Form 10-K |
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Houlihan Lokey, Inc. (Exact name of registrant as specified in its charter) | ||
Delaware | 95-2770395 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of Each Class | Name of each exchange on which registered | |
Class A Common Stock, par value $.001 | New York Stock Exchange |
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
HOULIHAN LOKEY, INC. TABLE OF CONTENTS | ||
Page | ||
• | our potential to offer new products within our existing lines of business or enter into new lines of business, which may result in additional risks and uncertainties in our business; |
Item 1. | Business |
• | up to 10% of each HL Holder’s shares held through the HL Voting Trust may be transferred for the purpose of charitable gifts and transfers to various family trusts for estate planning purposes, with any shares transferred under this exception reducing the number of shares that become transferable on the next transferability date; and |
• | our board of directors may authorize sales in underwritten offerings in accordance with the terms of the registration rights agreement entered into between HL and the HL Holders; provided that any shares sold under this exception will reduce the number of shares that become transferable on the next transferability date. |
• | terrorism, political hostilities, war and other civil disturbances or other catastrophic events that reduce business activity; |
• | cultural and language barriers and the need to adopt different business practices in different geographic areas; and |
• | changes in, or failure to meet, earnings estimates or recommendations by research analysts who track our common shares or the stock of other companies in our industry; |
• | be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting; |
• | be exempt from the "say on pay" and "say on golden parachute" advisory vote requirements of the Dodd-Frank Act; |
• | be exempt from certain disclosure requirements of the Dodd-Frank Act relating to compensation of its executive officers and be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and |
• | be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or a supplement to the auditor's report on the financial statements. |
• | the ability to issue "blank check" preferred stock, which could increase the number of outstanding shares and thwart a takeover attempt; |
• | a classified board of directors so that not all members of our board of directors are elected at one time; |
• | the ability to remove directors only for cause; |
• | no use of cumulative voting for the election of directors; |
• | no ability of stockholders to call special meetings; |
• | supermajority voting provisions for stockholder approval of amendments to our certificate of incorporation and by-laws; |
• | the requirement that, to the fullest extent permitted by law and unless we agree otherwise, certain proceedings against or involving us or our directors, officers or employees be brought exclusively in the Court of Chancery in the State of Delaware; |
• | the ability of stockholders to take action by written consent; and |
• | advance notice and duration of ownership requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings. |
Fiscal Year Ended March 31, 2016 | ||||||||||||
Sales Price | Dividends per share of common stock | |||||||||||
High | Low | |||||||||||
8/13/15-9/30/15 | $ | 23.10 | $ | 18.22 | $ | — | ||||||
Quarter ended 12/31/15 | $ | 26.75 | $ | 20.85 | $ | 0.15 | ||||||
Quarter ended 3/31/16 | $ | 26.09 | $ | 22.24 | $ | 0.15 |
Item 6. | Selected Financial Data |
($ in thousands) | Year ended March 31, | ||||||||||
2016 | 2015 | 2014 | |||||||||
Consolidated Statements of Operations Data: | |||||||||||
Fee revenue | $ | 693,765 | $ | 680,872 | $ | 592,450 | |||||
Operating expenses: | |||||||||||
Employee compensation and benefits | 461,609 | 475,100 | 414,918 | ||||||||
Non-compensation expenses | 105,756 | 77,118 | 74,684 | ||||||||
Total operating expenses | 567,365 | 552,218 | 489,602 | ||||||||
Operating income | 126,400 | 128,654 | 102,848 | ||||||||
Other (expenses) income, net | (770 | ) | 3,481 | 2,478 | |||||||
Income before provision for income taxes | 125,630 | 132,135 | 105,326 | ||||||||
Provision for income taxes | 55,863 | 52,196 | 43,898 | ||||||||
Net income | 69,767 | 79,939 | 61,428 | ||||||||
Net income attributable to noncontrolling interest | (26 | ) | (58 | ) | (108 | ) | |||||
Net income attributable to Houlihan Lokey, Inc. | $ | 69,741 | $ | 79,881 | $ | 61,320 | |||||
Weighted average number of shares outstanding (1) | |||||||||||
Basic | 59,044,981 | 57,134,305 | 55,050,159 | ||||||||
Diluted | 63,475,903 | 60,135,375 | 58,124,772 | ||||||||
Net income attributable to Houlihan Lokey, Inc. per share (1) | |||||||||||
Basic | $ | 1.18 | $ | 1.40 | $ | 1.11 | |||||
Diluted | $ | 1.10 | $ | 1.33 | $ | 1.05 | |||||
Cash dividends per share (2) | $ | 0.30 | $ | — | $ | — | |||||
Consolidated Balance Sheets Data: | |||||||||||
Cash and cash equivalents | $ | 166,169 | $ | 88,662 | |||||||
Total assets | 1,070,884 | 1,229,848 | |||||||||
Total liabilities | 417,329 | 403,960 | |||||||||
Long-term obligations | 76,620 | — | |||||||||
Total stockholders' equity | 651,160 | 824,506 |
(1) | The number of shares and per share amounts for the periods presented have been retroactively restated to reflect the conversion of Fram shares to HLI shares at a ratio of 10.425 shares to each share of Fram stock. See accompanying notes to consolidated financial statements. |
(2) | In addition to the $0.30 per share paid to holders of HLI shares during the year ended March 31, 2016, prior to the consummation of the IPO, the Company distributed to the existing owners an aggregate dividend of $270.0 million, consisting of (i) a short‑term note in the aggregate amount of $197.2 million, which was repaid immediately after the consummation of the IPO, and was allocated $94.5 million to ORIX USA and $102.7 million to the HL Holders, (ii) a note to ORIX USA in the amount of $45.0 million (see footnote 4), and (iii) certain of our non‑operating assets to certain of the HL Holders (consisting of non‑marketable minority equity interests in four separate businesses that range in carrying value from $2.5 million to $11.0 million. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Year ended March 31, | Year-over-Year Change | ||||||||||||||||
($ in thousands) | 2016 | 2015 | 2014 | '15-'16 | '14-'15 | ||||||||||||
Fee revenue | $ | 693,765 | $ | 680,872 | $ | 592,450 | 2 | % | 15 | % | |||||||
Operating expenses: | |||||||||||||||||
Employee compensation and benefits | 461,609 | 475,100 | 414,918 | (3 | )% | 15 | % | ||||||||||
Non-compensation expenses | 105,756 | 77,118 | 74,684 | 37 | % | 3 | % | ||||||||||
Total operating expenses | 567,365 | 552,218 | 489,602 | 3 | % | 13 | % | ||||||||||
Operating income | 126,400 | 128,654 | 102,848 | (2 | )% | 25 | % | ||||||||||
Other (expenses) income, net | (770 | ) | 3,481 | 2,478 | N/M | 40 | % | ||||||||||
Income before provision for income taxes | 125,630 | 132,135 | 105,326 | (5 | )% | 25 | % | ||||||||||
Provision for income taxes | 55,863 | 52,196 | 43,898 | 7 | % | 19 | % | ||||||||||
Net income | 69,767 | 79,939 | 61,428 | (13 | )% | 30 | % | ||||||||||
Net income attributable to noncontrolling interest | (26 | ) | (58 | ) | (108 | ) | | (55 | )% | (46 | )% | ||||||
Net income attributable to Houlihan Lokey, Inc. | $ | 69,741 | $ | 79,881 | $ | 61,320 | (13 | )% | 30 | % |
Year ended March 31, | Year-over-Year Change | |||||||||||||||||
($ in thousands) | 2016 | 2015 | 2014 | '15-'16 | '14-'15 | |||||||||||||
Revenues by Segment | ||||||||||||||||||
Corporate Finance | $ | 371,790 | $ | 367,632 | $ | 260,035 | 1 | % | 41 | % | ||||||||
Financial Restructuring | 202,343 | 207,909 | 230,062 | (3 | )% | (10 | )% | |||||||||||
Financial Advisory Services | 119,632 | 105,331 | 102,054 | 14 | % | 3 | % | |||||||||||
Total Segment Revenues | 693,765 | 680,872 | 592,151 | 2 | % | 15 | % | |||||||||||
Corporate Revenues (1) | — | — | — | 299 | — | N/M | ||||||||||||
Total Revenues | $ | 693,765 | $ | 680,872 | $ | 592,450 | 2 | % | 15 | % | ||||||||
Segment Profit (2) | ||||||||||||||||||
Corporate Finance | $ | 103,447 | $ | 101,266 | $ | 67,088 | 2 | % | 51 | % | ||||||||
Financial Restructuring | 54,950 | 52,246 | 56,910 | 5 | % | (8 | )% | |||||||||||
Financial Advisory Services | 30,313 | 24,344 | 24,921 | 25 | % | (2 | )% | |||||||||||
Total Segment Profit | 188,710 | 177,856 | 148,919 | 6 | % | 19 | % | |||||||||||
Corporate Expenses (1) | (62,310 | ) | (49,202 | ) | (46,071 | ) | 27 | % | 7 | % | ||||||||
Other (Expense) income, net | (770 | ) | 3,481 | 2,478 | N/M | 40 | % | |||||||||||
Income Before Provision for Income Taxes | $ | 125,630 | $ | 132,135 | $ | 105,326 | (5 | )% | 25 | % |
(1) | Corporate revenues were primarily generated by an immaterial ancillary business that was sold in December 2013. Corporate expenses represent expenses that are not allocated to individual business segments such as Office of the Executives, accounting, information technology, compliance, legal, marketing, human capital management and human resources. |
(2) | We adjust the compensation expense for a business segment in situations where an employee assigned to one business segment is performing work in another business segment and we want to adequately reflect the compensation expense in the business segment where the revenue is being booked. |
Year ended March 31, | |||||||||||
($ in thousands) | 2016 | 2015 | 2014 | ||||||||
Cash provided (used in) by | |||||||||||
Operating activities: | |||||||||||
Net income | $ | 69,767 | $ | 79,939 | $ | 61,428 | |||||
Non‑cash charges | 40,929 | 23,377 | 23,808 | ||||||||
Other operating activities | (97,177 | ) | 93,191 | 79,775 | |||||||
Total operating activities | 13,519 | 196,507 | 165,011 | ||||||||
Investing activities | 179,553 | (212,500 | ) | (121,984 | ) | ||||||
Financing activities | (116,008 | ) | (2,495 | ) | (3,264 | ) | |||||
Effect of exchange rate changes | 443 | (2,270 | ) | 1,271 | |||||||
Net increase (decrease) in cash and cash equivalents | 77,507 | (20,758 | ) | 41,034 | |||||||
Cash and cash equivalents—beginning of year | 88,662 | 109,420 | 68,386 | ||||||||
Cash and cash equivalents—end of year | $ | 166,169 | $ | 88,662 | $ | 109,420 |
($ in thousands) | Payment Due by Period | ||||||||||||||||||
Total | Less than 1 Year | 1 to 3 Years | 3 to 5 Years | More than 5 Years | |||||||||||||||
Operating Leases | $ | 146,411 | $ | 20,424 | $ | 40,346 | $ | 36,721 | $ | 48,920 | |||||||||
Loan payable to affiliate | $ | 45,000 | $ | 30,000 | $ | 15,000 | $ | — | $ | — | |||||||||
Loans payable to former shareholders | $ | 16,738 | $ | 4,473 | $ | 6,331 | $ | 2,846 | $ | 3,088 | |||||||||
Loan payable to non-affiliate | $ | 14,882 | $ | — | $ | — | $ | — | $ | 14,882 |
Index to Consolidated Financial Statements | |
Page | |
As of March 31, | |||||||
2016 | 2015 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 166,169 | $ | 88,662 | |||
Accounts receivable, net of allowance for doubtful accounts | 58,100 | 57,488 | |||||
Unbilled work in process | 51,300 | 42,547 | |||||
Income taxes receivable | 7,204 | — | |||||
Investments in unconsolidated entities | — | 12,666 | |||||
Receivable from affiliates | 27,408 | 327,921 | |||||
Property and equipment – at cost, net of accumulated depreciation | 21,701 | 16,489 | |||||
Goodwill and other intangibles | 717,368 | 652,806 | |||||
Other assets | 21,634 | 31,269 | |||||
Total assets | $ | 1,070,884 | $ | 1,229,848 | |||
Liabilities and Stockholders' Equity | |||||||
Liabilities: | |||||||
Accrued salaries and bonuses | $ | 254,058 | $ | 301,285 | |||
Accounts payable and accrued expenses | 34,400 | 37,190 | |||||
Deferred income | 5,547 | 3,064 | |||||
Income taxes payable | — | 9,760 | |||||
Deferred income taxes | 37,288 | 41,453 | |||||
Loan payable to affiliate | 45,000 | — | |||||
Loans payable to former shareholders | 16,738 | — | |||||
Loan payable to non-affiliate | 14,882 | — | |||||
Other liabilities | 9,416 | 11,208 | |||||
Total liabilities | $ | 417,329 | $ | 403,960 | |||
Redeemable noncontrolling interest | 2,395 | 1,382 | |||||
Commitments and contingencies (note 13) | |||||||
Stockholders' equity: | |||||||
Common stock, $0.10 par value. Authorized 2,500,000 shares; issued and outstanding 587,866 shares | — | 59 | |||||
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 12,084,524 shares | 12 | — | |||||
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 53,219,303 shares | 53 | — | |||||
Additional paid-in capital | 637,332 | 670,182 | |||||
Retained earnings | 28,623 | 170,929 | |||||
Accumulated other comprehensive loss | (14,613 | ) | (11,338 | ) | |||
Stock subscription receivable | (247 | ) | (7,135 | ) | |||
Total equity attributable to Houlihan Lokey, Inc. | 651,160 | 822,697 | |||||
Noncontrolling interest | — | 1,809 | |||||
Total stockholders' equity | 651,160 | 824,506 | |||||
Total liabilities and stockholders' equity | $ | 1,070,884 | $ | 1,229,848 |
Year Ended | |||||||||||
2016 | 2015 | 2014 | |||||||||
Fee revenue (a) | $ | 693,765 | $ | 680,872 | $ | 592,450 | |||||
Operating expenses: | |||||||||||
Employee compensation and benefits | 461,609 | 475,100 | 414,918 | ||||||||
Travel, meals, and entertainment | 20,955 | 17,928 | 15,113 | ||||||||
Rent | 26,459 | 24,253 | 22,386 | ||||||||
Depreciation and amortization | 7,499 | 5,508 | 6,040 | ||||||||
Information technology and communications | 16,017 | 14,013 | 12,272 | ||||||||
Professional fees | 20,687 | 5,563 | 3,398 | ||||||||
Other operating expenses (b) | 11,601 | 7,826 | 13,010 | ||||||||
Provision for bad debts | 2,538 | 2,027 | 2,465 | ||||||||
Total operating expenses | 567,365 | 552,218 | 489,602 | ||||||||
Operating income | 126,400 | 128,654 | 102,848 | ||||||||
Other income (expense), net (c) | (770 | ) | 3,481 | 2,478 | |||||||
Income before provision for income taxes | 125,630 | 132,135 | 105,326 | ||||||||
Provision for income taxes | 55,863 | 52,196 | 43,898 | ||||||||
Net income | 69,767 | 79,939 | 61,428 | ||||||||
Net income attributable to noncontrolling interests | (26 | ) | (58 | ) | (108 | ) | |||||
Net income attributable to Houlihan Lokey, Inc. | $ | 69,741 | $ | 79,881 | $ | 61,320 | |||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustments | (3,275 | ) | (2,435 | ) | 1,271 | ||||||
Comprehensive income attributable to Houlihan Lokey, Inc. | $ | 66,466 | $ | 77,446 | $ | 62,591 | |||||
Attributable to Houlihan Lokey, Inc. common stockholders: (d) | |||||||||||
