B. Riley Financial(US:RILY)2024-08-13 15:36Financial Data and Key Metrics Changes - The company reported a preliminary net loss in the range of $435 million to $475 million for Q2 2024, reflecting significant financial challenges [3] - Operating adjusted EBITDA is expected to be between $50 million and $55 million, indicating consistent contributions from core businesses despite losses [3] Business Line Data and Key Metrics Changes - The company experienced a non-cash impairment charge of approximately $28 million for Targus and a write-down of $330 million to $370 million related to the Freedom VCM investment [4] - The Great American Group business generated approximately $153 million in revenue and $35 million in operating income for fiscal year 2023, with a focus on asset appraisal and disposition [8] Market Data and Key Metrics Changes - The company noted a rapid deterioration in consumer spending, which has negatively impacted the operating performance of its investments, particularly in the Franchise Group [4] - There is renewed optimism in small-cap stocks in a post-peak rate environment, with increased transactional activity in capital raising and M&A [11] Company Strategy and Development Direction - The company is refocusing on its core financial services business and has paused its dividend to reduce outstanding debt, aiming for a leverage ratio of 2 to 3 times [7] - The acquisition of Interface Consulting International is expected to enhance the forensic accounting and litigation support practice within B. Riley Advisory Services [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the SEC's investigation, asserting no involvement in alleged misconduct related to the former CEO [6] - The company is determined to minimize the impact of principal losses on its operating subsidiaries and is focused on maximizing value from existing positions [11] Other Important Information - The company has been one of the largest net buyers of its stock over the last decade and has paid dividends every quarter since becoming listed [6] - The management team is actively working to restore confidence among stakeholders following recent challenges [6] Q&A Session Summary Question: What is the company's outlook on the current operating environment? - Management highlighted the challenges posed by consumer spending and the impact on investments, but noted a positive trend in small-cap stocks and increased transactional activity [11] Question: How is the company addressing the recent financial losses? - The company is focusing on reducing debt by pausing dividends and is committed to maximizing value from its principal positions [7][11]