LOS ANGELES, March 3, 2020 /PRNewswire/ -- B. Riley Financial,
Inc. (NASDAQ:RILY) ("B. Riley" or the "Company"), a diversified
provider of business advisory and financial services, today
announced results for the fourth quarter and full year ended
December 31, 2019.
Q4 2019 Highlights
- Revenues of $165.2 million vs.
$102.0 million for Q4 2018
- Net income of $16.9 million or
$0.59 per diluted share
- Adjusted EBITDA of $50.3 million
vs. $11.2 million for Q4 2018
- Adjusted net income of $23.6
million or $0.83 per diluted
share
FY 2019 Highlights
- Revenues of $652.1 million vs.
$423.0 million for FY 2018
- Net income of $81.3 million or
$2.95 per diluted share
- Adjusted EBITDA of $207.9 million
vs. $89.6 million for FY 2018
- Adjusted net income of $108.3
million or $3.93 per diluted
share
"Our strong quarterly performance was driven by record
investment banking revenues as well as significant gains from our
investment portfolio which helped more than offset a large loss in
our liquidation segment. Meanwhile, our consulting, appraisal,
wealth management and principal investment businesses continue to
perform steadily as we pursue new opportunities to create
additional value from our platform. Our recently acquired brand
portfolio also contributed to our fourth quarter results and we
expect this to be a more meaningful component of earnings as we
look ahead," said Bryant Riley,
Chairman and Co-Chief Executive Officer, B. Riley Financial.
Riley added, "Our results demonstrate the strength of B. Riley
Financial's diversified platform and successful execution of our
core strategy to create increased value while also delivering
dividends to our shareholders. Over the last few years, we have
meaningfully transformed our business by building and purchasing
assets with steadier and more recurring revenue streams. In 2019,
these recurring businesses contributed more than 50 percent of
pre-tax income before corporate overhead and approximately 40
percent of adjusted EBITDA. As we look ahead to 2020, and with a
full year of brand investments, we expect these percentages to
grow. Additionally, we continue to view our balance sheet as a
differentiator for gaining market share across all of our operating
subsidiaries and as an engine for driving incremental cash flows
from our more episodic capital markets and retail liquidation
businesses. The platform we have created allows us to
opportunistically pursue unique investment situations which helps
us to deliver shareholder value in excess of our day-to-day
operations."
Q4 2019 Financial Summary
Fourth quarter 2019 revenue increased to $165.2 million from $102.0
million for the fourth quarter of 2018, despite a loss in
the Auction and Liquidation segment during the quarter. Net income
increased to $16.9 million, or
$0.59 per diluted share, compared to
a loss of $8.8 million, or
$0.34 per diluted share, for the
fourth quarter of 2018.
- Capital Markets: Revenues increased to $172.2 million from $60.6
million for the fourth quarter of 2018. Segment income
increased to $88.6 million from a
loss of $12.5 million for the fourth
quarter of 2018. The significant increase was primarily driven by
investment banking as well as investment gains related to the
Company's proprietary equity positions.
- Auction and Liquidation: For the fourth quarter of 2019,
this segment recognized negative revenue of $44.4 million and a segment loss of $60.8 million. The negative revenue is attributed
to a significant loss accrual related to a large liquidation
project which is expected to be completed during 2020. The total
estimated loss for this project through completion is included in
fourth quarter 2019 results.
- Valuation and Appraisal: Revenues were $9.7 million compared to $11.3 million for the fourth quarter of 2018.
Segment income was $2.7 million
compared to $3.4 million for the same
year-ago period. While the fourth quarter of 2018 represented an
exceptional quarter for revenue growth in this segment, results
have remained relatively steady from quarter-to-quarter and
year-to-year.
- Principal Investments: Revenues increased to
$23.7 million from $20.0 million for the fourth quarter of 2018.
