B Riley Financial Inc (RILYL) 2023 Q3 法說會逐字稿

Good morning, and welcome to the B. Riley Financial's Third Quarter 2023 Earnings Call. My name is Britt, and I will be your call coordinator. Earlier this morning, B. Riley issued its third quarter earnings release. A copy of the release can be found on B. Riley's Investor Relations website at ir.brileyfin.com, or on the right side of your screen if you're joining us today via web.

早安，歡迎參加 B. Riley Financial 的 2023 年第三季財報電話會議。我叫布里特，我將擔任您的呼叫協調員。今天早些時候，B. Riley 發布了第三季財報。新聞稿的副本可以在 B. Riley 的投資者關係網站 ir.brileyfin.com 上找到，如果您今天透過網路加入我們，您也可以在螢幕右側找到新聞稿的副本。

Today's call includes prepared remarks from the company, which will be followed by a question-and-answer session with the management team. Joining us today from B. Riley are Bryant Riley, Chairman, Co-Founder and CEO; Tom Kelleher, Coke Founder and Co-CEO; and Philip Ahn, CFO and COO. (Operator Instructions) As a reminder, today's call is being recorded, and an audio replay of this call will be available later today. Finally, 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. Riley, you may proceed.

今天的電話會議包括公司準備好的講話，隨後將與管理團隊舉行問答會議。今天加入我們的還有 B. Riley 董事長、共同創辦人兼執行長 Bryant Riley；可口可樂創辦人兼共同執行長湯姆‧凱萊赫（Tom Kelleher）；以及財務長兼營運長 Philip Ahn。 （操作員說明）謹此提醒，今天的通話正在錄音，今天稍晚將提供該通話的音訊重播。最後，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。萊利先生，您可以繼續了。

Welcome, everyone, and thanks for joining our call. During the quarter, we continued to execute our platform strategy, generating a meaningful amount of operating EBITDA, while at the same time, maintaining disciplined focus on balance sheet flexibility to pursue our continued growth. We generated operating adjusted EBITDA of $107.5 million for the third quarter of 2023, up 34% from Q2 and operating EBITDA of $267.8 million for the first 9 months of 2023.

歡迎大家，感謝您加入我們的通話。本季度，我們繼續執行我們的平台策略，產生了大量的經營 EBITDA，同時保持對資產負債表靈活性的嚴格關注，以追求我們的持續成長。 2023 年第三季度，我們的營運調整後 EBITDA 為 1.075 億美元，比第二季度成長 34%，2023 年前 9 個月的營運 EBITDA 為 2.678 億美元。

Net loss of $76 million was driven by investment losses, which were primarily unrealized and relates to changes in mark-to-market valuation on investments that we hold. As we noted before, our investment gains and losses for any particular period are not indicative of our overall business performance, and we have a high degree of confidence in these investments.

7,600 萬美元的淨虧損是由投資損失造成的，這些損失主要是未實現的，與我們持有的投資的按市價估值的變化有關。正如我們之前指出的，我們在任何特定時期的投資收益和損失並不代表我們的整體經營業績，我們對這些投資充滿信心。

Our third quarter operating results highlighted strength across our platform with increased revenue and client activity levels picking up from earlier this year. To put this into perspective, our Q3 operating revenue was the highest quarterly total in our firm's history, and our Q3 operating EBITDA ranks third highest. On a year-to-date basis for the first 9 months, our 2023 operating revenue also ranks highest, and operating EBITDA ranks second. This is a direct outcome of our strategy in the steps we've taken to change the relative mix of stable, lower-margin revenue versus episodic higher-margin revenue.

我們第三季的營運表現突顯了我們整個平台的實力，收入增加，客戶活動水準較今年稍早有所回升。從這個角度來看，我們第三季的營業收入是我們公司歷史上最高的季度總額，我們第三季的營業 EBITDA 排名第三。從年初至今的前 9 個月來看，我們的 2023 年營業收入也排名最高，營業 EBITDA 排名第二。這是我們為改變穩定、低利潤收入與間歇性高利潤收入的相對組合所採取的策略的直接結果。

A few highlights for the quarter include strong performance from retail liquidation and another record revenue period for advisory services, which continue to perform -- outperform as an additional bright spot on our platform with increased contributions from both our specialty consulting and appraisal units in addition to a strong quarter from our real estate restructuring division.

本季度的一些亮點包括零售清算的強勁表現以及諮詢服務的另一個創紀錄收入時期，這些服務繼續表現出色，成為我們平台上的另一個亮點，除了我們的專業諮詢和評估部門的貢獻有所增加之外，我們的房地產重組部門表現強勁。

During the quarter, we also saw a meaningful increase in investment banking activity and improved performance from Wealth Management as a result of the actions we undertook to right size this business last year. In terms of our investments, we believe that equity valuations in the small-cap market are as attractive as we have seen in a number of years, and we'll look to take advantage of this opportunity, both as a principle, but also to facilitate transactions for our clients.

在本季度，由於我們去年採取了適當調整業務規模的行動，我們也看到投資銀行活動顯著增加，財富管理績效也有所改善。就我們的投資而言，我們認為小型股市場的股票估值與我們多年來看到的一樣具有吸引力，我們將尋求利用這個機會，這既是原則，也是為了為我們的客戶促進交易。

We have continued our disciplined focus on maintaining an optimal capital structure to both fund our continued growth and to take advantage of future opportunities. During the quarter, we raised approximately $150 million in equity proceeds in connection with our common stock offering in July, expanded our Nomura credit facility by approximately $240 million and reduced our other outstanding debt by over $160 million (sic) [$100 million]. Taken together, these events resulted in a meaningful change in our capitalization as of September 30. With over $2 billion of cash investment and a balanced debt profile, with the vast majority of our debt maturing in 2026 to 2028, our platform is strongly positioned as we look ahead to 2024 and beyond.

