Mar 7,2018

B. Riley Financial Reports Fourth Quarter and Full Year 2017 Financial Results

  • Revenue of $110.2 Million in Q4 and $322.2 Million for 2017
  • Adjusted EBITDA of $21.4 Million in Q4 and $69.8 Million for 2017
  • Capital Markets Revenue Up 33% over Q3 2017
  • Valuation and Appraisal Segment Record Revenues of $33.3 Million for 2017
  • Declares Special Dividend of $0.08 Per Share, in addition to Regular Dividend of $0.08 Per Share

LOS ANGELES, March 07, 2018 (GLOBE NEWSWIRE) -- B. Riley Financial, Inc. (NASDAQ:RILY), a diversified provider of financial and business advisory services, has reported results for the fourth quarter and full year ended December 31, 2017.

Fourth Quarter 2017 Highlights

  • Revenues totaled $110.2 million, up from $92.4 million in third quarter of 2017
  • Adjusted EBITDA totaled $21.4 million
  • Adjusted net income totaled $11.6 million or $0.44 per diluted share
  • Net loss of $6.1 million or $0.23 per diluted share (includes additional one-time tax expense of $13.1 million or $0.50 per diluted share in form of non-cash charges related to impact of U.S. Tax Cuts and Jobs Act)

Full Year 2017 Highlights

  • Revenues totaled $322.2 million, up from $190.4 million in 2016
  • Adjusted EBITDA totaled $69.8 million
  • Adjusted net income totaled $38.5 million or $1.59 per diluted share
  • Net income totaled $11.6 million or $0.48 per diluted share

"2017 was a milestone year for our company with our acquisitions of FBR & Co. and Wunderlich Securities in June and July of last year. The fourth quarter marked the first time we introduced our combined brokerage division under the name of B. Riley FBR, Inc. In the first two quarters together, we’ve begun to realize the benefits of our larger, but leaner platform. Since merging the companies in the third quarter of 2017, B. Riley FBR has contributed to a 33% increase in revenues in the fourth quarter compared to the third quarter for our Capital Markets segment,” said Bryant Riley, Chairman and CEO, B. Riley Financial. “We are excited by the overall momentum our combined Capital Markets business has created, namely through an enhanced equity research offering and a substantive increase in deal flow. Our ability to use our strong balance sheet to facilitate transactions has also had a meaningful effect, and we believe this is a key differentiator for both our clients and companies under coverage. Looking ahead, our focus on growing our current talent base, both from within and with strategic hires, will help us continue to build on this momentum as we look to expand on the breadth and depth of capabilities we offer our clients.”

“2017 also represented another strong year for our Valuations and Appraisals business with record revenues of $33.3 million driven by an increase in the volume of appraisal engagements. Our Appraisals business continues to be one of our most consistent segments in terms of performance, and we’re pleased to see this continued steady growth,” added Riley. “Results in our Auction and Liquidations segment were less favorable in comparison to the fourth quarter of 2016 in which we completed two large retail liquidation engagements. Despite that, our outlook for this business remains strong. Finally, we continue to be excited about our Principal Investments platform and the performance of United Online, which continues to generate significant income for us. We look forward to completing the acquisition of magicJack over the next several months, which should further increase the income contributions to our Principal Investments platform.”

Fourth Quarter 2017 Financial Summary
The increase in fourth quarter revenues to $110.2 million from the $93.2 million in the fourth quarter of 2016 was primarily driven by the completed acquisitions of FBR & Co. and Wunderlich Securities in June and July of 2017, respectively.

  • Capital Markets Segment: Revenues for the fourth quarter 2017 totaled $84.4 million compared to $16.5 million in reported revenue from the same year-ago period. The $67.9 million increase in year-over-year revenues was primarily driven by the acquisitions of FBR & Co. and Wunderlich Securities. On a sequential basis, results demonstrate a 33% increase in revenues from the $63.7 million recorded for the third quarter of 2017, the first full quarter in which results from FBR & Co. and Wunderlich Securities were included. Segment income generated $14.3 million for the quarter compared with $6.2 million in the same year-ago period.
  • Auction and Liquidation Segment: Fourth quarter revenues totaled $4.2 million compared to $51.9 million in the same year-ago period. The decrease in fourth quarter revenues was primarily due to a $28.3 million decline in services and fees and a $19.3 million decrease in the sale of goods. Segment income totaled $0.1 million for the quarter, compared to $24.2 million in the same year-ago period. Reported revenues for this segment are expected to vary substantially from quarter-to-quarter and year-to-year.
  • Valuation and Appraisal Segment: Fourth quarter revenues totaled $8.5 million compared to $8.9 million in the same year-ago period. The decrease of $0.4 million was primarily due to a decline in fee-based revenues related to appraisal engagement. Segment income for the quarter totaled $2.5 million compared with $2.8 million in the same year-ago period.
  • Principal Investments - United Online Segment: Fourth quarter revenues, which are primarily from services and fees for internet access and related subscription services, totaled $13.0 million compared to $15.9 million in the same year-ago period. Segment income for the quarter was $5.3 million, down from $5.8 million in the same year-ago period.

