0001302215-16-000077.txt : 20161102 0001302215-16-000077.hdr.sgml : 20161102 20161101194811 ACCESSION NUMBER: 0001302215-16-000077 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20161101 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20161102 DATE AS OF CHANGE: 20161101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOULIHAN LOKEY, INC. CENTRAL INDEX KEY: 0001302215 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [6282] IRS NUMBER: 952770395 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37537 FILM NUMBER: 161966057 BUSINESS ADDRESS: STREET 1: HOULIHAN LOKEY, INC. STREET 2: 10250 CONSTELLATION BLVD., 5TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90067 BUSINESS PHONE: 310.553.8871 MAIL ADDRESS: STREET 1: HOULIHAN LOKEY, INC. STREET 2: 10250 CONSTELLATION BLVD., 5TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: HOULIHAN LOKEY HOWARD & ZUKIN INC DATE OF NAME CHANGE: 20040902 8-K 1 hli-09302016x8k.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


Date of report (Date of earliest event reported):
November 1, 2016

Houlihan Lokey, Inc.

(Exact Name of Registrant as Specified in Charter)
Delaware
 
001-37537
 
95-2770395
(State or Other Jurisdiction of
Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
10250 Constellation Blvd., 5th Floor, Los Angeles, CA
 
 
 
90067
(Address of Principal Executive
Offices)
 
 
 
(Zip Code)

Registrant’s telephone number, including area code:
310-788-5200


(Former Name or Former Address, if Changed Since Last Report)
Not Applicable


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02.    Results of Operations and Financial Condition.

On November 1, 2016, Houlihan Lokey, Inc. issued a press release announcing its financial results for the second fiscal quarter ended September 30, 2016. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

The information in Item 2.02 of this Current Report on Form 8-K, including the information contained in Exhibit 99.1, is being furnished to the Securities and Exchange Commission pursuant to Item 2.02, and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by a specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.

(d)  Exhibits

99.1    Press Release dated November 1, 2016.





SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: November 1, 2016
Houlihan Lokey, Inc.
 
 
 
 
 
By:
/s/ J. Lindsey Alley
 
 
 
Name: J. Lindsey Alley
 
 
 
Position: Chief Financial Officer
 





EXHIBIT INDEX
Exhibit No.
 
Description
 
 
 
99.1
 
Press Release dated November 1, 2016



 EX-99.1 2 hli-09302016x991.htm EXHIBIT 99.1 Exhibit
hlilogoa02.gif

Houlihan Lokey Reports Second Quarter Fiscal 2017 Financial Results

– Second Quarter Fiscal 2017 Revenue of $187 million, up 18% Year-Over-Year –
– Second Quarter Fiscal 2017 Diluted EPS of $0.31, up 107% Year-Over-Year –
– Adjusted Second Quarter Fiscal 2017 Diluted EPS of $0.37, up 32% Year-Over-Year –
– Announces Dividend of $0.17 per Share for Third Quarter Fiscal 2017 –


LOS ANGELES and NEW YORK - November 1, 2016 - Houlihan Lokey, Inc. (NYSE: HLI) (“Houlihan Lokey” or the “Company”), the global investment bank, today reported financial results for its second quarter ended September 30, 2016. For the second quarter, total revenue grew 18% to a second quarter record of $187 million, as compared with $158 million for the second quarter ended September 30, 2015.
Net income grew 126% to $21 million, or $0.31 per diluted share, for the second quarter ended September 30, 2016, compared with $9 million, or $0.15 per diluted share, for the second quarter ended September 30, 2015. Adjusted net income for the second quarter ended September 30, 2016 grew 43% to $25 million, or $0.37 per diluted share, compared with $17 million, or $0.28 per diluted share, for the second quarter ended September 30, 2015.
"We finished the first half of fiscal 2017 with record results for the quarter and the first six months. All three of our business segments reported strong revenue growth from the previous year, despite a macroeconomic environment that remains directionless. These results are a testament to our diversified business model which has allowed the firm to succeed in a variety of business conditions,” stated Scott Beiser, Chief Executive Officer of Houlihan Lokey.
Selected Financial Data
(Unaudited and in thousands, except per share data)
 
U.S. GAAP
Three Months Ended September 30,
 
Six Months Ended
September 30,
2016
 
2015
 
2016
 
2015
Fee revenue
$
186,537

 
$
158,380

 
$
367,311

 
$
304,646

Operating expenses:
 
