Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 27, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | B. RILEY FINANCIAL, INC. | |
Trading Symbol | RILY | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 25,452,765 | |
Amendment Flag | false | |
Entity Central Index Key | 0001464790 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37503 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-0223495 | |
Entity Address, Address Line One | 11100 Santa Monica Blvd., | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90025 | |
City Area Code | (310) | |
Local Phone Number | 966-1444 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Cash and cash equivalents | $ 106,253 | $ 104,268 |
Restricted cash | 471 | 471 |
Due from clearing brokers | 29,089 | 23,818 |
Securities and other investments owned, at fair value | 399,044 | 408,213 |
Securities borrowed | 786,363 | 814,331 |
Accounts receivable, net | 43,226 | 46,624 |
Due from related parties | 295 | 5,832 |
Advances against customer contracts | 1,413 | 27,347 |
Loans receivable, at fair value (includes $233,396 from related parties at June 30, 2020) | 325,517 | 43,338 |
Loans receivable, at cost (includes $157,080 from related parties at December 31, 2019) | 225,848 | |
Prepaid expenses and other assets | 105,312 | 81,808 |
Operating lease right-of-use assets | 44,636 | 47,809 |
Property and equipment, net | 12,287 | 12,727 |
Goodwill | 227,046 | 223,697 |
Other intangible assets, net | 199,991 | 220,525 |
Deferred income taxes | 14,329 | 31,522 |
Total assets | 2,295,272 | 2,318,178 |
Liabilities: | ||
Accounts payable | 4,301 | 4,477 |
Accrued expenses and other liabilities | 106,531 | 130,714 |
Deferred revenue | 71,017 | 67,121 |
Due to related parties and partners | 617 | 1,750 |
Securities sold not yet purchased | 9,804 | 41,820 |
Securities loaned | 779,013 | 810,495 |
Mandatorily redeemable noncontrolling interests | 4,351 | 4,616 |
Operating lease liabilities | 57,364 | 61,511 |
Notes payable | 714 | 38,167 |
Loan participations sold | 14,109 | 12,478 |
Term loan | 57,195 | 66,666 |
Senior notes payable | 854,037 | 688,112 |
Total liabilities | 1,959,053 | 1,927,927 |
Commitments and contingencies (Note 14) | ||
B. Riley Financial, Inc. stockholders' equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 2,531 and 2,349 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively; liquidation preference of $63,273 and $58,723 as of June 30, 2020 and December 31, 2019, respectively. | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 25,864,393 and 26,972,332 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively. | 3 | 3 |
Additional paid-in capital | 306,772 | 323,109 |
Retained earnings | 5,927 | 39,536 |
Accumulated other comprehensive loss | (2,693) | (1,988) |
Total B. Riley Financial, Inc. stockholders' equity | 310,009 | 360,660 |
Noncontrolling interests | 26,210 | 29,591 |
Total equity | 336,219 | 390,251 |
Total liabilities and equity | $ 2,295,272 | $ 2,318,178 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Loans receivable from related parties (in Dollars) | $ 233,396 | $ 157,080 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 2,531 | 2,349 |
Preferred stock, outstanding | 2,531 | 2,349 |
Preferred Stock, Liquidation preference (in Dollars) | $ 63,273 | $ 58,723 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 25,864,393 | 26,972,332 |
Common stock, outstanding | 25,864,393 | 26,972,332 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||||
Services and fees | $ 125,595 | $ 139,968 | $ 284,976 | $ 243,864 |
Trading income (losses) and fair value adjustments on loans | 114,547 | 5,595 | (67,895) | 31,462 |
Interest income - Loans and securities lending | 24,506 | 16,961 | 46,357 | 28,381 |
Sale of goods | 1,820 | 2,160 | 2,824 | 3,105 |
Total revenues | 266,468 | 164,684 | 266,262 | 306,812 |
Operating expenses: | ||||
Direct cost of services | 7,985 | 19,663 | 27,937 | 33,779 |
Cost of goods sold | 860 | 1,805 | 1,629 | 2,924 |
Selling, general and administrative expenses | 106,562 | 91,907 | 194,306 | 186,871 |
Restructuring charge | 1,552 | 1,699 | ||
Impairment of tradenames | 8,500 | 12,500 | ||
Interest expense - Securities lending and loan participations sold | 11,221 | 5,502 | 19,694 | 12,306 |
Total operating expenses | 135,128 | 120,429 | 256,066 | 237,579 |
Operating income | 131,340 | 44,255 | 10,196 | 69,233 |
Other income (expense): | ||||
Interest income | 224 | 331 | 470 | 968 |
Loss from equity investments | (318) | (1,400) | (554) | (5,162) |
Interest expense | (16,509) | (11,588) | (32,163) | (22,358) |
Income (loss) before income taxes | 114,737 | 31,598 | (22,051) | 42,681 |
(Provision) beneft for income taxes | (32,208) | (9,289) | 5,331 | (12,393) |
Net income (loss) | 82,529 | 22,309 | (16,720) | 30,288 |
Net income (loss) attributable to noncontrolling interests | (1,311) | 152 | (1,895) | 108 |
Net income (loss) attributable to B. Riley Financial, Inc. | 83,840 | 22,157 | (14,825) | 30,180 |
Preferred stock dividends | 1,087 | 2,142 | ||
Net income (loss) available to common shareholders | $ 82,753 | $ 22,157 | $ (16,967) | $ 30,180 |
Basic income (loss) per common share (in Dollars per share) | $ 3.23 | $ 0.84 | $ (0.66) | $ 1.15 |
Diluted income (loss) per common share (in Dollars per share) | $ 3.07 | $ 0.82 | $ (0.66) | $ 1.13 |
Weighted average basic common shares outstanding (in Shares) | 25,627,085 | 26,278,352 | 25,827,849 | 26,247,952 |
Weighted average diluted common shares outstanding (in Shares) | 26,992,823 | 26,896,573 | 25,827,849 | 26,770,922 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 82,529 | $ 22,309 | $ (16,720) | $ 30,288 |
Other comprehensive (loss) income: | ||||
Change in cumulative translation adjustment | 515 | 167 | (705) | 337 |
Other comprehensive (loss) income, net of tax | 515 | 167 | (705) | 337 |
Total comprehensive income (loss) | 83,044 | 22,476 | (17,425) | 30,625 |
Comprehensive (loss) income attributable to noncontrolling interests | (1,311) | 152 | (1,895) | 108 |
Comprehensive income (loss) attributable to B. Riley Financial, Inc. | $ 84,355 | $ 22,324 | $ (15,530) | $ 30,517 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Balance at Dec. 31, 2018 | $ 258,660 | $ 2 | $ 258,638 | $ 1,579 | $ (2,161) | $ 602 | |
Balance (in Shares) at Dec. 31, 2018 | 26,603,355 | ||||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes | (2,291) | $ 1 | (2,292) | ||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes (in Shares) | 504,347 | ||||||
Common stock repurchased and retired | (3,252) | (3,252) | |||||
Common stock repurchased and retired (in Shares) | (187,761) | ||||||
Common stock warrants repurchased | (2,777) | (2,777) | |||||
Common stock warrants repurchased (in Shares) | |||||||
Share based payments | 5,548 | 5,548 | |||||
Share based payments (in Shares) | |||||||
Dividends on common stock | (9,335) | (9,335) | |||||
Dividends on common stock (in Shares) | |||||||
Net income (loss) | 30,288 | 30,180 | 108 | ||||
Other comprehensive income (loss) | 337 | 337 | |||||
Other comprehensive income (loss) (in Shares) | |||||||
Balance at Jun. 30, 2019 | 277,178 | $ 3 | 255,865 | 22,424 | (1,824) | 710 | |
Balance (in Shares) at Jun. 30, 2019 | 26,919,941 | ||||||
Balance at Mar. 31, 2019 | 263,925 | $ 2 | 257,888 | 7,468 | (1,991) | 558 | |
Balance (in Shares) at Mar. 31, 2019 | 26,525,216 | ||||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes | (1,577) | $ 1 | (1,578) | ||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes (in Shares) | 425,436 | ||||||
Common stock repurchased and retired | (602) | (602) | |||||
Common stock repurchased and retired (in Shares) | (30,711) | ||||||
Common stock warrants repurchased | (2,777) | (2,777) | |||||
Common stock warrants repurchased (in Shares) | |||||||
Share based payments | 2,934 | 2,934 | |||||
Share based payments (in Shares) | |||||||
Dividends on common stock | (7,201) | (7,201) | |||||
Dividends on common stock (in Shares) | |||||||
Dividends on preferred stock | |||||||
Net income (loss) | 22,309 | 22,157 | 152 | ||||
Other comprehensive income (loss) | 167 | 167 | |||||
Other comprehensive income (loss) (in Shares) | |||||||
Balance at Jun. 30, 2019 | 277,178 | $ 3 | 255,865 | 22,424 | (1,824) | 710 | |
Balance (in Shares) at Jun. 30, 2019 | 26,919,941 | ||||||
Balance at Dec. 31, 2019 | 390,251 | $ 3 | 323,109 | 39,536 | (1,988) | 29,591 | |
Balance (in Shares) at Dec. 31, 2019 | 2,349 | 26,972,332 | |||||
Preferred stock issued | 4,630 | 4,630 | |||||
Preferred stock issued (in Shares) | 182 | ||||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes | (2,677) | (2,677) | |||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes (in Shares) | 520,007 | ||||||
Common stock repurchased and retired | (27,779) | (27,779) | |||||
Common stock repurchased and retired (in Shares) | (1,627,946) | ||||||
Share based payments | 9,489 | 9,489 | |||||
Share based payments (in Shares) | |||||||
Dividends on common stock | (16,642) | (16,642) | |||||
Dividends on common stock (in Shares) | |||||||
Dividends on preferred stock | (2,142) | (2,142) | |||||
Dividends on preferred stock (in Shares) | |||||||
Net income (loss) | (16,720) | (14,825) | (1,895) | ||||
Distributions to noncontrolling interests | (1,486) | (1,486) | |||||
Distributions to noncontrolling interests (in Shares) | |||||||
Other comprehensive income (loss) | (705) | (705) | |||||
Other comprehensive income (loss) (in Shares) | |||||||
Balance at Jun. 30, 2020 | 336,219 | $ 3 | 306,772 | 5,927 | (2,693) | 26,210 | |
Balance (in Shares) at Jun. 30, 2020 | 2,531 | 25,864,393 | |||||
Balance at Mar. 31, 2020 | 263,021 | $ 3 | 308,472 | (70,232) | (3,208) | 27,986 | |
Balance (in Shares) at Mar. 31, 2020 | 2,531 | 25,988,565 | |||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes | (2,157) | (2,157) | |||||
ESPP shares issued and vesting of restricted stock, net of shares withheld for employer taxes (in Shares) | 481,709 | ||||||
Common stock repurchased and retired | (3,711) | (3,711) | |||||
Common stock repurchased and retired (in Shares) | (605,881) | ||||||
Share based payments | 4,168 | 4,168 | |||||
Share based payments (in Shares) | |||||||
Dividends on common stock | (6,594) | (6,594) | |||||
Dividends on common stock (in Shares) | |||||||
Dividends on preferred stock | (1,087) | (1,087) | |||||
Dividends on preferred stock (in Shares) | |||||||
Net income (loss) | 82,529 | 83,840 | (1,311) | ||||
Distributions to noncontrolling interests | (465) | (465) | |||||
Distributions to noncontrolling interests (in Shares) | |||||||
Other comprehensive income (loss) | 515 | 515 | |||||
Other comprehensive income (loss) (in Shares) | |||||||
Balance at Jun. 30, 2020 | $ 336,219 | $ 3 | $ 306,772 | $ 5,927 | $ (2,693) | $ 26,210 | |
Balance (in Shares) at Jun. 30, 2020 | 2,531 | 25,864,393 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends on common stock | $ 0.25 | $ 0.26 | $ 0.60 | $ 0.34 |
Dividends on preferred stock | $ 429.69 | $ 859.38 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (16,720) | $ 30,288 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 9,879 | 9,744 |
Provision for doubtful accounts | 2,081 | 1,067 |
Share-based compensation | 9,489 | 5,548 |
Fair value adjustments, non-cash | 21,975 | (5,639) |
Non-cash interest and other | (6,943) | (3,144) |
Effect of foreign currency on operations | (73) | 339 |
Loss from equity investments | 554 | 5,162 |
Deferred income taxes | (14,340) | 6,430 |
Impairment of intangibles and loss on disposal of fixed assets | 12,550 | (344) |
Gain on extinguishment of debt | (1,556) | |
Income allocated for mandatorily redeemable noncontrolling interests | 397 | 446 |
Change in operating assets and liabilities: | ||
Due from clearing brokers | (5,271) | 8,493 |
Securities and other investments owned | 20,009 | 8,926 |
Securities borrowed | 27,967 | 171,425 |
Accounts receivable and advances against customer contracts | 27,601 | (22,420) |
Prepaid expenses and other assets | (19,707) | (45,500) |
Accounts payable, accrued expenses and other liabilities | 738 | 1,143 |
Amounts due to/from related parties and partners | 4,404 | (3,454) |
Securities sold, not yet purchased | (32,017) | 5,131 |
Deferred revenue | 3,896 | (790) |
Securities loaned | (31,481) | (171,413) |
Net cash provided by operating activities | 13,432 | 1,438 |
Cash flows from investing activities: | ||
Purchases of loans receivable | (152,228) | (225,072) |
Repayments of loans receivable | 74,450 | 17,640 |
Sale of loan receivable to related party | 1,800 | |
Loan participations sold | 2,400 | |
Repayment of loan participations sold | (940) | |
Purchases of property, equipment and other | (851) | (2,514) |
Proceeds from sale of property, equipment and intangible assets | 1 | 503 |
Purchase of equity investments | (6,486) | (25,183) |
Proceeds from sale of division of magicJack | 6,196 | |
Dividends and distributions from equity investments | 797 | 854 |
Acquisition of other businesses | (1,500) | |
Net cash used in investing activities | (82,557) | (227,576) |
Cash flows from financing activities: | ||
Repayment of asset based credit facility | (37,096) | |
Repayment of notes payable | (357) | (357) |
Proceeds from term loan | 10,000 | |
Repayment of term loan | (9,620) | (8,305) |
Proceeds from issuance of senior notes | 171,078 | 123,935 |
Redemption of senior notes | (1,829) | |
Payment of debt issuance costs | (2,760) | (2,039) |
Payment of employment taxes on vesting of restricted stock | (2,678) | (2,291) |
Common dividends paid | (17,489) | (9,991) |
Preferred dividends paid | (2,142) | |
Repurchase of common stock | (27,779) | (3,252) |
Repurchase of warrants | (2,777) | |
Distribution to noncontrolling interests | (2,143) | (856) |
Proceeds from issuance of preferred stock | 4,630 | |
Net cash provided by financing activities | 71,815 | 104,067 |
Increase (decrease) in cash, cash equivalents and restricted cash | 2,690 | (122,071) |
Effect of foreign currency on cash, cash equivalents and restricted cash | (705) | 37 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 1,985 | (122,034) |
Cash, cash equivalents and restricted cash, beginning of period | 104,739 | 180,278 |
Cash, cash equivalents and restricted cash, end of period | 106,724 | 58,244 |
Supplemental disclosures: | ||
Interest paid | 45,934 | 31,604 |
Taxes paid | $ 608 | $ 891 |
Organization and Nature of Busi
Organization and Nature of Business Operations | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS OPERATIONS | NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS OPERATIONS B. Riley Financial, Inc. and its subsidiaries (collectively, the “Company”) provide investment banking and financial services to corporate, institutional and high net worth clients, and asset disposition, valuation and appraisal and capital advisory services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional services firms throughout the United States, Australia, Canada, and Europe and consumer Internet access and cloud communication services through its wholly-owned subsidiaries United Online, Inc. (“UOL” or “United Online”) and magicJack VocalTec Ltd. (“magicJack”). The Company acquired a majority ownership interest in BR Brand Holding, LLC (“BR Brand” or “Brands”) on October 28, 2019, which provides licensing of trademarks. The Company operates in five operating segments: (i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, consulting, research, sales and trading and wealth management services to corporate, institutional and high net worth clients; (ii) Auction and Liquidation, through which the Company provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property; (iii) Valuation and Appraisal, through which the Company provides valuation and appraisal services to clients with independent appraisals in connection with asset based loans, acquisitions, divestitures and other business needs; (iv) Principal Investments - United Online and magicJack, through which the Company provides consumer Internet access and related subscription services from United Online and cloud communication services primarily through the magicJack devices; and (v) Brands, which is focused on generating revenue through the licensing of trademarks. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( a) Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. (b) Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities and loan receivables, allowance for doubtful accounts, the fair value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests, fair value of share based arrangements, accounting for income tax valuation allowances, recovery of contract assets and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be materially adversely affected. (c) Interest Expense — Securities Lending Activities and Loan Participations Sold Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $10,802 and $5,502 for the three months ended June 30, 2020 and 2019, respectively, and $18,723 and $12,306 for the six months ended June 30, 2020 and 2019, respectively. Loan participations sold as of June 30, 2020 totaled $14,109. Interest expense from loan participations sold totaled $419 for the three months ended June 30, 2020, and $971 for the six months ended June 30, 2020. (d) Concentration of Risk Revenues in the Capital Markets, Valuation and Appraisal and Principal Investments — United Online and magicJack segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation segment are primarily generated in the United States, Australia, Canada and Europe. Revenues in the Brands segment are primarily generated in the United States and Canada. The Company’s activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company’s exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidations services contract, the Company sometimes conducts operations with third parties through collaborative arrangements. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements. (e) Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $864 and $584 for the three months ended June 30, 2020 and 2019, respectively, and $1,704 and $946 for the six months ended June 30, 2020 and 2019, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. (f) Share-Based Compensation The Company’s share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company’s employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of operations over the requisite service or performance period the award is expected to vest. (g) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. (h) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. (i) Restricted Cash As of June 30, 2020 and December 31, 2019, restricted cash balance of $471 related to one of the Company’s telecommunication suppliers. (j) Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The Company accounts for securities lending transactions in accordance with ASC “Topic 210: Balance Sheet,” which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets. (k) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property and equipment was $899 and $1,487 for the three months ended June 30, 2020 and 2019, respectively, and $1,831 and $3,023 for the six months ended June 30, 2020 and 2019, respectively (l) Loans Receivable The Company adopted the new credit loss standard effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were previously measured at amortized cost. Under the fair value option, loans receivable are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the condensed consolidated statements of operations. These loans are no longer subject to evaluation for impairment through an allowance for loan loss as such losses will be captured through fair value changes. The impact of adopting ASC 326 was immaterial to the condensed consolidated financial statements. Loans receivable, at fair value totaled $325,517 and $43,338 at June 30, 2020 and December 31, 2019, respectively. The loans have various maturities through December 2024. As of June 30, 2020 and December 31, 2019, the historical cost of loans receivable accounted for under the fair value option was $336,732 and $32,578, respectively, which included principal balances of $341,723 and $32,691 and unamortized costs, origination fees, premiums and discounts, totaling $4,991 and $113, respectively. During the three and six months ended June 30, 2020, the Company recorded unrealized losses of $4,049 and $21,975, respectively on the loans receivable, at fair value, which is included in trading income (losses) and fair value adjustments on loans on the condensed consolidated statement of operations. Prior to the adoption of the new credit loss standard effective January 1, 2020, at December 31, 2019 loans receivable, at historical cost totaled $225,848. Loans receivable, at cost are reported at their outstanding principal balances of $232,118 net of $6,270 of unearned income, and loan origination costs which includes unamortized deferred fees and costs on originated loans, and for purchased loans, net of any unamortized premiums or discounts. The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending customers. At June 30, 2020, the Company has provided limited guarantees with respect to the Franchise Group, Inc. (collectively with all of its affiliates, “FRG”) as further described in Note 14(b) and Babcock & Wilcox Enterprises, Inc. (“B&W”) as further described in Note 17. In accordance with the new credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. At June 30, 2020, the Company has not recorded any provision for credit losses on the FRG and B&W guarantees since the underlying guaranteed loans are senior to most of the outstanding debt of FRG and B&W and the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure. The maximum amount of credit exposure related to these limited guarantees is approximately $255,000. Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statement of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. (m) Securities and Other Investments Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of June 30, 2020 and December 31, 2019, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities: June 30, December 31, 2020 2019 Securities and other investments owned: Equity securities $ 341,515 $ 353,162 Corporate bonds 5,375 19,020 Other fixed income securities 2,768 8,414 Partnership interests and other 49,386 27,617 $ 399,044 $ 408,213 Securities sold not yet purchased: Equity securities $ 4,181 $ 5,360 Corporate bonds 5,272 33,436 Other fixed income securities 351 3,024 $ 9,804 $ 41,820 (n) Fair Value Measurements The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company’s partnership and investment fund interests are valued based on the Company’s proportionate share of the net assets of the partnerships and funds; the value for these investments are derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value (“NAV”) in accordance with ASC “Topic 820: Fair Value Measurements.” The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of June 30, 2020 and December 31, 2019. