HLI - Earnings call transcript Q3 2021

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Houlihan Lokey's Third Quarter Fiscal Year 2021 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded today Jan 28, 2021. I'd now turn the call over to Mr. General Lokey's Houlihan Crain, Counsel. Christopher

Christopher Crain

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

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

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

Scott Beiser

fiscal of segments revenues expectations everything of changed the the fiscal and Corporate the period that in first entered the pandemic pandemic. near the repeat year, the prospects everyone of three our earnings calls. measure adjusted XX $XXX an restructuring its revenues notwithstanding results benefited term. Finance XX% finance strong. record quarter XX% us from Overall, highs challenge a for all of results, material this months a were business XXXX million record. Christopher. our record were We By XXXX earnings results. to impact achieved calendar And third above second to quarter XX% financial $X and in of achieved quarters. recorded the record recorded valuation COVID-XX our quarterly financial the Year-to-date Corporate up advisory previous increase By previous very you, spring, quarterly achieved $X.XXX above firm's events billion which nine the per our revenues year. in our and its $XXX $X.XX. Thank last first year. of effects will to Welcome business XX% record record; the of We versus deteriorated. three million on quarterly previous achieved be previous enabled record; share XX% in above $XXX $XXX are and with the the We million above every solid record fiscal and revenues, $XX XX% million revenues, million. of through of quickly achieve at quarterly its revenues, with All of segments onset previous performance confluence in above same firm

opportunities. suddenly rapidly While under bankers valuation companies businesses capital shocks raise capital stress. towards financial Similar financial on to focusing previous for restructuring bankers helping restructuring the distressed our increased. we and our economy, prospects and industry And to to market redeployed pivoted

differentiated previous distress with the notably of positive resilient way to model work XXXX, it's this the and capital environment time has business financial markets activity levels supposed finance corporate Our highs. the and summer in and and steadily cycles. turn at consistent took By a Current business trend valuation valuation corporate course upward. activity accelerated. advisory and and both The finance downturn in reversed are turned all most

prospects closed put business financial comments our any in for engagements restructuring record impact meaningfully specific Corporate to came closed transactions now on fiscal quarter. some hold first of have transactions term pandemic. quarter quarter, from the new XX% near for XXX However, higher of finance Up a segments. provide of previous engagements each have slowed. pre-COVID might this that our close without or one-third than second our the I'll

tax likely potential lack Additionally, about changes our number calendar that engagements third transactions quarter. impacted closed a the Offsetting in of new accelerated quarter's a would concerned the as small that generated result business was and of XXXX. the closed spring reducing of results factors were summer, of portion this in likely in fiscal law quarter have positively our this early

finance industry quarter quarter. did are the fee mega All for a We exhibit Now sectors performance few unusual segment. well. performing year-to-date not corporate about business and any this projects specifics the

growing than are our revenues international U.S. revenues. Our faster

of Our new substantially year. hold recession finally, quarter itself levels versus on at this a now be capital last challenging record through and up markets early normal our from deals are and calendar proven this quarter this of experiencing what from first we to were this fiscal dead versus year. quarter number And second up number resistant up business quarter. set the nicely The engagements is has year, and deals our substantially

driven were FEA sub-product our by all strength Our lines. in almost of results

bear is markets. work pandemic which practice, and Revenues impacted activity and business, impressive. for transaction bull even have clients. Also, summer. to both created continues barely and has line in growing M&A financial Our proven corporate declined positively the record sponsor our in improvement earlier sub-product of our portfolio so do been in the and during valuation by opinion largest trough our has both produce been to The business the which FEA has since year resilience does segment, the results

size comparable and and of events activity revenues significantly the improve. business higher quarter New to are continues average year-to-date other the fee Financial than restructuring any for period.

amount the financial geographies practice year-to-date Our pandemic revenues our and by the historic distress general across benefited benefit basis and global In versus and from debt. tends the of restructuring weighted been slightly caused have strong both restructuring industries, Financial and are creditor be revenues on and more large number closings from few a mega towards didn't assignments events. to volatile a quarterly assignments. a debtor of quarterly

business equity new capital history. described in restructuring third in slowing. the for and business the quarter revenues activity time markets As and last of peaked our over it's recent slowed the The substantially debt And restructuring one two strongest has been suggests likely environment driven quarters, being. current by have

leverage amount extraordinary grow balance during been continued the businesses. amount the of an of of to However, and pandemic, sheets the struggling worldwide has added debt to

unprecedented may decline capital, access activity. new support and there short-term government a restructuring be Given to in

