B. Riley Financial Reports Fourth Quarter and Full Year 2022 Results; Declares $1.00 Dividend

Rhea-AI Summary

B. Riley Financial, Inc. (RILY) reported Q4 2022 total revenues of $326.8 million and operating revenues of $450.4 million. The company experienced a net loss of ($59.4 million), impacted by investment losses of ($123.5 million). Despite these losses, operating adjusted EBITDA reached $101.8 million, surpassing guidance of $90-100 million. The company declared a quarterly dividend of $1.00 per common share, totaling approximately $113 million returned to shareholders in fiscal 2022. B. Riley's diversified portfolio is expected to stabilize amidst recovering market conditions.

Positive

• Operating revenues increased to $450.4 million for Q4 2022.
• Operating adjusted EBITDA of $101.8 million exceeded guidance of $90-100 million.
• Declared quarterly dividend of $1.00 per common share, returning approximately $113 million to shareholders in 2022.

Negative

• Net loss of ($59.4 million) for Q4 2022 compared to net income of $62.2 million in the prior year.
• Investment losses total ($403.7 million) for the year due to market declines.
• Operating adjusted EBITDA decreased from $422 million in 2021 to $366.5 million for the full year 2022.

Q4 2022 GAAP Net Loss of ($59.4 million)

Q4 2022 Total Revenues of $326.8 million

Q4 2022 Operating Revenues of $450.4 million

Q4 2022 Operating Adjusted EBITDA of $101.8 million, had guided to $90-100 million

Q4 2022 Investment loss of ($123.5 million), had guided to ($125-$150 million)

Declares Quarterly Dividend of $1.00 per common share

LOS ANGELES, Feb. 22, 2023 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the "Company"), a diversified financial services platform, today released results for the three and twelve month periods ending December 31, 2022.

Q4 and FY 2022 Summary and Highlights

• Total revenues were $326.8 million for the quarter and $915.5 million for the year.
• Operating revenues increased to $450.4 million for the quarter and $1.3 billion for the year.
• Net losses of ($59.4 million) for the quarter and ($167.8 million) for the year were primarily driven by softness in small-cap markets throughout 2022 and related impact on investments.
• Operating adjusted EBITDA was $101.8 million for the quarter and $366.5 million for the year.
• Investment losses of ($123.5 million) for the quarter and ($403.7 million) for the year primarily reflected mark-to-market losses in the Company's equities portfolio.
• Completed multiple acquisitions during 2022, which are expected to enhance uncorrelated revenues and cash flow in 2023 and beyond.

Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: "Despite a challenging Capital Markets environment, we are proud to have delivered the second-best year of Operating Adjusted EBITDA in our firm's history. This achievement is a testament to the resiliency and diversification our platform. Capital Markets began to improve late in Q4 and this momentum has continued into Q1, which has us optimistic as our clients resume opportunistically accessing capital. We are also beginning to see increased activity in our Liquidation and Real Estate practices that are benefitting from pockets of distress."

Riley continued: "While our investments marks are not immune to broader market fluctuations, we believe the portfolio is well-positioned heading into 2023. Further, we continue to find attractive opportunities to deploy our excess liquidity in ways that competitively advantage our clients. We appreciate the trust our clients and colleagues place with us, and we look forward to continuing to execute our strategy to create value for all B. Riley stakeholders."

Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: "Over the past year, we have focused on supporting our clients by helping them deliver on their strategic business initiatives while navigating a liquidity restrained environment. At the same time, we onboarded and integrated several new businesses, and we expect we will continue to grow our platform both organically and through acquisitions. We look forward to expanding operational efficiencies through 2023 and making further enhancements to strengthen our position long term."

Declaration of Common Dividend
The Company has declared a regular quarterly cash dividend of $1.00 per common share payable on or about March 23 to common stockholders of record as of March 10. Upon this payment, the Company will have returned $4.00 per share in cash dividends, totaling approximately $113 million, to common shareholders in fiscal year 2022.

