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B. Riley Financial Reports Second Quarter 2022 Results; Declares $1.00 Dividend
Press Releases

B. Riley Financial Reports Second Quarter 2022 Results; Declares $1.00 Dividend

Q2 GAAP Revenues of $42.7 million; Operating Revenues of $266.6 million

Q2 GAAP Net Loss of ($142.2 million), Operating Adjusted EBITDA of $74.2 million

Declares Quarterly Dividend of $1.00 per common share

LOS ANGELES, July 28, 2022 /PRNewswire/ — B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”), a diversified financial services platform, today announced results for the three-month period ended June 30, 2022.

Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: “Our second quarter results demonstrated the relative strength and ability of our non-cyclical businesses to steadily perform amid disruptive markets. Periods of volatility have historically presented our most attractive opportunities to differentiate ourselves with clients, attract top talent, and generate sustainable share gains across key business lines. We believe the current environment is no exception.”

“Despite the markdown on our investments and declines in our underwriting business, our dynamic platform has demonstrated continued resiliency. We have earned over $17.00 per share for our shareholders since 2019, and despite a GAAP net loss of ($43.4 million) over the trailing twelve-month period, we delivered operating EBITDA of $366 million in the same period, representing a meaningful increase compared to $114 million in 2019. Increasing contributions from less cyclical and less episodic businesses have exceeded the capital needed to support our dividend while providing us flexibility to continue to invest across our business.”

“At the same time, strategic investments remain an integral part of our business, as a strategy that helps competitively advantage our clients. Our cash and investment portfolio has been diversified to balance our allocation between debt and equity-related investments. In our credit positions, we have demonstrated an ability to structure lending opportunities that enable us to earn attractive spreads with minimal impairments over time. The remainder of our portfolio is focused on public and private small-cap companies where we have high conviction in capital appreciation over our investment horizon. Securities in our investment portfolio have exceeded the Russell 2000 Index in multiple market cycles, having generated total returns of more than 90% to B. Riley since 2019. As we look ahead, we remain optimistic about the total return potential of our investment portfolio, as well as our ability to capitalize on opportunities being presented by the current market dislocation.”

Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: “During the quarter, the balance of our operating businesses continued to deliver steady cash flow to our platform while performing to support our clients. Amid another transformative period for B. Riley, we have made meaningful progress in expanding our existing businesses while consolidating recent acquisitions. Our communications business with Lingo serves as a leading source of recurring cash flow for our platform as financial consulting performs steadily quarter-to-quarter and year-to-year. With core capabilities in restructuring, asset disposition, and distressed financing, we believe our diversified platform stands to benefit during periods of market austerity. As we begin to realize synergies from combining National Holdings and FocalPoint into our respective legacy wealth and investment banking businesses, we are looking to the horizon and evaluating other accretive acquisitions to accelerate our growth.”

Declaration of Common Dividend

B. Riley has declared a regular quarterly cash dividend of $1.00 per common share which is payable on or about August 23 to common stockholders of record as of August 11.

Financial Summary















































Three Months Ended


Six Months Ended






June 30,

June 30,

























(Dollars in thousands, except for share data)



2022




2021




2022




2021



























Net (loss) income available to common shareholders


$

(142,161)



$

73,887



$

(154,225)



$

326,794



























Basic (loss) income per common share 


$

(5.07)



$

2.70



$

(5.52)



$

12.03






Diluted (loss) income per common share 


$

(5.07)



$

2.58



$

(5.52)



$

11.39














































 

Net loss available to common shareholders of ($142.2 million), or ($5.07) diluted earnings per share (EPS), was driven by investment loss (4) of ($223.9 million) related to the decline in capital markets which impacted the value of the Company’s investment portfolio. Net loss was ($154.2 million) year-to-date, or diluted EPS of ($5.52).















































Three Months Ended


Six Months Ended





June 30,

June 30,

























(Dollars in thousands)



2022




2021




2022




2021



























    Operating Revenues (2)


$

266,627



$

304,091



$

540,606



$

637,308






    Investment (Loss) Gains (4)



(223,927)




32,679




(292,317)




299,621






        Total Revenues


$

42,700



$

336,770



$

248,289



$

936,929



























   Operating Adjusted EBITDA (3)


$

74,220



$

92,124



$

158,407



$

214,841






   Investment Adjusted EBITDA (5)



(209,997)




32,763




(253,522)




295,527






       Total Adjusted EBITDA (1)


$

(135,777)



$

124,887



$

(95,115)



$

510,368










































 

  • Total revenues were $42.7 million for the quarter and $248.3 million year-to-date.
  • Operating revenues (2) were $266.6 million for the quarter and $540.6 million year-to-date.
  • Operating adjusted EBITDA (3) of $74.2 million for the quarter and $158.4 million year-to-date.
  • Total adjusted EBITDA (1) loss of ($135.8 million) for the quarter and ($95.1 million) year-to-date.

