LOS ANGELES, Oct. 30, 2019 /PRNewswire/ -- B. Riley Financial,
Inc. (NASDAQ:RILY) (the "Company" or "B. Riley"), a diversified
provider of business advisory and financial services which operates
through several wholly-owned subsidiaries, today announced
financial results for the third quarter ended September 30, 2019.
Third Quarter 2019 Highlights
- Total revenues of $180.1
million
- Net income of $34.3 million or
$1.21 per diluted share
- Adjusted EBITDA of $70.3
million
- Adjusted net income of $40.0
million or $1.42 per diluted
share
"We are extremely pleased to report record results in our third
quarter earnings. These results speak to the strength of our
individual businesses, combined with the synergies and
opportunities being created throughout B. Riley Financial. The
value created by our combined businesses continues to exceed our
expectations, and we believe our quarterly and year-to-date results
demonstrate the earnings power of our company. Over the last five
years, we have transitioned from a traditional investment banking
and brokerage business into a diversified platform of companies
which provide both recurring and episodic revenues. We have
utilized the broad capabilities of our enhanced platform to create
investment opportunities for ourselves and our clients, while at
the same time expanding our service revenues organically and
through acquisitions," said Bryant
Riley, Chairman and Co-Chief Executive Officer of B. Riley
Financial. "As a strategic matter, we use our balance sheet in
situations where we can source off market, proprietary investment
opportunities in partnership with our operating businesses. This
strategy has created a tremendous number of investment
opportunities, often combined with meaningful fee revenue, which
have added to our short-term profits as well as our recurring
revenues. We are mindful that a balance between steady revenues and
episodic opportunities is critical, and today's announcement about
the formation of our brand investment platform is a continuation of
our efforts to grow recurring revenues."
Third Quarter 2019 Financial Summary
For the
three-month period ending September 30,
2019, total revenues increased to $180.1 million compared to $99.7 million in revenues for the third quarter
of 2018. Strong performance from the Company's Capital Markets and
Auction and Liquidation segments contributed to record results for
the quarter. Revenues have increased across each of the Company's
segments over the respective same year-ago period for the third
consecutive quarter. Through the first three quarters of 2019, the
Company generated total revenues of $486.9
million.
- Capital Markets Segment: Revenues increased to
$134.1 million from $76.3 million for the same year-ago period.
Segment income increased to $52.4
million from $11.0 million for
the same year-ago period.
- Auction and Liquidation Segment: Revenues increased
to $11.3 million from $2.5 million for the same year-ago period.
Segment income increased to $6.0
million from $0.3 million for
the same year-ago period.
- Valuation and Appraisal Segment: Revenues increased
to $10.8 million from $9.4 million for the same year-ago period.
Segment income totaled $3.5 million
compared to $2.9 million for the same
year-ago period.
- Principal Investments Segment: Revenues increased
to $23.9 million compared to
$11.4 million for the same year-ago
period. Segment income increased to $8.7
million compared to $4.1
million for the same year-ago period.
Net income attributable to B. Riley Financial increased to
$34.3 million or $1.21 per diluted share for the third quarter of
2019 compared to $2.8 million or
$0.10 per diluted share for the same
year-ago period. Net income increased to $64.5 million or $2.37 per diluted share for the nine months
ending September 30, 2019.
Adjusted EBITDA increased to $70.3
million for the third quarter of 2019 compared to
$21.0 million for the same year-ago
period; and increased to $157.6
million through the first nine months of 2019. Adjusted
EBITDA includes earnings before interest, taxes, depreciation,
amortization, restructuring costs, share-based payments, and
transaction related and other costs. (See "Note Regarding Use of
Non-GAAP Financial Measures" below for further discussion of this
non-GAAP term.)
Adjusted net income increased to $40.0
million or $1.42 per diluted
share compared to $6.4 million or
$0.24 per diluted share for the same
year-ago period. Through the first three quarters of 2019, adjusted
net income increased to $84.6 million
or $3.11 per diluted share. Adjusted
net income excludes the impact of share-based payments,
amortization of intangible assets, restructuring costs, transaction
related and other costs, and tax impact of aforementioned
adjustments. (See "Note Regarding Use of Non-GAAP Financial
Measures" below for further discussion of this non-GAAP term.)
