Q2 2023 Houlihan Lokey Inc Earnings Call
Please standby we're about to begin.
Good day, ladies and gentlemen, thank you for standing by welcome to the Houlihan Lokey second core fiscal year 'twenty 'twenty three earnings conference call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today October 27, 2022, I would now like to hand, the call over to Christopher Crain.
Look he's a general counsel. Please go ahead.
Thank you operator, and Hello, everyone.
Now everyone should have access to our second quarter fiscal year 2023 earnings release, which can be found on the houlihan Lokey website at www Dot H L Dot com in the Investor Relations section.
Before we begin our formal remarks relate to remind everyone that the discussion today will include forward looking statements.
These forward looking statements, which are usually identified by use of words, such as will expect anticipate should or other similar phrases are not guarantees of future performance. These statements are subject to numerous risks.
Uncertainties that could cause actual results to differ materially from what we expect and therefore, you should exercise caution when interpreting and relying on them.
We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.
We encourage investors to review, our regulatory filings, including the Form 10-Q for the quarter ended September 32022, when it is filed with the SEC.
During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.
Reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release, and our investor presentation on the HL Dotcom website.
Hosting the call today, we have Scott Beiser, Houlihan, Lokey, Chief Executive Officer, and Lindsey Alley, Chief Financial Officer of the company.
They will provide some opening remarks, and then we will open the call to questions.
With that I'll turn the call over to Scott.
Welcome everyone to our second quarter fiscal year 2023 earnings call. We ended the quarter with revenues of $490 million and adjusted earnings per share of $1 19.
Revenues were down 9% versus the same quarter last year and down over 25% pro forma if we had included <unk> revenues for the quarter ended September 32021.
We achieved some positive momentum this quarter with revenues, improving 17% versus last quarter.
Corporate finance this quarterly revenues of 315 million were down year over year, but were 19% higher than last quarter. As we continue to see small improvements in market conditions heading into the second half of our fiscal year. For instance, we are starting to see a narrowing in the bid ask spread between sellers and buyers.
Nevertheless, middle market financing remains constrained as capital is more expensive, although selective leveraged transactions are still getting done.
These transactions involve higher quality companies, which are more resilient or recession resistant and in most cases are getting done with less leverage.
As mentioned in previous quarters, new business activity remains healthy still the average time to close transactions remains an elongated and we continue to see elevated number of transactions being put on hold.
Overall, I would characterize our corporate finance business today to be slightly improved from last quarter, but still operating in a challenging market environment.
Financial valuation and advisory recorded $77 million of revenues, its second best quarter ever and 17% higher than the same period last year.
We continue to grow our SBA business across all service lines, driven by an expansion of our employee base and several years of investing in senior hires.
A portion of our FAA business is tied to the M&A markets and is facing many of the same headwinds as our corporate finance business, partly offsetting those headwinds. We believe we continue to take market share in a few areas, where we would typically see pressure in a market environment like the one we were at.
Also a portion of FAA operates in service lines and for clients that are not as correlated to the M&A markets and market conditions in general and that portion of your FDA generally operates well in most market environments.
Financial restructuring produced $98 million of revenues up 17% when compared to the same quarter last year.
The quarter benefited from a very sizeable feet, which periodically occurs in this business segment.
And market conditions for financial restructuring continue to improve and we continue to see elevated levels of restructuring work in fiscal 2024, as a result of new business activity over the last couple of quarters.
The number of distressed companies and amount of distress debt in the marketplace is meaningfully up versus failure. This year.
Generally the market opportunities are growing faster outside the U S and there are fewer mega sized restructurings than in past downturns.
However in the last couple of months, we've seen a significant increase in activity levels in the U S. Furthermore, market current market conditions do not represent the same crisis environment that existed in the great financial crisis or early days of the pandemic. However, it is quite possible that this environment may produce an elevated level of <unk>.
Structuring revenues over a longer period of time.
As we step back and assess our business model. We are pleased by how all three product lines are performing in this environment, we believe our balanced balanced business and our well diversified footprint continue to give us a leg up versus our competitors with the addition of <unk>. We are more geographically diversified than at any time in our hip.
<unk> and her industry depth and breadth continues to improve as we add unique industry sub sectors.
Finally, we believe we believe we benefit greatly from a mix of both strategic and financial sponsor transactions. Our focus on growth continues despite current market conditions as we hired four managing directors. This quarter, we added new sub sector industry coverage. This quarter, we're actively engaged with a few acquisition targets.
