SecProbe.io

June 4, 2015

Via E -Mail
Christopher M. Crain, Esq.
General Counsel
Houlihan Lokey, Inc.
10250 Constellation Blvd., 5th Floor
Los Angeles, CA 90067

Re: Houlihan Lokey, Inc.
Draft Registration Statement on Form  S-1
Submitted May  8, 2015
  CIK No. 0001302215

Dear Mr. Crain :

We have reviewed your draft registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or  publicly  filing your registration statement on
EDGAR.  If you do not believe our comments apply to your facts and circumst ances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these  comments  and your
amended draft registration statement or filed registration statement,  we may have additional
comments.

General

1. Please provide us with copies of any graphical materials or artwork, including logos, that
you intend to use in your prospectus.  Please refer to Question  101.02 of our Compliance
and Disclosure Interpretations (Securities Act Forms) for guidance.

2. Please supplementally provide us with copies of all written communications, as defined
in Rule  405 under the Securities Act, that you, or anyone authorized to do so on your
behalf, present to potential investors in reliance on Section  5(d) of the Securities Act,
whether or not they retain copies of the communications.  Similarly, please
supplementally provide us with any research reports about you that are published or
distributed in reliance on Section  2(a)(3) of th e Securities Act by Section  105(a) of the

Christopher M. Crain , Esq.
Houlihan Lokey, Inc.
June 4, 2015
Page 2

 Jumpstart Our Business Startups Act by any broker or dealer that is participating or will
participate in your offering.

Overview, page  1

3. We note your statement that you achieved compound annual growth rates of  8.8% and
9.7% in revenues and net income, respectively, from 2000 to 2014.  We also note that, in
this passage and throughout your prospectus, you refer to your revenues as stable and
predictable, both as compared to your competitors and generally.  Pleas e expand your
disclosure as applicable to note any years in which your revenue and/or net income
significantly diverged from these historical averages.

Our Services, page  4

4. We note your statement here, and elsewhere, that you receive upfront and month ly
retainer fees in a majority of your Corporate Finance and Financial Restructuring
engagements.  We also note that on page  22 you state that for advisory engagements that
do not result in the successful consummation of a transaction, you sometimes receiv e a
“modest retainer.”  Finally, we note that, while you received retainer and/or progress fees
for 89% of your financial restructuring engagements, they combined to account for only
29% of your revenues in fiscal 2014.  Please consider revising this discl osure to include
information about the relative contribution that these types of fees make to your overall
revenues.

5. You state that your ability to provide customized capital markets solutions in the private
capital markets differentiates you from bulg e-bracket firms that focus on competing in
more standardized and commoditized financings.  Please expand your disclosure to
briefly describe the role or roles that you play in these types of private capital market
transactions.

Our Market Opportunity, pag e 7

Growth in Corporate Debt Issuance and Rise in Restructuring Activity, page  8

6. We note your statement that a spike in default rates often follows periods of substantial
leveraged loans and high yield issuances, which you indicate that you expect to occur
even if the macroeconomic environment continues to improve.  We also note that the past
two such spikes, as illustrated in your chart on page  9, occurred in proximity to U.S.
economic recessions.  Please reconcile these statements, along  with your s tatements
elsewhere (for example, on page  7) that the U.S. macroeconomic environment is
stabilizing and the market is returning to higher levels.

Christopher M. Crain , Esq.
Houlihan Lokey, Inc.
June 4, 2015
Page 3

 Summary Consolidated Financial and Other Data, page 18

7. We note that you have presented your financial data within the front part of the document
based on the oldest periods displayed first, but in your consolidated financial statements,
you have presented the most current data presented first.  Please revise your
chronological ordering of data to be consis tently presented throughout the entire
document.  Please refer to SAB Topic 11:E.

Risk Factors, page  20

General

8. A number of your risk factors discuss risk in generic terms, without providing the
investor with an indication of the likelihood that the risk may occur or the potential
impact of the risk on your financial condition.  For instance, on page 27 you discuss the
risk that your clients may not be able to pay you for your services.  How many clients
have failed to pay their bills in each of the l ast two fiscal years and what was the total
amount of fees that remain uncollected due to default?  Also, how much of your earned
fees are currently unpaid by your clients?  Similarly, on page 28 you discuss the potential
impact of operational risks.  Have  you suffered any significant losses or other damages as
a result of operational risks, or has your controls testing indicated that you have a
significant deficiency?  Revise all your risk factors so that they provide the investor with
an idea of the likel ihood that a risk may impact your results and the potential impact on
your assets and earnings.  For instance, please review the first risk factor on page 24, the
last risk factor on page 26, the last risk factor on page 28 and the first risk factor on pag e
29.

