B. Riley Financial Reports Preliminary Unaudited Fourth Quarter and Full Year 2023 Results; Declares Quarterly Dividend of $0.50 per share

LOS ANGELES, Feb. 29, 2024 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the "Company"), a diversified financial services platform, today released preliminary unaudited financial results for the three and twelve-month periods ending December 31, 2023. These financial results are subject to completion of the ongoing audit of the Company's annual financial statements.

Financial Highlights – Preliminary Unaudited

Fourth quarter ended December 31, 2023:

  • Total revenues were $347 million compared to $382 million for the fourth quarter of 2022
  • Net loss available to common shareholders was $70 million, or $2.32 diluted loss per share
  • Operating revenues(2) of $395 million compared to $449 million in the prior year quarter
  • Operating adjusted EBITDA(3) of $79 million compared to $110 million in the prior year quarter

Full year ended December 31, 2023:

  • Total revenues increased 52% to $1.65 billion in 2023, up from $1.08 billion in 2022
  • Net loss of $86 million for the full year driven primarily by non-cash impairment charge of $71 million
  • Operating revenues (2) increased 25% to $1.63 billion in 2023, up from $1.31 billion in 2022
  • Operating adjusted EBITDA (3) of $368 million compared to $394 million in the prior year
  • Total adjusted EBITDA(1) increased to $240 million in 2023, up from $32 million in 2022

Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: "Since our founding as a fundamental stock research firm over 27 years ago, we have invested opportunistically to build our platform and to enable our clients' success. This has been our stated strategy from the beginning – and with tailwinds in small caps, we believe B. Riley is poised to gain market share. This is our core business, and where we will continue to invest. We have reduced our dividend by 50 percent to focus on the many opportunities we have to invest in our own business, including potentially repurchasing our debt at attractive prices. As we look ahead, our focus remains on charting the best path forward for our business, employees, and shareholders."

Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: "2023 saw notable progress across the majority of our subsidiaries. Non-cash investment losses and an impairment charge masked what was otherwise a strong year for our core businesses. During 2023, financial consulting revenues and operating income grew 36% and 86%, respectively; segment income from our communications portfolio increased by 15%; and our wealth management business returned to profitability. Over the last 10 years, we have diversified our company by investing in and acquiring businesses that can benefit from and grow on our platform. On balance, each of our core financial services businesses have performed better than prior to our acquisition and involvement in these businesses. Our team continues to demonstrate complete focus and dedication, and this is truly what has been paramount to both our and our clients' collective success."

Declaration of Common Dividend
The Company's Board of Directors has approved a quarterly dividend of $0.50 per common share which will be payable on or about March 22, 2024 to common shareholders of record as of March 11, 2024.

Notice of Late Filing
The Company will file a Form 12b-25 with the SEC to provide notice of the late filing of its Annual Report on Form 10-K for the year ended December 31, 2023. The Company notes that it is unable, without unreasonable effort or expense, to file its Annual Report on Form 10-K for the year ended December 31, 2023 by February 29, 2024, the required filing date, due to delays experienced in finalizing the Company's financial statements. This delay resulted from the dedication of time and resources expended by the Company related to the review by the Audit Committee of the Company's Board of Directors, with the assistance of outside counsel, of the Company's transactions with Brian Kahn. The Company is compiling the required information to complete its Annual Report and it does not anticipate any significant changes to the financial results for the fourth quarter and year ended December 31, 2023 as disclosed.

Review of Strategic Alternatives 
The Company announced separately today that it has retained Moelis & Company as an independent financial advisor to commence a review of strategic alternatives for the appraisal and asset disposition businesses, collectively formerly known as Great American Group. There is no guarantee any potential transaction will result from this strategic review.

