Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 02, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-37503 | |
Entity Registrant Name | B. RILEY FINANCIAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-0223495 | |
Entity Address, Address Line One | 11100 Santa Monica Blvd | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90025 | |
City Area Code | (310) | |
Local Phone Number | 966-1444 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,135,636 | |
Entity Central Index Key | 0001464790 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Stock, par value $0.0001 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | RILY | |
Security Exchange Name | NASDAQ | |
Depositary Shares, each representing a 1/1000th fractional interest in a 6.875% share of Series A Cumulative Perpetual Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/1000th fractional interest in a 6.875% share of Series A Cumulative Perpetual Preferred Stock | |
Trading Symbol | RILYP | |
Security Exchange Name | NASDAQ | |
Depositary Shares, each representing a 1/1000th fractional interest in a 7.375% share of Series B Cumulative Perpetual Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares, each representing a 1/1000th fractional interest in a 7.375% share of Series B Cumulative Perpetual Preferred Stock | |
Trading Symbol | RILYL | |
Security Exchange Name | NASDAQ | |
6.50% Senior Notes due 2026 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.50% Senior Notes due 2026 | |
Trading Symbol | RILYN | |
Security Exchange Name | NASDAQ | |
6.375% Senior Notes due 2025 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.375% Senior Notes due 2025 | |
Trading Symbol | RILYM | |
Security Exchange Name | NASDAQ | |
6.75% Senior Notes due 2024 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.75% Senior Notes due 2024 | |
Trading Symbol | RILYO | |
Security Exchange Name | NASDAQ | |
6.00% Senior Notes due 2028 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.00% Senior Notes due 2028 | |
Trading Symbol | RILYT | |
Security Exchange Name | NASDAQ | |
5.50% Senior Notes due 2026 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 5.50% Senior Notes due 2026 | |
Trading Symbol | RILYK | |
Security Exchange Name | NASDAQ | |
5.25% Senior Notes due 2028 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 5.25% Senior Notes due 2028 | |
Trading Symbol | RILYZ | |
Security Exchange Name | NASDAQ | |
5.00% Senior Notes due 2026 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 5.00% Senior Notes due 2026 | |
Trading Symbol | RILYG | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Cash and cash equivalents | $ 209,971 | $ 268,618 |
Restricted cash | 2,351 | 2,308 |
Due from clearing brokers | 19,145 | 48,737 |
Securities and other investments owned, at fair value | 1,049,230 | 1,129,268 |
Securities borrowed | 2,942,843 | 2,343,327 |
Accounts receivable, net | 120,853 | 149,110 |
Due from related parties | 372 | 1,081 |
Loans receivable, at fair value (includes $97,062 and $98,729 from related parties as of March 31, 2023 and December 31, 2022, respectively) | 772,085 | 701,652 |
Prepaid expenses and other assets | 491,872 | 460,696 |
Operating lease right-of-use assets | 88,989 | 88,593 |
Property and equipment, net | 27,577 | 27,141 |
Goodwill | 523,997 | 512,595 |
Other intangible assets, net | 366,060 | 374,098 |
Deferred income taxes | 2,845 | 3,978 |
Total assets | 6,618,190 | 6,111,202 |
Liabilities: | ||
Accounts payable | 59,969 | 81,384 |
Accrued expenses and other liabilities | 263,335 | 322,974 |
Deferred revenue | 84,019 | 85,441 |
Deferred income taxes | 34,274 | 29,548 |
Due to related parties and partners | 431 | 2,210 |
Due to clearing brokers | 6,033 | 19,307 |
Securities sold not yet purchased | 7,806 | 5,897 |
Securities loaned | 2,937,982 | 2,334,031 |
Operating lease liabilities | 100,075 | 99,124 |
Notes payable | 19,882 | 25,263 |
Revolving credit facility | 139,463 | 127,678 |
Term loans, net | 626,613 | 572,079 |
Senior notes payable, net | 1,722,977 | 1,721,751 |
Total liabilities | 6,002,859 | 5,426,687 |
Commitments and contingencies (Note 17) | ||
Redeemable noncontrolling interests in equity of subsidiaries | 174,967 | 178,622 |
B. Riley Financial, Inc. equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,563 and 4,545 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively; and liquidation preference of $114,082 and $113,615 as of March 31, 2023 and December 31, 2022, respectively | 0 | 0 |
Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,135,636 and 28,523,764 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 3 | 3 |
Additional paid-in capital | 445,352 | 494,201 |
Accumulated deficit | (62,566) | (45,220) |
Accumulated other comprehensive loss | (1,604) | (2,470) |
Total B. Riley Financial, Inc. stockholders’ equity | 381,185 | 446,514 |
Noncontrolling interests | 59,179 | 59,379 |
Total equity | 440,364 | 505,893 |
Total liabilities and equity | $ 6,618,190 | $ 6,111,202 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Loans receivable, at fair value | $ 97,062 | $ 98,729 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 4,563 | 4,545 |
Preferred stock, shares outstanding (in shares) | 4,563 | 4,545 |
Preferred stock, liquidation preference | $ 114,082 | $ 113,615 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 28,135,636 | 28,523,764 |
Common stock, shares outstanding (in shares) | 28,135,636 | 28,523,764 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Services and fees | $ 235,559 | $ 202,814 |
Trading income (loss) and fair value adjustments on loans | 51,568 | (19,278) |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Sale of goods | 67,777 | 1,878 |
Total revenues | 432,090 | 246,840 |
Operating expenses: | ||
Direct cost of services | 54,397 | 11,651 |
Cost of goods sold | 47,626 | 2,251 |
Selling, general and administrative expenses | 212,627 | 175,199 |
Restructuring charge | 93 | 0 |
Interest expense - Securities lending and loan participations sold | 32,424 | 11,766 |
Total operating expenses | 347,167 | 200,867 |
Operating income | 84,923 | 45,973 |
Other income (expense): | ||
Interest income | 2,574 | 67 |
Dividend income | 13,204 | 7,861 |
Realized and unrealized gains (losses) on investments | (28,442) | (49,112) |
Change in fair value of financial instruments and other | (209) | 5,981 |
(Loss) income from equity investments | (10) | 6,775 |
Interest expense | (47,561) | (30,436) |
Income (loss) before income taxes | 24,479 | (12,891) |
(Provision for) benefit from income taxes | (7,919) | 3,695 |
Net income (loss) | 16,560 | (9,196) |
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (595) | 866 |
Net income (loss) attributable to B. Riley Financial, Inc. | 17,155 | (10,062) |
Preferred stock dividends | 2,012 | 2,002 |
Net income (loss) available to common shareholders | 15,143 | (12,064) |
Net income (loss) available to common shareholders | $ 15,143 | $ (12,064) |
Basic (loss) income per common share (in dollars per share) | $ 0.53 | $ (0.43) |
Diluted (loss) income per common share (in dollars per share) | $ 0.51 | $ (0.43) |
Weighted average basic common shares outstanding (in shares) | 28,585,337 | 27,855,033 |
Weighted average diluted common shares outstanding (in shares) | 29,513,435 | 27,855,033 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 16,560 | $ (9,196) |
Other comprehensive income (loss): | ||
Change in cumulative translation adjustment | 866 | (488) |
Other comprehensive income (loss), net of tax | 866 | (488) |
Total comprehensive income (loss) | 17,426 | (9,684) |
Comprehensive (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (449) | 866 |
Comprehensive income (loss) attributable to B. Riley Financial, Inc. | $ 17,875 | $ (10,550) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | FocalPoint Securities, LLC ("FocalPoint") | Preferred Stock | Common Stock | Common Stock Farber | Common Stock FocalPoint Securities, LLC ("FocalPoint") | Additional Paid-in Capital | Additional Paid-in Capital FocalPoint Securities, LLC ("FocalPoint") | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Common stock, shares outstanding (in shares) | 27,591,028 | ||||||||||
Balance (in shares) at Dec. 31, 2021 | 4,512 | ||||||||||
Balance at Dec. 31, 2021 | $ 705,201 | $ 0 | $ 3 | $ 413,486 | $ 248,862 | $ (1,080) | $ 43,930 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Preferred stock issued (in shares) | 23 | ||||||||||
Preferred stock issued | 639 | 639 | |||||||||
Vesting of restricted stock and other, net of shares withheld for employer taxes (in shares) | 32,328 | ||||||||||
Vesting of restricted stock and other, net of shares withheld for employer taxes | (1,294) | (1,294) | |||||||||
Shares issued for the acquisition of a business (in shares) | 304,878 | ||||||||||
Shares issued for the acquisition of a business | $ 20,320 | $ 20,320 | |||||||||
Share based payments | 17,013 | 17,013 | |||||||||
Dividends on common stock | (31,033) | (31,033) | |||||||||
Dividends on preferred stock | (2,002) | (2,002) | |||||||||
Net income | (9,196) | (10,062) | 866 | ||||||||
Distributions to noncontrolling interests | (935) | (935) | |||||||||
Contributions from noncontrolling interests | 1,770 | 1,770 | |||||||||
Acquisition of noncontrolling interests | 182 | 182 | |||||||||
Other comprehensive income | (488) | (488) | |||||||||
Balance (in shares) at Mar. 31, 2022 | 4,535 | ||||||||||
Balance at Mar. 31, 2022 | $ 700,177 | $ 0 | $ 3 | 450,164 | 205,765 | (1,568) | 45,813 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Common stock, shares outstanding (in shares) | 27,928,234 | ||||||||||
Common stock, shares outstanding (in shares) | 28,523,764 | 28,523,764 | |||||||||
Balance (in shares) at Dec. 31, 2022 | 4,545 | ||||||||||
Balance at Dec. 31, 2022 | $ 505,893 | $ 0 | $ 3 | 494,201 | (45,220) | (2,470) | 59,379 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Preferred stock issued (in shares) | 18 | ||||||||||
Preferred stock issued | 467 | 467 | |||||||||
Vesting of restricted stock and other, net of shares withheld for employer taxes (in shares) | 1,012,751 | ||||||||||
Vesting of restricted stock and other, net of shares withheld for employer taxes | (4,819) | (4,819) | |||||||||
Common stock repurchased and retired (in shares) | (1,452,831) | ||||||||||
Common stock repurchased and retired | (53,803) | (53,803) | |||||||||
Shares issued for the acquisition of a business (in shares) | 51,952 | ||||||||||