The company recorded a net loss of $6.1 million or $0.23 per diluted share for the fourth quarter of 2017, due to an additional one-time tax expense of $13.1 million or $0.50 per diluted share in the form of a non-cash charge relating to the impact of U.S. Tax Cuts and Jobs Act that was enacted on December 22, 2017. This compares to $12.4 million or $0.64 per diluted share recorded in the same year-ago period.

Adjusted net income (excluding the impact of share-based payments, fair value adjustments, amortization of intangible assets, restructuring costs, insurance settlement recovery, transaction costs, tax impact of aforementioned adjustments, and certain tax items) totaled $11.6 million or $0.44 per diluted share for the fourth quarter of 2017. This compares to $14.8 million or $0.76 per diluted share in the same year-ago period. (See note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP term.)

Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, transaction and restructuring expenses, insurance settlement recoveries, fair value adjustments, and share-based compensation) for the fourth quarter of 2017 totaled $21.4 million. This compares to $25.1 million in the same year-ago period. (See note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP term.)

As of December 31, 2017, B. Riley Financial had $132.8 million in unrestricted cash, $19.7 million of restricted cash, $31.5 million due from clearing brokers, $117.1 million of net securities and other investments owned, and $205.9 million of debt. Total B. Riley Financial stockholders’ equity at December 31, 2017 was $266.0 million.

Full Year 2017 Financial Summary
Revenue for the full year 2017 totaled $322.2 million, up from $190.4 million for the same year-ago period.

  • Capital Markets Segment: Revenues totaled $189.7 million compared to $39.3 million in 2016. The significant increase is attributed to the additional revenues driven by the acquisitions of FBR & Co. and Wunderlich Securities in 2017. Segment income for the year totaled $15.9 million, compared with $6.1 million in 2016.
  • Auction and Liquidation Segment: Revenues totaled $47.4 million compared to $87.7 million in 2016, due to a decline in services, fees and the sale of goods for the year. Segment income totaled $11.2 million for the year compared to $41.1 million in 2016.
  • Valuation and Appraisal Segment: Despite a slight decrease for the quarter, 2017 was a record year for this segment with annual revenue totaling $33.3 million compared to $31.7 million in 2016. The uptick in this segment was driven primarily by an increase in the volume of appraisal engagements conducted for the year. Segment income totaled $9.7 million for the year compared to $8.9 million in 2016.
  • Principal Investments - United Online Segment: Revenues totaled $51.7 million for the year compared to $31.5 million in 2016. Segment income totaled $19.5 million for 2017 compared to $9.2 million in 2016. The significant increases in segment revenues and income are reflective of 2017 being the first full year with United Online under B. Riley Financial since its acquisition on July 1, 2016.

Net income for the full year 2017 totaled $11.6 million or $0.48 per diluted share, compared to $21.5 million or $1.17 per diluted share in the same year-ago period.

Adjusted net income for the full year 2017 increased to $38.5 million or $1.59 per diluted share from $27.7 million or $1.51 per diluted share for the full year 2016. (See note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP term.)

Adjusted EBITDA for the full year 2017 increased to $69.8 million, compared to $48.9 million for the full year 2016. (See note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP term.)

Declaration of Dividend
On March 7, 2018, B. Riley Financial’s board of directors approved a regular quarterly dividend of $0.08 per share and a special dividend of $0.08, which will be paid on or about April 3, 2018 to stockholders of record as of March 20, 2018.

Conference Call
B. Riley Financial will host a conference call today March 7, 2018 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). The company's Chairman and CEO, Bryant Riley, President, Tom Kelleher, and CFO and COO, Phillip Ahn, will host the conference call, followed by a question and answer period.

Please call the conference telephone number 10 minutes prior to the start time and an operator will register your name and organization.

