Q2 GAAP Revenues of $42.7 million; Operating Revenues of $266.6 million
Q2 GAAP Net Loss of ($142.2 million), Operating Adjusted EBITDA of $74.2 million
Declares Quarterly Dividend of $1.00 per common share
LOS ANGELES, July 28, 2022 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the "Company"), a diversified financial services platform, today announced results for the three-month period ended June 30, 2022.
Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: "Our second quarter results demonstrated the relative strength and ability of our non-cyclical businesses to steadily perform amid disruptive markets. Periods of volatility have historically presented our most attractive opportunities to differentiate ourselves with clients, attract top talent, and generate sustainable share gains across key business lines. We believe the current environment is no exception."
"Despite the markdown on our investments and declines in our underwriting business, our dynamic platform has demonstrated continued resiliency. We have earned over $17.00 per share for our shareholders since 2019, and despite a GAAP net loss of ($43.4 million) over the trailing twelve-month period, we delivered operating EBITDA of $366 million in the same period, representing a meaningful increase compared to $114 million in 2019. Increasing contributions from less cyclical and less episodic businesses have exceeded the capital needed to support our dividend while providing us flexibility to continue to invest across our business."
"At the same time, strategic investments remain an integral part of our business, as a strategy that helps competitively advantage our clients. Our cash and investment portfolio has been diversified to balance our allocation between debt and equity-related investments. In our credit positions, we have demonstrated an ability to structure lending opportunities that enable us to earn attractive spreads with minimal impairments over time. The remainder of our portfolio is focused on public and private small-cap companies where we have high conviction in capital appreciation over our investment horizon. Securities in our investment portfolio have exceeded the Russell 2000 Index in multiple market cycles, having generated total returns of more than 90% to B. Riley since 2019. As we look ahead, we remain optimistic about the total return potential of our investment portfolio, as well as our ability to capitalize on opportunities being presented by the current market dislocation."
Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: "During the quarter, the balance of our operating businesses continued to deliver steady cash flow to our platform while performing to support our clients. Amid another transformative period for B. Riley, we have made meaningful progress in expanding our existing businesses while consolidating recent acquisitions. Our communications business with Lingo serves as a leading source of recurring cash flow for our platform as financial consulting performs steadily quarter-to-quarter and year-to-year. With core capabilities in restructuring, asset disposition, and distressed financing, we believe our diversified platform stands to benefit during periods of market austerity. As we begin to realize synergies from combining National Holdings and FocalPoint into our respective legacy wealth and investment banking businesses, we are looking to the horizon and evaluating other accretive acquisitions to accelerate our growth."
Declaration of Common Dividend
B. Riley has declared a regular quarterly cash dividend of $1.00 per common share which is payable on or about August 23 to common stockholders of record as of August 11.
Financial Summary
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
(Dollars in thousands, except for share data) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
Net (loss) income available to common shareholders | $ | (142,161) | $ | 73,887 | $ | (154,225) | $ | 326,794 | ||||||||||||
Basic (loss) income per common share | $ | (5.07) | $ | 2.70 | $ | (5.52) | $ | 12.03 | ||||||||||||
Diluted (loss) income per common share | $ | (5.07) | $ | 2.58 | $ | (5.52) | $ | 11.39 | ||||||||||||
Net loss available to common shareholders of ($142.2 million), or ($5.07) diluted earnings per share (EPS), was driven by investment loss (4) of ($223.9 million) related to the decline in capital markets which impacted the value of the Company's investment portfolio. Net loss was ($154.2 million) year-to-date, or diluted EPS of ($5.52).
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
Operating Revenues (2) | $ | 266,627 | $ | 304,091 | $ | 540,606 | $ | 637,308 | ||||||||||||
Investment (Loss) Gains (4) | (223,927) | 32,679 | (292,317) | 299,621 | ||||||||||||||||
Total Revenues | $ | 42,700 | $ | 336,770 | $ | 248,289 | $ | 936,929 | ||||||||||||
Operating Adjusted EBITDA (3) | $ | 74,220 | $ | 92,124 | $ | 158,407 | $ | 214,841 | ||||||||||||
Investment Adjusted EBITDA (5) | (209,997) | 32,763 | (253,522) | 295,527 | ||||||||||||||||
Total Adjusted EBITDA (1) | $ | (135,777) | $ | 124,887 | $ | (95,115) | $ | 510,368 | ||||||||||||
- | - | - | - | |||||||||||||||||
- Total revenues were $42.7 million for the quarter and $248.3 million year-to-date.
