LOS
ANGELES, July 25, 2023 /PRNewswire/ -- B.
Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the "Company"),
a diversified financial services platform, today announced certain
preliminary unaudited financial results for the three-month and
six-month period ending June 30,
2023. The Company has also provided guidance for operating
adjusted EBITDA in the third quarter of 2023.
Preliminary Estimates for the Three Months Ended June 30, 2023
- Total revenues estimated within the range of $405 million to $407
million
- Net income attributable to the Company between $44.6 million to $46.6
million
- Diluted earnings per common share in the range of $1.48 to $1.55 per
diluted share
- Adjusted EBITDA(1) expected in the range of
$138 million to $140 million
- Operating adjusted EBITDA(2) within the range of
$78.5 million and $80.5 million
Preliminary Estimates for the Six Months Ended June 30, 2023
- Total revenues estimated within the range of $837.1 million and $839.1
million
- Net income attributable to the Company between $61.8 million and $63.8
million
- Diluted earnings per common share in the range of $1.98 to $2.05 per
diluted share
- Adjusted EBITDA(1) expected in the range of
$232.8 million and $234.8 million
- Operating adjusted EBITDA(2) within the range of
$158.6 million and $160.6 million
Q3 2023 Operating Adjusted EBITDA Guidance
- Operating adjusted EBITDA(2) of at least
$105 million
"B. Riley Financial is experiencing strong momentum, and we
believe our preliminary second quarter results and outlook
demonstrate the ongoing successful execution of our platform
strategy," said Bryant Riley,
Chairman and Co-Chief Executive Officer of B. Riley Financial.
"We are seeing positive trends across our businesses. Capital
markets and retail liquidation activity is steadily increasing as a
function of market tailwinds in our historically episodic segments.
Demand for our consulting and appraisal services is at record
levels, and our communications and consumer segments continue to
perform as a stable source of earnings and cash flow."
"Investment banking during the month of July has already
exceeded our results for all of the second quarter. To the extent
that this recent momentum continues, Operating Adjusted EBITDA will
meaningfully exceed our $105 million
estimate," said Riley. "We expect to have over $500 million of immediate liquidity with current
cash on hand, anticipated proceeds from our concurrently announced
equity offering, and a new upsized credit facility which we
expect to finalize shortly. We plan to use this capital to go
on offense in pursuit of opportunities presented by this increased
activity in our investment banking business, as well as other
opportunities that we see across our B. Riley platform."
Total cash and investments (3) is estimated to
be approximately $1.9 billion as of
June 30, 2023. Total debt, net of
cash and investments, is expected to be approximately $406 million as of June
30, 2023.
Declaration of Common Dividend
The Company has
declared a Second Quarter 2023 cash dividend of $1.00 per share which will be payable on or about
August 21 to common stockholders of
record as of August 11.
The preliminary results and guidance presented herein reflect
reasonable estimates based upon the information available to B.
Riley Financial at this time. Actual results may differ from these
estimates. Further, these estimates should not be viewed as a
substitute for complete financial statements prepared in accordance
with GAAP and they are not necessarily indicative of the results to
be achieved in any future period. Preliminary results are subject
to completion of the Company's customary quarter-end closing and
review procedures and are not a comprehensive statement of its
financial results for the three months ended June 30, 2023.
B. Riley Financial plans to release its full second quarter 2023
financial results in a press release on Wednesday, August 9, 2023 after market close, to
be followed by a conference call on the same day at 4:30 pm ET (1:30 pm
PT). Conference call details will be announced prior to the
call.
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.
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) and our Quarterly Report on
Form 10-Q for the quarter ended March 31,
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.
Note Regarding Use of Non-GAAP Financial
Measures
Certain of the information set forth herein,
including operating revenues, adjusted EBITDA, operating adjusted
EBITDA and total debt, net of cash and investments 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 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,
restructuring charge, gain on extinguishment of loans, impairment
of trade names, stock-based compensation and transaction related
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, realized and unrealized gains (losses) on investments and
fair value adjustments and other investment related expenses and
(iv) 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, our
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.
