Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 07, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | B. Riley Financial, Inc. | ||
Entity Central Index Key | 1,464,790 | ||
Document Type | 10-K | ||
Trading Symbol | RILY | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 326,400,000 | ||
Entity Common Stock, Shares Outstanding | 26,634,158 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 132,823 | $ 112,105 |
Restricted cash | 19,711 | 3,294 |
Due from clearing brokers | 31,479 | |
Securities and other investments owned, at fair value | 145,360 | 16,579 |
Securities borrowed | 807,089 | |
Accounts receivable, net | 20,015 | 18,989 |
Due from related parties | 5,689 | 3,009 |
Advances against customer contracts | 5,208 | 427 |
Prepaid expenses and other assets | 22,605 | 5,742 |
Property and equipment, net | 11,977 | 5,785 |
Goodwill | 98,771 | 48,903 |
Other intangible assets, net | 56,948 | 41,166 |
Deferred income taxes | 29,229 | 8,619 |
Total assets | 1,386,904 | 264,618 |
Liabilities | ||
Accounts payable | 2,650 | 2,703 |
Accrued expenses and other liabilities | 71,685 | 53,168 |
Deferred revenue | 3,141 | 4,130 |
Due to partners | 1,578 | 10,037 |
Securities sold not yet purchased | 28,291 | 846 |
Securities loaned | 803,371 | |
Mandatorily redeemable noncontrolling interests | 4,478 | 4,019 |
Acquisition consideration payable | 10,381 | |
Notes payable | 2,243 | |
Senior notes payable | 203,621 | 27,700 |
Contingent consideration | 1,242 | |
Total liabilities | 1,121,058 | 114,226 |
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; 26,569,462 and 19,140,342 issued and outstanding as of December 31, 2017 and December 31, 2016, respectively | 2 | 2 |
Additional paid-in capital | 259,980 | 141,170 |
Retained earnings | 6,582 | 9,887 |
Accumulated other comprehensive loss | (534) | (1,712) |
Total B. Riley Financial, Inc. stockholders' equity | 266,030 | 149,347 |
Noncontrolling interests | (184) | 1,045 |
Total equity | 265,846 | 150,392 |
Total liabilities and equity | $ 1,386,904 | $ 264,618 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 40,000,000 | 40,000,000 |
Common stock, issued | 26,569,462 | 19,140,342 |
Common stock, outstanding | 26,569,462 | 19,140,342 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Services and fees | $ 304,841 | $ 164,235 | $ 101,929 |
Interest income - Securities lending | 17,028 | ||
Sale of goods | 307 | 26,116 | 10,596 |
Total revenues | 322,176 | 190,351 | 112,525 |
Operating expenses: | |||
Direct cost of services | 55,501 | 40,857 | 29,049 |
Cost of goods sold | 398 | 14,755 | 3,072 |
Selling, general and administrative expenses | 213,008 | 82,127 | 58,322 |
Restructuring charge | 12,374 | 3,887 | |
Interest expense - Securities lending | 12,051 | ||
Total operating expenses | 293,332 | 141,626 | 90,443 |
Operating income | 28,844 | 48,725 | 22,082 |
Other income (expense): | |||
Interest income | 420 | 318 | 17 |
Loss from equity investment | (437) | ||
Interest expense | (8,382) | (1,996) | (834) |
Income before income taxes | 20,445 | 47,047 | 21,265 |
Provision for income taxes | (8,510) | (14,321) | (7,688) |
Net income | 11,935 | 32,726 | 13,577 |
Net income attributable to noncontrolling interests | 379 | 11,200 | 1,772 |
Net income attributable to B. Riley Financial, Inc. | $ 11,556 | $ 21,526 | $ 11,805 |
Basic income per share (in dollars per share) | $ 0.50 | $ 1.19 | $ 0.73 |
Diluted income per share (in dollars per share) | 0.48 | 1.17 | 0.73 |
Cash dividends per share (in dollars per share) | $ 0.67 | $ 0.28 | $ 0.32 |
Weighted average basic shares outstanding (in shares) | 23,181,388 | 18,106,621 | 16,221,040 |
Weighted average diluted shares outstanding (in shares) | 24,290,904 | 18,391,852 | 16,265,915 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPHREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net income | $ 11,935 | $ 32,726 | $ 13,577 |
Other comprehensive income (loss): | |||
Change in cumulative translation adjustment | 1,178 | (654) | (410) |
Other comprehensive income (loss), net of tax | 1,178 | (654) | (410) |
Total comprehensive income | 13,113 | 32,072 | 13,167 |
Comprehensive income attributable to noncontrolling interests | 379 | 11,200 | 1,772 |
Comprehensive income attributable to B. Riley Financial, Inc. | $ 12,734 | $ 20,872 | $ 11,395 |
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 Interest [Member] | Total |
Balance at Beginning at Dec. 31, 2014 | $ 2 | $ 110,598 | $ (12,891) | $ (648) | $ 18 | $ 97,079 | |
Balance at Beginning (in shares) at Dec. 31, 2014 | 15,968,607 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2 | 4,657 | 4,657 | |||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2 (in shares) | 333,333 | ||||||
Vesting of restricted stock, net of shares withheld for employer taxes | (499) | (499) | |||||
Vesting of restricted stock, net of shares withheld for employer taxes (in shares) | 146,179 | ||||||
Offering of common stock, net of offering expenses | |||||||
Offering of common stock, net of offering expenses (in shares) | |||||||
Share based payments | 2,043 | 2,043 | |||||
Dividends on common stock | (5,219) | (5,219) | |||||
Net income | 11,805 | 1,772 | 13,577 | ||||
Distributions to noncontrolling interests | (1,908) | (1,908) | |||||
Foreign currency translation adjustment | (410) | (410) | |||||
Balance at End at Dec. 31, 2015 | $ 2 | 116,799 | (6,305) | (1,058) | (118) | 109,320 | |
Balance at End (in shares) at Dec. 31, 2015 | 16,448,119 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2 (in shares) | 166,667 | ||||||
Vesting of restricted stock, net of shares withheld for employer taxes | (1,156) | (1,156) | |||||
Vesting of restricted stock, net of shares withheld for employer taxes (in shares) | 104,576 | ||||||
Offering of common stock, net of offering expenses | 22,759 | 22,759 | |||||
Offering of common stock, net of offering expenses (in shares) | 2,420,980 | ||||||
Share based payments | 2,768 | 2,768 | |||||
Dividends on common stock | (5,334) | (5,334) | |||||
Net income | 21,526 | 1,163 | 32,726 | ||||
Distributions to noncontrolling interests | |||||||
Foreign currency translation adjustment | (654) | (654) | |||||
Balance at End at Dec. 31, 2016 | $ 2 | 141,170 | 9,887 | (1,712) | 1,045 | 150,392 | |
Balance at End (in shares) at Dec. 31, 2016 | 19,140,342 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2 | 1,151 | 1,151 | |||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2 (in shares) | 166,666 | ||||||
Issuance of common stock for acquisition of Dialectic general partner interests on April 13, 2017 | 1,952 | 1,952 | |||||
Issuance of common stock for acquisition of Dialectic general partner interests on April 13, 2017 (in shares) | 158,484 | ||||||
Issuance of common stock for acquisition of FBR & Co. on June 1, 2017 | 73,471 | 73,471 | |||||
Issuance of common stock for acquisition of FBR & Co. on June 1, 2017 (in shares) | 4,779,354 | ||||||
Issuance of common stock and common stock warrants for acquisition of Wunderlich on July 3, 2017 | 35,381 | 35,381 | |||||
Issuance of common stock and common stock warrants for acquisition of Wunderlich on July 3, 2017 (in shares) | 1,974,812 | ||||||
Vesting of restricted stock, net of shares withheld for employer taxes | (3,486) | (3,486) | |||||
Vesting of restricted stock, net of shares withheld for employer taxes (in shares) | 349,804 | ||||||
Offering of common stock, net of offering expenses | |||||||
Offering of common stock, net of offering expenses (in shares) | |||||||
Share based payments | 10,341 | 10,341 | |||||
Dividends on common stock | (14,861) | (14,861) | |||||
Net income | 11,556 | (307) | 11,935 | ||||
Distributions to noncontrolling interests | (922) | (922) | |||||
Foreign currency translation adjustment | 1,178 | 1,178 | |||||
Balance at End at Dec. 31, 2017 | $ 2 | $ 259,980 | $ 6,582 | $ (534) | $ (184) | $ 265,846 | |
Balance at End (in shares) at Dec. 31, 2017 | 26,569,462 |
CONSOLDIATED STATEMENTS OF CASH
CONSOLDIATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 11,935 | $ 32,726 | $ 13,577 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 11,140 | 4,306 | 848 |
Provision for doubtful accounts | 1,066 | 710 | 718 |
Share-based compensation | 10,341 | 2,768 | 2,043 |
Recovery of key man life insurance | (6,000) | ||
Non-cash interest and other | 456 | 136 | 163 |
Effect of foreign currency on operations | (769) | 973 | (375) |
Loss from equity investment | 437 | ||
Deferred income taxes | 5,729 | 3,549 | 6,609 |
Impairment of leaseholds and other, lease loss accrual and loss on disposal of fixed assets | 3,602 | 40 | |
Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests | 10,799 | 3,032 | 2,207 |
Change in operating assets and liabilities: | |||
Due from clearing brokers | 3,359 | ||
Securities and other investments owned | (82,143) | 8,964 | (7,588) |
Securities borrowed | 47,595 | ||
Accounts receivable and advances against customer contracts | 1,614 | (1,847) | 11,540 |
Goods held for sale or auction | 213 | 37 | 20 |
Prepaid expenses and other assets | (1,719) | 3,662 | (1,100) |
Accounts payable, accrued payroll and related expenses, accrued value added tax payable and other accrued expenses | (30,374) | 23,330 | 3,943 |
Amounts due from related parties and partners | (11,826) | (2,766) | (622) |
Securities sold, not yet purchased | 7,678 | 133 | (33) |
Deferred revenue | (668) | 884 | 346 |
Securities loaned | (64,255) | ||
Auction and liquidation proceeds payable | (317) | (665) | |
Net cash (used in) provided by operating activities | (81,790) | 80,280 | 31,671 |
Cash flows from investing activities: | |||
Acquisition of Wunderlich, net of cash acquired $4,259 | (25,478) | ||
Cash acquired from acquisition of FBR & Co. | 15,738 | ||
Acquisition of United Online, net of cash acquired $125,542 in 2016 | (10,381) | (33,430) | |
Acquisition of other businesses, net of cash acquired | (2,052) | (2,451) | |
Purchases of property and equipment | (825) | (729) | (239) |
Proceeds from key man life insurance | 6,000 | ||
Proceeds from sale of property and equipment and intangible asset | 836 | 96 | 4 |
Equity investment | (1,674) | ||
(Increase) decrease in restricted cash | (15,786) | (2,809) | 7,604 |
Net cash (used in) provided by investing activities | (33,622) | (36,872) | 4,918 |
Cash flows from financing activities: | |||
Repayment of revolving line of credit | (272) | 216 | |
Proceeds from asset based credit facility | 65,987 | 56,255 | |
Repayment of asset based credit facility | (65,987) | (56,255) | (18,506) |
Proceeds of notes payable - related party | 4,500 | ||
Repayment of notes payable - related party | (4,500) | ||
Repayment of notes payable | (8,336) | ||
Proceeds from participating note payable | 61,400 | ||
Repayment of participating note payable and contingent consideration | (1,250) | (62,650) | |
Proceeds from issuance of senior notes | 179,471 | 27,664 | |
Payment of debt issuance costs | (4,289) | ||
Proceeds from issuance of common stock | 22,759 | ||
Payment of employment taxes on vesting of restricted stock | (3,486) | (1,156) | (499) |
Dividends paid | (16,755) | (5,334) | (5,219) |
Distribution to noncontrolling interests | (11,261) | (2,007) | (4,042) |
Net cash provided by (used in) financing activities | 134,094 | 40,404 | (28,050) |
Increase in cash and cash equivalents | 18,682 | 83,812 | 8,539 |
Effect of foreign currency on cash | 2,036 | (1,719) | (127) |
Net increase in cash and cash equivalents | 20,718 | 82,093 | 8,412 |
Cash and cash equivalents, beginning of year | 112,105 | 30,012 | 21,600 |
Cash and cash equivalents, end of year | 132,823 | 112,105 | 30,012 |
Supplemental disclosures: | |||
Interest paid | 18,840 | 376 | 579 |
Taxes paid | $ 14,986 | $ 685 | $ 1,688 |
CONSOLDIATED STATEMENTS OF CAS8
CONSOLDIATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Cash Flows [Abstract] | ||
Cash acquired from acquisition | $ 4,259 | $ 125,542 |
ORGANIZATION, BUSINESS OPERATIO
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
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 investment banking and financial services to corporate, institutional and high net worth clients, and asset disposition, valuation and appraisal and capital advisory services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional services firms throughout the United States, Australia, Canada, and Europe, and with the acquisition of United Online, Inc. (“UOL”) on July 1, 2016, provide consumer Internet access and related subscription services. The Company operates in four operating segments: (i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, research, sales and trading and wealth management services to corporate, institutional and high net worth clients; (ii) Auction and Liquidation, through which the Company provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property; (iii) Valuation and Appraisal, through which the Company provides valuation and appraisal services to clients with independent appraisals in connection with asset based loans, acquisitions, divestitures and other business needs; and (iv) Principal Investments - United Online, through which the Company provides consumer Internet access and related subscription services. On November 9, 2017, the Company entered into an Agreement and Plan of Merger with B. R. Acquisition Ltd., an Israeli corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and magicJack VocalTec Ltd., an Israeli corporation (“magicJack”), pursuant to which Merger Sub will merge with and into magicJack, with magicJack continuing as the surviving corporation and as an indirect subsidiary of the Company. Subject to the terms and conditions of the Agreement and Plan of Merger, each outstanding share of magicJack will be converted into the right to receive $8.71 in cash without interest, representing approximately $143,500 in aggregate merger consideration. The closing of the transaction is subject to the receipt of certain regulatory approvals, the approval of the magicJack shareholder’s and the satisfaction of other closing conditions. It is anticipated that the acquisition of magicJack will close in the first half of 2018. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2017 | |
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 (a) Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations, and (b) GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership of a 50% partnership interest, appointment of executive officers and significant influence over the operations. All intercompany accounts and transactions have been eliminated upon consolidation. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. 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 accounting principles generally accepted in the United States of American (“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, 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, restructuring and wealth management services; (ii) revenues from sales and trading activities; and (iii) interest income from securities lending 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. Fees 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 include (i) commissions resulting from equity securities transactions executed as agent or principal and are recorded on a trade date basis; (ii) related net trading gains and losses from market making activities and from the commitment of capital to facilitate customer orders; (iii) fees paid for equity research; and (iv) principal transactions which include realized and unrealized gains and losses and interest and dividend income resulting from our principal investments in equity and other securities for the Company’s account. Revenues from securities lending activities consist of interest income from equity and fixed income securities that are borrowed from one party and loaned to another. The Company maintains relationships with a broad group of banks and broker-dealers to facilitate the sourcing, borrowing and lending of equity and fixed income securities in a “matched book” to limit the Company’s exposure to fluctuations in the market value or securities borrowed and securities loaned. 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. 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. Revenues earned from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation are recognized based on proceeds received. The Company records proceeds received from these types of engagements first as a reduction of contractual reimbursable expenses, second as a recovery of its guarantee and thereafter as revenue, subject to such revenue meeting the criteria of having been fixed or determinable. Contractual reimbursable expenses and amounts advanced to customers for minimum guarantees are initially recorded as advances against customer contracts in the accompanying consolidated balance sheets. If, during the auction or liquidation sale, the Company determines that the proceeds from the sale will not meet the minimum guaranteed recovery value as defined in the auction or liquidation services contract, the Company accrues a loss on the contract in the period that the loss becomes known. The Company also evaluates revenue from auction and liquidation contracts in accordance with the accounting guidance to determine whether to report Auction and Liquidation segment revenue on a gross or net basis. The Company has determined that it acts as an agent in a substantial majority of its auction and liquidation services contracts and therefore reports the auction and liquidation revenues on a net basis. Revenues from the sale of goods are recorded gross and are recognized in the period in which the sale of goods held for sale or auction are completed, title to the property passes to the purchaser and the Company has fulfilled its obligations with respect to the transaction. These revenues are primarily the result of the Company acquiring title to merchandise with the intent of selling the items at auction or for augmenting liquidation sales. For liquidation contracts where we take title to retail goods, our net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, and other promotional allowances and are recorded net of sales or value added tax. Fees earned from 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 in the Principal Investments - United Online segment are primarily comprised of services revenues, which are derived primarily from fees charged to pay accounts; advertising and other revenues; and products revenues, which are derived primarily from the sale of mobile broadband service devices, including the related shipping and handling fees. Service revenues are derived primarily from fees charged to pay accounts and are recognized in the period in which fees are fixed or determinable and the related services are provided to the customer. The Company’s pay accounts generally pay in advance for their services by credit card, PayPal, automated clearinghouse or check, and revenues are then recognized ratably over the service period. Advance payments from pay accounts are recorded in the consolidated balance sheet as deferred revenue. In circumstances where payment is not received in advance, revenues are only recognized if collectability is reasonably assured. Advertising revenues consist primarily of amounts from the Company’s Internet search partner that are generated as a result of users utilizing the partner’s Internet search services and amounts generated from display advertisements. The Company recognizes such advertising revenues in the period in which the advertisement is displayed or, for performance-based arrangements, when the related performance criteria are met. In determining whether an arrangement exists, the Company ensures that a written contract is in place, such as a standard insertion order or a customer-specific agreement. The Company assesses whether performance criteria have been met and whether the fees are fixed or determinable based on a reconciliation of the performance criteria and the payment terms associated with the transaction. The reconciliation of the performance criteria generally includes a comparison of customer-provided performance data to the contractual performance obligation and to internal or third-party performance data in circumstances where that data is available. 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, 2017, 2016 and 2015. (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 in the Principal Investments - United Online segment include cost of telecommunications and data center costs, personnel and overhead-related costs associated with operating the Company’s networks and data centers, depreciation of network computers and equipment, third party advertising sales commissions, license fees, costs related to providing customer support, costs related to customer billing and processing of customer credit cards and associated bank fees. Direct cost of services does not include an allocation of the Company’s overhead costs. (e) Interest Expense - Securities Lending Activities Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company. (f) Concentration of Risk Revenues from one liquidation service contract to a retailer represented 13.5% of total revenues during the year ended December 31, 2016. Revenues in the Capital Markets, Auction and Liquidation, Valuation and Appraisal and Principal Investments - United Online segment are primarily generated in the United States, Australia, Canada 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. (g) Advertising Expense The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $1,312, $1,456 and $519 for the years ended December 31, 2017, 2016 and 2015, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying consolidated statements of income. (h) 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. (i) 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. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, provides an exemption from U.S. federal tax for dividends received from foreign subsidiaries, and creates new taxes on certain foreign sourced earnings. As of the completion of these financial statements and related disclosures, we have not completed our accounting for the tax effects of the Tax Act; however, as described below, we have made a reasonable estimate of such effects and recorded a provisional tax expense of $13,052, which is included as a component of income tax expense in the fourth quarter of 2017. This provisional tax expense incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as we receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense from continuing operations in the reporting period in which any such adjustments are determined. See Note 13 for additional information. (j) Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. (k) Restricted Cash As of December 31, 2017, restricted cash of $19,711 included $19,197 of cash collateral related to certain retail liquidation engagements and $514 cash segregated in a special bank accounts for the benefit of customers related to our broker dealer subsidiary and collateral for one of our telecommunication suppliers. As of December 31, 2016, restricted cash of $3,294 included $1,440 of cash collateral related to a retail liquidation engagement in Australia, $1,320 of cash collateral for foreign exchange contracts and $534 cash segregated in a special bank accounts for the benefit of customers related to our broker dealer subsidiary and collateral for one of our telecommunication suppliers. (l) Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The Company accounts for securities lending transactions in accordance with Accounting Standards Codification (“ASC”) “Topic 210: Balance Sheet,” (m) Due from/to Brokers, Dealers, and Clearing Organizations The Company clears all of its proprietary and customer transactions through other broker-dealers on a fully disclosed basis. The amount receivable from or payable to the clearing brokers represents the net of proceeds from unsettled securities sold, the Company’s clearing deposit and amounts receivable for commissions less amounts payable for unsettled securities purchased by the Company and amounts payable for clearing costs and other settlement charges. This amount also includes the cash collateral received for securities loaned less cash collateral for securities borrowed. Any amounts payable would be fully collateralized by all of the securities owned by the Company and held on deposit at the clearing broker. (n) Accounts Receivable Accounts receivable represents amounts due from the Company’s auction and liquidation, valuation and appraisal, capital markets and principal investments - United Online 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 $1,066, $710 and $718 for the years ended December 31, 2017, 2016 and 2015, respectively. These amounts are included as a component of selling, general and administrative expenses in the accompanying consolidated statement of operations. (o) 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. (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) 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, 2017 and 2016, the Company’s securities owned and securities sold not yet purchased at fair value consisted of the following: December 31, 2017 December 31, 2016 Securities and other investments owned: Common stocks and warrants $ 67,306 $ 2,084 Corporate bonds 6,539 1,025 Fixed income securities 2,329 — Loans receivable 33,713 — Partnership interests and other 35,473 13,470 $ 145,360 $ 16,579 Securities sold not yet purchased: Common stocks $ 19,145 $ — Corporate bonds 1,175 846 Fixed income securities 699 — Partnership interests and other 7,272 — $ 28,291 $ 846 (r) 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 the excess of the purchase price over the fair value of net assets acquired in a business combination. 