RILYL B Riley Financial Inc

 

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 8, 2023

 

B. RILEY FINANCIAL, INC

(Exact name of registrant as specified in its charter)

 

Delaware		001-37503		27-0223495
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

11100 Santa Monica Blvd., Suite 800

 Los Angeles, CA 90025

 310-966-1444

 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		registered
Common Stock, par value $0.0001 per share		RILY		Nasdaq Global Market
Depositary Shares (each representing a 1/1000th interest in a 6.875% Series A Cumulative Perpetual Preferred Share, par value $0.0001 per share)		RILYP		Nasdaq Global Market
Depositary Shares, each representing a 1/1000th fractional interest in a 7.375% share of Series B Cumulative Perpetual Preferred Stock		RILYL		Nasdaq Global Market
6.75% Senior Notes due 2024		RILYO		Nasdaq Global Market
6.375% Senior Notes due 2025		RILYM		Nasdaq Global Market
5.00% Senior Notes due 2026		RILYG		Nasdaq Global Market
5.50% Senior Notes due 2026		RILYK		Nasdaq Global Market
6.50% Senior Notes due 2026		RILYN		Nasdaq Global Market
5.25% Senior Notes due 2028		RILYZ		Nasdaq Global Market
6.00% Senior Notes due 2028		RILYT		Nasdaq Global Market

  

Not Applicable

 (Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 8, 2023, B. Riley Financial, Inc. (the “Company”) issued a press release reporting its financial results for the fiscal quarter ended September 30, 2023. A copy of the press release is attached hereto as Exhibit 99.1.

 

The information set forth in this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section. The information in this Current Report, including Exhibit 99.1 attached hereto, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing to this Current Report.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Earnings Release dated November 8, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		B. Riley Financial, Inc.
		By:	/s/ Phillip J. Ahn
		Name:	Phillip J. Ahn
		Title:	Chief Financial Officer and Chief Operating Officer

  

Date: November 8, 2023

 

 

 

Exhibit 99.1

 

 

 

B. Riley Financial Reports Third Quarter 2023 Results;
Declares Quarterly Dividend of $1.00 per share

 

Board authorizes $50 million annual share repurchase plan

 

LOS ANGELES, November 8, 2023 – B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”), a diversified financial services platform, today released results for the three-month and nine-month period ending September 30, 2023.

 

Financial Highlights for Three and Nine Months Ended September 30, 2023

 

●	Record total revenues of $462.3 million in Q3, up 48% year-over-year; Record YTD revenues of $1.30 billion for the first nine months of 2023, up 86%

●	Net loss of $75.8 million in Q3 primarily driven by unrealized investment losses related to changes in mark-to-market valuations on equities portfolio; net loss of $16.3 million for the first nine months of 2023

●	Operating revenues(2) of $472.9 million in Q3; and $1.22 billion for the first nine months of 2023

●	Operating adjusted EBITDA(3) of $107.5 million in Q3, up 34% sequentially; and $267.8 million for the first nine months of 2023

●	Strong balance sheet with total cash and investments(6) of $2.05 billion at September 30; over $250 million in cash and cash equivalents and undrawn revolver of approximately $100 million

●

Board declares regular quarterly dividend of $1.00 per share; authorizes $50 million annual share repurchase plan

 

Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: “During the third quarter, we generated meaningful operating adjusted EBITDA consistent with our platform objectives to drive better results from a broader client set. Despite lower investment marks that reflect a difficult small cap market environment, we are as encouraged by the middle market setup as we have been in years and expect to take advantage of recent market dislocations.”

 

“We continue to focus on maintaining an efficient capital structure that funds continued platform growth. To this end, during the quarter, we raised approximately $115 million of equity proceeds in a July common stock offering, expanded our Nomura credit facility by approximately $240 million, and reduced other outstanding debt by over $100 million. Collectively, these initiatives resulted in a meaningful improvement in our quarter-end balance sheet, and leave us with over $2 billion in cash and investments. We believe our nimble balance sheet has us well positioned to take advantages of the opportunities we see ahead going into 2024, and we could not be more enthusiastic.”