Segment income increased to $8.8
million compared to $5.7
million for the fourth quarter of 2018. Results for this
segment are primarily driven by United Online and magicJack.
In October 2019, the Company
acquired a majority interest in a brand investment portfolio which
is focused on generating steady recurring revenue through the
licensing of brand trademarks. The Company's brand holdings
contributed an additional $4.1
million in revenue and $2.7
million in operating income for the fourth quarter of
2019.
Adjusted EBITDA (1) increased to $50.3 million compared to $11.2 million for the fourth quarter of 2018.
Adjusted net income (2) increased to $23.6 million, or $0.83 per diluted share, compared to $0.7 million, or $0.03 per diluted share, for the fourth quarter
of 2018.
FY 2019 Financial Summary
Full year 2019 revenue increased to $652.1
million from $423.0 million
for the full year 2018. Net income increased to $81.3 million or $2.95 per diluted share from $15.5 million or $0.58 per diluted share for the full year 2018.
The addition of the Company's brand holdings in October 2019 contributed $4.1 million in revenue and $2.7 million in operating income for the
year.
- Capital Markets: Revenues increased to $485.9 million from $275.1
million in the prior year. Segment income increased to
$179.3 million from $10.2 million for the full year of 2018. The
significant increase in results for this segment can be attributed
to strong investment banking performance as well as gains from the
Company's investment portfolio. The addition of GlassRatner, which
the Company acquired in August 2018,
also contributed to results for the full year.
- Auction and Liquidation: Revenues were $22.5 million with a segment loss of $25.5 million for the full year of 2019. Results
for this segment are expected to vary from quarter-to-quarter and
year-to-year due to the episodic nature of the Company's retail
liquidation engagements.
- Valuation and Appraisal: Revenues increased slightly to
$38.8 million from $38.7 million for the full year 2018. Segment
income totaled $10.2 million compared
to $11.1 million in the prior
year.
- Principal Investments: Revenues increased to
$100.9 million from $54.2 million in the prior year. Segment income
increased to $33.2 million from
$19.4 million for the full year 2018.
Results for this segment were primarily driven by United
Online and by magicJack which the Company acquired in November 2018.
Adjusted EBITDA (1) for the full year 2019 increased
to $207.9 million compared to
$89.6 million for the full year of
2018.
Adjusted net income (2) increased to $108.3 million, or $3.93 per diluted share, compared to $38.8 million, or $1.45 per diluted share, in the prior year.
As of December 31, 2019, the
Company had a total cash and investment balance of $832.2 million which includes approximately
$53 million in equity investments
included under prepaid expenses and other assets. Net of
$792.9 million in total debt, the
Company had a net cash and investment balance of $39.2 million at the end of the fourth
quarter.
The Company repurchased over 870,000 shares of its common stock
and warrants under its share repurchase program during 2019.
B. Riley Financial stockholders' equity increased to
$360.7 million as of December 31, 2019.
Declaration of Common Stock Dividend
The Company's Board of Directors has approved an increase in the
regular quarterly dividend to $0.25
per share, up from $0.175 per share,
and has also declared a one-time special quarterly dividend of
$0.10 per share. A total quarterly
cash dividend of $0.35 per common
share will be paid on or about March 31,
2020 to stockholders of record as of March 17, 2020.
Upon payment of the fourth quarter dividend, the Company will
have paid a total of $1.76 per share
in dividends on its common stock related to earnings for the full
year of 2019.
Conference Call Details
Management will host a conference call today, Tuesday, March 3, 2020 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time), to discuss results for
the fourth quarter and full year 2019. The live broadcast and
archived recording will also be made available on the Company's
investor relations website.
Date:
|
Tuesday, March 3,
2020
|
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 (expires on
Tuesday, March 10, 2020)
|
Toll-Free:
|
1-844-512-2921
|
International:
|
1-412-317-6671
|
Replay
Pin:
|
13698984
|
About B. Riley Financial, Inc. (NASDAQ:RILY)
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. The
Company 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. For more information about B. Riley and its affiliated
companies, visit www.brileyfin.com.