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 four 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. Based on the Company’s qualitative assessments during 2017, 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, 2017. (s) Fair Value Measurements The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, loans receivable and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company’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 Company also |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 3— ACQUISITIONS Acquisition of Wunderlich Investment Company, Inc. On May 17, 2017, the Company entered into a Merger Agreement (the “Wunderlich Merger Agreement”) with Wunderlich, a Delaware Corporation. Pursuant to the Wunderlich Merger Agreement, customary closing conditions were satisfied and the acquisition was completed on July 3, 2017. In connection with the Wunderlich acquisition on July 3, 2017, the total consideration of $65,118 paid to Wunderlich shareholders was comprised of (a) cash in the amount of $29,737; (b) 1,974,812 newly issued shares of the Company’s common stock at closing which were valued at $31,495 for accounting purposes determined based on the closing market price of the Company’s shares of common stock on the acquisition date on July 3, 2017, less a 13.0% discount for lack of marketability as the shares issued are subject to certain escrow provisions and restrictions that limit their trade or transfer; and (c) 821,816 newly issued common stock warrants with an estimated fair value of $3,886. The common stock and common stock warrants issued includes 387,365 common shares and 167,352 common stock warrants that are held in escrow and subject to forfeiture to indemnify the Company for certain representations and warranties in connection with the acquisition. The Company believes that the acquisition of Wunderlich will allow the Company to benefit from wealth management, investment banking, corporate finance, and sales and trading services provided by Wunderlich. The acquisition of Wunderlich is accounted for using the purchase method of accounting. The Company also entered into a registration rights agreement with certain shareholders of Wunderlich (the “Registration Rights Agreement”) on July 3, 2017 for the shares issued in connection with the Wunderlich Merger Agreement. The Registration Rights Agreement provides the Wunderlich shareholders with the right to notice of and, subject to certain conditions, the right to register shares of the Company’s common stock in certain future registered offerings of shares of the Company’s common stock. The assets and liabilities of Wunderlich, both tangible and intangible, were recorded at their estimated fair values as of the July 3, 2017, acquisition date for Wunderlich. The application of the purchase method of accounting resulted in goodwill of $34,638 which represents the benefits from synergies with our existing business and acquired workforce. Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of Wunderlich, were charged against earnings in the amount of $48 and included in selling, general and administrative expenses in the consolidated statements of income for the year ended December 31, 2017. The preliminary purchase accounting for the acquisition has been accounted for as a stock purchase with all of the recognized goodwill is expected to be non-deductible for tax purposes. The preliminary purchase price allocation was as follows: Consideration paid by B. Riley: Cash paid $ 29,737 Fair value of 1,974,812 B. Riley common shares issued 31,495 Fair value of 821,816 B. Riley common stock warrants issued 3,886 Total consideration $ 65,118 Tangible assets acquired and assumed: Cash and cash equivalents $ 4,259 Securities owned 1,413 Accounts receivable 3,193 Due from clearing broker 15,133 Prepaid expenses and other assets 10,103 Property and equipment 2,315 Deferred taxes 7,568 Accounts payable (1,718 ) Accrued payroll and related expenses (6,387 ) Accrued expenses and other liabilities (9,773 ) Securities sold, not yet purchased (1,707 ) Notes payable (10,579 ) Customer relationships 15,320 Trademarks 1,340 Goodwill 34,638 Total $ 65,118 The revenue and loss of Wunderlich included in our consolidated financial statements for the period from July 3, 2017 (the date of acquisition) through December 31, 2017 were $41,491 and $2,283, respectively. The loss from Wunderlich of $2,283 includes a restructuring charge in the amount of $1,471 related primarily to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment. Acquisition of FBR & Co. On February 17, 2017, the Company entered into an Agreement and Plan of Merger (the “FBR Merger Agreement”) with FBR, pursuant to which FBR was to merge with and into the Company (or a subsidiary of the Company), with the Company (or its subsidiary) as the surviving corporation (the “Merger”). On May 1, 2017, the Company and FBR filed a registration statement for the planned Merger. The stockholders of the Company and FBR approved the acquisition on June 1, 2017, customary closing conditions were satisfied and the acquisition was completed on June 1, 2017. Subject to the terms and conditions of the FBR Merger Agreement, each outstanding share of FBR common stock (“FBR Common Stock”) was converted into the right to receive 0.671 of a share of the Company’s common stock as summarized below. The Company believes that the acquisition of FBR will allow the Company to benefit from investment banking, corporate finance, securities lending, research, and sales and trading services provided by FBR and planned synergies from the elimination of duplicate corporate overhead and management functions with the Company. The acquisition of FBR is accounted for using the purchase method of accounting. The assets and liabilities of FBR, both tangible and intangible, were recorded at their estimated fair values as of the June 1, 2017 acquisition date for FBR. The application of the purchase method of accounting resulted in goodwill of $11,336 which represents expected overhead synergies and acquired workforce. Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of FBR, were charged against earnings in the amount of approximately $1,485 and included in selling, general and administrative expenses in the consolidated statements of income for the year ended December 31, 2017. The preliminary purchase accounting for the acquisition has been accounted for as a stock purchase with all of the recognized goodwill is expected to be non-deductible for tax purposes. The preliminary purchase price allocation was as follows: Consideration paid by B. Riley: Number of FBR Common Shares outstanding at June 1, 2017 7,099,511 Stock merger exchange ratio 0.671 Number of B. Riley common shares 4,763,772 Number of B. Riley common shares to be issued from acceleration of vesting for outstanding FBR stock options, restricted stock and RSU awards 67,861 Total number of B. Riley common shares to be issued 4,831,633 Closing market price of B. Riley common shares on December 31, 2016 $ 14.70 Total value of B. Riley common shares 71,025 Fair value of RSU’s attributable to service period prior to June 1, 2017 (a) 2,446 Total consideration $ 73,471 (a) Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the FBR Merger Agreement with the right to receive 0.671 shares of the Company’s common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company’s common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. The preliminary assets acquired and assumed was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 15,738 Securities owned 11,188 Securities borrowed 861,197 Accounts receivable 4,341 Due from clearing broker 29,169 Prepaid expenses and other assets 5,486 Property and equipment 8,663 Deferred taxes 17,706 Accounts payable (1,524 ) Accrued payroll and related expenses (7,182 ) Accrued expenses and other liabilities (22,411 ) Securities loaned (867,626 ) Customer relationships 5,600 Tradename and other intangibles 1,790 Goodwill 11,336 Total $ 73,471 The revenue and loss of FBR included in our consolidated financial statements for the period from June 1, 2017 (the date of acquisition) through December 31, 2017 were $85,111 and $2,099, respectively. The loss from FBR of $2,099 includes transaction costs of $3,551 related to an employment agreement with the former Chief Executive Officer of FBR and restructuring charges in the amount of $9,669 related primarily to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment. Acquisition of Rights to Manage Dialectic Hedge Funds On April 13, 2017, the Company entered into an Asset Purchase and Assignment Agreement with Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn (collectively “Dialectic”), pursuant to which Dialectic assigned and transferred the rights to manage certain hedge funds to the Company (the “Dialectic Acquisition”). In addition to obtaining the rights to manage certain hedge funds previously managed by Dialectic, the Company hired the employees that were previously employed by the management company that managed the Dialectic hedge funds and assumed Dialectic’s office lease. In connection with the Dialectic Acquisition, the Company paid the Dialectic parties $700 in cash consideration and 158,484 shares of common stock which has a fair value of approximately $1,952 for total purchase consideration of $2,652. The Dialectic Acquisition expands the Company’s assets under management in the Capital Markets segment and the Company believes such acquisition will allow the Company to benefit from planned synergies from the elimination of duplicate administrative functions of the Company. The acquisition of Dialectic is accounted for using the purchase method of accounting. The assets acquired from Dialectic were recorded at fair value as of April 13, 2017, the acquisition date of Dialectic. The application of the purchase method of accounting resulted in preliminary purchase allocation of $2,542 to goodwill, which represents expected overhead synergies and acquired workforce, and $110 to other intangible assets - customer relationship for total acquisition consideration of $2,652. There were no tangible assets or liabilities acquired in connection with Dialectic. Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of Dialectic, were charged against earnings in the amount of $72 and included in selling, general and administrative expenses in the consolidated statements of income for the year ended December 31, 2017. The preliminary purchase accounting for the acquisition has been accounted for as an asset purchase with all of the recognized goodwill and other intangible assets expected to be deductible for tax purposes. The revenue and loss of Dialectic included in our consolidated statements of income for the period from April 13, 2017 (the date of acquisition) through December 31, 2017 were $909 and $793, respectively. Acquisition of United Online, Inc. On May 4, 2016, the Company entered into a definitive agreement and plan of merger to acquire all of the outstanding common stock of UOL, a provider of consumer Internet access and related subscription services, for $11.00 per share, or approximately $169,354 in aggregate merger consideration plus an additional $1,352 of cash consideration paid to settle the legal matter as more fully described in Note 12. The shareholders of UOL approved the acquisition on June 29, 2016 and customary closing conditions were satisfied and the acquisition was completed on July 1, 2016. The acquisition of UOL allows the Company to benefit from the expected cash flows of UOL due in part to planned synergies from the elimination of duplicate overhead functions with the Company. Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of UOL, were charged against earnings in the amount of $674 and included in selling, general and administrative expenses in the consolidated statements of income for the year ended December 31, 2017. The acquisition of UOL is accounted for using the purchase method of accounting. The assets and liabilities of UOL, both tangible and intangible, were recorded at their estimated fair values as of the July 1, 2016 acquisition date for UOL. The application of the purchase method of accounting resulted in goodwill of $14,375 which represents expected overhead synergies and acquired workforce. The revenue and earnings of UOL included in our consolidated statements of income for the year ended December 31, 2017 were $51,743 and $19,503, respectively. The revenue and earnings of UOL included in the consolidated statements of income for the period from July 1, 2016 (the date of acquisition) through December 31, 2016 were $31,521 and $5,716, respectively. The preliminary purchase price allocation was as follows: Total consideration $ 169,354 Tangible assets acquired and assumed: Cash and cash equivalents $ 125,542 Restricted cash 482 Accounts receivables 3,850 Inventory 624 Property and equipment 5,536 Prepaid expenses and other assets 5,876 Accounts payable (4,874 ) Accrued expenses and other liabilities (8,886 ) Deferred revenue (2,900 ) Deferred tax liabilities (6,824 ) Other liabilities (3,180 ) Customer relationships 33,700 Advertising relationships 100 Trade name and trademarks 1,100 Domain names 1,500 Internally developed software 3,333 Goodwill 14,375 $ 169,354 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 Advisors, LLC (“MK Capital”), a wealth management business with operations primarily in New York. 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 was 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 $8 and $101 for the year ended December 31, 2017 and 2016, respectively. At December 31, 2016, the balance of the contingent consideration liability was $1,242 (discount of $8 at December 31, 2016) and has been recorded as contingent consideration liability in the consolidated balance sheets. 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 and second anniversary periods and the contingent cash consideration and contingent stock consideration for the first anniversary period was paid and issued on February 2, 2016 and for the second anniversary period was paid and issued on February 2, 2017. 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 Pro Forma Financial Information The unaudited financial information in the table below summarizes the combined results of operations of the Company, Wunderlich, FBR and UOL, as though the acquisitions had occurred as of January 1, of the respective periods presented. 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 and transaction related costs. 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 December 31, 2017 2016 Revenues $ 430,723 $ 464,587 Net income attributable to B. Riley Financial, Inc. $ 5,672 $ 1,754 Basic earnings per share $ 0.22 $ 0.07 Diluted earnings per share $ 0.21 $ 0.07 Weighted average basic shares outstanding 26,150,502 24,972,700 Weighted average diluted shares outstanding 27,268,888 25,257,931 |
RESTRUCTURING CHARGE
RESTRUCTURING CHARGE | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charge | |
RESTRUCTURING CHARGE | NOTE 4— RESTRUCTURING CHARGE The Company recorded a restructuring charge in the amount of $12,374 during the year ended December 31, 2017. The Company implemented costs savings measures taking into account the planned synergies as a result of the acquisitions of FBR and Wunderlich, as more fully described in Note 3, which included a reduction in force for some of the corporate executives of FBR and Wunderlich and a restructuring to integrate FBR and Wunderlich’s operations with the Company’s existing operations. These initiatives resulted in a restructuring charge of $11,651 during the year ended December 31, 2017. The restructuring charges during the year ended December 31, 2017 included $2,400 related to severance and $884 related to the accelerated vesting of restricted stock awards to former corporate executives of FBR and Wunderlich and $3,241 of severance and $1,710 related to accelerated vesting of stock awards to employees and $3,416 of lease loss accruals and impairments for the planned consolidation of office space related to operations of FBR and Wunderlich. Of the $11,651 of restructuring charges related to these initiatives, $7,855 related to the Capital Markets segment and $3,796 related to corporate overhead. The restructuring charge during the year ended December 31, 2017 also included employee termination costs of $723 related to a reduction in personnel in the principal investments – United Online segment of our operations. During the third quarter of 2016, after completing the acquisition of UOL, the Company initiated cost savings measures which included a reduction in force for certain corporate and administrative employees of UOL. The reduction in work force resulted in a restructuring charge of $3,474 for employee termination costs in the Principal Investments - United Online segment during the year ended December 31, 2016. In the third quarter of 2016, the Company also entered into a sublease and consolidated one of the offices of the Company with the former corporate offices of UOL. The sublease resulted in a restructuring charge of $413 related to office closure costs. The following table summarizes the changes in accrued restructuring charge during years ended December 31, 2017 and 2016: Accrued restructuring charge at December 31, 2015 $ 187 Restructuring charge 3,887 Cash paid (3,380 ) Non-cash items — Accrued restructuring charge at December 31, 2016 694 Restructuring charge 12,374 Cash paid (5,957 ) Non-cash items (4,511 ) Accrued restructuring charge at December 31, 2017 $ 2,600 The following tables summarize the restructuring activities by reportable segment during the years ended December 31, 2017 and 2016: Year Ended December 31, 2017 2016 Capital Markets Principal Investments - United Online Corporate Total Capital Markets Principal Investments - United Online Corporate Total Restructuring charge: Employee termination costs $ 4,951 $ 723 $ 3,284 $ 8,958 $ — $ 3,474 $ — $ 3,474 Facility closure and consolidation charge 2,904 — 512 3,416 — — 413 413 Total restructuring charge $ 7,855 $ 723 $ 3,796 $ 12,374 $ — $ 3,474 $ 413 $ 3,887 |
SECURITIES LENDING
SECURITIES LENDING | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charge | |
SECURITIES LENDING | NOTE 5— SECURITIES LENDING As a result of the acquisition of FBR, the Company has an active securities borrowed and loaned business in which it borrows securities from one party and lends them to another. Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of December 31, 2017: Amounts not offset in the consolidated balance Gross amounts Net amounts sheets but eligible offset in the included in the for offsetting Gross amounts consolidated consolidated upon counterparty recognized balance sheets (1) balance sheets default (2) Net amounts As of December 31, 2017 Securities borrowed $ 807,089 $ — $ 807,089 $ 807,089 $ — Securities loaned $ 803,371 $ — $ 803,371 $ 803,371 $ — (1) Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. (2) Includes the amount of cash collateral held/posted. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 6— ACCOUNTS RECEIVABLE The components of accounts receivable net include the following: December 31, December 31, 2017 2016 Accounts receivable $ 15,593 $ 16,610 Investment banking fees, commissions and other receivables 4,199 576 Unbilled receivables 1,023 2,058 Total accounts receivable 20,815 19,244 Allowance for doubtful accounts (800 ) (255 ) Accounts receivable, net $ 20,015 $ 18,989 Additions and changes to the allowance for doubtful accounts consist of the following: Year Ended December 31, 2017 2016 2015 Balance, beginning of year $ 255 $ 89 $ 728 Add: Additions to reserve 1,066 710 718 Less: Write-offs (311 ) (194 ) (1,056 ) Less: Recoveries (210 ) (350 ) (301 ) Balance, end of year $ 800 $ 255 $ 89 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. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7— PROPERTY AND EQUIPMENT Property and equipment, net, consists of the following: Estimated December 31, Useful Lives 2017 2016 Leasehold improvements Shorter of the remaining lease term or estimated useful life $ 7,834 $ 2,325 Machinery, equipment and computer software 3 to 5 years 9,474 6,559 Furniture and fixtures 5 years 2,688 1,921 Total 19,996 10,805 Less: Accumulated depreciation and amortization (8,019 ) (5,020 ) $ 11,977 $ 5,785 Depreciation expense was $3,718, $1,052 and $417 during the years ended December 31, 2017, 2016 and 2015, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 and 2016 were as follows: Principal Capital Auction and Valuation and Investments- Markets Liquidation Appraisal United Online Segment Segment Segment Segment Total Balance as of December 31, 2015 $ 28,840 $ 1,975 $ 3,713 $ — $ 34,528 Goodwill acquired during the period: — — — 14,375 14,375 United Online on July 1, 2016 Balance as of December 31, 2016 28,840 1,975 3,713 14,375 48,903 Goodwill acquired during the period: Dialectic on April 13, 2017 2,542 — — — 2,542 FBR on June 1, 2017 11,336 — — — 11,336 Resolution of acquisition related legal matter on June 30, 2017 — — — 1,352 1,352 Wunderlich on July 3, 2017 34,638 — — — 34,638 Balance as of December 31, 2017 $ 77,356 $ 1,975 $ 3,713 $ 15,727 $ 98,771 Intangible assets consisted of the following: December 31, 2017 December 31, 2016 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 4 to 16 Years $ 58,330 $ 9,100 $ 49,230 $ 37,300 $ 3,100 $ 34,200 Domain names 7 Years 287 61 226 1,419 101 1,318 Advertising relationships 8 Years 100 19 81 100 6 94 Internally developed software and other intangibles 0.5 to 4 Years 3,373 1,445 1,928 3,333 550 2,783 Trademarks 7 to 8 Years 4,190 447 3,743 1,100 69 1,031 Total 66,280 11,072 55,208 43,252 3,826 39,426 Non-amortizable assets: Tradenames 1,740 — 1,740 1,740 — 1,740 Total intangible assets $ 68,020 $ 11,072 $ 56,948 $ 44,992 $ 3,826 $ 41,166 Amortization expense was $7,422, $3,254 and $431 for the years ended December 31, 2017, 2016 and 2015, respectively. At December 31, 2017, estimated future amortization expense is $8,497, $8,376, $8,008, $7,617 and $7,592 for the years ended December 31, 2018, 2019, 2020, 2021 and 2022, respectively. The estimated future amortization expense after December 31, 2022 is $15,118. |
LEASING ARRANGEMENTS
LEASING ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
LEASING ARRANGEMENTS | NOTE 9— LEASING ARRANGEMENTS The Company has several noncancellable operating leases that expire at various dates through 2031. Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2017 were: Operating Leases Year Ending December 31: 2018 $ 13,496 2019 9,640 2020 6,984 2021 5,589 2022 5,024 Thereafter 16,369 Total minimum lease payments $ 57,102 Rent expense under all operating leases was $7,599, $3,205 and $2,376 for the years ended December 31, 2017, 2016, and 2015, respectively. Rent expense is included in Selling, general and administrative expenses in the accompanying consolidated statements of income. |
CREDIT FACILITIES
CREDIT FACILITIES | 12 Months Ended |
Dec. 31, 2017 | |
Line of Credit Facility [Abstract] | |
