Investor Presentation J U L Y 2 0 1 8
Disclaimers Forward-Looking Information This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation may be forward-looking statements. The words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from expectations are disclosed under the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” sections of our annual report on Form 10-K for the year ended March 31, 2018, as amended, and subsequent filings with the Securities and Exchange Commission (the “SEC”) . All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. You should evaluate all forward-looking statements made in this presentation in the context of these risks and uncertainties. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. The forward-looking statements in this presentation are made only as of the date hereof. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Non-GAAP Financial Measures Adjusted net income and adjusted operating expenses are presented and discussed in this investor presentation 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 and adjusted operating expenses remove the significant accounting impact of one-time charges associated with the Company’s one-time/non-recurring matters, as set forth at the end of this presentation. 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 operating expenses, see the end of this investor presentation. Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations, and cash flows. 2
Our Culture Analytically Driven Client Service and Solution Driven Entrepreneurially Motivated Employee DNA Desirous of a Winning Culture Strong Loyalty to the Firm High Integrity Partnership Culture Not a “Star” Culture Firm’s DNA Consensual Decision Making Measured Risk Taking Broad-Based, Long-Term Employee Ownership Sophisticated Corporate Procedures and Financial Systems Ownership and Controls NYSE Listed Blue Chip Institutional Ownership 3
A Leading Independent Global Investment Bank Expertise Global Integrated Platform Growth 2013 – 2018 Mergers & Acquisitions Seamlessly Combining Revenues CAGR 1 of 13% Capital Markets Advisory Product and Industry Expertise Unadjusted 2 Net Income CAGR 1 of 24% Financial Restructuring worldwide Adjusted Net Income CAGR 1,3 of 22% Financial Advisory Services Strategic Consulting 1972 1,000+ 22 Established Clients Served Annually Locations Worldwide 4 187 913 Managing Directors 5 Total Financial Professionals 5 1 CAGR based on the fiscal year ended March 31. 2. Unadjusted based on historical unaudited financials, not adjusted for any one-time, non-recurring items. 3. Adjusted Net Income is a non-GAAP financial measure. See page 20 for the most directly comparable GAAP measure for the period. 4 As of June 30, 2018; locations include one joint venture office. 4 5. As of June 30, 2018; excludes Corporate Managing Directors and MDs at joint ventures.
Principal Investment Highlights Strong Track Record of Growth and Profitability Low Revenues and Earnings Volatility Through Economic Cycles High Quality Earnings Long-Tenured Management Team Differentiated, Cyclically Balanced Business Model Market Fundamentals are Favorable for Independent Advisors 5
Our Three Primary Business Segments Our business is diversified across clients, services, industries and geographies, as well as cyclically balanced, allowing us to succeed in both bull and bear markets. Corporate Financial Financial Finance Restructuring Advisory Services Financial Opinions M&A Out-of-Court and Formal Valuation Services Core Services Capital Markets Advisory Bankruptcy / Insolvency Financial Consulting Illiquid Financial Assets Proceedings Services Superior Platform Drives Global Market Leader High-Margin Provider Strengths Success in Attractive Mid- with Strong Reputation with Strong Reputation Cap Market 1 Managing 105 45 37 Directors 2 LTM 6/30/18 Revenues/ $537 / 56% $286 / 29% $143 / 15% % of Total LTM 6/30/18 Revenues $5.5 $6.6 $3.8 per MD 3 LTM 6/30/18 Transactions 243 72 1,243 Closed / Fee Events Note: All dollar amounts in millions unless otherwise noted. Figures may not tie due to rounding. 1. Defined as transactions $1 billion or less in value. 2. As of June 30, 2018; Managing Directors excludes Corporate Managing Directors, and MDs at joint ventures. 6 3. Based on average of beginning-of-period and end-of-period MD count.
Diversified Revenues Base More than 1,000 clients served annually Balanced Client Mix 1 For FY 2018: Public No single transaction fee represented more than 3% of our Companies & Private Equity Government & Other revenues Owned Institutional 23% 39% No individual banker was responsible for more than 3% of our revenues No single employee shareholder owns more than 3% of shares outstanding Together, our CF and FR businesses provide a natural hedge Hedge Private Non- Funds Sponsor 32% 6% Diversified Industry Mix 1 Diversified Product Mix 1 Industrials 24% Financial Other Advisory 2% Services Financial 29% Institutions 16% Real Estate, Lodging & Leisure 2% Healthcare 8% Energy Financial 10% Restructuring Services 15% Corporate Group Finance 11% 56% Technology, Consumer, Media, & Telecom Food & Retail 13% 14% 7 1 Based on revenues for the LTM ended June 30, 2018.
Market Leader in All Three Business Segments Top U.S. M&A Advisor Top Global Restructuring Advisor Top Global Fairness Opinion Advisor CY 2017 Financial Advisors by Number CY 2017 Global Distressed Debt & Bankruptcy U.S. M&A Fairness Advisors: Announced or of U.S. M&A Deals Restructuring Deals Completed Deals (CY 1997 to CY 2017) Houlihan Houlihan Houlihan 63 1001 174 Lokey Lokey Lokey JP Goldman Rothschild 48 959 173 Morgan Sachs Bank of JP Lazard 36 699 164 America Morgan PJT Duff & Morgan 35 672 132 Partners Phelps Stanley Morgan Moelis 22 660 Barclays 106 Stanley #1 U.S. M&A Advisor #1 Global Restructuring Advisor #1 Global M&A Fairness Opinion Advisor Top 10 Global M&A Advisor Advised on 12 of the 15 Largest U.S. Bankruptcies Since 2000 #1 M&A Fairness Opinion Advisor Leading Capital Markets Advisor in the U.S. Over the Past 20 Years 1,000+ Transactions / Valued Over $1.5 Trillion 1,000+ Annual Engagements We invest in areas where we believe we can excel 8 Source: Thomson Reuters.
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