Date:                Wednesday, March 7, 2018
Time:                4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-Free:          1-877-451-6152
International:    1-201-389-0879

The conference call will be broadcast simultaneously and available for replay via the investor section of the company's website. A replay of the call will be available after 7:30 p.m. Eastern time on the same day through March 14, 2018.

Replay Dial-In Numbers:
Toll-Free:          1-844-512-2921
International:    1-412-317-6671
Replay Pin:      13677233

About B. Riley Financial, Inc.
Through its subsidiaries, B. Riley Financial, Inc. provides collaborative financial services and solutions to the capital raising and financial advisory needs of public and private companies and high net worth individuals. The company operates through several wholly-owned subsidiaries, including B. Riley FBR, Inc., Wunderlich Securities, Inc., Great American Group, LLC, B. Riley Capital Management, LLC (which includes B. Riley Asset Management, B. Riley Wealth Management, and Great American Capital Partners, LLC) and B. Riley Principal Investments, a group that makes proprietary investments in other businesses, such as the acquisition of United Online, Inc.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such statements include, without limitation, statements regarding our expectations, hopes or intentions regarding the future.  These forward looking statements can often be identified by their use of words such as "will", "predict", "continue", "forecast", "expect", "believe", "anticipate", "outlook", "could", "target", "project", "intend", "plan", "seek", "estimate", "should", "may" and "assume", as well as variations of such words and similar expressions referring to the future, and may include (without limitation) express or implied statements regarding future financial performance, the effects of our business model, the effects and anticipated benefits of our completed acquisitions of United Online, Inc., FBR & Co., and Wunderlich Securities, Inc., our pending acquisitions and related actions, expectations regarding future transactions and the financial impact, size and consistency of returns and timing thereof, as well as statements regarding the effect of investments in our business segments. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in each such statement. Factors that could cause actual results to differ include (without limitation) risks associated with large engagements in our auction and liquidation segment; our ability to achieve expected cost savings or other benefits with respect to our pending and completed acquisitions, in each case within expected time frames or at all; our ability to consummate anticipated transactions and the expected financial impact thereof, in each case within the expected timeframes or at all; our ability to successfully integrate recent acquisitions; loss of key personnel; our ability to manage growth; the potential loss of financial institution clients; changing economic and market conditions; the timing of completion of significant engagements and those risks described from time to time in B. Riley Financial, Inc.'s 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, 2016 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2017. 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 adjusted net income and 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 cash flow, excluding net interest expense, provisions for income taxes, depreciation, amortization, transaction expenses, restructuring costs, insurance dispute recoveries and stock-based compensation 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. The non-GAAP measures are described above and are reconciled to the corresponding GAAP measure in the unaudited condensed consolidated financial statements portion of this release under the headings “Adjusted Net Income Reconciliation” and "Adjusted EBITDA Reconciliation."

Investor Contact

Investor Relations
B. Riley Financial, Inc.
ir@brileyfin.com
(310) 966-1444


 

 

             
B. RILEY FINANCIAL, INC. AND SUBSIDIARIES   
CONSOLIDATED BALANCE SHEETS   
(Dollars in thousands, except par value)   
                December 31,   December 31,  
                2017   2016  
                (Unaudited)        
Assets              
Assets                      
  Cash and cash equivalents   $ 132,823     $ 112,105    
  Restricted cash     19,711       3,294    
  Due from clearing brokers     31,479          
  Securities and other investments owned, at fair value     145,360       16,579    
  Securities borrowed     807,089          
  Accounts receivable, net     20,015       18,989    
  Due from related parties     5,689       3,009    
  Advances against customer contracts     5,208       427    
  Prepaid expenses and other assets     22,605       5,742    
  Property and equipment, net     11,977       5,785    
  Goodwill         98,771       48,903    
  Other intangible assets, net     56,948       41,166    
  Deferred income taxes     29,229       8,619    
  Total assets   $ 1,386,904     $ 264,618    
Liabilities and Equity              
Liabilities                    
  Accounts payable   $ 2,650     $ 2,703    
  Accrued expenses and other liabilities     71,685       53,168    
  Deferred revenue     3,141       4,130    
  Due to partners     1,578       10,037    
  Securities sold not yet purchased     28,291       846    
  Securities loaned     803,371          
  Mandatorily redeemable noncontrolling interests     4,478       4,019    
  Acquisition consideration payable           10,381    
  Notes payable     2,243          
  Senior notes payable     203,621       27,700    
  Contingent consideration           1,242    
  Total liabilities     1,121,058       114,226    
                           
