Houlihan Lokey Reports Fiscal Year and Fourth Quarter 2016 Financial Results
– Fiscal Year 2016 Record Revenue of $694 Million, up 2% Year-Over-Year –
– GAAP Fiscal Year 2016 Diluted EPS of $1.10 and
Adjusted Fiscal Year 2016 Diluted EPS of $1.46 –
– Fourth Quarter Revenue of $184 Million –
– GAAP Fourth Quarter Diluted EPS of $0.35 and
Adjusted Fourth Quarter Diluted EPS of $0.43 –
– Increased Dividend by 13% to $0.17 per-Share for the First Quarter of Fiscal Year 2017 –
LOS ANGELES and NEW YORK - May 18, 2016 - Houlihan Lokey, Inc. (NYSE: HLI) (“Houlihan Lokey” or the “Company”) today reported financial results for its fiscal year and fourth quarter ended March 31, 2016. For the fiscal year ended March 31, 2016, total revenue was a record $694 million, an increase of 2% as compared with $681 million for the fiscal year ended March 31, 2015. Total revenue for the fourth quarter was $184 million as compared with $186 million for the fourth quarter of last year.
On a GAAP basis, net income was $70 million, or $1.10 per diluted share, for fiscal year 2016, compared with $80 million, or $1.33 per diluted share, in the prior year. GAAP net income was $23 million, or $0.35 per diluted share, for the quarter ended March 31, 2016, compared with $25 million, or $0.41 per diluted share, in the fourth quarter of the prior year.
Adjusted net income increased 15% to $93 million, or $1.46 per diluted share, for fiscal year 2016, compared with $81 million, or $1.35 per diluted share, in the prior year. Adjusted net income for the fourth quarter increased 12% to $28 million, or $0.43 per diluted share, compared with $25 million, or $0.41 per diluted share, in the prior year period.
“Fiscal 2016 was another record year at Houlihan Lokey with all three of our product lines contributing solid results. As a result of a record number of mandates in corporate finance, a more attractive financial restructuring market relative to prior years and a meaningful expansion of our financial staff, we remain confident that we are well positioned to grow our business and deliver enhanced results in our ongoing efforts to build shareholder value,” stated Scott Beiser, Chief Executive Officer of Houlihan Lokey.
GAAP and Adjusted Selected Financial Data
(Unaudited and in thousands, except share and per-share data)
|
| | | | | | | | | | | | | | | |
| | U.S. GAAP | | Adjusted |
| Twelve Months Ended March 31, |
| 2016 | | 2015 | | 2016 | | 2015 |
| Fee revenue | $ | 693,765 |
| | $ | 680,872 |
| | $693,765 | | $680,872 |
| Operating expenses: | | | | | | | |
| Employee compensation and benefits | 461,609 |
| | 475,100 |
| | 447,109 |
| | 474,344 |
|
| Non-compensation expenses | 105,756 |
| | 77,118 |
| | 89,330 |
| | 76,612 |
|
| Total operating expenses | 567,365 |
| | 552,218 |
| | 536,439 |
| | 550,956 |
|
| Operating income | 126,400 |
| | 128,654 |
| | 157,326 |
| | 129,916 |
|
| Other income (expense), net | (770 | ) | | 3,481 |
| | (488 | ) | | 3,342 |
|
| Income before provision for income taxes | 125,630 |
| | 132,135 |
| | 156,838 |
| | 133,258 |
|
| Provision for income taxes | 55,863 |
| | 52,196 |
| | 64,012 |
| | 52,293 |
|
| Net income | 69,767 |
| | 79,939 |
| | 92,826 |
| | 80,965 |
|
| Net income (loss) attributable to noncontrolling interest | (26 | ) | | (58 | ) | | — |
| | — |
|
| Net income attributable to Houlihan Lokey, Inc. | $ | 69,741 |
| | $ | 79,881 |
| | $92,826 | | $80,965 |
| | | | | | | | |
| Diluted Net income per share of common stock | $ | 1.10 |
| | $ | 1.33 |
| | $ | 1.46 |
| | $ | 1.35 |
|
|
| | | | | | | | | | | | | | | |
| | U.S. GAAP | | Adjusted |
| Three Months Ended March 31, |
| 2016 | | 2015 | | 2016 | | 2015 |
| Fee revenue | $ | 183,596 |
| | $ | 186,468 |
| | $183,596 | | $186,468 |
| Operating expenses: | | | | | | | |
| Employee compensation and benefits | 120,683 |
| | 128,540 |
| | 114,663 |
| | 128,540 |
|
| Non-compensation expenses | 21,416 |
| | 17,323 |
| | 21,416 |
| | 17,323 |