 

Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: “Highlights for the quarter included strong performance from retail liquidation and another record revenue period for Advisory Services as our countercyclical restructuring businesses continue to be the beneficiary of challenged market dynamics. During the quarter, we saw a meaningful increase in B. Riley Securities investment banking revenue, up over 100% from Q2 driven by significantly higher underwritten offerings, in addition to improved performance in wealth management as a result of our strategic realignment of this business. While Targus has faced challenges in 2023, we believe the brand will be competitively positioned as the PC market recovers. Our platform’s diversification continues to prove its resiliency amid a challenging backdrop throughout 2023. As we look ahead, we remained focused on executing on our strategy and continuing to invest in our platform to strengthen our market share and build out our execution capabilities with best-in-class talent.”

 

 

Financial Summary

 

Total revenues increased 48% to $462.3 million during the three months ended September 30, 2023 from $312.1 million during the three months ended September 30, 2022, primarily driven by retail liquidation and consumer in addition to increased revenues from financial consulting, communications, and wealth management.

 

Revenues increased 86% to $1.30 billion for the first nine months of 2023 compared to $698.6 million in the prior nine-month period in 2022 primarily driven by Capital Markets, liquidation, and the additions of Targus, Lingo and BullsEye Telecom to the platform in 2022.

 

Net loss of $75.8 million for the three months ended September 30, 2023 was primarily attributable to unrealized investment losses which reflect changes in mark-to-market values on held equity investments, in addition to a non-cash goodwill and tradename impairment charge of $35.5 million related to Targus. Net loss for the first nine months of 2023 was $16.3 million.

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(Dollars in thousands, except for share data)		2023				2022				2023				2022
Net (loss) income available to common shareholders		$	(75,838	)		$	45,835			$	(16,329	)		$	(108,390	)
Basic (loss) income per common share		$	(2.53	)		$	1.62			$	(0.56	)		$	(3.86	)
Diluted (loss) income per common share		$	(2.53	)		$	1.53			$	(0.56	)		$	(3.86	)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(Dollars in thousands)		2023				2022				2023				2022
Operating Revenues (2)		$	472,899			$	319,034			$	1,217,334			$	842,536
Investment (Loss) Gains (4)			(10,587	)			(6,917	)			83,346				(143,958	)
Total Revenues		$	462,312			$	312,117			$	1,300,680			$	698,578
Operating Adjusted EBITDA (3)		$	107,492			$	106,244			$	267,834			$	264,651
Investment Adjusted EBITDA (5)			(79,373	)			35,193				(4,991	)			(218,329	)
Total Adjusted EBITDA (1)		$	28,119			$	141,437			$	262,843			$	46,322

 

Certain of the information set forth herein, including Adjusted EBITDA⁽¹⁾, Operating Revenues⁽²⁾, and Operating Adjusted EBITDA⁽³⁾, may be considered non-GAAP financial measures. Information about B. Riley Financial’s use of non-GAAP financial measures is provided below under “Use of Non-GAAP Financial Measures.”

 

Operating revenues⁽²⁾ increased to $472.9 million for the third quarter and increased to $1.22 billion for the first nine months of 2023, up from $319.0 million and $842.5 million in the respective prior year periods in 2022, representing the highest in the firm’s history, both on a quarterly and year-to-date basis.

 

Operating adjusted EBITDA⁽³⁾ increased to $107.5 million for the third quarter and $267.8 million for the first nine months of 2023, up from $106.2 million in the prior year quarter and $264.7 million in the first nine months of 2022. Operating adjusted EBITDA for the third quarter ranked third highest in the firm’s history and ranked second highest for the first nine months.

 

 

Investment gains (loss)⁽⁴⁾ in the third quarter of 2023 was a loss of $10.6 million recognized as trading losses and fair value adjustments on loans in revenues. In addition, $75.4 million of realized and unrealized losses on investments was recognized as Other Income.

 

Dividend income increased to $12.9 million for the three months of 2023 and $35.6 million for the first nine months of 2023, up from $9.2 million in the third quarter of 2022 and $26.3 million for the first nine months of 2022.

 

Segment Financial Summary

 

Three months ended September 30, 2023:

 

		Segment Revenues								Segment Income (Loss)
		Three Months Ended September 30,								Three Months Ended September 30,
(Dollars in thousands)		2023				2022				2023				2022
Capital Markets		$	139,566			$	151,152			$	37,400			$	95,858
Wealth Management			51,365				48,172				2,399				(9,497	)
Auction and Liquidation			77,605				7,039				18,130				577
Financial Consulting			37,360				22,835				10,503				2,704
Communications			83,793				73,824				7,492				2,438
Consumer			62,695				5,023				(32,968	)			3,599

 

		Segment Revenues								Segment Income (Loss)
		Three Months Ended September 30,								Three Months Ended September 30,
(Dollars in thousands)		2023				2022				2023				2022
Capital Markets
Operating		$	150,643			$	159,096			$	51,407	(7)		$	81,592	(7)
Investment			(11,077	)			(7,944	)			(14,007	)			14,266
Total		$	139,566			$	151,152			$	37,400			$	95,858

 

	●	Capital Markets segment revenues were $139.6 million with segment income of $37.4 million. Excluding investment gains (loss)(4), this segment generated operating revenues(2) of $150.6 million and segment operating income(7) of $51.4 million, primarily driven by investment banking revenues from B. Riley Securities.

