B. Riley Financial Reports Strong Third Quarter 2020 Results

·15 min read

Q3 2020 Consolidated Revenues of $226.3 million and Net Income of $47.3 million , or $1.75 per Diluted Share

Year-to-Date Consolidated Revenues of $492.5 million and Net Income of $30.3 million

Q3 2020 Operating adjusted EBITDA of $67.2 million ; YTD Operating Adjusted EBITDA of $184.9 million

Regular Quarterly Cash Dividend Raised to $0.375 per Common Share

Board of Directors Approves Additional Share Repurchase Program

LOS ANGELES , Oct. 29, 2020 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ:RILY) ("B. Riley" or the "Company") today announced results for the third quarter ended September 30, 2020 .

Third Quarter 2020 Financial Highlights

  • GAAP consolidated revenues of $226.3 million

  • Net income available to common shareholders of $47.3 million , or $1.75 per diluted share

  • Adjusted EBITDA (1) of $94.1 million

  • Operating revenues (2) of $194.5 million and operating adjusted EBITDA (3) of $67.2 million

"We delivered strong third quarter results across our business lines which generated net income of $47.3 million compared to $34.3 million last year and operating adjusted EBITDA growth of over 90%," said Bryant Riley , Chairman and Co-Chief Executive Officer. "Our capital markets group was the primary driver of growth this quarter, having realized impressive performance in all of its verticals. Our focus on helping small cap companies navigate financial markets with advisory, capital raising, and restructuring services is the ethos of our firm and this quarter confirmed that we provide vital services during periods of market turmoil like we have seen with COVID-19. As we continue to creatively gain market share in each of our segments within capital markets, we anticipate becoming the market leader within the small cap ecosystem. In addition to capital markets, we have continued to see strong performance out of our liquidation business given the unfortunate ramifications of COVID-19. Additionally, our valuation business, brand portfolio, and wholly owned subsidiaries within our principal investments business continue to generate steady cash flows and healthy returns on invested capital. Finally, we continue to view our balance sheet as a vital differentiator that sets us apart from the competition. We saw investment gains of $32 million in the quarter which marks a continued recovery from our first quarter losses. This understates the importance that our strong balance sheet and our net cash and investments have on driving growth and cash flow across our segments. We pride ourselves on being solution providers to companies in need and use our balance sheet as a tool to generate both fees and returns. When I look through our portfolio, I am as optimistic as I have ever been about its future performance and love our set up as we finish the remainder of the year. Year-to-date, we have delivered net income of $30.3 million and almost $185 million of operating adjusted EBITDA, up 90% over last year. In addition, we have a clear line of sight to delivering strong growth in the fourth quarter as well. Our strong performance and the confidence we have in our business strategy and future are the primary reasons for our increasing our regular quarterly dividend to $0.375 ."

Mr. Riley added, "Since the formation of B. Riley Financial in 2014, our philosophy has been to provide a regular dividend enhanced by special dividends based on the strength of our episodic businesses. As our overall business has become increasingly diversified and recurring in nature, we feel a larger regular dividend annualized at $1.50 per share is more appropriate to reflect the underlying cash flow generating power of our business. To be clear, we will continue to consider special dividends when appropriate, and trust that a stable and growing regular dividend will be appreciated by our shareholders. In addition, we will continue to opportunistically repurchase shares as noted by our buyback authorization. Year-to-date, we repurchased approximately 1.7 million shares representing approximately 7% of our shares outstanding."

Co-Chief Executive Officer Tom Kelleher added, "This past quarter we took concerted steps to position our platform to drive increased client and shareholder value by rebranding our operating companies and providing greater visibility into the breadth of our offerings. In addition, we launched our venture capital business which should strengthen our capabilities to identify, acquire and invest in attractive emerging growth companies and is a highly strategic addition to our already broad platform. Moving forward, we are confident in our strategy and our ability to drive continued growth."

Third Quarter 2020 Financial Summary




Three Months Ended


Nine Months Ended

September 30,

September 30,




















(Dollars in thousands)



2020




2019




2020




2019



Revenues


















    Operating Revenues (2)


$

194,500



$

139,795



$

528,657



$

415,145



    Investment Gains (Loss) (4)



31,753




40,268




(36,142)




71,730



        Total Revenues


$

226,253



$

180,063



$

492,515



$

486,875





















Adjusted EBITDA (1)


















   Operating Adjusted EBITDA (3)


$

67,222



$

35,200



$

184,886



$

97,209



   Investment Adjusted EBITDA (5)



26,911




35,130




(38,554)




60,407



       Total Adjusted EBITDA


$

94,133



$

70,330



$

146,332



$

157,616


 

 

B. Riley Financial reported total revenues of $226.3 million for the three months ended September 30, 2020 , up from $180.1 million in total revenues for the prior year period. Operating revenues (2) totaled $194.5 million compared to $139.8 million in the prior year period.