我們繼續嚴格關注維持最佳資本結構，為我們的持續成長提供資金並利用未來的機會。在本季度，我們透過7 月份的普通股發行籌集了約1.5 億美元的股權收益，將野村信貸額度擴大了約2.4 億美元，並將其他未償債務減少了超過1.6 億美元（原文如此） [1 億美元]。總而言之，截至9 月30 日，這些事件導致我們的資本發生有意義的變化。憑藉超過20 億美元的現金投資和平衡的債務狀況，我們的絕大多數債務將於2026 年至2028 年到期，我們的平台處於強勢地位：我們展望 2024 年及以後。

We founded B. Riley over 25 years ago in a principle that there was a void of financial service firms that could adequately support the needs of companies and investors focused on the lower middle market. I think that premise still remains true today, and there's no other platform as diverse and competitively positioned as ours in the ability to provide value to our clients and partners, and there is no better team than the world-class professionals across our B. Riley platform.

我們在 25 年前創立了 B. Riley，其原則是，目前缺乏能夠充分滿足專注於中低端市場的公司和投資者需求的金融服務公司。我認為這一前提在今天仍然成立，沒有其他平台能夠像我們的平台一樣多元化和具有競爭力，能夠為我們的客戶和合作夥伴提供價值，而且沒有比我們B. Riley 的世界級專業人士更好的團隊了平台。

With that, I will now turn the call over to Phil Ahn, our CFO and COO, to discuss key metrics for the quarter. Phil?

現在，我將把電話轉給我們的財務長兼營運長 Phil Ahn，討論本季的關鍵指標。菲爾？

Thanks, Bryant. For the third quarter of 2023, B. Riley generated total revenues of $462 million, which represents a 48% increase from $312 million for the same period in 2022. Total revenues also increased by 86% to $1.3 billion for the first 9 months of 2023 compared to $699 million in the prior year period. Growth in revenue during the quarter was primarily driven by our Auction and Liquidation segment, Consumer segment and Financial Consulting segment.

謝謝，Kobe。 2023 年第三季度，B. Riley 的總收入為 4.62 億美元，比 2022 年同期的 3.12 億美元增長了 48%。2023 年前 9 個月的總收入也增長了 86%，達到 13 億美元相比之下，去年同期為6.99 億美元。本季營收的成長主要是由我們的拍賣和清算部門​​、消費者部門和財務諮詢部門所推動的。

On a GAAP basis, we recorded a third quarter net loss of $76 million, primarily attributable to unrealized investment losses of the equity investments that we hold. Year-to-date, we reported a net loss of $16 million.

根據公認會計原則，我們第三季淨虧損為 7,600 萬美元，主要歸因於我們持有的股權投資的未實現投資損失。今年迄今為止，我們的淨虧損為 1,600 萬美元。

Despite the markdowns in our investment portfolio, our platform continues to deliver strong operating results. For the third quarter of this year, operating revenues increased to $473 million, up from $319 million in the prior year quarter. Operating revenues increased to $1.22 billion for the first 9 months of 2023, up from $843 million in the same prior year period.

儘管我們的投資組合有所下降，但我們的平台仍持續提供強勁的營運績效。今年第三季度，營業收入從去年同期的 3.19 億美元增至 4.73 億美元。 2023 年前 9 個月的營業收入從去年同期的 8.43 億美元增至 12.2 億美元。

Third quarter operating adjusted EBITDA increased to $107.5 million, up from $106.2 million in the prior year quarter. And year-to-date, operating adjusted EBITDA increased to $268 million, up from $265 million in the first 9 months of 2022. As a reminder, adjusted EBITDA and our metrics for operating and investment results may be considered non-GAAP financial measures. Investors can find additional details relating to these metrics, including a reconciliation to the nearest GAAP measures in our earnings release and our financial supplement, which will be posted to our Investor Relations website.

第三季調整後營運 EBITDA 增至 1.075 億美元，高於去年同期的 1.062 億美元。今年迄今為止，調整後的經營EBITDA 增至2.68 億美元，高於2022 年前9 個月的2.65 億美元。需要提醒的是，調整後的EBITDA 以及我們的經營和投資績效指標可能被視為非GAAP 財務指標。投資者可以找到與這些指標相關的更多詳細信息，包括我們的收益發布和財務補充中最接近的 GAAP 衡量標準的對賬，這些信息將發佈在我們的投資者關係網站上。

Now turning to a summary of our balance sheet as of September 30. At quarter end, we had approximately $252 million of unrestricted cash and cash equivalents, $1.2 billion in net securities and other investments owned at fair value and $549 million in loans receivable at fair value. Total cash and investments was $2.05 billion, including $58 million of other investments reported in prepaid and other assets.

現在轉向我們截至9 月30 日的資產負債表摘要。截至季度末，我們擁有約2.52 億美元的不受限制的現金和現金等價物、12 億美元的淨證券和按公允價值擁有的其他投資以及按公允價值計算的5.49 億美元的應收貸款價值。現金和投資總額為 20.5 億美元，其中包括預付和其他資產中報告的 5,800 萬美元其他投資。

Total debt as of September 30 was approximately $2.36 billion. Total debt net of cash and investments was $311 million at quarter end.

截至 9 月 30 日，債務總額約 23.6 億美元。截至季末，扣除現金和投資的總債務為 3.11 億美元。

Finally, we declared our regular quarterly dividend of $1 per share, which we paid on or about November 30 to stockholders of record as of November 20. In addition, our Board has approved an annual share repurchase plan under which B. Riley may repurchase up to $50 million of our common shares.

最後，我們宣布了每股1 美元的定期季度股息，我們於11 月30 日左右向截至11 月20 日在冊的股東支付了股息。此外，我們的董事會還批准了年度股票回購計劃，根據該計劃，B. Riley 可以回購價值 5000 萬美元的普通股。

This completes my financial summary. I'll now turn the call over to Tom Kelleher, our co-CEO, to discuss our business segments. Tom?

我的財務摘要到此結束。我現在將把電話轉給我們的聯合執行長湯姆凱萊赫 (Tom Kelleher)，討論我們的業務部門。湯姆？

Thanks, Phil. B. Riley's unique combination of businesses and collaborative team approach has enabled us to continue to deliver against the backdrop of challenging markets. Throughout 2023, we have remained focused on executing on our strategic plans by continuing to invest in our platform, extending and strengthening our market share and building out our execution capabilities.

