Q4 2024 B Riley Financial Inc Earnings Call

Speaker #2: Your line is muted.

Matthew: Your line is muted. Ladies and gentlemen, thank you for your patience. The conference will begin momentarily. Your line is muted. Ladies and gentlemen, thank you for your patience. The conference will begin momentarily. Your line is muted. Good day, and welcome to the fiscal year 2024 preliminary results and a preliminary financial and business update for first half 2025. My name is Matthew, and I will be your EverCall moderator. The format of the call includes prepared remarks from the company, followed by a question and answer session. Please note that all attendees will be on a listen-only mode until the Q&A portion of the call. At this time, I will turn the call over to Bryant Riley, Chairman, Co-Founder, and Co-CEO of B. Riley Financial. You may now begin.

Speaker #3: Ladies and gentlemen, thank you for your patience. The conference will begin momentarily.

Speaker #2: Your line is muted.

Speaker #3: Ladies and gentlemen, thank you for your patience. The conference will begin momentarily.

Speaker #2: Your line is muted.

Speaker #4: Good day. And welcome to the fiscal year 2024 preliminary results, and a preliminary financial and business update for first half 2025. My name is Matthew, and I will be your EverCall moderator.

Speaker #4: The format of the call includes prepared remarks from the company, followed by a question-and-answer session. Please note that all attendees will be on a listen-only mode until the Q&A portion of the call.

Speaker #4: At this time, I will turn the call over to Bryant Riley, Chairman, Co-founder, and Co-CEO of B. Riley Financial. You may now begin.

Speaker #5: Thank you, and good afternoon. We appreciate everyone joining us. In the last 12 months, B. Riley has made significant progress with our strategy to realign our operating businesses towards financial services and capital markets, improve our capital structure, and reduce our debt.

Bryant Riley: Thank you and good afternoon. We appreciate everyone joining us. In the last 12 months, B. Riley has made significant progress with our strategy to realign our operating businesses towards financial services and capital markets, improve our capital structure, and reduce our debt. Before I expand on these achievements, I would like to share the 2024 audit status update. We are in the late stages of documenting the 2024 annual audit, and we expect to file the 10-K shortly. Simultaneously, we have been documenting our first and second quarter 10-Qs with both filings ready for auditor review after the 10-K filing. Scott will expand on our financial operations later in the call. Before walking through the details, we need to first thank our coworkers who have labored tirelessly to deliver for our shareholders. This commitment has resonated and helped drive strong client retention.

Speaker #5: Before I expand on these achievements, I would like to share a 2024 audit status update. We are in the late stages of documenting the 2024 annual audit, and we expect to file the 10-K shortly.

Speaker #5: Simultaneously, we have been documenting our first and second quarter 10-Qs with both filings ready for auditor review after the 10-K filing. Scott will expand on our financial operations later in the call.

Speaker #5: Before walking through the details, we need to first thank our coworkers who have labored tirelessly to deliver for our shareholders. This commitment has resonated and helped drive strong client retention.

Speaker #5: With their collective efforts, we have refocused our strategy on our financial services companies, supplemented by strong cash flows from our other subsidiaries, primarily telecom.

Bryant Riley: With their collective efforts, we have refocused our strategy on our financial services companies, supplemented by strong cash flows from our other subsidiaries, primarily telecom. We believe we are well-positioned to deploy capital and leverage cash generation from our diversified operating company portfolio. We have strengthened our balance sheet through reducing debt, extending maturities, and optimizing our capital structure. With respect to our business realignment, the March 2025 carve-out of B. Riley Securities was an essential step in maximizing value for the stakeholders of B. Riley Financial. To date, the carve-out has exceeded our expectations, as highlighted in a recent public update. BRS has excelled despite constraints driven by our late filings. Its management team has experienced and dedicated professionals, operational autonomy, and sufficient capital for growth, as evidenced by its recent dividend.

Speaker #5: We believe we are well-positioned to deploy capital and leverage cash generation from our diversified operating company portfolio. We have strengthened our balance sheet by reducing debt, extending maturities, and optimizing our capital structure.

Speaker #5: With respect to our business realignment, the March 2025 carve-out of B. Riley Securities was an essential step in maximizing value for the stakeholders of B.