 
 
 
 
 
 
Employee compensation and benefits
124,902

 
111,256

 
246,706

 
204,945

Non-compensation expenses
26,658

 
29,687

 
52,767

 
58,484

Total operating expenses
151,560

 
140,943

 
299,473

 
263,429

Operating income
34,977

 
17,437

 
67,838

 
41,217

Other income (expense), net
(749
)
 
(333
)
 
(1,657
)
 
988

Income before provision for income taxes
34,228

 
17,104

 
66,181

 
42,205

Provision for income taxes
13,352

 
7,849

 
25,894

 
17,879

Net income
20,876

 
9,255

 
40,287

 
24,326

Net loss attributable to noncontrolling interest
—

 
—

 
—

 
(26
)
Net income attributable to Houlihan Lokey, Inc.
$
20,876

 
$
9,255

 
$
40,287

 
$
24,300

 
 
 
 
 
 
 
 
Diluted net income per share of common stock
$
0.31

 
$
0.15

 
$
0.61

 
$
0.39






1
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Revenues

For the second quarter ended September 30, 2016, total fee revenue grew 18% to $187 million from $158 million for the second quarter ended September 30, 2015. For the quarter, Corporate Finance (“CF”) revenues increased 11%, Financial Restructuring (“FR”) revenues increased 39%, and Financial Advisory Services (“FAS”) revenues increased 7% when compared with the second quarter ended September 30, 2015.

Expenses
 
The Company’s employee compensation and benefits and non-compensation expenses during the periods presented and described below are on a GAAP, an adjusted, and an adjusted awarded basis, as appropriate.

(Unaudited and in thousands)
 
U.S. GAAP
 
Adjusted (Non-GAAP)*
 
Three Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Expenses:
 
 
 
 
 
 
 
Employee compensation and benefits
$
124,902

 
$
111,256

 
$
118,426

 
$
107,044

% of Revenues
67.0
%
 
70.2
%
 
63.5
%
 
67.6
%
Non-compensation expenses
$
26,658

 
$
29,687

 
$
26,658

 
$
21,539

% of Revenues
14.3
%
 
18.7
%
 
14.3
%
 
13.6
%
Total operating expenses
$
151,560

 
$
140,943

 
$
145,084

 
$
128,583

% of Revenues
81.2
%
 
89.0
%
 
77.8
%
 
81.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted awarded employee compensation and benefits
 
 
 
 
$
121,260

 
$
109,999

% of Revenues
 
 
 
 
65.0
%
 
69.5
%
 
U.S. GAAP
 
Adjusted (Non-GAAP)*
 
Six Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Expenses:
 
 
 
 
 
 
 
Employee compensation and benefits
$
246,706

 
$
204,945

 
$
233,700

 
$
204,131

% of Revenues
67.2
%
 
67.3
%
 
63.6
%
 
67.0
%
Non-compensation expenses
$
52,767

 
$
58,484

 
$
52,767

 
$
43,454

% of Revenues
14.4
%
 
19.2
%
 
14.4
%
 
14.3
%
Total operating expenses
$
299,473

 
$
263,429

 
$
286,467

 
$
247,585

% of Revenues
81.5
%
 
86.5
%
 
78.0
%
 
81.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted awarded employee compensation and benefits
 
 
 
 
$
239,668

 
$
209,756

% of Revenues
 
 
 
 
65.2
%
 
68.9
%

*Note: The adjusted and adjusted awarded figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.