- Operating revenues (2) were $266.6 million for the quarter and $540.6 million year-to-date.
- Operating adjusted EBITDA (3) of $74.2 million for the quarter and $158.4 million year-to-date.
- Total adjusted EBITDA (1) loss of ($135.8 million) for the quarter and ($95.1 million) year-to-date.
As of June 30, 2022, cash and investments (6) totaled approximately $2.2 billion including cash and cash equivalents of $216.1 million. Total cash and investments, (6) net of debt, was $61.5 million.
Segment Financial Summary
Operating Revenues (2) | Investment Gains (Loss) (4) | Total Segment Revenue | |||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Capital Markets | $ 129,825 | $ 151,488 | $ (225,455) | $ 29,897 | $ (95,630) | $ 181,385 | |||||||||||||||
Wealth Management | 60,861 | 87,444 | 1,528 | 2,865 | 62,389 | 90,309 | |||||||||||||||
Auction and Liquidation | 3,924 | 17,277 | - | - | 3,924 | 17,277 | |||||||||||||||
Financial Consulting | 24,310 | 23,735 | - | - | 24,310 | 23,735 | |||||||||||||||
Principal Investments - Communications and Other | 42,533 | 19,646 | - | - | 42,533 | 19,646 | |||||||||||||||
Brands | 5,174 | 4,501 | - | (83) | 5,174 | 4,418 | |||||||||||||||
Segment Operating Income (Loss) (7) | Investment Income (Loss) (5) | Total Segment Income (Loss) | |||||||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Capital Markets | $ 53,282 | $ 74,701 | $ (211,525) | $ 29,981 | $ (158,243) | $ 104,682 | |||||||||||||||
Wealth Management | (8,841) | (3,598) | 1,528 | 2,865 | (7,313) | (733) | |||||||||||||||
Auction and Liquidation | 451 | 3,555 | - | - | 451 | 3,555 | |||||||||||||||
Financial Consulting | 4,284 | 4,175 | - | - | 4,284 | 4,175 | |||||||||||||||
Principal Investments - Communications and Other | 7,647 | 7,275 | - | - | 7,647 | 7,275 | |||||||||||||||
Brands | 3,773 | 3,096 | - | (83) | 3,773 | 3,013 | |||||||||||||||
For the three months ended June 30, 2022:
Excluding investment loss of ($225.5 million),(4) Capital Markets segment operating revenues decreased to $129.8 million from $151.5 million in the prior year period. Segment operating income (7) fell to $53.3 million from $74.7 million in the prior year period. Results for the quarter were impacted by declines in investment banking and institutional brokerage activities that were consistent with the industry-wide reduction in deal activity.
Wealth Management revenues fell to $62.4 million with a segment loss of ($7.3 million) due to reduced activity and the impact of a settlement related to a legacy National Securities regulatory matter which pre-dated the Company's acquisition in 2021.
Auction and Liquidation revenues were $3.9 million with segment income of $0.5 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 revenues increased to $24.3 million, up from $23.7 million in the prior year period. Segment income increased to $4.3 million, up from $4.2 million in the prior year period. The increase was driven primarily by bankruptcy restructuring and forensic litigation consulting matters, in addition to appraisal engagements and real estate dispositions.
Principal Investments – Communications and Other segment revenues increased to $42.5 million, up from $19.6 million in the prior year period due to the addition of Lingo and Marconi Wireless. On a combined basis, communications businesses – magicJack, United Online, Marconi Wireless and Lingo—along with other principal investments, generated segment income of $7.6 million for the quarter.
Brands segment revenues increased to $5.2 million, up from $4.4 million in the prior year period related to the licensing of trademarks for six brands: Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too, and Nanette Lepore. Segment income increased to $3.8 million, up from $3.0 million in the prior year period.
