Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 06, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | B. Riley Financial, Inc. | |
Entity Central Index Key | 1,464,790 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,321,452 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 45,922 | $ 21,600 |
Restricted cash | 124 | 7,657 |
Securities owned, at fair value | 17,548 | 17,955 |
Accounts receivable, net | 10,069 | 10,098 |
Advances against customer contracts | 2,789 | $ 16,303 |
Due from related parties | 3,703 | |
Goods held for sale or auction | 39 | $ 4,117 |
Deferred income taxes | 4,645 | 6,420 |
Prepaid expenses and other current assets | 1,351 | 3,795 |
Total current assets | 86,190 | 87,945 |
Property and equipment, net | 651 | 776 |
Goodwill | 34,528 | 27,557 |
Other intangible assets, net | 4,880 | 2,799 |
Deferred income taxes | 15,505 | 19,181 |
Other assets | 615 | 732 |
Total assets | 142,369 | 138,990 |
Current liabilities: | ||
Accounts payable and accrued liabilities | $ 17,551 | 12,233 |
Due to related parties | 213 | |
Auction and liquidation proceeds payable | 665 | |
Securities sold not yet purchased | $ 6,481 | 746 |
Mandatorily redeemable noncontrolling interests | $ 2,921 | 2,922 |
Asset based credit facility | 18,506 | |
Revolving credit facility | $ 70 | 56 |
Notes payable | $ 6,570 | |
Contingent consideration- current portion | $ 1,218 | |
Total current liabilities | 28,241 | $ 41,911 |
Contingent consideration, net of current portion | 1,129 | |
Total liabilities | $ 29,370 | $ 41,911 |
Commitments and contingencies | ||
B. Riley Financial, Inc. stockholders' equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued | ||
Common stock, $0.0001 par value; 40,000,000 shares authorized; 16,311,452 and 15,968,607 issued and outstanding as of September 30, 2015 and December 31, 2014, respectively | $ 2 | $ 2 |
Additional paid-in capital | 116,423 | 110,598 |
Retained earnings (deficit) | (4,323) | (12,891) |
Accumulated other comprehensive loss | (935) | (648) |
Total B. Riley Financial, Inc. stockholders' equity | 111,167 | 97,061 |
Noncontrolling interests | 1,832 | 18 |
Total equity | 112,999 | 97,079 |
Total liabilities and equity | $ 142,369 | $ 138,990 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 40,000,000 | 135,000,000 |
Common stock, issued | 16,311,452 | 15,968,607 |
Common stock, outstanding | 16,311,452 | 15,968,607 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Services and fees | $ 21,150 | $ 20,669 | $ 82,176 | $ 48,001 |
Sale of goods | 122 | 5 | 10,588 | 9,273 |
Total revenues | 21,272 | 20,674 | 92,764 | 57,274 |
Operating expenses: | ||||
Direct cost of services | $ 5,213 | 5,135 | 20,530 | 17,001 |
Cost of goods sold | 1,747 | 3,071 | 10,811 | |
Selling, general and administrative expenses | $ 12,782 | 12,497 | $ 45,755 | 30,481 |
Restructuring charge | 2,548 | 2,548 | ||
Total operating expenses | $ 17,995 | 21,927 | $ 69,356 | 60,841 |
Operating income (loss) | 3,277 | (1,253) | 23,408 | (3,567) |
Other income (expense): | ||||
Interest income | 5 | 3 | 10 | 9 |
Interest expense | (64) | (53) | (735) | (1,130) |
Income (loss) before income taxes | 3,218 | (1,303) | 22,683 | (4,688) |
(Provision) benefit for income taxes | (600) | 387 | (8,060) | 1,795 |
Net income (loss) | 2,618 | (916) | 14,623 | (2,893) |
Net income (loss) attributable to noncontrolling interests | 1,155 | (48) | 1,814 | 86 |
Net income (loss) attributable to B. Riley Financial, Inc. | $ 1,463 | $ (868) | $ 12,809 | $ (2,979) |
Basic income (loss) per share | $ 0.09 | $ (0.05) | $ 0.79 | $ (0.40) |
Diluted income (loss) per share | 0.09 | $ (0.05) | 0.79 | $ (0.40) |
Cash dividends paid per share | $ 0.2 | $ 0.26 | ||
Weighted average basic shares outstanding | 16,243,425 | 15,911,482 | 16,199,931 | 7,492,295 |
Weighted average diluted shares outstanding | 16,344,649 | 15,911,482 | 16,272,953 | 7,492,295 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 2,618 | $ (916) | $ 14,623 | $ (2,893) |
Other comprehensive loss: | ||||
Unrealized loss on available for sale securities, net of tax of $4 | (6) | (6) | ||
Change in cumulative translation adjustment | $ (279) | 37 | (287) | 17 |
Other comprehensive loss, net of tax | (279) | 31 | (287) | 11 |
Total comprehensive income (loss) | 2,339 | (885) | 14,336 | (2,882) |
Comprehensive income (loss) attributable to noncontrolling interests | 1,155 | (48) | 1,814 | 86 |
Comprehensive income (loss) attributable to B. Riley Financial, Inc. | $ 1,184 | $ (837) | $ 12,522 | $ (2,968) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Unrealized loss on available for sale securities, net of tax of $4 | $ 4 | $ 4 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings (Deficit) | Accumulated Other Comprehensive Loss | Noncontrolling Interest | Total |
Begining Balance, Shares at Dec. 31, 2013 | 1,500,107 | ||||||
Begining Balance, Amount at Dec. 31, 2013 | $ 3,086 | $ (6,611) | $ (638) | $ 12 | $ (4,151) | ||
Issuance of common stock on June 5, 2014 for cash, net of issuance costs of $215, Shares | 10,289,300 | ||||||
Issuance of common stock on June 5, 2014 for cash, net of issuance costs of $215, Amount | $ 1 | 51,232 | 51,233 | ||||
Foregiveness of long-term debt on June 5, 2014 from the former Great American Group Members | 18,759 | 18,759 | |||||
Issuance of common stock for acquisition of B. Riley & Co., Inc. on June 18, 2014, Shares | 4,191,512 | ||||||
Issuance of common stock for acquisition of B. Riley & Co., Inc. on June 18, 2014, Amount | $ 1 | 26,406 | 26,407 | ||||
B. Riley Financial, Inc. common stock owned by B. Riley & Co., Inc. - cancelled upon acquisition, Shares | (3,437) | ||||||
B. Riley Financial, Inc. common stock owned by B. Riley & Co., Inc. - cancelled upon acquisition, Amount | (29) | (29) | |||||
Unrealized loss on available for sale investments, net of tax benefit of $4 | (6) | (6) | |||||
Foreign currency translation adjustment | 17 | 17 | |||||
Issuance of common stock for acquisition of MK Capital Advisors, LLC and contigent equity consideration, Shares | |||||||
Issuance of common stock for acquisition of MK Capital Advisors, LLC and contigent equity consideration, Amount | |||||||
Issuance of common stock, Shares | |||||||
Issuance of common stock, Amount | |||||||
Vesting of Restricted stock, Share | |||||||
Vesting of Restricted stock, Amount | |||||||
Share based payments | |||||||
Dividends paid | |||||||
Net income (loss) | (2,979) | 86 | (2,893) | ||||
Ending Balance, Shares at Sep. 30, 2014 | 15,977,482 | ||||||
Ending Balance, Amount at Sep. 30, 2014 | $ 2 | 99,454 | (9,590) | (627) | 98 | 89,337 | |
Begining Balance, Shares at Dec. 31, 2014 | 15,968,607 | ||||||
Begining Balance, Amount at Dec. 31, 2014 | $ 2 | 110,598 | (12,891) | (648) | 18 | 97,079 | |
Issuance of common stock on June 5, 2014 for cash, net of issuance costs of $215, Shares | |||||||
Issuance of common stock on June 5, 2014 for cash, net of issuance costs of $215, Amount | |||||||
Foregiveness of long-term debt on June 5, 2014 from the former Great American Group Members | |||||||
Issuance of common stock for acquisition of B. Riley & Co., Inc. on June 18, 2014, Shares | |||||||
Issuance of common stock for acquisition of B. Riley & Co., Inc. on June 18, 2014, Amount | |||||||
B. Riley Financial, Inc. common stock owned by B. Riley & Co., Inc. - cancelled upon acquisition, Shares | |||||||
B. Riley Financial, Inc. common stock owned by B. Riley & Co., Inc. - cancelled upon acquisition, Amount | |||||||
Unrealized loss on available for sale investments, net of tax benefit of $4 | |||||||
Foreign currency translation adjustment | (287) | (287) | |||||
Issuance of common stock for acquisition of MK Capital Advisors, LLC and contigent equity consideration, Shares | 333,333 | ||||||
Issuance of common stock for acquisition of MK Capital Advisors, LLC and contigent equity consideration, Amount | $ 4,657 | $ 4,657 | |||||
Issuance of common stock, Shares | $ 3,296 | ||||||
Issuance of common stock, Amount | 35 | 35 | |||||
Vesting of Restricted stock, Share | 6,216 | ||||||
Vesting of Restricted stock, Amount | |||||||
Share based payments | $ 1,133 | $ 1,133 | |||||
Dividends paid | (4,241) | (4,241) | |||||
Net income (loss) | 12,809 | 1,814 | 14,623 | ||||
Ending Balance, Shares at Sep. 30, 2015 | 16,311,452 | ||||||
Ending Balance, Amount at Sep. 30, 2015 | $ 2 | $ 116,423 | $ (4,323) | $ (935) | $ 1,832 | $ 112,999 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Equity (Deficit) (Unaudited) (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance costs | $ 215 |
Condensed Consolidated Stateme9
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 14,623 | $ (2,893) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 634 | 451 |
Provision for credit losses | $ 366 | 166 |
Impairment of goods held for sale | 1,750 | |
Loss on disposal of fixed assets | $ 7 | $ 77 |
Share based payments | 1,192 | |
Effect of foreign currency on operations | (363) | $ 78 |
Non-cash interest | 118 | |
Deferred income taxes | 5,451 | $ (1,865) |
Income allocated to mandatorily redeemable noncontrolling interests and redeemable noncontrolling interests | 1,796 | 1,580 |
Change in operating assets and liabilities: | ||
Accounts receivable and advances against customer contracts | $ 13,177 | (110) |
Lease finance receivable | 107 | |
Due from related party | $ (3,916) | (111) |
Securities owned | 407 | (14,289) |
Goods held for sale or auction | 52 | 9,062 |
Prepaid expenses and other assets | 9 | (675) |
Accounts payable and accrued expenses | 5,371 | (2,193) |
Securities sold, not yet purchased | 5,735 | 1,860 |
Auction and liquidation proceeds payable | (665) | 1,220 |
Net cash provided by (used in) operating activities | 43,994 | $ (5,785) |
Cash flows from investing activities: | ||
Acquisition of MK Capital Advisors, LLC, net of cash acquired of $49 | (2,451) | |
Purchases of property and equipment | (196) | $ (143) |
Proceeds from sale of property and equipment | $ 4 | |
Decrease in note receivable - related party | $ 1,200 | |
Cash acquired in acquisition of B. Riley & Co., Inc. | 2,668 | |
Decrease (increase) in restricted cash | $ 7,533 | (3,203) |
Net cash provided by investing activities | 4,890 | 522 |
Cash flows from financing activities: | ||
Repayment of asset based credit facility | (18,506) | (5,710) |
Proceeds from revolving line of credit | 14 | $ 92 |
Proceeds from note payable - related party | 4,500 | |
Repayment of note payable - related party | $ (4,500) | |
Repayment of notes payable and long-term debt | $ (32,010) | |
Proceeds from issuance of common stock | $ 51,233 | |
Dividends paid | $ (4,241) | |
Payment of employment taxes on vesting of restricted stock | (24) | |
Distribution to mandatorily redeemable noncontrolling interests | (1,797) | $ (1,494) |
Net cash (used in) provided by financing activities | (24,554) | 12,111 |
Increase in cash and cash equivalents | 24,330 | 6,848 |
Effect of foreign currency on cash | (8) | (173) |
Net increase in cash and cash equivalents | 24,322 | 6,675 |
Cash and cash equivalents, beginning of period | 21,600 | 18,867 |
Cash and cash equivalents, end of period | 45,922 | 25,542 |
Supplemental disclosures: | ||
Interest paid | 303 | 1,389 |
Taxes paid | $ 976 | $ 2 |
Condensed Consolidated Statem10
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Cash Flows [Abstract] | ||
Net of cash acquired | $ 49 | $ 0 |
ORGANIZATION, BUSINESS OPERATIO
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Operations B. Riley Financial, Inc. (formerly known as Great American Group, Inc.) and its subsidiaries (collectively the “Company”) provide (i) 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, Canada, and Europe and (ii) following the Company’s acquisition of B. Riley & Co. Inc. (“BRC”) on June 18, 2014 and MK Capital Advisors, LLC (“MK Capital”) on February 2, 2015, as more fully described below, investment banking, corporate finance, research, wealth management, sales and trading services to corporate, institutional and high net worth clients. With the acquisition of BRC in 2014, the Company now operates in three operating segments: capital market services (“Capital Markets”), auction and liquidation services (“Auction and Liquidation”), and valuation and appraisal services (“Valuation and Appraisal”). In the Capital Markets segment, the Company provides investment banking, corporate finance, research, sales and trading services to corporate, institutional and high net worth clients. In addition, with the acquisition of MK Capital Advisors, LLC (“MK Capital”) in 2015, the Company also provides wealth management services in the Capital Markets segment. In the Auction and Liquidation segment, the Company provides auction and liquidation services to help clients dispose of assets and capital advisory services. Such assets include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property. In the Valuation and Appraisal segment, the Company provides valuation and appraisal services to clients with independent appraisals in connection with asset based loans, acquisitions, divestitures and other business needs. The Company was incorporated in Delaware on May 7, 2009 as a wholly-owned subsidiary of Alternative Asset Management Acquisition Corp. (“AAMAC”). The Company was formed as a “shell company” for the purpose of acquiring Great American Group, LLC (“GAG, LLC”), a California limited liability company. On July 31, 2009, the members of GAG, LLC (the “Great American Members”) contributed all of their membership interests of GAG, LLC to the Company (the “Contribution”) in exchange for 528,000 shares of common stock of the Company and a subordinated unsecured promissory note in an initial principal amount of $60,000 issued in favor of the Great American Members and the phantom equityholders of GAG, LLC (the “Phantom Equityholders”, and together with the Great American Members, the “Contribution Consideration Recipients”) (see Note 8). Concurrently with the Contribution, AAMAC merged with and into AAMAC Merger Sub, Inc. (“Merger Sub”), a subsidiary of the Company (the “Merger” and, together with the Contribution, the “Acquisition”). As a result of the Acquisition, GAG, LLC and AAMAC became wholly-owned subsidiaries of the Company. The Acquisition has been accounted for as a reverse merger accompanied by a recapitalization of the Company. Reverse Stock Split On June 3, 2014, the Company completed a 1 for 20 reverse split of its common stock. The reverse split reduced the Company’s then outstanding shares of 30,002,975 to 1,500,107. Fractional shares from the reverse split were paid in cash based on the closing price of the Company’s common stock on June 2, 2014. The share amounts and earnings per share amounts in the Company’s consolidated financial statement have been adjusted as if the reverse split occurred on January 1, 2014. Private Placement On June 5, 2014, the Company completed a private placement of 10,289,300 shares of common stock at a purchase price of $5.00 per share (the “Private Placement”). There were fifty-three accredited investors (the “Investors”) that participated in the Private Placement pursuant to the terms and provisions of a securities purchase agreement entered into among the Company and the Investors on May 19, 2014. At the closing of the Private Placement on June 5, 2014, the Company received net proceeds of approximately $51,233. On June 5, 2014, the Company used $30,180 of the net proceeds from the Private Placement to repay long-term debt payable to Andrew Gumaer and Harvey Yellen, the two former Great American Members (as described in Note 8), both of whom were executive officers and directors of the Company at the time of such repayment. The $30,000 principal payment and then outstanding accrued interest of $180 retired the entire $48,759 face amount of the long-term debt at a discount of $18,759. The discount of $18,759 has been recorded as a capital contribution to additional paid in capital. The Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the investors participating in the Private Placement and selling stockholders of BRC. In accordance with the terms of the Registration Rights Agreement, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission covering the resale of the common stock issued in the Private Placement and acquisition of BRC on September 18, 2014 and the registration statement was declared effective on November 7, 2014. The Company filed a post-effective amendment to such registration statement on April 20, 2015 with the Securities and Exchange Commission to convert such Form S-1 registration statement into a registration statement on Form S-3, which registration statement, as amended, was declared effective on July 2, 2015. Registration Statement On April 20, 2015, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission covering the potential offering of various securities (and securities that may be issuable upon the conversion, exercise or exchange of such securities) with an aggregate initial offering price up to $50,000,000. Such registration statement also covers the resale of the common stock issued and potentially issuable in the acquisition of MK Capital. Such registration statement, as amended, was declared effective on July 2, 2015. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