2
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Total operating expenses were $152 million for the second quarter ended September 30, 2016, an increase of 8% when compared with $141 million in operating expenses for the second quarter ended September 30, 2015. Employee compensation and benefits expenses were $125 million for the second quarter ended September 30, 2016, compared with $111 million for the second quarter ended September 30, 2015. The increase in employee compensation and benefits expenses was primarily a result of the growth in revenues and headcount for the quarter, partially offset by the Company’s change on October 1, 2015 from a revenue sharing model to a target compensation payout model.
Total adjusted operating expenses were $145 million for the second quarter ended September 30, 2016, an increase of 13% when compared with $129 million in adjusted operating expenses for the second quarter ended September 30, 2015. Adjusted employee compensation and benefits expenses were $118 million for the second quarter ended September 30, 2016, compared with $107 million for the second quarter ended September 30, 2015. The additional adjusted employee compensation and benefits expenses were primarily a result of the growth in revenues and headcount for the quarter, partially offset by the Company’s change on October 1, 2015 from a revenue sharing model to a target compensation payout model. This resulted in an adjusted awarded compensation ratio of 65.0% for the second quarter ended September 30, 2016, versus 69.5% for the second quarter ended September 30, 2015.
Total non-compensation expenses were $27 million for the second quarter ended September 30, 2016, compared with $30 million for the second quarter ended September 30, 2015. The reduction in non-compensation expenses was primarily a result of second quarter fiscal 2016 costs related to the Company’s initial public offering that did not occur in the second quarter fiscal 2017.
Adjusted non-compensation expenses were $27 million for the second quarter ended September 30, 2016, compared with $22 million for the second quarter ended September 30, 2015. The rise in adjusted non-compensation expenses was primarily a result of (i) planned increases in non-compensation expenses as a result of being a public company, (ii) additional general operating expenses associated with an expansion of the Company’s financial staff, and (iii) increased amortization expense associated with the Company's acquisitions.
 
Segment Reporting for the Second Quarter
For the second quarter ended September 30, 2016, Corporate Finance revenue grew 11% to $100 million, compared with $90 million during the second quarter ended September 30, 2015. Revenues improved year-over-year primarily as a result of an increase in the number of closed transactions during the quarter. CF closed 56 transactions in the second quarter, versus 30 transactions in the same quarter last year. Segment profit equaled $28 million for the second quarter ended September 30, 2016, compared with $21 million for the second quarter ended September 30, 2015, an increase of 34%. Profitability increased as a result of (i) the corresponding increase in revenues, and (ii) our change on October 1, 2015 from a revenue sharing model to a target compensation payout model.

(Unaudited and in $ thousands)
 
Three Months Ended September 30,
 
Six Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Corporate Finance
 
 
 
 
 
 
 
Revenues
$
100,207

 
$
89,931

 
$
196,243

 
$
168,328

Segment Profit¹
27,722

 
20,758

 
51,094

 
44,184

# of MDs
91

 
88

 
91

 
88

# of Closed Transactions
56

 
30

 
104

 
70


3
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For the second quarter ended September 30, 2016, Financial Restructuring revenue grew 39% to $57 million, compared with $41 million during the second quarter ended September 30, 2015. The growth in revenues was primarily driven by a significant increase in the average transaction fee per closed transaction. FR closed 12 transactions in the second quarter ended September 30, 2016 versus 10 transactions in the second quarter ended September 30, 2015. Segment profit was $14 million for the second quarter ended September 30, 2016, compared with $11 million for the second quarter ended September 30, 2015, an increase of 30%. The increase in profitability was a result of (i) the corresponding increase in revenues, and (ii) our change on October 1, 2015 from a revenue sharing model to a target compensation payout model.

(Unaudited and in $ thousands)
 
Three Months Ended September 30,
 
Six Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Financial Restructuring
 
 
 
 
 
 
 
Revenues
$
56,862

 
$
40,930

 
$
113,192

 
$
79,923

Segment Profit¹
14,174

 
10,872

 
30,878

 
20,491

# of MDs
43

 
40

 
43

 
40

# of Closed Transactions
12

 
10

 
22

 
21

For the second quarter ended September 30, 2016, Financial Advisory Services revenue grew 7% to $29 million, compared with $28 million in the second quarter ended September 30, 2015. Revenues for FAS increased primarily as a result of (i) strong performance by our portfolio valuation and strategic consulting product lines and (ii) an increase in average project fees for the quarter. This increase in revenues was partially offset by weakness in the overall M&A market affecting our transaction-based product lines. Segment profit was $7 million for the second quarter ended September 30, 2016, compared with $6 million for the second quarter ended September 30, 2015, an increase of 3%. Segment profitability increased primarily as a result of the corresponding increase in revenues, partially offset by slightly higher compensation and non-compensation expenses. FAS generated 437 fee events in the second quarter ended September 30, 2016, versus 467 fee events during the same quarter last year.

