B. Riley Financial Reports Second Quarter 2020 Results; Raises Regular Dividend to $0.30 per Share and Declares Special Dividend of $0.05 per Share

Rhea-AI Summary

B. Riley Financial (RILY) reported strong second quarter 2020 results with consolidated revenues of $266.5 million, up from $164.7 million in Q2 2019. The net income reached $82.8 million, or $3.07 per diluted share. Investment gains surged to $114.5 million, reflecting market recovery from COVID-19 impacts. Operating revenues were $151.9 million, down slightly from the prior year, but adjusted EBITDA increased significantly to $148.3 million. A regular dividend increase to $0.30 per share, plus a special $0.05 dividend, was announced.

Positive

• Consolidated revenues increased to $266.5 million, surpassing Q2 2019's $164.7 million.
• Net income rose to $82.8 million, or $3.07 per diluted share, compared to $22.2 million or $0.82 per diluted share in the prior year.
• Investment gains of $114.5 million demonstrated recovery from COVID-19 related losses.
• Adjusted EBITDA improved significantly to $148.3 million from $52.9 million in Q2 2019.
• Regular dividend increased to $0.30 per share, with an additional special dividend of $0.05.

Negative

• Operating revenues of $151.9 million decreased from $159.1 million in the prior year.

LOS ANGELES, July 30, 2020 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ:RILY) ("B. Riley" or the "Company") today announced results for the second quarter ended June 30, 2020.

Second Quarter 2020 Financial Highlights

• GAAP consolidated revenues of $266.5 million, adjusted EBITDA ⁽¹⁾ of $148.3 million
• Net income available to common shareholders of $82.8 million, or $3.07 per diluted share
• Operating revenues ⁽²⁾ of $151.9 million and operating adjusted EBITDA ⁽³⁾ of $46.8 million
• Investment gains ⁽⁴⁾ of $114.5 million driven by second quarter market rebound

"Our second quarter results demonstrate our ability to successfully execute on our strategy in a challenging environment created by COVID-19. Our overall business continued to deliver solid performance, while our investment book rebounded sharply from the mark-to-market losses we experienced in the first quarter," said Bryant Riley, Chairman and Co-Chief Executive Officer, B. Riley Financial. "Operating adjusted EBITDA was approximately $117 million for the first six months versus $62 million during the same period in 2019, and increased year-over-year for the second quarter despite the effects of COVID-19 on our retail, brands and appraisal businesses. These results highlight the diversity of our business model and the resiliency of our platform to overcome the impact of COVID-19."

"Investment banking activity accelerated with several noteworthy capital markets transactions, including SPAC and ATM deals. In addition, our counter-cyclical businesses experienced an increase in activity following the initial slowdown in March," Riley continued. "Our bankruptcy and restructuring advisory and banking divisions added a record number of new mandates in June, several of which are ongoing. Retail liquidation activity also resumed in June with several new and returning clients. We expect activity will continue through year-end as COVID-19 accelerates retail industry challenges. Similarly, business for our real estate division increased as retailers and property owners reassess long-term lease and real estate plans."

Riley added, "The ongoing impact of COVID-19 creates limited visibility, but also tremendous opportunities where we believe our diversified platform will continue to serve as a competitive advantage. To that end, we are increasing our regular dividend to $0.30 per common share with an additional special dividend of $0.05 per share for the quarter. We will continue to aggressively leverage our resources and deliver on our mandate to perform for our employees, clients, partners, and shareholders."

Second Quarter 2020 Financial Summary

			Three Months Ended								Six Months Ended
			June 30,								June 30,
	(Dollars in thousands)		2020				2019				2020				2019
	Revenues
	Operating Revenues (2)		$	151,921			$	159,089			$	334,157			$	275,350
	Investment Gains (Loss) (4)			114,547				5,595				(67,895)				31,462
	Total Revenues		$	266,468			$	164,684			$	266,262			$	306,812
	Adjusted EBITDA (1)
	Operating Adjusted EBITDA (3)		$	46,756			$	43,151			$	117,664			$	62,009
	Investment Adjusted EBITDA			101,507				9,705				(65,465)				25,277
	Total Adjusted EBITDA		$	148,263			$	52,856			$	52,199			$	87,286

B. Riley Financial reported GAAP consolidated revenues of $266.5 million for the three months ended June 30, 2020, up from $164.7 million in total revenues for the prior year period. Total revenues exceeded the Company's previous quarterly record of $180.1 million in total revenues for the third quarter of 2019.

