Q3 2022 Houlihan Lokey Inc Earnings Call

Speaker 1: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lowkey's third quarter fiscal year 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Good day, ladies and gentlemen, thank you for standing by welcome to Houlihan Lokey third quarter fiscal year 2022 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 is being recorded today February eight 2022.

Speaker 1: Please note that this conference is being recorded today, February 8, 2022. I will now turn the call over to Christopher Crane, Oulahan Low Keys General Counselor.

I will now turn the call over to Christopher Crain, Houlihan Lokey as general counsel.

Speaker 2: Thank you operator and hello everyone. By now everyone should have access to our third quarter fiscal year 2022 earnings release which can be found on the Houlihan Loki website at www.hl.com in the investor relations section.

Thank you operator, and Hello, everyone.

By now everyone should have access to our third quarter fiscal year 2022 earnings release, which can be found on the houlihan Lokey website at www Dot H L Dot com in the Investor Relations section.

Speaker 2: Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements.

Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward looking statements.

Speaker 2: 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 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.

Speaker 2: These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution when interpreting and relying on them.

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.

Speaker 2: 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 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.

Speaker 2: We encourage investors to review our regulatory filings, including the Form 10Q for the quarter ended December 31, 2021, when it is filed with the SEC.

We encourage investors to review, our regulatory filings, including the Form 10-Q for the quarter ended December 31st 2021, when it is filed with the S E C.

Speaker 2: 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 an isolation, or as a substitute for our financial results prepared in accordance with GAP.

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.

Speaker 2: 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.

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 Dot Com website.

Speaker 2: Hosting the call today, we have Scott Beiser, Houlihan Lokey's Chief Executive Officer, and Lindsay Alley, Chief Financial Officer of the company.

Hosting the call today, we have Scott Beiser, Houlihan Lokey, as Chief Executive Officer, and Lindsey Alley, Chief Financial Officer of the company.

Speaker 2: They will provide some opening remarks and then we will open the call to questions. With that, I will turn it over to the audience for questions.

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.

Speaker 3: Thank you, Christopher. Welcome everyone to our third quarter fiscal year 2022 earnings call. We are pleased to report another very strong quarter. We achieved $889 million in third quarter revenues up 65% from the same quarter a year ago.

Thank you Christopher.

Welcome everyone to our third quarter fiscal year 2022 earnings call. We are pleased to report another very strong quarter, we achieved $889 million in third quarter revenues up 65% from the same quarter a year ago.

Speaker 3: All three of our business segments performed exceptionally well in the respective environments. Corporate Finance and Financial and Valuation Advisory delivered record quarterly results in a robust market environment. Financial and Valuation Advisory was delivered in a challenging environment.

All three of our business segments performed exceptionally well in their respective environments, corporate finance and financial and valuation advisory delivered record quarterly results in a robust market environment and financial structuring delivered solid results in a challenging restructuring environment.

Speaker 3: We also experienced strong earnings growth, delivering $2.90 in adjusted earnings per share, up 63% from the same quarter a year ago.

We also experienced strong earnings growth delivering $2.90 and adjusted earnings per share up 63% from the same quarter a year ago.

Speaker 3: More important than a single quarter of results is our leadership position in each of our business lines. That is where we look to assess the long-term quality and durability of our earnings.

More important than a single quarter of results is a real leadership position in each of our business lines and its where we look to assess the long term quality and durability of our earnings.

Speaker 3: Gullahan Lokey maintained its status as a leader across all three product lines for calendar year 2021.

Houlihan Lokey maintained its status as a leader across all three product lines for calendar year 2021 we rank as the number one global M&A investment banking firm based on the number of transactions close and we are proud to announce that we were the number two M&A investment banking firm in Europe based on the number of <unk>.

Speaker 3: We rank as the number one global M&A investment banking firm based on the number of transactions closed. We are proud to announce that we were the number two M&A investment banking firm in Europe based on the number of transactions closed.

Actions close.

Speaker 3: We are also the number one global restructuring advisor based on both the number of transactions close and the dollar value of restructured debt. And finally, we remain the number one global emanate fairness opinion provider over the past 20 years based on the number of transactions announced or closed.

We were also the number one global restructuring advisor based on both the number of transactions closed and the dollar value of restructured debt and finally, we remain the number one global M&A fairness opinion provider over the past 20 years based on the number of transactions announced or closed.

Speaker 3: Moving back to the quarter, a record third fiscal quarter results were driven by a combination of several positive events.

Moving back to the quarter a record third fiscal quarter results were driven by a combination of several positive events.

Speaker 3: Some of which are not likely to fully repeat over the next several quarters.

Some of which are not likely to fully repeat over the next several quarters.

Speaker 3: First, corporate finance revenues for the quarter included the results of GCA, which makes last year's third quarter revenues not directly comparable. And GCA's contribution to the quarter exceeded expectation.

First corporate finance revenues for the quarter included the results of G. C. A which makes last years third quarter revenue is not directly comparable in gce's contribution to the quarter exceeded expectations.

Speaker 3: Second, in corporate finance, we had a significant number of higher fee transactions close in our third fiscal quarter relative to previous quarters, and a significantly higher number than what is expected to close in the next couple of quarters.

Second in corporate Finance, we had a significant number of higher fee transactions close in our third fiscal quarter relative to previous quarters, and a significantly higher number than what is expected to close in the next couple of quarters.

Speaker 3: Third, for a corporate finance business, not including GCA, the third quarter has historically, on average, represented a seasonal high relative to our other recorders. In addition, the fourth calendar quarter for GCA has historically represented a seasonal high for them as well. Both Hula-Henloki and GCA performed extremely well for a third fiscal quarter, highlighting the seasonality of both businesses.

Third for our corporate finance business, not including G. C. Eight the third quarter has historically on average represented a seasonal high relative to our other quarters. In addition, the fourth calendar quarter for GTA has historically represented a seasonal high for them as well, both houlihan Lokey and G C eight before.

<unk> extremely well for our third fiscal quarter, highlighting the seasonality of both businesses fine.

Speaker 3: Finally, our corporate finance and our FEA business are benefiting from the most robust M&A market we have ever seen with strength across industry and geographically. It is well publicized that financial sponsors have been a strong influence on these markets and financial sponsor clients remain close to 50% of our client days.

Finally, our corporate finance and our S. E business are benefiting from the most robust M&A market, we've ever seen with strengths across industry and geography, it's well publicized that financial sponsors had been a strong influence on these markets and financial sponsor clients remain close to 50% of our client base.

Speaker 3: As we head into calendar year 2022, we are still experiencing a very strong M&A and capital markets environment for our mid-cap clients. It remains historically high levels of private equity drive powder.

As we head into calendar year 2022 we are still experiencing a very strong M&A and capital markets environment for our mid cap clients remained historically high levels of private equity dry powder large strategic clients remain flushed with cash and interest rates remain low.

Speaker 3: large strategic clients remain flush with cash and interest rates remain low.

Speaker 3: However, we expect growth in the M&A market to level off in calendar 2022, and we have seen a slowing rate of growth in our new engagement activity levels over the last several months when it compared to the same period last year.

We expect growth in the M&A market to level off in calendar 2022, and we have seen a slowing rate of growth in our new engagement activity levels over the last several months when compared to the same period last year.

Speaker 3: Moving on to some comments more specific to FEA, this business has performed at record levels for us throughout our fiscal year, and our fiscal third quarter was no exception. For each of the last six consecutive quarters, FEA has achieved an increase over the prior year's quarter, and year-to-date, FEA is up 64% over the same period last year.

Moving onto some comments more specific to FCA. This business has performed at record levels for us throughout our fiscal year.

And our fiscal third quarter was no exception.

For each of the last six consecutive quarters FAA has achieved an increase over the prior year's quarter and year to date is up 64% over the same period last year.

Speaker 3: Given the diversification of revenues in this business, these results are extraordinary. Growth is broad-based across all of the FDA's major product lines with several of them benefiting from strong M&A market conditions.

Given the diversification of revenues in this business. These results are extraordinary.

Both is broad based across all of the Fta's major product lines with several of them benefiting from strong M&A market conditions.

Speaker 3: FEA continues to see higher average revenues per fee event, higher average productivity per banker, and increasing number of seven figure engagement fees. In fact, in the third fiscal quarter, FEA recognized one of the largest fees in its history.

F D. A continues to see higher average revenues per fee event higher average productivity per banker and increasing number of seven figure engagement fees in fact in the third fiscal quarter F. D. A recognized one of the largest piece in its history.

Speaker 3: Financial restructuring had another solid quarter, despite ongoing limited opportunities in the marketplace. This business is currently experiencing new activity levels at or below pre-pandemic periods.

Financial restructuring had another solid quarter, despite ongoing limited opportunities in the marketplace. This business is currently experiencing new activity levels at or below pre pandemic periods headwinds for this product line, including weak restructuring environment, which is impacting our near term revenue prospects and the completion of a couple.

Speaker 3: Headwinds for this product line include a weak restructuring environment, which is impacting our near-term revenue prospects, and the completion of a couple of large fee events this year that may not repeat in fiscal year 2023.

Of large fee events. This year that may not repeat in fiscal year 2023.

