Christopher Crain – General Counsel Scott Beiser – Chief Executive Officer Lindsey Alley – Chief Financial Office.

Devin Ryan – JMP Securities Michael Needham – Bank of America Merrill Lynch Conor Fitzgerald – Goldman Sachs Brennan Hawken – UBS Ken Worthington – J.P. Morgan Jeff Harte – Sandler O'Neill Ann Dai – KBW.

Good day, ladies and gentlemen and thank you for standing by. Welcome to the Houlihan Lokey’s Second Quarter Fiscal 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference call is being recorded today, October 24, 2017.

And I will now turn the call over to Christopher Crain, Houlihan Lokey’s General Counsel. Please go ahead..

Thank you, operator and hello everyone. By now, everyone should have access to our first quarter fiscal 2018 earnings release, which can be found on the Houlihan Lokey website at www.hl.com in the Investor Relations section.

Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements, which are usually identified by use of words such as will, expect, anticipate, should or other similar phrases are not guarantees of future performance.

These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect and therefore you should exercise caution when interpreting and relying on them.

We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended September 30, 2017 when it is filed with the SEC.

During today’s call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the Company’s financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the hl.com website. Hosting the call today we have Scott Beiser, Houlihan Lokey’s Chief Executive Officer and Lindsey Alley, Chief Financial Officer of the company.

They will provide some opening remarks and we will then open the call to questions. With that, I will turn the call over to Scott..

Thank you Christopher. Hello everyone and welcome to our second quarter fiscal year 2018 earnings call. We are pleased to report strong second quarter results and a continuation of year-over-year revenue and earnings growth.

Our financial performance over the last several quarters is a result of executing on various strategic initiatives we have pursued over the last few years. We reported $242 million in revenues this quarter, up 30% from last year and our strongest second quarter in the firm’s history.

Once again all three of business segments had increases in quarterly revenues when compared to the same period last year. With respect to earnings, adjusted earnings per share for the quarter were $0.56, up 51% from the $0.37 in the same quarter last year.

For the six months ended September 30, 2017, adjusted earnings per share were $1.05, up 46% from $0.72 for the first half of last fiscal year.

Our continued strong earnings performance was driven by record revenues, continued economies of scale for non-compensation expenses, and improvement in other income and expense and slightly lower tax rates, all as compared to the same quarter last year. Today, the early dialogue regarding changes in the U.S.

tax code has not had an impact on our deal flow activity or timing of closing. However, if progress is made on tax policy, it is unclear what impact any changes it might have either positively or negatively on the timing of deal closings in the coming quarters and thereafter.

We’ve experienced a number of trends in our business in the first half of the year and emphasize in the strength of our business model in our three product lines.

We have seen our capital markets business grow significantly, driven by increased market penetration and continued collaboration and joint execution with both our financial restructuring business and our Corporate Finance industry groups.

Also the relationships that we developed and experience that enhanced during the last wave of restructurings in the oil and gas sector have started to yield higher Corporate Finance revenues. We continue to promote an integrated business with cross product line and cross geographic collaboration being the hallmark of our culture.

We believe our approach gives us a unique competitive advantage that will continue to allow us to provide superior client advice and very high employee retention. Now I’ll make some specific comments about each of our three business segments. Corporate Finance generated revenues of $146 million for the quarter, up 46% year-over-year.

Our growth for the quarter was driven largely by an increase in the average fee size, as well as an increase in the number of closed transactions. We have accomplished these results in a relatively stable M&A environment but one that has continued to slightly decline in activity over the last 12 months.

We continue to believe our market share for mid-cap transactions is growing, reflecting the same trends that we have been experiencing over the last several years. We remain focused on developing and supporting our existing MDs and we have seen revenues per MD increase by 23% in the latest 12 months.

In addition, we continue to be successful in hiring talented MDs and pursuing acquisitions, which adds strong banker and management teams to our Corporate Finance platform. Financial restructuring generated $63 million of revenues for the quarter, up 11% year-over-year.

While we show continued revenue growth in financial restructuring this quarter, our commentary regarding our full year performance in fiscal year 2018 has not changed. We continue to work through a variety of oil and gas related projects that have driven our revenues over the last several quarters.