Net income available to common shareholders totaled $82.8 million, or $3.07 per diluted share, compared to net income of $22.2 million, or $0.82 per diluted share, for the prior year period.

Operating revenues ⁽²⁾ totaled $151.9 million compared to $159.1 million in the prior year period. Operating adjusted EBITDA ⁽³⁾ increased to $46.8 million from $43.2 million for the prior year period. Through the first six months of 2020, B. Riley's operating revenues ⁽²⁾ totaled $334.2 million.

Investment gains ⁽⁴⁾ of $114.5 million reflected a sharp recovery from the significant mark-to-market losses in the first quarter due to the impact of COVID-19 on equity markets. B. Riley's proprietary investments are comprised of certain private and public securities and loans aimed to create revenue opportunities for the Company's operating business while driving long-term value for its clients, partners, and shareholders.

Total adjusted EBITDA ⁽¹⁾ increased to $148.3 million from $52.9 million for the second quarter of 2019.

Supplemental Financial Data
B. Riley has presented information related to its operating results and investments to provide investors with additional metrics regarding its performance and overall results of operations. Further details related to these metrics can be found in a Financial Supplement on the Company's investor relations website at ir.brileyfin.com.

Second Quarter 2020 Segment Financial Summary

			Three Months Ended June 30, 2020
	(Dollars in thousands)		Capital Markets				Auction and Liquidation				Valuation and Appraisal				Principal Investments				Brands
	Operating Revenues (2)		$	111,364			$	8,251			$	7,669			$	21,431			$	3,206
	Investment Gains (4)			114,547				-				-				-				-
	Segment Revenue		$	225,911			$	8,251			$	7,669			$	21,431			$	3,206
	Operating Income (Loss)			31,062			$	2,020			$	1,478			$	9,188			$	(6,318)
	Investment Gains Income			101,507				-				-				-				-
	Segment Income (Loss)		$	132,569			$	2,020			$	1,478			$	9,188			$	(6,318)

 

• Capital Markets operating revenues ⁽²⁾ increased to $111.4 million compared to $88.7 million for the prior year period. The increase was primarily driven by several banking and capital market transactions that closed during the quarter, in addition to contributions from financial consulting operations.
• Auction and Liquidation results reflect retail liquidation projects that closed during the quarter following the pause in March due to COVID-19 stay-at-home orders and social-distancing restrictions. These results tend to be variable from quarter-to-quarter and year-to-year due to the episodic impact of large retail liquidation engagements.
• Valuation and Appraisal results declined from the prior year quarter due to a slowdown in financing activity by lenders and COVID-19 related travel restrictions. Historical results for this segment have otherwise remained relatively steady from quarter-to-quarter and year-to-year.
• Principal Investments companies, United Online and magicJack, continued to perform above expectations, contributing steady cash flow for B. Riley. Segment income increased to $9.2 million from $7.8 million for the prior year period.

As of June 30, 2020, cash and investments totaled $899.5 million, including cash and cash equivalents of $106.3 million. The Company's investment balance included approximately $61 million of other equity investments and deposits reported in prepaid and other assets. Total net debt, including investments reported in prepaid and other assets, was $12.5 million.

Share Repurchases
During the second quarter, the Company repurchased over 200,000 shares of its common stock under its existing share repurchase program. In July, B. Riley announced an agreement to repurchase 900,000 shares of its common stock as part of a privately negotiated transaction. Year-to-date through July, B. Riley has repurchased approximately 1.7 million of its common shares.

Dividend
B. Riley's Board of Directors approved an increase in the Company's regular dividend to $0.30 per common share, from the previous dividend of $0.25 per common share. The Company has also declared a one-time, special dividend of $0.05 per common share for the quarter. A total quarterly dividend of $0.35 per common share will be paid on or about August 28, 2020 to stockholders of record as of August 14, 2020.

Conference Call
Management will host a conference call today, Thursday, July 30, 2020 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time), to discuss the Company's quarterly results. The live broadcast and archived recording will be available on the Company's investor relations website at https://ir.brileyfin.com/events-and-presentations.