|
| Total operating expenses | 142,099 |
| | 145,863 |
| | 136,079 |
| | 145,863 |
|
| Operating income | 41,497 |
| | 40,605 |
| | 47,517 |
| | 40,605 |
|
| Other income (expense), net | (664 | ) | | 366 |
| | (664 | ) | | 366 |
|
| Income before provision for income taxes | 40,833 |
| | 40,971 |
| | 46,853 |
| | 40,971 |
|
| Provision for income taxes | 18,053 |
| | 16,186 |
| | 19,069 |
| | 16,186 |
|
| Net income | 22,780 |
| | 24,785 |
| | 27,784 |
| | 24,785 |
|
| Net income (loss) attributable to noncontrolling interest | — |
| | (13 | ) | | — |
| | — |
|
| Net income attributable to Houlihan Lokey, Inc. | $ | 22,780 |
| | $ | 24,772 |
| | $ | 27,784 |
| | $ | 24,785 |
|
| | | | | | | | |
| Diluted Net income per share of common stock | $ | 0.35 |
| | $ | 0.41 |
| | $ | 0.43 |
| | $ | 0.41 |
|
Note: The adjusted columns 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.
Revenues
For fiscal year 2016, total fee revenue was $694 million, 2% higher than the total fee revenue for fiscal year 2015. For fiscal year 2016, Corporate Finance (“CF”) revenues increased 1%, Financial Restructuring (“FR”) revenues declined (3%), and Financial Advisory Services (“FAS”) revenues increased 14% when compared with fiscal year 2015.
For the fourth quarter ended March 31, 2016, total fee revenue was $184 million compared to $186 million in the fourth quarter of fiscal year 2015. For the quarter, CF revenues declined (11%), FR revenues increased 10%, and FAS revenues increased 3% when compared with the fourth quarter ended March 31, 2015.
Expenses
Our employee compensation and benefits during the periods presented and discussed below are on an adjusted and an adjusted awarded basis, and our non-compensation expenses are also on an adjusted basis. 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.
(Unaudited and in thousands)
|
| | | | | | | | | | | | | | | |
| | U.S. GAAP | | Adjusted |
| | Twelve Months Ended March 31, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Expenses: | | | | | | | |
| Employee compensation and benefits | $ | 461,609 |
| | $ | 475,100 |
| | $ | 447,109 |
| | $ | 474,344 |
|
| % of Revenues | 66.5 | % | | 69.8 | % | | 64.4 | % | | 69.7 | % |
| Non-compensation expenses | $ | 105,756 |
| | $ | 77,118 |
| | $ | 89,330 |
| | $ | 76,612 |
|
| % of Revenues | 15.2 | % | | 11.3 | % | | 12.9 | % | | 11.3 | % |
| Total operating expenses | $ | 567,365 |
| | $ | 552,218 |
| | $ | 536,439 |
| | $ | 550,956 |
|
| % of Revenues | 81.8 | % | | 81.1 | % | | 77.3 | % | | 80.9 | % |
| | | | | | | | |
| | | | | | | | |
| Adjusted awarded employee compensation and benefits | | | | | $ | 464,366 |
| | $ | 481,482 |
|
| % of Revenues | | | | | 66.9 | % | | 70.7 | % |
|
| | | | | | | | | | | | | | | |
| | U.S. GAAP | | Adjusted |
| | Three Months Ended March 31, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Expenses: | | | | | | | |
| Employee compensation and benefits | $ | 120,683 |
| | $ | 128,540 |
| | $ | 114,663 |
| | $ | 128,540 |
|
| % of Revenues | 65.7 | % | | 68.9 | % | | 62.5 | % | | 68.9 | % |
| Non-compensation expenses | $ | 21,416 |
| | $ | 17,323 |
| | $ | 21,416 |
| | $ | 17,323 |
|
| % of Revenues | 11.7 | % | | 9.3 | % | | 11.7 | % | | 9.3 | % |
| Total operating expenses | $ | 142,099 |
| | $ | 145,863 |
| | $ | 136,079 |
| | $ | 145,863 |
|
| % of Revenues | 77.4 | % | | 78.2 | % | | 74.1 | % | | 78.2 | % |
| | | | | | | | |
| | | | | | | | |
| Adjusted awarded employee compensation and benefits | | | | | $ | 120,494 |
| | $ | 134,293 |
|
| % of Revenues | | | | | 65.6 | % | | 72.0 | % |
Total adjusted operating expenses improved to $536 million for fiscal year 2016, compared with $551 million for fiscal year 2015. Adjusted employee compensation and benefits expenses decreased (6%) to $447 million for fiscal year 2016, as compared with $474 million for fiscal year 2015. The reduction in adjusted employee compensation and benefits expenses was due to our change on October 1, 2015 from a revenue sharing model that historically approximated an awarded compensation ratio of between 67% and 71% to a target adjusted awarded compensation ratio of between 65% and 66%. This resulted in an adjusted awarded compensation ratio of 67% for fiscal year 2016, versus 71% for fiscal year 2015.