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) those 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, 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 Annual Report on Form 10-K for
the year ended December 31, 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 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 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.
Footnotes
(1) 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" for further
discussion of this non-GAAP term.
(2) 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" for further discussion of this
non-GAAP term.
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
(Dollars in
thousands, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
104,268
|
|
$
|
179,440
|
|
Restricted
cash
|
|
471
|
|
|
838
|
|
Due from clearing
brokers
|
|
23,818
|
|
|
37,738
|
|
Securities and other
investments owned, at fair value
|
|
451,551
|
|
|
273,577
|
|
Securities
borrowed
|
|
814,331
|
|
|
931,346
|
|
Accounts receivable,
net
|
|
46,624
|
|
|
42,123
|
|
Due from related
parties
|
|
5,832
|
|
|
1,729
|
|
Advances against
customer contracts
|
|
27,347
|
|
|
—
|
|
Loans
receivable
|
|
225,848
|
|
|
38,794
|
|
Prepaid expenses and
other assets
|
|
81,808
|
|
|
79,477
|
|
Operating lease
right-of-use assets
|
|
47,809
|
|
|
—
|
|
Property and
equipment, net
|
|
12,727
|
|
|
15,523
|
|
Goodwill
|
|
223,697
|
|
|
223,368
|
|
Other intangible
assets, net
|
|
220,525
|
|
|
91,358
|
|
Deferred income
taxes
|
|
31,522
|
|
|
42,399
|
|
|
Total
assets
|
$
|
2,318,178
|
|
$
|
1,957,710
|
Liabilities and
Equity
|
|
|
Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
4,477
|
|
$
|
5,646
|
|
Accrued expenses and
other liabilities
|
|
130,714
|
|
|
108,662
|
|
Deferred
revenue
|
|
67,121
|
|
|
69,066
|
|
Due to related
parties and partners
|
|
1,750
|
|
|
2,428
|
|
Securities sold not
yet purchased
|
|
41,820
|
|
|
37,623
|
|
Securities
loaned
|
|
810,495
|
|
|
930,522
|
|
Mandatorily
redeemable noncontrolling interests
|
|
4,616
|
|
|
4,633
|
|
Operating lease
liabilities
|
|
61,511
|
|
|
—
|
|
Notes
payable
|
|
38,167
|
|
|
1,550
|
|
Loan participations
sold
|
|
12,478
|
|
|
—
|
|
Term loan
|
|
66,666
|
|
|
79,166
|
|
Senior notes
payable
|
|
688,112
|
|
|
459,754
|
|
|
Total
liabilities
|
|
1,927,927
|
|
|
1,699,050
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
B. Riley Financial,
Inc. stockholders' equity:
|
|
|
|
|
|
|
Preferred stock,
$0.0001 par value; 1,000,000 shares authorized; 2,349 shares issued
and outstanding as of December 31, 2019 and none issued and
outstanding as of December 31, 2018; liquidation preference of
$58,723 as of December 31, 2019.
|
|
—
|
|
|
—
|
|
Common stock, $0.0001
par value; 100,000,000 shares authorized; 26,972,332 and 26,603,355
issued and outstanding as of December 31, 2019 and December 31,
2018, respectively.