Date:	Thursday July 30, 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 Dial-In (expires on Thursday August 6, 2020)
Toll-Free:	1-844-512-2921
International:	1-412-317-6671
Replay Pin:	13707044

About B. Riley Financial, Inc. (NASDAQ:RILY)
B. Riley Financial, Inc. provides collaborative financial services solutions tailored to fit the capital raising, business, operational, and financial advisory needs of its clients and partners. B. Riley operates through several subsidiaries which offer a diverse range of complementary end-to-end capabilities spanning investment banking and institutional brokerage, private wealth and investment management, corporate advisory, restructuring, due diligence, forensic accounting, litigation support, appraisal and valuation, and auction and liquidation services. Certain registered affiliates of B. Riley originate and underwrite senior secured loans for asset-rich companies. B. Riley also makes proprietary investments in companies and assets with attractive return profiles. For more information about B. Riley and its affiliated companies, visit www.brileyfin.com.

Footnotes (See "Note Regarding Use of Non-GAAP Financial Measures" for further discussion of these non-GAAP terms.)

(1)	Adjusted EBITDA includes earnings before interest, taxes, depreciation, amortization, restructuring costs, share-based payments, impairment of tradenames, and transaction related and other costs. For a definition of adjusted EBITDA and a reconciliation to GAAP financial measures, please see the Appendix.
(2)	Operating revenue is defined as the sum of revenues from service and fees, interest income - loans and securities lending, and sales 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.

Forward-Looking Statements
Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date of this press release. Such forward looking statements include, but are not limited to, statements regarding the Company's anticipated results of operations for 2020, as well as statements regarding our excitement and the expected growth of our business segments. Factors that could cause such actual results to differ materially from those contemplated or implied by such forward-looking statements include, without limitation, the risks associated with the unpredictable and ongoing impact of the COVID-19 pandemic and other risks described from time to time in B. Riley Financial, Inc.'s periodic filings with the SEC, including, without limitation, the risks described in B. Riley Financial, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and any additional information included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 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 revenue, adjusted EBITDA, operating adjusted EBITDA, and investment adjusted EBITDA may be considered non-GAAP financial measures. B. Riley Financial believes this information is useful to investors because it provides a basis for measuring the Company's available capital resources, the operating performance of its business and its revenues and cash flow, (i) excluding in the case of operating revenues, trading income (losses) and fair value adjustments on loans, (ii) excluding in the case of adjusted EBITDA , net interest expense, provisions for or benefit from income taxes, depreciation, amortization, fair value adjustment, restructuring costs, impairment of trade names, stock-based compensation and transaction and other expenses, (iii) excluding in the case of operating adjusted EBITDA, aforementioned adjustments for adjusted EBITDA, trading income (losses) and fair value adjustments on loans, and other investment related expenses, and (iv) in the case of investment adjusted EBITDA this includes trading income (losses) and fair value adjustments on loans, net of other investment related expenses, 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
B. Riley Financial	Jo Anne McCusker
ir@brileyfin.com	press@brileyfin.com
(310) 966-1444	(646) 885-5425

 

B. RILEY FINANCIAL, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except par value)
							June 30,			December 31,
							2020			2019
								(Unaudited)
Assets
Assets:
Cash and cash equivalents							$	106,253		$	104,268
Restricted cash								471			471
Due from clearing brokers								29,089			23,818
Securities and other investments owned, at fair value								399,044			408,213
Securities borrowed								786,363			814,331
Accounts receivable, net								43,226			46,624
Due from related parties								295			5,832
Advances against customer contracts								1,413			27,347
Loans receivable, at fair value (includes $233,396 from related parties at June 30, 2020)								325,517			43,338
Loans receivable, at cost (includes $157,080 from related parties at December 31, 2019)								—			225,848
Prepaid expenses and other assets								105,312			81,808
Operating lease right-of-use assets								44,636			47,809
Property and equipment, net								12,287			12,727
Goodwill								227,046			223,697
Other intangible assets, net								199,991			220,525
Deferred income taxes								14,329			31,522
Total assets							$	2,295,272		$	2,318,178
Liabilities and Equity
Liabilities:
Accounts payable							$	4,301		$	4,477
Accrued expenses and other liabilities								106,531			130,714
Deferred revenue								71,017			67,121
Due to related parties and partners								617			1,750
Securities sold not yet purchased								9,804			41,820
Securities loaned								779,013			810,495
Mandatorily redeemable noncontrolling interests								4,351			4,616
Operating lease liabilities								57,364			61,511
Notes payable								714			38,167
Loan participations sold								14,109			12,478
Term loan								57,195			66,666
Senior notes payable								854,037			688,112
Total liabilities								1,959,053			1,927,927
Commitments and contingencies
B. Riley Financial, Inc. stockholders' equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 2,531 and 2,349 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively; liquidation preference of $63,273 and $58,723 as of June 30, 2020 and December 31, 2019, respectively.								—			—
Common stock, $0.0001 par value; 100,000,000 shares authorized; 25,864,393 and 26,972,332 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively.								3			3
Additional paid-in capital								306,772			323,109
Retained earnings								5,927			39,536
Accumulated other comprehensive loss								(2,693)			(1,988)
Total B. Riley Financial, Inc. stockholders' equity								310,009			360,660
Noncontrolling interests								26,210			29,591
Total equity								336,219			390,251
Total liabilities and equity							$	2,295,272		$	2,318,178