Adjusted non-compensation expenses were $89 million for fiscal year 2016, compared with $77 million for fiscal year 2015. The increase in adjusted non-compensation expenses was primarily a result of (i) planned increases in non-compensation expenses as a result of being a public company, and (ii) increases in general operating expenses associated with the significant expansion of the Company’s financial staff.
Total adjusted operating expenses were $136 million for the fourth quarter of fiscal year 2016, a decrease of (7%) when compared with $146 million in adjusted operating expenses for the fourth quarter of fiscal year 2015. Adjusted employee compensation and benefits expenses were $115 million for the fourth quarter fiscal year 2016, compared with $129 million for the same three-month period a year ago. The decrease in adjusted employee compensation and benefits expenses was primarily the result of our change on October 1st from a revenue sharing model to a target adjusted awarded compensation ratio. This resulted in an adjusted awarded compensation ratio of 66% for the fourth quarter of fiscal year 2016, versus 72% for the fourth quarter last year.
Non-compensation expenses were $21 million in the fourth quarter of fiscal year 2016, compared with $17 million in the prior year period. The increase in non-compensation expenses was primarily a result of (i) planned increases in non-compensation expenses as a result of being a public company, and (ii) increases in general operating expenses associated with the significant expansion of the Company’s financial staff.
Segment Reporting for the Fourth Quarter
For the fourth quarter ended March 31, 2016, Corporate Finance revenue was $79 million as compared with $89 million during the same period last year. Revenues were impacted quarter-over-quarter primarily as a result of a reduction in the number of closed transactions given challenging market conditions in the first half of the quarter. CF closed 40 transactions in the fourth quarter, versus 49 transactions in the same quarter last year. Segment profit equaled $24 million for the three months ended March 31, 2016, compared with $34 million for the three months ended March 31, 2015. Profitability was affected due to the corresponding decrease in revenues and higher non-compensation expenses for the quarter, which was partially offset by our change on October 1st to a target adjusted awarded compensation ratio of between 65% and 66%, as described above.
(Unaudited and in $ thousands) |
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | Twelve Months Ended March 31, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Corporate Finance | | | | | | | |
| Revenues | $ | 79,329 |
| | $ | 89,352 |
| | $ | 371,790 |
| | $ | 367,632 |
|
| Segment Profit¹ | 24,292 |
| | 33,611 |
| | 103,447 |
| | 101,266 |
|
| # of MDs | 89 |
| | 65 |
| | 89 |
| | 65 |
|
| # of Closed Transactions | 40 |
| | 49 |
| | 162 |
| | 164 |
|
For the fourth quarter ended March 31, 2016, Financial Restructuring revenue was $72 million, compared with $66 million during the prior year period. The growth in revenues was primarily driven by a higher number of transaction closings. FR closed 23 transactions in the fourth quarter versus 18 transactions in the same quarter last year. Segment profit was $20 million for the three months ended March 31, 2016, compared with $12 million for the three months ended March 31, 2015. The increase in profitability was a result of (i) the corresponding increase in revenues, and (ii) our change on October 1st to a target adjusted awarded compensation ratio of between 65% and 66%, as described above.