|
|
3
|
|
|
2
|
|
Additional paid-in
capital
|
|
323,109
|
|
|
258,638
|
|
Retained
earnings
|
|
39,536
|
|
|
1,579
|
|
Accumulated other
comprehensive loss
|
|
(1,988)
|
|
|
(2,161)
|
|
|
Total B. Riley
Financial, Inc. stockholders' equity
|
|
360,660
|
|
|
258,058
|
Noncontrolling
interests
|
|
29,591
|
|
|
602
|
|
|
Total
equity
|
|
390,251
|
|
|
258,660
|
|
|
|
Total liabilities and
equity
|
$
|
2,318,178
|
|
$
|
1,957,710
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Income
|
(Dollars in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services and
fees
|
|
$
|
138,251
|
|
$
|
88,660
|
|
$
|
566,956
|
|
$
|
384,076
|
|
Interest income -
Loans and securities lending
|
|
|
23,074
|
|
|
12,871
|
|
|
77,221
|
|
|
38,277
|
|
Sale of
goods
|
|
|
|
3,912
|
|
|
500
|
|
|
7,935
|
|
|
638
|
|
|
Total
revenues
|
|
|
165,237
|
|
|
102,031
|
|
|
652,112
|
|
|
422,991
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct cost of
services
|
|
|
17,109
|
|
|
13,409
|
|
|
58,824
|
|
|
34,754
|
|
Cost of goods
sold
|
|
|
3,740
|
|
|
658
|
|
|
7,575
|
|
|
800
|
|
Selling, general and
administrative expenses
|
|
|
97,256
|
|
|
81,517
|
|
|
385,219
|
|
|
310,508
|
|
Restructuring
charge
|
|
|
—
|
|
|
6,259
|
|
|
1,699
|
|
|
8,506
|
|
Interest expense -
Securities lending and loan participations sold
|
|
|
9,565
|
|
|
6,722
|
|
|
32,144
|
|
|
23,039
|
|
|
Total operating
expenses
|
|
|
127,670
|
|
|
108,565
|
|
|
485,461
|
|
|
377,607
|
|
|
|
Operating income
(loss)
|
|
|
37,567
|
|
|
(6,534)
|
|
|
166,651
|
|
|
45,384
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
248
|
|
|
590
|
|
|
1,577
|
|
|
1,326
|
|
Income (loss) from
equity investments
|
|
|
2,618
|
|
|
2,937
|
|
|
(1,431)
|
|
|
7,986
|
|
Interest
expense
|
|
|
(15,075)
|
|
|
(9,467)
|
|
|
(50,205)
|
|
|
(33,393)
|
|
|
Income (loss) before
income taxes
|
|
|
25,358
|
|
|
(12,474)
|
|
|
116,592
|
|
|
21,303
|
(Provision for)
benefit from income taxes
|
|
|
(7,842)
|
|
|
3,509
|
|
|
(34,644)
|
|
|
(4,903)
|
|
|
Net income
(loss)
|
|
|
17,516
|
|
|
(8,965)
|
|
|
81,948
|
|
|
16,400
|
Net income (loss)
attributable to noncontrolling interests
|
|
|
387
|
|
|
(160)
|
|
|
337
|
|
|
891
|
|
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
|
|
17,129
|
|
|
(8,805)
|
|
|
81,611
|
|
|
15,509
|
Preferred stock
dividends
|
|
|
264
|
|
|
—
|
|
|
264
|
|
|
—
|
|
|
Net income (loss)
applicable to common shareholders
|
|
$
|
16,865
|
|
$
|
(8,805)
|
|
$
|
81,347
|
|
$
|
15,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss)
per common share
|
|
$
|
0.64
|
|
$
|
(0.34)
|
|
$
|
3.08
|
|
$
|
0.60
|
Diluted income (loss)
per common share
|
|
$
|
0.59
|
|
$
|
(0.34)
|
|
$
|
2.95
|
|
$
|
0.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
basic common shares outstanding
|
|
|
26,547,023
|
|
|
26,177,560
|
|
|
26,401,036
|
|
|
25,937,305
|
Weighted average
diluted common shares outstanding