CREDIT FACILITIES | NOTE 10— CREDIT FACILITIES Credit facilities consist of the following arrangements: (a) $200,000 Asset Based Credit Facility On April 21, 2017, the Company amended its credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) to increase the maximum borrowing limit from $100,000 to $200,000. Such amendment, among other things, also extended the expiration date of the credit facility from July 15, 2018 to April 21, 2022. The Credit Agreement continues to allow for borrowings under the separate credit agreement (a “UK Credit Agreement”) which was dated March 19, 2015 with an affiliate of Wells Fargo Bank which provides for the financing of transactions in the United Kingdom. Such facility allows the Company to borrow up to 50 million British Pounds. Any borrowings on the UK Credit Agreement reduce the availability on the asset based $200,000 credit facility. The UK Credit Agreement is cross collateralized and integrated in certain respects with the Credit Agreement. The Credit Agreement continues to include the addition of our Canadian subsidiary, from the October 5, 2016 amendment to the Credit Agreement, to facilitate borrowings to fund retail liquidation transactions in Canada. 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 Company paid Wells Fargo Bank a closing fee in the amount of $500 in connection with the April 2017 amendment to the Credit Agreement. The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. Interest expense totaled $1,136 (including amortization of deferred loan fees of $123 and success fee of $198), $1,113 (including amortization of deferred loan fees of $92 and success fee of $732) and $376 (including amortization of deferred loan fees of $92 and success fee of $127) for the years ended December 31, 2017, 2016 and 2015, respectively. There was no outstanding balance of this credit facility at December 31, 2017 and December 31, 2016. 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) $20,000 UOL Line of Credit On April 13, 2017, UOL, in the capacity as borrower, entered into a credit agreement (the “UOL Credit Agreement”) with Banc of California, N.A. in the capacity as agent and lender. The UOL Credit Agreement provides for a revolving credit facility under which UOL may borrow (or request the issuance of letters of credit) up to $20,000 which amount is reduced by $1,500 commencing on June 30, 2017 and on the last day of each calendar quarter thereafter. The final maturity date is April 13, 2020. The proceeds of the UOL Credit Agreement can be used (a) for working capital and general corporate purposes and/or (b) to pay dividends or permitted tax distributions to its parent company, subject to the terms of the UOL Credit Agreement. Borrowings under the UOL Credit Agreement will bear interest at a rate equal to (a) (i) the base rate (the greater of the federal funds rate plus one half of one percent (0.5%), or the prime rate) for U.S. dollar loans or (ii) at UOL’s option, the LIBOR Rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two percent (2%) to three and one-half percent (3.5%) per annum, based upon UOL’s ratio of funded indebtedness to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the preceding four (4) fiscal quarters. Interest payments are to be made each one, three or six months for Eurodollar loans, and quarterly for U.S. dollar loans. UOL paid a commitment fee equal to 1.00% of the aggregate commitments upon the closing of the UOL Credit Agreement. The UOL Credit Agreement also provides for an unused line fee payable quarterly, in arrears, in an amount equal to: (a) 0.50% per annum times the amount of the unused revolving commitment that is less than or equal to the amount of the cash maintained in accounts with the agent (as depositary bank); plus (b) 1.00% per annum times the amount of the unused revolving commitment that is greater than the amount of the cash maintained in accounts with the agent (as depositary bank). Any amounts outstanding under the UOL Credit Facility are due at maturity. There was no outstanding balance under the UOL Credit Agreement at December 31, 2017. Interest expense totaled $292 (including amortization of deferred loan fees of $97) for the year ended December 31, 2017. Each of UOL’s U.S. subsidiaries is a guarantor of all obligations under the UOL Credit Agreement and are parties to the UOL Credit Agreement in such capacity (collectively, the “Secured Guarantors”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of UOL and a subsidiary of the Company, are guarantors of the obligations under the UOL Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares of outstanding capital stock of UOL are pledged as collateral. The obligations under the UOL Credit Agreement are secured by first-priority liens on, and a first-priority security interest in, substantially all of the assets of UOL and the Secured Guarantors, including a pledge of (a) 100% of the equity interests of the Secured Guarantors and (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India. Such security interests are evidenced by pledge, security and other related agreements. The UOL Credit Agreement contains certain negative covenants, including those limiting UOL’s and its subsidiaries’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the UOL Credit Agreement requires UOL and its subsidiaries to maintain certain financial ratios. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 11— NOTES PAYABLE Senior notes payable, net, is comprised of the following as of December 31, 2017 and 2016: December 31, 2017 2016 7.50% Senior notes due October 31, 2021 $ 35,231 $ 28,750 7.50% Senior notes due May 31, 2027 92,490 — 7.25% Senior notes due December 31, 2027 80,500 — 208,221 28,750 Less: Unamortized debt issue costs (4,600 ) (1,050 ) $ 203,621 $ 27,700 (a) $35,231 Senior Notes Payable due October 31, 2021 At December 31, 2017, the Company had $35,231 of Senior Notes Payable (the “2021 Notes”) due in 2021, interest payable quarterly at 7.50%. On November 2, 2016, the Company issued $28,750 of the 2021 Notes and during the third and fourth quarter of 2017, the Company issued an additional $6,481 of the 2021 Notes. The 2021 Notes are unsecured and due and payable in full on October 31, 2021. In connection with the issuance of the 2021 Notes, the Company received net proceeds of $34,238 (after underwriting commissions, fees and other issuance costs of $993). The outstanding balance of the 2021 Notes was $34,483 (net of unamortized debt issue costs and premiums of $748) and $27,700 (net of unamortized debt issue costs of $1,050) at December 31, 2017 and 2016, respectively. In connection with the offering of 2021 Notes on November 2, 2016, certain members of management and the Board of Directors of the Company purchased $2,731 or 9.5% of the 2021 Notes offered by the Company. Interest expense on the 2021 Notes totaled $2,537 and $360 for the years ended December 31, 2017 and 2016, respectively. (b) $92,490 Senior Notes Payable due May 31, 2027 At December 31, 2017, the Company had $92,490 of Senior Notes Payable (the “7.50% 2027 Notes”) due in May 2027, interest payable quarterly at 7.50%. On May 31, 2017, the Company issued $60,375 of the 7.5% 2027 Notes and during the third and fourth quarter ended 2017, the Company issued an additional $32,115 of the 7.50% 2027 Notes. The 7.50% 2027 Notes are unsecured and due and payable in full on May 31, 2027. In connection with the issuance of the 7.50% 2027 Notes, the Company received net proceeds of $90,796 (after underwriting commissions, fees and other issuance costs of $1,694). The outstanding balance of the 7.50% 2027 Notes was $90,904 (net of unamortized debt issue costs of $1,586) at December 31, 2017. Interest expense on the 7.50% 2027 Notes totaled $3,551 for the year ended December 31, 2017. (c) $80,500 Senior Notes Payable due December 31, 2027 At December 31, 2017, the Company had $80,500 of Senior Notes Payable ("7.25% 2027 Notes”) due in December 2027, interest payable quarterly at 7.25%. The 7.25% 2027 Notes are unsecured and due and payable in full on December 31, 2027. In connection with the issuance of the 7.25% 2027 Notes, the Company received net proceeds of $78,223 (after underwriting commissions, fees and other issuance costs of $2,277). The outstanding balance of the 7.25% 2027 Notes was $78,234 (net of unamortized debt issue costs of $2,266) at December 31, 2017. Interest expense on the 7.25% 2027 Notes totaled $303 for the year ended December 31, 2017. (d) At Market Issuance Sales Agreement to Issue Up to Aggregate of $19,000 of 2021 Notes, 7.50% 2027 Notes or 7.25% 2027 Notes. On December 19, 2017, the Company entered into the Sales Agreement and filed a prospectus supplement pursuant to which the Company may sell from time to time, at the Company’s option up to an aggregate of $19,000 of the 2021 Notes, the 7.50% 2027 Notes and the 7.25% 2027 Notes. The Notes sold pursuant to the Sales Agreement will be issued pursuant to a prospectus dated March 29, 2017, as supplemented by a prospectus supplement dated June 28, 2017, in each case filed with the Securities and Exchange Commission pursuant to the Company’s effective Registration Statement on Form S-3 (File No. 333-216763), which was declared effective by the SEC on March 29, 2017. The Notes will be issued pursuant to the Indenture, dated as of November 2, 2016, as supplemented by a First Supplemental Indenture, dated as of November 2, 2016 and the Second Supplemental Indenture, dated as of May 31, 2017, each between the Company and U.S. Bank, National Association, as trustee. Future sales of the 2021 Notes, 7.50% 2027 Notes and 7.25% 2027 Notes pursuant to the Sales Agreement will depend on a variety of factors including, but not limited to, market conditions, the trading price of the notes and the Company’s capital needs. At December 31, 2017, the Company has an additional $19,000 of 2021 Notes, 7.50% 2027 Notes or 7.25% 2027 Notes that may be sold pursuant to the Sales Agreement. There can be no assurance that the Company will be successful in consummating future sales based on prevailing market conditions or in the quantities or at the prices that the Company may deem appropriate. (e) Australian Dollar $80,000 Note Payable In August 2016, the Company formed GA Retail Investments, L.P., a Delaware limited partnership, (the “Partnership”) which required the Company to contribute $15,350. The Partnership borrowed $80,000 Australian dollars from a third party investor in connection with its formation and the $80,000 Australian dollars was exchanged for a 50% special limited partnership interest in the Partnership. The Partnership was formed to provide funding for the retail liquidation engagement the Company entered into to liquidate the Masters Home Improvement stores. The $80,000 Australian dollar participating note payable was non-interest bearing, shares in 50% of the all of the profits and losses of the Partnership and was subject to repayment upon the completion of the going-out-of-business sale of Masters Home Improvement stores as defined in the partnership agreement. Although the terms of the participating note payable included the issuance of a 50% equity interest in the Partnership, sharing in all profits and losses of the Partnership, and no repayment until certain events occur, in accordance with ASC 480 Distinguishing Liabilities From Equity, this financial instrument was classified as a participating note payable. The $80,000 Australian dollar participating note payable was repaid in December 2016 upon the completion of the going-out-of-business sale of Masters Home Improvement stores as defined in the partnership agreement. At December 31, 2017 and 2016, $1,323 and $10,037, respectively, were payable in accordance with the participating note payable share of profits and is included in net income attributable to noncontrolling interests and amounts Due to partners in the consolidated financial statements. (f) Other Notes Payable Other notes payable include notes payable to a clearing organization for one of the Company’s broker dealers. The notes payable accrue interest at rates ranging from the prime rate plus 0.25% to 2.0% (4.75% to 6.50% at December 30, 2017) payable annually. The principal payments on the notes payable are due annually in the amount of $357 on January 31, $214 on September 30, and $121 on October 31. The notes payable mature at various dates from September 30, 2018 through January 31, 2022. At December 31, 2017, the outstanding balance for the notes payable was $2,243. Interest expense was $71 for the period from July 3, 2017 (the date of Wunderlich acquisition) through December 31, 2017. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12— COMMITMENTS AND CONTINGENCIES (a) Letters of Credit – At December 31, 2017, there were letters of credit outstanding in the amount of $18,505 related to three retail liquidation engagements. At December 31, 2016, there was a letter of credit in the amount of $465 which was maintained pursuant to lease arrangements and contractual obligations. (b) Legal Matters The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from our securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding our business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against our company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, we cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations. In 2012, Gladden v. Cumberland Trust, WSI, et al. filed a complaint in Circuit Court, Hamblen County, TN at Morristown, Case No. 12-CV-119. This complaint alleges the improper distribution and misappropriation of trust funds. The plaintiff seeks damages of no less than $3,925, an accounting, and among other things, punitive damages. In October 2017, the Tennessee Supreme Court remanded the case to the Tennessee State Trial Court for determination of which claims are subject to arbitration and which are not. At the present time, the financial impact to the Company, if any, cannot be estimated. In January 2015, Great American Group, LLC (“Great American Group”) was served with a lawsuit that seeks to assert claims of breach of contract and other matters in connection with auction services provided to a debtor. The proceeding in the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”) is pending in the bankruptcy case of the debtor and its affiliates (the “Debtor”). In the lawsuit, a former landlord of the Debtor generally alleges that Great American Group and a joint venture partner were responsible for contamination while performing services in connection with the auction of certain assets of the Debtor and is seeking approximately $10,000 in damages. In December 2017, the parties settled the matter and the financial impact to the Company was not material. In May 2014, Waterford Township Police & Fire Retirement System et al. v. Regional Management Corp et al., filed a complaint in the Southern District of New York (the “Court”), against underwriters alleging violations under sections 11 and 12 of the Securities Act of 1933, as amended (the “Securities Act”). B. Riley FBR, Inc. (“B. Riley FBR”) (formerly, FBR Capital Markets & Co. (“FBRCM”)), a broker-dealer subsidiary of ours, was a co-manager of 2 offerings. On January 30, 2017, the Court denied the plaintiffs’ motion to file a first amended complaint, which would have revived claims previously dismissed by the Court on March 30, 2016. On March 1, 2017, the plaintiffs filed a notice of appeal and an opening brief on June 21, 2017. Defendant’s opposition motion was filed on September 12, 2017. Appellants filed their reply brief on October 17, 2017 and oral argument was held on November 17, 2017. On January 26, 2018, the Appellate court issued its order affirming the court’s order dismissing the plantiff’s case and denying leave to amend. Regional Management continues to indemnify all of the underwriters, including FBRCM, pursuant to the operative underwriting agreement. On January 5, 2017, complaints filed in November 2015 and May 2016 naming MLV & Co. (“MLV”), a broker-dealer subsidiary of FBR, as a defendant in putative class action lawsuits alleging claims under the Securities Act, in connection with the offerings of Miller Energy Resources, Inc. (“Miller”) have been consolidated. The Master Consolidated Complaint, styled Gaynor v. Miller et al., is pending in the United States District Court for the Eastern District of Tennessee, and, like its predecessor complaints, continues to allege claims under Sections 11 and 12 of the Securities Act against nine underwriters for alleged material misrepresentations and omissions in the registration statement and prospectuses issued in connection with six offerings (February 13, 2013; May 8, 2013; June 28, 2013; September 26, 2013; October 17, 2013 (as to MLV only) and August 21, 2014) with an alleged aggregate offering price of approximately $151,000. The plaintiffs seek unspecified compensatory damages and reimbursement of certain costs and expenses. In August 2017, the Court granted Defendant’s Motion to Dismiss on Section 12 claims and found that the plaintiffs had not sufficiently alleged a corrective disclosure prior to August 6, 2015, when an SEC civil action was announced. Defendants’ answer was filed on September 25, 2017. Although MLV is contractually entitled to be indemnified by Miller in connection with this lawsuit, Miller filed for bankruptcy in October 2015 and this likely will decrease or eliminate the value of the indemnity that MLV receives from Miller. On July 5, 2016, Quadre Investments LP (“Quadre”) filed a petition with the Delaware Court of Chancery (the “Court”) seeking a determination of fair value for 943,769 shares of common stock of UOL in connection with the acquisition of UOL by the Company. Such transaction gave rise to appraisal rights pursuant to Section 262 of the General Corporation Law of the State of Delaware. As a result, Quadre petitioned the Court to receive fair value as determined by the Court. On June 30, 2017, the parties settled the action and the petition was dismissed. As discussed in Note 3, the settlement of this action resulted in an increased in goodwill. In February 2017, certain former employees filed an arbitration claim with FINRA against Wunderlich Securities, Inc. (“WSI”) alleging misrepresentations in the recruitment of claimants to join WSI. Claimants also allege that WSI failed to support their mortgage trading business resulting in the loss of opportunities during their employment with WSI. Claimants are seeking $10,000 in damages. WSI has counterclaimed alleging that claimants mispresented their process for doing business, particularly their capital needs, resulting in substantial losses to WSI. WSI believes the claims are meritless and intends to vigorously defend the action. A hearing has been scheduled for March 2018. In March 2017, United Online, Inc. received a letter from PeopleConnect, Inc. (formerly, Classmates, Inc.) (“Classmates”) regarding a notice of investigation received from the Consumer Protection Divisions of the District Attorneys’ offices of four California counties (“California DAs”). These entities suggest that Classmates may be in violation of California codes relating to unfair competition, false or deceptive advertising, and auto-renewal practices. Classmates asserts that these claims are indemnifiable claims under the purchase agreement between United Online, Inc. and the buyer of Classmates. A tolling agreement with the California DAs has been signed and informal discovery and production is in process. At the present time, the financial impact to the Company, if any, cannot be estimated. In July 2017, an arbitration claim was filed with FINRA by Dominick & Dickerman LLC and Michael Campbell against WSI and Gary Wunderlich with respect to the acquisition by Wunderlich Investment Company, Inc. (“WIC”) (the parent corporation of WSI) of certain assets of Dominick & Dominick LLC in 2015. The Claimants allege that respondents overvalued WIC so that the purchase price paid to the Claimants in shares of WIC stock was artificially inflated. The Statement of Claim includes claims for common law fraud, negligent misrepresentation, and breach of contract. Claimants are seeking damages of approximately $8,000 plus unspecified punitive damages. Respondents believe the claims are meritless and intend to vigorously defend the action. In September 2017, Frontier State Bank (“Frontier”) filed a lawsuit against Wunderlich Loan Capital Corp., a subsidiary of WIC (“WLCC”), seeking rescission of the purchase a residential mortgage in the amount of $1,300. Vanguard Funding, LLC (“Vanguard”) sold the mortgage to WLCC who then assigned its rights to Frontier. Shortly after closing, Frontier was advised that the mortgage had been previously pledged to another lender. In the lawsuit against WLCC, it is alleged that WLCC did not deliver the mortgage to Frontier with clear title. WLCC is conducting settlement discussions with Frontier that are not expected to have a material financial impact on the Company. In September 2017, a statement of claim was filed in a FINRA arbitration naming FBRCM and other underwriters related to the underwriting of the now-bankrupt, Quantum Fuel Systems Technologies Worldwide, Inc. (“Quantum”). Claimants are seeking $37,000 in actual damages, plus $75,000 in punitive damages and attorney’s fees. On October 24, 2017, we joined in a motion with the other underwriters requesting that the claim be dismissed on the grounds that it is improper under FINRA Rules 12204 and 122205 which prohibit class actions and derivative claims, respectively. On December 1, 2017, the claims were dismissed by FINRA. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13— INCOME TAXES The Tax Act was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, provides an exemption from U.S. federal tax for dividends received from foreign subsidiaries, and creates new taxes on certain foreign sourced earnings. As of the completion of these financial statements and related disclosures, we have not completed our accounting for the tax effects of the Tax Act; however, we have made a reasonable estimate of such effects and recorded a provisional tax expense of $13,052, which is included as a component of income tax expense in the fourth quarter of 2017 and is comprised of (a) $12,954 related to the remeasurement of deferred tax assets and liabilities in the United States and (b) $98 related to the transition tax on foreign earnings. This provisional tax expense incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as we receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. The Company’s provision for income taxes consists of the following for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 Current: Federal $ 3,804 $ 5,530 $ 201 State 1,019 1,114 99 Foreign (975 ) 4,063 779 Total current provision 3,848 10,707 1,079 Deferred: Federal 6,889 3,015 5,166 State (1,937 ) 610 1,443 Foreign (290 ) (11 ) — Total deferred 4,662 3,614 6,609 Total provision for income taxes $ 8,510 $ 14,321 $ 7,688 A reconciliation of the federal statutory rate of 35% to the effective tax rate for income before income taxes is as follows for the year ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 Provision for income taxes at federal statutory rate 35.0 % 35.0 % 34.0 % State income taxes, net of federal benefit 5.0 2.8 4.0 Transaction expenses 2.0 — — Noncontrolling interest tax differential (6.6 ) (6.2 ) — Key man life insurance (7.9 ) — — Employee stock based compensation (8.7 ) — — Internal Revenue Service Section 338(g) - Treatment of acquisition of UOL as a taxable business combination (44.6 ) — — U.S. Tax Cuts and Jobs Act 63.8 — — Other 3.6 (1.2 ) (1.8 ) Effective income tax rate 41.6 % 30.4 % 36.2 % Deferred income tax assets (liabilities) consisted of the following as of December 31, 2017 and 2016: December 31, 2017 2016 Deferred tax assets: Deductible goodwill and other intangibles $ 4,019 $ — Accrued liabilities and other 3,549 2,459 Deferred revenue 54 335 Mandatorily redeemable noncontrolling interests 1,109 1,173 Other 312 379 State taxes — 994 Share based payments 2,117 443 Foreign tax and other tax credit carryforwards 290 1,855 Capital loss carryforward 2,582 3,600 Net operating loss carryforward 17,900 7,711 Total deferred tax assets 31,932 18,949 Deferred tax liabilities: State taxes (46 ) — Depreciation (73 ) (1,291 ) Goodwill and other intangibles — (4,139 ) Total deferred tax liabilities (119 ) (5,430 ) Net deferred tax assets 31,813 13,519 Valuation allowance (2,582 ) (4,900 ) Net deferred tax assets $ 29,231 $ 8,619 The Company’s income before income taxes of $20,445 for the year ended December 31, 2017 includes a United States component of income before income taxes of $19,949 and a foreign component comprised of income before income taxes of $496. As of December 31, 2017, the Company had federal net operating loss carryforwards of $63,445, state net operating loss carryforwards of $76,978. The Company’s federal net operating loss carryforwards will expire in the tax years commencing in December 31, 2029 through December 31, 2034, the state net operating loss carryforwards will expire in tax years commencing in December 31, 2029 and the foreign tax credit carryforwards will expire in 2027. The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of December 31, 2017, the Company believes that the existing net operating loss carryforwards will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets and has not provided a valuation allowance. The Company does not believe that it is more likely than not that the Company will be able to utilize the benefits related to capital loss carryforwards and has provided a full valuation allowance in the amount of $2,582 against these deferred tax assets. At December 31, 2017, the Company had gross unrecognized tax benefits totaling $1,140 all of which would have an impact on the Company’s effective income tax rate, if recognized. A reconciliation of the amounts of gross unrecognized tax benefits (before federal impact of state items), excluding interest and penalties, was as follows (in thousands): Year Ended December 31, 2017 Beginning balance Addition as a result of the acquisition of UOL $ 1,255 Additions for current year tax positions — Additions for Prior year tax positions 34 Reductions for Prior year tax positions — Reductions due to lapse in statutes of limitations (149 ) Ending balance $ 1,140 The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain state and local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2014 to 2017. At December 31, 2017, the Company believes it is reasonably possible that its gross liabilities for unrecognized tax benefits may decrease by approximately $345 within the next 12 months due to audit settlements and expiration of statute of limitations. The Company had accrued $786 for interest and penalties relating to uncertain tax positions at December 31, 2017 all of which was included in income taxes payable as a component of Accrual expenses and other liabilities in the consolidated balance sheet. The Company recorded a benefit of $149 for interest and penalty expenses related to uncertain tax positions, which was included in provision for income taxes, for the year ended December 31, 2017. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