While retail and other industries are seeing a pickup in restructuring activity, this is not expected to fully offset the completion of our oil and gas engagements. Consequently our revenues for the second half of fiscal 2018 and financial restructuring are expected to be below our second half of fiscal 2017.

However, looking ahead, we have experienced a recent increase in client enquiries which will often lead to new engagements. We do not expect these conversations to add to performances, but the intermediate and long-term prospects look more encouraging.

Considering the continual build-up of high yield bonds and leverage loans in the marketplace, and recent pitch activity, and client engagements, we see opportunities that can benefit us in subsequent years. Financial Advisory Services generated revenues of $33 million for the quarter, up 12% year-over-year.

We experienced and increase in fee events, but a decrease in the average revenue per fee event during the quarter. Transaction opinion work was up substantially versus the same period last year and we experienced growth in portfolio valuation, and transaction advisory services and our new intellectual property business is off to a strong start.

We have grown our MD headcount in fast by 18%, since this time last year and we have strong pipeline of experience senior candidates that should allow us to continue to add talent to an already deeper bench in our FAS business. We believe we are well-positioned for future revenue growth as these new employees develop on our platform.

Firm wide we remain disciplined in our development and search for talent either adding new capabilities or strengthening existing capabilities. This quarter, we added eight MDs, six were external hires primarily in Corporate Finance and two came from the consolidation of our Australian joint venture.

During the quarter, six MDs left our firm, most of which were planned departure. Overall, we believe that depth and strength of our senior employee base continues to improve. On the acquisition front, in late July, we purchased the remaining interest in our Australian joint venture that we did not previously own.

We are excited about the prospects in Australia and in fact added a third Managing Director focused on capital markets and financing opportunities in that office in August.

We also continue to maintain dialogue with a number of attractive acquisition opportunities, both in the United States and internationally and we continue to view acquisitions as playing an important part in the success of our business. In closing, we are pleased with our recent quarter’s financial results.

While we see no eminent signs of a change in market directions, we remain focused on building and sustaining the best business we can, one that we believe will be successful regardless of the business, political or economic environment that we are in. And with that I’ll turn the call over to Lindsey..

Thank you Scott. In Corporate Finance, revenues were $146 million for the quarter, an increase of 46% from the prior year. This was another record second quarter revenues for the Corporate Finance against the backdrop of a stable, but declining middle market M&A environment.

We closed 64 transactions in the quarter, compared to 56 in the same period last year. And our average transaction fee on closed deals was more than 26% higher than the same quarter last year.

We had very strong first half in Corporate Finance, however, it is worth highlighting that first half results include several above average transaction fees and favorable timing around closings.

While we expect the second half to continue our positive momentum, we don’t expect that the second half will necessarily follow the same seasonality that has existed in our Corporate Finance business in the past. Financial restructuring revenues were $63 million for the quarter, an increase of 11% from the prior year.

We closed 14 transactions in the quarter compared to 12 transactions in the same period last year, and our average transaction fee on closed deals was slightly higher, compared with the same quarter last year. We continue to see broad based restructuring activity across several of our industry verticals.

In oil and gas we have seen an expected decline in restructuring related revenues year-to-date, and we expect to see continued revenue decline in that sector through the balance of the year. In Financial Advisory Services, revenues were $33 million for the quarter, a 12% increase from the prior year.

Revenue growth was driven by more than – by more than 20% increase in fee events, compared to the same quarter last year, along with revenue growth and transaction opinions, portfolio evaluations and transaction advisory services. In addition, our new intellectual property business contributed to revenues for the quarter.

Turning to expenses, our adjusted compensation expenses were $155 million for the second quarter, versus $118 million for the same period last year. The increase in adjusted compensation expenses was primarily due to the increase in revenues for the quarter.

For the second quarter of fiscal 2018, we had an adjustment of $6.3 million related to the investing of grants that were issued in connection with our IPO and we expect this adjustment to continue until our last tranche of pre-IPO grants vest in April 2020.

This resulted in an adjusted awarded compensation ratio at 65.5% for the second quarter of fiscal 2018, compared with 65% for second quarter last year.

We continue to target an adjusted awarded compensation ratio of between 65% and 66% and our GAAP compensation ratio adjusted for pre-IPO grants should be between 125 basis points and 175 basis points lower than our adjusted awarded compensation ratio, this is consistent with the 150 basis points difference that we experienced in both Q1 and Q2 of this fiscal year.