Operating Revenues (2) | Investment Gains (Loss) (4) | Total Segment Revenue | |||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Capital Markets | $ 260,335 | $ 359,387 | $ (294,367) | $ 294,400 | $ (34,032) | $ 653,787 | |||||||||||||||
Wealth Management | 137,818 | 152,986 | 2,050 | 5,221 | 139,868 | 158,207 | |||||||||||||||
Auction and Liquidation | 7,279 | 30,727 | - | - | 7,279 | 30,727 | |||||||||||||||
Financial Consulting | 50,246 | 45,144 | - | - | 50,246 | 45,144 | |||||||||||||||
Principal Investments - Communications and Other | 75,197 | 40,175 | - | - | 75,197 | 40,175 | |||||||||||||||
Brands | 9,731 | 8,889 | - | - | 9,731 | 8,889 | |||||||||||||||
Segment Operating Income (Loss) (7) | Investment Income (Loss) (5) | Total Segment Income (Loss) | |||||||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
(Dollars in thousands) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Capital Markets | $ 111,151 | $ 180,684 | $ (255,572) | $ 290,306 | $ (144,421) | $ 470,990 | |||||||||||||||
Wealth Management | (19,459) | (1,927) | 2,050 | 5,221 | (17,409) | 3,294 | |||||||||||||||
Auction and Liquidation | (349) | 4,462 | - | - | (349) | 4,462 | |||||||||||||||
Financial Consulting | 9,196 | 7,497 | - | - | 9,196 | 7,497 | |||||||||||||||
Principal Investments - Communications and Other | 16,491 | 14,806 | - | - | 16,491 | 14,806 | |||||||||||||||
Brands | 6,991 | 6,094 | - | - | 6,991 | 6,094 | |||||||||||||||
For the six months ended June 30, 2022:
Excluding the year-to-date investment loss (4) of ($294.4 million), Capital Markets segment operating revenues (2) were $260.3 million with segment operating income (7) of $111.2 million.
Wealth Management segment revenues were $139.9 million with segment loss of ($17.4 million), year-to-date.
Auction and Liquidation segment revenues were $7.3 million with a segment loss of ($0.3 million), year-to-date.
Financial Consulting year-to-date segment revenues increased to $50.2 million, up from $45.1 million for the prior year-ago period. Segment income of $9.2 million increased compared to $7.5 million in the prior year-ago period.
Principal Investments – Communications and Other segment revenues were $75.2 million with segment income of $16.5 million, year-to-date.
Brands segment year-to-date revenues increased to $9.7 million, up from $8.9 million in the prior year-ago period. Segment income increased to $7.0 million, up from $6.1 million in the prior year ago period.
Investments in the Hurley and Justice brands contributed dividend income of $7.4 million for the quarter, and $13.3 million year-to-date. Results related to the Hurley and Justice investments are recognized as Capital Markets segment operating income. (7)
Supplemental Financial Data
Additional details related to operating results and investment performance can be found in the Second Quarter 2022 Financial Supplement on B. Riley's investor relations website.
Conference Call Details
Management will host an investor call to discuss its second quarter results today, Thursday, July 28, 2022 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). Investors may access the live broadcast and archived recording via ir.brileyfin.com.
Date and Time: | Thursday, July 28, 2022 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) |
Dial In: | 1-855-327-6837 (toll-free) or 1-631-891-4304 (international) |
Audio Webcast: |
Replay (expires Thursday, August 4, 2022) | |
Dial In: | 1-844-512-2921; 10019761 (pin) |
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, collaborative 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 registered 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.) | |
(1) | Adjusted EBITDA includes earnings before interest, taxes, depreciation, amortization, restructuring costs, share-based payments, gain on extinguishment of loans, impairment of tradenames, and transaction related and other costs. For a definition of adjusted EBITDA and a reconciliation to GAAP financial measures, please see the Appendix hereto. |
(2) | Operating revenue is defined as the sum of revenues from services and fees, interest income - loans and securities lending, and sale of goods. |
(3) | Operating adjusted EBITDA is defined as adjusted EBITDA excluding trading income (losses) and fair value adjustments on loans and other investment related expenses. |
(4) | Investment gains (loss) is defined as trading income (losses) and fair value adjustments on loans. |
(5) | Investment adjusted EBITDA and investment income (loss) are defined as trading income (losses) and fair value adjustments on loans, 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 (losses) and fair value adjustments on loans and other investment related 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 costs, 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, net of debt, total cash, net securities and investments, and other minus total debt, 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 associated with the unpredictable and ongoing impact of the COVID-19 pandemic and other 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 Annual Report on Form 10-K for the year ended December 31, 2021 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 June 30, 2022. 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.