Speaker #5: Riley Financial. To date, the carve-out has exceeded our expectations, as highlighted in their recent public update. BRS has excelled, despite constraints driven by our late filings.

Speaker #5: Its management team has experienced some dedicated professionals, operational autonomy, and sufficient capital for growth, as evidenced by its recent dividend. Since the carve-out, B. Riley has added to its talent base, recruiting important new hires in investment banking, research, and capital markets.

Bryant Riley: Since the carve-out, BRS has added to its talent base, recruiting important new hires in investment banking, research, and capital markets. Transaction highlights include acting as lead bookrunner on an AI infrastructure company's $159 million IPO, joint lead placement agent on a fabulous semiconductor's $384 million capital raise, the sole bookrunner for an Ethereum treasury company's $240 million equity raise across two transactions, and capital provider as part of a successful $150 million variable rate transaction for a digital infrastructure company. Since 1997, B. Riley has been a leader in small cap and middle market investment banking, research, trading, capital markets, and financial advisory. It is well-positioned with long-time leadership and capital to service clients. Also, in financial services, B. Riley Wealth is committed to having a world-class wealth platform to support our wealth advisors and clients, and will seek increased efficiencies, further strengthening our overall realignment financial services foundation.

Speaker #5: Transaction highlights include acting as lead bookrunner on an AI infrastructure company's $159 million IPO, joint lead placement agent on a fabless semiconductor's $384 million capital raise, the sole bookrunner for an Ethereum treasury company's $240 million equity raise across two transactions, and capital provider as part of a successful $150 million variable-rate transaction for a digital infrastructure company.

Speaker #5: Since 1997, B. Riley has been a leader in small cap and middle market investment banking, research, trading, capital markets, and financial advisory. It is well positioned with long-time leadership and capital-to-service clients.

Speaker #5: Also in financial services, B. Riley Wealth is committed to having a world-class wealth platform to support our wealth advisors and clients, and will seek increased efficiencies.

Speaker #5: Further strengthening our overall realignment financial services foundation. The sale of GA Group, formerly Great American, to Oaktree Funds provides significant strategic benefits, supporting our transformation.

Bryant Riley: The sale of GA Group, formerly Great American, to Oaktree Funds provides significant strategic benefits, supporting our transformation. The sale of proceeds also generated cash to support our debt reduction plans. It partnered us with a large financial sponsor, enabling competitive access to larger liquidation deals while maintaining our capacity to participate as an equity and credit investor in future liquidation transactions. Early benefits of this strategy were realized in February when GA Group won the liquidation of Joann's, the largest retail liquidation in history by square foot. We are an equity participant in the Joann liquidation deal, earning a realized investment gain of approximately $29 million as an equity investor. We expect to receive approximately $4 million of incremental profit in the coming months. With new financial owners, we are looking forward to GA Group's continued growth and liquidation of other businesses.

Speaker #5: The sale proceeds also generated cash to support our debt reduction plans. They partnered us with a large financial sponsor, enabling competitive access to larger liquidation deals while maintaining our capacity to participate as an equity and credit investor in future liquidation transactions.

Speaker #5: Early benefits of this strategy were realized in February, when GA Group won the liquidation of Joe Ann's. The largest retail liquidation in history by square foot.

Speaker #5: We are an equity participant in the Joe Ann liquidation deal, earning a realized investment gain of approximately $29 million. As an equity investor, we expect to receive approximately $4 million of incremental profit in the coming months.

Speaker #5: With new financial owners, we are looking forward to GA's Group's continued growth and liquidation in other businesses. While completing our business realignment toward our financial services businesses, our non-financial services operating companies—telecom and consumer products—are providing a diversified source of cash flow and business opportunity.

Bryant Riley: While completing our business realignment toward our financial services businesses, our non-financial services operating companies, telecom, and consumer products are providing a diversified source of cash flow and business opportunity. Our debt reduction strategy has led to significant progress, achieving a debt reduction from quarter end September 24 of approximately $600 million through investment and asset sales, our amended credit facility with Oaktree, and bond exchanges. Net debt ranges from $809 million to $839 million as of June 30, 2025. The investment sales, business exits, and investitures include selling GlassRatner for $117.8 million, and in March, we announced the sale of our investment in Atlantic Coast Recycling for approximately $70 million in cash proceeds. As mentioned in April, we completed the divestiture of B. Riley's W2 Wealth Management business to Stifel Financial Corporation for approximately $25 million.

