HLI - Earnings call transcript Q4 2018

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Operator

Good day, Ladies and gentlemen. Thank you for standing by. Please note that this call is being recorded today, May 9, 2018. I would now toll over to Christopher Crain, Houlihan Lokey's General Counsel. Please go ahead.

Christopher Crain

hello, and operator, you, everyone. Thank www.hl.com should By quarter the to Relations at fourth access XXXX now Houlihan earnings website on everyone fiscal found release, our be Investor have which the in Lokey section. can

we numerous use remind that statements to our as risks of forward-looking encourage financial These with are ended phrases words uncertainties including for not the Form of interpreting we are relying which expect, are include a everyone caution and you forward-looking for similar will We XX-K the such condition. recent subject our statements, more results actual when exercise remarks, other detailed operating today therefore, is These to discussion to to XXXX, that expect, usually and cause on We future Before SEC begin statements. filings, materially regulatory need and formal or discussion review the our SEC. should XX, identified will, should could impact could anticipate, differ it from and of we future that filings refer year our guarantees when to performance. results what them. the risks investors you all of March the filed by

is opening call, these financial our Scott. Executive of and for be With we Scott Hosting then questions. to will Lindsey A Chief Officer; comparable measures and GAAP. not will be substitute the Beiser, in over They in some in investor Houlihan which open useful we During remarks, considered of Officer on presentation financial measures a our the measures, website. today's These prepared today, most call Chief to can we our should measures to discuss the or accordance have directly in company. believe provide Financial I'll the call and that, reconciliation company's Alley, will we financial Lokey's turn the call non-GAAP GAAP earnings performance. evaluating hl.com release the results isolation the with available as

Scott Beiser

Thank you, Hello, quarter fourth fiscal welcome and our everyone, Chistopher. XXXX call. earnings to

our quarter up our are ended year million, record last to year. and to per share, our year, XX% $XXX across continued with decided year XX% performance our another $X.XX growth. from and We per consecutive fiscal the of strong ended dividend earnings growth, This quarterly from revenues $X.XX, record report segments. raise our of share year reached with to of last and business by pleased sixth We've revenue is the XX% we earnings X up year. a also successful all We reflecting

Corporate XX% $XXX from reported a record up revenues, business million Finance year. last Our

fiscal higher continue strong see with entering to positive average fees higher trends XXXX. Finance volume, in momentum average and higher sizes, We transaction Corporate

Advisory reported and million has consistently its Financial Our X% to lines product complement year revenues, up existing and This to talent Services years revenues areas. from in $XXX a last segment into its year. for has grown record last business expand senior-level X new the hire continued each business

million $XXX X% in reported business revenues, Restructuring last of year. Financial Our decline from

this a is of clients. franchise, our restructuring advice global to leader a very providing rate the to business a of testament default We are proud low performance which segment in environment, given

Looking back on are mentioning. fiscal accomplishments XXXX, several firm there worth

top position We firm as were adviser and #X position cementing the #X $X a as fairness U.S. #X transactions, of the leading named as Thomson in largest Reuters measured by the size opinion that believe U.S. our investment And First, we ended group billion, #X We row, named of global the as mid-cap were adviser year restructuring us all revenues our position transactions banking the M&A our market XXth FAS and M&A and business, across maintained lines. our M&A maintained over by we we market world. XX adviser as make for last the X U.S. the we XXXX year below calendar our adviser. the Financial for for the adviser, product our in Restructuring years. number

promoted capital Director with to in business we new we the managing investment Managing all fastest X addition made we XX the product Directors an segment, hired our Second, additional with employees across X a Managing operations of significant MDs expanded MDs U.S. our to outside X X group, We throughout of the lines in and the growing and of hiring year. markets, the international directors

helps investment York sustained historically, in demonstrated office. fiscal during did that an and our office we talent an opened Dubai, acquired Sydney opened we and future refurbished have growth. of equity in banking Singapore, our venture office joint we New senior we drive the the As expanded own already XXXX, And third, in

would forward, to Looking recent like I couple highlight developments. a

review our April we cycle which MDs the First, additional in of to XX new Director X added on and as acquisition Quayle Managing Munro, promoted and closed part with X. bonus of April employees