Preliminary Unaudited Financial Results for the Fourth Quarter and Full Year 2023

                             
 

Preliminary (Unaudited)

 

Three Months Ended 

 

Twelve Months Ended 

 
   

 December 31,

 December 31,

                             
 

(Dollars in thousands, except for share data)

   

2023

   

2022

   

2023

   

2022

 
                             
 

Net loss available to common shareholders

 

$

(70,042)

 

$

(59,447)

 

$

(86,371)

 

$

(167,837)

 
                             
 

Basic loss per common share

 

$

(2.32)

 

$

(2.08)

 

$

(2.95)

 

$

(5.95)

 
 

Diluted loss per common share

 

$

(2.32)

 

$

(2.08)

 

$

(2.95)

 

$

(5.95)

 
                             
                             
                             
                             
                             
                             
 

Preliminary (Unaudited)

 

Three Months Ended 

 

Twelve Months Ended 

 
   

 December 31,

 December 31,

                             
 

(Dollars in thousands)

   

2023

   

2022

   

2023

   

2022

 
                             
 

   Operating Revenues (2)

 

$

395,026

 

$

448,831

 

$

1,633,275

 

$

1,310,425

 
 

    Investment (Loss) Gains (4)

   

(48,521)

   

(66,739)

   

13,910

   

(229,755)

 
 

        Total Revenues

 

$

346,505

 

$

382,092

 

$

1,647,185

 

$

1,080,670

 
                             
 

   Operating Adjusted EBITDA (3)

 

$

78,855

 

$

109,876

 

$

367,604

 

$

393,585

 
 

   Investment Adjusted EBITDA (5)

   

(101,821)

   

(123,916)

   

(127,727)

   

(361,303)

 
 

       Total Adjusted EBITDA (1)

 

$

(22,966)

 

$

(14,040)

 

$

239,877

 

$

32,282

 
                             

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."

For the fourth quarter ended December 31, 2023

  • Total revenues were $347 million compared to $382 million in the fourth quarter of 2022.
  • Net loss attributable to common shareholders of $70 million, or $2.32 diluted loss per share, was primarily due to non-cash goodwill and tradename impairment charges of $34 million related to Targus, and unrealized investment losses.
  • Operating revenues(2) were $395 million for the fourth quarter of 2023, compared to $449 million in the prior year quarter.
  • Operating adjusted EBITDA (3) of $79 million compared to $110 million for the fourth quarter of 2022.

For the full year ended December 31, 2023

  • Total revenues increased 52% to $1.65 billion, up from $1.08 billion in 2022.
  • Net loss of $86 million for 2023 primarily related non-cash goodwill and tradename impairment charges of $71 million related to Targus, and unrealized investment losses.
  • Operating revenues (2) increased 25% to $1.63 billion in 2023, up from $1.31 billion in 2022.
  • Operating adjusted EBITDA (3) decreased to $368 million in 2023 compared to $394 million in 2022.
  • Total adjusted EBITDA(1) increased to $240 million in 2023, up from $32 million in 2022.

Investment gains and losses(4) include realized and unrealized gains and losses on our investments, whether realized from dispositions or unrealized due to changes in mark-to-market prices. These investment gains and losses have caused, and will continue to cause, volatility in our periodic earnings. For this reason, the Company generally discusses its financial performance in the context of operating revenues(2) and operating adjusted EBITDA(3) which may be considered non-GAAP financial measures. During the fourth quarter, the Company recast its operating metrics to include revenues from fixed income trading. This adjustment is reflected in the reconciliation for operating revenues and operating adjusted EBITDA.

Preliminary Unaudited Segment Financial Summary for the Fourth Quarter of 2023:

                           
 

Preliminary (Unaudited)

Segment Revenues

 

Segment Income (Loss)

 
   

Three Months Ended December 31,

 

Three Months Ended December 31,

 
 

(Dollars in thousands)

2023

 

2022

 

2023

 

2022

 
 

Capital Markets

 

$        87,558

   

$         72,304

   

$        (2,668)

   

$         (8,007)

 
 

Wealth Management

 

49,350

   

46,217

   

683

   

(7,414)

 
 

Auction and Liquidation

 

9,439

   

59,778

   

(1,147)

   

12,372

 
 

Financial Consulting

 

40,123

   

25,427

   

7,816

   

4,412

 
 