Shares issued for the acquisition of a business | 2,111 | 2,111 | |||||||||
Remeasurement of Lingo redeemable minority interest | (6,483) | (6,483) | |||||||||
Share based payments | 13,678 | 13,678 | |||||||||
Dividends on common stock | (31,291) | (31,291) | |||||||||
Dividends on preferred stock | (2,012) | (2,012) | |||||||||
Net income | 16,706 | 17,155 | (449) | ||||||||
Distributions to noncontrolling interests | (720) | (720) | |||||||||
Contributions from noncontrolling interests | 431 | 431 | |||||||||
Remeasurement of B. Riley Principal 250 Merger Corporation subsidiary temporary equity | (1,198) | (1,198) | |||||||||
Acquisition of noncontrolling interest | 538 | 538 | |||||||||
Other comprehensive income | 866 | 866 | |||||||||
Balance (in shares) at Mar. 31, 2023 | 4,563 | ||||||||||
Balance at Mar. 31, 2023 | $ 440,364 | $ 0 | $ 3 | $ 445,352 | $ (62,566) | $ (1,604) | $ 59,179 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Common stock, shares outstanding (in shares) | 28,135,636 | 28,135,636 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends on common stock per share (in dollars per share) | $ 1 | $ 1 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 16,560 | $ (9,196) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 13,077 | 7,848 |
Provision for doubtful accounts | 3,173 | 405 |
Share-based compensation | 13,746 | 17,013 |
Fair value adjustments, non-cash | (46,050) | (15,816) |
Non-cash interest and other | (1,141) | (3,596) |
Effect of foreign currency on operations | 271 | (34) |
Loss (income) from equity investments | 10 | (6,775) |
Dividends from equity investments | 129 | 774 |
Deferred income taxes | 5,807 | (41,900) |
Loss on loans receivable and disposal of fixed assets | 5 | 257 |
Gain on extinguishment of loan | 0 | (1,102) |
Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests | 308 | 215 |
Change in operating assets and liabilities: | ||
Amounts due to/from clearing brokers | 16,318 | (80,091) |
Securities and other investments owned | 95,037 | 215,973 |
Securities borrowed | (599,516) | 461,193 |
Accounts receivable | 25,083 | 6,355 |
Prepaid expenses and other assets | (25,705) | 1,701 |
Accounts payable, accrued payroll and related expenses, accrued expenses and other liabilities | (67,536) | (82,962) |
Amounts due to/from related parties and partners | (1,070) | 594 |
Securities sold, not yet purchased | 1,909 | (21,125) |
Deferred revenue | (1,749) | 4,924 |
Securities loaned | 603,951 | (469,553) |
Net cash provided by (used in) operating activities | 52,617 | (14,898) |
Cash flows from investing activities: | ||
Purchases of loans receivable | (311,970) | (93,853) |
Repayments of loans receivable | 260,587 | 101,000 |
Sale of loan receivable | 7,500 | 0 |
Acquisition of businesses and minority interest, net of $234 and $26,076 cash acquired for 2023 and 2022, respectively | (12,287) | (40,047) |
Purchases of property, equipment and intangible assets | (1,696) | (176) |
Proceeds from sale of property, equipment, intangible assets, and other | 1,364 | 2 |
Purchase of equity and other investments | (662) | (2,439) |
Net cash used in investing activities | (57,164) | (35,513) |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit | 29,021 | 0 |
Repayment of revolving line of credit | (17,237) | 0 |
Repayment of notes payable | (11,510) | (357) |
Repayment of term loan | (72,924) | (4,116) |
Proceeds from term loan | 128,187 | 0 |
Proceeds from issuance of senior notes | 0 | 20,037 |
Payment of debt issuance and offering costs | (1,957) | 0 |
Payment of contingent consideration | (1,302) | (181) |
Payment of employment taxes on vesting of restricted stock | (4,819) | (1,294) |
Common dividends paid | (46,856) | (27,886) |
Preferred dividends paid | (2,012) | (2,002) |
Repurchase of common stock | (53,803) | 0 |
Distribution to noncontrolling interests | (1,023) | (1,051) |
Contribution from noncontrolling interests | 431 | 1,770 |
Proceeds from issuance of preferred stock | 467 | 639 |
Net cash used in financing activities | (55,337) | (14,441) |
Decrease in cash, cash equivalents and restricted cash | (59,884) | (64,852) |
Effect of foreign currency on cash, cash equivalents and restricted cash | 1,280 | (496) |
Net decrease in cash, cash equivalents and restricted cash | (58,604) | (65,348) |
Cash, cash equivalents and restricted cash, beginning of period | 270,926 | 279,860 |
Cash, cash equivalents and restricted cash, end of period | 212,322 | 214,512 |
Supplemental disclosures: | ||
Interest paid | 81,423 | 38,272 |
Taxes paid | $ 2,932 | $ 73 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Cash Flows [Abstract] | ||
Net of cash acquired | $ 234 | $ 26,076 |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS OPERATIONS | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS OPERATIONS | ORGANIZATION AND NATURE OF BUSINESS OPERATIONS B. Riley Financial, Inc. and its subsidiaries (collectively, the “Company”) provide investment banking, brokerage, wealth management, asset management, direct lending, business advisory, valuation, and asset disposition services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals. The Company also has a portfolio of communication related businesses that provide consumer Internet access and cloud communication services and consumer related businesses that consist of a brands portfolio, which provides licensing of trademarks and brand investments, and Targus Cayman Holdco Limited (“Targus”), which designs and sells laptop and computer accessories. The Company operates in six reportable operating segments: (i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, research, sales and trading services to corporate and institutional clients; (ii) Wealth Management, through which the Company provides wealth management and tax services to corporate and high-net-worth clients; (iii) 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; (iv) Financial Consulting, through which the Company provides bankruptcy, financial advisory, forensic accounting, real estate consulting and valuation and appraisal services; (v) Communications, through which the Company provides consumer Internet access and related subscription services, cloud communication services, and mobile phone voice, text, and data services and devices; and (vi) Consumer, including brands, which generates revenue through the licensing of trademarks, and Targus, which generates revenue through sales of laptop and computer accessories. |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS In connection with the preparation of the consolidated financial statements for the year ended December 31, 2022, the Company identified a classification error of dividend income and realized and unrealized gains (losses) on certain investments within revenue. The following tables summarize the effects of the correction of the classification error on the Company’s restated condensed consolidated statements of operations for the three months ended March 31, 2022. The classification error had no impact on the Company's condensed consolidated balance sheet, condensed consolidated statements of equity, cash flows, net income, or earnings per share. The following tables present the corrections by financial statement line item within the condensed consolidated statement of operations for all periods presented: Three Months Ended March 31, 2022 As Previously Restatement Adjustments Restatement Reference As Restated Statement of Operations Revenues: Services and fees $ 210,675 $ (7,861) (a) $ 202,814 Trading (loss) income and fair value adjustments on loans (68,390) 49,112 (b) (19,278) Interest income - Loans and securities lending 61,426 — 61,426 Sale of goods 1,878 — 1,878 Total revenues 205,589 41,251 246,840 Operating expenses: Direct cost of services 11,651 — 11,651 Cost of goods sold 2,251 — 2,251 Selling, general and administrative expenses 175,199 — 175,199 Interest expense - Securities lending and loan participations sold 11,766 — 11,766 Total operating expenses 200,867 — 200,867 Operating income 4,722 41,251 45,973 Other income (expense): Interest income 67 — 67 Dividend income — 7,861 (a) 7,861 Realized and unrealized gains (losses) on investments — (49,112) (b) (49,112) Change in fair value of financial instruments and other 5,981 — 5,981 Income from equity method investments 6,775 — 6,775 Interest expense (30,436) — (30,436) Loss before income taxes (12,891) — (12,891) Provision for income taxes 3,695 — 3,695 Net loss (9,196) — (9,196) Net income attributable to noncontrolling interests and redeemable noncontrolling interests 866 — 866 Net loss attributable to B. Riley Financial, Inc. (10,062) — (10,062) Preferred stock dividends 2,002 — 2,002 Net loss available to common shareholders $ (12,064) $ — $ (12,064) Basic loss per common share $ (0.43) $ (0.43) Diluted loss per common share $ (0.43) $ (0.43) Weighted average basic common shares outstanding 27,855,033 27,855,033 Weighted average diluted common shares outstanding 27,855,033 27,855,033 (a) To reclassify dividends received from investments from Services and fees to Dividend income. (b) To reclassify realized and unrealized gains (losses) on investments from Trading income (loss) and fair value on loans to Realized and unrealized gains (losses) on investments. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( a) Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation. The Company consolidates all entities that it controls through a majority voting interest. In addition, the Company performs an analysis to determine whether its variable interest or interests give it a controlling financial interest in a variable interest entity (“VIE”) including ongoing reassessments of whether it is the primary beneficiary of a VIE. See Note 3(o) for further discussion. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 16, 2023. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. (b) Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, allowance for doubtful accounts, the fair value of loans receivables, intangible assets and goodwill, share based arrangements, contingent consideration, and accounting for income tax valuation allowances, recovery of contract assets and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. (c) 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 and totaled $32,424 and $11,766 during the three months ended March 31, 2023 and 2022, respectively. (d) Concentration of Risk Revenues in the Capital Markets, Financial Consulting, Wealth Management, and Communications segments are primarily generated in the United States. Revenues in the Auction and Liquidation segment and Consumer segment are primarily generated in the United States, Australia, Canada, and Europe. 