As of September 30, 2019, the
Company had a total cash and investment balance of $844.6 million, including approximately
$81 million in equity investments and
deposits included in prepaid expenses and other assets. Net of
$773.9 million of total debt, the
Company had a net cash and investment balance of $70.7 million at the end of the third
quarter.
Total B. Riley Financial stockholders' equity increased to
$298.9 million as of September 30, 2019.
Declaration of Dividend
The Company's Board of
Directors has approved a special dividend of $0.475 per share in addition to the regular
quarterly dividend of $0.175 per
share. The total quarterly cash dividend of $0.65 per share will be paid on or about
November 26, 2019 to stockholders of
record as of November 14, 2019. Upon
payment, the Company will have distributed a combined total of
$1.49 per share in dividends on its
common stock to its shareholders, year-to-date.
Share Repurchase Program
The Board has also approved
the repurchase of up to $50 million
of the Company's outstanding shares of common stock during the year
ending October 31, 2020. The share
repurchases may be effected on the open market at prevailing market
prices from time to time as market conditions warrant, or in
privately negotiated transactions. All purchases will be
implemented in accordance with the company's securities trading
policy and applicable requirements of Rule 10b-18 under the U.S. Securities Exchange Act of
1934, as amended, or other legally permissible ways in accordance
with applicable rules and regulations.
Conference Call
Bryant
Riley, Chairman and Co-CEO; Tom
Kelleher, Co-CEO; and Phillip
Ahn, CFO and COO, will host a conference call today at
4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss the Company's
financial and operational results, followed by a question and
answer period.
Please call the conference line 10 minutes prior to the start
time and an operator will register your name and organization. The
live broadcast and archive will be available on the Company's
investor relations website.
Q3 2019 Earnings
Call Details
|
Date:
|
Wednesday, October
30, 2019
|
Time:
|
4:30 p.m. Eastern
time (1:30 p.m. Pacific time)
|
Toll-Free:
|
1-877-451-6152
|
International:
|
1-201-389-0879
|
|
Replay Dial-In
(expires on Wednesday November 6, 2019)
|
Toll-Free:
|
1-844-512-2921
|
International:
|
1-412-317-6671
|
Replay
Pin:
|
13695614
|
For more information, visit ir.brileyfin.com.
About B. Riley Financial
B. Riley Financial provides
collaborative financial services tailored to fit the capital
raising and business advisory needs of public and private companies
and high-net-worth individuals. B. Riley operates through several
wholly-owned subsidiaries which offer complementary end-to-end
capabilities spanning investment banking and institutional
brokerage, private wealth and investment management, corporate
advisory, restructuring, due diligence, forensic accounting and
litigation support, appraisal and valuation, and auction and
liquidation services. Certain registered affiliates of B. Riley
originate and underwrite senior secured loans for asset-rich
companies. The Company also makes proprietary investments in
companies and assets with attractive return profiles.
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 the Company's anticipated results
of operations for 2019, expectations regarding the size and
consistency of returns, expectations regarding market dynamics, as
well as our expectations regarding our business strategies and the
expected growth of our business segments. Other factors that could
adversely affect our operating results and cash flows include
(without limitation) those risks described from time to time in B.
Riley Financial's periodic filings with the SEC, including, without
limitation, the risks described in B. Riley Financial's Annual
Report on Form 10-K for the year ended December 31, 2018 under the captions "Risk
Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Additional information will
be set forth in our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2019. 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 the Company undertakes no duty to update this information.
Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including adjusted net
income and 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 cash flow, excluding net interest expense,
provisions for or benefit from income taxes, depreciation,
amortization, fair value adjustment, transaction and other
expenses, restructuring costs, and stock-based compensation 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. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(Dollars in
thousands, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
170,587
|
|
$
|
179,440
|
|
Restricted
cash
|
|
471
|
|
|
838
|
|
Due from clearing
brokers
|
|
27,791
|
|
|
37,738
|
|
Securities and other
investments owned, at fair value
|
|
326,616
|
|
|
273,577
|
|
Securities
borrowed
|
|
720,207
|
|
|
931,346
|
|
Accounts receivable,
net
|
|
47,419
|
|
|
42,123
|
|
Due from related
parties
|
|
6,689
|
|
|
1,729
|
|
Loans
receivable
|
|
295,898
|
|
|
38,794
|
|
Prepaid expenses and
other assets
|
|
112,309
|
|
|
79,477
|
|
Operating lease
right-of-use assets
|
|
49,642
|
|
|
—
|
|
Property and
equipment, net
|
|
13,171
|
|
|
15,523
|
|
Goodwill
|
|
220,562
|
|
|
223,368
|
|
Other intangible
assets, net
|
|
79,488
|
|
|
91,358
|
|
Deferred income
taxes
|
|
36,041
|
|
|
42,399
|
|
|
Total
assets
|
$
|
2,106,891
|
|
$
|
1,957,710
|
Liabilities and
Equity
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
6,239
|
|
$
|
5,646
|
|
Accrued expenses and
other liabilities
|
|
115,062
|
|
|
108,662
|
|
Deferred
revenue
|
|
68,385
|
|
|
69,066
|
|
Due to related
parties and partners
|
|
2,814
|
|
|
2,428
|
|
Securities sold not
yet purchased
|
|
29,092
|
|
|
37,623
|
|
Securities
loaned
|
|
714,947
|
|
|
930,522
|
|
Mandatorily
redeemable noncontrolling interests
|
|
4,395
|
|
|
4,633
|
|
Operating lease
liabilities
|
|
63,817
|
|
|
—
|
|
Notes
payable
|
|
|
1,193
|
|
|
1,550
|
|
Loan participations
sold
|
|
28,872
|
|
|
—
|
|
Term loan
|
|
|
|
71,393
|
|
|
79,166
|
|
Senior notes
payable
|
|
701,278
|
|
|
459,754
|
|
|
Total
liabilities
|
|
1,807,487
|
|
|
1,699,050
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
B. Riley Financial,
Inc. stockholders' equity:
|
|
|
|
|
|
|
Preferred stock,
$0.0001 par value; 1,000,000 shares authorized; none
issued
|
|
—
|
|
|
—
|
|
and outstanding as of
September 30, 2019 and December 31, 2018, respectively.
|
|
|
|
|
|
|
Common stock, $0.0001
par value; 100,000,000 shares authorized; 26,921,500 and
26,603,355
|
|
3
|
|
|
2
|
|
issued and
outstanding as of September 30, 2019 and December 31, 2018,
respectively.
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
259,237
|
|
|
258,638
|
|
Retained
earnings
|
|
41,957
|
|
|
1,579
|
|
Accumulated other
comprehensive loss
|
|
(2,345)
|
|
|
(2,161)
|
|
|
Total B. Riley
Financial, Inc. stockholders' equity
|
|
298,852
|
|
|
258,058
|
Noncontrolling
interests
|
|
552
|
|
|
602
|
|
|
Total
equity
|
|
299,404
|
|
|
258,660
|
|
|
|
Total liabilities and
equity
|
$
|
2,106,891
|
|
$
|
1,957,710
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Income
|
(Unaudited)