Communications

 

82,021

   

87,944

   

6,468

   

11,205

 
 

Consumer Products

 

54,046

   

77,821

   

(35,146)

   

8,188

 
                           
                           
                           
 

Preliminary (Unaudited)

Segment Revenues

 

Segment Income (Loss)

 
 

(Dollars in thousands)

Three Months Ended December 31,

 

Three Months Ended December 31,

 
 

Capital Markets

2023

 

2022

 

2023

 

2022

 
 

Operating 

 

$      137,363

   

$       138,346

   

$        47,137

   

$         55,520

 
 

Investment

 

(49,805)

   

(66,042)

   

(49,805)

   

(63,527)

 
 

Total

 

$        87,558

   

$         72,304

   

$        (2,668)

   

$         (8,007)

 
                           

Preliminary Unaudited Segment Financial Summary for the Full Year 2023:

                           
 

Preliminary (Unaudited)

Segment Revenues

 

Segment Income (Loss)

 
   

Twelve Months Ended December 31,

 

Twelve Months Ended December 31,

 
 

(Dollars in thousands)

2023

 

2022

 

2023

 

2022

 
 

Capital Markets

 

$      574,587

   

$       327,596

   

$      198,428

   

$         81,602

 
 

Wealth Management

 

198,245

   

234,257

   

3,097

   

(34,320)

 
 

Auction and Liquidation

 

103,265

   

74,096

   

21,371

   

12,600

 
 

Financial Consulting

 

133,705

   

98,508

   

30,420

   

16,312

 
 

Communications

 

337,689

   

235,655

   

34,725

   

30,320

 
 

Consumer Products

 

233,202

   

77,821

   

(75,318)

   

8,188

 
                           
                           
                           
 

Preliminary (Unaudited)

Segment Revenues

 

Segment Income (Loss)

 
 

(Dollars in thousands)

Twelve Months Ended December 31,

 

Twelve Months Ended December 31,

 
 

Capital Markets

2023

 

2022

 

2023

 

2022

 
 

Operating 

 

$      561,789

   

$       556,511

   

$      198,512

   

$       246,998

 
 

Investment

 

12,798

   

(228,915)

   

(84)

   

(165,396)

 
 

Total

 

$      574,587

   

$       327,596

   

$      198,428

   

$         81,602

 
                           

Segment Highlights

  • Capital Markets segment revenues increased 75% to $575 million in 2023, up from $328 million in 2022. Segment income increased 143% to $198 million in 2023, up from $82 million in 2022. Excluding investment gains and losses,(4) segment operating revenues(2) increased to $562 million, up from $557 million in 2022 primarily driven by investment banking and institutional brokerage activities at B. Riley Securities. Despite relatively subdued equity capital markets activity during the quarter, investment banking benefitted from an uptick in M&A and recently gained significant market share in debt capital markets. Sales and trading demonstrated sequential improvement, supported by increased contribution from fixed income trading. Investment banking restructuring has continued to see an uptick in activity.
  • Wealth Management returned to profitability in 2023 following the operational realignment of this business throughout 2021 and 2022. Segment revenues were $198 million in 2023. For the fourth quarter, revenues and fee-based assets increased year-over-year, compared to the fourth quarter of 2022. Assets under management totaled $25.4 billion at December 31, 2023.
  • Auction and Liquidation revenues increased 39% to $103 million in 2023, up from $74 million in 2022 driven by a significant uptick in retail liquidation activity in the U.S. and Canada during 2023, and continued levels of retail liquidation activity in Europe. Segment income increased 70% to $21 million, up from $13 million in the prior year. Results for this segment vary quarter-to-quarter and year-to-year due to the episodic impact of large retail liquidation engagements.
  • Financial Consulting maintained strong steady growth throughout 2023. Segment revenues increased 36% to $134 million in 2023, up from $99 million in 2022 primarily driven by an increase of bankruptcy and litigation consulting assignments and appraisal engagements, and real estate restructuring projects. Segment income increased 86% to $30 million, up from $16 million in the prior year. The fourth quarter saw another record revenue period for our consulting division, along with increased revenues from the appraisal division.
  • Communications segment revenues increased 43% to $338 million in 2023, up from $236 million primarily due to acquisitions completed during late 2022. On a combined basis, segment income from communications businesses increased 15% to $35 million in 2023 from $30 million in the prior year.
  • Consumer Products segment revenues include the sale of goods from Targus, which was impacted by continued softness in the global PC and tablet marketplace throughout 2023. This resulted in non-cash goodwill and tradename impairment charges of approximately $71 million in 2023. As global sales improve, the Company believes Targus is well positioned to gain market share as the worldwide leader in its category.