The Company has not provided guidance for a comparable GAAP
measure or a quantitative reconciliation of its forecast for
Operating Adjusted EBITDA in the third quarter of 2023 to the most
directly comparable GAAP measure because it is unable to determine
with reasonable certainty the ultimate outcome of certain
significant items necessary to calculate such measure without
unreasonable effort. These items include, but are not limited to,
final calculation of investment gains (losses), defined as trading
income (losses) and fair value adjustments on loans.
Notwithstanding this limitation, as noted above, the Company
estimates Operating Adjusted EBITDA(2) of at least
$105 million in the third quarter of
2023. These items are uncertain, depend on various factors, and
could have a material impact on the GAAP reported results for the
period.
Footnotes (See "Note Regarding Use of Non-GAAP
Financial Measures" for further discussion of these non-GAAP terms.
For a reconciliation 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 on extinguishment of loans, impairment of
tradenames, and transaction related and other costs.
(2) 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 fair value adjustments, and (iii) Other investment related
expenses.
(3) Total cash and investments is defined as the sum of cash and
cash equivalents, restricted cash, due from clearing brokers net of
due to clearing brokers, securities and other investments owned, at
fair value net of (i) securities sold not yet purchased and (ii)
noncontrolling interest related to investments, advances against
customer contracts, loans receivable, at fair value net of loan
participations sold, and other investments reported in prepaid and
other assets.
The following is a reconciliation of Net Income estimates to
Adjusted EBITDA and Operating Adjusted EBITDA to the corresponding
GAAP measure (in thousands), as well as a reconciliation of diluted
income per common share:
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
June 30,
2023
|
|
|
Three Months
Ended
June 30,
2022
|
|
|
|
Low
|
|
|
High
|
|
|
Actual
|
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
|
$
|
44,600
|
|
|
$
|
46,600
|
|
|
$
|
(140,159)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit
from) income taxes
|
|
|
21,500
|
|
|
|
21,500
|
|
|
|
(52,513)
|
|
Interest
expense
|
|
|
47,300
|
|
|
|
47,300
|
|
|
|
31,764
|
|
Interest
income
|
|
|
(700)
|
|
|
|
(700)
|
|
|
|
(500)
|
|
Share based
payments
|
|
|
10,500
|
|
|
|
10,500
|
|
|
|
14,202
|
|
Depreciation and
amortization
|
|
|
12,500
|
|
|
|
12,500
|
|
|
|
7,961
|
|
Restructuring
charge
|
|
|
600
|
|
|
|
600
|
|
|
|
—
|
|
Impairment of
tradenames
|
|
|
1,700
|
|
|
|
1,700
|
|
|
|
—
|
|
Transactions related
costs and other
|
|
|
—
|
|
|
|
—
|
|
|
|
3,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
adjustments
|
|
|
93,400
|
|
|
|
93,400
|
|
|
|
4,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
138,000
|
|
|
$
|
140,000
|
|
|
$
|
(135,777)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading (income) losses
and fair value adjustments on loans
|
|
|
(42,000)
|
|
|
|
(42,000)
|
|
|
|
117,763
|
|
Realized and unrealized
(gains) losses on investments and fair value adjustments
|
|
|
(19,000)
|
|
|
|
(19,000)
|
|
|
|
106,164
|
|
Other investment
related expenses
|
|
|
1,500
|
|
|
|
1,500
|
|
|
|
(13,930)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating EBITDA Adjustments
|
|
|
(59,500)
|
|
|
|
(59,500)
|
|
|
|
209,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Adjusted
EBITDA
|
|
$
|
78,500
|
|
|
$
|
80,500
|
|
|
$
|
74,220
|
|
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
June 30,
2023
|
|
|
Three Months
Ended
June 30,
2022
|
|
|
|
Low
|
|
|
High
|
|
|
Actual
|
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
|
$
|
44,600
|
|
|
$
|
46,600
|
|
|
$
|
(140,159)
|
|
Preferred stock
dividends
|
|
|
2,000
|
|
|
|
2,000
|
|
|
|
2,002
|
|
Net income (loss) available to common shareholders
|
|
$
|
42,600
|
|
|
$
|
44,600
|
|
|
$
|
(142,161)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per common share
|
|
$
|
1.48
|
|
|
$
|
1.55
|
|
|
$
|
(5.07)
|
|
Weighted average
diluted common shares outstanding
|
|
|
28,700,000
|
|
|
|
28,700,000
|
|
|
|
28,051,570
|
|
B. RILEY FINANCIAL,
INC.