Weighted average shares of common stock outstanding: | |||||||||||
Basic | 59,044,981 | 57,134,305 | 55,050,159 | ||||||||
Diluted | 63,475,903 | 60,135,375 | 58,124,772 | ||||||||
Net income per share of common stock | |||||||||||
Basic | $ | 1.18 | $ | 1.40 | $ | 1.11 | |||||
Diluted | $ | 1.10 | $ | 1.33 | $ | 1.05 |
(a) | including related party fee revenue of $504, $119 and $6,156 during the years ended March 31, 2016, 2015, and 2014 respectively. |
(b) | including related party expenses of $874, $2,471 and $2,833 during the years ended March 31, 2016, 2015, and 2014 respectively. |
(c) | including related party interest income of $1,954, $4,046 and $1,636 during the years ended March 31, 2016, 2015, and 2014, respectively, and related party interest expense of $922, $253, and $0 during years ended March 31, 2016, 2015, and 2014, respectively. |
(d) | the number of shares and per share amounts for the periods presented have been retroactively restated to reflect the conversion of Fram shares to HLI shares at a ratio of 10.425 shares to each share of Fram stock. |
Common - shares | Class A - shares | Class B - shares | |||||||||||||||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | Shares | $ | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Stock Subscriptions Receivable | Equity attributable to Houlihan Lokey, Inc. | Noncontrolling interest | Total stockholders' equity | |||||||||||||||||||||||||||||||||
Balances - April 1, 2013 | 587,866 | $ | 59 | — | $ | — | — | $ | — | $ | 612,104 | $ | 32,844 | $ | (10,174 | ) | $ | (5,598 | ) | $ | 629,235 | $ | 1,643 | $ | 630,878 | ||||||||||||||||||||
Fram shares issued (note 3) | — | — | — | — | — | — | 18,267 | — | — | — | 18,267 | — | 18,267 | ||||||||||||||||||||||||||||||||
Fram stock compensation vesting (note 10) | — | — | — | — | — | — | 18,206 | — | — | — | 18,206 | — | 18,206 | ||||||||||||||||||||||||||||||||
Fram share redemptions (note 3) | — | — | — | — | — | — | (11,967 | ) | — | — | — | (11,967 | ) | — | (11,967 | ) | |||||||||||||||||||||||||||||
Dividend | — | — | — | — | — | — | 6 | (2,228 | ) | — | — | (2,222 | ) | — | (2,222 | ) | |||||||||||||||||||||||||||||
Stock subscriptions receivable issued, net | — | — | — | — | — | — | — | — | — | (2,172 | ) | (2,172 | ) | — | (2,172 | ) | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 61,320 | — | — | 61,320 | 108 | 61,428 | ||||||||||||||||||||||||||||||||
Change in unrealized translation | — | — | — | — | — | — | — | — | 1,271 | — | 1,271 | — | 1,271 | ||||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | 61,320 | 1,271 | — | 62,591 | 108 | 62,699 | ||||||||||||||||||||||||||||||||
Balances-March 31, 2014 | 587,866 | $ | 59 | — | $ | — | — | $ | — | $ | 636,616 | $ | 91,936 | $ | (8,903 | ) | $ | (7,770 | ) | $ | 711,938 | $ | 1,751 | $ | 713,689 |
Common - shares | Class A - shares | Class B - shares | |||||||||||||||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | Shares | $ | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Stock Subscriptions Receivable | Equity attributable to Houlihan Lokey, Inc. | Noncontrolling interest | Total stockholders' equity | |||||||||||||||||||||||||||||||||
Balances - April 1, 2014 | 587,866 | $ | 59 | — | $ | — | — | $ | — | $ | 636,616 | $ | 91,936 | $ | (8,903 | ) | $ | (7,770 | ) | $ | 711,938 | $ | 1,751 | $ | 713,689 | ||||||||||||||||||||
Fram shares issued (note 3) | — | — | — | — | — | — | 19,508 | — | — | — | 19,508 | — | 19,508 | ||||||||||||||||||||||||||||||||
Fram stock compensation vesting (note 10) | — | — | — | — | — | — | 17,589 | — | — | — | 17,589 | — | 17,589 | ||||||||||||||||||||||||||||||||
Fram share redemptions (note 3) | — | — | — | — | — | — | (3,531 | ) | — | — | — | (3,531 | ) | — | (3,531 | ) | |||||||||||||||||||||||||||||
Dividend | — | — | — | — | — | — | — | (888 | ) | — | — | (888 | ) | — | (888 | ) | |||||||||||||||||||||||||||||
Stock subscriptions receivable issued, net | — | — | — | — | — | — | — | — | — | 635 | 635 | — | 635 | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 79,881 | — | — | 79,881 | 58 | 79,939 | ||||||||||||||||||||||||||||||||
Change in unrealized translation | — | — | — | — | — | — | — | — | (2,435 | ) | — | (2,435 | ) | — | (2,435 | ) | |||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | 79,881 | (2,435 | ) | — | 77,446 | 58 | 77,504 | |||||||||||||||||||||||||||||||
Balances-March 31, 2015 | 587,866 | $ | 59 | — | $ | — | — | $ | — | $ | 670,182 | $ | 170,929 | $ | (11,338 | ) | $ | (7,135 | ) | $ | 822,697 | $ | 1,809 | $ | 824,506 |
Common - shares | Class A - shares | Class B - shares | |||||||||||||||||||||||||||||||||||||||||||
Shares | $ | Shares | $ | Shares | $ | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Stock Subscriptions Receivable | Equity attributable to Houlihan Lokey, Inc. | Noncontrolling interest | Total stockholders' equity | |||||||||||||||||||||||||||||||||
Balances - April 1, 2015 | 587,866 | $ | 59 | — | $ | — | — | $ | — | $ | 670,182 | $ | 170,929 | $ | (11,338 | ) | $ | (7,135 | ) | $ | 822,697 | $ | 1,809 | $ | 824,506 | ||||||||||||||||||||
Shares issued (note 3) | — | — | — | — | 31,414 | — | 15,118 | — | — | — | 15,118 | — | 15,118 | ||||||||||||||||||||||||||||||||
Stock compensation vesting (note 10) | — | — | — | — | — | — | 28,765 | — | — | — | 28,765 | — | 28,765 | ||||||||||||||||||||||||||||||||
Share redemptions (note 3) | — | — | — | — | (64,285 | ) | — | (2,295 | ) | — | — | — | (2,295 | ) | — | (2,295 | ) | ||||||||||||||||||||||||||||
Dividends | — | — | — | — | — | — | (74,432 | ) | (211,034 | ) | — | 4,168 | (281,298 | ) | (1,835 | ) | (283,133 | ) | |||||||||||||||||||||||||||
Stock subscriptions receivable redeemed | — | — | — | — | — | — | — | — | — | 2,720 | 2,720 | — | 2,720 | ||||||||||||||||||||||||||||||||
Conversion of Fram shares to HLI | (587,866 | ) | (59 | ) | 12,075,000 | 12 | 53,321,893 | 53 | (6 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Shares issued to non-employee directors (note 12) | — | — | 9,524 | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Shares forfeited | — | — | — | — | (69,719 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Adjustment of noncontrolling interest to redeemable value | — | — | — | — | — | — | — | (1,013 | ) | — | — | (1,013 | ) | — | (1,013 | ) | |||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | 69,741 | — | — | 69,741 | 26 | 69,767 | ||||||||||||||||||||||||||||||||
Change in unrealized translation | — | — | — | — | — | — | — | — | (3,275 | ) | — | (3,275 | ) | (3,275 | ) | ||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | 69,741 | (3,275 | ) | — | 66,466 | 26 | 66,492 | |||||||||||||||||||||||||||||||
Balances-March 31, 2016 | — | $ | — | 12,084,524 | $ | 12 | 53,219,303 | $ | 53 | $ | 637,332 | $ | 28,623 | $ | (14,613 | ) | $ | (247 | ) | $ | 651,160 | $ | — | $ | 651,160 |
Year Ended | |||||||||||
2016 | 2015 | 2014 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 69,767 | $ | 79,939 | $ | 61,428 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Deferred tax benefit | (4,165 | ) | (7,358 | ) | (7,176 | ) | |||||
Provision for bad debts | 2,538 | 2,027 | 2,465 | ||||||||
Depreciation and amortization | 7,499 | 5,508 | 6,040 | ||||||||
Compensation expense – restricted share grants (note 10) | 35,057 | 23,200 | 22,479 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (1,387 | ) | (8,533 | ) | (20,341 | ) | |||||
Unbilled work in process | (8,360 | ) | (3,720 | ) | (3,909 | ) | |||||
Other assets | (643 | ) | (795 | ) | (2,111 | ) | |||||
Accrued salaries and bonuses | (56,184 | ) | 51,797 | 50,545 | |||||||
Accounts payable and accrued expenses | (13,959 | ) | 3,084 | 4,735 | |||||||
Deferred income | 2,475 | (2,316 | ) | 1,717 | |||||||
Income taxes payable | (19,119 | ) | 53,674 | 49,139 | |||||||
Net cash provided by operating activities | 13,519 | 196,507 | 165,011 | ||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of business, net of cash acquired (note 6) | (36,854 | ) | (5,178 | ) | (9,090 | ) | |||||
Investments in other assets | — | (9,451 | ) | (5,000 | ) | ||||||
Changes in receivables from affiliates | 225,792 | (193,200 | ) | (105,653 | ) | ||||||
Purchase of property and equipment, net | (9,385 | ) | (4,671 | ) | (2,241 | ) | |||||
Net cash provided by (used in) investing activities | 179,553 | (212,500 | ) | (121,984 | ) | ||||||
Cash flows from financing activities: | |||||||||||
Dividends paid | (114,297 | ) | (2,166 | ) | (1,075 | ) | |||||
Earnouts paid | (1,417 | ) | (964 | ) | — | ||||||
Stock subscriptions receivable issued | — | (360 | ) | (3,000 | ) | ||||||
Stock subscriptions receivable redeemed | 2,720 | 995 | 828 | ||||||||
Loans payable to former shareholders redeemed | (3,047 | ) | — | — | |||||||
Other financing activities | 33 | — | (17 | ) | |||||||
Net cash used in financing activities | (116,008 | ) | (2,495 | ) | (3,264 | ) | |||||
Effects of exchange rate changes on cash and cash equivalents | 443 | (2,270 | ) | 1,271 | |||||||
Increase (decrease) in cash and cash equivalents | 77,507 | (20,758 | ) | 41,034 | |||||||
Cash and cash equivalents – beginning of period | 88,662 | 109,420 | 68,386 | ||||||||
Cash and cash equivalents – end of period | $ | 166,169 | $ | 88,662 | $ | 109,420 | |||||
Supplemental disclosures of noncash activities: | |||||||||||
Dividends paid via settlement of receivable from affiliate (note 3) | 94,520 | — | — | ||||||||
Dividends paid via distribution of non-cash assets | 22,800 | — | — | ||||||||
Dividends paid via loan payable to affiliate | 45,000 | — | — | ||||||||
Dividends paid via settlement of employee loans | 4,168 | — | — | ||||||||
Taxes paid via settlement of receivable from affiliate | 901 | 46,000 | 50,900 | ||||||||
Shares issued via settlement of receivable from affiliate (note 3) | — | (12,856 | ) | (11,623 | ) | ||||||
Shares redeemed via settlement of receivable from affiliate (note 3) | (763 | ) | 3,531 | 11,967 | |||||||
Shares issued as consideration for acquisitions (note 6) | 11,306 | — | — | ||||||||
Fully depreciated assets written off | 443 | 2,582 | 259 | ||||||||
Cash acquired through acquisitions | 14,688 | — | — | ||||||||
Cash paid during the year: | |||||||||||
Interest | 1,314 | 263 | 137 | ||||||||
Taxes | 75,365 | (1,478 | ) | 1,568 |
• | Houlihan Lokey Capital, Inc., a California corporation ("HL Capital, Inc."), is a wholly owned direct subsidiary of HL, Inc. HL Capital, Inc. is registered as a broker‑dealer under Section 15(b) of the Securities Exchange Act of 1934 and a member of the Financial Industry Regulatory Authority, Inc. |
• | Houlihan Lokey Financial Advisors, Inc., a California corporation ("HL FA, Inc."), is a wholly owned direct subsidiary of HL, Inc. HL FA, Inc. is a registered investment adviser under the Investment Advisers Act of 1940. |
• | Houlihan Lokey (Europe) Limited, a limited company incorporated in England ("HL Europe, Ltd."), is a wholly owned indirect subsidiary of HL, Inc. HL Europe, Ltd. is regulated by the Financial Conduct Authority in the United Kingdom. |
• | $12,783 of professional service and other third-party fees and expenses associated with the IPO, as well as a corporate reorganization and related activities; |
• | $7,420 of compensation expense associated with the amortization of restricted stock granted in connection with the IPO; amortization expense of restricted stock granted in connection with the IPO is being recognized over a four and one-half year vesting period; and |
• | $7,855 of compensation expense associated with the accrual of certain deferred cash payments granted in connection with the IPO; accrual expense of deferred cash payments granted in connection with the IPO is being recognized over a four and one-half year vesting period. |
• | Corporate Finance provides general advisory services on mergers and acquisitions and capital markets offerings. Corporate Finance advises public and private institutions on buy-side and sell-side transactions, as well as leveraged loans, private mezzanine debt, high‑yield debt, initial public offerings, follow‑ons, convertibles, equity private placements, private equity, and liability management transactions, as well as advises financial sponsors on all types of transactions. |
• | Financial Restructuring provides advice to creditors and debtors in connection with recapitalization/deleveraging transactions implemented both through bankruptcy proceedings and though out‑of‑court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, Financial Restructuring offers a wide range of advisory services to its clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; litigation support and expert testimony; and procuring debtor-in-possession financing. |
• | Financial Advisory Services provides valuations of various assets and liabilities including: companies, illiquid debt and equity securities, and intellectual property (among other assets and liabilities). These valuations are used for financial reporting, tax reporting, and other purposes. Financial Advisory Services renders fairness opinions in connection with mergers & acquisitions and other transactions, and solvency opinions in connection with corporate spin‑offs and dividend recapitalizations. Financial Advisory Services also provides strategic consulting services and dispute resolution services to clients where fees are usually based on the hourly rates of its consultants. |
(a) | Basis of Presentation |
(b) | Principles of Consolidation |
(c) | Use of Estimates |
(d) | Recognition of Revenue |
(e) | Operating Expenses |
(f) | Translation of Foreign Currency Transactions |
(g) | Property and Equipment |
(h) | Cash and Cash Equivalents |
(i) | Accounts Receivable |
(j) | Investment in Unconsolidated Entities |
(k) | Income Taxes |
(l) | Goodwill and Intangible Assets |
(m) | Fair Value Measurements |
• | Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. |
• | Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. |
• | Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. |
(n) | Recent Accounting Pronouncements |
(o) | Reclassifications |
Year Ended March 31, | |||||||
2016 | 2015 | ||||||
Balance-beginning | $ | 4,625 | $ | 3,862 | |||
Provision for bad debt | 2,538 | 2,027 | |||||
Recovery of uncollectible accounts | (2,897 | ) | (1,264 | ) | |||
Balance-ending | $ | 4,266 | $ | 4,625 |
Useful Lives | 2016 | 2015 | |||||||
Equipment | 5 Years | $ | 5,768 | $ | 4,977 | ||||
Furniture and fixtures | 5 Years | 19,158 | 13,819 | ||||||
Leasehold improvements | 10 Years | 16,987 | 16,765 | ||||||