Net income available to common shareholders totaled $47.3 million , or $1.75 per diluted share, compared to net income of $34.3 million , or $1.21 per diluted share, for the prior year period.

Total adjusted EBITDA (1) increased to $94.1 million from $70.3 million for the third quarter of 2019. Operating adjusted EBITDA (3) increased to $67.2 million from $35.2 million for the prior year period.

For the first nine months of 2020, B. Riley's total revenues were $492.5 million , operating revenues (2) totaled $528.7 million and net income totaled $30.3 million . During that same period, total adjusted EBITDA was $146.3 million and operating adjusted EBITDA was $184.9 million .

Investment gains (4) of $31.8 million in the third quarter reflected a continued recovery from the significant mark-to-market losses experienced in the first quarter of 2020 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 which also create revenue opportunities for the Company's operating business while driving long-term value for its clients, partners, and shareholders.

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 .

Third Quarter 2020 Segment Financial Summary




Three Months Ended

September 30, 2020














(Dollars in thousands)


Capital Markets


Auction and
Liquidation


Valuation and
Appraisal


Principal
Investments


Brands


    Operating Revenues (2)


$

115,058



$

44,185



$

9,655



$

21,602



$

4,000



    Investment Gains (4)



31,753




-




-




-




-



        Segment Revenue


$

146,811



$

44,185



$

9,655



$

21,602



$

4,000

























    Segment Operating Income (6)



37,900



$

12,000



$

2,972



$

8,368



$

2,292



    Investment Gains Income (5)



26,911




-




-




-




-



        Segment Income (Loss)


$

64,811



$

12,000



$

2,972



$

8,368



$

2,292


 

  • Capital Markets  segment revenues increased to $146.8 million compared to $134.1 million for the prior year period . The increase was primarily driven by increased fees from advisory services, the addition of our real estate consulting business and an increase in income related to minority investments.

  • Auction and Liquidation  performance was driven by a number of retail liquidations in the US and in Europe as our group further capitalized on the current challenging retail market conditions created by COVID-19.

  • Valuation and Appraisal  results continue to be negatively impacted by COVID-19 but overall business conditions and activity continue to show signs of recovery.

  • Principal Investments  companies, United Online and magicJack, continued to deliver solid operating performance and cash flow generation despite the impact of COVID-19.

As of September 30, 2020 , cash and investments totaled $991.7 million , including cash and cash equivalents of $169.7 million . The Company's investment balance included approximately $58.4 million of other equity investments reported in prepaid and other assets. Total cash and investments net of debt, including investments reported in prepaid and other assets, was $83.6 million .

Share Repurchases
The Board of Directors has approved an additional share repurchase program for up to $50 million . In July, B. Riley announced an agreement to repurchase 900,000 shares of its common stock as part of a privately negotiated transaction. During the third quarter, the Company repurchased 450,000 shares of these 900,000 shares and expects to purchase the remaining shares by year-end, subject to various factors including price, trading volume, corporate requirements, and market conditions. Year-to-date through September 30 th , 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 quarterly dividend to $0.375 per common share, from the previous regular quarterly dividend of $0.30 per common share. The quarterly dividend of $0.375 per common share will be paid on or about November 24, 2020 to stockholders of record as of November 10, 2020 .

Conference Call
Management will host a conference call today, Thursday, October 29 , 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 October 29, 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, November 5, 2020)

Toll-Free:

1-844-512-2921

International:

1-412-317-6671

Replay Pin:

13711619

 

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.
(5)  Investment adjusted EBITDA and investment gains income are defined as trading income (losses) 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

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 Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable)and any additional information included in our Quarterly Report on Form 10-Q for the quarter ended September 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

Brad Edwards

Scott Cianciulli

ir@brileyfin.com  

press@brileyfin.com

 

B. RILEY FINANCIAL, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands, except par value)





September 30,


December 31,



2020


2019




(Unaudited)




Assets






Assets:









Cash and cash equivalents

$

169,676


$

104,268


Restricted cash


1,410



471


Due from clearing brokers


19,589



23,818


Securities and other investments owned, at fair value


459,480



408,213


Securities borrowed



676,423



814,331


Accounts receivable, net


45,654



46,624


Due from related parties


3,766



5,832


Advances against customer contracts


900



27,347


Loans receivable, at fair value (includes$236,018 from related parties at September 30, 2020)