for they knowledge Pamay and and expect than firm Board be fully wealth our Board. and Pamay long-term and added Walker stronger bring and of for the Bassey Cyrus them news additions financial pre-COVID. Cyrus a quarter, today prospects mid Members. experience, the out Rounding we were as are to we restructuring to However, other Independent great

recognized pre-COVID upon continue for to the rankings. and achieving throughout with and to respect acquisitions to front, I show business business bullish more and year of these than I in entrust of And we But employees have firm Houlihan table On active M&A of has firm rankings, acquisition have businesses number number closing, every also challenges. in situations sellers wanted transactions. year faith completed unusual these restructuring clients potential and remain accomplishments, based the services the all transactions. who for business continued a league to us benefited as the the the one to a have decisions we proud their their to number slowed In U.S. our with row, seventh Lokey very financial times. thank perseverance With in thank supported row despite who completed in year. currently shareholders was as important which that year on two us sixth our strategic to the and January, globally, the model in continued have levels restructuring M&A congratulate difficult out incredible promising. And have employees for our of recognized based wanted renewed in the I who our thank environment one come these of a our who number look progress. and turbulent our were We're want energy

feel results calendar to the and we're this are positioned call well turn with pleased I'll very and We With Lindsey. our for XXXX that, quarter over beyond.

Lindsey Alley

last when Thank Corporate COVID-XX, first And year. as the to fiscal for closed were quarter this of year. contributing corporate earlier you, strong of nine year-to-date the a to compared compared fee last performance, transactions a corporate from the quarter September year-to-date average XX% year finance transactions the finances through quarter. result same XXX period last compared year. step up for revenues This increased is the a XX put comparing on our significantly this of period closed a a same same improvement Scott last number to hold quarter, that when down on and to was in increase closed finance Taking deals pandemic. XXXX period Scott. the when back in transaction due to stated, Also, this X% as we significant months

metrics quarter, transaction same transactions segment. more and we was our on business quarter period for in deals quarter when the closed quarter, enter XX last significantly our compared last higher this to fourth normalized operating As year compared average a return seeing XX are to this this we the year. to Financial restructuring closed same fee fiscal

and acceleration level resulting expect and to in the from leverage meaningfully around equity of to to medium restructuring we pre-COVID in many attractive industries market both contribution suggested, and expect restructurings and However, long-term to now across our that the those fourth access and close economy see transactions financial committed over debt belief changes COVID impacted the of But our mandates of remain activity new make global pandemic robust, transactions other levels this Scott pandemic in adoption We capital XXXX. the make an technology remains to long-term. continues time, is the for results secular We to reduced financial a as recover impacts fiscal at still levels. as the quarter. current and

improving quarter the capital business. its advisory, in the to across results during headwind we continue and finance productivity However, corporate short-term period have of FEA for continued compared year. growth current a year. to XXX benefits M&A same is the most XXX are and time. the we FEA throughout restructuring Overall, trends in to that sub-product markets to lost valuation our government up last same financial stimulus experiencing markets fee had experiencing and strong the as saw make is in In see events lines,

Before a year-to-date. we about few to get performance comments make like our to I expenses, would pre-tax margin

period year by result produced expense for unusually large also pre-tax result lower driven year-to-date, this from slightly dynamic the This a part same higher ratio have as benefited margins XX% of adjusted have We of we versus the that a expenses compensation the year. XX% has pandemic. non-compensation low ratio pandemic. seen reimbursable last Offsetting of an in

is As given long-term are XX% of determine targets to pre-tax to sit margins is abnormally for it expense our early business our going affect today, any But COVID-XX our how model categories. we high. here too

the one related period were for compensation million acquisitions. adjusted the We Turning certain for adjustment same our this for to year. to retention XXX expenses had quarter, quarter expenses, million XXX versus last payments

last quarter, ratio from result our in the a expense quarter. an is expense target which last expenses compensation above compared XX.X% was as adjusted increase ratio as reduced We and XX.X%. long-term adjusted current compensation for Our quarter slightly of XX.X% reimbursable to the between expense ratio of compensation for our

the our target compensation higher ratio lower fiscal pandemic. a as primarily As XXXX on expected reimbursable the to previous I've is due of for discussed long-term than expenses from than our impact calls, slightly result

the of adjusted a last same adjusted $XX for expense non-compensation non-compensation quarter X.X% were resulted in period for ratio decline an versus This of expenses quarter, versus XX%. for the same year. million the million Our last year, in the about $XX quarter XX%

marketing, entertainment well is office-related to as to non-compensation and the of below decline expenses, Our at lower expense as ratio pandemic. of the the well orders all because lower a as home year-to-date direct firm's meals expenses stay a and our imposed long-term current running travel due pandemic. result other result target of is response the This operating

reduced least year. to continue of to half this expect non-compensation We the see calendar at these categories first expenses through significantly in