Our adjusted non-compensation expenses in the second quarter were $28 million or 11.4% of revenues, versus $27 million or 14.3% of revenues in the second quarter last year. We had no adjustments to our non-competition expenses for this quarter.

Related to our adjusted other income and expenses line item, we experienced a slight gain as a result of lower interest expense, and lower debt balances and higher interest income on cash balances. As Scott mentioned, in July 2017, we acquired the remaining outstanding stake in Australia joint venture and we now consolidate its results.

As a result, we no longer account for gains and losses associated with the joint venture in the other income and expense line item. The only adjustment this quarter in other income and expense is related to the Australian transaction.

We had adjusted out a small one time gain that occurred as a result of the acquisition, partially offset by losses in the Australian entity in the quarter and legal expenses associated with the transaction.

Turning to the balance sheet, as of September 30, 2017 we had $306 million of unrestricted cash and equivalents and investment securities, and debt of $16 million. As a reminder we have a significant deferred cash bonus payment in the third quarter relating to bonuses awarded for fiscal year 2017.

In the second quarter we paid our quarterly dividend and invested $9.4 million, repurchasing 262,000 shares at an average price of $35.75 per share as part of our share repurchase program. With that, operator, we can open the line for questions..

Thank you. [Operator Instructions] At this time we'll hear from Devin Ryan with JMP Securities. Please go ahead..

Hey great, good evening Scot, Lindsey.

How are you guys?.

Hey Devin..

Maybe starting off here in Corporate Finance, obviously a strong quarter closings. And I think I heard you mention some slowing in the middle markets.

And it sounds maybe like that's nuanced, but I'm just curious what's driving that? And then if you can any additional perspective around the pace of kind of new mandates coming in after a good kind of closing quarter? And then within that any particular sectors that are becoming more or less active, it sounded like maybe you are seeing some momentum and energy..

Yes the comments we still see globally across all industries is the number of M&A transactions that we get announced that's what we've seen has been relatively flat, maybe with a slight decline. And that's been going on really for several quarters.

But in spite of that the number of transactions that we've been closing and we think therefore continually gaining market share. And it’s really coming across in all industries, I mean we did note the comment in the oil and gas sector which a year, or two years ago is almost exclusively focused on working in distressed situations.

Now we are also working on some turnaround or healthy situations, but really are in – all of the industry groups are doing pretty good.

In this quarter, this last half year and I won't necessarily point to any particular unique industry that is outpacing, compared to last year and just the normal rotation, I think, we have between different industry groups and how they're performing..

And I think Devin it's important to note that our mentioned kind of the global middle market M&A market was really only meant as a relative comparison to Houlihan Lokey's performance relative to the global M&A market, which has been kind of flat to slightly down over the last four to six quarters..

Got it. Okay, that's helpful. I know it's kind of a nuance point, but I appreciate the color there. And then maybe with respect to expenses we're trending right now at a pretty good level relative to that non-comp ratio guidance of 12% to 13% and that's because we've had such a strong start to the year for revenues.

But how should we think about that range just as we look into the back half of the year, given that clearly you've started on a better note..

Yes, so I think that we continue to maintain the 12% to 13% guidance kind of over the long-term. I think certainly this year we've seen a very good first half of the year from an efficiency standpoint. We don't expect that to meaningfully change in the second half of the year.

And so I would expect to be at the end or at the low end of that range and potentially even below it with respect to this year's performance on a non-comp basis..

Okay, great. And then maybe just last one kind of bigger picture.

Just, if you can, any update around or anecdotes around successes and some of the maybe what I'd say are the growth initiatives right now like Private Capital Advisory or maybe any anecdotes on recent progress, or wins on the international expansion fund?.

Yes thorough the years, I think, we've mentioned this we continue to see substantial increases in what we define as the capital markets predominantly private financing as agent. And it just continues to grow not only in the United States, but really across the globe. And it continues to be a added piece in working with mid-cap companies.

And on the international front, we've continued to add some of the acquisitions we did one or two years ago, somewhat new hirings we’re doing. We’re clearly getting growth outside of the United States, but we have still seen probably over the last year performance on a pure statistical basis, the U.S.

has continued to just be a better place in the world generally to operate than outside of the United States, but we do see, I think, more than kernels of improvement really coming in Europe and other parts of the globe. And that feel like they may be eventually playing catch up with the performance in the United States..