And we are greatly expanding our presence in India and expect to add new offices across the globe in the next few quarters.
Overall, the current business environment is more challenging than the last few years, but our brand reputation continues to grow and we believe our long term prospects are quite positive and with that I'll turn the call over to Lindsay.
Thank you Scott.
Revenues in corporate demand with $315 million for the quarter down 19% when compared to the same quarter last year. We closed 114 transactions this quarter compared to 134 in the same period last year.
And the average transaction fee on closed deals was down slightly.
As a reminder for comparative purposes since we did not complete the acquisition the acquisition of GTA until October 2021, Houlihan Lokey as revenues for the quarter ended September 32021 did not include revenue for GCI.
Financial restructuring revenues were $98 million for the quarter, a 17% increase from the same period last year, we closed 24 transactions in the quarter compared to 20 in the same quarter last year and our average transaction fee on closed deals increased slightly.
As Scott mentioned and as restructuring benefit from a significant fee events during the quarter.
In financial and valuation advisory revenues were $77 million for the quarter, a 17% increase from the same period last year, we had 890 key events during the quarter compared to 806 in the same period last year FDA saw growth across all service lines and continued to maintain good momentum as we enter our third.
Fiscal quarter.
Turning to expenses, our adjusted compensation expenses were $300 million for the second quarter versus $330 million for the same period last year are only adjustment was $8 8 million for deferred retention payments related to certain acquisitions, our adjusted compensation expense ratio for the second quarter was 61, 5%.
The same as last year.
Our adjusted non compensation expenses were $72 million for the quarter, an increase of $29 million over the same quarter last year last year's second quarter ended September 32021 does not include non compensation expenses for <unk> of approximately $11 million, which offsets a portion of the increase when comparing.
This year's second quarter to last year's second quarter.
Non compensation expenses also increased as a result of an increase in head count.
An increase in travel meals and entertainment expenses.
Bankers has significantly increased work related travel.
An increase in both rent and information technology as we continue to invest in both of these areas along with the growth of the firm.
And an increase in other operating expenses related to such things as placement fees outsourced personnel.
And trade shows and charitable contributions.
This resulted in an adjusted non compensation expense ratio of 14, 8% for the quarter versus eight 1% in the same quarter last year.
We believe that our long term target for our non compensation ratio will be lower than what it was pre COVID-19 given the increased size of our business and certain efficiencies that we believe will occur, especially in the areas of key M&A.
For the quarter, we adjusted out of our non compensation expenses.
16 million in noncash acquisition related amortization, the vast majority of which was amortization related to the GCI transaction we.
We do expect significantly elevated levels of amortization relating to this acquisition the remainder of fiscal year 2023.
In addition, we adjusted out of our non compensation expenses, $2 3 million and integration costs related to the GCI transaction, which includes the back office integration of Asia. The last piece of our corporate integration.
Our adjusted other income and expense increased for the quarter to an expense of approximately $1 2 million versus an expense of approximately 900000 in the same period last year, we adjusted out of our other income and expense $1 million related to a noncash revaluation of a warrant that was assumed as part of the GCI transaction.
And $2 $8 million related to an earn out for one of our previous acquisitions.
Our adjusted effective tax rate for the quarter was 27, 9% flat when compared to the same quarter last year.
Our long term range for our effective tax rate is between 27 and 28%.
Turning to the balance sheet and uses of cash.
The quarter end, we had approximately $540 million of unrestricted cash and equivalents and investment securities as it were.
Reminder, during November we will be paying our deferred cash bonuses for fiscal year 2022.
In this past quarter, we repurchased approximately 100000 shares at an average price of $81 56 per share as part of our share repurchase program. We continue to be disciplined regarding share repurchases as we look to maintain balance sheet flexibility and with that operator, we can open the line for questions.
Great. Thank you and if you'd like to ask a question. Please press star one on your telephone keypad, if you wish to remove yourself from the queue Press star two.
Again, it is star one if you would like to ask a question and we will go ahead and take our first question from Brennan Hawken with UBS. Please go ahead.
Hello can you hear me.
Yes Brennan.
Hi, This is Ben Rubin filling in for Brett and thank you for taking my question.
My first question is on the restructuring.
Definitely a nice quarter for you guys have definitely higher than what we were expecting.