London our existing fiscal on Quayle XXXX, plan we Houlihan office new Lokey our During location. office with Munro combining in a

on me market observations. touch let a few Now briefly

have our market any the time economic sponsors remain transactional greater of corporate client Corporate Current dialogue CEOs is active, and Finance earnings recently business the increased companies growth stock prospects we history. confidence today, While pipeline than has general a experienced strong. and and in our outlook, volatility, for with of financial at

several of about for light business, our default a prospects oil expressed markets future we restructuring and cautionary in quarters, low significantly note improved gas and the our Regarding rates.

this even cautious rates financial leverage to deliver interest enabled has Restructuring than us we more XXXX a technology various in at optimistic firms ongoing for remain Financial better year ago. disruptors our Restructuring results in than were time but in was a anticipated the Financial the However, impact at prospects and year. We for fiscal pressures increase slight last of regarding

into move impact XXXX. our towards and like I'd [included] specialization, industry expect that business of my end trends highlighting continued heavily to Financial front, key several the senior our remarks to business. On Advisory banking Services the that have our momentum in continued investment with we by fiscal continue deposit talent this

continues Our of number of each to we grow depth year financial and mid-cap presence measured and by complete staff. as the transactions our the that size M&A

great changed growth Our that that never of continue the our believe sponsor sponsor and with community of We effort financial the solutions since private been are for greater. transaction years in in recession, largest secular we sponsor clients the the believe to the finance coverage financial success early have market investment has in most bank has as We financial mid-cap believe collaboration the we change. meaningfully We with and to successful Furthermore, U.S. is any number the positioned we focus in of to and established, complete the of the we believe mid-cap in we the size successful firms with sponsor services are significant, market transactions clients serve being growth and growth continue specific our anyone financial new see needs. firms as that existing in well financing for we these given that

last fiscal decline and gas couple the several increased higher interest quarters, slightly our in of meaningful for our the XXXX oil ongoing related have of our higher from impact profile a restructuring and rates effect mitigated in revenues Finally, the restructurings confidence results. combined with

volatility a shareholders. in a to diversified is employees business committed year, way and their with the aligned our the return where incentives that are and goal thoughtful over a it I'll that, capital of Lindsey. and turn the maximizing deploys to to As With across model to cycles, remain maintaining that we business the a business begin we economic highly shareholders new and built reduce is fiscal a earnings revenue call

Lindsey Alley

quarter. you, XX compared In Thank few $XXX with period on Scott. performance same the the year. I'll quarter million Finance, recently Corporate revenues were closed XX% firm's from start in quarter, for the increase XX the the the last transactions We a to year. completed an comments prior for in of

and Finance the In Financial were strong Consistent average million XX XX expectations, continued fee the transactions of our However, the positive for the exceptionally same up fee year. year. XX% million in the a Advisory decrease compared our compared closed $XX last revenues in last quarter, lower Financial was the significantly. transaction $XX from on quarter deals last Restructuring year, was with for for We average same prior an transaction closed fourth quarter with our its X% the were to transactions a decline year. slightly year. revenues Services, momentum from quarter quarter, on period closed Corporate transactions

Our FAS events market fee business strong M&A a by offset a to couple benefit continues across slightly saw lines. from as higher results of product lower we

Turning to expenses.

range target for the year, for between awarded the quarter expenses fourth million This $XXX year. which and same ratio of versus fiscal an the our compensation low for quarter at adjusted resulted were and period end for XX% the of XX% XX.X% in compensation last XX%. $XXX XXXX expense adjusted the is Our million of

million, fourth when a XXXX This with which XX%. fiscal quarter adjusted up resulted were year. of in fiscal target expenses last non-compensation $XX ratio our XX% Our fourth year, non-compensation of the slightly range the XX.X% expense and for compared between below quarter were in the

of $XXX,XXX XXXX registered in expenses Quayle adjusted we acquisition March which quarter, associated in associated and legal block our Munro. out trade, primarily This costs our accounting with with in and closed $XXX,XXX

these continue types in will occur. in which the they adjust for of to We expenses quarters

million. adjusted $X.X of the in gain last million and $X.X of item resulted for income a other loss Our year versus expense line a year

sizable a with our November. line expenses reminder, a gains we item joint XXXX May income venture, Italian and and expense. anticipation was in interest for included As balances line this item the interest interest fiscal in the our of recurring hold Most are: result associated year bonus in this throughout income cash and of payments losses income in and our of that on our income

