Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 21, 2016 | Jun. 30, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | B. Riley Financial, Inc. | ||
Entity Central Index Key | 1,464,790 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 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 Public Float | $ 61,000 | ||
Entity Common Stock, Shares Outstanding | 16,614,786 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 30,012 | $ 21,600 |
Restricted cash | 51 | 7,657 |
Securities owned, at fair value | 25,543 | 17,955 |
Accounts receivable, net | 9,472 | $ 10,098 |
Due from related parties | 409 | |
Advances against customer contracts | 5,013 | $ 16,303 |
Goods held for sale or auction | 37 | 4,117 |
Prepaid expenses and other current assets | 2,415 | 3,795 |
Total current assets | 72,952 | 81,525 |
Property and equipment, net | 592 | 776 |
Goodwill | 34,528 | 27,557 |
Other intangible assets, net | 4,768 | 2,799 |
Deferred income taxes | 18,992 | 25,601 |
Other assets | 588 | 732 |
Total assets | 132,420 | 138,990 |
Current liabilities: | ||
Accounts payable | 1,123 | 1,093 |
Accrued payroll and related expenses | 7,178 | 6,017 |
Accrued value added tax payable | 1,785 | 11 |
Accrued expenses and other liabilities | 6,478 | 5,112 |
Due to related parties | $ 166 | 213 |
Auction and liquidation proceeds payable | 665 | |
Securities sold not yet purchased | $ 713 | 746 |
Mandatorily redeemable noncontrolling interests | $ 2,994 | 2,922 |
Asset based credit facility | 18,506 | |
Revolving credit facility | $ 272 | 56 |
Notes payable | $ 6,570 | |
Contingent consideration- current portion | $ 1,241 | |
Total current liabilities | 21,950 | $ 41,911 |
Contingent consideration, net of current portion | 1,150 | |
Total liabilities | $ 23,100 | $ 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; 16,448,119 and 15,968,607 issued and outstanding as of December 31, 2015 and 2014, respectively | $ 2 | $ 2 |
Additional paid-in capital | 116,799 | 110,598 |
Retained earnings (deficit) | (6,305) | (12,891) |
Accumulated other comprehensive loss | (1,058) | (648) |
Total B. Riley Financial, Inc. stockholders' equity | 109,438 | 97,061 |
Noncontrolling interests | (118) | 18 |
Total equity | 109,320 | 97,079 |
Total liabilities and equity | $ 132,420 | $ 138,990 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, issued | 16,448,119 | 15,968,607 |
Common stock, outstanding | 16,448,119 | 15,968,607 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | |||
Services and fees | $ 101,929 | $ 67,257 | $ 59,967 |
Sale of goods | 10,596 | 9,859 | 16,165 |
Total revenues | 112,525 | 77,116 | 76,132 |
Operating expenses: | |||
Direct cost of services | 29,049 | 23,466 | 24,146 |
Cost of goods sold | 3,072 | 14,080 | 11,506 |
Selling, general and administrative | $ 58,322 | 44,453 | $ 36,382 |
Restructuring charge | 2,548 | ||
Total operating expenses | $ 90,443 | 84,547 | $ 72,034 |
Operating income (loss) | 22,082 | (7,431) | 4,098 |
Other income (expense): | |||
Interest income | $ 17 | $ 12 | 26 |
Loss from equity investment in Great American Real Estate, LLC | (21) | ||
Loss from equity investment in Shoon Trading Limited | (156) | ||
Interest expense | $ (834) | $ (1,262) | (2,667) |
Income (loss) before income taxes | 21,265 | (8,681) | 1,280 |
(Provision) benefit for income taxes | (7,688) | 2,886 | (704) |
Net income (loss) | 13,577 | (5,795) | 576 |
Net income (loss) attributable to noncontrolling interests | 1,772 | 6 | (482) |
Net income (loss) attributable to B. Riley Financial, Inc. | $ 11,805 | $ (5,801) | $ 1,058 |
Basic earnings (loss) per share | $ 0.73 | $ (0.60) | $ 0.74 |
Diluted earnings (loss) per share | 0.73 | (0.60) | 0.71 |
Cash dividends per share | $ 0.32 | $ 0.03 | $ 0 |
Weighted average basic shares outstanding | 16,221,040 | 9,612,154 | 1,434,107 |
Weighted average diluted shares outstanding | 16,265,915 | 9,612,154 | 1,495,328 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPHREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 13,577 | $ (5,795) | $ 576 |
Other comprehensive loss: | |||
Change in cumulative translation adjustment | (410) | (10) | (118) |
Other comprehensive loss, net of tax | (410) | (10) | (118) |
Total comprehensive income (loss) | 13,167 | (5,805) | 458 |
Comprehensive income (loss) attributable to noncontrolling interests | 1,772 | 6 | (482) |
Comprehensive income (loss) attributable to B. Riley Financial, Inc. | $ 11,395 | $ (5,811) | $ 940 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Deficit) [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interests [Member] | Total |
Beginning Balance, Amount at Dec. 31, 2012 | $ 3,086 | $ (7,669) | $ (520) | $ 928 | $ (4,175) | ||
Beginning Balance, Shares at Dec. 31, 2012 | 1,500,107 | ||||||
Net (loss) income | $ 1,058 | 576 | |||||
Change in noncontrolling interest from deconsolidation of Shoon Trading Limited | $ (434) | (434) | |||||
Foreign currency translation adjustment | $ (118) | (118) | |||||
Changes in noncontrolling interests | $ (482) | (482) | |||||
Ending Balance, Amount at Dec. 31, 2013 | $ 3,086 | $ (6,611) | $ (638) | 12 | (4,151) | ||
Ending Balance, Shares at Dec. 31, 2013 | 1,500,107 | ||||||
Net (loss) income | $ (5,801) | $ 6 | (5,795) | ||||
Issuance of common stock, Amount | $ 1 | $ 51,232 | 51,233 | ||||
Issuance of common stock, Shares | 10,289,300 | ||||||
Foregiveness of long-term debt of the former Great American Group Members | 18,759 | 18,759 | |||||
Issuance of common stock for acquisition, Amount | $ 1 | 26,350 | 26,351 | ||||
Issuance of common stock for acquisition, Shares | 418,263 | ||||||
Common stock cancelled upon acquisition, Amount | $ (29) | (29) | |||||
Common stock cancelled upon acquisition, Shares | (3,437) | ||||||
Dividends paid | $ (479) | (479) | |||||
Deferred tax asset from principal payment on debt to the former Great American Group Members | $ 11,200 | 11,200 | |||||
Foreign currency translation adjustment | $ (10) | (10) | |||||
Ending Balance, Amount at Dec. 31, 2014 | $ 2 | $ 110,598 | $ (12,891) | $ (648) | $ 18 | 97,079 | |
Ending Balance, Shares at Dec. 31, 2014 | 15,968,607 | ||||||
Net (loss) income | $ 11,805 | $ 1,772 | 13,577 | ||||
Issuance of common stock for acquisition, Amount | $ 4,657 | 4,657 | |||||
Issuance of common stock for acquisition, Shares | 333,333 | ||||||
Dividends paid | $ (5,219) | (5,219) | |||||
Vesting of restricted stock, net of shares, Amount | $ (499) | (499) | |||||
Vesting of restricted stock, net of shares, Shares | 146,179 | ||||||
Share based payments | $ 2,043 | 2,043 | |||||
Distributions to non-controlling interests | $ (1,908) | (1,908) | |||||
Foreign currency translation adjustment | (410) | ||||||
Ending Balance, Amount at Dec. 31, 2015 | $ 2 | $ 116,799 | $ (6,305) | $ (1,058) | $ (118) | $ 109,320 | |
Ending Balance, Shares at Dec. 31, 2015 | 16,448,119 |
CONSOLIDATED STATEMENTS OF EQU7
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance costs | $ 215 |
CONSOLDIATED STATEMENTS OF CASH
CONSOLDIATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 13,577 | $ (5,795) | $ 576 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 848 | 646 | 1,863 |
Provision for doubtful accounts | 718 | 532 | (12) |
Share based compensation | 2,043 | ||
Impairment of goods held for sale or auction | 33 | $ 4,675 | $ 428 |
Non-cash interest | 163 | ||
Effect of foreign currency on operations | $ (375) | $ 137 | $ 226 |
Loss from equity investment in Great American Real Estate, LLC and Shoon Trading Limited | $ 177 | ||
Loss on disposal of assets | $ 7 | $ 91 | |
Deferred income taxes | 6,609 | (2,984) | $ 989 |
Income allocated to mandatorily redeemable noncontrolling interests | 2,207 | 1,892 | 1,897 |
Change in operating assets and liabilities: | |||
Accounts receivable and advances against customer contracts | $ 11,540 | (15,195) | 5,145 |
Lease finance receivable | 107 | $ (8,099) | |
Securities owned | $ (7,588) | $ (16,006) | |
Inventory | $ 455 | ||
Goods held for sale or auction | $ 20 | $ 9,414 | (1,625) |
Loan receivable | 156 | ||
Prepaid expenses and other assets | $ (1,100) | $ (59) | 167 |
Accounts payable, accrued payroll and related expenses, accrued value added tax payable and other accured expenses | 4,289 | (1,142) | $ (3,971) |
Amounts due to (from) related parties | (622) | 168 | |
Securities sold not yet purchased | (33) | (176) | |
Auction and liquidation proceeds payable | (665) | 665 | $ (864) |
Net cash provided by (used in) operating activities | 31,671 | $ (23,030) | $ (2,492) |
Cash flows from investing activities: | |||
Acquisition of MK Capital, net of cash acquired of $49 | $ (2,451) | ||
Cash acquired from acquisition of B. Riley & Co., Inc. | $ 2,667 | ||
Deconsolidation of Shoon Trading Limited | $ (1,564) | ||
Purchases of property and equipment | $ (239) | $ (252) | (1,142) |
Proceeds from sale of property and equipment and notes receivable - related party | $ 4 | $ 1,200 | 611 |
Equity investment in Great American Real Estate, LLC | (21) | ||
Decrease (increase) in restricted cash | $ 7,604 | $ (7,282) | 7,598 |
Net cash provided by (used in) investing activities | 4,918 | (3,667) | 5,482 |
Cash flows from financing activities: | |||
Proceeds from (repayments of) revolving line of credit | 216 | (277) | (1,971) |
(Repayment of) proceeds from asset based credit facility | (18,506) | $ 12,796 | $ 5,710 |
Proceeds from note payable - related party | 4,500 | ||
Repayment of note payable - related party | (4,500) | ||
Payment of employment taxes on vesting of restricted stock | $ (499) | ||
Payment of financing costs | $ (375) | ||
Repayment of notes payable, long-term debt and capital lease obligations | $ (32,010) | $ (4,509) | |
Proceeds from issuance of common stock | 51,233 | ||
Dividends paid | $ (5,219) | (479) | |
Distributions to noncontrolling interests | (4,042) | (1,794) | $ (1,930) |
Net cash (used in) provided by financing activities | (28,050) | 29,469 | (3,075) |
Effect of foreign currency on cash | (127) | (39) | 231 |
Net increase in cash and cash equivalents | 8,412 | 2,733 | 146 |
Cash and cash equivalents, beginning of year | 21,600 | 18,867 | 18,721 |
Cash and cash equivalents, end of year | 30,012 | 21,600 | 18,867 |
Supplemental disclosures: | |||
Interest paid | 579 | 1,501 | 2,680 |
Income taxes paid | $ 1,688 | $ 44 | $ 175 |
CONSOLDIATED STATEMENTS OF CAS9
CONSOLDIATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Statement of Cash Flows [Abstract] | |
Net of cash acquired | $ 49 |
ORGANIZATION, BUSINESS OPERATIO
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 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. 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 and Co. Inc. (“BRC Inc.”) 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 Inc. in 2014, the Company now operates in three operating segments: capital market (“Capital Markets”), auction and liquidation (“Auction and Liquidation”), and valuation and appraisal (“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 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’s business in 2013 had an operating segment relating to the operation of UK retail stores (“UK Retail Stores”). The UK Retail Stores segment included the operation of ten retail shoe stores in the United Kingdom as a result of the acquisition of Shoon Trading Limited (“Shoon”) in 2012. In August 2013, the Shoon shareholder agreement was also amended and restated to eliminate the Company’s super majority voting rights which enabled the Company to control the board of directors of Shoon. As a result of this amendment, the Company no longer controlled the board of directors of Shoon, no longer operated in the UK Retail Stores segment, and Shoon’s operating results are not consolidated for any periods after July 31, 2013. In January 2014, Shoon was sold to a third party, and the Company no longer has a financial interest in the operations of Shoon. 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, 2013. 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”) pursuant to the terms and provisions of a securities purchase agreement entered into among the Company and the accredited investors on May 19, 2014. At the closing of the Private Placement on June 5, 2014, the Company received aggregate gross proceeds of approximately $51,447. 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 11), 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 was recorded as a capital contribution to additional paid in capital in 2014. 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 Inc.. 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 Inc. 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. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 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 consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly owned and majority-owned subsidiaries. The consolidated financial statements also include the accounts of Great American Global Partners, LLC (“GA Global”) which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations. All intercompany accounts and transactions have been eliminated upon consolidation. The accounting guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE; to eliminate the solely quantitative approach previously required for determining the primary beneficiary of a VIE; to add an additional reconsideration event for determining whether an entity is a VIE when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE. (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, fair value of share based arrangements, fair value of contingent consideration in business combination’s 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, investment banking and wealth management services; and (ii) revenues from sales and trading activities. 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 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 from sales and trading includes (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 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 $3,052, $3,013 and $2,811 for the years ended December 31, 2015, 2014 and 2013, 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 $10,641, $6,950 and $5,620 for the years ended December 31, 2015, 2014, and 2013, 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. During the fourth quarter of 2014, revenues in the Auction and Liquidation segment also included estimated losses of $6,100 that were accrued at December 31, 2014 on the performance of one retail liquidation services engagement where we guaranteed a minimum recovery value for goods sold. 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. Revenues from sales-type leases are recorded as an asset at lease inception. The asset is recorded at the aggregate future minimum lease payments, estimated residual value of the leased equipment, and deferred incremental direct costs less unearned income. Income is recognized over the life of the lease to approximate a level rate of return on the net investment. During the year ended December 31, 2013, the terms of the lease agreement for four oil rigs that was included in leased equipment at December 31, 2012 was amended to, among other things, eliminate the right of the lessor to return the oil rigs to the Company. This amendment changed the classification of the lease from an operating lease to a sales-type lease and resulted in the Company recording revenues from the sale of the oil rigs of $9,280 and cost of goods sold of $7,447 during the year ended December 31, 2013. 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. Revenues from the sale of goods in our UK retail stores segment are recognized as revenue upon the sale of product to retail customers through July 31, 2013. 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. Allowances provided for these items are presented in the consolidated financial statements primarily as reductions to sales and cost of sales. In the normal course of business, the Company will enter into collaborative arrangements with other merchandise liquidators to collaboratively execute auction and liquidation contracts. The Company’s collaborative arrangements specifically include contractual agreements with other liquidation agents in which the Company and such other liquidation agents actively participate in the performance of the liquidation services and are exposed to the risks and rewards of the liquidation engagement. The Company’s participation in collaborative arrangements including its rights and obligations under each collaborative arrangement can vary. Revenues from collaborative arrangements are recorded net based on the proceeds received from the liquidation engagement. Amounts paid to participants in the collaborative arrangements are reported separately as direct costs of revenues. Revenue from collaborative arrangements in which the Company is not the majority participant is recorded net based on the Company’s share of proceeds received. There were no revenues and direct cost of services subject to collaborative arrangements during the year ended December 31, 2015 and 2014. There were revenues of $8,094 and direct cost of services of $1,073 subject to collaborative arrangements during the years ended December 31, 2013. (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 Revenues from one liquidation service contract to a retailer represented 12.4% of total revenues during the year ended December 31, 2015. Revenues from one liquidation service contract to a retailer and the sale of four oil rigs to one customer represented 10.7% and 12.2% of total revenues during the year ended December 31, 2013. Revenues in the Valuation and Appraisal segment and the Auction and Liquidation segment are primarily generated in the United States and Europe. 