And given your commentary on an extended period of time.
Elevated level of activity, how should we unpack those comments how long are you guys kind of seeing that period of time extend to for restructuring and how should we be thinking about the opportunity in the back half of your fiscal year 'twenty three.
So no one of course knows if we're in some downturn how long it might last and what the impact will be in our business I.
I think what we wanted to describe is the last two downturns, so I'll call. It the.
Pandemic issue and the great financial crisis were rather deep.
And last it, especially on the pandemic one relatively a short period of time.
Feels like if we're entering some form of a slowdown in.
And the business environment.
You probably won't see restructuring revenues from a year over year basis grow at the same pace that maybe we saw in previous downturns, but on the other hand, we think it'll probably last longer there's just more still that out there more companies with some level of trouble.
And ultimately it just feels like it will be a longer lasting potential restructuring cycle, but not as deep in therefore.
We're not necessarily expecting the doubling of revenues like we've seen in the past from trough to take and as far as your question in fiscal 'twenty three.
Pointed out is we still think fiscal 'twenty three it looks more like if you might a normal restructuring year and all of the new business that we've been hired on it's going to have much more of a financial impact in fiscal 'twenty, four or even fiscal 'twenty five.
Great. That's very helpful for framing up the duration my follow up is on FBA and yes, you mentioned second best quarter ever by 77 million.
I did see that MD head count did drop a little from last quarter.
Just trying to understand you know what is your expectations to continue to grow and take market share in the space.
Given the challenging environment.
We still think the market is huge we're only touching still a very small fraction of it our total head count.
And in the SBA business as well as maybe all of them. I mean, we are focused not only on managing directors, but all the way down to analysts as well we've continued to add quite a few new officers quite a few new analysts and associates.
Some level of turnover, but we clearly think the totality of our bench.
Strength of it the skills of it will allow us to continue to do well and at this moment and we've said it I think in the last quarter or two that we think.
The positive internal tell tailwind are doing a pretty good job against the external headwinds, which are still enabling the business to do quite well and otherwise what you typically find is not necessarily a healthy M&A marketplace.
Great. Thank you for the color thanks for taking my questions.
We'll go ahead and move on to our next question from Steven <unk> with Wolfe Research. Please go ahead.
Hi, Good evening this is Brian O'brien filling in for Steven.
So I guess to start on the corporate finance business. It sounds like you know you noted that the conditions there have improved somewhat.
In the past you've seen some pretty strong seasonality in the December quarter, but.
Given the ongoing challenges in the financing markets.
Noted in the elongation of deals.
Wanted to get a sense as to whether you believe that seasonal dynamic still holds or if that's maybe a bit more modest and then kind of thinking through the trajectory into.
Your fiscal year <unk> as well.
Yes.
So two comments really side to start out unless you can add to it is sometimes taxes or potential changes in the tax code drive reasons why people want to close prior to December 31 or after.
There isn't really at this moment any meaningful tax changes that are driving it and then what it comes down to is buyers and sellers and lenders and borrowers sometimes had motivations to want to for their own booking purposes bonus purposes, and while we are a March 31 company, our clients and their private equity firms in the lending institutions.
Our generally December 31.
Unclear in today's environment will people really try to race to get things done by December 31, So they at least have something to Pat themselves on the back for in terms of getting things done in this calendar year or will they go the other direction and feel like well this year isn't going to be great anyways, So why push it and we'll move it into our calendar.
2023.
We're not in control of whatever that outcome might be and so thats my hesitation, otherwise Youre correct. You have always seen that our second half of our fiscal year is better than our first half and there's usually some seasonality for some of the reasons I mentioned not clear whether there'll be some unique dynamics of this year that might change that.
Great.
Great color, so I guess.
Just taking a step back it sounds like restructuring revenues.
Going to be continuing to build here into next year and beyond.
And at the same time, you're discussing like an improvement in the overall M&A environment.
Historically speaking, we haven't really seen those too.
<unk> business is on an industry level kind of move in the same direction.
Yes.
Crisis is a bit unique.
And this one's not yet a crisis, but no different.
I just wanted to get a sense as to whether you really think like both of those businesses could be actually accelerating some looked like in lockstep.
In a crisis downturn it is hard when that turns around to see restructuring grow and corporate finance grow.
But we've seen actually many years that I Wouldnt say you are in crisis mode. So the markets are generally healthy corporate finance is growing.