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at June 30, 2020 Using Quoted prices in Fair value at active markets for Other Significant June 30, identical assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 341,515 $ 233,726 $ — $ 107,789 Corporate bonds 5,375 — 5,375 — Other fixed income securities 2,768 — 2,768 — Investment funds valued at net asset value (1) 49,386 Total securities and other investments owned 399,044 233,726 8,143 107,789 Loans receivable, at fair value 325,517 — — 325,517 Total assets measured at fair value $ 724,561 $ 233,726 $ 8,143 $ 433,306 Liabilities: Securities sold not yet purchased: Equity securities $ 4,181 $ 4,181 $ — $ — Corporate bonds 5,272 — 5,272 — Other fixed income securities 351 — 351 — Total securities sold not yet purchased 9,804 4,181 5,623 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,351 — — 4,351 Total liabilities measured at fair value $ 14,155 $ 4,181 $ 5,623 $ 4,351 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2019 Using Quoted prices in Fair value at active markets for Other Significant December 31 identical assets inputs inputs 2019 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 353,162 $ 243,911 $ — $ 109,251 Corporate bonds 19,020 — 19,020 — Other fixed income securities 8,414 — 8,414 — Investment funds valued at net asset value (1) 27,617 Total securities and other investments owned 408,213 243,911 27,434 109,251 Loans receivable, at fair value 43,338 — — 43,338 Total assets measured at fair value $ 451,551 $ 243,911 $ 27,434 $ 152,589 Liabilities: Securities sold not yet purchased: Equity securities $ 5,360 $ 5,360 $ — $ — Corporate bonds 33,436 — 33,436 — Other fixed income securities 3,024 — 3,024 — Total securities sold not yet purchased 41,820 5,360 36,460 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — — 4,616 Total liabilities measured at fair value $ 46,436 $ 5,360 $ 36,460 $ 4,616 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC “Topic 820 Fair Value Measurements.” The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. As of and December 31, 2019, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $433,306 and $152,589, respectively, or 19% and 6.6%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The following table summarizes the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment and valuation technique as of June 30, 2020: Fair value at June 30, Weighted 2020 Valuation Technique Unobservable Input Range Average Assets: Equity securities $ 107,789 Market approach Multiple of revenue 2.8x - 6.1x 4.6x Multiple of EBITDA 6.3x - 11.09x 6.5x Multiple of PV-10 .29x .29x Market price of related security $0.53 - $2.28/share $1.02 Discounted cash flow Market interest rate 107.0% 107.0% Option pricing model Annualized volatility 123.0% 123% Loans receivable at fair value 325,517 Discounted cash flow Market interest rate 8.3%-18.4% 15.1% Market approach Market price of related security $0.53/share $0.53 Total level 3 assets measured at fair value $ 433,306 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,351 Market approach Operating income multiple 6.0x 6.0x The changes in Level 3 fair value hierarchy during the six months ended June 30, 2020 and 2019 are as follows: Level 3 Level 3 Changes During the Period Level 3 Balance at Beginning of Year Fair Value Adjustments Relating to Undistributed Earnings Purchases, Sales and Settlements Transfer in and/or out of Level 3 Balance at Six Months Ended June 30, 2020 Equity securities $ 109,251 $ (2,462 ) $ — $ 1,000 $ — $ 107,789 Loans receivable at fair value 43,338 (21,974 ) 2,462 75,843 225,848 325,517 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — (265 ) — — 4,351 Six Months Ended June 30, 2019 Equity securities $ 24,577 $ 5,267 $ 1,360 $ 1,451 $ — $ 32,655 Loans receivable at fair value 33,731 8,619 475 (978 ) — 41,847 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — (409 ) — — 4,224 The Company adopted ASU 2016-13 and its amendment ASU 2019-05 effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were measured at amortized cost as of December 31, 2019. The loans receivable, at fair value are included in transfers into level 3 fair value assets in the above table. The amount reported in the table above for the six months ended June 30, 2020 and 2019 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments. As of June 30, 2020, the senior notes payable had a carrying amount of $854,037 and fair value of $772,721. The carrying amount of the term loan approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk. During the six months ended June 30, 2020 and 2019, except for the impact of the intangible impairment charge as described in Note 7- Goodwill and Other Intangible Assets, there were no assets or liabilities measured at fair value on a non-recurring basis. The fair value of the indefinite-lived intangible assets was determined based on a discounted cash flow model using a rate of 13.8%. The indefinite-lived intangible assets are level 3 assets in the fair value hierarchy. (o) Foreign Currency Translation The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction gains (loss) were ($438) and ($139) during the three months ended June 30, 2020 and 2019, respectively and $510 and ($325) during the six months ended June 30, 2020 and 2019, respectively. These amounts are included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations. (p) Common Stock Warrants The Company issued 821,816 warrants to purchase common stock of the Company (the “Wunderlich Warrants”) in connection with the acquisition of Wunderlich Securities, Inc. (“Wunderlich”) on July 3, 2017. The Wunderlich Warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $17.50 per share, subject to, among other matters, the proper completion of an exercise notice and payment. The exercise price and the number of shares of Company common stock issuable upon exercise are subject to customary anti-dilution and adjustment provisions, which include stock splits, subdivisions or reclassifications of the Company’s common stock. On May 16, 2019, the Company repurchased 638,311 warrants for $2,777 ($4.35 per warrant). On June 11, 2020, 167,352 warrants held in escrow from the acquisition of Wunderlich were cancelled in accordance with the terms of the escrow instructions. The Wunderlich Warrants expire on July 3, 2022. As of June 30, 2020, Wunderlich Warrants to purchase 16,153 shares of common stock were outstanding. On October 28, 2019, the Company issued 200,000 warrants to purchase common stock of the Company (the “BR Brands Warrants”) in connection with the acquisition of a majority ownership interest in BR Brand Holdings LLC. The BR Brand Warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $26.24 per share. One-third of the BR Brand Warrants immediately vested and became exercisable upon issuance, and the remaining two-thirds of warrants will vest and become exercisable following the first and/or second anniversaries of the closing, subject to BR Brand’s (or another related joint venture with Bluestar Alliance LLC) satisfaction of specified financial performance targets. The BR Brand warrants expire three years after the last vesting event occurs. (q) Equity Investment bebe stores, inc. At June 30, 2020, the Company had a 30.5% ownership interest in bebe stores, inc. (“bebe”). The equity ownership in bebe is accounted for under the equity method of accounting and is included in prepaid expenses and other assets in the condensed consolidated balance sheets. National Holdings Corporation In 2018, the Company entered into an agreement to acquire shares of National Holdings Corporation (“National Holdings”), a Nasdaq-listed issuer, from Fortress Biotech, Inc. for an aggregate purchase price totaling approximately $22.9 million. The transaction was completed in two tranches. In the first tranche, which was completed in the fourth quarter of 2018, the Company acquired shares representing 24% of the total outstanding shares of National Holdings. The second tranche was completed in the first quarter of 2019. As of June 30, 2020, the Company owned 6,159,550 shares of National Holdings’ common stock, representing 45.7% of National Holdings’ outstanding shares. The carrying value for the National Holdings investment is included in prepaid expenses and other assets in the condensed consolidated balance sheets. The equity ownership in National Holdings is accounted for under the equity method of accounting. As of June 30, 2020, the carrying values of the Company’s investments in bebe and National Holdings exceeded their fair values based on their quoted market prices. In light of these facts, the Company evaluated its investments in bebe and National Holdings for impairment. The Company utilized no bright- line tests in such evaluations. Based on the available facts and information regarding the operating results of both entities, the Company’s ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor these investments and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions. (r) Loan Participations Sold As of June 30, 2020, the Company has sold investments (“Loan Participations Sold”) to third parties (“Participants”) that are accounted for as secured borrowings under ASC Topic 860, Transfers and Servicing. Under ASC Topic 860, a partial loan transfer does not qualify for sale accounting in order for sale treatment to be allowed. A participation or other partial loan transfer that meets the definition of a participating interest is classified as loan receivable and the portion transferred is recorded as a secured borrowing under loan participations sold in the condensed consolidated balance sheet. The Participants are entitled to payments m |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 3 — ACQUISITIONS Membership Interest Purchase Agreement with BR Brand Acquisition LLC On October 11, 2019, the Company and B. Riley Brand Management LLC, an indirect wholly-owned subsidiary of the Company (the “B. Riley Member”), entered into a Membership Interest Purchase Agreement (the “MIPA”) with BR Brand Acquisition LLC (the “BR Brand Member”) and BR Brand, pursuant to which the B. Riley Member acquired a majority of the equity interest in BR Brand. The closing of the transactions in accordance with the MIPA (the “Closing”) occurred on October 28, 2019. The B. Riley Member completed the Closing of a majority of the equity interest in BR Brand pursuant to the terms of the MIPA in exchange for (i) aggregate consideration of $116,500 in cash and (ii) warrant consideration of $990 from the issuance by the Company to Bluestar Alliance LLC (“Bluestar”), an affiliate of the BR Brand Member, of a warrant to purchase up to 200,000 shares of the Company’s common stock at an exercise price per share equal to $26.24. One-third of the shares of common stock issuable under the warrant immediately vested and became exercisable upon issuance at the Closing, and the remaining two-thirds of such shares of common stock will vest and become exercisable following the first and/or second anniversaries of the Closing, subject to BR Brand’s (or another related joint venture with Bluestar) satisfaction of specified financial performance targets. The fair value of the non-controlling interest in the amount of $29,373 was determined based on the relative fair value of the net assets acquired. The Company incurred $570 of transaction costs in connection with the acquisition. In connection with the Closing, (i) the BR Brand Member has caused the transfer of certain trademarks, domain names, license agreements and related assets from existing brand owners to BR Brand and (ii) the Company, Bluestar and certain of their affiliates (including the B. Riley Member and the BR Brand Member) entered into an amended and restated operating agreement for BR Brand and certain other commercial agreements. The Company evaluated the transaction under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, and Accounting Standards Update (“ASU”) 2017-01, Business Combinations: Clarifying the Definition of a Business. Based on this evaluation, the Company has determined that the acquisition did not meet the definition of a business and, therefore, has accounted for the transaction as an acquisition of assets. The fair value of the assets acquired, including transaction costs, have been reflected in the accompanying financial statements as follows: Consideration paid by B. Riley: Cash acquisition consideration $ 116,500 Transaction costs 570 Total cash consideration 117,070 Warrant consideration 990 Total consideration $ 118,060 Tangible assets acquired and assumed: Cash and cash equivalents $ 2,160 Accounts receivable 1,751 Deferred revenue (1,332 ) Tradename 136,176 Customer list 8,678 Non-controlling interest (29,373 ) Total $ 118,060 |
Restructuring Charge
Restructuring Charge | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGE | NOTE 4 — RESTRUCTURING CHARGE The Company did not record any restructuring charges for the three and six months ended June 30, 2020. The Company recorded restructuring charges in the amount of $1,552 and $1,699 for the three and six months ended June 30, 2019, respectively. The restructuring charges during the three and six months ended June 30, 2019 were primarily related to severance costs for magicJack employees from a reduction in workforce in the Principal Investments – United Online and magicJack segment. The following tables summarize the changes in accrued restructuring charge during the three and six months ended June 30, 2020 and 2019: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Balance, beginning of period $ 1,284 3,384 1,600 3,855 Restructuring charge — 1,552 — 1,699 Cash paid (315 ) (2,411 ) (631 ) (3,047 ) Non-cash items 10 117 10 135 Balance, end of period $ 979 $ 2,642 $ 979 $ 2,642 The following tables summarize the restructuring activities by reportable segment during the three and six months ended June 30, 2019: Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Capital Markets Principal Investments - United Online and magicJack Total Capital Markets Principal Investments - United Online and magicJack Total Restructuring charge: Employee termination costs $ — $ 1,418 $ 1,418 $ — $ 1,594 $ 1,594 Facility closure and consolidation charge (recovery) 25 109 134 (4 ) 109 105 Total restructuring charge $ 25 $ 1,527 $ 1,552 $ (4 ) $ 1,703 $ 1,699 |
Securities Lending
Securities Lending | 6 Months Ended |
Jun. 30, 2020 | |
Securities Lending [Abstract] | |
SECURITIES LENDING | NOTE 5 — SECURITIES LENDING The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of June 30, 2020 and December 31, 2019: Gross amounts recognized Gross amounts offset in the consolidated balance sheets (1) Net amounts included in the consolidated balance sheets Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default (2) Net amounts As of June 30, 2020 Securities borrowed $ 786,363 $ — $ 786,363 $ 786,363 $ — Securities loaned $ 779,013 $ — $ 779,013 $ 779,013 $ — As of December 31, 2019 Securities borrowed $ 814,331 $ — $ 814,331 $ 814,331 $ — Securities loaned $ 810,495 $ — $ 810,495 $ 810,495 $ — (1) Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. (2) Includes the amount of cash collateral held/posted. |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 6 — ACCOUNTS RECEIVABLE The components of accounts receivable, net, include the following: June 30, December 31, 2020 2019 Accounts receivable $ 36,942 $ 36,385 Investment banking fees, commissions and other receivables 4,879 8,043 Unbilled receivables 4,165 3,710 Total accounts receivable 45,986 48,138 Allowance for doubtful accounts (2,760 ) (1,514 ) Accounts receivable, net $ 43,226 $ 46,624 Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Balance, beginning of period $ 2,238 $ 766 $ 1,514 $ 696 Add: Additions to reserve 940 834 2,081 1,067 Less: Write-offs (418 ) (219 ) (835 ) (382 ) Less: Recovery — (21 ) — (21 ) Balance, end of period $ 2,760 $ 1,360 $ 2,760 $ 1,360 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7 — GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $227,046 at June 30, 2020 and $223,697 at December 31, 2019. The increase in goodwill of $3,349 is due to the acquisition of a business consulting firm in the second quarter of 2020. Intangible assets consisted of the following: As of June 30, 2020 As of December 31, 2019 Useful Life Gross Carrying Value Accumulated Amortization Intangibles Net Gross Carrying Value Accumulated Amortization Intangibles Net Amortizable assets: Customer relationships 2 to 16 Years $ 99,008 $ 33,788 $ 65,220 $ 99,008 $ 27,269 $ 71,739 Domain names 7 Years 235 132 103 233 117 116 Advertising relationships 8 Years 100 50 50 100 44 56 Internally developed software and other intangibles 0.5 to 5 Years 11,775 6,068 5,707 11,765 4,843 6,922 Trademarks 7 to 10 Years 4,600 1,605 2,995 4,600 1,324 3,276 Total 115,718 41,643 74,075 115,706 33,597 82,109 Non-amortizable assets: Tradenames 125,916 — 125,916 138,416 — 138,416 Total intangible assets $ 241,634 $ 41,643 $ 199,991 $ 254,122 $ 33,597 $ 220,525 Amortization expense was $4,024 and $3,344 for the three months ended June 30, 2020 and 2019, respectively and $8,048 and $6,721 for the six months ended June 30, 2020 and 2019, respectively. At June 30, 2020, estimated future amortization expense was $7,669, $15,225, $14,564, $12,574 and $8,487 for the years ended December 31, 2020 (remaining six months), 2021, 2022, 2023 and 2024, respectively. The estimated future amortization expense after December 31, 2024 was $15,556. In the first quarter of 2020, in accordance with ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, the Company made a qualitative assessment of the impact of the COVID-19 outbreak on goodwill and other intangible assets. The Company determined that the COVID-19 outbreak was a triggering event for testing the indefinite-lived tradenames in the Brands segment and made a determination that the indefinite-lived tradenames in the Brands segment were impaired and the Company recognized an impairment charge of $4,000. As a result of the continuing impact and duration of the COVID-19 outbreak on the operations of the Brands segment, the Company determined that there was another triggering event for testing the indefinite-lived tradenames in the Brands segment and made a determination that the indefinite-lived tradenames in the Brands segment were impaired and the Company recognized an additional impairment charge of $8,500 in the second quarter of 2020. The Company |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 8 — NOTES PAYABLE Asset Based Credit Facility On April 21, 2017, the Company amended its credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) to increase the maximum borrowing limit from $100,000 to $200,000. Such amendment, among other things, also extended the expiration date of the credit facility from July 15, 2018 to April 21, 2022. The Credit Agreement continues to allow for borrowings under the separate credit agreement (a “UK Credit Agreement”) which was dated March 19, 2015 with an affiliate of Wells Fargo Bank which provides for the financing of transactions in the United Kingdom. Such facility allows the Company to borrow up to 50 million British Pounds. Any borrowings on the UK Credit Agreement reduce the availability on the asset based $200,000 credit facility. The UK Credit Agreement is cross collateralized and integrated in certain respects with the Credit Agreement. Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts. All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The Company paid Wells Fargo Bank a closing fee in the amount of $500 in connection with the April 2017 amendment to the Credit Agreement. The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. Interest expense totaled $143 and $104 for the three months ended June 30, 2020 and 2019, respectively and $420 and $586 for the six months ended June 30, 2020 and 2019, respectively. There was no outstanding balance on this credit facility at June 30, 2020. The outstanding balance on this credit facility was $37,096 at December 31, 2019. At June 30, 2020, there were no open letters of credit outstanding. We are in compliance with all financial covenants in the asset based credit facility at June 30, 2020. Other Notes Payable Notes payable include notes payable to a clearing organization for one of the Company’s broker dealers. The notes payable accrue interest at the prime rate plus 2.0% (6.75% at June 30, 2020) payable annually, maturing January 31, 2022. At June 30, 2020 and December 31, 2019, the outstanding balance for the notes payable was $714 and $1,071, respectively. Interest expense was $48 and $22 for the three months ended June 30, 2020 and 2019, respectively and $63 and $45 for the six months ended June 30, 2020 and 2019, respectively. |
Term Loan
Term Loan | 6 Months Ended |
Jun. 30, 2020 | |
Term Loan Disclosure [Abstract] | |
TERM LOAN | NOTE 9 — TERM LOAN On December 19, 2018, BRPI Acquisition Co LLC (“BRPAC”), a Delaware limited liability company, UOL, and YMAX Corporation, Delaware corporations (collectively, the “Borrowers”), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into a credit agreement (the “BRPAC Credit Agreement”) with the Banc of California, N.A. in the capacity as agent (the “Agent”) and lender and with the other lenders party thereto (the “Closing Date Lenders”). Certain of the Borrowers’ U.S. subsidiaries are guarantors of all obligations under the BRPAC Credit Agreement and are parties to the BRPAC Credit Agreement in such capacity (collectively, the “Secured Guarantors”; and together with the Borrowers, the “Credit Parties”). In addition, the Company and B. Riley Principal Investments, LLC (“BRPI”), the parent corporation of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares outstanding membership interests of BRPAC are pledged as collateral. The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties, (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security and other related agreements. The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding BRPAC Credit Agreement. Under the BRPAC Credit Agreement, the Company borrowed $80,000 due December 19, 2023. Pursuant to the terms of the BRPAC Credit Agreement, the Company may request additional optional term loans in an aggregate principal amount of up to $10,000 at any time prior to the first anniversary of the agreement date (the “Option Loan”) with a final maturity date of December 19, 2023. On February 1, 2019, the Credit Parties, the Closing Date Lenders, the Agent and City National Bank, as a new lender (the “New Lender”), entered into the First Amendment to the Credit Agreement and Joinder (the “First Amendment”) pursuant to which, among other things, (i) New Lender became a party to the BRPAC Credit Agreement, (ii) the New Lender extended to Borrowers the Option Loan in the amount of $10,000, (iii) the aggregate outstanding principal amount of the term loans was increased from $80,000 to $90,000; and (iv) the amortization schedule under the BRPAC was amended as set forth in the First Amendment. Additionally, in connection with the Option Loan, the Borrowers executed a term note in favor of New Lender dated February 1, 2019 in the amount of $10,000. Borrowings under the BRPAC Credit Agreement bear interest at a rate equal to (a) the LIBOR rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two and one-half percent (2.5%) to three percent (3.0%) per annum, based upon the Borrowers’ ratio of consolidated funded indebtedness to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the preceding four fiscal quarters or other applicable period. At June 30, 2020 interest rate on the BRPAC Credit Agreement was at 2.93%. Interest payments are to be made each one, three or six months. Amounts outstanding under the BRPAC Credit Agreement are due in quarterly installments commencing on March 31, 2019 with any remaining amounts outstanding due at maturity. For the $80,000 loan, quarterly installments from June 30, 2020 to December 31, 2022 are in the amount of $4,244 per quarter and from March 31, 2023 to December 31, 2023 are $2,122 per quarter. For the $10,000 loan, quarterly installments from June 30, 2020 to December 31, 2022 are $566 per quarter and from March 31, 2023 to December 31, 2023 are $265 per quarter. As of June 30, 2020 and December 31, 2019, the outstanding balance on the term loan was $57,195 (net of unamortized debt issuance costs of $452) and $66,666 (net of unamortized debt issuance costs of $600), respectively. Interest expense on the term loan during the three months ended June 30, 2020 and 2019 was $586 (including amortization of deferred debt issuance costs of $72) and $1,257 (including amortization of deferred debt issuance costs of $93), respectively. Interest expense on the term loan during the six months ended June 30, 2020 and 2019 was $1,415 (including amortization of deferred debt issuance costs of $148) and $2,535 (including amortization of deferred debt issuance costs of $181), respectively. We are in compliance with all financial covenants in the BRPAC Credit Agreement at June 30, 2020. |