Speaker 3: Positive for this business include our belief that we are winning and closing more than our fair market share of Restructuring mandates in the current environment and our continued success in Asia Particularly China as we take advantage of our leading market position in this very attractive market

Positives for this business include our belief that we are winning in closing more than our fair market share of restructuring mandates in the current environment and our continued success in Asia, particularly China as we take advantage of our leading market position in this very attractive market.

Speaker 3: We're also starting to see an uptick in interest rates globally, which tends to drive restructuring activity.

Also starting to see an uptick in interest rates globally, which tends to drive restructuring activity.

Speaker 3: Before concluding, I wanted to highlight several factors that look beyond our third quarter results and we believe set the stage for our midterm and longterm success.

Before concluding I wanted to highlight several factors that look beyond our third quarter results and we believe set the stage for a midterm and long term success.

Speaker 3: First, our brand and reputation are significantly greater and more recognizable than just a few years ago. This has and will enable us to attract better talent at all levels, as well as being an attractive acquirer of businesses. We've never seen a more attractive pipeline of talent than we're seeing today.

First our brand and reputation are significantly greater and more recognizable to just a few years ago. This has and will enable us to attract better talent at all levels as well as being an attractive acquirer of businesses, we've never seen a more attractive pipeline of talent and we are seeing today.

Speaker 3: Second, starting in fiscal year 2023, we will have a full year of GCA results versus only six months of results in fiscal 2022. We are quite pleased with the GCA acquisition to date and the integration efforts are on track. Nevertheless, we expect it will take several years to fully realize potential revenue synergies between our businesses.

Second starting in fiscal year 'twenty to 'twenty three we will have a full year of <unk> results versus only six months of results in fiscal 2022, we're quite pleased with the GC acquisition to date and integration efforts are on track. Nevertheless, we expect it will take several years to fully realize the potential revenue synergies between.

Our businesses.

Speaker 3: Third, FEA is experiencing a new growth profile beyond just current market conditions and we remain excited about the long-term growth prospects of this business. The growth and our continued investment in this...

Third F E is experiencing a new growth profile beyond just current market conditions and we remain excited about the long term growth prospects of this business to growth and our continued investment in this product line has created enough scale for FCA to achieve ongoing growth and success at it and Theres new markets enforced.

Speaker 3: has created enough scale for FAA to achieve ongoing growth and success at Ender's New Markets. In fourth, well financial restructuring is currently experiencing a virulent market for services are strong leadership position, the absolute size of corporate leveraged globally, the inevitable rise in interest rates, the expectation of less active central bank intervention, an ongoing technology in global trade disruption established a clear path to long-term revenue growth.

While financial restructuring is currently experiencing a very lean market for its services, our strong leadership position the absolute size of corporate leverage globally. The inevitable rising interest rates the expectation of less active central bank intervention and ongoing technology and global trade disruption establish a clear path.

The long term revenue growth.

Speaker 3: We ended the calendar year with over 2,200 employees and 12-month performer revenues in excess of $2.5 billion.

We ended the calendar year with over 2200 employees in 12 months' pro forma revenues in excess of $2 5 billion. In addition to adding over 75, new Mds towards senior banking group through the <unk> acquisition, we hired five managing directors this quarter three in corporate finance and two in financial restructuring.

Speaker 3: In addition to adding over 75 new MDs to our senior banking group through the GCA acquisition, we hired five managing directors this quarter, three in corporate finance and two in financial restructuring.

Speaker 3: We are very proud of how well all of our employees have done over the last several years, and we welcome all of our new partners to the firm.

We are very proud of how well all of our employees have done over the last several years and we welcome all of our new partners and firm collectively we look forward to continued success in the years ahead and with that I'll turn the call over to Lindsay.

Speaker 3: Collectively, we look forward to continued success in the years ahead. With that, I'll turn the call over to Lindsay.

Thank you Scott.

Speaker 4: Revenues in corporate finance were $716 million for the quarter, up 134% when compared to the same quarter last year.

Revenues in corporate finance were $716 million for the quarter up 134% when compared to the same quarter last year.

Speaker 4: We almost doubled the number of closed transactions this quarter, reaching 230 transactions closed compared to 121 in the same period last year.

We almost doubled the number of closed transactions this quarter, reaching 230 transactions closed compared to 121 in the same period last year.

Speaker 4: Corporate finance benefited from some very favorable timing of closed transactions.

Corporate finance benefited from some very favorable timing of closed transactions, a continuing trend towards higher close rates and as Scott suggested a disproportionately higher number of large transactions.

Speaker 4: a continuing trend towards higher close rates, and as Scott suggested, a disproportionately higher number of large fee transactions.

Speaker 4: These large fee transactions drove our average transaction fee higher than what we would have reported for the quarter in a more normalized operating environment.

These large fee transactions drove our average transaction fee higher than what we would have reported for the quarter and a more normalized operating environment. We expect that our average transaction fee next quarter will decline to a number that represents a more normalized mix of houlihan Lokey and G C as average transaction fee.

Speaker 4: We expect that our average transaction fee next quarter will decline to a number that represents a more normalized mix of Houlihan Loki and GCA's average transaction fee.

Speaker 4: From there, we expect it to resume growth, to resume a growth rate consistent with what we have experienced over the past two decades.

From there we expect it to resume growth to resume a growth rate consistent with what we have experienced over the past two decades.

Speaker 4: Financial restructuring revenues were $89 million for the quarter, a 50% decrease from the same quarter last year. However, last year's third quarter benefited significantly from pandemic closures and the disruption of business earlier in the year.

Financial restructuring revenues were $89 million for the quarter, a 50% decrease from the same quarter last year. However, last years third quarter benefited significantly from pandemic closures and the disruption of business earlier in the year.

Speaker 4: We closed 21 transactions this quarter, compared to 44 in the same period last year, and our average transaction fee on closed deals was relatively flat. Financial restructuring has benefited thus far in fiscal year 2022 with the closing of several larger fee transactions, while new business activity is generally made up of smaller fee opportunities.

We closed 21 transactions this quarter compared to 44 in the same period last year and our average transaction fee unclosed deals was relatively flat.

Restructuring has benefited best far in fiscal year 2022 with the closing of several larger fee transactions, while new business activity is generally made up of smaller fee opportunities.

Speaker 4: And financial evaluation advisory revenues were 84 million for the quarter. If 56% increase from the same period last year, we had 901 fee events during the quarter compared to 639 in the same period last year.

In financial and valuation visors revenues were $84 million for the quarter at 56% increase from the same period last year, we had 901 fee events during the quarter compared to 639 in the same period last year.

Speaker 4: FBA is benefiting from strong M&A markets and continued productivity gains across all major product lines.

At PAA is benefiting from strong M&A markets and continued productivity gains across all major product lines.

Speaker 4: Turning to expenses, our adjusted compensation expenses were $547 million for the third fiscal quarter.

Turning to expenses, our adjusted compensation expenses were 547 million for the third fiscal quarter.

Speaker 4: versus $335 million for the same period last year. Our only adjustment was for deferred retention payments related to certain acquisitions.

Versus $335 million for the same period last year.

Our only adjustment was for deferred retention payments related to certain acquisitions.

Speaker 4: Our adjusted compensation expense ratio was 61.5% for both the quarter and year to date.

Our adjusted compensation expense ratio was 61, 5% for both the quarter and year to date.

Speaker 4: beginning in our fourth fiscal quarter and continuing for four years, any accruals associated with the previously mentioned retention pool of $133 million related to the GCA acquisition will be included in this adjustment.

Beginning in our fourth fiscal quarter and continuing for four years any accruals associated with the previously mentioned retention pool of 133 million related to the TCA acquisition will be included in this adjustment.

Speaker 4: Our adjusted non-compensation expenses were $59 million for the quarter versus $39 million for the same quarter last year, an increase of 52%. This considerable increase is primarily associated with the addition of GCA's non-compensation expenses.

Our adjusted non compensation expenses were $59 million for the quarter versus 39 million for the same quarter last year, an increase of 32%.

This considerable increase is primarily associated with the addition of G C as non compensation expenses.

Speaker 4: increases in TM&E and general inflationary trends in several expense items.

Increases in peony, and general inflationary trends in several expense items we.

Speaker 4: We expect to continue to see accelerated increases in TM&E and marketing costs as a result of the easing of COVID restrictions.

We expect to continue to see accelerated increases in P. M. Many in marketing costs as a result of the easing of Covid restrictions are.

Speaker 4: Our adjusted non-compensation expense ratio was 6.6% for the quarter versus 7.2% in the same period last year.

Our adjusted non compensation expense ratio was six 6% for the quarter versus seven 2% in the same period last year.

Speaker 4: For the fourth quarter, we adjusted out of our non-compensation expenses $15 million in non-cash acquisition-related amortization, the vast majority of which was amortized related to the GCA acquisition.

For the fourth quarter, we adjusted out of our non compensation expenses $15 million in noncash acquisition related amortization. The vast majority of which was the amortize related to the G. P acquisition.

Speaker 4: We expect significantly elevated levels of amortization relating to this acquisition through the school year 2023.

We expect significantly elevated levels of amortization relating to this acquisition through fiscal year 2023.

Speaker 4: In addition, we adjusted out of our non-compensation expenses, 16 million in acquisition and integration costs related to the GCA acquisition.

In addition, we adjusted out of our non compensation expenses $16 million in acquisition and integration costs related to the GCI acquisition.