謝謝，菲爾。 B. Riley 獨特的業務與協作團隊方法相結合，使我們能夠在充滿挑戰的市場背景下繼續交付成果。在整個 2023 年，我們仍然專注於執行我們的策略計劃，繼續投資我們的平台，擴大和加強我們的市場份額，並增強我們的執行能力。

Excluding our investment results, our Capital Markets segment contributed operating revenues of $151 million and operating income of $51 million during the third quarter. Within this segment, revenues from B. Riley Securities represented a year-over-year increase of over 10% with investment banking fees revenue up over 100% from Q2, driven by significantly higher underwritten offerings.

不包括我們的投資成果，我們的資本市場部門在第三季貢獻了 1.51 億美元的營業收入和 5,100 萬美元的營業收入。在該細分市場中，在承銷產品大幅增加的推動下，B. Riley Securities 的營收年增超過 10%，投資銀行費用收入較第二季成長超過 100%。

In addition to adding several new clients in Q3, we completed key mandates for several repeat clients, including Harrow Health and Landsea Homes. Our M&A pipeline is beginning to bear fruit, and we expect activity to accelerate going into 2024.

除了在第三季增加幾位新客戶外，我們還完成了幾個回頭客的關鍵任務，包括 Harrow Health 和 Landsea Homes。我們的併購管道已開始取得成果，我們預計活動將在 2024 年加速。

B. Riley Securities has established its leadership in capital formation for small caps in the middle market. As we continue to focus on developing and adding talent to expand our coverage, we believe we are positioned to increase market share as investment banking activity returns to more normalized activity levels.

B. Riley Securities 已在中間市場小型股資本形成方面確立了領先地位。隨著我們繼續專注於培養和增加人才以擴大我們的覆蓋範圍，我們相信，隨著投資銀行活動恢復到更正常化的活動水平，我們將能夠增加市場份額。

In our Wealth Management segment, revenues increased both year-over-year and on a sequential basis to $51 million. Our third quarter results demonstrate continued progress in our strategic initiatives to realign this business with improving margins and an upward trend in reoccurring revenues.

在我們的財富管理部門，營收年增至 5,100 萬美元。我們第三季的業績表明，我們的策略舉措不斷取得進展，以提高利潤率和經常性收入的上升趨勢來調整該業務。

At quarter end, our wealth assets under management totaled $24 billion, and our producer base remained flat at approximately 400, representing a balanced mix between independent and W-2 advisers. As capital market activity improves, we believe there is an opportunity for more upside in this business.

截至季末，我們管理的財富資產總額為 240 億美元，我們的生產者基數維持在 400 人左右，代表了獨立顧問和 W-2 顧問之間的平衡組合。隨著資本市場活動的改善，我們相信該業務有更大的上升空間。

In Auction and Liquidations, B. Riley Retail Solutions had a robust third quarter, generating segment revenues of $78 million and segment income of $18 million, driven by an increase in both the number and the size of our retail liquidation engagements. The influx of new business that started during Q2 continued in the third quarter with several new and ongoing domestic and European projects carrying into the fourth quarter. Engagements completed during the quarter include Bed Bath & Beyond which we led with our JV partners and Salamander Shoes in Europe. More recent engagements include Z Gallerie and Depot Germany, which will contribute to future quarters. New business in Europe also continues to be promising as European retailers feel the effects of poor sales, reduced consumer spending and rising interest rates.

在拍賣和清算業務方面，B. Riley Retail Solutions 第三季業績強勁，在我們零售清算業務數量和規模增加的推動下，部門收入達到 7,800 萬美元，部門收入達到 1,800 萬美元。第二季開始的新業務湧入第三季繼續，幾個新的和正在進行的國內和歐洲項目延續到第四季度。本季完成的項目包括我們與合資夥伴共同領導的 Bed Bath & Beyond 項目以及歐洲的 Salamander Shoes。最近的合作包括 Z Gallerie 和 Depot 德國，這將為未來幾季做出貢獻。隨著歐洲零售商感受到銷售不佳、消費者支出減少和利率上升的影響，歐洲的新業務也持續充滿希望。

Financial Consulting segment revenues of $37 million represents an increase both on a sequential and absolute basis as another record period for our advisory services business. Segment income was $10.5 million for the quarter, and we are seeing momentum continue into what is historically a busy season in Q4.

財務諮詢部門的收入達到 3,700 萬美元，無論是環比或絕對值均實現成長，成為我們諮詢服務業務的另一個創紀錄時期。該季度的部門收入為 1050 萬美元，我們看到第四季的勢頭仍在延續，進入歷史上的繁忙季節。

Increasing levels of client activity across bankruptcy and litigation, consulting, appraisal and real estate restructuring contributed to our strong quarterly results. Additionally, our team of professionals at Farber have already contributed meaningful results in joining our platform in February. This team operates as a seamless extension of our core bankruptcy and restructuring services in the Canada market, and we are currently in the process of introducing legacy Farber's interim management and executive search as a new capability for us in the United States. We look forward to bringing our forensic accounting services to Canada in the near future as well.

破產和訴訟、諮詢、評估和房地產重組的客戶活動水準不斷提高，為我們強勁的季度業績做出了貢獻。此外，我們 Farber 的專業團隊在二月加入我們的平台時已經做出了有意義的成果。該團隊是我們在加拿大市場的核心破產和重整服務的無縫延伸，目前我們正在引入法伯遺留的臨時管理和高階主管搜尋服務，作為我們在美國的一項新能力。我們期待在不久的將來將我們的法務會計服務帶到加拿大。

In our Appraisal division, year-over-year revenues and operating income increased across the board in all of our business lines, including inventory, machinery and corporate valuations. Our appraisal business has continued to steadily gain market share over the last 5 years, and we expect demand from asset-based lenders to remain robust.