Commitments and contingencies              
B. Riley Financial, Inc. stockholders' equity:              
  Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued                        
  Common stock, $0.0001 par value; 40,000,000 shares authorized; 26,569,462       2       2    
  and 19,140,342 issued and outstanding as of December 31, 2017 and              
  December 31, 2016, respectively              
  Additional paid-in capital     259,980       141,170    
  Retained earnings     6,582       9,887    
  Accumulated other comprehensive loss     (534 )     (1,712 )  
  Total B. Riley Financial, Inc. stockholders' equity     266,030       149,347    
Noncontrolling interests     (184 )     1,045    
  Total equity     265,846       150,392    
  Total liabilities and equity   $ 1,386,904     $ 264,618    
                           

 

                                     
B. RILEY FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except share data)
                                     
                Three Months Ended
December 31,
  Year Ended
December 31,
                2017   2016   2017   2016
Revenues:                              
  Services and fees   $ 102,178     $ 73,730     $ 304,841     $ 164,235  
  Interest income - Securities lending     7,913             17,028        
  Sale of goods     86       19,448       307       26,116  
    Total revenues     110,177       93,178       322,176       190,351  
Operating expenses:                        
  Direct cost of services     9,277       15,773       55,501       40,857  
  Cost of goods sold     85       12,362       398       14,755  
  Selling, general and administrative expenses     80,172       33,283       213,008       82,127  
  Restructuring charge     890       302       12,374       3,887  
  Interest expense - Securities lending     5,536             12,051        
    Total operating expenses     95,960       61,720       293,332       141,626  
    Operating income     14,217       31,458       28,844       48,725  
Other income (expense):                        
  Interest income     62       286       420       318  
  Loss from equity investment     (280 )           (437 )      
  Interest expense     (3,187 )     (598 )     (8,382 )     (1,996 )
    Income before income taxes     10,812       31,146       20,445       47,047  
Provision for income taxes     (16,263 )     (8,137 )     (8,510 )     (14,321 )
    Net (loss) income     (5,451 )     23,009       11,935       32,726  
Net income attributable to noncontrolling interests     662       10,569       379       11,200  
    Net (loss) income attributable to B. Riley Financial, Inc.   $ (6,113 )   $ 12,440     $ 11,556     $ 21,526  
                                     
Basic (loss) income per share   $ (0.23 )   $ 0.65     $ 0.50     $ 1.19  
Diluted (loss) income per share   $ (0.23 )   $ 0.64     $ 0.48     $ 1.17  
                                     
Cash dividends per share   $ 0.12     $ 0.25     $ 0.67     $ 0.28  
                                     
Weighted average basic shares outstanding     26,150,502       19,004,548       23,181,388       18,106,621  
Weighted average diluted shares outstanding     26,150,502       19,511,292       24,290,904       18,391,852  
                                     
                                     

 

