B Riley Financial Inc (RILY) 2024 Q2 法說會逐字稿

Good morning, and welcome to the B Riley Financial investor call. Earlier today, B Riley issued a press release detailing its preliminary results for the second quarter of 2024. It can be found on its Investor Relations website ir.brileyfin.com.

早安，歡迎致電 B Riley Financial 投資者。今天早些時候，B Riley 發布了一份新聞稿，詳細介紹了 2024 年第二季的初步業績。您可以在其投資者關係網站 ir.brileyfin.com 上找到該資訊。

Today's call includes prepared remarks from the company, followed by a question-and-answer session. After management's remarks, we will open the line for questions. Please note that all participants will be on a listen only mode until the Q&A portion of the call. As a reminder, this call is being recorded and an audio replay will be available on the company's Investor Relations website later today.

今天的電話會議包括該公司準備好的發言，隨後是問答環節。管理層發言後，我們將開通提問專線。請注意，在通話的問答部分之前，所有參與者都將處於只聽模式。謹此提醒，本次通話正在錄音，今天稍晚將在公司投資人關係網站上提供音訊重播。

Today's call will also include non-GAAP measures. Reconciliations of these as well as an explanation for the use of these metrics and the definition of these terms, it's available and the press release, which is available on the company Investor Relations website.

今天的電話會議還將包括非公認會計準則措施。這些指標的調節以及對這些指標的使用和這些術語的定義的解釋，可在公司投資者關係網站上取得。

And before we conclude today's call, I will provide the necessary cautions regarding forward-looking statements. Now, I will turn the call over to Mr. Bryant Riley. Mr. Reilly. Please proceed.

在我們結束今天的電話會議之前，我將對前瞻性陳述提出必要的警告。現在，我將把電話轉給布萊恩特·萊利先生。賴利先生。請繼續。

Thank you for joining the call this morning. As we announced this morning. We are continuing to finalize our financial statements for the second quarter and are working to file our quarterly report as soon as possible. In the meantime, we have released preliminary estimates for the second quarter, which included a net loss in the range of $435 million to $475 million.

感謝您今天早上參加電話會議。正如我們今天早上宣布的那樣。我們正在繼續敲定第二季的財務報表，並努力盡快提交季度報告。同時，我們發布了第二季的初步估計，其中淨虧損在 4.35 億美元至 4.75 億美元之間。

Operating adjusted EBITDA is expected to be in the range of $50 million to $55 million for the second quarter, demonstrating the consistent contribution of our core businesses. The net loss for the quarter reflects a noncash impairment charge of approximately $28 million for Targa's, a charge of $25 million, which relates to a deferred tax benefit and a non-cash write down of approximately $330 million to $370 million in our Freedom VCM investment, which relates to the franchise group take-private transaction and also our loan Vintage Capital.

第二季經營運調整後的 EBITDA 預計將在 5,000 萬至 5,500 萬美元之間，這表明我們核心業務的持續貢獻。本季淨虧損反映了 Targa's 約 2,800 萬美元的非現金減損費用，其中 2,500 萬美元的費用與遞延稅項福利和我們的 Freedom VCM 投資中約 3.3 億至 3.7 億美元的非現金減記有關，這涉及到特許經營集團的私有化交易以及我們的貸款Vintage Capital。

As it relates to our investment in FRG thesis that we and other investors underwrote for this transaction contemplated a continuation of normal course operations from its subsidiaries, that would allow the FRG parent to execute on value unlocking asset monetization strategy.

由於與我們對 FRG 的投資相關，我們和其他投資者為此交易承銷，考慮繼續其子公司的正常運營，這將使 FRG 母公司能夠執行價值釋放資產貨幣化策略。

FRG made early progress to this and with the sale of Sylvan Learning and sell Babcock furniture to cons. However, the rapid deterioration in consumer spending, which accelerated over the past quarter ultimately impacted its operating performance and investments, including in times, which filed for bankruptcy in July.

