Houlihan Lokey, Inc.

Hey, ladies and gentlemen, thank you for standing by. Welcome to Houlihan-Loki's fourth quarter and fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, May 11, 2021. I will now turn the call over to Christopher Crane, Houlihan-Loki's general counsel.

Thank you, operator, and hello, everyone. By now, everyone should have access to our fourth quarter and fiscal year 2021 earnings release, which can be found on the Houlihan Loki website at www.hl.com in the investor relations section. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements contain which are usually identified by use of words such as will, expect, anticipate, should, or other similar phrases, are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore you should exercise caution when interpreting and relying on them. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. We encourage investors to review our regulatory filings, including the Form 10-K for the year ended March 31, 2021, when it is filed with the SEC. During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the HL.com website. Hosting the call today, we have Scott Beiser, Houlihan Logie's Chief Executive Officer, and Lindsey Alley, Chief Financial Officer of the company. They will provide some opening remarks and then we will open the call to questions. With that, I'll turn the call over to Scott.

Thank you, Christopher. Welcome everyone to our fourth quarter in fiscal year 2021 earnings call. Fiscal 2021 was a roller coaster of a year that brought out the best in Houlihan Loki's employees and highlighted the strength of our balanced business model. In the spring of 2020, with the rapid impact of the global pandemic, activity levels in our financial restructuring practice significantly increased, mitigating the reduction in M&A activity. By early fall of 2020, these trends reversed with similar speed as new financial restructuring opportunities returned to a more normal pace and our corporate finance business began to spring back from an almost complete pause in new business activity. and activity levels in our valuation business improved. By the end of the fiscal year, we had produced a record $1,525,000,000 in revenues, an increase of 32% over last year. Fiscal 2021 is our ninth consecutive year of annual revenue growth and a 14% compounded annual growth rate over that nine-year period. We are especially proud that all three of our business segments achieved record results. For fiscal 2021, Financial restructuring revenues grew 52%, corporate finance revenues grew 24% over last year's record level, and financial and valuation advisory revenues grew 17% against last year's record level. We also achieved $4.62 in adjusted earnings per share, an increase of 44% over last year's results. For the fourth quarter, we reported $501 million in revenues, up 65% over last year. and adjusted earnings per share was $1.51, up 57% over last year. FEA achieved another record quarter, and corporate finance was up 93% over last year. Financial restructuring's revenues were down from last quarter's peak, but still up 38% over last year. Our results were strong across all industry groups, most of which are operating at record levels and almost all of our subproduct lines in FVA achieved records this year. Furthermore, our investments outside the U.S. are paying dividends as our international revenues grew faster than our U.S. revenues. We enter fiscal 2022 with one of the most bullish market environments for our M&A, capital markets, and valuation businesses in the firm's history. We are at record levels for new business activity, mandated engagements, transaction size and estimated transaction and project fees. We have seen this business environment improve consistently since summer of 2020, and we remain cautiously optimistic that it will continue through at least the balance of this calendar year. While the bullish elements of our firm are operating at record levels, our financial restructuring practice, as highlighted in previous quarters, has slowed from its torrid pace in early fiscal 2021. The current business environment for restructuring is now at pre-pandemic levels, and we expect revenues in fiscal 2022 to return to those levels. We continue to remain optimistic about the restructuring outlook over the medium and long term. There are several themes that we believe support our optimism, including record levels of company leverage, continued technology disruption across most major industries, the eventual end of pandemic-related government support programs, the continued global expansion of the restructuring product, and finally, the likely challenges that exist as companies adjust to society's new norm. Although our restructuring revenues can be volatile during economic cycles like the one we just experienced, we have experienced consistent revenue growth for this business through the cycles and believe this growth will continue over the next decade or so. As a frame of reference, from calendar year 2007, just prior to the Great Recession, to calendar year 2019, just prior to the pandemic. Revenues for the financial restructuring business grew at a compound annual growth rate of almost 10%, punctuated by outsized activity during periods of financial dislocation, including the Great Recession, the oil and gas crisis, and the pandemic. Throughout this successful and challenging year, we've continued to invest in our people, and we promoted 16 employees to managing director in April, our largest and most capable class ever. Since April 1, we have announced the addition of three new MDs in both our healthcare and oil and gas groups. We remain very active in senior and junior employee recruiting, while noting that the cost of recruiting has risen recently. On the acquisition front, we are in dialogue with several firms and remain confident that we will continue to use M&A to effectively drive shareholder value. In our goal to deploy our excess cash, we repurchased over 60 million of stock in our fourth fiscal quarter and expect to continue to repurchase more shares than we issue in order to manage our cash position. Finally, consistent with our performance and our desire to return excess cash to our shareholders, we are pleased to announce a 30% increase in our quarterly dividend from 33 cents per share to 43 cents per share, payable on June 15th to shareholders of record as of June 2nd. In closing, we are pleased with our success during this incredibly difficult year. We are proud of the women and men at Houlihan Loki who worked so hard to achieve these results and are thrilled with the continued support we receive from our clients and shareholders. While there are always new challenges ahead, we believe we are well positioned for fiscal 2022 and beyond. With that, I'll turn the call over to Lindsey.