B. RILEY FINANCIAL, INC. This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "future," "intend," "seek," "likely," "potential" or "continue," the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report to conform such statements to actual results or to changes in our expectations.
The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part II of this Quarterly Report under the caption "Risk Factors."
Risk factors that could cause actual results to differ materially from those contained in the forward-looking statements include but are not limited to risks related to: volatility in our revenues and results of operations; the unpredictable and ongoing impact of the COVID-19 pandemic; changing conditions in the financial markets; our ability to generate sufficient revenues to achieve and maintain profitability; our exposure to credit risk; the short term nature of our engagements; the accuracy of our estimates and valuations of inventory or assets in "guarantee" based engagements; competition in the asset management business; potential losses related to our auction or liquidation engagements; our dependence on communications, information and other systems and third parties; potential losses related to purchase transactions in our auction and liquidations business; the potential loss of financial institution clients; potential losses from or illiquidity of our proprietary investments; changing economic and market conditions; potential liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation; potential mark-downs in inventory in connection with purchase transactions; failure to successfully compete in any of our segments; loss of key personnel; our ability to borrow under our credit facilities or at-the-market offering as necessary; failure to comply with the terms of our credit agreements or senior notes; our ability to meet future capital requirements; our ability to realize the benefits of our completed acquisitions, including our ability to achieve anticipated opportunities and operating cost savings, and accretion to reported earnings estimated to result from completed and proposed acquisitions in the time frame expected by management or at all; the diversion of management time on acquisition- related issues; the failure of our brand investment portfolio licensees to pay us royalties; and the intense competition to which our brand investment portfolio is subject. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Except as otherwise required by the context, references in this Quarterly Report
to the
Overview General
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providing financial advisory, corporate finance, research, securities lending
and sales and trading services to corporate, institutional and high net worth
individual clients. B. Riley FBR was formed in
of
in
toB. Riley FBR, Inc.
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comprehensive wealth management and brokerage services to individuals and
families, corporations and non-profit organizations, including qualified
retirement plans, trusts, foundations and endowments. B. Riley Wealth
Management was formerly
on
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registered investment advisor, which includes:
? B. Riley Asset Management, an advisor to certain private funds and to
institutional and high net worth investors;
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private funds,
provide senior secured loans and second lien secured loan facilities to middle
market public and private
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advisory services firm that provides consulting services to shareholders,
creditors and companies, including due diligence, fraud investigations,
corporate litigation support, crisis management and bankruptcy services. We
acquired GlassRatner on
diverse platform and compliments the restructuring services provided by B.
Riley FBR.
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disposition and auction solutions to a wide range of retail and industrial
clients.
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of appraisal and valuation services for asset based lenders, private equity
firms and corporate clients.
We also pursue a strategy of investing in or acquiring companies which we
believe have attractive investment return characteristics. We acquired
? UOL is a communications company that offers consumer subscription services and
products, consisting of Internet access services and devices under the
and Juno brands primarily sold in
? magicJack is a Voice over IP ("VoIP") cloud-based technology and services
communications provider.
BR Brand, in which the company owns a majority interest, provides licensing of a
brand investment portfolio. BR Brand owns the assets and intellectual property
related to licenses of six brands:
We are headquartered in
For financial reporting purposes we classify our businesses into five operating segments: (i) Capital Markets, (ii) Auction and Liquidation, (iii) Valuation and Appraisal, (iv) Principal Investments - United Online and magicJack and (v) Brands.
Capital Markets Segment. Our
Auction and Liquidation Segment. Our Auction and Liquidation segment utilizes
our significant industry experience, a scalable network of independent
contractors and industry-specific advisors to tailor our services to the
specific needs of a multitude of clients, logistical challenges and distressed
circumstances. Furthermore, our scale and pool of resources allow us to offer
our services across North American as well as parts of
Valuation and Appraisal Segment. Our Valuation and Appraisal segment provides Valuation and Appraisal services to financial institutions, lenders, private equity firms and other providers of capital. These services primarily include the valuation of assets (i) for purposes of determining and monitoring the value of collateral securing financial transactions and loan arrangements and (ii) in connection with potential business combinations. Our Valuation and Appraisal segment operates through limited liability companies that are majority owned by us.
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Principal Investments - United Online and magicJack Segment. Our Principal Investments - United Online and magicJack segment consists of businesses which have been acquired primarily for attractive investment return characteristics. Currently, this segment includes UOL, through which we provide consumer Internet access, and magicJack, through which we provide VoIP communication and related product and subscription services.
Brands Segment. Our Brands segment consists of our brand investment portfolio that is focused on generating revenue through the licensing of trademarks and is held by BR Brand.
Recent Developments
On
Results of Operations
The following period to period comparisons of our financial results are not necessarily indicative of future results.
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