Senior Notes Payable
Senior Notes Payable | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
SENIOR NOTES PAYABLE | NOTE 10 — SENIOR NOTES PAYABLE Senior notes payable, net, are comprised of the following: June 30, December 31, 2020 2019 7.50% Senior notes due May 31, 2027 $ 125,536 $ 117,954 7.25% Senior notes due December 31, 2027 122,545 120,126 7.375% Senior notes due May 31, 2023 127,358 122,140 6.875% Senior notes due September 30, 2023 113,109 105,952 6.75% Senior notes due May 31, 2024 110,476 106,589 6.50% Senior notes due September 30, 2026 134,657 124,226 6.375% Senior notes due February 28, 2025 130,942 — 864,623 696,987 Less: Unamortized debt issuance costs (10,586 ) (8,875 ) $ 854,037 $ 688,112 During the six months ended June 30, 2020, the Company issued $38,828 of senior notes with maturity dates ranging from May 2023 to December 2027 pursuant to At the Market Issuance Sales Agreements with B. Riley FBR, Inc. which governs the program of at-the-market sales of the Company’s senior notes. On February 12, 2020, the Company issued $132,250 of senior notes due in February 2025 (“6.375% 2025 Notes”) pursuant to the prospectus supplement dated February 10, 2020. Interest on the 6.375% 2025 Notes is payable quarterly at 6.375%. The 6.375% 2025 Notes are unsecured and due and payable in full on February 28, 2025. In connection with the issuance of the 6.375% 2025 Notes, the Company received net proceeds of $129,213 (after underwriting commissions, fees and other issuance costs of $3,037). During March 2020, the Company repurchased bonds with an aggregate face value of $3,443 for $1,829 resulting in a gain net of expenses and original issue discount of $1,556 during the six months ended June 30, 2020. As part of the repurchase, the Company paid $30 in interest accrued through the date of each respective repurchase. At June 30, 2020 and December 31, 2019, the total senior notes outstanding was $854,037 (net of unamortized debt issue costs of $10,586) and $688,112 (net of unamortized debt issue costs of $8,875) with a weighted average interest rate of 6.94% and 7.05%, respectively. Interest on senior notes is payable on a quarterly basis. Interest expense on senior notes totaled $15,588 and $10,071 for the three months ended June 30, 2020 and 2019, respectively and $29,980 and $18,926 for the six months ended June 30, 2020 and 2019, respectively. Sales Agreement Prospectus to Issue Up to $150,000 of Senior Notes On February 14, 2020, the Company entered into a new At Market Issuance Sales Agreement (the “February 2020 Sales Agreement”) with B. Riley FBR, Inc. governing a program of at-the-market sales of certain of the Company’s senior notes. This program provides for the sale by the Company of up to $150,000 of certain of the Company’s senior notes. As of June 30, 2020, the Company had $148,415 remaining availability under the February 2020 Sales Agreement. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 11 — REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers by reportable segment for the three and six months ended June 30, 2020 and 2019 is as follows: Three Months Ended June 30, 2020 Reportable Segment Principal Investments- Capital Auction and Valuation and United Online and Markets Liquidation Appraisal magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 49,653 $ — $ — $ — $ — $ 49,653 Wealth and asset management fees 18,701 — — — — 18,701 Commissions, fees and reimbursed expenses 12,785 2,596 7,668 — — 23,049 Subscription services — — — 18,287 — 18,287 Service contract revenues — 4,610 — — — 4,610 Advertising, licensing and other — 1,045 — 3,145 3,206 7,396 Total revenues from contracts with customers 81,139 8,251 7,668 21,432 3,206 121,696 Other sources of revenue: Interest income - Loans and securities lending 24,506 — — — — 24,506 Trading gains on investments 118,596 — — — — 118,596 Fair value adjustment on loans (4,049 ) — — — — (4,049 ) Other 5,719 — — — — 5,719 Total revenues $ 225,911 $ 8,251 $ 7,668 $ 21,432 $ 3,206 $ 266,468 Three Months Ended June 30, 2019 Reportable Segment Principal Investments- Capital Auction and Valuation and United Online and Markets Liquidation Appraisal magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 39,597 $ — $ — $ — $ — $ 39,597 Wealth and asset management fees 18,509 — — — — 18,509 Commissions, fees and reimbursed expenses 10,376 27,466 9,742 — — 47,584 Subscription services — — — 21,071 — 21,071 Service contract revenues — 6,274 — — — 6,274 Advertising, licensing and other — 1,176 — 4,707 — 5,883 Total revenues from contracts with customers 68,482 34,916 9,742 25,778 — 138,918 Other sources of revenue: Interest income - Loans and securities lending 16,961 — — — — 16,961 Trading losses on investments (93 ) — — — — (93 ) Fair value adjustment on loans 5,688 — — — — 5,688 Other 3,210 — — — — 3,210 Total revenues $ 94,248 $ 34,916 $ 9,742 $ 25,778 $ — $ 164,684 Six Months Ended June 30, 2020 Reportable Segment Capital Markets Auction and Liquidation Valuation and Appraisal Principal Investments - United Online and magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 117,034 $ — $ — $ — $ — $ 117,034 Wealth and asset management fees 39,022 — — — — 39,022 Commissions, fees and reimbursed expenses 27,255 18,774 16,457 — — 62,486 Subscription services — — — 37,120 — 37,120 Service contract revenues — 9,093 — — — 9,093 Advertising, licensing and other — 1,045 — 7,034 7,007 15,086 Total revenues from contracts with customers 183,311 28,912 16,457 44,154 7,007 279,841 Other sources of revenue: Interest income - Loans and securities lending 46,357 — — — — 46,357 Trading losses on investments (45,920 ) — — — — (45,920 ) Fair value adjustment on loans (21,975 ) — — — — (21,975 ) Other 7,959 — — — — 7,959 Total revenues $ 169,732 $ 28,912 $ 16,457 $ 44,154 $ 7,007 $ 266,262 Six Months Ended June 30, 2019 Reportable Segment Capital Markets Auction and Liquidation Valuation and Appraisal Principal Investments - United Online and magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 57,433 $ — $ — $ — $ — $ 57,433 Wealth and asset management fees 36,044 — — — — 36,044 Commissions, fees and reimbursed expenses 21,273 35,099 18,325 — — 74,697 Subscription services — — — 43,469 — 43,469 Service contract revenues — 19,350 — — — 19,350 Advertising, licensing and other — 1,176 — 9,844 — 11,020 Total revenues from contracts with customers 114,750 55,625 18,325 53,313 — 242,013 Other sources of revenue: Interest income - Loans and securities lending 28,381 — — — — 28,381 Trading gains on investments 25,822 — — — — 25,822 Fair value adjustment on loans 5,639 — — — — 5,639 Other 4,957 — — — — 4,957 Total revenues $ 179,549 $ 55,625 $ 18,325 $ 53,313 $ — $ 306,812 Contract Balances The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Receivables related to revenues from contracts with customers totaled $43,226 and $46,624 at June 30, 2020 and December 31, 2019, respectively. The Company had no significant impairments related to these receivables during the three and six months ended June 30, 2020. The Company’s deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, Valuation and Appraisal engagements and subscription services where the performance obligation has not yet been satisfied. Deferred revenue at June 30, 2020 and December 31, 2019 was $71,017 and $67,121, respectively. During the three months ended June 30, 2020 and 2019, the Company recognized revenue of $10,087 and $11,932 that was recorded as deferred revenue at the beginning of the respective year. During the six months ended June 30, 2020 and 2019, the Company recognized revenue of $24,074 and $25,166 that was recorded as deferred revenue at the beginning of the respective year. Contract Costs Contract costs include: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable; (2) costs to fulfill Auction and Liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation where the revenue is recognized over time when the performance obligation is satisfied; and (3) commissions paid to obtain magicJack contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period. The capitalized costs to fulfill a contract were $410 and $450 at June 30, 2020 and December 31, 2019, respectively, and are recorded in prepaid expenses and other assets in the condensed consolidated balance sheets. For the three months ended June 30, 2020 and 2019, the Company recognized expenses of $70 and $430 related to capitalized costs to fulfill a contract, respectively. For the six months ended June 30, 2020 and 2019, the Company recognized expenses of $142 and $1,031 related to capitalized costs to fulfill a contract, respectively. There were no significant impairment charges recognized in relation to these capitalized costs during the three and six months ended June 30, 2020 and 2019. Remaining Performance Obligations and Revenue Recognized from Past Performance The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at June 30, 2020. Corporate finance and investment banking fees and retail liquidation engagement fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price at June 30, 2020. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12 — INCOME TAXES The Company’s effective income tax rate was a benefit of 24.2% and provision of 29.0% for the six months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, the Company had federal net operating loss carryforwards of $53,932 and state net operating loss carryforwards of $64,088. The Company’s federal net operating loss carryforwards will expire in the tax years commencing in December 31, 2032 through December 31, 2037. The state net operating loss carryforwards will expire in the tax years commencing in December 31, 2029. The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of June 30, 2020, the Company believes that the existing net operating loss carryforwards will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets and has not provided a valuation allowance. The Company does not believe that it is more likely than not that the Company will be able to utilize the benefits related to capital loss carryforwards and has provided a valuation allowance in the amount of $61,945 against these deferred tax assets. The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain federal, state and local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2016 to 2019. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 13 — EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Basic common shares outstanding exclude 387,365 common shares in 2019 that were held in escrow and subject to forfeiture. The 387,365 common shares held in escrow were forfeited and cancelled on June 11, 2020 to indemnify the Company for certain representations and warranties and related claims pursuant to a related acquisition agreement. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share were 1,365,738 and for the three months ended June 30, 2020 and 2019, respectively and 1,592,958 and for the six months ended June 30, 2020 and 2019, respectively, because to do so would have been anti-dilutive. Basic and diluted earnings per share were calculated as follows: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net income (loss) attributable to B. Riley Financial, Inc. $ 83,840 $ 22,157 $ (14,825 ) $ 30,180 Preferred stock dividends (1,087 ) — (2,142 ) — Net income (loss) applicable to common shareholders $ 82,753 $ 22,157 $ (16,967 ) $ 30,180 Weighted average common shares outstanding: Basic 25,627,085 26,278,352 25,827,849 26,247,952 Effect of dilutive potential common shares: Restricted stock units and warrants 1,365,738 543,442 — 448,191 Contingently issuable shares — 74,779 — 74,779 Diluted 26,992,823 26,896,573 25,827,849 26,770,922 Basic income (loss) per common share $ 3.23 $ 0.84 $ (0.66 ) $ 1.15 Diluted income (loss) per common share $ 3.07 $ 0.82 $ (0.66 ) $ 1.13 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 — COMMITMENTS AND CONTINGENCIES (a) Legal Matters The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against the Company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, the Company cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations. On August 11, 2017, a putative class action lawsuit titled Freedman v. magicJack VocalTec Ltd. et al., Case 9-17-cv-80940, was filed against magicJack and its Board of Directors in the United States District Court for the Southern District of Florida (Case No: 9:17-cv-80940-RLR). In November 2018, the District court granted the Company’s request for dismissal of the case. However, the plaintiff appealed the ruling and oral arguments for the appeal were held in January 2020. On June 25, 2020, the Appeals court provided its ruling in favor of the Company, upholding the District court’s dismissal of the case. On January 5, 2017, complaints filed in November 2015 and May 2016 naming MLV & Co. (“MLV”), a broker-dealer subsidiary of FBR, as a defendant in putative class action lawsuits alleging claims under the Securities Act, in connection with the offerings of Miller Energy Resources, Inc. (“Miller”) have been consolidated. The Master Consolidated Complaint, styled Gaynor v. Miller et al., is pending in the United States District Court for the Eastern District of Tennessee, and, like its predecessor complaints, continues to allege claims under Sections 11 and 12 of the Securities Act against nine underwriters for alleged material misrepresentations and omissions in the registration statement and prospectuses issued in connection with six offerings (February 13, 2013; May 8, 2013; June 28, 2013; September 26, 2013; October 17, 2013 (as to MLV only) and August 21, 2014) with an alleged aggregate offering price of approximately $151,000. The Court ordered mediation before a federal magistrate took place on August 6, 2019, with no resolution. In December 2019, the Court remanded the case to state court. In July 2020, the Company agreed to settle this matter, subject to court approval. In July 2017, an arbitration claim was filed with FINRA by Dominick & Dickerman LLC and Michael Campbell against WSI and Gary Wunderlich with respect to the acquisition by Wunderlich Investment Company, Inc. (“WIC”) (the parent corporation of WSI) of certain assets of Dominick & Dominick LLC in 2015. The Claimants allege that respondents overvalued WIC so that the purchase price paid to the Claimants in shares of WIC stock was artificially inflated. On April 7, 2020, the arbitration panel issued an award against BRWM and Gary Wunderlich holding each party jointly and severally liable for damages, costs and expenses in an aggregate amount of $11,400. The Company filed a motion to vacate the arbitration award in the U.S. District Court for the Southern District of New York on May 5, 2020. In June 2020, Dominick & Dickerman LLC settled the matter for $10,150 in cash. Michael Campbell agreed that the award shall be vacated as to him In December 2015, magicJack received a Letter of Inquiry (the “2015 LOI”) from the Enforcement Bureau (the “Bureau”) of the Federal Communications Commission (“FCC”) in which the Bureau indicated that it was investigating whether the Company is subject to the FCC’s rules applicable to interconnected VoIP providers. magicJack believes that it is not an interconnected VoIP provider under current regulations and is not subject to the FCC rules. Previously, magicJack received similar letters of inquiry in 2010 and 2013, neither of which resulted in any enforcement action. magicJack responded to the 2015 LOI in February 2016. The Company participated in discussions with the FCC regarding a potential settlement, and on June 5, 2020, the Company and the FCC entered into a Consent Decree to settle the FCC’s inquiry. In the Consent Decree, magicJack made no admission of non-compliance with FCC regulations but did agree to make certain changes to its product offerings and marketing materials on a go forward basis and to make a cash payment of $5,000 to the FCC. (b) Franchise Group Commitment Letter, Loan Participant Guaranty and CIBC Guarantee Commitment Letter On February 14, 2020, affiliates of FRG entered into an ABL Credit Agreement (the “Franchise Credit Agreement”), with GACP Finance Co., LLC (“GACP Finance”) as administrative agent and collateral agent, and the lenders from time to time party thereto, pursuant to which the lenders provided an asset based credit facility to FRG in an aggregate principal amount of $100,000 In connection with the Franchise Credit Agreement, the Company entered into a commitment letter, dated as of February 14, 2020 (the “Commitment Letter”), pursuant to which the Company committed to provide a $100,000 asset based lending facility to FRG, on April 14, 2020 if, on or before such date, the obligations under the Franchise Credit Agreement are not refinanced in full. On May 1, 2020, the Company extended its commitment under the Commitment Letter until 30 days prior to the maturity date which is currently set forth in the Franchise Credit Agreement as September 30, 2020. The Loan Participant Guaranty On February 14, 2020, FRG, the lenders from time to time party thereto and GACP Finance as administrative agent, entered into a Credit Agreement (the “Term Loan Credit Agreement”), pursuant to which the lenders provided a term loan facility to FRG in an aggregate principal amount of $575,000. On February 19, 2020, the Company entered into a limited guaranty (the “Loan Participant Guaranty”) to one of the lenders under the Term Loan Credit Agreement (the “Loan Participant”) pursuant to which the Company guaranteed the payment when due of certain obligations, including principal, interest, and other amounts payable to the Loan Participant under the Term Loan Credit Agreement in an amount not to exceed $50,000 plus certain expenses of the Loan Participant and certain protective advances related to such guaranteed obligations (the “Loan Participant Guaranteed Obligations”). The Loan Participant may require payment of the Loan Participant Guaranteed Obligations by the Company upon the occurrence of certain guarantor events of default, including payment or bankruptcy events of default, in each case pursuant to the Term Loan Credit Agreement. The Loan Participant Guaranty remains in effect until the date that the Loan Participant Guaranteed Obligations have been paid in full. The Loan Participant Guaranteed Obligations are unsecured obligations of the Company and rank equally in right of payment with all of the Company’s other existing and future unsecured and unsubordinated indebtedness. The Loan Participant Guaranteed Obligations are effectively subordinated in right of payment to all of the Company’s existing and future secured indebtedness and structurally subordinated to all existing and future indebtedness of the Company’s subsidiaries, including trade payables. CIBC Guaranty On February 14, 2020, the Company entered into a limited guaranty (the “CIBC Guaranty”) in favor of CIBC Bank USA (“CIBC”), pursuant to which the Company guaranteed the payment when due of certain obligations, including all principal, interest, and other amounts that shall be at any time payable by FRG under FRG’s credit agreement with CIBC and the lenders party thereto, dated as of May 16, 2019, as amended (the “CIBC Credit Agreement”) in an amount not to exceed $125,000 plus certain expenses of CIBC related to such guaranteed obligations (the “CIBC Guaranteed Obligations”). CIBC may require payment of the CIBC Guaranteed Obligations by the Company upon the occurrence of either (a) the failure of FRG to pay any principal of any loan or any reimbursement obligation in respect of any letter of credit disbursement or (b) the failure of FRG to pay any interest on any loan or on any reimbursement obligation in respect of any letter of credit disbursement within five business days of the date due, in each case pursuant to the CIBC Credit Agreement. The CIBC Guaranty terminated on June 30, 2020. (c) Babcock & Wilcock Commitments and Guarantee On May 14, 2020, the Company entered into an a agreement to provide Babcock & Wilcox Enterprises, Inc. (“B&W”) future commitments to loan B&W up to $40,000 at various dates starting in November 2020 and the Company provided a limited guaranty of B&W’s obligations under B&W’s amended credit facility as more fully described in Note 17 - Related Party Transactions. |
Share-Based Payments and Common
Share-Based Payments and Common Stock | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED PAYMENTS AND COMMON STOCK | NOTE 15 — SHARE-BASED PAYMENTS AND COMMON STOCK (a) Employee Stock Incentive Plans Share- based compensation expense for restricted stock units under the Company’s Amended and Restated 2009 Stock Incentive Plan (the “Plan”) was $4,109 and $2,860 for the three months ended June 30, 2020 and 2019, respectively and $9,265 and $5,353 for the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2020, in connection with employee stock incentive plans the Company granted 586,916 restricted stock units with a weighted average grant date fair value of $18.53 per share. The restricted stock units generally vest over a period of one to three years based on continued service. Performance based restricted stock units generally vest based on both the employee’s continued service and the Company’s common stock price, as defined in the grant, achieving a set threshold during the three-year period following the grant. In determining the fair value of restricted stock units on the grant date, the fair value is adjusted for (a) estimated forfeitures, (b) expected dividends based on historical patterns and the Company’s anticipated dividend payments over the expected holding period and (c) the risk-free interest rate based on U.S. Treasuries for a maturity matching the expected holding period. (b) Employee Stock Purchase Plan In connection with the Company’s Purchase Plan, share based compensation was $59 and $74 for the three months ended June 30, 2020 and 2019, respectively and $224 and $195 for the six months ended June 30, 2020 and 2019, respectively. At June 30, 2020, there were 524,891 shares reserved for issuance under the Purchase Plan. (c) Common Stock During the six months ended June 30, 2020, the Company repurchased 1,240,581 shares of its common stock for $27,779 which represents an average price of $22.39 per common share. On July 1, 2020, the Company entered into an agreement to repurchase 900,000 shares of its common stock for $19,800 ($22.00 per common share) from one of its shareholders. In accordance with the agreement, the Company repurchased 450,000 shares for $9,900 on July 2, 2020 and the remaining 450,000 shares are required to be repurchased for $9,900 at a mutually agreeable date prior to January 1, 2021. In addition to the repurchases of common stock, 387,365 shares of the Company’s common stock that were previously held in escrow in connection with the acquisition of WIC in 2017 were forfeited and cancelled on June 11, 2020 to indemnify the Company for certain representations and warranties and related claims pursuant to a related acquisition agreement. |
