B. Riley Financial Reports Record Fourth Quarter and Full Year 2020 Results, Declares $3.50 Dividend

Rhea-AI Summary

B. Riley Financial reported record financial results for Q4 and FY 2020, with total revenues of $410.2 million for Q4, up from $165.2 million in Q4 2019, and $902.7 million for FY 2020, compared to $652.1 million in FY 2019. Net income for Q4 surged to $170.1 million, or $6.55 per share, versus $16.9 million, or $0.59 per share a year earlier. The company declared an increase in its regular dividend to $0.50 and a special dividend of $3.00, citing strong earnings potential. Investment banking activities and SPAC transactions significantly contributed to Q4 profitability.

Positive

• Record quarterly revenues of $410.2 million in Q4 2020, up 148% YoY.
• Q4 net income of $170.1 million, representing a 906% increase YoY.
• Annual total revenues reached $902.7 million, up 38% from 2019.
• Increased operating revenues of $798.7 million for FY 2020, a 46% rise YoY.
• Strong investment banking performance with larger transactions and increased activity.

Negative

• None

LOS ANGELES, Feb. 25, 2021 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("B. Riley" or the "Company") today announced results for the fourth quarter and full year ended December 31, 2020.

Fourth Quarter 2020 Financial Highlights

• Record quarterly total revenues of $410.2 million vs. $165.2 million for Q4 2019
• Record investment banking results driven by increased activity and larger transactions
• Net income of $170.1 million vs. $16.9 million, EPS of $6.55 vs. $0.59 per diluted share
• Operating revenues of $270.0 million vs. $130.5 million, Operating EBITDA of $126.8 million vs. $16.4 million
• Q4 total adjusted EBITDA of $260.5 million vs. $50.3 million

Full Year 2020 Financial Highlights

• Record annual total revenues of $902.7 million vs. $652.1 million for FY 2019
• Net income of $200.4 million vs. $81.3 million, EPS of $7.56 vs. $2.95 per diluted share
• Operating revenues of $798.7 million vs. $545.6 million, Operating EBITDA of $311.7 million vs. $113.6 million
• Annual investment gains of approximately $104 million
• Annual total adjusted EBITDA of $406.8 million vs. $207.9 million

Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, said: "Given the strength and performance of both our episodic and steady recurring businesses, we are increasingly confident in the earnings power of our platform. The increase in our regular quarterly dividend to $0.50 reflects the continued growth of our recurring businesses, namely our brands, advisory, and principal investments; and our special $3.00 dividend reflects the strength of our episodic businesses, including brokerage and retail liquidation. While these businesses tend to be cyclical, we believe issuing a special dividend allows us to maintain flexibility. As we continue to see extremely attractive uses for our capital, we also believe it is important to reward our shareholders with the cash flow that we generate. We feel strongly that a balanced capital allocation policy includes substantial dividends to our partners."

"Our results demonstrated increased profitability from all of our businesses, and particularly our brokerage. Investment banking delivered an impressive quarter driven not only by an acceleration in capital markets activity, but also from an increased number of larger transactions and significant retail restructuring assignments. In addition, SPAC activity contributed strong earnings, while our at-the-market (ATM) business saw another record quarter," continued Riley.

Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: "During the quarter, we also made further enhancements to our platform with the addition of a venture capital business, an operations management vertical, and our investment in the Justice brand. Our growth has enabled us to deliver greater value to our clients and partners and to attract talent to our platform."

"As we continue to invest in strategically scaling service offerings that complement core capabilities, our acquisition of National Holdings meaningfully enhances both steady and episodic results and further solidifies our small-cap capital markets leadership. While B. Riley's momentum has never been stronger, we will remain focused on delivering for our clients and partners as we continue to capitalize on the opportunities ahead," said Riley.