Reconciliation of
Net Income Preliminary Estimate to Adjusted EBITDA Preliminary
Estimate
(Unaudited)
(Dollars in thousands)
|
|
|
|
|
|
Preliminary
Estimate
|
|
|
Prior
Period
|
|
|
|
Six Months
Ended
June 30,
2023
|
|
|
Six Months
Ended
June 30,
2022
|
|
|
|
Low
|
|
|
High
|
|
|
Actual
|
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
|
$
|
61,755
|
|
|
$
|
63,755
|
|
|
$
|
(150,221)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for (benefit
from) income taxes
|
|
|
29,419
|
|
|
|
29,419
|
|
|
|
(56,208)
|
|
Interest
expense
|
|
|
94,861
|
|
|
|
94,861
|
|
|
|
62,200
|
|
Interest
income
|
|
|
(3,274)
|
|
|
|
(3,274)
|
|
|
|
(567)
|
|
Share based
payments
|
|
|
24,246
|
|
|
|
24,246
|
|
|
|
31,215
|
|
Depreciation and
amortization
|
|
|
25,577
|
|
|
|
25,577
|
|
|
|
15,809
|
|
Restructuring
charge
|
|
|
693
|
|
|
|
693
|
|
|
|
—
|
|
Gain on extinguishment
of loans
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,102)
|
|
Impairment of
tradenames
|
|
|
1,700
|
|
|
|
1,700
|
|
|
|
—
|
|
Transactions related
costs and other
|
|
|
(2,146)
|
|
|
|
(2,146)
|
|
|
|
3,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA adjustments
|
|
|
171,076
|
|
|
|
171,076
|
|
|
|
55,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
232,831
|
|
|
$
|
234,831
|
|
|
$
|
(95,115)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Trading (income) losses
and fair value adjustments on loans
|
|
|
(93,568)
|
|
|
|
(93,568)
|
|
|
|
137,041
|
|
Realized and unrealized
(gains) losses on investments and fair value adjustments
|
|
|
9,442
|
|
|
|
9,442
|
|
|
|
155,276
|
|
Other investment
related expenses
|
|
|
9,921
|
|
|
|
9,921
|
|
|
|
(38,795)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating EBITDA Adjustments
|
|
|
(74,205)
|
|
|
|
(74,205)
|
|
|
|
253,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Adjusted
EBITDA
|
|
$
|
158,626
|
|
|
$
|
160,626
|
|
|
$
|
158,407
|
|
B. RILEY FINANCIAL,
INC.
Diluted Income per
Common Share — Preliminary Estimate
(Unaudited)
(Dollars in thousands, except share data)
|
|
|
|
|
|
Preliminary
Estimate
|
|
|
Prior
Period
|
|
|
|
Six Months
Ended
June 30,
2023
|
|
|
Six Months
Ended
June 30,
2022
|
|
|
|
Low
|
|
|
High
|
|
|
Actual
|
|
Net income (loss)
attributable to B. Riley Financial, Inc.
|
|
$
|
61,755
|
|
|
$
|
63,755
|
|
|
$
|
(150,221)
|
|
Preferred stock
dividends
|
|
|
4,012
|
|
|
|
4,012
|
|
|
|
4,004
|
|
Net income (loss) available to common shareholders
|
|
$
|
57,743
|
|
|
$
|
59,743
|
|
|
$
|
(154,225)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per common share
|
|
$
|
1.98
|
|
|
$
|
2.05
|
|
|
$
|
(5.52)
|
|
Weighted average
diluted common shares outstanding
|
|
|
29,100,000
|
|
|
|
29,100,000
|
|
|
|
27,953,845
|
|
Contacts
|
|
|
|
Investors
|
Media
|
Mike Frank
|
Jo Anne
McCusker
|
ir@brileyfin.com
|
jmccusker@brileyfin.com
|
(212)
409-2424
|
(646)
885-5425
|
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SOURCE B. Riley Financial