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) Advertising Expense The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $519, $262 and $446 for the years ended December 31, 2015, 2014, and 2013, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying consolidated statement of operations. (g) Share-Based Compensation The Company’s share based payment awards principally consist of grants of restricted stock and restricted stock units. Share based payment awards also includes grants of membership interests in the Company’s majority owned subsidiaries. The grants of membership interests consist of percentage interests in the Company’s majority owned subsidiaries as determined at the date of grant. In accordance with the applicable accounting guidance, share based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the consolidated statement of operations over the requisite service or performance period the award is expected to vest. The fair value of the liability-classified award will be subsequently remeasured at each reporting date through the settlement date. Change in fair value during the requisite service period will be recognized as compensation cost over that period. (h) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. (i) 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. (j) Restricted Cash As of December 31, 2015, restricted cash included $51 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 of asset based credit facility, $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. (k) 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. The Company’s bad debt expense totaled $718, $532 and $18 for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included as a component of selling, general and administrative expenses in the accompanying consolidated statement of operations. (l) 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. (m) 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. (n) Lease Finance Receivable The Company had a lease finance receivable in the amount of $8,099 that consisted of the Company’s net investment in sales-type leases for four oil rigs as of December 31, 2013. The gross lease payments included a bargain purchase option in the amount of $4,242 that was payable upon the maturity of the lease on December 15, 2014. The lessee was in default and arrears on certain lease payments and did not exercise its right to purchase the four oil rigs in accordance with the bargain purchase option. Upon the expiration of the lease on December 15, 2014, the Company recorded an impairment charge in the amount of $1,142 in cost of goods sold to write-down the four oil rigs to their estimated fair value of $3,100 which was included in goods held for sale at December 31, 2014. In addition, certain lease payments in the amount of $2,363 that were in default and arrears was included in prepaid expenses and other current assets at December 31, 2014. The lease payments were guaranteed by the parent company of the lessee and the Company notified the lessee that it was in default under the lease and demanded payment. On January 11, 2015, the Company’s wholly-owned subsidiary which was a party to the lease agreement filed for voluntary bankruptcy protection as more fully discussed in Note 11. (o) Securities Owned and Securities Sold Not Yet Purchased Securities owned consists of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of December 31, 2015 and 2014, the Company’s securities owned and securities sold not yet purchased at fair value consisted of the following: December 31, December 31, 2015 2014 Securities owned Common stocks $ 17,586 $ 16,667 Corporate bonds 941 1,188 Partnership interests 7,016 100 $ 25,543 $ 17,955 Securities sold not yet purchased Corporate bonds $ 713 $ 746 (p) 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 were stated at the present value of minimum lease payments. (q) Goodwill and Other Intangible Assets The Company accounts for goodwill and intangible assets in accordance with the accounting guidance which requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. Goodwill includes (i) the excess of the purchase price over the fair value of net assets acquired in a business combinations and (ii) an increase for the subsequent acquisition of noncontrolling interests during the year ended December 31, 2007 (also see Note 8). The Accounting Standards Codification (“ASC”) requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. The Company operates three reporting units, which are the same as its reporting segments described in Note 20. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. When testing goodwill for impairment, the Company may assess qualitative factors for some or all of our reporting units to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this qualitative assessment for some or all of our reporting units and perform a detailed quantitative test of impairment (step 1). If the Company performs the detailed quantitative impairment test and the carrying amount of the reporting unit exceeds its fair value, the Company would perform an analysis (step 2) to measure such impairment. In 2015, the Company first performed a qualitative assessment to identify and evaluate events and circumstances to conclude whether it is more likely than not that the fair value of the Company’s reporting units are less than its carrying amounts. Based on the Company’s qualitative assessments, the Company concluded that a positive assertion can be made from the qualitative assessment that it is more likely than not that the fair value of the reporting units exceeded their carrying values and no impairments were identified. The Company reviews the carrying value of its amortizable intangibles and other long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparing the carrying amount of the asset or asset group to the undiscounted cash flows that the asset or asset group is expected to generate. If the undiscounted cash flows of such assets are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset group, if any, exceeds its fair market value. No impairment was deemed to exist as of December 31, 2015. (r) Fair Value Measurements The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company’s securities owned and securities sold and not yet purchased are comprised of common stocks, corporate bonds and investments in partnerships. Investments in common stocks are based on quoted prices in active markets which are included in Level 1 of the fair value hierarchy. The Company also holds nonpublic common stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily investment in equity securities, bonds, and direct lending funds. The Company’s partnership interests are valued based on the Company’s proportionate share of the net assets of the partnership which is derived from the most recent statements received from the general partner which are included in Level 2 of the fair value hierarchy. The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2015 and 2014. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2015, Using Quoted prices in Other Significant Fair Value at active markets for observable unobservable December 31, identical assets inputs inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Securities owned Common stocks $ 17,586 $ 17,296 $ - $ 290 Corporate bonds 941 - 941 - Partnership interests 7,016 - 5,250 1,766 Total assets measured at fair value $ 25,543 $ 17,296 $ 6,191 $ 2,056 Liabilities: Securities sold not yet purchased Corporate bonds $ 713 $ - $ 713 $ - Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,330 $ - $ - $ 2,330 Contingent consideration $ 2,391 $ - $ - $ 2,391 Total liabilities measured at fair value $ 5,434 $ - $ 713 $ 4,721 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2014, Using Quoted prices in Other Significant Fair Value at active markets for observable unobservable December 31, identical assets inputs inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Securities owned Common stocks $ 16,667 $ 16,348 $ - $ 319 Corporate bonds 1,188 - 1,188 - Partnership interests 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 changes in Level 3 fair value hierarchy during the year ended December 31, 2015 and 2014 is as follows: Level 3 Level 3 Changes During the Year Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Period Adjustments Earnings Settlements of Level 3 Period Year Ended December 31, 2015 Common stocks $ 319 $ - $ - $ (29 ) $ - $ 290 Partnership interests $ - $ 79 $ - $ 1,687 $ - $ 1,766 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ - $ 45 $ - $ - $ 2,330 Contingent consideration $ - $ 2,391 $ - $ - $ - $ 2,391 Year Ended December 31, 2014 Common stocks $ - $ - $ - $ 319 $ - $ 319 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,273 $ - $ 103 $ (91 ) $ - $ 2,285 The amount reported in the table above for the years ended December 31, 2015 and December 31, 2014 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The fair value adjustment for contingent consideration in the table above of $2,391 includes the initial value of contingent consideration of $2,229 and an adjustment for imputed interest of $162 for the year ended December 31, 2015. The amounts reported in the table above for the year ended December 31, 2015 includes $2,687 of partnership interests purchased which is included in securities owned at December 31, 2015. The amounts reported in the table above for the year ended December 31, 2014 includes settlements of $91 related to the repurchase of noncontrolling interests from one of our majority owned limited liability company subsidiaries and $319 of common stock purchased which is included in securities owned at December 31, 2014. The carrying amounts reported in the 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 payabl |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions | |
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” (“ASC 805”), the contingent consideration liability has been classified as a liability on the acquisition date. Imputed interest expense totaled $162 for the year ended December 31, 2015. The balance of the contingent consideration liability was $2,391 at December 31, 2015 (discount of $109 at December 31, 2015) and has been recorded as contingent consideration liability – current portion in the amount of $1,241 and contingent consideration liability, net of current portion in the amount of $1,150 in the 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, 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 ending on the first and second anniversary dates of the closing. MK Capital achieved the minimum amount of revenues for the first anniversary period and the contingent cash consideration and contingent stock consideration for such first anniversary period was paid and issued on February 2, 2016. The MK Capital 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 February 2, 2015 acquisition date for MK Capital. The application of the acquisition method of accounting resulted in goodwill of $6,971 which is deductible for tax purposes. 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 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 consolidated statement of operations during the year ended December 31, 2015 were as follows: Period from February 2, 2015 through December 31, 2015 Revenues $ 1,772 Income before income taxes 457 Acquisition of B. Riley and Co. Inc. On June 18, 2014, the Company completed the acquisition of BRC Inc. 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 Inc., B. Riley & Co. Holdings, LLC (“BRH”), Riley Investment Management LLC (“RIM,” and collectively with BRC, Inc. 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 Inc., Darwin Merger Sub I, Inc. merged with and into BRC Inc., and BRC Inc. 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 Inc. 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 Inc. 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 Inc. and August 1, 2014 for BRH and RIM. The application of the acquisition method of accounting resulted in goodwill of $21,869 which is not deductible for tax purposes. Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of BRC Inc. 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 The amount of revenue and earnings attributable to BRC Inc. in the Company’s consolidated statement of operations during the year ended December 31, 2014 were as follows: Period from June 18, 2014 Through December 31, 2014 Revenues $ 19,420 Income before income taxes 5,244 Pro Forma Financial Information The unaudited financial information in the table below summarizes the combined results of operations of the Company and BRC Inc. 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 Inc. on a pro forma basis, as though they had occurred as of January 1, 2013. 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 Year Ended Year Ended December 31, 2014 December 31, 2013 Revenues $ 91,656 $ 102,965 Net (loss) income attributable to B. Riley Financial, Inc. $ (3,938 ) $ 4,594 Basic (loss) income per share $ (0.34 ) $ 0.82 Diluted (loss) income per share $ (0.34 ) $ 0.81 Weighted average basic shares outstanding 11,533,178 5,613,307 Weighted average diluted shares outstanding 11,533,178 5,674,528 2012 Acquisition of Shoon Trading Limited On May 4, 2012, the Company invested $65 for a 44.4% interest in the common stock of Shoon. Shoon purchased the rights to operate the former Shoon internet business and retail stores that were in administration in the United Kingdom. As part of the investment, the Company also loaned Shoon approximately $1,300 that was collateralized by retail inventory. The loan bore interest at an annual rate of LIBOR plus 6.0% payable monthly and had a maturity date of May 3, 2014. In accordance with the Shoon shareholder agreement, the Company had the right to appoint a Chairman of Shoon. Together with the Company’s 44.4% investment in the common stock of Shoon and control of the majority of the board of directors, the Company had a controlling interest in Shoon. On August 2, 2013, an additional loan in the amount of $847 (net of $40 discount) was extended to Shoon with a maturity date of August 3, 2015. This increased the outstanding principal from both loans to $1,371. Interest on the new loan was payable monthly at 6.5%. Both of the loans were collateralized by the inventory of Shoon. In connection with the new loan in August 2013, the Shoon shareholder agreement was amended and restated to eliminate the Company’s super majority voting rights which enable the Company to control the board of directors of Shoon. As a result of this amendment, the Company no longer controls Shoon and the operating results of Shoon are not consolidated for any periods after July 31, 2013. The operating results in the UK Retail Stores reportable segment in Note 20 are comprised of Shoon’s operating results for the period from January 1, 2013 to July 31, 2013. In January 2014, Shoon was sold to a third party and the two loans in the amount of $1,200 were repaid to the Company. As a result of the sale of Shoon, the Company recorded an impairment charge as of December 31, 2013 of $111 to write-down the investment in Shoon to its estimated net realizable value. In accordance with the accounting guidance for consolidation of variable interest entities, the Company has determined that the additional financing arrangement in the form of the new note receivable with Shoon and the elimination of the Company’s super majority voting rights in August 2013, as discussed above, changed the status of Shoon to a VIE. The Company, in determining whether or not it is the primary beneficiary of Shoon, considered the voting interests of the shareholders of Shoon and the shareholders ability to direct the activities of Shoon. The Company determined it is not the primary beneficiary of the VIE since the Company does not have the ability to exercise any rights or powers to direct the activities of Shoon that most significantly impact Shoon’s economic performance. Accordingly, Shoon’s operating results are not consolidated for any periods after July 31, 2013. The Company’s loss under the equity method of accounting for Shoon was $156 for the five months ended December 31, 2013. |
RESTRUCTURING CHARGE
RESTRUCTURING CHARGE | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGE | NOTE 4— RESTRUCTURING CHARGE During the second quarter of 2014, the Company initiated a strategic review of our operations taking into account the planned synergies as a result of the acquisition of BRC Inc. On August 13, 2014, as a result of the strategic review, our Board of Directors ratified and approved the Company’s implementation of cost savings measures that resulted in a reduction in corporate overhead and the restructuring of our operations in Europe. The Company implemented a reduction in force for some of our corporate employees and a significant number of our employees in the United Kingdom and we closed our offices in Deerfield, Illinois and London, England. These initiatives resulted in a restructuring charge of $2,548 in the third quarter of 2014. The restructuring charge consists of payroll and severance costs of $1,595, office closure costs of $686 and other expenses of $267. As a result of such reductions in force and restructuring, which the Company completed in the third quarter of 2014, the Company anticipates a shift in its strategic focus from Europe which may result in a reduction in revenues from our European operations. The related accruals are included in accounts payable and accrued expenses in the consolidated balance sheet. The following table summarizes the restructuring charge during 2014 and 2015: Auction and Valuation and Corporate and Liquidation Appraisal Other Segment Segment Expenses Total Expensed during 2014: Payroll and severance costs $ 951 $ 131 $ 513 $ 1,595 Office closure 295 8 383 686 Other charges 93 64 110 267 Total expended during the 2014 1,339 203 1,006 2,548 Paid during 2014 1,208 203 647 2,058 Accrued balance at December 31, 2014 131 - 359 490 Paid during 2015 91 - 212 303 Accrued balance at December 31, 2015 $ 40 $ - $ 147 $ 187 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable | |
ACCOUNTS RECEIVABLE | NOTE 5— ACCOUNTS RECEIVABLE The components of accounts receivable net include the following: December 31, December 31, 2015 2014 Accounts receivable $ 8,417 $ 7,797 Investment banking fees, commissions and other receivables 709 1,608 Unbilled receivables 435 1,421 Total accounts receivable 9,561 10,826 Allowance for doubtful accounts (89 ) (728 ) Accounts receivable, net $ 9,472 $ 10,098 Additions and changes to the allowance for doubtful accounts consist of the following: Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 728 $ 275 $ 371 Add: Additions to reserve 718 532 18 Less: Write-offs (1,056 ) (79 ) (84 ) Less: Recoveries (301 ) - (30 ) Balance, end of year $ 89 $ 728 $ 275 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. At December 31, 2015 and 2014, accounts receivable in the amount of $3,922 and $2,385, respectively, were collateralized by the new accounts receivable revolving line of credit more fully described in Note 10. |
GOODS HELD FOR SALE OR AUCTION
GOODS HELD FOR SALE OR AUCTION | 12 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
GOODS HELD FOR SALE OR AUCTION | NOTE 6— GOODS HELD FOR SALE OR AUCTION Goods held for sale or auction consists of the following: December 31, 2015 2014 Machinery and equipment $ - $ 4,026 Aircraft parts and other 37 91 Total $ 37 $ 4,117 Goods held for sale or auction includes machinery and equipment and aircraft parts and other. 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. 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 11. As a result of the bankruptcy filing, the asset and liabilities of GAGEE including the machinery and equipment is no longer consolidated in the Company’s consolidated financial statements. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7— PROPERTY AND EQUIPMENT Property and equipment consists of the following: Estimated December 31, Useful Lives 2015 2014 Leasehold improvements Shorter of lease or estimated useful life $ 311 $ 244 Machinery, equipment and computer software 3 years 2,400 2,280 Furniture and fixtures 5 years 1,160 1,151 Capital lease equipment 3 to 5 years 388 388 Total 4,259 4,063 Less: Accumulated depreciation and amortization (3,667 ) (3,287 ) $ 592 $ 776 Depreciation expense was $417, $505 and $611 during the years ended December 31, 2015, 2014, and 2013, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8— GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2014 are as follows: Auction and Valuation and Capital Liquidation Appraisal Markets Segment Segment Segment Total Balance as of December 31, 2013 $ 1,975 $ 3,713 $ - $ 5,688 Goodwill acquired during the period: BRC acquisition on June 18, 2014 - - 21,869 21,869 Balance as of December 31, 2014 1,975 3,713 21,869 27,557 Goodwill acquired during the period: MK Capital acquisition on February 2, 2015 - - 6,971 6,971 Balance as of December 31, 2015 $ 1,975 $ 3,713 $ 28,840 $ 34,528 Intangible assets consisted of the following: December 31, 2015 December 31, 2014 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 4 to 13 Years $ 3,600 $ 572 $ 3,028 $ 1,200 $ 141 $ 1,059 Non-amortizable assets: Tradenames 1,740 - 1,740 1,740 - 1,740 Total intangible assets $ 5,340 $ 572 $ 4,768 $ 2,940 $ 141 $ 2,799 Amortization expense was $431 and $141 for the years ended December 31, 2015 and 2014, respectively. At December 31, 2015, estimated future amortization expense is $447, $447, $326, $222 and $222 for the years ended December 31, 2016, 2017, 2018, 2019 and 2020, respectively. The estimated future amortization expense after December 31, 2020 is $1,364. |
LEASING ARRANGEMENTS
LEASING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
LEASING ARRANGEMENTS | NOTE 9— LEASING ARRANGEMENTS The Company has several noncancellable operating leases that expire at various dates through 2019. Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2015 are: Operating Leases Year Ending December 31: 2016 $ 2,470 2017 1,578 2018 1,273 2019 460 Total minimum lease payments $ 5,781 Rent expense under all operating leases was $2,376, $2,107 and $1,717 for the years ended December 31, 2015, 2014, and 2013, respectively. Rent expense is included in selling, general and administrative expenses in the accompanying consolidated statement of operations. |
CREDIT FACILITIES
CREDIT FACILITIES | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITIES | NOTE 10— 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 11, and the acquisition of BRC Inc. Interest expense totaled $343 (including success fees of $119), $400 (including success fees of $162) and $532 (including success fees of $292) for the years ended December 31, 2015, 2014 and 2013, respectively. There was no outstanding balance under this credit facility at December 31, 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% (6.5% at December 31, 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. On December 7, 2015, the Company notified BFI to terminate the line of credit upon maturity on February 3, 2016. At December 31, 2015, there was $3,922 of accounts receivable as collateral for the Line of Credit and the total borrowings outstanding was $272 and $2,738 was available and unused. Interest expense totaled $84, $46 and $90 for the years ended December 31, 2015, 2014 and 2013, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 11— NOTES PAYABLE (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 6. 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. Great American Group, 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 Great American Group, 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, Great American Group, 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. Great American Group, LLC has satisfied its obligation to pay the $1,200 guarantee and the credit agreement does not provide for other recourse against Great American Group, LLC. At December 31, 2014, the note payable balance was $6,570. 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 6). 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 year ended December 31, 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 Notes Payable As of December 31, 2013, there was $50,483 of aggregate principal balance outstanding on the original $60,000 of notes payable. Of the $50,483 outstanding principal balance at December 31, 2013, $48,759 was owed to Andrew Gumaer, a member of our Board of Directors and an executive officer, and Harvey Yellen, a former director and executive officer (all of which accrued interest at 3.75%) and $1,724 was owed to other related parties, $1,084 of which accrued interest at 3.75% and $640 of which accrued interest at 12.0%. On January 31, 2014, the Company paid in full the $640 of principal balance for the notes that had the 12.0% interest rate. The remaining $1,084 of principal amount payable had a maturity date of July 31, 2014. The $48,759 principal amount payable to Messrs. Gumaer and Yellen had a maturity date of July 31, 2018. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12— COMMITMENTS AND CONTINGENCIES (a) Letters of Credit There were no letters of credit outstanding at December 31, 2015. At December 31, 2014, there were letters of credit outstanding in the amount of $8,553 related to two retail liquidation engagements. (b) Legal Matters In January 2015, the Company was served with a lawsuit that seeks to assert claims of breach of contract and other matters with damages in an amount up to $10,000. In April 2015, the Company filed a motion to dismiss the lawsuit and in March 2016 the Court issued its’ opinion dismissing some claims while denying the motion with respect to other claims. The Company is continuing to 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13— INCOME TAXES The Company’s provision (benefit) for income taxes consists of the following for the years ended December 31, 2015, 2014 and 2013: Year Ended December 31, 2015 2014 2013 Current: Federal $ 201 $ - $ - State 99 98 2 Foreign 779 - (287 ) Total current provision 1,079 98 (285 ) Deferred: Federal 5,166 (2,503 ) 791 State 1,443 (481 ) 198 Foreign - - - Total deferred 6,609 (2,984 ) 989 Total provision for income taxes $ 7,688 $ (2,886 ) $ 704 A reconciliation of the federal statutory rate of 34% to the effective tax rate for income (loss) before income taxes is as follows for the year ended December 31, 2015, 2014 and 2013: Year Ended December 31, 2015 2014 2013 Provision for income taxes at federal statutory rate 34.0 % (34.0 )% 34.0 % State income taxes, net of federal benefit 4.0 (3.7 ) 8.7 Foreign tax differential - - 9.0 Other (1.8 ) 4.5 3.3 Effective income tax rate 36.2 % (33.2 )% 55.0 % Deferred income tax assets (liabilities) consisted of the following as of December 31, 2015 and 2014: December 31, 2015 2014 Deferred tax assets: Allowance for doubtful accounts $ 160 $ 282 Goods held for sale or auction 692 2,819 Deductible goodwill and other intangibles 9,848 9,988 Accrued liabilities and other 1,177 3,210 Mandatorily redeemable noncontrolling interests 768 740 Foreign tax and other tax credit carryforwards 1,427 342 Net operating loss carryforward 4,920 8,220 Total gross deferred tax assets $ 18,992 $ 25,601 The Company's income before income taxes of $21,265 for the year ended December 31, 2015 includes a United States component of income before income taxes of $18,642 and a foreign component comprised of income before income taxes of $2,623. As of December 31, 2015, the Company had federal net operating loss carryforwards of $12,023, state net operating loss carryforwards of $13,886, and foreign tax credit carryforwards of $1,121. 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 is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of December 31, 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. On January 1, 2009, the Company adopted the accounting guidance for accounting for uncertainty in income taxes. This accounting guidance addresses the determination of how tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under the accounting guidance, 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, 2011 to 2015. 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 | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 14— EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Basic common shares outstanding exclude 66,000 common shares that are held in escrow and subject to forfeiture as a result of the failure to achieve certain performance targets specified in connection with the transaction with Alternative Asset Management Acquisition Corp. in 2009 (the “Acquisition”).. The 66,000 common shares issued to the former members of Great American Group, LLC are subject to forfeiture 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 was satisfied at the end of the respective periods. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income (loss) per share for the years ended December 31, 2015 and 2014 were 308,699 and 44,883 respectively, because to do so would have been antidilutive. Basic and diluted earnings from continuing operations calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2015 2014 2013 Net income (loss) attributable to B. Riley Financial, Inc. $ 11,805 $ (5,801 ) $ 1,058 Weighted average shares outstanding: Basic 16,221,040 9,612,154 1,434,107 Effect of dilutive potential common shares: Contingently issuable shares 44,875 - 61,221 Diluted 16,265,915 9,612,154 1,495,328 Basic earnings (loss) per share $ 0.73 $ (0.60 ) $ 0.74 Diluted earnings (loss) per share $ 0.73 $ (0.60 ) $ 0.71 |
LIMITED LIABILITY COMPANY SUBSI
LIMITED LIABILITY COMPANY SUBSIDIARIES | 12 Months Ended |
Dec. 31, 2015 | |
Limited Liability Company Disclosure Of Subsidiary [Abstract] | |
LIMITED LIABILITY COMPANY SUBSIDIARIES | NOTE 15— LIMITED LIABILITY COMPANY SUBSIDIARIES (a) Operating Agreements of Limited Liability Company Subsidiaries The Company has subsidiaries that are organized as limited liability companies, each of which has its own separate operating agreement. Generally, each of these subsidiaries is managed by an individual manager who is a member or employee of the subsidiary, although the manager may not take certain actions unless the majority member of the subsidiary consents to the action. These actions include, among others, the dissolution of the subsidiary, the disposition of all or a substantial part of the subsidiary’s assets not in the ordinary course of business, filing for bankruptcy, and the purchase by the subsidiary of one of the members’ ownership interest upon the occurrence of certain events. Certain of the members with a minority ownership interest in the subsidiaries are entitled to receive guaranteed payments in the form of compensation or draws, in addition to distributions of available cash from time to time. Distributions of available cash are generally made to each of the members in accordance with their respective ownership interests in the subsidiary after repayment of any loans made by any members to such subsidiary, and allocations of profits and losses of the subsidiary are generally made to members in accordance with their respective ownership interests in the subsidiary. The operating agreements also generally place restrictions on the transfer of the members’ ownership interests in the subsidiaries and provide the Company or the other members with certain rights of first refusal and drag along and tag along rights in the event of any proposed sales of the members’ ownership interests. Generally, a member of the subsidiary who materially breaches the operating agreement of the subsidiary, which breach has a direct, substantial and adverse effect on the subsidiary and the other members, or who is convicted of a felony (or a lesser crime of moral turpitude) involving his management of or involvement in the affairs of the subsidiary, or a material act of dishonesty of the member involving his management of or involvement in the affairs of the subsidiary, shall forfeit his entire ownership interest in the subsidiary. (b) Repurchase Obligations of Membership Interests of Limited Liability Company Subsidiaries The operating agreements of the Company’s limited liability company subsidiaries require the Company to repurchase the entire ownership interest of each the members upon the death of a member, disability of a member as defined in the operating agreement, or upon declaration by a court of law that a member is mentally unsound or incompetent. Upon the occurrence of one of these events, the Company is required to repurchase the member’s ownership interest in an amount equal to the fair market value of the member’s noncontrolling interest in the subsidiary. The Company evaluated the classification of all of its limited liability company members’ ownership interests in accordance with the accounting guidance for financial instruments with characteristics of liabilities and equity. This guidance generally provides for the classification of members’ ownership interests that are subject to mandatory redemption obligations to be classified outside of equity. In accordance with this guidance, all members with a minority ownership interest in these subsidiaries are classified as liabilities and included in mandatorily redeemable noncontrolling interests in the accompanying consolidated balance sheet. Members of these subsidiaries with a minority ownership interest issued before November 5, 2003 are stated on a historical cost basis and members of the Company’s subsidiaries with a minority ownership interests issued on or after November 5, 2003 are stated at fair value at each balance sheet date. The Company deems such repurchase obligations, which are payable to members who are also employees of these subsidiaries, to be a compensatory benefit. Accordingly, the changes in the historical cost basis and the changes in the fair value of the respective members’ ownership interests (noncontrolling interests) are recorded as a component of selling, general and administrative expenses in the accompanying consolidated statements of operations. The noncontrolling interests share of net income was $2,207, $1,921 and $1,897 for the years ended December 31, 2015, 2014 and 2013, respectively. There was no change in the fair value of the mandatorily redeemable noncontrolling interests during the years ended December 31, 2015, 2014 and 2013. |
SHARE BASED PAYMENTS
