Houlihan Lokey, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Houlihan-Loki, Inc. Fiscal First Quarter 2022 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Christopher Crane, Houlihan and Loki's general counsel. Please go ahead.

Thank you, operator, and hello, everyone. By now, everyone should have access to our first quarter fiscal year 2022 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, 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-Q, for the quarter ended June 30, 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 Pizer, Houlihan Loki'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 first quarter fiscal 2022 earnings call. We are pleased to report another strong quarter. We achieved 373 million in first quarter revenues, up 77% from a year ago. This significant increase was compared to a relatively weak first quarter last year as a result of the pandemic. While our first quarter revenues were down from our exceptionally strong third and fourth fiscal 2021 quarters, 373 million in first quarter revenues were the best ever for what is usually our seasonally lowest quarter. All three of our business segments did very well. corporate finance and financial and valuation advisory exhibited continued strength in a very robust M&A market environment, and financial restructuring delivered strong revenues and continued to maintain its significant market share during a challenging restructuring market environment. On the expense side, we reduced our compensation ratio from last year's level while maintaining historically low non-compensation expenses as we slowly return to in-person events and business travel. For the first fiscal quarter of 2022, we reported adjusted earnings of $1.19 per share, up 112% from last year. Our corporate finance business continued to benefit from a historically strong market with all key metrics experiencing positive trends. New business activity remained at record levels. Our average transaction size and average fee per closed transaction were higher than previous years. Close rates were up with fewer transactions put on hold. Nearly every industry sector and geography experienced improved market environments, and our core product offerings of M&A, capital markets, and private funds advisory showed year-over-year growth. Our FAA business has done incredibly well over the last few years, growing its revenues at a five-year compounded average growth rate of just under 10%. All of our service lines within FAA performed above last year's levels, and the number of our clients a number of new clients, recurring clients, complexity of assignments, and average fees all increased. Our financial restructuring business continues to slow from the torrid pace it experienced last year. As previously discussed, financial restructuring is now operating at pre-pandemic activity levels, and we expect that levels of business to continue for the foreseeable future. However, An ever-increasing amount of corporate leverage, coupled with effects from the pandemic and continued disruption from technology, provides optimism for this business segment in the medium and long term. During the first quarter, we announced 16 newly promoted MDs, our largest class ever, and we hired five MDs, mostly in corporate finance. While competitive, we believe the hiring market remains strong, and we remain in active dialogue with a number of key prospective hires. Regarding our acquisition activity, we are excited to announce our commencement of a tender offer to acquire all of the outstanding equity of GCA Corporation for a total cash purchase price of approximately 591 million. The transaction is expected to be funded with cash on our balance sheet. GCA is a well-known global investment banking firm publicly traded on the Tokyo Stock Exchange. They have significant operations in the UK and Europe Asia Pacific region, and the U.S. Their primary focus is in technology and related sectors, but they also have expertise in a couple additional core industries complementary to our existing business. We plan to commence the tender offer for GCA shares shortly, and we anticipate closing the tender offer in the beginning of October. In the meantime, we have started planning for a smooth and successful integration of our two businesses. Within the press release issued yesterday announcing the transaction, we provided a link to a summary of GCA that gives a snapshot of the company and the transaction and explains our strategic rationale for wanting to commence the tender offer to make this acquisition. Let me highlight a few performance statistics from that presentation. Upon completion of the tender offer, Houlihan Loki will have over 2,000 employees generating more than 1.8 billion in revenues on an annualized basis. We will have offices in 17 countries, and over 30% of our combined revenues will be outside the United States. As a combined firm, revenues in our technology, media, and telecom industry group will go from being underweighted relative to the industry size to becoming our largest and most global industry group. In many regards, this transaction is similar to the dozen or so transactions we have completed over the last decade. It's a business we know well, run by a management team that has a similar culture and business philosophy as we do. GCA and Houlihan Loki share a number of important cultural traits, including a collaborative entrepreneurial approach, independent thoughtful advice, and a relentless focus on its clients. While we believe this is an exciting transaction for our collective clients, employees, and shareholders, we also recognize the time and effort it will take to integrate these two businesses effectively. This is by far the largest transaction we've ever pursued, but we are up for the challenge and we are focused on a successful outcome. And with that, I'll turn the call over to Lyndon.