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 year. 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 year. Basic common shares outstanding exclude 453,365 common shares that are held in escrow and subject to forfeiture. The common shares held in escrow includes 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 Alternative Asset Management Acquisition Corp. in 2009 and 387,365 common shares that are subject to forfeitures upon the final settlement of claims as more fully described in the related escrow instructions. Dilutive common shares outstanding include contingently issuable shares that are currently in escrow and subject to release if the conditions for the final settlement of claims in accordance with the escrow instructions were satisfied at the end of the respective years. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share for the years ended December 31, 2017, 2016 and 2015 were 709,358, 384,825 and 308,699, respectively, because to do so would have been anti-dilutive. Basic and diluted earnings from continuing operations calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Net income attributable to B. Riley Financial, Inc. $ 11,556 $ 21,526 $ 11,805 Weighted average shares outstanding: Basic 23,181,388 18,106,621 16,221,040 Effect of dilutive potential common shares: Restricted stock units and non-vested shares 901,397 198,852 — Contingently issuable shares 208,119 86,379 44,875 Diluted 24,290,904 18,391,852 16,265,915 Basic income per share $ 0.50 $ 1.19 $ 0.73 Diluted income per share $ 0.48 $ 1.17 $ 0.73 |
LIMITED LIABILITY COMPANY SUBSI
LIMITED LIABILITY COMPANY SUBSIDIARIES | 12 Months Ended |
Dec. 31, 2017 | |
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 certain 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 sheets. 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 income. In accordance with the operating agreement of one of the Company’s limited liability Company’s, a repurchase event occurred in the second quarter of 2017 for one of the Members which resulted in the repurchase on the Members minority ownership interest. The triggering event resulted in a fair value adjustment and purchase of the Members minority interest in the amount of $7,850. The Company also received proceeds of $6,000 from key man life insurance in connection with this event. During the year ended December 31, 2017, the change in fair value of the mandatorily redeemable noncontrolling interests was $9,000, which was comprised of a fair value adjustments of $1,150 and $7,850 from the triggering event previously discussed above. During the year ended December 31, 2016, the change in fair value of the mandatorily redeemable noncontrolling interests was $800. There was no change in the fair value of the mandatorily redeemable noncontrolling interests during the year ended December 31, 2015. The noncontrolling interests share of net income was $1,799, $2,232 and $2,207 for the years ended December 31, 2017, 2016 and 2015, respectively. |
SHARE BASED PAYMENTS
SHARE BASED PAYMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE BASED PAYMENTS | NOTE 16—SHARE BASED PAYMENTS (a) Amended and Restated 2009 Stock Incentive Plan During the years ended December 31, 2017, 2016 and 2015, the Company granted restricted stock units representing 486,049, 544,605 and 527,372 shares of common stock with a total fair value of $7,732, $5,301 and $5,261 to certain employees and directors of the Company under the Company’s Amended and Restated 2009 Stock Incentive Plan (the “Plan”). Share-based compensation expense for such restricted stock units was $4,994, $2,768 and $2,043 for the years ended December 31, 2017, 2016 and 2015, respectively. The total income tax benefit recognized related to the vesting of restricted stock units was $1,249, $1,141 and $804 for the years ended December 31, 2017, 2016 and 2015, respectively. 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, 2017, the expected remaining unrecognized share-based compensation expense of $7,901 will be expensed over a weighted average period of 2.1 years. A summary of equity incentive award activity under the Plan for the years ended December 31, 2017, 2016, and 2015 was as follows: Shares Weighted Average Fair Value Nonvested at January 1, 2015 5,859 $ 7.68 Granted 527,372 9.98 Vested (196,414 ) 9.92 Forfeited (14,086 ) 9.98 Nonvested at December 31, 2015 322,731 $ 9.97 Granted 544,605 9.73 Vested (173,147 ) 10.13 Forfeited (14,054 ) 9.84 Nonvested at December 31, 2016 680,135 $ 9.74 Granted 486,049 15.91 Vested (344,196 ) 10.05 Forfeited (29,724 ) 10.49 Nonvested at December 31, 2017 792,264 $ 13.30 The per-share weighted average grant-date fair value of restricted stock units was $15.91, $9.73 and $9.98 for the years ending December 31, 2017, 2016 and 2015, respectively. The total fair value of shares vested during the years ended December 31, 2017, 2016 and 2015 was $3,459, $1,755 and $1,949, respectively. (b) Amended and Restated FBR & Co. 2006 Long-Term Stock Incentive Plan In connection with the acquisition of FBR on June 1, 2017, the equity awards previously granted or available for issuance under the FBR & Co. 2006 Long-Term Stock Incentive Plan (the “FBR Stock Plan”) may be issued under the Plan. During the year ended December 31, 2017, the Company granted restricted stock units representing 871,317 shares of common stock with a total grant date fair value of $14,577. Share-based compensation expense was $2,956 for such restricted stock units for the year ended December 31, 2017. In connection with the restructuring discussed in Note 4, the Company recorded additional share-based compensation expense of $2,391 related to the accelerated vesting of restricted stock awards. Of the $2,391, $884 related to former corporate executives of FBR and $1,507 related to employees in the Capital Markets segment. The total income tax benefit recognized related to the vesting of restricted stock units was $1,376 for the year ended December 31, 2017. 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, 2017, the expected remaining unrecognized share-based compensation expense of $11,362 will be expensed over a weighted average period of 2.5 years. A summary of equity incentive award activity for the period from June 1, 2017, the date of the acquisition of FBR, through December 31, 2017 was as follows: Shares Weighted Average Fair Value Nonvested at June 1, 2017, acquisition date of FBR resulting from the exchange of previously existing FBR awards 530,661 $ 14.70 Granted 871,317 16.73 Vested (200,905 ) 15.08 Forfeited (134,940 ) 15.79 Nonvested at December 31, 2017 1,066,133 $ 16.15 The per-share weighted average grant-date fair value of restricted stock units was $16.73 during the year ended December 31, 2017. There were 200,905 restricted stock units with a fair value of $3,030 that vested during the year ended December 31, 2017 under the Plan. |
BENEFIT PLANS AND CAPITAL TRANS
BENEFIT PLANS AND CAPITAL TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Benefit Plans And Capital Transactions | |
BENEFIT PLANS AND CAPITAL TRANSACTIONS | NOTE 17— BENEFIT PLANS AND CAPITAL TRANSACTIONS (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, 2017, the Company has 1,925,178 shares of common stock available for future grants under the Incentive Plan. (b) Employee Benefit Plan The Company maintains qualified defined contribution 401(k) plans, which cover substantially all of its U.S. employees. Under the plans, participants are entitled to make pre-tax contributions up to the annual maximums established by the Internal Revenue Service. The plan documents permit annual discretionary contributions from the Company. Employer contributions in the amount of $565 and $53 were made during the years ended December 31, 2017 and 2016, respectively. (c) Public Offering of Common Stock On May 10, 2016, the Company completed the public offering of 2,420,980 shares of common stock at a price to the public of $9.50 per share. The net proceeds from the offering were $22,759 after deducting underwriting commissions and other offering expenses of $240. (d) Dividends On May 4, 2015, our 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, our 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. On August 4, 2016, our Board of Directors approved a dividend of $0.03 per share, which was paid on or about September 8, 2016 to stockholders of record on August 22, 2016. On November 13, 2016, our Board of Directors approved a regular dividend of $0.08 per share and a special dividend of $0.17 per share, which was paid on or about December 14, 2016 to stockholders of record on November 29, 2016. On February 20, 2017, our Board of Directors approved a regular quarterly dividend of $0.08 per share and a special dividend of $0.18 per share, which were paid on or about March 13, 2017 to stockholders of record on March 6, 2017. On May 10, 2017, our Board of Directors approved a regular quarterly dividend of $0.08 per share and a special dividend of $0.08 per share, which were paid on or about May 31, 2017 to stockholders of record on May 23, 2017. On August 7, 2017, our Board of Directors approved a regular quarterly dividend of $0.08 per share and a special dividend of $0.05 per share, which were paid on or about August 29, 2017 to stockholders of record on August 21, 2017. On November 8, 2017, our Board of Directors approved a regular quarterly dividend of $0.08 per share and a special dividend of $0.04 per share, which were paid on or about November 30, 2017 to stockholders of record on November 22, 2017. On March 7, 2018, our Board of Directors approved a regular quarterly dividend of $0.08 per share and a special dividend of $0.08 per share, which will be paid on or about April 3, 2018 to stockholders of record on March 20, 2018. While it is the Board’s current intention to make regular dividend payments of $0.08 per share each quarter and special dividend payments dependent upon exceptional circumstances from time to time, our Board of Directors may reduce or discontinue the payment of dividends at any time for any reason it deems relevant. The declaration and payment of any future dividends or repurchases of our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors. 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, 2017 | |
Brokers and Dealers [Abstract] | |
NET CAPITAL REQUIREMENTS | NOTE 18— NET CAPITAL REQUIREMENTS B. Riley & Co., LLC (“BRC”), B. Riley FBR, MLV and Wunderlich Securities, Inc. (“WSI”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company’s broker-dealer subsidiaries are subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the subsidiaries to maintain minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As such, they are subject to the minimum net capital requirements promulgated by the SEC. As of December 31, 2017, BRC had net capital of $350, which was $100 in excess of its required net capital of $250 (net capital ratio of 3.50 to 1); B. Riley FBR had net capital of $56,462, which was $54,897 in excess of its required net capital of $1,565 (net capital ratio of 1.02 to 1); and MLV had net capital of $496, which was $396 in excess of its required net capital of $100 (net capital ratio of 1.25 to 1), and WSI had net capital of $4,292, which was $3,653 in excess of its required net capital of $640 (net capital ratio of 1.17 to 1). |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 19— RELATED PARTY TRANSACTIONS At December 31, 2017, amounts due from related parties include $5,585 from GACP I, L.P., $52 from GACP II, L.P. and $52 from CA Global Partners, LLC (“CA Global”) for management fees, incentive fees and other operating expenses. At December 31, 2016, amounts due from related parties include $2,050 from GACP I, L.P. for management fees, incentive fees and other operating expenses and $959 from CA Global Partners, LLC (“CA Global”). The amounts receivable and payable from CA Global are comprised of amounts due to and due from CA Global in connection with certain auctions of wholesale and industrial machinery and equipment that they were managed by CA Global on behalf of GA Global Ptrs. In connection with the offering of $28,750 of Senior Notes as more fully described in Note 11, certain members of management and the Board of Directors of the Company purchased $2,731 or 9.5% of the Senior Notes offered by the Company. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 2017 | |
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 investment banking, corporate finance, restructuring, research, wealth management, sales and trading services to corporate, institutional and high net worth clients. The Company also provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property and valuation and appraisal services to clients with independent appraisals in connection with asset based loans, acquisitions, divestitures and other business needs. As a result of the acquisition of UOL on July 1, 2016, the Company provides consumer services and products over the Internet. The Company’s business is classified into the Capital Markets segment, Auction and Liquidation segment, Valuation and Appraisal segment and Principal Investments - United Online segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. The following is a summary of certain financial data for each of the Company’s reportable segments: Year Ended December 31, 2017 2016 2015 Capital Markets reportable segment: Revenues - Services and fees $ 172,695 $ 39,335 $ 35,183 Interest income - Securities lending 17,028 — — Total revenues 189,723 39,335 35,183 Selling, general, and administrative expenses (150,092 ) (32,695 ) (30,229 ) Restructuring costs (7,855 ) — — Interest expense - Securities lending (12,051 ) — — Depreciation and amortization (3,794 ) (549 ) (519 ) Segment income 15,931 6,091 4,435 Auction and Liquidation reportable segment: Revenues - Services and fees 47,376 61,891 35,633 Revenues - Sale of goods 3 25,855 10,596 Total revenues 47,379 87,746 46,229 Direct cost of services (27,841 ) (17,787 ) (15,489 ) Cost of goods sold (2 ) (14,502 ) (3,072 ) Selling, general, and administrative expenses (8,329 ) (14,331 ) (8,170 ) Depreciation and amortization (21 ) (26 ) (191 ) Segment income 11,186 41,100 19,307 Valuation and Appraisal reportable segment: Revenues - Services and fees 33,331 31,749 31,113 Direct cost of services (14,876 ) (13,983 ) (13,560 ) Selling, general, and administrative expenses (8,561 ) (8,778 ) (9,101 ) Depreciation and amortization (181 ) (107 ) (137 ) Segment income 9,713 8,881 8,315 Principal Investments - United Online segment: Revenues - Services and fees 51,439 31,260 — Revenues - Sale of goods 304 261 — Total revenues 51,743 31,521 — Direct cost of services (12,784 ) (9,087 ) — Cost of goods sold (396 ) (253 ) — Selling, general, and administrative expenses (11,304 ) (5,974 ) — Depreciation and amortization (7,033 ) (3,518 ) — Restructuring costs (723 ) (3,474 ) — Segment income 19,503 9,215 — Consolidated operating income from reportable segments 56,333 65,287 32,057 Corporate and other expenses (including restructuring costs of $3,796, $413 and $1,006 for the years ended December 31, 2017, 2016 and 2015, respectively.) (27,489 ) (16,562 ) (9,975 ) Interest income 420 318 17 Loss from equity investment (437 ) — — Interest expense (8,382 ) (1,996 ) (834 ) Income before income taxes 20,445 47,047 21,265 Provision for income taxes (8,510 ) (14,321 ) (7,688 ) Net income 11,935 32,726 13,577 Net income attributable to noncontrolling interests 379 11,200 1,772 Net income attributable to B. Riley Financial, Inc. $ 11,556 $ 21,526 $ 11,805 The following table presents revenues by geographical area: Year Ended December 31, 2017 2016 2015 Revenues: Revenues - Services and fees: North America $ 301,881 $ 135,428 $ 77,153 Australia 940 26,487 — Europe 2,020 2,320 24,776 Total Revenues - Services and fees $ 304,841 $ 164,235 $ 101,929 Revenues - Sale of goods North America $ 307 $ 323 $ 907 Europe — 25,793 9,689 Total Revenues - Sale of goods $ 307 $ 26,116 $ 10,596 Revenues - Interest income - Securities lending: North America $ 17,028 $ — $ — Total Revenues: North America $ 319,216 $ 135,751 $ 78,060 Australia 940 26,487 — Europe 2,020 28,113 34,465 Total Revenues $ 322,176 $ 190,351 $ 112,525 The following table presents long-lived assets, which consists of property and equipment, net, by geographical area: As of As of December 31, December 31, 2017 2016 Long-lived Assets - Property and Equipment, net: North America $ 11,977 $ 5,785 Australia — — Europe — — Total $ 11,977 $ 5,785 Segment assets are not reported to, or used by, the Company’s Chief Operating Decision Maker to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed. |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2017 2017 2017 Total revenues $ 52,897 $ 66,676 $ 92,426 $ 110,177 Operating income $ 10,711 $ 2,560 $ 1,356 $ 14,217 Income (loss) before income taxes $ 10,052 $ 816 $ (1,235 ) $ 10,812 Benefit from (provision for) income taxes $ 3,849 $ 2,547 $ 1,357 $ (16,263 ) Net income (loss) $ 13,901 $ 3,363 $ 122 $ (5,451 ) Net income (loss) attributable to B. Riley Financial, Inc. $ 14,021 $ 3,280 $ 368 $ (6,113 ) Earnings (loss) per share: Basic $ 0.73 $ 0.15 $ 0.01 $ (0.23 ) Diluted $ 0.71 $ 0.15 $ 0.01 $ (0.23 ) Weighted average shares outstanding: Basic 19,181,749 21,216,829 26,059,490 26,150,502 Diluted 19,626,574 22,119,055 27,639,862 26,150,502 Quarter Ended March 31, June 30, September 30, December 31, 2016 2016 2016 2016 Total revenues $ 19,946 $ 20,261 $ 56,966 $ 93,178 Operating income $ 1,665 $ 180 $ 15,422 $ 31,458 Income (loss) before income taxes $ 1,536 $ (92 ) $ 14,457 $ 31,146 (Provision for) benefit from income taxes $ (166 ) $ 65 $ (6,083 ) $ (8,137 ) Net income (loss) $ 1,370 $ (27 ) $ 8,374 $ 23,009 Net income (loss) attributable to B. Riley Financial, Inc. $ 248 $ (101 ) $ 8,939 $ 12,440 Earnings (loss) per share: Basic $ 0.02 $ (0.01 ) $ 0.47 $ 0.65 Diluted $ 0.01 $ (0.01 ) $ 0.47 $ 0.64 Weighted average shares outstanding: Basic 16,490,178 17,935,254 18,977,072 19,004,548 Diluted 16,553,953 17,935,254 19,208,527 19,511,292 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | 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 (a) Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations, and (b) GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership of a 50% partnership interest, appointment of executive officers and significant influence over the operations. All intercompany accounts and transactions have been eliminated upon consolidation. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. 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 | (b) Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of American (“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, 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. |
Revenue Recognition | (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, restructuring and wealth management services; (ii) revenues from sales and trading activities; and (iii) interest income from securities lending 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. Fees 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 include (i) commissions resulting from equity securities transactions executed as agent or principal and are recorded on a trade date basis; (ii) related net trading gains and losses from market making activities and from the commitment of capital to facilitate customer orders; (iii) fees paid for equity research; and (iv) principal transactions which include realized and unrealized gains and losses and interest and dividend income resulting from our principal investments in equity and other securities for the Company’s account. Revenues from securities lending activities consist of interest income from equity and fixed income securities that are borrowed from one party and loaned to another. The Company maintains relationships with a broad group of banks and broker-dealers to facilitate the sourcing, borrowing and lending of equity and fixed income securities in a “matched book” to limit the Company’s exposure to fluctuations in the market value or securities borrowed and securities loaned. 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. 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. Revenues earned from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation are recognized based on proceeds received. The Company records proceeds received from these types of engagements first as a reduction of contractual reimbursable expenses, second as a recovery of its guarantee and thereafter as revenue, subject to such revenue meeting the criteria of having been fixed or determinable. Contractual reimbursable expenses and amounts advanced to customers for minimum guarantees are initially recorded as advances against customer contracts in the accompanying consolidated balance sheets. If, during the auction or liquidation sale, the Company determines that the proceeds from the sale will not meet the minimum guaranteed recovery value as defined in the auction or liquidation services contract, the Company accrues a loss on the contract in the period that the loss becomes known. The Company also evaluates revenue from auction and liquidation contracts in accordance with the accounting guidance to determine whether to report Auction and Liquidation segment revenue on a gross or net basis. The Company has determined that it acts as an agent in a substantial majority of its auction and liquidation services contracts and therefore reports the auction and liquidation revenues on a net basis. Revenues from the sale of goods are recorded gross and are recognized in the period in which the sale of goods held for sale or auction are completed, title to the property passes to the purchaser and the Company has fulfilled its obligations with respect to the transaction. These revenues are primarily the result of the Company acquiring title to merchandise with the intent of selling the items at auction or for augmenting liquidation sales. For liquidation contracts where we take title to retail goods, our net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, and other promotional allowances and are recorded net of sales or value added tax. Fees earned from 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 in the Principal Investments - United Online segment are primarily comprised of services revenues, which are derived primarily from fees charged to pay accounts; advertising and other revenues; and products revenues, which are derived primarily from the sale of mobile broadband service devices, including the related shipping and handling fees. Service revenues are derived primarily from fees charged to pay accounts and are recognized in the period in which fees are fixed or determinable and the related services are provided to the customer. The Company’s pay accounts generally pay in advance for their services by credit card, PayPal, automated clearinghouse or check, and revenues are then recognized ratably over the service period. Advance payments from pay accounts are recorded in the consolidated balance sheet as deferred revenue. In circumstances where payment is not received in advance, revenues are only recognized if collectability is reasonably assured. Advertising revenues consist primarily of amounts from the Company’s Internet search partner that are generated as a result of users utilizing the partner’s Internet search services and amounts generated from display advertisements. The Company recognizes such advertising revenues in the period in which the advertisement is displayed or, for performance-based arrangements, when the related performance criteria are met. In determining whether an arrangement exists, the Company ensures that a written contract is in place, such as a standard insertion order or a customer-specific agreement. The Company assesses whether performance criteria have been met and whether the fees are fixed or determinable based on a reconciliation of the performance criteria and the payment terms associated with the transaction. The reconciliation of the performance criteria generally includes a comparison of customer-provided performance data to the contractual performance obligation and to internal or third-party performance data in circumstances where that data is available. 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, 2017, 2016 and 2015. |
Direct Cost of Services | (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 in the Principal Investments - United Online segment include cost of telecommunications and data center costs, personnel and overhead-related costs associated with operating the Company’s networks and data centers, depreciation of network computers and equipment, third party advertising sales commissions, license fees, costs related to providing customer support, costs related to customer billing and processing of customer credit cards and associated bank fees. Direct cost of services does not include an allocation of the Company’s overhead costs. |
