LOS ANGELES, March 16, 2023 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the "Company"), a diversified financial services platform, today announced the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Certain previously issued financial statements have been restated to correct the classification of dividends received and realized and unrealized gains (losses) on certain investments held by non-regulated entities from within "Revenue" to "Other Income" in the Company's consolidated statement of operations.
This reclassification had no impact on previously issued consolidated balance sheets, net income, earnings per share (EPS), adjusted EBITDA, or operating adjusted EBITDA.
Additional information related to operating and investment metrics can be found in the revised Fourth Quarter 2022 Financial Supplement which is available on the Company's investor relations website. Information about the Company's use of non-GAAP financial measures is provided under "Use of Non-GAAP Financial Measures."
These results have been recast in the corresponding tables for the periods presented.
Year Ended | Year Ended | Year Ended | |||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
(Dollars in thousands) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||
Total Revenues | $ | 915,465 | $ | 165,205 | $ | 1,080,670 | $ | 1,740,561 | $ | (185,863) | $ | 1,554,698 | $ | 902,721 | $ | (68,504) | $ | 834,217 | |||||||||||
Total Operating Expenses | (1,011,222) | — | (1,011,222) | (1,040,170) | — | (1,040,170) | (557,956) | — | (557,956) | ||||||||||||||||||||
Other (Expenses) Income | (124,693) | (165,205) | (289,898) | (85,629) | 185,863 | 100,234 | (65,308) | 68,504 | 3,196 | ||||||||||||||||||||
(Loss) Income Before Income Taxes | (220,450) | — | (220,450) | 614,762 | — | 614,762 | 279,457 | — | 279,457 | ||||||||||||||||||||
Net (Loss) Income Available to Common Shareholders | $ | (167,837) | $ | — | $ | (167,837) | $ | 437,597 | $ | — | $ | 437,597 | $ | 200,438 | $ | — | $ | 200,438 | |||||||||||
Diluted (Loss) Income per Common Share | $ | (5.95) | $ | — | $ | (5.95) | $ | 15.09 | $ | — | $ | 15.09 | $ | 7.56 | $ | — | $ | 7.56 | |||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
(Dollars in thousands) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||
Operating Revenues (2) | $ | 1,319,172 | $ | (35,874) | $ | 1,283,298 | $ | 1,353,885 | $ | (19,732) | $ | 1,334,153 | $ | 798,703 | $ | (21,163) | $ | 777,540 | |||||||||||
Investment (Loss) Gains (4) | (403,707) | 201,079 | (202,628) | 386,676 | (166,131) | 220,545 | 104,018 | (47,341) | 56,677 | ||||||||||||||||||||
Total Revenues | $ | 915,465 | $ | 165,205 | $ | 1,080,670 | $ | 1,740,561 | $ | (185,863) | $ | 1,554,698 | $ | 902,721 | $ | (68,504) | $ | 834,217 | |||||||||||
Operating Adjusted EBITDA (3) | $ | 366,458 | $ | — | $ | 366,458 | $ | 422,029 | $ | — | $ | 422,029 | $ | 311,673 | $ | — | $ | 311,673 | |||||||||||
Investment Adjusted EBITDA (5) | (334,176) | — | (334,176) | 340,465 | — | 340,465 | 95,145 | — | 95,145 | ||||||||||||||||||||
Total Adjusted EBITDA (1) | $ | 32,282 | $ | — | $ | 32,282 | $ | 762,494 | $ | — | $ | 762,494 | $ | 406,818 | $ | — | $ | 406,818 | |||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||
(Dollars in thousands) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | Restated | |||||||||||||||||||||||
Total Revenues | $ | 326,813 | $ | 55,279 | $ | 382,092 | $ | 422,110 | $ | (21,796) | $ | 400,314 | |||||||||||||||||
Total Operating Expenses | (372,094) | — | (372,094) | (301,588) | — | (301,588) | |||||||||||||||||||||||
Other (Expenses) Income | (42,172) | (55,279) | (97,451) | (29,229) | 21,796 | (7,433) | |||||||||||||||||||||||