Net Capital Requirements
Net Capital Requirements | 6 Months Ended |
Jun. 30, 2020 | |
Brokers and Dealers [Abstract] | |
NET CAPITAL REQUIREMENTS | NOTE 16 — NET CAPITAL REQUIREMENTS B. Riley FBR and B. Riley Wealth Management (“BRWM”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company’s broker-dealer subsidiaries are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1) which requires the subsidiaries to maintain minimum net capital and provides that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As of June 30, 2020, B. Riley FBR had net capital of $99,404, which was $96,325 in excess of its required net capital of $3,079; and BRWM had net capital of $4,923 which was $4,263 in excess of its required net capital of $660. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17 — RELATED PARTY TRANSACTIONS At June 30, 2020, amounts due from related parties of $295 included $32 from GACP I, L.P. (“GACP I”) and $15 from GACP II, L.P. (“GACP II”) for management fees and other operating expenses, and $248 due from CA Global Partners (“CA Global”) for operating expenses related to wholesale and industrial liquidation engagements managed by CA Global on behalf of GA Global Ptrs. At December 31, 2019, amounts due from related parties of $5,832 included $145 from GACP I and $12 from GACP II for management fees and other operating expenses, $13 due from B. Riley Principal Merger Corp, a company that consummated its initial public offering on April 11, 2019, for which our wholly owned subsidiary, B. Riley Principal Sponsor Co. LLC, was the Sponsor, and $3,846 due from John Ahn, who at the time was the President of Great American Capital Partners, LLC, our indirect wholly owned subsidiary (“GACP”), pursuant to a Secured Line of Promissory Note related to a Transfer Agreement as further discussed below. During the six months ended June 30, 2020, the Company sold a portion of a loan receivable to GACP for $1,800. At June 30, 2020, the Company had sold loan participations to BRC Partners Opportunity Fund, LP (“BRCPOF”), a private equity fund managed by one of its subsidiaries, in the amount of $14,109, and recorded interest expense of $971 during the six months ended June 30, 2020 related to BRCPOF’s loan participations. Our executive officers and members of our board of directors have a 72.9% financial interest, which includes a financial interest of Bryant Riley, our Co-Chief Executive Officer, of 42.1% in the BRCPOF at June 30, 2020. At June 30, 2020 and December 31, 2019, the Company had outstanding loan to participations to BRCPOF in the amount of $14,109 and $12,478, respectively. On April 1, 2019, the Company entered into a Transfer Agreement (the “Transfer Agreement”) with GACP II, a fund managed by GACP, and John Ahn, who is the brother of Phil Ahn, the Company’s Chief Financial Officer and Chief Operating Officer. The Transfer Agreement provides for among other things, the transfer to Mr. J. Ahn of 55.56% of the Company’s limited partnership interest in GACP II (the “Transferred Interest”), which represents a capital commitment in the aggregate amount of $5,000. In connection with the Transfer Agreement, the Company provided Mr. J. Ahn with a non-recourse, secured line of credit in an aggregate amount of up to $5,003 pursuant to the terms of a Secured Line of Credit Promissory Note (the “Note”) dated April 1, 2019, to fund the purchase price of the Transferred Interest. We also entered into a Security Agreement with Mr. J. Ahn on April 1, 2019, which granted to the Company a security interest in the Transferred Interest to secure Mr. J. Ahn’s obligations under the Note. The Note is subject to an interest rate per annum of 7.00%. As of December 31, 2019, the principal and accrued interest on the Note were $3,798 and $48, respectively. In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P., a limited partnership controlled by Mr. J. Ahn, (“Whitehawk”). Whitehawk has agreed to provide investment advisory services for GACP I and GACP II. In accordance with the terms of the Note, Mr. Ahn surrendered the Transferred Interest to the Company in exchange for the cancellation of the Note. During the six months ended June 30, 2020, interest payments received on the Note was $121 and management fees paid for investment advisory services by Whitehawk was $103. On May 22, 2020, the Company earned $3,275 of underwriting fees from the initial public offering of B. Riley Principal Merger Corp. II, (“BRPM II”), which was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “BRPM II IPO”). The Company has also agreed to loan BRPM II up to $300 for operating expenses. The loan is interest free and there were no amounts outstanding at June 30, 2020. BRPM II entered into a non-binding letter of intent to acquire a privately held company that is not related to the Company (the “Proposed Acquisition”). In addition to the above, the Company from time to time participates in loans and financing arrangements in respect of companies in which the Company has an equity ownership and representation on the board of directors or equivalent body. The Company may also provide consulting services or investment banking services to raise capital for these companies. These transactions can be summarized as follows: Sonim The Company has a loan receivable due from Sonim Technologies, Inc. (“Sonim”) that is included in loans receivable at fair value with a fair value of $9,603 at December 31, 2019. Interest is payable at 10.0% per annum with a maturity date of September 1, 2022. The original loan was made in October 2017 in connection with the Company’s initial investment in common stock and preferred stock that was purchased from Sonim’s existing shareholders. In October 2017, the Company also entered into a management services agreement with Sonim to provide advisory and consulting services for management fees of up to $200 per year. The management services agreement was terminated in September 2019. In June 2020 Sonim repaid $4,000 of the outstanding loan balance in cash and the remaining principal amount, accrued interest and other amounts outstanding of $6,170 under the loan converted into shares of common stock of Sonim at the then public offering price of shares of Sonim’s common stock. Babcock and Wilcox The Company has a last-out term loan receivable due from B&W that is included in loans receivable, at fair value with a fair value of $150,812 at June 30, 2020. As of December 31, 2019, the last-out term loan was included in loans receivable, at cost with a carrying value of $109,147. On January 31, 2020, the Company provided B&W with an additional $30,000 of last-out term loans pursuant to new amendments to B&W’s credit agreement. On May 14, 2020, the Company provided B&W with another $30,000 of last-out term loans pursuant to a further amendment to B&W’s credit agreement which also included future commitments for the Company to loan B&W $40,000 at various dates starting in November 2020 and a limited guaranty by the Company of B&W’s obligations under the amended credit facility, (the “Amendment Transactions”). Interest is payable quarterly at the fixed rate of 12.0% per annum in common stock of B&W at $2.28 per common share through December 31, 2020 and in cash thereafter. All of these loans were made to B&W as part of various amendments to B&W’s existing credit agreement with other lenders not related to the Company. As part of the Amendment Transactions, the Company entered into the following agreements: (i) an Amendment and Restatement Agreement, dated as of May 14, 2020, among B&W, Bank of America, N.A., as Administrative Agent, and the other lenders party thereto, including the Company; (ii) a Fee Letter, dated as of May 14, 2020, among the Company and B&W; (iii) a Fee and Interest Equitization Agreement, dated May 14, 2020, between the Company, B. Riley FBR, and B&W; (iv) a Termination Agreement, dated as of May 14, 2020, the Company and B&W and acknowledged by Bank of America, N.A. with respect to the Backstop Commitment Letter; and (v) a Limited Guaranty Agreement, dated as of May 14, 2020, among the Company, B&W and Bank of America, N.A. In connection with making the loan to B&W, in April 2019 the Company received warrants to purchase 1,666,667 shares of common stock of B&W with an exercise price of $0.01 per share. The option to exercise the warrants expires on April 5, 2022. One of the Company’s wholly owned subsidiaries entered into a services agreement with B&W that provided for the President of the Company to serve as the Chief Executive Officer of B&W until November 30, 2020 (the “Executive Consulting Agreement”), unless terminated by either party with thirty days written notice. Under this agreement, fees for services provided are $750 per annum, paid monthly. In addition, subject to the achievement of certain performance objectives as determined by B&W’s compensation committee of the board, a bonus or bonuses may also be earned and payable to the Company. Maven The Company has loans receivable due from theMaven, Inc. (“Maven”) that are included in loans receivable, at fair value of $71,118 at June 30, 2020. At December 31, 2019, the Company had a loan receivable due from Maven that is included in loans receivable at fair value of $21,150 and another loan receivable from Maven that is included in loans receivable at historical cost with a carrying value of $47,933 (which is comprised of the principal balance due in the amount of $49,921, less original issue discount of $1,988). Interest on these loans is payable at 12.0% to 15.0% per annum with maturity dates through June 2022. Franchise Group The Company has a loan receivable due from Vitamin Shoppe, a subsidiary of FRG, (“Vitamin Shoppe”) that was included in loans receivable, at fair value with a fair value of $4,951 at December 31, 2019. Interest was payable at 13.7% per annum with a maturity date of December 16, 2022. The principal balance of $4,697 on the Vitamin Shoppe loan receivable was repaid in May 2020 and the final interest payment of $31 was paid on June 1, 2020. During the six months ended June 30, 2020, the Company earned $4,329 of underwriting fees from FRG in connection with FRG’s capital raising activities. The Company is party to a Commitment Letter, Loan Participant Guaranty and was party to the CIBC Guarantee with FRG as disclosed above in Note 14 – Commitments and Contingencies. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 18 — BUSINESS SEGMENTS The Company’s business is classified into the Capital Markets segment, Auction and Liquidation segment, Valuation and Appraisal segment, Principal Investments — United Online and magicJack segment, and Brands segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. The following is a summary of certain financial data for each of the Company’s reportable segments: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Capital Markets segment: Revenues - Services and fees $ 86,858 $ 71,692 $ 191,271 $ 119,706 Trading income (losses) and fair value adjustments on loans 114,547 5,595 (67,895 ) 31,462 Interest income - Loans and securities lending 24,506 16,961 46,357 28,381 Total revenues 225,911 94,248 169,733 179,549 Selling, general and administrative expenses (81,030 ) (63,041 ) (135,741 ) (126,430 ) Restructuring (charge) recovery — (25 ) — 4 Interest expense - Securities lending and loan participations sold (11,221 ) (5,502 ) (19,694 ) (12,306 ) Depreciation and amortization (1,091 ) (1,287 ) (2,196 ) (2,563 ) Segment income 132,569 24,393 12,102 38,254 Auction and Liquidation segment: Revenues - Services and fees 7,206 33,740 27,867 54,449 Revenues - Sale of goods 1,045 1,176 1,045 1,176 Total revenues 8,251 34,916 28,912 55,625 Direct cost of services (3,217 ) (12,939 ) (18,033 ) (19,213 ) Cost of goods sold (285 ) (852 ) (314 ) (866 ) Selling, general and administrative expenses (2,729 ) (3,295 ) (4,255 ) (6,210 ) Depreciation and amortization — (2 ) (1 ) (4 ) Segment income 2,020 17,828 6,309 29,332 Valuation and Appraisal segment: Revenues - Services and fees 7,669 9,742 16,457 18,325 Selling, general and administrative expenses (6,144 ) (6,974 ) (13,011 ) (14,161 ) Depreciation and amortization (47 ) (31 ) (88 ) (64 ) Segment income 1,478 2,737 3,358 4,100 Principal Investments - United Online and magicJack segment: Revenues - Services and fees 20,656 24,794 42,374 51,384 Revenues - Sale of goods 775 984 1,779 1,929 Total revenues 21,431 25,778 44,153 53,313 Direct cost of services (4,768 ) (6,724 ) (9,904 ) (14,566 ) Cost of goods sold (575 ) (953 ) (1,315 ) (2,058 ) Selling, general and administrative expenses (4,049 ) (5,495 ) (9,512 ) (12,515 ) Depreciation and amortization (2,851 ) (3,300 ) (5,730 ) (6,763 ) Restructuring charge — (1,527 ) — (1,703 ) Segment income 9,188 7,779 17,692 15,708 Brands segment: Revenues - Services and fees 3,206 — 7,007 — Selling, general and administrative expenses (309 ) — (1,213 ) — Depreciation and amortization (715 ) — (1,429 ) — Impairment of tradenames (8,500 ) — (12,500 ) — Segment loss (6,318 ) — (8,135 ) — Consolidated operating income from reportable segments 138,937 52,737 31,326 87,394 Corporate and other expenses (7,597 ) (8,482 ) (21,130 ) (18,161 ) Interest income 224 331 470 968 Loss on equity investments (318 ) (1,400 ) (554 ) (5,162 ) Interest expense (16,509 ) (11,588 ) (32,163 ) (22,358 ) Income (Loss) before income taxes 114,737 31,598 (22,051 ) 42,681 (Provision) benefit for income taxes (32,208 ) (9,289 ) 5,331 (12,393 ) Net income (loss) 82,529 22,309 (16,720 ) 30,288 Net (loss) income attributable to noncontrolling interests (1,311 ) 152 (1,895 ) 108 Net income (loss) attributable to B. Riley Financial, Inc. 83,840 22,157 (14,825 ) 30,180 Preferred stock dividends 1,087 — 2,142 — Net income (loss) available to common shareholders $ 82,753 $ 22,157 $ (16,967 ) $ 30,180 The following table presents revenues by geographical area: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenues: Revenues - Services and fees: North America $ 124,039 $ 139,968 $ 282,505 $ 243,788 Australia 1,038 — 1,702 15 Europe 518 — 769 61 Total Revenues - Services and fees $ 125,595 $ 139,968 $ 284,976 $ 243,864 Trading (losses) income and fair value adjustments on loans North America $ 114,547 $ 5,595 $ (67,895 ) $ 31,462 Revenues - Sale of goods North America $ 1,820 $ 2,160 $ 2,824 $ 3,105 Revenues - Interest income - Loans and securities lending: North America $ 24,506 $ 16,961 $ 46,357 $ 28,381 Total Revenues: North America $ 264,912 $ 164,684 $ 263,791 $ 306,736 Australia 1,038 — 1,702 15 Europe 518 — 769 61 Total Revenues $ 266,468 $ 164,684 $ 266,262 $ 306,812 During the six months ended June 30, 2020 and 2019 long-lived assets, which consist of property and equipment and other assets, of $12,287 and $13,997, respectively, were located in North America. Segment assets are not reported to, or used by, the Company’s Chief Operating Decision Maker to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19 — SUBSEQUENT EVENTS From time to time, the Company may decide to pay dividends which will be dependent upon our financial condition and results of operations. On July 30, 2020, the Board of Directors announced an increase to the regular quarterly dividend from $0.25 per share to $0.30 per share. On July 30, 2020, the Company declared a regular quarterly dividend of $0.30 per share and a special dividend of $0.05 per share which will be paid on or about August 28, 2020 to stockholders of record as of August 14, 2020. While it is the Board’s current intention to make regular dividend payments each quarter and special dividend payments dependent upon exceptional circumstances from time to time, our Board of Directors may reduce or discontinue the payment of dividends at any time for any reason it deems relevant. The declaration and payment of any future dividends on our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | ( a) Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020. The results of operations for the six months ended June 30, 2020 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. |
Use of Estimates | (b) Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities and loan receivables, allowance for doubtful accounts, the fair value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests, fair value of share based arrangements, accounting for income tax valuation allowances, recovery of contract assets and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s results of operations, financial position and cash flows may be materially adversely affected. |
Interest Expense — Securities Lending Activities and Loan Participations Sold | (c) Interest Expense — Securities Lending Activities and Loan Participations Sold Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $10,802 and $5,502 for the three months ended June 30, 2020 and 2019, respectively, and $18,723 and $12,306 for the six months ended June 30, 2020 and 2019, respectively. Loan participations sold as of June 30, 2020 totaled $14,109. Interest expense from loan participations sold totaled $419 for the three months ended June 30, 2020, and $971 for the six months ended June 30, 2020. |
Concentration of Risk | (d) Concentration of Risk Revenues in the Capital Markets, Valuation and Appraisal and Principal Investments — United Online and magicJack segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation segment are primarily generated in the United States, Australia, Canada and Europe. Revenues in the Brands segment are primarily generated in the United States and Canada. The Company’s activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company’s exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidations services contract, the Company sometimes conducts operations with third parties through collaborative arrangements. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements. |
Advertising Expenses | (e) Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $864 and $584 for the three months ended June 30, 2020 and 2019, respectively, and $1,704 and $946 for the six months ended June 30, 2020 and 2019, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Share-Based Compensation | (f) Share-Based Compensation The Company’s share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company’s employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of operations over the requisite service or performance period the award is expected to vest. |
Income Taxes | (g) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. |
Cash and Cash Equivalents | (h) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | (i) Restricted Cash As of June 30, 2020 and December 31, 2019, restricted cash balance of $471 related to one of the Company’s telecommunication suppliers. |
Securities Borrowed and Securities Loaned | (j) Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The Company accounts for securities lending transactions in accordance with ASC “Topic 210: Balance Sheet,” which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets. |
roperty and Equipment | (k) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property and equipment was $899 and $1,487 for the three months ended June 30, 2020 and 2019, respectively, and $1,831 and $3,023 for the six months ended June 30, 2020 and 2019, respectively |
Loans Receivable | (l) Loans Receivable The Company adopted the new credit loss standard effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were previously measured at amortized cost. Under the fair value option, loans receivable are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the condensed consolidated statements of operations. These loans are no longer subject to evaluation for impairment through an allowance for loan loss as such losses will be captured through fair value changes. The impact of adopting ASC 326 was immaterial to the condensed consolidated financial statements. Loans receivable, at fair value totaled $325,517 and $43,338 at June 30, 2020 and December 31, 2019, respectively. The loans have various maturities through December 2024. As of June 30, 2020 and December 31, 2019, the historical cost of loans receivable accounted for under the fair value option was $336,732 and $32,578, respectively, which included principal balances of $341,723 and $32,691 and unamortized costs, origination fees, premiums and discounts, totaling $4,991 and $113, respectively. During the three and six months ended June 30, 2020, the Company recorded unrealized losses of $4,049 and $21,975, respectively on the loans receivable, at fair value, which is included in trading income (losses) and fair value adjustments on loans on the condensed consolidated statement of operations. Prior to the adoption of the new credit loss standard effective January 1, 2020, at December 31, 2019 loans receivable, at historical cost totaled $225,848. Loans receivable, at cost are reported at their outstanding principal balances of $232,118 net of $6,270 of unearned income, and loan origination costs which includes unamortized deferred fees and costs on originated loans, and for purchased loans, net of any unamortized premiums or discounts. The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending customers. At June 30, 2020, the Company has provided limited guarantees with respect to the Franchise Group, Inc. (collectively with all of its affiliates, “FRG”) as further described in Note 14(b) and Babcock & Wilcox Enterprises, Inc. (“B&W”) as further described in Note 17. In accordance with the new credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. At June 30, 2020, the Company has not recorded any provision for credit losses on the FRG and B&W guarantees since the underlying guaranteed loans are senior to most of the outstanding debt of FRG and B&W and the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure. The maximum amount of credit exposure related to these limited guarantees is approximately $255,000. Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statement of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. |