Computers and software | 3 Years | 11,215 | 8,292 | ||||||
Other | N/A | 1,043 | 991 | ||||||
Total cost | 54,171 | 44,844 | |||||||
Less: accumulated depreciation | (32,470 | ) | (28,355 | ) | |||||
Total net book value | $ | 21,701 | $ | 16,489 |
Useful Lives | March 31, 2016 | March 31, 2015 | |||||||
Goodwill | Indefinite | $ | 518,679 | $ | 455,550 | ||||
Tradename-Houlihan Lokey | Indefinite | 192,210 | 192,210 | ||||||
Other intangible assets | Varies | 14,939 | 10,527 | ||||||
Total cost | 725,828 | 658,287 | |||||||
Less: accumulated amortization | (8,460 | ) | (5,481 | ) | |||||
Total net book value (before taxes) | 717,368 | 652,806 | |||||||
Deferred tax liability | (77,184 | ) | (77,184 | ) | |||||
Total net book value | $ | 640,184 | $ | 575,622 |
Business Segments | April 1, 2015 | Changes (a) | March 31, 2016 | |||||||||
Corporate Finance | $ | 206,643 | $ | 63,391 | $ | 270,034 | ||||||
Financial Restructuring | 163,823 | (262 | ) | 163,561 | ||||||||
Financial Advisory Services | 85,084 | — | 85,084 | |||||||||
Total | $ | 455,550 | $ | 63,129 | $ | 518,679 |
(a) | During June, September and November of 2015, the Company acquired three financial advisory firms that provide mergers and acquisitions advice, private capital raising and broad advisory services. Changes also include, foreign currency translation adjustments of $(262) for the year ended March 31, 2016. |
Year Ended March 31, | |||
2017 | $ | 3,148 | |
2018 | 1,405 | ||
2019 | 573 | ||
2020 | 569 | ||
2021 | 208 |
Balance, April 1, 2013 | $ | (10,174 | ) |
Foreign currency translation gain | 1,271 | ||
Balance, March 31, 2014 | $ | (8,903 | ) |
Foreign currency translation loss | (2,435 | ) | |
Balance, March 31, 2015 | $ | (11,338 | ) |
Foreign currency translation loss | (3,275 | ) | |
Balance, March 31, 2016 | $ | (14,613 | ) |
March 31, 2016 | March 31, 2015 | March 31, 2014 | |||||||||
Current: | |||||||||||
Federal | $ | 43,252 | $ | 42,297 | $ | 39,040 | |||||
State | 10,895 | 12,664 | 11,030 | ||||||||
Foreign | 5,881 | 4,593 | 1,004 | ||||||||
Subtotal | 60,028 | 59,554 | 51,074 | ||||||||
Deferred: | |||||||||||
Federal | (3,867 | ) | (6,798 | ) | (6,475 | ) | |||||
State | (93 | ) | (751 | ) | (1,701 | ) | |||||
Foreign | (205 | ) | 191 | 1,000 | |||||||
Subtotal | (4,165 | ) | (7,358 | ) | (7,176 | ) | |||||
Total | $ | 55,863 | $ | 52,196 | $ | 43,898 |
March 31, 2016 | March 31, 2015 | March 31, 2014 | ||||||||||||||||||
Federal income tax provision computed at statutory rate | $ | 43,963 | 35.0 | % | $ | 46,226 | 35.0 | % | $ | 36,826 | 35.0 | % | ||||||||
State and local taxes, net of federal tax effect | 7,108 | 5.7 | % | 6,844 | 5.2 | % | 5,081 | 4.8 | % | |||||||||||
Foreign taxes | (453 | ) | (0.4 | )% | (1,638 | ) | (1.3 | )% | (730 | ) | (0.7 | )% | ||||||||
Nondeductible expenses | 1,475 | 1.2 | % | 1,285 | 1.0 | % | 1,064 | 1.0 | % | |||||||||||
Nondeductible IPO-related expenses | 3,930 | 3.1 | % | — | — | % | — | — | % | |||||||||||
Other | (160 | ) | (0.1 | )% | (521 | ) | (0.4 | )% | 1,657 | 1.6 | % | |||||||||
Total | $ | 55,863 | 44.5 | % | $ | 52,196 | 39.5 | % | $ | 43,898 | 41.7 | % |
March 31, 2016 | March 31, 2015 | ||||||
Deferred tax assets: | |||||||
Deferred compensation expense/accrued bonus | $ | 43,348 | $ | 41,968 | |||
Allowance for doubtful accounts | 3,195 | 2,294 | |||||
Other, net | 1,399 | 3,580 | |||||
Total deferred tax assets | 47,942 | 47,842 | |||||
Deferred tax liabilities: | |||||||
Intangibles | (77,184 | ) | (77,184 | ) | |||
Accounts receivable and work in process | (8,046 | ) | (12,111 | ) | |||
Total deferred tax liabilities | (85,230 | ) | (89,295 | ) | |||
Net deferred tax liabilities | $ | (37,288 | ) | $ | (41,453 | ) |
March 31, 2016 | March 31, 2015 | ||||||
Unrecognized tax position at the beginning of the year | $ | 133 | $ | 533 | |||
Increases (decreases) related to prior year tax positions | 891 | (400 | ) | ||||
Unrecognized tax position at the end of the year | $ | 1,024 | $ | 133 |
(a) | Defined Contribution Plans |
(b) | Share‑Based Incentive Plans |
Nonvested share awards | Shares | Weighted average grant date fair value | ||||
Balance at April 1, 2014 | 2,965,475 | $ | 12.54 | |||
Granted | 1,855,815 | 13.24 | ||||
Vested | (1,736,909 | ) | 12.74 | |||
Forfeited | (100,382 | ) | 12.70 | |||
March 31, 2015 | 2,983,999 | $ | 12.85 | |||
Granted | 4,388,333 | 21.00 | ||||
Vested | (1,395,192 | ) | 12.99 | |||
Forfeited | (73,972 | ) | 18.59 | |||
March 31, 2016 | 5,903,168 | $ | 18.80 |
Awards settleable in shares | Fair value | ||
Balance at April 1, 2014 | $ | 11,171 | |
Offer to grant | 8,487 | ||
Share price determined-transferred to equity grants 1 | (3,869 | ) | |
Forfeited | (805 | ) | |
Balance at March 31, 2015 | $ | 14,984 | |
Offer to grant | 35,886 | ||
Share price determined-converted to cash payments | (6,244 | ) | |
Share price determined-transferred to equity grants 1 | (29,519 | ) | |
Forfeited | (1,125 | ) | |
Balance at March 31, 2016 | $ | 13,982 |
(a) | Fram Shares |
(b) | Class A Common Stock |
(c) | Class B Common Stock |
(d) | Dividends |
(e) | Noncontrolling interests |
(f) | Stock subscriptions receivable |
Year ended March 31: | |||
2017 | $ | 34,473 | |
2018 | 19,093 | ||
2019 | 2,238 | ||
2020 | 1,613 | ||
2021 | 1,233 | ||
2022 and thereafter | 17,970 | ||
Total | $ | 76,620 |
Year ended March 31: | |||
2017 | $ | 20,424 | |
2018 | 20,567 | ||
2019 | 19,779 | ||
2020 | 18,542 | ||
2021 | 18,179 | ||
2022 and thereafter | 48,920 | ||
Total | $ | 146,411 |
Year ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Revenues by segment: | |||||||||||
Corporate Finance | $ | 371,790 | $ | 367,632 | $ | 260,035 | |||||
Financial Restructuring | 202,343 | 207,909 | 230,062 | ||||||||
Financial Advisory Services | 119,632 | 105,331 | 102,054 | ||||||||
Total segment revenues | 693,765 | 680,872 | 592,151 | ||||||||
Corporate | — | — | 299 | ||||||||
Total revenues | $ | 693,765 | $ | 680,872 | $ | 592,450 | |||||
Segment profit | |||||||||||
Corporate Finance | $ | 103,447 | $ | 101,266 | $ | 67,088 | |||||
Financial Restructuring | 54,950 | 52,246 | 56,910 | ||||||||
Financial Advisory Services | 30,313 | 24,344 | 24,921 | ||||||||
Total segment profit | 188,710 | 177,856 | 148,919 | ||||||||
Corporate expenses | (62,310 | ) | (49,202 | ) | (46,071 | ) | |||||
Other (expense) income, net | (770 | ) | 3,481 | 2,478 | |||||||
Income before provision for income taxes | $ | 125,630 | $ | 132,135 | $ | 105,326 |
March 31, 2016 | March 31, 2015 | March 31, 2014 | |||||||||
Assets by segment: | |||||||||||
Corporate Finance | $ | 309,605 | $ | 234,966 | $ | 247,094 | |||||
Financial Restructuring | 196,473 | 186,234 | 185,843 | ||||||||
Financial Advisory Services | 111,637 | 98,688 | 99,660 | ||||||||
Total segment assets | 617,715 | 519,888 | 532,597 | ||||||||
Corporate assets | 453,169 | 709,960 | 528,629 | ||||||||
Total assets | $ | 1,070,884 | $ | 1,229,848 | $ | 1,061,226 |
Year ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Revenues by geography: | |||||||||||
United States | $ | 601,197 | $ | 595,113 | $ | 508,192 | |||||
International | 92,568 | 85,759 | 84,258 | ||||||||
Total revenues | $ | 693,765 | $ | 680,872 | $ | 592,450 |
Year ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Income before provision for income taxes by geography: | |||||||||||
United States | $ | 108,221 | $ | 119,819 | $ | 91,427 | |||||
International | 17,409 | 12,316 | 13,899 | ||||||||
Total income before provision for income taxes | $ | 125,630 | $ | 132,135 | $ | 105,326 |
March 31, 2016 | March 31, 2015 | March 31, 2014 | |||||||||
Assets by geography: | |||||||||||
United States | $ | 721,937 | $ | 948,054 | $ | 763,771 | |||||
International | 348,947 | 281,794 | 297,455 | ||||||||
Total assets | $ | 1,070,884 | $ | 1,229,848 | $ | 1,061,226 |
($ in thousands, except per share data) | |||||||||||||
For the Three Months Ended | |||||||||||||
06/30/15 | 09/30/15 | 12/31/15 | 03/31/16 | ||||||||||
Revenues | $ | 146,266 | $ | 158,380 | $ | 205,523 | $ | 183,596 | |||||
Total operating expenses | 122,486 | 140,943 | 161,837 | 142,099 | |||||||||
Operating income | 23,780 | 17,437 | 43,686 | 41,497 | |||||||||
Net income | 15,071 | 9,255 | 22,661 | 22,780 | |||||||||
Net loss attributable to noncontrolling interests | (26 | ) | — | — | — | ||||||||
Net income attributable to Houlihan Lokey, Inc. | $ | 15,045 | $ | 9,255 | $ | 22,661 | $ | 22,780 | |||||
Net income per share of common stock: | |||||||||||||
Basic | $ | 0.26 | $ | 0.16 | $ | 0.38 | $ | 0.38 | |||||
Diluted | $ | 0.25 | $ | 0.15 | $ | 0.35 | $ | 0.35 | |||||
Dividends declared per share of common stock (1) | $ | — | $ | — | $ | 0.15 | $ | 0.15 | |||||
For the Three Months Ended | |||||||||||||
06/30/14 | 09/30/14 | 12/31/14 | 03/31/15 | ||||||||||
Revenues | $ | 141,502 | $ | 156,294 | $ | 196,608 | $ | 186,468 | |||||
Total operating expenses | 117,453 | 128,907 | 159,995 | 145,863 | |||||||||
Operating income | 24,049 | 27,387 | 36,613 | 40,605 | |||||||||
Net income | 14,357 | 16,612 | 24,185 | 24,785 | |||||||||
Net income (loss) attributable to noncontrolling interests | 1 | (21 | ) | (25 | ) | (13 | ) | ||||||
Net income attributable to Houlihan Lokey, Inc. | $ | 14,358 | $ | 16,591 | $ | 24,160 | $ | 24,772 | |||||
Net income per share of common stock: | |||||||||||||
Basic | $ | 0.25 | $ | 0.29 | $ | 0.42 | $ | 0.43 | |||||
Diluted | $ | 0.24 | $ | 0.27 | $ | 0.40 | $ | 0.41 | |||||
Dividends declared per share of common stock | $ | — | $ | — | $ | — | $ | — |
Balance – April 1, 2013 | $ | 3,217 | ||
Provision for bad debts | 2,465 | |||
Write-off of uncollectible accounts | (1,829 | ) | ||
Foreign currency translation | 9 | |||
Balance – March 31, 2014 | $ | 3,862 | ||
Provision for bad debts | 2,027 | |||
Write-off of uncollectible accounts | (1,264 | ) | ||
Foreign currency translation | — | |||
Balance – March 31, 2015 | $ | 4,625 | ||
Provision for bad debts | 2,538 | |||
Write-off of uncollectible accounts | (2,897 | ) | ||
Foreign currency translation | — | |||
Balance – March 31, 2016 | $ | 4,266 |
HOULIHAN LOKEY, INC. | |
Date: June 23, 2016 | By: /s/ SCOTT L. BEISER |
Name: Scott L. Beiser | |
Title: Chief Executive Officer |
HOULIHAN LOKEY, INC. | |
Date: June 23, 2016 | /s/ SCOTT L. BEISER |
Scott L. Beiser | |
Chief Executive Officer | |
(Principal Executive Officer) | |
Date: June 23, 2016 | /s/ J. LINDSEY ALLEY |
J. Lindsey Alley | |
Chief Financial Officer | |
(Principal Financial and Accounting Officer) | |
Date: June 23, 2016 | /s/ IRWIN N. GOLD |
Irwin N. Gold | |
Executive Chairman and Director | |
Date: June 23, 2016 | /s/ SCOTT J. ADELSON |
Scott J. Adelson | |
Co-President and Director | |
Date: June 23, 2016 | /s/ DAVID A. PREISER |
David A. Preiser | |
Co-President and Director | |
Date: June 23, 2016 | /s/ RON K. BARGER |
Ron K. Barger | |
Director |
Date: June 23, 2016 | /s/ JACQUELINE B. KOSECOFF |
Jacqueline B. Kosecoff | |
Director | |
Date: June 23, 2016 | /s/ ROBERT J.B. LENHARDT |
Robert J.B. Lenhardt | |
Director | |
Date: June 23, 2016 | /s/ HIDETO NISHITANI |
Hideto Nishitani | |
Director | |
Date: June 23, 2016 | /s/ ROBERT A. SCHRIESHEIM |
Robert A. Schriesheim | |
Director | |
Date: June 23, 2016 | /s/ PAUL E. WILSON |
Paul E. Wilson | |
Director | |
Date: June 23, 2016 | /s/ BENNET VAN DE BUNT |
Bennet Van de Bunt | |
Director | |
Incorporated by Reference | |||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed / Furnished Herewith | |
3.1 | Amended and Restated Certificate of Incorporation of the Company, dated August 18, 2015 | 8-K | 333-205610 | 3.1 | 8/21/15 | ||
3.2 | Amended and Restated Bylaws of the Company, dated August 18, 2015 | 8-K | 333-205610 | 3.2 | 8/21/15 | ||
9.1 | Voting Trust Agreement, dated as of August 18, 2015, by and among the Company, the holders of shares of Class B common stock party thereto, and each trustee named therein | 8-K | 333-205610 | 9.1 | 8/21/15 | ||
9.2 | Amendment No. 1 to the Voting Trust Agreement, dated as of August 28, 2015, by and among the Company and the Trustees. | 8-K | 333-205610 | 9.1 | 8/28/15 | ||
10.1 | Stockholders' Agreement, dated as of August 18, 2015, by and among the Company and the holders identified therein | 8-K | 333-205610 | 10.1 | 8/21/15 | ||
10.2 | Registration Rights Agreement, dated as of August 18, 2015, by and between the Company and ORIX HLHZ Holding, LLC | 8-K | 333-205610 | 10.2 | 8/21/15 | ||
10.3 | Form of HL Lock- up Agreement | S-1 | 333-205610 | 10.2 | 7/10/15 | ||
10.4 | Registration Rights Agreement, dated as of August 18, 2015, by and among the Company and the stockholders party thereto | 8-K | 333-205610 | 10.3 | 8/21/15 | ||
10.5 | Transition Services Agreement, dated as of August 18, 2015, by and between ORIX USA, LP and the Company | 8-K | 333-205610 | 10.4 | 8/21/15 | ||
10.6 | Amended and Restated Subordinated Promissory Note, effective as of August 18, 2015, issued by the Company to ORIX USA Corporation | 8-K | 333-205610 | 10.5 | 8/21/15 | ||
10.7 | Credit Agreement, dated as of August 18, 2015, by and among the Company, certain domestic subsidiaries of the Company party thereto and Bank of America, N.A. | 8-K | 333-205610 | 10.6 | 8/21/15 | ||
10.8 | Amended and Restated Tax Sharing Agreement, dated as of August 18, 2015, by and among ORIX USA Corporation, HL Transitory Merger Company, Inc., the Company, and all corporations that are as of this date eligible to file a consolidated return as a member of the affiliated group of ORIX USA Corporation within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended, including ORIX Commercial Alliance Corporation, ORIX Real Estate Capital, Inc., and ORIX Capital Markets, LLC | 8-K | 333-205610 | 10.7 | 8/21/15 | ||
10.9 | Cash Management Agreement, entered into on August 18, 2015, by and between Houlihan Lokey Capital (Holdings) Ltd. And ORIX Global Capital, Ltd | 8-K | 333-205610 | 10.8 | 8/21/15 | ||
10.10 | Form of Indemnification Agreement between Houlihan Lokey, Inc. and its directors and executive officers | S-1/A | 333-205610 | 10.8 | 7/27/15 | ||
10.11 | Guarantee Agreement, dated as of August 18, 2015, by and between Houlihan Lokey Capital (Holdings) Ltd. and ORIX USA Corporation | 8-K | 333-205610 | 10.9 | 8/21/15 | ||
10.12‡ | Houlihan Lokey, Inc. Second Amended and Restated 2006 Incentive Compensation Plan. | S-1/A | 333-205610 | 10.9 | 8/3/15 | ||
10.13 | Letter Agreement, dated as of August 18, 2015, by and among the Company, ORIX USA Corporation and Fram Holdings, LLC | 8-K | 333-205610 | 10.10 | 8/21/15 |
Incorporated by Reference | |||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed / Furnished Herewith | |