As of June 30, 2022, cash and investments (6) totaled approximately $2.2 billion including cash and cash equivalents of $216.1 million. Total cash and investments, (6) net of debt, was $61.5 million.

Segment Financial Summary
















































    Operating Revenues (2)


    Investment Gains (Loss) (4)


Total Segment Revenue






Three Months Ended June 30,


Three Months Ended June 30,


Three Months Ended June 30,





(Dollars in thousands)

2022


2021


2022


2021


2022


2021





Capital Markets


$      129,825



$       151,488



$    (225,455)



$         29,897



$      (95,630)



$       181,385





Wealth Management


60,861



87,444



1,528



2,865



62,389



90,309





Auction and Liquidation


3,924



17,277







3,924



17,277





Financial Consulting


24,310



23,735







24,310



23,735





Principal Investments – Communications and Other


42,533



19,646







42,533



19,646





Brands


5,174



4,501





(83)



5,174



4,418




























Segment Operating Income (Loss) (7)


    Investment Income (Loss) (5)


Total Segment Income (Loss)






Three Months Ended June 30,


Three Months Ended June 30,


Three Months Ended June 30,





(Dollars in thousands)

2022


2021


2022


2021


2022


2021





Capital Markets


$        53,282



$         74,701



$    (211,525)



$         29,981



$    (158,243)



$       104,682





Wealth Management


(8,841)



(3,598)



1,528



2,865



(7,313)



(733)





Auction and Liquidation


451



3,555







451



3,555





Financial Consulting


4,284



4,175







4,284



4,175





Principal Investments – Communications and Other


7,647



7,275







7,647



7,275





Brands


3,773



3,096





(83)



3,773



3,013















































 

For the three months ended June 30, 2022:

Excluding investment loss of ($225.5 million),(4) Capital Markets segment operating revenues decreased to $129.8 million from $151.5 million in the prior year period. Segment operating income (7) fell to $53.3 million from $74.7 million in the prior year period. Results for the quarter were impacted by declines in investment banking and institutional brokerage activities that were consistent with the industry-wide reduction in deal activity.

Wealth Management revenues fell to $62.4 million with a segment loss of ($7.3 million) due to reduced activity and the impact of a settlement related to a legacy National Securities regulatory matter which pre-dated the Company’s acquisition in 2021.

Auction and Liquidation revenues were $3.9 million with segment income of $0.5 million. Results for this segment vary from quarter-to-quarter and year-to-year due to the episodic impact of large retail liquidation engagements.

Financial Consulting revenues increased to $24.3 million, up from $23.7 million in the prior year period. Segment income increased to $4.3 million, up from $4.2 million in the prior year period. The increase was driven primarily by bankruptcy restructuring and forensic litigation consulting matters, in addition to appraisal engagements and real estate dispositions.

Principal Investments – Communications and Other segment revenues increased to $42.5 million, up from $19.6 million in the prior year period due to the addition of Lingo and Marconi Wireless. On a combined basis, communications businesses – magicJack, United Online, Marconi Wireless and Lingo—along with other principal investments, generated segment income of $7.6 million for the quarter.

Brands segment revenues increased to $5.2 million, up from $4.4 million in the prior year period related to the licensing of trademarks for six brands: Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too, and Nanette Lepore. Segment income increased to $3.8 million, up from $3.0 million in the prior year period.
















































    Operating Revenues (2)


    Investment Gains (Loss) (4)


Total Segment Revenue






Six Months Ended June 30,


Six Months Ended June 30,


Six Months Ended June 30,





(Dollars in thousands)

2022


2021


2022


2021


2022


2021





Capital Markets


$      260,335



$       359,387



$    (294,367)



$       294,400



$      (34,032)



$       653,787





Wealth Management


137,818



152,986



2,050



5,221



139,868



158,207





Auction and Liquidation


7,279



30,727







7,279



30,727





Financial Consulting


50,246



45,144







50,246



45,144





Principal Investments – Communications and Other


75,197



40,175







75,197



40,175





Brands


9,731



8,889







9,731



8,889




























Segment Operating Income (Loss) (7)