Speaker 4: We expect to continue to see some integration-related costs in subsequent quarters, but we believe the bulk of those costs were in our third fiscal quarter.

We expect to continue to see some integration related costs in subsequent quarters.

But we believe the bulk of those costs, we're in our third fiscal quarter.

Speaker 4: Our adjusted other income and expense decreased for the quarter to an expense of approximately .3 million versus income of approximately .2 million in the same period last year. This was primarily due to a $900,000 reduction in the carrying value of our SPAC due to the requirement to mark to market that investment each reporting period.

Our adjusted other income and expense decreased for the quarter to an expense of approximately <unk> 3 million versus income of approximately <unk> 2 million in the same period last year.

This was primarily due to a 900000 dollar reduction in the carrying value of our spec due to the requirement to mark to market that investment each reporting period.

Speaker 4: Our effective tax rate for the quarter was 30% compared to 25.3% during the same quarter last year. Taxes are up as a result of increased state taxes, increased non-deductible expenses as we recover from the pandemic and return to work, the addition of non-deductible GCA transaction costs, and increased foreign taxes.

Our effective tax rate for the quarter was 30% compared to 25, 3% during the same quarter last year tax.

Taxes are up as a result of increased state taxes.

Increased nondeductible expenses as we recover from the pandemic and returned to work.

The addition of Nondeductible G C a transaction cost.

And increased foreign taxes.

Yeah.

Speaker 4: Turning to the balance sheet and uses of cash, as of the quarter end, we had approximately 1.1 billion of unrestricted cash and equivalents and investment security.

Turning to the balance sheet and uses of cash at the quarter end, we had approximately $1 1 billion of unrestricted cash and equivalents and investment securities.

Speaker 4: As a reminder, a significant portion of this cash is earmarked to cover accrued but unpaid bonuses.

As a reminder, a significant portion of this cash is earmarked to cover accrued but unpaid bonuses Hulu.

Speaker 4: Houlihan Loki will pay cash bonuses in February and March for calendar year 2021 to GCA employees who joined us in the merger.

Houlihan Lokey will pay cash bonuses in February and March for calendar year, 2021 two G C. A employees who joined us in the merger.

Speaker 4: we will pay additional cash bonuses in May consistent with our historical schedule for our fiscal year 2022.

We will pay additional cash bonuses and may consistent with our historical schedule for fiscal year 2022.

Speaker 4: Beginning next to the school year, all employees will be on the same schedule.

Beginning next fiscal year, all employees will be on the same schedule.

Speaker 4: Finally in this past quarter, we have repurchased the approximately 645,000 shares at an average price of $108.90 per share. It's part of our share repurchase program.

Finally in this past quarter, we have repurchased approximately 645000 shares at an average price of $108 90 per share as part of our share repurchase program.

Speaker 4: Midway through our fourth quarter, we expect to issue approximately $215 million of HL stock to GCA employees.

Mid way through our fourth quarter, we expect to issue approximately $215 million of H L stock to GCI employees.

Speaker 4: 133 million about amount is for the retention pool previously mentioned and the balance is the stock portion of GCA's calendar 2021 performance bonus

$133 million of that amount is for the retention pool previously mentioned and the balance is the stock portion of G. C. As calendar 2021 performance bonus and.

Speaker 4: And finally, we are pleased to announce that we're paying a dividend of $0.43 per share, payable on March 15th to shareholders of record as of March 2nd. And with that, operator, we can open the line for questions.

And finally, we are pleased to announce two we're paying a dividend of 43 cents per share payable on March 15th to shareholders of record as of March 2nd.

And with that operator, we can open the line for questions.

Speaker 1: At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the

At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Speaker 1: For participants using speaker equipment, it may be necessary to pick up your hands up before pressing the start keys. One moment please while we pull for...

One moment, please while we poll for questions.

Speaker 1: Our first question is from Ken Worthington with J.P. Morgan. Please proceed with your question.

Our first question is from Ken Worthington with J P. Morgan. Please proceed with your question.

Speaker 5: Hi, good morning and thank you for taking my question. On FVA, you cited in the press release that the number of deals increased across all parts of FVA. Can you give us a little bit more detail on those bigger contributors and how they perform?

Hi, Good morning, and thank you for taking my question.

Why not an FCA you cited in the press release that the number of deals increased.

Across all parts of SBA can you give us a little bit more detail on those bigger contributors and how they performed and then I think more interesting to me is the jump in the fee per event and S. P. A M that fee growth has been sort of more stable over the last six or so quarters, but.

Speaker 5: And then I think more interesting to me is the jump in the fee per event in FBA.

Speaker 5: That fee growth has been sort of more stable over the last six or so quarters, but jumped a good bit in the December quarter. Now, you mentioned a particularly large fee event. So could you give us a little bit more flavor there, but really on the broader jump in the fee per event in FY20?

But jumped a good bit in the December quarter, now you mentioned that particularly large fee events. So could you give us a little bit more flavor, there, but really on the broader jump in the fee per event.

And S P a.

It's about I think this has been a continuation of really work that we've focused on over the last couple of years.

Speaker 3: I think this has been a continuation of really work that we focused on over the last couple of years.

The business of functions really under a variety of sub product areas. Some of it's focused on doing portfolio valuation work some of which are focused on doing transactional work. So I'm just focused on what we call transactional admire zuhri services or corporate valuation type of work. So there's a variety of services.

Speaker 3: functions really under a variety of sub-product areas. Some of it's focused on doing portfolio evaluation work. Some of it's focused on doing transactional work. Some is focused on what we call transactional advisory services or corporate valuation type of work. So there's a variety of services.

Speaker 3: and effectively an ongoing orientation, I would say, away from just a focus on a project to more a focus on doing work and multiple tasks for clients.

And effectively.

And ongoing orientation I would stay away from just a focus on our projects you're more focused on doing work in multiple task for clients. So over the years and quarters. We built I think it increased our relationship with key clients. We've continued to do more repeat work.

Speaker 3: So over the years and quarters, we've built, I think, an increased relationship with key clients. We've continued to do more repeat work. And that work has generated not only more key events as we've described, but also the size, complexity of that work has continued to increase as I think the reputation of the firm has and just the market exists out there.

And that work is generated not only more events as we've described but also the size complexity and all of that work has continued to increase as I think the reputation of the firm has and just the market exists out there regarding your question on <unk>.

Speaker 2: Regarding your question on a large fee event, this is a business by its very nature. We do a lot of work at smaller size fees, but more and more we have seen us doing work for a million or a couple million dollars for clients, which was much more unusual a couple years ago, not quite as unusual today.

Large fee events. This is a business by its very nature, we do a lot of work at smaller size ease, but more and more we had you know.

Seen us doing work for you know a million or couple of million dollars for clients, which was much more unusual a couple of years ago not quite as unusual today.

Okay, great. Thank you very much.

Thanks, Ken.

Yeah.

Speaker 1: Our next question is from Manan Gozalia with Morgan Stanley . Please proceed with your question.

Our next question is from Banana goes all out with Morgan Stanley . Please proceed with your question.

Hi, good morning.

Sure.

Speaker 6: Scott, in a recent interview, you spoke about the opportunity for independent advisors to offer help with private debt capital raising and how we're still in the early days for that business. Can you give a little bit more color on that? How large do you see this business growing, what the fee rates are in that business, and what the opportunity set is for your firm specifically, and also is that something you need a specialized team for, or does that more involve existing senior bankers building deeper relationships with sponsors and their associated companies?

Scott Scott in a recent interview you spoke about the opportunity for independent advisers to offer help with private debt capital raising.

And you know how we're still in early days for that business.

Can you give a little bit more color on that you know how are you seeing you know how long did you see this business growing.

What the fee rates on that business and what the opportunity set is for your firm specific.

Civically.

Man you know also is that.

Something you'd need a specialized team for or does that you know more involved with existing senior bankers are building deeper relationships with sponsors and their associated companies.

Speaker 3: It's a business that we really like. We think it is rapidly growing and still has a lot of growth to go. I think we probably would have said not too long ago that the size of our capital markets business, we think, could rival the size of our M&A business.

It is a business that we really like we think it is rapidly growing and still has a lot of growth to go.

I think we probably would have said not too long ago that the size of the of our capital markets business, We think could rival the size of our M&A business, considering how well we've done an M&A in the last couple of quarters here it might be a little difficult to get to that 50 50 level, but what we're finding is there's just a tremendous amount.

Speaker 3: considering how well we've done in M&A in the last couple quarters here, it might be a little difficult to get to that 50-50 level. But what we're finding is, there's just a tremendous amount of interest by companies and private equity firms.

Mount of interest by companies and private equity firms to source from advisers like ourselves to help them find the right kind of capital and as we've mentioned for many.

Speaker 3: to source from advisors like ourselves to help them find the right kind of capital. As we've mentioned for many times that the number of providers of that capital have continued to grow and where you find that capital and the exact terms and conditions of that capital has become more and more important. We believe we've got one of the largest, if not largest,

Times that the number of providers of debt capital have continued to grow.

And where do you find that capital on the exact terms and conditions of that capital has become more and more important. We believe we've got one of the largest if not largest.

Speaker 3: staff dedicated in the mid-cap market for providing this kind of service. We continue to hire in that area. We continue to grow geographically along industry lines, along particular specialties within the capital structure, and think that over the years ahead, this will continue to be a major growth component of the firm and a major component in totality of not only the firm and corporate finance, but it helps in other parts of our product lines as well.