Dividend income related to securities owned and our Brand investments increased 33% to $48 million in 2023, up from $36 million in 2022.

Realignment of Segment Reporting
The Company re-aligned its segment reporting during the fourth quarter of 2023. These changes resulted in Targus's operations being reported on a standalone basis in the Consumer Products segment and the operations related to brand licensing that was previously reported in the Consumer segment being reported in the All Other Category that is reported with Corporate and Other. The Company has recast the financial data for the Consumer Products segment and reporting of the All Other Category for all periods presented.

Balance Sheet Summary
At December 31, 2023, cash and investments(6) totaled $1.90 billion, including $232 million of cash and cash equivalents; $1.11 billion in net securities and other investments owned, at fair value; and $532 million of loans receivable. Total debt, net of cash and investments,(6) was $457 million at quarter-end. Total debt was $2.36 billion as of December 31, 2023.

Earnings Call Details
B. Riley Financial will hold an investor call today, February 29, beginning at 4:30 PM ET (1:30 PM PT) to discuss its business and preliminary unaudited financial results for the fourth quarter and full year 2023. 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 March 14.

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/loss on extinguishment of loans, gain on bargain purchase, 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. During the fourth quarter of 2023, the Company recast its operating metrics to include revenues from fixed income trading. Operating Revenues has been adjusted to include fixed income trading revenue for the periods presented.
(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. During the fourth quarter of 2023, the Company recast its operating metrics to include revenues from fixed income trading. Operating Adjusted EBITDA has been adjusted to include fixed income trading revenue for the periods presented.
(4) Investment Gains (Loss) is defined as Trading Income (Loss) and Fair Value Adjustments on Loans less fixed income trading revenue.
(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 fixed income trading revenue and other investment related expenses.
(6) Total cash and investments is defined as the sum of cash and cash equivalents, net of noncontrolling interest, 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) including fixed income trading revenues and 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, gain on bargain purchase, impairment of goodwill and 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 and including fixed income trading revenue, (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 excluding fixed income trading revenue 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 B. Riley Financial, Inc.'s Annual Report on Form 10-K for the year ended 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. AND SUBSIDIARIES

Preliminary Unaudited Condensed Consolidated Balance Sheets

(Dollars in thousands)

                       
             

December 31,

 

December 31,

             

2023

 

2022

                       

Assets

         

Assets

                 
 

Cash and cash equivalents

$

231,964

 

$

268,618

 

Restricted cash

 

1,875

   

2,308

 

Due from clearing brokers

 

51,334

   

48,737

 

Securities and other investments owned, at fair value

 

1,117,430

   

1,129,268

 

Securities borrowed

 

2,870,939

   

2,343,327

 

Accounts receivable, net

 

115,496

   

149,110

 

Due from related parties

 

2,510

   

1,081

 

Loans receivable, at fair value (includes $73,502 and $98,729 from related parties as of December 31, 2023 and December 31, 2022, respectively)

 

532,419

   

701,652

 

Prepaid expenses and other assets

 

239,572

   

460,696

 

Operating lease right-of-use asset, net

 

87,605

   

88,593

 

Property and equipment, net

 

25,206

   

27,141

 

Goodwill

     

471,866

   

512,595

 

Other intangible assets, net

 

322,014

   

374,098

 

Deferred income taxes

 

25,411

   

3,978

   

Total assets

$

6,095,641

 