344,339



43,338


Loans receivable, at cost (includes $157,080 from related parties at December 31, 2019)




225,848


Prepaid expenses and other assets


87,560



81,808


Operating lease right-of-use assets


43,514



47,809


Property and equipment, net


11,986



12,727


Goodwill


227,046



223,697


Other intangible assets, net


194,516



220,525


Deferred income taxes


14,223



31,522


     Total assets

$

2,300,082


$

2,318,178

Liabilities and Equity






Liabilities:







Accounts payable

$

4,226


$

4,477


Accrued expenses and other liabilities


127,036



130,714


Deferred revenue


70,565



67,121


Due to related parties and partners


777



1,750


Securities sold not yet purchased


48,125



41,820


Securities loaned


667,109



810,495


Mandatorily redeemable noncontrolling interests


4,462



4,616


Operating lease liabilities


55,790



61,511


Notes payable


714



38,167


Loan participations sold


13,919



12,478


Term loan




52,452



66,666


Senior notes payable


854,926



688,112


     Total liabilities



1,900,101



1,927,927













Commitments and contingencies






B. Riley Financial, Inc. stockholders' equity:







Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 3,831 and 2,349 issued and







outstanding as of September 30, 2020 and December 31, 2019, respectively; liquidation







preference of $95,773 and $58,723 as of September 30, 2020 and December 31, 2019, respectively.




Common stock, $0.0001 par value; 100,000,000 shares authorized; 25,431,575 and 26,972,332







issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.


3



3


Additional paid-in capital


332,085



323,109


Retained earnings


43,938



39,536


Accumulated other comprehensive loss


(2,167)



(1,988)


     Total B. Riley Financial, Inc. stockholders' equity


373,859



360,660

Noncontrolling interests


26,122



29,591


     Total equity


399,981



390,251


Total liabilities and equity

$

2,300,082


$

2,318,178

B. RILEY FINANCIAL, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except share data)


























Three Months Ended


Nine Months Ended








September 30,


September 30,








2020


2019


2020


2019

Revenues:














Services and fees

$

144,823


$

113,111


$

429,799


$

356,975


Trading income (loss) and fair value adjustments on loans


31,753



40,268



(36,142)



71,730


Interest income - Loans and securities lending


26,026



25,766



72,383



54,147


Sale of goods


23,651



918



26,475



4,023



Total revenues


226,253



180,063



492,515



486,875

Operating expenses:













Direct cost of services


23,264



7,936



51,201



41,715


Cost of goods sold


9,813



911



11,442



3,835


Selling, general and administrative expenses


97,143



101,092



291,449



287,963


Restructuring charge


1,557





1,557



1,699


Impairment of tradenames






12,500




Interest expense - Securities lending and loan
participations sold


10,975



10,273



30,669



22,579



Total operating expenses


142,752



120,212



398,818



357,791



Operating income


83,501



59,851



93,697



129,084

Other income (expense):













Interest income


67



361



537



1,329


Income (loss) from equity investments


409



1,113



(145)



(4,049)


Interest expense


(16,374)



(12,772)



(48,537)



(35,130)



Income before income taxes


67,603



48,553



45,552



91,234

Provision for income taxes


(18,711)



(14,409)



(13,380)



(26,802)



Net income


48,892



34,144



32,172



64,432

Net income (loss) attributable to noncontrolling interests


513



(158)



(1,382)



(50)



Net income attributable to B. Riley Financial, Inc.


48,379



34,302



33,554



64,482

Preferred stock dividends


1,088





3,230





Net income available to common shareholders

$

47,291


$

34,302


$

30,324


$

64,482



















Basic income per common share

$

1.86


$

1.29


$

1.18


$

2.45

Diluted income per common share

$

1.75


$

1.21


$

1.14


$

2.37



















Weighted average basic common shares outstanding


25,446,292



26,556,223



25,699,735



26,351,839

Weighted average diluted common shares outstanding


27,050,448



28,233,423



26,689,700



27,251,837















B. RILEY FINANCIAL, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)






































Nine Months Ended September 30,










2020


2019

Cash flows from operating activities:








Net income




$

32,172


$

64,432


Adjustments to reconcile net income to net cash provided by operating activities:











Depreciation and amortization





14,765



14,217



Provision for doubtful accounts





2,438



1,646



Share-based compensation





14,267



10,276



Fair value adjustments, non-cash





21,755



(13,343)



Non-cash interest and other





(12,901)



(14,941)



Effect of foreign currency on operations





(602)



