events (1) |
806 |
|
|
539 |
|
|
1,242 |
|
|
798 |
|
||||
-
A Fee Event includes any engagement that involves revenue activity during the measurement period based on a revenue minimum of
one thousand dollars . References in this press release to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in our periodic reports on Forms 10-K and 10-Q.
Balance Sheet and Capital Allocation
The Board of Directors of the Company declared a regular quarterly cash dividend of
The Board of Directors of the Company increased the size of its share repurchase program from
As of
Investor Conference Call and Webcast
The Company will host a conference call and live webcast at
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” and similar expressions that do not relate to historical matters. For a further description of such factors, you should read the Company’s filings with the
Non-GAAP Financial Measures
Adjusted net income, total and on a per share basis, and certain adjusted items used to determine adjusted net income, are presented and discussed in this earnings press release and are non-GAAP measures that management believes, when presented together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results. These adjusted items remove the significant accounting impact of one-time or non-recurring charges associated with the Company’s one-time/non-recurring matters, as set forth in the tables at the end of this release.
The adjusted items included in this earnings press release as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these adjusted amounts are not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative to the Company’s financial information determined under GAAP. For a description of the Company’s use of these adjusted items and a reconciliation with comparable GAAP items, see the section of this press release titled “Reconciliation of GAAP to Adjusted Financial Information.” Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations, and cash flows.
About
For more information, please visit www.HL.com.
Appendix
Condensed Consolidated Balance Sheet (Unaudited)
Condensed Consolidated Statement of Income (Unaudited)
Reconciliation of GAAP to Adjusted Financial Information (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share data and par value) |
|
|
|
||||||
Assets |
|
|
|
||||||
Cash and cash equivalents |
$ |
923,009 |
|
|
|
$ |
846,851 |
|
|
Restricted cash |
373 |
|
|
|
373 |
|
|
||
Investment securities |
40,425 |
|
|
|
208,618 |
|
|
||
Accounts receivable, net of allowance for credit losses |
127,274 |
|
|
|
108,409 |
|
|
||
Unbilled work in process, net of allowance for credit losses |
115,732 |
|
|
|
118,115 |
|
|
||
Deferred income taxes |
36,401 |
|
|
|
28,332 |
|
|
||
Property and equipment, net |
43,295 |
|
|
|
46,370 |
|
|
||
Operating lease right-of-use assets |
143,341 |
|
|
|
152,031 |
|
|
||
|
883,964 |
|
|
|
866,221 |
|
|
||
Other assets |
43,015 |
|
|
|
50,747 |
|
|
||
Total assets |
$ |
2,356,829 |
|
|
|
$ |
2,426,067 |
|
|
|
|
|
|
||||||
Liabilities and Stockholders' Equity |
|
|
|
||||||
Liabilities: |
|
|
|
||||||
Accrued salaries and bonuses |
$ |
577,698 |
|
|
|
$ |
648,399 |
|
|
Accounts payable and accrued expenses |
60,273 |
|
|
|
67,468 |
|
|
||
Deferred income |
26,923 |
|
|
|
27,868 |
|
|
||
Income taxes payable |
24,540 |
|
|
|
68,339 |
|
|
||