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. The Company’s activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company’s exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidations services contract, the Company sometimes conducts operations with third parties through collaborative arrangements. (e) Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $5,121 and $1,763 during the three months ended March 31, 2023 and 2022, respectively. Advertising expense was included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. (f) 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. (g) Restricted Cash As of March 31, 2023 and December 31, 2022, restricted cash included $2,351 and $2,308 of cash collateral for leases, respectively. Cash, cash equivalents and restricted cash consist of the following: March 31, December 31, Cash and cash equivalents $ 209,971 $ 268,618 Restricted cash 2,351 2,308 Total cash, cash equivalents and restricted cash $ 212,322 $ 270,926 (h) Loans Receivable Under ASC 326 - Financial Instruments – Credit Losses , the Company elected the irrevocable fair value option for all outstanding loans receivable that were previously measured at amortized cost. Under the fair value option, loans receivables are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the condensed consolidated statements of operations. These loans are no longer subject to evaluation for impairment through an allowance for loan loss as such losses will be captured through fair value changes. Loans receivable, at fair value totaled $772,085 and $701,652 as of March 31, 2023 and December 31, 2022, respectively. The loans have various maturities through March 2027. As of March 31, 2023 and December 31, 2022, the historical cost of loans receivable accounted for under the fair value option was $795,996 and $769,022, respectively, which included principal balances of $799,616 and $772,873 respectively, and unamortized costs, origination fees, premiums and discounts, totaling $3,620 and $3,851, respectively. During the three months ended March 31, 2023 and 2022, the Company recorded net unrealized gains of $43,459 and $10,937, respectively, on the loans receivable at fair value, which was included in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. Loans receivable, at fair value on non-accrual was $39,552 and $7,153 as of March 31, 2023 and December 31, 2022, respectively, which represented approximately 5.1% and 1.0% of total loans receivable, at fair value as of March 31, 2023 and December 31, 2022, respectively. The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of March 31, 2023, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc. (“B&W”) as further described in Note 17. In accordance with the new credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. As of March 31, 2023, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure. Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statements of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. Badcock Loan Receivable On December 20, 2021, the Company entered into a Master Receivables Purchase Agreement with W.S. Badcock Corporation, a Florida corporation (“WSBC”), an indirect wholly owned subsidiary of Franchise Group, Inc., a Delaware corporation (“FRG”). The Company paid $400,000 in cash to WSBC for the purchase of certain consumer credit receivables of WSBC. On September 23, 2022, the Company's subsidiary, B Riley Receivables II, LLC (“BRRII”), a Delaware limited liability company, entered into a Master Receivables Purchase Agreement (“2022 Badcock Receivable”) with WSBC. This purchase of $168,363 consumer credit receivables of WSBC was partially financed by a $148,200 term loan discussed in Note 11. During the three months ended March 31, 2023, BRRII entered into Amendment No. 2 and No. 3 to the 2022 Badcock Receivable with WSBC for a total of $145,278 in additional consumer credit receivables. The accounting for these transactions resulted in the Company recording a loan receivable from WSBC with the recognition of interest income at an imputed rate based on the cash flows expected to be received from the collection of the consumer receivables that serve as collateral for the loan. The loan receivable was measured at fair value on the condensed consolidated balance sheets. In connection with these loans, the Company entered into a Servicing Agreement with WSBC pursuant to which WSBC will provide to the Company certain customary servicing and account management services in respect of the receivables purchased by the Company under the Receivables Purchase Agreement. In addition, subject to certain terms and conditions, FRG has agreed to guarantee the performance by WSBC of its obligations under the Master Receivables Purchase Agreements and the Servicing Agreement. As of March 31, 2023 and December 31, 2022, loans receivable to WSBC in the Company's condensed consolidated balance sheets included loans measured at fair value in the amount of $324,328 and $318,109, respectively. (i) Securities and Other Investments Owned and Securities Sold Not Yet Purchased Securities and other investments owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of March 31, 2023 and December 31, 2022, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities: March 31, December 31, Securities and other investments owned: Equity securities $ 929,582 $ 1,046,710 Corporate bonds 65,470 8,539 Other fixed income securities 5,248 3,956 Partnership interests and other 48,930 70,063 $ 1,049,230 $ 1,129,268 Securities sold not yet purchased: Equity securities $ 6,122 $ 4,466 Corporate bonds 480 1,162 Other fixed income securities 1,204 269 $ 7,806 $ 5,897 The Company owns certain equity securities that are accounted for under the fair value option where the Company would otherwise use the equity method of accounting. Investments become subject to the equity method of accounting when the Company possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the Company possesses more than 20% of the voting interests of the investee. However, the Company may have the ability to exercise significant influence over the investee when the Company owns less than 20% of the voting interests of the investee depending on the facts and circumstances that demonstrate that the ability to exercise influence is present, such as when the Company has representation on the board of directors of such investee. The following tables contain summarized financial information with respect to two of the Company's individually greater than 20% investments, where the Company has a voting interest in each investee of 41% and 43%, respectively, which has been aggregated and included below for purposes of the disclosure a quarter in arrears (for balance sheet information the period ended December 31, 2022 and September 30, 2022 correspond to the period ended March 31, 2023 and December 31, 2022, respectively, of the Company and for income statement information the three months ended December 31, 2022 and 2021 correspond to the three months ended March 31, 2023 and 2022, respectively, of the Company), which is the period in which the most recent financial information is available: December 31, 2022 September 30, 2022 Total assets $ 197,101 $ 202,520 Total liabilities $ 6,789 $ 5,737 Equity attributable to investee $ 190,312 $ 196,783 For the three months ended December 31, 2022 2021 Revenues $ 27,971 $ 27,209 Net income (loss) attributable to investees $ 11,808 $ 12,882 The following tables contain summarized financial information with respect to B&W, where the Company owns a 31% voting interest, included below for purposes of the disclosure a quarter in arrears (for balance sheet information the period ended December 31, 2022 and September 30, 2022 correspond to the period ended March 31, 2023 and December 31, 2022, respectively, of the Company and for income statement information the three months ended December 31, 2022 and 2021 correspond to the three months ended March 31, 2023 and 2022, respectively, of the Company), which is the period in which the most recent financial information is available: December 31, September 30, Total assets $ 942,655 $ 881,567 Total liabilities $ 944,744 $ 898,695 Equity attributable to investee $ (2,089) $ (17,128) For the three months ended December 31, 2022 2021 Revenues $ 249,877 $ 192,295 Net income attributable to investees $ 2,021 $ 25,874 As of March 31, 2023 and December 31, 2022, the fair value of these equity securities totaled $370,502 and $371,948, respectively, and are included in securities and other investments owned, at fair value in the condensed consolidated balance sheets. (j) 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 has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company’s partnership and investment fund interests are valued based on the Company’s proportionate share of the net assets of the partnerships and funds; the value for these investments is derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value (“NAV”) in accordance with ASC 820 - Fair Value Measurements. As of March 31, 2023 and December 31, 2022, partnership and investment fund interests valued at NAV of $48,930 and $70,063, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets. Securities and other investments owned also include investments in nonpublic entities that do not have a readily determinable fair value and do not report NAV per share. These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, we evaluate whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold. Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements, including the level in the fair value hierarchy that was used. As of March 31, 2023 and December 31, 2022, investments in nonpublic entities valued using a measurement alternative of $86,920 and $94,109, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets. The Company measures certain assets at fair value on a nonrecurring basis. These assets include equity method investments when they are deemed to be other-than-temporarily impaired, investments adjusted to their fair value by applying the measurement alternative, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. The Company did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, funds held in trust represents amounts invested in a mutual fund that invests in U.S. Treasury securities that were purchased with funds raised through the initial public offering of B. Riley Principal 250 Merger Corporation (“BRPM 250”), which is a consolidated special purpose acquisition corporation (“SPAC”). As of March 31, 2023 and December 31, 2022, the Company had $176,182 and $174,437, respectively, of funds held in trust related to the SPAC. The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of the class A public common shares of the SPAC as set forth in the trust agreement. The funds held in trust are included within Level 1 of the fair value hierarchy and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. The Company has warrant liabilities related to warrants of the SPAC that are held by investors in BRPM 250. The warrants are accounted for as liabilities in accordance with ASC 815 - Derivatives and Hedging and are measured at fair value at inception and on a recurring basis using quoted prices in over-the-counter markets. Warrant liabilities are included in Level 1 of the fair value hierarchy and included in accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets in the amount of $381 and $173 for BRPM 250 as of March 31, 2023 and December 31, 2022, respectively. Changes in fair value of warrants are included within change in fair value of financial instruments and other as part of other income (expense) in the consolidated statements of operations. 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 March 31, 2023 and December 31, 2022. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of March 31, 2023 Using Fair value as of March 31, 2023 Quoted prices in active markets Other observable inputs Significant unobservable inputs Assets: Funds held in trust account $ 176,182 $ 176,182 $ — $ — Securities and other investments owned: Equity securities 842,662 483,621 — 359,041 Corporate bonds 65,470 53,716 11,754 — Other fixed income securities 5,248 — 5,248 — Total securities and other investments owned 913,380 537,337 17,002 359,041 Loans receivable, at fair value 772,085 — — 772,085 Total assets measured at fair value $ 1,861,647 $ 713,519 $ 17,002 $ 1,131,126 Liabilities: Securities sold not yet purchased: Equity securities $ 6,122 $ 6,122 $ — $ — Corporate bonds 480 — 480 — Other fixed income securities 1,204 — 1,204 — Total securities sold not yet purchased 7,806 6,122 1,684 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,654 — — 4,654 Warrant liabilities 381 381 — — Contingent consideration 28,884 — — 28,884 Total liabilities measured at fair value $ 41,725 $ 6,503 $ 1,684 $ 33,538 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2022 Using Fair value at December 31, 2022 Quoted prices in active markets Other observable inputs Significant unobservable inputs Assets: Funds held in trust account $ 174,437 $ 174,437 $ — $ — Securities and other investments owned: Equity securities 952,601 584,136 — 368,465 Corporate bonds 8,539 — 8,539 — Other fixed income securities 3,956 — 3,956 — Total securities and other investments owned 965,096 584,136 12,495 368,465 Loans receivable, at fair value 701,652 — — 701,652 Total assets measured at fair value $ 1,841,185 $ 758,573 $ 12,495 $ 1,070,117 Liabilities: Securities sold not yet purchased: Equity securities $ 4,466 $ 4,466 $ — $ — Corporate bonds 1,162 — 1,162 — Other fixed income securities 269 — 269 — Total securities sold not yet purchased 5,897 4,466 1,431 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,648 — — 4,648 Warrant liabilities 173 173 — — Contingent consideration 31,046 — — 31,046 Total liabilities measured at fair value $ 41,764 $ 4,639 $ 1,431 $ 35,694 As of March 31, 2023 and December 31, 2022, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $1,131,126 and $1,070,117, respectively, or 17.1% and 17.5%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The following table summarizes the significant unobservable inputs in the fair value measurement of Level 3 financial assets and liabilities by category of investment and valuation technique as of March 31, 2023 and December 31, 2022: Fair value at March 31, 2023 Valuation Unobservable Range Weighted Assets: Equity securities $ 297,136 Market approach Multiple of EBITDA 1.5x - 16.0x 6.3x Multiple of Sales 3.8x 3.8x Market price of related security $0.01 - $14.05 $7.33 57,974 Discounted cash flow Market interest rate 23.8% 23.8% 3,931 Option pricing model Annualized volatility 30.0% - 510.0% 80.0% Loans receivable at fair value 744,018 Discounted cash flow Market interest rate 9.7% - 35.6% 18.1% 28,067 Market approach Market price of related security $13.25 $13.25 Total level 3 assets measured at fair value $ 1,131,126 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,654 Market approach Operating income multiple 6.0x 6.0x Contingent consideration 28,884 Discounted cash flow EBITDA volatility 75% 75% Asset volatility 69.0% 69.0% Market interest rate 8.5% 8.5% Revenue volatility 5.1% 5.1% Total level 3 liabilities measured at fair value $ 33,538 Fair value at December 31, Valuation Technique Unobservable Input Range Weighted Assets: Equity securities $ 304,172 Market approach Multiple of EBITDA 1.5x - 10.5x 6.0x Multiple of Sales 3.0x 3.0x Market price of related security $10.01 - $18.88 $16.91 57,267 Discounted cash flow Market interest rate 23.8% 23.8% 7,026 Option pricing model Annualized volatility 0.3% - 26.1% 70.0% Loans receivable at fair value 694,499 Discounted cash flow Market interest rate 6.0% - 83.5% 23.9% 7,153 Market approach Multiple of EBITDA 4.5x 4.5x Total level 3 assets measured at fair value $ 1,070,117 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,648 Market approach Operating income multiple 6.0x 6.0x Contingent consideration 31,046 Discounted cash flow EBITDA volatility 80.0% 80.0% Asset volatility 69.0% 69.0% Market interest rate 8.5% 8.5% Total level 3 liabilities measured at fair value $ 35,694 The changes in Level 3 fair value hierarchy during the three months ended March 31, 2023 and 2022 were as follows: Level 3 Level 3 Changes During the Period Level 3 Fair Relating to Purchases, Transfer in Three Months Ended March 31, 2023 Equity securities $ 368,465 $ (9,016) $ — $ 6,487 $ (6,895) $ 359,041 Loans receivable at fair value 701,652 43,459 231 26,743 — 772,085 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,648 — 308 (302) — 4,654 Contingent consideration 31,046 (3,447) — 1,285 — 28,884 Three Months Ended March 31, 2022 Equity securities $ 377,549 $ (4,543) $ — $ 19,912 $ (4,254) $ 388,664 Loans receivable at fair value 873,186 10,937 3,238 (4,970) — 882,391 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,506 — 247 (251) — 4,502 Contingent consideration — — — 22,464 — 22,464 The amount reported in the table above as of March 31, 2023 and December 31, 2022 included the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments. As of March 31, 2023 and December 31, 2022, the senior notes payable had a carrying amount of $1,722,977 and $1,721,751, respectively, and fair value of $1,258,532 and $1,431,787, respectively. The carrying amount of the term loans approximates fair value because the effective yield of such instruments are consistent with current market rates of interest for instruments of comparable credit risk. The investments in nonpublic entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. These investments are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments. Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators of impairment. If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022. These investments were measured due to an observable price change or impairment during the periods below. Fair Value Measurement Using Total Quoted prices in active markets Other observable inputs Significant unobservable inputs As of March 31, 2023 Investments in nonpublic entities that do not report NAV $ 4,271 $ — $ — $ 4,271 As of December 31, 2022 Investments in nonpublic entities that do not report NAV $ 20,251 $ — $ 18,659 $ 1,592 (k) Derivative and Foreign Currency Translation The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain loans receivable and Auction and Liquidation engagements with operations outside the United States. As of March 31, 2023 and December 31, 2022, there were no forward exchange contracts outstanding. The forward exchange contracts were entered into to improve the predictability of cash flows related to a retail store liquidation engagement and a loan receivable. The net gain from forward exchange contracts was zero and $68 during the three months ended March 31, 2023 and 2022, respectively. This amount was reported as a compo |
ACQUISITIONS
ACQUISITIONS | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS 2022 Acquisitions Acquisition of Targus On October 18, 2022, the Company acquired all of the issued and outstanding shares of Targus in a transaction pursuant to a purchase agreement among Targus, the sellers identified therein, and the other parties thereto. The purchase price consideration totaled $247,546, which consisted of cash in the amount of $112,686, seller financing of $54,000, the issuance of $59,016 in 6.75% senior notes due 2024, the issuance of $15,328 of the Company’s common stock and stock options, and deferred payments of $6,515. In accordance with ASC 805, the Company used the acquisition method of accounting for this acquisition. Goodwill of $78,519 and other intangible assets of $89,000 were recorded as a result of the acquisition. The acquisition complements the Company’s existing investments and offers potential growth to the Company’s operations in the Consumer segment. The assets and liabilities of Targus, both tangible and intangible, were recorded at their estimated fair values as of the October 18, 2022 acquisition date. Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of Targus, were charged against earnings in the amount of $1,921 and included in selling, general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2022. Targus goodwill recognized subsequent to the acquisition will be non-deductible for tax purposes. The fair value of acquisition consideration and preliminary purchase price allocation was as follows: Consideration paid: Cash $ 112,686 Fair value of seller financing 54,000 Fair value of 2,400,000 RILYO shares issued in senior notes at $24.59 per share 59,016 Fair value of 227,491 B. Riley common shares issued at $42.11 per share 9,580 Fair value of 215,876 stock options attributable to service period prior to acquisition 5,749 Fair value of deferred payments 6,515 Total consideration $ 247,546 Assets acquired and liabilities assumed: Cash and cash equivalents $ 18,810 Accounts receivable 91,039 Prepaid and other assets 90,289 Right-of-use assets 7,665 Property and equipment 8,320 Other intangible assets 89,000 Accounts payable (54,553) Accrued expenses and other liabilities (61,677) Deferred income taxes (9,989) Contingent consideration (2,212) Lease liability (7,665) Net tangible assets acquired and liabilities assumed 169,027 Goodwill 78,519 Total $ 247,546 During the three months ended March 31, 2023, goodwill for Targus changed by $2,766 related to certain purchase price accounting adjustments. The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets: Category Useful life Fair Value Customer relationships 9 years $ 50,000 Internally developed software and other intangibles 1 to 3 years 4,000 Tradenames N/A 35,000 Total $ 89,000 Unaudited Pro Forma Information Acquisition of Targus The following unaudited pro forma financial information is presented to illustrate the estimated effects of the acquisition of Targus as if it had occurred on January 1, 2021. The pro forma amounts include the historical operating results of the Targus prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include adjustments and consequential tax effects to reflect incremental depreciation and amortization expense to be incurred based on preliminary fair values of the identifiable intangible assets acquired, the incremental interest expense associated with the issuance of debt to finance the acquisition, and the adjustments to exclude acquisition related costs incurred during the year ended December 31, 2022 and to recognize these costs during the year ended December 31, 2021 as if incurred on January 1, 2021. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations of the combined company were, nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition. Pro Forma (unaudited) Three Months Ended March 31, 2022 Revenues $ 341,287 Net loss $ (7,313) Net loss attributable to B. Riley Financial, Inc. $ (8,179) Net loss attributable to common shareholders $ (10,181) These pro forma results do not necessarily represent the results of operations that would have been achieved if the acquisition had taken place on January 1, 2021, nor are they indicative of the results of operations for future periods. Other Acquisitions During the year ended December 31, 2022, the Company converted $17,500 of a loan receivable with Lingo into equity and the Company's ownership interest in Lingo increased from 40% to 80%. This resulted in the consolidation of Lingo and the pre-existing equity method investment was remeasured at fair value resulting in the recognition of a gain of $6,790, which is included in trading (losses) income and fair value adjustments on loans in the consolidated statements of operations. Upon the consolidation of Lingo on May 31, 2022, the total fair value of the assets of Lingo was $116,500 and the fair value of the 20% noncontrolling interest was $8,021. As part of the acquisition, the Company assumed liabilities in the amount of $32,172 and recorded goodwill of $34,412 and other intangible assets of $63,000 were recorded in the accompanying consolidated balance sheet. The Company also completed the acquisitions of BullsEye Telecom (“BullsEye”), FocalPoint Securities, LLC (“FocalPoint”), and Atlantic Coast Fibers, LLC (“ACR”) (and related businesses), and other immaterial business. In accordance with ASC 805, the Company used the acquisition method of accounting for these acquisitions, which were not material to our consolidated financial statements. The aggregate purchase price consideration consisted of $145,987 in cash, $20,320 in issuance of common stock of the Company, $52,969 in assumed debt and other consideration payable. The purchase price allocation consisted of $151,925 in goodwill, $52,860 in intangible assets, and $2,522 in net assets acquired. The results of operations of the acquisitions which were not material have been included in our consolidated financial statements from the date of purchase. In February 2023, certain working capital holdback provisions in the BullsEye purchase agreement were finalized resulting in the Company receiving $1,101 of cash which reduced goodwill from $151,925 to $150,824. Valuation Assumptions for Purchase Price Allocation Our valuation assumptions used to value the acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets, inventories, property and equipment, and deferred income taxes. In determining the fair value of intangible assets acquired, the Company must make assumptions about the future performance of the acquired businesses, including among other things, the forecasted revenue growth attributable to the asset groups and projected operating expenses inclusive of expected synergies, future cost savings, and other benefits expected to be achieved by combining the businesses acquired with the Company. The intangible assets acquired are primarily comprised of customer relationships, trade names and trademarks, developed technology, and backlog. The Company utilized widely accepted income-based, market-based, and cost-based valuation approaches to perform the preliminary purchase price allocations. The estimated fair value of the customer relationships and backlog are determined using the multi-period excess earnings method and the estimated fair value of the trade names and trademarks and developed technology are determined using the relief from royalty method. Both methods require forward looking estimates that are discounted to determine the fair value of the intangible asset using a risk-adjusted discount rate that is reflective of the level of risk associated with future estimates associated with the asset group that could be affected by future economic and market conditions. |
RESTRUCTURING CHARGE
RESTRUCTURING CHARGE | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING CHARGE | RESTRUCTURING CHARGE The Company had $93 and no restructuring charges during the three months ended March 31, 2023 and 2022, respectively. The restructuring charges during the three months ended March 31, 2023 were primarily related to reorganization and consolidation activities in the Wealth Management segment and the Communications segment. Reorganization and consolidation activities consisted of reductions in workforce and facility closures. The following tables summarize the changes in accrued restructuring charge during the three months ended March 31, 2023 and 2022: Three Months Ended 2023 2022 Balance, beginning of period $ 2,335 $ 624 Restructuring charge 93 — Cash paid (438) (27) Non-cash items 6 2 Balance, end of period $ 1,996 $ 599 The following table summarizes the restructuring activities by reportable segment during the three months ended March 31, 2023. There were no restructuring charges during the three months ended March 31, 2022. Wealth Management Communications Total Restructuring charges for the three months ended March 31, 2023: Employee termination $ — $ 60 $ 60 Facility closure and consolidation 33 — 33 Total restructuring charge $ 33 $ 60 $ 93 |
SECURITIES LENDING
SECURITIES LENDING | 3 Months Ended |
Mar. 31, 2023 | |
Securities Lending [Abstract] | |
SECURITIES LENDING | SECURITIES LENDING The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of March 31, 2023 and December 31, 2022: Gross amounts recognized Gross amounts offset in the consolidated balance sheets (1) Net amounts included in the consolidated balance sheets Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default (2) Net amounts As of March 31, 2023 Securities borrowed $ 2,942,843 $ — $ 2,942,843 $ 2,942,843 $ — Securities loaned $ 2,937,982 $ — $ 2,937,982 $ 2,937,982 $ — As of December 31, 2022 Securities borrowed $ 2,343,327 $ — $ 2,343,327 $ 2,343,327 $ — Securities loaned $ 2,334,031 $ — $ 2,334,031 $ 2,334,031 $ — _________________________ (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 | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The components of accounts receivable, net, include the following: March 31, December 31, Accounts receivable $ 116,411 $ 144,120 Investment banking fees, commissions and other receivables 10,766 8,654 Total accounts receivable 127,177 152,774 Allowance for doubtful accounts (6,324) (3,664) Accounts receivable, net $ 120,853 $ 149,110 Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended 2023 2022 Balance, beginning of period $ 3,664 $ 3,658 Add: Additions to reserve 3,173 405 Less: Write-offs (488) (960) Less: Recovery (25) — Balance, end of period $ 6,324 $ 3,103 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS | PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following: March 31, December 31, Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries $ 176,182 $ 174,437 Inventory 113,107 101,675 Equity method investments 41,816 41,298 Prepaid expenses 23,699 17,623 Unbilled receivables 14,857 14,144 Other receivables 67,902 66,403 Other assets 54,309 45,116 Prepaid expenses and other assets $ 491,872 $ 460,696 Unbilled receivables represent the amount of contractual reimbursable costs and fees for services performed in connection with fee and service based contracts in the Auction and Liquidation segment, mobile handsets in the Communications segment, and consulting related engagements in the Financial Consulting segment. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $523,997 and $512,595 as of March 31, 2023 and December 31, 2022, respectively. The changes in the carrying amount of goodwill for the three months ended March 31, 2023 were as follows: Capital Wealth Auction and Financial Communications Consumer Segment All Other Total Balance as of December 31, 2022 $ 162,018 $ 51,195 $ 1,975 $ 23,680 $ 193,195 $ 75,753 $ 4,779 $ 512,595 Acquisition of other business — — — 7,273 — — 2,428 9,701 Other — — — 36 (1,101) 2,766 — 1,701 Balance as of March 31, 2023 $ 162,018 $ 51,195 $ 1,975 $ 30,989 $ 192,094 $ 78,519 $ 7,207 $ 523,997 During the three months ended March 31, 2023, the changes in goodwill included $36 of foreign currency translation amounts, $(1,101) of working capital settlements as described in Note 4, and $2,766 related to certain purchase price accounting adjustments. Intangible assets consisted of the following: As of March 31, 2023 As of December 31, 2022 Useful Life Gross Carrying Value Accumulated Amortization Intangibles Net Gross Carrying Value Accumulated Amortization Intangibles Net Amortizable assets: Customer relationships 1.0 to 16 Years $ 270,511 $ (94,872) $ 175,639 $ 268,253 $ (87,049) $ 181,204 Domain names 7 years 185 (176) 9 185 (169) 16 Advertising relationships 8 years 100 (84) 16 100 (81) 19 Internally developed software and other intangibles 0.5 to 5 Years 28,295 (14,522) 13,773 28,295 (12,714) 15,581 Trademarks 3 to 10 Years 21,532 (5,185) 16,347 23,309 (6,307) 17,002 Total 320,623 (114,839) 205,784 320,142 (106,320) 213,822 Non-amortizable assets: Tradenames 160,276 — 160,276 160,276 — 160,276 Total intangible assets $ 480,899 $ (114,839) $ 366,060 $ 480,418 $ (106,320) $ 374,098 Amortization expense was $10,473 and $6,816 during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, estimated future amortization expense was $23,998, $26,786, $22,198, $18,897, and $26,132 for the three months ended March 31, 2023 (remaining nine months), 2024, 2025, 2026 and 2027, respectively. The estimated future amortization expense after December 31, 2027 was $87,773. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE Asset Based Credit Facility The Company is party to a credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) with a maximum borrowing limit of $200,000 and a maturity date of April 20, 2027. Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts. All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The interest rate for each revolving credit advance under the Credit Agreement is subject to certain terms and conditions, equal to the Secured Overnight Financing Rate (“SOFR”) 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 provides for success fees in the amount of 1.0% to 10.0% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. The credit facility also provides for funding fees in the amount of 0.05% to 0.20% of the aggregate principal amount of all credit advances and letters of credit issued in connection with a liquidation sale. Interest expense totaled $18 and $108 during the three months ended March 31, 2023 and 2022, respectively. There was no outstanding balance on this credit facility as of March 31, 2023 and December 31, 2022. As of March 31, 2023, there were no open letters of credit outstanding. The Company is in compliance with all financial covenants in the asset based credit facility as of March 31, 2023. Other Notes Payable |
TERM LOANS AND REVOLVING CREDIT
TERM LOANS AND REVOLVING CREDIT FACILITY | 3 Months Ended |
Mar. 31, 2023 | |
Term Loans And Revolving Credit Facility [Abstract] | |
TERM LOANS AND REVOLVING CREDIT FACILITY | TERM LOANS AND REVOLVING CREDIT FACILITY Targus Credit Agreement On October 18, 2022, the Company's subsidiary, Tiger US Holdings, Inc. (the “Borrower”), a Delaware corporation, among others, entered into a credit agreement (“Targus Credit Agreement”) with PNC Bank, National Association (“PNC”), as agent and security trustee for a five-year $28,000 term loan and a five-year $85,000 revolver loan, which was used to finance part of the acquisition of Targus. The Targus Credit Agreement contains certain covenants, including those limiting the Borrower’s 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. The Targus Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts outstanding under the Targus Credit Agreement. The Company is in compliance with all financial covenants in the Targus Credit Agreement as of March 31, 2023. The term loan bears interest on the outstanding principal amount equal to the term SOFR rate plus an applicable margin of 3.75%. The revolver loan consists of base rate loans that bear interest on the outstanding principal amount equal to the base rate plus an applicable margin of 1.00% to 1.75% and term rate loans that bear interest on the outstanding principal amount equal to the revolver SOFR rate plus an applicable margin of 2.00% to 2.75%. Principal outstanding is due in quarterly installments starting on December 31, 2022. Quarterly installments from June 30, 2023 to September 30, 2027 are in the amount of $1,400 per quarter and the remaining principal balance is due at final maturity on October 18, 2027. As of March 31, 2023 and December 31, 2022, the outstanding balance on the term loan was $24,678 (net of unamortized debt issuance costs of $522) and $26,021 (net of unamortized debt issuance costs of $580), respectively, and the outstanding balance on the revolver loan was $62,463 and $52,978, respectively. Interest expense on these loans during the three months ended March 31, 2023 was $1,689 (including amortization of deferred debt issuance costs and unused commitment fees of $173). The interest rate on the term loan was 8.66% and 8.43% and the interest rate on the revolver loan ranged between 6.66% and 9.75% and between 6.03% to 9.25% as of March 31, 2023 and December 31, 2022, respectively. Pathlight Credit Agreement On September 23, 2022, the Company's subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders (collectively, “Pathlight”) for a five-year $148,200 term loan. On January 12, 2023, Amendment No. 2 to the Pathlight Credit Agreement increased the term loan by an additional $78,296. On March 31, 2023, Amendment No. 3 to the Pathlight Credit Agreement increased the term loan by an additional $49,890. The term loan bears interest on the outstanding principal amount equal to the term SOFR rate plus an applicable margin of 6.50%. As of March 31, 2023 and December 31, 2022, the interest rate on the Pathlight Credit Agreement was 11.40% and 11.01%, respectively. The Pathlight Credit Agreement contains certain covenants, including those limiting the Borrower’s 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. The Pathlight Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults, and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding Pathlight Credit Agreement. The Company is in compliance with all financial covenants in the Pathlight Credit Agreement as of March 31, 2023. Principal outstanding under the Pathlight Credit Agreement is repaid based on collections of the 2022 Badcock Receivable less other application of payments as defined in the Pathlight Credit Agreement and the remaining principal balance is due at final maturity on September 23, 2027. As of March 31, 2023 and December 31, 2022, the outstanding balance on the term loan was $184,358 (net of unamortized debt issuance costs of $3,837) and $118,437 (net of unamortized debt issuance costs of $2,377), respectively. Interest expense on the term loan during the three months ended March 31, 2023 was $6,430 (including amortization of deferred debt issuance costs of $1,744). Lingo Credit Agreement On August 16, 2022, the Company's subsidiary, Lingo (the “Borrower”), entered into a credit agreement (the “Lingo Credit Agreement”) by and among the Borrower, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45,000 term loan. This loan was used to finance part of the purchase of Bullseye by Lingo. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank (the “New Lender”) for an incremental term loan of $7,500, increasing the principal balance of the term loan to $52,500. On November 10, 2022, Lingo entered into the Second Amendment to the Lingo Credit Agreement with KeyBank National Association for an incremental term loan of $20,500, increasing the principal balance of the term loan to $73,000. The term loan bears interest on the outstanding principal amount equal to the term SOFR rate plus a margin of 3.00% to 3.75% per annum, depending on the consolidated total funded debt ratio as defined in the Lingo Credit Agreement, plus applicable spread adjustment. As of March 31, 2023 and December 31, 2022, the interest rate on the Lingo Credit Agreement was 8.48% and 7.89%, respectively. The Lingo Credit Agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of its businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the Lingo Credit Agreement requires the Borrower to maintain certain financial ratios. The Lingo Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the Lingo Credit Agreement. The Company is in compliance with all financial covenants in the Lingo Credit Agreement as of March 31, 2023. Principal outstanding is due in quarterly installments. Quarterly installments from June 30, 2023 to December 31, 2023 are in the amount of $2,281 per quarter, from March 31, 2024 to December 31, 2024 are in the amount of $2,738 per quarter, from March 31, 2025 to June 30, 2027 are in the amount of $3,650, and the remaining principal balance is due at final maturity on August 16, 2027. As of March 31, 2023 and December 31, 2022, the outstanding balance on the term loan was $69,778 (net of unamortized debt issuance costs of $940) and $71,985 (net of unamortized debt issuance costs of $1,016), respectively. Interest expense on the term loan during the three months ended March 31, 2023 was $1,561 (including amortization of deferred debt issuance costs of $75). Nomura Credit Agreement On June 23, 2021, the Company, and its wholly owned subsidiaries, BR Financial Holdings, LLC (the “Primary Guarantor”), and BR Advisory & Investments, LLC (the “Borrower”) entered into a credit agreement (as amended, the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Administrative Agent”), and Wells Fargo Bank, N.A., as collateral agent (the “Collateral Agent”), for a four-year $200,000 secured term loan credit facility (the “Term Loan Facility”) and a four-year $80,000 secured revolving loan credit facility (the “Revolving Credit Facility”). On December 17, 2021 (the “Amendment Date”), the Company, the Primary Guarantor, and the Borrower entered into a Second Incremental Amendment to Credit Agreement, pursuant to which the Borrower established an incremental facility in an aggregate principal amount of $100,000 (the “Incremental Facility” and the incremental term loans made thereunder, the “Incremental Term Loans”) of secured term loans under the Credit Agreement on terms identical to those applicable to the Term Loan Facility. The Borrower borrowed the full amount of the Incremental Term Loans on the Amendment Date. The Term Loan Facility, Revolving Credit Facility, and Incremental Facility (together, the “Credit Facilities”), mature on June 23, 2025, subject to acceleration or prepayment. SOFR rate loans under the Credit Facilities accrue interest at the term SOFR rate plus a term SOFR adjustment determined by the selected interest period and an applicable margin of 4.50%. Base rate loans accrue interest at the Base Rate plus an applicable margin of 3.