Fourth Quarter and Full Year 2020 Financial Summary

	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
(Dollars in thousands)		2020				2019				2020				2019
Revenues
Operating Revenues (2)	$	270,046			$	130,504			$	798,703			$	545,649
Investment Gains (4)		140,160				34,733				104,018				106,463
Total Revenues	$	410,206			$	165,237			$	902,721			$	652,112
Adjusted EBITDA (1)
Operating Adjusted EBITDA (3)	$	126,787			$	16,394			$	311,673			$	113,603
Investment Adjusted EBITDA (5)		133,699				33,875				95,145				94,282
Total Adjusted EBITDA	$	260,486			$	50,269			$	406,818			$	207,885

For the three months ended December 31, 2020:

• B. Riley Financial reported record quarterly total revenues of $410.2 million, up from $165.2 million for the fourth quarter of 2019.
• Net income available to common shareholders totaled $170.1 million, or $6.55 per diluted share, up from $16.9 million, or $0.59 per diluted share, for the prior-year quarter.
• Total adjusted EBITDA ⁽¹⁾ increased to $260.5 million from $50.3 million for the fourth quarter of 2019.
• Operating revenues ⁽²⁾ increased to $270.0 million compared to $130.5 million for the fourth quarter of 2019. Operating adjusted EBITDA ⁽³⁾ increased to $126.8 million from $16.4 million for the prior-year quarter.

For the twelve months ended December 31, 2020:

• B. Riley Financial reported record annual total revenues of $902.7 million, up from $652.1 million for 2019.
• Net income available to common shareholders was $200.4 million, or $7.56 per diluted share, up from $81.3 million or $2.95 per diluted share for 2019.
• Total adjusted EBITDA ⁽¹⁾ increased to $406.8 million compared to $207.9 million for the prior-year period.
• Operating revenues ⁽²⁾ increased to $798.7 million compared to $545.6 million for 2019. Operating adjusted EBITDA ⁽³⁾ totaled $311.7 million for the year, compared to $113.6 million for 2019.

The Company reported quarterly investment gains ⁽⁴⁾ of approximately $140 million, resulting in investment gains ⁽⁴⁾ of approximately $104 million for the year. Investment gains ⁽⁴⁾ are primarily unrealized mark-to-market valuations on strategic investments held by the Company. Gains for the year represented a sharp recovery from the markdown in the first quarter of 2020.

As of December 31, 2020, cash and investments ⁽⁷⁾ totaled approximately $1.3 billion, including cash and cash equivalents of $103.6 million. B. Riley Financial's cash and investments, ⁽⁷⁾ net of debt, totaled over $315 million at year-end.

Segment Financial Summary

	Three Months Ended December 31, 2020
(Dollars in thousands)	Capital Markets				Auction and Liquidation				Financial Consulting				Principal Investments				Brands
Operating Revenues (2)	$	201,065			$	15,667			$	26,480			$	21,383			$	5,451
Investment Gains (4)		140,160				-				-				-				-
Segment Revenue	$	341,225			$	15,667			$	26,480			$	21,383			$	5,451
Segment Operating Income (6)		102,503			$	7,460			$	6,873			$	7,300			$	4,054
Investment Gains Income (5)		133,699				-				-				-				-
Segment Income	$	236,202			$	7,460			$	6,873			$	7,300			$	4,054

For the fourth quarter of 2020:

• Capital Markets operating revenues totaled $201.1 million with segment operating income of $102.5 million for the fourth quarter of 2020. Record investment banking activity, profits from institutional brokerage, and wealth management contributed to strong earnings for the quarter. Investment banking benefitted from an increase in larger capital markets transactions and significant retail and consumer restructuring advisory engagements completed during the fourth quarter.
• Auction and Liquidation quarterly results included revenues of $15.7 million and segment income of $7.5 million from B. Riley Retail Solutions (formerly known as Great American Group) retail liquidation and store closing projects.
• Financial Consulting revenues totaled $26.5 million, up from $20.1 million for the fourth quarter of 2019. Segment income totaled $6.9 million compared to $4.7 million for the prior-year period. Results were primarily driven by B. Riley Advisory Services bankruptcy, forensic accounting and appraisal assignments.
• Principal Investments companies, magicJack and United Online, contributed fourth quarter revenues of $21.4 million and segment income of $7.3 million.
• Brands generated revenues of $5.5 million related to the licensing of brand trademarks including Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too, and Nanette Lepore ("six brands").