Dedicated in the mid cap market for providing this kind of service we continue to hire in that area. We continue to grow geographically along industry lines long you know particular specialties within the capital structure and and think that over the years ahead. This will continue to be a major growth component of the firm.

A major component in totality of our not only the firm and corporate finance, but it helps in other parts of our product lines as well.

Speaker 6: Got it. And would the rate environment matter for that business? Like, would higher rates be more beneficial?

Got it and then with the rate environment matter for that business I would put high rich be more beneficial.

Speaker 3: You know, it has some elements to it. We always want the availability of capital at times making it a little more difficult for the CFO of the client or a member of the private equity firm to be able to access the capital themselves.

You know it has some elements to it we always want the availability of capital.

At times, making it a little more difficult for the CFO of the client or a member of a private equity firm to be able to access the capital themselves. The tiers away from what we could do so a little bit of difficulty a little bit of.

Speaker 3: the tears away from what we could do. So a little bit of difficulty, a little bit of.

Speaker 3: You know, issues out in the marketplace actually help the business, just don't want to get, you know, where interest rates get too high, where the availability of capital dries up too much. At this point, I think where the market is, maybe even where it's heading in the next couple quarters, looks like actually a very good opportunity set for a firm like ours.

Issues out in the marketplace actually help the business.

I just don't want to get.

Our interest rates get too high where the availability of capital drives up too much.

At this point I think where the market is maybe even where its heading in the next couple of quarters. It looks like actually a very good opportunity set for a firm like ours.

Speaker 6: Great, thanks. That's helpful. And then, can you talk a little bit about just the recent market volatility and how that's been factoring into your conversations with clients? I know that GCA gives you more exposure in the tech space, where we've seen most of the pain recently. But just given the cohort of companies you advised and your sponsor relationships,

Great. Thanks, that's helpful. And then can you talk a little bit about just the recent market volatility and how that's been factoring into your conversations with clients.

I know that G. C. It gives you more exposure in the tech space.

We have seen most of the band recently, but just given the cohort of companies you advise and your sponsor relationships.

Speaker 6: These lower valuations might actually spur the electivity even more, so just wanted to know what you're hearing from clients on both the buy and sell side given what we've seen recently in the market.

These lower valuations might actually spud activity, even more so just wanted to know how you're you know what are you hearing from clients on both the buy and sell side given what we've seen recently in the market.

Speaker 3: Clearly for all of us who are in the financial marketplace, we've seen an experience more volatility, but a couple of things I'd say. At this point, it may only be a month and a month half long in this volatility, probably need a longer duration before it really impacts, in some cases positive, in some cases negative, where our business might go. We've also found that volatility tends to impact public transactions more than private transactions.

It clearly for all of US you know we're in the financial marketplace, we've seen and experienced more volatility, but a couple of things I'd say at this point you know it may only be a month and a month half long in this volatility.

We need a longer duration before it really impacts.

Impacts in some cases positive in some cases negative.

Where our business might go.

We've also found that volatility tends to impact public transactions more than private transactions and due to arm, our mid cap focused especially in corporate finance, we tend to deal more with private companies or companies owned by financial sponsors. So we're we're sensitive to what's happened in the marketplace.

Speaker 3: due to our mid-cap focus, especially in corporate finance, we tend to deal more with private companies or companies owned by financial sponsors. So we're sensitive to what's happened in the marketplace.

Speaker 3: It impacts, you know, somewhat differently to all of our industry groups.

<unk>, you know somewhat differently to all of our industry groups, but at this juncture don't really see the increased volatility I wont be out there telling you, it's a significantly helping to do more deals or conversely, significantly slowing down or repricing deals.

Speaker 3: But if this juncture don't really see the increased volatility, I wouldn't be out there telling you it's significantly helping to do more deals, or conversely significantly slowing down or repricing deals. That might change in the quarters ahead, but sitting here in the early parts of February , I think it's much more of a public-treated stock issue than in many cases, than what's occurring in the private marketplace.

It might change in the quarters ahead, but sitting here in the early parts of February .

It's it's much more of a public.

Traded stock.

Issue then in many cases and what's occurring in the private marketplace.

Great. Thanks very much.

Speaker 1: Our next question is from Devon Ryan with JMP Securities. Please proceed with your question.

Our next question is from Devin Ryan with JMP Securities. Please proceed with your question.

Great Good morning, everyone.

Good morning Devin.

Speaker 7: First question, I just want to maybe touch on the European sponsor market.

First question just wanted to maybe touch on the European sponsor market and I guess, specifically kind of what you guys are seeing there today and then also if you just can't given your strength there just the maturation of that market I know.

Speaker 7: I guess specifically kind of what you guys are seeing there today and then also if you just can't give in your Strength there just the maturation of that market. I know

Speaker 7: You know, there's been significant pools of capital raised there and you guys Made it exerted effort to be bigger in Europe and that's been successful But can you just maybe talk a little bit more bigger picture around? Yeah, how the firm has been performing Wispsons, New York, but also kind of where you see that market today versus maybe where it could be and three or four years Just based on the pools of capital

Theres been significant pools of capital raise there do you guys.

We've made a concerted effort to be bigger in Europe , and that's been successful, but can you just maybe talk a bit more bigger picture around how the firm has been performing with sponsors in Europe , but also kind of where you see that market today versus maybe where it could be in three or four years, just based on the pools of capital raised.

Speaker 3: I think the European sponsor market started decade plus ago, primarily with US firms that opened up European operations. It now has, clearly, all the major and mid-major firms with a presence in Europe . And then you have dozens or hundreds of also pure European-based sponsor firms. So the number of firms have continued to grow, pulling up the size and what you see in the states that this jump.

Well I think the European sponsor market, you know started a decade plus ago, primarily with U S firms that opened up European operations. It now has clearly all the major and mid major firms with a presence in Europe , and then you have dozens or hundreds of also a pure European base.

<unk> sponsor firms. So the number of firms have continued to grow colon up the size and what you see in the states at this juncture and then what we have found is as we've added.

Speaker 3: And then what we have found is as we've added a significant amount of heft in terms of our coverage capabilities of our industry expertise, our geographical substance in Europe , we're seeing a lot more deal flow. We're talking a lot more of prospects, we're having a lot more interaction.

Significant amount of heft in terms of our coverage capabilities of our industry expertise our geographical substance in Europe , where we're seeing a lot more deal flow, we're talking a lot more our prospects for having a lot more interaction.

Speaker 3: We seem to kind of go through periods where the European marketplace

We seem to kind of go through periods, where the European marketplace appears to be moving from a growth standpoint, a little head of the states and then sometimes it comes back down in the U S looks a little more favorable.

Speaker 8: States and then sometimes it comes back down and the U.S. looks a little more favorable. But we we feel very confident that you know Europe will continue for our business to be a significant contributor and we went from I think a also ran player to a true dominant player in Europe and specifically with the sponsor community and we've continued to actually add some dedicated resources that are doing nothing but calling on those sponsors out of Europe . Okay

But we we feel very confident that Europe will continue for our business to be a significant contributor and we went from I think a also ran player to a true dominant player in Europe , and specifically with the sponsor community and we've continued to actually add some dedicated resources that youre doing.

But calling on those sponsors out of Europe .

Speaker 7: Okay, appreciate the color and then quick follow up here just on the restructuring business. You appreciate kind of the outlook commentary and kind of some of the normalization or even.

Okay I appreciate the color and then a quick follow up here just on the restructuring business.

I appreciate kind of the outlook commentary and kind of some of the normalization or even.

Speaker 7: Move below kind of pre pandemic levels of activity. We have heard from some of your peers that they're starting to see signs of more activity or those kind of early conversations. Are you guys seeing that?

Move below kind of pre pandemic levels of activity, we have heard from some of your peers that they are starting to see signs of more activity you were or are those kind of early conversations or are you guys seeing that as well.

Speaker 7: As well, you know, obviously higher rates or other, you do political issues or the other factors could drive more activity, but are there any early indicators that are suffering maybe you're starting to improve from kind of the currently you know, quieter levels or is it just more, if those factors play out than it could. You're trying to think about what's actually happening on the ground.

Obviously higher rates or other geopolitical issues or other factors could drive more activity, but are there any early indicators that restructuring maybe.

You're starting to improve from kind of the the currently quieter levels or is it just more.

Those factors play out and then it could you just trying to think about what's actually happening on the ground today.

Speaker 3: So I'd say two things. If you look at the macro fact.

So I'd say two things if you look at the macro facts that are out there that can help the restructuring business I think it's clearly more positive than negative theres just a lot of potential as we mentioned you know total amount of indebtedness interest rates peers like they can only go more up than down.

Speaker 3: that are out there that can help the restructuring business. And it's clearly more positive than negative. There's just a lot of potential, as we mentioned, you know, total amount of indebtedness that interest rates appears like they can only go more up than down, less government intervention, all the ongoing technology disruptors, et cetera, all of that lays positive framework.

Less government intervention, all the ongoing technology, Disruptors et cetera, all of that lays a positive framework. What we don't know none of US control is when will all of that tend to.

Speaker 3: what we don't know and none of us control is when will all that tend to uh... you know impact the number of companies default that so that

Impact the number of companies in default.

