HLI - Earnings call transcript Q3 2020

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lokey’s Third Quarter Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. conference being this X, today that XXXX. note call recorded is February Please

turn to call Lokey’s will the I now over General Christopher Counsel. Houlihan Crain,

Christopher Crain

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

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

or GAAP not release which a the our website. to these financial A in believe GAAP. for financial considered in in investor non-GAAP presentation During our be with we These the earnings the measures, accordance we of performance. and be in prepared discuss available results most comparable directly is financial today’s as measures should measures hl.com on will call, our isolation substitute company’s evaluating can measures useful reconciliation

we Alley, will opening and company. the Beiser, then today, Lokey’s to call questions. remarks provide They open will some call Officer Lindsey Chief Executive have the we Financial and Chief Houlihan Hosting Officer; Scott the of

turn With that, call I’ll Scott. over to the

Scott Beiser

our third you, a million fiscal million. call. XX% Thank And third achieved quarterly $XXX last this increase the had We first record Christopher. a quarter was generated We Hello, earnings same an revenues, the XXXX in fiscal almost and of in quarter to revenues versus year. excess welcome time strong we’ve $XXX everyone, quarter. of

Adjusted earnings of firm and a XX% the last record the quarter share per same were $XX.XX, an for increase versus year. quarterly

We per also announced the share our fourth $X.XX of quarterly quarter. dividend for

and are continue business fourth of we X% across we revenues all compared momentum to year. period up three good $XXX to of see fiscal of last our enter Year-to-date, million the our quarter the year, same as lines,

is trends. fiscal that the XXXX, an helping on to growth, exhibit economic far support a U.S. a expansion year, its economy market favorable an XXth year. to of in The mid-cap So The stock has number notwithstanding M&A this market. capitalized firm stable macroeconomic had continues now good exceptional

a provided tailwind Corporate may we private fiscal factors leverage And to tailwind Financial quarter. continue low, activity. and which in finally, supports strong healthy and to fuel expect Finance remain fourth capital into that both a and facilitating to businesses, growth M&A macro strong These interest – lending our and Valuation our equity access rates Advisory remains environment, economic

mismanagement changes business of growth or the have all current to a Our habits, the credit the Financial to Ongoing company environment Restructuring markets. business buying well, characteristics our Restructuring and in in despite consumer interest typical leverage rates. downturn default over higher low disruptors, business continues current perform in technology without contributed

to last average grow, recent Markets transaction saw business. our does the we’ve With couple respect softness XXXX, UK our election. M&A as opportunities into calendar over continues and trends, sell-side, heading started to Throughout in the But Capital of Markets buy-side number improving activity Capital company-specific size. the we see European of Finance, in to months, Corporate and

the the and changes the this not any experienced elections of pace year. the we’ve companies of U.S. outcome date, investors U.S., later in exploring To in in anticipation M&A of opportunities

pretty continue lines to debtor in and as between diversification primary split. finally, our in are experience And our In were debtor and we continues work. balance performing fiscal in its year-to-date, improvements Financial in and our and to fact, Valuation business well evenly of revenues sub-product increased XXXX revenues Restructuring, creditor business And, fiscal and our Advisory Financial all year-to-date. XXXX show creditor productivity

of some to accomplishments specific our the during Turning quarter.

an financial York-based two services investment Capital, to Co., On investment the provides transactions. bank industry. banking closed acquisition we Spain; announced, acquired in companies Freeman We advisory the that in as business Fidentiis & and New front, previously a services

acquisition We acquisitions maintain as continue right monitor we pursue model. and that other our to important part an are of opportunities, the business

to front, on a and On and directors see talented managing market quarter, robust third and our joining Houlihan healthcare oil the the MDs in interested hiring continue Lokey gas banker, we brought a in two an platform. for we banker

with the Finally, lines. consecutive M&A XXXX of leader Houlihan all U.S. for last advisor In number all business for be one to three years. across Finance, the continues Corporate transactions a us, behind calendar five our Lokey we are