 

	Twelve Months Ended December 31, 2020
(Dollars in thousands)	Capital Markets				Auction and Liquidation				Financial Consulting				Principal Investments				Brands
Operating Revenues (2)	$	514,721			$	88,764			$	91,622			$	87,138			$	16,458
Investment Gains (4)		104,018				-				-				-				-
Segment Revenue	$	618,739			$	88,764			$	91,622			$	87,138			$	16,458
Segment Operating Income (6)		208,630			$	25,769			$	22,543			$	33,360			$	(1,789)
Investment Gains Income (5)		95,145				-				-				-				-
Segment Income (Loss)	$	303,775			$	25,769			$	22,543			$	33,360			$	(1,789)

For the full year of 2020:

• Capital Markets operating revenues increased to $514.7 million with segment operating income of $208.6 million, compared to operating revenues of $341.9 million and segment operating income of $77.4 million in 2019.
• Auction and Liquidation generated annual revenues of $88.8 million and segment income of $25.8 million related to retail liquidation and store closing projects completed during 2020.
• Financial Consulting annual revenues increased to $91.6 million from $76.3 million in 2019. Segment income increased to $22.5 million, up from $17.8 million for the prior-year period.
• Principal Investments companies continued to outperform initial investment estimates and provide steady cash flow for the B. Riley platform. For the full year, magicJack and United Online contributed revenues of $87.1 million and segment income of $33.4 million.
• Brands contributed licensing revenues of $16.5 million for 2020. The Brands segment was established in October 2019.

The Company has presented information related to its operating results and investments to provide investors with additional metrics regarding its performance and overall results of operations. Additional information related to operating and investment results can be found in a Financial Supplement on the Company's investor relations website.

Segment Reclassification
The Company has realigned its segment reporting structure to reflect certain organizational changes. In conjunction with the new reporting structure, the Company recast its segment presentation. Valuation and Appraisal are reported in the Financial Consulting segment. Bankruptcy, forensic accounting, and real estate results that were previously reported in the Capital Markets segment are now reported as part of the Financial Consulting segment.

Declaration of Common Stock Dividend
A total fourth quarter dividend of $3.50 per share will be paid to common stockholders of record as of March 10, 2021 on or about March 24, 2021. The Company has increased its regular quarterly dividend to $0.50 per share from the previous $0.375 regular dividend and has declared a special quarterly dividend of $3.00 per share. B. Riley Financial intends to continue to review its dividend policy to align with its business outlook. Upon payment of the fourth quarter dividend, the Company will have returned a total of $4.475 per share in common dividends related to its fiscal 2020 earnings.

Conference Call Details
Management will host a conference call to discuss the Company's financial results followed by a question and answer period today, February 25, 2021, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). Investors may access the live broadcast and archived recording at https://ir.brileyfin.com/events-and-presentations.

Date:	Thursday, February 25, 2021
Time:	4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll Free:	1-855-327-6838
International:	1-604-235-2082
Replay Dial-In (expires on Thursday, March 4, 2021)
Toll Free:	1-844-512-2921
International:	1-412-317-6671
Replay Pin:	10013068

For more information, visit B. Riley Financial's investor relations website at ir.brileyfin.com.

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 that offer a diverse range of complementary end-to-end capabilities spanning investment banking and 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. 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 the latest news and developments, follow B. Riley on Twitter @BRileyFinancial and LinkedIn. For more information, visit www.brileyfin.com.

B. Riley refers to B. Riley Financial and/or one or more of its subsidiaries or affiliates. For more information about B. Riley's affiliated companies, visit www.brileyfin.com/platform.

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 hereto.
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  is defined as trading income  and fair value adjustments on loans.
5. Investment adjusted EBITDA and investment gains income are defined as trading income  and fair value adjustments on loans, less other investment related expenses.
6. Segment operating income is defined as segment income excluding trading income (losses) and fair value adjustments on loans and other investment related expenses.
7. 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 securities sold not yet purchased, advances against customer contracts, loans receivable, at fair value net of loan participations sold, and other equity investments reported in prepaid and other assets.