(Loss) Income Before Income Taxes | (87,453) | — | (87,453) | 91,293 | — | 91,293 | |||||||||||||||||||||||
Net (Loss) Income Available to Common Shareholders | $ | (59,447) | $ | — | $ | (59,447) | $ | 62,182 | $ | — | $ | 62,182 | |||||||||||||||||
Diluted (Loss) Income per Common Share | $ | (2.08) | $ | — | $ | (2.08) | $ | 2.08 | $ | — | $ | 2.08 | |||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||
(Dollars in thousands) | As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | Restated | |||||||||||||||||||||||
Operating Revenues (2) | $ | 450,357 | $ | (9,595) | $ | 440,762 | $ | 353,252 | $ | (7,786) | $ | 345,466 | |||||||||||||||||
Investment (Loss) Gains (4) | (123,544) | 64,874 | (58,670) | 68,858 | (14,010) | 54,848 | |||||||||||||||||||||||
Total Revenues | $ | 326,813 | $ | 55,279 | $ | 382,092 | $ | 422,110 | $ | (21,796) | $ | 400,314 | |||||||||||||||||
Operating Adjusted EBITDA (3) | $ | 101,807 | $ | — | $ | 101,807 | $ | 106,097 | $ | — | $ | 106,097 | |||||||||||||||||
Investment Adjusted EBITDA (5) | (115,847) | — | (115,847) | 31,928 | — | 31,928 | |||||||||||||||||||||||
Total Adjusted EBITDA (1) | $ | (14,040) | $ | — | $ | (14,040) | $ | 138,025 | $ | — | $ | 138,025 | |||||||||||||||||
This reclassification had no impact on previously issued consolidated balance sheets, net income, earnings per share (EPS), adjusted EBITDA, or operating adjusted EBITDA.
The Company's Annual Report on Form 10-K is available in the Investor Relations section of the Company's website at ir.brileyfin.com under "SEC Filings," as well as on the SEC's website at www.sec.gov.
About B. Riley FinancialB. 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 tradenames, and transaction related and other costs. |
(2) | Operating Revenue 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. |
Note Regarding Use of Non-GAAP Financial MeasuresCertain 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 (loss) 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, aforementioned adjustments for adjusted EBITDA, as well as trading income (loss) and fair value adjustments on loans, realized and unrealized gains (losses) on investments, and other investment related expenses, and (iv) in the case of investment adjusted EBITDA this includes trading income (loss) and fair value adjustments on loans and realized and unrealized gains (losses) on investments, net of other investment related expenses, 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, 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.
B. RILEY FINANCIAL, INC. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Dollars in thousands, except par value) | |||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Assets | |||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 268,618 | $ | 278,933 | |||||||
Restricted cash | 2,308 | 927 | |||||||||
Due from clearing brokers | 48,737 | 29,657 | |||||||||
Securities and other investments owned, at fair value | 1,129,268 | 1,532,095 | |||||||||
Securities borrowed | 2,343,327 | 2,090,966 | |||||||||
Accounts receivable, net | 149,110 | 49,673 | |||||||||
Due from related parties | 1,081 | 2,074 | |||||||||
Loans receivable, at fair value (includes $98,729 and $167,744 from related parties as of December 31, 2022 and December 31, 2021, respectively) | 701,652 | 873,186 | |||||||||
Prepaid expenses and other assets | 460,696 | 463,502 | |||||||||
Operating lease right-of-use assets | 88,593 | 56,969 | |||||||||
Property and equipment, net | 27,141 | 12,870 | |||||||||
Goodwill | 512,595 | 250,568 | |||||||||
