Company: HLI
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001302215-25-000111
Chunk: 105

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-11-04
Form: 10-Q
Item: Part I, Item 2
Chunk 105
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 its “prime rate,” and (c) a term SOFR rate plus a 1.00% margin. Commitment fees apply to unused amounts. The HLI Line of Credit contains certain financial covenants and other restrictions, including a financial loan covenant to maintain a consolidated leverage ratio of less than 2.00 to 1.00. As of September 30, 2025, we were, and expect to continue to be, in compliance with this financial covenant. As of September 30, 2025 and March 31, 2025, 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 September 30, 2025 and March 31, 2025.

25

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:

Six Months Ended September 30,(In thousands)20252024ChangeOperating activities:Net income$209,314 $182,489 15 %Non-cash charges153,223 115,017 33 %Other operating activities(169,121)(72,795)132 %Net cash provided by operating activities193,416 224,711 (14)%Net cash used in investing activities(4,630)(71,311)(94)%Net cash used in financing activities(268,765)(200,626)34 %Effects of exchange rate changes on cash, cash equivalents, and restricted cash32,798 18,234 80 %Net decrease in cash, cash equivalents, and restricted cash(47,181)(28,992)63 %Cash, cash