Securities and Other Investments Owned and Securities Sold Not Yet Purchased | (m) Securities and Other Investments Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of June 30, 2020 and December 31, 2019, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities: June 30, December 31, 2020 2019 Securities and other investments owned: Equity securities $ 341,515 $ 353,162 Corporate bonds 5,375 19,020 Other fixed income securities 2,768 8,414 Partnership interests and other 49,386 27,617 $ 399,044 $ 408,213 Securities sold not yet purchased: Equity securities $ 4,181 $ 5,360 Corporate bonds 5,272 33,436 Other fixed income securities 351 3,024 $ 9,804 $ 41,820 |
Fair Value Measurements | (n) Fair Value Measurements The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company’s partnership and investment fund interests are valued based on the Company’s proportionate share of the net assets of the partnerships and funds; the value for these investments are derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value (“NAV”) in accordance with ASC “Topic 820: Fair Value Measurements.” The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of June 30, 2020 and December 31, 2019. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at June 30, 2020 Using Quoted prices in Fair value at active markets for Other Significant June 30, identical assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 341,515 $ 233,726 $ — $ 107,789 Corporate bonds 5,375 — 5,375 — Other fixed income securities 2,768 — 2,768 — Investment funds valued at net asset value (1) 49,386 Total securities and other investments owned 399,044 233,726 8,143 107,789 Loans receivable, at fair value 325,517 — — 325,517 Total assets measured at fair value $ 724,561 $ 233,726 $ 8,143 $ 433,306 Liabilities: Securities sold not yet purchased: Equity securities $ 4,181 $ 4,181 $ — $ — Corporate bonds 5,272 — 5,272 — Other fixed income securities 351 — 351 — Total securities sold not yet purchased 9,804 4,181 5,623 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,351 — — 4,351 Total liabilities measured at fair value $ 14,155 $ 4,181 $ 5,623 $ 4,351 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2019 Using Quoted prices in Fair value at active markets for Other Significant December 31 identical assets inputs inputs 2019 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 353,162 $ 243,911 $ — $ 109,251 Corporate bonds 19,020 — 19,020 — Other fixed income securities 8,414 — 8,414 — Investment funds valued at net asset value (1) 27,617 Total securities and other investments owned 408,213 243,911 27,434 109,251 Loans receivable, at fair value 43,338 — — 43,338 Total assets measured at fair value $ 451,551 $ 243,911 $ 27,434 $ 152,589 Liabilities: Securities sold not yet purchased: Equity securities $ 5,360 $ 5,360 $ — $ — Corporate bonds 33,436 — 33,436 — Other fixed income securities 3,024 — 3,024 — Total securities sold not yet purchased 41,820 5,360 36,460 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — — 4,616 Total liabilities measured at fair value $ 46,436 $ 5,360 $ 36,460 $ 4,616 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC “Topic 820 Fair Value Measurements.” The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. As of and December 31, 2019, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $433,306 and $152,589, respectively, or 19% and 6.6%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The following table summarizes the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment and valuation technique as of June 30, 2020: Fair value at June 30, Weighted 2020 Valuation Technique Unobservable Input Range Average Assets: Equity securities $ 107,789 Market approach Multiple of revenue 2.8x - 6.1x 4.6x Multiple of EBITDA 6.3x - 11.09x 6.5x Multiple of PV-10 .29x .29x Market price of related security $0.53 - $2.28/share $1.02 Discounted cash flow Market interest rate 107.0% 107.0% Option pricing model Annualized volatility 123.0% 123% Loans receivable at fair value 325,517 Discounted cash flow Market interest rate 8.3%-18.4% 15.1% Market approach Market price of related security $0.53/share $0.53 Total level 3 assets measured at fair value $ 433,306 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,351 Market approach Operating income multiple 6.0x 6.0x The changes in Level 3 fair value hierarchy during the six months ended June 30, 2020 and 2019 are as follows: Level 3 Level 3 Changes During the Period Level 3 Balance at Beginning of Year Fair Value Adjustments Relating to Undistributed Earnings Purchases, Sales and Settlements Transfer in and/or out of Level 3 Balance at Six Months Ended June 30, 2020 Equity securities $ 109,251 $ (2,462 ) $ — $ 1,000 $ — $ 107,789 Loans receivable at fair value 43,338 (21,974 ) 2,462 75,843 225,848 325,517 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — (265 ) — — 4,351 Six Months Ended June 30, 2019 Equity securities $ 24,577 $ 5,267 $ 1,360 $ 1,451 $ — $ 32,655 Loans receivable at fair value 33,731 8,619 475 (978 ) — 41,847 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — (409 ) — — 4,224 The Company adopted ASU 2016-13 and its amendment ASU 2019-05 effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were measured at amortized cost as of December 31, 2019. The loans receivable, at fair value are included in transfers into level 3 fair value assets in the above table. The amount reported in the table above for the six months ended June 30, 2020 and 2019 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments. As of June 30, 2020, the senior notes payable had a carrying amount of $854,037 and fair value of $772,721. The carrying amount of the term loan approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk. During the six months ended June 30, 2020 and 2019, except for the impact of the intangible impairment charge as described in Note 7- Goodwill and Other Intangible Assets, there were no assets or liabilities measured at fair value on a non-recurring basis. The fair value of the indefinite-lived intangible assets was determined based on a discounted cash flow model using a rate of 13.8%. The indefinite-lived intangible assets are level 3 assets in the fair value hierarchy. |
Foreign Currency Translation | (o) Foreign Currency Translation The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction gains (loss) were ($438) and ($139) during the three months ended June 30, 2020 and 2019, respectively and $510 and ($325) during the six months ended June 30, 2020 and 2019, respectively. These amounts are included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations. |
Common Stock Warrants | (p) Common Stock Warrants The Company issued 821,816 warrants to purchase common stock of the Company (the “Wunderlich Warrants”) in connection with the acquisition of Wunderlich Securities, Inc. (“Wunderlich”) on July 3, 2017. The Wunderlich Warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $17.50 per share, subject to, among other matters, the proper completion of an exercise notice and payment. The exercise price and the number of shares of Company common stock issuable upon exercise are subject to customary anti-dilution and adjustment provisions, which include stock splits, subdivisions or reclassifications of the Company’s common stock. On May 16, 2019, the Company repurchased 638,311 warrants for $2,777 ($4.35 per warrant). On June 11, 2020, 167,352 warrants held in escrow from the acquisition of Wunderlich were cancelled in accordance with the terms of the escrow instructions. The Wunderlich Warrants expire on July 3, 2022. As of June 30, 2020, Wunderlich Warrants to purchase 16,153 shares of common stock were outstanding. On October 28, 2019, the Company issued 200,000 warrants to purchase common stock of the Company (the “BR Brands Warrants”) in connection with the acquisition of a majority ownership interest in BR Brand Holdings LLC. The BR Brand Warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $26.24 per share. One-third of the BR Brand Warrants immediately vested and became exercisable upon issuance, and the remaining two-thirds of warrants will vest and become exercisable following the first and/or second anniversaries of the closing, subject to BR Brand’s (or another related joint venture with Bluestar Alliance LLC) satisfaction of specified financial performance targets. The BR Brand warrants expire three years after the last vesting event occurs. |
Equity Investment | (q) Equity Investment bebe stores, inc. At June 30, 2020, the Company had a 30.5% ownership interest in bebe stores, inc. (“bebe”). The equity ownership in bebe is accounted for under the equity method of accounting and is included in prepaid expenses and other assets in the condensed consolidated balance sheets. National Holdings Corporation In 2018, the Company entered into an agreement to acquire shares of National Holdings Corporation (“National Holdings”), a Nasdaq-listed issuer, from Fortress Biotech, Inc. for an aggregate purchase price totaling approximately $22.9 million. The transaction was completed in two tranches. In the first tranche, which was completed in the fourth quarter of 2018, the Company acquired shares representing 24% of the total outstanding shares of National Holdings. The second tranche was completed in the first quarter of 2019. As of June 30, 2020, the Company owned 6,159,550 shares of National Holdings’ common stock, representing 45.7% of National Holdings’ outstanding shares. The carrying value for the National Holdings investment is included in prepaid expenses and other assets in the condensed consolidated balance sheets. The equity ownership in National Holdings is accounted for under the equity method of accounting. As of June 30, 2020, the carrying values of the Company’s investments in bebe and National Holdings exceeded their fair values based on their quoted market prices. In light of these facts, the Company evaluated its investments in bebe and National Holdings for impairment. The Company utilized no bright- line tests in such evaluations. Based on the available facts and information regarding the operating results of both entities, the Company’s ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor these investments and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions. |
Loan Participations Sold | (r) Loan Participations Sold As of June 30, 2020, the Company has sold investments (“Loan Participations Sold”) to third parties (“Participants”) that are accounted for as secured borrowings under ASC Topic 860, Transfers and Servicing. Under ASC Topic 860, a partial loan transfer does not qualify for sale accounting in order for sale treatment to be allowed. A participation or other partial loan transfer that meets the definition of a participating interest is classified as loan receivable and the portion transferred is recorded as a secured borrowing under loan participations sold in the condensed consolidated balance sheet. The Participants are entitled to payments made by the borrower of the related loan equal to the current Loan Participations Sold outstanding at the interest rates for the respective investment. In the event that the borrower defaults, the Participants have rights to payments from such borrower, but do not have recourse to the Company. The terms of the Loan Participations Sold are commensurate with the terms of the related loan. As of June 30, 2020, the Company had entered into participation agreements for a total of $14,109. In addition, the interest income and interest expense related to the Loan Participations Sold resulted in interest income and interest expense which is presented gross on the condensed consolidated statement of operations. |
Supplemental Non-cash Disclosures | (s) Supplemental Non-cash Disclosures During the six months ended June 30, 2020, non-cash investing activities included $4,633 non-cash conversion of an equity method investment and $6,170 conversion of a loan receivable to shares of stock. |
Reclassifications | (t) Reclassifications As of December 31, 2019, loans receivable recorded at fair value of $43,338 were previously included in securities and other investments owned, at fair value. These loans receivable amounts have been reclassified and reported in loans receivable, at fair value to conform to the 2020 presentation. During the three and six months ended June 30, 2019, trading income and fair value adjustments on loans of $5,595 and $31,462, respectively were previously included in services and fees income in the capital markets segment. These trading income and fair value adjustments on loans amounts have been reclassified and reported in trading income and fair value adjustments on loans to conform to the 2020 presentation. During the three and six months ended June 30, 2019, interest income earned on loans of $16,961 and $28,381, respectively were previously included in services and fees income in the capital markets segment. These interest income amounts have been reclassified and reported in interest income – loans and securities lending to conform to the 2020 presentation. During the three and six months ended June 30, 2019, expenses of $4,569 and $8,990, respectively, were previously included in direct cost of services in the valuation and appraisal segment. These expenses have been reclassified and reported in selling, general and administrative expenses to conform to the 2020 presentation. |
Variable Interest Entity | (u) Variable Interest Entity In 2018, the operations of GACP II, LP, a private debt investment limited partnership (the “Partnership”) commenced operations. The Company’s investment in the Partnership is a variable interest entity (“VIE”) since the unaffiliated limited partners do not have substantive kick- out or participating rights to remove the Company’s subsidiary that is the general partner managing the Partnership. The Company has determined that it is not the primary beneficiary due to the fact that its fee arrangements are considered at-market and thus not deemed to be variable interests, and it does not hold any other interests in the Partnership that are considered to be more than insignificant. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed. The carrying value of the Company’s investments in the VIE that was not consolidated is shown below. June 30, Partnership investments $ 20,352 Due from related party 15 Maximum exposure to loss $ 20,367 |
Recent Accounting Standards | (v) Recent Accounting Standards Not yet adopted In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by removing certain exceptions for recognizing deferred taxes on investments, performing intra-period allocations, and calculating income taxes in interim periods. The ASU also adds guidance to reduce the complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The revised guidance will be applied prospectively and is effective for SEC filers for annual periods or interim periods with fiscal years beginning after December 15, 2020. Early adoption is permitted for interim or annual periods for which financial statements have not been issued. The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial condition and results of operations. Recently adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments − Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”). This standard requires an allowance to be recorded for all expected credit losses for certain financial assets. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments − Credit Losses (Topic 326); Targeted Transition Relief,” which allows entities to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that (1) were previously recorded at amortized cost and (2) are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC 825-10. ASU 2016-13 and ASU 2019-05 are effective for public companies for interim and annual period beginning December 15, 2019. The Company adopted the new credit losses standard effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were previously measured at amortized cost. Under the fair value option, loans receivable are now measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the consolidated statements of operations. These loans are no longer subject to evaluation for impairment through an allowance for loan loss as such losses will be captured through fair value changes. The impact of adopting ASC 326 was immaterial to the condensed |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Summary of Significant Accounting Policies (Tables) [Line Items] | |
Schedule of securities and other investments owned and securities sold not yet purchased at fair value | June 30, December 31, 2020 2019 Securities and other investments owned: Equity securities $ 341,515 $ 353,162 Corporate bonds 5,375 19,020 Other fixed income securities 2,768 8,414 Partnership interests and other 49,386 27,617 $ 399,044 $ 408,213 Securities sold not yet purchased: Equity securities $ 4,181 $ 5,360 Corporate bonds 5,272 33,436 Other fixed income securities 351 3,024 $ 9,804 $ 41,820 |
Schedule of financial assets and liabilities measured on recurring basis | Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at June 30, 2020 Using Quoted prices in Fair value at active markets for Other Significant June 30, identical assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 341,515 $ 233,726 $ — $ 107,789 Corporate bonds 5,375 — 5,375 — Other fixed income securities 2,768 — 2,768 — Investment funds valued at net asset value (1) 49,386 Total securities and other investments owned 399,044 233,726 8,143 107,789 Loans receivable, at fair value 325,517 — — 325,517 Total assets measured at fair value $ 724,561 $ 233,726 $ 8,143 $ 433,306 Liabilities: Securities sold not yet purchased: Equity securities $ 4,181 $ 4,181 $ — $ — Corporate bonds 5,272 — 5,272 — Other fixed income securities 351 — 351 — Total securities sold not yet purchased 9,804 4,181 5,623 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,351 — — 4,351 Total liabilities measured at fair value $ 14,155 $ 4,181 $ 5,623 $ 4,351 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2019 Using Quoted prices in Fair value at active markets for Other Significant December 31 identical assets inputs inputs 2019 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 353,162 $ 243,911 $ — $ 109,251 Corporate bonds 19,020 — 19,020 — Other fixed income securities 8,414 — 8,414 — Investment funds valued at net asset value (1) 27,617 Total securities and other investments owned 408,213 243,911 27,434 109,251 Loans receivable, at fair value 43,338 — — 43,338 Total assets measured at fair value $ 451,551 $ 243,911 $ 27,434 $ 152,589 Liabilities: Securities sold not yet purchased: Equity securities $ 5,360 $ 5,360 $ — $ — Corporate bonds 33,436 — 33,436 — Other fixed income securities 3,024 — 3,024 — Total securities sold not yet purchased 41,820 5,360 36,460 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — — 4,616 Total liabilities measured at fair value $ 46,436 $ 5,360 $ 36,460 $ 4,616 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC “Topic 820 Fair Value Measurements.” The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. |
Fair value measurement of level 3 financial assets and liabilities | The following table summarizes the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment and valuation technique as of June 30, 2020: Fair value at June 30, Weighted 2020 Valuation Technique Unobservable Input Range Average Assets: Equity securities $ 107,789 Market approach Multiple of revenue 2.8x - 6.1x 4.6x Multiple of EBITDA 6.3x - 11.09x 6.5x Multiple of PV-10 .29x .29x Market price of related security $0.53 - $2.28/share $1.02 Discounted cash flow Market interest rate 107.0% 107.0% Option pricing model Annualized volatility 123.0% 123% Loans receivable at fair value 325,517 Discounted cash flow Market interest rate 8.3%-18.4% 15.1% Market approach Market price of related security $0.53/share $0.53 Total level 3 assets measured at fair value $ 433,306 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,351 Market approach Operating income multiple 6.0x 6.0x |
Schedule of changes in Level 3 fair value hierarchy | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenues: Revenues - Services and fees: North America $ 124,039 $ 139,968 $ 282,505 $ 243,788 Australia 1,038 — 1,702 15 Europe 518 — 769 61 Total Revenues - Services and fees $ 125,595 $ 139,968 $ 284,976 $ 243,864 Trading (losses) income and fair value adjustments on loans North America $ 114,547 $ 5,595 $ (67,895 ) $ 31,462 Revenues - Sale of goods North America $ 1,820 $ 2,160 $ 2,824 $ 3,105 Revenues - Interest income - Loans and securities lending: North America $ 24,506 $ 16,961 $ 46,357 $ 28,381 Total Revenues: North America $ 264,912 $ 164,684 $ 263,791 $ 306,736 Australia 1,038 — 1,702 15 Europe 518 — 769 61 Total Revenues $ 266,468 $ 164,684 $ 266,262 $ 306,812 |
Schedule of investments in the VIE | June 30, Partnership investments $ 20,352 Due from related party 15 Maximum exposure to loss $ 20,367 |
Fair Value, Inputs, Level 3 [Member] | |
Summary of Significant Accounting Policies (Tables) [Line Items] | |
Schedule of changes in Level 3 fair value hierarchy | The changes in Level 3 fair value hierarchy during the six months ended June 30, 2020 and 2019 are as follows: Level 3 Level 3 Changes During the Period Level 3 Balance at Beginning of Year Fair Value Adjustments Relating to Undistributed Earnings Purchases, Sales and Settlements Transfer in and/or out of Level 3 Balance at Six Months Ended June 30, 2020 Equity securities $ 109,251 $ (2,462 ) $ — $ 1,000 $ — $ 107,789 Loans receivable at fair value 43,338 (21,974 ) 2,462 75,843 225,848 325,517 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — (265 ) — — 4,351 Six Months Ended June 30, 2019 Equity securities $ 24,577 $ 5,267 $ 1,360 $ 1,451 $ — $ 32,655 Loans receivable at fair value 33,731 8,619 475 (978 ) — 41,847 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — (409 ) — — 4,224 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation for acquisition | The fair value of the assets acquired, including transaction costs, have been reflected in the accompanying financial statements as follows: Consideration paid by B. Riley: Cash acquisition consideration $ 116,500 Transaction costs 570 Total cash consideration 117,070 Warrant consideration 990 Total consideration $ 118,060 Tangible assets acquired and assumed: Cash and cash equivalents $ 2,160 Accounts receivable 1,751 Deferred revenue (1,332 ) Tradename 136,176 Customer list 8,678 Non-controlling interest (29,373 ) Total $ 118,060 |
Restructuring Charge (Tables)
Restructuring Charge (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of changes in accrued restructuring charge | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Balance, beginning of period $ 1,284 3,384 1,600 3,855 Restructuring charge — 1,552 — 1,699 Cash paid (315 ) (2,411 ) (631 ) (3,047 ) Non-cash items 10 117 10 135 Balance, end of period $ 979 $ 2,642 $ 979 $ 2,642 |
Schedule of restructuring activities by reportable segment | Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Capital Markets Principal Investments - United Online and magicJack Total Capital Markets Principal Investments - United Online and magicJack Total Restructuring charge: Employee termination costs $ — $ 1,418 $ 1,418 $ — $ 1,594 $ 1,594 Facility closure and consolidation charge (recovery) 25 109 134 (4 ) 109 105 Total restructuring charge $ 25 $ 1,527 $ 1,552 $ (4 ) $ 1,703 $ 1,699 |