	●	Wealth Management segment revenues increased to $51.4 million, up from $48.2 million in the prior year quarter. Segment income increased to $2.4 million, reflecting the strategic realignment of this business throughout 2022. Wealth Management assets under management totaled approximately $24 billion at quarter-end.

	●	Auction and Liquidation segment revenues increased to $77.6 million, up from $7.0 million from the prior year quarter, primarily due to an increase in both the number and the size of retail liquidation engagements. Segment income totaled $18.1 million. Results for this segment vary from quarter-to-quarter and year-to-year due to the episodic impact of large retail liquidation engagements.

	●	Financial Consulting segment revenues increased to $37.4 million up from $22.8 million in the prior year quarter, primarily due to an increase of bankruptcy and litigation consulting assignments, appraisal engagements, and real estate restructuring projects. Segment income totaled $10.5 million for the quarter.

●

Communications segment revenues increased to $83.8 million, primarily due to the addition of Lingo and BullsEye Telecom during 2022. On a combined basis, communications businesses – magicJack, United Online, Marconi Wireless, Lingo and BullsEye Telecom— generated segment income of $7.5 million for the quarter.

 

 

●

Consumer segment revenues increased to $62.7 million primarily due to the addition of Targus during the fourth quarter of 2022, in addition to revenues from the licensing of brand trademarks. Targus has faced challenges due to softness in the overall PC marketplace and as a result, recorded a non-cash goodwill and tradename impairment charge of $35.5 million which contributed to a segment loss for the quarter.

 

Nine months ended September 30, 2023:

 

		Segment Revenues								Segment Income (Loss)
		Nine Months Ended September 30,								Nine Months Ended September 30,
(Dollars in thousands)		2023				2022				2023				2022
Capital Markets		$	487,029			$	255,292			$	201,096			$	89,609
Wealth Management			148,895				188,040				2,414				(26,906	)
Auction and Liquidation			93,826				14,318				22,518				228
Financial Consulting			93,582				73,081				22,604				11,900
Communications			255,668				147,711				28,257				19,115
Consumer			192,810				14,754				(29,236	)			10,590

 

		Segment Revenues								Segment Income (Loss)
(Dollars in thousands)		Nine Months Ended September 30,								Nine Months Ended September 30,
Capital Markets		2023				2022				2023				2022
Operating		$	405,918			$	402,327			$	132,867	(7)		$	175,639	(7)
Investment			81,111				(147,035	)			68,229				(86,030	)
Total		$	487,029			$	255,292			$	201,096			$	89,609

 

Common Dividend

 

B. Riley’s Board of Directors declared a regular quarterly dividend of $1.00 per share which will be paid on or about November 30, 2023 to stockholders of record as of November 20, 2023.

 

Share Repurchase Authorization

 

B. Riley’s Board of Directors has approved an annual share repurchase plan authorizing the repurchase of up to $50 million of its common shares.

 

Balance Sheet Summary

 

At September 30, 2023, cash and investments⁽⁶⁾ totaled $2.05 billion including cash and cash equivalents of $252.3 million; $1.2 billion in net securities and other investments owned, at fair value; and $549.1 million of loans receivable.

 

Total debt, net of cash and investments,⁽⁶⁾ was $311.2 million at quarter-end. Total debt of $2.36 billion as of September 30, 2023 included $1.67 billion of senior notes due at various dates ranging from May 31, 2024 to August 31, 2028 with interest rates ranging from 5.00% to 6.75%; $618.3 million in term loan; $57.2 million of revolving credit facilities; and $21.3 million of notes payable.

 

Earnings Call Details

 

B. Riley Financial has pulled forward its third quarter 2023 earnings call to today, Wednesday November 8, 2023, beginning at 8:30 AM ET (5:30 AM PT). Investors may access the live audio webcast and archived recording at https://ir.brileyfin.com/events-and-presentations. A web recording will be made available for replay until November 23, 2023.