    Investment Income (Loss) (5)


Total Segment Income (Loss)






Six Months Ended June 30,


Six Months Ended June 30,


Six Months Ended June 30,





(Dollars in thousands)

2022


2021


2022


2021


2022


2021





Capital Markets


$      111,151



$       180,684



$    (255,572)



$       290,306



$    (144,421)



$       470,990





Wealth Management


(19,459)



(1,927)



2,050



5,221



(17,409)



3,294





Auction and Liquidation


(349)



4,462







(349)



4,462





Financial Consulting


9,196



7,497







9,196



7,497





Principal Investments – Communications and Other


16,491



14,806







16,491



14,806





Brands


6,991



6,094







6,991



6,094















































 

For the six months ended June 30, 2022:

Excluding the year-to-date investment loss (4) of ($294.4 million), Capital Markets segment operating revenues (2) were $260.3 million with segment operating income (7) of $111.2 million.

Wealth Management segment revenues were $139.9 million with segment loss of ($17.4 million), year-to-date.

Auction and Liquidation segment revenues were $7.3 million with a segment loss of ($0.3 million), year-to-date.

Financial Consulting year-to-date segment revenues increased to $50.2 million, up from $45.1 million for the prior year-ago period. Segment income of $9.2 million increased compared to $7.5 million in the prior year-ago period.

Principal Investments – Communications and Other segment revenues were $75.2 million with segment income of $16.5 million, year-to-date.

Brands segment year-to-date revenues increased to $9.7 million, up from $8.9 million in the prior year-ago period. Segment income increased to $7.0 million, up from $6.1 million in the prior year ago period.

Investments in the Hurley and Justice brands contributed dividend income of $7.4 million for the quarter, and $13.3 million year-to-date. Results related to the Hurley and Justice investments are recognized as Capital Markets segment operating income. (7)

Supplemental Financial Data

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

Conference Call Details

Management will host an investor call to discuss its second quarter results today, Thursday, July 28, 2022 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). Investors may access the live broadcast and archived recording via ir.brileyfin.com.

Date and Time:

Thursday, July 28, 2022 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

Dial In:

1-855-327-6837 (toll-free) or 1-631-891-4304 (international)

Audio Webcast:

https://ir.brileyfin.com/events-and-presentations

Replay (expires Thursday, August 4, 2022)

Dial In:

1-844-512-2921; 10019761 (pin)

About B. Riley Financial

B. Riley Financial is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. B. Riley leverages cross-platform expertise to provide clients with full service, collaborative solutions at every stage of the business life cycle. Through its affiliated subsidiaries, B. Riley provides end-to-end, collaborative financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. B. Riley opportunistically invests to benefit its shareholders, and certain registered affiliates originate and underwrite senior secured loans for asset-rich companies. B. Riley refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries or affiliates. For more information, please visit www.brileyfin.com.

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

(1)

Adjusted EBITDA includes earnings before interest, taxes, depreciation, amortization, restructuring costs, share-based payments, gain on extinguishment of loans, 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 (loss) is defined as trading income (losses) and fair value adjustments on loans.

(5)

Investment adjusted EBITDA and investment income (loss) are defined as trading income (losses) and fair value adjustments on loans, less other investment related expenses.

(6)

Total cash and investments is defined as the sum of cash and cash equivalents, restricted cash, due from clearing brokers net of due to clearing brokers, securities and other investments owned, at fair value net of (i) securities sold not yet purchased and (ii) noncontrolling interest related to investments, advances against customer contracts, loans receivable, at fair value net of loan participations sold, and other investments reported in prepaid and other assets.

(7)

Segment operating income (loss) is defined as segment income (loss) excluding trading income (losses) and fair value adjustments on loans and other investment related expenses.