We may not be able to generate sufficient cash in the future to service any future indebtedness,
page  27

9. Please revise this risk factor to indicate that you have current plans to incur indebtedness
in connection with the offering.

Corporate Reorganization , page 40

10. In order for investors to better understand the change in your organizational structure as
you transition to a public company, consider providing a graphical presentation of the
current corporate structure and the corporate str ucture after the reorganization and
offering.  The presentation should also clarify which assets will be added to Houlihan
Lokey and the assets which will be distributed to ORIX USA and the other current
owners of the existing entity prior to the offering.

11. You state that prior to the consummation of this offering, you will make a distribution to
your existing owners consisting of cash and certain of your non -operating assets.  We

Christopher M. Crain , Esq.
Houlihan Lokey, Inc.
June 4, 2015
Page 4

 also note per page 53 that your non -operating minority investment in an engineering
business will be distributed among other assets, to the existing owners of Houlihan Lokey
as part of the corporate reorganization.  Please clarify which assets, including the related
carrying value, will be include in the distribution to your e xisting owners.  Additionally,
in light of this distribution and other reorganization transactions occurring, please tell us
how you concluded that pro forma financial statements prepared in accordance with
Article 11 of Regulation S -X were not required.

12. We note from your discussion of your 2006 Incentive Compensation Plan on page 96,
that in connection with the corporate reorganization, outstanding restricted stock granted
pursuant to the 2006 Plan will convert into restricted shares of Class B common  stock.
Please enhance and clarify in your “Corporate Reorganization” and “Effects of the
Corporate Reorganization and this Offering” discussions how the conversion of
outstanding restricted stock granted under the 2006 Incentive Plan will be effected.

13. We note from you disclosure on page F -14, that ORIX USA has the right, but not the
obligation, to purchase shares to maintain its majority effective ownership of the
Company and that historically it has exercised this right.  Please clarify whether ORI X
USA will maintain the right, post corporate reorganization to maintain its effective
ownership of the Company.

Capitalization, page 43

14. We note that you have included Receivable from affiliates in your capitalization table.
Please explain the basi s thereof and tell us whether this line item is expected to be
affected by any pro forma adjustments.

Management’s Discussion and Analysis of Financial Condition and Results of Operations,
page  48

Business Environment and Outlook, page  49

15. We note yo ur statement here, and elsewhere in the registration statement, that demand for
your financial restructuring services remains “reasonably strong.”  Please expand your
disclosure to clarify what the benchmark for this comparison is (i.e. as compared to your
performance in prior years, or, alternatively, as compared to your peer companies, for
example).  We note that revenues and earnings for the nine month period ending
December 31, 2014 declined compared to the prior year period.

16. In your Overview discu ssion on page 1 you state that Houlihan Lokey is a leading global
independent investment bank with 17 offices globally and on page 25 your disclose that
14% of your revenue was earned from international operations. Please enhance your Fee
Revenue discussio n on page 49 to disclose fees earned from your international

Christopher M. Crain , Esq.
Houlihan Lokey, Inc.
June 4, 2015
Page 5

 operations, including by business segment, as applicable, for the respective periods
presented.  Additionally, to the extent that any specific countries account for the majority
of the internatio nal revenue, please disclose those countries.

Key Financial Measures, page 49

Operating Expenses; Employee Compensation and Benefit Expenses, page 50

17. Please revise this section, or another appropriate portion of your Management’s
Discussion and Analysis, to discuss any reason why compensation expense appears to
rise faster than your revenues, but also will decline faster than revenues contract.  For
instance, we note that overall compensation expenses increased 19% in the year ended
March 31, 2014 compared to the prior year, and 20% in in the nine month period ending
December 31, 2014 compared to the same period in 2013.  However, Fee revenue
increased 1 4% and 19% over the same periods.  Conversely, when revenues for your
restructuring unit declined in the nine month period ending December 31, 2014 compared
to 2013, compensation declined 25%.