FRG 在這方面取得了早期進展，出售了 Sylvan Learning 並向 cons 出售 Babcock 家具。然而，消費者支出的迅速惡化（在過去一個季度加速）最終影響了其經營業績和投資，包括在 7 月申請破產的時代。

While these more recent events impacted valuation of our investment during this quarter. All of these issues have been compounded by the ongoing fallout related to the alleged misconduct of FRG's former CEO, which is created challenging dynamic among FRGs lenders and counterparties.

雖然最近發生的這些事件影響了我們本季的投資估值。FRG 前執行長涉嫌不當行為所帶來的持續影響使所有這些問題變得更加複雜，這在 FRG 貸方和交易對手之間造成了挑戰。

Throughout all of this, our firm as directly or indirectly, become a subject of criticism and scrutiny stemming from the circumstances surrounding Brian Kahn. To this end, as should surprise no one and not an unexpectedly, the company and I receive subpoenas in July from the SEC.

在這一切過程中，我們的公司直接或間接地因布萊恩·卡恩周圍的情況而成為批評和審查的對象。為此，公司和我於 7 月收到了 SEC 的傳票，這應該不會令任何人感到意外，也不意外。

These primarily relate to the company's dealings with prior Brian Kahn. We are responding to the subpoenas and are fully cooperating with the SEC. We are confident that the SEC will reach the same conclusion that our own internal investigation with the assistance of two separate law firms did that had no involvement with our knowledge of any alleged misconduct concerning Brian Kahn or his affiliates.

這些主要與該公司與前任布萊恩·卡恩的交易有關。我們正在回應傳票，並與 SEC 充分合作。我們相信，美國證券交易委員會將得出與我們在兩家獨立律師事務所協助下進行的內部調查相同的結論，這與我們對布萊恩·卡恩或其關聯公司涉嫌不當行為的了解無關。

Well, the business of investing inherently involve taking risks that result in wins and losses. We regret how the nature of this investment losses overshadowed the operating strength of our platform and the value our firm delivers to our clients every day, we are more focused than ever on reducing this overhang and restoring confidence among all our stakeholders, including the shareholders in this call.

嗯，投資業務本質上涉及承擔導致輸贏的風險。我們感到遺憾的是，這種投資損失的性質掩蓋了我們平台的營運實力以及我們公司每天為客戶提供的價值，我們比以往任何時候都更加專注於減少這種懸而未決的問題並恢復所有利益相關者（包括股東）的信心。

Our management team has been one of the largest net buyers of our stock in the market over the last decade, we have paid a dividend every quarter since becoming listed as B Riley Financial. Near term, we are focused on operating a strong flexible balance sheet.

過去十年來，我們的管理團隊一直是市場上最大的股票淨買家之一，自以 B Riley Financial 上市以來，我們每季都支付股息。短期內，我們的重點是營運強大、靈活的資產負債表。

Our view is Ben, that returning capital to shareholders while maintaining a leverage ratio of two to three times is a prudent strategy. We are currently outside of that range. And so we are pausing our dividend in an effort to retire more of our outstanding debt, while we have significant cash on the balance sheet, that's important to understand the benefit the capital strength provides our operating businesses and our clients. The decision to suspend our dividend will also help support other strategic decisions. We view as a priority at this time.

Ben 我們認為，在維持兩到三倍槓桿率的同時向股東返還資本是一個謹慎的策略。我們目前超出了該範圍。因此，我們暫停派發股息，以償還更多未償債務，雖然我們的資產負債表上有大量現金，但了解資本實力為我們的營運業務和客戶帶來的好處非常重要。暫停派息的決定也將有助於支持其他策略決策。我們目前將其視為優先事項。

Second quarter write-downs, notwithstanding, we continue to work towards maximizing value from our existing principle positions. Our review of the Great American Group business is advancing and we look forward to keeping you updated on that process.

儘管第二季發生了減記，我們仍繼續努力實現現有主要部位的價值最大化。我們對 Great American Group 業務的審查正在推進，我們期待向您通報該流程的最新情況。

We have so much respect and appreciation for this management team and the business at Grand American is Bill. Prior to our combination, the Great American business was overextended, and we made a concerted effort to focus on two core business lines, asset appraisal and asset disposition. Those businesses generated approximately $153 million in revenue and approximately $35 million operating income for fiscal year 2023.