10.14‡ | Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under the Houlihan Lokey, Inc. Second Amended and Restated 2006 Incentive Compensation Plan. | S-1/A | 333-205610 | 10.10 | 8/3/15 | ||
10.15‡ | Form of Deferred Restricted Stock Award Grant Notice and Agreement under the Houlihan Lokey, Inc. Second Amended and Restated 2006 Incentive Compensation Plan. | S-1/A | 333-205610 | 10.11 | 8/3/15 | ||
10.16‡ | Houlihan Lokey, Inc. 2016 Incentive Award Plan | S-1/A | 333-206337 | 10.12 | 8/3/15 | ||
10.17‡ | Form of Restricted Stock Award Agreement under the Houlihan Lokey, Inc. 2016 Incentive Award Plan | S-1/A | 333-206337 | 10.13 | 8/3/15 | ||
10.18‡ | Form of Restricted Stock Unit Award Agreement under the Houlihan Lokey, Inc. 2016 Incentive Annual Plan. | S-1/A | 333-206337 | 10.14 | 8/3/15 | ||
10.19‡ | Houlihan Lokey, Inc. Director Compensation Program. | S-1/A | 333-205610 | 10.18 | 8/3/15 | ||
10.20‡ | Notice to Fram Holdings, Inc. Second Amended and Restated 2006 Incentive Compensation Plan Equity Award Holders | S-1/A | 333-205610 | 10.19 | 8/3/15 | ||
31.1 | Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer | * | |||||
31.2 | Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer | * | |||||
32.1 | Section 1350 Certification of Chief Executive Officer | ** | |||||
32.2 | Section 1350 Certification of Chief Financial Officer | ** | |||||
101.INS | XBRL Instance Document | ** | |||||
101.SCH | XBRL Taxonomy Extension Schema Document | ** | |||||
101.CAL† | XBRL Taxonomy Extension Calculation Linkbase Document | ** | |||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ** | |||||
101.LAB† | XBRL Taxonomy Extension Label Linkbase Document | ** | |||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ** |
† | In accordance with Rule 406T of Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections |
‡ | Indicates a management contract or compensation plan or arrangement. |
1. | I have reviewed this Annual Report on Form 10- K for the period ending March 31, 2016 of Houlihan Lokey, Inc. as filed with the Securities and Exchange Commission on the date hereof; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d-15(f)) for the above registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and to the audit committee of the registrant's board of directors: |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
June 23, 2016 | /s/ SCOTT L. BEISER |
Scott L. Beiser | |
Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10- K for the period ending March 31, 2016 of Houlihan Lokey, Inc. as filed with the Securities and Exchange Commission on the date hereof; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a- 15(f) and 15d-15(f)) for the above registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and to the audit committee of the registrant's board of directors: |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
June 23, 2016 | /s/ J. Lindsey Alley |
J. Lindsey Alley | |
Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
June 23, 2016 | /s/ SCOTT L. BEISER |
Scott L. Beiser | |
Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
June 23, 2016 | /s/ J. Lindsey Alley |
J. Lindsey Alley | |
Chief Financial Officer |
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Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Jun. 21, 2016 |
Sep. 30, 2015 |
|
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Period End Date | Mar. 31, 2016 | ||
Amendment Flag | false | ||
Entity Registrant Name | Houlihan Lokey, Inc. | ||
Entity Central Index Key | 0001302215 | ||
Current Fiscal Year End Date | --03-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 263 | ||
Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 12,094,809 | ||
Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 54,749,480 |
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Common stock, par value (in usd per share) | $ 0.1 | |
Common stock, shares authorized | 2,500,000 | |
Common stock, shares issued | 587,866 | |
Common stock, shares outstanding | 587,866 | |
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 12,084,524 shares | ||
Common stock, par value (in usd per share) | $ 0.001 | |
Common stock, shares authorized | 1,000,000,000 | |
Common stock, shares issued | 12,084,524 | |
Common stock, shares outstanding | 12,084,524 | |
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 53,219,303 shares | ||
Common stock, par value (in usd per share) | $ 0.001 | |
Common stock, shares authorized | 1,000,000,000 | |
Common stock, shares issued | 53,219,303 | |
Common stock, shares outstanding | 53,219,303 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
||||||||||
Income Statement [Abstract] | ||||||||||||
Fee revenue | [1] | $ 693,765 | $ 680,872 | $ 592,450 | ||||||||
Operating expenses: | ||||||||||||
Employee compensation and benefits | 461,609 | 475,100 | 414,918 | |||||||||
Travel, meals, and entertainment | 20,955 | 17,928 | 15,113 | |||||||||
Rent | 26,459 | 24,253 | 22,386 | |||||||||
Depreciation and amortization | 7,499 | 5,508 | 6,040 | |||||||||
Information technology and communications | 16,017 | 14,013 | 12,272 | |||||||||
Professional fees | 20,687 | 5,563 | 3,398 | |||||||||
Other operating expenses | [2] | 11,601 | 7,826 | 13,010 | ||||||||
Provision for bad debts | 2,538 | 2,027 | 2,465 | |||||||||
Total operating expenses | 567,365 | 552,218 | 489,602 | |||||||||
Operating income | 126,400 | 128,654 | 102,848 | |||||||||
Other income (expense), net | [3] | (770) | 3,481 | 2,478 | ||||||||
Income before provision for income taxes | 125,630 | 132,135 | 105,326 | |||||||||
Provision for income taxes | 55,863 | 52,196 | 43,898 | |||||||||
Net income | 69,767 | 79,939 | 61,428 | |||||||||
Net income attributable to noncontrolling interests | (26) | (58) | (108) | |||||||||
Net income attributable to Houlihan Lokey, Inc. | 69,741 | 79,881 | 61,320 | |||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Foreign currency translation adjustments | (3,275) | (2,435) | 1,271 | |||||||||
Comprehensive income attributable to Houlihan Lokey, Inc. | $ 66,466 | $ 77,446 | $ 62,591 | |||||||||
Weighted average shares of common stock outstanding: | ||||||||||||
Basic (in shares) | [4] | 59,044,981 | 57,134,305 | 55,050,159 | ||||||||
Diluted (in shares) | [4] | 63,475,903 | 60,135,375 | 58,124,772 | ||||||||
Net income per share of common stock | ||||||||||||
Basic (in usd per share) | [4] | $ 1.18 | $ 1.40 | $ 1.11 | ||||||||
Diluted (in usd per share) | [4] | $ 1.10 | $ 1.33 | $ 1.05 | ||||||||
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (PARENTHETICAL) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
Mar. 31, 2014
USD ($)
|
|
Income Statement [Abstract] | |||
Related party fee revenue | $ 504 | $ 119 | $ 6,156 |
Related party expenses | 874 | 2,471 | 2,833 |
Related party interest income | 1,954 | 4,046 | 1,636 |
Related party interest expense | $ 922 | $ 253 | $ 0 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands |
Total |
Class A |
Class B |
Equity attributable to Houlihan Lokey, Inc. |
Common Stock |
Common Stock
Class A
|
Common Stock
Class B
|
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive income (loss) |
Stock Subscriptions Receivable |
Noncontrolling interest |
---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance (in shares) at Mar. 31, 2013 | 587,866 | 0 | 0 | |||||||||
Beginning balance at Mar. 31, 2013 | $ 630,878 | $ 629,235 | $ 59 | $ 0 | $ 0 | $ 612,104 | $ 32,844 | $ (10,174) | $ (5,598) | $ 1,643 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Shares issued | 18,267 | 18,267 | 18,267 | |||||||||
Stock compensation vesting | 18,206 | 18,206 | 18,206 | |||||||||
Fram share redemptions | 11,967 | 11,967 | 11,967 | |||||||||
Dividend | (2,222) | (2,222) | 6 | (2,228) | ||||||||
Stock subscriptions receivable issued, net | (2,172) | (2,172) | (2,172) | |||||||||
Net income | 61,428 | 61,320 | 61,320 | 108 | ||||||||
Change in unrealized translation | 1,271 | 1,271 | 1,271 | |||||||||
Total comprehensive income | 62,699 | 62,591 | 61,320 | 1,271 | 108 | |||||||
Ending balance (in shares) at Mar. 31, 2014 | 587,866 | 0 | 0 | |||||||||
Ending balance at Mar. 31, 2014 | 713,689 | 711,938 | $ 59 | $ 0 | $ 0 | 636,616 | 91,936 | (8,903) | (7,770) | 1,751 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Shares issued | 19,508 | 19,508 | 19,508 | |||||||||
Stock compensation vesting | 17,589 | 17,589 | 17,589 | |||||||||
Fram share redemptions | 3,531 | 3,531 | 3,531 | |||||||||
Dividend | (888) | (888) | (888) | |||||||||
Stock subscriptions receivable issued, net | 635 | 635 | 635 | |||||||||
Net income | 79,939 | 79,881 | 79,881 | 58 | ||||||||
Change in unrealized translation | (2,435) | (2,435) | (2,435) | |||||||||
Total comprehensive income | $ 77,504 | 77,446 | 79,881 | (2,435) | 58 | |||||||
Ending balance (in shares) at Mar. 31, 2015 | 587,866 | 587,866 | 0 | 0 | ||||||||
Ending balance at Mar. 31, 2015 | $ 824,506 | 822,697 | $ 59 | $ 0 | $ 0 | 670,182 | 170,929 | (11,338) | (7,135) | 1,809 | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||||
Shares issued (in shares) | 31,414 | |||||||||||
Shares issued | 15,118 | 15,118 | 15,118 | |||||||||
Stock compensation vesting | 28,765 | 28,765 | 28,765 | |||||||||
Share redemptions (in shares) | (64,285) | |||||||||||
Share redemptions | (2,295) | (2,295) | (2,295) | |||||||||
Dividend | (283,133) | (281,298) | (74,432) | (211,034) | 4,168 | (1,835) | ||||||
Stock subscriptions receivable redeemed | 2,720 | 2,720 | 2,720 | |||||||||
Conversion of Fram shares to HLI (in shares) | (587,866) | (12,075,000) | (53,321,893) | |||||||||
Conversion of Fram shares to HLI | $ (59) | $ 12 | $ 53 | (6) | ||||||||
Shares issued to non-employee directors (in shares) | 9,524 | |||||||||||
Shares forfeited (in shares) | (69,719) | |||||||||||
Adjustment of noncontrolling interest to redeemable value | (1,013) | (1,013) | (1,013) | |||||||||
Net income | 69,767 | 69,741 | 69,741 | 26 | ||||||||
Change in unrealized translation | (3,275) | (3,275) | (3,275) | |||||||||
Total comprehensive income | 66,492 | 66,466 | 69,741 | (3,275) | 26 | |||||||
Ending balance (in shares) at Mar. 31, 2016 | 12,084,524 | 53,219,303 | 0 | 12,084,524 | 53,219,303.000 | |||||||
Ending balance at Mar. 31, 2016 | $ 651,160 | $ 651,160 | $ 0 | $ 12 | $ 53 | $ 637,332 | $ 28,623 | $ (14,613) | $ (247) | $ 0 |
BACKGROUND |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||
BACKGROUND | BACKGROUND Houlihan Lokey, Inc. ("Houlihan Lokey," or "HL, Inc." also referred to as the "Company," "we," "our," or "us") is a Delaware corporation that controls the following primary subsidiaries:
On August 18, 2015, the Company successfully completed an initial public offering (IPO) of its Class A common stock. Prior to a corporate reorganization that was consummated immediately prior to the closing of the IPO, the Company was incorporated in California as Houlihan Lokey, Inc., a California corporation ("HL CA"), and was a wholly owned indirect subsidiary of Fram Holdings, Inc., a Delaware corporation ("Fram"), which, in turn, was a majority owned subsidiary of ORIX USA Corporation, a Delaware corporation ("ORIX USA"), with the remaining minority interest being held by Company employees ("HL Holders"). ORIX USA and the HL Holders held their interests in HL CA indirectly through their ownership of Fram. On July 24, 2015, HL CA merged with and into HL, Inc., with HL, Inc. as the surviving entity. In connection with the IPO, the HL Holders deposited their shares of Class B common stock in HL, Inc. into a voting trust (the "HL Voting Trust") and own such common stock through the HL Voting Trust. Houlihan Lokey has separated from Fram and as a result, common stock in HL, Inc. is held directly by ORIX USA (through ORIX HLHZ Holding, LLC, its wholly owned subsidiary), the HL Voting Trust for the benefit of the HL Holders, non-employee directors, and public shareholders. In addition, prior to the consummation of the IPO, the Company distributed to its existing owners a dividend of $270.0 million, consisting of (i) a short‑term note in the aggregate amount of $197.2 million, which was repaid immediately after the consummation of the IPO, and was allocated $94.5 million to ORIX USA and $102.7 million to the HL Holders, (ii) a note to ORIX USA in the amount of $45 million (see Note 3), and (iii) certain of our non‑operating assets to certain of the HL Holders (consisting of non‑marketable minority equity interests in four separate businesses that range in carrying value from $2.5 million to $11.0 million, and valued in the aggregate at approximately $22.8 million as of June 30, 2015, together with $5.0 million in cash to be used to complete a potential additional investment and in the administration of these assets in the future. All issued and outstanding Fram shares were converted to HL, Inc. common stock at a ratio of 10.425 shares for each share of Fram stock. Immediately following the IPO, there were two classes of authorized HL, Inc. common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. As of March 31, 2016, there were 12,075,000 Class A shares held by the public, 9,524 Class A shares held by non-employee directors, 31,608,972 Class B shares held by the HL Voting Trust, and 21,610,331 Class B shares held by ORIX USA. The Company did not receive any proceeds from the sale of our Class A common stock in the IPO. Expenses related to the corporate reorganization and IPO during the year ended March 31, 2016 and recorded in the consolidated statements of comprehensive income include the following:
The Company offers financial services and financial advice to a broad clientele located throughout the United States of America, Europe, and the Asia-Pacific region. The Company has U.S. offices in Los Angeles, Newport Beach, San Francisco, Chicago, New York City, Minneapolis, McLean (Virginia), Dallas, Houston, Miami, and Atlanta as well as foreign offices in London, Paris, Frankfurt, Madrid, Amsterdam, Tokyo, Hong Kong, and Beijing. Together, the Company and its subsidiaries form an organization that provides financial services to meet a wide variety of client needs. The Company concentrates its efforts toward the earning of professional fees with focused services across the following three business segments:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC") and include all information and footnotes required for financial statement presentation, and include all disclosures required under generally accepted accounting principles GAAP in the United States for annual financial statements.