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 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. 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 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, 2014, filed with the Securities and Exchange Commission on March 30, 2015. The results of operations for the nine months ended September 30, 2015 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 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 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, reserves for accounts receivable and slow moving goods held for sale or auction, the carrying value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests and accounting for income tax valuation 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. (c) Revenue Recognition Revenues are recognized in accordance with the accounting guidance when persuasive evidence of an arrangement exists, the related services have been provided, the fee is fixed or determinable, and collection is reasonably assured. Revenues in the Capital Markets segment are primarily comprised of (i) fees earned from corporate finance and investment banking services; (ii) revenues from sales and trading activities, and (iii) revenues from wealth management services. Fees earned from corporate finance and investment banking services are derived from debt, equity and convertible securities offerings in which the Company acted as an underwriter or placement agent and from financial advisory services rendered in connection with client mergers, acquisitions, restructurings, recapitalizations and other strategic transactions. Fees from underwriting activities are recognized in earnings when the services related to the underwriting transaction are completed under the terms of the engagement and when the income was determined and is not subject to any other contingencies. Revenues from sales and trading include (i) commissions resulting from equity securities transactions executed as agent or principal and are recorded on a trade date basis, (ii) related net trading gains and losses from market making activities and from the commitment of capital to facilitate customer orders, (iii) fees paid for equity research and (iv) principal transactions which include realized and unrealized net gains and losses resulting from our principal investments in equity and other securities for the Company’s account. Revenues from wealth management services consist primarily of investment management fees that are recognized over the period the services are provided. Investment management fees are primarily comprised of fees for investment management services and are generally based on the dollar amount of the assets being managed. Revenues in the Valuation and Appraisal segment are primarily comprised of fees for valuation and appraisal services. Revenues are recognized upon the delivery of the completed services to the related customers and collection of the fee is reasonably assured. Revenues in the Valuation and Appraisal segment also include contractual reimbursable costs which totaled $734 and $752 for the three months ended September 30, 2015 and 2014, respectively, and $2,156 and $2,267 for the nine months ended September 30, 2015 and 2014, respectively. Revenues in the Auction and Liquidation segment are comprised of (i) commissions and fees earned on the sale of goods at auctions and liquidations; (ii) revenues from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation; (iii) revenue from the sale of goods that are purchased by the Company for sale at auction or liquidation sales events; (iv) fees earned from real estate services and the origination of loans; (v) revenues from financing activities is recorded over the lives of related loans receivable using the interest method; and (vi) revenues from contractual reimbursable expenses incurred in connection with auction and liquidation contracts. Commission and fees earned on the sale of goods at auction and liquidation sales are recognized when evidence of an arrangement exists, the sales price has been determined, title has passed to the buyer and the buyer has assumed the risks of ownership, and collection is reasonably assured. The commission and fees earned for these services are included in revenues in the accompanying consolidated statements of operations. Under these types of arrangements, revenues also include contractual reimbursable costs which totaled $1,921 and $1,363 for the three months ended September 30, 2015 and 2014, respectively, and $5,910 and $4,054 for the nine months ended September 30, 2015 and 2014, respectively. Revenues earned from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation are recognized based on proceeds received. The Company records proceeds received from these types of engagements first as a reduction of contractual reimbursable expenses, second as a recovery of its guarantee and thereafter as revenue, subject to such revenue meeting the criteria of having been fixed or determinable. Contractual reimbursable expenses and amounts advanced to customers for minimum guarantees are initially recorded as advances against customer contracts in the accompanying consolidated balance sheets. If, during the auction or liquidation sale, the Company determines that the proceeds from the sale will not meet the minimum guaranteed recovery value as defined in the auction or liquidation services contract, the Company accrues a loss on the contract in the period that the loss becomes known. The Company also evaluates revenue from auction and liquidation contracts in accordance with the accounting guidance to determine whether to report auction and liquidation segment revenue on a gross or net basis. The Company has determined that it acts as an agent in a substantial majority of its auction and liquidation services contracts and therefore reports the auction and liquidation revenues on a net basis. Revenues from the sale of goods are recorded gross and are recognized in the period in which the sale of goods held for sale or auction are completed, title to the property passes to the purchaser and the Company has fulfilled its obligations with respect to the transaction. These revenues are primarily the result of the Company acquiring title to merchandise with the intent of selling the items at auction or for augmenting liquidation sales. For liquidation contracts where we take title to retail goods, our net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, and other promotional allowances and are recorded net of sales or value added tax. Fees earned from real estate services and the origination of loans where the Company provides capital advisory services are recognized in the period earned, if the fee is fixed and determinable and collection is reasonably assured. (d) Direct Cost of Services Direct cost of services relate to service and fee revenues. The costs consist of employee compensation and related payroll benefits, travel expenses, the cost of consultants assigned to revenue-generating activities and direct expenses billable to clients in the Valuation and Appraisal segment. Direct costs of services include participation in profits under collaborative arrangements in which the Company is a majority participant. Direct costs of services also include the cost of consultants and other direct expenses related to auction and liquidation contracts pursuant to commission and fee based arrangements in the Auction and Liquidation segment. Direct cost of services does not include an allocation of the Company’s overhead costs. (e) Concentration of Risk Revenue from one wholesale auction and liquidation engagement represented 11.7% of total revenues during the three months ended September 30, 2015 and revenues from one liquidation engagement represented 14.0% of total revenues during the nine months ended September 30, 2015. Revenues in the Valuation and Appraisal segment and the Auction and Liquidation segment are currently primarily generated in the United States. 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 liquidation 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. (f) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the 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. (g) 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. (h) Restricted Cash As of September 30, 2015, restricted cash included $80 of cash collateral for the purchase of a forward exchange contract as more fully described on Note 2(o) and $44 of cash segregated in a special reserve bank account for the benefit of customers related to our broker dealer subsidiary. As of December 31, 2014, restricted cash included $7,532 of cash collateral for the letters of credit and the outstanding loan balance under the $100,000 asset based credit facility described in Note 7, $50 of cash segregated in a special reserve bank account for the benefit of customers related to our broker dealer subsidiary, and $75 of cash collateral for electronic payment processing in Europe. (i) Accounts Receivable Accounts receivable represents amounts due from the Company’s auction and liquidation, valuation and appraisal, and capital markets customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes a specific customer identification methodology. Management also considers historical losses adjusted for current market conditions and the customers’ financial condition and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. Bad debt expense and changes in the allowance for doubtful accounts for the three and nine months ended September 30, 2015 and 2014 are included in Note 4. (j) Advances Against Customer Contracts Advances against customer contracts represent advances of contractually reimbursable expenses incurred prior to, and during the term of the auction and liquidation services contract. These advances are charged to expense in the period that revenue is recognized under the contract. (k) Goods Held for Sale or Auction Goods held for sale or auction are stated at the lower of cost, determined by the specific-identification method, or market. (l) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Property and equipment under capital leases are stated at the present value of minimum lease payments. Depreciation and amortization expense was $102 and $122 for the three months ended September 30, 2015 and 2014, respectively, and $315 and $375 for the nine months ended September 30, 2015 and 2014, respectively. (m) Securities Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable 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 September 30, 2015 and December 31, 2014, the Company’s securities owned and securities sold not yet purchased at fair value consisted of the following securities: September 30, 2015 December 31, 2014 Securities owned Common stocks $ 6,872 $ 16,667 Mutual funds 3,013 — Corporate bonds 501 1,188 Partnership interests and other securities 7,162 100 $ 17,548 $ 17,955 Securities sold not yet purchased Common stocks $ 5,395 $ — Corporate bonds 1,086 746 $ 6,481 $ 746 (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. The Company also records mandatorily redeemable noncontrolling interests that were issued after November 5, 2003 at fair value with fair value determined in accordance with the Accounting Standards Codification (“ASC”). The table below presents information about the Company’s securities owned, mandatorily redeemable noncontrolling interests and securities sold not yet purchased that are measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 which are categorized using the three levels of fair value hierarchy. 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 following tables present information on the assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. Financial Assets Measured at Fair Value on a Recurring Basis at September 30, 2015, Using Fair Value at September 30, 2015 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities owned Common stocks $ 6,872 $ 6,846 $ — $ 26 Mutual funds 3,013 3,013 — — Corporate bonds 501 501 — — Partnership interests and other securities 7,162 — 5,996 1,166 Total assets measured at fair value $ 17,548 $ 10,360 $ 5,996 $ 1,192 Liabilities: Securities sold not yet purchased Common stocks $ 5,395 $ 5,395 $ — $ — Corporate bonds 1,086 — 1,086 — Contingent consideration 2,347 — — 2,347 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 2,278 — — 2,278 Total liabilities measured at fair value $ 11,106 $ 5,395 $ 1,086 $ 4,625 Financial Assets Measured at Fair Value on a Recurring Basis at December 31, 2014, Using Fair Value at December 31, 2014 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities owned Common stocks $ 16,667 $ 16,348 $ — $ 319 Corporate bonds 1,188 — 1,188 — Partnership interests and other securities 100 — 100 — Total assets measured at fair value $ 17,955 $ 16,348 $ 1,288 $ 319 Liabilities: Securities sold not yet purchased Corporate bonds $ 746 $ — $ 746 $ — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ — $ — $ 2,285 Total liabilities measured at fair value $ 3,031 $ — $ 746 $ 2,285 The Company determined the fair value of mandatorily redeemable noncontrolling interests described above 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 changes in Level 3 fair value hierarchy during the nine months ended September 30, 2015 and 2014 is as follows: Level 3 Balance at Beginning of Period Level 3 Changes During the Period Level 3 Balance at End of Period Fair Value Adjustments Relating to Undistributed Earnings Purchases, Sales and Settlements Transfer in and/or out of Level 3 Nine Months Ended September 30, 2015 Common stocks $ 319 $ — $ — $ (293 ) $ — $ 26 Partnership interests $ — $ 41 $ — $ 1,125 $ — $ 1,166 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ — $ (7 ) $ — $ — $ 2,278 Contingent consideration (1) $ — $ 2,347 $ — $ — $ — $ 2,347 Nine Months Ended September 30, 2014 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,273 $ — $ (48 ) $ — $ — $ 2,225 (1) Fair value adjustment of $2,347 including initial value of contingent consideration of $2,229 and an adjustment for imputed interest of $118 for the nine months ended September 30, 2015. The amount reported in the table above for the nine months ended September 30, 2015 and 2014 includes the amount of undistributed earnings attributable to the mandatorily redeemable noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash, restricted cash, accounts receivable, accounts payable and accrued expenses and other current liabilities approximate fair value based on the short-term maturity of these instruments. The carrying amounts of the notes payable (including credit lines used to finance liquidation engagements) and long-term debt approximate fair value because the contractual interest rates or effective yields of such instruments are consistent with current market rates of interest for instruments of comparable credit risk. (o) Derivative Instruments and Hedging Activity The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain auction and liquidation engagements with operations outside the United States. At September 30, 2015, the Company’s use of derivatives consists of a forward exchange contract agreement in the amount of $1,870 Canadian dollars. The forward exchange contract was originally required to be settled anytime between June 27, 2015 and August 31, 2015 and in August 2015 the settlement date was extended to November 30, 2015. The net gains and losses from foreign exchange contracts are reported as a component of selling, general and administrative expenses in the condensed consolidated financial statements. The net gain from forward exchange contracts was $68 and $28 during the three and nine months ended September 30, 2015. (p) 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. Equity accounts of foreign subsidiaries are translated at the historical rate. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. Foreign currency transaction losses were $127 and $442 during the three and nine months ended September 30, 2015. Foreign currency transaction gains were $32 and $76 during the three and nine months ended September 30, 2014. These amounts are included in selling, general and administrative expenses in our condensed consolidated statements of operations. (q) Share-based Compensation Share-based compensation cost is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period for all stock-based awards granted or modified. The awards principally consist of grants of restricted stock units with the fair value of the award, adjusted for estimated forfeitures. In accordance with the applicable accounting guidance, the grant of restricted stock units are classified as equity based awards. (r) Supplemental Cash Flows Disclosure During the nine months ended September 30, 2015, supplemental non-cash activity included a decrease in goods held for sale or auction of $4,026, a decrease in prepaid expenses of $2,531, and a decrease of note payable of $6,570 related to the bankruptcy filing of Great American Group Energy and Equipment, LLC (“GAGEE”), a wholly-owned special purpose subsidiary of the Company, in the first quarter of 2015 as more fully described in Note 8. (s) Reclassifications Certain reclassifications have been made to the condensed consolidated financial statements in 2014 to conform to the current year presentation. During the three and nine months ended September 30, 2014, $217 and $795, respectively, of costs were reclassified from selling, general and administrative costs to direct costs in the valuation and appraisal segment. (t) Recent Accounting Pronouncements In February 2015, the FASB issued ASU 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 3— ACQUISITIONS Acquisition of MK Capital On January 2, 2015 the Company entered into a purchase agreement to acquire all of the equity interests of MK Capital, a wealth management business with operations primarily in New York. The terms of the purchase agreement required the sellers to meet certain pre-closing conditions. On February 2, 2015, the closing conditions were satisfied and the Company completed the purchase of MK Capital for a total purchase price of $9,386. The purchase price is comprised of a cash payment in the amount of $2,500 and 333,333 newly issued shares of the Company’s common stock at closing which were valued at $2,687 for accounting purposes determined based on the closing market price of the Company’s shares of common stock on the acquisition date on February 2, 2015, less a 19.4% discount for lack of marketability as the shares issued are subject to certain restrictions that limit their trade or transfer. The purchase agreement also requires the payment of contingent consideration in the form of future cash payments with a fair value of $2,229 and the issuance of common stock with a fair value of $1,970. The contingent cash consideration of $2,229 has been recorded based on the payment of the contingent cash consideration of $1,250 on the first anniversary date of the closing (February 2, 2016) and a final cash payment of $1,250 on the second anniversary date of the closing (February 2, 2017) to the former members of MK Capital discounted at 8.0% per annum (initial discount of $271). In accordance with ASC 805, “Business Combination”, the contingent consideration liability has been classified as a liability on the acquisition date. Imputed interest expense totaled $45 and $118 for the three and nine months ended September 30, 2015. The balance of the contingent consideration liability was $2,347 at September 30, 2015 (discount of $153 at September 30, 2015) and has been recorded as contingent consideration liability – current portion in the amount of $1,218 and contingent consideration liability, net of current portion in the amount of $1,129 in the condensed consolidated balance sheet. The fair value of the contingent stock consideration in the amount of $1,970 has been classified as equity in accordance with ASC 805, “Business Combinations”, and is comprised of the issuance of 166,667 shares of common stock on the first anniversary date of the closing (February 2, 2016) and 166,666 shares of common stock on the second anniversary date of the closing (February 2, 2017). The contingent cash and stock consideration is payable on the first and second anniversary dates of the closing provided that MK Capital generates a minimum amount of gross revenues as defined in the purchase agreement for the twelve months following the first and second anniversary dates of the closing. The acquisition of MK Capital allows the Company to expand into the wealth management business. In connection with the issuance of common stock to the members of MK Capital, the Company entered into a registration rights agreement which allows the selling members of MK Capital to register their shares upon the Company filing a prospectus or registration statement at any time subsequent to the acquisition of MK Capital. The Company filed a registration statement with the Securities and Exchange Commission on May 22, 2015 that covers the resale of the common stock issued and potentially issuable in the acquisition of MK Capital, and such registration statement, as amended, was declared effective on July 2, 2015. The preliminary purchase price allocation was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 49 Accounts receivable 8 Prepaid expenses and other assets 30 Property and equipment 15 Accounts payable and accrued liabilities (87 ) Customer relationships 2,400 Goodwill 6,971 Total $ 9,386 The amount of revenue and earnings attributable to MK Capital in the Company’s condensed consolidated statement of operations during the three and nine months ended September 30, 2015 were as follows: Three Months Ended September 30, 2015 Period from February 2, 2015 through September 30, 2015 Revenues $ 479 $ 1,285 Income before income taxes 107 226 The pro forma financial information for the three and nine months ended September 30, 2015 and 2014 as if the MK Capital acquisition had occurred on January 1, 2014 is in management’s opinion immaterial to the pro forma financial information amounts reported below. 2014 Acquisition of B. Riley and Co. Inc. On June 18, 2014, the Company completed the acquisition of BRC pursuant to the terms of the Acquisition Agreement (the “Acquisition Agreement”), dated as of May 19, 2014, by and among the Company, Darwin Merger Sub I, Inc., a wholly owned subsidiary of the Company, B. Riley Capital Markets, LLC, a wholly owned subsidiary of the Company (“BCM”), BRC, B. Riley & Co. Holdings, LLC (“BRH”), Riley Investment Management LLC (“RIM,” and collectively with BRC and BRH, the “B. Riley Entities”) and Bryant Riley, a director of the Company and principal owner of each of the B. Riley Entities. In connection with the Company’s acquisition of BRC, Darwin Merger Sub I, Inc. merged with and into BRC, and BRC subsequently merged with and into BCM, with BCM surviving as a wholly owned subsidiary of the Company. The Company completed the acquisitions of BRH and RIM on August 1, 2014 in accordance with the terms of the Acquisition Agreement. The Company acquired BRC in exchange for the issuance of 4,182,637 shares of newly issued for a total purchase price of $26,351. The fair value of the newly issued shares of the Company’s common stock for accounting purposes was determined based on the closing market price of the Company’s shares of common stock on the acquisition date on June 18, 2014, less a 25% discount for lack of marketability as the shares issued are subject to certain restrictions that limit their trade or transfer. The BRC acquisition has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the June 18, 2014 acquisition date for BRC and August 1, 2014 for BRH and RIM. The application of the acquisition method of accounting resulted in goodwill of $21,869. Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of BRC in the amount of $997 were charged against earnings in the second quarter of 2014. All of the recognized goodwill is expected to be non-deductible for tax purposes. The purchase price allocation was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 2,667 Restricted cash 50 Securities owned 1,978 Accounts receivable 1,845 Prepaid expenses and other assets 302 Property and equipment 76 Accounts payable and accrued liabilities (3,194 ) Securities sold, not yet purchased (922 ) Deferred tax liability (1,120 ) Customer relationships 1,200 Tradename 1,600 Goodwill 21,869 Total $ 26,351 Pro Forma Financial Information The unaudited financial information in the table below summarizes the combined results of operations of the Company and BRC as well as the related impact of the new employment agreements with Bryant Riley, Andrew Gumaer and Harvey Yellen that became effective upon the acquisition of BRC on a pro forma basis, as though they had occurred as of January 1, 2014. The pro forma financial information presented includes the effects of adjustments related to the amortization charges from the acquired intangible assets and the elimination of certain activities excluded from the transaction. The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results . Pro Forma Unaudited Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 Revenues $ 20,700 $ 71,814 Net loss attributable to B. Riley Financial, Inc. $ (881 ) $ (1,116 ) Basic loss per share $ (0.06 ) $ (0.11 ) Diluted loss per share $ (0.06 ) $ (0.11 ) Weighted average basic shares outstanding 15,911,482 10,069,572 Weighted average diluted shares outstanding 15,911,482 10,069,572 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 4— ACCOUNTS RECEIVABLE The components of accounts receivable, net, include the following: September 30, 2015 December 31, 2014 Accounts receivable $ 9,793 $ 7,797 Investment banking fees, commissions and other receivables 834 1,608 Unbilled receivables 237 1,421 Total accounts receivable 10,864 10,826 Allowance for doubtful accounts (795 ) (728 ) Accounts receivable, net $ 10,069 $ 10,098 Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Balance, beginning of period $ 973 $ 331 $ 728 $ 275 Add: Additions to reserve 111 133 366 166 Add: Additions from B. Riley & Co., Inc. Acquisition — (31 ) — Less: Write-offs (289 ) (18 ) (299 ) (26 ) Less: Recoveries — — — — Balance, end of period $ 795 $ 415 $ 795 $ 415 Unbilled receivables represent the amount of contractual reimbursable costs and fees for services performed in connection with fee and service based auction and liquidation contracts. |
GOODS HELD FOR SALE OR AUCTION
GOODS HELD FOR SALE OR AUCTION | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
GOODS HELD FOR SALE OR AUCTION | NOTE 5— GOODS HELD FOR SALE OR AUCTION September 30, 2015 December 31, 2014 Machinery and equipment $ — $ 4,026 Aircraft parts and other 39 91 Total $ 39 $ 4,117 Goods held for sale or auction includes machinery and equipment and aircraft parts. At December 31, 2014, machinery and equipment consisted of five oils rigs with a carrying value of $4,026 which includes a lower-of-cost or market adjustment of $1,782 for one of the oil rigs Aircraft parts and other is primarily comprised of aircraft parts with a carrying value of $39 and $91 as of September 30, 2015 and December 31, 2014, respectively, which includes a lower of cost or market adjustment of $1,329 at September 30, 2015 and $1,297 at December 31, 2014. The machinery and equipment with a carrying value of $4,026 as of December 31, 2014 served as collateral for the related note payable, which had an outstanding principal amount of $6,570 as of December 31, 2014. The machinery and equipment was owned by GAGEE, a wholly-owned special purpose subsidiary of the Company, which filed for bankruptcy in the first quarter of 2015 as more fully described in Note 8. As a result of the bankruptcy filing, the asset and liabilities of GAGEE including the machinery and equipment of $4,026 at December 31, 2014, is no longer consolidated in the Company’s consolidated financial statements. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 6— GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill of $27,557 at December 31, 2014 is comprised of $1,975 in the Auction and Liquidation segment, $3,713 of goodwill in the Valuation and Appraisal segment and $21,869 in the Capital Markets segment. On February 2, 2015, goodwill increased by $6,971 from the Company’s purchase of MK Capital. The increase in goodwill represents the excess of the purchase price over the fair value of assets acquired and was recorded in the Capital Markets segment based on the preliminary purchase price allocation. The acquisition of MK Capital allows the Company to expand into the wealth management business. Other intangible assets increased from $2,799 at December 31, 2014 to $4,880 at September 30, 2015 from the acquisition of MK Capital. Other intangible assets includes $1,600 for the tradename of B. Riley and $1,200 for customer relationships in connection with the acquisition of BRC on June 18, 2014 and $2,400 for customer relationships related to the acquisition of MK Capital on February 2, 2015. The customer relationships are being amortized over their estimated useful lives of 4 to 13 years and the tradename is not being amortized since it has an indefinite life. Amortization expense was $111 and $319 for the three and nine months ended September 30, 2015 and $66 and $75 for the three and nine months ended September 30, 2014. |
CREDIT FACILITIES
CREDIT FACILITIES | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITIES | NOTE 7— CREDIT FACILITIES Credit facilities consist of the following arrangements: (a) $100,000 Asset Based Credit Facility On July 15, 2013, the Company entered into a Second Amended and Restated Credit Agreement (“Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo Bank”) that amended and restated that certain First Amended and Restated Credit Agreement dated as of December 31, 2010. The maximum revolving loan amount under the asset based credit facility remains at $100,000, less the aggregate principal amount borrowed under the UK Credit Agreement (if in effect), and the maturity date has been extended from July 16, 2013 to July 15, 2018. The asset based credit facility can be used for borrowings and letter of credit obligations up to the aggregate amount of $100,000, less the aggregate principal amount borrowed under the UK Credit Agreement (if in effect). 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 restated Credit Agreement removed the Company’s United Kingdom subsidiary as a party to such agreement and the concept of borrowings thereunder for certain transactions in the United Kingdom. On March 19, 2014, the Company entered into a separate credit agreement (a “UK Credit Agreement”) with an affiliate of Wells Fargo Bank which provides for the financing of transactions in the United Kingdom. The 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 $100,000 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 more fully described in Note 2(c). 