SHARE BASED PAYMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED PAYMENTS | NOTE 16— SHARE BASED PAYMENTS During the year ended December 31, 2015, the Company granted equity incentive rewards representing 527,372 shares of common stock with a total fair value of $5,255 to certain employees and directors of the Company. Such equity incentive awards consisted of restricted stock units subject to vesting representing 521,772 shares of common stock and stock bonus awards of 5,600 fully vested shares of common stock. Of the 521,772 restricted stock units, the shares of common stock underlying such awards are issuable upon vesting as follows: 189,652 during the year ended December 31, 2015, 169,727 during the year ended December 31, 2016 and the remaining 162,393 during the year ended December 31, 2017. During the year ended December 31, 2014, the Company granted restricted stock units representing 5,859 shares of common stock with a total fair value of $45 to directors of the Company which vested on July 31, 2015. Share based compensation expense for the stock bonus awards and restricted stock units was $2,043 for the year ended December 31, 2015. The total income tax benefit recognized related to the vesting of restricted stock units during the year ended December 31, 2015 was $804. The restricted stock units generally vest over a period of one to three years based on continued service. In determining the fair value of restricted stock units on the grant date, the fair value is adjusted for (a) estimated forfeitures, (b) expected dividends based on historical patterns and the Company’s anticipated dividend payments over the expected holding period and (c) the risk-free interest rate based on U.S. Treasuries for a maturity matching the expected holding period. As of December 31, 2015, the expected remaining unrecognized share based compensation expense of $3,043 will be expensed over a weighted average period of 1.4 years. A summary of equity incentive award activity for the periods indicated was as follows: Weighted Average Shares Fair Value Nonvested at December 31, 2013 - $ - Granted 5,859 7.68 Vested - - Forfeited - - Nonvested at December 31, 2014 5,859 $ 7.68 Granted 527,372 9.96 Vested (198,002 ) 9.88 Forfeited (9,324 ) 9.98 Nonvested at December 31, 2015 325,905 $ 9.97 The per-share weighted average grant-date fair value of equity incentive awards was $7.68 and $9.96 for the years ending December 31, 2014 and 2015, respectively. The total fair value of shares vested during the year ended December 31, 2015 was $1,905. |
BENEFIT PLANS AND DIVIDENDS
BENEFIT PLANS AND DIVIDENDS | 12 Months Ended |
Dec. 31, 2015 | |
Benefit Plans And Dividends | |
BENEFIT PLANS AND DIVIDENDS | NOTE 17— BENEFIT PLANS AND DIVIDENDS (a) Amended and Restated 2009 Stock Incentive Plan In connection with the consummation of the Acquisition, the Company assumed the AAMAC 2009 Stock Incentive Plan which was approved by the AAMAC stockholders on July 31, 2009 (as assumed, the “Incentive Plan”). In accordance with Section 13(a) of the Incentive Plan, in connection with the Company’s assumption of the Incentive Plan, the Company’s board of directors adjusted the maximum number of shares that may be delivered under the Incentive Plan to 782,200 to account for the two-for-one exchange ratio of Company common stock for AAMAC common stock in the Acquisition. On August 19, 2009, the Company’s board of directors approved an amendment and restatement of the Incentive Plan which adjusted the number of shares of stock the Company reserved for issuance thereunder to 391,100. Effective as of October 7, 2014, the Company’s board of directors approved an amendment and restatement of the Incentive Plan which, among other things, increased the number of shares of stock the Company reserved for issuance thereunder to 3,210,133 shares. As of December 31, 2015, the Company has 2,726,328 shares of common stock available for future grants under the Incentive Plan. (b) Employee Benefit Plan The Company maintains a qualified defined contribution 401(k) plan, which covers substantially all of its U.S. employees. Under the plan, participants are entitled to make pre-tax contributions up to the annual maximums established by the Internal Revenue Service. The plan document permits annual discretionary contributions from the Company. No employer contributions were made in any of the periods presented. (c) Dividends On October 29, 2014, the Board of Directors of the Company approved a dividend of $0.03 per share, which was paid on December 9, 2014 to stockholders of record on November 18, 2014. On May 4, 2015, the Company’s Board of Directors approved a dividend of $0.06 per share, which was paid on or about June 12, 2015 to stockholders of record on May 22, 2015. On August 10, 2015, the Company’s Board of Directors approved a dividend of $0.20 per share, which was paid on or about September 10, 2015 to stockholders of record on August 25, 2015. On November 9, 2015, our Board of Directors approved a dividend of $0.06 per share, which was paid on or about December 9, 2015 to stockholders of record on November 24, 2015. The Company’s Board of Directors may reduce or discontinue the payment of dividends at any time for any reason it deems relevant. The declaration and payment of any future dividends or repurchases of the Company’s common stock will be made at the discretion of the Board of Directors and will be dependent upon the Company’s financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by the Board of Directors. |
NET CAPITAL REQUIREMENTS
NET CAPITAL REQUIREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Net Capital Requirements | |
NET CAPITAL REQUIREMENTS | NOTE 18— NET CAPITAL REQUIREMENTS BRC, a subsidiary of the Company, is a registered broker-dealer and, accordingly, is subject to the SEC Uniform Net Capital Rule (Rule 15c3-1) which requires BRC 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 December 31, 2015, BRC had net capital of $7,477 (an excess of $7,099). BRC net capital ratio for December 31, 2015 was 0.41 to 1. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 19— RELATED PARTY TRANSACTIONS On March 10, 2015, the Company borrowed $4,500 from RIP in accordance with the RIP Note. The borrowings were for short-term working capital needs and capital for other retail liquidation engagements. The principal amount of $4,500 million 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) and included a Success Fee as more fully described in Note 11(b). 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 the 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 our Board of Directors unanimously approved the issuance of the RIP Note. The RIP Note was repaid on May 4, 2015 in accordance with its terms. Interest expense on the RIP Note totaled $194 for the year ended December 31, 2015, which includes success fees of $126. The RIP Note was repaid on May 4, 2015. At December 31, 2015 amounts due from related party of $409 represented amounts due from GACP I, L.P. for management fees and other operating expenses. At December 31, 2015 and 2014, amounts due to related party of $166 and $213, respectively, represents amounts due to CA Global Partners, LLC (“CA Global”). CA Global is one of the members of Great American Global Partners, LLC (“GA Global Ptrs”) which started operations in the first quarter of 2013. The amount payable at December 31, 2015 and 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. At December 31, 2013, the Company had two loan receivables from Shoon with an aggregate outstanding balance of $1,200. The Company owned 44.4% of the common stock of Shoon. The original loan receivable in the amount of $1,300 was made to Shoon on May 4, 2012 and had a remaining principal balance of $353 at December 31, 2013. The loan had a maturity date of May 3, 2014 with interest payable monthly at LIBOR plus 6.0%. On August 2, 2013, an additional loan in the amount of $847 (net of $40 discount) was extended to Shoon with a maturity date of August 3, 2015. Interest is payable monthly at 6.5%. Both of the loans were collateralized by the inventory of Shoon. In January 2014, Shoon was sold to a third party and the two loans in the amount of $1,200 outstanding at December 31, 2013 were repaid to the Company as more fully described in Note 3. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 20— 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 Inc in 2014 and MK Capital in 2015, the Company provides investment banking, corporate finance, research, wealth management, sales and trading services to corporate, institutional and high net worth clients. As a result of the acquisition of Shoon in 2012, the Company operated ten retail stores in the United Kingdom which were reported in the UK Retail Stores segment in 2013. In August 2013, the Shoon shareholder agreement was amended and restated to eliminate the Company’s super majority voting rights which enabled the Company to control the board of directors of Shoon. As a result of this amendment, the Company no longer controls Shoon and the operating results of Shoon are not consolidated for any periods after July 31, 2013. As such, the Company no longer operates in the UK Retail Stores segment. In January 2014, Shoon was sold to a third party, and the Company no longer has a financial interest in the operations of Shoon. The Company’s business in 2013 was previously classified by management into the Auction and Liquidation segment, Valuation and Appraisal segment, and UK Retail Stores segment. In 2014 and 2015, with the acquisition of BRC Inc and MK Capital, the Company’s business is classified into the Capital Markets segment, Auction and Liquidation segment and Valuation and Appraisal segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. Additionally, the Valuation and Appraisal operating segments are aggregated into one reportable segment as they have similar economic characteristics and are expected to have similar long-term financial performance. The following is a summary of certain financial data for each of the Company’s reportable segments: Year Ended December 31, 2015 2014 2013 Capital markets reportable segment: Revenues - Services and fees $ 35,183 $ 19,420 $ Selling, general, and administrative expenses (30,229 ) (14,185 ) - Depreciation and amortization (519 ) (193 ) - Segment income 4,435 5,042 - Auction and Liquidation reportable segment: Revenues - Services and fees $ 35,633 $ 17,166 $ 32,409 Revenues - Sale of goods 10,596 9,859 9,963 Total revenues 46,229 27,025 42,372 Direct cost of services (15,489 ) (10,719 ) (11,120 ) Cost of goods sold (3,072 ) (14,080 ) (7,940 ) Selling, general, and administrative expenses (8,170 ) (8,481 ) (11,889 ) Restructuring charge - (1,339 ) - Depreciation and amortization (191 ) (107 ) (176 ) Segment income (loss) 19,307 (7,701 ) 11,247 Valuation and Appraisal reportable segment: Revenues - Services and fees 31,113 30,671 27,558 Direct cost of services (13,560 ) (12,747 ) (13,026 ) Selling, general, and administrative expenses (9,101 ) (10,721 ) (8,718 ) Restructuring charge - (203 ) - Depreciation and amortization (137 ) (151 ) (143 ) Segment income 8,315 6,849 5,671 UK Retail Stores reportable segment: Revenues - Sale of goods - - 6,202 Cost of goods sold - - (3,566 ) Selling, general, and administrative expenses - - (3,773 ) Depreciation and amortization - - (45 ) Segment loss - - (1,182 ) Consolidated operating income from reportable segments 32,057 4,190 15,736 Corporate and other expenses (includes restructuring charge of $1,006 for the year ended December 31, 2014) (9,975 ) (11,621 ) (11,638 ) Interest income 17 12 26 Loss from equity investment in Great American Real Estate, LLC and Shoon Trading Limited - - (177 ) Interest expense (834 ) (1,262 ) (2,667 ) Income (loss) before income taxes 21,265 (8,681 ) 1,280 (Provision) benefit for income taxes (7,688 ) 2,886 (704 ) Net income (loss) 13,577 (5,795 ) 576 Net income (loss) attributable to noncontrolling interests 1,772 6 (482 ) Net income (loss) attributable to B. Riley Financial, Inc. $ 11,805 $ (5,801 ) $ 1,058 Capital expenditures: Capital Markets segment $ 51 $ 104 $ - Auction and Liquidation segment 157 38 423 Valuation and Appraisal segment 31 1 418 UK Retail Stores segment - - 319 Total $ 239 $ 143 $ 1,160 As of December 31, 2015 2014 Total Assets: Capital Markets segment $ 54,882 $ 48,878 Auction and Liquidation segment 45,892 41,360 Valuation and Appraisal segment 12,171 9,527 Corporate and Other segment 19,475 39,225 Total $ 132,420 $ 138,990 The following table presents revenues by geographical area: Year Ended December 31, 2015 2014 2013 Revenues: Revenues - Services and fees: North America $ 77,153 $ 63,417 $ 50,624 Europe 24,776 3,840 9,343 Total Revenues - Services and fees $ 101,929 $ 67,257 $ 59,967 Revenues - Sale of goods North America $ 907 $ 9,859 $ 9,532 Europe 9,689 - 6,633 Total Revenues - Sale of goods $ 10,596 $ 9,859 $ 16,165 Total Revenues: North America $ 78,060 $ 73,276 $ 60,156 Europe 34,465 3,840 15,976 Total Revenues - Services and fees $ 112,525 $ 77,116 $ 76,132 The following table presents long-lived assets and identifiable assets by geographical area: As of As of December 31, December 31, 2015 2014 Long-lived Assets - Property and Equipment, net: North America $ 592 $ 776 Europe - - Total Long-lived Assets $ 592 $ 776 Identifiable Assets: North America $ 128,094 $ 137,216 Europe 4,326 1,774 Total Assets $ 132,420 $ 138,990 |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE 21— SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Quarter Ended March 31, June 30, September 30, December 31, 2015 2015 2015 2015 Total revenues $ 26,031 $ 45,461 $ 21,272 $ 19,761 Operating income (loss) $ 5,462 $ 14,669 $ 3,277 $ (1,326 ) Income (loss) before income taxes $ 5,211 $ 14,254 $ 3,218 $ (1,418 ) (Provision) benefit for income taxes $ (1,775 ) $ (5,685 ) $ (600 ) $ 372 Net income (loss) $ 3,436 $ 8,569 $ 2,618 $ (1,046 ) Net income (loss) attributable to B. Riley Financial, Inc. $ 2,682 $ 8,664 $ 1,463 $ (1,004 ) Earnings (loss) per share: Basic $ 0.17 $ 0.53 $ 0.09 $ (0.06 ) Diluted $ 0.17 $ 0.53 $ 0.09 $ (0.06 ) Weighted average shares outstanding: Basic 16,117,422 16,237,860 16,243,425 16,283,677 Diluted 16,162,304 16,310,829 16,344,649 16,283,677 Quarter Ended March 31, June 30, September 30, December 31, 2014 2014 2014 2014 Total revenues $ 21,653 $ 14,947 $ 20,674 $ 19,842 Operating loss $ (1,258 ) $ (1,056 ) $ (1,253 ) $ (3,864 ) Loss before income taxes $ (1,884 ) $ (1,501 ) $ (1,303 ) $ (3,993 ) Benefit for income taxes $ 814 $ 594 $ 387 $ 1,091 Net loss $ (1,070 ) $ (907 ) $ (916 ) $ (2,902 ) Net loss attributable to B. Riley Financial, Inc. $ (1,334 ) $ (777 ) $ (868 ) $ (2,822 ) Earnings (loss) per share: Basic $ (0.93 ) $ (0.16 ) $ (0.05 ) $ (0.18 ) Diluted $ (0.93 ) $ (0.16 ) $ (0.05 ) $ (0.18 ) Weighted average shares outstanding: Basic 1,434,107 4,972,203 15,911,482 15,902,607 Diluted 1,434,107 4,972,203 15,911,482 15,902,607 |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation, Policy [Policy Text Block] | (a) Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly owned and majority-owned subsidiaries. The consolidated financial statements also include the accounts of Great American Global Partners, LLC (“GA Global”) which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations. All intercompany accounts and transactions have been eliminated upon consolidation. The accounting guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE; to eliminate the solely quantitative approach previously required for determining the primary beneficiary of a VIE; to add an additional reconsideration event for determining whether an entity is a VIE when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE. |
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, fair value of share based arrangements, fair value of contingent consideration in business combinationÂ’s 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, investment banking and wealth management services; and (ii) revenues from sales and trading activities. 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 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 from sales and trading includes (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 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 $3,052, $3,013 and $2,811 for the years ended December 31, 2015, 2014 and 2013, 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 $10,641, $6,950 and $5,620 for the years ended December 31, 2015, 2014, and 2013, 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. During the fourth quarter of 2014, revenues in the Auction and Liquidation segment also included estimated losses of $6,100 that were accrued at December 31, 2014 on the performance of one retail liquidation services engagement where we guaranteed a minimum recovery value for goods sold. 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. Revenues from sales-type leases are recorded as an asset at lease inception. The asset is recorded at the aggregate future minimum lease payments, estimated residual value of the leased equipment, and deferred incremental direct costs less unearned income. Income is recognized over the life of the lease to approximate a level rate of return on the net investment. During the year ended December 31, 2013, the terms of the lease agreement for four oil rigs that was included in leased equipment at December 31, 2012 was amended to, among other things, eliminate the right of the lessor to return the oil rigs to the Company. This amendment changed the classification of the lease from an operating lease to a sales-type lease and resulted in the Company recording revenues from the sale of the oil rigs of $9,280 and cost of goods sold of $7,447 during the year ended December 31, 2013. 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. Revenues from the sale of goods in our UK retail stores segment are recognized as revenue upon the sale of product to retail customers through July 31, 2013. 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. Allowances provided for these items are presented in the consolidated financial statements primarily as reductions to sales and cost of sales. In the normal course of business, the Company will enter into collaborative arrangements with other merchandise liquidators to collaboratively execute auction and liquidation contracts. The CompanyÂ’s collaborative arrangements specifically include contractual agreements with other liquidation agents in which the Company and such other liquidation agents actively participate in the performance of the liquidation services and are exposed to the risks and rewards of the liquidation engagement. The CompanyÂ’s participation in collaborative arrangements including its rights and obligations under each collaborative arrangement can vary. Revenues from collaborative arrangements are recorded net based on the proceeds received from the liquidation engagement. Amounts paid to participants in the collaborative arrangements are reported separately as direct costs of revenues. Revenue from collaborative arrangements in which the Company is not the majority participant is recorded net based on the CompanyÂ’s share of proceeds received. There were no revenues and direct cost of services subject to collaborative arrangements during the year ended December 31, 2015 and 2014. There were revenues of $8,094 and direct cost of services of $1,073 subject to collaborative arrangements during the years ended December 31, 2013. |