This of primarily approximately investment quarter, related our approximately $XXX,XXX expense relating we our a income of $X on for adjusted decreased only amortization. one Other acquisition in year. to income expenses result versus period interest million to item earned was the the of same cash lower income This and non-compensation and of out last balances. quarter

Our non-tax adjusted year. entertainment and and decline rate effective The XX.X%, items, rates our target, was other same current the certain as period in XX.X%, for quarter is a below significant to tax expenses. running driven compared last meals tax long-term adjusted such by the effective deductible during

XXXX be rate for tax As closer a result, XX%. adjusted we expect fiscal to our to

sheet end, investment balance the unrestricted and equivalents million securities. $XXX to have of cash, of the uses as we of and quarter and cash Turning

As dilution unpaid fiscal we repurchases of to to Also, share XXXX, earnings And part share quarter, announced offsetting finally, associated repurchased this portion program. increased of March per this of our share With in record are repurchase cents stated XX payable line $X.XX share earmarked announce of shareholders the an $XX.XX part March approximately on paying compensation increase million that to of $XXX cover for for of repurchase are shares is per we we for program we as at pleased operator, past we our as bonuses significant and In we release, can X. a to as fiscal cash a above issued expect dividend average reminder, of share we price that to of our XXX,XXX goal a our XXXX. our shares open the program. with questions. accrued

Operator

comes Ken from Thank question with line JPMorgan. of Worthington Your first you. [Operator Instructions] the

Ken Worthington

restructuring you like of any us you working where terms how are would Thanks. COVID would I Appreciate through you terms pipeline? say all in completions you backlog? your working retainers, right your of restructuring, in about driven you the comments of now through say versus are give information terms in that's can guess Where

Lindsey Alley

Yes.

Ken, it's think it question. to performance. see will to that prefer give quarter it not I leads specifics; just we will good you I is that fourth a But, But think expectation tell of I kind our that our in our the on COVID a on that not in related of some quarter. to quarter through. impact prefer we've But will how closing terms specifics comment have transactions fourth positive worked restructuring results much

Ken Worthington

stand a or trying you as about the approach, vague quarter, year, four Okay. there Maybe skip more we following any think maybe Is the even quarters. calendar where next but maybe same current that versus did. what further I'm of color the you out maybe through? looking the give of repackage needs us into be to can in terms Or is future the I if question worked sorry, again.

Scott Beiser

second to continued through and COVID in I'll fiscal still slow about do down still et seen, from quarter. we as And we've still and generally not nothing first it call the in, it, it's technology, of quarter to come having have standpoint. there's our we what to new whether it suspected And we completely terms fourth saw issues. quarter, COVID And worked third will a what down large cetera. year in talked normal businesses, business work ago. in very maybe disruptors, There's that's business slow Ken amount in of et cetera, whether overleveraged, the that a started just with the

amount still six finance we optimistic with helped government the would and the out struggling two our of totality, potential business and literally their probably Capital look at coming and the companies what's companies resolve markets described short-term. have are very clearly I that in today still that's comments, very we months in thought there last world we've versus corporate not of probably ago. And think feel in business. what in we flip from long-term, slowed terms when the are plan totally months still the wide a been all may and down mid activity in issues, business short-term. leverage has was conversely, would number of open But about, our we where seen have intervention the restructuring

Ken Worthington

you. that you what per was in Can then, rate more fee higher we mix fee that thank seeing, average that and higher per continuing been you're have that deal driving to Okay, rate And change seeing mix fee talk color the the M&A. deal? just on about anyway help term this like but

Lindsey Alley

When you or… and you debtor business the talking restructuring mix say about -- can our creditor and mix, you are

Ken Worthington

market and to was based M&A, Like No, business. non-US related size the I is the market? quarter, no. more it size middle sorry, transactions, M&A just mentioned is finance deals? -- believe, that sort per higher fee of this it Is to you'd I'm corporate contributing

Lindsey Alley

really international I maybe just say impact SKU capital transactions slightly. there anything don't it for it previous of fees the larger and think has increasing we I quarters in our think with we had business the generally it's markets I'd those in on we've versus the is quarter, speaking But saw, to had because had benefits fee do an a U.S. average than size, And

Ken Worthington

on we nothing lines. generally there's what from we no and this and little that should engagements close saw theme there fluctuate read along does quarter. quarter-by-quarter, Okay. But No, a things forward just what those depending

Operator

Devin question with comes of from JMP next the Your Securities. line Ryan

Devin Ryan

completions, I'm But curious in prior potentially that it's sped if the or up in touched the People were some the a couple of a couple special taxes like like reasons. here pace feel change, deals just completion deals of a pace corporate on And clearly pandemic. does of off. So quarter. and to you sped for on squeezing it backlog finance, seems really it maybe the

question continue? in related and completions, markets assuming XXX And then, I'm the together as of that those how a tied maybe well. can to capital probably many close faster were deals corporate come finance and So

think just trying seems like the to were few completions maybe change, that, quick months thinking a what just about it we relative So to given how ago.