Financial Summary
The financial results included in this press release are preliminary and pending final review. Financial results will not be final until B. Riley Financial files its Annual Report on Form 10-K for the period. Information about B. Riley Financial's use of non-GAAP financial measures is provided below under "Use of Non-GAAP Financial Measures."

			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
	(Dollars in thousands, except for share data)			2022				2021				2022				2021
	Net (loss) income available to common shareholders		$	(59,447)			$	62,182			$	(167,837)			$	437,597
	Basic (loss) income per common share		$	(2.08)			$	2.26			$	(5.95)			$	15.99
	Diluted (loss) income per common share		$	(2.08)			$	2.08			$	(5.95)			$	15.09
			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
	(Dollars in thousands)			2022				2021				2022				2021
	Operating Revenues (2)		$	450,357			$	353,252			$	1,319,172			$	1,353,885
	Investment (Loss) Gains (4)			(123,544)				68,858				(403,707)				386,676
	Total Revenues		$	326,813			$	422,110			$	915,465			$	1,740,561
	Operating Adjusted EBITDA (3)		$	101,807			$	106,097			$	366,458			$	422,029
	Investment Adjusted EBITDA (5)			(115,847)				31,928				(334,176)				340,465
	Total Adjusted EBITDA (1)		$	(14,040)			$	138,025			$	32,282			$	762,494

For the fourth quarter ended December 31, 2022:

• Total revenues were $326.8 million compared to $422.1 million for the fourth quarter ended December 31, 2021.
• Net loss available to common shareholders was ($59.4 million), or ($2.08) diluted loss per share, compared to net income of $62.2 million, or $2.08 diluted earnings per share (EPS), for the prior year period.
• Investment loss⁽⁴⁾ of ($123.5 million) primarily reflected mark-to-market declines in the Company's equities portfolio.
• Operating revenues ⁽²⁾ increased to $450.4 million for the quarter, up from $353.3 million for the prior year period.
• Operating Adjusted EBITDA ⁽³⁾ of $101.8 million compared to $106.1 million for the prior year period.

For the full year ended December 31, 2022:

• Total revenues were $915.5 million compared to $1.7 billion for the full year ended December 31, 2021.
• Net loss applicable to common shareholders was ($167.8 million), or ($5.95) diluted loss per share, compared to net income of $437.6 million, or $15.09 diluted earnings per share.
• Operating revenues⁽²⁾ remained relatively flat at $1.3 billion compared to the prior year period despite softness in small-cap markets throughout 2022 and a decrease in investment banking and underwriting fees.
• Operating adjusted EBITDA⁽³⁾ of $366.5 million compared to $422.0 million for the prior year period.
• Investment loss⁽⁴⁾ of ($403.7 million) was primarily due to broad market declines during 2022 which resulted in trading losses of ($349.4 million) related to the valuation of public and private securities in our investment portfolio.

Balance Sheet Highlights
As of December 31, 2022, the Company had $268.6 million of cash and cash equivalents, $1.1 billion in net securities and other investments owned, and $701.7 million in loans receivable. Of this total, non-accrual loans receivable accounted for approximately $7 million of loans receivable, at fair value. Total cash and investments ⁽⁶⁾ was approximately $2.15 billion at year-end.

Total debt was approximately $2.45 billion at December 31, 2022 including $1.7 billion of senior notes due at various dates ranging from May 31, 2024 to August 31, 2028 with interest rates ranging from 5.00% to 6.75%; and approximately $700 million from term loans and credit facilities. The Company is in compliance with all of its debt covenants.

Segment Reclassification
During the fourth quarter of 2022, the Company realigned its segment reporting structure to reflect organizational changes. The Consumer segment includes the previously reported Brands segment and Targus, which the Company acquired in the fourth quarter of 2022. The Consumer segment also includes revenues from equity investments in the Hurley and Justice brands, which were previously reported in the Capital Markets segment. The Company has also realigned its previously reported Principal Investments - Communications and Other segment into two separate segments: Communications segment and All Other segment. The Company has recast its segment presentation in the corresponding unaudited Segment Financial Information tables for all periods presented.