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 Revenues from one liquidation service contract to a retailer represented 12.4% of total revenues during the year ended December 31, 2015. Revenues from one liquidation service contract to a retailer and the sale of four oil rigs to one customer represented 10.7% and 12.2% of total revenues during the year ended December 31, 2013. Revenues in the Valuation and Appraisal segment and the Auction and Liquidation segment are primarily generated in the United States and Europe. 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. |
Advertising Costs, Policy [Policy Text Block] | (f) Advertising Expense The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $519, $262 and $446 for the years ended December 31, 2015, 2014, and 2013, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying consolidated statement of operations. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | (g) Share-Based Compensation The CompanyÂ’s share based payment awards principally consist of grants of restricted stock and restricted stock units. Share based payment awards also includes grants of membership interests in the CompanyÂ’s majority owned subsidiaries. The grants of membership interests consist of percentage interests in the CompanyÂ’s majority owned subsidiaries as determined at the date of grant. In accordance with the applicable accounting guidance, share based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the consolidated statement of operations over the requisite service or performance period the award is expected to vest. The fair value of the liability-classified award will be subsequently remeasured at each reporting date through the settlement date. Change in fair value during the requisite service period will be recognized as compensation cost over that period. |
Income Tax, Policy [Policy Text Block] | (h) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. |
Cash and Cash Equivalents, Policy [Policy Text Block] | (i) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block] | (j) Restricted Cash As of December 31, 2015, restricted cash included $51 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 of asset based credit facility, $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. |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | (k) 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. The CompanyÂ’s bad debt expense totaled $718, $532 and $18 for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included as a component of selling, general and administrative expenses in the accompanying consolidated statement of operations. |
Advances Against Customer Contracts, Policy [Policy Text Block] | (l) 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] | (m) 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. |
Loans and Leases Receivable, Lease Financing, Policy [Policy Text Block] | (n) Lease Finance Receivable The Company had a lease finance receivable in the amount of $8,099 that consisted of the CompanyÂ’s net investment in sales-type leases for four oil rigs as of December 31, 2013. The gross lease payments included a bargain purchase option in the amount of $4,242 that was payable upon the maturity of the lease on December 15, 2014. The lessee was in default and arrears on certain lease payments and did not exercise its right to purchase the four oil rigs in accordance with the bargain purchase option. Upon the expiration of the lease on December 15, 2014, the Company recorded an impairment charge in the amount of $1,142 in cost of goods sold to write-down the four oil rigs to their estimated fair value of $3,100 which was included in goods held for sale at December 31, 2014. In addition, certain lease payments in the amount of $2,363 that were in default and arrears was included in prepaid expenses and other current assets at December 31, 2014. The lease payments were guaranteed by the parent company of the lessee and the Company notified the lessee that it was in default under the lease and demanded payment. On January 11, 2015, the CompanyÂ’s wholly-owned subsidiary which was a party to the lease agreement filed for voluntary bankruptcy protection as more fully discussed in Note 11. |
Securities Owned and Securities Sold Not Yet Purchased, Policy [Policy Text Block] | (o) Securities Owned and Securities Sold Not Yet Purchased Securities owned consists of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of December 31, 2015 and 2014, the CompanyÂ’s securities owned and securities sold not yet purchased at fair value consisted of the following: December 31, December 31, 2015 2014 Securities owned Common stocks $ 17,586 $ 16,667 Corporate bonds 941 1,188 Partnership interests 7,016 100 $ 25,543 $ 17,955 Securities sold not yet purchased Corporate bonds $ 713 $ 746 |
Property, Plant and Equipment, Policy [Policy Text Block] | (p) 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 were stated at the present value of minimum lease payments. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | (q) Goodwill and Other Intangible Assets The Company accounts for goodwill and intangible assets in accordance with the accounting guidance which requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. Goodwill includes (i) the excess of the purchase price over the fair value of net assets acquired in a business combinations and (ii) an increase for the subsequent acquisition of noncontrolling interests during the year ended December 31, 2007 (also see Note 8). The Accounting Standards Codification (“ASC”) requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment). Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. The Company operates three reporting units, which are the same as its reporting segments described in Note 20. Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. When testing goodwill for impairment, the Company may assess qualitative factors for some or all of our reporting units to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this qualitative assessment for some or all of our reporting units and perform a detailed quantitative test of impairment (step 1). If the Company performs the detailed quantitative impairment test and the carrying amount of the reporting unit exceeds its fair value, the Company would perform an analysis (step 2) to measure such impairment. In 2015, the Company first performed a qualitative assessment to identify and evaluate events and circumstances to conclude whether it is more likely than not that the fair value of the Company’s reporting units are less than its carrying amounts. Based on the Company’s qualitative assessments, the Company concluded that a positive assertion can be made from the qualitative assessment that it is more likely than not that the fair value of the reporting units exceeded their carrying values and no impairments were identified. The Company reviews the carrying value of its amortizable intangibles and other long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparing the carrying amount of the asset or asset group to the undiscounted cash flows that the asset or asset group is expected to generate. If the undiscounted cash flows of such assets are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset group, if any, exceeds its fair market value. No impairment was deemed to exist as of December 31, 2015. |
Fair Value Measurement, Policy [Policy Text Block] | (r) Fair Value Measurements The CompanyÂ’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The CompanyÂ’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 CompanyÂ’s securities owned and securities sold and not yet purchased are comprised of common stocks, corporate bonds and investments in partnerships. Investments in common stocks are based on quoted prices in active markets which are included in Level 1 of the fair value hierarchy. The Company also holds nonpublic common stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, managementÂ’s determination of fair value is based on the best available information which may incorporate managementÂ’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuerÂ’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily investment in equity securities, bonds, and direct lending funds. The CompanyÂ’s partnership interests are valued based on the CompanyÂ’s proportionate share of the net assets of the partnership which is derived from the most recent statements received from the general partner which are included in Level 2 of the fair value hierarchy. The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2015 and 2014. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2015, Using Quoted prices in Other Significant Fair Value at active markets for observable unobservable December 31, identical assets inputs inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Securities owned Common stocks $ 17,586 $ 17,296 $ - $ 290 Corporate bonds 941 - 941 - Partnership interests 7,016 - 5,250 1,766 Total assets measured at fair value $ 25,543 $ 17,296 $ 6,191 $ 2,056 Liabilities: Securities sold not yet purchased Corporate bonds $ 713 $ - $ 713 $ - Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,330 $ - $ - $ 2,330 Contingent consideration $ 2,391 $ - $ - $ 2,391 Total liabilities measured at fair value $ 5,434 $ - $ 713 $ 4,721 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2014, Using Quoted prices in Other Significant Fair Value at active markets for observable unobservable December 31, identical assets inputs inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Securities owned Common stocks $ 16,667 $ 16,348 $ - $ 319 Corporate bonds 1,188 - 1,188 - Partnership interests 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 changes in Level 3 fair value hierarchy during the year ended December 31, 2015 and 2014 is as follows: Level 3 Level 3 Changes During the Year Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Period Adjustments Earnings Settlements of Level 3 Period Year Ended December 31, 2015 Common stocks $ 319 $ - $ - $ (29 ) $ - $ 290 Partnership interests $ - $ 79 $ - $ 1,687 $ - $ 1,766 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ - $ 45 $ - $ - $ 2,330 Contingent consideration $ - $ 2,391 $ - $ - $ - $ 2,391 Year Ended December 31, 2014 Common stocks $ - $ - $ - $ 319 $ - $ 319 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,273 $ - $ 103 $ (91 ) $ - $ 2,285 The amount reported in the table above for the years ended December 31, 2015 and December 31, 2014 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The fair value adjustment for contingent consideration in the table above of $2,391 includes the initial value of contingent consideration of $2,229 and an adjustment for imputed interest of $162 for the year ended December 31, 2015. The amounts reported in the table above for the year ended December 31, 2015 includes $2,687 of partnership interests purchased which is included in securities owned at December 31, 2015. The amounts reported in the table above for the year ended December 31, 2014 includes settlements of $91 related to the repurchase of noncontrolling interests from one of our majority owned limited liability company subsidiaries and $319 of common stock purchased which is included in securities owned at December 31, 2014. The carrying amounts reported in the 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. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | (s) Derivative and Foreign Currency Translation 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. During 2015, the CompanyÂ’s use of derivatives consists of forward exchange contract agreements totaling $16,870 Canadian dollars at various times during the year. The forward exchange contracts were entered into to improve the predictability of cash flows related to retail store liquidation and wholesale and industrial auction engagements. 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 $13 during the year ended December 31, 2015. 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 year-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders' equity as a component of accumulated other comprehensive income in the accompanying consolidated balance sheets. Transaction losses were $271 and $137 during the years ended December 31, 2015 and 2014, respectively, and transaction gains were $257 during the year ended December 31, 2013. These amounts are included in selling, general and administrative expenses in our consolidated statements of operations. |
Supplemental Cash Flows Disclosure, Policy [Policy Text Block] | (t) Supplemental Cash Flows Disclosure During the year ended December 31, 2014, supplemental non-cash activity included a decrease in long term debt of $18,759 related to the discount on the retirement of the long term debt payable to Andrew Gumaer and Harvey Yellen, the two former Great American Members (as more fully described in Notes 1 and 11), both of whom were executive officers and directors of the Company at the time of such retirement. The $48,759 principal amount of long-term debt was repaid in full with a cash payment of $30,000 on June 5, 2014. The discount of $18,759 has been recorded as a capital contribution to additional paid in capital in our consolidated financial statements. |
New Accounting Pronouncements, Policy [Policy Text Block] | (u) Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02: Leases (Topic 842) (“ASU 2016-02”). The amendments in this update require lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. ASU 2016-02 will be effective for the Company in fiscal year 2019, but early application is permitted. The Company is currently evaluating the impact of this update on the consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which simplifies the presentation of deferred income taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. The updated standard is effective for the Company at the beginning of its first quarter 2017, with early application permitted as of the beginning of any interim or annual reporting period. The Company elected to early adopt this standard as of December 31, 2015, and retrospectively reclassified $6,420 of our current deferred tax assets to noncurrent deferred tax assets as of December 31, 2014. In February 2015, the FASB issued ASU 2015-2, Consolidation (Topic 810): Amendments to the Consolidation Analysis, that provides guidance which makes targeted amendments to current consolidation guidance. Among other things, the standard changes the manner in which we would assesses one of the characteristics of variable interest entities (VIEs) and introduces a separate analyses specific to limited partnerships and similar entities for assessing if the equity holders at risk lack decision making. Limited partnerships and similar entities will be a VIE unless the limited partners hold substantive kick-out rights or participating rights. A right to liquidate an entity is akin to a kick-out right. Guidance for limited partnerships under the voting model has been eliminated. A limited partner and similar partners with a controlling financial interest obtained through substantive kick out rights would consolidate a limited partnership or similar entity. The guidance is effective for our annual and interim periods beginning in 2016. Early adoption is allowed. The Company does not expect the impact of this update to have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which amends revenue recognition requirements for multiple deliverable revenue arrangements. This update provides guidance on how revenue is recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. This determination is made in five steps: (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update is effective for annual reporting periods after December 15, 2016 and for interim reporting periods within that reporting period. Early adoption is not permitted. The Company has not yet adopted this update and is currently evaluating the impact it may have on its financial condition and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of Collaborative Arrangements and Non-collaborative Arrangement Transactions [Table Text Block] | December 31, December 31, 2015 2014 Securities owned Common stocks $ 17,586 $ 16,667 Corporate bonds 941 1,188 Partnership interests 7,016 100 $ 25,543 $ 17,955 Securities sold not yet purchased Corporate bonds $ 713 $ 746 |