在我們的評估部門，所有業務線（包括庫存、機械和企業估值）的收入和營業收入都比去年同期全面成長。我們的評估業務在過去五年中持續穩定擴大市場份額，我們預計資產貸款機構的需求將保持強勁。

Turning to our communications portfolio. Segment revenues were $84 million and segment income was $7.5 million for the third quarter. As a reminder, we acquired these businesses at opportunistic valuations and with an understanding that the portions of the respective market segments may continue to decline. We acquired United Online in 2016 and magicJack in late 2018. Since then, we've generated cash flows in excess of our original purchase prices for these businesses within about 2 years in the case of United Online and within 3.5 years for magicJack. Both continue to be strong cash flow contributors to B. Riley. Based on our earlier successes with these businesses, we added Marconi Wireless to our portfolio in late 2021 and Lingo BullsEye through a series of transactions over the last year, which contributed to the significant increase in this segment.

轉向我們的通訊產品組合。第三季部門營收為 8,400 萬美元，部門營收為 750 萬美元。提醒一下，我們以機會主義估值收購了這些業務，並了解各自細分市場的份額可能會繼續下降。我們於 2016 年收購了 United Online，並於 2018 年底收購了 magicJack。從那時起，我們在 United Online 的大約 2 年內和 magicJack 的 3.5 年內產生的現金流超過了這些業務的原始購買價格。兩人仍然是 B. Riley 現金流的強勁貢獻者。基於我們早期在這些業務上取得的成功，我們於2021 年底將Marconi Wireless 添加到我們的投資組合中，並透過去年的一系列交易將Lingo BullsEye 添加到我們的投資組合中，這促成了該細分市場的顯著成長。

In our Consumer segment, revenues of $63 million for the third quarter were largely driven by the addition of targets to our platform in Q4 of last year in addition to the brand licensing revenues from our 6 brands portfolio. Targus has faced challenges in 2023 due to softness in the overall PC marketplace, and as a result we recorded a noncash goodwill and trade name impairment charge of $35.5 million, which contributed to a segment loss for the quarter. However, with the strength of the Targus brand and financial strength at B. Riley, we believe Targus will be competitively positioned to gain share as the PC market recovers.

在我們的消費者細分市場中，第三季的收入為 6,300 萬美元，主要是由於去年第四季度我們平台上增加的目標以及我們 6 個品牌組合的品牌授權收入推動的。由於整個 PC 市場疲軟，Targus 在 2023 年面臨挑戰，因此我們記錄了 3,550 萬美元的非現金商譽和商號減損費用，這導致了本季的部門虧損。然而，憑藉 Targus 品牌的實力和 B. Riley 的財務實力，我們相信隨著 PC 市場的復甦，Targus 將具有競爭優勢並贏得市場份額。

Now I'd like to turn the call back over to Bryant. Bryant?

現在我想把電話轉回給Kobe。科比？

Thanks, Tom. Before we open up the call for Q&A, I just wanted to take a few moments to address the news surrounding FRG. It wouldn't be appropriate for us to speculate or provide commentary on the reported allegations. However, I do think it's important for us to lend context to how we view FRG as a business and our rationale for that investment.

謝謝，湯姆。在我們開始問答之前，我只想花一些時間來談談有關 FRG 的新聞。我們不宜對所報告的指控進行推測或發表評論。然而，我確實認為，對於我們來說，提供背景資訊來說明我們如何看待 FRG 作為一項業務以及我們進行該投資的理由是很重要的。

During the quarter, we announced our role leading the financing of FRG's $2 billion take-private transaction. We placed a significant portion of the equity and principally invested in the deal alongside management and other co-investors. We own a little over 30% equity interest in the private entity in connection with that transaction. FRG is comprised of 6 distinct businesses with over 3,000 combined locations across the U.S. and Canada, including American Freight, Badcock Furniture, Buddy's Home Furnishing, Pet Supply Plus, Sylvan Learning Centers and the Vitamin Shoppe. Given our view that FRG's public valuation was below the sum of its parts, we saw a compelling opportunity to participate in its take private as do many co-investors of that deal.

在本季度，我們宣布了我們在 FRG 20 億美元私有化交易融資中的主導地位。我們投入了很大一部分股權，並主要與管理層和其他聯合投資者一起投資於該交易。我們擁有與該交易相關的私人實體 30% 多一點的股權。 FRG 由 6 家不同的企業組成，在美國和加拿大擁有 3,000 多個營業地點，包括 American Freight、Badcock Furniture、Buddy's Home Furnishing、Pet Supply Plus、Sylvan Learning Centers 和 Vitamin Shoppe。鑑於我們認為 FRG 的公開估值低於其各個部分的總和，我們看到了一個令人信服的機會，可以像該交易的許多共同投資者一樣參與其私有化。

We invested in FRG based on the fundamental of those distinct businesses, that is we underwrote and that is what we invested in, the FRG business. And our confidence in these businesses has not waned at all. From an operational perspective, FRG is not run by any one individual. As franchise businesses, these companies are run by 6 different management teams that operate with their own infrastructures. FRG was formed through the purchase of shares of the founder of Liberty Tax in 2018. We purchased these shares at approximately $8 per share, and we were a largest shareholder than the current management team at that time. We realized a return of over 30% IRR over the next few years on that original investment. We know these assets.

我們投資 FRG 是基於這些獨特業務的基本原理，那就是我們承保了，這就是我們投資的 FRG 業務。我們對這些企業的信心絲毫沒有減弱。從營運角度來看，FRG 不是由任何個人營運的。作為特許經營企業，這些公司由 6 個不同的管理團隊經營，這些團隊擁有自己的基礎設施。 FRG是在2018年透過購買Liberty Tax創辦人的股票而成立的。我們以每股約8美元的價格購買了這些股票，我們是當時比現任管理團隊最大的股東。在接下來的幾年裡，我們的原始投資實現了超過 30% 的 IRR 回報。我們了解這些資產。

As CEO, Brian Kahn was the architect to help put these businesses together to form FRG as it is known today. I've known Brian for many years and have had no direct experience with what has been alleged. We learned of this matter late last week like many others, and we continue to closely monitor relevant developments. However, I have no interest in going through hypotheticals and speculation.