$

6,111,202

Liabilities and Equity

         

Liabilities

               
 

Accounts payable

$

44,550

 

$

81,384

 

Accrued expenses and other liabilities

 

272,586

   

322,974

 

Deferred revenue

 

71,504

   

85,441

 

Due to related parties and partners

 

2,731

   

2,210

 

Due to clearing brokers

 

   

19,307

 

Securities sold not yet purchased

 

8,601

   

5,897

 

Securities loaned

 

2,859,306

   

2,334,031

 

Operating lease liabilities

 

98,563

   

99,124

 

Deferred income taxes

 

   

29,548

 

Notes payable

 

19,391

   

25,263

 

Revolving credit facility

 

43,801

   

127,678

 

Term loan

     

625,151

   

572,079

 

Senior notes payable, net

 

1,668,021

   

1,721,751

   

Total liabilities

 

5,714,205

   

5,426,687

                       

Redeemable noncontrolling interests in equity of subsidiaries

 

   

178,622

Total B. Riley Financial, Inc. stockholders' equity

 

312,713

   

446,514

Noncontrolling interests

 

68,723

   

59,379

   

Total equity

 

381,436

   

505,893

     

Total liabilities and equity

$

6,095,641

 

$

6,111,202

 

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Preliminary Unaudited Condensed Consolidated Statement of Operations

(Dollars in thousands, except share data)

                                   
             

Three Months Ended 

 

Twelve Months Ended 

             

 December 31,

 

 December 31,

             

2023

 

2022

 

2023

 

2022

Revenues:

                       
 

Services and fees

$

260,799

 

$

243,837

 

$

1,004,708

 

$

895,623

 

Trading (loss) income and fair value adjustments on loans

 

(40,271)

   

(58,670)

   

43,075

   

(202,628)

 

Interest income - Loans and securities lending

 

62,781

   

62,545

   

284,896

   

245,400

 

Sale of goods

 

63,196

   

134,380

   

314,506

   

142,275

   

Total revenues

 

346,505

   

382,092

   

1,647,185

   

1,080,670

Operating expenses:

                     
 

Direct cost of services

 

60,606

   

68,496

   

238,794

   

142,455

 

Cost of goods sold

 

45,110

   

71,313

   

211,106

   

78,647

 

Selling, general and administrative expenses

 

205,096

   

208,552

   

828,296

   

714,614

 

Restructuring charge

 

1,182

   

995

   

2,131

   

9,011

 

Impairment of goodwill and tradenames

 

33,560

   

   

70,793

   

 

Interest expense - Securities lending and loan participations sold

 

38,863

   

22,738

   

145,435

   

66,495

   

Total operating expenses

 

384,417

   

372,094

   

1,496,555

   

1,011,222

     

Operating (loss) income

 

(37,912)

   

9,998

   

150,630

   

69,448

Other income (expense):

                     
 

Interest income

 

420

   

1,482

   

3,875

   

2,735

 

Dividend income

 

12,141

   

9,595

   

47,776

   

35,874

 

Realized and unrealized gains (losses) on investments

 

(53,552)

   

(64,874)

   

(138,512)

   

(201,079)

 

Change in fair value of financial instruments and other

 

(750)

   

460

   

(4,748)

   

10,188

 

Gain on bargain purchase

 

15,903

   

   

15,903

   

 

(Loss) income from equity investments

 

(6)

   

285

   

(181)

   

3,570

 

Interest expense

 

(46,891)

   

(44,399)

   

(187,013)

   

(141,186)

   

Loss before income taxes

 

(110,647)

   

(87,453)

   

(112,270)

   

(220,450)

Benefit from income taxes

 

42,853

   

23,998

   

28,509

   

63,856

   

Net loss

 

(67,794)

   

(63,455)

   

(83,761)

   

(156,594)

Net income (loss) attributable to noncontrolling interests

                     

and redeemable noncontrolling interests

 

233

   

(6,010)

   

(5,447)

   

3,235

   

Net loss attributable to B. Riley Financial, Inc.