|
|
|
28,412,871
|
|
|
26,177,560
|
|
|
27,529,157
|
|
|
26,764,856
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
2019
|
|
2018
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net income
|
|
81,948
|
|
$
|
16,400
|
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
19,048
|
|
|
13,809
|
|
|
Provision for
doubtful accounts
|
|
2,126
|
|
|
1,308
|
|
|
Share-based
compensation
|
|
15,916
|
|
|
13,042
|
|
|
Non-cash interest and
other
|
|
(12,267)
|
|
|
4,068
|
|
|
Effect of foreign
currency on operations
|
|
(78)
|
|
|
(916)
|
|
|
Loss (income) from
equity investments
|
|
1,431
|
|
|
(7,986)
|
|
|
Deferred income
taxes
|
|
10,874
|
|
|
1,990
|
|
|
Impairment of
leaseholds and intangibles, lease loss accrual and gain on disposal
of fixed assets
|
|
(286)
|
|
|
4,142
|
|
|
Income allocated and
fair value adjustment for mandatorily redeemable noncontrolling
interests
|
|
1,220
|
|
|
1,222
|
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Due from clearing
brokers
|
|
13,920
|
|
|
(6,259)
|
|
|
|
Securities and other
investments owned
|
|
(165,765)
|
|
|
(128,217)
|
|
|
|
Securities
borrowed
|
|
117,015
|
|
|
(124,257)
|
|
|
|
Accounts receivable
and advances against customer contracts
|
|
(33,927)
|
|
|
(12,948)
|
|
|
|
Prepaid expenses and
other assets
|
|
9,588
|
|
|
(24,395)
|
|
|
|
Accounts payable,
accrued payroll and related expenses, accrued expenses and other
liabilities
|
|
32,553
|
|
|
3,559
|
|
|
|
Amounts due to/from
related parties and partners
|
|
(4,781)
|
|
|
4,705
|
|
|
|
Securities sold, not
yet purchased
|
|
4,197
|
|
|
9,332
|
|
|
|
Deferred
revenue
|
|
(3,098)
|
|
|
(564)
|
|
|
|
Securities
loaned
|
|
(120,026)
|
|
|
127,151
|
|
|
|
|
Net cash used in
operating activities
|
|
(30,392)
|
|
|
(104,814)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Purchases of loans
receivable
|
|
(343,811)
|
|
|
(38,794)
|
|
Repayments of loans
receivable
|
|
159,186
|
|
|
—
|
|
Loan participations
sold
|
|
31,806
|
|
|
—
|
|
Repayment of loan
participations sold
|
|
(18,911)
|
|
|
—
|
|
Asset acquisition -
BR Brand, net of cash acquired $2,160
|
|
(114,912)
|
|
|
—
|
|
Acquisition of
magicJack, net of cash acquired $53,875
|
|
—
|
|
|
(89,240)
|
|
Acquisition of other
businesses
|
|
—
|
|
|
(4,000)
|
|
Proceeds from sale of
division of magicJack
|
|
6,196
|
|
|
—
|
|
Purchases of
property, equipment and intangible assets
|
|
(3,461)
|
|
|
(5,432)
|
|
Proceeds from sale of
property, equipment and intangible assets
|
|
513
|
|
|
37
|
|
Equity
investments
|
|
(33,391)
|
|
|
(16,640)
|
|
Dividends and
distributions from equity investments
|
|
21,389
|
|
|
2,628
|
|
|
|
|
Net cash used in
investing activities
|
|
(295,396)
|
|
|
(151,441)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from asset
based credit facility
|
|
140,439
|
|
|
300,000
|
|
Repayment of asset
based credit facility
|
|