Deferred income taxes |
45 |
|
|
|
52 |
|
|
||
Loans payable to former shareholders |
711 |
|
|
|
818 |
|
|
||
Operating lease liabilities |
164,209 |
|
|
|
174,516 |
|
|
||
Other liabilities |
64,693 |
|
|
|
55,046 |
|
|
||
Total liabilities |
919,092 |
|
|
|
1,042,506 |
|
|
||
|
|
|
|
||||||
Stockholders' equity: |
|
|
|
||||||
Class A common stock, |
51 |
|
|
|
51 |
|
|
||
Class B common stock, |
17 |
|
|
|
17 |
|
|
||
Additional paid-in capital |
720,579 |
|
|
|
803,573 |
|
|
||
Retained earnings |
741,678 |
|
|
|
600,096 |
|
|
||
Accumulated other comprehensive (loss) |
(24,588 |
) |
|
|
(20,176 |
) |
|
||
Total stockholders' equity |
1,437,737 |
|
|
|
1,383,561 |
|
|
||
Total liabilities and stockholders' equity |
$ |
2,356,829 |
|
|
|
$ |
2,426,067 |
|
|
|
|
|
|
||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
(In thousands, except share and per share data) |
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
||||||||
Revenues |
$ |
537,272 |
|
|
$ |
275,736 |
|
|
|
$ |
909,994 |
|
|
$ |
486,872 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits |
333,374 |
|
|
177,249 |
|
|
|
565,678 |
|
|
314,370 |
|
|
||||
Travel, meals, and entertainment |
4,687 |
|
|
964 |
|
|
|
6,374 |
|
|
3,078 |
|
|
||||
Rent |
9,050 |
|
|
10,301 |
|
|
|
19,275 |
|
|
19,924 |
|
|
||||
Depreciation and amortization |
4,344 |
|
|
3,670 |
|
|
|
8,515 |
|
|
7,342 |
|
|
||||
Information technology and communications |
8,858 |
|
|
6,868 |
|
|
|
15,819 |
|
|
13,251 |
|
|
||||
Professional fees |
6,915 |
|
|
5,227 |
|
|
|
13,616 |
|
|
10,234 |
|
|
||||
Other operating expenses |
12,725 |
|
|
4,582 |
|
|
|
15,722 |
|
|
9,208 |
|
|
||||
Total operating expenses |
379,953 |
|
|
208,861 |
|
|
|
644,999 |
|
|
377,407 |
|
|
||||
Operating income |
157,319 |
|
|
66,875 |
|
|
|
264,995 |
|
|
109,465 |
|
|
||||
Other (income)/expense, net |
853 |
|
|
(196 |
) |
|
|
752 |
|
|
(1,357 |
) |
|
||||
Income before provision for income taxes |
156,466 |
|
|
67,071 |
|
|
|
264,243 |
|
|
110,822 |
|
|
||||
Provision for income taxes |
43,583 |
|
|
18,281 |
|
|
|
65,400 |
|
|
15,932 |
|
|
||||
Net income attributable to |
$ |
112,883 |
|
|
$ |
48,790 |
|
|
|
$ |
198,843 |
|
|
$ |
94,890 |
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares of common stock outstanding: |
|
|
|
|
|
|
|
||||||||||
Basic |
65,156,968 |
|
|
66,787,832 |
|
|
|
65,433,649 |
|
|
65,244,611 |
|
|
||||
Fully diluted |
68,566,127 |
|
|
69,615,060 |
|
|
|
68,641,962 |
|
|
68,214,505 |
|
|
||||
Earnings per share |
|
|
|
|
|
|
|
||||||||||
Basic |
$ |
1.73 |
|
|
$ |
0.73 |
|
|
|
$ |
3.04 |
|
|
$ |
1.45 |
|
|
Fully diluted |
$ |
1.65 |
|
|
$ |
0.70 |
|
|
|
$ |
2.90 |
|
|
$ |
1.39 |
|
|
RECONCILIATION OF GAAP TO ADJUSTED FINANCIAL INFORMATION
(UNAUDITED)
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
(In thousands, except per share data) |
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
||||||||
Revenues |
$ |
537,272 |
|
|
|
$ |
275,736 |
|
|
|
$ |
909,994 |
|
|
|
$ |
486,872 |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Employee compensation and benefits expenses |
|
|
|
|
|
|
|
||||||||||||
Employee compensation and benefits expenses (GAAP) |
$ |
333,374 |
|
|
|
$ |
177,249 |
|
|
|
$ |
565,678 |
|
|
|
$ |
314,370 |
|
|
(Less)/plus: Acquisition related retention payments |
(2,953 |
) |
|
|
(2,159 |
) |
|
|
(6,032 |
) |
|
|
(7,320 |