The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation.
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Items subject to such estimates and assumptions include the allowance for doubtful accounts; the valuation of deferred tax assets, goodwill, accrued expenses, and share based compensation; the allocation of goodwill and other assets across the reporting units (segments); and reserves for income tax uncertainties and other contingencies.
Revenues consist primarily of professional service fees. The Company and its clients enter into agreements that outline the general terms and conditions of the specific engagements. The Company performs professional services in accordance with the engagement terms on both a fixed and contingent fee basis. Revenues are recognized when earned and realizable. Revenues under fixed fee contracts are recognized based on management’s estimates of the relative proportion of services provided through the financial reporting date to the total services required to be performed. The recognition of revenues under contingent fee contracts depends on whether the revenues relate to monthly retainers or success fees. Monthly retainers are generally recognized on a monthly basis, except in situations where there is uncertainty as to the timing of collection of the amount due. Success fees are recognized only upon substantial completion of the contingencies stipulated by the engagement agreement. In some cases, approval of the Company’s fees is required from the courts or other regulatory authority; in these circumstances, the recognition of revenue is often deferred until approval is granted; however, if the fee that is going to be collected from the client is fixed and determinable, and the collectability of the fee is reasonably assured, there are instances when revenue recognition prior to such approval is appropriate. Engagements related to Financial Advisory Services are most often structured as fixed fee contracts, whereas engagements related to Corporate Finance and Financial Restructuring are most often structured as contingent fee contracts. Further, Financial Restructuring contracts are commonly subject to the applicable court’s approval. In those instances when the revenue recognized on a specific engagement exceeds both the amounts billed and the amounts collected, unbilled work-in-process is recorded. Billed receivables are recorded as accounts receivable in the accompanying consolidated balance sheets. Deferred income results when cash is received in advance of dates when revenues are recognized. Taxes, including value added taxes, collected from customers and remitted to governmental authorities are accounted for on a net basis, and therefore, are excluded from revenue in the consolidated statements of comprehensive income.
The majority of the Company’s operating expenses are related to compensation for employees, which includes the amortization of the relevant portion of the Company’s share‑based incentive plans (note 10). Other examples of operating expenses include: travel, meals and entertainment; rent; depreciation and amortization; information technology and communication costs; professional fees and other operating expenses, which include such items as office expenses, business license and registration fees, non‑income‑related taxes, legal expenses, related‑party support services, and charitable contributions. During the years ended March 31, 2016, 2015 and 2014, the Company received reimbursements of $28,183, $27,173, and $23,133 respectively, from customers for out‑of‑pocket expenses incurred by the Company that are presented net against the related expenses in the accompanying consolidated statements of comprehensive income.
The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The assets and liabilities of subsidiaries whose functional currency is other than the U.S. dollar are included in the consolidation by translating the assets and liabilities at the reporting period‑end exchange rates; however, revenues and expenses are translated using the applicable exchange rates determined on a monthly basis throughout the year. Resulting translation adjustments are reported as a separate component of accumulated other comprehensive loss net of applicable taxes.
Property and equipment are stated at cost. Repair and maintenance charges are expensed as incurred and costs of renewals or improvements are capitalized at cost. Depreciation on furniture and office equipment is provided on a straight‑line basis over the estimated useful lives of the respective assets. Leasehold improvements are depreciated over the lesser of the lease term or estimated useful life.
Cash and cash equivalents include cash held at banks and highly liquid investments with original maturities of three months or less. At March 31, 2016 and 2015, the Company had cash balances with banks in excess of insured limits. The Company has not experienced any losses in its cash accounts and believes it is not exposed to any significant credit risk with respect to cash and cash equivalents. Although not classified as cash and cash equivalents, included in the Company’s receivable from affiliates (note 3), are amounts due on demand, which generally arise from the transfer of available cash from HL, Inc. to ORIX USA and affiliates of ORIX USA. The amount due from ORIX USA was repaid in August 2015.
The allowance for doubtful accounts on receivables reflects management’s best estimate of probable inherent losses determined principally on the basis of historical experience and review of uncollected revenues and is recorded through provision for bad debts in the accompanying consolidated statements of comprehensive income. Amounts deemed to be uncollectible are written off against the allowance for doubtful accounts.
The Company uses the equity method of accounting for investments when it has more than a minor ownership interest or more than minor influence over operations, but does not have a controlling interest and is not the primary beneficiary. Under the equity method, the Company’s share of the investment earnings or losses are recognized in income as earned, and capital contributions are recorded as investments in unconsolidated entities as they occur. At March 31, 2015, the Company had an investment, through one of its subsidiaries, in a heavy highway construction firm based in Phoenix, Arizona. The Company had an approximately 20% ownership in the firm. The investment was accounted for using the equity method. In August 2015, prior to the consummation of the IPO, the Company distributed this investment to certain HL Holders as part of the pre-IPO dividend (note 1).
Prior to the IPO, ORIX USA and its subsidiaries, including the Company, filed consolidated federal income tax returns and separate returns in state and local jurisdictions and will do so for fiscal 2016 through the date of the IPO. The Company reported income tax expense as if it filed separate returns in all jurisdictions. Following the IPO, the Company will file separate federal income tax returns, as well as continue to file separate returns in state and local jurisdictions, and the Company will report income tax expense on this basis. We account for income taxes in accordance with ASC 740, “Income Taxes,” which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The measurement of the deferred items is based on enacted tax laws and applicable tax rates. A valuation allowance related to a deferred tax asset is recorded if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company utilized a comprehensive model to recognize, measure, present, and disclose in its financial statements any uncertain tax positions that have been taken or are expected to be taken on a tax return. The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest expense and penalties related to income taxes are included in the provision for income taxes in the accompanying consolidated statements of comprehensive income.
Goodwill represents an acquired company’s acquisition cost over the fair value of acquired net tangible and intangible assets. Goodwill is the net asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets identified and accounted for include tradenames and marks, backlog, developed technologies, and customer relationships. Those intangible assets with finite lives, including backlog and customer relationships, are amortized over their estimated useful lives. When HL CA was acquired by Fram in January 2006, approximately $392,600 of goodwill and $192,210 of indefinite-lived intangible assets were generated and recognized. In accordance with ASC Topic 805, Business Combinations, since HL CA was wholly owned by Fram, this goodwill and all other purchase accounting‑related adjustments were pushed down to the Company’s reporting level. Through both foreign and domestic acquisitions made directly by HL CA and the Company since 2006, additional goodwill of approximately $126,079, inclusive of foreign currency translations has been recognized. Goodwill is reviewed for impairment in accordance with Accounting Standards Update (ASU) No. 2011‑08, Testing Goodwill for Impairment, which permits management to make a qualitative assessment of whether it is more likely than not that one of its reporting unit’s fair value is less than its carrying amount before applying the two‑step goodwill impairment test. If management concludes that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then management would not be required to perform the two‑step impairment test for that reporting unit. If the assessment indicates that it is more likely than not that the reporting unit’s fair value is less than its carrying value, management must test further for impairment utilizing a two‑step process. Step 1 compares the estimated fair value of the reporting unit with its carrying value, including goodwill. If the carrying value of the reporting unit exceeds the estimated fair value, an impairment exists and is measured in Step 2 as the excess of the recorded amount of goodwill over the implied fair value of goodwill resulting from the valuation of the reporting unit. Impairment testing of goodwill requires a significant amount of judgment in assessing qualitative factors and estimating the fair value of the reporting unit, if necessary. The fair value is determined using an estimated market value approach, which considers estimates of future after tax cash flows, including a terminal value based on market earnings multiples, discounted at an appropriate market rate. During the years ended March 31, 2016, 2015, and 2014, management has concluded that it is not more likely than not that the Company’s reporting units' fair value is less than its carrying amount and no further impairment testing had been considered necessary. Indefinite-lived intangible assets are reviewed for impairment in accordance with ASU 2012‑02, Testing Indefinite‑lived Intangible Assets for Impairment, which provides management the option to perform a qualitative assessment. If it is more likely than not that the asset is impaired, the amount that the carrying value exceeds the fair value is recorded as an impairment expense. During the years ended March 31, 2016, 2015, and 2014, management has concluded that it is not more likely than not that the fair values were less than the carrying values. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long‑lived asset or asset group (inclusive of other long‑lived assets) be tested for possible impairment, management first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long‑lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third‑party independent appraisals, as considered necessary. During the years ended March 31, 2016, 2015, and 2014, no events or changes in circumstances were identified that indicated that the carrying amount of the finite‑lived intangible assets were not recoverable.
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with ASC Topic 820, Fair Value Measurement:
In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014‑09, Revenue from Contracts with Customers, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity should also disclose sufficient quantitative and qualitative information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, Deferral of Effective Date which deferred the effective date of the new standard to annual and interim periods within that reporting period beginning after December 15, 2017 (year ended March 31, 2019 for the Company). The new standard is to be applied using either the retrospective or cumulative‑effective transition method. The Company expects to implement the provisions of ASU No. 2014‑09 as of April 1, 2018. The Company is currently evaluating the impact of the new standard on its current policies for revenue recognition. In June 2014, the FASB issued ASU No. 2014‑12, Accounting for Share‑ Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU No. 2014‑12 will be effective for interim and annual reporting periods beginning after December 15, 2015 (year ended March 31, 2017 for the Company). Early application is permitted. The Company did not adopt early and is currently evaluating the impact of the adoption of ASU No. 2014‑12 but does not anticipate that such adoption would have a material impact its operating results and financial position. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) — Amendments to the Consolidation Analysis, which eliminates the deferral of the requirements of ASU No. 2009-17, Consolidations (Topic 810) — Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities for certain interests in investment funds and provides a scope exception from Topic 810 for certain investments in money market funds. The ASU also makes several modifications to the consolidation guidance for variable interest entities ("VIEs") and general partners’ investments in limited partnerships, as well as modifications to the evaluation of whether limited partnerships are VIEs or voting interest entities. ASU No. 2015-02 is effective for interim and annual reporting periods beginning after December 31, 2015 (year ended March 31, 2017 for the Company). The Company did not adopt early and is currently evaluating the impact of the adoption of ASU No. 2015‑02 but does not anticipate that such adoption would have a material impact on its operating results and financial position.
Certain prior year amounts have been reclassified to conform with current year presentation. |
RELATED‑PARTY TRANSACTIONS |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED‑PARTY TRANSACTIONS | RELATED‑PARTY TRANSACTIONS The Company provides financial advisory services to ORIX USA and its affiliates and received fees for these services totaling approximately $504, $119 and $6,156 during the years ended March 31, 2016, 2015 and 2014, respectively. Prior to the IPO, ORIX USA performed certain management, accounting, legal, regulatory, and other administrative services for the benefit of the Company. ORIX USA charged the Company a management fee for these services. Management fee expense incurred by the Company related to these services was approximately $660, $2,471 and $2,833 for the years ended March 31, 2016, 2015 and 2014, respectively, which is included in other operating expenses in the accompanying consolidated statements of comprehensive income. In connection with the IPO, ORIX USA and the Company entered into a Transition Services Agreement, pursuant to which ORIX USA provides services for Sarbanes-Oxley compliance, internal audit, and other services for specified fees. Expenses incurred by the Company related to these services were approximately $214 for the year ended March 31, 2016 and are included in professional fees in the accompanying consolidated statements of comprehensive income. To the extent that ORIX USA and its affiliates paid for expenses of the Company, ORIX USA is reimbursed for such payments by the Company. Prior to the IPO, the receivable from affiliates generally arose from cumulative cash transferred by the Company to ORIX USA or affiliates of ORIX USA. Affiliate charges and reimbursements were generally settled through the receivable from affiliates account. The receivable from ORIX USA was due on demand and bore interest at a variable rate that was approximately 1.91% at March 31, 2015. In August 2015, prior to the IPO the receivable from ORIX USA was repaid in full; however, the receivable from an affiliate of ORIX USA remains outstanding with a balance of $20,136 and $81,072 as of March 31, 2016 and 2015, respectively. Interest income earned by the Company related to these receivables from affiliates was approximately $1,954, $4,046 and $1,636 for the years ended March 31, 2016, 2015 and 2014, respectively. In August 2015, prior to the IPO, the Company paid a dividend to its shareholders, a portion of which was paid to ORIX USA in the form of a note further described in footnotes 7 and 13. For the year ended March 31, 2016, the Company paid $254 in interest on the note. Prior to the IPO, certain employees of the Company were issued shares of Fram (note 10). When these shares were redeemed (generally at the recipient's termination of employment), these share transactions settled through the receivable from affiliates account and additional paid‑in capital of the Company as the cash portion of these transactions occurred at ORIX USA. ORIX USA had the right, but not the obligation, to purchase Fram shares (note 12a) to maintain its majority effective ownership of HL CA. Historically, ORIX USA had exercised this right. In November 2015, the Company entered into a joint venture arrangement with Leonardo & Co. NV, a European-based investment banking firm ("Leonardo") in relation to Leonardo's Italian business by means of acquisition of a minority (49 percent) interest. In conjunction with this transaction, a subsidiary of the Company loaned the joint venture 5.5 million euro which bears interest at 1.5% and matures no later than November 2025. |
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE | ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE
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PROPERTY AND EQUIPMENT |
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PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following:
Additions to property and equipment during the years ended March 31, 2016 and 2015 primarily relate to costs incurred to furnish new leased office space. Depreciation expense of approximately $4,588, $4,106 and $4,281 was recognized during the years ended March 31, 2016, 2015 and 2014, respectively. |
GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and other intangibles consist of the following.
