B RLY FINCL(RILYP) - 2024 Q4 - Annual Report

Debt Management - Total indebtedness reduced from $2.4 billion at December 31, 2023 to $1.8 billion at December 31, 2024[368] - The company anticipates continued focus on reducing indebtedness through strategic asset dispositions[368] - A new credit agreement was established on February 26, 2025, providing a three-year $125.0 million secured term loan and a $35.0 million delayed draw facility[401] - The Company entered into a new credit agreement on August 21, 2023, for a four-year $500.0 million secured term loan and a $100.0 million revolving credit facility, replacing the prior agreements with an aggregate outstanding balance of $347.9 million[542] - The outstanding balance on the term loan as of December 31, 2024, was $117.3 million, down from $475.1 million in 2023, with interest expenses of $23.5 million in 2024[548] - The Company is in compliance with all financial covenants in both the Credit Agreement and the BRPAC Credit Agreement as of December 31, 2024[545][554] Financial Performance - Total revenues for the year ended December 31, 2024, were $200.7 million, a slight increase from $198.2 million in 2023, but down from $234.3 million in 2022[382] - The company recorded realized and unrealized losses of $(263.7) million for the year ended December 31, 2024, compared to $(162.1) million in 2023[394] - Total revenues decreased by approximately $627.2 million to $838.6 million for the year ended December 31, 2024, compared to $1.5 billion for the year ended December 31, 2023, representing a decline of 42.8%[427] - The net loss attributable to B. Riley Financial, Inc. was $764.3 million, a 91.1% increase compared to a net loss of $99.9 million in the prior year[422] - Loss from continuing operations before income taxes increased to $878.7 million in 2024 from a loss of $199.3 million in 2023, primarily due to a revenue decrease of approximately $627.2 million[454] Revenue Breakdown - Wealth management revenues are derived from retail brokerage, investment management, insurance, and tax preparation services[381] - Advisory revenues for 2024 were $77.3 million, compared to $73.9 million in 2023, with advisory assets under management totaling approximately $6.9 billion[382] - Brokerage revenues for 2024 were $91.5 million, up from $88.9 million in 2023, but down from $112.8 million in 2022[382] - The Wealth Management segment saw an increase in revenues of $4.0 million to $197.5 million, driven by higher wealth and asset management fees[430] - The Financial Consulting segment experienced a revenue increase of $14.9 million to $92.2 million, mainly from bankruptcy and restructuring services[431] - The Communications segment's revenues decreased by $41.5 million to $289.4 million, largely due to a decline in subscription services[432] Asset Management - Total assets under management decreased to approximately $20.7 billion as of December 31, 2024, down from $25.4 billion in 2023 and $23.9 billion in 2022[382] - The Company signed a definitive agreement to sell a portion of its Wealth Management business for net cash consideration of $26.0 million, representing 19.3% of AUM as of December 31, 2024[400] Impairments and Adjustments - The Company recorded a significant non-cash markdown of $287.0 million related to its investment in Freedom VCM due to negative impacts from allegations against FRG's former CEO[398] - FRG and its affiliates filed for Chapter 11 bankruptcy on November 3, 2024, leading to additional non-cash impairments of $118.0 million for the Freedom VCM Investment and Vintage Loan Receivable[398] - The fair value adjustments on loans receivable for the year ended December 31, 2024 were $(325.5) million, compared to $20.2 million in 2023[374] Cash Flow and Financing Activities - Net cash provided by operating activities increased significantly to $263.6 million for the year ended December 31, 2024, compared to $24.5 million in 2023[512] - Cash provided by investing activities was $440.5 million in 2024, up from $301.2 million in 2023, driven by cash received from the sale of Brands Interests and the Great American Group[514] - Cash used in financing activities increased to $671.9 million in 2024 from $365.9 million in 2023, primarily due to repayments on term loans and redemption of senior notes[515] Interest Income and Expenses - Interest income from loans decreased by $69.1 million to $54.1 million, reflecting a 56.1% decline[422] - Interest income from securities lending decreased by $90.8 million to $70.9 million for the year ended December 31, 2024, due to a decrease in securities borrowed balance from $2.9 billion to $43.0 million[437] - Interest expense from securities lending and loan participations sold decreased by $79.3 million to $66.1 million for the year ended December 31, 2024, due to a decline in securities lending activities[451] Corporate Transactions - The Company signed an equity purchase agreement to sell all membership interests of GlassRatner and Farber for $117.8 million[383] - The Company completed the sale of its majority-owned subsidiary Atlantic Coast Recycling, LLC for approximately $68.6 million and the sale of part of its Wealth Management business for $26.0 million in 2025[507]