Okay, great. Very helpful. Thanks guys..

Thanks Devin..

Thanks Devin..

We’ll now move to Michael Needham with Bank of America Merrill Lynch..

Hey good afternoon guys..

Good afternoon Mike..

So just for some of the Corporate Finance fees, the average fee per transaction is up this year pretty meaningfully from the first half of last year. You guys touched on it. I'm just wondering is this is a trend I know, I'm just comparing the half years but I mean you've indicated in the past that you want to advise on bigger deals..

I think a few trends. We do always seem to work on somewhat bigger deals each and every quarter, each and every year, but it's not a giant doubling upsize deals, just the deal size do get bigger will be point one.

Point two, is we do see especially when either we are hiring, or recently promoting, or acquiring businesses, it does still take one year, two years, three years for them to ramp up on our platform.

So part of that is we're just seeing the performance of the newly acquired our hired or promoted and these are kind of catching up with the people who have been in place for a while.

And I think just the brand reputation allows us to find more opportunities and work on more big deals and provide a better advice that's allowing us to get increase deal size and increased fees..

And the only thing I would add to that is 26% is meaningfully larger than we would typically see in terms of average increases – in terms of increases in average deal sizes. So that's kind of why I had the comments relating to the seasonality in the first half of Corporate Finance versus the second half.

It was a very good first half for Corporate Finance in terms of larger deals. And that's why you see the big increase. But measured over time, I reiterate Scott’s point, we tend to see our average transaction sizes and our average fees increase year-over-year, but not a 26%..

Okay got it. That make sense. And on just I guess growth in Corporate Finance and market share gains you guys are clearly like made a lot of progress, maybe I would just look at your like, reported MD headcount. You hired some people, but over the last year or two it's flattish. And I think some of the acquisitions you've done have been outside the U.S.

for that business.

So what are the drivers, can you continue to take share that going headcount or are you going to be focused on hiring more people in the U.S.?.

I think as both we are right now and will continue to look at hiring people where we think it makes sense, where we think we can add to the bench strength. There's always some rotation on some individuals that either get hired or acquired throughout the business.

But I would say we’re as much focus on how we can continue to grow the market share and for the foreseeable future, we just don't see anything that will stop us from continuing to look to either acquire businesses, or hire people, or continue to promote. We're just not feeling any cap to the market.

And right now it's really what can we continue to do to find the right people that will fit the culture of the firm and know how to bring in and execute on the types of transactions we work on..

Okay thanks. And last one on restructuring does the $60 million revenue level does that's still feel inflated relative to new assignments coming in or out? Thanks..

No this business, the restructuring business is clearly our most volatile, and seasonal and not so much seasonal but it can have lumpy results depending upon the size of transactions that close. So it's really hard for us to comment on a particular quarter or two. We had two very strong quarters in our third and fourth fiscal 2017 quarters.

Our first half quarters were in 2018 were a little bigger than we had in the same time period in 2017.

And I think the quarters in terms of revenues kind of business we're getting in, like I said now like in many other recent calls we're not seen the volume of size on the oil and gas side, but everything else feels to be doing rather well and expanding both geographically and along different industry lines..

Okay thank you..

We’ll now move to Conor Fitzgerald with Goldman Sachs..

Hi good afternoon. Just want to kick it off with a bigger – bigger picture question just about the balance sheet and how you think about potentially using leverage with your business. You're definitely more diversified than some of your peers, your revenue tends to be less volatile.

Do you think that leverage is something that your business would support or that you'd consider using..

So two questions there. I think businesses that have more of a less volatility to it a little bit more of a consulting advisory component, I think, can afford itself some amount of leverage more than a pure contingency only, high volatile business.

That being said, since we've gone public, we've chosen to really pretty much follow the marketplace which is to not take on much of any debt and we continue to look at what should we be doing with their cash and capital and we continue to tell people we will not hold on to any more than we need, we’ll use it for acquisitions, or repurchases, dividends, et cetera.

And we do occasionally talk about is a appropriate kind of balance sheet, amount of leverage that a business like ours could take on might be beneficial to our shareholders, but for the foreseeable future I anticipate we will be similar to the rest of the marketplace and stay relatively unlevered..

Got you, thanks. And then I want to circle back to your comments around tax reform that it hasn't really been an impediment yet, but it sounds like it could be both a very positive, negative going forward.