Goodwill attributable to the Company’s business segments are as follows:
Amortization expense of approximately $2,911, $1,402 and $1,759 was recognized for the years ended March 31, 2016, 2015 and 2014, respectively. The estimated future amortization for amortizable intangible assets for each of the next five years as of March 31, 2016 are as follows:
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LOANS PAYABLE |
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Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | LOANS PAYABLE Loan payable to affiliate - In August 2015, prior to the IPO the Company paid a dividend to its shareholders, a portion of which was paid to ORIX USA in the form of a $45 million note that bears interest at a rate of LIBOR plus 165 basis points and is payable quarterly. For the year ended March 31, 2016, the Company paid $254 in interest on the note. Beginning on June 30, 2016, the Company will be required to make quarterly repayments in the amount of $7.5 million, with the remaining principal amount due on the second anniversary of the completion of the IPO. Prior to the IPO, Fram maintained certain loans payable to former shareholders consisting of unsecured notes payable which were transferred in conjunction to the IPO to the Company. Interest rates on the individual notes range from 1.80% to 2.30% and maturity dates range from 2016 to 2045. For the year ended March 31, 2016, the Company incurred $188 in interest expense on these notes. Loan payable to non-affiliate - In November 2015, the Company acquired the investment banking operations of Leonardo & Co. NV in Germany, the Netherlands, and Spain. Total consideration included an unsecured loan of $15.2 million, which bears interest at a rate of 1.50% and is payable on November 16, 2040. See note 13 for aggregated 5-year maturity table on loans payable. |
OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS | OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS The only component of other comprehensive income (loss) relates to foreign currency translation (loss) gain of $(3,275), $(2,435) and $1,271 for the years ended March 31, 2016, 2015 and 2014, respectively. Accumulated other comprehensive loss at March 31, 2016 and 2015 was comprised of the following:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The Company’s provision for income taxes was $55,863, $52,196 and $43,898 for the years ended March 31, 2016, 2015 and 2014, respectively. This represents effective tax rates of 44.5%, 39.5% and 41.7% for the years ended March 31, 2016, 2015 and 2014, respectively. The increase in the Company’s tax rate during the year ended March 31, 2016 relative to the same period in 2015 and 2014 was primarily due to the effect of certain nondeductible transaction costs related to the IPO. The provision (benefit) for income taxes on operations for the years ended March 31, 2016, 2015 and 2014 comprises the following approximate values:
The provision for income taxes on operations for the years ended March 31, 2016, 2015 and 2014 is reconciled to the income taxes computed at the statutory federal income tax rate (computed by applying the federal corporate rate of 35% to consolidated operating income before provision for income taxes) as follows:
Deferred income taxes arise principally from temporary differences between book and tax recognition of income, expenses, and losses relating to financing and other transactions. The deferred income taxes on the accompanying consolidated balance sheets at March 31, 2016, and 2015 comprise the following:
A valuation allowance is required when it is more likely than not that some portion of the deferred tax assets will not be realized. The Company has determined that it is more likely than not that all deferred tax assets will be realized. Accordingly, no valuation allowance has been recognized. As of March 31, 2016 and 2015, the Company had recorded liabilities for interest and penalties related to uncertain tax positions in the amounts of $313 and $10, net of any future tax benefit of such interest, respectively. Unrecognized tax benefits totaled $1,024 and $133 as of March 31, 2016 and 2015, respectively. If the income tax benefits from these tax positions are ultimately realized, such realization would affect the income tax provision and effective tax rate. A reconciliation of the unrecognized tax benefits for the years ended March 31, 2016 and 2015 is as follows:
In the next 12 months, certain uncertain tax positions may reverse as the related statutes expire. Prior to the IPO, the Company filed as a member of the ORIX USA consolidated federal income tax group and will do so for fiscal 2016 through the date of the IPO. As of March 31, 2016, all of the federal income tax returns filed since 2013 by ORIX USA which include the Company as a subsidiary are still subject to adjustment upon audit and ORIX USA is currently under federal income tax audit by the Internal Revenue Service for the year ended March 31, 2013. The Company also files combined and separate income tax returns in many states, and these returns remain open for adjustments to the Company’s federal income tax returns. |
EMPLOYEE BENEFIT PLANS |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS
The Company sponsors a 401(k) defined contribution savings plan for its domestic employees and defined contribution retirement plans for its international employees. The Company contributed approximately $2,060, $1,355 and $1,242 during the years ended March 31, 2016, 2015 and 2014, respectively, to these defined contribution plans.
Prior to the IPO, HL CA had no stock‑based incentive compensation plans; however, during the period it was a subsidiary of Fram, certain employees of HL CA were granted restricted shares of Fram. Compensation expense related to these shares was recorded at the HL CA level as it was related to services provided by its employees. Under its 2006 incentive plan (the "2006 Incentive Plan"), Fram granted restricted share awards to employees of the Company as a component of annual incentive pay and occasionally in conjunction with new hire employment. Under 2006 Incentive Plan, awards typically vested after three years of service from the date of grant. Prior to the IPO, the grant-date fair value of each award was determined by Fram's board of directors as discussed further below. In addition, the stock grants to employees of the Company in connection with the IPO were made under the 2006 Incentive Plan (note 1). Following the IPO, additional awards of restricted shares have been and will be made under the Company's 2016 Incentive Award Plan (the "2016 Incentive Plan"), which became effective in August 2015. Under the 2016 Incentive Plan, it is anticipated that the Company will continue to grant cash- and equity-based incentive awards to eligible service providers in order to attract, motivate and retain the talent necessary to operate the Company's business. An aggregate of 9,524 restricted shares of Class A common stock were granted under the 2016 Incentive Plan to two independent directors in August 2015 at $21.00 per share. No Class B shares were issued under the 2016 Incentive Plan during the year ended March 31, 2016. The share awards are classified as equity awards at the time of grant unless the number of shares granted is unknown. Award offers that are settleable in shares based upon a future determinable stock price are classified as a liability until the price is established and the resulting number of shares is known, at which time they are re-classified from liabilities to equity awards. Activity in equity classified share awards which relate to the 2006 Incentive Plan during the years ended March 31, 2016 and 2015 is as follows:
Activity in liability classified share awards during the years ended March 31, 2016 and 2015 is as follows:
1 1,404,566 and 292,309 shares for the years ended March 31, 2016 and 2015, respectively. Compensation expense for the Company associated with these awards totaled $35,057, $23,200 and $22,479 for the years ended March 31, 2016, 2015 and 2014, respectively. At March 31, 2016, there was $88,949 of total unrecognized compensation cost related to unvested share awards granted under the 2006 Incentive Plan and the 2016 Incentive Plan. That cost is expected to be recognized over a weighted average period of 1.70 years. Prior to the IPO, the Fram board of directors determined fair value of the shares using input from a third party, which used a combination of historical and forecasted results and market data. The methods used to estimate the fair value of our shares included the market approach and the income approach. Under the market approach, fair value was determined by multiplying revenues of comparable public companies by the relevant valuation multiple, adjusted for any differences with the referenced comparable. Under the income approach, fair value was determined by converting future cash flows to a single present amount (discounted) using current expectations about those future amounts. The significant assumptions used to develop the fair value estimates included the discount rate (11.5% for 2015 and 2014) used under the income approach and revenue multiples (0.9x - 4.4x for 2015 and 0.9x - 3.3x for 2014) used under the market approach. |
FAIR VALUE OF FINANCIAL INSTRUMENTS |
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Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The fair values of the financial instruments represent the amounts that would be received to sell assets or that would be paid to transfer liabilities in an orderly transaction between market participants as of a specified date. Fair value measurements maximize the use of observable inputs; however, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances, including expected cash flows and appropriately risk‑adjusted discount rates, as well as available observable and unobservable inputs. The carrying value of cash and cash equivalents, accounts receivable, unbilled work-in-process, receivable from affiliates, accounts payable, accrued expenses, and deferred income approximates fair value due to the short maturity of these instruments. The carrying value of the loan payable to affiliate, loans payable to former shareholders and the loan to a non-affiliate approximates fair value due to the variable interest rate borne by those instruments. |
STOCKHOLDERS' EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY
As described in note 10, the Company’s former parent, Fram, granted compensatory restricted shares to certain employees of the Company under the 2006 Incentive Plan. As stated in note 3, prior to the IPO, ORIX USA had the right, but not the obligation, to purchase shares to maintain its majority effective ownership of HL CA and has purchased $0, $12,856 and $11,623 for the years ended March 31, 2016, 2015 and 2014, respectively. As described in note 1, all Fram shares were converted to shares of Class B common stock in connection with the corporate reorganization that preceded the IPO.
In conjunction with the Company's IPO, 12,075,000 Class A shares were sold to the public by existing shareholders and 9,524 Class A shares were issued to non-employee directors. Each share of Class A common stock is entitled to one vote per share.
Each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. As of March 31, 2016, there were 31,608,972 Class B shares held by the HL Voting Trust and 21,610,331 Class B shares held by ORIX USA.
Approximately $8,657 and $888 of dividends previously declared related to unvested shares at March 31, 2016 and 2015, respectively, were outstanding.
Net income (loss) attributable to noncontrolling interests primarily represents the income (loss) associated with persons other than Houlihan Lokey that are its co‑investors in a consolidated subsidiary that holds an equity method investment in an unconsolidated entity. As described in note 1, the assets associated with certain noncontrolling interests were distributed to shareholders in conjunction with a pre-IPO dividend in August 2015.
Employees of the Company periodically issued notes receivable to the Company documenting loans made by the Company to such employees for the purchase of restricted shares of Fram. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company has been named in various legal actions arising in the normal course of business. In the opinion of the Company, in consultation with legal counsel, the final resolutions of these matters are not expected to have a material adverse effect on the Company’s financial condition. In August 2015, the Company entered into a revolving line of credit with Bank of America, N.A., which allows for borrowings of up to $75.0 million and matures in August 2017. Borrowings under this facility bear interest at LIBOR plus 1.00%. As of and during the year ended March 31, 2016, the Company had no borrowings under the line of credit. Our obligation under the loan payable to affiliate is subordinated to our obligations under the revolving credit facility with Bank of America, N.A. The scheduled aggregate repayments of the loan payable to affiliate, the loans payable to former shareholders, and the loan payable to non-affiliate are as follows:
The Company also provides routine indemnifications relating to certain real estate (office) lease agreements under which it may be required to indemnify property owners for claims and other liabilities arising from the Company’s use of the applicable premises. In addition, the Company guarantees the performance of its subsidiaries under certain office lease agreements. The terms of these obligations vary, and because a maximum obligation is not explicitly stated, the Company has determined that it is not possible to make an estimate of the maximum amount that it could be obligated to pay under such contracts. Based on historical experience and evaluation of specific indemnities, management believes that judgments, if any, against the Company related to such matters are not likely to have a material effect on the consolidated financial statements. Accordingly, the Company has not recorded any liability for these obligations as of March 31, 2016 or 2015. In addition, an acquisition made in December 2012 included contingent consideration with carrying value of $1,418 and $2,789 as of March 31, 2016 and 2015, respectively, which is included in other liabilities in the accompanying consolidated balance sheets. An acquisition made in January 2015 included contingent consideration with a carrying value of $2,466 and $2,290, respectively, as of March 31, 2016 and 2015, and non‑contingent consideration with a carrying value of $3,247 and $3,289, respectively, as of March 31, 2016 and 2015, which are included in other liabilities in the accompanying consolidated balance sheets. Straight‑line rent expense under noncancelable operating lease arrangements and the related operating expenses were approximately $25,645, $23,486 and $21,422 for the years ended March 31, 2016, 2015 and 2014, respectively. The approximate future minimum annual noncancelable rental commitments required under these agreements with initial terms in excess of one year are as follows:
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SEGMENT AND GEOGRAPHICAL INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHICAL INFORMATION | SEGMENT AND GEOGRAPHICAL INFORMATION The Company’s reportable segments are described in note 1 and each are individually managed and provide separate services which require specialized expertise for the provision of those services. Revenues by segment represents fees earned on the various services offered within each segment. Segment profit represents each segment’s profit, which consists of segment revenues, less (1) direct expenses including compensation, employee recruitment, travel, meals and entertainment, professional fees, and bad debt and (2) expenses allocated by headcount such as communications, rent, depreciation and amortization, and office expense. The corporate expense category includes costs not allocated to individual segments, including charges related to incentive compensation and share‑based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis including accounting, finance and taxation, human resources, human capital management, marketing, information technology, legal, and office services. The following tables present information about revenues, profit and assets by segment and geography.
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SUBSEQUENT EVENTS |
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Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On May 18, 2016, the Board of Directors of the Company declared a quarterly dividend of $0.17 per share for holders of record as of June 3, 2016 and payable on June 15, 2016. The Company has evaluated subsequent events from the consolidated balance sheet date through the date at which the consolidated financial statements were available to be issued. As a result of that evaluation, we have determined that there were no additional subsequent events requiring disclosure in the financial statements. |
Consolidated Quarterly Results of Operations (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Quarterly Results of Operations (Unaudited) | Consolidated Quarterly Results of Operations (Unaudited)
_______________________________________________________________________________ (1) In addition to the $0.30 per share paid to holders of HLI shares during the year ended March 31, 2016, prior to the consummation of the IPO, the Company distributed to the existing owners a dividend of $270.0 million, consisting of (i) a short‑term note in the aggregate amount of $197.2 million, which was repaid immediately after the consummation of the IPO, and was allocated $94.5 million to ORIX USA and $102.7 million to the HL Holders, (ii) a note to ORIX USA in the amount of $45 million (see footnote 4), and (iii) certain of our non‑operating assets to certain of the HL Holders (consisting of non‑marketable minority equity interests in four separate businesses that range in carrying value from $2.5 million to $11.0 million. |
Schedule II - Valuation and Qualifying Accounts |
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Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II—Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts March 31, 2016, 2015 and 2014 ($ in thousands) Allowance for Uncollectible Accounts
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") and pursuant to the rules and regulations of the United States Securities and Exchange Commission (the "SEC") and include all information and footnotes required for financial statement presentation, and include all disclosures required under generally accepted accounting principles GAAP in the United States for annual financial statements. |
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. |
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Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Items subject to such estimates and assumptions include the allowance for doubtful accounts; the valuation of deferred tax assets, goodwill, accrued expenses, and share based compensation; the allocation of goodwill and other assets across the reporting units (segments); and reserves for income tax uncertainties and other contingencies. |