Last and based material this the tax We made don't foreign up onetime effective in assets tax they XX.X%. with remeasurement effective non-recurring reform, year. our to tax these to estimates estimates. a tax effective GAAP regarding the of repatriation are we coming including adjustments to liabilities that both we made deferred we and was deemed include relating new our the the on items, adjustments and -- adjusted any an related tax earnings. to our quarter, adjusted and additional quarter, reform tax we those truing of rate ended our this adjustments to estimates the rate on Our XX%, year to a the respect rate expect quarter tax estimated With quarter, for rate,

year because March fiscal until the As of are XX reform full publicly not will a peers, reminder, traded quarter. unlike our next we tax we recognize impact company, a

require address like of how to Now take to of reference, changes frame the the expenses you were of beginning our gross fiscal with fiscal XXXX. next which $XX our revenues our XXXX is first quarter, million. as To minutes reimbursable provide accounting I a and change to affects rule our rule report us part would change few Accounting targets. an expenses reimbursable that quarter for

to report Going intend ratios forward, results and the expenses revenues, you incorporated should first for to reimbursable our change affect and quarter This we targets do product when not compensation XXXX, accordingly. we and our adjust individual our into line accounting adjusting non-compensation see revenues. expect forward, we're fiscal GAAP going will our of

the also change, to regarding recent compensation expected we addition non-compensation accounting experience our regarding are In our and costs. incorporating experiences

compensation target on our provide we GAAP manage Although our adjusted expense. will expense awarded continue an expense compensation call will adjusted or adjusted certain what compensation based non-recurring to we items on for basis, we

ratio from to prior our XX% This is The lowering we awarded an compensation. ratio compensation XX.X% to of forward, continued our for operating leverage XX% range related XX% has on business, between Going off improved lower of modestly reimbursable approximately of resulted to old in of target which XX% targeting compensation new and are expenses. our adjusted XX.X% our equivalent based adjusted to growth expectations the in revenue. under gross accounting way are

we Previously, revenue amount. to the expenses Now add to non-compensation we our non-compensation in let's our standpoint, expenses, whatever an shift non-compensation add we reimbursable netted accounting as reimbursable against expenses. our expenses From also to expense. same

our pro million, in Assuming a forma of XXXX $XXX fiscal non-compensation expenses non-compensation resulting the have adjusted same XX%. adjusted $XX million expense for would been reimbursable ratio in fiscal XXXX, for

of under This between is of XX% consolidation with associated results on and our XX% year. way will prior increase for new our are have the result our XXXX, a expected and the new Going XX% to Even to treating target will ratio costs, adjusted revenues non-compensation fiscal increase us experience and maintaining for ratio expenditures our range a London modest better off to equivalent of targeting and those York accounting is office our expect forward, of planned and reimbursable of an of ratio gross business. between a expense the that our as change. believe result is in in old and our we space, year. see range and the of completion of ongoing revenue refurbishment from we than expenses. believe non-compensation planned the non-compensation of: we expenses addition building was our a this though in that XX% -- result gross office our fiscal our positive to a New in related the incremental with to increase impact year line depreciation We short- our target, XX% of long-term non-compensation the that rent a move these for technology new increases XX% of target in The

between Lastly, XX% changing target we tax and rate are XX%. not our of effective

the to for use and quarter. cash balance Turning sheet of the

closed March. offering X completed by sheet of million the time repurchase forward year-end, we $XX at restricted additional which been as sheet contract to $XX a we in relates completed offsetting that we Related line million treasury amount X ORIX is shareholders' had balance which and in balance it cash of items to an the $XX XXXX, forward on equity at shares, know, the of million you $XX into entered This items the offset repurchase of As stock. of million in With now settled offering. public and and million line April liability the all transaction These early that contract of have eliminated. reflect we all APIC, negative

unrestricted we $XXX XXXX, million. of cash million securities $XX XX, equivalents and investment and of had debt March and of As