Scott Beiser

is ago, M&A time this take the them if close, a those changed driven really them et have market on did it transactions would to drove we quarter longer already hold quarter. versus typically XX. an But get pattern, than cetera. maybe year were Taking What mentioned, of percentage isolation, to last were partially put which by in completed individually, I the two dissect any types December But in mean, accomplished wasn't of purposely yes, normal close you were wanting say hasn't some I deals, by smaller we of And to versus spring. capital overwhelming were a to there deals in maybe that transactions quarter as period fact transactions.

And quicker. mentioned, part therefore than so the timeframe up of of you conversely, already were could cetera May, normal deals new that deals because have close But therefore, pandemic. normal been the et brought April, of much amount March, had as in probably we in, those and eaten lighter we the would

But overall versus in So, comment is balancing the there's pre-pandemic. think your where regarding some were I world there. today's closed change timeline, we don't meaningfully to deals,

Devin Ryan

just And up Okay, thanks. follow That's then, helpful. here. a maybe

and of a the this $XXX kind excess similar repurchase. we should of bit May without just thought business is Is just being a given can elaborate that you the read opportunistic; the If occurring, a of a large capital as on Or million creating raised lot scale return last flexible of for obviously, kind cash. was really kind process size? little M&A the more

in to that to extent the that look you continue buybacks. to may continues potentially, So on lean

extent see same well, a and or announcement whether more continues perform a kind the You to try one-off continue business thing, this and may the this potentially the kind to reload to we you is to think of of situation, of about do

Scott Beiser

shareholder several and to cash factors, we the with value. to think Board continue our can continues doing about I to be maximize talk what should

authority market or at two of I value company think have the our we of had. stock other looked size the raised total the grow. repurchase times continues obviously; have to three total We We've

that at has I business think and the as to some market business consistent with we we've repurchase. somewhat, returning fact fiscal of least more heading goal, the the the to in grown, of to we've some of something I that terms size of continue profitability at historically grown, it's than feel read flexibility more financial at the shareholders. the our Lindsey always wouldn't and company to a clearly So approximately additional mentioned, the least to into was doing in the do amount focused we've on And, other anything has looked recognized thing of repurchases, cap business have condition prudent size; financial the is, 'XX thought that. cash issued, of than shares do we

Operator

Manan line with the question Morgan next Your of Stanley. comes from Gosalia

Manan Gosalia

maybe comments Maybe so the expense we get more going just And near and back line. 'XX. to about as 'XX, thinking maybe much your it not more but even on fiscal non-comp maybe term, into

was to a more You've of pre-COVID. some willing in people also there's clearly there. are it But, operating low, really even [ph] to keep know leverage it in operations] do [non-comp record I things And managed where quarter. virtually. half your

non-GAAP back So go a why ago? to reason ever should number is a expense had you XX% there that ratio year the

Lindsey Alley

question. we question. to the that know a It's honestly, good answer don't And

our real it expense which last months is, happened what's some the will see we largest nine of and think that will of items. that pandemic primarily we're is I benefits efficiency kind with one see over that anticipating of TM&E we out the expense, efficiency in

to that hard But we efficiencies the today that whatever the they how the payments kind a to shame out long-term, of medium to to cube those need for hoping an this. to out of But looks have like. don't And if separate until is sit getting But of as to don't those start with even new to to coming their and in some will might how people from go expect be we office. we're question. rent glimpse So the has not a and that we TM&E. here own over regard. levels. normal just away a we least to it's -- extra pandemic, we until see changed few everyone our The no, to respect back again likely travel look really answer answer react everyone at it see normal with the come like, and and we're quarters world But what respect have of

Manan Gosalia

Got made then, how talk curious ramp on think about international the it. spoke about how activity And up is about some there? the is you've business overall, maybe well. sort little you're you this versus you And side, the strength a doing much Can in investments share a internationally M&A bit how you much here? of getting of

Scott Beiser

it's added dozen internationally terms both, meaningfully last hiring acquisitions, individuals. think years, we've mean over the of invested I half in I