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 credit facility also provides for success fees in the amount of 5% to 20% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. On July 15, 2014, the Company entered into a further amendment to the Credit Agreement whereby Wells Fargo Bank consented to the reverse stock split, Private Placement, repayment of long-term debt as more fully described in Note 8, and the acquisition of BRC. Interest expense totaled $22 (comprised of deferred loan fees) and $28 (including amortization of deferred loan fees of $19) for the three months ended September 30, 2015 and 2014, respectively, and $343 (including success fees of $119 and amortization of deferred loan fees of $69) and $266 (including success fees of $162 and amortization of deferred loan fees of $69) for the nine months ended September 30, 2015 and 2014, respectively, There was no outstanding balance under this credit facility at September 30, 2015 and the outstanding balance under this credit facility was $18,506 at December 31, 2014. The Credit Agreement governing the credit facility contains certain covenants, including covenants that limit or restrict the Company’s ability to incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, merge or consolidate and enter into certain transactions with affiliates. Upon the occurrence of an event of default under the Credit Agreement, the lender may cease making loans, terminate the Credit Agreement and declare all amounts outstanding under the Credit Agreement to be immediately due and payable. The Credit Agreement specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, nonpayment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, and material judgment defaults. (b) Line of Credit On May 17, 2011, GAAV entered into a Loan and Security Agreement (Accounts Receivable Line of Credit) (the “Line of Credit”) with BFI Business Finance (“BFI”). The Line of Credit is collateralized by the accounts receivable of GAAV and allows for borrowings in the amount of 85% of the net face amount of prime accounts, as defined in the Line of Credit, with maximum borrowings not to exceed $2,000. The interest rate under the Line of Credit is the prime rate plus 2% (6% at September 30, 2015), payable monthly in arrears. The Line of Credit was amended effective February 3, 2012 and the maximum borrowings allowed was increased from $2,000 to $3,000. The maturity date of the Line of Credit is February 3, 2016 and the maturity date may be extended for successive periods equal to one year, unless GAAV gives BFI written notice of its intent to terminate the Line of Credit at least thirty days prior to the maturity date of the Line of Credit. BFI has the right to terminate the Line of Credit at its sole discretion upon giving sixty days’ prior written notice to GAAV. In connection with the Line of Credit, GAG, LLC entered into a limited continuing guaranty of GAAV’s obligations under the Line of Credit. At September 30, 2015, there was $3,166 of accounts receivable as collateral for the Line of Credit and total borrowings outstanding of $70. There was $2,621 available and unused on the Line of Credit at September 30, 2015. Interest expense totaled $9 and $11 for three months ended September 30, 2015 and 2014, respectively, and $75 and $36 for the nine months ended September 30, 2015 and 2014, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 8— NOTES PAYABLE Notes-payable debt consists of the following arrangements: September 30, 2015 December 31, 2014 Note payable collateralizeed by machinery and equipment $ — $ 6,570 $4,500 notes payable to related party - Riley Investment Partners, L.P. — — Total notes payable, current portion $ — $ 6,570 (a) Note Payable Collateralized by Machinery and Equipment On May 29, 2008, GAGEE entered into a credit agreement with Garrison Special Opportunities Fund LP and Gage Investment Group LLC (collectively, the “Lenders”) to finance the purchase of certain machinery and equipment to be sold at auction or liquidation. The principal amount of the loan was $12,000 and borrowings bore interest at a rate of 20% per annum. The loan is collateralized by the machinery and equipment which were purchased with the proceeds from the loan as more fully described in Note 5. GAGEE was required to make principal and interest payments from proceeds from the sale of the machinery and equipment. GAGEE is a special purpose entity created to purchase the machinery and equipment, whose assets consist only of the machinery and equipment in question and whose liabilities are limited to the Lenders’ note and certain operational expenses related to this transaction. GAG, LLC guaranteed GAGEE’s liabilities to the Lenders up to a maximum of $1,200. The original maturity date of the loan was May 29, 2009; however, GAGEE exercised its right to extend the maturity date for 120 days until September 26, 2009. On September 26, 2009, the note payable became due and payable. On October 8, 2009, GAGEE and GAG, LLC entered into a Forbearance Agreement effective as of September 27, 2009 (the “Forbearance Agreement”) with the Lenders and Garrison Loan Agency Services LLC (the “Administrative Agent”), relating to the credit agreement, by and among GAGEE, as borrower, GAG, LLC, as guarantor, the Lenders and the Administrative Agent. Pursuant to the terms of the Forbearance Agreement, the Lenders agreed to forbear from exercising any of the remedies available to them under the credit agreement and the related security agreement unless a forbearance default occurs, as specified in the Forbearance Agreement. Pursuant to the Forbearance Agreement, and further amendments to the credit agreement for which the most recent amendment which was effective December 31, 2013 the maturity date of the note payable was extended to June 30, 2015 and the interest rate remained at 0% through maturity. GAGEE has no assets other than those collateralizing the loan which is comprised of prepaid and other current assets of $2,531 and machinery and equipment with a carrying value of $4,026 that is included in goods held for sale or auction in the accompanying balance sheet at December 31, 2014. GAG, LLC has satisfied its obligation to pay the $1,200 guarantee and the credit agreement does not provide for other recourse against GAG, LLC. At December 31, 2014, the note payable balance was $6,570. On January 11, 2015, GAGEE filed for voluntary bankruptcy protection as more fully discussed below. On January 11, 2015, GAGEE filed a voluntary petition with the United States Bankruptcy Court for the Northern District of Texas for relief under Chapter 7 of Title 11 of the United States Code. At December 31, 2014, GAGEE had total assets of $6,557 and total liabilities of $6,570. Total assets included $2,531 of other receivables included in prepaid and other current assets and $4,026 of goods held for sale which was comprised of five oil rigs (see Note 5). Total liabilities include the $6,570 of notes payable discussed above that is collateralized by the assets of GAGEE. As a result of such bankruptcy filing, the assets and liabilities of GAGEE described above are no longer consolidated in the Company's consolidated financial statements for periods subsequent to such bankruptcy filing. In January 2015, upon GAGEE’s filing for bankruptcy the Company recorded a loss on the deconsolidation of GAGEE of $13. On June 29, 2015, the trustee handling the bankruptcy case for GAGEE was discharged and the bankruptcy case was closed. As a result of this process, the Lenders are proceeding with the disposition of the assets of GAGEE in accordance with their security interest in connection with their loan. At the present time, the Company does not have any remaining investment or any obligations with respect to GAGEE’s liabilities. The Company intends to dissolve GAGEE and wind up its business. If any future expenses or losses are incurred by GAGEE during its wind up, the Company will record its share of losses under the equity method of accounting. Management does not expect these events or any subsequent related actions regarding GAGEE will have a material impact on the consolidated financial position of the Company. (b) $4,500 Note Payable to Related Party – Riley Investment Partners, L.P. In March 2015, the Company had capital deployed for three retail liquidation engagements. On March 10, 2015, the Company borrowed $4,500 from Riley Investment Partners, L.P. (“RIP”) in accordance with the subordinated unsecured promissory note (the “RIP Note”). The principal amount of $4,500 for the RIP Note accrued interest at the rate of 10% per annum (or 15% in the event of a default under the RIP Note). The borrowings were for short-term working capital needs and capital for other retail liquidation engagements. RIP was also entitled to a success fee (the “Success Fee”) of 20% of the net profit, if any, earned by the Company in connection with a designated liquidation transaction. Pursuant to the terms of the RIP Note, under no circumstances was the Company obligated to pay RIP any portion of the combined amount of interest and the Success Fee which exceeded twelve percent (12%) of the $4,500 principal amount of the RIP Note. The outstanding principal amount, together with the accrued and unpaid interest and the Success Fee, were due and payable by the Company on March 9, 2016. The RIP Note was subordinated in certain respects to the Company’s guaranty relating to its existing credit facility with Wells Fargo Bank, National Association and, in the event of certain insolvency proceedings, with respect to such credit facility itself, as well as to any other indebtedness of the Company to the extent required by the documents governing the repayment thereof. Interest expense on the RIP Note totaled $194 for the nine months ended September 30, 2015, which includes success fees of $ $126. The RIP Note was repaid on May 4, 2015. Riley Investment Management LLC, a wholly owned subsidiary of the Company, is the general partner of RIP. Bryant Riley, the Chief Executive Officer and Chairman of the Board of Directors of the Company, owns or controls approximately 45% of the equity interests of RIP. In addition, Thomas Kelleher, the President and a director of the Company, and one other employee of the Company, own or control de minimis amounts of the equity interests of RIP. After considering the economic interests of Mr. Riley and Mr. Kelleher in the RIP Note and comparing the terms of the RIP Note to terms that may have been available from unaffiliated third parties, the disinterested members of the Company’s Board of Directors unanimously approved the issuance of the RIP Note. (c) $60,000 Note Payable On July 31, 2009, the Great American Members contributed all of their membership interests of GAG, LLC to the Company in exchange for 528,000 shares of common stock of the Company and a subordinated unsecured promissory note in an initial principal amount of $60,000 issued in favor of the Great American Members and the Phantom Equityholders. In connection with the closing of the Acquisition, an initial principal payment of $4,383 was made, thereby reducing the principal amount of the note to $55,617. On August 28, 2009, the note was replaced with separate subordinated unsecured promissory notes (collectively, the “Notes”) issued in favor of each of the Great American Members and Phantom Equityholders. At December 31, 2013, the principal amount of $1,724 was payable to the Phantom Equityholders with a maturity date of July 31, 2015 and $48,759 was payable to Andrew Gumaer and Harvey Yellen, the two former Great American Members, both of whom were executive officers and directors of the Company at such time, with a maturity date of July 31, 2018 (subject to annual principal payments based upon cash flow, with certain limitations). The interest rate on these notes was 12.0% on $640 of the principal balance payable to the Phantom Equityholders and 3.75% on the remaining $1,084 principal balance payable to the Phantom Equityholders and $48,759 payable to the Great American Members. On January 31, 2014, the Company paid in full the $640 of principal balance for the Notes to the Phantom Equityholders that had the 12.0% interest rate. On June 5, 2014, the Company used $30,180 of the net proceeds from the Private Placement to repay the Notes payable to Andrew Gumaer and Harvey Yellen. The $30,000 principal payment and then outstanding accrued interest of $180 retired the entire $48,759 face amount of outstanding Notes payable to Andrew Gumaer and Harvey Yellen. The discount of $18,759 for the repayment of the Notes payable to Andrew Gumaer and Harvey Yellen has been recorded as a capital contribution to additional paid in capital in our consolidated financial statements. On July 31, 2014, the remaining outstanding principal amount of $1,085 was paid in full to the Phantom Equityholders. As of August 1, 2014, there is no remaining outstanding principal or interest payable on the Notes. Interest expense was $4 and $812 for the three and nine months ended September 30, 2014. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9— INCOME TAXES The Company’s effective income tax rate was 35.5% for the nine months ended September 30, 2015 and the effective benefit rate was (38.3)% for the nine months ended September 30, 2014. The effective income tax rate for the nine months ended September 30, 2015 is lower than the statutory federal and state income tax rate due to the tax differential on net income attributable to noncontrolling interests during the nine months ended September 30, 2015. As of September 30, 2015, the Company had federal net operating loss carryforwards of approximately $19,422, state net operating loss carryforwards of approximately $19,678, and foreign tax credit carryforwards of $342. The Company’s federal net operating loss carryforwards will expire in the tax year ending December 31, 2030, the state net operating loss carryforwards will expire in 2032, and the foreign tax credit carryforwards will expire in 2022. 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 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. As a result of the common stock offering that was completed on June 5, 2014, the Company had a more than 50% ownership shift in accordance with Internal Revenue Code Section 382. Accordingly, the Company may be 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 September 30, 2015, the Company believes that the net operating loss that existed as of the more than 50% ownership shift 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 an allowance. The Company must recognize the tax benefit from an uncertain tax position 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. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company did not recognize any additional liabilities for uncertain tax positions as a result of the implementation of this accounting guidance. The Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant taxing authorities. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2012 to 2014. The Company and its subsidiaries’ state tax returns are also open to audit under similar statutes of limitations for the same tax years. 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. The Company had no such accrued interest or penalties included in the accrued liabilities associated with unrecognized tax benefits as of the date of adoption. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 10— EARNINGS PER SHARE Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) 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 66,000 common shares that are held in escrow and subject to forfeiture that were issued to the former Great American members upon the final settlement of claims for goods held for sale in connection with the Acquisition. Dilutive common shares outstanding includes contingently issuable shares that are currently in escrow and subject to release if the conditions for the final settlement of claims for goods held for sale in connection with the Acquisition were satisfied at the end of the respective periods. Weighted average diluted shares outstanding during the three and nine months ended September 30, 2014 exclude 58,212 shares from the computation of net loss per diluted share because the impact would have been anti-dilutive. Basic and diluted earnings (loss) per share was calculated as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income (loss) attributable to B. Riley Financial, Inc. $ 1,463 $ (868 ) $ 12,809 $ (2,979 ) Weighted average shares outstanding: Basic 16,243,425 15,911,482 16,199,931 7,492,295 Effect of dilutive potential common shares: Restricted stock units 56,349 — 28,147 — Contingently issuable shares 44,875 — 44,875 — Diluted 16,344,649 15,911,482 16,272,953 7,492,295 Basic income (loss) per share $ 0.09 $ (0.05 ) $ 0.79 $ (0.40 ) Diluted income (loss) per share $ 0.09 $ (0.05 ) $ 0.79 $ (0.40 ) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11— COMMITMENTS AND CONTINGENCIES Legal Matters In January 2015, the Company was served with a lawsuit that seeks to assert claims of breach of contract and other matters in connection with auction services provided to a debtor. The proceeding is pending in the bankruptcy case of the debtor and its affiliates (the “Debtor”). In the lawsuit, a former landlord of the Debtor generally alleges that the Company and a joint venture partner were responsible for contamination while performing services in connection with the auction of certain assets of the Debtor and is seeking $10,000. The Company has filed a Motion to Dismiss the Complaint and has indicated that it will deny the material averments in the Complaint. In May 2015, the plaintiff filed an Opposition to the Motion to Dismiss and in June 2015, the Company filed a Reply Brief with the Court. The Company is vigorously defending this lawsuit. This lawsuit is in the initial stages, the financial impact to the Company, if any, cannot be estimated. The Company is subject to certain legal and other claims that arise in the ordinary course of its business. The Company does not believe that the results of these claims are likely to have a material effect on its consolidated financial position or results of operations. Commitments In April 2015, the Company formed GACP I, L.P. (“GACP”), a direct lending fund that focuses on providing asset-based debt loans to middle market companies. Great American Capital Partners, a wholly owned subsidiary of the Company, is the general partner and manager of GACP. In connection with the formation of GACP, the Company has committed to invest $5,000 in exchange for a 5% partnership interest in GACP. As of September 30, 2015, the Company has funded $1,125, which is included in securities owned at a fair value of $1,166 in the condensed consolidated balance sheet, of the $5,000 commitment to invest in GACP. |