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 2021, 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). Additional information will be set forth in our Annual Report on Form 10-K for the year ended December 31, 2020. 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 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 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, (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, net of debt, 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	Media
Mike Frank	Jo Anne McCusker
ir@brileyfin.com	jmccusker@brileyfin.com
(212) 409-2424	(646) 885-5425

 

B. RILEY FINANCIAL, INC.
Consolidated Balance Sheets
(Dollars in thousands, except par value)
				December 31,			December 31,
				2020			2019
				(Unaudited)
Assets
Assets:
	Cash and cash equivalents			$	103,602		$	104,268
	Restricted cash				1,235			471
	Due from clearing brokers				7,089			23,818
	Securities and other investments owned, at fair value				777,319			408,213
	Securities borrowed				765,457			814,331
	Accounts receivable, net				46,518			46,624
	Due from related parties				986			5,832
	Advances against customer contracts				200			27,347
	Loans receivable, at fair value (includes $295,809 from related parties at December 31, 2020)				390,689			43,338
	Loans receivable, at cost (includes $157,080 from related parties at December 31, 2019)				—			225,848
	Prepaid expenses and other assets				87,262			81,808
	Operating lease right-of-use assets				48,799			47,809
	Property and equipment, net				11,685			12,727
	Goodwill				227,046			223,697
	Other intangible assets, net				190,745			220,525
	Deferred tax assets, net				4,098			31,522
		Total assets		$	2,662,730		$	2,318,178
Liabilities and Equity
Liabilities:
	Accounts payable			$	2,722		$	4,477
	Accrued expenses and other liabilities				168,478			130,714
	Deferred revenue				68,651			67,121
	Deferred tax liabilities, net				34,248			—
	Due to related parties and partners				327			1,750
	Due to clearing brokers			#	13,672		#	—
	Securities sold not yet purchased				10,105			41,820
	Securities loaned				759,810			810,495
	Mandatorily redeemable noncontrolling interests				4,700			4,616
	Operating lease liabilities				60,778			61,511
	Notes payable				37,967			38,167
	Loan participations sold				17,316			12,478
	Term loan				74,213			66,666
	Senior notes payable, net				870,783			688,112
		Total liabilities			2,123,770			1,927,927
Commitments and contingencies
B. Riley Financial, Inc. stockholders' equity:
	Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 3,971 and 2,349 shares				—			—
	issued and outstanding as of December 31, 2020 and 2019, respectively; liquidation
	preference of $99,260 and $58,723 as of December 31, 2020 and 2019, respectively.
	Common stock, $0.0001 par value; 100,000,000 shares authorized; 25,777,796 and 26,972,332				3			3
	issued and outstanding as of December 31, 2020 and 2019, respectively.
	Additional paid-in capital				310,326			323,109
	Retained earnings				203,080			39,536
	Accumulated other comprehensive loss				(823)			(1,988)
		Total B. Riley Financial, Inc. stockholders' equity			512,586			360,660
Noncontrolling interests					26,374			29,591
		Total equity			538,960			390,251
			Total liabilities and equity	$	2,662,730		$	2,318,178

 

B. RILEY FINANCIAL, INC.
Consolidated Statements of Income
(Dollars in thousands, except share data)
			Three Months Ended						Year Ended
			December 31,						December 31,
			2020			2019			2020			2019
			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
	Services and fees		$	237,270		$	103,518		$	667,069		$	460,493
	Trading income and fair value adjustments on loans			140,160			34,733			104,018			106,463
	Interest income - Loans and securities lending			30,116			23,074			102,499			77,221
	Sale of goods			2,660			3,912			29,135			7,935
		Total revenues		410,206			165,237			902,721			652,112
Operating expenses:
	Direct cost of services			9,250			17,109			60,451			58,824
	Cost of goods sold			1,018			3,740			12,460			7,575
	Selling, general and administrative expenses			137,088			97,256			428,537			385,219
	Restructuring charge			—			—			1,557			1,699
	Impairment of tradenames			—			—			12,500			—
	Interest expense - Securities lending and loan participations sold			11,782			9,565			42,451			32,144
		Total operating expenses		159,138			127,670			557,956			485,461
		Operating income		251,068			37,567			344,765			166,651
Other income (expense):
	Interest income			27			248			564			1,577
	(Loss) income from equity investments			(478)			2,618			(623)			(1,431)
	Interest expense			(16,712)			(15,075)			(65,249)			(50,205)
		Income before income taxes		233,905			25,358			279,457			116,592
Provision for income taxes				(62,060)			(7,842)			(75,440)			(34,644)
		Net income		171,845			17,516			204,017			81,948
Net income (loss) attributable to noncontrolling interests				251			387			(1,131)			337
		Net income attributable to B. Riley Financial, Inc.		171,594			17,129			205,148			81,611
Preferred stock dividends				1,480			264			4,710			264
		Net income available to common shareholders	$	170,114		$	16,865		$	200,438		$	81,347
Basic income per common share			$	6.72		$	0.64		$	7.83		$	3.08
Diluted income per common share			$	6.55		$	0.59		$	7.56		$	2.95
Weighted average basic common shares outstanding				25,331,918			26,547,023			25,607,278			26,401,036
Weighted average diluted common shares outstanding				25,966,501			28,412,871			26,508,397			27,529,157

