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Section 1: 8-K (8-K)

Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


Date of report (Date of earliest event reported):
October 25, 2018

Houlihan Lokey, Inc.

(Exact Name of Registrant as Specified in Charter)
Delaware
 
001-37537
 
95-2770395
(State or Other Jurisdiction of
Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
10250 Constellation Blvd., 5th Floor, Los Angeles, CA
 
 
 
90067
(Address of Principal Executive
Offices)
 
 
 
(Zip Code)

Registrant’s telephone number, including area code:
310-788-5200


(Former Name or Former Address, if Changed Since Last Report)
Not Applicable


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨





Item 2.02.    Results of Operations and Financial Condition.

On October 25, 2018, Houlihan Lokey, Inc. issued a press release announcing its financial results for the second fiscal quarter ended September 30, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.

The information in Item 2.02 of this Current Report on Form 8-K, including the information contained in Exhibit 99.1, is being furnished to the Securities and Exchange Commission pursuant to Item 2.02, and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by a specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.

(d)  Exhibits

99.1    Press Release dated October 25, 2018.






SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:
October 25, 2018
Houlihan Lokey, Inc.
 
 
 
 
 
 
 
 
By:
/s/ J. Lindsey Alley
 
 
 
 
Name: J. Lindsey Alley
 
 
 
 
Position: Chief Financial Officer
 






EXHIBIT INDEX
Exhibit No.
 
Description
 
 
 
99.1
 



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
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Houlihan Lokey Reports Second Quarter Fiscal 2019 Financial Results

Record Second Quarter Fiscal 2019 Revenues of $275 million
Second Quarter Fiscal 2019 Diluted EPS of $0.61
Adjusted Second Quarter Fiscal 2019 Diluted EPS of $0.70
Announces Dividend of $0.27 per Share for Third Quarter Fiscal 2019


LOS ANGELES and NEW YORK - October 25, 2018 - Houlihan Lokey, Inc. (NYSE:HLI) (“Houlihan Lokey”, or the “Company”) today reported record financial results for its second quarter ended September 30, 2018. For the second quarter, revenues increased 14% to $275 million, compared with $242 million for the second quarter ended September 30, 2017.
Net income increased 20% to $40 million, or $0.61 per diluted share, for the second quarter ended September 30, 2018, compared with $33 million, or $0.50 per diluted share, for the second quarter ended September 30, 2017. Adjusted net income for the second quarter ended September 30, 2018 grew 24% to $46 million, or $0.70 per diluted share, compared with $37 million, or $0.56 per diluted share, for the second quarter ended September 30, 2017.
"We are pleased to report that the firm achieved its highest quarterly revenues ever, with good results across all three business segments. As the global equity and debt markets have recently experienced increased volatility, we increasingly see a bifurcated business environment. Most of our client base continues to exhibit a healthy confidence in their financial results while selected pockets of distress are resulting in stable restructuring activity. Currently, this is a positive environment for our balanced business model, allowing the firm to achieve solid results in both our corporate finance and financial advisory business segments as well as our financial restructuring business segment," stated Scott Beiser, Chief Executive Officer of Houlihan Lokey.
Selected Financial Data
(Unaudited and in thousands, except per share data)
 
U.S. GAAP
Three Months Ended
September 30,
 
Six Months Ended
September 30,
2018
 
2017
 
2018
 
2017
Revenues

$274,992

 

$242,183

 

$494,994

 

$459,674

Operating expenses:

 

 

 

Employee compensation and benefits
175,321

 
161,295

 
314,501

 
306,804

Non-compensation expenses
43,496

 
27,562

 
84,188

 
52,671

Operating income
56,175

 
53,326

 
96,305

 
100,199

Other (income) expense, net
(1,007
)
 
(200
)
 
(2,613
)
 
(1,706
)
Income before provision for income taxes
57,182

 
53,526

 
98,918

 
101,905

Provision for income taxes
17,063

 
20,169

 
29,115

 
29,304

Net income attributable to Houlihan Lokey, Inc.

$40,119

 

$33,357

 

$69,803

 

$72,601

 
 
 
 
 
 
 
 
Diluted net income per share of common stock

$0.61

 

$0.50

 

$1.06

 

$1.09


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Revenues

For the second quarter ended September 30, 2018, revenues increased to $275 million, compared with $242 million for the second quarter ended September 30, 2017. For the quarter, Corporate Finance ("CF") revenues were relatively flat, Financial Restructuring ("FR") revenues increased 46%, and Financial Advisory Services ("FAS") revenues increased 10% when compared with the second quarter ended September 30, 2017. Revenues for the quarter ended September 30, 2018 included $5.2 million in expense reimbursements as a result of the adoption of ASC 606 effective April 1, 2018 that now clarifies that reimbursements of out-of-pocket expenses should be included in revenues, whereas prior to adoption we had been reporting non-compensation expenses net of such reimbursements.