Contacts | |
Investors | Media |
Mike Frank | Jo Anne McCusker |
(212) 409-2424 | (646) 885-5425 |
B. RILEY FINANCIAL, INC. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(Dollars in thousands, except par value) | |||||||||||
June 30, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 216,098 | $ | 278,933 | |||||||
Restricted cash | 928 | 927 | |||||||||
Due from clearing brokers | 50,597 | 29,657 | |||||||||
Securities and other investments owned, at fair value | 1,144,896 | 1,532,095 | |||||||||
Securities borrowed | 2,414,074 | 2,090,966 | |||||||||
Accounts receivable, net | 52,935 | 49,673 | |||||||||
Due from related parties | 645 | 2,074 | |||||||||
Loans receivable, at fair value (includes $88,893 and $167,744 from related parties as of June 30, 2022 and December 31, 2021, respectively) | 770,840 | 873,186 | |||||||||
Prepaid expenses and other assets | 480,276 | 463,502 | |||||||||
Operating lease right-of-use assets | 59,806 | 56,969 | |||||||||
Property and equipment, net | 14,182 | 12,870 | |||||||||
Goodwill | 394,331 | 250,568 | |||||||||
Other intangible assets, net | 270,322 | 207,651 | |||||||||
Deferred tax assets, net | 5,287 | 2,848 | |||||||||
Total assets | $ | 5,875,217 | $ | 5,851,919 | |||||||
Liabilities and Equity | |||||||||||
Liabilities: | |||||||||||
Accounts payable | $ | 22,428 | $ | 6,326 | |||||||
Accrued expenses and other liabilities | 245,773 | 343,750 | |||||||||
Deferred revenue | 79,226 | 69,507 | |||||||||
Deferred tax liabilities, net | — | 93,055 | |||||||||
Due to related parties and partners | 470 | — | |||||||||
Due to clearing brokers | 24,695 | 69,398 | |||||||||
Securities sold not yet purchased | 5,403 | 28,623 | |||||||||
Securities loaned | 2,414,201 | 2,088,685 | |||||||||
Operating lease liabilities | 70,972 | 69,072 | |||||||||
Notes payable | 23,186 | 357 | |||||||||
Revolving credit facility | 80,000 | 80,000 | |||||||||
Term loans, net | 367,815 | 346,385 | |||||||||
Senior notes payable, net | 1,644,778 | 1,606,560 | |||||||||
Total liabilities | 4,978,947 | 4,801,718 | |||||||||
Commitments and contingencies | |||||||||||
Redeemable noncontrolling interests in equity of subsidiaries | 352,894 | 345,000 | |||||||||
B. Riley Financial, Inc. equity: | |||||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,535 and 4,512 issued and | — | — | |||||||||
outstanding as of June 30, 2022 and December 31, 2021, respectively; and liquidation preference | |||||||||||
of $113,380 and $112,790 as of June 30, 2022 and December 31, 2021, respectively | |||||||||||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,290,458 and 27,591,028 | 3 | 3 | |||||||||
issued and outstanding as of June 30, 2022 and December 31, 2020, respectively | |||||||||||
Additional paid-in capital | 459,220 | 413,486 | |||||||||
Retained earnings | 32,570 | 248,862 | |||||||||
Accumulated other comprehensive loss | (3,884) | (1,080) | |||||||||
Total B. Riley Financial, Inc. stockholders' equity | 487,909 | 661,271 | |||||||||
Noncontrolling interests | 55,467 | 43,930 | |||||||||
Total equity | 543,376 | 705,201 | |||||||||
Total liabilities and equity | $ | 5,875,217 | $ | 5,851,919 | |||||||
B. RILEY FINANCIAL, INC. | |||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(Dollars in thousands, except share data) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||
Revenues: | |||||||||||||||||
Services and fees | $ | 200,905 | $ | 266,143 | $ | 411,580 | $ | 555,612 | |||||||||