 

 

About B. Riley Financial

 

B. Riley Financial is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. B. Riley leverages cross-platform expertise to provide clients with full service, collaborative solutions at every stage of the business life cycle. Through its affiliated subsidiaries, B. Riley provides end-to-end financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. B. Riley opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. B. Riley refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries or affiliates. For more information, please visit www.brileyfin.com.

 

Footnotes (See “Note Regarding Use of Non-GAAP Financial Measures” for further discussion of these non-GAAP terms. For a reconciliation of Adjusted EBITDA, Operating Revenue, Operating Adjusted EBITDA, and Investment Adjusted EBITDA to the comparable GAAP financial measures, please see the Appendix hereto.)

 

(1)	Adjusted EBITDA includes earnings before interest, taxes, depreciation, amortization, restructuring charge, share-based payments, gain on extinguishment of loans, impairment of goodwill and tradenames, and transaction related and other costs.

(2)	Operating Revenues is defined as the sum of revenues from (i) Service and Fees, (ii) Interest Income - Loans and Securities Lending and (iii) Sales of Goods.

(3)	Operating Adjusted EBITDA is defined as Adjusted EBITDA excluding (i) Trading Income (Loss) and Fair Value Adjustments on Loans, (ii) Realized and Unrealized Gains (Losses) on Investments, and (iii) other investment related expenses.

(4)	Investment Gains (Loss) is defined as Trading Income (Loss) and Fair Value Adjustments on Loans.

(5)	Investment Adjusted EBITDA is defined as the sum of (i) Trading Income (Loss) and Fair Value Adjustments on Loans and (ii) Realized and Unrealized Gains (Losses) on Investments, less other investment related expenses.

(6)

Total cash and investments is defined as the sum of cash and cash equivalents, restricted cash, due from clearing brokers net of due to clearing brokers, securities and other investments owned, at fair value net of (i) securities sold not yet purchased and (ii) noncontrolling interest related to investments, advances against customer contracts, loans receivable, at fair value net of loan participations sold, and other investments reported in prepaid and other assets.

(7)	Segment Operating Income (Loss) is defined as segment income (loss) excluding trading income (loss) and fair value adjustments on loans and other investment related operating expenses.

 

Note Regarding Use of Non-GAAP Financial Measures

 

Certain of the information set forth herein, including operating revenues, adjusted EBITDA, operating adjusted EBITDA, and investment adjusted EBITDA, may be considered non-GAAP financial measures. B. Riley Financial believes this information is useful to investors because it provides a basis for measuring the Company’s available capital resources, the operating performance of its business and its revenues and cash flow, (i) excluding in the case of operating revenues, trading income (losses) and fair value adjustments on loans, (ii) excluding in the case of adjusted EBITDA, net interest expense, provisions for or benefit from income taxes, depreciation, amortization, fair value adjustment, restructuring charge, gain on extinguishment of loans, impairment of trade names, stock-based compensation and transaction and other expenses, (iii) excluding in the case of operating adjusted EBITDA, the aforementioned adjustments for adjusted EBITDA as well as trading income (losses) and fair value adjustments on loans, and other investment related expenses, (iv) including in the case of investment adjusted EBITDA, trading income (losses) and fair value adjustments on loans, net of other investment related expenses, and (v) including in the case of total cash and investments, cash and cash equivalents, restricted cash, due from clearing brokers net of due to clearing brokers, securities and other investments owned, at fair value net of (a) securities sold not yet purchased and (b) noncontrolling interest related to investments, advances against customer contracts, loans receivable, at fair value net of loan participations sold, and other investments reported in prepaid and other assets, that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”). In addition, the Company’s management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company’s operating performance, management compensation, capital resources, and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies.

 

Forward-Looking Statements

 

Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management’s current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date of this press release. Such forward-looking statements include, but are not limited to, statements regarding our excitement and the expected growth of our business segments. Factors that could cause such actual results to differ materially from those contemplated or implied by such forward-looking statements include, without limitation, the risks described from time to time in B. Riley Financial, Inc.’s periodic filings with the SEC, including, without limitation, the risks described in B. Riley Financial, Inc.’s 2022 Annual Report on Form 10-K under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (as applicable). Additional information will be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and B. Riley Financial undertakes no duty to update this information.