) |
|
||||
Employee compensation and benefits expenses (adjusted) |
330,421 |
|
|
|
175,090 |
|
|
|
559,646 |
|
|
|
307,050 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Non-compensation expenses |
|
|
|
|
|
|
|
||||||||||||
Non-compensation expenses (GAAP) |
$ |
46,579 |
|
|
|
$ |
31,612 |
|
|
|
$ |
79,321 |
|
|
|
$ |
63,037 |
|
|
(Less)/plus: Secondary offering related costs |
— |
|
|
|
— |
|
|
|
— |
|
|
|
(418 |
) |
|
||||
(Less)/plus: Acquisition related costs |
(1,640 |
) |
|
|
(1,258 |
) |
|
|
(1,640 |
) |
|
|
(1,258 |
) |
|
||||
(Less)/plus: Acquisition amortization |
(1,612 |
) |
|
|
(888 |
) |
|
|
(2,676 |
) |
|
|
(1,886 |
) |
|
||||
(Less)/plus: Oracle ERP implementation |
— |
|
|
|
(736 |
) |
|
|
— |
|
|
|
(736 |
) |
|
||||
Non-compensation expenses (adjusted) |
43,327 |
|
|
|
28,730 |
|
|
|
75,005 |
|
|
|
58,739 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Operating income |
|
|
|
|
|
|
|
||||||||||||
Operating income (GAAP) |
$ |
157,319 |
|
|
|
$ |
66,875 |
|
|
|
$ |
264,995 |
|
|
|
$ |
109,465 |
|
|
(Less)/plus: Adjustments (1) |
6,205 |
|
|
|
5,041 |
|
|
|
10,348 |
|
|
|
11,618 |
|
|
||||
Operating income (adjusted) |
163,524 |
|
|
|
71,916 |
|
|
|
275,343 |
|
|
|
121,083 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Other (income)/expense, net |
|
|
|
|
|
|
|
||||||||||||
Other (income)/expense, net (GAAP) |
$ |
853 |
|
|
|
$ |
(196 |
) |
|
|
$ |
752 |
|
|
|
$ |
(1,357 |
) |
|
Other (income)/expense, net (adjusted) |
853 |
|
|
|
(196 |
) |
|
|
752 |
|
|
|
(1,357 |
) |
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Provision/(benefit) for income taxes |
|
|
|
|
|
|
|
||||||||||||
Provision/(benefit) for income taxes (GAAP) |
$ |
43,583 |
|
|
|
$ |
18,281 |
|
|
|
$ |
65,400 |
|
|
|
$ |
15,932 |
|
|
(Less)/plus: Impact of the excess tax benefit for stock vesting |
— |
|
|
|
— |
|
|
|
6,922 |
|
|
|
13,408 |
|
|
||||
Adjusted provision/(benefit) for income taxes |
43,583 |
|
|
|
18,281 |
|
|
|
72,322 |
|
|
|
29,340 |
|
|
||||
(Less)/plus: Resulting tax impact (2) |
1,728 |
|
|
|
1,374 |
|
|
|
2,833 |
|
|
|
3,036 |
|
|
||||
Provision/(benefit) for income taxes (adjusted) |
45,311 |
|
|
|
19,655 |
|
|
|
75,155 |
|
|
|
32,376 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Net income |
|
|
|
|
|
|
|
||||||||||||
Net income (GAAP) |
$ |
112,883 |
|
|
|
$ |
48,790 |
|
|
|
$ |
198,843 |
|
|
|
$ |
94,890 |
|
|
(Less)/plus: adjustments (3) |
4,477 |
|
|
|
3,667 |
|
|
|
593 |
|
|
|
(4,826 |
) |
|
||||
Net income (adjusted) |
117,360 |
|
|
|
52,457 |
|
|
|
199,436 |
|
|
|
90,064 |
|
|
||||
|
|
|
|
|
|
|
|
||||||||||||
Diluted EPS (GAAP) |
$ |
1.65 |
|
|
|
$ |
0.70 |
|
|
|
$ |
2.90 |
|
|
|
$ |
1.39 |
|
|
Diluted EPS (adjusted) |
$ |
1.71 |
|
|
|
$ |
0.75 |
|
|
|
$ |
2.91 |
|
|
|
$ |
1.32 |
|
|
- The aggregate of adjustments from employee compensation and benefits and non-compensation expenses.
- Reflects the tax impact of utilizing the adjusted effective tax rate on the non-tax adjustments identified above.
- Consists of all adjustments identified above net of the associated tax impact.
View source version on businesswire.com: https://www.businesswire.com/news/home/20211028006080/en/
Investor Relations
212.331.8225
IR@HL.com
OR
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212.331.8223
PR@HL.com
Source:
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