 

Note Regarding Use of Non-GAAP Financial Measures

Certain of the information set forth herein, including operating revenues, adjusted EBITDA, operating adjusted EBITDA, and investment adjusted EBITDA, may be considered non-GAAP financial measures. B. Riley Financial believes this information is useful to investors because it provides a basis for measuring the Company’s available capital resources, the operating performance of its business and its revenues and cash flow, (i) excluding in the case of operating revenues, trading income (losses) and fair value adjustments on loans, (ii) excluding in the case of adjusted EBITDA, net interest expense, provisions for or benefit from income taxes, depreciation, amortization, fair value adjustment, restructuring costs, gain on extinguishment of loans, impairment of trade names, stock-based compensation and transaction and other expenses, (iii) excluding in the case of operating adjusted EBITDA, the aforementioned adjustments for adjusted EBITDA as well as trading income (losses) and fair value adjustments on loans, and other investment related expenses, (iv) including in the case of investment adjusted EBITDA, trading income (losses) and fair value adjustments on loans, net of other investment related expenses, and (v) including in the case of total cash and investments, 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, management compensation, capital resources, and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies.

Forward-Looking Statements

Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management’s current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date of this press release. Such forward-looking statements include, but are not limited to, statements regarding our excitement and the expected growth of our business segments. Factors that could cause such actual results to differ materially from those contemplated or implied by such forward-looking statements include, without limitation, the risks 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, 2021 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and B. Riley Financial undertakes no duty to update this information.

Contacts




Investors

Media

Mike Frank

Jo Anne McCusker

ir@brileyfin.com

press@brileyfin.com

(212) 409-2424

(646) 885-5425

 

B. RILEY FINANCIAL, INC.



Consolidated Balance Sheets



(Dollars in thousands, except par value)










June 30,


December 31,








2022


2021









(Unaudited)




Assets






Assets:







Cash and cash equivalents

$

216,098


$

278,933


Restricted cash


928



927


Due from clearing brokers


50,597



29,657


Securities and other investments owned, at fair value


1,144,896



1,532,095


Securities borrowed


2,414,074



2,090,966


Accounts receivable, net


52,935



49,673


Due from related parties


645



2,074


Loans receivable, at fair value (includes $88,893 and $167,744 from related parties as of June 30, 2022

and December 31, 2021, respectively)


770,840



873,186


Prepaid expenses and other assets


480,276



463,502


Operating lease right-of-use assets


59,806



56,969


Property and equipment, net


14,182



12,870


Goodwill


394,331



250,568


Other intangible assets, net


270,322



207,651


Deferred tax assets, net


5,287



2,848



Total assets

$

5,875,217


$

5,851,919

Liabilities and Equity






Liabilities:







Accounts payable

$

22,428


$

6,326


Accrued expenses and other liabilities


245,773



343,750


Deferred revenue


79,226



69,507


Deferred tax liabilities, net




93,055


Due to related parties and partners


470




Due to clearing brokers


24,695



69,398


Securities sold not yet purchased


5,403



28,623


Securities loaned


2,414,201



2,088,685


Operating lease liabilities


70,972



69,072


Notes payable


23,186



357


Revolving credit facility


80,000



80,000


Term loans, net


367,815



346,385


Senior notes payable, net


1,644,778



1,606,560



Total liabilities


4,978,947



4,801,718








Commitments and contingencies 






Redeemable noncontrolling interests in equity of subsidiaries


352,894



345,000

B. Riley Financial, Inc. equity:







Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,535 and 4,512 issued and





outstanding as of June 30, 2022 and December 31, 2021, respectively; and liquidation preference







of $113,380 and $112,790 as of June 30, 2022 and December 31, 2021, respectively







Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,290,458 and 27,591,028


3



3


issued and outstanding as of June 30, 2022 and December 31, 2020, respectively







Additional paid-in capital


459,220



413,486


Retained earnings


32,570



248,862


Accumulated other comprehensive loss


(3,884)



(1,080)



Total B. Riley Financial, Inc. stockholders’ equity


487,909



661,271

Noncontrolling interests


55,467



43,930



Total equity


543,376



705,201




Total liabilities and equity

$

5,875,217


$

5,851,919

 

B. RILEY FINANCIAL, INC.

Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except share data)


























Three Months Ended


Six Months Ended








June 30,


June 30,








2022


2021


2022


2021

Revenues:














Services and fees

$

200,905


$

266,143


$

411,580


$

555,612


Trading (losses) income and fair value adjustments on loans


(223,927)



32,679



(292,317)



299,621


Interest income – Loans and securities lending


63,835



25,491



125,261



62,411


Sale of goods


1,887



12,457



3,765



19,285



Total revenues


42,700



336,770



248,289



936,929

Operating expenses:













Direct cost of services


17,785



12,094



29,436



23,416


Cost of goods sold


1,994



3,626



4,245



8,952


Selling, general and administrative expenses


167,136



199,922



342,335



391,266


Interest expense – Securities lending and loan participations sold


14,544



10,983



26,310



30,172



Total operating expenses


201,459



226,625



402,326



453,806




Operating (loss) income


(158,759)



110,145



(154,037)



483,123

Other income (expense):













Interest income


500



56



567



105


Change in fair value of financial instruments and other


4,321



6,509



10,302



6,509


(Loss) income from equity investments


(3,399)



(852)



3,376



23


Interest expense


(31,764)



(20,856)



(62,200)



(40,642)



(Loss) income before income taxes


(189,101)



95,002



(201,992)



449,118

Benefit from (provision for) income taxes


52,513



(19,902)



56,208



(117,420)



Net (loss) income


(136,588)



75,100



(145,784)



331,698

Net income (loss) attributable to noncontrolling interests












and redeemable noncontrolling interests


3,571



(576)



4,437



1,366



Net (loss) income attributable to B. Riley Financial, Inc.


(140,159)



75,676



(150,221)



330,332

Preferred stock dividends


2,002



1,789



4,004



3,538



Net (loss) income available to common shareholders

$

(142,161)


$

73,887


$

(154,225)



326,794



















Basic (loss) income per common share

$

(5.07)


$

2.70


$

(5.52)


$

12.03

Diluted (loss) income per common share

$

(5.07)


$

2.58


$

(5.52)


$

11.39



















Weighted average basic common shares outstanding


28,051,570



27,344,184



27,953,845



27,159,257

Weighted average diluted common shares outstanding


28,051,570



28,668,465



27,953,845



28,690,444





































 

B. RILEY FINANCIAL, INC.

Segment Financial Information

(Unaudited)

(Dollars in thousands)



Three Months Ended


Six Months Ended


June 30,


June 30,


2022


2021


2022


2021

Capital Markets segment:













Revenues – Services and fees

$

67,426


$

125,997


$

136,510


$

296,976


Trading (losses) income and fair value adjustments on loans


(225,455)



29,897



(294,367)



294,400


Interest income – Loans and securities lending


62,399



25,491



123,825



62,411


    Total revenues


(95,630)



181,385



(34,032)



653,787


Selling, general and administrative expenses


(45,865)



(65,473)



(79,982)



(151,613)


Interest expense – Securities lending and loan participations sold


(14,544)



(10,983)



(26,310)



(30,172)


Depreciation and amortization


(2,204)



(247)



(4,097)



(1,012)



Segment (loss) income


(158,243)



104,682



(144,421)



470,990

Wealth Management segment:













Revenues – Services and fees


60,861



87,444



137,818



152,986


Trading income and fair value adjustments on loans


1,528



2,865



2,050



5,221


    Total revenues


62,389



90,309



139,868



158,207


Selling, general and administrative expenses


(68,394)



(88,702)



(154,136)



(150,174)


Depreciation and amortization


(1,308)



(2,340)



(3,141)



(4,739)



Segment (loss) income


(7,313)



(733)



(17,409)



3,294

Auction and Liquidation segment:













Revenues – Services and fees


2,488



5,534



5,843



12,892


Revenues – Sale of goods




11,743





17,835


Interest income – Loans and securities lending


1,436





1,436




    Total revenues


3,924



17,277



7,279



30,727


Direct cost of services


(1,296)



(7,540)



(3,631)



(14,120)


Cost of goods sold




(3,105)





(7,579)


Selling, general and administrative expenses


(2,177)



(3,077)



(3,997)



(4,566)



Segment income (loss) 


451



3,555



(349)



4,462

Financial Consulting segment:













Revenues – Services and fees


24,310



23,735



50,246



45,144


Selling, general and administrative expenses


(19,948)



(19,471)



(40,891)



(37,460)


Depreciation and amortization


(78)



(89)



(159)



(187)



Segment income


4,284



4,175



9,196



7,497

Principal Investments – Communications and Other segment:













Revenues – Services and fees


40,646



18,932



71,432



38,725


Revenues – Sale of goods


1,887



714



3,765



1,450


    Total revenues


42,533



19,646



75,197



40,175


Direct cost of services


(16,489)



(4,554)



(25,805)



(9,296)


Cost of goods sold


(1,994)



(521)



(4,245)



(1,373)


Selling, general and administrative expenses


(12,808)



(4,768)



(21,836)



(9,638)


Depreciation and amortization


(3,595)



(2,528)