Our is literally largest now ago. our London much years X, much, XX was office smaller second office

for base. you the because two, U.S. it's it's off they're And to business, we our at a up So then, from greater of because just our some us, of the or years brand, it Brexit. a it's good a like partly lagged years. as resolution feel And last ago. stops is Maybe think and it least finally greater was before, lower it in due presence. some clearly many been. picking mentioned where And half year does have of position a also coming Maybe it dozen our international of part been it States even there's is starts presence, today is the I outside and much over for the United while than has

to that moment, all of at causing business and think nicely is the growing rather our be results internationally. profile I

Operator

Richard Your Sachs. Ramsden next with Goldman from question line comes of

James Yaro

Thanks. This is in Richard. Yaro James filling for

which year views in XX performed the on start And your higher expectations? you the quarter update a I'll spot on the a Perhaps how So obviously could growth it's congratulations so over those obviously on both the a this Maybe is versus maybe bright been of unchanged HIL and this peers and or your across finance, your business, business markets capital last results potential advisory versus long-term that. with fantastic growth is your us whether of ago? are months. say

Scott Beiser

about ongoing public is to our to capabilities. optimistic debt, the Houlihan do participate and We more see marketplace of very on much there's done equity base, capital tend advisors, in more or Remember, on and on the continue than what side, we private equity raising. both Lokey some financing classical the shop. still we're meaningful define So interest have others. that not our I'll by corporates much to other financial capital what do we anything sponsors our marketplace client we're raising been and that And peers to equity U.S. IPO really overall focused not

from XX today So that over side, that. go we everything about can haven't on benefited ago year But a see it were we as the where or X, as two the optimistic financing just we next years ago. years

James Yaro

over the about the sponsors and developed That months. past how it. Got you few dialogue talk makes sense. And that's could with then, maybe

could in far, so the perhaps and think next change you XXXX And year. how that over

Scott Beiser

mode, side bit sponsors in summer. very they number refinancing and and to side, certain by the and The we side, while a do were their deals, of sponsors ability both and and points. restructuring side, force in sell full cover in number mode interest spring and They're affected sleeping the of active probably

at think I been even things. too they've active to certain look

that the sponsors think the So the is, part in all And and time in there are are, is And of corporates. like they're again. of capital may is catch we argue I of believe feeling kind that but of tunnel eventually the out, with look here by pandemic, And it what might activity two. it, they the economies at money the where end little world's of play up. deal a borrow the just most next better people think, exactly to over go year period the vaccine is things light able people in about driving or part I markets what

James Yaro

you you inorganically, bit, today, last could the about a slowed the did maybe that is, over what talk the and to had year, if raised but you dialogue how little grow and has acquisitions quarter, characterize past at Okay. targets timeline that's focus all, see And this if changed. don't down And potential on for continuing changed environment you the cash then, that potentially returning any with the

Scott Beiser

when we the closing of back transactions. year-ish May money in and is in raised XXXX, felt finding, of on always type terms We a timeline acquiring probably two

So that they or it sellers the like out last we of Having due sellers, maybe time third to stay and so the said quarter still maybe said what we're are independent. feeling is quarter, a there, kind repeat who this want in some that, only improved were again we ago marketplace of six to period. months

Some Having price feel think to their line that still that talking we of and have really always juncture. we I some mentioned, them close this we but time said all gotten closing still are is take two do about, quite the from not to good as of at line. companies a that, in expectations They're not numerous there's these maybe months. perspective

there, to little to six these we're more in the terms So of of months close we difficult timeline the elongated opportunities than little optimistic of out situations, situations, and the were and improvement or still some in just where due of we marketplace. those have maybe more about the a think number situations, ago sometimes size and gotten a the

Operator

Your line of comes KBW. with Brown next question Michael from

Michael Brown

the comments bit of all corporate I appreciate different I tack little to So, wanted the finance But a on take a there. here business.

obviously the wall right gone vaccinations us, of kind election the behind worry of rolling got out. we've and clearly So, with

have kind out that, a some are they're relative they still were, the now contemplating Or What bankers? how curious of virus lot your C evolved the the seem on of major may those risks that of it of are the and lot but like here less mind, just more be not is what with valuations to that a is to concerns we top what concerns have is a how where recently. raising I'm in obvious of curious suites are pre-COVID? just discussions dissipated. conversations potential So sure the of I'm And there focus now kind