                     
B. RILEY FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
                     
            Year ended December 31,
            2017   2016
            (Unaudited)    
Cash flows from operating activities:          
  Net income $ 11,935     $ 32,726  
  Adjustments to reconcile net income to net cash (used in) provided by operating activities:          
    Depreciation and amortization   11,140       4,306  
    Provision for doubtful accounts   1,066       710  
    Share-based compensation   10,341       2,768  
    Recovery of key man life insurance   (6,000 )      
    Non-cash interest and other   456       136  
    Effect of foreign currency on operations   (769 )     973  
    Loss from equity investment   437        
    Deferred income taxes   5,729       3,549  
    Impairment of leaseholds and other, lease loss accrual and loss on disposal of fixed assets   3,602        
    Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests   10,799       3,032  
    Change in operating assets and liabilities:          
      Due from clearing brokers   3,359        
      Securities and other investments owned   (82,143 )     8,964  
      Securities borrowed   47,595        
      Accounts receivable and advances against customer contracts   1,031       (1,847 )
      Goods held for sale or auction   213       37  
      Prepaid expenses and other assets   (1,719 )     3,662  
      Accounts payable, accrued payroll and related expenses, accrued value   (29,791 )     23,330  
        added tax payable and other accrued expenses          
      Amounts due from related parties and partners   (11,826 )     (2,766 )
      Securities sold, not yet purchased   7,678       133  
      Deferred revenue   (668 )     884  
      Securities loaned   (64,255 )      
      Auction and liquidation proceeds payable         (317 )
        Net cash (used in) provided by operating activities   (81,790 )     80,280  
Cash flows from investing activities:          
  Acquisition of Wunderlich, net of cash acquired $4,259   (25,478 )      
  Cash acquired from acquisition of FBR & Co.   15,738        
  Acquisition of United Online, net of cash acquired $125,542 in 2016   (10,381 )     (33,430 )
  Acquisition of other businesses, net of cash acquired   (2,052 )      
  Purchases of property and equipment   (825 )     (729 )
  Proceeds from key man life insurance   6,000        
  Proceeds from sale of property and equipment and intangible asset   836       96  
  Equity investment   (1,674 )      
  Increase in restricted cash   (15,786 )     (2,809 )
        Net cash used in investing activities   (33,622 )     (36,872 )
Cash flows from financing activities:          
  Repayment of revolving line of credit         (272 )
  Proceeds from asset based credit facility   65,987       56,255  
  Repayment of asset based credit facility   (65,987 )     (56,255 )
  Repayment of notes payable   (8,336 )      
  Proceeds from participating note payable         61,400  
  Repayment of participating note payable and contingent consideration   (1,250 )     (62,650 )
  Proceeds from issuance of senior notes   179,471       27,664  
  Payment of debt issuance costs   (4,289 )      
  Proceeds from issuance of common stock         22,759  
  Payment of employment taxes on vesting of restricted stock   (3,486 )     (1,156 )
  Dividends paid   (16,755 )     (5,334 )
  Distribution to noncontrolling interests   (11,261 )     (2,007 )
        Net cash provided by financing activities   134,094       40,404  
        Increase in cash and cash equivalents   18,682       83,812  
        Effect of foreign currency on cash   2,036       (1,719 )
        Net increase in cash and cash equivalents   20,718       82,093  
Cash and cash equivalents, beginning of  year   112,105       30,012  
Cash and cash equivalents, end of year $ 132,823     $ 112,105  
                     
Supplemental disclosures:          
  Interest paid $ 18,840     $ 376  
  Taxes paid   $ 18,413     $ 685  
                     
                   

 

 
B. RILEY FINANCIAL, INC. AND SUBSIDIARIES
SEGMENT FINANCIAL INFORMATION
(Unaudited)
(Dollars in thousands)
                                 
            Three Months Ended   Year Ended
            December 31,   December 31,
            2017   2016   2017   2016
Capital Markets reportable segment:                      
  Revenues - Services and fees $ 76,514     $ 16,536     $ 172,695     $ 39,335  
  Interest income - Securities lending   7,913             17,028        
  Total revenues     84,427       16,536       189,723       39,335  
  Selling, general, and administrative expenses   (62,339 )     (10,160 )     (150,092 )     (32,695 )
  Restructuring costs     (610 )           (7,855 )      
  Interest expense - Securities lending   (5,536 )           (12,051 )      
  Depreciation and amortization   (1,627 )     (143 )     (3,794 )     (549 )
  Segment income     14,315       6,233       15,931       6,091  
Auction and Liquidation reportable segment:                      
  Revenues - Services and fees   4,197       32,533       47,376       61,891  
  Revenues - Sale of goods     2       19,350       3       25,855  
  Total revenues     4,199       51,883       47,379       87,746  
  Direct cost of services     (2,359 )     (7,917 )     (27,841 )     (17,787 )
  Cost of goods sold           (12,277 )     (2 )     (14,502 )
  Selling, general, and administrative expenses   (1,767 )     (7,491 )     (8,329 )     (14,331 )
  Depreciation and amortization   (6 )     (4 )     (21 )     (26 )
  Segment income     67       24,194       11,186       41,100  
Valuation and Appraisal reportable segment:                      
  Revenues - Services and fees   8,532       8,884       33,331       31,749  
  Direct cost of services     (3,845 )     (3,696 )     (14,876 )     (13,983 )
  Selling, general, and administrative expenses   (2,166 )     (2,399 )     (8,561 )     (8,778 )
  Depreciation and amortization   (51 )     (35 )     (181 )     (107 )
  Segment income     2,470       2,754       9,713       8,881  
Principal Investments - United Online segment:                      
  Revenues - Services and fees   12,935       15,777       51,439       31,260  
  Revenues - Sale of goods     84       98       304       261  
  Total revenues     13,019       15,875       51,743       31,521  
  Direct cost of services     (3,073 )     (4,160 )     (12,784 )     (9,087 )
  Cost of goods sold     (85 )     (85 )     (396 )     (253 )
  Selling, general, and administrative expenses   (2,768 )     (3,835 )     (11,304 )     (5,974 )
  Depreciation and amortization   (1,720 )     (1,716 )     (7,033 )     (3,518 )
  Restructuring costs     (91 )     (287 )     (723 )     (3,474 )
  Segment income     5,282       5,792       19,503       9,215  
Consolidated operating income from reportable segments   22,134         38,973         56,333         65,287    
                                 