Other intangible assets, net | 374,098 | 207,651 | |||||||||
Deferred income taxes | 3,978 | 2,848 | |||||||||
Total assets | $ | 6,111,202 | $ | 5,851,919 | |||||||
Liabilities and Equity | |||||||||||
Liabilities | |||||||||||
Accounts payable | $ | 81,384 | $ | 6,326 | |||||||
Accrued expenses and other liabilities | 322,974 | 343,750 | |||||||||
Deferred revenue | 85,441 | 69,507 | |||||||||
Deferred income taxes | 29,548 | 93,055 | |||||||||
Due to related parties and partners | 2,210 | — | |||||||||
Due to clearing brokers | 19,307 | 69,398 | |||||||||
Securities sold not yet purchased | 5,897 | 28,623 | |||||||||
Securities loaned | 2,334,031 | 2,088,685 | |||||||||
Operating lease liabilities | 99,124 | 69,072 | |||||||||
Notes payable | 25,263 | 357 | |||||||||
Loan participations sold | — | — | |||||||||
Revolving credit facility | 127,678 | 80,000 | |||||||||
Term loans, net | 572,079 | 346,385 | |||||||||
Senior notes payable, net | 1,721,751 | 1,606,560 | |||||||||
Total liabilities | 5,426,687 | 4,801,718 | |||||||||
Commitments and contingencies | |||||||||||
Redeemable noncontrolling interests in equity of subsidiaries | 178,622 | 345,000 | |||||||||
B. Riley Financial, Inc. equity: | |||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,545 and 4,512 issued and | |||||||||||
outstanding as of December 31, 2022 and December 31, 2021, respectively; liquidation preference | |||||||||||
of $113,615 and $112,790 as of December 31, 2022 and December 31, 2021, respectively. | — | — | |||||||||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,523,764 and 27,591,028 issued and outstanding as of December 31, 2022 and December 31, 2021, respectively. | 3 | 3 | |||||||||
Additional paid-in capital | 494,201 | 413,486 | |||||||||
(Accumulated deficit) retained earnings | (45,220) | 248,862 | |||||||||
Accumulated other comprehensive loss | (2,470) | (1,080) | |||||||||
Total B. Riley Financial, Inc. stockholders' equity | 446,514 | 661,271 | |||||||||
Noncontrolling interests | 59,379 | 43,930 | |||||||||
Total equity | 505,893 | 705,201 | |||||||||
Total liabilities and equity | $ | 6,111,202 | $ | 5,851,919 | |||||||
B. RILEY FINANCIAL, INC. | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(Dollars in thousands, except share data) | |||||||||||||||
Year Ended December 31, | |||||||||||||||
2022 | 2021 | 2020 | |||||||||||||
As Revised | As Restated | As Restated | |||||||||||||
Revenues: | |||||||||||||||
Services and fees | $ | 895,623 | $ | 1,153,225 | $ | 645,906 | |||||||||
Trading (loss) income and fair value adjustments on loans | (202,628) | 220,545 | 56,677 | ||||||||||||
Interest income - Loans and securities lending | 245,400 | 122,723 | 102,499 | ||||||||||||
Sale of goods | 142,275 | 58,205 | 29,135 | ||||||||||||
Total revenues | 1,080,670 | 1,554,698 | 834,217 | ||||||||||||
Operating expenses: | |||||||||||||||
Direct cost of services | 142,455 | 54,390 | 60,451 | ||||||||||||
Cost of goods sold | 78,647 | 26,953 | 12,460 | ||||||||||||
Selling, general and administrative expenses | 714,614 | 906,196 | 428,537 | ||||||||||||
Restructuring charge | 9,011 | — | 1,557 | ||||||||||||
Impairment of tradenames | — | — | 12,500 | ||||||||||||
Interest expense - Securities lending and loan participations sold | 66,495 | 52,631 | 42,451 | ||||||||||||
Total operating expenses | 1,011,222 | 1,040,170 | 557,956 | ||||||||||||
Operating income | 69,448 | 514,528 | 276,261 | ||||||||||||
Other income (expense): | |||||||||||||||
Interest income | 2,735 | 229 | 564 | ||||||||||||
Dividend income | 35,874 | 19,732 | 21,163 | ||||||||||||
Realized and unrealized (losses) gains on investments | (201,079) | 166,131 | 47,341 | ||||||||||||