Interest Expense - Securities Lending Activities | (e) Interest Expense - Securities Lending Activities Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company. |
Concentration of Risk | (f) Concentration of Risk Revenues from one liquidation service contract to a retailer represented 13.5% of total revenues during the year ended December 31, 2016. Revenues in the Capital Markets, Auction and Liquidation, Valuation and Appraisal and Principal Investments - United Online segment are primarily generated in the United States, Australia, Canada 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 Expense | (g) Advertising Expense The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $1,312, $1,456 and $519 for the years ended December 31, 2017, 2016 and 2015, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying consolidated statements of income. |
Share-Based Compensation | (h) 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. |
Income Taxes | (i) 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. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, provides an exemption from U.S. federal tax for dividends received from foreign subsidiaries, and creates new taxes on certain foreign sourced earnings. As of the completion of these financial statements and related disclosures, we have not completed our accounting for the tax effects of the Tax Act; however, as described below, we have made a reasonable estimate of such effects and recorded a provisional tax expense of $13,052, which is included as a component of income tax expense in the fourth quarter of 2017. This provisional tax expense incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as we receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense from continuing operations in the reporting period in which any such adjustments are determined. See Note 13 for additional information. |
Cash and Cash Equivalents | (j) Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Restricted Cash | (k) Restricted Cash As of December 31, 2017, restricted cash of $19,711 included $19,197 of cash collateral related to certain retail liquidation engagements and $514 cash segregated in a special bank accounts for the benefit of customers related to our broker dealer subsidiary and collateral for one of our telecommunication suppliers. As of December 31, 2016, restricted cash of $3,294 included $1,440 of cash collateral related to a retail liquidation engagement in Australia, $1,320 of cash collateral for foreign exchange contracts and $534 cash segregated in a special bank accounts for the benefit of customers related to our broker dealer subsidiary and collateral for one of our telecommunication suppliers. |
Securities Borrowed and Securities Loaned | (l) Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The Company accounts for securities lending transactions in accordance with Accounting Standards Codification (“ASC”) “Topic 210: Balance Sheet,” |
Due from/to Brokers, Dealers, and Clearing Organizations | (m) Due from/to Brokers, Dealers, and Clearing Organizations The Company clears all of its proprietary and customer transactions through other broker-dealers on a fully disclosed basis. The amount receivable from or payable to the clearing brokers represents the net of proceeds from unsettled securities sold, the Company’s clearing deposit and amounts receivable for commissions less amounts payable for unsettled securities purchased by the Company and amounts payable for clearing costs and other settlement charges. This amount also includes the cash collateral received for securities loaned less cash collateral for securities borrowed. Any amounts payable would be fully collateralized by all of the securities owned by the Company and held on deposit at the clearing broker. |
Accounts Receivable | (n) Accounts Receivable Accounts receivable represents amounts due from the Company’s auction and liquidation, valuation and appraisal, capital markets and principal investments - United Online 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 $1,066, $710 and $718 for the years ended December 31, 2017, 2016 and 2015, 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 | (o) 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. |
Property and Equipment | (p) Property and Equipment |
Securities Owned and Securities Sold Not Yet Purchased | (q) 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, 2017 and 2016, the Company’s securities owned and securities sold not yet purchased at fair value consisted of the following: December 31, December 31, Securities and other investments owned: Common stocks and warrants $ 67,306 $ 2,084 Corporate bonds 6,539 1,025 Fixed income securities 2,329 — Loans receivable 33,713 — Partnership interests and other 35,473 13,470 $ 145,360 $ 16,579 Securities sold not yet purchased: Common stocks $ 19,145 $ — Corporate bonds 1,175 846 Fixed income securities 699 — Partnership interests and other 7,272 — $ 28,291 $ 846 |
Goodwill and Other Intangible Assets | (r) 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 the excess of the purchase price over the fair value of net assets acquired in a business combination. 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 four 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. Based on the Company’s qualitative assessments during 2017, 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, 2017. |
Fair Value Measurements | (s) Fair Value Measurements The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, loans receivable and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company’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 Company also invests in certain proprietary investment funds that are valued at net asset value (“NAV”) determined by the fund administrator. The underlying securities held by these investment companies are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. As a practical expedient, the Company relies on the NAV of these investments as their fair value. The NAVs that have been provided by the fund administrators are derived from the fair values of the underlying investments as of the reporting date. In accordance with ASC “Topic 820: Fair Value Measurements,” The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2017 and 2016. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2017, Using Fair value at December 31, 2017 Quoted prices active markets identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities and other investments owned: Common stocks and warrants $ 67,306 $ 38,960 $ — $ 28,346 Corporate bonds 6,539 — 6,539 — Fixed income securities 2,329 — 2,329 — Loans receivable 33,713 — — 33,713 Partnership interests and other 31,883 686 5,093 26,104 Total assets measured at fair value $ 141,770 $ 39,646 $ 13,961 $ 88,163 Liabilities: Securities sold not yet purchased: Common stocks $ 19,145 $ 19,145 $ — $ — Corporate bonds 1,175 — 1,175 Fixed income securities 699 — 699 — Partnership interests and other 7,272 7,272 — — Total securities sold not yet purchased 28,291 26,417 1,874 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,478 — — 4,478 Total liabilities measured at fair value $ 32,769 $ 26,417 $ 1,874 $ 4,478 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2016, Using Fair value at December 31, 2016 Quoted prices active markets identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities and other investments owned: Common stocks $ 2,084 $ 1,785 $ — $ 299 Corporate bonds 1,025 — 865 160 Partnership interests 13,470 — 44 13,426 Total assets measured at fair value $ 16,579 $ 1,785 $ 909 $ 13,885 Liabilities: Securities sold not yet purchased: Corporate bonds $ 846 $ — $ 846 $ — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 3,214 — — 3,214 Contingent consideration 1,242 — — 1,242 Total liabilities measured at fair value $ 5,302 $ — $ 846 $ 4,456 As of December 31, 2017, securities and other investments owned included $3,590 of investment funds valued at NAV per share as a practical expedient. As such, total securities and other investments owned of $145,360 in the consolidated balance sheets at December 31, 2017 included investments in investment funds of $3,590 and securities and other investments owned in the amount of $141,770 as outlined in the fair value table above. As of December 31, 2017 and December 31, 2016, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $88,163 and $13,885, respectively, or 6.4% and 5.2%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The changes in Level 3 fair value hierarchy during the year ended December 31, 2017 and 2016 is as follows: Level 3 Level 3 Changes During the Year Balance at Beginning of Year Fair Value Adjustments Relating to Undistribute Earnings Purchases, Sales and Settlements Transfer in and/or out of Level 3 Level 3 Balance at End of Year Year Ended December 31, 2017 Common stocks and warrants $ 299 $ 3,028 $ 3,419 $ 21,600 $ — $ 28,346 Corporate bonds 160 — — — (160 ) — Loans receivable — 1,447 — 32,266 — 33,713 Partnership interests and other 13,426 3,465 — 9,213 — 26,104 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 3,214 9,000 (8,542 ) — 806 4,478 Contingent consideration 1,242 8 — (1,250 ) — — Year Ended December 31, 2016 Common stocks $ 290 $ — $ — $ 9 $ — $ 299 Corporate bonds — — — 160 — 160 Partnership interests 1,766 2,294 1,366 8,000 — 13,426 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 2,330 800 84 — — 3,214 Contingent consideration 2,391 101 — (1,250 ) — 1,242 The fair value adjustment for contingent consideration of $8 and $101 represents imputed interest for the years ended December 31, 2017 and 2016, respectively. The Company had a triggering event in 2017 for the mandatorily redeemable noncontrolling interests that resulted in a fair value adjustment of $7,850 of the total fair value adjustment of $9,000 for the year ended December 31, 2017. In connection with this event, the Company received proceeds of $6,000 from key man life insurance. These amounts have been recorded in the consolidated statements of income in Selling, general and administrative expenses in the corporate segment. The amount reported in the table above also for the years ended December 31, 2017 and 2016 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the consolidated financial statements for cash, restricted cash, accounts receivable, accounts payable, accrued payroll and related, accrued value added tax, income taxes payable and accrued expenses and other current liabilities approximate fair value based on the short-term maturity of these instruments. The carrying amount of the senior notes payable approximates 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. During the years ended December 31, 2017, 2016 and 2015, there were no assets or liabilities measured at fair value on a non-recurring basis. |
Derivative and Foreign Currency Translation | (t) 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 the year ended December 31, 2017, the Company’s use of derivative consisted of the purchase of forward exchange contracts (a) in the amount of $8,000 Australian dollars that was settled on March 31, 2017; (b) in the amount of $27,100 Canadian dollars, of which $20,703 remained open at December 31, 2017 and will settle in 2018, and (b) $1,500 Euro’s that will settle in 2018. During the year ended December 31, 2016, the Company’s use of derivatives consisted of the purchase of forward exchange contracts (a) in the amount of $10,200 Canadian dollars that was settled at various periods prior to August 31, 2016, (b) 5,600 Euro’s that was settled on December 30, 2016 and (c) $20,000 Australian dollars that was settled on December 30, 2016 and another $25,000 Australian dollars that was settled on January 31, 2017. The forward exchange contract was entered into to improve the predictability of cash flows related to a retail store liquidation engagement that was completed in December 2016. The net gain from forward exchange contracts was $31 and $13 during the years ended December 31, 2017 and 2015, respectively. The net loss from forward exchange contracts was $117 during the years ended December 31, 2016. This amount is reported as a component of Selling, general and administrative expenses in the consolidated statements of income. 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 $786, $848 and $271 during the years ended December 31, 2017, 2016 and 2015, respectively. These amounts are included in selling, general and administrative expenses in our consolidated statements of income. |
Common Stock Warrants | (u) Common Stock Warrants The Company issued 821,816 warrants to purchase common stock of the Company in connection with the acquisition of Wunderlich on July 3, 2017. The common stock warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at a price of $17.50 per share (the “Exercise Price”), subject to, among other matters, the proper completion of an exercise notice and payment. The Exercise Price and the number of shares of Company common stock issuable upon exercise are subject to customary anti-dilution and adjustment provisions, which include stock splits, subdivisions or reclassifications of the Company’s common stock. The common stock warrants expire on July 3, 2022. |
Recent Accounting Pronouncements | (v) Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2016-02: Leases (Topic 842) (“ASU 2016-02"). In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2016, the FASB issued ASU 2016-15, S tatement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company has elected to apply the modified retrospective method and the impact was determined to be immaterial on the consolidated financial statements. Accordingly, the new revenue standard will be applied prospectively in our consolidated financial statements from January 1, 2018 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods. The Company has performed an analysis and identified its revenues and costs that are within the scope of the new guidance. The Company anticipates that its current methods of recognizing revenues will not be significantly impacted by the new guidance. In addition, there may be certain situations where advisory fees are deferred and not recognized, dependent upon performance obligations and other situations that will result in the acceleration of the recognition of revenue on retail liquidation engagements that contain performance-based arrangements if certain predefined outcomes occur. The scope of the accounting update does not apply to revenue associated with financial instruments, and as a result, will not have an impact on the elements of our consolidated statements of operations most closely associated with our secured lending business and proprietary trading income which includes interest income, proprietary trading income and interest expense. The adoption of the accounting update will not have a material impact on the Company’s consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of securities owned and securities sold not yet purchased at fair value | As of December 31, 2017 and 2016, the Company’s securities owned and securities sold not yet purchased at fair value consisted of the following: December 31, December 31, Securities and other investments owned: Common stocks and warrants $ 67,306 $ 2,084 Corporate bonds 6,539 1,025 Fixed income securities 2,329 — Loans receivable 33,713 — Partnership interests and other 35,473 13,470 $ 145,360 $ 16,579 Securities sold not yet purchased: Common stocks $ 19,145 $ — Corporate bonds 1,175 846 Fixed income securities 699 — Partnership interests and other 7,272 — $ 28,291 $ 846 |
Schedule of financial assets and liabilities measured on recurring basis | 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, 2017 and 2016. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2017, Using Fair value at December 31, Quoted prices active markets identical assets (Level 1) Other observable inputs Significant unobservable inputs Assets: Securities and other investments owned: Common stocks and warrants $ 67,306 $ 38,960 $ — $ 28,346 Corporate bonds 6,539 — 6,539 — Fixed income securities 2,329 — 2,329 — Loans receivable 33,713 — — 33,713 Partnership interests and other 31,883 686 5,093 26,104 Total assets measured at fair value $ 141,770 $ 39,646 $ 13,961 $ 88,163 Liabilities: Securities sold not yet purchased: Common stocks $ 19,145 $ 19,145 $ — $ — Corporate bonds 1,175 — 1,175 Fixed income securities 699 — 699 — Partnership interests and other 7,272 7,272 — — Total securities sold not yet purchased 28,291 26,417 1,874 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,478 — — 4,478 Total liabilities measured at fair value $ 32,769 $ 26,417 $ 1,874 $ 4,478 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2016, Using Fair value at Quoted prices active markets identical Other observable Significant unobservable inputs (Level 3) Assets: Securities and other investments owned: Common stocks $ 2,084 $ 1,785 $ — $ 299 Corporate bonds 1,025 — 865 160 Partnership interests 13,470 — 44 13,426 Total assets measured at fair value $ 16,579 $ 1,785 $ 909 $ 13,885 Liabilities: Securities sold not yet purchased: Corporate bonds $ 846 $ — $ 846 $ — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 3,214 — — 3,214 Contingent consideration 1,242 — — 1,242 Total liabilities measured at fair value $ 5,302 $ — $ 846 $ 4,456 |
Schedule of changes in Level 3 fair value hierarchy | The changes in Level 3 fair value hierarchy during the year ended December 31, 2017 and 2016 is as follows: Level 3 Level 3 Changes During the Year Balance at Beginning of Year Fair Value Adjustments Relating to Undistribute Earnings Purchases, Transfer in and/or out of Level 3 Level 3 Year Ended December 31, 2017 Common stocks and warrants $ 299 $ 3,028 $ 3,419 $ 21,600 $ — $ 28,346 Corporate bonds 160 — — — (160 ) — Loans receivable — 1,447 — 32,266 — 33,713 Partnership interests and other 13,426 3,465 — 9,213 — 26,104 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 3,214 9,000 (8,542 ) — 806 4,478 Contingent consideration 1,242 8 — (1,250 ) — — Year Ended December 31, 2016 Common stocks $ 290 $ — $ — $ 9 $ — $ 299 Corporate bonds — — — 160 — 160 Partnership interests 1,766 2,294 1,366 8,000 — 13,426 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 2,330 800 84 — — 3,214 Contingent consideration 2,391 101 — (1,250 ) — 1,242 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of pro forma financial information | 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 December 31, 2017 2016 Revenues $ 430,723 $ 464,587 Net income attributable to B. Riley Financial, Inc. $ 5,672 $ 1,754 Basic earnings per share $ 0.22 $ 0.07 Diluted earnings per share $ 0.21 $ 0.07 Weighted average basic shares outstanding 26,150,502 24,972,700 Weighted average diluted shares outstanding 27,268,888 25,257,931 |
Delaware corporation ("Wunderlich") [Member] | |
Schedule of accquisition consideration | The preliminary purchase price allocation was as follows: Consideration paid by B. Riley: Cash paid $ 29,737 Fair value of 1,974,812 B. Riley common shares issued 31,495 Fair value of 821,816 B. Riley common stock warrants issued 3,886 Total consideration $ 65,118 Tangible assets acquired and assumed: Cash and cash equivalents $ 4,259 Securities owned 1,413 Accounts receivable 3,193 Due from clearing broker 15,133 Prepaid expenses and other assets 10,103 Property and equipment 2,315 Deferred taxes 7,568 Accounts payable (1,718 ) Accrued payroll and related expenses (6,387 ) Accrued expenses and other liabilities (9,773 ) Securities sold, not yet purchased (1,707 ) Notes payable (10,579 ) Customer relationships 15,320 Trademarks 1,340 Goodwill 34,638 Total $ 65,118 |
FBR & Co. ("FBR") [Member] | |
Schedule of accquisition consideration | The preliminary purchase price allocation was as follows: Consideration paid by B. Riley: Number of FBR Common Shares outstanding at June 1, 2017 7,099,511 Stock merger exchange ratio 0.671 Number of B. Riley common shares 4,763,772 Number of B. Riley common shares to be issued from acceleration of vesting for outstanding FBR stock options, restricted stock and RSU awards 67,861 Total number of B. Riley common shares to be issued 4,831,633 Closing market price of B. Riley common shares on December 31, 2016 $ 14.70 Total value of B. Riley common shares 71,025 Fair value of RSU’s attributable to service period prior to June 1, 2017 (a) 2,446 Total consideration $ 73,471 (a) Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the FBR Merger Agreement with the right to receive 0.671 shares of the Company’s common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company’s common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. The preliminary assets acquired and assumed was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 15,738 Securities owned 11,188 Securities borrowed 861,197 Accounts receivable 4,341 Due from clearing broker 29,169 Prepaid expenses and other assets 5,486 Property and equipment 8,663 Deferred taxes 17,706 Accounts payable (1,524 ) Accrued payroll and related expenses (7,182 ) Accrued expenses and other liabilities (22,411 ) Securities loaned (867,626 ) Customer relationships 5,600 Tradename and other intangibles 1,790 Goodwill 11,336 Total $ 73,471 |
United Online Inc [Member] | |
Schedule of accquisition consideration | The preliminary purchase price allocation was as follows: Total consideration $ 169,354 Tangible assets acquired and assumed: Cash and cash equivalents $ 125,542 Restricted cash 482 Accounts receivables 3,850 Inventory 624 Property and equipment 5,536 Prepaid expenses and other assets 5,876 Accounts payable (4,874 ) Accrued expenses and other liabilities (8,886 ) Deferred revenue (2,900 ) Deferred tax liabilities (6,824 ) Other liabilities (3,180 ) Customer relationships 33,700 Advertising relationships 100 Trade name and trademarks 1,100 Domain names 1,500 Internally developed software 3,333 Goodwill 14,375 $ 169,354 |
MK Capital Advisors, LLC [Member] | |
Schedule of accquisition consideration | 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 |
RESTRUCTURING CHARGE (Tables)
RESTRUCTURING CHARGE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring Charge Tables | |
Schedule of changes in accrued restructuring charge | The following table summarizes the changes in accrued restructuring charge during years ended December 31, 2017 and 2016: Accrued restructuring charge at December 31, 2015 $ 187 Restructuring charge 3,887 Cash paid (3,380 ) Non-cash items — Accrued restructuring charge at December 31, 2016 694 Restructuring charge 12,374 Cash paid (5,957 ) Non-cash items (4,511 ) Accrued restructuring charge at December 31, 2017 $ 2,600 |
Schedule of restructuring activities by reportable segment | The following tables summarize the restructuring activities by reportable segment during the years ended December 31, 2017 and 2016: Year Ended December 31, 2017 2016 Capital Principal Corporate Total Capital Principal Corporate Total Restructuring charge: Employee termination costs $ 4,951 $ 723 $ 3,284 $ 8,958 $ — $ 3,474 $ — $ 3,474 Facility closure and consolidation charge 2,904 — 512 3,416 — — 413 413 Total restructuring charge $ 7,855 $ 723 $ 3,796 $ 12,374 $ — $ 3,474 $ 413 $ 3,887 |
SECURITIES LENDING (Tables)
SECURITIES LENDING (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Securities Lending Tables | |
Schedule of contractual gross and net securities borrowing and lending balances | The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of December 31, 2017: Amounts not offset in the consolidated balance Gross amounts Net amounts sheets but eligible offset in the included in the for offsetting Gross amounts consolidated consolidated upon counterparty recognized balance sheets (1) balance sheets default (2) Net amounts As of December 31, 2017 Securities borrowed $ 807,089 $ — $ 807,089 $ 807,089 $ — Securities loaned $ 803,371 $ — $ 803,371 $ 803,371 $ — (1) Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. (2) Includes the amount of cash collateral held/posted. |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of components of accounts receivable | The components of accounts receivable net include the following: December 31, December 31, 2017 2016 Accounts receivable $ 15,593 $ 16,610 Investment banking fees, commissions and other receivables 4,199 576 Unbilled receivables 1,023 2,058 Total accounts receivable 20,815 19,244 Allowance for doubtful accounts (800 ) (255 ) Accounts receivable, net $ 20,015 $ 18,989 |
Schedule of allowance for doubtful accounts | Additions and changes to the allowance for doubtful accounts consist of the following: Year Ended December 31, 2017 2016 2015 Balance, beginning of year $ 255 $ 89 $ 728 Add: Additions to reserve 1,066 710 718 Less: Write-offs (311 ) (194 ) (1,056 ) Less: Recoveries (210 ) (350 ) (301 ) Balance, end of year $ 800 $ 255 $ 89 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property And Equipment Tables | |