 

(68,027)

   

(57,445)

   

(78,314)

   

(159,829)

Preferred stock dividends

 

2,015

   

2,002

   

8,057

   

8,008

   

Net loss available to common shareholders

$

(70,042)

 

$

(59,447)

 

$

(86,371)

 

$

(167,837)

                                   

Basic loss per common share

$

(2.32)

 

$

(2.08)

 

$

(2.95)

 

$

(5.95)

Diluted loss per common share

$

(2.32)

 

$

(2.08)

 

$

(2.95)

 

$

(5.95)

                                   

Weighted average basic common shares outstanding

 

30,248,946

   

28,545,714

   

29,265,099

   

28,188,530

Weighted average diluted common shares outstanding

 

30,248,946

   

28,545,714

   

29,265,099

   

28,188,530

 

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Preliminary Unaudited Adjusted EBITDA(1) and Operating Adjusted EBITDA(3) Reconciliations

(Dollars in thousands)

                                   
             

Three Months Ended 

 

Twelve Months Ended 

             

 December 31,

 

 December 31,

             

2023

 

2022

 

2023

 

2022

Net loss attributable to B. Riley Financial, Inc.

$

(68,027)

 

$

(57,445)

 

$

(78,314)

 

$

(159,829)

Adjustments:

                         
 

Benefit from income taxes

 

(42,853)

   

(23,998)

   

(28,509)

   

(63,856)

 

Interest expense

 

46,891

   

44,399

   

187,013

   

141,186

 

Interest income

 

(420)

   

(1,482)

   

(3,875)

   

(2,735)

 

Share based payments

 

9,845

   

15,312

   

45,109

   

61,140

 

Depreciation and amortization

 

11,502

   

13,443

   

49,604

   

39,969

 

Restructuring charge

 

1,182

   

995

   

2,131

   

9,011

 

Gain on bargain purchase

 

(15,903)

   

   

(15,903)

   

 

Loss (gain) on extinguishment of loans

 

   

   

5,409

   

(1,102)

 

Impairment of goodwill and tradenames

 

33,560

   

   

70,793

   

 

Transactions related costs and other

 

1,257

   

(5,264)

   

6,419

   

8,498

   

Total EBITDA adjustments

 

45,061

   

43,405

   

318,191

   

192,111

     

Adjusted EBITDA

$

(22,966)

 

$

(14,040)

 

$

239,877

 

$

32,282

                                   

Operating EBITDA Adjustments:

                     
 

Trading loss (income) and fair value adjustments on loans

 

40,271

   

58,670

   

(43,075)

   

202,628

 

Realized and unrealized (gains) losses on investments

 

53,552

   

64,874

   

138,512

   

201,079

 

Fixed Income Spread

 

8,250

   

8,069

   

29,165

   

27,127

 

Other investment related expenses

 

(252)

   

(7,697)

   

3,125

   

(69,531)

   

Total Operating EBITDA Adjustments

 

101,821

   

123,916

   

127,727

   

361,303

Operating Adjusted EBITDA

$

78,855

 

$

109,876

 

$

367,604

 

$

393,585

 

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Preliminary Unaudited Revenues Reconciliation

(Dollars in thousands)

                                   
             

Three Months Ended 

 

Twelve Months Ended 

             

 December 31,

 

 December 31,

             

2023

 

2022

 

2023

 

2022

Revenues:

                           
 

Capital Markets

$

87,558

   

72,304

 

$

574,587

   

327,596

 

Wealth Management

 

49,350

   

46,217

   

198,245

   

234,257

 

Auction and Liquidation

 

9,439

   

59,778

   

103,265

   

74,096

 

Financial Consulting

 

40,123

   

25,427

   

133,705

   

98,508

 

Communications

 

82,021

   

87,944

   

337,689

   

235,655

 

Consumer Products

 

54,046

   

77,821

   

233,202

   

77,821

 

All Other

     

23,968

   

12,601

   

66,492

   

32,737

   

Total  Revenues

$

346,505

 

