Business
B. Riley Financial Releases Preliminary Second Quarter 2024 Financial Results
Provides Additional Detail on FRG Investment and Other Developments Investor Call Scheduled for Monday, August 12 at 8:30 am ET LOS ANGELES, Aug. 12, 2024
About this update from Brc Group Holdings, Inc.
[{"type":"text","content":"Provides Additional Detail on FRG Investment and Other Developments\nInvestor Call Scheduled for Monday, August 12 at 8:30 am ET\nLOS ANGELES, Aug. 12, 2024 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) (\"B. Riley\" or the \"Company\"), a diversified financial services platform, today released preliminary financial results for the three-month period ending June 30, 2024.\n\n \n \n \n \n \n \n\n \nBryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: \"Our second quarter results were negatively impacted by non-cash losses, the overwhelming majority of which relate to performance of our investment in Franchise Group, Inc. (\"FRG\") and our Vintage Capital loan receivable, which is primarily collateralized by equity interests in FRG. The substantial write-down during the quarter was driven by a confluence of recent events, including the impact of a meaningfully weaker consumer spending environment on FRG's businesses and its investments. The reports concerning Brian Kahn, FRG's former CEO, and his alleged misconduct at Prophecy have continued to create additional challenges for this investment, despite the fact that these allegations are unrelated to FRG or B. Riley. Ultimately, we believe these developments have materially impacted the execution of FRG's business strategy, including its ability to divest or otherwise monetize certain assets.\"\n\"We have taken and are continuing to take actions to ensure we maintain a strong, flexible balance sheet and will be suspending our common dividend as we prioritize deleveraging. Our review of strategic alternatives for Great American Group is advancing and we look forward to providing additional updates when appropriate. We will continue to work towards maximizing value from our existing principal positions and positioning the firm to capitalize on opportunities presented to our core operating businesses.\"\nRiley concluded, \"The operating strength of this platform has recently been masked by the performance of our principal investments. As we look ahead, we will be refocusing on our core financial services businesses and supporting our valued clients across the small-cap and middle-market sectors as we have for the past 27 years. We also recognize the benefits that our other diversified assets deliver in the form of uncorrelated free cash flo...