作為首席執行官，布萊恩·卡恩 (Brian Kahn) 是幫助將這些業務整合在一起形成今天眾所周知的 FRG 的架構師。我認識布萊恩很多年了，對所指控的事情沒有直接的經驗。我們和其他許多人一樣，在上週晚些時候獲悉此事，並將繼續密切關注相關事態發展。然而，我沒有興趣進行假設和猜測。

B. Riley's business is much more than just FRG and to the extent to which we have ever needed to work to protect the firm's interest and that of our investment partners, we have and always will. With that, we are ready to open for Q&A. As always, we're happy to address any questions within the context of our results and our overall business. Operators, please open the line for questions. Thanks.

B. Riley 的業務不僅僅是 FRG，在我們需要努力保護公司和投資合作夥伴利益的範圍內，我們已經而且將永遠如此。這樣，我們就可以開始問答了。一如既往，我們很樂意解決有關我們的業績和整體業務的任何問題。接線員，請打開線路提問。謝謝。

(Operator Instructions) my first question comes from Sean at Charles Lane Capital.

（操作員說明）我的第一個問題來自 Charles Lane Capital 的 Sean。

So on the consumer side, how big did the revenue increase? Like what contribution came from Targus on that?

那麼在消費者方面，收入增加了多大呢？塔格斯對此有何貢獻？

Phil, do you have that number? I can tell you that effectively, I can break it down for you on EBITDA and will come back to you. But Targus was close to breakeven EBITDA for the quarter. The brands business represented the vast majority of the EBITDA, and the brands business is doing great.

菲爾，你有那個號碼嗎？我可以有效地告訴你，我可以為你細分 EBITDA，然後再回覆你。但塔格斯本季的 EBITDA 接近收支平衡。品牌業務佔 EBITDA 的絕大多數，品牌業務表現出色。

And just remind me, what is that Scotch & Soda, is that currently impacted?

請提醒我，蘇格蘭蘇打水是什麼，目前受到影響嗎？

So we have 6 brands that consist of smaller brands that we originally acquired from Bluestar. And then the bigger ones are Justice, Hurley, Scotch & Soda and then we also have a majority position in PB. So those are the majority. We're actually seeing some exciting momentum in Limited Too. That's one of our 6 brands where that's got a kind of many of the children that shop there are now mothers, and there's a lot of momentum around that brand. So it's -- we'll see what happens, but there's definitely some momentum there.

因此，我們有 6 個品牌，其中包括我們最初從藍星收購的較小品牌。然後更大的是 Justice、Hurley、Scotch & Soda，然後我們在 PB 中也佔有多數地位。所以這些是大多數。實際上，我們在 Limited Too 中看到了一些令人興奮的勢頭。這是我們的 6 個品牌之一，在那裡購物的許多孩子現在都成為了母親，而且該品牌有很大的發展勢頭。所以，我們會看看會發生什麼，但肯定有一些動力。

Got it. And then on Auction and Liquidation, big quarter. How should we think about the cadence of that business I mean, for the current quarter, are you seeing engagements? How do we kind of model that out?

知道了。然後是拍賣和清算，大季度。我們應該如何考慮該業務的節奏，我的意思是，在本季度，您是否看到了業務量？我們如何對其進行建模？

Yes. So look, we have tried to be really clear about how we think about the episodic businesses. And for a long time, the broker dealer was really the driver of the EBITDA and episodic businesses. We have always known that liquidation and retail advisory would have its time, and that business has been on breakeven when there's nothing going on through some advisory stuff and things like that. And that's the same with the broker-dealer. When there's no capital markets and there's just no M&A, which has been the environment kind of off and on over the course of the last 3 or 4 months, our goal is just to breakeven and to have meaningful upside when things turn. And I think what you saw this quarter is there is a little bit more distress in the retail side, both domestically and Europe. We are a leader there, and we had one of our best quarters ever. And I can't tell you that the timing of the next event, it's really short usually. We will find out a month before there's a company that the banks may want to do something. Usually happens in Q4 because what you typically do is give a retailer through the holidays. So I will say that as I look forward in the next year of that business, I think it's going to be a very strong business. But I can't tell you that like there's an exact backlog. There's a lot of activity.

是的。所以看，我們試著真正清楚地了解我們對情境業務的看法。長期以來，經紀自營商確實是 EBITDA 和偶發性業務的推動者。我們一直都知道，清算和零售諮詢會有它的時間，當一些諮詢和類似的事情沒有發生任何事情時，業務就會保持盈虧平衡。經紀自營商也是如此。當沒有資本市場，也沒有併購時，在過去的三、四個月裡，這種環境時斷時續，我們的目標只是實現收支平衡，並在情況好轉時實現有意義的上升。我認為本季您看到的是，國內和歐洲的零售業都面臨著更多的困境。我們是那裡的領導者，我們度過了有史以來最好的季度之一。我不能告訴你下一次活動的時間，通常很短。我們會在一個月前發現有一家公司銀行可能會想要做一些事情。通常發生在第四季度，因為您通常會在假期期間向零售商提供服務。所以我想說，當我展望明年的業務時，我認為這將是一項非常強勁的業務。但我不能告訴你，好像有確切的積壓。有很多活動。

Okay. A lot of news out there on a particular landlord recently filing for bankruptcy. Can you comment on just is your real estate solutions business seeing any uptick in activity?

好的。最近有很多關於某個房東申請破產的新聞。您能否評論一下您的房地產解決方案業務的活動是否增加？

Yes. I mean we're definitely seeing an uptick in activity. I just can't quantify it for you.

是的。我的意思是，我們肯定會看到活動增加。我只是無法為你量化。

Okay, fair enough. And then just last for me, just on the buyback, timing of that. I mean the stocks obviously have been hit recently. Is that something that's going to be felt soon, or how are you guys thinking about that?