Change in fair value of financial instruments and other | 10,188 | 3,796 | — | ||||||||||||
Income from equity method investments | 3,570 | 2,801 | (623) | ||||||||||||
Interest expense | (141,186) | (92,455) | (65,249) | ||||||||||||
(Loss) income before income taxes | (220,450) | 614,762 | 279,457 | ||||||||||||
Benefit from (provision for) income taxes | 63,856 | (163,960) | (75,440) | ||||||||||||
Net (loss) income | (156,594) | 450,802 | 204,017 | ||||||||||||
Net (loss) income attributable to noncontrolling interests | |||||||||||||||
and redeemable noncontrolling interests | 3,235 | 5,748 | (1,131) | ||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | (159,829) | 445,054 | 205,148 | ||||||||||||
Preferred stock dividends | 8,008 | 7,457 | 4,710 | ||||||||||||
Net (loss) income available to common shareholders | $ | (167,837) | $ | 437,597 | $ | 200,438 | |||||||||
Basic (loss) income per common share | $ | (5.95) | $ | 15.99 | $ | 7.83 | |||||||||
Diluted (loss) income per common share | $ | (5.95) | $ | 15.09 | $ | 7.56 | |||||||||
Weighted average basic common shares outstanding | 28,188,530 | 27,366,292 | 25,607,278 | ||||||||||||
Weighted average diluted common shares outstanding | 28,188,530 | 29,005,602 | 26,508,397 | ||||||||||||
B. RILEY FINANCIAL, INC. | ||||||||||||||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
(Dollars in thousands, except share data) | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Restated | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Services and fees | $ | 931,497 | $ | (35,874) | $ | 895,623 | $ | 1,172,957 | $ | (19,732) | $ | 1,153,225 | $ | 667,069 | $ | (21,163) | $ | 645,906 | ||||||||||||||
Trading (loss) income and fair value adjustments on loans | (403,707) | 201,079 | (202,628) | 386,676 | (166,131) | 220,545 | 104,018 | (47,341) | 56,677 | |||||||||||||||||||||||
Interest income - Loans and securities lending | 245,400 | — | 245,400 | 122,723 | — | 122,723 | 102,499 | — | 102,499 | |||||||||||||||||||||||
Sale of goods | 142,275 | — | 142,275 | 58,205 | — | 58,205 | 29,135 | — | 29,135 | |||||||||||||||||||||||
Total revenues | 915,465 | 165,205 | 1,080,670 | 1,740,561 | (185,863) | 1,554,698 | 902,721 | (68,504) | 834,217 | |||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Direct cost of services | 142,455 | — | 142,455 | 54,390 | — | 54,390 | 60,451 | — | 60,451 | |||||||||||||||||||||||
Cost of goods sold | 78,647 | — | 78,647 | 26,953 | — | 26,953 | 12,460 | — | 12,460 | |||||||||||||||||||||||
Selling, general and administrative expenses | 714,614 | — | 714,614 | 906,196 | — | 906,196 | 428,537 | — | 428,537 | |||||||||||||||||||||||
Restructuring charge | 9,011 | — | 9,011 | — | — | — | 1,557 | — | 1,557 | |||||||||||||||||||||||
Impairment of tradenames | — | — | — | — | — | — | 12,500 | — | 12,500 | |||||||||||||||||||||||
Interest expense - Securities lending and loan participations sold | 66,495 | — | 66,495 | 52,631 | — | 52,631 | 42,451 | — | 42,451 | |||||||||||||||||||||||
Total operating expenses | 1,011,222 | — | 1,011,222 | 1,040,170 | — | 1,040,170 | 557,956 | — | 557,956 | |||||||||||||||||||||||
Operating (loss) income | (95,757) | 165,205 | 69,448 | 700,391 | (185,863) | 514,528 | 344,765 | (68,504) | 276,261 | |||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||
Interest income | 2,735 | — | 2,735 | 229 | — | 229 | 564 | — | 564 | |||||||||||||||||||||||
Dividend income | — | 35,874 | 35,874 | — | 19,732 | 19,732 | — | 21,163 | 21,163 | |||||||||||||||||||||||
Realized and unrealized (losses) gains on investments | — | (201,079) | (201,079) | — | 166,131 | 166,131 | — | 47,341 | 47,341 | |||||||||||||||||||||||