Advisory, as for the Valuation consecutive provider Financial M&A known global Restructuring, in the the Financial all we’re one formerly and the over to of based one Thomson Financial In years, year. number Reuters. sixth XX global we’re Refinitiv, transactions number according on opinion number adviser past fairness Restructuring And

more there factors recently, impacting positively While our business. been have

are around environment. in results solid how or create could to any through We general mindful of manage successfully change. risks the are economic or impact quickly order strive U.S. in outcome business economy, We in events elections, macro The and our coronavirus that business. maintain any the headwinds of geopolitical factors events, a can disputes, all to ever downturn trade financial

that, Lindsey. with turn to the And I’ll over call

Lindsey Alley

transactions XX our same quarter average We last fee last the year. were Thank to you, the the higher for in deals XX year, Revenues was the quarter compared compared this last same $XXX on and X% compared when closed to Corporate quarter, transaction in quarter same Scott. period when million up closed Finance to slightly quarter, the year. in

very were Restructuring XX Financial year, We quarter in deals closed to $XX relatively when volume. same transaction at quarter year. increase XX% the million, flat a closed to last higher the from the fee transactions XX driven quarter, same same period strong quarter on year. compared by the last transactions transaction revenues in this Average last was compared

We can would like as lumpy the it that often across our of to business timing driven Financial everyone Restructuring events. is be large fee quarters, by remind

– way positive benefited a quarter, that lumpiness. benefit This from in we

business into the Financial announced Before FAS. business, we our segment, Advisory name for get our Services change have the specifics we next of or

accurately now the Financial doing this this type are Advisory, or the business we and are FVA. of business to We referring believe change segment. segment more We name within as reflects Valuation

We Financial same X% In last compared period a increase same and year. the Advisory, quarter, the Valuation revenues $XX XXX events million from in quarter, during quarter were last the fee year. had for the XXX to

across business of to see and our remains in New solid productivity FVA managing the lines major we year. improvements director throughout product all activity in have continued

to expenses. Turning

$XXX of deferred related the between targeted we The XX% and for same period primarily this versus $XXX quarter within were and the million payments, expenses adjusted year. compensation quarter, million to for quarter adjusted compensation for last adjusted range acquisitions. XX.X% Continuing third for our the pre-IPO ratio XX.X%. Our – for $XXX grants was

quarter in non-compensation year. the were for adjusted expenses versus million same the Our $XX period million third $XX last

adjusted third non-compensation last quarter fiscal ratio in expense from Our the XX.X% to XX% in year. declined quarter same the

same for non-compensation last year-to-date the XX.X% period is ratio XX.X% adjusted versus Our year.

and As a fiscal for long-term non-compensation between reminder, XX% adjusted the ratio our XX%. is target expense

quarter, we items This of out two the non-compensation expenses. adjusted

First, December Co., closed XXXX, legal and Capital respectively. approximately November $XXX,XXX and costs in acquisitions associated Fidentiis with primarily of Freeman and in accounting & which our

out Second, of amortization. of out we adjusted $X.X our non-compensation adjusted non-compensation approximately expenses our We acquisition-related expenses. million

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

line income resulted a other year $XXX,XXX. in a same of period quarter for Our gain adjusted last the approximately of versus million item expense the during $X gain and

balances. income was cash in the this for line interest income result Our of our item and on quarter investment primarily

XX.X% the the and of quarter associated move. London a costs the effective quarter there a rate adjustments. usual acquisitions non-deductible GAAP was as items certain We to no tax Our this and with were several for little than two higher related were result

reminder, fiscal between a the is XX% our targeted year range for and As XX%.

Turning to the of balance sheet cash. and uses

million majority fiscal XXXX XXX,XXX had As unrestricted price our the and of year-end repurchase of per $XX.XX anticipation and part securities. $XXX investment quarter-end, on In in is balance at accumulating our remaining shares of cash our the as of May. approximately we The the cash average purchased of bonus equivalents program. share, in quarter, we of payments an third vast share sheet

we for operator, questions. line that, can With the open

Operator

Ryan line question-and-answer session. a comes will Thank first of you. Please this of the with Instructions] time, proceed At Devin set JMP from question. your questions be conducting Securities. we [Operator Our of

Devin Ryan

guys. evening, Good Great.

