LOS ANGELES, Jan. 12, 2021 /PRNewswire/ -- B.
Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or "the
Company") today announced certain preliminary estimates for the
fourth quarter and full year 2020 ending December 31, 2020.
Fourth Quarter 2020 Preliminary Results
- Net income: $162 to $167 million; $6.18
to $6.38 per diluted share
- Total adjusted EBITDA: $253 to
$260 million
- Operating adjusted EBITDA: $120
to $125 million
Full Year 2020 Preliminary Results
- Net income: $196 to $201 million; $7.20
to $7.39 per diluted share
- Total adjusted EBITDA: $399 to
$407 million
- Operating adjusted EBITDA: $305
to $310 million
"We are providing preliminary results for the fourth quarter and
full year of 2020 that exceed our previously released guidance for
net income by over $50 million,
operating EBITDA guidance by $20
million and total EBITDA by over $70
million. Our updated estimates reflect better-than-expected
operating performance and appreciation in our investment portfolio
as of year-end," said Bryant Riley,
Chairman and Co-Chief Executive Officer of B. Riley Financial. "Our
Capital Markets business outperformed our initial forecasts, both
in terms of our operating results and investments. We expect our
cash and investments balance to be approximately $1.3 billion as of year-end, with over
$300 million in total cash and
investments net of debt. The current momentum of our combined
operating units has never been stronger, and we are increasingly
excited about the opportunities ahead as we look to continue to
build upon our growing platform."
For the fourth quarter of 2020, net income attributable
to the Company is expected to be within the range of $162 million and $167
million. Diluted income per common share is expected to be
within the range of $6.18 to
$6.38. This compares to $17.1 million and $0.59 per diluted share for the fourth quarter of
2019. The Company estimates fourth quarter total adjusted EBITDA
(1) to be within the range of $253 million and $260
million and operating adjusted EBITDA (2) in the
range of $120 million and
$125 million.
For the full year of 2020, net income attributable to the
Company is expected to be within the range of $196 million and $201
million. Diluted income per common share is expected to be
within the range of $7.20 to
$7.39. This compares to $81.6 million and $2.95 per diluted share for the full year of
2019, representing a year-over-year increase of approximately 140%
for the lower end of the range compared to the same prior year
period. Total adjusted EBITDA (1) is expected to be
within the range of $399 million and
$407 million, an increase of over 90%
for the lower end of the range when compared with total adjusted
EBITDA of $207.9 million from the
same prior year period. Operating adjusted EBITDA (2) is
expected to be within the range of $305
million to $310 million, a
year-over-year increase of over 160% compared to $113.6 million from the prior year period.
As of December 31, 2020, the
Company expects its cash and investments balance to be
approximately $1.3 billion, with over
$300 million in total cash and
investments, net of debt (3).
These preliminary estimates are not a comprehensive statement of
the Company's financial results. Actual results for the fourth
quarter and full year of 2020 may differ from these preliminary
unaudited estimates as a result of the completion of the Company's
customary year-end closing, review and audit procedures and other
developments arising between now and the time that its financial
results are finalized.
About B. Riley Financial
B. Riley Financial (NASDAQ:
RILY) provides collaborative financial services solutions tailored
to fit the capital raising, business, operational, and financial
advisory needs of its clients and partners. B. Riley operates
through several subsidiaries which offer a diverse range of
complementary end-to-end capabilities spanning investment banking
and institutional brokerage, private wealth and investment
management, corporate advisory, restructuring, due diligence,
forensic accounting, 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. B. Riley also makes proprietary investments
in companies and assets with attractive return profiles. For more
information about B. Riley and its affiliated companies, 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, 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.
(2) Operating adjusted EBITDA is defined as adjusted EBITDA
excluding trading income (losses) and fair value adjustments on
loans and other investment related expenses.
(3) Total cash and investments, net of debt is defined as total
cash, net securities and investments, and other minus total
debt.
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 2020, as well as 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, 2019 and Quarterly Reports on Form
10-Q for the quarters ended March 31,
2020, June 30, 2020 and
September 30, 2020 under the captions
"Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" (as applicable).
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, Inc. undertakes no duty
to update this information.
Note Regarding Use of Non-GAAP Financial
Measures
Certain of the information set forth herein,
including operating revenue, 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, impairment of trade names, stock-based
compensation and transaction and other expenses, (iii) excluding in
the case of operating adjusted EBITDA, aforementioned adjustments
for adjusted EBITDA, trading income (losses) and fair value
adjustments on loans, and other investment related expenses, and
(iv) in the case of investment adjusted EBITDA this includes
trading income (losses) and fair value adjustments on loans, net of
other investment related expenses, and (v) in the case of total
cash and investments, net of debt, this includes 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, 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.