a cash significant We expect a of on as for in May; quarterly Second, early quarter this which will our dividend we to June, our to several bonuses we the the Quayle first to been XXXX: Munro First, closed share. see of has cash pay will transaction amount uses portion in $X.XX $X.XX April; we mentioned, increased shareholders in a share in fiscal pay and significant Scott third, of from

the share planned first This show vest of up our count will program our quarter, to part over to in period a in our issue fully we X-year stock During quarter. as beginning also stock XXXX. fiscal diluted $XX approximately employees compensation million generally but for next

to continue repurchase the a program offsets associated with part will compensation program. issue We shares our dilution share that as the target of

remains outstanding approximately million, today, just diluted of of shares shareholders HLI we approximately operator, that, acquisitions fully public, we cycle. XX shares of at when to the I went through our for of returning prior questions. work had million for business team in our are we XXXX issuance fact, In fully to as or extent investing management outstanding growth. capital to unable to the to XX.X and put we The it entire line the committed fiscal to can our stock the have diluted mentioned we for bonus hiring, with And open that

Operator

[Operator question Instructions] JPMorgan. Worthington Ken come Our from first with will

Ken Worthington

Margins a be business And higher. we And Which it somewhat. you you declining to generally little has then business? lastly, the about profits right out to? of prepared you think margins, were if flesh lower should at the heading on revenue that results been here? lines in better? is those I through think the comments Can across there you drivers way walk Or mentioned at maybe business, And lines. referring look the this and your a some remarks Just advisory XX% product couple been could are doing more? have

Scott Beiser

your first I'll part question. is the this second the can Ken, take Lindsey take question. Scott. of

particular our decline did actually during we -- We Finance, for all the first the the had part year-over-year. talking one Financial and over XX% we in slight throughout we is saw quarter growth and Financial volatile the some saw what quarters business, particular in a had business roughly a still time and FAS about growth of growth decline ended, Restructuring last the the Finance, a good in period. quarter-over-quarter half a just that had and X time. We I in probably full significant almost this business, Corporate FAS least what Restructuring. revenues in slight of was last it, Corporate this and expected of product over But been and Regarding lines, any had saw in our year a decline year a think very more parcel their

Lindsey Alley

Yes.

last didn't basis continue that from I product think the good just particular FAS did particular I tell you benefits business do in going see read as a they into within to there and said quarter. if break you XXXX. FAS, that report M&A quarter, wouldn't this Having on for in can a but momentum a FAS it well segment-by-segment down that were strong that, all segment. to have of a Ken, we don't segments business couple quarter of I lines our good market as into

of of past, our As the to well model. then do segment at that good of segment profitability portion more market portion FAS employees with does being collaboration we more associated Corporate project when collaboration reported is that release portion that M&A fees or With tend the drivers investment And stays the bankers. that product FAS for up the for and by is said for in product significant through healthy end a I recurring I that's project our think collaboration we've earnings do project FAS respect another XX-Qs, lines, pretty of It's the adjust have allocated Finance and past, be business, of mean our we all of this with a Finance that there suggested across profitability, but a there lines. in cycles. FAS you and if, the to -- a the Corporate and Corporate we will revenues significant is across a XX-Ks profitability when our X what with and requires instance, much in that Finance, the look to business bankers, that within valuation-oriented associated

compensation the And you'll FAS without associated in see revenues. so higher expenses

any profitability hard they years. it's segment that. collaboration news of But our live report be will so a of to very and is to across for that's other volatile the just And more occurring good volatility And quarters product with fairly more because sense and the to get across lines. are, the have they we lines, product way we're the reporting, to going tend the

answers question. hopefully that your So

all past, a Scott and this lines, I X margins each product suggested relatively within at has points think XXX in the of other. similar operate basis couple

Operator

Our will come next Goldman question Fitzgerald from Sachs. Conor with

Conor Fitzgerald

Just on how good [pet] the want pretty What be would -- perspective. just Like the you're pipe. update quarter your Seems brand to get obviously traction. you progressing clients well. the is in gaining in like you're a as curious from hearing hiring an in had what year

Scott Beiser

Yes.