Speaker #5: Our debt reduction strategy has led to significant progress, achieving a debt reduction from quarter-end September '24 of approximately $600 million through investment and asset sales, our amended credit facility with Oaktree, and bond exchanges.

Speaker #5: Net debt ranges from $890 million to $839 million as of June 30th, 2025. The investment sales, business exits, and investitures include selling Glass Ratna for $117.8 million, and in March, we announced the sale of our investment in Atlantic Coast Recycling for approximately $70 million in cash proceeds.

Speaker #5: As mentioned in April, we've completed the divestiture of B. Riley's Wealth W2 Wealth Management business to Stifel Financial Corporation for approximately $25 million. As I described earlier in the fourth quarter of 2024, we divested 53% of Great American, now GA Group.

Bryant Riley: As I described earlier, in the fourth quarter of 2024, we divested 53% of Great American, now GA Group. Also, we improved our capital structure in February 2025 when we secured $160 million senior secured facility with Oaktree Capital Management, which we use to retire outstanding senior secured credit facility with Nomura, invest in the Joann transaction, and provide additional working capital. Approximately four months later, we have reduced our outstanding balance to $62.5 million, positioning us to negotiate an amended senior secured facility with Oaktree that provides a substantial increase in operational flexibility. New terms include a new investment basket enabling us an incremental $100 million to facilitate transactions using our balance sheet, a $30 million investment basket for parent company investments upsized from $20 million. Lastly, bond exchanges have been an important strategy to reducing our outstanding debt.

Speaker #5: Also, we improved our capital structure in February 2025 when we secured a $160 million senior-secured facility with Oaktree Capital Management, which we used to retire the outstanding senior-secured credit facility with Nomura, invest in the Joe Ann transaction, and provide additional working capital.

Speaker #5: Approximately four months later, we have reduced our outstanding balance to $62.5 million, positioning us to negotiate an amended senior-secured facility with Oaktree that provides a substantial increase in operational flexibility.

Speaker #5: New terms include a new investment basket enabling us an incremental $100 million to facilitate transactions using our balance sheet. A $30 million investment basket for parent company investments upsized from $20 million.

Speaker #5: Lastly, bond exchanges have been an important strategy to reducing our outstanding debt. Since March 2025, we have executed five bond exchanges, reducing total outstanding debt by approximately $126 million.

Bryant Riley: Since March 2025, we have executed five bond exchanges, reducing total outstanding debt by approximately $126 million. Additionally, in February 2025, the company fully redeemed its February 2025 senior notes at 100% of their principal amount. As a result of our activities, cash at June 30, 2025 is over $260 million. We will leverage cash to support our business and clients while also funding debt reduction plans. I would now like to turn the call over to my Co-CEO, Tom Keller, for some additional context around a few operational items.

Speaker #5: Additionally, in February 2025, the company fully redeemed its February 2025 senior notes at 100% of their principal amount. As a result of our activities, cash at June 30, 2025, is over $260 million.

Speaker #5: We will leverage cash to support our business and clients while also funding debt reduction plans. I would now like to turn the call over to my co-CEO, Tom Feller, for some additional context around a few operational items.

Speaker #6: Thanks, Bryant. First, regarding B. Riley Securities, due to the long operating history and longevity of the workforce, the carve-out has progressed very smoothly. In addition, the transaction afforded us the opportunity to methodically review all parts of the business, which not only helped in the transition but also allowed us to tweak certain operations and drive efficiencies.

Tom Kelleher: Thanks, Bryant. First, regarding B. Riley Securities, due to the long operating history and longevity of the workforce, the carve-out has progressed very smoothly. In addition, the transaction afforded us the opportunity to methodically review all parts of the business, which not only helped in the transition but also allowed us to tweak certain operations and drive efficiencies. In Wealth, here again, the carve-out of a portion of the business to Stifel went well. As it took a number of months to clear regulatory hurdles, it provided plenty of time to plan and execute the transaction. It is worth noting here that the group has undertaken two material projects in 2025 that will further streamline operations and reduce costs. The first is the consolidation of our two principal clearing arrangements under Fidelity, as well as the installation of a new commission system.