Schedule of Securities Owned and Sold, Not yet Purchased, at Fair Value [Table Text Block] | The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2015 and 2014. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2015, Using Quoted prices in Other Significant Fair Value at active markets for observable unobservable December 31, identical assets inputs inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Securities owned Common stocks $ 17,586 $ 17,296 $ - $ 290 Corporate bonds 941 - 941 - Partnership interests 7,016 - 5,250 1,766 Total assets measured at fair value $ 25,543 $ 17,296 $ 6,191 $ 2,056 Liabilities: Securities sold not yet purchased Corporate bonds $ 713 $ - $ 713 $ - Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,330 $ - $ - $ 2,330 Contingent consideration $ 2,391 $ - $ - $ 2,391 Total liabilities measured at fair value $ 5,434 $ - $ 713 $ 4,721 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2014, Using Quoted prices in Other Significant Fair Value at active markets for observable unobservable December 31, identical assets inputs inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Securities owned Common stocks $ 16,667 $ 16,348 $ - $ 319 Corporate bonds 1,188 - 1,188 - Partnership interests 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] | Level 3 Level 3 Changes During the Year Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Period Adjustments Earnings Settlements of Level 3 Period Year Ended December 31, 2015 Common stocks $ 319 $ - $ - $ (29 ) $ - $ 290 Partnership interests $ - $ 79 $ - $ 1,687 $ - $ 1,766 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,285 $ - $ 45 $ - $ - $ 2,330 Contingent consideration $ - $ 2,391 $ - $ - $ - $ 2,391 Year Ended December 31, 2014 Common stocks $ - $ - $ - $ 319 $ - $ 319 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 2,273 $ - $ 103 $ (91 ) $ - $ 2,285 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The 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 consolidated statement of operations during the year ended December 31, 2015 were as follows: Period from February 2, 2015 through December 31, 2015 Revenues $ 1,772 Income before income taxes 457 |
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 Year Ended Year Ended December 31, 2014 December 31, 2013 Revenues $ 91,656 $ 102,965 Net (loss) income attributable to B. Riley Financial, Inc. $ (3,938 ) $ 4,594 Basic (loss) income per share $ (0.34 ) $ 0.82 Diluted (loss) income per share $ (0.34 ) $ 0.81 Weighted average basic shares outstanding 11,533,178 5,613,307 Weighted average diluted shares outstanding 11,533,178 5,674,528 |
BRC Inc. [Member] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [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 |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The amount of revenue and earnings attributable to BRC Inc. in the CompanyÂ’s consolidated statement of operations during the year ended December 31, 2014 were as follows: Period from June 18, 2014 Through December 31, 2014 Revenues $ 19,420 Income before income taxes 5,244 |
RESTRUCTURING CHARGE (Tables)
RESTRUCTURING CHARGE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring Charge Tables | |
Restructuring and Related Costs [Table Text Block] | The following table summarizes the restructuring charge during 2014 and 2015: Auction and Valuation and Corporate and Liquidation Appraisal Other Segment Segment Expenses Total Expensed during 2014: Payroll and severance costs $ 951 $ 131 $ 513 $ 1,595 Office closure 295 8 383 686 Other charges 93 64 110 267 Total expended during the 2014 1,339 203 1,006 2,548 Paid during 2014 1,208 203 647 2,058 Accrued balance at December 31, 2014 131 - 359 490 Paid during 2015 91 - 212 303 Accrued balance at December 31, 2015 $ 40 $ - $ 147 $ 187 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable Tables | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The components of accounts receivable net include the following: December 31, December 31, 2015 2014 Accounts receivable $ 8,417 $ 7,797 Investment banking fees, commissions and other receivables 709 1,608 Unbilled receivables 435 1,421 Total accounts receivable 9,561 10,826 Allowance for doubtful accounts (89 ) (728 ) Accounts receivable, net $ 9,472 $ 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: Year Ended December 31, 2015 2014 2013 Balance, beginning of year $ 728 $ 275 $ 371 Add: Additions to reserve 718 532 18 Less: Write-offs (1,056 ) (79 ) (84 ) Less: Recoveries (301 ) - (30 ) Balance, end of year $ 89 $ 728 $ 275 |
GOODS HELD FOR SALE OR AUCTION
GOODS HELD FOR SALE OR AUCTION (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goods Held For Sale Or Auction Tables | |
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | Goods held for sale or auction consists of the following: December 31, 2015 2014 Machinery and equipment $ - $ 4,026 Aircraft parts and other 37 91 Total $ 37 $ 4,117 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property And Equipment Tables | |
Schedule of Property and equipment [Table Text Block] | Property and equipment consists of the following: Estimated December 31, Useful Lives 2015 2014 Leasehold improvements Shorter of lease or estimated useful life $ 311 $ 244 Machinery, equipment and computer software 3 years 2,400 2,280 Furniture and fixtures 5 years 1,160 1,151 Capital lease equipment 3 to 5 years 388 388 Total 4,259 4,063 Less: Accumulated depreciation and amortization (3,667 ) (3,287 ) $ 592 $ 776 |
GOODWILL AND OTHER INTANGIBLE38
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill And Other Intangible Assets Tables | |
Schedule of Carrying amount of goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2014 are as follows: Auction and Valuation and Capital Liquidation Appraisal Markets Segment Segment Segment Total Balance as of December 31, 2013 $ 1,975 $ 3,713 $ - $ 5,688 Goodwill acquired during the period: BRC acquisition on June 18, 2014 - - 21,869 21,869 Balance as of December 31, 2014 1,975 3,713 21,869 27,557 Goodwill acquired during the period: MK Capital acquisition on February 2, 2015 - - 6,971 6,971 Balance as of December 31, 2015 $ 1,975 $ 3,713 $ 28,840 $ 34,528 |
Intangible assets | Intangible assets consisted of the following: December 31, 2015 December 31, 2014 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 4 to 13 Years $ 3,600 $ 572 $ 3,028 $ 1,200 $ 141 $ 1,059 Non-amortizable assets: Tradenames 1,740 - 1,740 1,740 - 1,740 Total intangible assets $ 5,340 $ 572 $ 4,768 $ 2,940 $ 141 $ 2,799 |
LEASING ARRANGEMENTS (Tables)
LEASING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leasing Arrangements Tables | |
Schedule Of Future Minimum Lease Payments For Leases [Table Text Block] | Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2015 are: Operating Leases Year Ending December 31: 2016 $ 2,470 2017 1,578 2018 1,273 2019 460 Total minimum lease payments $ 5,781 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes Tables | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The CompanyÂ’s provision (benefit) for income taxes consists of the following for the years ended December 31, 2015, 2014 and 2013: Year Ended December 31, 2015 2014 2013 Current: Federal $ 201 $ - $ - State 99 98 2 Foreign 779 - (287 ) Total current provision 1,079 98 (285 ) Deferred: Federal 5,166 (2,503 ) 791 State 1,443 (481 ) 198 Foreign - - - Total deferred 6,609 (2,984 ) 989 Total provision for income taxes $ 7,688 $ (2,886 ) $ 704 |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | A reconciliation of the federal statutory rate of 34% to the effective tax rate for income (loss) before income taxes is as follows for the year ended December 31, 2015, 2014 and 2013: Year Ended December 31, 2015 2014 2013 Provision for income taxes at federal statutory rate 34.0 % (34.0 )% 34.0 % State income taxes, net of federal benefit 4.0 (3.7 ) 8.7 Foreign tax differential - - 9.0 Other (1.8 ) 4.5 3.3 Effective income tax rate 36.2 % (33.2 )% 55.0 % |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred income tax assets (liabilities) consisted of the following as of December 31, 2015 and 2014: December 31, 2015 2014 Deferred tax assets: Allowance for doubtful accounts $ 160 $ 282 Goods held for sale or auction 692 2,819 Deductible goodwill and other intangibles 9,848 9,988 Accrued liabilities and other 1,177 3,210 Mandatorily redeemable noncontrolling interests 768 740 Foreign tax and other tax credit carryforwards 1,427 342 Net operating loss carryforward 4,920 8,220 Total gross deferred tax assets $ 18,992 $ 25,601 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic and diluted earnings from continuing operations calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2015 2014 2013 Net income (loss) attributable to B. Riley Financial, Inc. $ 11,805 $ (5,801 ) $ 1,058 Weighted average shares outstanding: Basic 16,221,040 9,612,154 1,434,107 Effect of dilutive potential common shares: Contingently issuable shares 44,875 - 61,221 Diluted 16,265,915 9,612,154 1,495,328 Basic earnings (loss) per share $ 0.73 $ (0.60 ) $ 0.74 Diluted earnings (loss) per share $ 0.73 $ (0.60 ) $ 0.71 |
SHARE BASED PAYMENTS (Tables)
SHARE BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share Based Payments Tables | |
Summary of restricted stock unit activity | A summary of restricted stock unit activity for the periods indicated was as follows: Weighted Average Shares Fair Value Nonvested at December 31, 2013 - $ - Granted 5,859 7.68 Vested - - Forfeited - - Nonvested at December 31, 2014 5,859 $ 7.68 Granted 527,372 9.96 Vested (198,002 ) 9.88 Forfeited (9,324 ) 9.98 Nonvested at December 31, 2015 325,905 $ 9.97 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Segments Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following is a summary of certain financial data for each of the CompanyÂ’s reportable segments: Year Ended December 31, 2015 2014 2013 Capital markets reportable segment: Revenues - Services and fees $ 35,183 $ 19,420 $ Selling, general, and administrative expenses (30,229 ) (14,185 ) - Depreciation and amortization (519 ) (193 ) - Segment income 4,435 5,042 - Auction and Liquidation reportable segment: Revenues - Services and fees $ 35,633 $ 17,166 $ 32,409 Revenues - Sale of goods 10,596 9,859 9,963 Total revenues 46,229 27,025 42,372 Direct cost of services (15,489 ) (10,719 ) (11,120 ) Cost of goods sold (3,072 ) (14,080 ) (7,940 ) Selling, general, and administrative expenses (8,170 ) (8,481 ) (11,889 ) Restructuring charge - (1,339 ) - Depreciation and amortization (191 ) (107 ) (176 ) Segment income (loss) 19,307 (7,701 ) 11,247 Valuation and Appraisal reportable segment: Revenues - Services and fees 31,113 30,671 27,558 Direct cost of services (13,560 ) (12,747 ) (13,026 ) Selling, general, and administrative expenses (9,101 ) (10,721 ) (8,718 ) Restructuring charge - (203 ) - Depreciation and amortization (137 ) (151 ) (143 ) Segment income 8,315 6,849 5,671 UK Retail Stores reportable segment: Revenues - Sale of goods - - 6,202 Cost of goods sold - - (3,566 ) Selling, general, and administrative expenses - - (3,773 ) Depreciation and amortization - - (45 ) Segment loss - - (1,182 ) Consolidated operating income from reportable segments 32,057 4,190 15,736 Corporate and other expenses (includes restructuring charge of $1,006 for the year ended December 31, 2014) (9,975 ) (11,621 ) (11,638 ) Interest income 17 12 26 Loss from equity investment in Great American Real Estate, LLC and Shoon Trading Limited - - (177 ) Interest expense (834 ) (1,262 ) (2,667 ) Income (loss) before income taxes 21,265 (8,681 ) 1,280 (Provision) benefit for income taxes (7,688 ) 2,886 (704 ) Net income (loss) 13,577 (5,795 ) 576 Net income (loss) attributable to noncontrolling interests 1,772 6 (482 ) Net income (loss) attributable to B. Riley Financial, Inc. $ 11,805 $ (5,801 ) $ 1,058 Capital expenditures: Capital Markets segment $ 51 $ 104 $ - Auction and Liquidation segment 157 38 423 Valuation and Appraisal segment 31 1 418 UK Retail Stores segment - - 319 Total $ 239 $ 143 $ 1,160 As of December 31, 2015 2014 Total Assets: Capital Markets segment $ 54,882 $ 48,878 Auction and Liquidation segment 45,892 41,360 Valuation and Appraisal segment 12,171 9,527 Corporate and Other segment 19,475 39,225 Total $ 132,420 $ 138,990 |
Schedule of Segment Reporting Information, revenues by geographical area [Table Text Block] | The following table presents revenues by geographical area: Year Ended December 31, 2015 2014 2013 Revenues: Revenues - Services and fees: North America $ 77,153 $ 63,417 $ 50,624 Europe 24,776 3,840 9,343 Total Revenues - Services and fees $ 101,929 $ 67,257 $ 59,967 Revenues - Sale of goods North America $ 907 $ 9,859 $ 9,532 Europe 9,689 - 6,633 Total Revenues - Sale of goods $ 10,596 $ 9,859 $ 16,165 Total Revenues: North America $ 78,060 $ 73,276 $ 60,156 Europe 34,465 3,840 15,976 Total Revenues - Services and fees $ 112,525 $ 77,116 $ 76,132 |
Schedule of Segment Reporting Information, long-lived assets and identifiable assets by geographical area [Table Text Block] | The following table presents long-lived assets and identifiable assets by geographical area: As of As of December 31, December 31, 2015 2014 Long-lived Assets - Property and Equipment, net: North America $ 592 $ 776 Europe - - Total Long-lived Assets $ 592 $ 776 Identifiable Assets: North America $ 128,094 $ 137,216 Europe 4,326 1,774 Total Assets $ 132,420 $ 138,990 |
SELECTED QUARTERLY FINANCIAL 44
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Financial Data Tables | |
Schedule of Selected quarterly financial data [Table Text Block] | Quarter Ended March 31, June 30, September 30, December 31, 2015 2015 2015 2015 Total revenues $ 26,031 $ 45,461 $ 21,272 $ 19,761 Operating income (loss) $ 5,462 $ 14,669 $ 3,277 $ (1,326 ) Income (loss) before income taxes $ 5,211 $ 14,254 $ 3,218 $ (1,418 ) (Provision) benefit for income taxes $ (1,775 ) $ (5,685 ) $ (600 ) $ 372 Net income (loss) $ 3,436 $ 8,569 $ 2,618 $ (1,046 ) Net income (loss) attributable to B. Riley Financial, Inc. $ 2,682 $ 8,664 $ 1,463 $ (1,004 ) Earnings (loss) per share: Basic $ 0.17 $ 0.53 $ 0.09 $ (0.06 ) Diluted $ 0.17 $ 0.53 $ 0.09 $ (0.06 ) Weighted average shares outstanding: Basic 16,117,422 16,237,860 16,243,425 16,283,677 Diluted 16,162,304 16,310,829 16,344,649 16,283,677 Quarter Ended March 31, June 30, September 30, December 31, 2014 2014 2014 2014 Total revenues $ 21,653 $ 14,947 $ 20,674 $ 19,842 Operating loss $ (1,258 ) $ (1,056 ) $ (1,253 ) $ (3,864 ) Loss before income taxes $ (1,884 ) $ (1,501 ) $ (1,303 ) $ (3,993 ) Benefit for income taxes $ 814 $ 594 $ 387 $ 1,091 Net loss $ (1,070 ) $ (907 ) $ (916 ) $ (2,902 ) Net loss attributable to B. Riley Financial, Inc. $ (1,334 ) $ (777 ) $ (868 ) $ (2,822 ) Earnings (loss) per share: Basic $ (0.93 ) $ (0.16 ) $ (0.05 ) $ (0.18 ) Diluted $ (0.93 ) $ (0.16 ) $ (0.05 ) $ (0.18 ) Weighted average shares outstanding: Basic 1,434,107 4,972,203 15,911,482 15,902,607 Diluted 1,434,107 4,972,203 15,911,482 15,902,607 |
ORGANIZATION, BUSINESS OPERAT45
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrativel) - USD ($) $ / shares in Units, $ in Thousands | Jun. 05, 2014 | Jun. 03, 2014 | Dec. 31, 2015 | Dec. 31, 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 | $ 30,180 | ||
Gains (Losses) on Extinguishment of Debt | $ 18,759 | |||
Notes Payable, Total | $ 48,759 | |||
Common Stock [Member] | ||||
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 | $ 51,447 | |||
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 | |||
Subordinated Unsecured Promissory Notes Payable [Member] | Andrew Gumaer and Harvey Yellen [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 |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Securities Owned: | ||
Securities Owned | $ 25,543 | $ 17,955 |
Securities Sold Not Yet Purchased: | ||
Securities Sold Not Yet Purchased | 713 | 746 |
Common Stock [Member] | ||
Securities Owned: | ||
Securities Owned | 17,586 | 16,667 |
Corporate bonds [Member] | ||
Securities Owned: | ||
Securities Owned | 941 | 1,188 |
Securities Sold Not Yet Purchased: | ||
Securities Sold Not Yet Purchased | 713 | 746 |
Partnership interests [Member] | ||
Securities Owned: | ||
Securities Owned | $ 7,016 | $ 100 |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Securities owned | ||
Total assets measured at fair value | $ 25,543 | $ 17,955 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | 713 | 746 |
Contingent consideration | 2,391 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 2,330 | 2,285 |
Total liabilities measured at fair value | 5,434 | 3,031 |
Common Stock [Member] | ||
Securities owned | ||
Total assets measured at fair value | 17,586 | 16,667 |
Corporate bonds [Member] | ||
Securities owned | ||
Total assets measured at fair value | 941 | 1,188 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | 713 | 746 |
Partnership interests [Member] | ||
Securities owned | ||
Total assets measured at fair value | 7,016 | 100 |
Fair Value, Inputs, Level 1 [Member] | ||
Securities owned | ||
Total assets measured at fair value | 17,296 | 16,348 |
Fair Value, Inputs, Level 1 [Member] | Common Stock [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 17,296 | $ 16,348 |
Fair Value, Inputs, Level 1 [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 1 [Member] | Partnership interests [Member] | ||
Securities owned | ||
Total assets measured at fair value | ||
Fair Value, Inputs, Level 2 [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 6,191 | $ 1,288 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | $ 713 | $ 746 |