Securities Lending (Tables)
Securities Lending (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Securities Lending [Abstract] | |
Schedule of contractual gross and net securities borrowing and lending balances | Gross amounts recognized Gross amounts offset in the consolidated balance sheets (1) Net amounts included in the consolidated balance sheets Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default (2) Net amounts As of June 30, 2020 Securities borrowed $ 786,363 $ — $ 786,363 $ 786,363 $ — Securities loaned $ 779,013 $ — $ 779,013 $ 779,013 $ — As of December 31, 2019 Securities borrowed $ 814,331 $ — $ 814,331 $ 814,331 $ — Securities loaned $ 810,495 $ — $ 810,495 $ 810,495 $ — (1) Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. (2) Includes the amount of cash collateral held/posted. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of components of accounts receivable, net | June 30, December 31, 2020 2019 Accounts receivable $ 36,942 $ 36,385 Investment banking fees, commissions and other receivables 4,879 8,043 Unbilled receivables 4,165 3,710 Total accounts receivable 45,986 48,138 Allowance for doubtful accounts (2,760 ) (1,514 ) Accounts receivable, net $ 43,226 $ 46,624 |
Schedule of allowance for doubtful accounts | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Balance, beginning of period $ 2,238 $ 766 $ 1,514 $ 696 Add: Additions to reserve 940 834 2,081 1,067 Less: Write-offs (418 ) (219 ) (835 ) (382 ) Less: Recovery — (21 ) — (21 ) Balance, end of period $ 2,760 $ 1,360 $ 2,760 $ 1,360 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | As of June 30, 2020 As of December 31, 2019 Useful Life Gross Carrying Value Accumulated Amortization Intangibles Net Gross Carrying Value Accumulated Amortization Intangibles Net Amortizable assets: Customer relationships 2 to 16 Years $ 99,008 $ 33,788 $ 65,220 $ 99,008 $ 27,269 $ 71,739 Domain names 7 Years 235 132 103 233 117 116 Advertising relationships 8 Years 100 50 50 100 44 56 Internally developed software and other intangibles 0.5 to 5 Years 11,775 6,068 5,707 11,765 4,843 6,922 Trademarks 7 to 10 Years 4,600 1,605 2,995 4,600 1,324 3,276 Total 115,718 41,643 74,075 115,706 33,597 82,109 Non-amortizable assets: Tradenames 125,916 — 125,916 138,416 — 138,416 Total intangible assets $ 241,634 $ 41,643 $ 199,991 $ 254,122 $ 33,597 $ 220,525 |
Senior Notes Payable (Tables)
Senior Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of senior notes payable | June 30, December 31, 2020 2019 7.50% Senior notes due May 31, 2027 $ 125,536 $ 117,954 7.25% Senior notes due December 31, 2027 122,545 120,126 7.375% Senior notes due May 31, 2023 127,358 122,140 6.875% Senior notes due September 30, 2023 113,109 105,952 6.75% Senior notes due May 31, 2024 110,476 106,589 6.50% Senior notes due September 30, 2026 134,657 124,226 6.375% Senior notes due February 28, 2025 130,942 — 864,623 696,987 Less: Unamortized debt issuance costs (10,586 ) (8,875 ) $ 854,037 $ 688,112 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues from contracts with customers | Three Months Ended June 30, 2020 Reportable Segment Principal Investments- Capital Auction and Valuation and United Online and Markets Liquidation Appraisal magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 49,653 $ — $ — $ — $ — $ 49,653 Wealth and asset management fees 18,701 — — — — 18,701 Commissions, fees and reimbursed expenses 12,785 2,596 7,668 — — 23,049 Subscription services — — — 18,287 — 18,287 Service contract revenues — 4,610 — — — 4,610 Advertising, licensing and other — 1,045 — 3,145 3,206 7,396 Total revenues from contracts with customers 81,139 8,251 7,668 21,432 3,206 121,696 Other sources of revenue: Interest income - Loans and securities lending 24,506 — — — — 24,506 Trading gains on investments 118,596 — — — — 118,596 Fair value adjustment on loans (4,049 ) — — — — (4,049 ) Other 5,719 — — — — 5,719 Total revenues $ 225,911 $ 8,251 $ 7,668 $ 21,432 $ 3,206 $ 266,468 Three Months Ended June 30, 2019 Reportable Segment Principal Investments- Capital Auction and Valuation and United Online and Markets Liquidation Appraisal magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 39,597 $ — $ — $ — $ — $ 39,597 Wealth and asset management fees 18,509 — — — — 18,509 Commissions, fees and reimbursed expenses 10,376 27,466 9,742 — — 47,584 Subscription services — — — 21,071 — 21,071 Service contract revenues — 6,274 — — — 6,274 Advertising, licensing and other — 1,176 — 4,707 — 5,883 Total revenues from contracts with customers 68,482 34,916 9,742 25,778 — 138,918 Other sources of revenue: Interest income - Loans and securities lending 16,961 — — — — 16,961 Trading losses on investments (93 ) — — — — (93 ) Fair value adjustment on loans 5,688 — — — — 5,688 Other 3,210 — — — — 3,210 Total revenues $ 94,248 $ 34,916 $ 9,742 $ 25,778 $ — $ 164,684 Six Months Ended June 30, 2020 Reportable Segment Capital Markets Auction and Liquidation Valuation and Appraisal Principal Investments - United Online and magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 117,034 $ — $ — $ — $ — $ 117,034 Wealth and asset management fees 39,022 — — — — 39,022 Commissions, fees and reimbursed expenses 27,255 18,774 16,457 — — 62,486 Subscription services — — — 37,120 — 37,120 Service contract revenues — 9,093 — — — 9,093 Advertising, licensing and other — 1,045 — 7,034 7,007 15,086 Total revenues from contracts with customers 183,311 28,912 16,457 44,154 7,007 279,841 Other sources of revenue: Interest income - Loans and securities lending 46,357 — — — — 46,357 Trading losses on investments (45,920 ) — — — — (45,920 ) Fair value adjustment on loans (21,975 ) — — — — (21,975 ) Other 7,959 — — — — 7,959 Total revenues $ 169,732 $ 28,912 $ 16,457 $ 44,154 $ 7,007 $ 266,262 Six Months Ended June 30, 2019 Reportable Segment Capital Markets Auction and Liquidation Valuation and Appraisal Principal Investments - United Online and magicJack Brands Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 57,433 $ — $ — $ — $ — $ 57,433 Wealth and asset management fees 36,044 — — — — 36,044 Commissions, fees and reimbursed expenses 21,273 35,099 18,325 — — 74,697 Subscription services — — — 43,469 — 43,469 Service contract revenues — 19,350 — — — 19,350 Advertising, licensing and other — 1,176 — 9,844 — 11,020 Total revenues from contracts with customers 114,750 55,625 18,325 53,313 — 242,013 Other sources of revenue: Interest income - Loans and securities lending 28,381 — — — — 28,381 Trading gains on investments 25,822 — — — — 25,822 Fair value adjustment on loans 5,639 — — — — 5,639 Other 4,957 — — — — 4,957 Total revenues $ 179,549 $ 55,625 $ 18,325 $ 53,313 $ — $ 306,812 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net income (loss) attributable to B. Riley Financial, Inc. $ 83,840 $ 22,157 $ (14,825 ) $ 30,180 Preferred stock dividends (1,087 ) — (2,142 ) — Net income (loss) applicable to common shareholders $ 82,753 $ 22,157 $ (16,967 ) $ 30,180 Weighted average common shares outstanding: Basic 25,627,085 26,278,352 25,827,849 26,247,952 Effect of dilutive potential common shares: Restricted stock units and warrants 1,365,738 543,442 — 448,191 Contingently issuable shares — 74,779 — 74,779 Diluted 26,992,823 26,896,573 25,827,849 26,770,922 Basic income (loss) per common share $ 3.23 $ 0.84 $ (0.66 ) $ 1.15 Diluted income (loss) per common share $ 3.07 $ 0.82 $ (0.66 ) $ 1.13 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of reportable segments | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Capital Markets segment: Revenues - Services and fees $ 86,858 $ 71,692 $ 191,271 $ 119,706 Trading income (losses) and fair value adjustments on loans 114,547 5,595 (67,895 ) 31,462 Interest income - Loans and securities lending 24,506 16,961 46,357 28,381 Total revenues 225,911 94,248 169,733 179,549 Selling, general and administrative expenses (81,030 ) (63,041 ) (135,741 ) (126,430 ) Restructuring (charge) recovery — (25 ) — 4 Interest expense - Securities lending and loan participations sold (11,221 ) (5,502 ) (19,694 ) (12,306 ) Depreciation and amortization (1,091 ) (1,287 ) (2,196 ) (2,563 ) Segment income 132,569 24,393 12,102 38,254 Auction and Liquidation segment: Revenues - Services and fees 7,206 33,740 27,867 54,449 Revenues - Sale of goods 1,045 1,176 1,045 1,176 Total revenues 8,251 34,916 28,912 55,625 Direct cost of services (3,217 ) (12,939 ) (18,033 ) (19,213 ) Cost of goods sold (285 ) (852 ) (314 ) (866 ) Selling, general and administrative expenses (2,729 ) (3,295 ) (4,255 ) (6,210 ) Depreciation and amortization — (2 ) (1 ) (4 ) Segment income 2,020 17,828 6,309 29,332 Valuation and Appraisal segment: Revenues - Services and fees 7,669 9,742 16,457 18,325 Selling, general and administrative expenses (6,144 ) (6,974 ) (13,011 ) (14,161 ) Depreciation and amortization (47 ) (31 ) (88 ) (64 ) Segment income 1,478 2,737 3,358 4,100 Principal Investments - United Online and magicJack segment: Revenues - Services and fees 20,656 24,794 42,374 51,384 Revenues - Sale of goods 775 984 1,779 1,929 Total revenues 21,431 25,778 44,153 53,313 Direct cost of services (4,768 ) (6,724 ) (9,904 ) (14,566 ) Cost of goods sold (575 ) (953 ) (1,315 ) (2,058 ) Selling, general and administrative expenses (4,049 ) (5,495 ) (9,512 ) (12,515 ) Depreciation and amortization (2,851 ) (3,300 ) (5,730 ) (6,763 ) Restructuring charge — (1,527 ) — (1,703 ) Segment income 9,188 7,779 17,692 15,708 Brands segment: Revenues - Services and fees 3,206 — 7,007 — Selling, general and administrative expenses (309 ) — (1,213 ) — Depreciation and amortization (715 ) — (1,429 ) — Impairment of tradenames (8,500 ) — (12,500 ) — Segment loss (6,318 ) — (8,135 ) — Consolidated operating income from reportable segments 138,937 52,737 31,326 87,394 Corporate and other expenses (7,597 ) (8,482 ) (21,130 ) (18,161 ) Interest income 224 331 470 968 Loss on equity investments (318 ) (1,400 ) (554 ) (5,162 ) Interest expense (16,509 ) (11,588 ) (32,163 ) (22,358 ) Income (Loss) before income taxes 114,737 31,598 (22,051 ) 42,681 (Provision) benefit for income taxes (32,208 ) (9,289 ) 5,331 (12,393 ) Net income (loss) 82,529 22,309 (16,720 ) 30,288 Net (loss) income attributable to noncontrolling interests (1,311 ) 152 (1,895 ) 108 Net income (loss) attributable to B. Riley Financial, Inc. 83,840 22,157 (14,825 ) 30,180 Preferred stock dividends 1,087 — 2,142 — Net income (loss) available to common shareholders $ 82,753 $ 22,157 $ (16,967 ) $ 30,180 |
Schedule of revenues by geographical area | Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenues: Revenues - Services and fees: North America $ 124,039 $ 139,968 $ 282,505 $ 243,788 Australia 1,038 — 1,702 15 Europe 518 — 769 61 Total Revenues - Services and fees $ 125,595 $ 139,968 $ 284,976 $ 243,864 Trading (losses) income and fair value adjustments on loans North America $ 114,547 $ 5,595 $ (67,895 ) $ 31,462 Revenues - Sale of goods North America $ 1,820 $ 2,160 $ 2,824 $ 3,105 Revenues - Interest income - Loans and securities lending: North America $ 24,506 $ 16,961 $ 46,357 $ 28,381 Total Revenues: North America $ 264,912 $ 164,684 $ 263,791 $ 306,736 Australia 1,038 — 1,702 15 Europe 518 — 769 61 Total Revenues $ 266,468 $ 164,684 $ 266,262 $ 306,812 |
Organization and Nature of Bu_2
Organization and Nature of Business Operations (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Number of operating segments | 5 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 11, 2020 | Oct. 28, 2019 | May 16, 2019 | Jul. 03, 2017 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Interest expense | $ 16,509 | $ 11,588 | $ 32,163 | $ 22,358 | ||||||
Loan participation sold | 14,109 | |||||||||
Interest expense from loan participations | 419 | 971 | ||||||||
Advertising costs | 864 | 584 | 1,704 | 946 | ||||||
Restricted cash | 471 | 471 | $ 471 | |||||||
Depreciation and amortization | 899 | 1,487 | 1,831 | 3,023 | ||||||
Principal balances | 325,517 | 325,517 | 43,338 | |||||||
Net of unamortized costs, origination fees, premiums and discounts | 4,991 | 4,991 | 113 | |||||||
Notes receivable unrealized losses | 4,049 | 21,975 | ||||||||
Senior notes payable | 854,037 | $ 854,037 | ||||||||
Discounted cash flow model rate | 13.80% | |||||||||
Transaction gains (loss) | $ (438) | (139) | $ 510 | (325) | ||||||
Conversion of loans receivable | 4,633 | |||||||||
Conversion of loans receivable shares of stock | $ 6,170 | |||||||||
Fair value adjustments on loans | 5,595 | 31,462 | ||||||||
Interest income | 16,961 | 28,381 | ||||||||
Costs and Expenses | 4,569 | 8,990 | ||||||||
Great American Global Partners, LLC [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Ownership, percentage | 50.00% | 50.00% | ||||||||
Bebe Stores Inc. ("bebe") [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Ownership, percentage | 30.50% | 30.50% | ||||||||
Wunderlich Warrants [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Warrants repurchased (in Shares) | 821,816 | |||||||||
Warrant [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Warrants repurchased (in Shares) | 638,311 | |||||||||
Exercise price (in Dollars per share) | $ 17.50 | $ 17.50 | $ 4.35 | |||||||
Warrants and rights outstanding | $ 2,777 | |||||||||
Warrants held in cancelled (in Shares) | 167,352 | |||||||||
Warrants expire date | Jul. 3, 2022 | |||||||||
Class of warrant or right, outstanding (in Shares) | 16,153 | 16,153 | ||||||||
BR Brands Warrants [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Warrants repurchased (in Shares) | 200,000 | |||||||||
Exercise price (in Dollars per share) | $ 26.24 | |||||||||
Loans receivable [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Principal balances | $ 232,118 | $ 232,118 | 225,848 | |||||||
Unearned income | 6,270 | 6,270 | ||||||||
Maximum amount of credit exposure | 255,000 | |||||||||
Fixed Income Securities [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Interest expense | $ 10,802 | $ 5,502 | 18,723 | $ 12,306 | ||||||
Babcock and Wilcox [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Outstanding loan | $ 14,109 | |||||||||
National Holdings Corporation [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Payments to acquire businesses | $ 22,900 | |||||||||
Percentage of voting interests acquired | 45.70% | 45.70% | 24.00% | |||||||
Number of shares acquire (in Shares) | 6,159,550 | |||||||||
Fair Value, Recurring [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Principal balances | $ 341,723 | $ 341,723 | 32,691 | |||||||
Loans receivable carrying value | 336,732 | 336,732 | 32,578 | |||||||
Total assets measured in Level 3 | 433,306 | 433,306 | 152,589 | |||||||
Senior notes payable | $ 772,721 | $ 772,721 | ||||||||
Conversion of loans receivable | $ 43,338 | |||||||||
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||||||
Percentage of total assets measured in Level 3 of the hierarchy level | 19.00% | 19.00% | 6.60% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of securities and other investments owned and securities sold not yet purchased at fair value - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Securities and other investments owned: | ||
Securities and other investments owned | $ 399,044 | $ 408,213 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 9,804 | 41,820 |
Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 5,375 | 19,020 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 5,272 | 33,436 |
Other Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 2,768 | 8,414 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 351 | 3,024 |
Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 49,386 | 27,617 |
Equity Securities [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 341,515 | 353,162 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | $ 4,181 | $ 5,360 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | $ 399,044 | $ 408,213 | |
Total assets measured at fair value | 724,561 | 451,551 | |
Total securities sold not yet purchased | 9,804 | 41,820 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,351 | 4,616 | |
Total liabilities measured at fair value | 14,155 | 46,436 | |
Investment funds valued at net asset value | [1] | 49,386 | 27,617 |
Corporate bonds [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 5,375 | 19,020 | |
Total securities sold not yet purchased | 5,272 | 33,436 | |
Other fixed income securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 2,768 | 8,414 | |
Total securities sold not yet purchased | 351 | 3,024 | |
Loans receivable, at fair value [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 325,517 | 43,338 | |
Equity securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 341,515 | 353,162 | |
Total securities sold not yet purchased | 4,181 | 5,360 | |
Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 233,726 | 243,911 | |
Total assets measured at fair value | 233,726 | 243,911 | |
Total securities sold not yet purchased | 4,181 | 5,360 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | |||
Total liabilities measured at fair value | 4,181 | 5,360 | |
Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate bonds [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | |||
Total securities sold not yet purchased | |||
Quoted prices in active markets for identical assets (Level 1) [Member] | Other fixed income securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | |||
Total securities sold not yet purchased | |||
Quoted prices in active markets for identical assets (Level 1) [Member] | Loans receivable, at fair value [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | |||
Quoted prices in active markets for identical assets (Level 1) [Member] | Equity securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 233,726 | 243,911 | |
Total securities sold not yet purchased | 4,181 | 5,360 | |
Other observable inputs (Level 2) [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 8,143 | 27,434 | |
Total assets measured at fair value | 8,143 | 27,434 | |
Total securities sold not yet purchased | 5,623 | 36,460 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | |||
Total liabilities measured at fair value | 5,623 | 36,460 | |
Other observable inputs (Level 2) [Member] | Corporate bonds [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 5,375 | 19,020 | |
Total securities sold not yet purchased | 5,272 | 33,436 | |
Other observable inputs (Level 2) [Member] | Other fixed income securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 2,768 | 8,414 | |
Total securities sold not yet purchased | 351 | 3,024 | |
Other observable inputs (Level 2) [Member] | Loans receivable, at fair value [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | |||
Other observable inputs (Level 2) [Member] | Equity securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | |||
Total securities sold not yet purchased | |||
Significant unobservable inputs (Level 3) [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 107,789 | 109,251 | |
Total assets measured at fair value | 433,306 | 152,589 | |
Total securities sold not yet purchased | |||
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,351 | 4,616 | |
Total liabilities measured at fair value | 4,351 | 4,616 | |
Significant unobservable inputs (Level 3) [Member] | Corporate bonds [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | |||
Total securities sold not yet purchased | |||
Significant unobservable inputs (Level 3) [Member] | Other fixed income securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | |||
Total securities sold not yet purchased | |||
Significant unobservable inputs (Level 3) [Member] | Loans receivable, at fair value [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 325,517 | 43,338 | |
Significant unobservable inputs (Level 3) [Member] | Equity securities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of financial assets and liabilities measured on recurring basis [Line Items] | |||
Total securities and other investments owned | 107,789 | 109,251 | |
Total securities sold not yet purchased | |||
[1] | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC “Topic 820 Fair Value Measurements.” The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Fair value measurement of level 3 financial assets and liabilities - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value Assets | $ 433,306 |
Equity Securities [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value Assets | $ 107,789 |
Valuation Technique | Market approach |
Unobservable Input | Multiple of revenue |
Weighted Average | 4.6x |
Equity Securities [Member] | Minimum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | 2.8 |
Equity Securities [Member] | Maximum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | 6.1 |
Equity Securities [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Unobservable Input | Multiple of EBITDA |
Weighted Average | 6.5x |
Equity Securities [Member] | Minimum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | 6.3 |
Equity Securities [Member] | Maximum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | 11.09 |
Equity Securities [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Unobservable Input | Multiple of PV-10 |
Range | 29 |
Weighted Average | .29x |
Equity Securities [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Unobservable Input | Market price of related security |
Weighted Average | $1.02 |
Equity Securities [Member] | Minimum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | $0.53 |
Equity Securities [Member] | Maximum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | $2.28 |
Equity Securities [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Valuation Technique | Discounted cash flow |
Unobservable Input | Market interest rate |
Range | 107.0% |
Weighted Average | 107.0% |
Equity Securities [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Valuation Technique | Option pricing model |
Unobservable Input | Annualized volatility |
Range | 123.0% |
Weighted Average | 123% |
Loans receivable at fair value [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Fair value Assets | $ 325,517 |
Valuation Technique | Discounted cash flow |
Unobservable Input | Market interest rate |
Weighted Average | 15.1% |
Loans receivable at fair value [Member] | Minimum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | 8.3% |
Loans receivable at fair value [Member] | Maximum [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Range | 18.4% |
Loans receivable at fair value [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Valuation Technique | Market approach |
Unobservable Input | Market price of related security |
Range | $0.53 |
Weighted Average | $0.53 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Valuation Technique | Market approach |
Unobservable Input | Operating income multiple |
Range | 6.0 |
Weighted Average | 6.0x |
Fair value Liabilities | $ 4,351 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of changes in Level 3 fair value hierarchy - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Equity securities [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of changes in Level 3 fair value hierarchy [Line Items] | ||
Balance at Beginning of Period | $ 109,251 | $ 24,577 |
