Houlihan Lokey, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan-Loki's fourth quarter and fiscal year 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, May 9th, 2023. And I will now turn the call over to Christopher Crane, Houlihan-Loki's general counsel. Please go ahead.

Thank you, operator, and hello, everyone. By now, everyone should have access to our fourth quarter and fiscal year 2023 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 conditions. We encourage investors to review our regulatory filings, including the Form 10-K for the year ended March 31, 2023, 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 Loki's chief executive officer, and Lindsay 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 and fiscal year 2023 earnings call. We ended the quarter with revenues of $445 million and adjusted earnings per share of $1.11. Revenues for the quarter were down 6% from a year ago and adjusted earnings per share were down 15% from a year earlier. During fiscal 2023, we had little volatility in our quarterly revenues and our second half results were almost identical to our first half results. This fiscal year, we did not experience our typical increase in second half results, likely due to current market conditions. However, our diversified service industry and geographic platform enabled us to achieve our second highest yearly revenues in the firm's history, notwithstanding the difficult market environment. For the quarter, we recorded $256 million in corporate finance revenues, down 8% versus last year. For the fiscal year, corporate finance revenues of $1.13 billion were down substantially from last fiscal year, but still the second best year in the firm's history. Our corporate finance business continues to be a tale of two cities. On the positive side, we have more managing directors than at any other time in the firm's history, covering more industry sectors and geographies than ever before. We closed more transactions this quarter than in any other quarter this fiscal year. The number of new engagements this quarter remains strong and consistent with previous quarters this fiscal year. Overall, the quality and size of the companies hiring us especially in Europe, continues to improve driven by our investments in talent, build out of industry verticals, and geographic expansion. On the other hand, there are headwinds that include continued uncertainty in global markets, challenging financing markets, and a longer time to close transactions as measured between the time we are hired and the time we complete a transaction. Similar to my comments in previous quarters, this environment has resulted in strong new business activity as companies hire us in anticipation of market conditions improving, but lower current revenues as the time to close has extended and companies are cautious about the economic outlook. Financial restructuring achieved 120 million in revenues, down 1% versus the same quarter last year, but up 22% versus last quarter. Fiscal year revenues of 396 million, the second highest in the firm's history, and we enter fiscal 2024 with strong momentum in this business. Several factors are contributing to financial restructuring performance. The period of easy government money and low interest rates no longer exists. With very tight debt markets, leveraged companies are turning to restructuring or liability management to find solutions. The pending debt maturity walls in 2024 and 2025 are putting increasing pressure on companies to do something as the volatility in the capital markets is showing no signs of letting up. These factors, combined with breadth and depth in our restructuring business, are expected to contribute positively to our financial results throughout the year. The number of closed transactions, new quarterly engagements, active engagements, and potential fees associated with active engagements are at highs not seen since the initial months of the COVID pandemic. However, as expressed previously, the current environment for financial restructuring is not fueled by a crisis, but by a combination of factors that should allow this business segment to do well for an extended period of time. Financial and valuation advisory produced 68 million of quarterly revenues, down 4% versus the same quarter last year. fiscal year revenues of $287 million were a record for FEA as they were able to grow revenues slightly this year in a challenging environment. FEA's diversified service offerings enabled some segments to perform quite well, while other segments experienced the same headwinds as our corporate finance business. The disruption occurring in regional banking is having a short-term negative impact on FEA, but an increased banking regulatory environment which most of us believe is likely, will benefit FVA over the long term. Finally, FVA is experiencing strong new business activity, but the time and effort to complete engagements is decreasing overall employee productivity. This will likely result in FVA having a stronger second half of the year than first half. Looking forward, we continue to take advantage of a favorable market for adding talent by hiring eight new MDs this quarter across the globe. We would also like to congratulate our 18 newly promoted managing directors, all effective as of April 1st. On the acquisition front, we continue to be selective in ensuring targets fit both culturally and strategically. Finally, I'd like to thank our 2,600 employees for an exceptional effort in a challenging year and our clients and shareholders who continue to support us with confidence as we navigate the current market. With that, I'll turn the call over to Lindsay.