Scott Beiser

and U.S. no I'd particular the I concerned order. still matter we buyers things, people's the But that both be and to a likely always changes in timeframe on in tax shouldn't issues is globe I to administration current one probably code, Increase on no size coming the not what other we the in from can impact parts could think potential on. few tend about regulatory that going larger work some transactions, of views what have the mean, hear corporate on deals say they more are certain do. could impact

concerns exactly say; operate now how at don't from and always so have, are yeah, clearly the the thing, know Third then, just general know before valuation then, of many, issues you be what lower the versus I for valuations, the uncertainty. can out there see you at when we of And a those some think time, them look see suggests I handful sellers many multiples today. pandemic hearing the the more like? there's be you'll people suite disagreements plans, people any and world both upper way the generally normal of year know can that you think we're the anything world. to And companies look business sellers think there's given And issues quartile buyers that business and take full their some I I should the post-pandemic. does there. typically are still companies, are may post-pandemic, so, quartile. post able those C And or And buyers putting world still it three And between of at but that year five a out together have

Michael Brown

Okay, great. helpful. That's

and I the able pushing see to margin over certainly could this travel see I helps. though, this like do, expected have quarter, result in XX% and something great maybe would suppose So, inherent see I down When of course, just I ratio model. no be to of expected comp the that the have certainly kind little operating really business to hadn't revenue to leverage operating that a was come given

bit you full the that's about So about fourth as ratio, result. that. how you But are thinking a year to little I you something reimbursable with perhaps contemplating, about just understand dynamics of you're quarter a comp the expenses. that And think if the hear fiscal wanted

Scott Beiser

to for to too we've we much think compensation primarily full not but is be there always focused try on variability. vary year, quarter-to-quarter, some going the I

that's So it. part of

volatility analysts and whether and bad payout or to I told our think going you told and compensation the years. are investors, we've typically ratio, ourselves always in less Second, movement good we're viewing have years

or So This non-comp shrinking than times. tax much quarter, our an you much, bit than is increase fixed times. meaningfully percentage on the a abnormal And pre before. side. will And little a usually typically just was so during margins not more side the see higher revenues at ever necessarily we've our in just difficult more all on likewise, it seen because good are doesn't

significant classical you're that generally started because minds the of year, public year compensation quarter, payout a -- earning lower or three would mostly our have years XXX%, we But not said, So, the some upon of obviously the I not comments stayed look, And run you it's some a beginning end twists to in of year, it today business. did of level think, told profit we from And we've due it, decline in the ago the off bit the too our we've within had like to we we even what eve reimbursables, us based seems not you've necessarily mentioned. the are the way going pre-public. ratio or than always which of in different revenues, it. this where the this

Operator

Please question line next proceed Instructions] with with Harte the Jeff Your Sandler. your [Operator Piper comes of from question.

Jeff Harte

pre-administration to us for where from outside. on of think things visible just after or kind year-end think the the much any finance of get to help than hold so and closing about I'm see a of corporate me how about the just kind deals of of going from we were forward Can stronger like, magnitude revenues quarter kind the feel revenues a pipeline, trying change can to to you stuff, order of acceleration. benefits

Scott Beiser

that nine and quarter. worth one versus have a at first had results we've looking said ever just maybe as start would the that things we are worse had and occurred, the have as momentum is not would have quarter. third pandemic of So exists certain I months great seen. step today take backwards with quarter, We that better second then Having clearly we and maybe there arguably, a mentioned a

some closed, still full reasons, and that tax think confluence it, market we're at have it But and a very that's smaller I playing at just, of That's quarter and corporate this think the look continue for in about deck the way do optimistic new was amount fourth are But of the can lot of the with say the quarter don't So, to level a least quarters. deals mean, you we we as couple the quarter in as what quarter things at us. beyond. weren't look I into finance I business. to presents fiscal of ended closed a of that closed there think last in and probably that is, didn't for for those offsetting the we heading fourth because next amount bring ultimately of quarter some it. maybe fiscal best some quarter, second was normalized quarter, of should instead mentioned third events, a up third first can closing

business about want we of did happen forward So what pandemic. years, it, we going look before pre-pandemic, try it if with knew and year, today going sit the and however two we was to for half at feel we we about next kind to to year, do the better what analyze the it, than here now think you

got to we've have we're So and growth we hit, seemed back mode. recovered all in

Jeff Harte

we're non-comp the XX of when in do a was Okay. we have quarter expenses, of wise? running kind a think at kind you hot. what dollar least a pandemic million kind expecting of as feel about near-term, and the And maybe for you're mean, I

used it's XX at the near-term million feel you for I what do mean, see trajectory run we to have and least might Now, it XX. any there?