Speaker #6: In wealth, here again, the carve-out of a portion of the business to Stifel went well, as it took a number of months to clear regulatory hurdles that provided plenty of time to plan and execute the transaction.

Speaker #6: It is worth noting here that the group has undertaken two material projects in 2025 that will further streamline operations and reduce costs. The first is the consolidation of our two principal clearing arrangements under Fidelity, as well as the installation of a new commission system.

Speaker #6: The telecom group continues to enjoy an effective business model with steady cash flow generation. We continue to leverage our India team to normalize and streamline operations, and we recently initiated an $80 million refinancing with our current lender, Bank of California, with additional capacity to upsize.

Tom Kelleher: The telecom group continues to enjoy an effective business model with steady cash flow generation. We continue to leverage our India team to normalize and streamline operations and recently initiated an $80 million refinancing with current lender, Bank of California, with additional capacity to upsize. Targus has faced a prolonged down market, notably broader macro consumer electronic headwinds, and tariff uncertainties, which is putting pressure on all parts of its business. Management is navigating the headwinds well, rationalizing expenses, and maintaining lean inventory levels. With respect to Great American and GlassRatner, the transition services agreement, or TSA, that we had with Great American is soon to be completed, and we just began another one with GlassRatner that is scheduled to be completed by year-end. Real estate has been a focus. Half of our larger offices have been sublet or exited via divestiture or normal expirations.

Speaker #6: Targus has faced a prolonged down market, notably broader macro-consumer electronic headwinds and tariff uncertainties, which have put pressure on all parts of its business.

Speaker #6: Management is navigating the headwinds well, rationalizing expenses and maintaining lean inventory levels. With respect to Great American and Glass Ratna, the transition services agreement, or TSA, that we had with Great American is soon to be completed, and we just began another one with Glass Ratna that is scheduled to be completed by year-end.

Speaker #6: Real estate has been a focus. Half of our larger offices have been sublet or exited via divestiture or normal expirations. We will continue to assess our office footprint as our needs evolve.

Tom Kelleher: We will continue to assess our office footprint as our needs evolve. We are also actively reviewing our systems, identifying consolidation opportunities as they emerge. One final note, like many companies, we have progressed in our utilization of AI. We are actively engaged in identifying and deploying safe enterprise-wide AI tools to increase productivity and expand capabilities. Our substantial accomplishments reflect the collective skill and commitment of our team. This strength resonates with our clients, driving strong client retention. Serving clients and stakeholders is the core mission of our business at every level. With that, I'd like to turn it over to our new CFO, Scott Yesner. Scott?

Speaker #6: We are also actively reviewing our systems, identifying consolidation opportunities as they emerge. One final note, like many companies, we have progressed in our utilization of AI.

Speaker #6: We are actively engaged in identifying and deploying safe, enterprise-wide AI tools to increase productivity and expand capabilities. Our substantial accomplishments reflect the collective skill and commitment of our team.

Speaker #6: This strength resonates with our clients, driving strong client retention. Serving clients and stakeholders is the core mission of our business at every level. With that, I'd like to turn it over to our new CFO, Scott Yessner.

Speaker #6: Scott?

Speaker #7: Thank you, Tom. I would like to provide an update on our financial operations. The 2024 audit and 10-K filing is very large and complex.

Scott Yesner: Thank you, Tom. I would like to provide an update on our financial operations. The 2024 audit and 10-K filing is very large and complex. The 10-K has been complicated by a fast-evolving operating environment, including the divestitures of several operating companies and investments, requiring significant transaction support and transition services agreements. Further, the process was impacted by our auditor's sale to CBIZ, causing them to pause work for six weeks. These factors placed our financial operations on a continuum track of work outstripping our determined team's capacity. In early July, we hired a national accounting advisory firm to staff augment our team with technical accounting, financial operations, documentation construction, GAAP, and internal control support. The firm will remain engaged through the 2025 annual audit and 10-K.

Speaker #7: The 10-K has been complicated by a fast-evolving operating environment, including the divestitures of several operating companies and investments, requiring significant transaction support and transition services agreements.