(103,343)
|
|
|
(300,000)
|
|
Proceeds from notes
payable
|
|
—
|
|
|
51,020
|
|
Repayment of notes
payable
|
|
(478)
|
|
|
(51,713)
|
|
Payment of
participating note payable and contingent consideration
|
|
(4,250)
|
|
|
—
|
|
Proceeds from term
loan
|
|
10,000
|
|
|
80,000
|
|
Repayment of term
loan
|
|
(22,734)
|
|
|
—
|
|
Proceeds from
issuance of senior notes
|
|
281,924
|
|
|
258,997
|
|
Redemption of senior
notes
|
|
(52,154)
|
|
|
—
|
|
Payment of debt
issuance costs
|
|
(3,425)
|
|
|
(7,260)
|
|
Payment of employment
taxes on vesting of restricted stock
|
|
(2,022)
|
|
|
(3,731)
|
|
Common dividends
paid
|
|
(41,138)
|
|
|
(22,684)
|
|
Preferred dividends
paid
|
|
(264)
|
|
|
—
|
|
Repurchase of common
stock
|
|
(4,273)
|
|
|
(18,703)
|
|
Repurchase of
warrants
|
|
(2,777)
|
|
|
—
|
|
Distribution to
noncontrolling interests
|
|
(1,958)
|
|
|
(1,067)
|
|
Proceeds from
offering common stock
|
|
63
|
|
|
—
|
|
Proceeds from
offering preferred stock
|
|
56,566
|
|
|
—
|
|
|
|
|
Net cash provided by
financing activities
|
|
250,176
|
|
|
284,859
|
|
|
|
|
(Decrease) increase
in cash, cash equivalents and restricted cash
|
|
(75,612)
|
|
|
28,604
|
|
|
|
|
Effect of foreign
currency on cash, cash equivalents and restricted cash
|
|
73
|
|
|
(860)
|
|
|
|
|
Net (decrease)
increase in cash, cash equivalents and restricted cash
|
|
(75,539)
|
|
|
27,744
|
Cash, cash
equivalents and restricted cash, beginning of year
|
|
180,278
|
|
|
152,534
|
Cash, cash
equivalents and restricted cash, end of year
|
|
104,739
|
|
$
|
180,278
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures:
|
|
|
|
|
|
|
Interest
paid
|
|
74,625
|
|
$
|
50,103
|
|
Taxes paid
|
|
8,649
|
|
$
|
6,497
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Segment Financial
Information
|
(Dollars in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Capital Markets
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
$
|
149,139
|
$
|
|
47,738
|
|
$
|
408,637
|
|
$
|
236,789
|
|
Interest income -
Loans and securities lending
|
|
23,074
|
|
|
12,871
|
|
|
77,221
|
|
|
38,277
|
|
Total revenues
|
|
172,213
|
|
|
60,609
|
|
|
485,858
|
|
|
275,066
|
|
Selling, general and
administrative expenses
|
|
(72,924)
|
|
|
(59,215)
|
|
|
(269,494)
|
|
|
(227,774)
|
|
Restructuring
recovery (charge)
|
|
—
|
|
|
(5,921)
|
|
|
4
|
|
|
(8,378)
|
|
Interest expense -
Securities lending and loan participations sold
|
|
(9,565)
|
|
|
(6,722)
|
|
|
(32,144)
|
|
|
(23,039)
|
|
Depreciation and
amortization
|
|
(1,130)
|
|
|
(1,295)
|
|
|
(4,974)
|
|
|
(5,723)
|
|
|
Segment income
(loss)
|
|
88,594
|
|
|
(12,544)
|
|
|
179,250
|
|
|
10,152
|
Auction and
Liquidation segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
|
(47,385)
|
|
|
10,111
|
|
|
18,296
|
|
|
54,923
|
|
Revenues - Sale of
goods
|
|
2,990
|
|
|
15
|
|
|
4,220
|
|
|
63
|
|
Total revenues
|
|
(44,395)
|
|
|
10,126