Fair Value Adjustments | (2,462) | 5,267 |
Relating to Undistributed Earnings | 1,360 | |
Purchases, Sales and Settlements | 1,000 | 1,451 |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 107,789 | 32,655 |
Loans receivable at fair value [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of changes in Level 3 fair value hierarchy [Line Items] | ||
Balance at Beginning of Period | 43,338 | 33,731 |
Fair Value Adjustments | (21,974) | 8,619 |
Relating to Undistributed Earnings | 2,462 | 475 |
Purchases, Sales and Settlements | 75,843 | (978) |
Transfer in and/or out of Level 3 | 225,848 | |
Balance at End of Period | 325,517 | 41,847 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of changes in Level 3 fair value hierarchy [Line Items] | ||
Balance at Beginning of Period | 4,616 | 4,633 |
Fair Value Adjustments | ||
Relating to Undistributed Earnings | (265) | (409) |
Purchases, Sales and Settlements | ||
Transfer in and/or out of Level 3 | ||
Balance at End of Period | $ 4,351 | $ 4,224 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of investments in the VIE $ in Thousands | Jun. 30, 2020USD ($) |
Schedule of investments in the VIE [Abstract] | |
Partnership investments | $ 20,352 |
Due from related party | 15 |
Maximum exposure to loss | $ 20,367 |
Acquisitions (Details)
Acquisitions (Details) $ / shares in Units, $ in Thousands | Oct. 11, 2019USD ($)$ / sharesshares |
Acquisitions (Details) [Line Items] | |
Non-controlling interest | $ 29,373 |
B. Riley [Member] | |
Acquisitions (Details) [Line Items] | |
Cash acquisition consideration | 116,500 |
Warrant consideration | $ 990 |
Warrants to purchases (in Shares) | shares | 200,000 |
Exercise price (in Dollars per share) | $ / shares | $ 26.24 |
Transaction costs | $ 570 |
Acquisitions (Details) - Schedu
Acquisitions (Details) - Schedule of purchase price allocation for acquisition $ in Thousands | Oct. 11, 2019USD ($) |
Tangible assets acquired and assumed: | |
Cash and cash equivalents | $ 2,160 |
Accounts receivable | 1,751 |
Deferred revenue | (1,332) |
Tradename | 136,176 |
Customer list | 8,678 |
Non-controlling interest | (29,373) |
Total | 118,060 |
B. Riley [Member] | |
Consideration paid by B. Riley: | |
Cash acquisition consideration | 116,500 |
Transaction costs | 570 |
Total cash consideration | 117,070 |
Warrant consideration | 990 |
Total consideration | $ 118,060 |
Restructuring Charge (Details)
Restructuring Charge (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring Charges | $ 1,552 | $ 1,699 |
Restructuring Charge (Details)
Restructuring Charge (Details) - Schedule of changes in accrued restructuring charge - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of changes in accrued restructuring charge [Abstract] | ||||
Balance, beginning of period | $ 1,284 | $ 3,384 | $ 1,600 | $ 3,855 |
Restructuring charge | 1,552 | 1,699 | ||
Cash paid | (315) | (2,411) | (631) | (3,047) |
Non-cash items | 10 | 117 | 10 | 135 |
Balance, end of period | $ 979 | $ 2,642 | $ 979 | $ 2,642 |
Restructuring Charge (Details_2
Restructuring Charge (Details) - Schedule of restructuring activities by reportable segment - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restructuring charge: | ||||
Employee termination costs | $ 1,418 | $ 1,594 | ||
Facility closure and consolidation charge (recovery) | 134 | 105 | ||
Total restructuring charge | 1,552 | 1,699 | ||
Capital Markets [Member] | ||||
Restructuring charge: | ||||
Employee termination costs | ||||
Facility closure and consolidation charge (recovery) | 25 | (4) | ||
Total restructuring charge | 25 | (4) | ||
Principal Investments - United Online and magicJack [Member] | ||||
Restructuring charge: | ||||
Employee termination costs | 1,418 | 1,594 | ||
Facility closure and consolidation charge (recovery) | 109 | 109 | ||
Total restructuring charge | $ 1,527 | $ 1,703 |
Securities Lending (Details) -
Securities Lending (Details) - Schedule of contractual gross and net securities borrowing and lending balances - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Schedule of contractual gross and net securities borrowing and lending balances [Abstract] | |||
Gross amounts recognized | $ 786,363 | $ 814,331 | |
Gross amounts offset in the consolidated balance sheets | [1] | ||
Net amounts included in the consolidated balance sheets | 786,363 | 814,331 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | [2] | 786,363 | 814,331 |
Net amounts | |||
Gross amounts recognized | 779,013 | 810,495 | |
Gross amounts offset in the consolidated balance sheets | [1] | ||
Net amounts included in the consolidated balance sheets | 779,013 | 810,495 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | [2] | 779,013 | 810,495 |
Net amounts | |||
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | ||
[2] | Includes the amount of cash collateral held/posted. |
Accounts Receivable (Details) -
Accounts Receivable (Details) - Schedule of components of accounts receivable, net - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Schedule of components of accounts receivable, net [Abstract] | ||
Accounts receivable | $ 36,942 | $ 36,385 |
Investment banking fees, commissions and other receivables | 4,879 | 8,043 |
Unbilled receivables | 4,165 | 3,710 |
Total accounts receivable | 45,986 | 48,138 |
Allowance for doubtful accounts | (2,760) | (1,514) |
Accounts receivable, net | $ 43,226 | $ 46,624 |
Accounts Receivable (Details)_2
Accounts Receivable (Details) - Schedule of allowance for doubtful accounts - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of allowance for doubtful accounts [Abstract] | ||||
Balance, beginning of period | $ 2,238 | $ 766 | $ 1,514 | $ 696 |
Add: Additions to reserve | 940 | 834 | 2,081 | 1,067 |
Less: Write-offs | (418) | (219) | (835) | (382) |
Less: Recovery | (21) | (21) | ||
Balance, end of period | $ 2,760 | $ 1,360 | $ 2,760 | $ 1,360 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 227,046 | $ 227,046 | $ 223,697 | ||
Goodwill, Other Increase (Decrease) | 3,349 | ||||
Amortization expense | 4,024 | $ 3,344 | 8,048 | $ 6,721 | |
Estimated future amortization expense 2020 | 7,669 | 7,669 | |||
Estimated future amortization expense 2021 | 15,225 | 15,225 | |||
Estimated future amortization expense 2022 | 14,564 | 14,564 | |||
Estimated future amortization expense 2023 | 12,574 | 12,574 | |||
Estimated future amortization expense 2024 | 8,487 | 8,487 | |||
Estimated future amortization expense after 2024 | $ 15,556 | $ 15,556 | |||
Goodwill, change in goodwill allocation, description | the Company made a qualitative assessment of the impact of the COVID-19 outbreak on goodwill and other intangible assets. The Company determined that the COVID-19 outbreak was a triggering event for testing the indefinite-lived tradenames in the Brands segment and made a determination that the indefinite-lived tradenames in the Brands segment were impaired and the Company recognized an impairment charge of $4,000. As a result of the continuing impact and duration of the COVID-19 outbreak on the operations of the Brands segment, the Company determined that there was another triggering event for testing the indefinite-lived tradenames in the Brands segment and made a determination that the indefinite-lived tradenames in the Brands segment were impaired and the Company recognized an additional impairment charge of $8,500 in the second quarter of 2020. The Company will continue to monitor the impacts of the COVID-19 outbreak in future quarters. |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Value | $ 115,718 | $ 115,706 |
Accumulated Amortization | 41,643 | 33,597 |
Intangibles Net | 74,075 | 82,109 |
Gross Carrying Value | 241,634 | 254,122 |
Accumulated Amortization | 41,643 | 33,597 |
Intangibles Net | 199,991 | 220,525 |
Customer relationships [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Value | 99,008 | 99,008 |
Accumulated Amortization | 33,788 | 27,269 |
Intangibles Net | $ 65,220 | 71,739 |
Customer relationships [Member] | Minimum [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 2 years | |
Customer relationships [Member] | Maximum [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 16 years | |
Domain names [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 7 years | |
Gross Carrying Value | $ 235 | 233 |
Accumulated Amortization | 132 | 117 |
Intangibles Net | $ 103 | 116 |
Advertising relationships [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 8 years | |
Gross Carrying Value | $ 100 | 100 |
Accumulated Amortization | 50 | 44 |
Intangibles Net | 50 | 56 |
Internally developed software and other intangibles [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Value | 11,775 | 11,765 |
Accumulated Amortization | 6,068 | 4,843 |
Intangibles Net | $ 5,707 | 6,922 |
Internally developed software and other intangibles [Member] | Minimum [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 6 months | |
Internally developed software and other intangibles [Member] | Maximum [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 5 years | |
Trademarks [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Value | $ 4,600 | 4,600 |
Accumulated Amortization | 1,605 | 1,324 |
Intangibles Net | $ 2,995 | 3,276 |
Trademarks [Member] | Minimum [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 7 years | |
Trademarks [Member] | Maximum [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Useful Life | 10 years | |
Tradenames [Member] | ||
Goodwill and Other Intangible Assets (Details) - Schedule of intangible assets [Line Items] | ||
Gross Carrying Value | $ 125,916 | 138,416 |
Accumulated Amortization | ||
Intangibles Net | $ 125,916 | $ 138,416 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Apr. 21, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Mar. 19, 2015 | |
Notes Payable (Details) [Line Items] | |||||||
Credit facility | $ 0 | $ 0 | |||||
Interest expense | 29,980 | $ 18,926 | |||||
Clearing Organisation [Member] | |||||||
Notes Payable (Details) [Line Items] | |||||||
Credit facility | 714 | $ 714 | $ 1,071 | ||||
Description of interest rate | The notes payable accrue interest at the prime rate plus 2.0% (6.75% at June 30, 2020) payable annually, maturing January 31, 2022. | ||||||
Interest expense | 48 | $ 22 | $ 63 | 45 | |||
UK Credit Agreement [Member] | |||||||
Notes Payable (Details) [Line Items] | |||||||
Credit facility | $ 200,000 | ||||||
Wells Fargo Bank, National Association [Member] | Asset Based Credit Facility [Member] | Second Amended and Restated Credit Agreement [Member] | |||||||
Notes Payable (Details) [Line Items] | |||||||
Credit facility expiration date | Apr. 21, 2022 | ||||||
Credit facility | $ 37,096 | ||||||
Description of collateral | The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. | ||||||
Description of collateral | $ 500 | ||||||
Description of interest rate | The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. | ||||||
Description of success fees | The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. | ||||||
Interest expense | $ 143 | $ 104 | $ 420 | $ 586 | |||
Wells Fargo Bank, National Association [Member] | Asset Based Credit Facility [Member] | Second Amended and Restated Credit Agreement [Member] | Minimum [Member] | |||||||
Notes Payable (Details) [Line Items] | |||||||
Maximum borrowing capacity credit facility | $ 100,000 | ||||||
Wells Fargo Bank, National Association [Member] | Asset Based Credit Facility [Member] | Second Amended and Restated Credit Agreement [Member] | Maximum [Member] | |||||||
Notes Payable (Details) [Line Items] | |||||||
Maximum borrowing capacity credit facility | $ 200,000 | ||||||
Wells Fargo Bank, National Association [Member] | Line of Credit [Member] | UK Credit Agreement [Member] | |||||||
Notes Payable (Details) [Line Items] | |||||||
Maximum borrowing capacity credit facility | $ 50,000 |
Term Loan (Details)
Term Loan (Details) - BRPI Acquisition Co LLC [Member] - BRPAC Credit Agreement [Member] - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Dec. 19, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Feb. 01, 2019 | |
Term Loan [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Principal amount | $ 57,195 | $ 57,195 | $ 66,666 | ||||
Date of first required periodic payment | Feb. 1, 2019 | ||||||
Interest rate terms, description | Borrowings under the BRPAC Credit Agreement bear interest at a rate equal to (a) the LIBOR rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two and one-half percent (2.5%) to three percent (3.0%) per annum, based upon the Borrowers’ ratio of consolidated funded indebtedness to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the preceding four fiscal quarters or other applicable period. | ||||||
Interest rate | 2.93% | 2.93% | |||||
Frequency of periodic payment | Amounts outstanding under the BRPAC Credit Agreement are due in quarterly installments commencing on March 31, 2019 with any remaining amounts outstanding due at maturity. | ||||||
Unamortized debt issuance costs | $ 600 | ||||||
Interest expense | $ 586 | $ 1,257 | $ 1,415 | $ 2,535 | |||
Amortization of deferred debt issuance costs | 72 | $ 93 | 148 | $ 181 | |||
Banc of California, N.A. [Member] | Term Loan [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Description of collateral | The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties, (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security and other related agreements. | ||||||
Principal amount | 80,000 | 80,000 | |||||
Additional borrowed amount (the "Option Loan") | 10,000 | $ 10,000 | |||||
Debt maturity date | Dec. 19, 2023 | ||||||
Quarterly installments for term loan | $ 4,244 | ||||||
City National Bank [Member] | Minimum [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Principal amount | 80,000 | 80,000 | |||||
Unamortized debt issuance costs | $ 452 | ||||||
City National Bank [Member] | Maximum [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Principal amount | 90,000 | 90,000 | |||||
City National Bank [Member] | Term Loan [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Additional borrowed amount (the "Option Loan") | 10,000 | 10,000 | $ 10,000 | ||||
City National Bank [Member] | December 31, 2023 [Member] | Term Loan [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Quarterly installments for term loan | 2,122 | ||||||
City National Bank [Member] | December 23, 2023 [Member] | Term Loan [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Additional borrowed amount (the "Option Loan") | $ 10,000 | 10,000 | |||||
Quarterly installments for term loan | 265 | ||||||
City National Bank [Member] | December 23, 2022 [Member] | Term Loan [Member] | |||||||
Term Loan (Details) [Line Items] | |||||||
Quarterly installments for term loan | $ 566 |
Senior Notes Payable (Details)
Senior Notes Payable (Details) - USD ($) $ in Thousands | Feb. 12, 2020 | Mar. 31, 2020 | Feb. 14, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Senior Notes Payable (Details) [Line Items] | ||||||||
Senior notes payable | $ 864,623 | $ 864,623 | $ 696,987 | |||||
Repurchased face value | $ 3,443 | |||||||
Net of expenses gain | $ 1,829 | |||||||
Original issue discount | 1,556 | 1,556 | ||||||
Accrued interest paid | 30 | |||||||
Senior notes Outstanding | 854,037 | 854,037 | 688,112 | |||||
Unamortized debt issuance costs | $ 10,586 | $ 10,586 | $ 8,875 | |||||
Weighted average interest rate | 6.94% | 6.94% | 7.05% | |||||
Interest expense | $ 29,980 | $ 18,926 | ||||||
Outstanding notes payable | $ 100,000 | |||||||
Senior Notes [Member] | ||||||||
Senior Notes Payable (Details) [Line Items] | ||||||||
Interest expense | $ 15,588 | $ 10,071 | ||||||
6.375% 2025 Notes [Member] | ||||||||
Senior Notes Payable (Details) [Line Items] | ||||||||
Senior notes payable | $ 132,250 | |||||||
Interest rate | 6.375% | |||||||
Net proceeds | $ 129,213 | |||||||
Underwriting commissions, fees and other issuance costs | $ 3,037 | |||||||
February 2020 Sales Agreement [Member] | February 2020 Sales Agreement Prospectus [Member] | ||||||||
Senior Notes Payable (Details) [Line Items] | ||||||||
Senior notes payable | $ 150,000 | |||||||
B. Riley FBR, Inc. [Member] | Market Issuance Sales Agreements [Member] | Senior Notes [Member] | ||||||||
Senior Notes Payable (Details) [Line Items] | ||||||||
Senior notes payable | $ 38,828 | 38,828 | ||||||
B. Riley FBR, Inc. [Member] | December 2019 Sales Agreement [Member] | Senior Notes And Common Stock [Member] | ||||||||
Senior Notes Payable (Details) [Line Items] | ||||||||
Outstanding notes payable | $ 148,415 |
Senior Notes Payable (Details)
Senior Notes Payable (Details) - Schedule of senior notes payable - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Senior notes payable | $ 864,623 | $ 696,987 |
Less: Unamortized debt issuance costs | (10,586) | (8,875) |
Senior notes payable, net | 854,037 | 688,112 |
7.50% Senior notes due May 31, 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 125,536 | 117,954 |
7.25% Senior notes due December 31, 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 122,545 | 120,126 |
7.375% Senior notes due May 31, 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 127,358 | 122,140 |
6.875% Senior notes due September 30, 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 113,109 | 105,952 |
6.75% Senior notes due May 31, 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 110,476 | 106,589 |
6.50% Senior notes due September 30, 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 134,657 | 124,226 |
6.375% Senior notes due February 28, 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 130,942 |
Senior Notes Payable (Details_2
Senior Notes Payable (Details) - Schedule of senior notes payable (Parentheticals) | 6 Months Ended |
Jun. 30, 2020 | |
7.50% Senior notes due May 31, 2027 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 7.50% |
Maturity date | May 31, 2027 |
7.25% Senior notes due December 31, 2027 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 7.25% |
Maturity date | Dec. 31, 2027 |
7.375% Senior notes due May 31, 2023 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 7.375% |
Maturity date | May 31, 2023 |
6.875% Senior notes due September 30, 2023 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 6.875% |
Maturity date | Sep. 30, 2023 |
6.75% Senior notes due May 31, 2024 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 6.75% |
Maturity date | May 31, 2024 |
6.50% Senior notes due September 30, 2026 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 6.50% |
Maturity date | Sep. 30, 2026 |
6.375% Senior notes due February 28, 2025 [Member] | |
Debt Instrument [Line Items] | |
Interest rate | 6.375% |
Maturity date | Feb. 28, 2025 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Accounts receivable, net | $ 43,226 | $ 43,226 | $ 46,624 | ||
Deferred revenue | 71,017 | 71,017 | 67,121 | ||
Recognized revenue from contract | 10,087 | $ 11,932 | 24,074 | $ 25,166 | |
Capitalized costs | 410 | $ 450 | |||
Recognized expenses capitalized costs | $ 70 | $ 430 | $ 142 | $ 1,031 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Details) - Schedule of revenues from contracts with customers - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | $ 121,696 | $ 138,918 | $ 279,841 | $ 242,013 |
Other sources of revenue: | ||||
Total revenues | 266,468 | 164,684 | 266,262 | 306,812 |
Capital Markets [Member | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 81,139 | 68,482 | 183,311 | 114,750 |
Other sources of revenue: | ||||
Total revenues | 225,911 | 94,248 | 169,732 | 179,549 |
Auction and Liquidation [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 8,251 | 34,916 | 28,912 | 55,625 |
Other sources of revenue: | ||||
Total revenues | 8,251 | 34,916 | 28,912 | 55,625 |
Valuation and Appraisal [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 7,668 | 9,742 | 16,457 | 18,325 |
Other sources of revenue: | ||||
Total revenues | 7,668 | 9,742 | 16,457 | 18,325 |
Principal United Online and magicJack [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 21,432 | 25,778 | 44,154 | 53,313 |
Other sources of revenue: | ||||
Total revenues | 21,432 | 25,778 | 44,154 | 53,313 |
Brands [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 3,206 | 7,007 | ||
Other sources of revenue: | ||||
Total revenues | 3,206 | 7,007 | ||
Corporate finance, consulting and investment banking fees [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 49,653 | 39,597 | 117,034 | 57,433 |
Corporate finance, consulting and investment banking fees [Member] | Capital Markets [Member | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 49,653 | 39,597 | 117,034 | 57,433 |
Corporate finance, consulting and investment banking fees [Member] | Auction and Liquidation [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Corporate finance, consulting and investment banking fees [Member] | Valuation and Appraisal [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Corporate finance, consulting and investment banking fees [Member] | Principal United Online and magicJack [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Corporate finance, consulting and investment banking fees [Member] | Brands [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Wealth and asset management fees [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 18,701 | 18,509 | 39,022 | 36,044 |
Wealth and asset management fees [Member] | Capital Markets [Member | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 18,701 | 18,509 | 39,022 | 36,044 |
Wealth and asset management fees [Member] | Auction and Liquidation [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Wealth and asset management fees [Member] | Valuation and Appraisal [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Wealth and asset management fees [Member] | Principal United Online and magicJack [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Wealth and asset management fees [Member] | Brands [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Commissions, fees and reimbursed expenses [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 23,049 | 47,584 | 62,486 | 74,697 |
Commissions, fees and reimbursed expenses [Member] | Capital Markets [Member | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 12,785 | 10,376 | 27,255 | 21,273 |
Commissions, fees and reimbursed expenses [Member] | Auction and Liquidation [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 2,596 | 27,466 | 18,774 | 35,099 |
Commissions, fees and reimbursed expenses [Member] | Valuation and Appraisal [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 7,668 | 9,742 | 16,457 | 18,325 |
Commissions, fees and reimbursed expenses [Member] | Principal United Online and magicJack [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Commissions, fees and reimbursed expenses [Member] | Brands [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Subscription services [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 18,287 | 21,071 | 37,120 | 43,469 |
Subscription services [Member] | Capital Markets [Member | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Subscription services [Member] | Auction and Liquidation [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Subscription services [Member] | Valuation and Appraisal [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Subscription services [Member] | Principal United Online and magicJack [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 18,287 | 21,071 | 37,120 | 43,469 |