Segment Financial Summary

		Operating Revenues (2)						Investment Gains (Loss) (4)						Total Segment Revenue
		Three Months Ended December 31,						Three Months Ended December 31,						Three Months Ended December 31,
	(Dollars in thousands)	2022			2021			2022			2021			2022			2021
	Capital Markets		$      133,351			$      171,645			$    (154,455)			$        24,623			$      (21,104)			$      196,268
	Wealth Management		45,772			103,803			445			1,140			46,217			104,943
	Auction and Liquidation		59,778			5,718			-			-			59,778			5,718
	Financial Consulting		25,427			27,877			-			-			25,427			27,877
	Communications		87,944			33,872			-			-			87,944			33,872
	Consumer		89,670			10,337			30,466			43,095			120,136			53,432
	All Other		8,415			-			-			-			8,415			-
		Segment Operating Income (Loss) (7)						Investment Income (Loss) (5)						Total Segment Income (Loss)
		Three Months Ended December 31,						Three Months Ended December 31,						Three Months Ended December 31,
	(Dollars in thousands)	2022			2021			2022			2021			2022			2021
	Capital Markets		$        50,525			$        81,913			$    (151,940)			$       (12,307)			$    (101,415)			$        69,606
	Wealth Management		(7,859)			4,916			445			1,140			(7,414)			6,056
	Auction and Liquidation		12,372			(2,706)			-			-			12,372			(2,706)
	Financial Consulting		4,412			6,628			-			-			4,412			6,628
	Communications		11,205			5,846			-			-			11,205			5,846
	Consumer		18,935			8,895			30,466			43,095			49,401			51,990
	All Other		(1,931)			-			-			-			(1,931)			-
		Operating Revenues (2)						Investment Gains (Loss) (4)						Total Segment Revenue
		Twelve Months Ended December 31,						Twelve Months Ended December 31,						Twelve Months Ended December 31,
	(Dollars in thousands)	2022			2021			2022			2021			2022			2021
	Capital Markets		$      541,597			$      682,190			$    (453,690)			$      318,274			$       87,907			$   1,000,464
	Wealth Management		230,735			374,361			3,522			7,623			234,257			381,984
	Auction and Liquidation		74,096			73,517			-			-			74,096			73,517
	Financial Consulting		98,508			94,312			-			-			98,508			94,312
	Communications		235,655			93,347			-			-			235,655			93,347
	Consumer		124,784			36,158			46,461			60,779			171,245			96,937
	All Other		13,797			-			-			-			13,797			-
		Segment Operating Income (Loss) (7)						Investment Income (Loss) (5)						Total Segment Income (Loss)
		Twelve Months Ended December 31,						Twelve Months Ended December 31,						Twelve Months Ended December 31,
	(Dollars in thousands)	2022			2021			2022			2021			2022			2021
	Capital Markets		$      232,083			$      328,179			$    (390,170)			$      272,063			$    (158,087)			$      600,242
	Wealth Management		(37,842)			8,311			3,522			7,623			(34,320)			15,934
	Auction and Liquidation		12,600			8,054			-			-			12,600			8,054
	Financial Consulting		16,312			16,894			-			-			16,312			16,894
	Communications		30,320			27,158			-			-			30,320			27,158
	Consumer		49,885			30,235			46,461			60,779			96,346			91,014
	All Other		(2,649)			-			-			-			(2,649)			-

 

• Capital Markets: Segment revenues were $87.9 million for the year. Excluding investment loss⁽⁴⁾ of ($453.7 million), Capital Markets segment operating revenues⁽²⁾ were $541.6 million. Lower levels of investment banking and underwriting activity were partially offset by increases in revenues from asset management.
  