And the total amount of global indebtedness and a variety of companies.
Which always have a litany of issues, maybe its too much debt, maybe its technology disruptors, maybe it's some fraud issue maybe it's some natural disasters, maybe some regulatory issue. There are always a constant component of restructuring out there and so we've seen I think in many years over the last probably 10 years in fact, all three of our business.
<unk>.
Have grown and so while instinctively Youre correct, you generally think corporate finance goes up on restructuring goes down and vice versa, but if you actually look at our historical financials. There's been many of those years and in fact, all three of the businesses have grown.
Great. Thanks for taking my questions.
And we will move on to our next question from James <unk> with Goldman Sachs. Please go ahead.
Good afternoon, and thanks for taking my questions, Scott and Lindsey maybe.
Maybe I could just start with.
The private credit markets, that's obviously, where I think most of your clients finance.
Given your mid caps SKU, maybe you just talk about how these markets are performing are they open and functioning or of any of the stress in the capital markets began to trickle down and then just sort of as you know.
Corollary, what does that meant for the sponsor ecosystem and their willingness to deploy capital.
So tied into the comments that we gave you earlier, we do see and believe that the.
Private financing marketplace is open is functioning.
It is has levels of strain we've noted that in some regards to financing marketplace. Today is probably a little tighter than it was even a quarter ago.
But there is a difference in our mind between the.
Public finance deals and private finance deals and types of size of deals and we have to remember there are literally hundreds and hundreds of potential.
Financier is who will provide financing for a particular company. So that enables us to still find opportunities out there, but yes. It is more difficult and I think it is putting some constraints on the volume and ability for private equity firms do deals, but they are still doing them.
As we've noted sometimes theyre doing them with a different capital structure I E maybe potentially more equity.
And you're focused on different kinds of companies that tend to have a better business plan for this kind of a business environment than others, but we are nowhere near kind of the closed environment that we experienced in calendar <unk> and the great financial recession.
Okay. That's very clear maybe you could just touch on the ongoing strength in Europe in corporate finance as that part of the market certainly continues to outperform what do you think is driving that and do you think it really can persist at this elevated level versus other geographies given the magnitude of the economic stress there.
Sure.
If you read or understand what potentially is existing and it might be forthcoming in Europe versus the U S.
Europe does feel like it's going to have more economic issues at least short term in the U S.
Having said that.
Part of our problem in answering to your question is the size and importance and brand and reputation that we have in Europe . Today is so much greater than it was 1234 years ago, it's not as easy for us when we look at what we're doing is it because of the marketplace or is it because of houlihan lokey and in many regards I think.
It's much more probably houlihan lokey and it has to do with the acquisitions. We've made the hirings that we've made I mean instead of being a just an average also ran player we are a meaningful.
Subsequent player in M&A and the capital markets.
In Europe so.
Try not to Dodge your question I think others are probably better able to answer it on a comparison basis, we struggle a bit with that question because we're so much different and stronger and better than we were.
Relative to even just a year or two ago.
Okay totally understand thanks for taking my questions.
And we'll move on to our next question from Manan <unk> with Morgan Stanley . Please go ahead.
Hi, good afternoon.
I wanted to clarify some of your comments on M&A and the release you mentioned that you are seeing an increase in deal closings for the next two quarters.
In your remarks earlier on the call you suggested that the environment is only slightly improved from last quarter, but it's still challenging. So what are you, making a distinction between say what you all uniquely seeing in your geographies and then in your <unk>.
Focus areas versus the broader industry or.
What are you what are you just quantifying the comments that there is a slight improvement that is taking place in the industry.
Yeah.
So.
<unk> points.
We do feel slightly better about our corporate finance business and opportunities today than 90 days ago.
That's 0.1 0.2 as we mentioned.
We are now close to nine months, if you might from kind of declines in asset value stock market et cetera. We think this gap, which was much greater between seller perspective, and buyer perspective is closed which helps do deals. So.
What I think always buyers and sellers are lenders and borrowers want as much certainty as they can even if it's when.
It's good certainty or bad certainty here.
Appears to be a bit more certainty at least than what we're experiencing there is always some expectation we have in the seasonality at the other gentlemen asked that typically we do see better results in the second half versus the first half whether that will continue or not but that's at least been what our history has and the other comment is.
While Lindsey mentioned the actual number of deals we've closed with less.