Lindsey Alley

driven Some predict. is really of to reimbursable expenses, by the which increase are hard

So standpoint, it. accounting from expenses, higher just the do because a I the better non-comp frankly, revenue for think we of our the

So, the But And three so non-GAAP last going that attached look I much to have that usually think you for that hard is when given guess, to a expense. it the grow like it's drive quarters. driven tell is by to you be that that's quarter fourth what it you revenues, and of will growth of a might in revenue expenses clients from reimbursable QX. average look, an proxy

change. And than so answer little harder to used a question to that accounting it free be

Scott Beiser

is there's fiscal our But occurs. our look quarter fourth historically, And if highest why tended a of non-comp. fiscal absolute reasons our couple lower. dollar on just to third then, quarters in historically, Jeff, amount an this you seasonal back And, and come

of timing. certain that's similar predict that not assumption, but occur, amount an used be revenue, there patterns thing ran to some seasonality. the to or have the things of things training, certain if absolute its of nothing some has is do to certain because So absolutely with tied as to mentioned quarter-by-quarter conferences, reimbursables, and you the it's costs fact you seasonality when had But Lindsey our there's amount its we can't And unreasonable then, of some when been non-comp.

Jeff Harte

a the there cash sheet? cash should of of there's an so finally, of to much kind think as kind dollar percent absolute basis, Okay. And being balance then, total we as targeted of on I a minimum mean, something also hold assets. but in

up? to So kind of like it targeted a range, you keep guys

Scott Beiser

It's a answer. complicated

I paid. bonuses accrued sheet. think, have a be unpaid have on as balance our Those do we and liability to

have for And So you are remind going in you payments to keep those occur those enough and cash to November. payments. May

the loss to and certain thing is The is of that other is some even with overseas expense amount new there home. there bring that is, a money

And and then, not necessarily be And the kept so from that, distributable overseas. not us. easily is balance operating to there's in cash sheet, but that needs U.S., cash that regulatory capital the in only

terms an dollar answer. having Scott a of is We here about We we're we do cash. to it absolute level do number. excess suggested that excess of cash don't Board with as think minimum at hard And one what with to or I in today. the conversations sitting so, And it think believe

quarters. the the probably over was seeing a over that of earlier and more coming to You're the come little bit share on mentioned repurchase movement

Operator

question with comes Research. line the Steven next from of Wolfe Chubak Your

Steven Chubak

wanted mandates, fees over least infer a reasonable pace XX levels, roughly with that to it restructuring on When the restructuring. back off at I getting quarter. million to to of of pre-COVID about was rate be run medium-term restructuring at the us start thinking So should a question for pre-COVID the new running

reckoning leveraged you. have highly their Fed of recognizing, low of Just the given spreads, may what so rates, backstop, face day the credit existence not corporates quickly tighter simply

Lindsey Alley

the think short-term. I like going tell to is little a it's to in look early restructuring what

continue see transactions to some COVID-related You're going in to QX. benefits from our

typical periods well. restructuring complete. take to are years year the next because as for can Activity some mandate levels see restructuring tough, You'll

to at to So is that million normality is level; of that's But those prior too to that a COVID. kind experienced you XXXX we see are to million return Whether But, hard two tell. of to hope what fiscal to for sort hard three mean early quarter, that that it's quarters years answer. one that normality. is going XXX QX does for in of and three XXX to level two it's whether We or tell. just quarter,

Scott Beiser

impact amount of markets, world, restructuring years, kind be technology, to never on were, of healthy capital A completely kind which you the XXX. things from that to getting more the been 'XX the yourself optimistic. may as as the the all businesses, revenues system, kind fiscal total tends companies range XXX And of hand, factors, restructuring down. dollar disrupts a absolute those still pandemics come obviously, have increasing the to they I'd number of other fiscal 'XX, and ignoring positive lead and mentioned, generally negative for today to pandemic, of of couple ever the Lindsey or once and of the interest as the healthy across four lower to moment, our last of slow Steven, add, out leverage very the rates,

start -- difficult. more continue year-by-year, to of the size would the total complexities the to a has blip The just with market, to pandemic. of with I restructuring the get So a continued do and for having nothing grow moment

not been well, thing, first this we think mega and a There on. And There's number size one other business. really we months did nine worked or the very Brothers that while financial so and I there's other leadership of crisis in ago. quarter, say or obviously ones. decade these I a CIT then, saw this the mega been Lehman great global we've these position been in deals there, super size so in deals some that maintained or of hasn't of we a would far

we're feeling they're said, just going and that some those COVID go medium basically that more us continue fact, the see working we good the in in experience it on a not some be leads staff, all size by decade so And transactions, of long-term, our standpoint of any healthier, probably of had there's typical staff our restructuring getting where to comments the road over done. super can mega the to the of to business good analyze you the from skewed skilled, from about deals, regards, still may really more very of where cetera we it much work results in the is number pretty when some we're et of kind many staff same bumps isn't size, the and ago, a mature,