Change in fair value of financial instruments and other | 10,188 | — | 10,188 | 3,796 | — | 3,796 | — | — | — | |||||||||||||||||||||||
Income from equity method investments | 3,570 | — | 3,570 | 2,801 | — | 2,801 | (623) | — | (623) | |||||||||||||||||||||||
Interest expense | (141,186) | — | (141,186) | (92,455) | — | (92,455) | (65,249) | — | (65,249) | |||||||||||||||||||||||
(Loss) income before income taxes | (220,450) | — | (220,450) | 614,762 | — | 614,762 | 279,457 | — | 279,457 | |||||||||||||||||||||||
Benefit from (provision for) income taxes | 63,856 | — | 63,856 | (163,960) | — | (163,960) | (75,440) | — | (75,440) | |||||||||||||||||||||||
Net (loss) income | (156,594) | — | (156,594) | 450,802 | — | 450,802 | 204,017 | — | 204,017 | |||||||||||||||||||||||
Net income attributable to noncontrolling interestsand redeemable noncontrolling interests | 3,235 | — | 3,235 | 5,748 | — | 5,748 | (1,131) | — | (1,131) | |||||||||||||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | (159,829) | — | (159,829) | 445,054 | — | 445,054 | 205,148 | — | 205,148 | |||||||||||||||||||||||
Preferred stock dividends | 8,008 | — | 8,008 | 7,457 | — | 7,457 | 4,710 | — | 4,710 | |||||||||||||||||||||||
Net (loss) income available to common shareholders | $ | (167,837) | $ | — | $ | (167,837) | $ | 437,597 | $ | — | $ | 437,597 | $ | 200,438 | $ | — | $ | 200,438 | ||||||||||||||
Basic (loss) income per common share | $ | (5.95) | $ | (5.95) | $ | 15.99 | $ | 15.99 | $ | 7.83 | $ | 7.83 | ||||||||||||||||||||
Diluted (loss) income per common share | $ | (5.95) | $ | (5.95) | $ | 15.09 | $ | 15.09 | $ | 7.56 | $ | 7.56 | ||||||||||||||||||||
Weighted average basic common shares outstanding | 28,188,530 | 28,188,530 | 27,366,292 | 27,366,292 | 25,607,278 | 25,607,278 | ||||||||||||||||||||||||||
Weighted average diluted common shares outstanding | 28,188,530 | 28,188,530 | 29,005,602 | 29,005,602 | 26,508,397 | 26,508,397 | ||||||||||||||||||||||||||
B. RILEY FINANCIAL, INC. | |||||||||||
Consolidated Statements of Operations | |||||||||||
(Unaudited) | |||||||||||
(Dollars in thousands, except share data) | |||||||||||
Three Months Ended | |||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
As Revised | As Restated | ||||||||||
Revenues: | |||||||||||
Services and fees | $ | 243,837 | $ | 308,062 | |||||||
Trading (loss) income and fair value adjustments on loans | (58,670) | 54,848 | |||||||||
Interest income - Loans and securities lending | 62,545 | 33,443 | |||||||||
Sale of goods | 134,380 | 3,961 | |||||||||
Total revenues | 382,092 | 400,314 | |||||||||
Operating expenses: | |||||||||||
Direct cost of services | 68,496 | 12,955 | |||||||||
Cost of goods sold | 71,313 | 5,559 | |||||||||
Selling, general and administrative expenses | 208,552 | 270,712 | |||||||||
Restructuring charge | 995 | — | |||||||||
Interest expense - Securities lending and loan participations sold | 22,738 | 12,362 | |||||||||
Total operating expenses | 372,094 | 301,588 | |||||||||
Operating income | 9,998 | 98,726 | |||||||||
Other income (expense): | |||||||||||
Interest income | 1,482 | 54 | |||||||||
Dividend income | 9,595 | 7,786 | |||||||||
Realized and unrealized (losses) gains on investments | (64,874) | 14,010 | |||||||||
Change in fair value of financial instruments and other | 460 | (4,471) | |||||||||
Income from equity method investments | 285 | 1,629 | |||||||||
Interest expense | (44,399) | (26,441) | |||||||||
(Loss) income before income taxes | (87,453) | 91,293 | |||||||||
Benefit from (provision for) income taxes | 23,998 | (23,847) | |||||||||