SHARE BASED PAYMENTS
SHARE BASED PAYMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED PAYMENTS | NOTE 12— SHARE BASED PAYMENTS During the nine months ended September 30, 2015, the Company granted restricted stock units representing 514,466 shares of common stock with a total fair value of $5,125 to certain employees and directors of the Company. Of the 514,466 restricted stock units, the shares of common stock underlying such awards are issuable upon vesting as follows: 357 shares on July 31, 2015, 16,842 shares on December 10, 2015 and the remaining 497,267 shares, one-third on December 10, 2015, one-third on December 10, 2016, and one-third on December 10, 2017. In addition, 5,859 restricted stock units that were previously issued to the directors of the Company in 2014 vested on July 31, 2015. Share based compensation expense for these restricted stock units was $727 and $1,193 during the three and nine months ended September 30, 2015. On May 9, 2015, the Company also paid a stock bonus amounting to 5,600 fully vested shares of common stock with a total value of $59 to certain employees. Of the 5,600 common shares that vested upon grant, 2,304 common shares were forfeited by the employees to pay for employment withholding taxes during the second quarter of 2015. During the nine months ended September 30, 2015, 9,324 restricted stock units were forfeited and there are 505,142 restricted stock units that remain unvested as of September 30, 2015. As of September 30, 2015, the expected remaining unrecognized share based compensation expense of $3,938 will be expensed over a weighted average period of 1.4 years. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13— RELATED PARTY TRANSACTIONS At September 30, 2015, amounts due from related party of $3,371 represents amounts due from CA Global Partners, LLC (“CA Global”). At December 31, 2014, amounts due to related party of $213 represents amounts due to CA Global. CA Global is one of the members of Great American Global Partners, LLC (“GA Global Ptrs”), a majority owned subsidiary of the Company, which started operations in the first quarter of 2013. The amount receivable at September 30, 2015 is comprised of expenses paid by the Company and amounts advanced to CA Global and amounts payable at December 31, 2014 is comprised of expenses that were paid on behalf of the Company by CA Global in connection with certain auctions of wholesale and industrial machinery and equipment that they were managed on behalf of GA Global Ptrs. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 14— BUSINESS SEGMENTS The Company’s operating segments reflect the manner in which the business is managed and how the Company allocates resources and assesses performance internally. The Company has several operating subsidiaries through which it delivers specific services. The Company provides auction, liquidation, capital advisory, financing, real estate, and other services to stressed or distressed companies in a variety of diverse industries that have included apparel, furniture, jewelry, real estate, and industrial machinery. The Company also provides appraisal and valuation services for retail and manufacturing companies. As a result of the acquisition of BRC, the Company provides investment banking, corporate finance, research, sales and trading services to corporate, institutional and high net worth clients. In addition, with the acquisition of MK Capital in 2015, the Company also provides wealth management services in the Capital Markets segment. The Company’s business in 2014 prior to the acquisition of BRC on June 18, 2014, was previously classified by management into the Auction and Liquidation segment and Valuation and Appraisal segment. Upon closing the acquisition of BRC on June 18, 2014, the Company’s business is classified into the Auction and Liquidation segment, Valuation and Appraisal segment, and Capital Markets 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 September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Auction and Liquidation reportable segment: Revenues - Services and fees $ 5,727 $ 3,397 $ 28,861 $ 14,627 Revenues - Sale of goods 122 5 10,588 9,273 Total revenues 5,849 3,402 39,449 23,900 Direct cost of services (1,722 ) (1,670 ) (10,642 ) (6,708 ) Cost of goods sold — (1,747 ) (3,071 ) (10,811 ) Selling, general, and administrative expenses (1,260 ) (1,460 ) (7,725 ) (7,292 ) Restructuring charge — (1,339 ) — (1,339 ) Depreciation and amortization (45 ) (19 ) (147 ) (92 ) Segment income (loss) 2,822 (2,833 ) 17,864 (2,342 ) Valuation and Appraisal reportable segment: Revenues - Services and fees 7,945 7,764 22,972 23,499 Direct cost of services (3,491 ) (3,465 ) (9,888 ) (10,293 ) Selling, general, and administrative expenses (2,000 ) (2,091 ) (6,434 ) (7,304 ) Restructuring charge — (203 ) — (203 ) Depreciation and amortization (35 ) (40 ) (104 ) (116 ) Segment income 2,419 1,965 6,546 5,583 Capital markets reportable segment: Revenues - Services and fees 7,478 9,508 30,343 9,875 Selling, general, and administrative expenses (7,310 ) (6,527 ) (23,234 ) (7,046 ) Depreciation and amortization (134 ) (83 ) (384 ) (94 ) Segment income 34 2,898 6,725 2,735 Consolidated operating income from reportable segments 5,275 2,030 31,135 5,976 Corporate and other expenses (includes restucturing charge of $1,006 in each of the three and nine month periods ended September 30, 2014) (1,998 ) (3,283 ) (7,727 ) (9,543 ) Interest income 5 3 10 9 Interest expense (64 ) (53 ) (735 ) (1,130 ) Income (loss) before income taxes 3,218 (1,303 ) 22,683 (4,688 ) (Provision) benefit for income taxes (600 ) 387 (8,060 ) 1,795 Net income (loss) 2,618 (916 ) 14,623 (2,893 ) Net income attributable to noncontrolling interests 1,155 (48 ) 1,814 86 Net income (loss) attributable to B. Riley Financial, Inc. $ 1,463 $ (868 ) $ 12,809 $ (2,979 ) Capital expenditures: Auction and Liquidation segment $ — $ 2 $ — $ 38 Valuation and Appraisal segment 7 — 24 1 Capital Markets segment — 99 108 104 Corporate and Other 18 — 64 — Total $ 25 $ 101 $ 196 $ 143 As of September 30, 2015 As of December 31, 2014 Total assets: Auction and Liquidation segment $ 25,415 $ 41,360 Valuation and Appraisal segment 10,575 9,527 Capital markets segment 64,069 48,878 Corporate and other 42,310 39,225 Total $ 142,369 $ 138,990 |
NET CAPITAL REQUIREMENTS
NET CAPITAL REQUIREMENTS | 9 Months Ended |
Sep. 30, 2015 | |
Net Capital Requirements | |
NET CAPITAL REQUIREMENTS | NOTE 15— NET CAPITAL REQUIREMENTS B. Riley & Co., LLC, a subsidiary of the Company, is a registered broker-dealer and, accordingly, is subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires B. Riley & Co., LLC to maintain minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As of September 30, 2015, B. Riley & Co., LLC had net capital of $8,990 (an excess of $8,592). B. Riley & Co., LLC’s net capital ratio for September 30, 2015 was 0.65 to 1. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16— SUBSEQUENT EVENTS On November 9, the Company’s Board of Directors approved a dividend of $0.06 per share, which will be paid on or about December 9, 2015 to stockholders of records on November 24, 2015. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation, Policy [Policy Text Block] | (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 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. 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 have been condensed or omitted pursuant to such rules and regulations. In the opinion of the CompanyÂ’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 CompanyÂ’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on March 30, 2015. The results of operations for the nine months ended September 30, 2015 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. |
Use of Estimates, Policy [Policy Text Block] | (b) Use of Estimates The preparation of the 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 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, reserves for accounts receivable and slow moving goods held for sale or auction, the carrying value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests and accounting for income tax valuation 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. |
Revenue Recognition, Policy [Policy Text Block] | (c) Revenue Recognition Revenues are recognized in accordance with the accounting guidance when persuasive evidence of an arrangement exists, the related services have been provided, the fee is fixed or determinable, and collection is reasonably assured. Revenues in the Capital Markets segment are primarily comprised of (i) fees earned from corporate finance and investment banking services; (ii) revenues from sales and trading activities, and (iii) revenues from wealth management services. Fees earned from corporate finance and investment banking services are derived from debt, equity and convertible securities offerings in which the Company acted as an underwriter or placement agent and from financial advisory services rendered in connection with client mergers, acquisitions, restructurings, recapitalizations and other strategic transactions. Fees from underwriting activities are recognized in earnings when the services related to the underwriting transaction are completed under the terms of the engagement and when the income was determined and is not subject to any other contingencies. Revenues from sales and trading include (i) commissions resulting from equity securities transactions executed as agent or principal and are recorded on a trade date basis, (ii) related net trading gains and losses from market making activities and from the commitment of capital to facilitate customer orders, (iii) fees paid for equity research and (iv) principal transactions which include realized and unrealized net gains and losses resulting from our principal investments in equity and other securities for the CompanyÂ’s account. Revenues from wealth management services consist primarily of investment management fees that are recognized over the period the services are provided. Investment management fees are primarily comprised of fees for investment management services and are generally based on the dollar amount of the assets being managed. Revenues in the Valuation and Appraisal segment are primarily comprised of fees for valuation and appraisal services. Revenues are recognized upon the delivery of the completed services to the related customers and collection of the fee is reasonably assured. Revenues in the Valuation and Appraisal segment also include contractual reimbursable costs which totaled $734 and $752 for the three months ended September 30, 2015 and 2014, respectively, and $2,156 and $2,267 for the nine months ended September 30, 2015 and 2014, respectively. Revenues in the Auction and Liquidation segment are comprised of (i) commissions and fees earned on the sale of goods at auctions and liquidations; (ii) revenues from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation; (iii) revenue from the sale of goods that are purchased by the Company for sale at auction or liquidation sales events; (iv) fees earned from real estate services and the origination of loans; (v) revenues from financing activities is recorded over the lives of related loans receivable using the interest method; and (vi) revenues from contractual reimbursable expenses incurred in connection with auction and liquidation contracts. Commission and fees earned on the sale of goods at auction and liquidation sales are recognized when evidence of an arrangement exists, the sales price has been determined, title has passed to the buyer and the buyer has assumed the risks of ownership, and collection is reasonably assured. The commission and fees earned for these services are included in revenues in the accompanying consolidated statements of operations. Under these types of arrangements, revenues also include contractual reimbursable costs which totaled $1,921 and $1,363 for the three months ended September 30, 2015 and 2014, respectively, and $5,910 and $4,054 for the nine months ended September 30, 2015 and 2014, respectively. Revenues earned from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation are recognized based on proceeds received. The Company records proceeds received from these types of engagements first as a reduction of contractual reimbursable expenses, second as a recovery of its guarantee and thereafter as revenue, subject to such revenue meeting the criteria of having been fixed or determinable. Contractual reimbursable expenses and amounts advanced to customers for minimum guarantees are initially recorded as advances against customer contracts in the accompanying consolidated balance sheets. If, during the auction or liquidation sale, the Company determines that the proceeds from the sale will not meet the minimum guaranteed recovery value as defined in the auction or liquidation services contract, the Company accrues a loss on the contract in the period that the loss becomes known. The Company also evaluates revenue from auction and liquidation contracts in accordance with the accounting guidance to determine whether to report auction and liquidation segment revenue on a gross or net basis. The Company has determined that it acts as an agent in a substantial majority of its auction and liquidation services contracts and therefore reports the auction and liquidation revenues on a net basis. Revenues from the sale of goods are recorded gross and are recognized in the period in which the sale of goods held for sale or auction are completed, title to the property passes to the purchaser and the Company has fulfilled its obligations with respect to the transaction. These revenues are primarily the result of the Company acquiring title to merchandise with the intent of selling the items at auction or for augmenting liquidation sales. For liquidation contracts where we take title to retail goods, our net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, and other promotional allowances and are recorded net of sales or value added tax. Fees earned from real estate services and the origination of loans where the Company provides capital advisory services are recognized in the period earned, if the fee is fixed and determinable and collection is reasonably assured. |
Direct Cost of Services, Policy [Policy Text Block] | (d) Direct Cost of Services Direct cost of services relate to service and fee revenues. The costs consist of employee compensation and related payroll benefits, travel expenses, the cost of consultants assigned to revenue-generating activities and direct expenses billable to clients in the Valuation and Appraisal segment. Direct costs of services include participation in profits under collaborative arrangements in which the Company is a majority participant. Direct costs of services also include the cost of consultants and other direct expenses related to auction and liquidation contracts pursuant to commission and fee based arrangements in the Auction and Liquidation segment. Direct cost of services does not include an allocation of the CompanyÂ’s overhead costs. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | (e) Concentration of Risk Revenue from one wholesale auction and liquidation engagement represented 11.7% of total revenues during the three months ended September 30, 2015 and revenues from one liquidation engagement represented 14.0% of total revenues during the nine months ended September 30, 2015. Revenues in the Valuation and Appraisal segment and the Auction and Liquidation segment are currently primarily generated in the United States. 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 liquidation 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. |