Schedule of property and equipment | Property and equipment, net, consists of the following: Estimated December 31, Useful Lives 2017 2016 Leasehold improvements Shorter of the remaining lease term or estimated useful life $ 7,834 $ 2,325 Machinery, equipment and computer software 3 to 5 years 9,474 6,559 Furniture and fixtures 5 years 2,688 1,921 Total 19,996 10,805 Less: Accumulated depreciation and amortization (8,019 ) (5,020 ) $ 11,977 $ 5,785 |
GOODWILL AND OTHER INTANGIBLE37
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 were as follows: Principal Capital Auction and Valuation and Investments- Markets Liquidation Appraisal United Online Segment Segment Segment Segment Total Balance as of December 31, 2015 $ 28,840 $ 1,975 $ 3,713 $ — $ 34,528 Goodwill acquired during the period: — — — 14,375 14,375 United Online on July 1, 2016 Balance as of December 31, 2016 28,840 1,975 3,713 14,375 48,903 Goodwill acquired during the period: Dialectic on April 13, 2017 2,542 — — — 2,542 FBR on June 1, 2017 11,336 — — — 11,336 Resolution of acquisition related legal matter on June 30, 2017 — — — 1,352 1,352 Wunderlich on July 3, 2017 34,638 — — — 34,638 Balance as of December 31, 2017 $ 77,356 $ 1,975 $ 3,713 $ 15,727 $ 98,771 |
Schedule of intangible assets | Intangible assets consisted of the following: December 31, 2017 December 31, 2016 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 4 to 16 Years $ 58,330 $ 9,100 $ 49,230 $ 37,300 $ 3,100 $ 34,200 Domain names 7 Years 287 61 226 1,419 101 1,318 Advertising relationships 8 Years 100 19 81 100 6 94 Internally developed software and other intangibles 0.5 to 4 Years 3,373 1,445 1,928 3,333 550 2,783 Trademarks 7 to 8 Years 4,190 447 3,743 1,100 69 1,031 Total 66,280 11,072 55,208 43,252 3,826 39,426 Non-amortizable assets: Tradenames 1,740 — 1,740 1,740 — 1,740 Total intangible assets $ 68,020 $ 11,072 $ 56,948 $ 44,992 $ 3,826 $ 41,166 |
LEASING ARRANGEMENTS (Tables)
LEASING ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leasing Arrangements Tables | |
Schedule of future minimum lease payments under noncancellable operating leases | The Company has several noncancellable operating leases that expire at various dates through 2031. Future minimum lease payments under noncancellable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2017 were: Operating Leases Year Ending December 31: 2018 $ 13,496 2019 9,640 2020 6,984 2021 5,589 2022 5,024 Thereafter 16,369 Total minimum lease payments $ 57,102 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable Tables | |
Schedule of senior notes payable | Senior notes payable, net, is comprised of the following as of December 31, 2017 and 2016: December 31, 2017 2016 7.50% Senior notes due October 31, 2021 $ 35,231 $ 28,750 7.50% Senior notes due May 31, 2027 92,490 — 7.25% Senior notes due December 31, 2027 80,500 — 208,221 28,750 Less: Unamortized debt issue costs (4,600 ) (1,050 $ 203,621 $ 27,700 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes Tables | |
Schedule of provision (benefit) for income taxes | The Company’s provision for income taxes consists of the following for the years ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 Current: Federal $ 3,804 $ 5,530 $ 201 State 1,019 1,114 99 Foreign (975 ) 4,063 779 Total current provision 3,848 10,707 1,079 Deferred: Federal 6,889 3,015 5,166 State (1,937 ) 610 1,443 Foreign (290 ) (11 ) — Total deferred 4,662 3,614 6,609 Total provision for income taxes $ 8,510 $ 14,321 $ 7,688 |
Schedule of reconciliation effective tax rate for income (loss) before income taxes | A reconciliation of the federal statutory rate of 35% to the effective tax rate for income before income taxes is as follows for the year ended December 31, 2017, 2016 and 2015: Year Ended December 31, 2017 2016 2015 Provision for income taxes at federal statutory rate 35.0 % 35.0 % 34.0 % State income taxes, net of federal benefit 5.0 2.8 4.0 Transaction expenses 2.0 — — Noncontrolling interest tax differential (6.6 ) (6.2 ) — Key man life insurance (7.9 ) — — Employee stock based compensation (8.7 ) — — Internal Revenue Service Section 338(g) - Treatment of acquisition of UOL as a taxable business combination (44.6 ) — — U.S. Tax Cuts and Jobs Act 63.8 — — Other 3.6 (1.2 ) (1.8 ) Effective income tax rate 41.6 % 30.4 % 36.2 % |
Schedule of deferred income tax assets (liabilities) | Deferred income tax assets (liabilities) consisted of the following as of December 31, 2017 and 2016: December 31, 2017 2016 Deferred tax assets: Deductible goodwill and other intangibles $ 4,019 $ — Accrued liabilities and other 3,549 2,459 Deferred revenue 54 335 Mandatorily redeemable noncontrolling interests 1,109 1,173 Other 312 379 State taxes — 994 Share based payments 2,117 443 Foreign tax and other tax credit carryforwards 290 1,855 Capital loss carryforward 2,582 3,600 Net operating loss carryforward 17,900 7,711 Total deferred tax assets 31,932 18,949 Deferred tax liabilities: State taxes (46 ) — Depreciation (73 ) (1,291 ) Goodwill and other intangibles — (4,139 ) Total deferred tax liabilities (119 ) (5,430 ) Net deferred tax assets 31,813 13,519 Valuation allowance (2,582 ) (4,900 ) Net deferred tax assets $ 29,231 $ 8,619 |
Schedule of reconciliation of the amounts of gross unrecognized tax benefits | A reconciliation of the amounts of gross unrecognized tax benefits (before federal impact of state items), excluding interest and penalties, was as follows (in thousands): Year Ended December 31, 2017 Beginning balance Addition as a result of the acquisition of UOL $ 1,255 Additions for current year tax positions — Additions for Prior year tax positions 34 Reductions for Prior year tax positions — Reductions due to lapse in statutes of limitations (149 ) Ending balance $ 1,140 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Basic and diluted earnings from continuing operations calculated as follows (in thousands, except per share amounts): Year Ended December 31, 2017 2016 2015 Net income attributable to B. Riley Financial, Inc. $ 11,556 $ 21,526 $ 11,805 Weighted average shares outstanding: Basic 23,181,388 18,106,621 16,221,040 Effect of dilutive potential common shares: Restricted stock units and non-vested shares 901,397 198,852 — Contingently issuable shares 208,119 86,379 44,875 Diluted 24,290,904 18,391,852 16,265,915 Basic income per share $ 0.50 $ 1.19 $ 0.73 Diluted income per share $ 0.48 $ 1.17 $ 0.73 |
SHARE BASED PAYMENTS (Tables)
SHARE BASED PAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Amended and Restated 2009 Stock Incentive Plan [Member] | |
Schedule of equity incentive award activity | A summary of equity incentive award activity under the Plan for the years ended December 31, 2017, 2016, and 2015 was as follows: Shares Weighted Average Fair Value Nonvested at January 1, 2015 5,859 $ 7.68 Granted 527,372 9.98 Vested (196,414 ) 9.92 Forfeited (14,086 ) 9.98 Nonvested at December 31, 2015 322,731 $ 9.97 Granted 544,605 9.73 Vested (173,147 ) 10.13 Forfeited (14,054 ) 9.84 Nonvested at December 31, 2016 680,135 $ 9.74 Granted 486,049 15.91 Vested (344,196 ) 10.05 Forfeited (29,724 ) 10.49 Nonvested at December 31, 2017 792,264 $ 13.30 |
Amended and Restated FBR & Co. 2006 Long-Term Stock Incentive Plan [Member] | |
Schedule of equity incentive award activity | A summary of equity incentive award activity for the period from June 1, 2017, the date of the acquisition of FBR, through December 31, 2017 was as follows: Shares Weighted Average Fair Value Nonvested at June 1, 2017, acquisition date of FBR resulting from the exchange of previously existing FBR awards 530,661 $ 14.70 Granted 871,317 16.73 Vested (200,905 ) 15.08 Forfeited (134,940 ) 15.79 Nonvested at December 31, 2017 1,066,133 $ 16.15 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Segments Tables | |
Schedule of reportable segments | The following is a summary of certain financial data for each of the Company’s reportable segments: Year Ended December 31, 2017 2016 2015 Capital Markets reportable segment Revenues - Services and fees $ 172,695 $ 39,335 $ 35,183 Interest income - Securities lending 17,028 — — Total revenues 189,723 39,335 35,183 Selling, general, and administrative expenses (150,092 ) (32,695 ) (30,229 ) Restructuring costs (7,855 ) — — Interest expense - Securities lending (12,051 ) — — Depreciation and amortization (3,794 ) (549 ) (519 ) Segment income 15,931 6,091 4,435 Auction and Liquidation reportable segment: Revenues - Services and fees 47,376 61,891 35,633 Revenues - Sale of goods 3 25,855 10,596 Total revenues 47,379 87,746 46,229 Direct cost of services (27,841 ) (17,787 ) (15,489 ) Cost of goods sold (2 ) (14,502 ) (3,072 ) Selling, general, and administrative expenses (8,329 ) (14,331 ) (8,170 ) Depreciation and amortization (21 ) (26 ) (191 ) Segment income 11,186 41,100 19,307 Valuation and Appraisal reportable segment: Revenues - Services and fees 33,331 31,749 31,113 Direct cost of services (14,876 ) (13,983 ) (13,560 ) Selling, general, and administrative expenses (8,561 ) (8,778 ) (9,101 ) Depreciation and amortization (181 ) (107 ) (137 ) Segment income 9,713 8,881 8,315 Principal Investments - United Online segment: Revenues - Services and fees 51,439 31,260 — Revenues - Sale of goods 304 261 — Total revenues 51,743 31,521 — Direct cost of services (12,784 ) (9,087 ) — Cost of goods sold (396 ) (253 ) — Selling, general, and administrative expenses (11,304 ) (5,974 ) — Depreciation and amortization (7,033 ) (3,518 ) — Restructuring costs (723 ) (3,474 ) — Segment income 19,503 9,215 — Consolidated operating income from reportable segments 56,333 65,287 32,057 Corporate and other expenses (including restructuring costs of $3,796, $413 and $1,006 for the years ended December 31, 2017, 2016 and 2015, respectively.) (27,489 ) (16,562 ) (9,975 ) Interest income 420 318 17 Loss from equity investment (437 ) — — Interest expense (8,382 ) (1,996 ) (834 ) Income before income taxes 20,445 47,047 21,265 Provision for income taxes (8,510 ) (14,321 ) (7,688 ) Net income 11,935 32,726 13,577 Net income attributable to noncontrolling interests 379 11,200 1,772 Net income attributable to B. Riley Financial, Inc. $ 11,556 $ 21,526 $ 11,805 |
Schedule of revenues by geographical area | The following table presents revenues by geographical area: Year Ended December 31, 2017 2016 2015 Revenues: Revenues - Services and fees: North America $ 301,881 $ 135,428 $ 77,153 Australia 940 26,487 — Europe 2,020 2,320 24,776 Total Revenues - Services and fees $ 304,841 $ 164,235 $ 101,929 Revenues - Sale of goods North America $ 307 $ 323 $ 907 Europe — 25,793 9,689 Total Revenues - Sale of goods $ 307 $ 26,116 $ 10,596 Revenues - Interest income - Securities lending: North America $ 17,028 $ — $ — Total Revenues: North America $ 319,216 $ 135,751 $ 78,060 Australia 940 26,487 — Europe 2,020 28,113 34,465 Total Revenues $ 322,176 $ 190,351 $ 112,525 |
Schedule of long-lived assets of property and equipment and other assets, by geographical area | The following table presents long-lived assets, which consists of property and equipment, net, by geographical area: As of As of December 31, December 31, 2017 2016 Long-lived Assets - Property and Equipment, net: North America $ 11,977 $ 5,785 Australia — — Europe — — Total $ 11,977 $ 5,785 |
SELECTED QUARTERLY FINANCIAL 44
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Selected Quarterly Financial Data Tables | |
Schedule of selected quarterly financial data | Quarter Ended March 31, June 30, September 30, December 31, 2017 2017 2017 2017 Total revenues $ 52,897 $ 66,676 $ 92,426 $ 110,177 Operating income $ 10,711 $ 2,560 $ 1,356 $ 14,217 Income (loss) before income taxes $ 10,052 $ 816 $ (1,235 ) $ 10,812 Benefit from (provision for) income taxes $ 3,849 $ 2,547 $ 1,357 $ (16,263 ) Net income (loss) $ 13,901 $ 3,363 $ 122 $ (5,451 ) Net income (loss) attributable to B. Riley Financial, Inc. $ 14,021 $ 3,280 $ 368 $ (6,113 ) Earnings (loss) per share: Basic $ 0.73 $ 0.15 $ 0.01 $ (0.23 ) Diluted $ 0.71 $ 0.15 $ 0.01 $ (0.23 ) Weighted average shares outstanding: Basic 19,181,749 21,216,829 26,059,490 26,150,502 Diluted 19,626,574 22,119,055 27,639,862 26,150,502 Quarter Ended March 31, June 30, September 30, December 31, 2016 2016 2016 2016 Total revenues $ 19,946 $ 20,261 $ 56,966 $ 93,178 Operating income $ 1,665 $ 180 $ 15,422 $ 31,458 Income (loss) before income taxes $ 1,536 $ (92 ) $ 14,457 $ 31,146 (Provision for) benefit from income taxes $ (166 ) $ 65 $ (6,083 ) $ (8,137 ) Net income (loss) $ 1,370 $ (27 ) $ 8,374 $ 23,009 Net income (loss) attributable to B. Riley Financial, Inc. $ 248 $ (101 ) $ 8,939 $ 12,440 Earnings (loss) per share: Basic $ 0.02 $ (0.01 ) $ 0.47 $ 0.65 Diluted $ 0.01 $ (0.01 ) $ 0.47 $ 0.64 Weighted average shares outstanding: Basic 16,490,178 17,935,254 18,977,072 19,004,548 Diluted 16,553,953 17,935,254 19,208,527 19,511,292 |
ORGANIZATION, BUSINESS OPERAT45
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Nov. 09, 2017USD ($) | Dec. 31, 2017Segment |
Number of operating segment | Segment | 4 | |
MagicJack VocalTec [Member] | ||
Cash consideration paid | $ 8,710 | |
Total consideration | $ 143,500,000 |
SUMMARY OF SIGNIFICANT ACCOUN46
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Securities and other investments owned: | ||
Securities and other investments owned | $ 145,360 | $ 16,579 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 28,291 | 846 |
Common Stock [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | ||
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 19,145 | |
Common Stocks and Warrants [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 67,306 | 2,084 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | ||
Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 6,539 | 1,025 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 1,175 | 846 |
Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 2,329 | |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 699 | |
Loans Receivable [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 33,713 | |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | ||
Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 35,473 | 13,470 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | $ 7,272 |
SUMMARY OF SIGNIFICANT ACCOUN47
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Securities and other investments owned: | ||
Total assets measured at fair value | $ 145,360 | $ 16,579 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 28,291 | 846 |
Contingent consideration | 1,242 | |
Common Stock [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 19,145 | |
Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 6,539 | 1,025 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,175 | 846 |
Common Stocks and Warrants [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 67,306 | 2,084 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 2,329 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 699 | |
Loans Receivable [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 33,713 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 35,473 | 13,470 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 7,272 | |
Fair Value, Measurements, Recurring [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 141,770 | 16,579 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 28,291 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,478 | 3,214 |
Contingent consideration | 1,242 | |
Total liabilities measured at fair value | 32,769 | 5,302 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 39,646 | 1,785 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 26,417 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | ||
Contingent consideration | ||
Total liabilities measured at fair value | 26,417 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 13,961 | 909 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,874 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | ||
Contingent consideration | ||
Total liabilities measured at fair value | 1,874 | 846 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 88,163 | 13,885 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,478 | 3,214 |
Contingent consideration | 1,242 | |
Total liabilities measured at fair value | 4,478 | 4,456 |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 2,084 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 19,145 | |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 1,785 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 19,145 | |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 299 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 6,539 | 1,025 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,175 | 846 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 6,539 | 865 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,175 | 846 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 160 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Partnership Interests [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 13,470 | |
Fair Value, Measurements, Recurring [Member] | Partnership Interests [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Fair Value, Measurements, Recurring [Member] | Partnership Interests [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 44 | |
Fair Value, Measurements, Recurring [Member] | Partnership Interests [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | $ 13,426 | |
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 67,306 | |
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 38,960 | |
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 28,346 | |
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 2,329 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 699 | |
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 2,329 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 699 | |
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 33,713 | |
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 33,713 | |
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 31,883 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 7,272 | |
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 686 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 7,272 | |
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 5,093 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 26,104 | |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased |
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, 2017 | Dec. 31, 2016 | |
Common Stocks and Warrants [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | $ 299 | |
Fair Value Adjustments | 3,028 | |
Relating to Undistribute Earnings | 3,419 | |
Purchases, Sales and Settlements | 21,600 | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 28,346 | $ 299 |
Corporate Bond [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 160 | |
Fair Value Adjustments | ||
Relating to Undistribute Earnings | ||
Purchases, Sales and Settlements | 160 | |
Transfer in and/or out of Level 3 | (160) | |
Balance at End of Period | 160 | |
Loans Receivable [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | ||
Fair Value Adjustments | 1,447 | |
Relating to Undistribute Earnings | ||
Purchases, Sales and Settlements | 32,266 | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 33,713 | |
Partnership Interests and Other [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 13,426 | |
Fair Value Adjustments | 3,465 | |
Relating to Undistribute Earnings | ||
Purchases, Sales and Settlements | 9,213 | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 26,104 | 13,426 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 3,214 | 2,330 |
Fair Value Adjustments | 9,000 | 800 |
Relating to Undistribute Earnings | (8,542) | 84 |
Purchases, Sales and Settlements | ||
Transfer in and/or out of Level 3 | 806 | |
Balance at End of Period | 4,478 | 3,214 |
Contingent Consideration [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 1,242 | 2,391 |
Fair Value Adjustments | 8 | 101 |
Relating to Undistribute Earnings | ||
Purchases, Sales and Settlements | (1,250) | (1,250) |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 1,242 | |
Common Stock [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 299 | 290 |
Fair Value Adjustments | ||
Relating to Undistribute Earnings | ||
Purchases, Sales and Settlements | 9 | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 299 | |
Partnership Interests [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | $ 13,426 | 1,766 |
Fair Value Adjustments | 2,294 | |
Relating to Undistribute Earnings | 1,366 | |
Purchases, Sales and Settlements | 8,000 | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | $ 13,426 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) € in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017CAD ($) | Dec. 31, 2017EUR (€) | Mar. 31, 2017AUD ($) | Jan. 31, 2017AUD ($) | Dec. 30, 2016AUD ($) | Dec. 30, 2016EUR (€) | Aug. 31, 2016CAD ($) | |
Concentration risk, percentage | 13.50% | ||||||||||||
Advertising costs | $ 1,312 | $ 1,456 | $ 519 | ||||||||||
Restricted cash and cash equivalents | $ 19,711 | 19,711 | 3,294 | ||||||||||
Cash collateral | 19,197 | 19,197 | 1,440 | ||||||||||
Net gain (loss) from forward exchange contracts | 31 | (117) | 13 | ||||||||||
Transaction losses | 786 | 848 | $ 271 | ||||||||||
Securities and other investments owned | 3,590 | 3,590 | |||||||||||
Securities and other investments owned, at fair value | 145,360 | 145,360 | $ 16,579 | ||||||||||
Proceeds from key man life insurance | 6,000 | ||||||||||||
Total assets measured at fair value | 141,770 | $ 141,770 | |||||||||||
Revised federal statutory rate | 21.00% | ||||||||||||
Previously federal statutory rate | 35.00% | 35.00% | 34.00% | ||||||||||
Estimate provisional tax expense | 13,052 | ||||||||||||
Bad debt expenses | $ 1,066 | $ 710 | $ 718 | ||||||||||
Foreign Exchange Contract [Member] | |||||||||||||
Cash collateral | 1,320 | ||||||||||||
Derivatives | 20,703 | 20,703 | |||||||||||
Foreign Exchange Contract [Member] | CAD | |||||||||||||
Derivatives | $ 27,100 | $ 10,200 | |||||||||||
Foreign Exchange Contract [Member] | AUD | |||||||||||||
Derivatives | $ 8,000 | $ 25,000 | $ 20,000 | ||||||||||
Foreign Exchange Contract [Member] | EUR | |||||||||||||
Derivatives | € | € 1,500 | € 5,600 | |||||||||||
Special Bank Accounts [Member] | |||||||||||||
Restricted cash and cash equivalents | 514 | 514 | 534 | ||||||||||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | |||||||||||||
Total assets measured at fair value | $ 88,163 | $ 88,163 | $ 13,885 | ||||||||||
Percentage of assets measured at fair value | 6.40% | 6.40% | 5.20% | 6.40% | 6.40% | ||||||||
Fair Value, Inputs, Level 3 [Member] | Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | |||||||||||||
Fair Value Adjustments | $ 7,850 | $ 9,000 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative 1) - USD ($) $ / shares in Units, $ in Thousands | Jul. 03, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
MK Capital Advisors, LLC [Member] | Purchase Agreement [Member] | |||
Imputed interest | $ 8 | $ 101 | |
Warrant [Member] | Wunderlich [Member] | |||
Number of shares issued | 821,816 | ||
Exercise price (in dollars per share) | $ 17.50 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ / shares in Units, $ in Thousands | Jul. 03, 2017USD ($)shares | Jun. 01, 2017USD ($)$ / sharesshares | Dec. 31, 2017shares | Dec. 31, 2016shares | Dec. 31, 2015shares | Dec. 31, 2014shares | |
Common Stock [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Number of FBR Common Shares outstanding at June 1, 2017 | shares | 26,569,462 | 19,140,342 | 16,448,119 | 15,968,607 | |||
FBR & Co. ("FBR") [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Number of FBR Common Shares outstanding at June 1, 2017 | shares | 7,099,511 | ||||||
Stock merger exchange ratio | 0.671 | ||||||
Number of B. Riley common shares | shares | 4,763,772 | ||||||
Number of B. Riley common shares to be issued from acceleration of vesting for outstanding FBR stock options, restricted stock and RSU awards | shares | 67,861 | ||||||
Total number of B. Riley common shares to be issued | shares | 4,831,633 | ||||||
Closing market price of B. Riley common shares on December 31, 2016 | $ / shares | $ 14.70 | ||||||
Total value of B. Riley common shares | $ 71,025 | ||||||
Fair value of RSU's attributable to service period prior to June 1, 2017 | [1] | 2,446 | |||||
Total consideration | $ 73,471 | ||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Cash paid | $ 29,737 | ||||||
Fair value of shares issued for acquisition | 31,495 | ||||||
Total consideration | $ 65,118 | ||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Common Stock [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Total number of B. Riley common shares to be issued | shares | 1,974,812 | ||||||
Fair value of shares issued for acquisition | $ 3,886 | ||||||
[1] | Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the Merger Agreement with the right to receive 0.671 shares of the Company's common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company's common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - USD ($) $ in Thousands | May 04, 2016 | Feb. 02, 2015 | Dec. 31, 2017 | Jul. 03, 2017 | Jun. 01, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Tangible assets acquired and assumed: | |||||||
Securities borrowed | $ 807,089 | ||||||
Securities loaned | (803,371) | ||||||