Fair Value, Inputs, Level 2 [Member] | Common Stock [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 | $ 941 | $ 1,188 |
Securities sold not yet purchased | ||
Securities sold not yet purchased | 713 | 746 |
Fair Value, Inputs, Level 2 [Member] | Partnership interests [Member] | ||
Securities owned | ||
Total assets measured at fair value | 5,250 | 100 |
Fair Value, Inputs, Level 3 [Member] | ||
Securities owned | ||
Total assets measured at fair value | 2,056 | 319 |
Securities sold not yet purchased | ||
Contingent consideration | 2,391 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 2,330 | 2,285 |
Fair Value, Inputs, Level 3 [Member] | Common Stock [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 290 | $ 319 |
Fair Value, Inputs, Level 3 [Member] | Corporate bonds [Member] | ||
Securities owned | ||
Total assets measured at fair value | ||
Fair Value, Inputs, Level 3 [Member] | Partnership interests [Member] | ||
Securities owned | ||
Total assets measured at fair value | $ 1,766 |
SUMMARY OF SIGNIFICANT ACCOUN48
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Common Stock [Member] | ||
Balance at Beginning of Period | $ 319 | |
Fair Value Adjustments | ||
Relating to Undistributed Earnings | ||
Purchases, Sales and Settlements | $ (29) | $ 319 |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | $ 290 | $ 319 |
Partnership interests [Member] | ||
Balance at Beginning of Period | ||
Fair Value Adjustments | $ 79 | |
Relating to Undistributed Earnings | ||
Purchases, Sales and Settlements | $ 1,687 | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | $ 1,766 | |
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 | $ 45 | $ 103 |
Purchases, Sales and Settlements | $ (91) | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | $ 2,330 | $ 2,285 |
Contingent consideration [Member] | ||
Balance at Beginning of Period | ||
Fair Value Adjustments | $ 2,391 | |
Relating to Undistributed Earnings | ||
Purchases, Sales and Settlements | ||
Transfer in and/or out of Level 3 | ||
Balance at End of Period | $ 2,391 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) $ in Thousands | Dec. 15, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 05, 2014 |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Cost of Reimbursable Expense | $ 3,052 | $ 3,013 | $ 2,811 | ||||||||||
Total revenues | $ 19,761 | $ 21,272 | $ 45,461 | $ 26,031 | $ 19,842 | $ 20,674 | $ 14,947 | $ 21,653 | 112,525 | 77,116 | 76,132 | ||
Cost of services | $ 29,049 | $ 23,466 | $ 24,146 | ||||||||||
Concentration Risk, Percentage | 12.40% | 10.70% | 12.20% | ||||||||||
Advertising costs | $ 519 | $ 262 | $ 446 | ||||||||||
Foreign Currency Transaction Gain (Loss) | 442 | ||||||||||||
Restricted Cash and Cash Equivalents | 51 | 51 | |||||||||||
Debt expense | 718 | 532 | 18 | ||||||||||
Lease finance receivable | 8,099 | ||||||||||||
Lease payments | $ 4,242 | ||||||||||||
Depreciation and amortization expense | 315 | ||||||||||||
Impairment charge | $ 1,142 | ||||||||||||
Goods held for sale | 3,100 | 3,100 | |||||||||||
Prepaid expenses and other current assets | 2,415 | 3,795 | 2,415 | 3,795 | |||||||||
Decrease in goods held for sale | 4,026 | ||||||||||||
Decrease in prepaid expenses | 2,531 | ||||||||||||
Decrease of note payable | 6,570 | ||||||||||||
Fair value adjustment | 2,391 | ||||||||||||
Contingent consideration | 2,229 | ||||||||||||
Imputed interest | 162 | ||||||||||||
Partnership interests purchased | 2,687 | ||||||||||||
Common stock purchased | 319 | ||||||||||||
Gains (Losses) on Extinguishment of Debt | 18,759 | ||||||||||||
Notes Payable, Total | $ 48,759 | ||||||||||||
Derivatives | 16,870 | 16,870 | $ 30,000 | ||||||||||
Repurchase of noncontrolling interests | 91 | ||||||||||||
Net gain from forward exchange contracts | 13 | ||||||||||||
Transaction losses and gains | 271 | 137 | 257 | ||||||||||
Auction and Liquidation Reportable Segment [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Cost of Reimbursable Expense | 6,100 | 10,641 | 6,950 | 5,620 | |||||||||
Total revenues | 46,229 | 27,025 | 42,372 | ||||||||||
Cost of services | 15,489 | 10,719 | 11,120 | ||||||||||
Special reserve bank account [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Restricted Cash and Cash Equivalents | $ 51 | 50 | $ 51 | 50 | |||||||||
Letter Of Credit [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Restricted Cash and Cash Equivalents | 7,532 | 7,532 | |||||||||||
Electronic payment processing [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Restricted Cash and Cash Equivalents | 75 | 75 | |||||||||||
Oil Rigs One [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Total revenues | 8,094 | ||||||||||||
Cost of Revenue, Total | 1,073 | ||||||||||||
Oil Rigs [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Total revenues | 9,280 | ||||||||||||
Cost of Revenue, Total | $ 7,447 | ||||||||||||
Arrears [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Prepaid expenses and other current assets | $ 2,363 | $ 2,363 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Jul. 02, 2015 | Dec. 31, 2014 | Jun. 18, 2014 |
Tangible assets acquired and assumed: | ||||
Goodwill | $ 34,528 | $ 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) - USD ($) $ in Thousands | 6 Months Ended | 11 Months Ended |
Dec. 31, 2014 | Dec. 31, 2015 | |
MK Capital [Member] | ||
Business Acquisition [Line Items] | ||
Revenues | $ 1,772 | |
Income before income taxes | $ 457 | |
B. Riley and Co. Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Revenues | $ 19,420 | |
Income before income taxes | $ 5,244 |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - B. Riley and Co. Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | $ 91,656 | $ 102,965 |
Net (loss) income attributable to B. Riley Financial, Inc. | $ (3,938) | $ 4,594 |
Basic (loss) income per share | $ (0.34) | $ 0.82 |
Diluted (loss) income per share | $ (0.34) | $ 0.81 |
Weighted average basic shares outstanding | 11,533,178 | 5,613,307 |
Weighted average diluted shares outstanding | 11,533,178 | 5,674,528 |
ACQUISITIONS (Details Textual)
ACQUISITIONS (Details Textual) - USD ($) $ in Thousands | Feb. 02, 2017 | Feb. 02, 2016 | Feb. 02, 2015 | May. 04, 2012 | Jun. 18, 2014 | Jan. 31, 2014 | Aug. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 02, 2013 |
Business Acquisition [Line Items] | ||||||||||||
Acquisition of MK Capital | $ 2,451 | |||||||||||
Payment of contingent consideration | 2,229 | |||||||||||
Initial discount | 109 | |||||||||||
Interest expense | 834 | $ 1,262 | $ 2,667 | |||||||||
Contingent consideration liability | 2,391 | |||||||||||
Contingent consideration- current portion | 1,241 | |||||||||||
Contingent consideration, net of current portion | 1,150 | |||||||||||
Stock Issued During Period, Value, Acquisitions | 4,657 | 26,351 | ||||||||||
Goodwill | $ 34,528 | $ 27,557 | ||||||||||
Common Stock [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Stock Issued During Period, Shares, Acquisitions | 333,333 | 418,263 | ||||||||||
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 | |||||||||||
Shoon Trading Limited [Member] | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Investment | $ 65 | |||||||||||
Loan collateralized | $ 1,300 | $ 847 | ||||||||||
LIBOR rate | 6.00% | |||||||||||
Loan collateralized maturity date | May 3, 2014 | Aug. 3, 2015 | ||||||||||
Increased outstanding principal loans | $ 1,371 | |||||||||||
Proceeds from loan | $ 1,200 | |||||||||||
Impairment charge write-down the investment estimated net realizable value | $ 111 | $ 111 | ||||||||||
Increased outstanding principal loans interest rate | 6.50% | |||||||||||
Capital Discount | 44.40% | |||||||||||
Initial discount | $ 40 | |||||||||||
Loss under the equity method of accounting | $ 156 | |||||||||||
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 | ||||||||||
Interest expense | 162 | |||||||||||
Contingent consideration liability | 2,347 | |||||||||||
Contingent consideration- current portion | 1,218 | |||||||||||
Contingent consideration, net of current portion | 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 | |||||||||||
Goodwill | $ 6,971 | |||||||||||
Acquisition of MK Capital [Member] | Common Stock [Member] | ||||||||||||
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 | ||||||||||
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 | |||||||||||
Goodwill | $ 21,869 |
RESTRUCTURING CHARGE (Details)
RESTRUCTURING CHARGE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Expensed during 2014: | ||||
Payroll and severance costs | $ 1,595 | |||
Office closure | 686 | |||
Other charges | $ 267 | |||
Total expended during the 2014 | $ 2,548 | $ 2,548 | ||
Paid during 2014 | $ 2,058 | |||
Accrued balance at December 31, 2014 | 490 | |||
Paid during 2015 | 303 | |||
Accrued balance at December 31, 2015 | 187 | |||
Auction and Liquidation Reportable Segment [Member] | ||||
Expensed during 2014: | ||||
Payroll and severance costs | 951 | |||
Office closure | 295 | |||
Other charges | 93 | |||
Total expended during the 2014 | 1,339 | |||
Paid during 2014 | 1,208 | |||
Accrued balance at December 31, 2014 | 131 | |||
Paid during 2015 | 91 | |||
Accrued balance at December 31, 2015 | 40 | |||
Valuation and Appraisal Reportable Segment [Member] | ||||
Expensed during 2014: | ||||
Payroll and severance costs | 131 | |||
Office closure | 8 | |||
Other charges | 64 | |||
Total expended during the 2014 | 203 | |||
Paid during 2014 | $ 203 | |||
Accrued balance at December 31, 2014 | ||||
Paid during 2015 | ||||
Accrued balance at December 31, 2015 | ||||
Corporate and Other [Member] | ||||
Expensed during 2014: | ||||
Payroll and severance costs | $ 513 | |||
Office closure | 383 | |||
Other charges | 110 | |||
Total expended during the 2014 | 1,006 | |||
Paid during 2014 | 647 | |||
Accrued balance at December 31, 2014 | 359 | |||
Paid during 2015 | 212 | |||
Accrued balance at December 31, 2015 | $ 147 |
RESTRUCTURING CHARGE (Details T
RESTRUCTURING CHARGE (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring and Related Activities [Abstract] | ||||
Restructuring charge | $ 2,548 | $ 2,548 | ||
Payroll and severance costs | $ 1,595 | |||
Office closure costs | 686 | |||
Other expenses | $ 267 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Accounts receivable | $ 8,417 | $ 7,797 |
Investment banking fees, commissions and other receivables | 709 | 1,608 |
Unbilled receivables | 435 | 1,421 |
Total accounts receivable | 9,561 | 10,826 |
Allowance for doubtful accounts | (89) | (728) |
Accounts receivable, net | $ 9,472 | $ 10,098 |
ACCOUNTS RECEIVABLE (Details 1)
ACCOUNTS RECEIVABLE (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Receivables [Abstract] | |||
Balance, beginning of year | $ 728 | $ 275 | $ 371 |
Add: Additions to reserve | 718 | 532 | (12) |
Less: Write-offs | (1,056) | $ (79) | (84) |
Less: Recoveries | (301) | (30) | |
Balance, end of year | $ 89 | $ 728 | $ 275 |
ACCOUNTS RECEIVABLE (Details Te
ACCOUNTS RECEIVABLE (Details Textual) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Receivables [Abstract] | ||
Trade Receivables Held-For-Sale, Amount | $ 3,922 | $ 2,385 |
GOODS HELD FOR SALE OR AUCTIO59
GOODS HELD FOR SALE OR AUCTION (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Machinery and equipment | $ 4,026 | |
Aircraft parts and other | $ 37 | 91 |
Total | $ 37 | $ 4,117 |
GOODS HELD FOR SALE OR AUCTIO60
GOODS HELD FOR SALE OR AUCTION (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Long Lived Assets Held-for-sale [Line Items] | |||
Assets Held-For-Sale, Property, Plant and Equipment | $ 4,026 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 162 | ||
Assets Held For Sale Market Adjustment | 1,330 | 1,297 | |
Assets Held-For-Sale, Other, Noncurrent | 37 | 91 | |
Assets Held For Sale Market Adjustment Amount Recognized | 33 | 4,673 | $ 405 |
Deferred Revenue | 1,076 | ||
Cost of Goods Sold, Total | $ 3,072 | 14,080 | 11,506 |
Notes Payable, Current, Total | 6,570 | ||
Leased equipment with a carrying value | 4,026 | ||
Assets Held under Capital Leases [Member] | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Depreciation, Total | $ 1,252 | ||
Oil Rigs [Member] | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Assets Held For Sale Market Adjustment | $ 1,782 | ||
Machinery Equipment and Computer Software [Member] | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Assets Held-For-Sale, Property, Plant and Equipment | $ 4,026 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 4,259 | $ 4,063 |
Less: Accumulated depreciation and amortization | (3,667) | (3,287) |
Property, Plant and Equipment, Net | 592 | 776 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 311 | 244 |
Estimated Useful Lives | Shorter of lease or estimated useful life | |
Machinery Equipment and Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,400 | 2,280 |
Estimated Useful Lives | 3 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 1,160 | 1,151 |
Estimated Useful Lives | 5 years | |
Capital Lease Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 388 | $ 388 |
Capital Lease Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Capital Lease Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years |
PROPERTY AND EQUIPMENT (Detai62
PROPERTY AND EQUIPMENT (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation, Depletion and Amortization, Total | $ 417 | $ 505 | $ 611 |
GOODWILL AND OTHER INTANGIBLE63
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Balance Beginning Goodwill | $ 27,557 | |
Balance Ending Goodwill | 34,528 | $ 27,557 |
Auction and Liquidation Reportable Segment [Member] | ||
Balance Beginning Goodwill | $ 1,975 | $ 1,975 |
Goodwill acquired during the period | ||
Balance Ending Goodwill | $ 1,975 | $ 1,975 |
Valuation and Appraisal Reportable Segment [Member] | ||
Balance Beginning Goodwill | $ 3,713 | $ 3,713 |
Goodwill acquired during the period | ||
Balance Ending Goodwill | $ 3,713 | $ 3,713 |
Corporate and Other [Member] | ||
Balance Beginning Goodwill | 21,869 | |
Goodwill acquired during the period | 6,971 | $ 21,869 |
Balance Ending Goodwill | 28,840 | 21,869 |
Total [Member] | ||
Balance Beginning Goodwill | 27,557 | 5,688 |
Goodwill acquired during the period | 6,971 | 21,869 |
Balance Ending Goodwill | $ 34,528 | $ 27,557 |
GOODWILL AND OTHER INTANGIBLE64
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Customer Relationships [Member] | ||
Gross Carrying Value | $ 3,600 | $ 1,200 |
Accumulated Amortization | 572 | 141 |
Intangibles Net | $ 3,028 | 1,059 |
Customer Relationships [Member] | Minimum [Member] | ||
Useful Life | 4 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Useful Life | 13 years | |
Tradenames [Member] | ||
Gross Carrying Value | $ 1,740 | $ 1,740 |
Accumulated Amortization | ||
Intangibles Net | $ 1,740 | $ 1,740 |
Total intangible assets [Member] | ||
Gross Carrying Value | 5,340 | 2,940 |
Accumulated Amortization | 572 | 141 |
Intangibles Net | $ 4,768 | $ 2,799 |
GOODWILL AND OTHER INTANGIBLE65
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 431 | $ 141 |
Estimated future amortization expense 2016 | 447 | |
Estimated future amortization expense 2017 | 447 | |
Estimated future amortization expense 2018 | 326 | |
Estimated future amortization expense 2019 | 222 | |
Estimated future amortization expense 2020 | 222 | |
Estimated future amortization expense after 2020 | $ 1,364 |
LEASING ARRANGEMENTS (Details)
LEASING ARRANGEMENTS (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Operating Leases Year Ending December 31: | |
2,016 | $ 2,470 |
2,017 | 1,578 |
2,018 | 1,273 |
2,019 | 1,316 |
Thereafter | 460 |
Total minimum lease payments | $ 5,781 |
LEASING ARRANGEMENTS (Details T
LEASING ARRANGEMENTS (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases [Abstract] | |||
Operating Leases, Rent Expense, Net | $ 2,376 | $ 2,107 | $ 1,717 |
CREDIT FACILITIES (Details Text
CREDIT FACILITIES (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2014 | May. 31, 2011 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jul. 15, 2013 | May. 17, 2011 | |
Line of Credit Facility [Line Items] | |||||||
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 | $ 343 | $ 400 | $ 532 | ||||
Interest expense including success fees | $ 119 | 162 | 292 | ||||
Outstanding amount | $ 18,506 | ||||||
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% (6.5% at December 31, 2015), payable monthly in arrears. | ||||||
Interest Expense, Debt | $ 84 | $ 46 | $ 90 | ||||
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 | 3,922 | ||||||
Outstanding amount unused | 2,738 | ||||||
Outstanding amount available | $ 272 | ||||||
UK Credit Agreement [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000 | ||||||
Line Of Credit Facility Maximum Borrowing Capacity Amended | $ 100,000 |
NOTES PAYABLE (Details Textual)
NOTES PAYABLE (Details Textual) - USD ($) $ in Thousands | Mar. 10, 2015 | Jun. 05, 2014 | Jun. 03, 2014 | Jan. 31, 2015 | Jul. 31, 2014 | Dec. 31, 2013 | May. 29, 2008 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 11, 2015 | Jan. 31, 2014 | Oct. 08, 2009 |
Debt Instrument [Line Items] | |||||||||||||
Interest Expense, Total | $ 834 | $ 1,262 | $ 2,667 | ||||||||||
Notes Payable, Total | $ 48,759 | ||||||||||||
Total assets | 132,420 | 138,990 | |||||||||||
Total liabilities | 23,100 | $ 41,911 | |||||||||||
Proceeds from related party debt | $ 4,500 | ||||||||||||
Net proceeds from the Private Placement | 30,180 | $ 30,180 | |||||||||||
GAGEE [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 0.00% | ||||||||||||
Payments Under Guarantee Obligations | $ 1,200 | ||||||||||||