Speaker #7: Further, the process was impacted by our auditor's sale to CBiz, causing them to pause work for six weeks. These factors placed our financial operations on a continuum track of work outstripping our determined team's capacity.

Speaker #7: In early July, we hired a national accounting advisory firm to staff augment our team with technical accounting, financial operations, documentation construction, and gap internal control support.

Speaker #7: The firm will remain engaged through the 2025 annual audit and 10-K. With the additional staff, we have been documenting our Q1 and Q2 10-Qs during the 2024 audit, with both filings ready for auditor review after the 10-K filing.

Scott Yesner: With the additional staff, we have been documenting our 1Q and 2Q 10-Qs during the 2024 audit, with both filings ready for auditor review after the 10-K filing. We'll plan for the auditor to require 30 to 45 days to complete the interim reviews of both 10-Qs. We expect the third quarter filing will be on a normal quarterly schedule and filed timely. The next item I would like to provide an update on is our investment portfolio. Our investment portfolio is estimated to be $320 million to $355 million at June 30, 2025, which is lower by approximately $75 million to $106 million from 12/31. The decline was driven by $48 million in debt paydowns, $66 million in investment position sales, and an $8 million increase in fair value marks. The portfolio consists of equity and debt structures with varying levels of liquidity.

Speaker #7: We'll plan for the auditor to require 30 to 45 days to complete the interim reviews of both 10-Qs. We expect a third quarter filing will be on a normal quarterly schedule and file timely.

Speaker #7: The next item I would like to provide an update on is our investment portfolio. Our investment portfolio is estimated to be $320 million to $355 million, at June 30th, 2025.

Speaker #7: Which is lower by approximately 75% to $106 million from 12/31. The decline was driven by $48 million in debt paydowns, $66 million in investment position sales, and an $8 million increase in favorable value marks.

Speaker #7: The portfolio consists of equity and debt structures with varying levels of liquidity. At this time, with our high level of cash, we intend to optimize investment portfolio financial performance exiting positions when market timing is appropriate or when paid off in the case of debt instruments.

Scott Yesner: At this time, with our high level of cash, we intend to optimize investment portfolio financial performance, exiting positions when market timing is appropriate or when paid off in the case of debt instruments. We are prioritizing capital markets clients for our operating and investment capital. As opportunities to improve our capital structure and debt maturities arrive, we will adjust the investment portfolio. Next, I would like to walk through our financial performance in the first half of 2025. We are estimating first half 2025 net income available to common shareholders to be in the range of $125 million to $145 million, despite our operating companies being constrained by our 10-K filing delay. The first half estimated results were driven by gains on sale of $159 million, comprised of $53 million for Atlantic Recycling, $68 million for GlassRatner, and multiple other sale gains of $38 million.

Speaker #7: We are prioritizing capital markets clients for our operating and investment capital. As opportunities to improve our capital structure and debt maturities arrive, we will adjust the investment portfolio.

Speaker #7: Next, I would like to walk through our financial performance in the first half of 2025. We are estimating first half 2025 net income available to common shareholders to be in the range of $125 million to $145 million.

Speaker #7: Despite our operating company's being constrained by our 10-K filing delay, the first half estimated results were driven by gains on sale of $159 million.

Speaker #7: Comprised of $53 million for Atlantic Recycling, $68 million for Glass Ratna, and multiple other sale gains of $38 million. Additionally, we had a $29 million gain on equity participation in the Joe Ann liquidation.

Scott Yesner: Additionally, we had a $29 million gain on equity participation in the Joann liquidation and a $39 million net gain on bond retirements from the bond exchange program net of the Nomura facility termination fees. Our operating companies are estimated to perform at about a combined break-even in the first half of 2025. Finally, our corporate interest expense and other expenses had a total estimated cost of $102 million. Our operating company segments at 6/30 are capital markets, wealth, telecom, consumer products, with corporate completing the group. We'll have disclosures on segment performance with our first quarter and second quarter 10-Q filings. The GA Group, formerly Great American, is booked as an investment now, which is not consolidated, nor a business segment post the sale in late 2024. Equity and/or credit investments in the GA Group liquidations by B. Riley Financial directly will be booked in the capital markets segment.

Speaker #7: And a $39 million net gain on bond retirements from the bond exchange program, net of the Nomura facility termination fees. Our operating companies are estimated to perform at about a combined break-even in the first half of 2025.