Trading (losses) income and fair value adjustments on loans | (223,927) | 32,679 | (292,317) | 299,621 | |||||||||||||
Interest income - Loans and securities lending | 63,835 | 25,491 | 125,261 | 62,411 | |||||||||||||
Sale of goods | 1,887 | 12,457 | 3,765 | 19,285 | |||||||||||||
Total revenues | 42,700 | 336,770 | 248,289 | 936,929 | |||||||||||||
Operating expenses: | |||||||||||||||||
Direct cost of services | 17,785 | 12,094 | 29,436 | 23,416 | |||||||||||||
Cost of goods sold | 1,994 | 3,626 | 4,245 | 8,952 | |||||||||||||
Selling, general and administrative expenses | 167,136 | 199,922 | 342,335 | 391,266 | |||||||||||||
Interest expense - Securities lending and loan participations sold | 14,544 | 10,983 | 26,310 | 30,172 | |||||||||||||
Total operating expenses | 201,459 | 226,625 | 402,326 | 453,806 | |||||||||||||
Operating (loss) income | (158,759) | 110,145 | (154,037) | 483,123 | |||||||||||||
Other income (expense): | |||||||||||||||||
Interest income | 500 | 56 | 567 | 105 | |||||||||||||
Change in fair value of financial instruments and other | 4,321 | 6,509 | 10,302 | 6,509 | |||||||||||||
(Loss) income from equity investments | (3,399) | (852) | 3,376 | 23 | |||||||||||||
Interest expense | (31,764) | (20,856) | (62,200) | (40,642) | |||||||||||||
(Loss) income before income taxes | (189,101) | 95,002 | (201,992) | 449,118 | |||||||||||||
Benefit from (provision for) income taxes | 52,513 | (19,902) | 56,208 | (117,420) | |||||||||||||
Net (loss) income | (136,588) | 75,100 | (145,784) | 331,698 | |||||||||||||
Net income (loss) attributable to noncontrolling interests | |||||||||||||||||
and redeemable noncontrolling interests | 3,571 | (576) | 4,437 | 1,366 | |||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | (140,159) | 75,676 | (150,221) | 330,332 | |||||||||||||
Preferred stock dividends | 2,002 | 1,789 | 4,004 | 3,538 | |||||||||||||
Net (loss) income available to common shareholders | $ | (142,161) | $ | 73,887 | $ | (154,225) | 326,794 | ||||||||||
Basic (loss) income per common share | $ | (5.07) | $ | 2.70 | $ | (5.52) | $ | 12.03 | |||||||||
Diluted (loss) income per common share | $ | (5.07) | $ | 2.58 | $ | (5.52) | $ | 11.39 | |||||||||
Weighted average basic common shares outstanding | 28,051,570 | 27,344,184 | 27,953,845 | 27,159,257 | |||||||||||||
Weighted average diluted common shares outstanding | 28,051,570 | 28,668,465 | 27,953,845 | 28,690,444 | |||||||||||||
B. RILEY FINANCIAL, INC. | ||||||||||||||||
Segment Financial Information | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Capital Markets segment: | ||||||||||||||||
Revenues - Services and fees | $ | 67,426 | $ | 125,997 | $ | 136,510 | $ | 296,976 | ||||||||
Trading (losses) income and fair value adjustments on loans | (225,455) | 29,897 | (294,367) | 294,400 | ||||||||||||
Interest income - Loans and securities lending | 62,399 | 25,491 | 123,825 | 62,411 | ||||||||||||
Total revenues | (95,630) | 181,385 | (34,032) | 653,787 | ||||||||||||
Selling, general and administrative expenses | (45,865) | (65,473) | (79,982) | (151,613) | ||||||||||||
Interest expense - Securities lending and loan participations sold | (14,544) | (10,983) | (26,310) | (30,172) | ||||||||||||
Depreciation and amortization | (2,204) | (247) | (4,097) | (1,012) | ||||||||||||
Segment (loss) income | (158,243) | 104,682 | (144,421) | 470,990 | ||||||||||||
Wealth Management segment: | ||||||||||||||||