 

B. RILEY FINANCIAL, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except share data)
					Three Months Ended						Six Months Ended
					June 30,						June 30,
					2020			2019			2020			2019
Revenues:
	Services and fees				$	125,595		$	139,968		$	284,976		$	243,864
	Trading income (losses) and fair value adjustments on loans					114,547			5,595			(67,895)			31,462
	Interest income - Loans and securities lending					24,506			16,961			46,357			28,381
	Sale of goods					1,820			2,160			2,824			3,105
		Total revenues				266,468			164,684			266,262			306,812
Operating expenses:
	Direct cost of services					7,985			19,663			27,937			33,779
	Cost of goods sold					860			1,805			1,629			2,924
	Selling, general and administrative expenses					106,562			91,907			194,306			186,871
	Restructuring charge					—			1,552			-			1,699
	Impairment of tradenames					8,500			—			12,500			—
	Interest expense - Securities lending and loan participations sold					11,221			5,502			19,694			12,306
		Total operating expenses				135,128			120,429			256,066			237,579
			Operating income			131,340			44,255			10,196			69,233
Other income (expense):
	Interest income					224			331			470			968
	Loss from equity investments					(318)			(1,400)			(554)			(5,162)
	Interest expense					(16,509)			(11,588)			(32,163)			(22,358)
		Income (loss) before income taxes				114,737			31,598			(22,051)			42,681
(Provision) benefit for income taxes						(32,208)			(9,289)			5,331			(12,393)
		Net income (loss)				82,529			22,309			(16,720)			30,288
Net (loss) income attributable to noncontrolling interests						(1,311)			152			(1,895)			108
		Net income (loss) attributable to B. Riley Financial, Inc.				83,840			22,157			(14,825)			30,180
Preferred stock dividends						1,087			—			2,142			—
		Net income (loss) available to common shareholders			$	82,753		$	22,157		$	(16,967)		$	30,180
Basic income (loss) per common share					$	3.23		$	0.84		$	(0.66)		$	1.15
Diluted income (loss) per common share					$	3.07		$	0.82		$	(0.66)		$	1.13
Weighted average basic common shares outstanding						25,627,085			26,278,352			25,827,849			26,247,952
Weighted average diluted common shares outstanding						26,992,823			26,896,573			25,827,849			26,770,922

 

