B. Riley Financial(US:RILY)2024-05-15 23:26Financial Data and Key Metrics Changes - The company reported total revenues of $343 million for Q1 2024, a decrease from $389 million in the prior-year quarter, with a net loss attributable to common shareholders of $51 million driven by $59 million of investment-related losses [11][12] - Operating adjusted EBITDA was $66 million, down from $88 million in Q1 2023, while operating income remained flat at approximately $33 million compared to the same period last year [4][13][5] - Interest income from loans and securities lending decreased to $60 million from $77 million year-over-year, primarily due to a reduction in loans receivable at fair value [34] Business Line Data and Key Metrics Changes - Advisory Services achieved record revenues and operating income, generating over $100 million in annualized revenue, up from approximately $76 million three years ago [27] - Wealth Management revenues increased to $52 million in Q1 2024, surpassing prior revenues on both a year-over-year and sequential basis, with assets under management totaling $25.8 billion [37] - The Auction and Liquidation segment contributed revenues of $5.8 million and operating income of $2 million, driven by returning clients and new business activity [17] Market Data and Key Metrics Changes - The Consumer Products segment experienced a loss of $3 million due to continued softness in global PC and laptop sales, with expectations for recovery as the market normalizes [18] - The Communications businesses generated revenues of $82 million and operating income of $8 million during the quarter, contributing steady cash flow to the platform [38] Company Strategy and Development Direction - The company remains focused on capitalizing on opportunities in the small- and mid-cap space, believing it is uniquely positioned to meet the needs of companies in this market [30] - Management emphasized the importance of long-term investment strategies and the ability to manage potential downsides, acknowledging the volatility in quarterly results due to investment fluctuations [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operators and management teams of their investments, despite recent market challenges, and highlighted the potential for recovery in the consumer market [7] - The company anticipates a more active capital markets environment in the coming months, with expectations for improved deal-making activity [66] Other Important Information - The company declared a dividend of $0.50 per share related to its operating performance for Q1, with plans to pay it on or about June 11 [9][15] - Total debt as of March 31 was approximately $2.2 billion, with net debt (total debt minus cash and investments) at approximately $581 million [14] Q&A Session Summary Question: What accounts for the revenue delta in Consumer Products? - Management indicated that the delta is likely due to a mixture of different retail liquidation activities and will need further clarification [60] Question: How is the margin in the Communications segment? - Management noted that while some assets performed well, others have contracted margins, and they are exploring solutions to improve this situation [62] Question: What is the outlook for Capital Markets in Q2? - Management reported a slow start in Q2 but noted a meaningful pickup in activity recently, indicating a more favorable environment for deal-making [66] Question: What is the plan regarding the Great American Group? - Management acknowledged the unique value of the Great American Group and indicated that while they are exploring options, they are not in a rush to sell unless the price is right [70][100] Question: How does the company plan to address upcoming expenses and capital allocation? - Management emphasized the importance of maintaining a balance between operational needs and investment opportunities, with a focus on covering dividends and interest expenses through recurring operating EBITDA [83][84]