Net (loss) income | (63,455) | 67,446 | |||||||||
Net (loss) income attributable to noncontrolling interests | |||||||||||
and redeemable noncontrolling interests | (6,010) | 3,274 | |||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | (57,445) | 64,172 | |||||||||
Preferred stock dividends | 2,002 | 1,990 | |||||||||
Net (loss) income available to common shareholders | $ | (59,447) | $ | 62,182 | |||||||
Basic (loss) income per common share | $ | (2.08) | $ | 2.26 | |||||||
Diluted (loss) income per common share | $ | (2.08) | $ | 2.08 | |||||||
Weighted average basic common shares outstanding | 28,545,714 | 27,569,188 | |||||||||
Weighted average diluted common shares outstanding | 28,545,714 | 29,840,704 | |||||||||
B. RILEY FINANCIAL, INC. | |||||||||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
(Dollars in thousands, except share data) | |||||||||||||||||||||||
Three Months Ended December 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
As Previously Reported | Adjustments | As Revised | As Previously Reported | Adjustments | As Restated | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Services and fees | $ | 253,432 | $ | (9,595) | $ | 243,837 | $ | 315,848 | $ | (7,786) | $ | 308,062 | |||||||||||
Trading (loss) income and fair value adjustments on loans | (123,544) | 64,874 | (58,670) | 68,858 | (14,010) | 54,848 | |||||||||||||||||
Interest income - Loans and securities lending | 62,545 | — | 62,545 | 33,443 | — | 33,443 | |||||||||||||||||
Sale of goods | 134,380 | — | 134,380 | 3,961 | — | 3,961 | |||||||||||||||||
Total revenues | 326,813 | 55,279 | 382,092 | 422,110 | (21,796) | 400,314 | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Direct cost of services | 68,496 | — | 68,496 | 12,955 | — | 12,955 | |||||||||||||||||
Cost of goods sold | 71,313 | — | 71,313 | 5,559 | — | 5,559 | |||||||||||||||||
Selling, general and administrative expenses | 208,552 | — | 208,552 | 270,712 | — | 270,712 | |||||||||||||||||
Restructuring charge | 995 | — | 995 | — | — | — | |||||||||||||||||
Interest expense - Securities lending and loan participations sold | 22,738 | — | 22,738 | 12,362 | — | 12,362 | |||||||||||||||||
Total operating expenses | 372,094 | — | 372,094 | 301,588 | — | 301,588 | |||||||||||||||||
Operating (loss) income | (45,281) | 55,279 | 9,998 | 120,522 | (21,796) | 98,726 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 1,482 | — | 1,482 | 54 | — | 54 | |||||||||||||||||
Dividend income | — | 9,595 | 9,595 | — | 7,786 | 7,786 | |||||||||||||||||
Realized and unrealized (losses) gains on investments | — | (64,874) | (64,874) | — | 14,010 | 14,010 | |||||||||||||||||
Change in fair value of financial instruments and other | 460 | — | 460 | (4,471) | — | (4,471) | |||||||||||||||||
Income from equity method investments | 285 | — | 285 | 1,629 | — | 1,629 | |||||||||||||||||
Interest expense | (44,399) | — | (44,399) | (26,441) | — | (26,441) | |||||||||||||||||
(Loss) income before income taxes | (87,453) | — | (87,453) | 91,293 | — | 91,293 | |||||||||||||||||
Benefit from (provision for) income taxes | 23,998 | — | 23,998 | (23,847) | — | (23,847) | |||||||||||||||||
Net (loss) income | (63,455) | — | (63,455) | 67,446 | — | 67,446 | |||||||||||||||||
Net (loss) income attributable to noncontrolling interestsand redeemable noncontrolling interests | (6,010) | — | (6,010) | 3,274 | — | 3,274 | |||||||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | (57,445) | — | (57,445) | 64,172 | — | 64,172 | |||||||||||||||||
Preferred stock dividends | 2,002 | — | 2,002 | 1,990 | — | 1,990 | |||||||||||||||||
