B RLY FINCL(US:RILYP)2025-11-18 21:06Financial Performance - Total revenues decreased by $111.5 million to $186.1 million for the three months ended March 31, 2025, compared to $297.6 million for the same period in 2024, representing a decline of 37.5%[348]. - Revenues from services and fees fell by $55.2 million, with significant decreases in the Capital Markets segment ($35.1 million) and Communications segment ($17.9 million)[348][349]. - The operating loss for the three months ended March 31, 2025, was $61.5 million, compared to an operating loss of $16.0 million for the same period in 2024[345]. - The net loss attributable to B. Riley Financial, Inc. was $9.975 million for the three months ended March 31, 2025, a decrease of 79.7% compared to a net loss of $49.2 million in the same period in 2024[345]. - The Capital Markets segment reported a revenue decrease of 58.2%, falling to $25.2 million from $60.3 million year-over-year[350]. - Wealth Management segment revenues from services and fees decreased by $4.5 million to $46.7 million for the three months ended March 31, 2025, down from $51.2 million in the same period of 2024, primarily due to an $8.8 million decrease in wealth and asset management fees[351]. - Communications segment revenues from services and fees decreased by $17.9 million to $63.2 million for the three months ended March 31, 2025, primarily due to a $17.6 million decline in subscription revenue[352]. - E-Commerce segment saw a revenue increase of 100%, generating $3.5 million in the three months ended March 31, 2025, compared to no revenue in the same period in 2024[347]. Investment and Assets - As of March 31, 2025, total securities and other investments owned amounted to $231.8 million, down from $282.3 million as of December 31, 2024, representing a decrease of approximately 17.9%[331]. - The carrying value of public equity securities decreased from $124.9 million as of December 31, 2024, to $79.7 million as of March 31, 2025, a decline of about 36.2%[331]. - The carrying value of private equity securities decreased from $107.6 million as of December 31, 2024, to $97.7 million as of March 31, 2025, a reduction of approximately 9.2%[331]. - Total assets under management (AUM) were approximately $18.4 billion as of March 31, 2025, down from $25.8 billion as of March 31, 2024, reflecting a significant decline in AUM[351]. Business Operations - The Company operates through five reportable business segments: Capital Markets, Wealth Management, Communications, Consumer, and E-Commerce[320]. - The Company maintains a diverse investment approach, focusing on operational improvements to maximize free cash flow from acquired companies[318]. - The Company has a significant presence in various locations, including offices in Los Angeles, New York, Chicago, and internationally in Canada, Europe, Asia, and Australia[319]. Debt and Financing - The Company executed four private exchange transactions resulting in the cancellation of approximately $29.5 million of 5.50% Senior Notes and the issuance of approximately $140.7 million aggregate principal amount of 8.00% Senior Secured Second Lien Notes due 2028[337]. - The Targus/FGI Credit Agreement provides a $30.0 million revolving loan facility, with a final maturity date of August 20, 2028[339]. - The company extended an additional subordinated loan of $5.0 million to the Targus Borrower, increasing the total loan amount to $10.0 million[340]. - The company expects to utilize existing cash and proceeds from business sales to meet debt service obligations over the next twelve months[383]. - As of March 31, 2025, the company had $138.3 million in unrestricted cash and cash equivalents and $1.6 billion in borrowings outstanding[382]. - Approximately 86% of the company's debt obligations bore interest at fixed rates as of March 31, 2025[402]. - A 1% change in floating interest rates would result in a $0.5 million change in interest expense[403]. Cash Flow - Cash provided by operating activities decreased to $0.2 million in Q1 2025 from $135.4 million in Q1 2024, a reduction of $135.2 million[395]. - Cash provided by investing activities increased to $59.2 million in Q1 2025 from $18.3 million in Q1 2024, an increase of $40.9 million[397]. - Cash used in financing activities decreased to $172.5 million in Q1 2025 from $190.9 million in Q1 2024, a reduction of $18.4 million[398]. Other Financial Metrics - Interest income from loans decreased by $18.9 million, while interest income from securities lending dropped by $37.0 million, reflecting declines of 85.6% and 97.8%, respectively[345][348]. - Selling, general and administrative expenses decreased by $11.6 million to $167.4 million during the three months ended March 31, 2025, from $178.9 million in the same period of 2024[363]. - Direct cost of services decreased by $17.0 million to $42.7 million during the three months ended March 31, 2025, primarily due to a $16.2 million decrease in the Communications segment[361]. - Cost of goods sold decreased by $2.1 million to $36.7 million during the three months ended March 31, 2025, primarily due to lower sales volume in the Consumer Products segment[362]. - Interest expense from securities lending and loan participations sold decreased by $34.7 million to $0.7 million for the three months ended March 31, 2025, due to a reduction in loaned securities from $2.0 billion to $33.0 million[370]. - Realized and unrealized losses on investments were $14.5 million for the three months ended March 31, 2025, an improvement from a loss of $34.9 million in the same period of 2024[372]. - The company reported a benefit from income taxes of $3.0 million for the three months ended March 31, 2025, compared to $21.3 million in the prior year, with an effective tax rate of 13.2%[376]. Corporate Actions - The Company completed the sale of a portion of its Wealth Management business for net cash consideration of $26.0 million, which included 36 financial advisors managing approximately $4.0 billion, or 23.6%, of assets under management as of March 31, 2025[336]. - The company completed the sale of Atlantic Coast Recycling for approximately $68.6 million and the sale of its financial consulting business for $117.8 million[386]. - The company did not pay any cash dividends on common stock during the three months ended March 31, 2025, following the suspension of dividends announced in August 2024[390]. - Common stock dividends declared for Q1 2025 were $0.50 per share, consistent with Q1 2024[391]. - Series A Preferred Stock dividends are at a cumulative rate of 6.875%, with $2.0 million in arrears as of March 31, 2025[392]. - Series B Preferred Stock dividends are at a cumulative rate of 7.375%, with $1.3 million in arrears as of March 31, 2025[393]. - The company announced a name change to BRC Group Holdings, Inc., effective January 1, 2026[341].