B. RILEY FINANCIAL, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
							Six Months Ended June 30,
							2020			2019
Cash flows from operating activities:
Net (loss) income							$	(16,720)		$	30,288
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization								9,879			9,744
Provision for doubtful accounts								2,081			1,067
Share-based compensation								9,489			5,548
Fair value adjustments, non-cash								21,975			(5,639)
Non-cash interest and other								(6,943)			(3,144)
Effect of foreign currency on operations								(73)			339
Loss from equity investments								554			5,162
Deferred income taxes								(14,340)			6,430
Impairment of intangibles and loss on disposal of fixed assets								12,550			(344)
Gain on extinguishment of debt								(1,556)			—
Income allocated for mandatorily redeemable noncontrolling interests								397			446
Change in operating assets and liabilities:
Due from clearing brokers								(5,271)			8,493
Securities and other investments owned								20,009			8,926
Securities borrowed								27,967			171,425
Accounts receivable and advances against customer contracts								27,601			(22,420)
Prepaid expenses and other assets								(19,707)			(45,500)
Accounts payable, accrued expenses and other liabilities								738			1,143
Amounts due to/from related parties and partners								4,404			(3,454)
Securities sold, not yet purchased								(32,017)			5,131
Deferred revenue								3,896			(790)
Securities loaned								(31,481)			(171,413)
Net cash provided by operating activities								13,432			1,438
Cash flows from investing activities:
Purchases of loans receivable								(152,228)			(225,072)
Repayments of loans receivable								74,450			17,640
Sale of loan receivable to related party								1,800			—
Proceeds from loan participations sold								2,400			—
Repayment of loan participations sold								(940)			—
Purchases of property, equipment and other								(851)			(2,514)
Proceeds from sale of property, equipment and intangible assets								1			503
Purchase of equity investments								(6,486)			(25,183)
Proceeds from sale of division of magicJack								—			6,196
Dividends and distributions from equity investments								797			854
Acquisition of other businesses								(1,500)			–
Net cash used in investing activities								(82,557)			(227,576)
Cash flows from financing activities:
Repayment of asset based credit facility								(37,096)			—
Repayment of notes payable								(357)			(357)
Proceeds from term loan								—			10,000
Repayment of term loan								(9,620)			(8,305)
Proceeds from issuance of senior notes								171,078			123,935
Redemption of senior notes								(1,829)			—
Payment of debt issuance costs								(2,760)			(2,039)
Payment of employment taxes on vesting of restricted stock								(2,678)			(2,291)
Common dividends paid								(17,489)			(9,991)
Preferred dividends paid								(2,142)			—
Repurchase of common stock								(27,779)			(3,252)
Repurchase of warrants								-			(2,777)
Distribution to noncontrolling interests								(2,143)			(856)
Proceeds from issuance of preferred stock								4,630			—
Net cash provided by financing activities								71,815			104,067
Increase (decrease) in cash, cash equivalents and restricted cash								2,690			(122,071)
Effect of foreign currency on cash, cash equivalents and restricted cash								(705)			37
Net increase (decrease) in cash, cash equivalents and restricted cash								1,985			(122,034)
Cash, cash equivalents and restricted cash, beginning of period								104,739			180,278
Cash, cash equivalents and restricted cash, end of period							$	106,724		$	58,244
Supplemental disclosures:
Interest paid							$	45,934		$	31,604
Taxes paid							$	608		$	891

 

B. RILEY FINANCIAL, INC.
Segment Financial Information
(Unaudited)
(Dollars in thousands)
						Three Months Ended						Six Months Ended
						June 30,						June 30,
						2020			2019			2020			2019
Capital Markets segment:
	Revenues - Services and fees					$	86,858		$	71,692		$	191,271		$	119,706
	Trading income (losses) and fair value adjustments on loans						114,547			5,595			(67,895)			31,462
	Interest income - Loans and securities lending						24,506			16,961			46,357			28,381
	Total revenues						225,911			94,248			169,733			179,549
	Selling, general and administrative expenses						(81,030)			(63,041)			(135,741)			(126,430)
	Restructuring (charge) recovery						—			(25)			—			4
	Interest expense - Securities lending and loan participations sold						(11,221)			(5,502)			(19,694)			(12,306)
	Depreciation and amortization						(1,091)			(1,287)			(2,196)			(2,563)
		Segment income					132,569			24,393			12,102			38,254
Auction and Liquidation segment:
	Revenues - Services and fees						7,206			33,740			27,867			54,449
	Revenues - Sale of goods						1,045			1,176			1,045			1,176
	Total revenues						8,251			34,916			28,912			55,625
	Direct cost of services						(3,217)			(12,939)			(18,033)			(19,213)
	Cost of goods sold						(285)			(852)			(314)			(866)
	Selling, general and administrative expenses						(2,729)			(3,295)			(4,255)			(6,210)
	Depreciation and amortization						—			(2)			(1)			(4)
		Segment income					2,020			17,828			6,309			29,332
Valuation and Appraisal segment:
	Revenues - Services and fees						7,669			9,742			16,457			18,325
	Selling, general and administrative expenses						(6,144)			(6,974)			(13,011)			(14,161)
	Depreciation and amortization						(47)			(31)			(88)			(64)
		Segment income					1,478			2,737			3,358			4,100
Principal Investments - United Online and magicJack segment:
	Revenues - Services and fees						20,656			24,794			42,374			51,384
	Revenues - Sale of goods						775			984			1,779			1,929
	Total revenues						21,431			25,778			44,153			53,313
	Direct cost of services						(4,768)			(6,724)			(9,904)			(14,566)
	Cost of goods sold						(575)			(953)			(1,315)			(2,058)
	Selling, general and administrative expenses						(4,049)			(5,495)			(9,512)			(12,515)
	Depreciation and amortization						(2,851)			(3,300)			(5,730)			(6,763)
	Restructuring charge						—			(1,527)			—			(1,703)
		Segment income					9,188			7,779			17,692			15,708
Brands segment:
	Revenues - Services and fees						3,206			—			7,007			—
	Selling, general and administrative expenses						(309)			—			(1,213)			—
	Depreciation and amortization						(715)			—			(1,429)			—
	Impairment of tradenames						(8,500)			—			(12,500)			—
		Segment loss					(6,318)			—			(8,135)			—
Consolidated operating income from reportable segments							138,937			52,737			31,326			87,394
Corporate and other expenses							(7,597)			(8,482)			(21,130)			(18,161)
Interest income							224			331			470			968
Loss on equity investments							(318)			(1,400)			(554)			(5,162)
Interest expense							(16,509)			(11,588)			(32,163)			(22,358)
	Income (Loss) before income taxes						114,737			31,598			(22,051)			42,681
(Provision) benefit for income taxes							(32,208)			(9,289)			5,331			(12,393)
	Net income (loss)						82,529			22,309			(16,720)			30,288
Net (loss) income attributable to noncontrolling interests							(1,311)			152			(1,895)			108
	Net income (loss) attributable to B. Riley Financial, Inc.						83,840			22,157			(14,825)			30,180
Preferred stock dividends							1,087			—			2,142			—
	Net income (loss) available to common shareholders					$	82,753		$	22,157		$	(16,967)		$	30,180