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services and
fees
|
$
|
153,379
|
|
|
89,824
|
|
$
|
428,705
|
|
|
295,416
|
|
Interest income -
Loans and securities lending
|
|
25,766
|
|
|
9,785
|
|
|
54,147
|
|
|
25,406
|
|
Sale of
goods
|
|
918
|
|
|
72
|
|
|
4,023
|
|
|
138
|
|
|
Total
revenues
|
|
180,063
|
|
|
99,681
|
|
|
486,875
|
|
|
320,960
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct cost of
services
|
|
12,441
|
|
|
8,156
|
|
|
55,210
|
|
|
33,733
|
|
Cost of goods
sold
|
|
911
|
|
|
52
|
|
|
3,835
|
|
|
142
|
|
Selling, general and
administrative expenses
|
|
96,587
|
|
|
71,782
|
|
|
274,468
|
|
|
216,603
|
|
Restructuring
charge
|
|
—
|
|
|
428
|
|
|
1,699
|
|
|
2,247
|
|
Interest expense -
Securities lending and loan participations sold
|
|
10,273
|
|
|
6,425
|
|
|
22,579
|
|
|
16,317
|
|
|
Total operating
expenses
|
|
120,212
|
|
|
86,843
|
|
|
357,791
|
|
|
269,042
|
|
|
Operating
income
|
|
59,851
|
|
|
12,838
|
|
|
129,084
|
|
|
51,918
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
361
|
|
|
442
|
|
|
1,329
|
|
|
736
|
|
Income (loss) from
equity investments
|
|
1,113
|
|
|
828
|
|
|
(4,049)
|
|
|
5,049
|
|
Interest
expense
|
|
(12,772)
|
|
|
(9,340)
|
|
|
(35,130)
|
|
|
(23,926)
|
|
|
Income before income
taxes
|
|
48,553
|
|
|
4,768
|
|
|
91,234
|
|
|
33,777
|
Provision for income
taxes
|
|
(14,409)
|
|
|
(2,046)
|
|
|
(26,802)
|
|
|
(8,412)
|
|
|
Net income
|
|
34,144
|
|
|
2,722
|
|
|
64,432
|
|
|
25,365
|
Net (loss) income
attributable to noncontrolling interests
|
|
(158)
|
|
|
(92)
|
|
|
(50)
|
|
|
1,051
|
|
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
34,302
|
|
$
|
2,814
|
|
$
|
64,482
|
|
$
|
24,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per
share
|
$
|
1.29
|
|
$
|
0.11
|
|
$
|
2.45
|
|
$
|
0.94
|
Diluted income per
share
|
$
|
1.21
|
|
$
|
0.10
|
|
$
|
2.37
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
basic shares outstanding
|
|
26,556,223
|
|
|
25,968,997
|
|
|
26,351,839
|
|
|
25,856,339
|
Weighted average
diluted shares outstanding
|
|
28,233,423
|
|
|
26,854,261
|
|
|
27,251,837
|
|
|
26,776,133
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
|
|
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
64,432
|
|
$
|
25,365
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
14,217
|
|
|
9,768
|
|
|
Provision for
doubtful accounts
|
|
|
1,646
|
|
|
840
|
|
|
Share-based
compensation
|
|
|
10,276
|
|
|
8,650
|
|
|
Non-cash interest and
other
|
|
|
(14,941)
|
|
|
1,384
|
|
|
Effect of foreign
currency on operations
|
|
|
8
|
|
|
(352)
|
|
|
Loss (income) from
equity investments
|
|
|
4,049
|
|
|
(5,049)
|
|
|
Deferred income
taxes
|
|
|
6,358
|
|
|
7
|
|
|
Impairment of
leaseholds and intangibles, lease loss accrual and gain on disposal
of fixed assets
|
|
|
(327)
|
|
|
1,718
|
|
|
Income allocated and
fair value adjustment for mandatorily redeemable noncontrolling
interests
|
|
|
857
|
|
|
847
|
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Due from clearing
brokers
|
|
|
9,947
|
|
|
(23,412)
|
|
|
|
Securities and other
investments owned
|
|
|
(45,465)
|
|
|
(77,161)