Subscription services [Member] | Brands [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Service contract revenues [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 4,610 | 6,274 | 9,093 | 19,350 |
Service contract revenues [Member] | Capital Markets [Member | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Service contract revenues [Member] | Auction and Liquidation [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 4,610 | 6,274 | 9,093 | 19,350 |
Service contract revenues [Member] | Valuation and Appraisal [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Service contract revenues [Member] | Principal United Online and magicJack [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Service contract revenues [Member] | Brands [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Advertising, licensing and other [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 7,396 | 5,883 | 15,086 | 11,020 |
Advertising, licensing and other [Member] | Capital Markets [Member | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Advertising, licensing and other [Member] | Auction and Liquidation [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 1,045 | 1,176 | 1,045 | 1,176 |
Advertising, licensing and other [Member] | Valuation and Appraisal [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | ||||
Advertising, licensing and other [Member] | Principal United Online and magicJack [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 3,145 | 4,707 | 7,034 | 9,844 |
Advertising, licensing and other [Member] | Brands [Member] | ||||
Revenues from contracts with customers: | ||||
Total revenues from contracts with customers | 3,206 | 7,007 | ||
Interest income - Loans and securities lending [Member] | ||||
Other sources of revenue: | ||||
Total revenues | 24,506 | 16,961 | 46,357 | 28,381 |
Interest income - Loans and securities lending [Member] | Capital Markets [Member | ||||
Other sources of revenue: | ||||
Total revenues | 24,506 | 16,961 | 46,357 | 28,381 |
Interest income - Loans and securities lending [Member] | Auction and Liquidation [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Interest income - Loans and securities lending [Member] | Valuation and Appraisal [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Interest income - Loans and securities lending [Member] | Principal United Online and magicJack [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Interest income - Loans and securities lending [Member] | Brands [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Trading gains on investments [Member] | ||||
Other sources of revenue: | ||||
Total revenues | 118,596 | (93) | (45,920) | 25,822 |
Trading gains on investments [Member] | Capital Markets [Member | ||||
Other sources of revenue: | ||||
Total revenues | 118,596 | (93) | (45,920) | 25,822 |
Trading gains on investments [Member] | Auction and Liquidation [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Trading gains on investments [Member] | Valuation and Appraisal [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Trading gains on investments [Member] | Principal United Online and magicJack [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Trading gains on investments [Member] | Brands [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Fair value adjustment on loans [Member] | ||||
Other sources of revenue: | ||||
Total revenues | (4,049) | 5,688 | (21,975) | 5,639 |
Fair value adjustment on loans [Member] | Capital Markets [Member | ||||
Other sources of revenue: | ||||
Total revenues | (4,049) | 5,688 | (21,975) | 5,639 |
Fair value adjustment on loans [Member] | Auction and Liquidation [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Fair value adjustment on loans [Member] | Valuation and Appraisal [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Fair value adjustment on loans [Member] | Principal United Online and magicJack [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Fair value adjustment on loans [Member] | Brands [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Other [Member] | ||||
Other sources of revenue: | ||||
Total revenues | 5,719 | 3,210 | 7,959 | 4,957 |
Other [Member] | Capital Markets [Member | ||||
Other sources of revenue: | ||||
Total revenues | 5,719 | 3,210 | 7,959 | 4,957 |
Other [Member] | Auction and Liquidation [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Other [Member] | Valuation and Appraisal [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Other [Member] | Principal United Online and magicJack [Member] | ||||
Other sources of revenue: | ||||
Total revenues | ||||
Other [Member] | Brands [Member] | ||||
Other sources of revenue: | ||||
Total revenues |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes (Details) [Line Items] | ||
U.S. federal corporate tax rate | 24.20% | 29.00% |
Net operating loss carryforwards | $ 64,088 | |
Deferred tax assets valuation allowance | 61,945 | |
State and Local Jurisdiction [Member] | ||
Income Taxes (Details) [Line Items] | ||
Net operating loss carryforwards | $ 53,932 | |
Federal Tax Authority [Member] | Minimum [Member] | ||
Income Taxes (Details) [Line Items] | ||
Expiration date | Dec. 31, 2037 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share (Details) [Line Items] | ||||
Number of shares held in escrow account | 387,365 | |||
Number of antidilutive securities were excluded from the computation of diluted net income (loss) per share | 1,365,738 | 1,104,198 | 1,592,958 | 1,528,533 |
Escrow Subject to Cancellation Escrow Claims [Member] | ||||
Earnings Per Share (Details) [Line Items] | ||||
Number of shares issued in escrow account to forfeiture for final settlement of claims | 387,365 |
Earnings Per Share (Details) -
Earnings Per Share (Details) - Schedule of basic and diluted earnings per share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of basic and diluted earnings per share [Abstract] | ||||
Net income (loss) attributable to B. Riley Financial, Inc. (in Dollars) | $ 83,840 | $ 22,157 | $ (14,825) | $ 30,180 |
Preferred stock dividends (in Dollars) | (1,087) | (2,142) | ||
Net income (loss) applicable to common shareholders (in Dollars) | $ 82,753 | $ 22,157 | $ (16,967) | $ 30,180 |
Weighted average common shares outstanding: | ||||
Basic | 25,627,085 | 26,278,352 | 25,827,849 | 26,247,952 |
Effect of dilutive potential common shares: | ||||
Restricted stock units and warrants | 1,365,738 | 543,442 | 448,191 | |
Contingently issuable shares | 74,779 | 74,779 | ||
Diluted | 26,992,823 | 26,896,573 | 25,827,849 | 26,770,922 |
Basic income (loss) per common share (in Dollars per share) | $ 3.23 | $ 0.84 | $ (0.66) | $ 1.15 |
Diluted income (loss) per common share (in Dollars per share) | $ 3.07 | $ 0.82 | $ (0.66) | $ 1.13 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Apr. 07, 2020 | Jan. 05, 2017 | Feb. 19, 2020 | Feb. 14, 2020 | May 16, 2019 | Jun. 30, 2020 | May 14, 2020 |
Commitments and Contingencies (Details) [Line Items] | |||||||
Offering price | $ 151,000 | ||||||
Litigation settlement description | On April 7, 2020, the arbitration panel issued an award against BRWM and Gary Wunderlich holding each party jointly and severally liable for damages, costs and expenses in an aggregate amount of $11,400. The Company filed a motion to vacate the arbitration award in the U.S. District Court for the Southern District of New York on May 5, 2020. In June 2020, Dominick & Dickerman LLC settled the matter for $10,150 in cash. Michael Campbell agreed that the award shall be vacated as to him. | ||||||
Payments for legal settlements | $ 5,000 | ||||||
Aggregate principal amount | $ 100,000 | ||||||
Asset based lending facility | 100,000 | ||||||
Babcock and Wilcox [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Contractual obligation | $ 40,000 | ||||||
Franchise Group Merger Sub AF, INC, [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Aggregate principal amount | $ 50,000 | $ 575,000 | |||||
Franchise Group Intermediate L2, LLC, [Member] | |||||||
Commitments and Contingencies (Details) [Line Items] | |||||||
Aggregate principal amount | $ 125,000 |
Share-Based Payments and Comm_2
Share-Based Payments and Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 02, 2020 | Jul. 01, 2020 | Jan. 02, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Share-Based Payments and Common Stock (Details) [Line Items] | |||||||
Share based compensation expense | $ 9,489 | $ 5,548 | |||||
Stock repurchased shares (in Shares) | 450,000 | 900,000 | 450,000 | 1,240,581 | |||
Stock repurchased value | $ 9,900 | $ 19,800 | $ 9,900 | $ 27,779 | |||
Average price (in Dollars per share) | $ 22 | $ 22.39 | $ 22.39 | ||||
Sale of Stock, Description of Transaction | In addition to the repurchases of common stock, 387,365 shares of the Company’s common stock that were previously held in escrow in connection with the acquisition of WIC in 2017 were forfeited and cancelled on June 11, 2020 to indemnify the Company for certain representations and warranties and related claims pursuant to a related acquisition agreement. | ||||||
Amended and Restated 2009 Stock Incentive Plan [Member] | |||||||
Share-Based Payments and Common Stock (Details) [Line Items] | |||||||
Granted (in Shares) | 586,916 | ||||||
Weighted average grant date fair value, shares (in Dollars per share) | $ 18.53 | ||||||
2018 Employee Stock Purchase Plan [Member] | |||||||
Share-Based Payments and Common Stock (Details) [Line Items] | |||||||
Share based compensation expense | $ 59 | $ 74 | $ 224 | 195 | |||
Number of shares reserved for future issuance (in Shares) | 524,891 | 524,891 | |||||
Restricted Stock Units (RSUs) [Member] | Amended and Restated 2009 Stock Incentive Plan [Member] | |||||||
Share-Based Payments and Common Stock (Details) [Line Items] | |||||||
Share based compensation expense | $ 4,109 | $ 2,860 | $ 9,265 | $ 5,353 |
Net Capital Requirements (Detai
Net Capital Requirements (Details) $ in Thousands | Jun. 30, 2020USD ($) |
FBR & Co. ("FBR") [Member] | |
Net Capital Requirements (Details) [Line Items] | |
Net capital | $ 99,404 |
Excess capital | 96,325 |
FBR & Co. ("FBR") [Member] | Maximum [Member] | |
Net Capital Requirements (Details) [Line Items] | |
Excess capital | 3,079 |
B. Riley Wealth Management [Member] | |
Net Capital Requirements (Details) [Line Items] | |
Net capital | 4,923 |
Excess capital | 4,263 |
B. Riley Wealth Management [Member] | Maximum [Member] | |
Net Capital Requirements (Details) [Line Items] | |
Excess capital | $ 660 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | May 14, 2020 | Apr. 02, 2019 | May 31, 2020 | May 22, 2020 | Oct. 17, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Related Party Transactions (Details) [Line Items] | ||||||||
Due from related party | $ 295 | $ 5,832 | ||||||
Management fee earned | $ 200 | 13 | ||||||
Interest expense | 29,980 | $ 18,926 | ||||||
Transfer Agreement, description | the Company entered into a Transfer Agreement (the “Transfer Agreement”) with GACP II, a fund managed by GACP, and John Ahn, who is the brother of Phil Ahn, the Company’s Chief Financial Officer and Chief Operating Officer. The Transfer Agreement provides for among other things, the transfer to Mr. J. Ahn of 55.56% of the Company’s limited partnership interest in GACP II (the “Transferred Interest”), which represents a capital commitment in the aggregate amount of $5,000. In connection with the Transfer Agreement, the Company provided Mr. J. Ahn with a non-recourse, secured line of credit in an aggregate amount of up to $5,003 pursuant to the terms of a Secured Line of Credit Promissory Note (the “Note”) dated April 1, 2019, to fund the purchase price of the Transferred Interest. We also entered into a Security Agreement with Mr. J. Ahn on April 1, 2019, which granted to the Company a security interest in the Transferred Interest to secure Mr. J. Ahn’s obligations under the Note. The Note is subject to an interest rate per annum of 7.00%. As of December 31, 2019, the principal and accrued interest on the Note were $3,798 and $48, respectively. In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P., a limited partnership controlled by Mr. J. Ahn, (“Whitehawk”). Whitehawk has agreed to provide investment advisory services for GACP I and GACP II. In accordance with the terms of the Note, Mr. Ahn surrendered the Transferred Interest to the Company in exchange for the cancellation of the Note. | |||||||
Interest payments received | 121 | |||||||
Management fees paid | 103 | |||||||
Underwriting fees | $ 3,275 | |||||||
Initial public offering, description | The Company has also agreed to loan BRPM II up to $300 for operating expenses. The loan is interest free and there were no amounts outstanding at June 30, 2020. BRPM II entered into a non-binding letter of intent to acquire a privately held company that is not related to the Company (the “Proposed Acquisition”). The non-binding letter of intent contemplates that the Company would provide a backstop guarantee to raise $50,000 new equity in a private placement for the Proposed Acquisition. | |||||||
Services fees | 750 | |||||||
Debt issue discount | $ 10,586 | 8,875 | ||||||
Executive Officer's and Board of Directors [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Financial interest | 72.90% | |||||||
GACP [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Loans receivable with a carrying value | $ 1,800 | |||||||
Sonim [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Loan amount | 6,170 | |||||||
Maven [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Principal amount due on loan | 49,921 | |||||||
GACP I, L.P [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Due from related party | 32 | 145 | ||||||
GACP II, L.P [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Due from related party | 15 | 12 | ||||||
CA Global Partners, LLC [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Due from related party | 248 | |||||||
President [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Due from related party | 3,846 | |||||||
GACP I, L.P [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Interest expense | $ 971 | |||||||
GACP I, L.P [Member] | Co-Chief Executive Officer [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Financial interest | 42.10% | |||||||
GACP I, L.P [Member] | B. Riley Partners Opportunity Fund's Loan Participations [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Subsidiaries amount value | $ 14,109 | |||||||
Outstanding loan | $ 14,109 | 12,478 | ||||||
Sonim [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Loans receivable with a carrying value | 9,603 | |||||||
Financial interest | 10.00% | |||||||
Related Party Transaction, Date | Sep. 1, 2022 | |||||||
Principal amount due on loan | $ 4,000 | |||||||
Babcock and Wilcox [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Loans receivable with a carrying value | 109,147 | |||||||
Outstanding loan | 14,109 | |||||||
Loans receviable amount | $ 150,812 | |||||||
Related party transaction, description | the Company provided B&W with another $30,000 of last-out term loans pursuant to a further amendment to B&W’s credit agreement which also included future commitments for the Company to loan B&W $40,000 at various dates starting in November 2020 and a limited guaranty by the Company of B&W’s obligations under the amended credit facility, (the “Amendment Transactions”). Interest is payable quarterly at the fixed rate of 12.0% per annum in common stock of B&W at $2.28 per common share through December 31, 2020 and in cash thereafter. All of these loans were made to B&W as part of various amendments to B&W’s existing credit agreement with other lenders not related to the Company. | |||||||
Warrants granted (in Shares) | 1,666,667 | |||||||
Exercise Price (in Dollars per share) | $ 0.01 | |||||||
Maturity date | Apr. 5, 2022 | |||||||
Maven [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Due from related party | 21,150 | |||||||
Loans receivable with a carrying value | $ 71,118 | 47,933 | ||||||
Debt issue discount | $ 1,988 | |||||||
Description of loan payable | Interest on these loans is payable at 12.0% to 15.0% per annum with maturity dates through June 2022. | |||||||
Franchise Group [Member] | ||||||||
Related Party Transactions (Details) [Line Items] | ||||||||
Loans receivable with a carrying value | $ 4,951 | |||||||
Financial interest | 13.70% | |||||||
Underwriting fees | $ 4,329 | |||||||
Maturity date | Dec. 16, 2022 | |||||||
Principal balance | $ 4,697 | |||||||
Interest payment | $ 31 |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
North America [Member] | ||
Business Segments (Details) [Line Items] | ||
Property and equipment, net | $ 12,287 | $ 13,997 |
Business Segments (Details) - S
Business Segments (Details) - Schedule of reportable segments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Selling, general and administrative expenses | $ (106,562) | $ (91,907) | $ (194,306) | $ (186,871) |
Restructuring (charge) recovery | 1,552 | 1,699 | ||
Interest expense - Securities lending and loan participations sold | 11,221 | 5,502 | 19,694 | 12,306 |
Depreciation and amortization | (9,879) | (9,744) | ||
Impairment of tradenames | 8,500 | 12,500 | ||
Segment income | 131,340 | 44,255 | 10,196 | 69,233 |
Consolidated operating income from reportable segments | 138,937 | 52,737 | 31,326 | 87,394 |
Loss on equity investments | (554) | (5,162) | ||
Interest expense | 16,509 | 11,588 | 32,163 | 22,358 |
(Provision) benefit for income taxes | 32,208 | 9,289 | (5,331) | 12,393 |
Net income (loss) | 82,529 | 22,309 | (16,720) | 30,288 |
Net (loss) income attributable to noncontrolling interests | (1,311) | 152 | (1,895) | 108 |
Net income (loss) attributable to B. Riley Financial, Inc. | (797) | (854) | ||
Preferred stock dividends | 1,087 | 2,142 | ||
Net income (loss) available to common shareholders | 82,753 | 22,157 | (16,967) | 30,180 |
Capital Markets Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues - Services and fees | 86,858 | 71,692 | 191,271 | 119,706 |
Trading income (losses) and fair value adjustments on loans | 114,547 | 5,595 | (67,895) | 31,462 |
Interest income - Loans and securities lending | 24,506 | 16,961 | 46,357 | 28,381 |
Total revenues | 225,911 | 94,248 | 169,733 | 179,549 |
Selling, general and administrative expenses | (81,030) | (63,041) | (135,741) | (126,430) |
Restructuring (charge) recovery | (25) | 4 | ||
Interest expense - Securities lending and loan participations sold | (11,221) | (5,502) | (19,694) | (12,306) |
Depreciation and amortization | (1,091) | (1,287) | (2,196) | (2,563) |
Segment income | 132,569 | 24,393 | 12,102 | 38,254 |
Auction and Liquidation segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues - Services and fees | 7,206 | 33,740 | 27,867 | 54,449 |
Revenues - Sale of goods | 1,045 | 1,176 | 1,045 | 1,176 |
Total revenues | 8,251 | 34,916 | 28,912 | 55,625 |
Direct cost of services | (3,217) | (12,939) | (18,033) | (19,213) |
Cost of goods sold | (285) | (852) | (314) | (866) |
Selling, general and administrative expenses | (2,729) | (3,295) | (4,255) | (6,210) |
Depreciation and amortization | (2) | (1) | (4) | |
Segment income | 2,020 | 17,828 | 6,309 | 29,332 |
Valuation and Appraisal segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues - Services and fees | 7,669 | 9,742 | 16,457 | 18,325 |
Selling, general and administrative expenses | (6,144) | (6,974) | (13,011) | (14,161) |
Depreciation and amortization | (47) | (31) | (88) | (64) |
Segment income | 1,478 | 2,737 | 3,358 | 4,100 |
Principal Investments - United Online and magicJack segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues - Services and fees | 20,656 | 24,794 | 42,374 | 51,384 |
Revenues - Sale of goods | 775 | 984 | 1,779 | 1,929 |
Total revenues | 21,431 | 25,778 | 44,153 | 53,313 |
Direct cost of services | (4,768) | (6,724) | (9,904) | (14,566) |
Cost of goods sold | (575) | (953) | (1,315) | (2,058) |
Selling, general and administrative expenses | (4,049) | (5,495) | (9,512) | (12,515) |
Depreciation and amortization | (2,851) | (3,300) | (5,730) | (6,763) |
Restructuring charge | (1,527) | (1,703) | ||
Segment income | 9,188 | 7,779 | 17,692 | 15,708 |
Brands Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues - Services and fees | 3,206 | 7,007 | ||
Selling, general and administrative expenses | (309) | (1,213) | ||
Depreciation and amortization | (715) | (1,429) | ||
Impairment of tradenames | (8,500) | (12,500) | ||
Segment loss | (6,318) | (8,135) | ||
Consolidated operating (loss) income from reportable segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Corporate and other expenses | (7,597) | (8,482) | (21,130) | (18,161) |
Interest income | 224 | 331 | 470 | 968 |
Loss on equity investments | (318) | (1,400) | (554) | (5,162) |
Interest expense | (16,509) | (11,588) | (32,163) | (22,358) |
Income (Loss) before income taxes | 114,737 | 31,598 | (22,051) | 42,681 |
(Provision) benefit for income taxes | (32,208) | (9,289) | 5,331 | (12,393) |
Net income (loss) | 82,529 | 22,309 | (16,720) | 30,288 |
Net (loss) income attributable to noncontrolling interests | (1,311) | 152 | (1,895) | 108 |
Net income (loss) attributable to B. Riley Financial, Inc. | 83,840 | 22,157 | (14,825) | 30,180 |
Preferred stock dividends | 1,087 | 2,142 | ||
Net income (loss) available to common shareholders | $ 82,753 | $ 22,157 | $ (16,967) | $ 30,180 |
Business Segments (Details) -_2
Business Segments (Details) - Schedule of revenues by geographical area - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues - Services and fees: | ||||
Total Revenues - Services and fees | $ 125,595 | $ 139,968 | $ 284,976 | $ 243,864 |
Total Revenues: | ||||
Total Revenues | 266,468 | 164,684 | 266,262 | 306,812 |
North America [Member] | ||||
Revenues - Services and fees: | ||||
Total Revenues - Services and fees | 124,039 | 139,968 | 282,505 | 243,788 |
Trading (losses) income and fair value adjustments on loans | ||||
Trading (losses) income and fair value adjustments on loans | 114,547 | 5,595 | (67,895) | 31,462 |
Revenues - Sale of goods | ||||
Revenues - Sale of goods | 1,820 | 2,160 | 2,824 | 3,105 |
Revenues - Interest income - Loans and securities lending: | ||||
Revenues - Interest income - Loans and securities lending: | 24,506 | 16,961 | 46,357 | 28,381 |
Total Revenues: | ||||
Total Revenues | 264,912 | 164,684 | 263,791 | 306,736 |
AUSTRALIA | ||||
Revenues - Services and fees: | ||||
Total Revenues - Services and fees | 1,038 | 1,702 | 15 | |
Total Revenues: | ||||
Total Revenues | 1,038 | 1,702 | 15 | |
Europe [Member] | ||||
Revenues - Services and fees: | ||||
Total Revenues - Services and fees | 518 | 769 | 61 | |
Total Revenues: | ||||
Total Revenues | $ 518 | $ 769 | $ 61 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - $ / shares | 1 Months Ended | |
Jul. 30, 2020 | Aug. 28, 2020 | |
Subsequent Events (Details) [Line Items] | ||
Dividend per share | $ 0.30 | $ 0.05 |
Minimum [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Schedule of Subsequent Events [Table Text Block] | $0.25 | |
Maximum [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Schedule of Subsequent Events [Table Text Block] | $0.30 |