(Unaudited and in $ thousands) |
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | Twelve Months Ended March 31, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Financial Restructuring | | | | | | | |
| Revenues | $ | 72,204 |
| | $ | 65,851 |
| | $ | 202,343 |
| | $ | 207,909 |
|
| Segment Profit¹ | 20,482 |
| | 12,033 |
| | 54,950 |
| | 52,246 |
|
| # of MDs | 42 |
| | 40 |
| | 42 |
| | 40 |
|
| # of Closed Transactions | 23 |
| | 18 |
| | 58 |
| | 62 |
|
For the fourth quarter ended March 31, 2016, Financial Advisory Services revenue was $32 million, compared with $31 million in the prior year period. Strong quarter revenues for FAS reflect (i) continued strong performance for transaction based products despite weakness in the overall M&A markets, and (ii) continued strength in non-transaction based products. Segment profit equaled $10 million for the three months ended March 31, 2016, compared with $8 million for the three months ended March 31, 2015. The increase in profitability was a result of (i) the corresponding increase in revenues, and (ii) our change on October 1st to a target adjusted awarded compensation ratio of between 65% and 66%, as described above. FAS generated 538 fee events in the fourth quarter, versus 532 fee events during the same quarter last year.
(Unaudited and in $ thousands) |
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | Twelve Months Ended March 31, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Financial Advisory Services | | | | | | | |
| Revenues | $ | 32,063 |
| | $ | 31,265 |
| | $ | 119,632 |
| | $ | 105,331 |
|
| Segment Profit¹ | 9,528 |
| | 8,159 |
| | 30,313 |
| | 24,344 |
|
| # of MDs | 34 |
| | 32 |
| | 34 |
| | 32 |
|
# of Fee Events² | 538 |
| | 532 |
| | 1,179 |
| | 1,046 |
|
| |
| 1. | We adjust the compensation expense for a business segment in situations where an employee assigned to one business segment is performing work in another business segment and we want to adequately reflect the compensation expense in the business segment where the revenue is being booked. |
| |
| 2. | A Fee Event includes any engagement that involves revenue activity during the measurement period. |
Balance Sheet and Capital Allocation
The Board of Directors of the Company declared a regular quarterly cash dividend of $0.17 per-share of Class A and Class B common stock. The dividend will be payable on June 15, 2016 to stockholders of record as of the close of business on June 3, 2016.
As of March 31, 2016, the Company had $194 million of cash and equivalents (including our receivable from affiliates), and loans payable and a seller note relating to the Leonardo acquisition aggregating $77 million, resulting in net cash (cash and cash equivalents net of loans payable and seller note) of $117 million.
Investor Conference Call and Webcast
The Company will host a conference call and live webcast at 5:00 p.m. Eastern Daylight Time on Wednesday, May 18, 2016, to discuss its 2016 fiscal year and fourth quarter results. The number to call is 1-877-548-7901 (domestic) or 1-719-325-4750 (international). A live webcast will be available in the Investor Relations section of the Company’s website. A replay of the conference call will be available on May 18, 2016 through May 25, 2016, by dialing 1-877-870-5176 (domestic) or 1-858-384-5517 (international) and entering the passcode 8721447#. A replay of the webcast will be archived and available on the Company’s website.
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. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company’s control and could materially affect actual results, performance, or achievements. For a further description of such factors, you should read the Company’s filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures
Adjusted net income, total and on a per-share basis, and adjusted operating expenses 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. Adjusted net income and adjusted operating expenses remove the significant accounting impact of one-time charges associated with the Company’s IPO and other matters, as set forth in the tables at the end of this release.
Adjusted net income and adjusted operating expenses as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, adjusted net income is 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 adjusted net income and a reconciliation with net income, as well as a reconciliation of the specific line items in adjusted operating expenses, 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 Houlihan Lokey
Houlihan Lokey (NYSE: HLI) is a global investment bank with expertise in mergers and acquisitions, capital markets, valuation, financial restructuring, and strategic consulting. The firm serves corporations, institutions, and governments worldwide with offices in the United States, Europe, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of our commitment to client success across our advisory services. Houlihan Lokey is ranked as the No. 1 M&A advisor for all U.S. transactions, the No. 1 global M&A fairness opinion advisor over the past 15 years, and the No. 1 global restructuring advisor, according to Thomson Reuters. For more information, please visit www.HL.com.