 

B. RILEY FINANCIAL, INC.
Consolidated Statements of Cash Flows
(Dollars in thousands)
					Year Ended December 31,
					2020			2019
					(Unaudited)
Cash flows from operating activities:
	Net income				$	204,017		$	81,948
	Adjustments to reconcile net income to net cash used in operating activities:
		Depreciation and amortization				19,369			19,048
		Provision for doubtful accounts				3,385			2,126
		Share-based compensation				18,588			15,916
		Fair value adjustments, non-cash				21,954			12,258
		Non-cash interest and other				(16,810)			(12,267)
		Effect of foreign currency on operations				(460)			(78)
		Loss from equity investments				623			1,431
		Dividends from equity investments				1,343			3,194
		Deferred income taxes				61,619			10,874
		Impairment of leaseholds and intangibles, lease loss accrual and gain on disposal of fixed assets				14,107			(286)
		Gain on extinguishment of debt				(1,556)			—
		Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests				1,230			1,220
		Change in operating assets and liabilities:
			Amounts due to/from clearing brokers			30,401			13,920
			Securities and other investments owned			(331,759)			(178,023)
			Securities borrowed			48,873			117,015
			Accounts receivable and advances against customer contracts			24,488			(33,927)
			Prepaid expenses and other assets			4,423			9,588
			Accounts payable, accrued payroll and related expenses, accrued expenses and other liabilities			31,301			32,553
			Amounts due to/from related parties and partners			3,423			(4,781)
			Securities sold, not yet purchased			(31,715)			4,197
			Deferred revenue			1,530			(3,098)
			Securities loaned			(50,685)			(120,026)
				Net cash provided by (used in) operating activities		57,689			(27,198)
Cash flows from investing activities:
	Purchases of loans receivable					(207,466)			(343,811)
	Repayments of loans receivable					90,083			159,186
	Sale of loan receivable to related party					1,800			—
	Proceeds from loan participations sold					6,900			31,806
	Repayment of loan participations sold					(2,233)			(18,911)
	Asset acquisition - BR Brand, net of cash acquired $2,160					—			(114,912)
	Acquisition of magicJack, net of cash acquired $53,875					—			—
	Acquisition of other businesses					(1,500)			—
	Proceeds from sale of division of magicJack					—			6,196
	Purchases of property, equipment and intangible assets					(2,045)			(3,461)
	Proceeds from sale of property, equipment and intangible assets					1			513
	Purchases of equity investments					(13,986)			(33,391)
	Distributions from equity investments					—			18,195
				Net cash used in investing activities		(128,446)			(298,590)
Cash flows from financing activities:
	Proceeds from asset based credit facility					—			140,439
	Repayment of asset based credit facility					(37,096)			(103,343)
	Proceeds from notes payable					—			—
	Repayment of notes payable					(357)			(478)
	Payment of participating note payable and contingent consideration					(4,250)			(4,250)
	Proceeds from term loan					75,000			10,000
	Repayment of term loan					(67,266)			(22,734)
	Proceeds from issuance of senior notes					186,796			281,924
	Redemption of senior notes					(1,829)			(52,154)
	Payment of debt issuance costs					(3,359)			(3,425)
	Payment of employment taxes on vesting of restricted stock					(22,578)			(2,022)
	Common dividends paid					(38,792)			(41,138)
	Preferred dividends paid					(4,710)			(264)
	Repurchase of common stock					(48,248)			(4,273)
	Repurchase of warrants					—			(2,777)
	Distribution to noncontrolling interests					(3,826)			(1,958)
	Contributions from noncontrolling interests					604			—
	Proceeds from offering common stock					—			63
	Proceeds from offering preferred stock					39,455			56,566
				Net cash provided by financing activities		69,544			250,176
				Decrease in cash, cash equivalents and restricted cash		(1,213)			(75,612)
				Effect of foreign currency on cash, cash equivalents and restricted cash		1,311			73
				Net increase (decrease) in cash, cash equivalents and restricted cash		98			(75,539)
Cash, cash equivalents and restricted cash, beginning of year						104,739			180,278
Cash, cash equivalents and restricted cash, end of year					$	104,837		$	104,739
Supplemental disclosures:
	Interest paid				$	98,595		$	75,625
	Taxes paid				$	2,368		$	8,649