  Interest income from loans and securities lending increased to $61.9 million for the quarter and $240.8 million for the year. Interest income from securities lending increased to $27.5 million for the quarter and $83.1 million for the year. Interest income from loans increased to $157.7 million.

• Wealth Management: Segment revenues were $234.3 million for the year. The decrease in revenues related to the strategic exit of several brokers and certain businesses previously affiliated with National Securities, which the Company acquired in the first quarter of 2021, in addition to challenging market conditions that resulted in reduced client activity throughout 2022. Wealth management assets under management were over $23 billion as of December 31, 2022.

• Auction and Liquidation: Segment revenues increased to $74.1 million for the year driven by an increase in retail liquidation assignments during the fourth quarter of 2022. Segment income was $12.6 million for the year. Results for this segment vary from quarter-to-quarter and year-to-year due to the episodic impact of large retail liquidation engagements.

• Financial Consulting: Segment revenues were $98.5 million for the year related to fees earned from providing bankruptcy, financial advisory, forensic accounting, real estate, valuation and appraisal services. Segment income was $16.3 million for the year. These businesses have continued to generate stable revenues and profits to our platform.

• Communications: Segment revenues increased 152% to $235.7 million with segment income of $30.3 million for the year. The significant increase was primarily driven by the Company's acquisition of Marconi Wireless in the fourth quarter of 2021 the Lingo acquisition in the second quarter of 2022, and Lingo's acquisition of BullsEye Telecom in the third quarter of 2022. This segment also includes the Company's United Online and magicJack businesses.

• Consumer: Segment revenues increased 77% to $171.2 million with segment income of $96.3 million for the year. The significant increase in revenues was primarily due to the acquisition of Targus in the fourth quarter of 2022, which also contributed to the increase in segment income of $5.3 million to $96.3 million from $91.0 million in the prior year. Segment revenues also includes revenue related to the fair value of our investment in the Hurley and Justice brands and dividend income received from these investments, which totaled $28.0 million for the year. This segment also includes revenues related to the licensing of trademarks for our six brands portfolio.

Supplemental Financial Data
Additional details related to operating results and investment performance can be found in the Fourth Quarter 2022 Financial Supplement on B. Riley Financial's investor relations website.

Conference Call Details
Management will host an investor call to discuss its fourth quarter results today, Wednesday, February 22, 2023 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). Investors may access the live broadcast and archived recording via ir.brileyfin.com.

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, collaborative financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. B. Riley opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. B. Riley refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries or affiliates. For more information, please visit www.brileyfin.com.

Footnotes 
(See "Note Regarding Use of Non-GAAP Financial Measures" for further discussion of these non-GAAP terms. For a reconciliation of adjusted EBITDA, operating revenue, operating adjusted EBITDA, investment adjusted EBITDA, and total cash and investments, 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 revenue is defined as the sum of revenues from services and fees, interest income - loans and securities lending, and sale of goods.
(3)	Operating adjusted EBITDA is defined as adjusted EBITDA excluding trading income (losses) and fair value adjustments on loans and other investment related expenses.
(4)	Investment gains (loss) is defined as trading income (losses) and fair value adjustments on loans.
(5)	Investment adjusted EBITDA and investment income (loss) are defined as trading income (losses) and fair value adjustments on loans, less other investment related expenses.
(6)	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.
(7)	Segment operating income (loss) is defined as segment income (loss) excluding trading income (losses) and fair value adjustments on loans and other investment related operating expenses.

Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including operating revenues, adjusted EBITDA, operating adjusted EBITDA, and investment adjusted EBITDA, may be considered non-GAAP financial measures. B. Riley Financial believes this information is useful to investors because it provides a basis for measuring the Company's available capital resources, the operating performance of its business and its revenues and cash flow, (i) excluding in the case of operating revenues, trading income (losses) and fair value adjustments on loans, (ii) excluding in the case of adjusted EBITDA, net interest expense, provisions for or benefit from income taxes, depreciation, amortization, fair value adjustment, restructuring charge, gain on extinguishment of loans, impairment of trade names, stock-based compensation and transaction and other expenses, (iii) excluding in the case of operating adjusted EBITDA, the aforementioned adjustments for adjusted EBITDA as well as trading income (losses) and fair value adjustments on loans, and other investment related expenses, (iv) including in the case of investment adjusted EBITDA, trading income (losses) and fair value adjustments on loans, net of other investment related expenses, and (v) including in the case of total cash and investments, cash and cash equivalents, restricted cash, due from clearing brokers net of due to clearing brokers, securities and other investments owned, at fair value net of (a) securities sold not yet purchased and (b) noncontrolling interest related to investments, advances against customer contracts, loans receivable, at fair value net of loan participations sold, and other investments reported in prepaid and other assets, that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles ("GAAP"). In addition, the Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance, management compensation, capital resources, and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies.

Forward-Looking Statements
Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date of this press release. Such forward-looking statements include, but are not limited to, statements regarding our excitement and the expected growth of our business segments. Factors that could cause such actual results to differ materially from those contemplated or implied by such forward-looking statements include, without limitation, the risks described from time to time in B. Riley Financial, Inc.'s periodic filings with the SEC, including, without limitation, the risks described in B. Riley Financial, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2021 and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2022 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable). Additional information will be set forth in our Annual Report on Form 10-K for the year ended December 31, 2022. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and B. Riley Financial undertakes no duty to update this information.

B. RILEY FINANCIAL, INC.
Consolidated Balance Sheets
(Dollars in thousands, except par value)
							December 31,			December 31,
							2022			2021
								(Unaudited)
Assets
Assets
	Cash and cash equivalents						$	268,618		$	278,933
	Restricted cash							2,308			927
	Due from clearing brokers							48,737			29,657
	Securities and other investments owned, at fair value							1,129,268			1,532,095
	Securities borrowed							2,343,327			2,090,966
	Accounts receivable, net							149,110			49,673
	Due from related parties							1,081			2,074
	Loans receivable, at fair value (includes $98,729 and $167,744 from related parties as of December 31, 2022 and December 31, 2021, respectively)							701,652			873,186
	Prepaid expenses and other assets							460,696			463,502
	Operating lease right-of-use assets							88,593			56,969
	Property and equipment, net							27,141			12,870
	Goodwill							512,595			250,568
	Other intangible assets, net							374,098			207,651
	Deferred income taxes							3,978			2,848
	Total assets						$	6,111,202		$	5,851,919
Liabilities and Equity
Liabilities
	Accounts payable						$	81,384		$	6,326
	Accrued expenses and other liabilities							322,974			343,750
	Deferred revenue							85,441			69,507
	Deferred income taxes							29,548			93,055
	Due to related parties and partners							2,210			—
	Due to clearing brokers							19,307			69,398
	Securities sold not yet purchased							5,897			28,623
	Securities loaned							2,334,031			2,088,685
	Operating lease liabilities							99,124			69,072
	Notes payable							25,263			357
	Revolving credit facility							127,678			80,000
	Term loans, net							572,079			346,385
	Senior notes payable, net							1,721,751			1,606,560
	Total liabilities							5,426,687			4,801,718
Commitments and contingencies
Redeemable noncontrolling interests in equity of subsidiaries								178,622			345,000
B. Riley Financial, Inc. equity:
	Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,545 and 4,512 issued and
	outstanding as of December 31, 2022 and December 31, 2021, respectively; liquidation preference
	of $113,615 and $112,790 as of December 31, 2022 and December 31, 2021, respectively.							—			—
	Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,523,764 and 27,591,028 issued and outstanding as of December 31, 2022 and December 31, 2021, respectively.							3			3
	Additional paid-in capital							494,201			413,486
	(Accumulated deficit) Retained earnings							(45,220)			248,862
	Accumulated other comprehensive loss							(2,470)			(1,080)
	Total B. Riley Financial, Inc. stockholders' equity							446,514			661,271
Noncontrolling interests								59,379			43,930
	Total equity							505,893			705,201
	Total liabilities and equity						$	6,111,202		$	5,851,919