Expenses

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

(Unaudited and in thousands)
 
Three Months Ended September 30,
 
U.S. GAAP
 
Adjusted (Non-GAAP)*
 
2018
 
2017
 
2018
 
2017
Expenses:
 
 
 
 
 
 
 
Employee compensation and benefits

$175,321

 

$161,295

 

$169,119

 

$154,997

% of Revenues
63.8
%
 
66.6
%
 
61.5
%
 
64.0
%
Non-compensation expenses

$43,496

 

$27,562

 

$41,286

 

$27,562

% of Revenues
15.8
%
 
11.4
%
 
15.0
%
 
11.4
%
Provision for Income Taxes

$17,063

 

$20,169

 

$19,573

 

$22,479

% of Pre-Tax Income
29.8
%
 
37.7
%
 
29.8
%
 
37.7
%

(Unaudited and in thousands)
 
Six Months Ended September 30,
 
U.S. GAAP
 
Adjusted (Non-GAAP)*
 
2018
 
2017
 
2018
 
2017
Expenses:
 
 
 
 
 
 
 
Employee compensation and benefits

$314,501

 

$306,804

 

$302,224

 

$294,193

% of Revenues
63.5
%
 
66.7
%
 
61.1
%
 
64.0
%
Non-compensation expenses

$84,188


$—


$52,671

 

$78,232


$—


$52,671

% of Revenues
17.0
%
 
11.5
%
 
15.8
%
 
11.5
%
Provision for Income Taxes

$29,115

 

$29,304

 

$34,254

 

$42,908

% of Pre-Tax Income
29.4
%
 
28.8
%
 
29.4
%
 
38.0
%


*Note: The adjusted figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.

Employee compensation and benefits expenses were $175 million for the second quarter ended September 30, 2018, compared with $161 million for the second quarter ended September 30, 2017. The increase in employee compensation and benefits expenses was primarily a result of higher fee revenues when compared with the same quarter last year.

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Adjusted employee compensation and benefits expenses were $169 million for the second quarter ended September 30, 2018, compared with $155 million for the second quarter ended September 30, 2017. The increase in adjusted employee compensation and benefits expenses was primarily a result of an increase in fee revenues for the quarter when compared with the same quarter last year. This resulted in an adjusted compensation ratio of 61.5% for the second quarter ended September 30, 2018, versus 64.0% for the second quarter ended September 30, 2017.

Non-compensation expenses were $43 million for the second quarter ended September 30, 2018 and $28 million for the second quarter ended September 30, 2017. The increase in non-compensation expenses was primarily driven by (i) the recognition of reimbursements of out-of-pocket expenses as revenues, (ii) higher rent expense, (iii) higher professional fees, and (iv) general increases in travel, meals, and entertainment and other operating expenses.

Adjusted non-compensation expenses were $41 million for the second quarter ended September 30, 2018 and $28 million for the second quarter ended September 30, 2017. The increase in adjusted non-compensation expenses was primarily driven by (i) the recognition of reimbursements of out-of-pocket expenses as revenues, (ii) higher rent expense, (iii) higher professional fees, and (iv) general increases in travel, meals, and entertainment and other operating expenses.

The provision for income taxes was $17 million, representing an effective tax rate of 29.8% for the second quarter ended September 30, 2018, compared with $20 million, representing an effective tax rate of 37.7% for the second quarter ended September 30, 2017. The decrease in the effective tax rate was a result of a lower statutory federal tax rate per the Tax Cuts and Jobs Acts (the "Tax Act") that was enacted into law in December 2017.

The adjusted provision for income taxes was $20 million, representing an adjusted effective tax rate of 29.8% for the second quarter ended September 30, 2018, compared with $22 million, representing an adjusted effective tax rate of 37.7% for the second quarter ended September 30, 2017. The decrease in the adjusted effective tax rate was a result of a lower statutory federal tax rate per the Tax Act.
 