(Unaudited and in $ thousands)
 
Three Months Ended September 30,
 
Six Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Financial Advisory Services
 
 
 
 
 
 
 
Revenues
$
29,468

 
$
27,519

 
$
57,876

 
$
56,395

Segment Profit¹
6,535

 
6,372

 
13,270

 
13,098

# of MDs
34

 
33

 
34

 
33

# of Fee Events2
437

 
467

 
701

 
663

1.
We adjust the compensation expense for a business segment in situations where an employee assigned to one business segment is performing work in another business segment and we want to adequately reflect the compensation expense in the business segment where the revenue is being booked.
2.
A Fee Event includes any engagement that involves revenue activity during the measurement period.



4
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Balance Sheet and Capital Allocation
The Board of Directors of the Company declared a regular quarterly cash dividend of $0.17 per share of Class A and Class B common stock. The dividend will be payable on December 15, 2016 to stockholders of record as of the close of business on December 5, 2016.
As of September 30, 2016, the Company had $156 million of cash and equivalents, and loans payable aggregating $51 million.
 
Investor Conference Call and Webcast
The Company will host a conference call and live webcast at 5:00 p.m. Eastern Daylight Time on Tuesday, November 1, 2016, to discuss its second quarter fiscal 2017 results. The number to call is 1-800-946-0706(domestic) or 1-719-457-2656 (international). A live webcast will be available in the Investor Relations section of the Company’s website. A replay of the conference call will be available on November 1, 2016 through November 8, 2016, by dialing 1-877-870-5176 (domestic) or 1-858-384-5517 (international) and entering the passcode 9593029#. A replay of the webcast will be archived and available on the Company’s website.
 
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company’s control and could materially affect actual results, performance, or achievements. For a further description of such factors, you should read the Company’s filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures
Adjusted net income, total and on a per share basis, and adjusted operating expenses are presented and discussed in this earnings press release and are non-GAAP measures that management believes, when presented together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results. Adjusted net income and adjusted operating expenses remove the significant accounting impact of one-time charges associated with the Company’s IPO and other matters, as set forth in the tables at the end of this release.
Adjusted net income and adjusted operating expenses as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, adjusted net income is not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative to the Company’s financial information determined under GAAP. For a description of the Company’s use of adjusted net income and a reconciliation with net income, as well as a reconciliation of the specific line items in adjusted operating expenses, see the section of this press release titled “Reconciliation of GAAP to Adjusted Financial Information.” Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations, and cash flows.


5
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About Houlihan Lokey
Houlihan Lokey (NYSE: HLI) is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, valuation, and strategic consulting. The firm serves corporations, institutions, and governments worldwide with offices in the United States, Europe, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of our commitment to client success across our advisory services. Houlihan Lokey is ranked as the No. 1 M&A advisor for all U.S. transactions, the No. 1 global restructuring advisor, and the No. 1 global M&A fairness opinion advisor over the past 15 years, according to Thomson Reuters. For more information, please visit www.HL.com.


Contact Information:
Investor Relations:
212-331-8225
IR@HL.com
OR
Public Relations:
212-331-8223
PR@HL.com


6
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Appendix

Consolidated Balance Sheet (Unaudited)
Consolidated Statement of Income (Unaudited)
Reconciliation of GAAP to Adjusted Financial Information (Unaudited)


7
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Houlihan Lokey, Inc.
Consolidated Balance Sheet
(Unaudited and in thousands, except share data and par value)
 
September 30, 2016
 
March 31, 2016
Assets
 
 
 
Cash and cash equivalents
$
156,067

 
$
166,169

Accounts receivable, net of allowance for doubtful accounts
45,748

 
58,100

Unbilled work in process
35,656

 
51,300

Income taxes receivable
5,098

 
7,204

Receivable from affiliates
7,929

 
27,408

Property and equipment, net of accumulated depreciation
27,715

 
21,701

Goodwill and other intangibles
712,148

 
717,368

Other assets
17,639

 
21,634

Total assets
$
1,008,000

 
$
1,070,884

Liabilities and Stockholders' Equity
 
 
 
Liabilities:
 
 
 
Accrued salaries and bonuses
$
180,700

 
$
254,058

Accounts payable and accrued expenses
31,611

 
34,400

Deferred income
7,599

 
5,547

Deferred income taxes
32,352

 
37,288

Loan payable to affiliate
30,000

 
45,000

Loans payable to former shareholders
6,234

 
16,738

Loan payable to non-affiliate
15,000

 
14,882

Other liabilities
8,272

 
9,416

Total liabilities
$
311,768

 
$
417,329

 
 
 
 