So the second point that I'd say is it's been going on for maybe a year plus it's you can have a month, where you tend to get far more positive feelers and then it tends to cool down. So we just haven't seen a string of enough months together that says Oh, yes. The tide is definitely turn we're definitely starting to see an increase.

Speaker 3: it's been going on for maybe a year plus. You can have a month where you tend to get far more positive feelers and then it tends to cool down. So we just haven't seen a string of enough months together that says, oh yeah, the tide has definitely turned. We're definitely starting to see an increase that feels like it's going to last for a year or two in restructuring. So it really almost depends what

That feels like it's going to last for a year or two in restructuring so it really almost depends what.

Speaker 3: You know, months you talked about what day of the week you talked about. So that would be our comment, or we see clearly certain grassroots are increasing in certain areas. They haven't really started to sprout yet.

Once you talk about what day of the week you talked about so that that would be our commentary we see clearly certain grass roots are increasing in certain areas. They haven't really.

Started to sprout yet.

Speaker 7: We just haven't seen a consistent set of months that would get us to the point that says, yes, we think we definitely have hit bottom up from here yet. Yep, okay, perfect, I'm excited.

We just haven't seen a consistent set of months that would get us to the point that says, yes, we think we definitely have hit bottom in.

From up from here yet.

Yep, Okay, perfect that makes sense I appreciate you taking my questions.

Thanks, Kevin Thanks, Kevin.

Speaker 9: Our next question is from Michael Brown with KBW. Please proceed with your question. Great. Good morning, Scott, Lindsay, how are you guys?

Our next question is from Michael Brown with K B W. Please proceed with your question.

Great.

Good morning, Scott Lindsey or I guess what.

Michael.

Good morning.

So I wanted to I guess follow up on Europe , and in our corporate finance business, how much of the fiscal third quarter revenue came from from here and any specific comments in regards to your outlook for the region. There just given the rising.

Rising geopolitical uncertainty there.

So in our.

Speaker 3: Our disclosure, not necessarily on the release, but when we come out with the queue and report, we do talk about where a total revenue sur from all of our business lines. Otherwise, we don't specifically discuss exactly what it is by product. I would tell you the...

Our disclosure not necessarily in the release, but when we come out with the Q and in our report we do talk about where total revenues are from all of our business lines. The way. So we don't specifically discuss exactly what it is byproduct I.

I would tell you the statistical importance of our non U S business has clearly grown since a we've added people ourselves and clearly the acquisition of <unk>, which significantly increased our presence in Europe and in the Asia Pacific region.

Speaker 3: statistical importance of our non-US business is clearly grown since A. We've added people ourselves in clearly the acquisition of GCA which significantly increased our presence in Europe and in Asia Pacific region

Speaker 3: So that continues, I think, due to the size of our staff and where it's located will continue to increase. And we are feeling that there is quite a bit of more activity going on in Europe than we would have seen a couple years ago. And I think part of that is the market itself. And part of it is just because we have more bankers now in that geography, we're more attuned to what's going on in the marketplace than where we would have been three, five years ago.

So that continues I think due to the size of our staff and where it's located we will continue to increase and we are feeling that there is quite a bit of more activity going on in Europe than we would have seen a couple of years ago.

And I think part of that is the market itself and part of it is just because we have more bankers now in that geography or more tuned to what's going on in the marketplace than where we would've been three five years ago.

Okay. So no real near term pressure at this point in any of them.

Speaker 9: No, I think business and consolidation and M&A activity, they're slowly falling along and some of the SPAC deals clearly their importance out there in sponsor activity continues to increase. We're seeing improvements, I think, really across the board in opportunities for us in your run. Okay, great. And just as a follow-up, you know, on corporate financial.

No.

And like I said I think business.

And consolidation and M&A activity.

They are slowly falling along in some of the spec deals clearly their importance out there in <unk>.

Sponsor activity continues to increase.

We're seeing improvements I think really across the board and opportunities for us in Europe .

Okay, Great and just as a follow up you know on corporate finance, you talked about the seasonal strength in the quarter and.

And also some of the other key drivers for this quarter, but I wanted to clarify is there any was there kind of a larger proportion of your <unk>.

Non traditional M&A related fees. This this quarter was that.

Elevated as well.

I don't think the pull forward is typically something that that impacts houlihan lokey, but I just wanted to check to see if there was any pull forward into that.

Third quarter above normal levels.

Speaker 4: Lindsay, you want to comment anything then? Yeah, sure. I think from a non-traditional M&A fees, the answers no. I think are mix of merges and acquisitions and...

Yeah, Lindsay you want to comment on any of them yeah sure I think from a non traditional M&A fees.

Answer is no I think our mix of mergers and acquisitions and.

Speaker 4: Our capital markets business was not any different this quarter than in previous quarters. We have pulled forwards the way you describe it. Every quarter we've had it for years. It's just the way we accrue revenues. So there are no unusual circumstances around pulled forwards this quarter.

Our capital markets business was not any different this quarter than in previous quarters.

We do we have Uh huh.

Pull forwards the way you describe it every quarter, we've had them for years. Its just the way we accrue revenue. So there's no unusual circumstances around pull forward this quarter.

Speaker 4: I think the unusual circumstances were kind of what Scott had mentioned earlier, which was we did have a disproportionately high number of larger fee transactions for this quarter relative to last several quarters and relative to what we're expecting the next couple quarters.

The unusual circumstances, where kind of what Scott had mentioned earlier, which was we did have a disproportionately high number of larger fee transactions.

For this quarter rare.

Relative to the last several quarters and relative to what we're expecting in the next couple of quarters. So I think that's one of the things that drove it.

Speaker 4: So I think that's one of the things that drove significant revenues in corporate finance. We had high close rates this quarter, which is a continuing trend. And maybe some time some favorable timing around some transactions as well. But not the mix of business and not pull forwards at all that had any impact on the quarter.

Significant revenues in corporate finance, we had high close rates this quarter, which is a continuing trend.

And you know maybe some time, some favorable timing around some transactions as well, but not the mix of business.

And not pull forwards at all that that had any impact on the quarter.

Okay very helpful. Thank you both.

Speaker 1: Our next question is from Stephen Jubak with Wolf Research. Please proceed with your question. Please proceed with your question.

Our next question is from Steven <unk> with Wolfe Research. Please proceed with your question.

Hi, Good morning, Scott Good morning Lindsay.

Speaker 10: So, wanted to really spend some time just unpacking some of the comments you made around the corporate finance fee rate. You noted the high fee rate for transaction, helped buoy your results this quarter. It was up 19% year on year. And you acknowledge that it should begin to normalize. Since we don't have as much experience with GCA, which hopefully you could just help frame how we should think about the normalized fee rate within corporate finance versus that $3 million level that we saw in the most recent quarter.

Let's see if I understand so wanted.

I wanted to really spend some time just unpacking some of the comments you made around the corporate finance fee Red you noted the high fee rate per transaction helped buoy results. This quarter. It was up 19% year on year, you and you acknowledged that it should begin to normalize since we don't have as much experience with G. C. A I was hoping you could.

Just help frame, how we should think about the normalized fee rate within corporate finance versus that $3 million level that we saw in the most recent quarter.

Great.

Yeah, we can't give you.

Specific numbers around what we expect the fee rate debates just not something that will disclose but what we can tell you is that if you.

Separate the two businesses, which we don't like to do but we'll do it for discussion purposes. The houlihan lokey, excluding G C a business.

Speaker 4: on average had extremely high average V rates this quarter. For most of the acquisitions that we've historically done.

On average had extremely high average fee rates this quarter for.

For most of the acquisitions that we've historically done.

Speaker 4: Those acquisitions have average fee rates, they tend to be a little lower than what Huala and Loki's is. GCA is no different, so GCA's average fee rates were a bit lower than Huala and Loki's for the quarter. When you blend the two of them, they tended to be right around that 3 million number that you're seeing in the earnings release. Expectations are that the Huala and Loki business

Those acquisitions are.

Have.

Average fee rates, they tend to be a little lower than what houlihan lokey. The TCA is no different so D. C. As average fee rates were a bit lower than houlihan lokey as for the quarter. When you blend the two of them they tended to be right around that 3 million number that youre seeing in the earnings release and expectations are that the houlihan lokey busy.

Speaker 4: over the next couple quarters, that average fee rate will come down, and GCA's will stay the same or go up, which will bring the 3 million down to some number, you know, likely in the two.

<unk>.

Over the next couple of quarters that average fee rate will come down and G. C. As will stay the same or go up which will bring the 3 million down to some number.

In the twos and so that's the dynamic that Scott and I were talking about is that we had an artificially high average fee rate this quarter driven by Houlihan lokey expectations are that on a blended basis that will come down to something in the twos and then from there it will start to grow at the average rates that it's been growing over the long.

Speaker 4: And so that's the dynamic that Scott and I were talking about is that we had an artificially high average fee rate this quarter driven up by who will handle key expectations are that on a blended basis that will come down to something in the twos. And then from there it will start to grow at the average rates that it's been growing over the last, you know, a couple of decades and Scott and I talked about the fact that

A couple of decades, and Scott and I have talked about the fact that on average our average transaction size. Our average fee rates tend to go up but in baby steps. This quarter. It was not a baby's stopped it was a much larger steps can we expect that to kind of come back down to a normalized level.