Contact Information:
|
| | |
Investor Relations: 212-331-8225 IR@HL.com | OR | Public Relations: 212-331-8223 PR@HL.com |
Appendix
Consolidated Balance Sheet (Unaudited)
Consolidated Statement of Income (Unaudited)
Reconciliation of GAAP to Adjusted Financial Information (Unaudited)
Houlihan Lokey, Inc.
Consolidated Balance Sheet
(Unaudited and in thousands)
|
| | | | | | | |
| | March 31, 2016 | | March 31, 2015 |
| | (unaudited) | | |
| Assets | | | |
| Cash and cash equivalents | $ | 166,169 |
| | $ | 88,662 |
|
| Accounts receivable, net of allowance for doubtful accounts | 58,100 |
| | 57,488 |
|
| Unbilled work in process | 51,300 |
| | 42,547 |
|
| Income taxes receivable | 7,204 |
| | — |
|
| Investments in unconsolidated entities | — |
| | 12,666 |
|
| Receivable from affiliates | 27,408 |
| | 327,921 |
|
| Property and equipment—at cost, net of accumulated depreciation | 21,701 |
| | 16,489 |
|
| Goodwill and other intangibles | 717,368 |
| | 652,806 |
|
| Other assets | 21,634 |
| | 31,269 |
|
| Total assets | $ | 1,070,884 |
| | $ | 1,229,848 |
|
| Liabilities and Stockholders' Equity | | | |
| Liabilities: | | | |
| Accrued salaries and bonuses | $ | 254,058 |
| | $ | 301,285 |
|
| Accounts payable and accrued expenses | 34,400 |
| | 37,190 |
|
| Deferred income | 5,547 |
| | 3,064 |
|
| Income taxes payable | — |
| | 9,760 |
|
| Deferred income taxes | 37,288 |
| | 41,453 |
|
| Loan payable to affiliate | 45,000 |
| | — |
|
| Loans payable to former shareholders | 16,738 |
| | — |
|
| Loan payable to non-affiliate | 14,882 |
| | — |
|
| Other liabilities | 9,416 |
| | 11,208 |
|
| Total liabilities | 417,329 |
| | 403,960 |
|
| Redeemable noncontrolling interest | 2,395 |
| | 1,382 |
|
| Commitments and contingencies | | | |
| Stockholders' equity: | | | |
Common stock, $0.10 par value.
Authorized 2,500,000 shares; issued and outstanding 587,866 shares | — |
| | 59 |
|
Class A common stock, $0.001 par value.
Authorized 1,000,000,000 shares; issued and outstanding 12,084,524 shares | 12 |
| | — |
|
Class B common stock, $0.001 par value.
Authorized 1,000,000,000 shares; issued and outstanding 53,239,440 shares | 53 |
| | — |
|
| Additional paid-in capital | 637,332 |
| | 670,182 |
|
| Retained earnings | 28,623 |
| | 170,929 |
|
| Accumulated other comprehensive loss | (14,613 | ) | | (11,338 | ) |
| Stock subscription receivable | (247 | ) | | (7,135 | ) |
| Total equity attributable to Houlihan Lokey, Inc. | 651,160 |
| | 822,697 |
|
| | | | |
| Noncontrolling interest | — |
| | 1,809 |
|
| Total stockholders' equity | 651,160 |
| | 824,506 |
|
| Total liabilities and stockholders' equity | $ | 1,070,884 |
| | $ | 1,229,848 |
|
Houlihan Lokey, Inc.