Segment Reporting for the Second Quarter

Corporate Finance revenues were $146 million for both the second quarter of September 30, 2018 and September 30, 2017. The increase in revenues due to the recognition of reimbursements of out-of-pocket expenses as revenues was offset by a slight decrease in the number of transactions that closed during the quarter compared to the same period last year. CF closed 62 transactions in the second quarter ended September 30, 2018, versus 64 transactions in the second quarter ended September 30, 2017, and CF's average transaction fee for the quarter was slightly higher when compared with the same period last year.

(Unaudited and $ in thousands)
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
2018
 
2017
 
2018
 
2017
Corporate Finance
 
 
 
 
 
 
 
Revenues

$146,057

 

$145,821

 

$278,928

 

$269,820

# of MDs
106

 
94

 
106

 
94

# of Closed Transactions
62

 
64

 
131

 
116




3

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For the second quarter ended September 30, 2018, Financial Restructuring revenues increased 46% to $93 million, compared with $63 million in the second quarter ended September 30, 2017. FR closed 20 transactions in the second quarter ended September 30, 2018, versus 14 transactions in the second quarter ended September 30, 2017, and FR's average transaction fee for the quarter was higher when compared with the same period last year.

(Unaudited and $ in thousands)
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
2018
 
2017
 
2018
 
2017
Financial Restructuring
 
 
 
 
 
 
 
Revenues

$92,684

 

$63,281

 

$143,160

 

$122,310

# of MDs
45

 
40

 
45

 
40

# of Closed Transactions
20

 
14

 
33

 
32

For the second quarter ended September 30, 2018, Financial Advisory Services revenues increased 10% to $36 million, compared with $33 million in the second quarter ended September 30, 2017. The growth in revenues was primarily a result of the recognition of reimbursements of out-of-pocket expenses as revenues.

(Unaudited and $ in thousands)
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
2018
 
2017
 
2018
 
2017
Financial Advisory Services
 
 
 
 
 
 
 
Revenues

$36,251

 

$33,082

 

$72,906

 

$67,545

# of MDs
35

 
40

 
35

 
40

# of Fee Events1
469

 
532

 
771

 
842

1.
A Fee Event includes any engagement that involves revenue activity during the measurement period based on a revenue minimum of $1,000 (one thousand dollars).

Balance Sheet and Capital Allocation

The Board of Directors of the Company declared a regular quarterly cash dividend of $0.27 per share of Class A and Class B common stock. The dividend will be payable on December 14, 2018 to stockholders of record as of the close of business on December 3, 2018.

For the second quarter ended September 30, 2018, the Company repurchased 413,141 shares of its common stock in open market purchases at an average price of $48.38 per share, for a total cost of $20 million.

As of September 30, 2018, the Company had $254 million of unrestricted cash and cash equivalents and investment securities, and loans payable and other liabilities aggregating $33 million.
 

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Investor Conference Call and Webcast

The Company will host a conference call and live webcast at 5:00 p.m. Eastern Time on Thursday, October 25, 2018, to discuss its second quarter fiscal 2019 results. The number to call is 1-888-599-8686 (domestic) or 1-323-994-2093 (international). A live webcast will be available in the Investor Relations section of the Company’s website. A replay of the conference call will be available from October 25, 2018 through November 1, 2018, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 3699015#. A replay of the webcast will be archived and available on the Company’s website.
 
Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company’s control and could materially affect actual results, performance, or achievements. For a further description of such factors, you should read the Company’s filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

Adjusted net income, total and on a per share basis, adjusted operating expenses and adjusted provision for income taxes are presented and discussed in this earnings press release and are non-GAAP measures that management believes, when presented together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results. Adjusted net income, adjusted operating expenses and adjusted provision for income taxes remove the significant accounting impact of one-time or non-recurring charges associated with the Company’s one-time/non-recurring matters, as set forth in the tables at the end of this release.

Adjusted net income as calculated by the Company is not necessarily comparable to similarly titled measures reported by other companies. Additionally, adjusted net income is not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative to the Company’s financial information determined under GAAP. For a description of the Company’s use of adjusted net income and a reconciliation with net income, as well as a reconciliation of the specific line items in adjusted net income, see the section of this press release titled “Reconciliation of GAAP to Adjusted Financial Information.” Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations, and cash flows.

About Houlihan Lokey

Houlihan Lokey (NYSE:HLI) is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, valuation, and strategic consulting. The firm serves corporations, institutions, and governments worldwide with offices in the United States, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of the firm's commitment to client success across its advisory services. Houlihan Lokey is ranked as the No. 1 M&A advisor for all U.S. transactions, the No. 1 global restructuring advisor, and the No. 1 global M&A fairness opinion advisor over the past 20 years, according to Thomson Reuters. For more information, please visit www.HL.com.