Goodwill | $ 98,771 | $ 48,903 | $ 34,528 | ||||
FBR & Co. ("FBR") [Member] | |||||||
Tangible assets acquired and assumed: | |||||||
Cash and cash equivalents | $ 15,738 | ||||||
Securities owned | 11,188 | ||||||
Securities borrowed | 861,197 | ||||||
Accounts receivable | 4,341 | ||||||
Due from clearing broker | 29,169 | ||||||
Prepaid expenses and other assets | 5,486 | ||||||
Property and equipment | 8,663 | ||||||
Deferred taxes | 17,706 | ||||||
Accounts payable | (1,524) | ||||||
Accrued payroll and related expenses | (7,182) | ||||||
Accrued expenses and other liabilities | (22,411) | ||||||
Securities loaned | (867,626) | ||||||
Customer relationships | 5,600 | ||||||
Tradename and other intangibles | 1,790 | ||||||
Goodwill | 11,336 | ||||||
Total consideration | $ 73,471 | ||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | |||||||
Tangible assets acquired and assumed: | |||||||
Cash and cash equivalents | $ 4,259 | ||||||
Securities owned | 1,413 | ||||||
Accounts receivable | 3,193 | ||||||
Due from clearing broker | 15,133 | ||||||
Prepaid expenses and other assets | 10,103 | ||||||
Property and equipment | 2,315 | ||||||
Deferred taxes | 7,568 | ||||||
Accounts payable | (1,718) | ||||||
Accrued payroll and related expenses | (6,387) | ||||||
Accrued expenses and other liabilities | (9,773) | ||||||
Securities loaned | (1,707) | ||||||
Notes payable | (10,579) | ||||||
Customer relationships | 15,320 | ||||||
Tradename and other intangibles | 1,340 | ||||||
Goodwill | 34,638 | ||||||
Total consideration | $ 65,118 | ||||||
United Online Inc [Member] | |||||||
Total consideration | $ 169,354 | ||||||
Tangible assets acquired and assumed: | |||||||
Cash and cash equivalents | 125,542 | ||||||
Restricted cash | 482 | ||||||
Accounts receivable | 3,850 | ||||||
Inventory | 624 | ||||||
Prepaid expenses and other assets | 5,876 | ||||||
Property and equipment | 5,536 | ||||||
Accounts payable | (4,874) | ||||||
Accrued expenses and other liabilities | (8,886) | ||||||
Deferred revenue | (2,900) | ||||||
Deferred tax liabilities | (6,824) | ||||||
Other liabilities | (3,180) | ||||||
Customer relationships | 33,700 | ||||||
Advertising relationships | 100 | ||||||
Tradename and other intangibles | 1,100 | ||||||
Domain names | 1,500 | ||||||
Internally developed software | 3,333 | ||||||
Goodwill | 14,375 | ||||||
Total consideration | $ 169,354 | ||||||
MK Capital Advisors, LLC [Member] | Purchase Agreement [Member] | |||||||
Total consideration | $ 9,386 | ||||||
Tangible assets acquired and assumed: | |||||||
Cash and cash equivalents | 49 | ||||||
Accounts receivable | 8 | ||||||
Prepaid expenses and other assets | 30 | ||||||
Property and equipment | 15 | ||||||
Accrued expenses and other liabilities | (87) | ||||||
Customer relationships | 2,400 | ||||||
Goodwill | 6,971 | ||||||
Total consideration | $ 9,386 |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted average basic shares outstanding (in shares) | 26,150,502 | 26,059,490 | 21,216,829 | 19,181,749 | 19,004,548 | 18,977,072 | 17,935,254 | 16,490,178 | 23,181,388 | 18,106,621 | 16,221,040 |
Weighted average diluted shares outstanding (in shares) | 26,150,502 | 27,639,862 | 22,119,055 | 19,626,574 | 19,511,292 | 19,208,527 | 17,935,254 | 16,553,953 | 24,290,904 | 18,391,852 | 16,265,915 |
United Online Inc [Member] | |||||||||||
Revenues | $ 430,723 | $ 464,587 | |||||||||
Net income attributable to B. Riley Financial, Inc. | $ 5,672 | $ 1,754 | |||||||||
Basic earnings per share (in dollars per share) | $ 0.22 | $ 0.07 | |||||||||
Diluted earnings per share (in dollars per shares) | $ 0.21 | $ 0.07 | |||||||||
Weighted average basic shares outstanding (in shares) | 26,150,502 | 24,972,700 | |||||||||
Weighted average diluted shares outstanding (in shares) | 27,268,888 | 25,257,931 |
AQUISITIONS (Details Narrative)
AQUISITIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jul. 03, 2017 | Jun. 01, 2017 | Apr. 13, 2017 | Feb. 02, 2017 | May 04, 2016 | Feb. 02, 2016 | Feb. 02, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquisition consideration payable | $ 10,381 | $ 10,381 | ||||||||||||||||||
Goodwill | $ 98,771 | 48,903 | $ 98,771 | $ 98,771 | 48,903 | $ 34,528 | ||||||||||||||
Payroll and severance costs | 8,958 | 3,474 | ||||||||||||||||||
Office closure | 3,416 | 413 | ||||||||||||||||||
Revenues | 322,176 | 190,351 | 112,525 | |||||||||||||||||
Net income (loss) | (5,451) | $ 122 | $ 3,363 | $ 13,901 | 23,009 | $ 8,374 | $ (27) | $ 1,370 | 11,935 | 32,726 | 13,577 | |||||||||
Principal Investments - United Online [Member] | ||||||||||||||||||||
Goodwill | 15,727 | 14,375 | 15,727 | 15,727 | 14,375 | |||||||||||||||
Payroll and severance costs | 723 | 3,474 | ||||||||||||||||||
Office closure | ||||||||||||||||||||
Revenues | 51,743 | 31,521 | ||||||||||||||||||
Capital Markets Reportable Segment [Member] | ||||||||||||||||||||
Goodwill | $ 77,356 | 28,840 | 77,356 | 77,356 | 28,840 | 28,840 | ||||||||||||||
Payroll and severance costs | 4,951 | |||||||||||||||||||
Office closure | 2,904 | |||||||||||||||||||
Revenues | 189,723 | 39,335 | $ 35,183 | |||||||||||||||||
FBR & Co. ("FBR") [Member] | ||||||||||||||||||||
Share price (in dollars per share) | $ 14.70 | |||||||||||||||||||
Goodwill | $ 11,336 | |||||||||||||||||||
Number of shares issued for acquisition | 4,831,633 | |||||||||||||||||||
Total consideration | $ 73,471 | |||||||||||||||||||
Fair value of total purchase consideration | [1] | $ 2,446 | ||||||||||||||||||
Revenues | 85,111 | |||||||||||||||||||
Net income (loss) | 2,099 | |||||||||||||||||||
FBR & Co. ("FBR") [Member] | Selling, General and Administrative Expenses [Member] | ||||||||||||||||||||
Acquisition related costs | 1,485 | |||||||||||||||||||
FBR & Co. ("FBR") [Member] | Richard J. Hendrix [Member] | ||||||||||||||||||||
Acquisition related costs | 3,551 | |||||||||||||||||||
Payroll and severance costs | 9,669 | |||||||||||||||||||
United Online Inc [Member] | ||||||||||||||||||||
Share price (in dollars per share) | $ 11 | |||||||||||||||||||
Merger consideration | $ 169,354 | |||||||||||||||||||
Cash consideration paid | 1,352 | |||||||||||||||||||
Goodwill | 14,375 | |||||||||||||||||||
Total consideration | 169,354 | |||||||||||||||||||
Revenues | 51,743 | 31,521 | ||||||||||||||||||
Net income (loss) | 19,503 | 5,716 | ||||||||||||||||||
United Online Inc [Member] | Selling, General and Administrative Expenses [Member] | ||||||||||||||||||||
Acquisition related costs | $ 674 | |||||||||||||||||||
Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | Asset Purchase and Assignment Agreement [Member] | ||||||||||||||||||||
Cash consideration paid | $ 700 | |||||||||||||||||||
Acquisition related costs | $ 909 | |||||||||||||||||||
Number of shares issued for acquisition | 158,484 | |||||||||||||||||||
Total consideration | $ 2,652 | |||||||||||||||||||
Fair value of total purchase consideration | $ 1,952 | |||||||||||||||||||
Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | Capital Markets Reportable Segment [Member] | ||||||||||||||||||||
Increase in goodwill | 2,542 | |||||||||||||||||||
Acquisition related costs | 793 | |||||||||||||||||||
Expected overhead synergies | 110 | |||||||||||||||||||
Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | Selling, General and Administrative Expenses [Member] | Capital Markets Reportable Segment [Member] | ||||||||||||||||||||
Acquisition related costs | 72 | |||||||||||||||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | ||||||||||||||||||||
Cash consideration paid | $ 29,737 | |||||||||||||||||||
Goodwill | 34,638 | |||||||||||||||||||
Payroll and severance costs | 1,471 | |||||||||||||||||||
Total consideration | 65,118 | |||||||||||||||||||
Revenues | 41,491 | |||||||||||||||||||
Net income (loss) | $ 2,283 | |||||||||||||||||||
Value of shares issued upon acqusition | $ 31,495 | |||||||||||||||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Common Stock [Member] | ||||||||||||||||||||
Number of shares issued for acquisition | 1,974,812 | |||||||||||||||||||
Number of shares issued held in escrow account | 387,365 | |||||||||||||||||||
Value of shares issued upon acqusition | $ 3,886 | |||||||||||||||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Warrant [Member] | ||||||||||||||||||||
Number of shares issued for acquisition | 821,816 | |||||||||||||||||||
Number of shares issued held in escrow account | 167,352 | |||||||||||||||||||
Delaware corporation ("Wunderlich") [Member] | Selling, General and Administrative Expenses [Member] | Merger Agreement [Member] | ||||||||||||||||||||
Acquisition related costs | $ 48 | |||||||||||||||||||
MK Capital Advisors, LLC [Member] | Purchase Agreement [Member] | ||||||||||||||||||||
Merger consideration | $ 9,386 | |||||||||||||||||||
Cash consideration paid | 2,500 | |||||||||||||||||||
Goodwill | $ 6,971 | |||||||||||||||||||
Number of shares issued for acquisition | 333,333 | |||||||||||||||||||
Total consideration | $ 9,386 | |||||||||||||||||||
Value of shares issued upon acqusition | $ 2,687 | |||||||||||||||||||
Description of shares issued upon acqusition | 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. | |||||||||||||||||||
Contingent consideration arrangements | $ 2,229 | |||||||||||||||||||
Phased wise repayment of contingent consideration | $ 1,250 | $ 1,250 | ||||||||||||||||||
Percentage of initial discount on contingent consideration | 8.00% | |||||||||||||||||||
Initial discount on contingent consideration | $ 271 | 8 | 8 | |||||||||||||||||
Imputed interest expense | $ 8 | 101 | ||||||||||||||||||
Contingent consideration- current portion | $ 1,242 | $ 1,242 | ||||||||||||||||||
Number of shares issued upon contingent consideration | 166,666 | 166,667 | ||||||||||||||||||
Fair value of contingent consideration | $ 1,970 | $ 1,970 | ||||||||||||||||||
[1] | Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the Merger Agreement with the right to receive 0.671 shares of the Company's common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company's common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. |
RESTRUCTURING CHARGE (Details)
RESTRUCTURING CHARGE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance of Accrued restructuring charge | $ 694 | $ 187 |
Restructuring charge | 12,374 | 3,887 |
Cash paid | (5,957) | (3,380) |
Non-cash items | (4,511) | |
Ending balance of Accrued restructuring charge | $ 2,600 | $ 694 |
RESTRUCTURING CHARGE (Details 1
RESTRUCTURING CHARGE (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Employee termination costs | $ 8,958 | $ 3,474 |
Facility closure and consolidation charge | 3,416 | 413 |
Total restructuring charge | 12,374 | 3,887 |
Capital Markets [Member] | ||
Employee termination costs | 4,951 | |
Facility closure and consolidation charge | 2,904 | |
Total restructuring charge | (7,855) | |
Principal Investments - United Online [Member] | ||
Employee termination costs | 723 | 3,474 |
Facility closure and consolidation charge | ||
Total restructuring charge | (723) | (3,474) |
Corporate [Member] | ||
Employee termination costs | 3,284 | |
Facility closure and consolidation charge | 512 | 413 |
Total restructuring charge | $ 3,796 | $ 413 |
RESTRUCTURING CHARGE (Details N
RESTRUCTURING CHARGE (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Restructuring charge | $ 12,374 | $ 3,887 |
Revised restructuring charge | 11,651 | |
Severance costs | 2,400 | |
Accelerated vesting of restricted stock awards | 1,710 | |
Severance costs | 3,241 | |
Lease loss accruals and impairments | 3,416 | |
Capital Markets [Member] | ||
Restructuring charge | (7,855) | |
Accelerated vesting of restricted stock awards | 884 | |
Corporate [Member] | ||
Restructuring charge | 3,796 | 413 |
Principal Investments - United Online [Member] | ||
Restructuring charge | $ (723) | $ (3,474) |
SECURITIES LENDING (Details)
SECURITIES LENDING (Details) $ in Thousands | Dec. 31, 2017USD ($) | |
Securities borrowed | ||
Gross amounts recognized | $ 807,089 | |
Gross amounts offset in the consolidated balance sheets | [1] | |
Net amounts included in the consolidated balance sheets | 807,089 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | 807,089 | [2] |
Net amounts | ||
Securities loaned | ||
Gross amounts recognized | 803,371 | |
Gross amounts offset in the consolidated balance sheets | [1] | |
Net amounts included in the consolidated balance sheets | 803,371 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | 803,371 | [2] |
Net amounts | ||
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | |
[2] | Includes the amount of cash collateral held/posted. |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 15,593 | $ 16,610 |
Investment banking fees, commissions and other receivables | 4,199 | 576 |
Unbilled receivables | 1,023 | 2,058 |
Total accounts receivable | 20,815 | 19,244 |
Allowance for doubtful accounts | (800) | (255) |
Accounts receivable, net | $ 20,015 | $ 18,989 |
ACCOUNTS RECEIVABLE (Details 1)
ACCOUNTS RECEIVABLE (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Balance, beginning of period | $ 255 | $ 89 | $ 728 |
Add: Additions to reserve | 1,066 | 710 | 718 |
Less: Write-offs | (311) | (194) | (1,056) |
Less: Recoveries | (210) | (350) | (301) |
Balance, ending of period | $ 800 | $ 255 | $ 89 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 19,996 | $ 10,805 |
Less: Accumulated depreciation and amortization | (8,019) | (5,020) |
Property, Plant and Equipment, Net | 11,977 | 5,785 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 7,834 | 2,325 |
Description of useful life | Shorter of the remaining lease term or estimated useful life | |
Machinery Equipment and Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 9,474 | 6,559 |
Machinery Equipment and Computer Software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Machinery Equipment and Computer Software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 5 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 2,688 | $ 1,921 |
Estimated Useful Lives | 5 years |
PROPERTY AND EQUIPMENT (Detai62
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 3,718 | $ 1,052 | $ 417 |
GOODWILL AND OTHER INTANGIBLE63
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 48,903 | $ 34,528 |
Goodwill acquired during the period | ||
Ending balance | 98,771 | 48,903 |
United Online,Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 14,375 | |
Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 2,542 | |
FBR & Co. ("FBR") [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 11,336 | |
Wunderlich Securities, Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 34,638 | |
Resolution of Acquisition Related Legal Matter [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 1,352 | |
Capital Markets [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 28,840 | 28,840 |
Goodwill acquired during the period | ||
Ending balance | 77,356 | 28,840 |
Capital Markets [Member] | United Online,Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Capital Markets [Member] | Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 2,542 | |
Capital Markets [Member] | FBR & Co. ("FBR") [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 11,336 | |
Capital Markets [Member] | Wunderlich Securities, Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | 34,638 | |
Capital Markets [Member] | Resolution of Acquisition Related Legal Matter [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Auction and Liquidation Reportable Segment [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 1,975 | 1,975 |
Goodwill acquired during the period | ||
Ending balance | 1,975 | 1,975 |
Auction and Liquidation Reportable Segment [Member] | United Online,Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Auction and Liquidation Reportable Segment [Member] | Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Auction and Liquidation Reportable Segment [Member] | FBR & Co. ("FBR") [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Auction and Liquidation Reportable Segment [Member] | Wunderlich Securities, Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Auction and Liquidation Reportable Segment [Member] | Resolution of Acquisition Related Legal Matter [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Valuation and Appraisal Reportable Segment [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 3,713 | 3,713 |
Goodwill acquired during the period | ||
Ending balance | 3,713 | 3,713 |
Valuation and Appraisal Reportable Segment [Member] | United Online,Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Valuation and Appraisal Reportable Segment [Member] | Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Valuation and Appraisal Reportable Segment [Member] | FBR & Co. ("FBR") [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Valuation and Appraisal Reportable Segment [Member] | Wunderlich Securities, Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Valuation and Appraisal Reportable Segment [Member] | Resolution of Acquisition Related Legal Matter [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Principal Investments - United Online [Member] | ||
Goodwill [Roll Forward] | ||
Beginning balance | 14,375 | |
Goodwill acquired during the period | ||
Ending balance | 15,727 | 14,375 |
Principal Investments - United Online [Member] | United Online,Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | $ 14,375 | |
Principal Investments - United Online [Member] | Dialectic Capital Management, L.P., Dialectic Capital, LLC and John Fichthorn [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Principal Investments - United Online [Member] | FBR & Co. ("FBR") [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Principal Investments - United Online [Member] | Wunderlich Securities, Inc. [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | ||
Principal Investments - United Online [Member] | Resolution of Acquisition Related Legal Matter [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill acquired during the period | $ 1,352 |
GOODWILL AND OTHER INTANGIBLE64
GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Amortizable assets: | ||
Gross Carrying Value | $ 66,280 | $ 43,252 |
Accumulated Amortization | 11,072 | 3,826 |
Intangibles Net | 55,208 | 39,426 |
Non-amortizable assets: | ||
Gross Carrying Value | 68,020 | 44,992 |
Accumulated Amortization | 11,072 | 3,826 |
Intangibles Net | 56,948 | 41,166 |
Customer Relationships [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | 58,330 | 37,300 |
Accumulated Amortization | 9,100 | 3,100 |
Intangibles Net | $ 49,230 | 34,200 |
Customer Relationships [Member] | Minimum [Member] | ||
Amortizable assets: | ||
Useful Life | 4 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Amortizable assets: | ||
Useful Life | 16 years | |
Domain Names [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 287 | 1,419 |
Accumulated Amortization | 61 | 101 |
Intangibles Net | $ 226 | 1,318 |
Useful Life | 7 years | |
Advertising Relationships [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 100 | 100 |
Accumulated Amortization | 19 | 6 |
Intangibles Net | $ 81 | 94 |
Useful Life | 8 years | |
Internally Developed Software and Other Intangibles [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 3,373 | 3,333 |
Accumulated Amortization | 1,445 | 550 |
Intangibles Net | $ 1,928 | 2,783 |
Internally Developed Software and Other Intangibles [Member] | Minimum [Member] | ||
Amortizable assets: | ||
Useful Life | 6 months | |
Internally Developed Software and Other Intangibles [Member] | Maximum [Member] | ||
Amortizable assets: | ||
Useful Life | 4 years | |
Trademarks [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 4,190 | 1,100 |
Accumulated Amortization | 447 | 69 |
Intangibles Net | $ 3,743 | 1,031 |
Trademarks [Member] | Minimum [Member] | ||
Amortizable assets: | ||
Useful Life | 7 years | |
Trademarks [Member] | Maximum [Member] | ||
Amortizable assets: | ||
Useful Life | 8 years | |
Tradenames [Member] | ||
Non-amortizable assets: | ||
Gross Carrying Value | $ 1,740 | 1,740 |
Accumulated Amortization | ||
Intangibles Net | $ 1,740 | $ 1,740 |
GOODWILL AND OTHER INTANGIBLE65
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 7,422 | $ 3,254 | $ 431 |
Estimated future amortization expense | |||
Estimated future amortization expense 2018 | 8,497 | ||
Estimated future amortization expense 2019 | 8,376 | ||
Estimated future amortization expense 2020 | 8,008 | ||
Estimated future amortization expense 2021 | 7,617 | ||
Estimated future amortization expense 2022 | 7,592 | ||
Estimated future amortization expense after 2022 | $ 15,118 |
LEASING ARRANGEMENTS (Details)
LEASING ARRANGEMENTS (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases Year Ending December 31: | |
2,018 | $ 13,496 |
2,019 | 9,640 |
2,020 | 6,984 |
2,021 | 5,589 |
2,022 | 5,024 |
Thereafter | 16,369 |
Total minimum lease payments | $ 57,102 |
LEASING ARRANGEMENTS (Details N
LEASING ARRANGEMENTS (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Leases [Abstract] | |||
Rent expense | $ 7,599 | $ 3,205 | $ 2,376 |
CREDIT FACILITIES (Details Narr
CREDIT FACILITIES (Details Narrative) £ in Thousands, $ in Thousands | Apr. 21, 2017USD ($) | Apr. 13, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Mar. 19, 2015GBP (£) |
Second Amended and Restated Credit Agreement [Member] | Wells Fargo Bank, National Association [Member] | Asset Based Credit Facility [Member] | ||||||
Credit facility | $ 200 | |||||
Credit facility expiration date | Apr. 21, 2022 | |||||
Description of interest rate | The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. | |||||
Description of success fees | The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. | |||||
Interest expense | $ 1,136 | $ 1,113 | $ 376 | |||
Amortization of deferred loan fees | 123 | 92 | 92 | |||
Success fees | 198 | $ 732 | $ 127 | |||
Description of collateral | The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. | |||||
Payment for closing fee | $ 500 | |||||
UK Credit Agreement [Member] | Wells Fargo Bank, National Association [Member] | Line of Credit [Member] | GBP [Member] | ||||||
Maximum borrowing capacity credit facility | £ | £ 50,000 | |||||
Credit Agreement [Member] | Line of Credit [Member] | United Online, Inc. ("UOL") [Member] | ||||||
Credit facility | $ 20 | |||||
Outstanding balance credit facility | ||||||
Credit facility expiration date | Apr. 13, 2020 | |||||
Description of interest rate | Borrowings under the UOL Credit Agreement will bear interest at a rate equal to (a) (i) the base rate (the greater of the federal funds rate plus one half of one percent (0.5%), or the prime rate) for U.S. dollar loans or (ii) at UOL’s option, the LIBOR Rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two percent (2%) to three and one-half percent (3.5%) per annum, based upon UOL’s ratio of funded indebtedness to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the preceding four (4) fiscal quarters. Interest payments are to be made each one, three or six months for Eurodollar loans, and quarterly for U.S. dollar loans. | |||||
Interest expense | 292 | |||||
Amortization of deferred loan fees | $ 97 | |||||
Description of collateral | Each of UOL’s U.S. subsidiaries is a guarantor of all obligations under the UOL Credit Agreement and are parties to the UOL Credit Agreement in such capacity (collectively, the “Secured Guarantors”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of UOL and a subsidiary of the Company, are guarantors of the obligations under the UOL Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares of outstanding capital stock of UOL are pledged as collateral. The obligations under the UOL Credit Agreement are secured by first-priority liens on, and a first-priority security interest in, substantially all of the assets of UOL and the Secured Guarantors, including a pledge of (a) 100% of the equity interests of the Secured Guarantors and (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India. | |||||
Description of line of credit | Amount is reduced by $1,500 commencing on June 30, 2017 and on the last day of each calendar quarter thereafter. | |||||
Percent of commitment fees | 1.00% | |||||
Description of unused line fee payable | (a) 0.50% per annum times the amount of the unused revolving commitment that is less than or equal to the amount of the cash maintained in accounts with the agent (as depositary bank); plus (b) 1.00% per annum times the amount of the unused revolving commitment that is greater than the amount of the cash maintained in accounts with the agent (as depositary bank). |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Senior notes payable | $ 208,221 | $ 28,750 |
Less: Unamortized debt issue costs | (4,600) | (1,050) |
Senior notes payable , net | 203,621 | 27,700 |
7.50% Senior Notes Due 2021 [Member] | ||
Senior notes payable | 35,231 | 28,750 |
Less: Unamortized debt issue costs | (748) | $ (1,050) |
7.50% Senior Notes Due May 2027 [Member] | ||
Senior notes payable | 92,490 | |
Less: Unamortized debt issue costs | (1,586) | |
7.25% Senior Notes Due December 2027 [Member] | ||
Senior notes payable | 80,500 | |
Less: Unamortized debt issue costs | $ (2,266) |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) $ in Thousands, $ in Thousands | Dec. 31, 2017USD ($) | May 31, 2017USD ($) | Nov. 02, 2016USD ($) | Aug. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 19, 2017USD ($) | Sep. 30, 2017USD ($) | Aug. 31, 2016AUD ($) |