Speaker 4: Unhaveraged or average transaction size, our average P-rate, tend to go up.

Speaker 4: But in baby steps this quarter, it was not a baby step. It was a much larger step than we expected to kind of come back down to a normalized.

Thanks for that color Lindsey and just had a follow up on some of the comments you made on the non comp side I.

Speaker 10: Thanks for that caller, Lindsay. And just had a follow-up on some of the comments you made on the non-comp side.

Speaker 10: I was hoping you can give some color on how we should be thinking about the non-com dollar run rate, X, the acquisition cost, recognizing there's a fair amount of noise, just so we can try to think about the appropriate jumping off point. And how should we be thinking about TNE normalization now that travel is starting to...

I was hoping you can give some color on how we should be thinking about the non comp dollar run rate ex the acquisition costs, recognizing theres a fair amount of noise. Just so we can try to think about the appropriate jumping off point and how should we be thinking about a T. N E. Normalization now that travel is starting to come back.

Speaker 4: So as the first part of it, I'd say the quarterly, this quarter's not compensation expense on an adjusted basis is probably a pretty good absolute dollar number to use. I will caution you though, we do have a little seasonality and the not cop number. Remember, a portion of the not cop number is reimbursable expenses from clients.

So the first part of it I'd say the quarterly this quarters non compensation expense on an adjusted basis.

Is probably a pretty good absolute dollar number to use I would caution you, though we do have a little seasonality in the non comp number remember.

A portion of the non comp number is a reimbursable expenses from clients. So as revenues increase the reimbursable expenses increased non comp increases so youre going to have some volatility and non comp based on how the revenues performed for the quarter. There's also some seasonality in and non comp around things like.

Speaker 4: So as revenues increase, the reimbursement expenses increase, non-comp increases. So you're going to have some volatility and non-comp based on how the revenues perform for the quarter. There's also some seasonality and non-comp around things like recruiting and training. But this quarter number is actually a pretty good, pretty good quarter number from an absolute basis for our third quarter.

Recruiting and training, but the this quarter number is actually a pretty good pretty good quarter number from an absolute basis for our third quarter.

Speaker 4: And then with respect to team and E, look, I think it's, you know, as you can see, significantly higher than it was this time last year. Expectations are that you will see outsized growth in that number as we return to work.

And and then with respect the team any look I think it's you know as you can see significantly higher than it was this time last year. Our expectations are that you will see outsized growth in that number as we returned to work.

Speaker 4: Where it settles, I think we're all still trying to estimate that I've heard peers say anywhere from

Where it settles I think we're all still trying to estimate that I've.

I've heard peers say anywhere from.

Speaker 4: you know, 60% to 80% of what it used to be, I think that's probably a pretty good number. We don't think it will go to the same, you know, rates per MD or rates per average employee in terms of TM&E spend. I think people become more efficient in the way they think about travel. Having said that, we haven't seen...

60% to 80% of what it used to be I think that's probably a pretty good number.

We don't think it will go to the same rates per M D or rates per average employee in terms of P. M and E spend I think people become more efficient in the way. They think about travel having said that we haven't seen the top yet in terms of upside to that number so.

Speaker 4: the top yet in terms of, you know, upside to that number. So...

Speaker 4: You know, if anyone's guests on when it occurs, whether it's next quarter or the quarter after, it likely happened sometime in this calendar year. And unless we find ourselves with a new variant and a new set of restrictions. But expectations for us is that sometime in this calendar year we'll be back to what we think is more normalized, TM any number. And we'll let you know when we get there. We just don't know when it's gonna be.

It's anyone's guess on when it occurs whether it's next quarter or the quarter after it'll likely happen sometime in this calendar year and unless we find ourselves with a new variant and a new set of restrictions.

But expectations for us is that sometime in this calendar year, we'll we'll be back to what we think is a more normalized T. At many number and we'll let you know when we get there. We just don't know when it's going to be.

Speaker 10: I completely understand, Lindsay. Admittedly, at the same time, your MD count is also up 40%, so clearly that's going to drive some upward pressure there.

No I completely understand Lindsay I'm admittedly at the same time your MD count is also up 40%. So you don't think that's going to drive some upward pressure there as well.

Speaker 10: It will. Yes. Okay. And just if I could squeeze in one more. It's just a topic that's coming up quite often as it relates to you guys specifically, which is around the earnings growth algorithm. And if there's one thing you guys have demonstrated consistently over time, it's the durability of your revenues. And if I look at slide 26, it shows the historical contribution from Corp Fin.

It will yes, okay.

And just if I could squeeze in one more it just a topic that's coming up quite often as it relates to you guys, specifically, which is around the earnings growth algorithm and if there's one thing you guys have demonstrated consistently over time, it's the durability of your revenues and if I look at slide 26. It shows the historical contribution from Corp fin.

And.

Speaker 10: Historically, it's been remarkably consistent in that 50 to 56 percent range, naturally pro forma GCA. That contribution over the last nine months is north of 70. Certainly the subdued restructuring environment hasn't helped, but I was hoping you could just speak to your confidence in sustaining that more durable, less volatile revenue stream despite the change in mix, and whether you believe the legacy earnings growth algorithm that you guys have spoken to in the past, whether that's ultimately still...

Historically, it's been remarkably consistent in that 50% to 56% range naturally pro forma G. C. A that contribution over the last nine months is north of 70.

Certainly the subdued restructuring environment hasn't helped but I was hoping you could just speak to your confidence in sustaining that more durable and less volatile revenue stream. Despite the change in mix and whether you believe the legacy earnings growth algorithm that you guys have spoken to in the past, whether that's ultimately where that paradigm still hold.

<unk>.

Speaker 3: I would focus on what I think we've built is more diversification than we've ever had. And you have to look at it beyond just the cyclicality balance that, you know, historically people have focused on between maybe corporate finance and restructuring. So what do I mean by that? We have more core industry groups that we follow and we're much more balanced.

So I would focus on what I think we built is more diversification than we've ever had.

And you have to look at it beyond just the cyclicality balanced historically people have focused on between maybe corporate finance and restructuring so what do I mean by that we have more.

Core industry groups that we follow and were much more balanced than we were before we're much more balanced I think in our geographical outreach that we have or probably even a little more balanced in the amount of the.

Speaker 3: than we were before. We're much more balanced, I think, in our geographical outreach that we have. We're probably even a little more balanced in the amount of

Speaker 3: financial sponsor clientele we have versus corporate clientele we have. We've got a growing FBA business that tends to run generally less, at least historically less volatile than the transactional business of M&A or financial restructuring. We continue to have really hundreds of key employees and not focused on a very small subset of employees.

The financial sponsored clientele, we have versus corporate clientele. We have we've got a growing SBA business that tends to run generally less at least historically less volatile than.

And then the transactional business of M&A or financial restructuring, we continued to have really hundreds of key employees and not focused on a very small subset of employees shareholders clients et cetera. So it's always been I think in our DNA to try to find how we can continue to grow.

Speaker 3: shareholders, clients, et cetera. So it's always been, I think, in our DNA to try to find how we can continue to grow, but do it on a diversified basis that hopefully will, you know, minimize the volatility. We can't obviously predict.

But do it on a diversified basis that hopefully will minimize the volatility we can't obviously predict what will happen in the marketplace. There are certain things, we don't control from interest rates to the stock markets geopolitical issues, but I think we have continued to build a very diversified and hopefully sustainable and grow.

Speaker 3: what will happen in the marketplace or certain things we don't control.

Speaker 3: from interest rates to the stock market to geopolitical issues, but I think we have continued to build a very diversified and hopefully sustainable and growing business.

<unk> business and I think also since we tend to deal more in the mid cap space clearly in corporate finance.

Speaker 3: And I think also since we tend to deal more in the mid-cap space, clearly in corporate finance, size transaction aren't nearly as important on restructuring or FEA, but that also provides some element of, you know, less volatility than the bigger cap space.

This transaction aren't nearly as important in restructuring or FCA, but that also provides some element of less.

Less volatility than the bigger cap space.

That's great color Scott Thanks for taking my questions.

Thanks Steven.

Speaker 1: Our next question is from Richard Ramsden with Goldman Sachs. Please proceed with your question.

Our next question is from Richard Ramsden with Goldman Sachs. Please proceed with your question.

Speaker 11: Good morning. So just a quick question for me. Can you just comment on what you're seeing in terms of cross-border activity? Has that started to pick up materially? And perhaps, I know it's early, but maybe you could just comment on whether or not you think UCA materially increases the opportunity set for you in terms of cross-border transactions? Thanks.

Hi, Good morning. So just a quick question for me can you just comment on what you've seen in terms of cross border activity has that started to pick up materially and perhaps I know, it's early but maybe you could just comment on whether or not you think that you see a materially increases the opportunity set for you in terms of cross border transactions.

So, yes and yes.

Speaker 3: I think A is the market has continued to be healthy.

I think as the market has continued to be healthy.

Speaker 3: as the size of our deals, as Lindsay mentions, they grow, but they tend to grow in kind of baby steps. And the fact that we've always been a dominant player for many years, decade plus in the U.S. And I think we're now also one of the most dominant players in Europe and a growing dominant player in Asia. All of that allows us to do much more cross-border work. And we know while we've only been together with the GCA for a short number of months,

As the size of our deals as Lindsey mentioned as they grow but they tend to grow in kind of baby steps.