8



Loss from equity investments





145



4,049



Deferred income taxes





17,312



6,358



Impairment of intangibles and loss on disposal of fixed assets





14,057



(327)



Gain on extinguishment of debt





(1,556)





Income allocated for mandatorily redeemable noncontrolling interests





779



857



Change in operating assets and liabilities:












Due from clearing brokers





4,230



9,947




Securities and other investments owned





(36,859)



(32,122)




Securities borrowed





137,908



211,139




Accounts receivable and advances against customer contracts





25,336



(8,645)




Prepaid expenses and other assets





(3,507)



(9,619)




Accounts payable, accrued expenses and other liabilities





(10,297)



31,473




Amounts due to/from related parties and partners





1,093



(4,574)




Securities sold, not yet purchased





6,304



(8,531)




Deferred revenue





3,444



(502)




Securities loaned





(143,386)



(215,575)





Net cash provided by operating activities





86,897



46,223

Cash flows from investing activities:










Purchases of loans receivable





(169,100)



(350,695)


Repayments of loans receivable





75,982



98,742


Sale of loan receivable to related party





1,800




Proceeds from loan participations sold





2,400



31,806


Repayment of loan participations sold





(1,131)



(3,175)


Purchases of property, equipment and other





(1,517)



(2,885)


Proceeds from sale of property, equipment and intangible assets





1



504


Purchase of equity investments





(6,486)



(33,391)


Proceeds from sale of division of magicJack







6,196


Dividends and distributions from equity investments





1,005



1,454


Acquisition of other businesses





(1,500)







Net cash used in investing activities





(98,546)



(251,444)

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





(14,429)



(17,924)


Proceeds from issuance of senior notes





171,417



244,497


Redemption of senior notes





(1,829)




Payment of debt issuance costs





(2,761)



(4,212)


Payment of employment taxes on vesting of restricted stock





(2,950)



(2,626)


Common dividends paid





(25,822)



(25,049)


Preferred dividends paid





(3,230)




Repurchase of common stock





(38,348)



(4,273)


Repurchase of warrants







(2,777)


Distribution to noncontrolling interests





(3,013)



(1,095)


Proceeds from issuance of preferred stock





36,007







Net cash provided by financing activities





77,589



196,184





Increase (decrease) in cash, cash equivalents and restricted cash





65,940



(9,037)





Effect of foreign currency on cash, cash equivalents and restricted cash





407



(183)





Net increase (decrease) in cash, cash equivalents and restricted cash





66,347



(9,220)

Cash, cash equivalents and restricted cash, beginning of period





104,739



180,278

Cash, cash equivalents and restricted cash, end of period




$

171,086


$

171,058















Supplemental disclosures:










Interest paid




$

75,231


$

52,931


Taxes paid




$

1,460


$

5,029


















B. RILEY FINANCIAL, INC.

Segment Financial Information

(Unaudited)

(Dollars in thousands)
























Three Months Ended


Nine Months Ended







September 30,


September 30,







2020


2019


2020


2019

Capital Markets segment:














Revenues - Services and fees

$

89,032


$

68,062


$

280,303


$

187,768


Trading income (losses) and fair value adjustments on loans


31,753



40,268



(36,142)



71,730


Interest income - Loans and securities lending


26,026



25,766



72,383



54,147


Total revenues



146,811



134,096



316,544



313,645


Selling, general and administrative expenses


(68,442)



(70,140)



(204,183)



(196,570)


Restructuring (charge) recovery


(1,417)





(1,417)



4


Interest expense - Securities lending and loan participations sold


(10,975)



(10,273)



(30,669)



(22,579)


Depreciation and amortization


(1,166)



(1,281)



(3,362)



(3,844)



Segment income



64,811



52,402



76,913



90,656

Auction and Liquidation segment:













Revenues - Services and fees


21,473



11,232



49,340



65,681


Revenues - Sale of goods



22,712



54



23,757



1,230


Total revenues



44,185



11,286



73,097



66,911


Direct cost of services



(18,373)



(2,371)



(36,406)



(21,584)


Cost of goods sold



(9,046)



(126)



(9,360)



(992)


Selling, general and administrative expenses


(4,625)



(2,835)



(8,880)



(9,045)


Restructuring (charge) recovery


(140)





(140)




Depreciation and amortization


(1)



(1)



(2)



(5)



Segment income



12,000



5,953



18,309



35,285

Valuation and Appraisal segment:













Revenues - Services and fees


9,655



10,818



26,112



29,143


Selling, general and administrative expenses


(6,632)



(7,331)



(19,643)



(21,492)