Is your anticipation that as dialogue kind of heats up and they start getting into some of the nitty-gritty policy details, you could start to see an impact in terms of deals flowing?.

Well, I won't use the word slowing, and we would have told you we were taught a year ago that potential changes in tax policy would make changes to people's behavior. And kind of 12 months into it we haven't seen it.

If tomorrow we actually had a full blueprint of what the new tax policy would be, which is of course something none of us know, we think it could encourage some people to want to accelerate deal timings, it could encourage some people to want to stall on deal timings, it could change people's behavior that like I said could be both positive or negative.

So clearly we do not read anything that comes out would be negative or for that matter be positive.

We're just saying right now it's not part of the vernacular of our clients to their conversations, they’re not making decisions based upon tax policy, but that's because, I think, nobody quite knows while we have a new tax policy or what will it look like.

And we’re tell ourselves, tell our clients, tell our shareholders that if and eventually something comes out, it could change people's behavior. Don't know what those changes could be. Could be positive, could be negative, but sitting here today that's not impacting our business or timing on closings..

I mean that’s a helpful color, thanks.

And then just last one from me kind of following-up on that if there was a tax reduction for small business past year, I'd just be curious for your thoughts on how that could kind of impact the broader, small business community and specifically some of the sales that we've seen in kind of the private equity firms by small businesses over that being in a growing service of kind of M&A activity? And do you think if we get lower tax rates for small businesses the way that part of the ecosystem works adapts at all?.

Yes. I think it's so difficult to speculate on one slice of any of this. And you're going to have to take it all in totality.

I think we've always found when there is change that is net good for our business and as it would be, I think, for other peers and advisors, because you will have winners and losers, and people will be making different decisions.

But really don't have a view on your very specific question of what impact it might have other than like I said, we're not afraid of change and that change has historically always been good for our business..

And I know it's a tough one answer. I appreciate you taking a stab at it. Thanks for call..

Okay Conor..

We will now move to Brennan Hawken with UBS..

Good afternoon. Thanks for taking the question guys. I've got a question on financial sponsors. So they've gotten a lot of – there's been a ton of headlines here recently in the amount of money that they've been raising here.

Have you noticed any change in activity or engagement by some of these critical partners for you all on the back of some of that fund raising?.

We're driven, we like to have a lot of participants. It's also good for us if money is raised for newly formed funds that are looking to get into in completing transactions. And probably the amount of our business that is tied to financial sponsors on a percentage basis is it continues to grow. But been relatively constant say over the last five years.

And it’s a very important part of our business. But I want to say we see anything unique this quarter versus a couple previous quarters.

Clearly as you said the amount of money raised has been increasing, the number of funds out there is pretty large and it continues to go more and more global with more and more specialties and people focusing on different sectors of the economy, which allows us to have more potential not only would be buyers of the business as we sell, but there are also great clients when we can help them on their sales or financing, restructuring the evaluation group..

Okay. And then thinking about your I think you indicated that you've seen an uptick in the Corporate Finance activity in energy here recently. How much do you think that it seemed like you were implying that, that was a function of a [indiscernible] Houlihan-specific weight because of the resonance that you got from some of the restructuring mandates.

Is the energy market though overall picking up just given that there's sort of quest distress in that market, and therefore you would naturally start to see more M&A activities pick up..

Yes on the macro level you would have asked the question 18 months ago, someone would have told you almost exclusively all investment banking were done in the oil and gas sector was associated with some distressed situation. Now it's much more of a mix, both distressed as well as healthy.

And on the internal comment that we made, we did this with telecommunications, in a previous way we've done this with real estate and other sometimes we will start some of our industry expertise on the restructuring side and then as the market improves, we will ultimately transition into working on healthy parts of that industry, just as the same thing in reverse might be happening in retail.

We've been very active over the years on the healthy side and more and more is starting to turn on the distressed side. It's one of the flexibilities we have in our firm where we can take an industry expertise and might start it in distressed and it could go to healthy. It could start in healthy and go to distressed or sometimes occur for both.

So I think it's a comment that yes you're starting to see some healthy improvements in the oil and gas. And yes Houlihan Lokey is now also doing M&A and capital raising as the needs might be for the oil and gas industry and above beyond just pure restructuring work that would have been kind of the hallmark one or two years ago..