$

382,092

 

$

1,647,185

 

$

1,080,670

                                   
                                   
                                   

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Preliminary Unaudited Operating (Loss) Income Reconciliation

(Dollars in thousands)

                                   
             

Three Months Ended 

 

Twelve Months Ended 

             

 December 31,

 

 December 31,

             

2023

 

2022

 

2023

 

2022

Operating (Loss) Income:

                     
 

Capital Markets

$

(2,668)

   

(8,007)

 

$

198,428

   

81,602

 

Wealth Management

 

683

   

(7,414)

   

3,097

   

(34,320)

 

Auction and Liquidation

 

(1,147)

   

12,372

   

21,371

   

12,600

 

Financial Consulting

 

7,816

   

4,412

   

30,420

   

16,312

 

Communications

 

6,468

   

11,205

   

34,725

   

30,320

 

Consumer Products

 

(35,146)

   

8,188

   

(75,318)

   

8,188

 

All Other

     

(13,918)

   

(10,758)

   

(62,093)

   

(45,254)

   

Total Operating (Loss) Income

$

(37,912)

 

$

9,998

 

$

150,630

 

$

69,448

 

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Preliminary Unaudited Operating Revenues(2) Reconciliation

(Dollars in thousands)

                                   
             

Three Months Ended 

 

Twelve Months Ended 

             

 December 31,

 

 December 31,

             

2023

 

2022

 

2023

 

2022

Total Revenues

 

$

346,505

 

$

382,092

 

$

1,647,185

 

$

1,080,670

Operating Revenues Adjustments:

                     
 

Trading loss (income) and fair value adjustments on loans

 

40,271

   

58,670

   

(43,075)

   

202,628

 

Fixed Income Spread

 

8,250

   

8,069

   

29,165

   

27,127

   

Total Revenues Adjustments

 

48,521

   

66,739

   

(13,910)

   

229,755

Operating Revenues

$

395,026

 

$

448,831

 

$

1,633,275

 

$

1,310,425

 

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Preliminary Unaudited Capital Markets Operating Revenues(2) Reconciliation

(Dollars in thousands)

                                   
             

Three Months Ended 

 

Twelve Months Ended 

             

 December 31,

 

 December 31,

Capital Markets

 

2023

 

2022

 

2023

 

2022

Total Revenues

 

$

87,558

 

$

72,304

 

$

574,587

 

$

327,596

Operating Revenues Adjustments:

                     
 

Trading loss (income) and fair value adjustments on loans

 

42,794

   

59,115

   

(38,317)

   

206,150

 

Fixed Income Spread

 

7,011

   

6,927

   

25,519

   

22,765

   

Total Revenues Adjustments

 

49,805

   

66,042

   

(12,798)

   

228,915

Operating Revenues

$

137,363

 

$

138,346

 

$

561,789

 

$

556,511

                                   
                                   

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Preliminary Unaudited Capital Markets Segment Operating Income(7) Reconciliation

(Dollars in thousands)

                                   
             

Three Months Ended 

 

Twelve Months Ended 

             

 December 31,

 

 December 31,

Capital Markets

 

2023

 

2022

 

2023

 

2022

Segment (Loss) Income

$

(2,668)

 

$

(8,007)

 

$

198,428

 

$

81,602

Operating Revenues Adjustments:

                     
 

Trading loss (income) and fair value adjustments on loans

 

42,794

   

59,115

   

(38,317)

   

206,150

 

Fixed Income Spread

 

7,011

   

6,927

   

25,519

   

22,765

 

Other investment related expenses

 

   

(2,515)

   

12,882

   

(63,519)

   

Total Operating Income Adjustments

 

49,805

   

63,527

   

84

   

165,396

Segment Operating Income

$

47,137

 

$

55,520

 

$

198,512

 

$

246,998

 

Contacts

   

Investors

 

Media 

Mike Frank

 

Jo Anne McCusker

[email protected]

 

[email protected]

(212) 409-2424

 

(646) 885-5425

 

SOURCE B. Riley Financial