Income Tax, Policy [Policy Text Block] | (f) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the 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. |
Cash and Cash Equivalents, Policy [Policy Text Block] | (g) 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. |
Restricted Cash, Policy [Policy Text Block] | (h) Restricted Cash As of September 30, 2015, restricted cash included $80 of cash collateral for the purchase of a forward exchange contract as more fully described on Note 2(o) and $44 of cash segregated in a special reserve bank account for the benefit of customers related to our broker dealer subsidiary. As of December 31, 2014, restricted cash included $7,532 of cash collateral for the letters of credit and the outstanding loan balance under the $100,000 asset based credit facility described in Note 7, $50 of cash segregated in a special reserve bank account for the benefit of customers related to our broker dealer subsidiary, and $75 of cash collateral for electronic payment processing in Europe. |
Accounts Receivable, Policy [Policy Text Block] | (i) Accounts Receivable Accounts receivable represents amounts due from the CompanyÂ’s auction and liquidation, valuation and appraisal, and capital markets customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes a specific customer identification methodology. Management also considers historical losses adjusted for current market conditions and the customersÂ’ financial condition and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. Bad debt expense and changes in the allowance for doubtful accounts for the three and nine months ended September 30, 2015 and 2014 are included in Note 4. |
Advances Against Customer Contracts, Policy [Policy Text Block] | (j) Advances Against Customer Contracts Advances against customer contracts represent advances of contractually reimbursable expenses incurred prior to, and during the term of the auction and liquidation services contract. These advances are charged to expense in the period that revenue is recognized under the contract. |
Goods Held For Sale Or Auction Policy [Policy Text Block] | (k) Goods Held for Sale or Auction Goods held for sale or auction are stated at the lower of cost, determined by the specific-identification method, or market. |
Property and Equipment, Policy [Policy Text Block] | (l) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Property and equipment under capital leases are stated at the present value of minimum lease payments. Depreciation and amortization expense was $102 and $122 for the three months ended September 30, 2015 and 2014, respectively, and $315 and $375 for the nine months ended September 30, 2015 and 2014, respectively. |
Securities Owned and Securities Sold Not Yet Purchased, Policy [Policy Text Block] | (m) Securities Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable 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 September 30, 2015 and December 31, 2014, the Company’s securities owned and securities sold not yet purchased at fair value consisted of the following securities: September 30, 2015 December 31, 2014 Securities owned Common stocks $ 6,872 $ 16,667 Mutual funds 3,013 — Corporate bonds 501 1,188 Partnership interests and other securities 7,162 100 $ 17,548 $ 17,955 Securities sold not yet purchased Common stocks $ 5,395 $ — Corporate bonds 1,086 746 $ 6,481 $ 746 |
Fair Value Measurement, Policy [Policy Text Block] | (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. The Company also records mandatorily redeemable noncontrolling interests that were issued after November 5, 2003 at fair value with fair value determined in accordance with the Accounting Standards Codification (“ASC”). The table below presents information about the Company’s securities owned, mandatorily redeemable noncontrolling interests and securities sold not yet purchased that are measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 which are categorized using the three levels of fair value hierarchy. 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 following tables present information on the assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. Financial Assets Measured at Fair Value on a Recurring Basis at September 30, 2015, Using Fair Value at September 30, 2015 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities owned Common stocks $ 6,872 $ 6,846 $ — $ 26 Mutual funds 3,013 3,013 — — Corporate bonds 501 501 — — Partnership interests and other securities 7,162 — 5,996 1,166 Total assets measured at fair value $ 17,548 $ 10,360 $ 5,996 $ 1,192 Liabilities: Securities sold not yet purchased Common stocks $ 5,395 $ 5,395 $ — $ — Corporate bonds 1,086 — 1,086 — Contingent consideration 2,347 — — 2,347 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 2,278 — — 2,278 Total liabilities measured at fair value $ 11,106 $ 5,395 $ 1,086 $ 4,625 Financial Assets Measured at Fair Value on a Recurring Basis at December 31, 2014, Using Fair Value at December 31, 2014 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities owned Common stocks $ 16,667 $ 16,348 $ — $ 319 Corporate bonds 1,188 — 1,188 — Partnership interests and other securities 100 — 100 — Total assets measured at fair value $ 17,955 $ 16,348 $ 1,288 $ 319 Liabilities: Securities sold not yet purchased Corporate bonds $ 746 $ — $ 746 $ — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ — $ — $ 2,285 Total liabilities measured at fair value $ 3,031 $ — $ 746 $ 2,285 The Company determined the fair value of mandatorily redeemable noncontrolling interests described above 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 changes in Level 3 fair value hierarchy during the nine months ended September 30, 2015 and 2014 is as follows: Level 3 Balance at Beginning of Period Level 3 Changes During the Period Level 3 Balance at End of Period Fair Value Adjustments Relating to Undistributed Earnings Purchases, Sales and Settlements Transfer in and/or out of Level 3 Nine Months Ended September 30, 2015 Common stocks $ 319 $ — $ — $ (293 ) $ — $ 26 Partnership interests $ — $ 41 $ — $ 1,125 $ — $ 1,166 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ — $ (7 ) $ — $ — $ 2,278 Contingent consideration (1) $ — $ 2,347 $ — $ — $ — $ 2,347 Nine Months Ended September 30, 2014 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,273 $ — $ (48 ) $ — $ — $ 2,225 (1) Fair value adjustment of $2,347 including initial value of contingent consideration of $2,229 and an adjustment for imputed interest of $118 for the nine months ended September 30, 2015. The amount reported in the table above for the nine months ended September 30, 2015 and 2014 includes the amount of undistributed earnings attributable to the mandatorily redeemable noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash, restricted cash, accounts receivable, accounts payable and accrued expenses and other current liabilities approximate fair value based on the short-term maturity of these instruments. The carrying amounts of the notes payable (including credit lines used to finance liquidation engagements) and long-term debt approximate fair value because the contractual interest rates or effective yields of such instruments are consistent with current market rates of interest for instruments of comparable credit risk. |
Derivative Instruments and Hedging Activity | (o) Derivative Instruments and Hedging Activity The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain auction and liquidation engagements with operations outside the United States. At September 30, 2015, the CompanyÂ’s use of derivatives consists of a forward exchange contract agreement in the amount of $1,870 Canadian dollars. The forward exchange contract was originally required to be settled anytime between June 27, 2015 and August 31, 2015 and in August 2015 the settlement date was extended to November 30, 2015. The net gains and losses from foreign exchange contracts are reported as a component of selling, general and administrative expenses in the condensed consolidated financial statements. The net gain from forward exchange contracts was $68 and $28 during the three and nine months ended September 30, 2015. |
Foreign Currency Translations Policy [Policy Text Block] | (p) 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. Equity accounts of foreign subsidiaries are translated at the historical rate. The effects of foreign currency translation adjustments are included in stockholders' equity as a component of accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. Foreign currency transaction losses were $127 and $442 during the three and nine months ended September 30, 2015. Foreign currency transaction gains were $32 and $76 during the three and nine months ended September 30, 2014. These amounts are included in selling, general and administrative expenses in our condensed consolidated statements of operations. |
Share-based Compensation | (q) Share-based Compensation Share-based compensation cost is measured at the grant date based on the estimated fair value of the award and is recognized as expense over the employee's requisite service period for all stock-based awards granted or modified. The awards principally consist of grants of restricted stock units with the fair value of the award, adjusted for estimated forfeitures. In accordance with the applicable accounting guidance, the grant of restricted stock units are classified as equity based awards. |
Supplemental Cash Flows Disclosure, Policy [Policy Text Block] | (r) Supplemental Cash Flows Disclosure During the nine months ended September 30, 2015, supplemental non-cash activity included a decrease in goods held for sale or auction of $4,026, a decrease in prepaid expenses of $2,531, and a decrease of note payable of $6,570 related to the bankruptcy filing of Great American Group Energy and Equipment, LLC (“GAGEE”), a wholly-owned special purpose subsidiary of the Company, in the first quarter of 2015 as more fully described in Note 8 . |
Reclassifications | (s) Reclassifications Certain reclassifications have been made to the condensed consolidated financial statements in 2014 to conform to the current year presentation. During the three and nine months ended September 30, 2014, $217 and $795, respectively, of costs were reclassified from selling, general and administrative costs to direct costs in the valuation and appraisal segment. |
Recent Accounting Pronouncements, Policy [Policy Text Block] | (t) Recent Accounting Pronouncements In February 2015, the FASB issued ASU 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Collaborative Arrangements and Non-collaborative Arrangement Transactions [Table Text Block] | As of September 30, 2015 and December 31, 2014, the Company’s securities owned and securities sold not yet purchased at fair value consisted of the following securities: September 30, 2015 December 31, 2014 Securities owned Common stocks $ 6,872 $ 16,667 Mutual funds 3,013 — Corporate bonds 501 1,188 Partnership interests and other securities 7,162 100 $ 17,548 $ 17,955 Securities sold not yet purchased Common stocks $ 5,395 $ — Corporate bonds 1,086 746 $ 6,481 $ 746 |
Schedule of Securities Owned and Sold, Not yet Purchased, at Fair Value [Table Text Block] | The following tables present information on the assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. Financial Assets Measured at Fair Value on a Recurring Basis at September 30, 2015, Using Fair Value at September 30, 2015 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities owned Common stocks $ 6,872 $ 6,846 $ — $ 26 Mutual funds 3,013 3,013 — — Corporate bonds 501 501 — — Partnership interests and other securities 7,162 — 5,996 1,166 Total assets measured at fair value $ 17,548 $ 10,360 $ 5,996 $ 1,192 Liabilities: Securities sold not yet purchased Common stocks $ 5,395 $ 5,395 $ — $ — Corporate bonds 1,086 — 1,086 — Contingent consideration 2,347 — — 2,347 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 2,278 — — 2,278 Total liabilities measured at fair value $ 11,106 $ 5,395 $ 1,086 $ 4,625 Financial Assets Measured at Fair Value on a Recurring Basis at December 31, 2014, Using Fair Value at December 31, 2014 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities owned Common stocks $ 16,667 $ 16,348 $ — $ 319 Corporate bonds 1,188 — 1,188 — Partnership interests and other securities 100 — 100 — Total assets measured at fair value $ 17,955 $ 16,348 $ 1,288 $ 319 Liabilities: Securities sold not yet purchased Corporate bonds $ 746 $ — $ 746 $ — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ — $ — $ 2,285 Total liabilities measured at fair value $ 3,031 $ — $ 746 $ 2,285 |
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2015 and 2014 is as follows: Level 3 Balance at Beginning of Period Level 3 Changes During the Period Level 3 Balance at End of Period Fair Value Adjustments Relating to Undistributed Earnings Purchases, Sales and Settlements Transfer in and/or out of Level 3 Nine Months Ended September 30, 2015 Common stocks $ 319 $ — $ — $ (293 ) $ — $ 26 Partnership interests $ — $ 41 $ — $ 1,125 $ — $ 1,166 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ — $ (7 ) $ — $ — $ 2,278 Contingent consideration (1) $ — $ 2,347 $ — $ — $ — $ 2,347 Nine Months Ended September 30, 2014 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,273 $ — $ (48 ) $ — $ — $ 2,225 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The preliminary purchase price allocation was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 49 Accounts receivable 8 Prepaid expenses and other assets 30 Property and equipment 15 Accounts payable and accrued liabilities (87 ) Customer relationships 2,400 Goodwill 6,971 Total $ 9,386 |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The amount of revenue and earnings attributable to MK Capital in the CompanyÂ’s condensed consolidated statement of operations during the three and nine months ended September 30, 2015 were as follows: Three Months Ended September 30, 2015 Period from February 2, 2015 through September 30, 2015 Revenues $ 479 $ 1,285 Income before income taxes 107 226 |
The purchase price allocation [Table Text Block] | The purchase price allocation was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 2,667 Restricted cash 50 Securities owned 1,978 Accounts receivable 1,845 Prepaid expenses and other assets 302 Property and equipment 76 Accounts payable and accrued liabilities (3,194 ) Securities sold, not yet purchased (922 ) Deferred tax liability (1,120 ) Customer relationships 1,200 Tradename 1,600 Goodwill 21,869 Total $ 26,351 |
Business Acquisition, Pro Forma Information [Table Text Block] | The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results . Pro Forma Unaudited Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 Revenues $ 20,700 $ 71,814 Net loss attributable to B. Riley Financial, Inc. $ (881 ) $ (1,116 ) Basic loss per share $ (0.06 ) $ (0.11 ) Diluted loss per share $ (0.06 ) $ (0.11 ) Weighted average basic shares outstanding 15,911,482 10,069,572 Weighted average diluted shares outstanding 15,911,482 10,069,572 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The components of accounts receivable, net, include the following: September 30, 2015 December 31, 2014 Accounts receivable $ 9,793 $ 7,797 Investment banking fees, commissions and other receivables 834 1,608 Unbilled receivables 237 1,421 Total accounts receivable 10,864 10,826 Allowance for doubtful accounts (795 ) (728 ) Accounts receivable, net $ 10,069 $ 10,098 |
Schedule of Allowance for Doubtful Accounts Receivable [Table Text Block] | Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Balance, beginning of period $ 973 $ 331 $ 728 $ 275 Add: Additions to reserve 111 133 366 166 Add: Additions from B. Riley & Co., Inc. Acquisition — (31 ) — Less: Write-offs (289 ) (18 ) (299 ) (26 ) Less: Recoveries — — — — Balance, end of period $ 795 $ 415 $ 795 $ 415 |
GOODS HELD FOR SALE OR AUCTION