And the fact that we've always been a dominant player for many years decade, plus in the U S and I think we're now also one of the most dominant players in Europe and a growing dominant player in Asia. All of that allows us to do much more cross border work and we know while we've only been together with <unk>.

For a short number of months.

Speaker 3: We're pitching business that we would have never been able to pitch. We are winning business that we would never be able to win. It's still early days in actually executing on some of those newly hired tasks, but as we move forward in one firm, we think collectively there will be more work for us out there, and clearly a lot of it is cross-border work just due to, I think, the increased presence we have across the globe.

We're we're pitching business that we would have never been able to pitch.

We are winning business that we would never be able to win it.

It's still early days and actually executing on some of those newly hired Jas.

As we move forward in one firm, we think collectively there will be more work for us out there and clearly a lot of it is cross border work just due to I think the increased presence we have across the globe.

Okay, alright, thanks very much.

Speaker 1: Our next question is from Jeff Hart with Piper Sandler. Please proceed with your question. Good morning.

Our next question is from Jeff Harte with Piper Sandler. Please proceed with your question.

Good morning, guys, a very nice quarter.

Speaker 11: So, a couple left for me, one, on the sustainability of corporate finance activity levels, you guys mentioned slowing revenue growth likely and slowing new engagements year over year. I want to make sure I'm interpreting that correctly. Still growing, just growing at a slower pace, is that what you're saying, as opposed to actually declining?

Thank you.

A couple left for me one on the sustainability of corporate finance activity levels. You guys mentioned, you know slowing revenue growth likely slowing new engagements year over year I want to make sure I'm interpreting that correctly still growing just growing at a slower pace is that what you're saying as opposed to actually declining.

Speaker 11: On the new engagement side? Yes, that is what we mean.

On the new you engage outside that.

Yes that is what we made.

Hey.

Speaker 11: That's what I was hoping, but good to hear. Secondly, I was kind of surprised by the level of cash and investable securities in the balance sheet, given that you paid for GCA and a round of deferred cash bonuses this quarter.

That's what I was hoping but good to hear.

And then secondly, I was kind of surprised by the level of cash and investable securities on the balance sheet given that you paid for <unk> and you know round of deferred cash bonuses this quarter.

Speaker 11: How should we think about that cash balance now for you as a larger company, and I'm just kind of maybe trying to see what that means as far as potential buybacks or maybe your willingness to enter into other transactions.

Should we think about that cash balance now for you as a larger company and I'm just kind of maybe trying to see what that means as far as potential buybacks or maybe your willingness to enter into other transactions.

Speaker 4: Yeah, so we did have an unusually strong cash quarter. We had our pre-tax margins, and therefore our net income margins remain high as a result of COVID.

Yeah. So we did have an unusually strong cash quarter, we are.

Pre tax margins and therefore, our net income margins remain high as a result of Fei.

Speaker 4: you know, favorable non-compensation expenses, I kind of alluded to that in an earlier question, particularly around TM&E. And as a result, we're just generating quite a bit of cash.

Favorable non compensation expenses I kind of alluded to that in an earlier question, particularly around <unk> and as a result, we're just generating quite a bit of cash.

Speaker 4: GCA's additional revenues at similar margins to ours is also generating along with who will hand some significant cash and we both had a very strong quarter.

G C. As additional revenues at similar margins to ours is also generating along with Hulu and some significant cash and we both had a very strong quarter.

Speaker 4: I think, in addition, we had some favorable working capital trends this quarter that were, I think, more timing than anything else. And so that added to our cash position.

In addition, we had some favorable working capital trends this quarter that were I think more timing than anything else and so that added to our cash position in terms of philosophy and what to do with that cash it really hasn't changed I mean, our primary goal is to find acquisitions that are attractive to the business.

Speaker 4: In terms of philosophy and what to do with that cash, it really hasn't changed.

Speaker 4: primary goal is to find acquisitions that are attractive to the business, to our strategic growth plan, and have that as the primary use of excess cash, aside from, obviously, our quarterly dividends.

To kind of our strategic growth plan and have that as the primary use of excess cash in.

Aside from obviously, our quarterly dividends.

Speaker 4: And to the extent we are not able to do that, then we will look to...

And to the extent, we are not able to do that then we will look to.

Speaker 4: repurchase shares in excess of what we issue to bankers as part of their compensation and as you know we've had a

Repurchase shares in excess of what we issue two bankers as part of their compensation and as you know we've had a strategy in place to minimize dilution associated with our competition compensation.

Speaker 4: a strategy in place to minimize dilution associated with compensation equity. And we've essentially, since we went public, been able to do that. We intend to continue to do that. We've used acquisitions as the primary source of excess cash, and we'll continue to do so. And to the extent we don't have acquisitions available, then we'll evaluate.

Equity and we.

Essentially since we went public been able to do that we intend to continue to do that we've used acquisitions as the primary source of excess cash and we'll continue to do so and to the extent. We don't have acquisitions available then we'll evaluate weather accessories repurchases or a a onetime dividend would be.

Speaker 4: excess repurchases or a one-time dividend would be an attractive way to return cash to shareholders, but we don't expect to hold on to anything in excess for any long period.

At an attractive way to return cash to shareholders, but we don't expect to hold on to anything in excess for any long periods of time.

Speaker 11: OK, should we think of you guys as being kind of open to additional acquisitions, or is there going to be a pause here while you digest GCA?

Okay shall we think of you guys as being kind of open to additional acquisitions or is there going to should there be a pause here, while you Digest UCA.

Yeah.

Go ahead Scott.

Speaker 3: Like I say, we're always looking, and if we find the right opportunities, we'll continue to do acquisitions. Having said that, I think practicality, at least from a larger-sized transaction for the foreseeable future, until we make more headway in the integration, makes those kinds of more sizable acquisitions less likely in the short term, but it's part of the way we like to run the business, the way we like to grow, and so I would anticipate we will do acquisitions in the future.

I would just say, we're always looking and if we find the right opportunities we will continue to do acquisitions.

<unk> said that you know.

Practicality at least from a larger sized transaction for the foreseeable future.

Until we make more headway in the integration.

Those kinds of more sizeable acquisitions less likely in the short term but.

It's part of the way, we like to run the business the way, we like to grow and so I would anticipate we will do acquisitions in the future.

Speaker 11: Okay, one clean up for you in the tax rate. Should we think of kind of last quarter is the kind of forward run rate? Is that a good starting point?

Okay, and one clean up for Ya Lindsey on the tax rate should we think of kind of last quarter is the kind of forward run rate is that a good starting point.

Speaker 4: It's not about starting point. I'm hoping this is still a combination of companies here and we're still working through taxes, but I think high 20s, 30% is probably a good way to think about it going forward.

It's not a bad starting point I'm, hoping you know this is still a combination of companies here and we're still working through taxes, but I think high twenties, 30% is probably a good a good way to think about it going forward.

Okay. Thank you.

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Speaker 1: Our next question is from Brennan Hawken with UBS. Please proceed with your question.

Our next question is from Brennan Hawken with UBS. Please proceed with your question.

Speaker 12: Hey, guys. Good morning. Thanks for taking my question. Hi, Brendan. Hey. So you guys provided some pretty clear messaging around slowing growth, although still growing. But given the remarkable strength in the current quarter, I'm a little unclear about what the baseline is that we're supposed to consider that growth off.

Hey, guys. Good morning, Thanks for taking my question.

Hi, Brendan.

Hey, So you guys provided some pretty clear messaging around slowing growth, although still growing.

But.

Given the remarkable strength in the current quarter I'm, a little unclear about what the baseline is that we're supposed to consider that growth off of are you talking about continuing to grow off of.

Speaker 12: Are you talking about continuing to grow off of, you know, the pace of the recent quarter? Are you talking about continuing to grow off the year-to-date results this year? I mean, year-to-date, you've already reported more revenue than you did in the full fiscal year of 2021. So, how are we supposed to calibrate and use a baseline to think about growth from here?

The pace of the recent quarter are you talking about continuing to grow off the year to date results. This year I mean year to date, you've already reported more revenues than you did in the full fiscal year 'twenty to 'twenty one so.

How are we supposed to calibrate and base use of baseline to think about growth from here.

Great Lindsay.

Speaker 4: Sure. Look, I think the year-to-date number, if you got any message from today's call, is much better than the quarterly number, so I'd say that we did have an extraordinary quarter. I think that we believe that our year-to-date results are reflective of an extremely strong M&A market.

Yeah sure I look I think the year to date number if you got any message from today's call is much better than the quarterly number.

So I I'd say that we did have an extraordinary quarter I think we believe that our year to date results are reflective of an extremely strong M&A market.

Speaker 3: that has really, I think, risen all boats in our industry. Our reported results are not significantly different than many of our competitors or peers. So, I'd say focus on year-to-date, that is a good, stable.

That has really I think risen all boats in our industry.

Our.

Reported results are not significantly different than many of our competitors or peers. So I would say focus on year to date.

That that is a good stable.

Speaker 4: I guess a normalized number to think about in terms of where to go from here. Having said that, recognize that we're in

I'd say a normalized number.

To think about it in terms of where to go from here, having said that recognize that we're in arguably the best M&A and capital markets environment that we've ever seen certainly in my career.