specifically company bankers. years Quayle numerous that ago, see more the Leonardo of did tone McQueen we in specific acquisition locations the activities do been with from a are First the hiring month, we positive continue through executives. X called much in the acquisition And Finance last an in Munro probably about to of to occurring, years also the effort in probably a X.X to dialogue economy have types just then of activity, the having we're we all, closed build and European out ourselves, adding made of itself last of marketplace Corporate our ago, about our or years that X senior European just Europe an transactions X

out and to I seeing, we see we're dictates. to an we'll brand And improved results. continue opportunities. So resources improved presence greater as we strengthen that therefore, there marketplace have, add think We market see

Conor Fitzgerald

rate's Scott, guess, interest was that outsized then, just market purely comment I on the in your of the distress in move just of just reasons, that any the That's Or signs helpful. not going in higher? the because of the design, rates, move was for some fact given And that LIBOR? technical but

Scott Beiser

Yes.

either right interest but M&A doing XX no trough, of the maybe normal more a of in transactions simple doing up much type highly of company the situation, I date difference. a leveraged haven't issue to basis XXX average that now a I moved transaction would typical think or it's or a rates say points since more for make

business, the business. the negative it quarters Corporate in the this last say, [at I'd restructuring impact, had] Finance and So nominal on juncture's if our helped a side any, couple of

Lindsey Alley

defaults. driven created in it It's the by technically fundamental. wasn't generally that's driving -- But what's volatility much it. that LIBOR not wasn't more That

Conor Fitzgerald

spoke housekeeping X perspective? Yes, business. expenses, sense that's understand trying just And reimbursable helpful. from between just to one. flows of lines us way what any Just a you then million a of, line through get a that the various item of The help revenue to the breakdown your $XX

Lindsey Alley

was So as I didn't I this, question going it. that someone reading realized I ask was to provide because

modeling Roughly Corporate is and is $XX are million vary roughly that use. And So million but I'd the roughly is those Finance. will, Financial Restructuring. our year, business, $X purposes, each half valuation for obviously, numbers

Operator

Our KBW. Yian question Dai come next with will from

Yian Dai

for question you MD on Quick headcount.

XX And think year to just net the promotes then we that and year feel it hires new that? give there's was was been How of voluntary? elevated of breakdown the the if beginning like breakage attrition to can just it where in saw related some maybe acquisition? you much change of MDs, little year. around the maybe the it But compare So bit it does about a quarters. prior around and X us from of How this about in the we've a this talked much you

Scott Beiser

categories, was throughout vast the and the couple and and a planned in it put I'd more surprising Yes. period. not expected majority time

is many retirements, it with people years. who for have just normal been firm of the component Some

know either not expect very is other and know in not is certain when mentioned platform what versus or out what considered. going or of planned few they we're were came would percentage a really sometimes departures we that component Some of they are especially categorize that from. people call new type voluntary And the as to I that of work not we you a of those the acquire I turnover platform has people maybe when businesses them hiring been -- it would just we

we that So we've certain strengths and and years, that on But the to we didn't think and that a that much year the I talents we're net change I we'll time adding year-over-year. headcount we every basis, and certain bench, for kinds have need, much many felt really adding as keep of think have to But increase large fact, see necessarily grow, and you a the in departures. been fact higher bench continues year headcount. in we've to in last this strength able not achieve revenues net

Yian Dai

That's acceleration are the that? helpful. color those seen I back I you them, around that certain be then. that the pipeline are may And And than know of just could sectors us on one you've greater guys an there or commentary maybe guess, some of seeing whether on you historically, pipelines. Europe curious To seen your where give you've early geographies, in I'm

Scott Beiser

their better. circulation going any is in or Especially they'll have all I fiscal is subindustry or unique our almost be think what in of own But industries, that cetera. it's industry point to and Corporate doing key I and is volatility the wouldn't particular versus diversified phenomenally 'XX, versus on to et across Finance 'XX 'XX leading strongest business, so maybe the

in really across Partly, the it's more sectors. people we different think I key have board.

been Some of from it's the acquisitions.

efforts Europe. clearly, it's from in you've our mentioned, As

attempt to But we or it's pipeline. in mentioned X that industry ongoing don't or also, numerous think has of I added we've I would that think build group to out point our you. strength I capital particular X and to think, the all out ourselves to any markets times

Operator

comes [Operator next Devin Instructions] from Ryan Our with JMP Securities. question