GOODS HELD FOR SALE OR AUCTION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | September 30, 2015 December 31, 2014 Machinery and equipment $ — $ 4,026 Aircraft parts and other 39 91 Total $ 39 $ 4,117 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE (Tables) [Table Text Block] | Notes-payable debt consists of the following arrangements: September 30, 2015 December 31, 2014 Note payable collateralizeed by machinery and equipment $ — $ 6,570 $4,500 notes payable to related party - Riley Investment Partners, L.P. — — Total notes payable, current portion $ — $ 6,570 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic and diluted earnings (loss) per share was calculated as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income (loss) attributable to B. Riley Financial, Inc. $ 1,463 $ (868 ) $ 12,809 $ (2,979 ) Weighted average shares outstanding: Basic 16,243,425 15,911,482 16,199,931 7,492,295 Effect of dilutive potential common shares: Restricted stock units 56,349 — 28,147 — Contingently issuable shares 44,875 — 44,875 — Diluted 16,344,649 15,911,482 16,272,953 7,492,295 Basic income (loss) per share $ 0.09 $ (0.05 ) $ 0.79 $ (0.40 ) Diluted income (loss) per share $ 0.09 $ (0.05 ) $ 0.79 $ (0.40 ) |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following is a summary of certain financial data for each of the Company’s reportable segments: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Auction and Liquidation reportable segment: Revenues - Services and fees $ 5,727 $ 3,397 $ 28,861 $ 14,627 Revenues - Sale of goods 122 5 10,588 9,273 Total revenues 5,849 3,402 39,449 23,900 Direct cost of services (1,722 ) (1,670 ) (10,642 ) (6,708 ) Cost of goods sold — (1,747 ) (3,071 ) (10,811 ) Selling, general, and administrative expenses (1,260 ) (1,460 ) (7,725 ) (7,292 ) Restructuring charge — (1,339 ) — (1,339 ) Depreciation and amortization (45 ) (19 ) (147 ) (92 ) Segment income (loss) 2,822 (2,833 ) 17,864 (2,342 ) Valuation and Appraisal reportable segment: Revenues - Services and fees 7,945 7,764 22,972 23,499 Direct cost of services (3,491 ) (3,465 ) (9,888 ) (10,293 ) Selling, general, and administrative expenses (2,000 ) (2,091 ) (6,434 ) (7,304 ) Restructuring charge — (203 ) — (203 ) Depreciation and amortization (35 ) (40 ) (104 ) (116 ) Segment income 2,419 1,965 6,546 5,583 Capital markets reportable segment: Revenues - Services and fees 7,478 9,508 30,343 9,875 Selling, general, and administrative expenses (7,310 ) (6,527 ) (23,234 ) (7,046 ) Depreciation and amortization (134 ) (83 ) (384 ) (94 ) Segment income 34 2,898 6,725 2,735 Consolidated operating income from reportable segments 5,275 2,030 31,135 5,976 Corporate and other expenses (includes restucturing charge of $1,006 in each of the three and nine month periods ended September 30, 2014) (1,998 ) (3,283 ) (7,727 ) (9,543 ) Interest income 5 3 10 9 Interest expense (64 ) (53 ) (735 ) (1,130 ) Income (loss) before income taxes 3,218 (1,303 ) 22,683 (4,688 ) (Provision) benefit for income taxes (600 ) 387 (8,060 ) 1,795 Net income (loss) 2,618 (916 ) 14,623 (2,893 ) Net income attributable to noncontrolling interests 1,155 (48 ) 1,814 86 Net income (loss) attributable to B. Riley Financial, Inc. $ 1,463 $ (868 ) $ 12,809 $ (2,979 ) Capital expenditures: Auction and Liquidation segment $ — $ 2 $ — $ 38 Valuation and Appraisal segment 7 — 24 1 Capital Markets segment — 99 108 104 Corporate and Other 18 — 64 — Total $ 25 $ 101 $ 196 $ 143 As of September 30, 2015 As of December 31, 2014 Total assets: Auction and Liquidation segment $ 25,415 $ 41,360 Valuation and Appraisal segment 10,575 9,527 Capital markets segment 64,069 48,878 Corporate and other 42,310 39,225 Total $ 142,369 $ 138,990 |
ORGANIZATION, BUSINESS OPERAT35
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrativel) - USD ($) $ / shares in Units, $ in Thousands | Jun. 05, 2014 | Jul. 31, 2009 | Sep. 30, 2014 | Apr. 20, 2015 | Jun. 03, 2014 |
Business Acquisition [Line Items] | |||||
Stockholders' Equity, Reverse Stock Split | 1 for 20 reverse split of its common stock | ||||
Proceeds from Issuance of Private Placement | $ 30,180 | ||||
Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Common Stock Shares Outstanding | 1,500,107 | ||||
Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Common Stock Shares Outstanding | 30,002,975 | ||||
Aggregate Initial Offering Price | $ 50,000 | ||||
Great American Global Partners [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Equity Interest Issued Or Issuable, Number Of Shares | 528,000 | ||||
Subordinated Unsecured Promissory Notes Payable [Member] | |||||
Business Acquisition [Line Items] | |||||
Debt Instrument, Face Amount | $ 60,000 | ||||
Andrew Gumaer and Harvey Yellen [Member] | Subordinated Unsecured Promissory Notes Payable [Member] | |||||
Business Acquisition [Line Items] | |||||
Repayments of Long-term Debt | 30,000 | ||||
Interest Paid, Total | 180 | ||||
Gains (Losses) on Extinguishment of Debt | 18,759 | ||||
Notes Payable, Total | $ 48,759 | ||||
Common Stock | |||||
Business Acquisition [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 10,289,300 | 10,289,300 | |||
Sale of Stock, Price Per Share | $ 5 | ||||
Gross Proceeds from Issuance of Private Placement | $ 51,233 | ||||
Proceeds from Issuance of Private Placement | $ 30,180 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Securities Owned: | ||
Securities Owned | $ 17,548 | $ 17,955 |
Securities Sold Not Yet Purchased: | ||
Securities Sold Not Yet Purchased | 6,481 | 746 |
Common Stock | ||
Securities Owned: | ||
Securities Owned | 6,872 | 16,667 |
Securities Sold Not Yet Purchased: | ||
Securities Sold Not Yet Purchased | 5,395 | |
Mutual funds [Member] | ||
Securities Owned: | ||
Securities Owned | 3,013 | |
Corporate bonds [Member] | ||
Securities Owned: | ||
Securities Owned | 501 | 1,188 |
Securities Sold Not Yet Purchased: | ||
Securities Sold Not Yet Purchased | 1,086 | 746 |
Partnership interests and other securities [Member] | ||
Securities Owned: | ||
Securities Owned | $ 7,162 | $ 100 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Securities owned | ||
Total assets measured at fair value | $ 17,548 | $ 17,955 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | 6,481 | 746 |
Contingent consideration | 2,347 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 2,278 | 2,285 |
Total liabilities measured at fair value | 11,106 | 3,031 |
Common Stock | ||
Securities owned | ||
Total assets measured at fair value | 6,872 | 16,667 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | 5,395 | |
Mutual funds [Member] | ||
Securities owned | ||
Total assets measured at fair value | 3,013 | |
Corporate bonds [Member] | ||
Securities owned | ||
Total assets measured at fair value | 501 | 1,188 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | 1,086 | 746 |
Partnership interests and other securities [Member] | ||
Securities owned | ||
Total assets measured at fair value | 7,162 | 100 |
Fair Value, Inputs, Level 1 [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 10,360 | $ 16,348 |
Securities sold not yet purchased | ||
Contingent consideration | ||
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | ||
Total liabilities measured at fair value | $ 5,395 | |
Fair Value, Inputs, Level 1 [Member] | Common Stock | ||
Securities owned | ||
Total assets measured at fair value | 6,846 | $ 16,348 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | 5,395 | |
Fair Value, Inputs, Level 1 [Member] | Mutual funds [Member] | ||
Securities owned | ||
Total assets measured at fair value | 3,013 | |
Fair Value, Inputs, Level 1 [Member] | Corporate bonds [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 501 | |
Securities sold not yet purchased | ||
Securities sold not yet purchased | ||
Fair Value, Inputs, Level 1 [Member] | Partnership interests and other securities [Member] | ||
Securities owned | ||
Total assets measured at fair value | ||
Fair Value, Inputs, Level 2 [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 5,996 | $ 1,288 |
Securities sold not yet purchased | ||
Contingent consideration | ||
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | ||
Total liabilities measured at fair value | $ 1,086 | $ 746 |
Fair Value, Inputs, Level 2 [Member] | Common Stock | ||
Securities owned | ||
Total assets measured at fair value | ||
Securities sold not yet purchased | ||
Securities sold not yet purchased | ||
Fair Value, Inputs, Level 2 [Member] | Mutual funds [Member] | ||
Securities owned | ||
Total assets measured at fair value | ||
Fair Value, Inputs, Level 2 [Member] | Corporate bonds [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 1,188 | |
Securities sold not yet purchased | ||
Securities sold not yet purchased | $ 1,086 | 746 |
Fair Value, Inputs, Level 2 [Member] | Partnership interests and other securities [Member] | ||
Securities owned | ||
Total assets measured at fair value | 5,996 | 100 |
Fair Value, Inputs, Level 3 [Member] | ||
Securities owned | ||
Total assets measured at fair value | 1,192 | 319 |
Securities sold not yet purchased | ||
Contingent consideration | 2,347 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 2,278 | 2,285 |
Total liabilities measured at fair value | 4,625 | 2,285 |
Fair Value, Inputs, Level 3 [Member] | Common Stock | ||
Securities owned | ||
Total assets measured at fair value | $ 26 | $ 319 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | ||
Fair Value, Inputs, Level 3 [Member] | Mutual funds [Member] | ||
Securities owned | ||
Total assets measured at fair value | ||
Fair Value, Inputs, Level 3 [Member] | Corporate bonds [Member] | ||
Securities owned | ||
Total assets measured at fair value | ||
Securities sold not yet purchased | ||
Securities sold not yet purchased | ||
Fair Value, Inputs, Level 3 [Member] | Partnership interests and other securities [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 1,166 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | ||
Common Stock | |||
Balance at Beginning of Period | $ 319 | ||
Fair Value Adjustments | |||
Relating to Undistributed Earnings | |||
Purchases, Sales and Settlements | $ (293) | ||
Transfer in and/or out of Level 3 | |||
Balance at End of Period | $ 26 | ||
Partnership interests | |||
Balance at Beginning of Period | |||
Fair Value Adjustments | $ 41 | ||
Relating to Undistributed Earnings | |||
Purchases, Sales and Settlements | $ 1,125 | ||
Transfer in and/or out of Level 3 | |||
Balance at End of Period | $ 1,166 | ||
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | |||
Balance at Beginning of Period | $ 2,285 | $ 2,273 | |
Fair Value Adjustments | |||
Relating to Undistributed Earnings | $ (7) | $ (48) | |
Purchases, Sales and Settlements | |||
Transfer in and/or out of Level 3 | |||
Balance at End of Period | $ 2,278 | $ 2,225 | |
Contingent consideration [Member] | |||
Balance at Beginning of Period | [1] | ||
Fair Value Adjustments | [1] | $ 2,347 | |
Relating to Undistributed Earnings | [1] | ||
Purchases, Sales and Settlements | [1] | ||
Transfer in and/or out of Level 3 | [1] | ||
Balance at End of Period | [1] | $ 2,347 | |
[1] | Fair value adjustment of $2,347 including initial value of contingent consideration of $2,229 and an adjustment for imputed interest of $118 for the nine months ended September 30, 2015. |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Cost of Reimbursable Expense | $ 1,921 | $ 1,363 | $ 5,910 | $ 4,054 | |
Total revenues | $ 21,272 | 20,674 | $ 92,764 | 57,274 | |
Concentration Risk, Percentage | 11.70% | 14.00% | |||
Foreign Currency Transaction Gain (Loss) | $ 127 | 32 | $ 442 | 76 | |
Depreciation and amortization expense | 102 | 122 | 315 | 375 | |
Decrease in goods held for sale | 4,026 | ||||
Decrease in prepaid expenses | 2,531 | ||||
Decrease of note payable | 6,570 | ||||
Fair value adjustment | 2,347 | ||||
Contingent consideration | 2,229 | ||||
Imputed interest | 118 | ||||
Derivatives | 1,870 | 1,870 | |||
Net gain from forward exchange contracts | 68 | 28 | |||
Selling, General and Administrative Costs [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Cost of Revenue, Total | 217 | 795 | |||
Special reserve bank account [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted Cash and Cash Equivalents | 44 | 44 | $ 50 | ||
Forward exchange contract[Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted Cash and Cash Equivalents | 80 | 80 | |||
Letter Of Credit [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted Cash and Cash Equivalents | 100,000 | ||||
Electronic payment processing [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted Cash and Cash Equivalents | 75 | ||||
Collateral Letter Of Credit [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted Cash and Cash Equivalents | $ 7,532 | ||||
Valuation and Appraisal Reportable Segment [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Cost of Reimbursable Expense | $ 734 | $ 752 | $ 2,156 | $ 2,267 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jul. 02, 2015 | Feb. 02, 2015 | Dec. 31, 2014 | Jun. 18, 2014 |
Tangible assets acquired and assumed: | |||||
Goodwill | $ 34,528 | $ 6,971 | $ 27,557 | ||
MK Capital [Member] | |||||
Tangible assets acquired and assumed: | |||||
Cash and cash equivalents | $ 49 | ||||
Accounts receivable | 8 | ||||
Prepaid expenses and other assets | 30 | ||||
Property and equipment | 15 | ||||
Accounts payable and accrued liabilities | (87) | ||||
Customer relationships | 2,400 | ||||
Goodwill | 6,971 | ||||
Total | $ 9,386 | ||||
B. Riley and Co. Inc. [Member] | |||||
Tangible assets acquired and assumed: | |||||
Cash and cash equivalents | $ 2,667 | ||||
Restricted cash | 50 | ||||
Securities owned | 1,978 | ||||
Accounts receivable | 1,845 | ||||
Prepaid expenses and other assets | 302 | ||||
Property and equipment | 76 | ||||
Accounts payable and accrued liabilities | (3,194) | ||||
Securities sold, not yet purchased | (922) | ||||
Deferred tax liability | (1,120) | ||||
Customer relationships | 1,200 | ||||
Tradename | 1,600 | ||||
Goodwill | 21,869 | ||||
Total | $ 26,351 |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - MK Capital [Member] - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended |
Sep. 30, 2015 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | ||
Revenues | $ 479 | $ 1,285 |
Income before income taxes | $ 107 | $ 226 |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - B. Riley and Co. Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
Revenues | $ 20,700 | $ 71,814 |
Net loss attributable to B. Riley Financial, Inc. | $ (881) | $ (1,116) |
Basic loss per share | $ (0.06) | $ (0.11) |
Diluted loss per share | $ (0.06) | $ (0.11) |
Weighted average basic shares outstanding | 15,911,482 | 10,069,572 |
Weighted average diluted shares outstanding | 15,911,482 | 10,069,572 |
ACQUISITIONS (Details Textual)
ACQUISITIONS (Details Textual) - USD ($) $ in Thousands | Feb. 02, 2017 | Feb. 02, 2016 | Feb. 02, 2015 | Jun. 18, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Business Acquisition [Line Items] | ||||||||
Acquisition of MK Capital | $ 2,451 | |||||||
Payment of contingent consideration | 2,229 | |||||||
Interest expense | $ 64 | $ 53 | 735 | $ 1,130 | ||||
Contingent consideration liability | 2,347 | 2,347 | ||||||
Stock Issued During Period, Value, Acquisitions | $ 26,407 | |||||||
Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock Issued During Period, Shares, Acquisitions | 4,191,512 | |||||||
Stock Issued During Period, Value, Acquisitions | $ 1 | |||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable, Discount Rate | 25.00% | |||||||
Goodwill, Acquired During Period | $ 21,869 | |||||||
B. Riley and Co. Inc. [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock Issued During Period, Shares, Acquisitions | 4,182,637 | |||||||
Business Combination, Acquisition Related Costs | $ 997 | |||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | $ 26,351 | |||||||
Acquisition of MK Capital [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition of MK Capital | $ 2,500 | |||||||
Discount for lack of marketability | 19.40% | |||||||
Payment of contingent consideration | $ 2,229 | |||||||
Contingent cash consideration | $ 2,229 | |||||||
Payment of contingent cash consideration | $ 1,250 | $ 1,250 | ||||||
Capital Discount | 8.00% | |||||||
Initial discount | $ 271 | 153 | 153 | |||||
Interest expense | 45 | 118 | ||||||
Contingent consideration liability | 2,347 | 2,347 | ||||||
Contingent consideration- current portion | 1,218 | 1,218 | ||||||
Contingent consideration, net of current portion | $ 1,129 | 1,129 | ||||||
Stock Issued During Period, Shares, Acquisitions | 333,333 | |||||||
Stock Issued During Period, Value, Acquisitions | $ 2,687 | $ 1,970 | ||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | 9,386 | |||||||
Acquisition of MK Capital [Member] | Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock Issued During Period, Value, Acquisitions | $ 1,970 | |||||||
Acquisition of MK Capital [Member] | Subsequent Event [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Stock Issued During Period, Shares, Acquisitions | 166,666 | 166,667 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Accounts receivable | $ 9,793 | $ 7,797 |