我們非常尊重和讚賞這個管理團隊，而大美國的業務就是比爾。合併前，大美國業務過度擴張，我們齊心協力聚焦資產評估和資產處置兩個核心業務。這些業務在 2023 財年創造了約 1.53 億美元的收入和約 3,500 萬美元的營業收入。

In similar fashion, we have gone back to our roots and refocusing on our core financial services business, will also continue to benefit from the steady cash flow generated by our communications and brand portfolios. I still believe there is not a firm that can execute like we can.

同樣，我們回歸本源，重新專注於我們的核心金融服務業務，也將繼續受益於我們的傳播和品牌組合產生的穩定現金流。我仍然相信沒有一家公司能夠像我們一樣執行。

Despite the setback created by Evergy, we remain a platform that is purpose-built to create opportunities for the firm and for our clients and partners. When we acquired our advisory practice, formerly known as GlassRatner, the business was generating approximately $25 million in revenues and $5 million in EBITDA.

儘管 Evergy 遭遇了挫折，但我們仍然是一個專門為公司、我們的客戶和合作夥伴創造機會的平台。當我們收購我們的諮詢業務（以前稱為 GlassRatner）時，該業務產生了大約 2500 萬美元的收入和 500 萬美元的 EBITDA。

We immediately recognize the managerial talent and practices of this team cannot only make us better, but that together, we could cross-sell, grow and support tack-on acquisitions. Years later, we are on an approximately $23 million EBITDA run rate and will continue to grow and find opportunities to enhance this business through geographic and capability expansion.

我們立即認識到，團隊的管理才能和實踐不僅能讓我們變得更好，而且齊心協力，我們可以交叉銷售、發展並支持後續收購。多年後，我們的 EBITDA 運行率約為 2300 萬美元，並將繼續發展並尋找機會透過地理和能力擴張來增強這項業務。

In early July, we closed the acquisition of interface consulting International, a leading engineering and construction consulting and expert services firm. Icc joins B Riley advisory services, where it will enhance our forensic accounting and litigation support practice. Wealth management is an example, the ones, money losing business that has been rebuilt under a banner is now generating double digit EBITDA.

7 月初，我們完成了對 Interface Consulting International 的收購，這是一家領先的工程和建築諮詢及專家服務公司。Icc 加入 B Riley 諮詢服務，將增強我們的法務會計和訴訟支援實務。財富管理就是一個例子，那些虧損的業務在其旗幟下重建，現在產生了兩位數的 EBITDA。

And our institutional broker-dealer B Riley Securities, delivers incredible value to its clients and provides a multitude of opportunities to virtually all of the subsidiaries across our firm. While volatile environment for our core financial services appears to be improving, transactional activity is increasing market-wide both in terms of capital raising and M&A, concurrently, restructuring and liability management is seeing increased activity. We have added key hires serving each of these market segments in recent months and have an active pipeline of senior producers looking to join our platform.

我們的機構經紀自營商 B Riley Securities 為其客戶提供了令人難以置信的價值，並為我們公司幾乎所有子公司提供了大量機會。雖然我們核心金融服務的不穩定環境似乎正在改善，但整個市場的交易活動在融資和併購方面都在增加，同時，重組和負債管理活動也在增加。近幾個月來，我們增加了服務每個細分市場的關鍵員工，並擁有大量希望加入我們平台的高級生產商。

During the second quarter, we held our 24th Annual Institutional Investor Conference, hundreds of our clients ranging from mutual fund managers to private equity partners to public company executives joined us for our flagship event in Beverly Hills. After years of unprecedented underperformance, there appears to be renewed optimism and small-cap stocks in a post peak rate environment.