Devin Ryan

here following up So restructuring. maybe on one

heard Just the better commentary, bit it like than maybe we quarter. outlook's sounded what the last a

for was revenues the I in lower commentary expectation XXXX. think an

to I mean, previously of were? right. What make than be less could the Or where the So there I want actually XXXX? -- grow a scenario of kind I'm scenario from expect just restructuring would maybe we maybe revenues like a that here? hearing is look to takeaway sure decline

Scott Beiser

Yes.

rate exists So the issue and this of and generally today, couple is call gas default the it, low see what years, that we in existed, marketplace put that last same environment aside. oil still

meaningful the your comments changes, marketplace. changes new are of major any ago. default than some some next just our gets was fact these near forecast or seen more potential companies today magnitude going still whether the continue we least see next any to is a running haven't patterns, we are grow slightly for to That distress, it's that's in restructuring we revenue the would until growth just we described or need in term. decline several or the out that increased maybe ago. into interest think are restructuring us felt and at always We which I said, suggest technology quarters to really several and years potential remember, year see would in being that unique So substantially level to have what But that a of a decline growth just right. those more we've business And confident -- others, of of looking rates kind companies' still hard disruptors occurring in plans, kind felt macro don't and year either same low rate environment, so that -- unless

Devin Ryan

Understood. it. Got

color. capital very markets the one now business. Okay, that's helpful here just on And then

think you managing I doubled you then new the activity believe, prior that directors, mentioned quarter, there added X you said year. and last from the I

kind But it's the how many revenues? you group, it you more bring year about of a Or of of group I know kind bigger think this So it over how driving more big, opportunity? big be I think kind predict the but in in is people the of to more is as how the opportunity. do kind that about then could you is the that's like and team -- of currently people next few hard And longer-term sizing this kind of years. have about we know bringing

Scott Beiser

marketplace, think So the say before, We're described could where go. on as first, very, very very, is big. we the we I'd in this early days very

senses of either firms consider to actually to it and financial or just sponsor advisers in So convincing make companies the client believing their financing. is base them that financial assist it part hire that

big second with help. will #X. So certain grow it, end of capital trend to just geographically. will being We as then in providing up is can we we structure. the specialize people grow that's particular And can who people think with in financing on parts the key industries grow can focused continue who We thing ultimately probably grow and of

be So going there's places people successful we're we of what very I'd moment, after. of will the on a at grow. can the we think picky that also But we're lot kinds market say in

but kinds big we not a really to like a how trying time. of at we ours find that it's people as It's need what prudent right platform hire to can can on driven be market focus to and about successful. -- a the So there's market, be many people

Devin Ryan

last will then Directors. Quayle with stand appreciate here just Munro the helpful. of with some promotions? Managing do commentary now be overall just on and on just -- And one That Where the recent we

Scott Beiser

You'd take the our disclosure. numbers that we published in

in You'd April. coming We'd so Munro early we'd add be closed that first up through be to and that week April, XX Quayle XX. X the April the also it early did we XX promotions from up of in

Lindsey Alley

force the months of although senior-level assume, X that to of a is X year. months the it's to the perfect, last that And in occur I not preponderance in there think often X not the fair first year, of reductions

Operator

go we'll from Brennan next to UBS. Hawken And

Brennan Hawken

of Devin's questions Just a there. follow-up one on

expect some you is orientation these of restructuring may fact the an of not part may Houlihan Or episodic restructuring default be that is maybe this in components that you're that orientation creditor seeing the not does driven, your of guys necessarily stress not competitors? and whatever do a or should side of, want in we mean in orientation, participate given have versus in this, it that of to So you creditor many regard? that I your cycle whatever that some you business think don't creditor know, we're call side obstacle really

Scott Beiser

in while of First amount side, creditor for work work to of actually more well do the known our the on be well. largest as as a all, tended transactions we creditor debtor-related large large, maybe we Brennan, we're of

what debtor side. And we're do be that of in perceive We activity doing, creditor from pursuing, what out couple So I both years' the situations we and us kinds everything that are that there, firm getting all on, there's see actually or of wouldn't couple us disadvantage any to with to hired to the terms others. is we're peers focused. what of creditor suggest are know we put going or worth quarters nothing what that at at restructuring our next would consider next

that I fact, that will we amount and years team to revenues, In we largest continue of largest and like many the expect that's be producing the for future. the way hope and said, foreseeable that, probably got for believe been