 

B. RILEY FINANCIAL, INC.
Consolidated Statements of Operations
(Dollars in thousands, except share data)
							Three Months Ended						Twelve Months Ended
							December 31,						December 31,
							2022			2021			2022			2021
							(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
	Services and fees						$	253,432		$	315,848		$	931,497		$	1,172,957
	Trading (losses) income and fair value adjustments on loans							(123,544)			68,858			(403,707)			386,676
	Interest income - Loans and securities lending							62,545			33,443			245,400			122,723
	Sale of goods							134,380			3,961			142,275			58,205
		Total revenues						326,813			422,110			915,465			1,740,561
Operating expenses:
	Direct cost of services							68,496			12,955			142,455			54,390
	Cost of goods sold							71,313			5,559			78,647			26,953
	Selling, general and administrative expenses							208,552			270,712			714,614			906,196
	Restructuring charge							995			—			9,011			—
	Interest expense - Securities lending and loan participations sold							22,738			12,362			66,495			52,631
		Total operating expenses						372,094			301,588			1,011,222			1,040,170
			Operating (loss) income					(45,281)			120,522			(95,757)			700,391
Other income (expense):
	Interest income							1,482			54			2,735			229
	Change in fair value of financial instruments and other							460			(4,471)			10,188			3,796
	Income from equity investments							285			1,629			3,570			2,801
	Interest expense							(44,399)			(26,441)			(141,186)			(92,455)
		(Loss) income before income taxes						(87,453)			91,293			(220,450)			614,762
Benefit from (provision for) income taxes								23,998			(23,847)			63,856			(163,960)
		Net (loss) income						(63,455)			67,446			(156,594)			450,802
Net (loss) income attributable to noncontrolling interests
and redeemable noncontrolling interests								(6,010)			3,274			3,235			5,748
		Net (loss) income attributable to B. Riley Financial, Inc.						(57,445)			64,172			(159,829)			445,054
Preferred stock dividends								2,002			1,990			8,008			7,457
		Net (loss) income available to common shareholders					$	(59,447)		$	62,182		$	(167,837)		$	437,597
Basic (loss) income per common share							$	(2.08)		$	2.26		$	(5.95)		$	15.99
Diluted (loss) income per common share							$	(2.08)		$	2.08		$	(5.95)		$	15.09
Weighted average basic common shares outstanding								28,545,714			27,569,188			28,188,530			27,366,292
Weighted average diluted common shares outstanding								28,545,714			29,840,704			28,188,530			29,005,602

 