Net (loss) income available to common shareholders | $ | (59,447) | $ | — | $ | (59,447) | $ | 62,182 | $ | — | $ | 62,182 | |||||||||||
Basic (loss) income per common share | $ | (2.08) | $ | (2.08) | $ | 2.26 | $ | 2.26 | |||||||||||||||
Diluted (loss) income per common share | $ | (2.08) | $ | (2.08) | $ | 2.08 | $ | 2.08 | |||||||||||||||
Weighted average basic common shares outstanding | 28,545,714 | 28,545,714 | 27,569,188 | 27,569,188 | |||||||||||||||||||
Weighted average diluted common shares outstanding | 28,545,714 | 28,545,714 | 29,840,704 | 29,840,704 | |||||||||||||||||||
B. RILEY FINANCIAL, INC. | |||||||||||||||
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation | |||||||||||||||
(Unaudited) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
Year Ended December 31, | |||||||||||||||
2022 | 2021 | 2020 | |||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | $ | (159,829) | $ | 445,054 | $ | 205,148 | |||||||||
Adjustments: | |||||||||||||||
(Benefit from) provision for income taxes | (63,856) | 163,960 | 75,440 | ||||||||||||
Interest expense | 141,186 | 92,455 | 65,249 | ||||||||||||
Interest income | (2,735) | (229) | (564) | ||||||||||||
Share based payments | 61,140 | 36,011 | 18,588 | ||||||||||||
Depreciation and amortization | 39,969 | 25,871 | 19,369 | ||||||||||||
Restructuring charge | 9,011 | — | 1,557 | ||||||||||||
Gain on extinguishment of loans | (1,102) | (6,509) | — | ||||||||||||
Impairment of tradenames | — | — | 12,500 | ||||||||||||
Transactions related costs and other | 8,498 | 5,881 | 9,531 | ||||||||||||
Total EBITDA Adjustments | 192,111 | 317,440 | 201,670 | ||||||||||||
Adjusted EBITDA | $ | 32,282 | $ | 762,494 | $ | 406,818 | |||||||||
Operating EBITDA Adjustments: | |||||||||||||||
Trading loss (income) and fair value adjustments on loans | 202,628 | (220,545) | (56,677) | ||||||||||||
Realized and unrealized losses (gains) on investments | 201,079 | (166,131) | (47,341) | ||||||||||||
Other investment related expenses | (69,531) | 46,211 | 8,873 | ||||||||||||
Total Operating EBITDA Adjustments | 334,176 | (340,465) | (95,145) | ||||||||||||
Operating Adjusted EBITDA | $ | 366,458 | $ | 422,029 | $ | 311,673 | |||||||||
B. RILEY FINANCIAL, INC. | |||||||||||
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation | |||||||||||
(Unaudited) | |||||||||||
(Dollars in thousands) | |||||||||||
Three Months Ended | |||||||||||
December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | $ | (57,445) | $ | 64,172 | |||||||
Adjustments: | |||||||||||
(Benefit from) provision for income taxes | (23,998) | 23,847 | |||||||||
Interest expense | 44,399 | 26,441 | |||||||||
Interest income | (1,482) | (54) | |||||||||
Share based payments | 15,312 | 12,503 | |||||||||
Depreciation and amortization | 13,443 | 6,805 | |||||||||
Restructuring charge | 995 | — | |||||||||
Gain on extinguishment of loans | — | — | |||||||||
Transactions related costs and other | (5,264) | 4,311 | |||||||||
Total EBITDA Adjustments | 43,405 | 73,853 | |||||||||
Adjusted EBITDA | $ | (14,040) | $ | 138,025 | |||||||
Operating EBITDA Adjustments: | |||||||||||
Trading loss (income) and fair value adjustments on loans | 58,670 | (54,848) | |||||||||
Realized and unrealized losses (gains) on investments | 64,874 | (14,010) | |||||||||
Other investment related expenses | (7,697) | 36,930 | |||||||||
Total Operating EBITDA Adjustments | 115,847 | (31,928) | |||||||||
Operating Adjusted EBITDA | $ | 101,807 | $ | 106,097 | |||||||
Contacts | |
Investors | Media |
Mike Frank | Jo Anne McCusker |
(212) 409-2424 | (646) 885-5425 |
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SOURCE B. Riley Financial