Speaker #7: Finally, our corporate interest expense and other expenses had a total estimated cost of $102 million. Our operating company segments at 6:30 are Capital Markets, Wealth, Telecom, and Consumer Products, with Corporate completing the group.

Speaker #7: We'll have disclosures on segment performance with our first quarter and second quarter 10-Q filings. The GA Group, formerly Great American, is booked as an investment now, which has not consolidated nor a business segment post the sale in late 2024.

Speaker #7: Equity and/or credit investments in the GA Group liquidations by B. Riley Financial directly will be booked in the capital markets segment. Next, with respect to debt and capital structure, Bryant highlighted the significant progress in lowering our net debt which is estimated to range between $890 million to $839 million as of 6:30.

Scott Yesner: Next, with respect to debt and capital structure, Bryant highlighted the significant progress in lowering our net debt, which is estimated to range between $809 million to $839 million as of 6/30. As we evaluate our cash, investments, and other resources, we have sufficient cash and capital to fund our clients' needs and business operations while also servicing our debt over the next 12 months. The bond exchange program has been an important lever in reducing our debt. We have capacity to execute more bond exchanges and remain active in the program. The Oaktree facility and bond exchange program are examples of how we will explore options to lower our debt and improve our capital structure. Lastly, we are pursuing additional tactics to enhance financial operations, and we'll provide an update shortly. Thank you for your time today. I joined B.

Speaker #7: As we evaluate our cash investments and other resources, we have sufficient cash and capital to fund our clients' needs and business operations while also servicing our debt over the next 12 months. The bond exchange program has been an important lever in reducing our debt.

Speaker #7: We have the capacity to execute more bond exchanges and remain active in the program. The Oaktree facility and bond exchange program are examples of how we will explore options to lower our debt and improve our capital structure.

Speaker #7: Lastly, we are pursuing additional tactics to enhance financial operations and will provide an update shortly. Thank you for your time today. I joined B.

Speaker #7: Riley in June after two months working for the firm as an advisor because I could see the great opportunity ahead for B. Riley Financial and to work with an incredibly talented team.

Scott Yesner: Riley in June after two months working for the firm as an advisor because I could see the great opportunity ahead for B. Riley Financial and to work with an incredibly talented team. I'm looking forward to updating the results in the next earnings call. I'll turn the call back to the operator for Q&A.

Speaker #7: I'm looking forward to updating the results in the next earnings call. I'll turn the call back to the operator for Q&A.

Speaker #4: Thank you. At this time, we will conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to enter the queue.

Matthew: Thank you. At this time, we will conduct the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to enter the queue. Again, press star one on your telephone keypad to enter the queue. We will pause here briefly to allow any questions to generate. Our first question comes from Griffin with Owl Creek Asset Management. Griffin, your line is open. You may proceed.

Speaker #4: Again, press star one on your telephone keypad to enter the queue. We will pause here briefly to allow any questions to generate. Our first question comes from Griffin with Owl Creek Asset Management.

Speaker #4: Griffin, your line is open. You may proceed.

Speaker #8: Hey, guys. Congratulations on the progress you've made here. Well done. I have a few questions, so I guess the first two pertain to the filing of the financials.

Griffin: Hey, guys. Congratulations on the progress you've made here. Well done. I have a few questions. So I guess the first two pertain to the filing of the financials. The first would be if you can kind of elaborate on the main cause for the delay in the 10-K filing for B. Riley Financial. And the second would be when do they expect the financials for B. Riley Securities to be public?

Speaker #8: The first would be, if you can kind of elaborate on the main cause for the delay in the 10-K filing for B. Riley Financial.

Speaker #8: And the second would be, when did they expect the financials for B. Riley Securities to be public?

Speaker #5: Scott, do you want to answer that one?

Tom Kelleher: Scott, you want to answer that one?

Speaker #7: Yeah, absolutely. Thank you so much for the question, Griffin. So, you know, as highlighted in my script, there are multiple complex events that have driven the delays in our 10-K.