Revenues - Services and fees | 60,861 | 87,444 | 137,818 | 152,986 | ||||||||||||
Trading income and fair value adjustments on loans | 1,528 | 2,865 | 2,050 | 5,221 | ||||||||||||
Total revenues | 62,389 | 90,309 | 139,868 | 158,207 | ||||||||||||
Selling, general and administrative expenses | (68,394) | (88,702) | (154,136) | (150,174) | ||||||||||||
Depreciation and amortization | (1,308) | (2,340) | (3,141) | (4,739) | ||||||||||||
Segment (loss) income | (7,313) | (733) | (17,409) | 3,294 | ||||||||||||
Auction and Liquidation segment: | ||||||||||||||||
Revenues - Services and fees | 2,488 | 5,534 | 5,843 | 12,892 | ||||||||||||
Revenues - Sale of goods | — | 11,743 | — | 17,835 | ||||||||||||
Interest income - Loans and securities lending | 1,436 | — | 1,436 | — | ||||||||||||
Total revenues | 3,924 | 17,277 | 7,279 | 30,727 | ||||||||||||
Direct cost of services | (1,296) | (7,540) | (3,631) | (14,120) | ||||||||||||
Cost of goods sold | — | (3,105) | — | (7,579) | ||||||||||||
Selling, general and administrative expenses | (2,177) | (3,077) | (3,997) | (4,566) | ||||||||||||
Segment income (loss) | 451 | 3,555 | (349) | 4,462 | ||||||||||||
Financial Consulting segment: | ||||||||||||||||
Revenues - Services and fees | 24,310 | 23,735 | 50,246 | 45,144 | ||||||||||||
Selling, general and administrative expenses | (19,948) | (19,471) | (40,891) | (37,460) | ||||||||||||
Depreciation and amortization | (78) | (89) | (159) | (187) | ||||||||||||
Segment income | 4,284 | 4,175 | 9,196 | 7,497 | ||||||||||||
Principal Investments - Communications and Other segment: | ||||||||||||||||
Revenues - Services and fees | 40,646 | 18,932 | 71,432 | 38,725 | ||||||||||||
Revenues - Sale of goods | 1,887 | 714 | 3,765 | 1,450 | ||||||||||||
Total revenues | 42,533 | 19,646 | 75,197 | 40,175 | ||||||||||||
Direct cost of services | (16,489) | (4,554) | (25,805) | (9,296) | ||||||||||||
Cost of goods sold | (1,994) | (521) | (4,245) | (1,373) | ||||||||||||
Selling, general and administrative expenses | (12,808) | (4,768) | (21,836) | (9,638) | ||||||||||||
Depreciation and amortization | (3,595) | (2,528) | (6,820) | (5,062) | ||||||||||||
Segment income | 7,647 | 7,275 | 16,491 | 14,806 | ||||||||||||
Brands segment: | ||||||||||||||||
Revenues - Services and fees | 5,174 | 4,501 | 9,731 | 8,889 | ||||||||||||
Trading loss and fair value adjustments on loans | — | (83) | — | — | ||||||||||||
Total revenues | 5,174 | 4,418 | 9,731 | 8,889 | ||||||||||||
Selling, general and administrative expenses | (818) | (690) | (1,574) | (1,366) | ||||||||||||
Depreciation and amortization | (583) | (715) | (1,166) | (1,429) | ||||||||||||
Segment income | 3,773 | 3,013 | 6,991 | 6,094 | ||||||||||||
Consolidated operating (loss) income from reportable segments | (149,401) | 121,967 | (129,501) | 507,143 | ||||||||||||
Corporate and other expenses | (9,358) | (11,822) | (24,536) | (24,020) | ||||||||||||
Interest income | 500 | 56 | 567 | 105 | ||||||||||||
Change in fair value of financial instruments and other | 4,321 | 6,509 | 10,302 | 6,509 | ||||||||||||
(Loss) Income on equity investments | (3,399) | (852) | 3,376 | 23 | ||||||||||||
Interest expense | (31,764) | (20,856) | (62,200) | (40,642) | ||||||||||||
(Loss) income before income taxes | (189,101) | 95,002 | (201,992) | 449,118 | ||||||||||||
Benefit from (provision for) income taxes | 52,513 | (19,902) | 56,208 | (117,420) | ||||||||||||