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Contact Information

Investor Relations
212.331.8225
IR@HL.com
OR
Public Relations
212.331.8223
PR@HL.com

Appendix

Consolidated Balance Sheet (Unaudited)
Consolidated Statement of Income (Unaudited)
Reconciliation of GAAP to Adjusted Financial Information (Unaudited)


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Houlihan Lokey, Inc.
Consolidated Balance Sheet
(In thousands, except share data and par value)
 
September 30,
2018
 
March 31,
2018
 
(unaudited)
 
(audited)
Assets:
 
 
 
Cash and cash equivalents

$227,599

 

$206,723

Restricted cash
366

 
93,500

Investment securities
26,565

 
209,319

Accounts receivable, net of allowance for doubtful accounts
66,010

 
77,259

Unbilled work in process
31,841

 
45,862

Receivable from affiliates
7,870

 
8,732

Property and equipment – net of accumulated depreciation
31,699

 
32,146

Goodwill and other intangibles, net
799,322

 
723,310

Other assets
29,134

 
21,990

Total assets
1,220,406

 
1,418,841

Liabilities and Stockholders' Equity
 
 
 
Liabilities:
 
 
 
Accrued salaries and bonuses
268,548

 
377,901

Accounts payable and accrued expenses
41,183

 
40,772

Deferred income
30,946

 
3,620

Income taxes payable
7,941

 
9,967

Deferred income taxes
10,148

 
22,180

Forward purchase liability

 
93,500

Loans payable to former shareholders
2,642

 
3,036

Loan payable to non-affiliate
8,899

 
8,825

Other liabilities
21,793

 
6,227

Total liabilities
392,100

 
566,028

 
 
 
 
Stockholders' equity:
 
 
 
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 34,696,005 and 30,604,405 shares as of September 30 and March 31, 2018, respectively
35

 
31

Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 31,063,445 and 37,187,932 shares as of September 30 and March 31, 2018, respectively
31

 
37

Treasury stock, at cost; 0 and 2,000,000 shares as of September 30 and March 31, 2018, respectively

 
(93,500
)
Additional paid-in capital
636,150

 
753,077

Retained earnings
222,324

 
207,124

Accumulated other comprehensive loss
(30,234
)
 
(13,956
)
Total stockholders' equity
828,306

 
852,813

Total liabilities and stockholders' equity
1,220,406

 
1,418,841


7

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Houlihan Lokey, Inc.
Consolidated Statement of Income
(Unaudited and in thousands, except share and per share data)
 
Three Months Ended September 30,
 
Six Months Ended
September 30,
 
2018

2017
 
2018
 
2017
Revenues

$274,992



$242,183

 

$494,994

 

$459,674

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Employee compensation and benefits
175,321


161,295

 
314,501

 
306,804

Travel, meals, and entertainment
10,111

 
6,229

 
19,697

 
11,907

Rent
10,437

 
6,959

 
18,625

 
14,149

Depreciation and amortization
3,706

 
2,175

 
7,174

 
4,149

Information technology and communications
4,709

 
4,966

 
10,298

 
9,242

Professional fees
5,784

 
3,371

 
12,061

 
5,758

Other operating expenses, net
8,749

 
3,862

 
16,333

 
7,466

Total operating expenses
218,817


188,857

 
398,689

 
359,475

 
 
 
 
 
 
 
 
Operating income
56,175


53,326

 
96,305

 
100,199

 
 
 
 
 
 
 
 
Other (income) expense, net
(1,007
)

(200
)
 
(2,613
)
 
(1,706
)
Income before provision for income taxes
57,182


53,526

 
98,918

 
101,905

 
 
 
 
 
 
 
 
Provision for income taxes
17,063


20,169

 
29,115

 
29,304

Net income attributable to Houlihan Lokey, Inc.

