Company: HLI
Filing Date: 2025-02-04
Form Type: 10-Q
Source: 0001302215-25-000007
Chunk: 45

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-02-04
Form: 10-Q
Item: Part I, Item 1
Chunk 45
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 contains debt covenants which require that the Company maintain certain financial ratios. The loan agreement requires compliance with certain loan covenants including but not limited to the maintenance of minimum consolidated earnings before interest, taxes, depreciation and amortization of no less than $150 million as of the end of any quarterly 12-month period and certain leverage ratios including a consolidated leverage ratio of less than 2.00 to 1.00. As of December 31, 2024, we were, and expect to continue to be, in compliance with such covenants. As of December 31, 2024 and March 31, 2024, no principal was outstanding under the HLI Line of Credit.

The majority of the Company's payment obligations and commitments pertain to routine operating leases. The Company also has various obligations relating to notes payable and contingent consideration issued in connection with businesses previously acquired (see Note 10 included in Part I, Item 1 of this Form 10-Q).

In connection with certain acquisitions, certain employees may be entitled to deferred consideration, primarily in the form of retention payments, should certain service and/or performance conditions be met in the future. As a result of these conditions, such deferred consideration would be expensed as compensation in current and future periods and has been accrued as liabilities on the Consolidated Balance Sheets as of December 31, 2024 and March 31, 2024.

32

Cash Flows

Our operating cash flows are primarily influenced by the amount and timing of receipt of advisory fees and the payment of operating expenses, including payments of incentive compensation to our employees. We pay a significant portion of our incentive compensation during the first and third quarters of each fiscal year. A summary of our operating, investing, and financing cash flows is as follows:

Nine Months Ended December 31,(In thousands)20242023ChangeOperating activities:Net income$277,791 $199,224 39 %Non-cash charges191,961 184,270 4 %Other operating activities20,473 (280,346)(107)%Net cash provided by operating activities490,225 103,148 375 %Net cash used in investing activities(158,709)(55,718)185 %Net cash used in financing activities(237,985)(214,438)11 %Effects of exchange rate changes on cash, cash equivalents, and restricted cash(14,593)8,101 (280)%Net increase/(decrease) in cash,