Scott Beiser

Devin. Hey,

Devin Ryan

we’ve kind on question and level. I moving recently I out and business here and breaking million been potentially feel of it overall guess, higher the maybe range there. trend the this be you’re quarter-to-quarter, does that you annual even lumpy can is that appreciate, kind mentioned, first like from it of $XXX as that seeing the Restructuring but momentum in of in at

in that drivers while. some I’m that’s place kind of tone that just the if and curious you so accelerating a been of have right And the it’s referenced for

may curious year be seems XXXX? the to the of So I’m what heading that driving kind uptick as – just and end that, be to occurring in fiscal we else

Scott Beiser

in your said, patterns of assessment. I been of grow. ancillary the there opportunities continue business business. do your slowly as macroeconomic really see restructuring very are baseline notwithstanding, that the little help persist I continue we all items to – to Devin, grow to It’s of continue to think, kind getting fair and we these comments fact Restructuring mean, has

Devin Ryan

coming probably year, Okay. think, are ratio we And on then expectation than the better this had. most that. one us where to I compensation that, a especially today is and into think of just appreciate about how I

all maybe And the in compensation? or so whether it’s fourth the of more implication if like I least up firm has and around that been ability revenue the mechanical the at has some viewed businesses, on than because on individual better what seem I’m it that would curious, true at coming in the kind any thought to does overall based just quarter, there’s was trajectory, suspect

Lindsey Alley

throughout of business in fourth consistent we’re and compensation think think, the of done done up of year. amount this the think, fair couple it to year. I’m I year of we – we also But folks it ratio, a a we’ve in a truing added we quite the and well the from a quarter, has sure, acquisitions. standpoint we’ve I going revenue maintain where be not with for terms I think

is probably to between And reflective best XX.X% ratio up. that XX.X%. is feel year-end to I of we year-to-date our compensation pretty the with where so going continue very think on and And guess end comfortable

Devin Ryan

Yes.

Okay, terrific. quarter quarter just was Last forward the whether fiscal fourth quick pull in from the and the revenues quarter? one around any in there

Lindsey Alley

say you Devin, do mean? forward, pull When you what

Devin Ryan

Of revenues fiscal in deals that day third of the the after closed the were quarter, recognized where quarter? the third last

Lindsey Alley

you’re have pull – decade. quarter, we than transaction that structure we’ve when items concept and every for we a according – revenues We Yes. ensure that and more place had recognize We that that to in GAAP, substantially complete, to same revenue defining of through we the have met, is is forward. checklist a

So yes, have to revenues. we according forward your did definition, we in – pulled

Devin Ryan

I that was the bounds was if was, I of what more what’s getting of Right. outside at normal? guess,

Lindsey Alley

and straightforward pretty drove in we revenues fees, out. revenues, quarter And It’s some calling of worth Oh, didn’t we large a had have quarter. outsize that particular, any in nothing, but that’s no. the significant terms

Devin Ryan

Thanks and quarter. my it. taking questions got nice you. congratulations on for Okay, Thank the

Lindsey Alley

you. Thank Sure.

Operator

come Richard your of Goldman set of questions the Ramsden line Sachs. proceed next Please The from with of questions.

James Yaro

Thanks. for James Yaro Richard. is in filling This

and completed quarter? you softened confidence giving Could question next So significantly about of the parts heading you talk the the Corporate my sizes geographies, deal deal business are what seeing January first M&A around is, industry XXXX business and into across strength types. volumes Finance

Scott Beiser

that of usually we you’ve said and need to numbers volume what we deal make number that that, a grow. the experiencing been I deal deal that always Having in to the difference deals more numbers business last couple do. of continue making of between have to been shrinking even relevant complete are and you years deal to First you’re just our all, and numbers sure think,

what we’re sub-industry anything, more continually combination a there’s individuals, the experienced improving and area. that that’s than out uniquely And we have, Finance acquisitions couple sector mentoring participate a is and and don’t And the the Corporate the really talent hiring last what’s quarter don’t of it’s think been both base of – we to and globally transaction key growing think in two would I particular, in different activity. able deploying, been in in or making years. in just more our last And we’ve business we point the in

Lindsey Alley

some in We years, is schematic think share standpoint market years taking others, industrials stronger particularly it’s others, is I of that some last don’t certainly a may believe we’re be driving trend stronger not different mean, than and than that industry strong, our saying or there’s from I but the Corporate revenue one business in over mix way, Finance. couple a any healthcare be any may years.