Due to related parties | $ 1,578 | $ 1,578 | $ 10,037 | ||||||
Senior notes payable | 203,621 | 203,621 | 27,700 | ||||||
Unamortized debt issuance cost and premiums | 4,600 | 4,600 | 1,050 | ||||||
Proceeds from Notes Payable | 61,400 | ||||||||
Notes payable | 2,243 | 2,243 | |||||||
Other Notes Payable [Member] | |||||||||
Interest expense | $ 71 | ||||||||
Description of non interest bearing notes payable | The notes payable accrue interest at rates ranging from the prime rate plus 0.25% to 2.0% (4.75% to 6.50% at December 30, 2017) payable annually. | ||||||||
Notes payable | 2,243 | $ 2,243 | |||||||
Payment terms | The principal payments on the notes payable are due annually in the amount of $357 on January 31, $214 on September 30, and $121 on October 31. | ||||||||
Maturity date, description | The notes payable mature at various dates from September 30, 2018 through January 31, 2022. | ||||||||
GA Retail Investments, L.P [Member] | |||||||||
Capital contributed | $ 15,350 | ||||||||
Third Party Investor [Member] | GA Retail Investments, L.P [Member] | |||||||||
Due to related parties | 1,323 | $ 1,323 | 10,037 | ||||||
Third Party Investor [Member] | GA Retail Investments, L.P [Member] | AUD | |||||||||
Principal amount | $ 80,000 | ||||||||
Description of non interest bearing notes payable | The $80,000 Australian note payable is non-interest bearing, shares in 50% of the all of the profits and losses of the Partnership and is subject to repayment upon the completion of the going-out-of-business sale of Masters Home Improvement stores as defined in the partnership agreement. | ||||||||
7.50% Senior Notes Due 2021 [Member] | |||||||||
Principal amount | $ 35,231 | $ 28,750 | 35,231 | ||||||
Interest expense | $ 2,537 | 360 | |||||||
Proceeds from note payable | 34,238 | ||||||||
Interest rate | 7.50% | 7.50% | |||||||
Unamortized debt issuance cost and premiums | $ 748 | $ 748 | $ 1,050 | ||||||
Underwriting commissions, fees and other issuance costs | 993 | ||||||||
7.50% Senior Notes Due 2021 [Member] | Management And Board Of Directors [Member] | |||||||||
Principal amount | $ 2,731 | ||||||||
Interest rate | 9.50% | ||||||||
7.50% Senior Notes Due 2021 [Member] | At The Market Issuance Sales Agreement [Member] | |||||||||
Principal amount | 6,481 | 6,481 | $ 6,481 | ||||||
7.50% Senior Notes Due May 2027 [Member] | |||||||||
Principal amount | $ 92,490 | $ 60,375 | 92,490 | ||||||
Interest expense | $ 3,551 | ||||||||
Proceeds from note payable | 90,796 | ||||||||
Interest rate | 7.50% | 7.50% | |||||||
Unamortized debt issuance cost and premiums | $ 1,586 | $ 1,586 | |||||||
Underwriting commissions, fees and other issuance costs | $ 1,694 | ||||||||
7.50% Senior Notes Due May 2027 [Member] | At The Market Issuance Sales Agreement [Member] | |||||||||
Principal amount | 32,115 | 32,115 | $ 32,115 | ||||||
7.50% Senior Notes Due 2021/ 7.25% Senior Notes Due 2027 [Member] | At The Market Issuance Sales Agreement [Member] | |||||||||
Principal amount | 19,000 | 19,000 | $ 19,000 | ||||||
Interest rate | 7.50% | ||||||||
7.25% Senior Notes Due December 2027 [Member] | |||||||||
Principal amount | 80,500 | $ 80,500 | |||||||
Interest expense | 303 | ||||||||
Proceeds from note payable | $ 78,223 | ||||||||
Interest rate | 7.25% | 7.25% | |||||||
Unamortized debt issuance cost and premiums | $ 2,266 | $ 2,266 | |||||||
Underwriting commissions, fees and other issuance costs | $ 2,277 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | Jan. 05, 2017 | Jul. 05, 2016 | Sep. 30, 2017 | Jul. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2015 | Dec. 31, 2012 | Dec. 31, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | |||||||||
Letter of credit outstanding | $ 18,505 | $ 465 | |||||||
Frontier State Bank Vs Wunderlich Loan Capital Corp [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages value | $ 1,300 | ||||||||
Gladden Vs Cumberland Trust [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages value | $ 3,925 | ||||||||
Bankruptcy Case [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages value | $ 10,000 | ||||||||
Arbitration Claim Against WSI and Gary Wunderlich [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages value | $ 8,000 | ||||||||
Arbitration Claim Against WSI and Gary Wunderlich [Member] | MLV & Co. [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Offering price | $ 151 | ||||||||
Aquistion Letigation Case [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Number of shares connection with the acquisition | 943,769 | ||||||||
Name of plaintiff | Quadre Investments LP (“Quadre”) | ||||||||
Description of allegation | Seeking a determination of fair value for 943,769 shares of common stock of UOL in connection with the acquisition of UOL by the Company. Such transaction gave rise to appraisal rights. | ||||||||
Arbitration Claim Against Wunderlich Securities, Inc. [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages value | $ 10,000 | ||||||||
Arbitration Claim Against Quantum Fuel Systems Technologies Worldwide, Inc. [Member] | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages value | 37,000 | ||||||||
Punitive damages and attorney's fees | $ 75,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||||||||||
Federal | $ 3,804 | $ 5,530 | $ 201 | ||||||||
State | 1,019 | 1,114 | 99 | ||||||||
Foreign | (975) | 4,063 | 779 | ||||||||
Total current provision | 3,848 | 10,707 | 1,079 | ||||||||
Deferred: | |||||||||||
Federal | 6,889 | 3,015 | 5,166 | ||||||||
State | (1,937) | 610 | 1,443 | ||||||||
Foreign | (290) | (11) | |||||||||
Total deferred | 4,662 | 3,614 | 6,609 | ||||||||
Total provision for income taxes | $ (16,263) | $ 1,357 | $ 2,547 | $ 3,849 | $ (8,137) | $ (6,083) | $ 65 | $ (166) | $ 8,510 | $ 14,321 | $ 7,688 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Provision for income taxes at federal statutory rate | 35.00% | 35.00% | 34.00% |
State income taxes, net of federal benefit | 5.00% | 2.80% | 4.00% |
Transaction expenses | 2.00% | ||
Noncontrolling interest tax differential | (6.60%) | (6.20%) | |
Key man life insurance | (7.90%) | ||
Employee stock based compensation | (8.70%) | ||
Internal Revenue Service Section 338(g) - Treatment of acquisition of UOL as a taxable business combination | (44.60%) | ||
U.S. Tax Cuts and Jobs Act | 63.80% | ||
Other | 3.60% | (1.20%) | (1.80%) |
Effective income tax rate | 41.60% | 30.40% | 36.20% |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Deductible goodwill and other intangibles | $ 4,019 | |
Accrued liabilities and other | 3,549 | 2,459 |
Deferred revenue | 54 | 335 |
Mandatorily redeemable noncontrolling interests | 1,109 | 1,173 |
Other | 312 | 379 |
State taxes | 994 | |
Share based payments | 2,117 | 443 |
Foreign tax and other tax credit carryforwards | 290 | 1,855 |
Capital loss carryforward | 2,582 | 3,600 |
Net operating loss carryforward | 17,900 | 7,711 |
Total deferred tax assets | 31,932 | 18,949 |
Deferred tax liabilities: | ||
State taxes | (46) | |
Depreciation | (73) | (1,291) |
Goodwill and other intangibles | (4,139) | |
Total deferred tax liabilities | (119) | (5,430) |
Net deferred tax assets | 31,813 | 13,519 |
Valuation allowance | (2,582) | (4,900) |
Net deferred tax assets | $ 29,231 | $ 8,619 |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Beginning balance | |
Addition as a result of the acquisition of UOL | 1,255 |
Additions for current year tax positions | |
Additions for Prior year tax positions | 34 |
Reductions for Prior year tax positions | |
Reductions due to lapse in statutes of limitations | (149) |
Ending balance | $ 1,140 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||||
Revised federal statutory rate | 21.00% | |||
Previously federal statutory rate | 35.00% | 35.00% | 34.00% | |
Estimate provisional tax expense | $ 13,052 | |||
Remeasurement of deferred tax assets and liabilities | 12,954 | |||
Transition tax on foreign earnings | 98 | |||
Income before income taxes | $ 20,445 | $ 47,047 | $ 21,265 | |
Valuation allowance | 2,582 | 2,582 | 4,900 | |
Gross unrecognized tax benefits | 1,140 | 1,140 | ||
Reductions due to lapse in statutes of limitations | 345 | |||
Accrued for interest and penalties | 786 | 786 | ||
Income tax benefit for interest and penalty expenses | 149 | |||
Federal Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income before income taxes | 19,949 | |||
Net operating loss carryforwards | 63,445 | $ 63,445 | ||
Description of expiration date of net operating loss carryforwards | Expire in the tax years commencing in December 31, 2029 through December 31, 2034 | |||
State and Local Jurisdiction [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 76,978 | $ 76,978 | ||
Description of expiration date of net operating loss carryforwards | Expire in tax years commencing in December 31, 2029 | |||
Foreign Tax Authority [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income before income taxes | $ 496 | |||
Description of expiration date of net operating loss carryforwards | Expire in 2027 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net income attributable to B. Riley Financial, Inc. | $ (6,113) | $ 368 | $ 3,280 | $ 14,021 | $ 12,440 | $ 8,939 | $ (101) | $ 248 | $ 11,556 | $ 21,526 | $ 11,805 |
Weighted average shares outstanding: | |||||||||||
Basic (in shares) | 26,150,502 | 26,059,490 | 21,216,829 | 19,181,749 | 19,004,548 | 18,977,072 | 17,935,254 | 16,490,178 | 23,181,388 | 18,106,621 | 16,221,040 |
Effect of dilutive potential common shares: | |||||||||||
Restricted stock units and non-vested shares (in shares) | 901,397 | 198,852 | |||||||||
Contingently issuable shares (in shares) | 208,119 | 86,379 | 44,875 | ||||||||
Diluted (in shares) | 26,150,502 | 27,639,862 | 22,119,055 | 19,626,574 | 19,511,292 | 19,208,527 | 17,935,254 | 16,553,953 | 24,290,904 | 18,391,852 | 16,265,915 |
Basic income per share (in dollars per share) | $ (0.23) | $ 0.01 | $ 0.15 | $ 0.73 | $ 0.65 | $ 0.47 | $ (0.01) | $ 0.02 | $ 0.50 | $ 1.19 | $ 0.73 |
Diluted income per share (in dollars per share) | $ (0.23) | $ 0.01 | $ 0.15 | $ 0.71 | $ 0.64 | $ 0.47 | $ (0.01) | $ 0.01 | $ 0.48 | $ 1.17 | $ 0.73 |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of antidilutive securities were excluded from the computation of diluted net income (loss) per share | 709,358 | 384,825 | 308,699 |
Escrow Subject to Cancellation Escrow Claims [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares held in escrow account | 453,365 | ||
Escrow Subject to Cancellation Escrow Claims [Member] | Great American Group LLC [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares issued in escrow account to forfeiture | 66,000 | ||
Number of shares issued in escrow account to forfeiture for final settlement of claims | 387,365 |
LIMITED LIABILITY COMPANY SUB79
LIMITED LIABILITY COMPANY SUBSIDIARIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Minority interest | $ (184) | $ 1,045 | ||
Proceeds of key man life insurance | 6,000 | |||
Noncontrolling interests share of net income | 1,799 | $ 2,232 | $ 2,207 | |
Change in fair value of redeemable noncontrolling interests | 800 | |||
Operating Agreement [Member] | ||||
Minority interest | $ 7,850 | |||
Proceeds of key man life insurance | 6,000 | |||
Fair value adjustments | 1,150 | |||
Operating Agreement [Member] | Mandatorily Redeemable Noncontrolling Interests [Member] | ||||
Fair value adjustments | $ 7,850 | $ 9,000 |
SHARE BASED PAYMENTS (Details)
SHARE BASED PAYMENTS (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Amended and Restated 2009 Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Nonvested at beginning | 680,135 | 322,731 | 5,859 | |
Granted | 486,049 | 544,605 | 527,372 | |
Vested | (344,196) | (173,147) | (196,414) | |
Forfeited | (29,724) | (14,054) | (14,086) | |
Nonvested at end | 792,264 | 792,264 | 680,135 | 322,731 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Nonvested at beginning | $ 9.74 | $ 9.97 | $ 7.68 | |
Granted | 15.91 | 9.73 | 9.98 | |
Vested | 10.05 | 10.13 | 9.92 | |
Forfeited | 10.49 | 9.84 | 9.98 | |
Nonvested at end | $ 13.30 | $ 13.30 | $ 9.74 | $ 9.97 |
FBR Stock Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Nonvested at beginning | 530,661 | |||
Granted | 871,317 | 871,317 | ||
Vested | (200,905) | (193,626) | ||
Forfeited | (134,940) | |||
Nonvested at end | 1,066,133 | 1,066,133 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||
Nonvested at beginning | $ 14.70 | |||
Granted | 16.73 | $ 16.73 | ||
Vested | 15.08 | |||
Forfeited | 15.79 | |||
Nonvested at end | $ 16.15 | $ 16.15 |
SHARE BASED PAYMENTS (Details N
SHARE BASED PAYMENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | $ 10,341 | $ 2,768 | $ 2,043 | |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | 2,391 | |||
Restricted Stock [Member] | Former Corporate Executives [Member] | FBR & Co. ("FBR") [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | 884 | |||
Restricted Stock [Member] | Employee [Member] | FBR & Co. ("FBR") [Member] | Capital Markets Reportable Segment [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation expense | $ 1,507 | |||
Amended and Restated 2009 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 486,049 | 544,605 | 527,372 | |
Number of shares vested | 344,196 | 173,147 | 196,414 | |
Total fair value | $ 3,459 | $ 3,459 | $ 1,755 | $ 1,949 |
Share based compensation expense | 4,994 | 2,768 | 2,043 | |
Total income tax benefit recognized | 1,249 | $ 1,141 | $ 804 | |
Unrecognized share based compensation expense | 7,901 | $ 7,901 | ||
Unrecognized share based compensation weighted average period | 2 years 1 month 6 days | |||
Weighted average grant date fair value (in dollars per share) | $ 15.91 | $ 9.73 | $ 9.98 | |
Amended and Restated 2009 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting periods | 1 year | |||
Amended and Restated 2009 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting periods | 3 years | |||
Amended and Restated 2009 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Employee and Directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 486,049 | 544,605 | 527,372 | |
Total fair value | $ 7,732 | $ 7,732 | $ 5,301 | $ 5,261 |
FBR Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 871,317 | 871,317 | ||
Number of shares vested | 200,905 | 193,626 | ||
Total fair value | $ 3,030 | $ 3,030 | ||
Share based compensation expense | 2,956 | |||
Total income tax benefit recognized | 1,376 | |||
Unrecognized share based compensation expense | $ 11,362 | $ 11,362 | ||
Unrecognized share based compensation weighted average period | 2 years 6 months | |||
Weighted average grant date fair value (in dollars per share) | $ 16.73 | $ 16.73 | ||
FBR Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting periods | 1 year | |||
FBR Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting periods | 3 years |
BENEFIT PLANS AND CAPITAL TRA82
BENEFIT PLANS AND CAPITAL TRANSACTIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Mar. 07, 2018 | Nov. 09, 2017 | Aug. 07, 2017 | May 10, 2017 | Feb. 20, 2017 | Nov. 13, 2016 | Aug. 04, 2016 | May 10, 2016 | Nov. 09, 2015 | Aug. 10, 2015 | May 04, 2015 | Jul. 31, 2009 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 07, 2014 | Aug. 19, 2009 |
Repayment of notes payable | $ 8,336 | |||||||||||||||
Principal balance outstanding | 208,221 | $ 28,750 | ||||||||||||||
Dividend [Member] | ||||||||||||||||
Dividend paid date | Nov. 30, 2017 | Aug. 29, 2017 | May 31, 2017 | Mar. 13, 2017 | Dec. 14, 2016 | Sep. 8, 2016 | Dec. 9, 2015 | Sep. 10, 2015 | Jun. 12, 2015 | |||||||
Dividend record date | Nov. 22, 2017 | Aug. 21, 2017 | May 23, 2017 | Mar. 6, 2017 | Nov. 29, 2016 | Aug. 22, 2016 | Nov. 24, 2015 | Aug. 25, 2015 | May 22, 2015 | |||||||
Dividend payable (in dollars per share) | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.08 | $ 0.03 | $ 0.06 | $ 0.20 | $ 0.06 | |||||||
Dividend declared date | Nov. 8, 2017 | Aug. 7, 2017 | May 10, 2017 | Feb. 20, 2017 | Nov. 13, 2016 | Aug. 4, 2016 | Nov. 9, 2015 | Aug. 10, 2015 | May 4, 2015 | |||||||
Special dividend payable (in dollars per share) | $ 0.04 | $ 0.05 | $ 0.18 | $ 0.17 | ||||||||||||
Dividend [Member] | Subsequent Event [Member] | ||||||||||||||||
Dividend paid date | Apr. 3, 2018 | |||||||||||||||
Dividend record date | Mar. 20, 2018 | |||||||||||||||
Dividend payable (in dollars per share) | $ 0.08 | |||||||||||||||
Dividend declared date | Mar. 7, 2018 | |||||||||||||||
Special dividend payable (in dollars per share) | $ 0.08 | |||||||||||||||
Public Offering [Member] | ||||||||||||||||
Number of common shares issued | 2,420,980 | |||||||||||||||
Shares issued (in dollars per share) | $ 9.50 | |||||||||||||||
Net proceeds from public offering | $ 22,759 | |||||||||||||||
Underwriting expense and other offering expense | $ 240 | |||||||||||||||
Employee Benefit Plan [Member] | ||||||||||||||||
Amount of employer contributions | $ 565 | $ 53 | ||||||||||||||
2009 Stock Incentive Plan [Member] | ||||||||||||||||
Number of shares authorized | 3,210,133 | 391,100 | ||||||||||||||
Number of common stock available for future grants | 1,925,178 | |||||||||||||||
2009 Stock Incentive Plan [Member] | Alternative Asset Management Acquisition Corp. ("AAMAC") [Member] | ||||||||||||||||
Number of shares authorized | 782,200 | |||||||||||||||
Description of shares exchange ratio | two-for-one |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details Narrative) $ in Thousands | Dec. 31, 2017USD ($) |
FBR & Co. ("FBR") [Member] | |
Net capital | $ 56,462 |
Excess capital | 54,897 |
MLV & Co. [Member] | |
Net capital | 496 |
Excess capital | 396 |
Wunderlich Securities, Inc. [Member] | |
Net capital | 4,292 |
Excess capital | 3,653 |
Maximum [Member] | FBR & Co. ("FBR") [Member] | |
Net capital | 1,565 |
Maximum [Member] | MLV & Co. [Member] | |
Net capital | 100 |
Maximum [Member] | Wunderlich Securities, Inc. [Member] | |
Net capital | 640 |
B. Riley & Co., LLC [Member] | |
Net capital | 350 |
Excess capital | 100 |
B. Riley & Co., LLC [Member] | Maximum [Member] | |
Net capital | $ 250 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 02, 2016 |
Due from related party | $ 5,689 | $ 3,009 | |
GACP I, L.P [Member] | |||
Due from related party | 5,585 | 2,050 | |
CA Global Partners, LLC [Member] | |||
Due from related party | 52 | $ 959 | |
7.50% Senior Notes Due 2021 [Member] | |||
Principal amount | $ 35,231 | $ 28,750 | |
Interest rate | 7.50% | ||
7.50% Senior Notes Due 2021 [Member] | Management And Board Of Directors [Member] | |||
Principal amount | $ 2,731 | ||
Interest rate | 9.50% |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | $ 304,841 | $ 164,235 | $ 101,929 | ||||||||
Revenues - Sale of goods | 307 | 26,116 | 10,596 | ||||||||
Interest income - Securities lending | 17,028 | ||||||||||
Total revenues | 322,176 | 190,351 | 112,525 | ||||||||
Selling, general, and administrative expenses | (213,008) | (82,127) | (58,322) | ||||||||
Restructuring costs | 12,374 | 3,887 | |||||||||
Depreciation and amortization | (11,140) | (4,306) | (848) | ||||||||
Segment (loss) income | $ 14,217 | $ 1,356 | $ 2,560 | $ 10,711 | $ 31,458 | $ 15,422 | $ 180 | $ 1,665 | 28,844 | 48,725 | 22,082 |
Corporate and other expenses (including restructuring costs of $3,796, $413 and $1,006 for the years ended December 31, 2017, 2016 and 2015, respectively.) | (27,489) | (16,562) | (9,975) | ||||||||
Interest income | 420 | 318 | 17 | ||||||||
Loss from equity investment | (437) | ||||||||||
Interest expense | (8,382) | (1,996) | (834) | ||||||||
Income before income taxes | 20,445 | 47,047 | 21,265 | ||||||||
Provision for income taxes | 16,263 | (1,357) | (2,547) | (3,849) | 8,137 | 6,083 | (65) | 166 | (8,510) | (14,321) | (7,688) |
Net income | (5,451) | 122 | 3,363 | 13,901 | 23,009 | 8,374 | (27) | 1,370 | 11,935 | 32,726 | 13,577 |
Net income attributable to noncontrolling interests | 379 | 11,200 | 1,772 | ||||||||
Net income attributable to B. Riley Financial, Inc. | $ (6,113) | $ 368 | $ 3,280 | $ 14,021 | $ 12,440 | $ 8,939 | $ (101) | $ 248 | 11,556 | 21,526 | 11,805 |
Capital Markets [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | 172,695 | 39,335 | 35,183 | ||||||||
Interest income - Securities lending | 17,028 | ||||||||||
Total revenues | 189,723 | 39,335 | 35,183 | ||||||||
Selling, general, and administrative expenses | (150,092) | (32,695) | (30,229) | ||||||||
Restructuring costs | (7,855) | ||||||||||
Interest expense - Securities lending | (12,051) | ||||||||||
Depreciation and amortization | (3,794) | (549) | (519) | ||||||||
Segment (loss) income | 15,931 | 6,091 | 4,435 | ||||||||
Auction and Liquidation Reportable Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | 47,376 | 61,891 | 35,633 | ||||||||
Revenues - Sale of goods | 3 | 25,855 | 10,596 | ||||||||
Total revenues | 47,379 | 87,746 | 46,229 | ||||||||
Selling, general, and administrative expenses | (8,329) | (14,331) | (8,170) | ||||||||
Depreciation and amortization | (21) | (26) | (191) | ||||||||
Direct cost of services | (27,841) | (17,787) | (15,489) | ||||||||
Cost of goods sold | (2) | (14,502) | (3,072) | ||||||||
Segment (loss) income | 11,186 | 41,100 | 19,307 | ||||||||
Valuation and Appraisal Reportable Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | 33,331 | 31,749 | 31,113 | ||||||||
Selling, general, and administrative expenses | (8,561) | (8,778) | (9,101) | ||||||||
Depreciation and amortization | (181) | (107) | (137) | ||||||||
Direct cost of services | (14,876) | (13,983) | (13,560) | ||||||||
Segment (loss) income | 9,713 | 8,881 | 8,315 | ||||||||
Principal Investments - United Online [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues - Services and fees | 51,439 | 31,260 | |||||||||
Revenues - Sale of goods | 304 | 261 | |||||||||
Total revenues | 51,743 | 31,521 | |||||||||
Selling, general, and administrative expenses | (11,304) | (5,974) | |||||||||
Restructuring costs | (723) | (3,474) | |||||||||
Depreciation and amortization | (7,033) | (3,518) | |||||||||
Direct cost of services | (12,784) | (9,087) | |||||||||
Cost of goods sold | (396) | (253) | |||||||||
Segment (loss) income | 19,503 | 9,215 | |||||||||
Consolidated operating income from reportable segments | $ 56,333 | $ 65,287 | $ 32,057 |
BUSINESS SEGMENTS (Details 1)
BUSINESS SEGMENTS (Details 1) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Total Revenues - Services and fees | $ 304,841 | $ 164,235 | $ 101,929 |
Total Revenues - Sale of goods | 307 | 26,116 | 10,596 |
Total Revenues - Interest income - Securities lending | 17,028 | ||
Total revenues | 322,176 | 190,351 | 112,525 |
North America | |||
Segment Reporting Information [Line Items] | |||
Total Revenues - Services and fees | 301,881 | 135,428 | 77,153 |
Total Revenues - Sale of goods | 307 | 323 | 907 |
Total Revenues - Interest income - Securities lending | 17,028 | ||
Total revenues | 319,216 | 135,751 | 78,060 |
Australia | |||
Segment Reporting Information [Line Items] | |||
Total Revenues - Services and fees | 940 | 26,487 | |
Total revenues | 940 | 26,487 | |
Europe | |||
Segment Reporting Information [Line Items] | |||
Total Revenues - Services and fees | 2,020 | 2,320 | 24,776 |
Total Revenues - Sale of goods | 25,793 | 9,689 | |
Total revenues | $ 2,020 | $ 28,113 | $ 34,465 |
BUSINESS SEGMENTS (Details 2)
BUSINESS SEGMENTS (Details 2) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Total Long-lived Assets - Property and Equipment, net | $ 11,977 | $ 5,785 |
North America | ||
Total Long-lived Assets - Property and Equipment, net | 11,977 | 5,785 |
Australia | ||
Total Long-lived Assets - Property and Equipment, net | ||
Europe | ||
Total Long-lived Assets - Property and Equipment, net |
SELECTED QUARTERLY FINANCIAL 88
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 110,177 | $ 92,426 | $ 66,676 | $ 52,897 | $ 93,178 | $ 56,966 | $ 20,261 | $ 19,946 | |||
Operating income (loss) | 14,217 | 1,356 | 2,560 | 10,711 | 31,458 | 15,422 | 180 | 1,665 | $ 28,844 | $ 48,725 | $ 22,082 |
Income (loss) before income taxes | 10,812 | (1,235) | 816 | 10,052 | 31,146 | 14,457 | (92) | 1,536 | |||
(Provision) benefit for income taxes | (16,263) | 1,357 | 2,547 | 3,849 | (8,137) | (6,083) | 65 | (166) | 8,510 | 14,321 | 7,688 |
Net income (loss) attributable to B. Riley | (5,451) | 122 | 3,363 | 13,901 | 23,009 | 8,374 | (27) | 1,370 | 11,935 | 32,726 | 13,577 |
Net income (loss) attributable to B. Riley Financial, Inc. | $ (6,113) | $ 368 | $ 3,280 | $ 14,021 | $ 12,440 | $ 8,939 | $ (101) | $ 248 | $ 11,556 | $ 21,526 | $ 11,805 |
Earnings (loss) per share: | |||||||||||
Basic | $ (0.23) | $ 0.01 | $ 0.15 | $ 0.73 | $ 0.65 | $ 0.47 | $ (0.01) | $ 0.02 | $ 0.50 | $ 1.19 | $ 0.73 |
Diluted | $ (0.23) | $ 0.01 | $ 0.15 | $ 0.71 | $ 0.64 | $ 0.47 | $ (0.01) | $ 0.01 | $ 0.48 | $ 1.17 | $ 0.73 |
Weighted average shares outstanding: | |||||||||||
Basic | 26,150,502 | 26,059,490 | 21,216,829 | 19,181,749 | 19,004,548 | 18,977,072 | 17,935,254 | 16,490,178 | 23,181,388 | 18,106,621 | 16,221,040 |
Diluted | 26,150,502 | 27,639,862 | 22,119,055 | 19,626,574 | 19,511,292 | 19,208,527 | 17,935,254 | 16,553,953 | 24,290,904 | 18,391,852 | 16,265,915 |