B. Riley posts latest steer on financials as it tries to rebound

by Yizhu Wang

B. Riley Financial Inc. posted a preliminary fourth-quarter loss from continuing operations as the brokerage and investment firm seeks to rebound from soured investments.

Net income swung to a profit on the strength of gains from divested operations, and it reported completing the sale of Atlantic Coast Recycling. 

Separately, the company’s chairman and co-founder suspended a tentative effort to take his company private. Bryant Riley made an informal offer last year to buy out his company for $7 a share, without disclosing who would provide financing, and a formal bid didn’t materialize. 

In a filing Monday, Riley said he “recognized that we will have additional options available to us to manage our balance sheet.” The shares rose 4.6% to $5.64 in after-hours trading.

Earnings Data

The loss from continuing operations is expected to range from $178 million to $187 million, B. Riley said in its statement Monday, citing impairments of goodwill and intangible assets, trading losses and realized and unrealized losses on investments.

Net income will be $48 million to $68 million, or $1.57 to $2.22 a share, according to the unaudited results. The sum was boosted by $236 million to $247 million from discontinued operations, the firm said, citing its divestiture of a majority interest in the Great American businesses. 

Bryant Riley has been trying to craft a turnaround after one of his company’s biggest holdings went bankrupt, and he’s been cutting the firm’s debt load while responding to investigations by federal authorities into some of B. Riley’s business deals.

B. Riley’s shares are down almost 68% from year-ago levels. The firm previously omitted its common stock dividend and suspended payouts on two sets of preferred stock. The common shares changed hands at the lowest levels in at least a decade earlier this year and quotes on some of its debt securities slid to distressed levels, but Riley said in Monday’s statement that “we do believe the worst is behind us.”

The quarter ended with about $156 million of unrestricted cash and equivalents. In a separate statement, B. Riley said the sale of Atlantic Coast Recycling will produce a gain of approximately $30 million in this year’s first quarter.

B. Riley missed multiple deadlines for getting quarterly filings to regulators last year, and at one point faced potential delisting by Nasdaq. Those reports have since been made, and the company has vowed to resume filing on time, but it cautioned during Monday’s conference call that its audited full-year 2024 results may also be delayed.

On Feb. 27, B. Riley disclosed a new $160 million debt package provided by Oaktree Capital Management, and it used approximately $118 million of it to retire a prior credit agreement with Nomura Holdings Inc. Even with the new credit facility, B. Riley is isn’t able to buy back debt in the open market, Bryant Riley said during the earnings call.