|
|
|
|
Securities
borrowed
|
|
|
211,139
|
|
|
(235,206)
|
|
|
|
Accounts receivable
and advances against customer contracts
|
|
|
(8,645)
|
|
|
(35,982)
|
|
|
|
Prepaid expenses and
other assets
|
|
|
(9,619)
|
|
|
(19,418)
|
|
|
|
Accounts payable,
accrued payroll and related expenses, accrued expenses and other
liabilities
|
|
|
31,473
|
|
|
10,111
|
|
|
|
Amounts due to/from
related parties and partners
|
|
|
(4,574)
|
|
|
(4,487)
|
|
|
|
Securities sold, not
yet purchased
|
|
|
(8,531)
|
|
|
31,381
|
|
|
|
Deferred
revenue
|
|
|
(502)
|
|
|
64
|
|
|
|
Securities
loaned
|
|
|
(215,575)
|
|
|
232,037
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
|
46,223
|
|
|
(78,895)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of loans
receivable
|
|
|
(350,695)
|
|
|
(35,111)
|
|
Acquisition of other
businesses
|
|
|
—
|
|
|
(4,000)
|
|
Repayments of loans
receivable
|
|
|
98,742
|
|
|
—
|
|
Loan participations
sold
|
|
|
31,806
|
|
|
—
|
|
Repayment of loan
participations sold
|
|
|
(3,175)
|
|
|
—
|
|
Purchases of
property, equipment and intangible assets
|
|
|
(2,885)
|
|
|
(2,314)
|
|
Proceeds from sale of
property, equipment and intangible assets
|
|
|
504
|
|
|
37
|
|
Equity
investments
|
|
|
(33,391)
|
|
|
(6,856)
|
|
Proceeds from sale of
division of magicJack
|
|
|
6,196
|
|
|
—
|
|
Dividends from equity
investments
|
|
|
1,454
|
|
|
1,695
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(251,444)
|
|
|
(46,549)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from asset
based credit facility
|
|
|
—
|
|
|
300,000
|
|
Repayment of asset
based credit facility
|
|
|
—
|
|
|
(300,000)
|
|
Proceeds from notes
payable
|
|
|
—
|
|
|
51,020
|
|
Repayment of notes
payable
|
|
|
(357)
|
|
|
(51,591)
|
|
Proceeds from term
loan
|
|
|
10,000
|
|
|
—
|
|
Repayment of term
loan
|
|
|
(17,924)
|
|
|
—
|
|
Proceeds from
issuance of senior notes
|
|
|
244,497
|
|
|
255,290
|
|
Payment of debt
issuance costs
|
|
|
(4,212)
|
|
|
(6,356)
|
|
Payment of employment
taxes on vesting of restricted stock
|
|
|
(2,626)
|
|
|
(4,106)
|
|
Dividends
paid
|
|
|
(25,049)
|
|
|
(17,912)
|
|
Repurchase of common
stock
|
|
|
(4,273)
|
|
|
(17,338)
|
|
Repurchase of
warrants
|
|
|
(2,777)
|
|
|
—
|
|
Distribution to
noncontrolling interests
|
|
|
(1,095)
|
|
|
(915)
|
|
|
|
|
Net cash provided by
financing activities
|
|
|
196,184
|
|
|
208,092
|
|
|
|
|
(Decrease) increase
in cash, cash equivalents and restricted cash
|
|
|
(9,037)
|
|
|
82,648
|
|
|
|
|
Effect of foreign
currency on cash, cash equivalents and restricted cash
|
|
|
(183)
|
|
|
(796)
|
|
|
|
|
Net (decrease)
increase in cash, cash equivalents and restricted cash
|
|
|
(9,220)
|
|
|
81,852
|
Cash, cash
equivalents and restricted cash, beginning of year
|
|
|
180,278
|
|
|
152,534
|
Cash, cash
equivalents and restricted cash, end of period
|
|
$
|
171,058
|
|
$
|
234,386
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
52,931
|
|
$
|
35,289
|
|
Taxes paid
|
|
|
$
|
5,029
|
|
$
|
2,455
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Segment Financial
Information