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, the Company is required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by the average utilization of the facility for the immediately preceding fiscal quarter. Subject to certain eligibility requirements, the assets of certain subsidiaries of the Company that hold credit assets, private equity assets, and public equity assets are placed into a borrowing base, which serves to limit the borrowings under the Credit Facilities. If borrowings under the facilities exceed the borrowing base, the Company is obligated to prepay the loans in an aggregate amount equal to such excess. The Credit Agreement contains certain representations and warranties (subject to certain agreed qualifications) that are customary for financings of this kind. The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit the Company’s, the Primary Guarantor’s, the Borrower’s, and the Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain operating earnings before interest, taxes, depreciation, and amortization (EBITDA) of at least $135,000 and the Primary Guarantor to maintain net asset value of at least $1,100,000. The Credit Agreement contains customary events of default, including with respect to a failure to make payments under the credit facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events. The Company is in compliance with all financial covenants in the Credit Agreement as of March 31, 2023. Commencing on September 30, 2022, the Term Loan Facility and Incremental Facility began to amortize in equal quarterly installments of 1.25% of the aggregate principal amount of the term loan as of the closing date with the remaining balance due at final maturity on June 23, 2025. Quarterly installments from June 30, 2023 to March 31, 2025 are in the amount of $3,750 per quarter. As of March 31, 2023 and December 31, 2022, the outstanding balances on the Term Loan Facility and Incremental Facility were $283,739 (net of unamortized debt issuance costs of $5,011) and $286,962 (net of unamortized debt issuance costs of $5,538), respectively. Interest on the term loan during the three months ended March 31, 2023 and 2022 was $7,300 (including amortization of deferred debt issuance costs of $527) and $4,102 (including amortization of deferred debt issuance costs of $509, respectively. The interest rate on the term loan as of March 31, 2023 and December 31, 2022 was 9.59% and 9.23%, respectively. The Company had an outstanding balance of $77,000 and $74,700 under the Revolving Credit Facility as of March 31, 2023 and December 31, 2022, respectively. Interest on the revolving facility during the three months ended March 31, 2023 and 2022 was $1,956 (including amortization of deferred financing costs of $150) and $1,100 (including amortization of deferred financing costs of $143). The interest rate on the revolving facility as of March 31, 2023 and December 31, 2022 was 9.69% and 9.23%, respectively. BRPAC Credit Agreement On December 19, 2018, BRPI Acquisition Co LLC (“BRPAC”), a Delaware limited liability company, UOL, and YMAX Corporation, Delaware corporations (collectively, the “Borrowers”), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into a credit agreement (the “BRPAC Credit Agreement”) with the Banc of California, N.A. in the capacity as agent (the “Agent”) and lender and with the other lenders party thereto (the “Closing Date Lenders”). Certain of the Borrowers’ U.S. subsidiaries are guarantors of all obligations under the BRPAC Credit Agreement and are parties to the BRPAC Credit Agreement in such capacity (collectively, the “Secured Guarantors”; and together with the Borrowers, the “Credit Parties”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares outstanding membership interests of BRPAC are pledged as collateral. The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties; (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security, and other related agreements. The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’, ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the BRPAC Credit Agreement. The Company is in compliance with all financial covenants in the BRPAC Credit Agreement as of March 31, 2023. Through a series of amendments, including the most recent Fourth Amendment to the BRPAC Credit Agreement (the “Fourth Amendment”) on June 21, 2022, the Borrowers, the Secured Guarantors, the Agent and the Closing Date Lenders agreed to the following, among other things: (i) the Lenders agreed to make a new $75,000 term loan to the Borrowers, the proceeds of which the Borrowers’ used to repay the outstanding principal amount of the existing terms loans and optional loans and will use for other general corporate purposes, (ii) a new applicable margin level of 3.50% was established as set forth from the date of the Fourth Amendment, (iii) Marconi Wireless Holdings, LLC (“Marconi Wireless”) was added to the Borrowers, (iv) the maturity date of the term loan was set to June 30, 2027, and (v) the Borrowers were permitted to make certain distributions to the parent company of the Borrowers. The borrowings under the amended BRPAC Credit Agreement bear interest equal to the term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the Borrowers’ consolidated total funded debt ratio as defined in the BRPAC Credit Agreement. As of March 31, 2023 and December 31, 2022, the interest rate on the BRPAC Credit Agreement was 8.23% and 7.65%, respectively. Principal outstanding under the Amended BRPAC Credit Agreement is due in quarterly installments. Quarterly installments from June 30, 2023 to December 31, 2023 are in the amount of $4,688 per quarter, from March 31, 2024 to December 31, 2026 are in the amount of $3,750 per quarter, on March 31, 2027 is in the amount of $2,813, and the remaining principal balance is due at final maturity on June 30, 2027. |
SENIOR NOTES PAYABLE
SENIOR NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
SENIOR NOTES PAYABLE | SENIOR NOTES PAYABLE Senior notes payable, net, are comprised of the following: March 31, December 31, 6.750% Senior notes due May 31, 2024 $ 199,232 $ 199,232 6.500% Senior notes due September 30, 2026 180,532 180,532 6.375% Senior notes due February 28, 2025 146,432 146,432 6.000% Senior notes due January 31, 2028 266,058 266,058 5.500% Senior notes due March 31, 2026 217,440 217,440 5.250% Senior notes due August 31, 2028 405,483 405,483 5.000% Senior notes due December 31, 2026 324,714 324,714 1,739,891 1,739,891 Less: Unamortized debt issuance costs (16,914) (18,140) $ 1,722,977 $ 1,721,751 During the three months ended March 31, 2023 and 2022, the Company issued zero and $20,073, respectively, of senior notes with maturity dates ranging from May 2024 to August 2028 pursuant to At the Market Issuance Sales Agreements with B. Riley Securities, Inc. which governs the program of at-the-market sales of the Company’s senior notes. A series of prospectus supplements were filed by the Company with the SEC in respect of the Company’s offerings of these senior notes. As of March 31, 2023 and December 31, 2022, the total senior notes outstanding was $1,722,977 (net of unamortized debt issue costs of $16,914) and $1,721,751 (net of unamortized debt issue costs of $18,140) with a weighted average interest rate of 5.75% and 5.75%, respectively. Interest on senior notes is payable on a quarterly basis. Interest expense on senior notes totaled $26,227 and $24,409 during the three months ended March 31, 2023 and 2022, respectively. Sales Agreement Prospectus to Issue Up to $250,000 of Senior Notes The most recent sales agreement prospectus was filed by the Company with the SEC on January 5, 2022 (the “Sales Agreement Prospectus”). This program provides for the sale by the Company of up to $250,000 of certain of the Company’s senior notes. As of March 31, 2023 and December 31, 2022, the Company had $70 remaining availability under the Sales Agreement Prospectus. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following: March 31, December 31, Accrued payroll and related expenses $ 60,141 $ 86,798 Dividends payable 18,360 33,923 Income taxes payable 12,100 14,760 Other tax liabilities 19,617 23,426 Contingent consideration 28,884 31,046 Accrued expenses 79,520 68,180 Other liabilities 44,713 64,841 Accrued expenses and other liabilities $ 263,335 $ 322,974 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers by the Company's six reportable operating segments and the All Other category during the three months ended March 31, 2023 and 2022 was as follows: Capital Wealth Auction and Financial Communications Segment Consumer All Other Total Revenues for the three months ended March 31, 2023 Corporate finance, consulting and investment banking fees $ 39,149 $ — $ — $ 14,515 $ — $ — $ — $ 53,664 Wealth and asset management fees 664 43,310 — — — — — 43,974 Commissions, fees and reimbursed expenses 9,218 3,928 5,444 10,495 — — — 29,085 Subscription services — — — — 83,008 — — 83,008 Sale of goods — — 216 — 1,867 65,694 — 67,777 Advertising, licensing and other — — — — 2,044 4,309 9,273 15,626 Total revenues from contracts with customers 49,031 47,238 5,660 25,010 86,919 70,003 9,273 293,134 Interest income - Loans and securities lending 77,186 — — — — — — 77,186 Trading (loss) gain on investments 7,020 1,272 — — — — — 8,292 Fair value adjustment on loans 43,276 — — — — — — 43,276 Other 8,898 1,304 — — — — — 10,202 Total revenues $ 185,411 $ 49,814 $ 5,660 $ 25,010 $ 86,919 $ 70,003 $ 9,273 $ 432,090 Capital Wealth Auction and Financial Communications Segment Consumer All Other Total Revenues for the three months ended March 31, 2022 Corporate finance, consulting and investment banking fees $ 41,673 $ — $ — $ 16,970 $ — $ — $ — $ 58,643 Wealth and asset management fees 2,400 64,222 — — — — — 66,622 Commissions, fees and reimbursed expenses 12,045 12,849 3,355 8,966 — — — 37,215 Subscription services — — — — 27,813 — — 27,813 Sale of goods — — — — 1,878 — — 1,878 Advertising, licensing and other — — — — 2,274 4,557 699 7,530 Total revenues from contracts with customers 56,118 77,071 3,355 25,936 31,965 4,557 699 199,701 Interest income - Loans and securities lending 61,426 — — — — — — 61,426 Trading (loss) gain on investments (30,738) 522 — — — — — (30,216) Fair value adjustment on loans 10,938 — — — — — — 10,938 Other 5,105 (114) — — — — 4,991 Total revenues $ 102,849 $ 77,479 $ 3,355 $ 25,936 $ 31,965 $ 4,557 $ 699 $ 246,840 Contract Balances