Redeemable noncontrolling interest
1,856

 
2,395

 
 
 
 
Stockholders' equity:
 
 
 
Class A common stock, $0.001 par value per share.
Authorized 1,000,000,000 shares; issued and outstanding 12,159,427 and 12,084,524 shares at September 30 and March 31, 2016, respectively
12

 
12

Class B common stock, $0.001 par value per share.
Authorized 1,000,000,000 shares; issued and outstanding 54,548,978 and 53,219,303 shares at September 30 and March 31, 2016, respectively
55

 
53

Additional paid-in capital
668,424

 
637,332

Retained earnings
46,804

 
28,623

Accumulated other comprehensive loss
(20,797
)
 
(14,613
)
Stock subscription receivable
(122
)
 
(247
)
Total stockholders' equity
694,376

 
651,160

Total liabilities and stockholders' equity
$
1,008,000

 
$
1,070,884





8
hlilogoa02.gif

Houlihan Lokey, Inc.
Consolidated Statement of Income
(Unaudited and in thousands, except share and per share data)
 
Three Months Ended September 30,
 
Six Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Fee revenue
$
186,537

 
$
158,380

 
$
367,311

 
$
304,646

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Employee compensation and benefits
124,902

 
111,256

 
246,706

 
204,945

Travel, meals, and entertainment
5,215

 
5,329

 
11,145

 
10,198

Rent
6,702

 
6,197

 
13,736

 
12,352

Depreciation and amortization
2,382

 
1,713

 
4,621

 
3,145

Information technology and communications
4,465

 
3,375

 
8,851

 
6,874

Professional fees
3,074

 
8,369

 
5,431

 
15,959

Other operating expenses
4,115

 
5,389

 
7,539

 
8,235

Provision for bad debt
705

 
(685
)
 
1,444

 
1,721

Total operating expenses
151,560

 
140,943

 
299,473

 
263,429

 
 
 
 
 
 
 
 
Operating income
34,977

 
17,437

 
67,838

 
41,217

 
 
 
 
 
 
 
 
Other income (expense), net
(749
)
 
(333
)
 
(1,657
)
 
988

Income before provision for income taxes
34,228

 
17,104

 
66,181

 
42,205

 
 
 
 
 
 
 
 
Provision for income taxes
13,352

 
7,849

 
25,894

 
17,879

Net income
20,876

 
9,255

 
40,287

 
24,326

 
 
 
 
 
 
 
 
Net loss attributable to noncontrolling interest
—

 
—

 
—

 
(26
)
Net income attributable to Houlihan Lokey, Inc.
20,876

 
9,255

 
40,287

 
24,300

 
 
 
 
 
 
 
 
Attributable to Houlihan Lokey, Inc. common stockholders:
 
 
 
 
 
 
 
  Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
    Basic
61,134,501

 
58,989,994

 
60,860,138

 
58,708,203

    Fully Diluted
66,816,689

 
62,696,730

 
66,582,459

 
61,586,950

  Net income per share of common stock:
 
 
 
 
 
 
 
    Basic
$
0.34

 
$
0.16

 
$
0.66

 
$
0.41

    Fully Diluted
$
0.31

 
$
0.15

 
$
0.61

 
$
0.39




9
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Houlihan Lokey, Inc.
Reconciliation of GAAP to Adjusted Financial Information
(Unaudited and in thousands, except per share data)
 
Three Months Ended September 30,
 
Six Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Fee revenue
$
186,537

 
$
158,380

 
$
367,311

 
$
304,646

 
 
 
 
 
 
 
 
Employee Compensation and Benefits
 
 
 
 
 
 
 
Employee Compensation and Benefits (GAAP)
$
124,902

 
$
111,256

 
$
246,706

 
$
204,945

Less/Plus: Adjustments1
(6,476
)
 
(4,212
)
 
(13,006
)
 
(814
)
Employee Compensation and Benefits (Adjusted)
118,426

 
107,044

 
233,700

 
204,131

Less/Plus: Adjustments2
2,834

 
2,955

 
5,968

 
5,625

Employee Compensation and Benefits (Adjusted Awarded)
121,260

 
109,999

 
239,668

 
209,756

 


 


 
 
 
 
Non-Compensation Expenses
 
 
 
 
 
 
 
Non-Compensation Expenses (GAAP)
$
26,658

 
$
29,687

 
$
52,767

 
$
58,484

Less/Plus: Adjustments3
—

 
(8,148
)
 