第二季度，我們舉辦了第 24 屆年度機構投資者大會，數百名客戶（從共同基金經理人、私募股權合作夥伴到上市公司高層）參加了我們在比佛利山莊舉行的旗艦活動。經過多年前所未有的表現不佳之後，在高峰利率後的環境中，樂觀情緒和小型股似乎重新抬頭。

Market segments where we have been early, such as energy infrastructure, fintech and cryptocurrency have seen renewed investor interest. We remain well positioned in our core financial services businesses and are determined to minimize the impact from our principal losses on these operating subsidiaries.

我們早期涉足的細分市場，如能源基礎設施、金融科技和加密貨幣，已經引起了投資者的新興趣。我們在核心金融服務業務中仍處於有利地位，並決心盡量減少本金損失對這些營運子公司的影響。

With that, we will open the call for questions, and I hope everyone can appreciate that we are still in the process of finalizing our financial statements and quarterly report. So it will be somewhat limited thought up I have just discussed and the announcement we released this morning. Thank you.

至此，我們將開始提問，我希望大家能夠理解，我們仍在敲定財務報表和季度報告。因此，我剛才討論的想法以及我們今天早上發布的公告將是有限的。謝謝。

Thank you. (Operator Instructions) We will pause here briefly to allow any questions to generate.

謝謝。（操作員說明）我們將在此短暫暫停，以便提出任何問題。

Apparently there are currently no questions. This concludes our question and answer. Before we conclude today's call, I will provide B Riley Financial's safe harbor statement, which includes important cautions regarding forward-looking statements made during this call.

顯然目前沒有任何問題。我們的問題和答案到此結束。在我們結束今天的電話會議之前，我將提供 B Riley Financial 的安全港聲明，其中包括有關本次電話會議期間所做前瞻性陳述的重要警告。

Statements made during this call that are not descriptions of historical facts. Our forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or if such, assumptions prove incorrect, our business operating results, financial condition and stockprice could be materially negatively affected.

這次電話會議中的發言並非對歷史事實的描述。我們的前瞻性陳述是基於管理層目前的預期和假設，並受到風險和不確定性的影響。如果此類風險或不確定性成為現實，或假設被證明不正確，我們的業務經營業績、財務狀況和股價可能會受到重大負面影響。

You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of today's day. Such forward-looking statements include, but I'm not limited to maintaining a strong flexible balance sheet, the strategic alternative review process for Great American Group and any expected related announcements.

您不應過度依賴此類前瞻性陳述，這些陳述基於我們目前掌握的信息，且僅代表今天的情況。此類前瞻性陳述包括但不限於維持強大的靈活資產負債表、Great American Group 的策略替代審查流程以及任何預期的相關公告。

And working to maximize value from existing principal positions and positioning the Firm capitalize on opportunities presented to our core operating business, could differ materially from those contemplated or implied by such forward-looking statements include, without limitation, the risks described from time to time in B Riley Financial, Inc., periodic filings with the SEC, including without limitation, the risks described in B Riley Financial, Inc., Annual Report on Form 10-K for the year ended December 31, 2023.

努力從現有主要部位中實現價值最大化，並將公司定位為利用我們核心營運業務提供的機會，可能與此類前瞻性陳述中預期或暗示的內容有重大差異，包括但不限於以下內容中不時描述的風險： B Riley Financial, Inc. 向 SEC 定期提交的文件，包括但不限於 B Riley Financial, Inc. 截至 2023 年 12 月 31 日的年度 10-K 表格年度報告中所述的風險。

Under the caption Risk Factors and management's discussion and analysis, financial condition and results of operations (inaudible) These factors should be considered carefully and Participants are cautioned not to place undue reliance on such forward-looking statements. All information is current as of today's call and B Riley Financial undertakes no duty to update this information.

在「風險因素和管理層的討論和分析、財務狀況和經營業績（聽不清楚）」標題下，應仔細考慮這些因素，並告誡參與者不要過度依賴此類前瞻性陳述。截至今天的電話會議，所有資訊均為最新信息，B Riley Financial 不承擔更新此資訊的義務。

Thank you for joining us for today's call. You may now disconnect.

感謝您參加今天的電話會議。您現在可以斷開連線。