 

B. RILEY FINANCIAL, INC.
Segment Financial Information
(Unaudited)
(Dollars in thousands)
			Three Months Ended						Year Ended
			December 31,						December 31,
			2020			2019			2020			2019
Capital Markets segment:
	Revenues - Services and fees		$	170,949		$	103,975		$	412,222		$	264,703
	Trading income and fair value adjustments on loans			140,160			34,733			104,018			106,463
	Interest income - Loans and securities lending			30,116			23,074			102,499			77,221
	Total revenues			341,225			161,782			618,739			448,387
	Selling, general and administrative expenses			(92,260)			(64,501)			(267,330)			(239,716)
	Restructuring (charge) recovery			—			—			(917)			4
	Interest expense - Securities lending and loan participations sold			(11,782)			(9,565)			(42,451)			(32,144)
	Depreciation and amortization			(981)			(1,100)			(4,266)			(4,858)
		Segment income		236,202			86,616			303,775			171,673
Auction and Liquidation segment:
	Revenues - Services and fees			13,761			(47,385)			63,101			18,296
	Revenues - Sale of goods			1,906			2,990			25,663			4,220
	Total revenues			15,667			(44,395)			88,764			22,516
	Direct cost of services			(4,324)			(11,712)			(40,730)			(33,295)
	Cost of goods sold			(406)			(3,024)			(9,766)			(4,016)
	Selling, general and administrative expenses			(3,477)			(1,685)			(12,357)			(10,731)
	Restructuring charge			—			—			(140)			—
	Depreciation and amortization			—			(2)			(2)			(7)
		Segment income (loss)		7,460			(60,818)			25,769			(25,533)
Financial Consulting segment:
	Revenues - Services and fees			26,480			20,109			91,622			76,292
	Selling, general and administrative expenses			(19,476)			(15,379)			(68,232)			(58,226)
	Restructuring charge			—			—			(500)			—
	Depreciation and amortization			(131)			(66)			(347)			(252)
		Segment income		6,873			4,664			22,543			17,814
Principal Investments - United Online and magicJack segment:
	Revenues - Services and fees			20,629			22,764			83,666			97,147
	Revenues - Sale of goods			754			922			3,472			3,715
	Total revenues			21,383			23,686			87,138			100,862
	Direct cost of services			(4,926)			(5,398)			(19,721)			(25,529)
	Cost of goods sold			(612)			(716)			(2,694)			(3,559)
	Selling, general and administrative expenses			(6,000)			(5,846)			(20,352)			(24,256)
	Depreciation and amortization			(2,545)			(2,939)			(11,011)			(12,658)
	Restructuring charge			—			—			—			(1,703)
		Segment income		7,300			8,787			33,360			33,157
Brands segment:
	Revenues - Services and fees			5,451			4,055			16,458			4,055
	Selling, general and administrative expenses			(682)			(881)			(2,889)			(881)
	Depreciation and amortization			(715)			(507)			(2,858)			(507)
	Impairment of tradenames			—			—			(12,500)			—
		Segment income (loss)		4,054			2,667			(1,789)			2,667
Consolidated operating income from reportable segments				261,889			41,916			383,658			199,778
Corporate and other expenses				(10,821)			(4,349)			(38,893)			(33,127)
Interest income				27			248			564			1,577
(Loss) income on equity investments				(478)			2,618			(623)			(1,431)
Interest expense				(16,712)			(15,075)			(65,249)			(50,205)
	Income before income taxes			233,905			25,358			279,457			116,592
Provision for income taxes				(62,060)			(7,842)			(75,440)			(34,644)
	Net income			171,845			17,516			204,017			81,948
Net income (loss) attributable to noncontrolling interests				251			387			(1,131)			337
	Net income attributable to B. Riley Financial, Inc.			171,594			17,129			205,148			81,611
Preferred stock dividends				1,480			264			4,710			264
	Net income available to common shareholders		$	170,114		$	16,865		$	200,438		$	81,347