Corporate and other expenses (including restructuring   (7,917 )     (7,515 )     (27,489 )     (16,562 )
  costs of $3,796 and $413 for the years ended December 31, 2017                      
  and 2016, respectively, and $190 and $15 for the three months                      
  ended December 31, 2017 and 2016, respectively)                      
Interest income       62       286       420       318  
Loss from equity investment     (280 )           (437 )      
Interest expense       (3,187 )     (598 )     (8,382 )     (1,996 )
  Income before income taxes     10,812       31,146       20,445       47,047  
Provision for income taxes     (16,263 )     (8,137 )     (8,510 )     (14,321 )
  Net (loss) income     (5,451 )     23,009       11,935       32,726  
Net income attributable to noncontrolling interests   662       10,569       379       11,200  
  Net (loss) income attributable to B. Riley Financial, Inc. $ (6,113 )   $ 12,440     $ 11,556     $ 21,526  
                                 
                                 

 

 

 
B. RILEY FINANCIAL, INC. AND SUBSIDIARIES
ADJUSTED EBITDA RECONCILIATION
(Unaudited)
(Dollars in thousands)
                                   
              Three Months Ended
December 31,
  Year Ended
December 31,
              2017   2016   2017   2016
Net (loss) income attributable to B. Riley Financial, Inc. $ (6,113 )   $ 12,440     $ 11,556     $ 21,526  
Adjustments:                          
  Provision for income taxes   16,263       8,137       8,510       14,321  
  Interest expense   3,187       598       8,382       1,996  
  Interest income     (62 )     (286 )     (420 )     (318 )
  Share based payments   2,662       1,736       7,950       3,567  
  Fair value adjustment               9,000        
  Depreciation and amortization   3,434       1,925       11,140       4,306  
  Restructuring costs   890       302       12,374       3,887  
  Insurance settlement recovery               (6,000 )     (1,618 )
  Transactions related costs   1,136       279       7,291       1,236  
                                   
    Total EBITDA adjustments   27,510       12,691       58,227       27,377  
                                   
      Adjusted EBITDA $ 21,397     $ 25,131     $ 69,783     $ 48,903  
                                   
                                   

 

 
B. RILEY FINANCIAL, INC. AND SUBSIDIARIES
ADJUSTED NET INCOME RECONCILIATION
(Unaudited)
(Dollars in thousands, except share data)
                                   
                Three Months Ended
December 31,
    Year Ended
December 31,
              2017   2016   2017   2016
Net (loss) income attributable to B. Riley Financial, Inc. $ (6,113 )   $ 12,440     $ 11,556     $ 21,526  
Adjustments:                          
  Share-based payments   2,662       1,736       7,950       3,567  
  Fair value adjustments               9,000        
  Amortization of intangible assets   2,174       1,566       7,422       3,254  
  Restructuring costs   890       302       12,374       3,887  
  Insurance settlement recovery               (6,000 )     (1,618 )
  Transactions related costs   1,136       279       7,291       1,236  
  Income tax effect of adjusting entries   (2,172 )     (1,535 )     (15,741 )     (4,145 )
  Tax benefit from tax election to treat acquisition of UOL               (8,389 )      
    as a taxable business combination                      
  Tax expense from new tax legislation change - Reduction   13,051             13,051        
    in Federal rate from 35% to 21%                      
                                   
Adjusted net income attributable to B. Riley Financial, Inc. $ 11,628     $ 14,788     $ 38,514     $ 27,707  
                                   
Adjusted income per common share:                      
  Adjusted basic income per share $ 0.44     $ 0.78     $ 1.66     $ 1.53  
  Adjusted diluted income per share $ 0.44     $ 0.76     $ 1.59     $ 1.51  
                                   
Shares used to calculate adjusted basic net income per share   26,150,502       19,004,548       23,181,388       18,106,621  
Shares used to calculate adjusted diluted net income per share   26,150,502       19,511,292       24,290,904       18,391,852  

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Source: B. Riley Financial, Inc.