|
|
|
22,516
|
|
|
54,986
|
|
Direct cost of
services
|
|
(11,712)
|
|
|
(7,364)
|
|
|
(33,296)
|
|
|
(19,627)
|
|
Cost of goods
sold
|
|
(3,024)
|
|
|
—
|
|
|
(4,016)
|
|
|
(41)
|
|
Selling, general and
administrative expenses
|
|
(1,685)
|
|
|
(487)
|
|
|
(10,730)
|
|
|
(8,274)
|
|
Depreciation and
amortization
|
|
(2)
|
|
|
(8)
|
|
|
(7)
|
|
|
(31)
|
|
|
Segment (loss)
income
|
|
(60,818)
|
|
|
2,267
|
|
|
(25,533)
|
|
|
27,013
|
Valuation and
Appraisal segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
|
9,678
|
|
|
11,322
|
|
|
38,821
|
|
|
38,705
|
|
Selling, general and
administrative expenses
|
|
(6,956)
|
|
|
(7,877)
|
|
|
(28,448)
|
|
|
(27,403)
|
|
Depreciation and
amortization
|
|
(36)
|
|
|
(46)
|
|
|
(136)
|
|
|
(205)
|
|
|
Segment
income
|
|
2,686
|
|
|
3,399
|
|
|
10,237
|
|
|
11,097
|
Principal
Investments - United Online and magicJack segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
|
22,764
|
|
|
19,489
|
|
|
97,147
|
|
|
53,659
|
|
Revenues - Sale of
goods
|
|
922
|
|
|
485
|
|
|
3,715
|
|
|
575
|
|
Total revenues
|
|
23,686
|
|
|
19,974
|
|
|
100,862
|
|
|
54,234
|
|
Direct cost of
services
|
|
(5,398)
|
|
|
(6,045)
|
|
|
(25,529)
|
|
|
(15,127)
|
|
Cost of goods
sold
|
|
(716)
|
|
|
(658)
|
|
|
(3,559)
|
|
|
(759)
|
|
Selling, general and
administrative expenses
|
|
(5,846)
|
|
|
(4,641)
|
|
|
(24,256)
|
|
|
(10,962)
|
|
Depreciation and
amortization
|
|
(2,939)
|
|
|
(2,560)
|
|
|
(12,658)
|
|
|
(7,600)
|
|
Restructuring
charge
|
|
—
|
|
|
(338)
|
|
|
(1,703)
|
|
|
(338)
|
|
|
Segment
income
|
|
8,787
|
|
|
5,732
|
|
|
33,157
|
|
|
19,448
|
Brands
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues - Services
and fees
|
|
4,055
|
|
|
—
|
|
|
4,055
|
|
|
—
|
|
Selling, general and
administrative expenses
|
|
(881)
|
|
|
—
|
|
|
(881)
|
|
|
—
|
|
Depreciation and
amortization
|
|
(507)
|
|
|
—
|
|
|
(507)
|
|
|
—
|
|
|
Segment
income
|
|
2,667
|
|
|
—
|
|
|
2,667
|
|
|
—
|
Consolidated
operating income (loss) from reportable segments
|
|
41,916
|
|
|
(1,146)
|
|
|
199,778
|
|
|
67,710
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other
expenses (including restructuring recovery of $210 during the
year ended December 31, 2018)
|
|
(4,349)
|
|
|
(5,388)
|
|
|
(33,127)
|
|
|
(22,326)
|
Interest
income
|
|
248
|
|
|
590
|
|
|
1,577
|
|
|
1,326
|
Income (loss) on
equity investments
|
|
2,618
|
|
|
2,937
|
|
|
(1,431)
|
|
|
7,986
|
Interest
expense
|
|
(15,075)
|
|
|
(9,467)
|
|
|
(50,205)
|
|
|
(33,393)
|
|
Income (loss) before
income taxes
|
|
25,358
|
|
|
(12,474)
|
|
|
116,592
|
|
|
21,303
|
(Provision for)
benefit from income taxes
|
|
(7,842)
|
|
|
3,509
|
|
|
(34,644)
|
|
|
(4,903)
|
|
Net income
(loss)
|
|
17,516
|
|
|
(8,965)
|
|
|
81,948
|
|
|
16,400
|
Net income (loss)
attributable to noncontrolling interests
|
|
387
|
|
|
(160)
|
|
|
337
|
|
|
891
|