Brennan Hawken

pie. about obviously, think that's whole the that's I about we is think guess, represent doesn't guys Okay, But are you to fair. and usually on I how larger it. things creditor side, like since -- categorically and proportionally that

a it debt rate been once higher turn it on early amount system, So only a blown, is might we question added actually up, a particularly once have be, restructuring I the be that to pick Or you see fully the that rates just of could given interest to to to comment of potential this guess, follow-up gets bit to with if that that? at in seen that beginning too restructuring really cycle, stress believe a pretty we or levels, cycle, remarkable? here lead the that's does

Scott Beiser

No.

is high-yield the of than leveraged amount for I we think is total debt or what that many years know loans was it talk. the today greater we've at last much said

the default still we turns. half probably bigger. for at rates, know the longer. there's just it X go that when eventually we is years up because marketplace to cycle been today a lot of -- the So know skilled more we're it they've bottom We or even ago XX just that more than think all is have as was banking We restructuring around is in in team fact, so

to cycle we've all So would yes, much the that bigger that, it be us seen could in past. turns, than that when point

recession. think last throw I cycle, and recession the We you'd to have did crisis. had not a there a liquidity caveat global in we have in a is, only the

is expect what and and they higher revenues it higher And out evidence saw things and believe look own before, peaks that what turn, know you'd it we've than what we peers like Or and other be have of kind there, should will the do at that 'XX? we before. next That downturn. much all would look figure ourselves saw Does us our of to it tempering probably peak know none does our like. is bigger like to is when downturn will out than of troughs. be comments So have kind whatever exactly that the look But experienced, downturn? that's XXXX some all higher

Lindsey Alley

or law last as I'd thing their along work. the is last back X if look weren't matured another X in just with East ago levels any we you have of X to there that are I recession, years say where, But during will in were economies several whether we more or and there today And rule ago, weren't X or if grown, them, during they've other the we that, it's be years X have of the is in than years X Middle the doing operating countries recession. or ago. or restructuring matured India places we the so China global think, recession, activity adding

Brennan Hawken

tax mid-market That's Thinking few M&A a general pickup about, last -- higher a the years anticipated for back one a in there of on fair. me. was income rates. And the ago,

for rates. that now Just the motivations? we're seeing so are business or that have lower M&A of a different otherwise Is in and consider when seeing end the guys not transaction curious to whether to other tax done you any through change not drive here folks gotten albeit carry and we've -- through continuing that may it

Lindsey Alley

don't I see... Yes.

Operator

sorry the This I'm for the is interruption. operator. Difficulty] [Technical

immediately. are must to emergency, we We experiencing an safe proceed a area and

be left any will apologize time. at unattended. this for Your call inconvenience We

Christopher Crain

Everything's okay.

Operator

hope back Yes. contact I Thank We'll too. you. to later. so, you try

that. about Sorry,

Lindsey Alley

I think, conversations been pulse have mean, driven the I tax that year. Yes. if on half latter for last of lower anything, potentially rates the could have

market and years, described have couple I back I think, Scott M&A on as of I last would you look it if over the think the stable.

sitting be a I think, some And if feel in part suggested, in been I anything that at comfortable higher by rates, the now, more it's valuation million of slightly with better that than stable driven that the should entrepreneurs a is $XXX have sidelines higher tax in that may may to you space. which theoretically valuations the things transact. valuation that's lower think mid-cap

in tax we've whole decision part, So of to those go there's space. decision-making a have relating that mid-cap the lot been what processes. reform for with to the all positive seen factors into And most I think, respect

Brennan Hawken

might alarm question. last meant that I'm the fire The have

Lindsey Alley

to a ask people extent there's call, the of you're unable follow-up. know to I to, don't Yes. But the we'll questions. wanting why that complete couple you Scott, and

Scott Beiser

our results fiscal quarter we want I thank and progress you, you when updating summer. year-end look our on everybody Thank Well, all to fiscal quarter the and discuss forward XXXX in our call, in for to everyone. first participating fourth for we

Houlihan Lokey (HLI) 9 May 182018 Q4 Earnings call transcript