 

B. RILEY FINANCIAL, INC.
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation
(Unaudited)
(Dollars in thousands)
							Three Months Ended June 30,						Six Months Ended June 30,
							2020			2019			2020			2019
Net income (loss) attributable to B. Riley Financial, Inc.							$	83,840		$	22,157		$	(14,825)		$	30,180
Adjustments:
	Provision (benefit) for income taxes							32,208			9,289			(5,331)			12,393
	Interest expense							16,509			11,588			32,163			22,358
	Interest income							(224)			(331)			(470)			(968)
	Share based payments							4,167			2,934			9,489			5,548
	Depreciation and amortization							4,923			4,831			9,879			9,744
	Restructuring costs							—			1,552			—			1,699
	Impairment of tradenames							8,500			—			12,500			—
	Transactions related costs and other							(1,660)			836			8,794			6,332
		Total EBITDA adjustments						64,423			30,699			67,024			57,106
			Adjusted EBITDA				$	148,263		$	52,856		$	52,199		$	87,286
Operating EBITDA Adjustments:
	Trading (income) losses and fair value adjustments on loans							(114,547)			(5,595)			67,895			(31,462)
	Other investment related expenses							13,040			(4,110)			(2,430)			6,185
		Total Operating EBITDA Adjustments						(101,507)			(9,705)			65,465			(25,277)
Operating Adjusted EBITDA							$	46,756		$	43,151		$	117,664		$	62,009

 

B. RILEY FINANCIAL, INC.
Adjusted Net Income Reconciliation
(Unaudited)
(Dollars in thousands, except share data)
							Three Months Ended June 30,						Six Months Ended June 30,
							2020			2019			2020			2019
Net income (loss) attributable to B. Riley Financial, Inc.							$	83,840		$	22,157			(14,825)			30,180
Adjustments:
	Share based payments							4,167			2,934			9,489			5,548
	Amortization of intangible assets							4,024			3,344			8,048			6,721
	Restructuring costs							—			1,552			—			1,699
	Impairment of tradenames							8,500			—			12,500			—
	Transactions related costs and other							(1,660)			836			8,794			6,332
	Income tax effect of adjusting entries							(4,172)			(2,560)			(10,731)			(5,805)
Adjusted net income attributable to B. Riley Financial, Inc.							$	94,699		$	28,263			13,275			44,675
Adjusted income per common share:
	Adjusted basic income per share						$	3.70		$	1.08			0.51			1.70
	Adjusted diluted income per share						$	3.51		$	1.05			0.51			1.67
Shares used to calculate adjusted basic net income per share								25,627,085			26,278,352			25,827,849			26,247,952
Shares used to calculate adjusted diluted net income per share								26,992,823			26,896,573			25,827,849			26,770,922

 

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SOURCE B. Riley Financial