Contacts
Investors
Investor Relations
ir@brileyfin.com
(310) 966-1444
Media
Jo Anne
McCusker
jmccusker@brileyfin.com
(646) 885-5425
# # #
B. RILEY
FINANCIAL, INC.
|
Reconciliation of
Net Income Preliminary Estimate to Adjusted EBITDA Preliminary
Estimate
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary
Estimate
|
|
|
|
Prior
Period
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2020
|
|
|
|
Three Months
Ended
December 31, 2019
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
Actual
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
162,000
|
|
$
|
167,100
|
|
|
|
$
|
17,129
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
63,900
|
|
|
66,000
|
|
|
|
|
7,842
|
|
Interest
expense
|
|
16,700
|
|
|
16,900
|
|
|
|
|
15,075
|
|
Interest
income
|
|
|
—
|
|
|
(100)
|
|
|
|
|
(248)
|
|
Share based
payments
|
|
4,300
|
|
|
4,500
|
|
|
|
|
5,640
|
|
Depreciation and
amortization
|
|
4,600
|
|
|
4,700
|
|
|
|
|
4,831
|
|
Transactions related
costs and other
|
|
1,100
|
|
|
1,300
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
adjustments
|
|
90,600
|
|
|
93,300
|
|
|
|
|
33,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
252,600
|
|
$
|
260,400
|
|
|
|
$
|
50,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Trading (income)
losses and fair value adjustments on loans
|
|
(139,000)
|
|
|
(142,000)
|
|
|
|
|
(34,733)
|
|
Other investment
related expenses
|
|
6,400
|
|
|
6,600
|
|
|
|
|
858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
EBITDA Adjustments
|
|
(132,600)
|
|
|
(135,400)
|
|
|
|
|
(33,875)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Adjusted
EBITDA
|
$
|
120,000
|
|
$
|
125,000
|
|
|
|
$
|
16,394
|
B. RILEY
FINANCIAL, INC.
|
Diluted Income per
Common Share - Preliminary Estimate
|
(Unaudited)
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary
Estimate
|
|
|
|
Prior
Period
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2020
|
|
|
|
Three Months
Ended
December 31, 2019
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
Actual
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
162,000
|
|
$
|
167,100
|
|
|
|
$
|
17,129
|
|
Preferred stock
dividends
|
|
1,480
|
|
|
1,480
|
|
|
|
|
264
|
|
|
Net income available
to common shareholders
|
$
|
160,520
|
|
$
|
165,620
|
|
|
|
$
|
16,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
common share
|
$
|
6.18
|
|
$
|
6.38
|
|
|
|
$
|
0.59
|
Weighted average
diluted common shares outstanding
|
|
25,960,000
|
|
|
25,960,000
|
|
|
|
|
28,412,871
|
B. RILEY
FINANCIAL, INC.
|
Reconciliation of
Net Income Preliminary Estimate to Adjusted EBITDA Preliminary
Estimate
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary
Estimate
|
|
|
|
Prior
Period
|
|
|
|
|
|
|
|
Twelve Months
Ended
December 31, 2020
|
|
|
|
Twelve Months
Ended
December 31, 2019
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
Actual
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
195,554
|
|
$
|
200,654
|
|
|
|
$
|
81,611
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
77,280
|
|
|
79,380
|
|
|
|
|
34,644
|
|
Interest
expense
|
|
65,237
|
|
|
65,437
|
|
|
|
|
50,205
|
|
Interest
income
|
|
|
(537)
|
|
|
(637)
|
|
|
|
|
(1,577)
|
|
Share based
payments
|
|
18,567
|
|
|
18,767
|
|
|
|
|
15,916
|
|
Depreciation and
amortization
|
|
19,365
|
|
|
19,465
|
|
|
|
|
19,048
|
|
Restructuring
costs
|
|
1,557
|
|
|
1,557
|
|
|
|
|
1,699
|
|
Impairment of
tradenames
|
|
12,500
|
|
|
12,500
|
|
|
|
|
—
|
|
Transactions related
costs and other
|
|
9,409
|
|
|
9,609
|
|
|
|
|
6,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
adjustments
|
|
203,378
|
|
|
206,078
|
|
|
|
|
126,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
398,932
|
|
$
|
406,732
|
|
|
|
$
|
207,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Trading (income)
losses and fair value adjustments on loans
|
|
(102,858)
|
|
|
(105,858)
|
|
|
|
|
(106,463)
|
|
Other investment
related expenses
|
|
8,812
|
|
|
9,012
|
|
|
|
|
12,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
EBITDA Adjustments
|
|
(94,046)
|
|
|
(96,846)
|
|
|
|
|
(94,282)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Adjusted
EBITDA
|
$
|
304,886
|
|
$
|
309,886
|
|
|
|
$
|
113,603
|
B. RILEY
FINANCIAL, INC.