好吧，很公平。最後對我來說，就是回購的時機。我的意思是，這些股票最近顯然受到了打擊。這是很快就會感受到的嗎？或者你們對此有何看法？

I mean it's obviously something that we've done in the past, we'll do in the future when we think it makes sense. I mean, realize that what is not on our balance sheet is the decision we made to sell bonds to a broad array of buyers because yield was hard to get 2 years ago. And that is a huge asset. If we were to buy those bonds back in the open market, that would be from where we issued them over $280 million profit. So we have -- we can do that. We have to determine whether we think the opportunities are better than the yield that those trade. Obviously, we have equity out there that is -- has a very low yield, and we feel like that's very undervalued. Or will -- but the other thing I've said, Sean, before is the #1 thing we will do is we will utilize those dollars for retail advisory situations, liquidations where we are a principal that's our best IRR. and then there's just not a lot of buyers of small-cap stocks and there's not a lot of funders of small cap companies. And this is a time where we think we can use our balance sheet to really create a lot of value for our shareholders. If you remember the last go around, after COVID, I mean, we changed our whole business based on what we did there. Our EBITDA doubled. And we think that this environment is a great environment for us. We are incredibly well positioned to take advantage of that.

我的意思是，這顯然是我們過去做過的事情，將來當我們認為有意義時我們也會這樣做。我的意思是，意識到我們的資產負債表上沒有的是我們向廣大買家出售債券的決定，因為兩年前很難獲得收益率。這是一筆巨大的資產。如果我們在公開市場上回購這些債券，我們將從發行債券中獲得超過 2.8 億美元的利潤。所以我們可以做到這一點。我們必須確定我們是否認為機會比這些交易的收益更好。顯然，我們的股票殖利率非常低，我們覺得它的價值被嚴重低估了。或會- 但我之前說過的另一件事，肖恩，我們要做的第一件事是，我們將利用這些美元進行零售諮詢、清算，在這些情況下，我們是委託人，這是我們最好的內部報酬率。然後，小型股的買家不多，小型股公司的資助者也不多。現在我們認為我們可以利用我們的資產負債表為股東真正創造大量價值。如果你還記得新冠疫情之後的最後一次復工，我的意思是，我們根據在那裡所做的事情改變了我們的整個業務。我們的 EBITDA 翻了一番。我們認為這個環境對我們來說是一個很好的環境。我們處於非常有利的位置來利用這一點。

Okay, yes. I guess just you're trading at -- the stock is at a kind of alarmingly high yield. Any thought of maybe diverting some of the funds you guys use for dividend towards either more buybacks or buying the bonds, just given how high your dividend deal is today.

好吧，是的。我猜你正在交易的股票的收益率高得驚人。考慮到今天的股息交易有多高，是否有可能將你們用於股息的部分資金轉移到更多回購或購買債券。

Look, I think that we would -- the dividends are very important to us, and it's important for us to return a portion of our EBITDA to shareholders. I think what we could do if we wanted to be more aggressive around on those things. We have some -- like the brand assets are amazing assets. They generate $50 million of dividends. Those assets are super valuable. Do we think from Tom -- and the partners here are in that business are amazing and I'm a huge fan. But is that something that historically has traded at 12x, maybe trade at 8x or 10x now? That's something that if things got -- if there was an opportunity for us to do something dramatic because our shares, our business is being undervalued, we would not hesitate to do something like that.

我認為，股息對我們來說非常重要，而且將部分 EBITDA 回饋給股東也很重要。我認為如果我們想在這些事情上更加積極主動，我們可以做些什麼。我們有一些——例如品牌資產是驚人的資產。他們產生 5000 萬美元的股息。這些資產非常有價值。我們認為湯姆和這裡的合作夥伴在這個行業都很棒，而我是它的超級粉絲。但這是歷史上以 12 倍交易的東西嗎，現在可能以 8 倍或 10 倍交易嗎？如果事情發展成這樣——如果我們有機會做一些戲劇性的事情，因為我們的股票、我們的業務被低估，我們會毫不猶豫地做這樣的事情。

(Operator Instructions)

（操作員說明）

We have an e-mail in question. This is Mike Frank. Bryant, can you walk through the updated recurring EBITDA and then go through the forward interest expense and maybe touch on the breakeven for B. Riley Securities.

我們有一封有問題的電子郵件。這是麥克·弗蘭克。 Bryant，您能否介紹一下更新後的經常性 EBITDA，然後介紹遠期利息支出，或許還可以談談 B. Riley 證券的損益平衡點。

Sure. So the breakeven EBITDA, when you're talking about breakeven where we're paying for our whole dividend, right, paying all on interest expense. It's in and around $85 million. And let me give you how we underwrite that $85 million and then you can kind of work through those numbers. So the way that we underwrite that $85 million is the broker-dealer or for a long period of time, was averaging $30 million a quarter in EBITDA. We just -- we underwrite that at $15 million a quarter. Obviously, it did more this quarter. The retail advisory can be all over the place, but we underwrite that to $7 million a quarter. Appraisal advisory, I mean, look at those numbers, those numbers -- the appraisal business is up 35%. Advisory is up far more than that. Those 2 businesses this quarter did over $10 million in EBITDA. So we underwrite that to $8 million to $10 million in EBITDA per quarter. So you're at about $30 million. Telecoms, we were underwriting that to closer to $70 million, $80 million a quarter. I think it's in and around $15 million to $17.5 per million quarter, the telecom assets. Wealth, we underwrite to about $4 million per quarter. Brands, including BB, $12 million per quarter. Interest income in and around $25 million per quarter, $25 million to $30 million per quarter. and Targus, $10 million per quarter. So Targus right now is -- last quarter was flat. It's going to be EBITDA positive this quarter, and we are starting to see the PC market come back for many, many years. That business generated at least $40 million in EBITDA per quarter. So we're not going to -- we recognize right now that, that business is up but in our long-term model, we underwrite that. So if you add all that up, it comes out to somewhere and then take $10 million from Core it comes out to somewhere in and around $85 million, $90 million. And then there's -- we think those are the conservative views of each of those businesses.