Depreciation and amortization


(51)



(36)



(139)



(100)



Segment income



2,972



3,451



6,330



7,551

Principal Investments - United Online and magicJack segment:













Revenues - Services and fees


20,663



22,999



63,037



74,383


Revenues - Sale of goods



939



864



2,718



2,793


Total revenues



21,602



23,863



65,755



77,176


Direct cost of services



(4,891)



(5,565)



(14,795)



(20,131)


Cost of goods sold



(767)



(785)



(2,082)



(2,843)


Selling, general and administrative expenses


(4,840)



(5,895)



(14,352)



(18,410)


Depreciation and amortization


(2,736)



(2,956)



(8,466)



(9,719)


Restructuring charge









(1,703)



Segment income



8,368



8,662



26,060



24,370

Brands segment:















Revenues - Services and fees


4,000





11,007




Selling, general and administrative expenses


(994)





(2,207)




Depreciation and amortization


(714)





(2,143)




Impairment of tradenames







(12,500)





Segment income (loss)



2,292





(5,843)



Consolidated operating income from reportable segments


90,443



70,468



121,769



157,862


















Corporate and other expenses


(6,942)



(10,617)



(28,072)



(28,778)

Interest income




67



361



537



1,329

Income (loss) on equity investments


409



1,113



(145)



(4,049)

Interest expense




(16,374)



(12,772)



(48,537)



(35,130)


Income before income taxes



67,603



48,553



45,552



91,234

Provision for income taxes



(18,711)



(14,409)



(13,380)



(26,802)


Net income




48,892



34,144



32,172



64,432

Net income (loss) attributable to noncontrolling interests


513



(158)



(1,382)



(50)


Net income attributable to B. Riley Financial, Inc.


48,379



34,302



33,554



64,482

Preferred stock dividends



1,088





3,230




Net income available to common shareholders

$

47,291


$

34,302


$

30,324


$

64,482






















































B. RILEY FINANCIAL, INC.

Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation

(Unaudited)

(Dollars in thousands)


























Three Months Ended
September 30,


Nine Months Ended
September 30,








2020


2019


2020


2019

Net income attributable to B. Riley Financial, Inc.

$

48,379


$

34,302


$

33,554


$

64,482

Adjustments:















Provision for income taxes


18,711



14,409



13,380



26,802


Interest expense


16,374



12,772



48,537



35,130


Interest income



(67)



(361)



(537)



(1,329)


Share based payments


4,778



4,728



14,267



10,276


Depreciation and amortization


4,886



4,473



14,765



14,217


Restructuring costs


1,557





1,557



1,699


Impairment of tradenames






12,500




Transactions related costs and other


(485)



7



8,309



6,339





















Total EBITDA adjustments


45,754



36,028



112,778



93,134






















Adjusted EBITDA

$

94,133


$

70,330


$

146,332


$

157,616

Operating EBITDA Adjustments:













Trading (income) losses and fair value adjustments on loans

(31,753)



(40,268)



36,142



(71,730)


Other investment related expenses


4,842



5,138



2,412



11,323





















Total Operating EBITDA Adjustments


(26,911)



(35,130)



38,554



(60,407)



















Operating Adjusted EBITDA

$

67,222


$

35,200


$

184,886


$

97,209



















B. RILEY FINANCIAL, INC.

Adjusted Net Income Reconciliation

(Unaudited)

(Dollars in thousands, except share data)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2020


2019


2020


2019

Net income attributable to B. Riley Financial, Inc.

$

48,379


$

34,302


$

33,554


$

64,482

Adjustments:













Share based payments


4,778



4,728



14,267



10,276


Amortization of intangible assets


3,919



3,310



11,967



10,031


Restructuring costs


1,557





1,557



1,699


Impairment of tradenames






12,500




Transactions related costs and other


(485)



7



8,309



6,339


Income tax effect of adjusting entries


(2,725)



(2,380)



(13,456)



(8,185)

Adjusted net income attributable to B. Riley Financial, Inc.

$

55,423


$

39,967


$

68,698


$

84,642














Adjusted income per common share:













Adjusted basic income per share

$

2.18


$

1.51


$

2.67


$

3.21


Adjusted diluted income per share

$

2.05


$

1.42


$

2.57


$

3.11



















Shares used to calculate adjusted basic net income per share


25,446,292



26,556,223



25,699,735



26,351,839

Shares used to calculate adjusted diluted net income per share


27,050,448



28,233,423



26,689,700



27,251,837

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B. Riley Financial logo (PRNewsFoto/B. Riley Financial, Inc.)
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SOURCE B. Riley Financial