Net (loss) income | (136,588) | 75,100 | (145,784) | 331,698 | ||||||||||||
Net income (loss) attributable to noncontrolling interests | ||||||||||||||||
and redeemable noncontrolling interests | 3,571 | (576) | 4,437 | 1,366 | ||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | (140,159) | 75,676 | (150,221) | 330,332 | ||||||||||||
Preferred stock dividends | 2,002 | 1,789 | 4,004 | 3,538 | ||||||||||||
Net (loss) income available to common shareholders | $ | (142,161) | $ | 73,887 | $ | (154,225) | $ | 326,794 | ||||||||
B. RILEY FINANCIAL, INC. | |||||||||||||||||
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | $ | (140,159) | $ | 75,676 | $ | (150,221) | $ | 330,332 | |||||||||
Adjustments: | |||||||||||||||||
(Benefit from) provision for income taxes | (52,513) | 19,902 | (56,208) | 117,420 | |||||||||||||
Interest expense | 31,764 | 20,856 | 62,200 | 40,642 | |||||||||||||
Interest income | (500) | (56) | (567) | (105) | |||||||||||||
Share based payments | 14,202 | 8,608 | 31,215 | 14,134 | |||||||||||||
Depreciation and amortization | 7,961 | 6,165 | 15,809 | 12,924 | |||||||||||||
Gain on extinguishment of loans | — | (6,509) | (1,102) | (6,509) | |||||||||||||
Transactions related costs and other | 3,468 | 245 | 3,759 | 1,530 | |||||||||||||
Total EBITDA adjustments | 4,382 | 49,211 | 55,106 | 180,036 | |||||||||||||
Adjusted EBITDA | $ | (135,777) | $ | 124,887 | $ | (95,115) | $ | 510,368 | |||||||||
Operating EBITDA Adjustments: | |||||||||||||||||
Trading losses (income) and fair value adjustments on loans | 223,927 | (32,679) | 292,317 | (299,621) | |||||||||||||
Other investment related expenses | (13,930) | (84) | (38,795) | 4,094 | |||||||||||||
Total Operating EBITDA Adjustments | 209,997 | (32,763) | 253,522 | (295,527) | |||||||||||||
Operating Adjusted EBITDA | $ | 74,220 | $ | 92,124 | $ | 158,407 | $ | 214,841 | |||||||||
B. RILEY FINANCIAL, INC. | |||||||||||||||||
Adjusted Net Income Reconciliation | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(Dollars in thousands, except share data) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||
Net (loss) income attributable to B. Riley Financial, Inc. | $ | (140,159) | $ | 75,676 | $ | (150,221) | $ | 330,332 | |||||||||
Adjustments: | |||||||||||||||||
Share based payments | 14,202 | 8,608 | 31,215 | 14,134 | |||||||||||||
Amortization of intangible assets | 6,940 | 5,134 | 13,756 | 11,020 | |||||||||||||
Gain on extinguishment of loans | — | (6,509) | (1,102) | (6,509) | |||||||||||||
Transactions related costs and other | 3,468 | 245 | 3,759 | 1,530 | |||||||||||||
Income tax effect of adjusting entries | (6,707) | (1,557) | (12,889) | (5,073) | |||||||||||||
Adjusted net (loss) income attributable to B. Riley Financial, Inc. | $ | (122,256) | $ | 81,597 | $ | (115,482) | $ | 345,434 | |||||||||
Adjusted (loss) income per common share: | |||||||||||||||||
Adjusted basic (loss) income per share | $ | (4.36) | $ | 2.98 | $ | (4.13) | $ | 12.72 | |||||||||
Adjusted diluted (loss) income per share | $ | (4.36) | $ | 2.85 | $ | (4.13) | $ | 12.04 | |||||||||
Shares used to calculate adjusted basic net income per share | 28,051,570 | 27,344,184 | 27,953,845 | 27,159,257 | |||||||||||||
Shares used to calculate adjusted diluted net income per share | 28,051,570 | 28,668,465 | 27,953,845 | 28,690,444 | |||||||||||||
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SOURCE B. Riley Financial