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Recognition of Revenue | Recognition of Revenue Revenues consist primarily of professional service fees. The Company and its clients enter into agreements that outline the general terms and conditions of the specific engagements. The Company performs professional services in accordance with the engagement terms on both a fixed and contingent fee basis. Revenues are recognized when earned and realizable. Revenues under fixed fee contracts are recognized based on management’s estimates of the relative proportion of services provided through the financial reporting date to the total services required to be performed. The recognition of revenues under contingent fee contracts depends on whether the revenues relate to monthly retainers or success fees. Monthly retainers are generally recognized on a monthly basis, except in situations where there is uncertainty as to the timing of collection of the amount due. Success fees are recognized only upon substantial completion of the contingencies stipulated by the engagement agreement. In some cases, approval of the Company’s fees is required from the courts or other regulatory authority; in these circumstances, the recognition of revenue is often deferred until approval is granted; however, if the fee that is going to be collected from the client is fixed and determinable, and the collectability of the fee is reasonably assured, there are instances when revenue recognition prior to such approval is appropriate. Engagements related to Financial Advisory Services are most often structured as fixed fee contracts, whereas engagements related to Corporate Finance and Financial Restructuring are most often structured as contingent fee contracts. Further, Financial Restructuring contracts are commonly subject to the applicable court’s approval. In those instances when the revenue recognized on a specific engagement exceeds both the amounts billed and the amounts collected, unbilled work-in-process is recorded. Billed receivables are recorded as accounts receivable in the accompanying consolidated balance sheets. Deferred income results when cash is received in advance of dates when revenues are recognized. Taxes, including value added taxes, collected from customers and remitted to governmental authorities are accounted for on a net basis, and therefore, are excluded from revenue in the consolidated statements of comprehensive income. |
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Translation of Foreign Currency Transactions | Translation of Foreign Currency Transactions The reporting currency for the consolidated financial statements of the Company is the U.S. dollar. The assets and liabilities of subsidiaries whose functional currency is other than the U.S. dollar are included in the consolidation by translating the assets and liabilities at the reporting period‑end exchange rates; however, revenues and expenses are translated using the applicable exchange rates determined on a monthly basis throughout the year. Resulting translation adjustments are reported as a separate component of accumulated other comprehensive loss net of applicable taxes. |
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Property and Equipment | Property and Equipment Property and equipment are stated at cost. Repair and maintenance charges are expensed as incurred and costs of renewals or improvements are capitalized at cost. Depreciation on furniture and office equipment is provided on a straight‑line basis over the estimated useful lives of the respective assets. Leasehold improvements are depreciated over the lesser of the lease term or estimated useful life. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash held at banks and highly liquid investments with original maturities of three months or less. At March 31, 2016 and 2015, the Company had cash balances with banks in excess of insured limits. The Company has not experienced any losses in its cash accounts and believes it is not exposed to any significant credit risk with respect to cash and cash equivalents. Although not classified as cash and cash equivalents, included in the Company’s receivable from affiliates (note 3), are amounts due on demand, which generally arise from the transfer of available cash from HL, Inc. to ORIX USA and affiliates of ORIX USA. The amount due from ORIX USA was repaid in August 2015. |
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Accounts Receivable | Accounts Receivable The allowance for doubtful accounts on receivables reflects management’s best estimate of probable inherent losses determined principally on the basis of historical experience and review of uncollected revenues and is recorded through provision for bad debts in the accompanying consolidated statements of comprehensive income. Amounts deemed to be uncollectible are written off against the allowance for doubtful accounts. |
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Investment in Unconsolidated Entities | Investment in Unconsolidated Entities The Company uses the equity method of accounting for investments when it has more than a minor ownership interest or more than minor influence over operations, but does not have a controlling interest and is not the primary beneficiary. Under the equity method, the Company’s share of the investment earnings or losses are recognized in income as earned, and capital contributions are recorded as investments in unconsolidated entities as they occur. |
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Income Taxes | Income Taxes Prior to the IPO, ORIX USA and its subsidiaries, including the Company, filed consolidated federal income tax returns and separate returns in state and local jurisdictions and will do so for fiscal 2016 through the date of the IPO. The Company reported income tax expense as if it filed separate returns in all jurisdictions. Following the IPO, the Company will file separate federal income tax returns, as well as continue to file separate returns in state and local jurisdictions, and the Company will report income tax expense on this basis. We account for income taxes in accordance with ASC 740, “Income Taxes,” which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The measurement of the deferred items is based on enacted tax laws and applicable tax rates. A valuation allowance related to a deferred tax asset is recorded if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company utilized a comprehensive model to recognize, measure, present, and disclose in its financial statements any uncertain tax positions that have been taken or are expected to be taken on a tax return. The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest expense and penalties related to income taxes are included in the provision for income taxes in the accompanying consolidated statements of comprehensive income. |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents an acquired company’s acquisition cost over the fair value of acquired net tangible and intangible assets. Goodwill is the net asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets identified and accounted for include tradenames and marks, backlog, developed technologies, and customer relationships. Those intangible assets with finite lives, including backlog and customer relationships, are amortized over their estimated useful lives. When HL CA was acquired by Fram in January 2006, approximately $392,600 of goodwill and $192,210 of indefinite-lived intangible assets were generated and recognized. In accordance with ASC Topic 805, Business Combinations, since HL CA was wholly owned by Fram, this goodwill and all other purchase accounting‑related adjustments were pushed down to the Company’s reporting level. Through both foreign and domestic acquisitions made directly by HL CA and the Company since 2006, additional goodwill of approximately $126,079, inclusive of foreign currency translations has been recognized. Goodwill is reviewed for impairment in accordance with Accounting Standards Update (ASU) No. 2011‑08, Testing Goodwill for Impairment, which permits management to make a qualitative assessment of whether it is more likely than not that one of its reporting unit’s fair value is less than its carrying amount before applying the two‑step goodwill impairment test. If management concludes that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then management would not be required to perform the two‑step impairment test for that reporting unit. If the assessment indicates that it is more likely than not that the reporting unit’s fair value is less than its carrying value, management must test further for impairment utilizing a two‑step process. Step 1 compares the estimated fair value of the reporting unit with its carrying value, including goodwill. If the carrying value of the reporting unit exceeds the estimated fair value, an impairment exists and is measured in Step 2 as the excess of the recorded amount of goodwill over the implied fair value of goodwill resulting from the valuation of the reporting unit. Impairment testing of goodwill requires a significant amount of judgment in assessing qualitative factors and estimating the fair value of the reporting unit, if necessary. The fair value is determined using an estimated market value approach, which considers estimates of future after tax cash flows, including a terminal value based on market earnings multiples, discounted at an appropriate market rate. During the years ended March 31, 2016, 2015, and 2014, management has concluded that it is not more likely than not that the Company’s reporting units' fair value is less than its carrying amount and no further impairment testing had been considered necessary. Indefinite-lived intangible assets are reviewed for impairment in accordance with ASU 2012‑02, Testing Indefinite‑lived Intangible Assets for Impairment, which provides management the option to perform a qualitative assessment. If it is more likely than not that the asset is impaired, the amount that the carrying value exceeds the fair value is recorded as an impairment expense. During the years ended March 31, 2016, 2015, and 2014, management has concluded that it is not more likely than not that the fair values were less than the carrying values. Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long‑lived asset or asset group (inclusive of other long‑lived assets) be tested for possible impairment, management first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long‑lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third‑party independent appraisals, as considered necessary. During the years ended March 31, 2016, 2015, and 2014, no events or changes in circumstances were identified that indicated that the carrying amount of the finite‑lived intangible assets were not recoverable. |
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Fair Value Measurements | Fair Value Measurements The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with ASC Topic 820, Fair Value Measurement:
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014‑09, Revenue from Contracts with Customers, which requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity should also disclose sufficient quantitative and qualitative information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, Deferral of Effective Date which deferred the effective date of the new standard to annual and interim periods within that reporting period beginning after December 15, 2017 (year ended March 31, 2019 for the Company). The new standard is to be applied using either the retrospective or cumulative‑effective transition method. The Company expects to implement the provisions of ASU No. 2014‑09 as of April 1, 2018. The Company is currently evaluating the impact of the new standard on its current policies for revenue recognition. In June 2014, the FASB issued ASU No. 2014‑12, Accounting for Share‑ Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU No. 2014‑12 will be effective for interim and annual reporting periods beginning after December 15, 2015 (year ended March 31, 2017 for the Company). Early application is permitted. The Company did not adopt early and is currently evaluating the impact of the adoption of ASU No. 2014‑12 but does not anticipate that such adoption would have a material impact its operating results and financial position. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) — Amendments to the Consolidation Analysis, which eliminates the deferral of the requirements of ASU No. 2009-17, Consolidations (Topic 810) — Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities for certain interests in investment funds and provides a scope exception from Topic 810 for certain investments in money market funds. The ASU also makes several modifications to the consolidation guidance for variable interest entities ("VIEs") and general partners’ investments in limited partnerships, as well as modifications to the evaluation of whether limited partnerships are VIEs or voting interest entities. ASU No. 2015-02 is effective for interim and annual reporting periods beginning after December 31, 2015 (year ended March 31, 2017 for the Company). The Company did not adopt early and is currently evaluating the impact of the adoption of ASU No. 2015‑02 but does not anticipate that such adoption would have a material impact on its operating results and financial position. |
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Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. |
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE (Tables) |
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Uncollectible Accounts Receivable |
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PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment consist of the following:
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill | Goodwill and other intangibles consist of the following.
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Schedule of Goodwill by Business Segment | Goodwill attributable to the Company’s business segments are as follows:
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Finite-lived Intangible Assets Amortization Expense | The estimated future amortization for amortizable intangible assets for each of the next five years as of March 31, 2016 are as follows:
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OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss at March 31, 2016 and 2015 was comprised of the following:
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INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision (Benefit) for Income Taxes on Operations | The provision (benefit) for income taxes on operations for the years ended March 31, 2016, 2015 and 2014 comprises the following approximate values:
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Effective Income Tax Rate Reconciliation | The provision for income taxes on operations for the years ended March 31, 2016, 2015 and 2014 is reconciled to the income taxes computed at the statutory federal income tax rate (computed by applying the federal corporate rate of 35% to consolidated operating income before provision for income taxes) as follows:
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Schedule of Deferred Tax Assets and Liabilities | The deferred income taxes on the accompanying consolidated balance sheets at March 31, 2016, and 2015 comprise the following:
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Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the unrecognized tax benefits for the years ended March 31, 2016 and 2015 is as follows:
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EMPLOYEE BENEFIT PLANS (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Equity Classified Share Awards | Activity in equity classified share awards which relate to the 2006 Incentive Plan during the years ended March 31, 2016 and 2015 is as follows:
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Activity in Liability Classified Share Awards | Activity in liability classified share awards during the years ended March 31, 2016 and 2015 is as follows:
1 1,404,566 and 292,309 shares for the years ended March 31, 2016 and 2015, respectively. |
COMMITMENTS AND CONTINGENCIES (Tables) |
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Scheduled Repayments of Loan | The scheduled aggregate repayments of the loan payable to affiliate, the loans payable to former shareholders, and the loan payable to non-affiliate are as follows:
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Schedule of Future Minimum Annual Noncancelable Rental Commitments | The approximate future minimum annual noncancelable rental commitments required under these agreements with initial terms in excess of one year are as follows:
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SEGMENT AND GEOGRAPHICAL INFORMATION (Tables) |
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Schedule of Revenue, Profit and Assets by Segment |
The following tables present information about revenues, profit and assets by segment and geography.
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Revenue by Geographic Areas |
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Consolidated Quarterly Results of Operations (Unaudited) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Quarterly Results of Operations (Unaudited) |
_______________________________________________________________________________ (1) In addition to the $0.30 per share paid to holders of HLI shares during the year ended March 31, 2016, prior to the consummation of the IPO, the Company distributed to the existing owners a dividend of $270.0 million, consisting of (i) a short‑term note in the aggregate amount of $197.2 million, which was repaid immediately after the consummation of the IPO, and was allocated $94.5 million to ORIX USA and $102.7 million to the HL Holders, (ii) a note to ORIX USA in the amount of $45 million (see footnote 4), and (iii) certain of our non‑operating assets to certain of the HL Holders (consisting of non‑marketable minority equity interests in four separate businesses that range in carrying value from $2.5 million to $11.0 million. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands |
12 Months Ended | 122 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
Mar. 31, 2016 |
Jan. 31, 2006 |
|
Accounting Policies [Abstract] | |||||
Reimbursements received | $ 28,183 | $ 27,173 | $ 23,133 | ||
Intangible Assets, Net | |||||
Goodwill | $ 518,679 | $ 455,550 | $ 518,679 | $ 392,600 | |
Indefinite-lived intangible assets (excluding goodwill) | $ 192,210 | ||||
Goodwill, acquired during period | $ 126,079 | ||||
Heavy Highway Construction Firm | Phoenix, Arizona | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership percentage | 20.00% |
ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Allowance for Uncollectible Accounts Receivable | |||
Balance-beginning | $ 4,625 | $ 3,862 | |
Provision for bad debt | 2,538 | 2,027 | $ 2,465 |
Recovery of uncollectible accounts | (2,897) | (1,264) | |
Balance-ending | $ 4,266 | $ 4,625 | $ 3,862 |
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 54,171 | $ 44,844 | |
Less: accumulated depreciation | (32,470) | (28,355) | |
Total net book value | 21,701 | 16,489 | |
Depreciation | $ 4,588 | 4,106 | $ 4,281 |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives | 5 years | ||
Total cost | $ 5,768 | 4,977 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives | 5 years | ||
Total cost | $ 19,158 | 13,819 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives | 10 years | ||
Total cost | $ 16,987 | 16,765 | |
Computers and software | |||
Property, Plant and Equipment [Line Items] | |||
Useful Lives | 3 years | ||
Total cost | $ 11,215 | 8,292 | |
Other | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 1,043 | $ 991 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Mar. 31, 2015 |
Jan. 31, 2006 |
---|---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 518,679 | $ 455,550 | $ 392,600 |
Tradename-Houlihan Lokey | 192,210 | 192,210 | |
Other intangible assets | 14,939 | 10,527 | |
Total cost | 725,828 | 658,287 | |