James Yaro

what characterize activity strategic levels more And activity, some dialogue then, to start Got private side low dry you supported powder it. than the would rate? of record Could them national obviously, couple you but with been equity sponsor over financing do sponsors? past of prompt And have the on the deploying a think of costs at the has accelerated weaker quarters.

Lindsey Alley

comment has as for The I think equity Scott our us and been made could experience. not you Private been just many as quarters, robust activity for about. pretty has

necessarily usual. a I slower equity would with comments private bit is So know the agree I don’t than that that

closer look, defined larger equity private of under the could private might, $XXX dynamics it And There we’re very of billion we think – I mid-cap $X what call in different. to three I are that really mid-cap private three playing and But equity. I and groups. maybe equity under probably all it’s different be private market think million – equity, you what then where be And could equity private large-cap could be and in robust. around kind

James Yaro

I be And skewing may time. it All sounds appreciate that. like right. the deals the larger

Scott Beiser

Thank you.

Operator

of next questions. Our with questions Michael Please proceed come set the of from of KBW. line Brown your

Michael Brown

evening, good guys. Hi,

Scott Beiser

Mike. Hi,

Michael Brown

potential I activity to the follow-up to it oil if compare kind to set us? but specifically, in In you the speak maybe space, obviously the energy today, could just from XX barrel. last that, seen the maybe was first, for we’ve you industry? if good settling of gas And for below cycle that opportunity and restructuring wondering helpful could, So, oil Restructuring. energy, on some a you

Scott Beiser

Yes.

a as we what I going lengthy restructuring second think, here from we do a or see arena It like as the it’s of to wave little necessarily a feel pickup gas and standpoint. bit be big oil before. in as doesn’t saw

to business a and always the have we’ve plans of put causing are. as duration necessarily juncture, in additional the we And of of at, But combination saw where restructuring. it’s couple those kind mandates going what years all some of people kind conversations package financing and of size at don’t of a But are looked package together, it’s what be oil of prices financing think same this they ago. some round ultimately, was and that what

Michael Brown

in call, to government that earnings before advised allowed speak from capabilities you DOE you have win to on Okay. Treasury kind kind unique past, the we headlines the just have saw In guys And Could FHFA. Houlihan’s you just of of mandates? these the the then some Department.

are we transactions, is And they as structure transactions successfully And something of typically fees about then, government the think driven? like some these that? for are how

Lindsey Alley

for specifics the First marquee kind just don’t I firm. leading about we’ve firm many get of of years, or of in Financial of in example really particular the assignment the a exact all, the project. it’s ever Street another think, and a for Restructuring We fees task into been any

corporate or for decades. to organizations been area, we’ve these read of restructuring get think, continue can level what’s in municipality are levels, But and at fact, build some high-profile we’ve publicly I in stellar to levels, government mandates, we doing there. years, a whether those this disclosed continued You out the

Michael Brown

Okay. I appreciate the color.

Lindsey Alley

right. All

Scott Beiser

Mike. Thanks,

Operator

Our of next Please question. Hawken set of UBS. Brennan your line questions with of come from the proceed

Adam Beatty

Thank Adam is Brennan you, today. in good and Beatty from This afternoon. sitting

get But of folks terms just policy, off from mid-market just M&A, a maybe U.S. real of seems election upcoming of Any results your cycles, or see you the to binary alternatives kind in tax mentioned the through cycle, hold on that noteworthy wanted found effect of like a set try policy it been quicker effects You past? of there the has in that what elections, past around, in that. just to you. whether this among And push the and particularly we factors. any around risk too bit until or the a deals are clear. early little where more potential around little thinking it’s more has U.S. nuances Thank the

Scott Beiser

Yes.