Perfect. And then from me just last one nitty gritty question here. Just a clarification because the foot though was a little bit unclear to me. When you guys record your comp expense, you recorded in the segment where the MD or the employee works even if the revenue on a mandate they're working on happens to be accrued in a different segment.

Do I have that right?.

You do..

Okay, okay..

And you've seen that in the last two quarters as a result of a couple of larger transactions where there was collaboration between restructuring and Corporate Finance. You've seen that enhanced in the last couple quarters. But, yes, you read the footnotes correctly..

Yes, yes. Great that’s right. I just want to make sure. Thanks very much..

Thanks Brennan..

We’ll now move to Ken Worthington with J.P. Morgan..

Okay, good afternoon. Thanks for taking my questions. I guess maybe first can you help us may be better understand the strategy and build out in the Middle East if possible maybe frame the resources you're focusing there? And if you could talk about the businesses you think have the greatest opportunity? Thanks..

Sure Ken. So it’s our newest office out in Dubai, we have done work in the Middle East for many, many years, but ultimately opened up an office, moved a few people primarily from our London office. Will eventually have a few people locally also staff up that office.

And historically we have done work for various sovereign wealth funds out there who could be both buyers or providers of capital in transactions we're working on. And we've done some restructuring work for the business out there. Eventually we’ll also do work for local companies out there.

But I would consider no different than the other two dozen offices really that we have both in the United States and across the globe. We’ll both service local situations, as well as could be local financiers who are looking to do deals with other companies or situations across the globe..

Okay, great thank you. Maybe following that in terms of energy restructuring, you've been pretty clear on the call and I think in prior calls that the pipeline is slowing. We're hoping to get a sense of the pace of the slowdown.

And I think maybe one way to frame it is could you maybe give us an indication of the ratio of the new work coming in related to the existing work being completed like what is that relationship look like?.

Well, I'm specific to oil and gas. I don't know that we will disclose the specifics around kind of new engagements versus engagements coming off, but we would expect the oil and gas related restructuring revenues to be down double-digits year-over-year. And I think that's probably the most I'd like to provide in terms of specifics.

I think Scott alluded to the fact that we do expect higher revenue than oil and gas in our corporate finance business. It won't mitigate the decline in restructuring related revenues.

And as also Scott mentioned we are seeing pick up in activity outside of oil and gas and restructuring as well, but we do expect double-digit decreases in oil and gas related restructuring activity certainly the second half of the year versus – this year versus second half of the year last year..

Okay, fair enough and then just a follow up there. You’ve mentioned a couple times increase in inquiries elsewhere in restructuring.

Can you talk about the theme – if there's any themes or what you’re seeing in terms of either subsectors or businesses that you're seeing restructuring pickup in for a lot about retail and some others, but like what is – where are you seeing the positives coming in restructuring?.

First of all I think we – what always occurs there's going to be during the best of times or the worst of times there's always a subset of companies that have put in the wrong capital structure may have managerial problems may have some unusual litigation some product false, a whole variety of reasons that a percentage of companies run into financial difficulties.

So we have that having nothing to do with any particular unique industry, but we are seeing some issues and certain subcomponents out in health care or starting to experience some issues – we clearly mentioned retail as others.

We think shipbuilding, which is somewhat still tied into the old commodity and oil and gas issues, still has some pockets of issues.

And really just across the globe, we continue to do I'd say more work what used to be almost a pure United States and Western Europe restructuring environment now is in dozens and dozens of other countries as we've effectively followed capital sources that have provided capital and then deals in different industries in different countries.

So I don't think there is necessarily specific trends other than we would just say there is – look there's a lot and what we'll call the technology disruptors and whether that's the right sharing that's going to cause issues in the automotive sector and housing sharing, whether it's A or B, rework is going to cause some issues in real of the stake.

And whether it was fracking that cost of oil and gas and whether it's Amazon and retail.

So if I would label a lot of the issues that you find is business plans that are no longer as robust as that used to be because of these different technology disruptors and what that next new disruptor might be three months from now or three years from now it's still evolving all the time and what that could be..

Okay, great. Thank you very much..

Thanks, Ken..

Thanks, Ken..

We will now move to Jeff Harte with Sandler O'Neill..

Good evening guys. Nice quarter..

Thank you, Jeff..