Less: accumulated amortization | (8,460) | (5,481) | |
Total net book value (before taxes) | 717,368 | 652,806 | |
Deferred tax liability | (77,184) | (77,184) | |
Total net book value | $ 640,184 | $ 575,622 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill by Business Segments (Details) $ in Thousands |
12 Months Ended |
---|---|
Mar. 31, 2016
USD ($)
business
| |
Goodwill | |
April 1, 2015 | $ 455,550 |
Changes | 63,129 |
March 31, 2016 | $ 518,679 |
Number of acquired financial advisory firms | business | 3 |
Corporate Finance | |
Goodwill | |
April 1, 2015 | $ 206,643 |
Changes | 63,391 |
March 31, 2016 | 270,034 |
Financial Restructuring | |
Goodwill | |
April 1, 2015 | 163,823 |
Changes | (262) |
March 31, 2016 | 163,561 |
Foreign currency translation adjustments | (262) |
Financial Advisory Services | |
Goodwill | |
April 1, 2015 | 85,084 |
Changes | 0 |
March 31, 2016 | $ 85,084 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Finite-Lived Intangible Assets, Additional Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 2,911 | $ 1,402 | $ 1,759 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Finite-Lived Intangible Assets, Amortization Expense, Fiscal Year Maturity (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
---|---|
Year Ended March 31, | |
2017 | $ 3,148 |
2018 | 1,405 |
2019 | 573 |
2020 | 569 |
2021 | $ 208 |
LOANS PAYABLE (Details) - USD ($) |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2015 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
Nov. 30, 2015 |
|
Debt Instrument [Line Items] | |||||
Related party interest expense | $ 922,000 | $ 253,000 | $ 0 | ||
Loans Payable | 1.50% Loans Payable | |||||
Debt Instrument [Line Items] | |||||
Loans payable, face amount | $ 15,200,000.0 | ||||
Stated interest rate | 1.50% | ||||
Loans Payable | ORIX USA Corporation | 1.65% Loans Payable | |||||
Debt Instrument [Line Items] | |||||
Loans payable, face amount | $ 45,000,000 | ||||
Related party interest expense | 254,000 | ||||
Loans payable, required quarterly repayments | $ 7,500,000 | ||||
Loans Payable | ORIX USA Corporation | 1.65% Loans Payable | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.65% | ||||
Loans Payable | Former Shareholders | |||||
Debt Instrument [Line Items] | |||||
Related party interest expense | $ 188,000 | ||||
Loans Payable | Former Shareholders | Minimum | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 1.80% | ||||
Loans Payable | Former Shareholders | Maximum | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 2.30% |
OTHER COMPREHENSIVE INCOME (LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Equity [Abstract] | |||
Foreign currency translation adjustments | $ (3,275) | $ (2,435) | $ 1,271 |
Accumulated Other Comprehensive Loss | |||
Beginning balance | 824,506 | 713,689 | 630,878 |
Ending balance | 651,160 | 824,506 | 713,689 |
Accumulated other comprehensive loss | |||
Equity [Abstract] | |||
Foreign currency translation adjustments | (3,275) | (2,435) | 1,271 |
Accumulated Other Comprehensive Loss | |||
Beginning balance | (11,338) | (8,903) | (10,174) |
Ending balance | (14,613) | (11,338) | (8,903) |
Foreign currency translation gain (loss) | |||
Accumulated Other Comprehensive Loss | |||
Foreign currency translation gain (loss) | $ (3,275) | $ (2,435) | $ 1,271 |
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Provision for income taxes | $ 55,863 | $ 52,196 | $ 43,898 |
Effective tax rate | 44.50% | 39.50% | 41.70% |
Federal corporate rate | 35.00% | 35.00% | 35.00% |
Recorded liabilities for interest and penalties related to uncertain tax positions | $ 313 | $ 10 | |
Unrecognized tax benefits | $ 1,024 | $ 133 | $ 533 |
INCOME TAXES - Provision (Benefit) for Income Taxes on Operations (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Current: | |||
Federal | $ 43,252 | $ 42,297 | $ 39,040 |
State | 10,895 | 12,664 | 11,030 |
Foreign | 5,881 | 4,593 | 1,004 |
Current income tax expense (benefit) | 60,028 | 59,554 | 51,074 |
Deferred: | |||
Federal | (3,867) | (6,798) | (6,475) |
State | (93) | (751) | (1,701) |
Foreign | (205) | 191 | 1,000 |
Deferred income tax expense (benefit) | (4,165) | (7,358) | (7,176) |
Total | $ 55,863 | $ 52,196 | $ 43,898 |
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Effective Income Tax Rate Reconciliation, Amount | |||
Federal income tax provision computed at statutory rate | $ 43,963 | $ 46,226 | $ 36,826 |
State and local taxes, net of federal tax effect | 7,108 | 6,844 | 5,081 |
Foreign taxes | (453) | (1,638) | (730) |
Nondeductible expenses | 1,475 | 1,285 | 1,064 |
Nondeductible IPO-related expenses | 3,930 | 0 | 0 |
Other | (160) | (521) | 1,657 |
Total | $ 55,863 | $ 52,196 | $ 43,898 |
Effective Income Tax Rate Reconciliation, Percent | |||
Federal income tax provision computed at statutory rate | 35.00% | 35.00% | 35.00% |
State and local taxes, net of federal tax effect | 5.70% | 5.20% | 4.80% |
Foreign taxes | (0.40%) | (1.30%) | (0.70%) |
Nondeductible expenses | 1.20% | 1.00% | 1.00% |
Nondeductible IPO-related expenses | 3.10% | 0.00% | 0.00% |
Other | (0.10%) | (0.40%) | 1.60% |
Total | 44.50% | 39.50% | 41.70% |
INCOME TAXES - Deferred Income Taxes (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Mar. 31, 2015 |
---|---|---|
Deferred tax assets: | ||
Deferred compensation expense/accrued bonus | $ 43,348 | $ 41,968 |
Allowance for doubtful accounts | 3,195 | 2,294 |
Other, net | 1,399 | 3,580 |
Total deferred tax assets | 47,942 | 47,842 |
Deferred tax liabilities: | ||
Intangibles | (77,184) | (77,184) |
Accounts receivable and work in process | (8,046) | (12,111) |
Total deferred tax liabilities | (85,230) | (89,295) |
Net deferred tax liabilities | $ (37,288) | $ (41,453) |
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Reconciliation of Unrecognized Tax Benefits | ||
Unrecognized tax position at the beginning of the year | $ 133 | $ 533 |
Increases (decreases) related to prior year tax positions | 891 | (400) |
Unrecognized tax position at the end of the year | $ 1,024 | $ 133 |
EMPLOYEE BENEFIT PLANS - Defined Contribution Plans (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Defined contribution plan, amount of contributions | $ 2,060 | $ 1,355 | $ 1,242 |
EMPLOYEE BENEFIT PLANS - Share-Based Incentive Plans Narrative (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2015
director
$ / shares
shares
|
Mar. 31, 2016
USD ($)
$ / shares
shares
|
Mar. 31, 2015
USD ($)
$ / shares
shares
|
Mar. 31, 2014
USD ($)
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense | $ | $ 35,057 | $ 23,200 | $ 22,479 | |
Unrecognized compensation cost | $ | $ 88,949 | |||
Unrecognized compensation cost, period for recognition | 1 year 8 months 12 days | |||
Restricted Stock | Income Approach | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Discount rate | 11.50% | 11.50% | ||
Restricted Stock | Market Approach | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Revenue multiple | 0.9 | 0.9 | ||
Restricted Stock | Market Approach | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Revenue multiple | 4.4 | 3.3 | ||
2006 Incentive Plan | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate shares granted | shares | 4,388,333 | 1,855,815 | ||
Granted (in usd per share) | $ / shares | $ 21.00 | $ 13.24 | ||
Director | 2006 Incentive Plan | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period, restricted stock | 3 years | |||
Director | 2016 Incentive Plan | Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate shares granted | shares | 9,524 | |||
Aggregate shares granted, number of recipients | director | 2 | |||
Granted (in usd per share) | $ / shares | $ 21.00 |
EMPLOYEE BENEFIT PLANS - Activity in Equity Classified Share Awards (Details) - 2006 Incentive Plan - Restricted Stock - $ / shares |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Shares | ||
Beginning balance (in shares) | 2,983,999 | 2,965,475 |
Granted (in shares) | 4,388,333 | 1,855,815 |
Vested (in shares) | (1,395,192) | (1,736,909) |
Forfeited (in shares) | (73,972) | (100,382) |
Ending balance (in shares) | 5,903,168 | 2,983,999 |
Weighted average grant date fair value | ||
Beginning balance (in usd per share) | $ 12.85 | $ 12.54 |
Granted (in usd per share) | 21.00 | 13.24 |
Vested (in usd per share) | 12.99 | 12.74 |
Forfeited (in usd per share) | 18.59 | 12.70 |
Ending balance (in usd per share) | $ 18.80 | $ 12.85 |
EMPLOYEE BENEFIT PLANS - Activity in Liability Classified Shares (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Awards settleable in shares | ||
Beginning balance | $ 14,984 | $ 11,171 |
Offer to grant | 35,886 | 8,487 |
Share price determined-converted to cash payments | (6,244) | |
Share price determined-transferred to equity grants | (29,519) | (3,869) |
Forfeited | (1,125) | (805) |
Ending balance | $ 13,982 | $ 14,984 |
Share price determined-transferred to equity grants (in shares) | 1,404,566 | 292,309 |
STOCKHOLDERS' EQUITY (Details) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016
USD ($)
shares
|
Mar. 31, 2015
USD ($)
shares
|
Mar. 31, 2014
USD ($)
|
Aug. 18, 2015
vote
|
|
Class of Stock [Line Items] | ||||
Shares issued of common stock | 587,866 | |||
Conversion ratio of common stock | 1 | |||
Number of common shares outstanding | 587,866 | |||
Dividends outstanding | $ | $ 8,657 | $ 888 | ||
Class A | ||||
Class of Stock [Line Items] | ||||
Shares issued of common stock | 12,084,524 | |||
Common stock voting rights, number of votes per share | vote | 1 | |||
Number of common shares outstanding | 12,084,524 | |||
Class B | ||||
Class of Stock [Line Items] | ||||
Shares issued of common stock | 53,219,303 | |||
Common stock voting rights, number of votes per share | vote | 10 | |||
Number of common shares outstanding | 53,219,303 | |||
ORIX USA Corporation | ||||
Class of Stock [Line Items] | ||||
Proceeds from purchase of shares | $ | $ 0 | $ 12,856 | $ 11,623 | |
ORIX USA Corporation | Class B | ||||
Class of Stock [Line Items] | ||||
Number of common shares outstanding | 21,610,331 | |||
Investor | Class A | ||||
Class of Stock [Line Items] | ||||
Shares issued of common stock | 12,075,000 | |||
Director | Class A | ||||
Class of Stock [Line Items] | ||||
Shares issued of common stock | 9,524 | |||
HL Holders | Class B | ||||
Class of Stock [Line Items] | ||||
Number of common shares outstanding | 31,608,972 |
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2015 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Operating Leased Assets [Line Items] | ||||
Rent expense | $ 26,459,000 | $ 24,253,000 | $ 22,386,000 | |
Noncancelable Operating Lease Arrangements | ||||
Operating Leased Assets [Line Items] | ||||
Rent expense | 25,645,000 | 23,486,000 | $ 21,422,000 | |
Revolving Credit Facility | Bank of America | ||||
Debt Instrument [Line Items] | ||||
Line of credit, maximum borrowing capacity | $ 75,000,000.0 | |||
Outstanding line of credit | 0 | |||
Revolving Credit Facility | Bank of America | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Line of credit, basis spread on variable rate | 1.00% | |||
December 2012 Acquisition | Other Liabilities | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | 1,418,000 | 2,789,000 | ||
January 2015 Acquisition | Other Liabilities | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration | 2,466,000 | 2,290,000 | ||
Non-contingent consideration | $ 3,247,000 | $ 3,289,000 |
COMMITMENTS AND CONTINGENCIES - Schedule of Loan Payments (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
---|---|
Year ended March 31: | |
2017 | $ 34,473 |
2018 | 19,093 |
2019 | 2,238 |
2020 | 1,613 |
2021 | 1,233 |
2022 and thereafter | 17,970 |
Total | $ 76,620 |
COMMITMENTS AND CONTINGENCIES - Future Minimum Annual Noncancelable Rental Commitments (Details) $ in Thousands |
Mar. 31, 2016
USD ($)
|
---|---|
Year ended March 31: | |
2017 | $ 20,424 |
2018 | 20,567 |
2019 | 19,779 |
2020 | 18,542 |
2021 | 18,179 |
2022 and thereafter | 48,920 |
Total | $ 146,411 |
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue and Assets by Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Revenues | $ 183,596 | $ 205,523 | $ 158,380 | $ 146,266 | $ 186,468 | $ 196,608 | $ 156,294 | $ 141,502 | $ 693,765 | [1] | $ 680,872 | [1] | $ 592,450 | [1] | ||||
Corporate expenses | (142,099) | $ (161,837) | $ (140,943) | $ (122,486) | (145,863) | $ (159,995) | $ (128,907) | $ (117,453) | (567,365) | (552,218) | (489,602) | |||||||
Other (expense) income, net | [2] | (770) | 3,481 | 2,478 | ||||||||||||||
Income before provision for income taxes | 125,630 | 132,135 | 105,326 | |||||||||||||||
Assets | 1,070,884 | 1,229,848 | 1,070,884 | 1,229,848 | 1,061,226 | |||||||||||||
Operating Segments | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Revenues | 693,765 | 680,872 | 592,151 | |||||||||||||||
Segment profit | 188,710 | 177,856 | 148,919 | |||||||||||||||
Assets | 617,715 | 519,888 | 617,715 | 519,888 | 532,597 | |||||||||||||
Operating Segments | Corporate Finance | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Revenues | 371,790 | 367,632 | 260,035 | |||||||||||||||
Segment profit | 103,447 | 101,266 | 67,088 | |||||||||||||||
Assets | 309,605 | 234,966 | 309,605 | 234,966 | 247,094 | |||||||||||||
Operating Segments | Financial Restructuring | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Revenues | 202,343 | 207,909 | 230,062 | |||||||||||||||
Segment profit | 54,950 | 52,246 | 56,910 | |||||||||||||||
Assets | 196,473 | 186,234 | 196,473 | 186,234 | 185,843 | |||||||||||||
Operating Segments | Financial Advisory Services | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Revenues | 119,632 | 105,331 | 102,054 | |||||||||||||||
Segment profit | 30,313 | 24,344 | 24,921 | |||||||||||||||
Assets | 111,637 | 98,688 | 111,637 | 98,688 | 99,660 | |||||||||||||
Corporate, Non-Segment | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Revenues | 0 | 0 | 299 | |||||||||||||||
Corporate expenses | (62,310) | (49,202) | (46,071) | |||||||||||||||
Assets | $ 453,169 | $ 709,960 | 453,169 | 709,960 | 528,629 | |||||||||||||
Segment Reconciling Items | ||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||
Other (expense) income, net | $ (770) | $ 3,481 | $ 2,478 | |||||||||||||||
|
SEGMENT AND GEOGRAPHICAL INFORMATION - Revenue and Assets by Geographical Areas (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenues | $ 183,596 | $ 205,523 | $ 158,380 | $ 146,266 | $ 186,468 | $ 196,608 | $ 156,294 | $ 141,502 | $ 693,765 | [1] | $ 680,872 | [1] | $ 592,450 | [1] | ||
Income before provision for income taxes | 125,630 | 132,135 | 105,326 | |||||||||||||
Assets | 1,070,884 | 1,229,848 | 1,070,884 | 1,229,848 | 1,061,226 | |||||||||||
United States | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenues | 601,197 | 595,113 | 508,192 | |||||||||||||
Income before provision for income taxes | 108,221 | 119,819 | 91,427 | |||||||||||||
Assets | 721,937 | 948,054 | 721,937 | 948,054 | 763,771 | |||||||||||
International | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Revenues | 92,568 | 85,759 | 84,258 | |||||||||||||
Income before provision for income taxes | 17,409 | 12,316 | 13,899 | |||||||||||||
Assets | $ 348,947 | $ 281,794 | $ 348,947 | $ 281,794 | $ 297,455 | |||||||||||
|
SUBSEQUENT EVENTS (Details) - $ / shares |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
May 18, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
|
Subsequent Event [Line Items] | |||||||||
Quarterly dividend declared (in usd per share) | $ 0.15 | $ 0.15 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Quarterly dividend declared (in usd per share) | $ 0.17 |
Consolidated Quarterly Results of Operations (Unaudited) (Details) |
3 Months Ended | 12 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 17, 2015
USD ($)
business
|
Mar. 31, 2016
USD ($)
$ / shares
|
Dec. 31, 2015
USD ($)
$ / shares
|
Sep. 30, 2015
USD ($)
$ / shares
|
Jun. 30, 2015
USD ($)
$ / shares
|
Mar. 31, 2015
USD ($)
$ / shares
|
Dec. 31, 2014
USD ($)
$ / shares
|
Sep. 30, 2014
USD ($)
$ / shares
|
Jun. 30, 2014
USD ($)
$ / shares
|
Mar. 31, 2016
USD ($)
$ / shares
|
Mar. 31, 2015
USD ($)
$ / shares
|
Mar. 31, 2014
USD ($)
$ / shares
|
||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||
Revenues | $ 183,596,000 | $ 205,523,000 | $ 158,380,000 | $ 146,266,000 | $ 186,468,000 | $ 196,608,000 | $ 156,294,000 | $ 141,502,000 | $ 693,765,000 | [1] | $ 680,872,000 | [1] | $ 592,450,000 | [1] | |||||
Total operating expenses | 142,099,000 | 161,837,000 | 140,943,000 | 122,486,000 | 145,863,000 | 159,995,000 | 128,907,000 | 117,453,000 | 567,365,000 | 552,218,000 | 489,602,000 | ||||||||
Operating income | 41,497,000 | 43,686,000 | 17,437,000 | 23,780,000 | 40,605,000 | 36,613,000 | 27,387,000 | 24,049,000 | 126,400,000 | 128,654,000 | 102,848,000 | ||||||||
Net income | 22,780,000 | 22,661,000 | 9,255,000 | 15,071,000 | 24,785,000 | 24,185,000 | 16,612,000 | 14,357,000 | 69,767,000 | 79,939,000 | 61,428,000 | ||||||||
Net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | (26,000) | (13,000) | (25,000) | (21,000) | 1,000 | (26,000) | (58,000) | (108,000) | ||||||||
Net income attributable to Houlihan Lokey, Inc. | $ 22,780,000 | $ 22,661,000 | $ 9,255,000 | $ 15,045,000 | $ 24,772,000 | $ 24,160,000 | $ 16,591,000 | $ 14,358,000 | $ 69,741,000 | $ 79,881,000 | $ 61,320,000 | ||||||||
Net income per share of common stock: | |||||||||||||||||||
Basic (in usd per share) | $ / shares | $ 0.38 | $ 0.38 | $ 0.16 | $ 0.26 | $ 0.43 | $ 0.42 | $ 0.29 | $ 0.25 | $ 1.18 | [2] | $ 1.40 | [2] | $ 1.11 | [2] | |||||
Diluted (in usd per share) | $ / shares | 0.35 | 0.35 | 0.15 | 0.25 | 0.41 | 0.40 | 0.27 | 0.24 | 1.10 | [2] | $ 1.33 | [2] | $ 1.05 | [2] | |||||
Dividends declared per share of common stock (in usd per share) | $ / shares | $ 0.15 | $ 0.15 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||
Dividend paid per share of common stock (in usd per share) | $ / shares | $ 0.30 | ||||||||||||||||||
Dividend Paid | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Pre-IPO aggregate dividend distribution to existing owners | $ 270,000,000 | ||||||||||||||||||
Dividend Paid | ORIX USA Corporation | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Notes payable issued, dividend distribution | $ 45,000,000 | ||||||||||||||||||
Dividend Paid | HL Holders | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Non-marketable minority equity interests, number of businesses | business | 4 | ||||||||||||||||||
Dividend Paid | HL Holders | Minimum | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Non-marketable minority equity interests, carrying value | $ 2,500,000 | ||||||||||||||||||
Dividend Paid | HL Holders | Maximum | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Non-marketable minority equity interests, carrying value | 11,000,000 | ||||||||||||||||||
Dividend Paid | Notes Payable | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Notes payable issued, dividend distribution | 197,200,000 | ||||||||||||||||||
Dividend Paid | Notes Payable | ORIX USA Corporation | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Notes payable issued, dividend distribution | 94,500,000 | ||||||||||||||||||
Dividend Paid | Notes Payable | HL Holders | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Notes payable issued, dividend distribution | $ 102,700,000 | ||||||||||||||||||
|
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for Uncollectible Accounts - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Mar. 31, 2014 |
|
Allowance for Uncollectible Accounts | |||
Beginning balance | $ 4,625 | $ 3,862 | $ 3,217 |
Provision for bad debts | 2,538 | 2,027 | 2,465 |
Write-off of uncollectible accounts | (2,897) | (1,264) | (1,829) |
Foreign currency translation | 0 | 0 | 9 |
Ending balance | $ 4,266 | $ 4,625 | $ 3,862 |
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