This quarter than it was a year ago, but a lot of those deals that we keep talking about are put on hold or elongated.
Not die so were some of the stuff that we really thought or hope would have closed 1234 months ago. They are finally closing.
That gives us some level of confidence as well that eventually a lot what we have in our backlog potentially will still close it still may just take a little longer than we'd like but there is not things that are completely disappearing like we've seen another down cycles. So I think those are some of the points that I've mentioned.
You mentioned.
Got it and in terms of buyer and seller expectation is coming closer together.
What side are you seeing more of that on is it seller expectations capitulating going into year end and potentially higher recession risks into next year or.
Is it just willing to put more money to work given that we're close to year end and theres, so much dry powder out there.
Yeah, I would not at all used the word a capitulation I just think it's consistent with what we're talking about home prices a business or other kinds of assets buyers typically move to.
New fair market value much quicker than sellers and the longer summer.
<unk> continues eventually both sides to get a little closer probably I'd say sellers have moved a little more towards whatever that mid point is then buyers, but its not a capitulation concept.
I don't necessarily think we've entered a period, where buyers have said enough enough. Let's just go out and start really buying things that was a commentary you might have said in summer or fall of 2020.
There are still deals getting done.
And just like I said, we kind of smell test what people are thinking and what they are willing to do deals that are getting closer in their prospectus of each other.
And I think just as a reminder manner.
80% or more of our transactions are private.
So there is a lot more factors that go into why why are you selling why are you buying than simply value and whether it.
End of life for financial sponsors or succession planning for family held businesses.
The longer we're in this stable, but choppy market the more likely they are going to take steps towards the middle because of timing and thats essentially what Scott's saying and what we're seeing is as long as the capital markets kind of hold up for us.
Youre going to see then.
March towards the middle because theres, just a lot more factors going into that just maximizing value or.
Economic terms for both.
Okay. That's really helpful. Thank you.
Well move on to our next question from Mike Brown with <unk>. Please go ahead.
Hi, good afternoon, Scott and Lindsey.
Hey, Mike Mike.
So our corporate finance had a strong result in a tough environment. So I was just hoping to get a little more color about the key drivers of the result, this quarter and if you could touch on any of the contribution from the non traditional laminate business areas such as HR finance.
Go ahead Lindsey.
I mean, I think corporate finances success this quarter was pretty broad based.
We had.
Quite a strong quarter as did some of our peers and our Europe and U K business.
And but from an industry standpoint fairly fairly broad based.
I would say the capital markets business and the M&A business, which is the second largest component.
Corporate finance, both get about the same so no distinction between either of them in terms of performance and.
Pretty pretty broad based resolved corporate finance with really no theme other than maybe.
Europe performing better than the U S, which we've also heard from some of our peers as well.
Okay, and then just a follow up on corporate finance.
It looks like the MD headcount there declined by about seven seven quarter over quarter, which seems like a pretty large move.
Can you expand on that change or is that simply just normal attrition or is there was there maybe a purposeful.
<unk> for us or something else at play there.
No absolutely no.
Reduction enforce layoffs, whatever you want to call. It I think this is just normal turnover. Some of it is retirement some of it is people getting out of the business and wanted to do something else. Some are going to competitors. Some for the same reason we successfully hire people because we have a better platform for what they do there is other bankers.
So they are going to feel that there's a different platform that they might go to a.
Part of it is also a little bit of digesting of whenever we hire people or acquire businesses theres always going to be some small amount of churn.
But at this point I don't really think the total number of Mds.
Net departures anything significant.
Along those lines I think our attitude and process towards hiring people has been very consistent we're really not looking at trying to pull back any.
Of our expectations and I would say, both what we hired into the announced for the September quarter, and what we've hired and have in place and we will announce when they officially come in and get to the December quarter and March quarter, I think it looks very normal for the size of our business at this point.
Okay. Thanks for the color Scott.
As another reminder, it is star one if you'd like to ask a question we'll move onto our next question from Devin Ryan with JMP Securities. Please go ahead.
Hi, This is actually Michael Falco standing in for Devin Ryan Thanks for taking my question.
I wanted to ask about M&A opportunities. You noted that you are actively engaged with a few acquisition targets I'm. Just curious if there was any more color you can provide there.
It's across the business are white spaces across the platform that that might benefit from an acquisition.
Would appreciate any additional color you might have on that.