|
Diluted Income per
Common Share - Preliminary Estimate
|
(Unaudited)
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preliminary
Estimate
|
|
|
|
Prior
Period
|
|
|
|
|
|
|
|
Twelve Months
Ended
December 31, 2020
|
|
|
|
Twelve Months
Ended
December 31, 2019
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
Actual
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
195,554
|
|
$
|
200,654
|
|
|
|
$
|
81,611
|
|
Preferred stock
dividends
|
|
4,710
|
|
|
4,710
|
|
|
|
|
264
|
|
|
Net income available
to common shareholders
|
$
|
190,844
|
|
$
|
195,944
|
|
|
|
$
|
81,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
common share
|
$
|
7.20
|
|
$
|
7.39
|
|
|
|
$
|
2.95
|
Weighted average
diluted common shares outstanding
|
|
26,510,000
|
|
|
26,510,000
|
|
|
|
|
27,529,157
|
B. RILEY
FINANCIAL, INC.
|
Reconciliation of
Net Income Prior Guidance to Adjusted EBITDA Prior
Guidance
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior Guidance
(12/17/20)
|
|
|
|
Prior Guidance
(12/17/20)
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2020
|
|
|
|
Twelve Months
Ended
December 31, 2020
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
Low
|
|
High
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
109,000
|
|
$
|
112,200
|
|
|
|
$
|
142,554
|
|
$
|
145,754
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
40,800
|
|
|
42,200
|
|
|
|
|
54,180
|
|
|
55,580
|
|
Interest
expense
|
|
16,200
|
|
|
16,400
|
|
|
|
|
64,737
|
|
|
64,937
|
|
Interest
income
|
|
|
(100)
|
|
|
(100)
|
|
|
|
|
(637)
|
|
|
(637)
|
|
Share based
payments
|
|
4,300
|
|
|
4,500
|
|
|
|
|
18,567
|
|
|
18,767
|
|
Depreciation and
amortization
|
|
4,700
|
|
|
4,700
|
|
|
|
|
19,465
|
|
|
19,465
|
|
Restructuring
costs
|
|
—
|
|
|
—
|
|
|
|
|
1,557
|
|
|
1,557
|
|
Impairment of
tradenames
|
|
—
|
|
|
—
|
|
|
|
|
12,500
|
|
|
12,500
|
|
Transactions related
costs and other
|
|
300
|
|
|
300
|
|
|
|
|
8,609
|
|
|
8,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
adjustments
|
|
66,200
|
|
|
68,000
|
|
|
|
|
178,978
|
|
|
180,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
175,200
|
|
$
|
180,200
|
|
|
|
$
|
321,532
|
|
$
|
326,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading (income)
losses and fair value adjustments on loans
|
|
(80,000)
|
|
|
(80,000)
|
|
|
|
|
(43,858)
|
|
|
(43,858)
|
|
Other investment
related expenses
|
|
4,800
|
|
|
4,800
|
|
|
|
|
7,212
|
|
|
7,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
EBITDA Adjustments
|
|
(75,200)
|
|
|
(75,200)
|
|
|
|
|
(36,646)
|
|
|
(36,646)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Adjusted
EBITDA
|
$
|
100,000
|
|
$
|
105,000
|
|
|
|
$
|
284,886
|
|
$
|
289,886
|
B. RILEY
FINANCIAL, INC.
|
Diluted Income per
Common Share - Prior Guidance
|
(Unaudited)
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior Guidance
(12/17/20)
|
|
|
|
Prior Guidance
(12/17/20)
|
|
|
|
|
|
|
|
Three Months
Ended
December 31, 2020
|
|
|
|
Twelve Months
Ended
December 31, 2020
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
Low
|
|
High
|
Net income
attributable to B. Riley Financial, Inc.
|
$
|
109,000
|
|
$
|
112,200
|
|
|
|
$
|
142,554
|
|
$
|
145,754
|
|
Preferred stock
dividends
|
|
1,500
|
|
|
1,500
|
|
|
|
|
4,900
|
|
|
4,900
|
|
|
Net income available
to common shareholders
|
$
|
107,500
|
|
$
|
110,700
|
|
|
|
$
|
137,654
|
|
$
|
140,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per
common share
|
|
$4.15
|
|
|
$4.27
|
|
|
|
|
$5.19
|
|
|
$5.31
|
Weighted average
diluted common shares outstanding
|
|
25,930,000
|
|
|
25,930,000
|
|
|
|
|
26,510,000
|
|
|
26,510,000
|
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SOURCE B. Riley Financial