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Capital Markets
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
$
|
108,330
|
|
$
|
66,558
|
|
$
|
259,498
|
|
$
|
189,051
|
|
Interest income -
Loans and securities lending
|
|
25,766
|
|
|
9,785
|
|
|
54,147
|
|
|
25,406
|
|
Total revenues
|
|
|
134,096
|
|
|
76,343
|
|
|
313,645
|
|
|
214,457
|
|
Selling, general and
administrative expenses
|
|
(70,140)
|
|
|
(57,207)
|
|
|
(196,570)
|
|
|
(168,559)
|
|
Restructuring
(charge) recovery
|
|
—
|
|
|
(428)
|
|
|
4
|
|
|
(2,457)
|
|
Interest expense -
Securities lending and loan participations sold
|
|
(10,273)
|
|
|
(6,425)
|
|
|
(22,579)
|
|
|
(16,317)
|
|
Depreciation and
amortization
|
|
(1,281)
|
|
|
(1,309)
|
|
|
(3,844)
|
|
|
(4,428)
|
|
|
Segment
income
|
|
|
52,402
|
|
|
10,974
|
|
|
90,656
|
|
|
22,696
|
Auction and
Liquidation segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
|
11,232
|
|
|
2,459
|
|
|
65,681
|
|
|
44,812
|
|
Revenues - Sale of
goods
|
|
|
54
|
|
|
48
|
|
|
1,230
|
|
|
48
|
|
Total revenues
|
|
|
11,286
|
|
|
2,507
|
|
|
66,911
|
|
|
44,860
|
|
Direct cost of
services
|
|
|
(2,371)
|
|
|
(838)
|
|
|
(21,584)
|
|
|
(12,263)
|
|
Cost of goods
sold
|
|
|
(126)
|
|
|
(24)
|
|
|
(992)
|
|
|
(41)
|
|
Selling, general and
administrative expenses
|
|
(2,835)
|
|
|
(1,289)
|
|
|
(9,045)
|
|
|
(7,787)
|
|
Depreciation and
amortization
|
|
(1)
|
|
|
(7)
|
|
|
(5)
|
|
|
(23)
|
|
|
Segment
income
|
|
|
5,953
|
|
|
349
|
|
|
35,285
|
|
|
24,746
|
Valuation and
Appraisal segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
|
10,818
|
|
|
9,404
|
|
|
29,143
|
|
|
27,383
|
|
Direct cost of
services
|
|
|
(4,505)
|
|
|
(4,067)
|
|
|
(13,495)
|
|
|
(12,388)
|
|
Selling, general and
administrative expenses
|
|
(2,826)
|
|
|
(2,379)
|
|
|
(7,997)
|
|
|
(7,138)
|
|
Depreciation and
amortization
|
|
(36)
|
|
|
(56)
|
|
|
(100)
|
|
|
(159)
|
|
|
Segment
income
|
|
|
3,451
|
|
|
2,902
|
|
|
7,551
|
|
|
7,698
|
Principal
Investments - United Online and magicJack segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
|
22,999
|
|
|
11,403
|
|
|
74,383
|
|
|
34,170
|
|
Revenues - Sale of
goods
|
|
|
864
|
|
|
24
|
|
|
2,793
|
|
|
90
|
|
Total revenues
|
|
|
23,863
|
|
|
11,427
|
|
|
77,176
|
|
|
34,260
|
|
Direct cost of
services
|
|
|
(5,565)
|
|
|
(3,251)
|
|
|
(20,131)
|
|
|
(9,082)
|
|
Cost of goods
sold
|
|
|
(785)
|
|
|
(28)
|
|
|
(2,843)
|
|
|
(101)
|
|
Selling, general and
administrative expenses
|
|
(5,895)
|
|
|
(2,348)
|
|
|
(18,410)
|
|
|
(6,321)
|
|
Depreciation and
amortization
|
|
(2,956)
|
|
|
(1,682)
|
|
|
(9,719)
|
|
|
(5,040)
|
|
Restructuring
charge
|
|
|
—
|
|
|
—
|
|
|
(1,703)
|
|
|
—
|
|
|
Segment
income
|
|
|
8,662
|
|
|
4,118
|
|
|
24,370
|
|
|
13,716
|
Consolidated
operating income from reportable segments
|
|
70,468
|
|
|
18,343
|
|
|
157,862
|
|
|
68,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other
expenses (including restructuring recovery of
|
|
|
|
|
|
|
|
|
|
|
|
$210 during
the nine months ended September 30, 2018)
|
|
(10,617)
|
|
|
(5,505)
|
|
|
(28,778)
|
|
|
(16,938)
|
Interest
income