Speaker 4: arguably the best M&A and capital markets environment that we've ever seen, certainly in my career. So I think we, as Scott suggested in his comments, expect some sort of moderation in this calendar year that should affect the entire industry. And what that looks like, no one knows, but, yes, focus on year-to-date.

So I think we as Scott suggested in his comments I expect so.

Some sort of moderation in this calendar year.

That that that should affect the entire industry and what that looks like no one knows but but yes focus on year to date in our corner.

Speaker 12: Got it. And yeah, I think pretty much most investors are in the same boat as you, isn't expecting.

Got it and then yeah I think that's pretty much what most investors are in the same but are you expecting some moderation here in this calendar year. So one more calibration question.

Speaker 12: some moderation here in this calendar year. So one more calibration question. Lindsay, I believe you indicated a growth rate similar to the last few decades. My model only goes back to your fiscal 2005, but still using that and going up until fiscal year 2021, I get an average of about 11%. So is that kind of low double digit the right range? If I include this year.

You know Lindsay I believe you indicated a growth rate similar to the last few decades. My my model goes back to your fiscal 'twenty, five, but still using that and and going up until fiscal year 2021 I get an average of about 11%. So is that kind of.

Low double digit rate range. If I include this year to date is such a monster that if I include the year to date and the average bump it up a few more percentage points into the you know.

Speaker 12: to date is such a monster that if I include that, the year to date in the average, it would bump it up a few more percentage points into the.

Speaker 12: you know, roughly 14% range. So, are those the sort of numbers that you are talking about? Am I going back far enough to calibrate for that growth rate?

Roughly 14% range so are.

Are those the sort of numbers that you are talking about am I going back far enough to calibrate for that growth rate.

Speaker 1: Are you talking about average fee increases, average fee rate increases specifically? Yeah, yeah. A total fee revenue growth for the firm as a whole.

Are you talking about average fee increases average fee rate increases specifically be right. Yeah. Yeah, a few with total fee revenue growth for the firm as a whole yeah I know I don't know if 10% to 11% is the right number.

Speaker 4: 10, 11% is the right number. I'd say that we, over the last couple decades, and it changes every year, we have seen a good, strong contribution from what I call fee inflation. It's unique to the middle market. You know, if you're doing $6 billion deals, next year you're not gonna do $6.6 billion deals. It doesn't work that way. But when you're doing smaller transactions and you're moving up markets slowly, you are gonna see some inflation. That definitely is one of.

I I'd say that we over the last couple of decades and it changes every year we have seen.

A good strong contribution from what I call fee inflation, it's unique to the middle market. If youre doing 6 billion dollar deals next year, you're not going to do $6 6 billion dollar deals it doesn't work that way, but when youre doing smaller transactions and you're moving up market slowly you are going to see some inflation that definitely is one of the component.

Speaker 4: the components of our growth and we don't expect that to change. Whether it's 5% or 15%, I think it will vary, but I do believe that for the foreseeable future in our corporate finance business and in our FAA business, you are going to see some fee inflation because of the size of our restructuring transactions and because of the seasonality of that business, you're not likely to see

<unk> of our growth and we don't expect that to change, whether it's 5% or 15% I think it will vary but I do believe that for the foreseeable future and our corporate finance business and in our SBA business you are going to see some fee inflation because of the size of our restructuring transactions and because of the seasonality of that business.

Not likely to see.

Speaker 4: feed growth and restructuring other than in a period of distress.

Fee growth and restructuring other than in a period of distress, but but yes, you can build that into your model, but I think it's anyone's guess on what number that is in and it is going to vary a little bit by by year.

Speaker 4: But yes, you can build that into your model, but I think it's anyone's guess on what number that is, and it is gonna vary a little bit by year.

Speaker 2: Sure. Sure. Thanks. I just rendered what I. Yeah.

Sure sure so just rented what I.

Speaker 3: What's got Brendan what I would add is whether you look over five 10 15 years

Yeah, well, that's got Brendan what I would add is when you look over 510 15 years, we have tended to grow at a very I won't say year by year consistent rate, but over a couple of your trends.

Speaker 3: We have tended to grow at a very, I won't say year-by-year consistent rate, but over a couple year trend.

Speaker 3: by the numbers that you've quoted. You have a couple things going on.

By the numbers that you've quoted.

A couple of things going on.

Speaker 3: The largest transaction we've ever done is called the GCA transaction, which really only showed up in our financials in this quarter versus previous quarters. So you're going to have a statistical aberration in growth rate, you know, quarter over quarter because of this new acquisition. Obviously, as we have a full year's worth of results, it'll more stabilize.

One.

The largest transaction we've ever done in this quarter, the GCI transaction, which really only showed up in our financials in this quarter versus previous quarters, So you're going to have.

A statistical aberration in growth rate quarter over quarter because of this new acquisition. Obviously is we have a full year's worth of results it'll more stabilized you also have some seasonality that always occurs in this calendar quarter.

Speaker 3: You also have some seasonality that always occurs in this calendar quarter.

Speaker 3: all not only us but our peers I think have all commented we're all operating in an extremely favorable business environment for the business that we do and sometimes it's very favorable sometimes it's less favorable so we clearly I think experience for some of those reasons some growth rates in our revenues higher than obviously what we're going to expect in the foreseeable future but we do still expect as the businesses

All are not only us, but our peers I think have all commented.

We're all.

Operating in an extremely favorable business environment for the business that we do and sometimes it's very favorable sometimes it's less favorable. So we clearly I think experience for some of those reasons some growth rates in our revenues.

Higher than obviously, what we're going to expect in the foreseeable future, but we do still expect as the businesses reputation as the businesses brand as the businesses depth of skills coverage etcetera continues to increase still believe that there is.

Speaker 3: reputation as the businesses, brand as the businesses, depth of skills, coverage, et cetera, continues to increase. Still believe that there is quite a bit of growth potential for us. We're just probably in a little bit of an aberrational time period. If somebody's trying to focus on the last quarter or two on what you do with that.

Quite a bit of growth potential for us, we're just probably a little bit of an operational time period. If somebody is trying to focus on the last quarter or two one what you do with that.

Speaker 12: Right, OK, thanks. Thanks for that additional course. Got appreciated one more follow up if I might.

Right. Okay. Thanks, Thanks for that additional color Scott appreciate it one more follow up if I might.

Speaker 12: Did GCA, they're focused on technology, some of the questions that I received from investors.

Did you see a focus on technology some of the questions that I received from investors is whether or not.

Speaker 12: is whether or not the more hawkish antitrust rhetoric that we're hearing out of regulators might be problematic here. Could you just remind us about the average size, maybe the range of deal size for GCA in that tech practice?

More hawkish antitrust rhetoric that we're hearing out of regulators might be problematic here could you just remind us about the average size maybe the range of deal size for GCI in that tech practice with the geographic mix is.

And how many of the deals or cross border just because it's sort of my sense that that would be a lower risk for their business model based on how I understand it but I'm curious if you could provide some additional color and if that's right.

Speaker 3: The size of the deals that they do are similar to what we've described as mid-cap, so think of that generally speaking as deals under $1 billion, probably put whatever currency you'd like into that. Clearly, there are some that we've collectively done in the billions, but I think most of the significant antitrust concerns are in the

The size of the deals that they do are similar to what we've described as mid cap. So think of that generally speaking is of deals under $1 billion, probably put whatever currency like into that clearly there are some that we've collectively done you know are in the billions.

But I think most of the significant antitrust concerns R&D 10, 2050 et cetera, 1 billion type deals, which is not the typical kind of deal that we're getting involved in.

Speaker 3: 10, 20, 50, et cetera billion type deals, which is not the typical kind of deal that we're getting involved in.

Speaker 3: So I think whatever increase in antitrust issues will impact us.

So I think whatever increase in anti trust issues will impact us nominally at least historically that's been our experience and don't have a statistic for you top of my head on what is the cross border.

Speaker 3: nominally, at least historically that's been our experience.

Speaker 3: and don't have a statistic for you up top my head on what is the cross-border work that we're doing in the organization. We clearly do work, I'll call it, within the country and across countries and across oceans.

Work that we're doing in the organization, we clearly do work I'll call it within the country and across countries and across oceans.

Speaker 3: So I think we're all aware and we read what we do about antitrust issues. I think it's gonna be far less of an issue for the typical size deals we're doing.

So I think we're all aware and we read what we do about antitrust issues I think it's going to be far less of an issue for the typical size deals we're doing.

Speaker 2: including GCA, including the technology space, compared to what might be occurring with some of our competitors who focus on much larger deals.

Including <unk>, including the technology space compared to what might be occurring with some of our competitors, who will focus on much larger deals.

Great. Thanks for clarifying.

Speaker 1: We have reached the end of the question and answer session, and I will now turn the call over to Scott Visor for closing remarks.

We have reached the end of the question and answer session and I will now turn the call over to Scott Beiser for closing remarks.

Speaker 3: I want to thank you all for participating in our 3rd quarter fiscal year 2022 earnings call. We look forward to updating everyone on our progress when we discuss our 4th quarter and full year results for fiscal 2022 this coming spring.

I want to thank you all for participating in our third quarter fiscal year 2022 earnings call. We look forward to updating everyone on our progress when we discuss our fourth quarter and full year results for fiscal 2022, this coming spring.

Speaker 1: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Speaker 13: .

Okay.

Yes.

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Yes.

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