 

 

B. RILEY FINANCIAL, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands, except par value)

 

		September 30,				December 31,
		2023				2022
		(Unaudited)
Assets
Assets
Cash and cash equivalents		$	252,288			$	268,618
Restricted cash			2,060				2,308
Due from clearing brokers			25,579				48,737
Securities and other investments owned, at fair value			1,197,587				1,129,268
Securities borrowed			2,782,000				2,343,327
Accounts receivable, net			127,418				149,110
Due from related parties			395				1,081
Loans receivable, at fair value (includes $192,828 and $98,729 from related parties as of September 30, 2023 and December 31, 2022, respectively)			549,142				701,652
Prepaid expenses and other assets			265,531				460,696
Operating lease right-of-use asset, net			82,245				88,593
Property and equipment, net			24,774				27,141
Goodwill			497,388				512,595
Other intangible assets, net			333,641				374,098
Deferred income taxes			2,808				3,978
Total assets		$	6,142,856			$	6,111,202
Liabilities and Equity
Liabilities
Accounts payable		$	54,030			$	81,384
Accrued expenses and other liabilities			303,428				322,974
Deferred revenue			73,829				85,441
Due to related parties and partners			289				2,210
Due to clearing brokers			—				19,307
Securities sold not yet purchased			7,120				5,897
Securities loaned			2,772,790				2,334,031
Operating lease liabilities			93,027				99,124
Deferred income taxes			6,677				29,548
Notes payable			21,300				25,263
Revolving credit facility			57,246				127,678
Term loan			618,301				572,079
Senior notes payable, net			1,667,088				1,721,751
Total liabilities			5,675,125				5,426,687
Redeemable noncontrolling interests in equity of subsidiaries			—				178,622
Total B. Riley Financial, Inc. stockholders’ equity			413,781				446,514
Noncontrolling interests			53,950				59,379
Total equity			467,731				505,893
Total liabilities and equity		$	6,142,856			$	6,111,202

 

 

B. RILEY FINANCIAL, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except share data)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Revenues:						As Restated								As Restated
Services and fees		$	278,023			$	257,310			$	743,909			$	651,786
Trading (loss) income and fair value adjustments on loans			(10,587	)			(6,917	)			83,346				(143,958	)
Interest income - Loans and securities lending			69,730				57,594				222,115				182,855
Sale of goods			125,146				4,130				251,310				7,895
Total revenues			462,312				312,117				1,300,680				698,578
Operating expenses:
Direct cost of services			67,850				44,523				178,188				73,959
Cost of goods sold			78,053				3,089				165,996				7,334
Selling, general and administrative expenses			221,688				163,727				623,200				506,062
Restructuring charge			228				8,016				949				8,016
Impairment of goodwill and tradenames			35,500				—				37,233				—
Interest expense - Securities lending and loan participations sold			38,368				17,447				106,572				43,757
Total operating expenses			441,687				236,802				1,112,138				639,128
Operating income			20,625				75,315				188,542				59,450
Other income (expense):
Interest income			180				686				3,455				1,253
Dividend income			12,876				9,175				35,635				26,279
Realized and unrealized (losses) gains on investments			(75,361	)			19,071				(84,960	)			(136,205	)
Change in fair value of financial instruments and other			(4,170	)			(574	)			(3,998	)			9,728
(Loss) income from equity investments			(308	)			(91	)			(175	)			3,285
Interest expense			(45,229	)			(34,587	)			(140,122	)			(96,787	)
(Loss) income before income taxes			(91,387	)			68,995				(1,623	)			(132,997	)
Benefit from (provision for) income taxes			15,079				(16,350	)			(14,344	)			39,858
Net (loss) income			(76,308	)			52,645				(15,967	)			(93,139	)
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests			(2,485	)			4,808				(5,680	)			9,245
Net (loss) income attributable to B. Riley Financial, Inc.			(73,823	)			47,837				(10,287	)			(102,384	)
Preferred stock dividends			2,015				2,002				6,042				6,006
Net (loss) income available to common shareholders		$	(75,838	)		$	45,835			$	(16,329	)		$	(108,390	)
Basic (loss) income per common share		$	(2.53	)		$	1.62			$	(0.56	)		$	(3.86	)
Diluted (loss) income per common share		$	(2.53	)		$	1.53			$	(0.56	)		$	(3.86	)
Weighted average basic common shares outstanding			29,961,068				28,293,064				28,933,546				28,068,160
Weighted average diluted common shares outstanding			29,961,068				29,968,417				28,933,546				28,068,160

 

Note: Certain results for the three and nine-month periods ended September 30, 2022 reflect amounts as restated in our 2022 Annual Report on Form 10-K for the year ended December 31, 2022.