Can you update us a little bit on what you're seeing in Europe and while any macroenvironmental commentary would be welcome. I'm more specifically interested in your business now that we're a couple years out past the closing of McQueen and Leonardo..

Is your question how those businesses are performing or what we're just seeing in the European economy or it was quite….

Well, I mean, if you have some comments on the European economy that would be interesting, but I'm more specifically interested in how kind of McQueen and Leonardo are outperforming for you guys after you acquired them. Now that you've got a couple years of trying to do things with Houlihan way there..

Yeah, I think the integration has gone well. On the McQueen side I think it's a very seamless industry group right now where both the U.S. and the European efforts are really now pursuing and winning and closing deals all across the globe and we don't really even view it’s new people, old people.

It's just a larger consumer food and retail group that we have. Clearly I think on the Leonardo side, it provided these locations in a handful of locations in Europe. And the amount of work that not only are they doing in country, but in across transactions which could be with England or the United States, clearly increased.

That was one of the reasons for the transaction of the first places we could bring the skills and opportunities and efforts that we had together with what the Leonardo folks had in terms of their operations.

Having said that I always think whether you're hiring people or acquiring or even promoting, it always takes a longer than you'd like and you can always pencil out why everything should perfectly work out.

I think there's still things that we can continue to improve and we'll continue to see improvements in terms of productivity and results, but I think you know part of it when you look at we've actually hired some additional people in really most of the locations that we acquired through Leonardo. So we continue to build the business.

And like I said – I think things have been going well..

And one comment I will add and you will see this in the 10-Q, which will come out in the next week or two, a couple of weeks. As our international revenues quarter-over-quarter is consistent or in this quarter slightly above what our growth profile was as a firm, so our international business is vast majority of it is in Europe and in the UK.

So, we are seeing good solid growth in that business for us and you'll see that when we disclose the financial results for our international business next quarter..

Okay, thank you..

Thank you. [Operator Instructions] We’ll now move to Ann Dai with KBW..

Hi, good evening. Thanks for taking my question..

Hey, Ann..

Hey, Ann..

I just wanted to start with something from Lindsey’s prepared remarks and just clarify quickly. Lindsey I think you’d said that second half should continue on a positive momentum.

And I guess I'm just wondering was that a comment about the overall business or corporate finance itself? And then is that compared to first half levels or same period last year?.

So the results around or the common throughout positive momentum were specific to corporate finance. We expect to continue to see good strong momentum in our corporate finance business.

Having said that if you look back over the last several years, our corporate finance business has been weighted more heavily to the second half of the year versus the first half of the year. And then I think my comments were to just be careful about doing that for this year because we did have a very strong first half in corporate finance.

So if you just imply what the second half revenues might look like relative to historical results, it would be a very aggressive assumption. So that that's really what my comments were geared towards, Ann..

Okay, I appreciate the clarification. My second question was around the attrition you guys alluded to just a handful of people leaving over- during the quarter. And I guess more broadly when it comes to restructuring; we have seen also some decline in the MD count in that business over the past year or so.

Could you address that a little bit and just give us some color on what's been going on in that business and why we've been seeing some attrition there?.

And I thought actually we've been – it’s flat to maybe slightly up. In our restructuring business, we seldom have really any meaningful MD changes other than promotions. And just there aren't a lot. We've not acquired something for the most part in the restructuring area.

We did add some oil and gas in the MD expertise, so that would have been probably about two or so years ago. I think you know one of our restructuring people moved into our financial sponsored groups are sometimes that's just a little bit of the movement from one part of the business to the other.

And you know occasionally we get a retirement here or there, but I would not read anything into – you know I'm just looking where we are versus one year ago down a couple people, but I think that’s – you know maybe it was one departure, maybe was one retirement or maybe was one transfer in another unit, but it's those kinds of things.

It's really small percentage changes really in all of the business units the head counts other than FAS which has probably been on a net basis growing. The other ones has been minor changes and clearly on a net basis not much has changed..

Okay, great. Thanks..

Sure..

And at this time, we have no further questions in the queue. I will turn it back to you Scott Beiser for closing remarks..

I wanted to thank you all for participating in our second quarter call and we look forward to updating everyone on our progress when we discuss our third quarter results for fiscal 2018 in the winter..

And again that does conclude today's conference call. Thank you all for your participation..