On other hand, the in stabilize have things kind we other the new months activity. of until to business areas last several slowdown witnessing in been

Steven Chubak

more normality, of really just on were they or color. helpful both, you but side. the on thank Now, topic follow-up, corporate finance subject the And for the my focused

at levels, to mean, obviously was of alluded I this I the that's most north per XX for quarter, be expected. not recent the million quarter. I think decline look banker. it some least If productivity You at to the versus expectation

about fact closed two should probably in the the of to third alluded a earlier that transactions quarters. You the have that closed

as think million two range. might years a out productivity be underwriting? in of guys XX a year terms per you reasonable to I million like? square now you can X quite a or Now, As look banker M&A a tried truck the healthier seems in is healthy trajectory you drive do through environment, expectation per obviously, not to very what comfortable was that a next expectation it productivity we for activity reasonable pre-COVID look What that what's that are -- what recognizing

Lindsey Alley

can Here's overnight. good The proven from to million we've that news increase productivity million the XX X good news. is,

so And a is for capacity And keep is there productivity our there that to productivity levels of M&A bankers. of the things XX. continue us to number below drive

think I constantly hire people is levels of then one productivity them new we lower. will

is we've is system. in bankers there think And on corporate our is continue that finance And this of to Our in But But, drive structure the M&A levels will last there. or overseas to sustainable. in quarter for we've And the not productivity corporate a the bankers we that quarter-by-quarter. will hard next improvements to I U.S. the over proven we extraordinarily last five productivity but only have continued the be FEA relative it finance And in seen the is not seen over also expansion few a in capacity overseas headwind that to we look business. years, for theme because worked fee there our ways productivity three business capacity believe us years.

Operator

question Your UBS. next from Hawken comes line with of Brennan

Brennan Hawken

remarks acceleration in to possible prepared finance You just corporate thinking drove anticipation in is to about squaring your understand bringing, law next year? some try your of year-end it wanting into potentially change or impact would forecasts in that tax referenced in -- activity base forward looking our and business? that off size of to we build I the when right which kind that we're of we'd revenue so can of and the know be up

Scott Beiser

the of by Yes. But early M&A there hired isn't common who least just on in practical, closed close says, if What while to that that XX, there would to the optimistic able got XX, people we some landscape. were XXX. our were or or the had number you X of give when a XX, XX December close. them and yes, December of client expectations field, minimum wanted were isn't you transactions a in really we them that I to achieve get fall, by where some there at very oh, out could to that our we some be don't. was summer, talk didn't, bankers yes, number late much can say probably Brennan, projects is, are

easy So have our into was and don't ones of rounding really and close that how this to XX, I all otherwise, accelerate able trying which people to have of by being an think way -- small we it XXX won't deal Like warranted gotten several amount footnote it December quarter. reasons. analyze business. closed. hired a a a projects actually project was our that people pushed the were Because in not of said, strong. more to won't don't I be analyze it say was to an for was revenues said, adjustment I'd have a or commentary statistical that overwhelming think reason this a major I to commentary, caused quarter different it had

Brennan Hawken

the of kind fiscal that say want that quarters number, And there some deals full quickly of going that just what about is, about Are from year, then, that then it Given want since that, to for have really on Scott. we rather you finish a they think to trying think And way this the said when the everybody business? the reanimated, when you'd there year is about we kind some off about and understand, just and jumping better of Okay. on that quarter regular period had the was fiscal way Thanks a involved reinvigorated, look to some when clearly to quarterly year different thinking from business cadence than down? like brought while, this funky. And like, line got focusing a -- the seems what your world quarter to trying off were I think to which ground new was some XXXX? is in is were for brought it business when were been shut stuff. that that with this just that,

So misleading. it be might bit a

Lindsey Alley

reason look at back year-to-date not I is a to is are, finance a pandemic look numbers in next relative take finance two look corporate think probably our be you are transactions the of related no might have what point and upside a earlier, metrics as QX normalized of numbers, mentioned the in that go at realizing But that in slightly of through there's Brennan, There's business had you and we're up for that Scott year-to-date the or a year-over-year. benefit and if have year last the year to comments off occurred. going closed potentially QX this then not to from jumping that you quarter-on-quarter some if makes we're which the things, I sense. pandemic with comparisons, corporate think quarter if bit of lot kind at my seeing little to earlier

Brennan Hawken

does. It

Operator

have for we session gentlemen, to back would end of and question-and-answer and remarks. closing the reached like call to Ladies the turn the Beiser Mr. Scott I

Scott Beiser

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

Operator

concludes conference. today's This

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

Houlihan Lokey (HLI) 29 Jan 212021 Q3 Earnings call transcript