 

B. RILEY FINANCIAL, INC.
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation
(Unaudited)
(Dollars in thousands)
				Three Months Ended December 31,						Year Ended December 31,
				2020			2019			2020			2019
Net income attributable to B. Riley Financial, Inc.				$	171,594		$	17,129		$	205,148		$	81,611
Adjustments:
	Provision for income taxes				62,060			7,842			75,440			34,644
	Interest expense				16,712			15,075			65,249			50,205
	Interest income				(27)			(248)			(564)			(1,577)
	Share based payments				4,321			5,640			18,588			15,916
	Depreciation and amortization				4,604			4,831			19,369			19,048
	Restructuring costs				—			—			1,557			1,699
	Impairment of tradenames				—			—			12,500			—
	Transactions related costs and other				1,222			—			9,531			6,339
		Total EBITDA adjustments			88,892			33,140			201,670			126,274
			Adjusted EBITDA	$	260,486		$	50,269		$	406,818		$	207,885
Operating EBITDA Adjustments:
	Trading income and fair value adjustments on loans				(140,160)			(34,733)			(104,018)			(106,463)
	Other investment related expenses				6,461			858			8,873			12,181
		Total Operating EBITDA Adjustments			(133,699)			(33,875)			(95,145)			(94,282)
Operating Adjusted EBITDA				$	126,787		$	16,394		$	311,673		$	113,603

 

B. RILEY FINANCIAL, INC.
Adjusted Net Income Reconciliation
(Unaudited)
(Dollars in thousands, except share data)
		Three Months Ended December 31,						Year Ended December 31,
		2020			2019			2020			2019
Net income attributable to B. Riley Financial, Inc.		$	171,594		$	17,129		$	205,148		$	81,611
Adjustments:
	Share based payments		4,321			5,640			18,588			15,916
	Amortization of intangible assets		3,769			3,815			15,736			13,846
	Restructuring costs		—			—			1,557			1,699
	Impairment of tradenames		—			—			12,500			—
	Transactions related costs and other		1,222			—			9,531			6,339
	Income tax effect of adjusting entries		(2,473)			(2,969)			(15,929)			(11,154)
Adjusted net income attributable to B. Riley Financial, Inc.		$	178,433		$	23,615		$	247,131		$	108,257
Adjusted income per common share:
	Adjusted basic income per share	$	7.04		$	0.89		$	9.65		$	4.10
	Adjusted diluted income per share	$	6.87		$	0.83		$	9.32		$	3.93
Shares used to calculate adjusted basic net income per share			25,331,918			26,547,023			25,607,278			26,401,036
Shares used to calculate adjusted diluted net income per share			25,966,501			28,412,871			26,508,397			27,529,157

 

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SOURCE B. Riley Financial

FAQ

What were B. Riley Financial's fourth quarter 2020 earnings results?

B. Riley Financial reported record Q4 2020 revenues of $410.2 million and net income of $170.1 million, or $6.55 per share.

How did B. Riley Financial perform in fiscal year 2020?

In FY 2020, B. Riley Financial achieved total revenues of $902.7 million and a net income of $200.4 million, or $7.56 per share.

What dividends did B. Riley Financial declare in 2021?

B. Riley Financial increased its regular dividend to $0.50 per share and declared a special dividend of $3.00 per share.

How did investment banking affect B. Riley Financial's Q4 results?

Investment banking significantly boosted Q4 results, driven by larger transactions and increased capital market activities.

What were the investment gains reported by B. Riley Financial?

B. Riley Financial reported quarterly investment gains of approximately $140 million and annual gains of about $104 million.