Consolidated Statement of Income
(Unaudited and in thousands, except share and per-share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | Twelve Months Ended March 31, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Fee revenue | $ | 183,596 |
| | $ | 186,468 |
| | $ | 693,765 |
| | $ | 680,872 |
|
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Employee compensation and benefits | 120,683 |
| | 128,540 |
| | 461,609 |
| | 475,100 |
|
| Travel, meals, and entertainment | 4,058 |
| | 4,516 |
| | 20,955 |
| | 17,928 |
|
| Rent | 7,086 |
| | 5,748 |
| | 26,459 |
| | 24,253 |
|
| Depreciation and amortization | 2,433 |
| | 1,322 |
| | 7,499 |
| | 5,508 |
|
| Information technology and communications | 4,487 |
| | 3,859 |
| | 16,017 |
| | 14,013 |
|
| Professional fees | 1,899 |
| | 2,167 |
| | 20,687 |
| | 5,563 |
|
| Other operating expenses | 1,168 |
| | 663 |
| | 11,601 |
| | 7,826 |
|
| Provision (recovery) for bad debts | 285 |
| | (952 | ) | | 2,538 |
| | 2,027 |
|
| Total operating expenses | 142,099 |
| | 145,863 |
| | 567,365 |
| | 552,218 |
|
| | | | | | | | |
| Operating income | 41,497 |
| | 40,605 |
| | 126,400 |
| | 128,654 |
|
| | | | | | | | |
| Other income (expense), net | (664 | ) | | 366 |
| | (770 | ) | | 3,481 |
|
| Income before provision for income taxes | 40,833 |
| | 40,971 |
| | 125,630 |
| | 132,135 |
|
| | | | | | | | |
| Provision for income taxes | 18,053 |
| | 16,186 |
| | 55,863 |
| | 52,196 |
|
| Net income | 22,780 |
| | 24,785 |
| | 69,767 |
| | 79,939 |
|
| | | | | | | | |
| Net income attributable to noncontrolling interests | — |
| | (13 | ) | | (26 | ) | | (58 | ) |
| Net income attributable to Houlihan Lokey, Inc. | $ | 22,780 |
| | $ | 24,772 |
| | $ | 69,741 |
| | $ | 79,881 |
|
| | | | | | | | |
| Attributable to Houlihan Lokey, Inc. common stockholders: |
| Weighted average shares of common stock outstanding: | | | | | | | |
| Basic | 59,347,798 |
| | 57,377,035 |
| | 59,044,981 |
| | 57,134,305 |
|
| Fully Diluted | 65,323,743 |
| | 60,310,079 |
| | 63,475,903 |
| | 60,135,375 |
|
| Net income per share of common stock | | | | | | | |
| Basic | $ | 0.38 |
| | $ | 0.43 |
| | $ | 1.18 |
| | $ | 1.40 |
|
| Fully Diluted | $ | 0.35 |
| | $ | 0.41 |
| | $ | 1.10 |
| | $ | 1.33 |
|
Houlihan Lokey, Inc.
Reconciliation of GAAP to Adjusted Financial Information
(Unaudited and in thousands, except share and per share data)
|
| | | | | | | | | | | | | | | | |
| | Three months ended March 31, 2016 |
| | GAAP | | Adj. | | Adjusted | | Adj. | | Adj. Awarded |
| Fee revenue | $ | 183,596 |
| | — |
| | $ | 183,596 |
| | | | |
| Operating expenses: | | | | | | | | | |
| Employee compensation and benefits | 120,683 |
| | (6,020 | ) | (a) | 114,663 |
| | 5,831 |
| (d) | 120,494 |
|
| Non-compensation expenses | 21,416 |
| | — |
| | 21,416 |
| | | | |
| Total operating expenses | 142,099 |
| | (6,020 | ) | | 136,079 |
| | | | |
| Operating income | 41,497 |
| | 6,020 |
| | 47,517 |
| | | | |
| Other income (expense), net | (664 | ) | | — |