18. In your discussion of employee compensation and benefits  expenses, you state that your
existing arrangements with your affiliate, ORIX USA, will terminate and that your
compensation and benefits expenses to fee revenue has been higher than what you intend
to target.  You also state that you plan to target a com pensation ratio of approximately
65% to 66%.  Please clarify if your target compensation ratio is calculated based on
compensation and benefits expenses to fee revenue and revise your discussion to disclose
what the ratio has been for the periods presented .

Business Segments, page  53

Corporate Finance, page  54

19. We note your table on page 55 of U.S. M&A market and M& A transaction information
specific to Houlihan Lokey based on Thomson Reuters reporting.  In the table and the
discussion following the table you state that U.S. M&A transactions announced and
completed increased 6% and 3%, respectively compared with the y ear ended March 31,
2013 and the number of U.S. M&A transactions announced and completed for the nine
months ended December 31, 2014 increased 10% and 6%, respectively, compared with
the nine months ended December 31, 2013.  However, these changes do not c orrespond
with the number changes shown in the table.  Specifically, it appears that either the
percentage changes all have the wrong signs, or that the data in the table is incorrectly
included in the wrong column of the table. Please revise the tables an d/or percentages
accordingly, along with the qualitative discussion on page 56 related to your analysis of
your segment results.

Christopher M. Crain , Esq.
Houlihan Lokey, Inc.
June 4, 2015
Page 6

 20. We note your disclosure on page 56 that during the year ended March, 31, 2014 versus
March 31, 2013, you experienced a 1 9.6% increase in your average fee for closed
corporate finance transactions, and that for the nine months ended December 31, 2014
versus the nine months ended December 31, 2013, you experienced a 29% increase in
your average fee for the closed corporate fi nance transactions.  Please clarify how this
percentage increase is calculated and discuss the drivers of the increase in the average
fee.  To the extent there are any known trends or uncertainties regarding the continued
growth in the average fee rate, pl ease discuss them.

Corporate Revenues and Expenses, page 59

21. We note from your disclosure that corporate expenses increased by 38% for the year
ended March 31, 2014 compared to the year ended March 31, 2013, and increased an
additional 23% during the nine months ended December 31, 2014 compared to the nine
months ended December 31, 2013.  In both cases, your disclosure indicates that the
increase in these expenses was primarily a result of increased compensation costs to
corporate employees.  Please ex pand your disclosure to provide the underlying drivers
(e.g. increase in number of employees, nature of the employees’ functions, nature of
benefits offered, etc.)  of these compensation increases for each period presented.

Liquidity and Capital Resourc es, page  60

22. We note that you loan excess cash on hand to ORIX USA and that you intend to continue
your current cash management processes.  Please expand this disclosure to provide a
general description of the terms of this arrangement, including a dis cussion of any
collateral provided to secure these loans and any other types of recourse that you have
against ORIX USA in the case of nonpayment.

23. We note from your discussion that a significant use of your cash is your loan receivable
from ORIX USA.  Enhance your discussion to address how the impact of this offering,
related reorganization and agreements will impact this lending arrangement with ORI X
USA and the related impact to your liquidity, including any expected changes in uses and
sources of liquidity.  Refer to Item 303(A)(1) of Regulation S -K.

24. We note that for the periods ending March 31, 2014, and 2013 and the nine months
ending Dece mber 31, 2014 and 2013, you paid cash dividends to your stockholders.
Enhance your discussion to address how you expect both the corporate reorganization
and this offering to impact this trend.  Refer to Item 303(A)(1) of Regulation S -K.

Contractual Obli gations, page 62

25. We note that in conjunction with your minority investment in an unconsolidated entity
call and put rights were issued each at a multiple of the prior twelve months net income

Christopher M. Crain , Esq.
Houlihan Lokey, Inc.
June 4, 2015
Page 7

 times the percentage of ownership being acquired or sold.  Please revise your Summary
of Significant Accounting Policies to disclose your accounting policy for the options and
tell us how you have determined the value of the options.

Critical Accounting Policies and Estimates, page 63

Recognition of Revenue, pa ge 63

26. Disclose the specific method you use to measure the estimates of work completed under
the proportional revenue methodology.   Additionally, discuss the estimates and
assumptions involved in evaluating the profitability and stage of completion of projects.
27. Your disclosu