– First Quarter Fiscal 2024 Revenues of $416 million –

– First Quarter Fiscal 2024 Diluted EPS of $0.90 –

– Adjusted First Quarter Fiscal 2024 Diluted EPS of $0.89 –

– Announces Dividend of $0.55 per Share for Second Quarter Fiscal 2024 –

LOS ANGELES and NEW YORK - July 27, 2023 - Houlihan Lokey, Inc. (NYSE:HLI) (“Houlihan Lokey” or the “Company”) today reported financial results for its first quarter ended June 30, 2023. For the first quarter ended June 30, 2023, revenues were $416 million, compared with $419 million for the first quarter ended June 30, 2022.

Net income was $61 million, or $0.90 per diluted share, for the first quarter ended June 30, 2023, compared with $71 million, or $1.03 per diluted share, for the first quarter ended June 30, 2022. Adjusted net income for the first quarter ended June 30, 2023 was $62 million, or $0.89 per diluted share, compared with $76 million, or $1.10 per diluted share, for the first quarter ended June 30, 2022.

“Our first quarter fiscal 2024 continued to see strength in financial restructuring and softness in the M&A market. This is the 6th quarter in a row with these market dynamics. However, recently we have started to see improvements in the M&A environment and are hopeful that this momentum remains for the foreseeable future. We have continued to invest heavily in our people and our infrastructure for the last 18 months in anticipation of improved market conditions, and we believe we are well positioned to capitalize when they occur.” stated Scott Beiser, Chief Executive Officer of Houlihan Lokey.

For the first quarter ended June 30, 2023, revenues were $416 million, compared with $419 million for the first quarter ended June 30, 2022. For the first quarter ended June 30, 2023, Corporate Finance (“CF”) revenues decreased (14)%, Financial Restructuring (“FR”) revenues increased 56%, and Financial and Valuation Advisory (“FVA”) revenues decreased (14)% when compared with the first quarter ended June 30, 2022.

The Company’s employee compensation and benefits expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis.

*Adjusted 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.

(1)Calculated using the average full time employees at the beginning of the reporting period and the end of the reporting period.

Employee compensation and benefits expenses were $263 million for the first quarter ended June 30, 2023, compared with $266 million for the first quarter ended June 30, 2022. Adjusted employee compensation and benefits expenses were $256 million for the first quarter ended June 30, 2023, compared with $257 million for the first quarter ended June 30, 2022. This resulted in an adjusted compensation ratio of 61.5% for both the first quarter ended June 30, 2023 and June 30, 2022.

Non-compensation expenses were $79 million for the first quarter ended June 30, 2023, compared with $75 million for the first quarter ended June 30, 2022. Adjusted non-compensation expenses were $76 million for the first quarter ended June 30, 2023, compared with $60 million for the first quarter ended June 30, 2022. The increase in GAAP and adjusted non-compensation expenses was primarily a result of an increase in travel, meals, and entertainment expenses and an increase in rent expense.

The provision for income taxes was $15 million, representing an effective tax rate of 19.6% for the first quarter ended June 30, 2023, compared with $5 million, representing an effective tax rate of 6.6% for the first quarter ended June 30, 2022. The increase in the Company’s GAAP tax rate during the first quarter ended June 30, 2023, relative to the same period in 2022, was primarily a result of the release of the provision for an uncertain tax position as a result of the successful closure of a state audit, that occurred during the first quarter ended June 30, 2022 and did not repeat in the first quarter ended June 30, 2023. The adjusted provision for income taxes was $25 million, representing an adjusted effective tax rate of 29.2% for the first quarter ended June 30, 2023, compared with $25 million, representing an adjusted effective tax rate of 24.9% for the first quarter ended June 30, 2022.

CF revenues were $227 million for the first quarter ended June 30, 2023, compared with $264 million for the first quarter ended June 30, 2022, representing a decrease of (14)%. Revenues decreased primarily due to a decrease in the number of closed transactions, which was driven by softness in the M&A markets.

FR revenues increased 56% to $123 million for the first quarter ended June 30, 2023, compared with $79 million for the first quarter ended June 30, 2022. Revenues increased primarily due to a significant increase in the number of closed transactions, which was driven by favorable market conditions for restructuring transactions.

FVA revenues decreased (14)% to $65 million for the first quarter ended June 30, 2023, compared with $76 million for the first quarter ended June 30, 2022. Revenues decreased primarily due to a decrease in the number of Fee Events. The decrease in the number of Fee Events was driven by softness in the M&A markets, which affected one or more of the service lines within our FVA business.

(1)A Fee Event includes any engagement that involves revenue activity during the measurement period based on a revenue minimum of one thousand dollars. References in this press release to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in our periodic reports on Forms 10-K and 10-Q.

The Board of Directors of the Company declared a regular quarterly cash dividend of $0.55 per share of Class A and Class B common stock. The dividend will be payable on September 15, 2023, to stockholders of record as of the close of business on September 1, 2023.

As of June 30, 2023, the Company had $490 million of cash and cash equivalents and investment securities, and $58 million of other liabilities.

The Company will host a conference call and live webcast at 5:00 p.m. Eastern Time on Thursday, July 27, 2023, to discuss its first quarter fiscal 2024 results. The number to call is 1-877-407-4018 (domestic) or 1-201-689-8471 (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 from July 27, 2023 through August 3, 2023, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 13740130. A replay of the webcast will be archived and available on the Company’s website.

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. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. 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.

Adjusted net income, total and on a per share basis, and certain adjusted items used to determine adjusted net income, 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. These adjusted items remove the significant accounting impact of one-time or non-recurring charges associated with the Company’s one-time/non-recurring matters, as set forth in the tables at the end of this release.

The adjusted items included in this earnings press release as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these adjusted amounts are 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 these adjusted items and a reconciliation with comparable GAAP items, 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.

Houlihan Lokey (NYSE:HLI) is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and financial and valuation advisory. The firm serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of the firm’s commitment to client success across its advisory services. Houlihan Lokey is the No. 1 investment bank for global M&A transactions under $1 billion, the No. 1 M&A advisor for the past eight consecutive years in the U.S., the No. 1 global restructuring advisor for the past nine consecutive years, and the No. 1 global M&A fairness opinion advisor over the past 25 years, all based on number of transactions and according to data provided by Refinitiv.

For more information, please visit www.HL.com.

Condensed Consolidated Balance Sheets (Unaudited)

Condensed Consolidated Statements of Income (Unaudited)

Reconciliation of GAAP to Adjusted Financial Information (Unaudited)

(1)The aggregate of adjustments from employee compensation and benefits and non-compensation expenses.

(2)Reflects the tax impact of utilizing the adjusted effective tax rate on the non-tax adjustments identified above.

(3)Consists of all adjustments identified above net of the associated tax impact.