$40,119



$33,357

 

$69,803

 

$72,601

 
 
 
 
 
 
 
 
  Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
    Basic
62,258,919

 
62,117,998

 
62,620,017

 
62,230,177

    Fully Diluted
66,045,921

 
66,907,890

 
66,099,770

 
66,640,539

  Net income per share of common stock:
 
 
 
 
 
 
 
    Basic

$0.64

 

$0.54

 

$1.11

 

$1.17

    Fully Diluted

$0.61

 

$0.50

 

$1.06

 

$1.09



8

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Houlihan Lokey, Inc.
Reconciliation of GAAP to Adjusted Financial Information
(Unaudited and in thousands, except per share data)
 
Three Months Ended
September 30,
 
Six Months Ended
September 30,
 
2018
 
2017
 
2018
 
2017
Revenues

$274,992

 

$242,183

 

$494,994

 

$459,674

 
 
 
 
 
 
 
 
Employee Compensation and Benefits
 
 
 
 
 
 
 
Employee Compensation and Benefits (GAAP)

$175,321

 

$161,295

 

$314,501

 

$306,804

Less/Plus: Adjustments1
(6,202
)
 
(6,298
)
 
(12,278
)
 
(12,611
)
Employee Compensation and Benefits (Adjusted)
169,119

 
154,997

 
302,224

 
294,193

 


 


 
 
 
 
Non-Compensation Expenses
 
 
 
 
 
 
 
Non-Compensation Expenses (GAAP)

$43,496

 

$27,562

 

$84,188

 

$52,671

Less/Plus: Adjustments2
(2,209
)
 

 
(5,955
)
 

Non-Compensation Expenses (Adjusted)
41,286

 
27,562

 
78,232

 
52,671

 
 
 
 
 
 
 
 
Operating Income
 
 
 
 
 
 
 
Operating Income (GAAP)

$56,175

 

$53,326

 

$96,305

 

$100,199

Less/Plus: Adjustments3
8,411

 
6,298

 
18,233

 
12,611

Operating Income (Adjusted)
64,586

 
59,624

 
114,538

 
112,810

 
 
 
 
 
 
 
 
Other (Income) Expenses, net
 
 
 
 
 
 
 
Other (Income) Expenses, net (GAAP)

($1,007
)
 

($200
)
 

($2,613
)
 

($1,706
)
Less/Plus: Adjustments4

 
166

 
719

 
1,552

Other (Income) Expenses, net (Adjusted)
(1,007
)
 
(34
)
 
(1,894
)
 
(154
)
 
 
 
 
 
 
 
 
Provision for Income Taxes
 
 
 
 
 
 
 
Provision for Income Taxes (GAAP)

$17,063

 

$20,169

 

$29,115

 

$29,304

Less/Plus: Adjustments5
2,510

 
2,310

 
5,139

 
13,604

Provision for Income Taxes (Adjusted)
19,573

 
22,479

 
34,254

 
42,908

 
 
 
 
 
 
 
 
Net Income
 
 
 
 
 
 
 
Net Income (GAAP)

$40,119

 

$33,357

 

$69,803

 

$72,601

Less/Plus: Adjustments6
5,902

 
3,822

 
12,375

 
(2,545
)
Net Income (Adjusted)
46,021

 
37,179

 
82,178

 
70,056

 
 
 
 
 
 
 
 
Diluted adjusted net income per share of common stock

$0.70

 

$0.56

 

$1.24

 

$1.05

____________________________
Note: Figures may not sum due to rounding.
1.
Consists of pre-IPO grant vesting, including grants re-awarded following forfeiture, if any.
2.
Includes costs associated with Houlihan Lokey's secondary offering of stock ($0 in Q2 FY19; ($498) in YTD Q2 FY19), completed acquisitions ($0 in Q2 FY19; ($1,929) in YTD Q2 FY19), acquisition-related amortization (($1,589) in Q2 FY19; ($2,910) in YTD Q2 FY19), and HL Finance setup costs (($619) in Q2 FY19 and YTD Q2 FY19).
3.
Includes adjustments from (1) and (2) above.
4.
Includes Australia related transaction expenses ($166 in Q2 FY18 and YTD Q2 FY18) and the reduction of an earnout liability ($719 in YTD Q2 FY19; $1,386 in YTD Q2 FY18).
5.
Includes adjustments relating to the following: (i) the tax impact as a result of the adoption of ASU No. 2016-09, Compensation - Stock Compensation due to the acceleration of vesting of share awards ($9,406 in YTD Q2 FY18) and (ii) the tax impact, using the adjusted effective tax rate, of the adjustments described in footnotes 1, 2, and 4 ($2,510 in Q2 FY19; $2,310 in Q2 FY18; $5,139 in YTD Q2 FY19; $4,198 in YTD Q2 FY18).
6.
Consists of the adjustments described above net of the tax impact of described adjustments.

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