potential which do points what make decisions. our have really to be changes corporate different major I with U.S. policy, executives drive regarding of in to elections could more tax kinds does think,

remarks, date, I or of to seen advance elections. said As so transactions evidence we’ve far start business early not in investors new my any key making owners decisions to really of

they’re either or So waiting. point, not at this it concerned they’re about still

at to significant this kinds it, on we’ve kind forward policy, who aware and in. But seen Typically, when get not focused impact in new to periods. people business it start tax terms transactions say, do changes will coming you volume the different will of folks, any of different of of expect on going point, be I’d we’re different but of time in see

Adam Beatty

Much Okay. had. That’s we appreciated. all

Scott Beiser

Thank you, right. Adam. Al

Operator

Stanley. Please of questions line Our proceed question. of Manan of come next set the with from Gosalia Morgan your

Manan Gosalia

good Hi, afternoon.

remain Is and more Basically, mentioned like impact sentiment, mainly elevated? would You could the the the potential U.S., you up if the markets there? impact the hold is markets to impact or in trying direct that to a there on indirect coronavirus M&A a to get M&A earlier was call environment. on environment that I expect

Scott Beiser

in that a a we has on a only on any in tell lot transactional really, to two of what ensuing become this will go. weeks where somewhat more happens of of week been work impact this world’s it of us. we could albeit, do all, It’s careful don’t have First business some need I in directly the months a news Short-term, days, China. be counterparties China, with or can all with agree,

continues getting forward, everybody But it materials, And ongoing in also or go or these on have last to mentioned, or here, you necessarily obviously otherwise, the standpoint, it investor sentiment. we’ve just stock over as a if who’s because themselves two virus could transaction of not impact can and days website obviously week impact, impact early but some seen the supplies from market negative businesses events. the

Lindsey Alley

in to And that we’re anyone’s the transactions said, how of effects I eye keeping terms it’s months? might it theory be and six but than it And tell, has supply on worth too any have temporary Yes. calling but I a of effect. result should theory, on virus in a M&A it on it’s, out. chain an think Scott as in next expectations temporary, early have it’s mean, disruption, as faster moved an the impact could

Manan Gosalia

as spend? now. coming IT investment about now, cost in higher-end the you your we then think the a And reiterated that the the your XX% few you’re just on for I special range. your expense of ratio at to you your couple it. the for ratio And you Got is of quarters you of that I on separately, out outlook because was wondering, And doing called a expense higher-end for anything that quarters, continue – range non-comp came reiterated non-com in that know non-comp side, there at XX% side should right range.

Lindsey Alley

Yes.

previous our I out are think, a in IT-related affecting of there I’ve and expenditures that called are P&L. handful this quarters

costs. are larger IT-related ERP rolling is that ones and One having out impact of we is, a system the its the on new

bit at that. year, non-compensation Having a end performing look than we Last at year-to-date a I non-comp And said time at our ended expectation if is think, hope slightly ratio, up we are better up were expense we XX.X% this year. quite better standpoint. that, and than roughly that, is you last we from our

long have I’d the towards certainly to continue to seen to over assume run. And year-over-year we that that improvement answer your yes, probably the expect range, question, but higher-end so, see and of

Manan Gosalia

it. you. Got Thank

Operator

Ken next set your with come from of question. Please JPMorgan. of Worthington questions of the Our proceed line

Will Cuddy

is filling This Hi. for Ken. Will in Cuddy

Scott Beiser

Will. Hi,

Will Cuddy

Hi.