—

 
(15,030
)
Non-Compensation Expenses (Adjusted)
26,658

 
21,539

 
52,767

 
43,454

 
 
 
 
 
 
 
 
Operating Income
 
 
 
 
 
 
 
Operating Income (GAAP)
$
34,977

 
$
17,437

 
$
67,838

 
$
41,217

Less/Plus: Adjustments4
6,476

 
12,360

 
13,006

 
15,844

Operating Income (Adjusted)
41,453

 
29,797

 
80,844

 
57,061

 
 
 
 
 
 
 
 
Other Income (Expenses), net
 
 
 
 
 
 
 
Other Income (Expenses), net (GAAP)
$
(749
)
 
$
(333
)
 
$
(1,657
)
 
$
988

Less/Plus: Adjustments5
—

 
—

 
—

 
(179
)
Other Income (Expenses), net (Adjusted)
(749
)
 
(333
)
 
(1,657
)
 
809

 
 
 
 
 
 
 
 
Provision for Income Taxes
 
 
 
 
 
 
 
Provision for Income Taxes (GAAP)
$
13,352

 
$
7,849

 
$
25,894

 
$
17,879

Less/Plus: Adjustments6
2,548

 
4,231

 
5,111

 
5,848

Provision for Income Taxes (Adjusted)
15,900

 
12,080

 
31,005

 
23,727

 
 
 
 
 
 
 
 
Net Income
 
 
 
 
 
 
 
Net Income (GAAP)
$
20,876

 
$
9,255

 
$
40,287

 
$
24,300

Less/Plus: Adjustments7
3,928

 
8,129

 
7,895

 
9,843

Net Income (Adjusted)
24,804

 
17,384

 
48,182

 
34,143

 
 
 
 
 
 
 
 
Diluted adjusted net income per share of common stock
$
0.37

 
$
0.28

 
$
0.72

 
$
0.55


____________________________
Note: Figures may not sum due to rounding.
1.
Consists of pre-IPO grant vesting, including grants re-awarded following forfeiture, if any (($6,476) in Q2 FY17; ($2,444) in Q2 FY16; ($13,006) in YTD FY17; ($2,444) in YTD FY16); and adjustments relating to previous ownership agreements (($1,768) in Q2 FY16; $1,630 in YTD FY16).
2.
Reflects (i) the expected vesting of grants that were made in prior year periods that were expensed during the period (($6,213) in Q2 FY17; ($5,745) in Q2 FY16; ($12,494) in YTD FY17; ($11,375) in YTD FY16), and (ii) estimated normal year-end grants of deferred stock during the period ($9,047 in Q2 FY17; $8,700 in Q2 FY16; $18,462 in YTD FY17; $17,000 in YTD FY16).
3.
Includes costs associated with (i) Houlihan Lokey’s initial public offering, corporate reorganization, spin-out of non-operating assets, shareholder solicitation process and other related activities (($6,768) in Q2 FY16; ($12,783) in YTD FY16), (ii) costs incurred from completed acquisitions of (($1,110) in Q2 FY16; ($1,241) in YTD FY16), and (iii) adjustments relating to previous ownership agreements (($270) in Q2 FY16; ($1,006) in YTD FY16).
4.
Consists of pre-IPO grant vesting, including grants re-awarded following forfeiture, if any. Q2 and YTD FY16 includes costs associated with (i) Houlihan Lokey’s initial public offering, corporate reorganization, spin-out of non-operating assets, shareholder solicitation process and other related activities, (ii) costs incurred from completed acquisitions, and (iii) adjustments relating to previous ownership agreements.
5.
Includes adjustments relating to previous ownership agreements (($179) in YTD FY16).
6.
Reflects the tax impact of described adjustments.
7.
Consists of pre-IPO grant vesting, including grants re-awarded following forfeiture, if any, net of the tax impact of described adjustments. Q2 and YTD FY16 includes costs associated with (i) Houlihan Lokey’s initial public offering, corporate reorganization, spin-out of non-operating assets, shareholder solicitation process and other related activities, (ii) costs incurred from completed acquisitions, (iii) adjustments relating to previous ownership agreements, (iv) the tax impact of described adjustments, and (v) net income/loss attributable to noncontrolling interests ($26 in YTD FY16).

10
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