Go ahead, Lindsey <unk> been closer to I think that we've been tracking recently.
Sure look I think we have our strategy for years has been to maintain a pretty healthy pipeline in M&A.
These transactions as we've mentioned often take months or years to perform before we actually come together.
That hasnt changed and I think if anything probably as the market has become a bit more choppy.
And in M&A, you've seen a decline we tend to see that pipeline improve.
Necessarily by volume, but by quality of discussion and I think thats, what Scott was alluding to is that we had a we are happy with the pipeline. We have we're happy with the discussions and.
And one of the reasons why we've been more conservative with respect to our balance sheet is that when we go through.
Downturns are situations like this often times M&A tends to become more active and and.
And thats consistent with what we've seen in the past and we're experiencing it now.
Great. That's very helpful. And then I did see that you announced a new senior hire this week, that's going to expand your capital markets business in the Middle East and Africa could you talk a little bit about the growing opportunity in that region and then also just globally for the business more broadly.
If you if you look at the map, where houlihan Lokey operates where you've got a very sizable presence in the United States very sizable presence in Europe .
A growing presence in Asia Pacific area.
Still relatively small in the middle East. So that's one of the areas that we see business opportunities and we're looking and wanted to expand it.
We said at some juncture, we'll probably get to Latin America other parts of Southeast Asia. So there is by no means have we stopped where we think we can go geographically.
We've been in our Dubai office for summary years, and we have continued to add personnel. There from the original beginnings and we think that theres more business for us out there and so.
The person that was announced.
Days ago is just an ongoing addition in terms of once again I'll call. It bench strength to provide even more services than what we currently do in our Dubai office, and what will hopefully be able to do across the middle East in total.
Yes, and I think just to add to that we had been quite successful in the middle East with respect to our restructuring practice.
The handful of fairly notable engagements in that region and.
There is a symbiotic relationship between restructuring and capital markets and so it is a natural too in a healthy restructuring environment loci kind of add that type of that.
That type of senior experience higher to one to our service offerings over there.
Thank you really appreciate it.
And we will take our next question from Ken Worthington with JP Morgan. Please go ahead.
Hi, Thanks for taking my question.
You mentioned that the different parts of the middle market M&A was holding up better than others with sort of the high quality deals.
Much more apt to get funding, while the lower quality deals.
Think struggled to really struggled this quarter.
And so I don't want you to insult any of your your your clients, but and I'm sure. All your companies are high quality, but as we think about the mix of your middle market clients. What portion do you think it will be.
We'll likely to get funding, even if the financing markets get much more challenging like how how durable.
Are the clients that you serve.
That makes sense.
Yes, I understand the question.
There's an easy answer because you can't quite pull that kind of question I mean, what we've said in it.
It's not high quality or lower quality companies certain companies and what they do.
Can and will perform okay, or not so bad or even very good in a business environment that we're in and therefore, that's what we're seeing those companies are in a better position to be buyers or sellers or raise money or continue to grow and other companies that are going to have more difficulties in a economy that.
Might be slowing down.
That they will just maybe have to wait until things turn so really it's all over the board and probably what that company does for a living geographically where they are maybe the management team. Their particular business plan and I don't think we have really an answer that says X percent of our clients are going to get financing today and y percent.
Canton, here's what might happen.
A quarter or two quarters from now.
Okay, Okay I tried.
And then maybe in terms of FX moves this quarter.
You know clearly we have a G C. A we had you know the yen euro.
And move a lot to what extent did currency weigh on revenue and income in the September quarter, any any sort of magnitude you can help us with.
Kevin we haven't done an analysis that compares.
Sort of what pro forma revenues would look like had currency not changed because we just don't have those numbers I will tell you that we have a pretty significant business in Japan.
Which obviously was meaningfully impacted by currency and we have a an increasingly significant business in the UK and Europe .
But havent gone through the process of saying here's the tens of millions of dollars that revenues would have been higher had currency not changed.
Okay, Okay zero for two.
But thank you anyway.
Thanks, Ken.
Okay.
And with that we have no further questions I would now like to hand, the call back over to our speakers for any additional or closing remarks.
I want to thank you all for participating in our second quarter fiscal year 2023 earnings call and we look forward to updating everyone on our progress when we discuss our third quarter results for fiscal 2023. This coming winter. Thank you everyone.
Yeah.
With that that does conclude today's call. Thank you for your participation and you may now disconnect.
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