B. Riley Financial(RILY)2025-03-04 03:55Financial Data and Key Metrics Changes - For Q4 2024, the company expects net income available to common shareholders to be between 68 million, including approximately 247 million from discontinued operations related to the divestiture of a majority interest in Great American businesses [30] - Diluted net income per share is projected to be between 2.22, with a net loss from continuing operations estimated at 187 million, primarily due to impairment charges and trading losses [31] - Operating adjusted EBITDA from continuing operations is expected to be between 14 million, with total debt reported at 221 million from the previous quarter [32] Business Line Data and Key Metrics Changes - The company established a joint venture with Oaktree Capital Management, contributing its appraisal and valuation services, which provided approximately 26 million [13] - The advisory services business, GlassRatner, had a record year in 2024, indicating strong performance in its core expertise areas [24] Market Data and Key Metrics Changes - The wealth management business's assets under management decreased from approximately 15 billion following the sale of a majority of W-2 employees [58] - The company continues to focus on its core businesses, including B. Riley Securities, Wealth Management, and advisory services, while also looking for opportunities to monetize non-core assets [17][16] Company Strategy and Development Direction - The company aims to emerge as a more nimble and focused entity, concentrating on its core businesses and reducing debt through asset monetization [17] - The management emphasized the importance of investing in its broker-dealer, wealth management, and advisory businesses to drive growth [36] - The company plans to continue monetizing non-core assets to strengthen its balance sheet and support future growth [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for recovery and growth, highlighting the strategic actions taken to improve the balance sheet and focus on core operations [66] - The management acknowledged the challenges faced due to past principal investments but is committed to moving forward and capitalizing on new opportunities [6][27] Other Important Information - The company completed the full redemption of its February 2025 senior notes, retiring its only significant maturity for that year [14] - A new $160 million senior secured credit facility was established with Oaktree, providing greater financial flexibility [15] Q&A Session Summary Question: What are the plans for liquidity and balance sheet improvement in the next six months? - Management indicated a focus on investing in core businesses and aligning the balance sheet, while remaining opportunistic in asset monetization [36] Question: Can you provide insights on the core business's EBITDA and cash flow potential? - Management suggested looking at historical performance, noting that while the company is smaller, there is still significant operating EBITDA potential [38][42] Question: What is the value and EBITDA generation potential of the telecom and advisory businesses? - Management emphasized the importance of investing in operating businesses and maintaining profitability in wealth management and advisory services [46] Question: Is there an ability to buy back debt under the new credit agreement? - Management clarified that the current senior facility does not allow for buying bonds in the open market [51] Question: What does the wealth management business look like now after the sale? - Management noted that assets under management decreased significantly, providing context for the remaining wealth management group's size [58] Question: Will future asset monetization primarily come from the Principal Investment Group? - Management stated that they will be selective in monetizing non-core assets while focusing on growing core businesses [61]