B. RILEY FINANCIAL, INC.
Segment Financial Information
(Unaudited)
(Dollars in thousands)
						Three Months Ended						Twelve Months Ended
						December 31,						December 31,
						2022			2021			2022			2021
Capital Markets segment:
	Revenues - Services and fees					$	71,417		$	138,202		$	300,784		$	559,467
	Trading (loss) income and fair value adjustments on loans						(154,455)			24,623			(453,690)			318,274
	Interest income - Loans and securities lending						61,934			33,443			240,813			122,723
	Total revenues						(21,104)			196,268			87,907			1,000,464
	Selling, general and administrative expenses						(55,351)			(113,690)			(171,006)			(345,455)
	Interest expense - Securities lending and loan participations sold						(22,738)			(12,362)			(66,495)			(52,631)
	Depreciation and amortization						(2,222)			(610)			(8,493)			(2,136)
		Segment (loss) income					(101,415)			69,606			(158,087)			600,242
Wealth Management segment:
	Revenues - Services and fees						45,772			103,803			230,735			374,361
	Trading income and fair value adjustments on loans						445			1,140			3,522			7,623
	Total revenues						46,217			104,943			234,257			381,984
	Selling, general and administrative expenses						(51,696)			(96,799)			(258,134)			(357,130)
	Restructuring charge						(849)			—			(4,955)			—
	Depreciation and amortization						(1,086)			(2,088)			(5,488)			(8,920)
		Segment (loss) income					(7,414)			6,056			(34,320)			15,934
Auction and Liquidation segment:
	Revenues - Services and fees						4,789			4,532			12,581			20,169
	Revenues - Sale of goods						54,378			1,186			56,928			53,348
	Interest income - Loans and securities lending						611			—			4,587			—
	Total revenues						59,778			5,718			74,096			73,517
	Direct cost of services						(17,290)			(2,977)			(23,920)			(30,719)
	Cost of goods sold						(16,658)			(1,097)			(17,893)			(20,675)
	Selling, general and administrative expenses						(13,458)			(4,350)			(19,683)			(14,069)
		Segment income (loss)					12,372			(2,706)			12,600			8,054
Financial Consulting segment:
	Revenues - Services and fees						25,427			27,877			98,508			94,312
	Selling, general and administrative expenses						(20,944)			(21,166)			(81,891)			(77,062)
	Depreciation and amortization						(71)			(83)			(305)			(356)
		Segment income					4,412			6,628			16,312			16,894
Communications segment
	Revenues - Services and fees						85,763			31,096			228,129			88,490
	Revenues - Sale of goods						2,181			2,776			7,526			4,857
	Total revenues						87,944			33,872			235,655			93,347
	Direct cost of services						(44,366)			(9,978)			(108,686)			(23,671)
	Cost of goods sold						(2,493)			(4,462)			(8,592)			(6,278)
	Selling, general and administrative expenses						(23,368)			(10,397)			(64,836)			(25,493)
	Restructuring charge						(146)			—			(4,056)			—
	Depreciation and amortization						(6,366)			(3,189)			(19,165)			(10,747)
		Segment income					11,205			5,846			30,320			27,158
Consumer segment
	Revenues - Services and fees						11,849			10,337			46,963			36,158
	Trading income and fair value adjustments on loans						30,466			43,095			46,461			60,779
	Revenues - Sale of goods						77,821			—			77,821			—
	Total revenues						120,136			53,432			171,245			96,937
	Cost of goods sold						(52,162)			—			(52,162)			—
	Selling, general and administrative expenses						(16,039)			(840)			(18,458)			(3,178)
	Depreciation and amortization						(2,534)			(602)			(4,279)			(2,745)
		Segment income					49,401			51,990			96,346			91,014
All Other segment
	Revenues - Services and fees						8,415			—			13,797			—
	Direct cost of services						(6,840)			—			(9,849)			—
	Selling, general and administrative expenses						(2,524)			—			(5,159)			—
	Depreciation and amortization						(982)			—			(1,438)			—
		Segment loss					(1,931)			—			(2,649)			—
Consolidated operating (loss) income from reportable segments							(33,370)			137,420			(39,478)			759,296
Corporate and other expenses							(11,911)			(16,898)			(56,279)			(58,905)
Interest income							1,482			54			2,735			229
Change in fair value of financial instruments and other							460			(4,471)			10,188			3,796
Income on equity investments							285			1,629			3,570			2,801
Interest expense							(44,399)			(26,441)			(141,186)			(92,455)
	(Loss) income before income taxes						(87,453)			91,293			(220,450)			614,762
Benefit from (provision for) income taxes							23,998			(23,847)			63,856			(163,960)
	Net (loss) income						(63,455)			67,446			(156,594)			450,802
Net (loss) income attributable to noncontrolling interests
and redeemable noncontrolling interests							(6,010)			3,274			3,235			5,748
	Net (loss) income attributable to B. Riley Financial, Inc.						(57,445)			64,172			(159,829)			445,054
Preferred stock dividends							2,002			1,990			8,008			7,457
	Net (loss) income available to common shareholders					$	(59,447)		$	62,182		$	(167,837)		$	437,597