Scott Yesner: Yeah, absolutely. Thank you so much for the question, Griffin. Yeah, so you know it's highlighted in my script. There's multiple complex events that have driven the delays in our 10-K. We have a very, very complex operating environment with all the changes we've made at the firm. And that's led into a very large and complex 10-K filing. It will be, you know, it's probably going to be over 200 pages. And that amount of documentation, along with some other things that have created delays, we've sort of gotten this continual process of fighting uphill. We have an incredibly talented team here, very sophisticated and knowledgeable. But the demands and requirements on our team with all these complexities sort of outstripped the incredible will and determination the group has.

Speaker #7: We have a very, very complex operating environment with all the changes we've made at the firm. And, you know, that's led into a very large and complex 10-K filing.

Speaker #7: It will be, you know, it's probably going to be over 200 pages. And that amount of documentation along with, you know, some other things that have created delays we've sort of gotten this continual process of of fighting uphill.

Speaker #7: We have an incredibly talented team here very sophisticated and knowledgeable. And, but the demands and requirements on our team with all these complexities sort of outstripped the incredible will and determination the group has.

Speaker #7: So, you know, we added that staffing firm that I mentioned in in my remarks to help the team that, you know, it's important for our companies and our shareholders and stakeholders for us to get timely in our filings.

Scott Yesner: So we added that staffing firm that I mentioned in my remarks to help the team that it's important for our companies and our shareholders and stakeholders for us to get timely in our filings. We also needed to support our team and auditor with resources that can pull us forward. So we're, with those things and understanding how complex it is, we're very close to, we're in the final stages of documenting our 10-K. I can't be specific to the date. I can only describe it as shortly. And we're all motivated to get the 10-K done as soon as possible. So I hope those comments have helped you understand where we're at. I think I just would also add that we have the view that we also needed to get ourselves caught up and to be on time.

Speaker #7: We also needed to support our team and auditor with, you know, resources that can pull us forward. So, you know, we're with those things and understanding how complex it is, we have we're very close to we're in the final stages of documenting our 10-K.

Speaker #7: I can't be specific to the date. I can only describe it shortly. And we're all motivated to get the 10-K done, you know, as soon as possible.

Speaker #7: So I hope you know those comments have helped you understand you know where we're at. I think I just would also add that you know we we have the the the view that we also needed to to get ourselves caught up and to be on time we were going to have to work simultaneously on the 10-K and our 1-Q and 2-Q.

Scott Yesner: We were going to have to work simultaneously on the 10-K and our 1Q and 2Q. And so in addition to the staffing firm elements around the 10-K, we needed to bolster ourselves to do essentially three filings' worth of work in a very compressed amount of time. And you know we believe that strategy is yielding very favorable results for the company. By the time the 10-K is filed, we should have our 1Q and 2Q documented so we can start the review process with our auditors. And they're going to need time to do their interim review. And then ultimately, by having this enhanced capacity at the firm to process our financial operations, we'll get ourselves on track to be on time with the Q3 filing.

Speaker #7: And so, in addition to the staffing firm elements around the 10-K, we needed to bolster ourselves to do essentially three filings' worth of work in a very compressed amount of time.

Speaker #7: And you know, we believe that our strategy is yielding very favorable results for the company. By the time the 10-K is filed, we should have our Q1 and Q2 documented so we can start the review process with our auditors. You know they're going to need time to do their interim review.

Speaker #7: And then ultimately, by having you know this enhanced capacity at the firm, to process our our financial operations, we'll get ourselves on track to be on time with the Q3 filing.

Speaker #8: Okay, great. And then the second part was just when will the financials for B. Riley Securities be public, the entity that you've carved out?

Griffin: Okay, great. And then the second part was just when will the financials for B. Riley Securities be public, the entity that you've carved out?

Speaker #5: So So that's a live kind of decision. Right now, as you know, we own 90% and employees own 10% in a given update. On their business, two weeks ago, just demonstrate the momentum.

Tom Kelleher: So that's a live kind of decision. Right now, as you know, we own 90% and employees own 10%. And they gave an update on their business two weeks ago. There's demonstrated momentum. I think I mentioned in my script that that momentum or that performance has been higher than we expected, better than we expected. And you know there's an opportunity there to, I think, create value for BRF and BRS shareholders. But that decision is not something we're going to update right now.