| | (664 | ) | | | | |
| Income before provision for income taxes | 40,833 |
| | 6,020 |
| | 46,853 |
| | | | |
| Provision for income taxes | 18,053 |
| | 1,016 |
| (b) | 19,069 |
| | | | |
| Net income | 22,780 |
| | 5,004 |
| | 27,784 |
| | | | |
| Net income (loss) attributable to noncontrolling interest | — |
| | — |
| | — |
| | | | |
| Net income attributable to Houlihan Lokey, Inc. | 22,780 |
| | 5,004 |
| | 27,784 |
| | | | |
| | | | | | | | | | |
| Attributable to Houlihan Lokey, Inc. common stockholders: | | | | | | | | |
| Weighted average shares of common stock outstanding: | | | | | | | | |
| Basic | 59,347,798 |
| | | | 59,347,798 |
| | | | |
| Fully Diluted | 65,323,743 |
| | | | 65,323,743 |
| | | | |
| Net income per share of common stock | | | | | | | | |
| Basic | $ | 0.38 |
| | | | $ | 0.47 |
| | | | |
| Fully Diluted | $ | 0.35 |
| | | | $ | 0.43 |
| | | | |
|
| | | | | | | | | | | | | | | | |
| | Three months ended March 31, 2015 |
| | GAAP | | Adj. | | Adjusted | | Adj. | | Adj. Awarded |
| Fee revenue | $ | 186,468 |
| | — |
| | $ | 186,468 |
| | | | |
| Operating expenses: | | | | | | | | | |
| Employee compensation and benefits | 128,540 |
| | — |
| | 128,540 |
| | 5,753 |
| (d) | 134,293 |
|
| Non-compensation expenses | 17,323 |
| | — |
| | 17,323 |
| | | | |
| Total operating expenses | 145,863 |
| | — |
| | 145,863 |
| | | | |
| Operating income | 40,605 |
| | — |
| | 40,605 |
| | | | |
| Other income (expense), net | 366 |
| | — |
| | 366 |
| | | | |
| Income before provision for income taxes | 40,971 |
| | — |
| | 40,971 |
| | | | |
| Provision for income taxes | 16,186 |
| | — |
| | 16,186 |
| | | | |
| Net income | 24,785 |
| | — |
| | 24,785 |
| | | | |
| Net income (loss) attributable to noncontrolling interest | (13 | ) | | 13 |
| (c) | — |
| | | | |
| Net income attributable to Houlihan Lokey, Inc. | 24,772 |
| | 13 |
| | 24,785 |
| | | | |
| | | | | | | | | | |
| Attributable to Houlihan Lokey, Inc. common stockholders: | | | | | | | | |
| Weighted average shares of common stock outstanding: | | | | | | | | |
| Basic | 57,377,035 |
| | | | 57,377,035 |
| | | | |
| Fully Diluted | 60,310,079 |
| | | | 60,310,079 |
| | | | |
| Net income per share of common stock | | | | | | | | |
| Basic | $ | 0.43 |
| | | | $ | 0.43 |
| | | | |
| Fully Diluted | $ | 0.41 |
| | | | $ | 0.41 |
| | | | |
____________________________
| |
| (a) | Consists of pre-IPO grant vesting, including grants re-awarded following forfeiture ($6,020 in FY2016). |
| |
| (b) | Normalizes quarter to an adjusted effective tax rate of 40.7%. |
| |
| (c) | Includes adjustments relating to previous ownership agreements (($13) in FY2015). |
| |
| (d) | Adjustment includes the normal year end grants of deferred stock that were made during the quarter ($10,455 in FY2016 and $10,250 in FY2015), less the vesting of grants that were made in prior year periods and vested during the quarter (($4,624) in FY2016 and ($4,497) in FY2015). |
Houlihan Lokey, Inc.