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
|
17,129
|
|
|
(8,805)
|
|
|
81,611
|
|
|
15,509
|
Preferred stock
dividends
|
|
264
|
|
|
—
|
|
|
264
|
|
|
—
|
|
Net income (loss)
applicable to common shareholders
|
$
|
16,865
|
|
$
|
(8,805)
|
|
$
|
81,347
|
|
$
|
15,509
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Adjusted EBITDA
Reconciliation
|
(Unaudited)
|
(Dollars in
thousands)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
$
|
17,129
|
|
$
|
(8,805)
|
|
$
|
81,611
|
|
$
|
15,509
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for
(benefit from) income taxes
|
|
7,842
|
|
|
(3,509)
|
|
|
34,644
|
|
|
4,903
|
|
Interest
expense
|
|
15,075
|
|
|
9,467
|
|
|
50,205
|
|
|
33,393
|
|
Interest
income
|
|
(248)
|
|
|
(590)
|
|
|
(1,577)
|
|
|
(1,326)
|
|
Share based
payments
|
|
5,640
|
|
|
3,286
|
|
|
15,916
|
|
|
11,596
|
|
Depreciation and
amortization
|
|
4,831
|
|
|
4,041
|
|
|
19,048
|
|
|
13,809
|
|
Restructuring
costs
|
|
—
|
|
|
6,259
|
|
|
1,699
|
|
|
8,506
|
|
Transactions related
costs and other
|
|
—
|
|
|
1,048
|
|
|
6,339
|
|
|
3,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
adjustments
|
|
33,140
|
|
|
20,002
|
|
|
126,274
|
|
|
74,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
50,269
|
|
$
|
11,197
|
|
$
|
207,885
|
|
$
|
89,631
|
B. RILEY
FINANCIAL, INC. AND SUBSIDIARIES
|
Adjusted Net
Income Reconciliation
|
(Unaudited)
|
(Dollars in
thousands, except share data)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
$
|
17,129
|
|
$
|
(8,805)
|
|
$
|
81,611
|
|
$
|
15,509
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Share based
payments
|
|
5,640
|
|
|
3,286
|
|
|
15,916
|
|
|
11,596
|
|
Amortization of
intangible assets
|
|
3,815
|
|
|
2,734
|
|
|
13,846
|
|
|
9,133
|
|
Restructuring
costs
|
|
—
|
|
|
6,259
|
|
|
1,699
|
|
|
8,506
|
|
Transactions related
costs and other
|
|
—
|
|
|
1,048
|
|
|
6,339
|
|
|
3,241
|
|
Income tax effect of
adjusting entries
|
|
(2,969)
|
|
|
(3,798)
|
|
|
(11,154)
|
|
|
(9,209)
|
Adjusted net income
attributable to B. Riley Financial, Inc.
|
$
|
23,615
|
|
$
|
724
|
|
$
|
108,257
|
|
$
|
38,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted basic income
per share
|
$
|
0.89
|
|
$
|
0.03
|
|
$
|
4.10
|
|
$
|
1.49
|
|
Adjusted diluted
income per share
|
$
|
0.83
|
|
$
|
0.03
|
|
$
|
3.93
|
|
$
|
1.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to
calculate adjusted basic net income per share
|
|
26,547,023
|
|
|
26,177,560
|
|
|
26,401,036
|
|
|
25,937,305
|
Shares used to
calculate adjusted diluted net income per share
|
|
28,412,871
|
|
|
26,177,560
|
|
|
27,529,157
|
|
|
26,764,856
|
Contacts
|
|
|
Investors
|
Media
|
B. Riley
Financial
|
Jo Anne
McCusker
|
ir@brileyfin.com
|
jmccusker@brileyfin.com
|
(310)
966-1444
|
(646)
885-5425
|
View original content to download
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SOURCE B. Riley Financial