Speaker #5: I think I mentioned in my script that that momentum or that performance has been higher than we expected, better than we expected. And you know there's an opportunity there to, I think, create value for BRF and BRS shareholders but that that that decision is not something we're going to we're going to update right now.

Speaker #8: Okay, understood. So I have two more questions. So I guess you've got to set up bond maturities coming up in in '26. What are the different leverage that you're contemplating using to help refinance these upcoming maturities?

Griffin: Okay, I understood. So I have two more questions. So I guess you've got to set up bond maturities coming up in '26. What are the different levers that you're contemplating using to help refinance these upcoming maturities? And I guess what would be the time frame to deal with each issuance? Or are you considering something more holistic?

Speaker #8: And I guess what would be the time timeframe to deal with each issuance, or are you considering something more holistic?

Speaker #5: Yeah, I would say, Griffin, we're obviously... we've been very active in the last nine months. Things that, you know, we utilized to help pay down debt were not expected a year ago.

Tom Kelleher: Yeah, I would say, Griffin, we're obviously, we've been very active in the last nine months. Things that we utilize to help pay down debt were not expected a year ago. We did not expect to make $29 million in Joann's fabrics, for example. And some of the bond swaps have been stronger than we expected. And there's other opportunities, obviously, there, as Scott mentioned. And generating cash solves a lot of problems. So I'm not going to get into specifics on our strategies. We feel very confident and think we've done a pretty good job of managing a difficult situation in '24 and coming out of it focused and with a lot of cash to be able to generate revenues and for our BD. And I feel really confident we will resolve that over the course of the next 12 months. But I can't get into any details.

Speaker #5: We did not expect to make $29 million in joint fabrics, for example. And you know some of the bond swaps have been you know stronger than we expected.

Speaker #5: And there's other opportunities obviously there as Scott mentioned. And you know generating cash solves a lot of problems. So I'm not going to get into specifics on our strategies.

Speaker #5: We feel very confident and think we've done a pretty good job of you know managing a difficult situation in '24 and coming out of it focused and you know with with a lot of cash to be able to to generate you know revenues and and for our our BD and I feel really confident we will resolve that over the course of the next 12 months.

Speaker #5: But I can't get into any details.

Speaker #8: Okay, makes sense. That's it for me. Congratulations again, guys.

Griffin: Okay, it makes sense. That's it for me. Congratulations again, guys.

Speaker #5: All All right. Thanks, Griffin.

Tom Kelleher: All right. Thanks, Griffin.

Speaker #7: Thank you.

Scott Yesner: Thank you.

Speaker #4: Thank you. And once again, ladies and gentlemen, to ask a question, that will be star one on your telephone keypad to enter the queue.

Matthew: Thank you. And once again, ladies and gentlemen, to ask a question, that will be star one on your telephone keypad to enter the queue. That is star one on your telephone keypad to enter the queue. We will pause again briefly to allow any additional questions to generate. This concludes the Q&A. Handing it back to Bryant Riley for any final remarks.

Speaker #4: That is star one on your telephone keypad to enter the queue. We will pause again briefly to allow any additional questions to generate. This concludes the Q&A.

Speaker #4: Handing it back to Bryant Riley for any final remarks.

Speaker #5: Great. Thank you, operator. Scott, welcome. Really appreciate all the effort that's gone on. As you had mentioned, in this complex audit, to our team, you know I think what we've demonstrated is that we are coming out of this stronger; we're seeing more and more momentum particularly at BRS, and look forward to reporting on that momentum over the course of the of the next year.

Tom Kelleher: Great. Thank you, operator. Scott, welcome. Really appreciate all the effort that's gone on. As you had mentioned in this complex audit, to our team, you know I think what we've demonstrated is that we are coming out of this stronger. We're seeing more and more momentum, particularly at BRS, and look forward to reporting on that momentum over the course of the next year. Thank you, everybody, for your time. Thank you to our employees, and thank you to our counterparties for being so supportive. We are excited for the next year. Thank you.

Speaker #5: Thank you, everybody, for your time. Thank you to our employees, and thank you to our counterparties for being so supportive. We are excited for the next year.

Speaker #5: Thank you.

Speaker #4: This concludes today's EverCall. Thank you, and have a great day.

Matthew: This concludes today's EverCall. Thank you and have a great day.

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