 

B. RILEY FINANCIAL, INC.
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation
(Unaudited)
(Dollars in thousands)
							Three Months Ended						Twelve Months Ended
							December 31,						December 31,
							2022			2021			2022			2021
Net (loss) income attributable to B. Riley Financial, Inc.							$	(57,445)		$	64,172		$	(159,829)		$	445,054
Adjustments:
	(Benefit from) provision for income taxes							(23,998)			23,847			(63,856)			163,960
	Interest expense							44,399			26,441			141,186			92,455
	Interest income							(1,482)			(54)			(2,735)			(229)
	Share based payments							15,312			12,503			61,140			36,011
	Depreciation and amortization							13,443			6,805			39,969			25,871
	Restructuring charge							995			—			9,011			—
	Gain on extinguishment of loans							—			—			(1,102)			(6,509)
	Transactions related costs and other							(5,264)			4,311			8,498			5,881
		Total EBITDA Adjustments						43,405			73,853			192,111			317,440
			Adjusted EBITDA				$	(14,040)		$	138,025		$	32,282		$	762,494
Operating EBITDA Adjustments:
	Trading losses (income) and fair value adjustments on loans							123,544			(68,858)			403,707			(386,676)
	Other investment related expenses							(7,697)			36,930			(69,531)			46,211
		Total Operating EBITDA Adjustments						115,847			(31,928)			334,176			(340,465)
Operating Adjusted EBITDA							$	101,807		$	106,097		$	366,458		$	422,029

 

B. RILEY FINANCIAL, INC.
Adjusted Net Income Reconciliation
(Unaudited)
(Dollars in thousands, except share data)
							Three Months Ended						Twelve Months Ended
							December 31,						December 31,
							2022			2021			2022			2021
Net (loss) income attributable to B. Riley Financial, Inc.							$	(57,445)		$	64,172		$	(159,829)		$	445,054
Adjustments:
	Share based payments							15,312			12,503			61,140			36,011
	Amortization of intangible assets							11,146			5,830			34,292			22,006
	Restructuring charge							995			—			9,011			—
	Gain on extinguishment of loans							—			—			(1,102)			(6,509)
	Transactions related costs and other							(5,264)			4,311			8,498			5,881
	Income tax effect of adjusting entries							(6,538)			(6,135)			(30,131)			(15,722)
Adjusted net (loss) income attributable to B. Riley Financial, Inc.							$	(41,794)		$	80,681		$	(78,121)		$	486,721
Adjusted (loss) income per common share:
	Adjusted basic (loss) income per share						$	(1.46)		$	2.93		$	(2.77)		$	17.79
	Adjusted diluted (loss) income per share						$	(1.46)		$	2.70		$	(2.77)		$	16.78
Shares used to calculate adjusted basic net income per share								28,545,714			27,569,188			28,188,530			27,366,292
Shares used to calculate adjusted diluted net income per share								28,545,714			29,840,704			28,188,530			29,005,602

Contacts

Investors
Mike Frank
ir@brileyfin.com
(212) 409-2424

Media
Jo Anne McCusker
press@brileyfin.com
(646) 885-5425

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SOURCE B. Riley Financial

FAQ

What were B. Riley Financial's Q4 2022 revenues?

B. Riley Financial reported total revenues of $326.8 million for Q4 2022.

What was the net loss reported for B. Riley Financial in Q4 2022?

B. Riley Financial reported a net loss of $59.4 million for Q4 2022.

What is the dividend declared by B. Riley Financial for Q4 2022?

B. Riley Financial declared a quarterly dividend of $1.00 per common share.

How did B. Riley Financial's operating adjusted EBITDA perform in Q4 2022?

Operating adjusted EBITDA was $101.8 million in Q4 2022, exceeding guidance.

What were the total investment losses for B. Riley Financial in 2022?

B. Riley Financial experienced total investment losses of $403.7 million for the full year 2022.