(6,820)



(5,062)



Segment income


7,647



7,275



16,491



14,806

Brands segment:













Revenues – Services and fees


5,174



4,501



9,731



8,889


Trading loss and fair value adjustments on loans




(83)






    Total revenues



5,174



4,418



9,731



8,889


Selling, general and administrative expenses


(818)



(690)



(1,574)



(1,366)


Depreciation and amortization


(583)



(715)



(1,166)



(1,429)



Segment income



3,773



3,013



6,991



6,094

Consolidated operating (loss) income from reportable segments


(149,401)



121,967



(129,501)



507,143













Corporate and other expenses 


(9,358)



(11,822)



(24,536)



(24,020)

Interest income


500



56



567



105

Change in fair value of financial instruments and other


4,321



6,509



10,302



6,509

(Loss) Income on equity investments


(3,399)



(852)



3,376



23

Interest expense


(31,764)



(20,856)



(62,200)



(40,642)


(Loss) income before income taxes


(189,101)



95,002



(201,992)



449,118

Benefit from (provision for) income taxes


52,513



(19,902)



56,208



(117,420)


Net (loss) income


(136,588)



75,100



(145,784)



331,698

Net income (loss) attributable to noncontrolling interests












and redeemable noncontrolling interests


3,571



(576)



4,437



1,366


Net (loss) income attributable to B. Riley Financial, Inc.


(140,159)



75,676



(150,221)



330,332

Preferred stock dividends


2,002



1,789



4,004



3,538


Net (loss) income available to common shareholders

$

(142,161)


$

73,887


$

(154,225)


$

326,794

 

B. RILEY FINANCIAL, INC.

Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation

(Unaudited)

(Dollars in thousands)


























Three Months Ended


Six Months Ended








June 30,


June 30,








2022


2021


2022


2021

Net (loss) income attributable to B. Riley Financial, Inc.

$

(140,159)


$

75,676


$

(150,221)


$

330,332

Adjustments:















(Benefit from) provision for income taxes


(52,513)



19,902



(56,208)



117,420


Interest expense


31,764



20,856



62,200



40,642


Interest income


(500)



(56)



(567)



(105)


Share based payments


14,202



8,608



31,215



14,134


Depreciation and amortization


7,961



6,165



15,809



12,924


Gain on extinguishment of loans




(6,509)



(1,102)



(6,509)


Transactions related costs and other


3,468



245



3,759



1,530





















Total EBITDA adjustments


4,382



49,211



55,106



180,036






















Adjusted EBITDA

$

(135,777)


$

124,887


$

(95,115)


$

510,368

Operating EBITDA Adjustments:













Trading losses (income) and fair value adjustments on loans

223,927



(32,679)



292,317



(299,621)


Other investment related expenses


(13,930)



(84)



(38,795)



4,094





















Total Operating EBITDA Adjustments


209,997



(32,763)



253,522



(295,527)



















Operating Adjusted EBITDA

$

74,220


$

92,124


$

158,407


$

214,841



















 

B. RILEY FINANCIAL, INC.

Adjusted Net Income Reconciliation

(Unaudited)

(Dollars in thousands, except share data)


























Three Months Ended


Six Months Ended








June 30,


June 30,








2022


2021


2022


2021

Net (loss) income attributable to B. Riley Financial, Inc.

$

(140,159)


$

75,676


$

(150,221)


$

330,332

Adjustments:















Share based payments


14,202



8,608



31,215



14,134


Amortization of intangible assets


6,940



5,134



13,756



11,020


Gain on extinguishment of loans




(6,509)



(1,102)



(6,509)


Transactions related costs and other


3,468



245



3,759



1,530


Income tax effect of adjusting entries


(6,707)



(1,557)



(12,889)



(5,073)

Adjusted net (loss) income attributable to B. Riley Financial, Inc.

$

(122,256)


$

81,597


$

(115,482)


$

345,434



















Adjusted (loss) income per common share:













Adjusted basic (loss) income per share 

$

(4.36)


$

2.98


$

(4.13)


$

12.72


Adjusted diluted (loss) income per share 

$

(4.36)


$

2.85


$

(4.13)


$

12.04



















Shares used to calculate adjusted basic net income per share


28,051,570



27,344,184



27,953,845



27,159,257

Shares used to calculate adjusted diluted net income per share


28,051,570



28,668,465



27,953,845



28,690,444



















 

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SOURCE B. Riley Financial

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