 

 

B. RILEY FINANCIAL, INC.

Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation

(Unaudited)

(Dollars in thousands)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Net (loss) income attributable to B. Riley Financial, Inc.		$	(73,823	)		$	47,837			$	(10,287	)		$	(102,384	)
Adjustments:
(Benefit from) provision for income taxes			(15,079	)			16,350				14,344				(39,858	)
Interest expense			45,229				34,587				140,122				96,787
Interest income			(180	)			(686	)			(3,455	)			(1,253	)
Share based payments			11,026				14,613				35,264				45,828
Depreciation and amortization			12,491				10,717				38,102				26,526
Restructuring charge			228				8,016				949				8,016
Loss (gain) on extinguishment of loans			5,409				—				5,409				(1,102	)
Impairment of goodwill and tradenames			35,500				—				37,233				—
Transactions related costs and other			7,318				10,003				5,162				13,762
Total EBITDA adjustments			101,942				93,600				273,130				148,706
Adjusted EBITDA		$	28,119			$	141,437			$	262,843			$	46,322
Operating EBITDA Adjustments:
Trading loss (income) and fair value adjustments on loans			10,587				6,917				(83,346	)			143,958
Realized and unrealized losses (gains) on investments			75,361				(19,071	)			84,960				136,205
Other investment related expenses			(6,575	)			(23,039	)			3,377				(61,834	)
Total Operating EBITDA Adjustments			79,373				(35,193	)			4,991				218,329
Operating Adjusted EBITDA		$	107,492			$	106,244			$	267,834			$	264,651

 

# # #

 

Contacts
Investors	Media
Mike Frank	Jo Anne McCusker
ir@brileyfin.com	jmccusker@brileyfin.com
(212) 409-2424	(646) 885-5425
Source: B. Riley Financial, Inc.

 

 

v3.23.3

Cover	Nov. 08, 2023
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 08, 2023
Entity File Number	001-37503
Entity Registrant Name	B. RILEY FINANCIAL, INC
Entity Central Index Key	0001464790
Entity Tax Identification Number	27-0223495
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	11100 Santa Monica Blvd.
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90025
City Area Code	310
Local Phone Number	966-1444
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock, par value $0.0001 per share
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	RILY
Security Exchange Name	NASDAQ
Depositary Shares (each representing a 1/1000th interest in a 6.875% Series A Cumulative Perpetual Preferred Share, par value $0.0001 per share)
Title of 12(b) Security	Depositary Shares (each representing a 1/1000th interest in a 6.875% Series A Cumulative Perpetual Preferred Share, par value $0.0001 per share)
Trading Symbol	RILYP
Security Exchange Name	NASDAQ
Depositary Shares, each representing a 1/1000th fractional interest in a 7.375% share of Series B Cumulative Perpetual Preferred Stock
Title of 12(b) Security	Depositary Shares, each representing a 1/1000th fractional interest in a 7.375% share of Series B Cumulative Perpetual Preferred Stock
Trading Symbol	RILYL
Security Exchange Name	NASDAQ
6.75% Senior Notes due 2024
Title of 12(b) Security	6.75% Senior Notes due 2024
Trading Symbol	RILYO
Security Exchange Name	NASDAQ
6.375% Senior Notes due 2025
Title of 12(b) Security	6.375% Senior Notes due 2025
Trading Symbol	RILYM
Security Exchange Name	NASDAQ
5.00% Senior Notes due 2026
Title of 12(b) Security	5.00% Senior Notes due 2026
Trading Symbol	RILYG
Security Exchange Name	NASDAQ
5.50% Senior Notes due 2026
Title of 12(b) Security	5.50% Senior Notes due 2026
Trading Symbol	RILYK
Security Exchange Name	NASDAQ
6.50% Senior Notes due 2026
Title of 12(b) Security	6.50% Senior Notes due 2026
Trading Symbol	RILYN
Security Exchange Name	NASDAQ
5.25% Senior Notes due 2028
Title of 12(b) Security	5.25% Senior Notes due 2028
Trading Symbol	RILYZ
Security Exchange Name	NASDAQ
6.00% Senior Notes due 2028
Title of 12(b) Security	6.00% Senior Notes due 2028
Trading Symbol	RILYT
Security Exchange Name	NASDAQ

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