|
|
|
|
361
|
|
|
442
|
|
|
1,329
|
|
|
736
|
Income (loss) on
equity investments
|
|
1,113
|
|
|
828
|
|
|
(4,049)
|
|
|
5,049
|
Interest
expense
|
|
|
|
(12,772)
|
|
|
(9,340)
|
|
|
(35,130)
|
|
|
(23,926)
|
|
Income before income
taxes
|
|
48,553
|
|
|
4,768
|
|
|
91,234
|
|
|
33,777
|
Provision for income
taxes
|
|
|
(14,409)
|
|
|
(2,046)
|
|
|
(26,802)
|
|
|
(8,412)
|
|
Net income
|
|
|
|
34,144
|
|
|
2,722
|
|
|
64,432
|
|
|
25,365
|
Net income
attributable to noncontrolling interests
|
|
(158)
|
|
|
(92)
|
|
|
(50)
|
|
|
1,051
|
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
34,302
|
|
$
|
2,814
|
|
$
|
64,482
|
|
$
|
24,314
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Adjusted EBITDA
Reconciliation
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
34,302
|
|
$
|
2,814
|
|
$
|
64,482
|
|
$
|
24,314
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
14,409
|
|
|
2,046
|
|
|
26,802
|
|
|
8,412
|
|
Interest
expense
|
|
12,772
|
|
|
9,340
|
|
|
35,130
|
|
|
23,926
|
|
Interest
income
|
|
(361)
|
|
|
(442)
|
|
|
(1,329)
|
|
|
(736)
|
|
Share based
payments
|
|
4,728
|
|
|
3,074
|
|
|
10,276
|
|
|
8,310
|
|
Depreciation and
amortization
|
|
4,473
|
|
|
3,098
|
|
|
14,217
|
|
|
9,768
|
|
Restructuring
costs
|
|
—
|
|
|
428
|
|
|
1,699
|
|
|
2,247
|
|
Transactions related
costs and other
|
|
7
|
|
|
648
|
|
|
6,339
|
|
|
2,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
adjustments
|
|
36,028
|
|
|
18,192
|
|
|
93,134
|
|
|
54,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
70,330
|
|
$
|
21,006
|
|
$
|
157,616
|
|
$
|
78,434
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Adjusted Net
Income Reconciliation
|
(Unaudited)
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
34,302
|
|
$
|
2,814
|
|
$
|
64,482
|
|
$
|
24,314
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based
payments
|
|
4,728
|
|
|
3,074
|
|
|
10,276
|
|
|
8,310
|
|
Amortization of
intangible assets
|
|
3,310
|
|
|
2,093
|
|
|
10,031
|
|
|
6,399
|
|
Restructuring
costs
|
|
—
|
|
|
428
|
|
|
1,699
|
|
|
2,247
|
|
Transactions related
costs and other
|
|
7
|
|
|
648
|
|
|
6,339
|
|
|
2,193
|
|
Income tax effect of
adjusting entries
|
|
(2,380)
|
|
|
(2,628)
|
|
|
(8,185)
|
|
|
(5,411)
|
Adjusted net income
attributable to B. Riley Financial, Inc.
|
$
|
39,967
|
|
$
|
6,429
|
|
$
|
84,642
|
|
$
|
38,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic income
per share
|
$
|
1.51
|
|
$
|
0.25
|
|
$
|
3.21
|
|
$
|
1.47
|
|
Adjusted diluted
income per share
|
$
|
1.42
|
|
$
|
0.24
|
|
$
|
3.11
|
|
$
|
1.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to
calculate adjusted basic net income per share
|
|
26,556,223
|
|
|
25,968,997
|
|
|
26,351,839
|
|
|
25,856,339
|
Shares used to
calculate adjusted diluted net income per share
|
|
28,233,423
|
|
|
26,854,261
|
|
|
27,251,837
|
|
|
26,776,133
|
Contacts
|
|
Investors
|
Media
|
|
B. Riley
Financial
|
Jo Anne
McCusker
|
|
ir@brileyfin.com
|
jmccusker@brileyfin.com
|
|
(310)
966-1444
|
(646)
885-5425
|
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SOURCE B. Riley Financial