So, your UK Scott, business? evolution you been highlighted remarks. impacting of you Could has the elaborate prepared European in Brexit how the you on

Scott Beiser

I my a think, really Well, to probably it broader even Brexit. little – comments

the pace the the that have seen of all grown at European over we’ve U.S. think, that I couple last economies years. not the has

in to the extent did we the during that continued roll we there the new especially finally half calendar was the But marketplace rates Brexit of the would or felt and in our XXXX because we uncertainty Europe out a And a calendar in lesser some adjusting negative continent. months seen improvement But and have seen people European Brexit. peers of exist have somewhat calendar that issues, are to whether seen resolution think XXXX, in UK, be have ago. in the think some the to expectation pick of in out months a we’ve first last the As up was an probably of probably a I couple maybe year necessarily couple in of we didn’t growth that, the have found going slower of in Europe that last than it’s because year. thought in they

Will Cuddy

hand earlier Lindsey, about I segmenting Thank could been – equity. entrants going those got up think on seeing you. your full been share segmentation? continued more it. If the in following strong And on comments Has equity businesses? to the then you appreciate Okay, a in maybe into that those growth question space. of an come different segments, have private private to you contributing And we’re

Lindsey Alley

number cetera, et formation think, the we’re the of continue firms tend the more newer ones new years, equity grassroots, of the we from in firms, of but of last completely personnel most spinouts And see private grow. especially size of existing deals I years doing, to focus to early continue usually, formations formation. to, that their Well, the of private whether they’re couple over equity on funds,

Will Cuddy

And I’ll sneak in. one it. Got more

bit more lumpiness, on that a you could restructuring, the of lumpiness please? what just little maybe the drove elaborate On

Lindsey Alley

transactions I say, no have in the say, We I where quarter or this quarter. we’re called very strong that are there quarter. transactions. impact meaningful this in out two past, one would – a not quarter, single just had a the had had restructuring I’d have was

growth business think does. comments – the it’s I it more Finance projectile follow our that, that my doesn’t Corporate FVA are or same

number and or that growth So can assuming quarter-over-quarter dangerous annualizing number be restructuring. that in

no So was transaction had very the specific for on this callouts large affected just very a – We timing quarter. restructuring. fees strong the good that quarter

Will Cuddy

our Got questions. it. for Thank you taking

Lindsey Alley

Of course.

Operator

The the your next of Research. Please line from with come set questions of Chris Walsh proceed of Wolfe questions.

Chris Walsh

Hey, Scott. Hey, Lindsey.

Scott Beiser

Hey, Chris.

Lindsey Alley

Hi.

Scott Beiser

Hey.

past, now have size not couple the the over Corporate franchise. if kind And is in called fastest, contribution revenue you old. the you one that, Can across areas a out of as of help last that team XX months? guys the years fastest of of team the Capital Markets revenues whole So Advisory to the Finance the growth

Scott Beiser

it’s firms important over we are of or raising hiring the markets We is most Yes. we regardless to think Finance. actually that ourselves kind And rapidly Capital it financing whole of don’t just a for Corporate and private continue last percentage we our years. I one debt reasons tell especially Markets secular firms that the talked of assist sometime private like about, equity rather call peers effectively just –we’re going. specific you, It’s the more, would in we’ve think companies believe represents being lot a or pieces the of of capital. out in of, the where we for can and more growing of the we the and agenting it It’s to seeing days have. early the grow think are either quite couple

Chris Walsh

part front, fit and the your playbook, with could of deals share Okay, you that’s in on being then hoping was earnings growth deals just fourth overall I revenue into just And announced strategy? growth the most a recently helpful. two your the quarter key acquisition how

Scott Beiser

of are average size Like our most of deals, smaller kind tuck-ins. these

transaction our So have financial the just of substance and box. size capabilities. already impact have of business strong just none in significant Spain. Freeman acquisition increases clearly, to – clearly this strength the of But to Fidentiis of bench builds that out all really them adds right And FIG this any the our and a the we FIG out an

Chris Walsh

Okay, cool. much. Thank very you

Scott Beiser

Thank you, Chris.