當然。因此，盈虧平衡的 EBITDA，當你談論盈虧平衡時，我們支付全部股息，對吧，支付全部利息費用。其價值約為 8500 萬美元。讓我告訴你我們如何承保這 8500 萬美元，然後你就可以計算這些數字了。因此，我們為經紀交易商承保 8,500 萬美元，或在很長一段時間內，平均每季 EBITDA 為 3,000 萬美元。我們只是——我們每季承保 1500 萬美元。顯然，本季它做得更多。零售諮詢可能無處不在，但我們每季承保 700 萬美元。我的意思是，評估諮詢，看看這些數字，這些數字——評估業務增長了 35%。諮詢的增幅遠不止於此。這兩家企業本季的 EBITDA 超過 1,000 萬美元。因此，我們每季的 EBITDA 承保額為 800 萬至 1,000 萬美元。所以你的資產大約是 3000 萬美元。電信方面，我們每季承保接近 7,000 萬美元、8,000 萬美元。我認為電信資產每百萬季約為 1500 萬至 17.5 美元。財富方面，我們每季承保約 400 萬美元。包括 BB 在內的品牌每季可營收 1,200 萬美元。每季利息收入在 2,500 萬美元左右，每季 2,500 萬至 3,000 萬美元。 Targus，每季 1000 萬美元。塔格斯現在的情況是——上個季度持平。本季 EBITDA 將為正值，我們開始看到 PC 市場多年來的復甦。該業務每季產生至少 4000 萬美元的 EBITDA。所以我們不會——我們現在認識到，業務正在成長，但在我們的長期模型中，我們會承保這一點。因此，如果你把所有這些加起來，它就會達到某個地方，然後從 Core 中取出 1000 萬美元，它就會達到 8500 萬美元、9000 萬美元左右。然後，我們認為這些是每個企業的保守觀點。

And then, Phil, do you want to comment on the interest expense going forward and any other corporate overhead that might be included in those recurring businesses?

然後，菲爾，您想對未來的利息支出以及可能包含在這些經常性業務中的任何其他公司管理費用發表評論嗎？

Well, I can just comment on the go-forward interest expense. We're roughly run rating at $42 million a quarter in interest expense that when we netted against some of our investments and the net interest income that we're receiving, the net of that is in the low 20s. And the -- when Bryant was just talking about the operating business that is inclusive of allocations for corporate.

好吧，我只能評論一下未來的利息支出。我們的利息支出評級大致為每季 4,200 萬美元，當我們扣除部分投資和我們收到的淨利息收入時，淨額約為 20 美元以上。當科比剛剛談論包括公司分配在內的營運業務時。

So the quick math, quick math is if you take 90 and we have D&A of 12 -- excuse me, we have interest of, call it, 40. It depends whether we're going to pay taxes or not. The dividend -- there's no CapEx in this business, very little CapEx. And you always have a minimum amount of taxes, but that's kind of the math.

所以快速算一下，如果你拿 90，我們的 D&A 是 12——對不起，我們有興趣，稱之為 40。這取決於我們是否要納稅。股利－這個產業沒有資本支出，資本支出很少。而且你總是有最低限度的稅收，但這就是數學。

Our next question comes from Brett at Nokomis Capital.

我們的下一個問題來自 Nokomis Capital 的 Brett。

Bryant, could you just remind us which brands were the -- where essentially your royalty income goes into dividend? And if there's anything else that was added into that line-item year-over-year.

布萊恩特，您能否提醒我們哪些品牌是您的特許權使用費收入基本上轉化為股息的地方？如果還有其他內容逐年加入該行項目。

Yes. Phil, do you have the breakdown of each of the brands roughly? I mean do you have that number handy.

是的。 Phil，你有每個品牌的大致分類嗎？我的意思是你手邊有那個號碼嗎？

I'm sorry, actually, I don't have that, but I can follow up on that with you, Brett.

抱歉，事實上，我沒有，但我可以和你一起跟進，布雷特。

Okay.

好的。

Yes. Brett, the number you're solving, the Brands business had a really strong quarter. Hold on will just give you a little bit to have it here. Just give me one second. But the Brands business had a really strong quarter. So 6 brands for the quarter was in and around 3-ish and change million. Hurley Justice was in and around $9 million, that's $9.5 million, that's higher than typical. Scotch & Soda, we had a little bump from Scotch & Soda because they have done a really good job of kind of getting to a spot of liquidating the assets before it's just a regular brand. So we picked up a couple of million there. So that's probably the biggest difference you're seeing is the Scotch & Soda.

是的。布雷特，您正在解決的問題是，品牌業務的季度業績非常強勁。堅持下去只會給你一點點時間來擁有它。給我一秒鐘。但品牌業務的季度表現非常強勁。因此，本季有 6 個品牌的銷售額在 3 左右，變動為 100 萬。赫爾利·賈斯蒂斯 (Hurley Justice) 的身價約為 900 萬美元，即 950 萬美元，比一般水平要高。 Scotch & Soda，我們受到 Scotch & Soda 的一點影響，因為他們在成為一個普通品牌之前，在資產清算方面做得非常好。所以我們在那裡賺了幾百萬。因此，您看到的最大區別可能是蘇格蘭威士忌和蘇打水。

Got it. Because I can't remember the timing. Scotch & Soda was not in Q3 a year ago?

知道了。因為我記不清具體時間了。 Scotch & Soda 一年前還沒有進入第三季？

No. It was not.

不，那不是。

Okay. So when I think of that -- I think it went from $9.2 million to $12.9 million of dividend income, I should think about a moderate amount of same-store growth, probably mostly limited to which we're seeing in, I guess, a bigger presence in Walmart and then adding Scotch & Soda get to that growth.

好的。因此，當我想到這一點時，我認為股息收入從 920 萬美元增加到 1290 萬美元，我應該考慮適度的同店增長，我想，這可能主要限於我們所看到的在沃爾瑪擴大業務，然後添加蘇格蘭威士忌和蘇打水可以實現這一增長。

Yes.