Reconciliation of GAAP to Adjusted Financial Information
(Unaudited and in thousands, except share and per-share data)
|
| | | | | | | | | | | | | | | | |
| | Twelve months ended March 31, 2016 |
| | GAAP | | Adj. | | Adjusted | | Adj. | | Adj. Awarded |
| Fee revenue | $ | 693,765 |
| | — |
| | $ | 693,765 |
| | | | |
| Operating expenses: | | | | | | | | | |
| Employee compensation and benefits | 461,609 |
| | (14,500 | ) | (a) | 447,109 |
| | 17,257 |
| (e) | 464,366 |
|
| Non-compensation expenses | 105,756 |
| | (16,426 | ) | (b) | 89,330 |
| | | | |
| Total operating expenses | 567,365 |
| | (30,926 | ) | | 536,439 |
| | | | |
| Operating income | 126,400 |
| | 30,926 |
| | 157,326 |
| | | | |
| Other income (expense), net | (770 | ) | | 282 |
| (c) | (488 | ) | | | | |
| Income before provision for income taxes | 125,630 |
| | 31,208 |
| | 156,838 |
| | | | |
| Provision for income taxes | 55,863 |
| | 8,149 |
| | 64,012 |
| | | | |
| Net income | 69,767 |
| | 23,059 |
| | 92,826 |
| | | | |
| Net income (loss) attributable to noncontrolling interest | (26 | ) | | 26 |
| (d) | — |
| | | | |
| Net income attributable to Houlihan Lokey, Inc. | 69,741 |
| | 23,085 |
| | 92,826 |
| | | | |
| | | | | | | | | | |
| Attributable to Houlihan Lokey, Inc. common stockholders: | | | | | | | | |
| Weighted average shares of common stock outstanding: | | | | | | | | |
| Basic | 59,044,981 |
| | | | 59,044,981 |
| | | | |
| Fully Diluted | 63,475,903 |
| | | | 63,475,903 |
| | | | |
| Net income per share of common stock | | | | | | | | |
| Basic | $ | 1.18 |
| | | | $ | 1.57 |
| | | | |
| Fully Diluted | $ | 1.10 |
| | | | $ | 1.46 |
| | | | |
|
| | | | | | | | | | | | | | | | |
| | Twelve months ended March 31, 2015 |
| | GAAP | | Adj. | | Adjusted | | Adj. | | Adj. Awarded |
| Fee revenue | $ | 680,872 |
| | — |
| | $ | 680,872 |
| | | | |
| Operating expenses: | | | | | | | | | |
| Employee compensation and benefits | 475,100 |
| | (756 | ) | (a) | 474,344 |
| | 7,138 |
| (e) | 481,482 |
|
| Non-compensation expenses | 77,118 |
| | (506 | ) | (b) | 76,612 |
| | | | |
| Total operating expenses | 552,218 |
| | (1,262 | ) | | 550,956 |
| | | | |
| Operating income | 128,654 |
| | 1,262 |
| | 129,916 |
| | | | |
| Other income (expense), net | 3,481 |
| | (139 | ) | (c) | 3,342 |
| | | | |
| Income before provision for income taxes | 132,135 |
| | 1,123 |
| | 133,258 |
| | | | |
| Provision for income taxes | 52,196 |
| | 97 |
| | 52,293 |
| | | | |
| Net income | 79,939 |
| | 1,026 |
| | 80,965 |
| | | | |
| Net income (loss) attributable to noncontrolling interest | (58 | ) | | 58 |
| (d) | — |
| | | | |
| Net income attributable to Houlihan Lokey, Inc. | 79,881 |
| | 1,084 |
| | 80,965 |
| | | | |
| | | | | | | | | | |
| Attributable to Houlihan Lokey, Inc. common stockholders: | | | | | | | | |
| Weighted average shares of common stock outstanding: | | | | | | | | |
| Basic | 57,134,305 |
| | | | 57,134,305 |
| | | | |
| Fully Diluted | 60,135,375 |
| | | | 60,135,375 |
| | | | |
| Net income per share of common stock | | | | | | | | |
| Basic | $ | 1.40 |
| | | | $ | 1.42 |
| | | | |
| Fully Diluted | $ | 1.33 |
| | | | $ | 1.35 |
| | | | |
| |
| (a) | Consists of pre-IPO Grant Vesting, including grants re-awarded following forfeiture ($15,275 in FY2016), and adjustments relating to previous ownership agreements (($775) in FY2016 and $756 in FY2015). |
| |
| (b) | Includes IPO-related costs ($12,783 in FY2016), other acquisition-related costs ($2,637 in FY2016 and $453 in FY2015), and adjustments relating to previous ownership agreements ($1,006 in FY2016 and $53 in FY2015). |
| |
| (c) | Includes adjustments relating to previous ownership agreements (($282) in FY2016 and $139 in FY2015). |
| |
| (d) | Includes adjustments relating to previous ownership agreements (($26) in FY2016 and ($58) in FY2015). |
| |
| (e) | Adjustment includes the normal year end grants of deferred stock that were made during the fiscal year ($38,602 in FY2016 and $26,000 in FY2015), less the vesting of grants that were made in prior year periods and vested during the fiscal year (($21,345) in FY2016 and ($18,862) in FY2015). |