Investment banking fees, commissions and other receivables | 834 | 1,608 |
Unbilled receivables | 237 | 1,421 |
Total accounts receivable | 10,864 | 10,826 |
Allowance for doubtful accounts | (795) | (728) |
Accounts receivable, net | $ 10,069 | $ 10,098 |
ACCOUNTS RECEIVABLE (Details 1)
ACCOUNTS RECEIVABLE (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Receivables [Abstract] | ||||
Balance, beginning of period | $ 973 | $ 331 | $ 728 | $ 275 |
Add: Additions to reserve | $ 111 | 133 | 366 | $ 166 |
Add: Additions from B. Riley & Co., Inc. Acquisition | (31) | |||
Less: Write-offs | $ (289) | $ (18) | $ (299) | $ (26) |
Less: Recoveries | ||||
Balance, end of period | $ 795 | $ 415 | $ 795 | $ 415 |
GOODS HELD FOR SALE OR AUCTIO46
GOODS HELD FOR SALE OR AUCTION (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Machinery and equipment | $ 4,026 | |
Aircraft parts and other | $ 39 | 91 |
Total | $ 39 | $ 4,117 |
GOODS HELD FOR SALE OR AUCTIO47
GOODS HELD FOR SALE OR AUCTION (Details Textual) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Long Lived Assets Held-for-sale [Line Items] | ||
Assets Held-For-Sale, Property, Plant and Equipment | $ 4,026 | |
Assets Held For Sale Market Adjustment | 1,297 | |
Assets Held For Sale, Aircraft parts and other | $ 1,329 | 1,297 |
Notes Payable, Current, Total | 6,570 | |
Oil Rigs [Member] | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Assets Held For Sale Market Adjustment | $ 1,782 |
GOODWILL AND OTHER INTANGIBLE48
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Jul. 02, 2015 | Feb. 02, 2015 | Jun. 18, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 34,528 | $ 34,528 | $ 27,557 | $ 6,971 | ||||
Amortization Of Intangible Assets | 111 | $ 66 | 319 | $ 75 | ||||
Other intangible assets | $ 4,880 | $ 4,880 | 2,799 | |||||
MK Capital [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 6,971 | |||||||
Capital Markets Segment [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 21,869 | |||||||
Trademarks [Member] | BRC [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Other intangible assets | $ 1,600 | |||||||
Customer Relationships [Member] | Minimum [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 4 years | |||||||
Customer Relationships [Member] | Maximum [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 13 years | |||||||
Customer Relationships [Member] | BRC [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Other intangible assets | $ 1,200 | |||||||
Customer Relationships [Member] | MK Capital [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Other intangible assets | $ 2,400 | |||||||
Auction and Liquidation Reportable Segment [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 1,975 | |||||||
Valuation and Appraisal Reportable Segment [Member] | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 3,713 |
CREDIT FACILITIES (Details Text
CREDIT FACILITIES (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2014 | May. 31, 2011 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 19, 2014 | Jul. 15, 2013 | May. 17, 2011 | |
Line of Credit Facility [Line Items] | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000 | ||||||||||
Line of Credit Facility, Expiration Date | Jul. 15, 2018 | ||||||||||
Line of Credit Facility, Interest Rate Description | 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. | ||||||||||
Interest Expense, Debt | $ 22 | $ 28 | $ 343 | $ 266 | $ 325 | ||||||
Amortization of Deferred Loan Origination Fees, Net | 19 | 69 | 69 | ||||||||
Interest expense including success fees | 119 | 162 | |||||||||
Outstanding amount | $ 18,506 | ||||||||||
Outstanding amount unused | $ 70 | $ 70 | |||||||||
Maximum [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Line Of Credit Facility Borrowing Capacity Percentage | 20.00% | ||||||||||
Minimum [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Line Of Credit Facility Borrowing Capacity Percentage | 5.00% | ||||||||||
Line Of Credit [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,000 | ||||||||||
Line of Credit Facility, Expiration Date | Feb. 3, 2016 | ||||||||||
Line of Credit Facility, Interest Rate Description | prime rate plus 2% (6% at September 30, 2015), payable monthly in arrears. | ||||||||||
Interest Expense, Debt | 9 | $ 11 | $ 75 | $ 36 | |||||||
Line Of Credit Facility Borrowing Capacity Percentage | 85.00% | ||||||||||
Line Of Credit Facility Maximum Borrowing Capacity Before Amended | $ 2,000 | ||||||||||
Line Of Credit Facility Maximum Borrowing Capacity Amended | $ 3,000 | ||||||||||
Outstanding amount | 3,166 | 3,166 | |||||||||
Outstanding amount unused | $ 2,621 | $ 2,621 | |||||||||
UK Credit Agreement [Member] | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000 | $ 100,000 | |||||||||
Line Of Credit Facility Maximum Borrowing Capacity Amended | $ 100,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Total notes payable, current portion | $ 6,570 | |
Note payable collateralizeed by machinery and equipment [Member] | ||
Total notes payable, current portion | $ 0 | 6,570 |
Notes payable to related party - Riley Investment Partners, L.P. [Member] | ||
Total notes payable, current portion | $ 0 | $ 0 |
NOTES PAYABLE (Details Textual)
NOTES PAYABLE (Details Textual) - USD ($) $ in Thousands | Mar. 10, 2015 | Jun. 05, 2014 | Oct. 08, 2009 | Jan. 31, 2015 | Jul. 31, 2014 | Jan. 31, 2014 | Dec. 31, 2013 | Jul. 31, 2009 | May. 29, 2008 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||||||||||||
Interest Expense, Total | $ 64 | $ 53 | $ 735 | $ 1,130 | ||||||||||
Total assets | 142,369 | 142,369 | $ 138,990 | |||||||||||
Total liabilities | $ 29,370 | $ 29,370 | 41,911 | |||||||||||
Net proceeds from the Private Placement | $ 30,180 | |||||||||||||
Chief Executive Officer [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Ownership percentage | 45.00% | 45.00% | ||||||||||||
Andrew Gumaer and Harvey Yellen [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||
Debt Instrument, Face Amount | 48,759 | |||||||||||||
Repayment of Unsecured promissory note | 30,000 | |||||||||||||
Unsecured promissory note outstanding | $ 48,759 | |||||||||||||
Face amount of outstanding Notes payable | 48,759 | |||||||||||||
Outstanding accrued interest | 180 | |||||||||||||
Debt discount | $ 18,759 | |||||||||||||
Notes payable to related party - Riley Investment Partners, L.P. [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Maturity Date | Mar. 9, 2016 | May 4, 2015 | ||||||||||||
Interest Expense, Total | $ 194 | |||||||||||||
Success fees | $ 126 | |||||||||||||
Notes Payable, Total | $ 4,500 | |||||||||||||
Proceeds from related party debt | $ 4,500 | |||||||||||||
Phantom Equityholders [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | |||||||||||||
Debt Instrument, Maturity Date | Jul. 31, 2015 | |||||||||||||
Success fee percentage | 12.00% | |||||||||||||
Repayment of Unsecured promissory note | $ 1,085 | $ 640 | ||||||||||||
Unsecured promissory note outstanding | $ 1,724 | |||||||||||||
Principal balance payable | 640 | |||||||||||||
Remaining principal balance payable | $ 1,084 | |||||||||||||
Remaining principal balance payable interest rate | 3.75% | |||||||||||||
Great American Global Partners [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Maturity Date | Jul. 31, 2018 | |||||||||||||
Number of common stock exchanged | 528,000 | |||||||||||||
Proceeds from unsecured promissory note | $ 60,000 | |||||||||||||
Repayment of Unsecured promissory note | 4,383 | |||||||||||||
Unsecured promissory note outstanding | $ 48,759 | 55,617 | ||||||||||||
$60,000 Note Payable [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest Expense, Total | $ 4 | $ 812 | ||||||||||||
GAGEE [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | |||||||||||||
Debt Instrument Maturity Date Amended | Jun. 30, 2015 | |||||||||||||
Payments Under Guarantee Obligations | $ 1,200 | |||||||||||||
Notes Payable, Total | 6,570 | |||||||||||||
Prepaid and other current assets | 2,531 | |||||||||||||
Machinery and equipment | 4,026 | |||||||||||||
Total assets | 6,557 | |||||||||||||
Total liabilities | 6,570 | |||||||||||||
Other receivables | 2,531 | |||||||||||||
Goods held for sale | $ 4,026 | |||||||||||||
Loss on deconsolidation of GAGEE | $ 13 | |||||||||||||
Loss on the deconsolidation | $ 13 | |||||||||||||
Maximum [Member] | Notes payable to related party - Riley Investment Partners, L.P. [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 15.00% | |||||||||||||
Success fee percentage | 20.00% | |||||||||||||
Minimum [Member] | Notes payable to related party - Riley Investment Partners, L.P. [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | |||||||||||||
Success fee percentage | 12.00% | |||||||||||||
Notes Payable [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Long-term Debt, Gross | $ 12,000 | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 20.00% | |||||||||||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 1,200 | |||||||||||||
Debt Instrument, Maturity Date | May 29, 2009 | |||||||||||||
Debt Instrument Maturity Date Amended | Sep. 26, 2009 | |||||||||||||
Subordinated Unsecured Promissory Notes Payable [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt Instrument, Face Amount | 60,000 | |||||||||||||
Face amount of outstanding Notes payable | $ 60,000 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Line Items] | ||
Effective income tax rate | 35.50% | |
Effective benefit rate | (38.60%) | |
Ownership interest | 50.00% | |
Domestic Tax Authority [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | $ 19,422 | |
Operating Loss Carryforward, Expiration Date | Dec. 31, 2030 | |
State and Local Jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | $ 19,678 | |
Operating Loss Carryforward, Expiration Date | Dec. 31, 2032 | |
Foreign Tax Authority [Member] | ||
Income Tax Disclosure [Line Items] | ||
Tax Credit Carryforward, Amount | $ 342 | |
Operating Loss Carryforward, Expiration Date | Dec. 31, 2022 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to B. Riley Financial, Inc. | $ 1,463 | $ (868) | $ 12,809 | $ (2,979) |
Weighted average shares outstanding: | ||||
Basic | 16,243,425 | 15,911,482 | 16,199,931 | 7,492,295 |
Effect of dilutive potential common shares: | ||||
Restricted stock units | 56,349 | 28,147 | ||
Contingently issuable shares | 44,875 | 44,875 | ||
Diluted | 16,344,649 | 15,911,482 | 16,272,953 | 7,492,295 |
Basic income (loss) per share | $ 0.09 | $ (0.05) | $ 0.79 | $ (0.40) |
Diluted income (loss) per share | $ 0.09 | $ (0.05) | $ 0.79 | $ (0.40) |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share, Basic and Diluted [Line Items] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount | 58,212 | 58,212 | |
Escrow Subject To Cancellation Escrow Claims [Member] | |||
Earnings Per Share, Basic and Diluted [Line Items] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount | 66,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Apr. 30, 2015 | |
Loss Contingency, Damages Sought, Value | $ 10,000 | |
Ownership interest | 50.00% | |
GACP I, L.P. [Member] | ||
Commitment to invest | $ 5,000 | |
Ownership interest | 5.00% | |
Investment in subsidiary | $ 1,125 | |
Securities owned at a fair value | $ 1,166 |
SHARE BASED PAYMENTS (Details T
SHARE BASED PAYMENTS (Details Textual) - Restricted Stock Units [Member] - USD ($) $ in Thousands | Dec. 10, 2015 | Jul. 31, 2015 | May. 09, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2015 |
Share based compensation expense | $ 727 | $ 1,193 | ||||
Stock vested | 357 | 514,466 | ||||
Stock unit forfieted | 9,324 | |||||
Stock unit unvested | 505,142 | 505,142 | ||||
Unrecognized share based compensation expense | $ 3,938 | $ 3,938 | ||||
Unrecognized share based compensation weighted average period | 1 year 4 months 24 days | |||||
Subsequent Event [Member] | ||||||
Stock vested | 16,842 | |||||
Stock award vested description | Remaining 497,267 shares, one-third on December 10, 2015, one-third on December 10, 2016, and one-third on December 10, 2017. | |||||
Employees and Directors [Member] | ||||||
Stock granted | 514,466 | |||||
Stock granted fair value | $ 5,125 | |||||
Stock vested | 5,600 | |||||
Stock vested value | $ 59 | |||||
Employees [Member] | ||||||
Stock unit forfieted | 2,304 | |||||
Director [Member] | ||||||
Stock vested | 5,859 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | ||
Due from Related Parties | $ 3,703 | |
Due to Related Parties | $ 213 | |
CA Global Partners, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | $ 3,371 | |
Due to Related Parties | $ 213 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||
Revenues - Services and fees | $ 21,150 | $ 20,669 | $ 82,176 | $ 48,001 | |
Revenues - Sale of goods | 122 | 5 | 10,588 | 9,273 | |
Total revenues | 21,272 | 20,674 | 92,764 | 57,274 | |
Direct cost of services | $ (5,213) | (5,135) | (20,530) | (17,001) | |
Cost of goods sold | (1,747) | (3,071) | (10,811) | ||
Selling, general, and administrative expenses | $ (12,782) | (12,497) | $ (45,755) | (30,481) | |
Restructuring charge | 2,548 | 2,548 | |||
Segment income (loss) | $ 3,277 | (1,253) | $ 23,408 | (3,567) | |
Consolidated operating income from reportable segments | 5,275 | 2,030 | 31,135 | 5,976 | |
Corporate and other expenses (includes restucturing charge of $1,006 in each of the three and nine month periods ended September 30, 2014) | (1,998) | (3,283) | (7,727) | (9,543) | |
Interest income | 5 | 3 | 10 | 9 | |
Interest expense | (64) | (53) | (735) | (1,130) | |
Income (loss) before income taxes | 3,218 | (1,303) | 22,683 | (4,688) | |
(Provision) benefit for income taxes | (600) | 387 | (8,060) | 1,795 | |
Net income (loss) | 2,618 | (916) | 14,623 | (2,893) | |
Net income attributable to noncontrolling interests | 1,155 | (48) | 1,814 | 86 | |
Net income (loss) attributable to B. Riley Financial, Inc. | 1,463 | (868) | 12,809 | (2,979) | |
Capital expenditures | 25 | 101 | 196 | 143 | |
Total assets | 142,369 | 142,369 | $ 138,990 | ||
Auction and Liquidation Reportable Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues - Services and fees | 5,727 | 3,397 | 28,861 | 14,627 | |
Revenues - Sale of goods | 122 | 5 | 10,588 | 9,273 | |
Total revenues | 5,849 | 3,402 | 39,449 | 23,900 | |
Direct cost of services | $ (1,722) | (1,670) | (10,642) | (6,708) | |
Cost of goods sold | (1,747) | (3,071) | (10,811) | ||
Selling, general, and administrative expenses | $ (1,260) | (1,460) | $ (7,725) | (7,292) | |
Restructuring charge | (1,339) | (1,339) | |||
Depreciation and amortization | $ (45) | (19) | $ (147) | (92) | |
Segment income (loss) | $ 2,822 | (2,833) | $ 17,864 | (2,342) | |
Capital expenditures | 2 | 38 | |||
Total assets | $ 25,415 | $ 25,415 | 41,360 | ||
Valuation and Appraisal Reportable Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues - Services and fees | 7,945 | 7,764 | 22,972 | 23,499 | |
Direct cost of services | (3,491) | (3,465) | (9,888) | (10,293) | |
Selling, general, and administrative expenses | $ (2,000) | (2,091) | $ (6,434) | (7,304) | |
Restructuring charge | (203) | (203) | |||
Depreciation and amortization | $ (35) | (40) | $ (104) | (116) | |
Segment income (loss) | 2,419 | $ 1,965 | 6,546 | 5,583 | |
Capital expenditures | 7 | 24 | 1 | ||
Total assets | 10,575 | 10,575 | 9,527 | ||
Capital markets reportable segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenues - Services and fees | 7,478 | $ 9,508 | 30,343 | 9,875 | |
Selling, general, and administrative expenses | (7,310) | (6,527) | (23,234) | (7,046) | |
Depreciation and amortization | (134) | (83) | (384) | (94) | |
Segment income (loss) | $ 34 | 2,898 | 6,725 | 2,735 | |
Capital expenditures | $ 99 | 108 | $ 104 | ||
Total assets | $ 64,069 | 64,069 | 48,878 | ||
Corporate and other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Capital expenditures | 18 | 64 | |||
Total assets | $ 42,310 | $ 42,310 | $ 39,225 |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details Textual) - B. Riley and Co. Inc. [Member] $ in Thousands | Sep. 30, 2015USD ($) |
Net Capital | $ 8,990 |
Alternative Excess Net Capital | $ 8,592 |
Minimum [Member] | |
Ratio of Indebtedness to Net Capital | 1 |
Ratio Of Net Capital | 0.65 |
Maximum [Member] | |
Ratio of Indebtedness to Net Capital | 15 |
Ratio Of Net Capital | 1 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member] | Nov. 09, 2015$ / shares |
Dividend declared | $ 0.06 |
Dividend declared date | Nov. 9, 2015 |
Dividend declared record date | Nov. 24, 2015 |
Dividend paid date | Dec. 9, 2015 |