Operator

come Please Autonomous the of next with Coad line question. proceed Our Matt set Research. of questions from of your

Matthew Coad

guys. Hey, the good for Thanks question. taking evening,

Scott Beiser

evening. Good

Matthew Coad

last I’m take So addressable just to step Houlihan, default the the taking the improvement law and curious set the well the market? rates, downturn level will could bankruptcy as we one on attempt if your rates credit international fee rise and private you for the impact as a against how vehicles, implications next provide back, of as of

Scott Beiser

would than was I we cetera, of say et think, that, high marketplace, what the we XXXX. in is peak know debt last do at is yield larger leverage absolute debt, size the the substantially it

when we we get that entered Finance grow restructuring environment. would business And rates expect we We and and the likewise, we into do compared the also know the would then see. when we’ve restructuring a from some downturn, in levels that business slowing And substantially down or Corporate default would business slowness have. are we still low if would very to historical expect periods time some FVA

So exactly in we’ve fact seen than predict view patterns each recession, point I set different of in we’ll than a what what causes downturns it and the can previous don’t the have expect what completely and we’ve seen of one different a than necessarily timing, impact other no and past.

markets cetera. just rates, we can interest as operate we the successfully our not et might build to occur, stock what And to best will the will are our in happen stress hopefully whatever best market, business a they to is, We we continue and experts financially, in segments continue try recession what with when way. send can exactly does of to all

Matthew Coad

Great, guys. Thanks.

Scott Beiser

Thanks, Matt.

Operator

come your of line questions the proceed Research. with Please of questions. final from Mitchell Buckingham Jim Our

James Mitchell

Hey, guys. good afternoon,

some you try are there there companies the longer-term you taking How investment the the with companies. more see a and strategies I question U.S. over looks to like and stakes And now activity from maybe China. to you’ve Just in more or opportunity investment restructuring one in making deal – up think investing foreign any capture that there phase started do long-term companies on there? be know might future? to changes or about XXX% restructuring opening

Scott Beiser

term No in United areas and be and being of dozens the we’ve restructurings the global player and dozens and continue we operated now We’ve a outside that Western countries States changes. Europe one done many to short there. restructurings. of of doing China

is Financial operate we differences believe capital marketplace et of where follow, creditors player. out to we we some a form for in China to standpoint. in any will Restructuring can successful and where tend rule they’ll restructuring law, from as come along investments short-term, should continue don’t the But rights, see make We there’s – what of a think going, be cetera,

Lindsey Alley

And economies we’ve past present in aggressive countries are as India. and very the we’re those a talked matures or allows and Financial as we I think the sure mature product, – Restructuring countries, rule this for whether mature of in be it China law in is, about making

to in triples, And you I to in going those quickly if the willing product less you really the us presence that West. be rule law second we’re player are in the next allows China used if by a doubles, by how XX could think China restructuring world more the probably if over the here that climate financial environment the for So markets and in countries to governments those significant a driven it’s our and expect accept think of XX quadruples, modeling be markets. – in those restructuring years, from through years now, to

James Mitchell

Obviously, still guys is helpful. on And it- sense. grows, the that did how balance still acquisitions, or return, about No, cash maybe business it, going we hold just a Great. acquisitions, makes cash could Lindsey, on capital about couple or to or XX% flow start as more grows. do you sheet, it year-over-year. your so think do to up you where do but is – of bigger you’re special think Is That’s aggressive you dividends buybacks? to

Lindsey Alley

on with a it that do we don’t of that. approach in that to think way. so acquisitions, cash really don’t respect holding we I revolver have in put to to We anticipation place,

repurchases: share buckets: and tend we so and one, to or two, of cash three acquisitions. one, share for for dividends; for and And purchases; three, will for the our primary use kind

that best in what since we the anticipate cash we of have anything some have And acquisitions. we lot holding on a do while, so that be don’t an excess But big consider don’t we for enough excess gets would Board to cash are it to held enough our number, that to is. back holding relative think think to a public, we it. – acquisition use – makes cash. made a we’ll sense anything we and If any haven’t of of as anticipation if generating acquisitions, went a we I

James Mitchell

All right. Thank very much. you

Operator

session. have remarks. reached I the end over of Scott back question-and-answer We now for Beiser will any closing the call turn the to

Scott Beiser

earnings our everyone updating participating for when progress I to fiscal all our to results XXXX we our you on quarter thank third we coming discuss spring. forward in want quarter for look And call. XXXX fourth this

Lindsey Alley

everyone. you, Thank

Operator

today’s concludes This conference.

disconnect your time. this may lines at You for participation. you Thank your

Houlihan Lokey (HLI) 3 Feb 202020 Q3 Earnings call transcript