Notes Payable, Total | $ 6,570 | ||||||||||||
Prepaid and other current assets | 2,531 | $ 2,531 | |||||||||||
Machinery and equipment | 4,026 | 4,026 | |||||||||||
Total assets | 6,557 | ||||||||||||
Total liabilities | 6,570 | ||||||||||||
Other receivables | $ 2,531 | ||||||||||||
Loss on deconsolidation of GAGEE | $ 13 | ||||||||||||
Chief Executive Officer [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Ownership percentage | 45.00% | 45.00% | |||||||||||
60,000 Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Outstanding accrued interest | $ 1,084 | ||||||||||||
Debt description | all of which accrued interest at 3.75%) and $1,724 was owed to other related parties, $1,084 of which accrued interest at 3.75% and $640 of which accrued interest at 12.0%. | ||||||||||||
60,000 Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of outstanding Notes payable | $ 48,759 | $ 48,759 | |||||||||||
60,000 Notes Payable [Member] | Board of Directors [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Face amount of outstanding Notes payable | $ 50,483 | 50,483 | |||||||||||
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] | Andrew Gumaer and Harvey Yellen [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Notes Payable, Total | $ 48,759 | ||||||||||||
60,000 Notes Payable [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Interest Expense, Total | $ 812 | $ 2,014 | |||||||||||
Phantom Equityholders [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 12.00% | ||||||||||||
Debt Instrument, Maturity Date | Jul. 31, 2014 | ||||||||||||
Repayment of Unsecured promissory note | $ 1,085 | ||||||||||||
Principal balance payable | $ 640 | ||||||||||||
Remaining principal balance payable | $ 1,084 | ||||||||||||
Andrew Gumaer and Harvey Yellen [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Maturity Date | Jul. 31, 2018 | ||||||||||||
Repayment of Unsecured promissory note | $ 30,000 | ||||||||||||
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 | ||||||||||||
Notes payable to related party - Riley Investment Partners, L.P. [Member] | Maximum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 15.00% | ||||||||||||
Success fee percentage | 20.00% | ||||||||||||
Notes payable to related party - Riley Investment Partners, L.P. [Member] | Minimum [Member] | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||||||
Success fee percentage | 12.00% |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) $ in Thousands | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Line of Credit Facility, Amount Outstanding | $ 8,553 |
Loss Contingency, Damages Sought, Value | $ 10,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | |||||||||||
Federal | $ 201 | ||||||||||
State | 99 | $ 98 | $ 2 | ||||||||
Foreign | 779 | (287) | |||||||||
Total current provision | 1,079 | $ 98 | (285) | ||||||||
Deferred: | |||||||||||
Federal | 5,166 | (2,503) | 791 | ||||||||
State | $ 1,443 | $ (481) | $ 198 | ||||||||
Foreign | |||||||||||
Total deferred | $ 6,609 | $ (2,984) | $ 989 | ||||||||
Total provision for income taxes | $ 372 | $ (600) | $ (5,685) | $ (1,775) | $ 1,091 | $ 387 | $ 594 | $ 814 | $ 7,688 | $ (2,886) | $ 704 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Provision for income taxes at federal statutory rate | 34.00% | 34.00% | 34.00% |
State income taxes, net of federal benefit | 4.00% | (3.70%) | 8.70% |
Foreign tax differential | 0.00% | 0.00% | 9.00% |
Other | (1.80%) | 4.50% | 3.30% |
Effective income tax rate | 36.20% | (33.20%) | 55.00% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 160 | $ 282 |
Goods held for sale or auction | 692 | 2,819 |
Deductible goodwill and other intangibles | 9,848 | 9,988 |
Accrued liabilities and other | 1,177 | 3,210 |
Mandatorily redeemable noncontrolling interests | 768 | 740 |
Foreign tax and other tax credit carryforwards | 1,427 | 342 |
Net operating loss carryforward | 4,920 | 8,220 |
Total gross deferred tax assets | $ 18,992 | $ 25,601 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Line Items] | |||
(Loss) income before income taxes | $ 21,265 | $ (8,681) | $ 1,280 |
Income (Loss) from Continuing Operations before Income Taxes, Domestic | 18,642 | ||
Income (Loss) from Continuing Operations before Income Taxes, Foreign | 2,623 | ||
Foreign Tax Authority [Member] | |||
Income Tax Disclosure [Line Items] | |||
Tax Credit Carryforward, Amount | $ 1,121 | ||
Tax Credit Carryforward Expiration Date | will expire in 2022 | ||
State and Local Jurisdiction [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating Loss Carryforwards | $ 13,886 | ||
Operating Loss Carryforwards Expiration Dates | will expire in 2032 | ||
Domestic Tax Authority [Member] | |||
Income Tax Disclosure [Line Items] | |||
Operating Loss Carryforwards | $ 12,023 | ||
Operating Loss Carryforwards Expiration Dates | will expire in the tax year ending December 31, 2030 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Net income (loss) attributable to B. Riley Financial, Inc. | $ (1,418) | $ 3,218 | $ 14,254 | $ 5,211 | $ (3,993) | $ (1,303) | $ (1,501) | $ (1,884) | $ 11,805 | $ (5,801) | $ 1,058 |
Weighted average shares outstanding: | |||||||||||
Basic | 16,283,677 | 16,243,425 | 16,237,860 | 16,117,422 | 15,902,607 | 15,911,482 | 4,972,203 | 1,434,107 | 16,221,040 | 9,612,154 | 1,434,107 |
Effect of dilutive potential common shares: | |||||||||||
Contingently issuable shares | 44,875 | 61,221 | |||||||||
Diluted | 16,283,677 | 16,344,649 | 16,310,829 | 16,162,304 | 15,902,607 | 15,911,482 | 4,972,203 | 1,434,107 | 16,265,915 | 9,612,154 | 1,495,328 |
Basic earnings (loss) per share | $ (0.06) | $ 0.09 | $ 0.53 | $ 0.17 | $ (0.18) | $ (0.05) | $ (0.16) | $ (0.93) | $ 0.73 | $ (0.60) | $ 0.74 |
Diluted earnings (loss) per share | $ (0.06) | $ 0.09 | $ 0.53 | $ 0.17 | $ (0.18) | $ (0.05) | $ (0.16) | $ (0.93) | $ 0.73 | $ (0.60) | $ 0.71 |
EARNINGS PER SHARE (Details Tex
EARNINGS PER SHARE (Details Textual) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share, Basic and Diluted [Line Items] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount | 308,699 | 44,883 |
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 |
LIMITED LIABILITY COMPANY SUB77
LIMITED LIABILITY COMPANY SUBSIDIARIES (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Limited Liability Company Disclosure Of Subsidiary [Abstract] | |||
Decrease In Fair Value Of Ownership Interest | $ 0 | $ 0 | $ 0 |
Other Operating Activities Cash Flow Statement | $ 2,207 | $ 1,892 | $ 1,897 |
SHARE BASED PAYMENTS (Details)
SHARE BASED PAYMENTS (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Shares | ||
Nonvested, Beginning | 5,859 | |
Granted | 527,372 | 5,859 |
Vested | (198,002) | |
Forfeited | (9,324) | |
Nonvested, Ending | 325,905 | 5,859 |
Weighted Average Fair Value | ||
Nonvested, Beginning | $ 7.68 | |
Granted | 9.96 | $ 7.68 |
Vested | 9.88 | |
Forfeited | 9.98 | |
Nonvested, Ending | $ 9.97 | $ 7.68 |
SHARE BASED PAYMENTS (Details T
SHARE BASED PAYMENTS (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock granted | 527,372 | 5,859 | ||
Stock vested | 198,002 | |||
Weighted average grant-date fair value of restricted stock units | $ 9.88 | |||
Restricted Stock Units [Member] | ||||
Stock granted | 5,859 | |||
Stock granted fair value | $ 45 | |||
Share based compensation expense | $ 2,043 | |||
Stock vested | 189,652 | |||
Total income tax benefit recognized related to the vesting of restricted stock units | $ 804 | |||
Unrecognized share based compensation expense | $ 3,043 | |||
Unrecognized share based compensation weighted average period | 1 year 4 months 24 days | |||
Restricted Stock Units [Member] | Employees and Directors [Member] | ||||
Stock granted | 521,772 | |||
Stock granted fair value | $ 5,600 | |||
Restricted Stock Units [Member] | Subsequent Event [Member] | ||||
Stock vested | 162,393 | 169,727 | ||
Equity Incentive Rewards [Member] | ||||
Weighted average grant-date fair value of restricted stock units | $ 9.96 | $ 7.68 | ||
Stock vested value | $ 1,905 | |||
Equity Incentive Rewards [Member] | Employees and Directors [Member] | ||||
Stock granted | 527,372 | |||
Stock granted fair value | $ 5,255 |
BENEFIT PLANS AND DIVIDENDS (De
BENEFIT PLANS AND DIVIDENDS (Details Textual) - $ / shares | Nov. 09, 2015 | Aug. 10, 2015 | May. 04, 2015 | Oct. 29, 2014 | Dec. 31, 2015 | Oct. 07, 2014 | Aug. 19, 2009 |
Benefit Plans And Dividends | |||||||
Common stock available for future grants | 2,726,328 | 3,210,133 | 391,100 | ||||
Dividend per share | $ 0.06 | $ 0.20 | $ 0.06 | $ 0.03 | |||
Dividend paid date | Dec. 9, 2015 | Sep. 10, 2015 | Jun. 12, 2015 | Dec. 9, 2014 | |||
Dividend record date | Nov. 24, 2015 | Aug. 25, 2015 | May 22, 2015 | Nov. 18, 2014 |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details Textual) - B. Riley and Co. Inc. [Member] $ in Thousands | Dec. 31, 2015USD ($) |
Net Capital | $ 7,477 |
Alternative Excess Net Capital | $ 7,099 |
Minimum [Member] | |
Ratio of Indebtedness to Net Capital | 1 |
Ratio Of Net Capital | 0.41 |
Maximum [Member] | |
Ratio of Indebtedness to Net Capital | 15 |
Ratio Of Net Capital | 1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) $ in Thousands | Mar. 10, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 04, 2012 |
Related Party Transaction [Line Items] | |||||
Interest expense debt | $ 343 | $ 400 | $ 532 | ||
Due from Related Parties | 409 | ||||
Due to Related Parties | $ 166 | $ 213 | |||
Bryant Riley [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 45.00% | 45.00% | |||
RIP Note [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from notes payable | $ 4,500 | ||||
Principal balance | $ 4,500,000 | ||||
Interest expense debt | $ 194 | ||||
Debt Instrument, Maturity Date | May 4, 2015 | ||||
Success fees | $ 126 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||
RIP Note [Member] | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 15.00% | ||||
CA Global Partners, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to Related Parties | 166 | $ 213 | |||
GACP I, L.P. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due from Related Parties | $ 409 | ||||
Shoon Trading Limited [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt Instrument, Maturity Date | May 3, 2014 | ||||
Equity Method Investment, Ownership Percentage | 44.40% | ||||
Accounts and Notes Receivable, Net, Total | $ 1,200 | $ 1,300 | |||
Loan Remaining Principal Outstanding | 353 | ||||
Proceeds from Issuance of Debt | 847 | ||||
Discount On Additional Loans Borrowings | $ 40 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | ||||
Repayments of Debt | $ 1,200 | ||||
Libor interest rate | LIBOR plus 6.0% |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | $ 101,929 | $ 67,257 | $ 59,967 | ||||||||
Revenues - Sale of goods | 10,596 | 9,859 | 16,165 | ||||||||
Total revenues | $ 19,761 | $ 21,272 | $ 45,461 | $ 26,031 | $ 19,842 | $ 20,674 | $ 14,947 | $ 21,653 | 112,525 | 77,116 | 76,132 |
Direct cost of services | (29,049) | (23,466) | (24,146) | ||||||||
Cost of goods sold | (3,072) | (14,080) | (11,506) | ||||||||
Selling, general, and administrative expenses | $ (58,322) | (44,453) | $ (36,382) | ||||||||
Restructuring charge | 2,548 | 2,548 | |||||||||
Depreciation and Amortization | $ (417) | (505) | $ (611) | ||||||||
Segment income (loss) | (1,326) | 3,277 | 14,669 | 5,462 | (3,864) | (1,253) | (1,056) | (1,258) | 22,082 | (7,431) | 4,098 |
Corporate and other expenses | (9,975) | (11,621) | (11,638) | ||||||||
Interest income | $ 17 | $ 12 | 26 | ||||||||
Loss from equity investment in Great American Real Estate, LLC and Shoon Trading Limited | (21) | ||||||||||
Interest expense | $ (834) | $ (1,262) | (2,667) | ||||||||
Income (loss) before income taxes | 21,265 | (8,681) | 1,280 | ||||||||
(Provision) benefit for income taxes | (372) | 600 | 5,685 | 1,775 | (1,091) | (387) | (594) | (814) | (7,688) | 2,886 | (704) |
Net income (loss) | (1,046) | 2,618 | 8,569 | 3,436 | (2,902) | (916) | (907) | (1,070) | 13,577 | (5,795) | 576 |
Net income (loss) attributable to noncontrolling interests | 1,772 | 6 | (482) | ||||||||
Net income (loss) attributable to B. Riley Financial, Inc. | (1,004) | $ 1,463 | $ 8,664 | $ 2,682 | (2,822) | $ (868) | $ (777) | $ (1,334) | 11,805 | (5,801) | 1,058 |
Capital expenditures | 239 | 143 | $ 1,160 | ||||||||
Total assets | 132,420 | 138,990 | 132,420 | 138,990 | |||||||
Capital markets reportable segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | 35,183 | 19,420 | |||||||||
Selling, general, and administrative expenses | (30,229) | (14,185) | |||||||||
Depreciation and Amortization | (519) | (193) | |||||||||
Segment income (loss) | 4,435 | 5,042 | |||||||||
Capital expenditures | 51 | 104 | |||||||||
Total assets | 54,882 | 48,878 | 54,882 | 48,878 | |||||||
Auction and Liquidation Reportable Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | 35,633 | 17,166 | $ 32,409 | ||||||||
Revenues - Sale of goods | 10,596 | 9,859 | 9,963 | ||||||||
Total revenues | 46,229 | 27,025 | 42,372 | ||||||||
Direct cost of services | (15,489) | (10,719) | (11,120) | ||||||||
Cost of goods sold | (3,072) | (14,080) | (7,940) | ||||||||
Selling, general, and administrative expenses | $ (8,170) | (8,481) | $ (11,889) | ||||||||
Restructuring charge | (1,339) | ||||||||||
Depreciation and Amortization | $ (191) | (107) | $ (176) | ||||||||
Segment income (loss) | 19,307 | (7,701) | 11,247 | ||||||||
Capital expenditures | 157 | 38 | 423 | ||||||||
Total assets | 45,892 | 41,360 | 45,892 | 41,360 | |||||||
Valuation and Appraisal Reportable Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | 31,113 | 30,671 | 27,558 | ||||||||
Direct cost of services | (13,560) | (12,747) | (13,026) | ||||||||
Selling, general, and administrative expenses | $ (9,101) | (10,721) | $ (8,718) | ||||||||
Restructuring charge | (203) | ||||||||||
Depreciation and Amortization | $ (137) | (151) | $ (143) | ||||||||
Segment income (loss) | 8,315 | 6,849 | 5,671 | ||||||||
Capital expenditures | 31 | 1 | 418 | ||||||||
Total assets | 12,171 | 9,527 | $ 12,171 | $ 9,527 | |||||||
Uk Retail Stores Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Sale of goods | 6,202 | ||||||||||
Cost of goods sold | (3,566) | ||||||||||
Selling, general, and administrative expenses | (3,773) | ||||||||||
Depreciation and Amortization | (45) | ||||||||||
Segment income (loss) | (1,182) | ||||||||||
Consolidated Reportable Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Segment income (loss) | $ 32,057 | $ 4,190 | $ 15,736 | ||||||||
Corporate and Other segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | $ 19,475 | $ 39,225 | $ 19,475 | $ 39,225 |
BUSINESS SEGMENTS (Details 1)
BUSINESS SEGMENTS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | |||||||||||
Total Revenues - Services and fees | $ 101,929 | $ 67,257 | $ 59,967 | ||||||||
Total Revenues - Sale of goods | 10,596 | 9,859 | 16,165 | ||||||||
Total revenues | $ 19,761 | $ 21,272 | $ 45,461 | $ 26,031 | $ 19,842 | $ 20,674 | $ 14,947 | $ 21,653 | 112,525 | 77,116 | 76,132 |
North America [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Revenues - Services and fees | 77,153 | 63,417 | 50,624 | ||||||||
Total Revenues - Sale of goods | 907 | 9,859 | 9,532 | ||||||||
Total revenues | 78,060 | 73,276 | 60,156 | ||||||||
Europe [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total Revenues - Services and fees | 24,776 | $ 3,840 | 9,343 | ||||||||
Total Revenues - Sale of goods | 9,689 | 6,633 | |||||||||
Total revenues | $ 34,465 | $ 3,840 | $ 15,976 |
BUSINESS SEGMENTS (Details 2)
BUSINESS SEGMENTS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Segment Reporting Information [Line Items] | ||
Total Long-lived Assets - Property and Equipment, net | $ 592 | $ 776 |
Total Identifiable Assets | 132,420 | 138,990 |
North America [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Long-lived Assets - Property and Equipment, net | 592 | 776 |
Total Identifiable Assets | 128,094 | 137,216 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Long-lived Assets - Property and Equipment, net | 0 | 0 |
Total Identifiable Assets | $ 4,326 | $ 1,774 |
SELECTED QUARTERLY FINANCIAL 86
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 19,761 | $ 21,272 | $ 45,461 | $ 26,031 | $ 19,842 | $ 20,674 | $ 14,947 | $ 21,653 | $ 112,525 | $ 77,116 | $ 76,132 |
Operating income (loss) | (1,326) | 3,277 | 14,669 | 5,462 | (3,864) | (1,253) | (1,056) | (1,258) | 22,082 | (7,431) | 4,098 |
Income (loss) before income taxes | (1,418) | 3,218 | 14,254 | 5,211 | (3,993) | (1,303) | (1,501) | (1,884) | 11,805 | (5,801) | 1,058 |
(Provision) benefit for income taxes | 372 | (600) | (5,685) | (1,775) | 1,091 | 387 | 594 | 814 | 7,688 | (2,886) | 704 |
Net income (loss) | (1,046) | 2,618 | 8,569 | 3,436 | (2,902) | (916) | (907) | (1,070) | 13,577 | (5,795) | 576 |
Net income (loss) attributable to B. Riley Financial, Inc. | $ (1,004) | $ 1,463 | $ 8,664 | $ 2,682 | $ (2,822) | $ (868) | $ (777) | $ (1,334) | $ 11,805 | $ (5,801) | $ 1,058 |
Earnings (loss) per share: | |||||||||||
Basic | $ (0.06) | $ 0.09 | $ 0.53 | $ 0.17 | $ (0.18) | $ (0.05) | $ (0.16) | $ (0.93) | $ 0.73 | $ (0.60) | $ 0.74 |
Diluted | $ (0.06) | $ 0.09 | $ 0.53 | $ 0.17 | $ (0.18) | $ (0.05) | $ (0.16) | $ (0.93) | $ 0.73 | $ (0.60) | $ 0.71 |
Weighted average shares outstanding: | |||||||||||
Basic | 16,283,677 | 16,243,425 | 16,237,860 | 16,117,422 | 15,902,607 | 15,911,482 | 4,972,203 | 1,434,107 | 16,221,040 | 9,612,154 | 1,434,107 |
Diluted | 16,283,677 | 16,344,649 | 16,310,829 | 16,162,304 | 15,902,607 | 15,911,482 | 4,972,203 | 1,434,107 | 16,265,915 | 9,612,154 | 1,495,328 |