是的。

This concludes today's Q&A. I'd like to turn the call back to Mr. Riley for his closing remarks.

今天的問答到此結束。我想將電話轉回給萊利先生，讓他作結束語。

Thanks, operator. I want to actually answer some questions that I don't think were asked, and I think there's noise out there, so I want to address it and be crystal clear. We would have bought all of Franchise Group. We are a huge fan of that business, and it's a really simple analysis. They have a great steady EBITDA in Vitamin Shoppes. Pet Supplies Plus, which is bought for $900 million is going to get to $140 million in the next couple of years. American Freight is an unbelievable business that faces the same challenges at Targus. That's a business that was doing $110 million in 2021 and went down along with Badcock. That was our opportunity. And we would buy that over and over again. We were a founder in that business. We have been a great -- we've got a great partnership with Brian. We have a great partnership with other management teams. We've helped fund Badcock. We sold the real estate. We made 27% IRR on our receivables. We made the first batch, we made over 40% on the second batch. We have $50 million exposure there now, which is money good. And we, over time, determine that the better path was to allow shareholders that were involved in Franchise Group, many of which rolled as well as management, many of which purchased in the deal to participate. So there should be no confusion where that is. And I know that today, a statement came out from Brian denying any involvement and what happened with Prophecy, and that's good enough for me. So I'm -- I don't -- I want to just be crystal clear. I believe we are going to make a lot of money for our shareholders and Franchise Group, just like we did in the first investment when we bought a big chunk of Liberty Tax at 8 and just like we did in Badcock, and we will continue to do so. So I want to answer that question, and we'll go back to closing the call.

謝謝，接線生。我想真正回答一些我認為沒有被問到的問題，而且我認為外面有噪音，所以我想解決它並說得一清二楚。我們會買下整個特許經營集團。我們是這項業務的忠實粉絲，這是一個非常簡單的分析。維他命專賣店的 EBITDA 非常穩定。 Pet Supplies Plus 的收購價格為 9 億美元，未來幾年其銷售額將達到 1.4 億美元。美國貨運是一家令人難以置信的企業，在塔格斯也面臨同樣的挑戰。這家公司在 2021 年的營收為 1.1 億美元，但隨著 Badcock 一起倒閉。那是我們的機會。我們會一遍又一遍地購買它。我們是該行業的創始人。我們一直都很棒——我們與布萊恩建立了良好的合作關係。我們與其他管理團隊有著良好的合作關係。我們為 Badcock 提供了資金支持。我們賣掉了房地產。我們的應收帳款 IRR 為 27%。我們做了第一批，第二批我們做了40%以上。我們現在在那裡有 5000 萬美元的投資，這是一筆不錯的錢。隨著時間的推移，我們確定更好的途徑是允許參與特許經營集團的股東（其中許多是滾動的）以及管理層（其中許多是在交易中購買的）參與。所以不應該對它在哪裡感到困惑。我知道今天布萊恩發表了一份聲明，否認與預言有任何關係以及發生了什麼，這對我來說已經足夠了。所以我——我不——我只想說得一清二楚。我相信我們將為我們的股東和特許經營集團賺很多錢，就像我們在第一筆投資中所做的那樣，當時我們在8 點購買了一大筆Liberty Tax，就像我們在Badcock 所做的那樣，當時我們在8 點購買了一大筆Liberty Tax，就像我們在Badcock 所做的那樣，我們將繼續這樣做。所以我想回答這個問題，然後我們將回到結束通話。

And by the way, I just want to again, shout out to everybody that's a partner with us. Many of our shareholders that invested in our initial deal at 5 are still shareholders, and we appreciate your partnership. Our -- the people that we work with, our partners are sort -- they're the best out there, and I am so excited about how we're going to create value over the next year with a little bit of dislocation out there. So thank you, operator, and we look forward to next quarter.

順便說一句，我想再次向所有與我們合作的人大聲喊叫。許多在 5 初始交易中投資的股東仍然是股東，我們感謝您的合作。我們的——與我們一起工作的人，我們的合作夥伴——他們是最好的，我對我們將如何在明年創造價值感到非常興奮，儘管有一點混亂。謝謝您，運營商，我們期待下個季度。

Thank you. Before we conclude today's call, I will provide B. Riley's financial safe harbor statement, which includes important cautions regarding forward-looking statements made during this call.

謝謝。在我們結束今天的電話會議之前，我將提供 B. Riley 的財務安全港聲明，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 are 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 such assumptions prove incorrect, our business, operating results, financial condition and stock price could be materially negatively affected. 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 date. Such forward-looking statements include, but are not limited to, statements regarding our excitement and the expected growth of our business segments. Factors that could cause such actual results to 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.'s periodic filings with the SEC, including, without limitation, the risks described in B. Riley Financial, Inc.'s annual report on Form 10-K for the year ended December 31, 2022, under the captions Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations as applicable. Additional information will be set forth in B. Riley Financial's quarterly report on Form 10-Q for the quarter ended September 30, 2023. 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.

本次電話會議期間所做的不屬於歷史事實描述的陳述屬於前瞻性陳述，這些陳述基於管理層當前的預期和假設，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此類假設被證明不正確，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。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，且僅代表截至今日的情況。此類前瞻性陳述包括但不限於有關我們的興奮和我們業務部門的預期增長的陳述。可能導致此類實際結果與此類前瞻性陳述預期或暗示的結果有重大差異的因素包括但不限於 B. Riley Financial, Inc. 向 SEC 定期提交的文件中不時描述的風險，包括（但不限於）B. Riley Financial, Inc. 截至2022 年12 月31 日的10-K 表格年度報告中所述的風險，標題為「風險因素以及管理層對財務狀況和營運結果的討論與分析」如適用。其他資訊將在 B. Riley Financial 截至 2023 年 9 月 30 日的季度 10-Q 表格季度報告中列出。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 today for B. Riley Financial's Third Quarter 2023 Earnings Conference Call. You may now disconnect.

感謝您今天參加 B. Riley Financial 的 2023 年第三季財報電話會議。您現在可以斷開連線。