The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligation(s) are satisfied. Receivables related to revenues from contracts with customers totaled $120,853 and $149,110 as of March 31, 2023 and December 31, 2022, respectively. The Company had no significant impairments related to these receivables during the three months ended March 31, 2023 and 2022. The Company also has $14,857 and $14,144 of unbilled receivables included in prepaid expenses and other assets as of March 31, 2023 and December 31, 2022, respectively. The Company’s deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, financial consulting engagements, subscription services where the performance obligation has not yet been satisfied and license agreements with guaranteed minimum royalty payments and advertising/marketing fees with additional royalty revenue based on a percentage of defined sales. Deferred revenue as of March 31, 2023 and December 31, 2022 was $84,019 and $85,441, respectively. The Company expects to recognize the deferred revenue of $84,019 as of March 31, 2023 as service and fee revenues when the performance obligation is met during the years ended December 31, 2023 (remaining nine months), 2024, 2025, 2026 and 2027 in the amount of $54,839, $13,350, $7,449, $3,552, and $1,780, respectively. The Company expects to recognize the deferred revenue of $3,049 after December 31, 2027. During the three months ended March 31, 2023 and 2022, the Company recognized revenue of $22,502 and $14,939 that was recorded as deferred revenue at the beginning of the respective year. Contract Costs Contract costs include: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable; (2) costs to fulfill Auction and Liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation where the revenue is recognized over time when the performance obligation is satisfied; and (3) commissions paid to obtain magicJack contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period. The capitalized costs to fulfill a contract were $7,190 and $5,990 as of March 31, 2023 and December 31, 2022, respectively, and are recorded in prepaid expenses and other assets in the condensed consolidated balance sheets. For the three months ended March 31, 2023 and 2022, the Company recognized expenses of $1,015 and $915 related to capitalized costs to fulfill a contract, respectively. There were no significant impairment charges recognized in relation to these capitalized costs during the three months ended March 31, 2023 and 2022. Remaining Performance Obligations and Revenue Recognized from Past Performance The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of March 31, 2023. Corporate finance and investment banking fees and retail liquidation engagement fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price as of March 31, 2023. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective income tax rate was a provision of 32.4% during the three months ended March 31, 2023 and a benefit of 28.7% during the three months ended March 31, 2022. As of March 31, 2023, the Company had federal net operating loss carryforwards of $55,349 and state net operating loss carryforwards of $46,981, respectively. The Company’s federal net operating loss carryforwards will expire in the tax years commencing in December 31, 2033 through December 31, 2038. The state net operating loss carryforwards will expire in the tax years commencing in December 31, 2030. 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 March 31, 2023, the Company believes that the existing net operating loss carryforwards will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets and has not provided a valuation allowance. The Company does not believe that it is more likely than not that the Company will be able to utilize the benefits related to capital loss carryforwards and has provided a valuation allowance in the amount of $66,308 against these deferred tax assets. The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain federal, state and local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2019 to 2022. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into law. The IR Act provides for, among other things, a new U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of public traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. The Company does not expect the IR Act to have a material impact on its financial position and result of operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Remeasurements to the carrying value of the redeemable noncontrolling interests in equity of subsidiaries are not deemed to be a dividend (see Note 3(l)). According to ASC 480 - Distinguishing Liabilities from Equity , there is no impact on earnings per share in the computation of basic and diluted earnings per share to common shareholders for changes in the carrying value of the redeemable noncontrolling interests in equity, when such changes in carrying value which in substance approximates fair value. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share were 1,999,273 and 1,350,062 for the three months ended March 31, 2023 and 2022, respectively, because to do so would have been anti-dilutive. Basic and diluted earnings per share were calculated as follows: Three Months Ended 2023 2022 Net income (loss) attributable to B. Riley Financial, Inc. $ 17,155 $ (10,062) Preferred stock dividends (2,012) (2,002) Net income (loss) applicable to common shareholders $ 15,143 $ (12,064) Weighted average common shares outstanding: Basic 28,585,337 27,855,033 Effect of dilutive potential common shares: Restricted stock units and warrants 928,098 — Diluted 29,513,435 27,855,033 Basic income (loss) per common share $ 0.53 $ (0.43) Diluted income (loss) per common share $ 0.51 $ (0.43) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES (a) Legal Matters The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against the Company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, the Company cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations. (b) Babcock & Wilcox Commitments and Guarantees On June 30, 2021, the Company agreed to guaranty (the “B. Riley Guaranty”) up to $110,000 of obligations that B&W may owe to providers of cash collateral pledged in connection with B&W’s debt financing. The B. Riley Guaranty is enforceable in certain circumstances, including, among others, certain events of default and the acceleration of B&W’s obligations under a reimbursement agreement with respect to such cash collateral. B&W will pay the Company $935 per annum in connection with the B. Riley Guaranty. B&W has agreed to reimburse the Company to the extent the B. Riley Guaranty is called upon. The B. Riley Guaranty was in respect of up to $100,000 of B&W obligations after B&W made paydowns of $10,000 during the year ended December 31, 2022. On August 10, 2020, the Company entered into a project specific indemnity rider to a general agreement of indemnity made by B&W in favor of one of its sureties. Pursuant to the indemnity rider, the Company agreed to indemnify the surety in connection with a default by B&W under the underlying indemnity agreement relating to a $29,970 payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. In consideration for providing the indemnity rider, B&W paid the Company fees in the amount of $600 on August 26, 2020. On December 22, 2021, the Company entered into a general agreement of indemnity in favor of one of B&W’s sureties. Pursuant to this indemnity agreement, the Company agreed to indemnify the surety in connection with a default by B&W under a 30,000€ payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. In consideration for providing the indemnity, B&W paid the Company fees in the amount of $1,694 on January 20, 2022. (c) Other Commitments In the normal course of business, the Company enters into commitments to its clients in connection with capital raising transactions, such as firm commitment underwritings, equity lines of credit, or other commitments to provide financing on specified terms and conditions. These commitments require the Company to purchase securities at a specified price or otherwise provide debt or equity financing on specified terms. Securities underwriting exposes the Company to market and credit risk, primarily in the event that, for any reason, securities purchased by the Company cannot be distributed at the anticipated price and to balance sheet risk in the event that debt or equity financing commitments cannot be syndicated. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED PAYMENTS | SHARE-BASED PAYMENTS (a) Employee Stock Incentive Plans Under the 2021 Stock Incentive Plan (the “2021 Plan”), share-based compensation expense for restricted stock units under the Company’s 2021 Plan was $13,312 and $16,860 during the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023, in connection with employee stock incentive plans, the Company granted 502,824 restricted stock units with a grant date fair value of $19,338. During the three months ended March 31, 2022, in connection with employee stock incentive plans, the Company granted 161,559 restricted stock units with a grant date fair value of $11,863 and 65,000 performance based restricted stock units with a grant date fair value of $2,329. The restricted stock units generally vest over a period of one based restricted stock units generally vest based on both the employee’s continued service and the achievement of a set threshold of the Company’s common stock price, as defined in the grant, during the two (b) Employee Stock Purchase Plan In connection with the Company’s Employee Stock Purchase Plan ("Purchase Plan"), share based compensation was $298 and $153 for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022, there were 362,986 shares reserved for issuance under the Purchase Plan. (c) Common Stock Since October 30, 2018, the Company’s Board of Directors has authorized annual share repurchase programs of up to $50,000 of its outstanding common shares. All share repurchases were effected on the open market at prevailing market prices or in privately negotiated transactions. During the three months ended March 31, 2023 and 2022, the Company repurchased 1,452,831 shares of its common stock for $53,688, which represents an average price of $36.95 per common share and zero shares of its common stock, respectively. The shares repurchased under the program are retired. On October 31, 2022, the share repurchase program was reauthorized by the Board of Directors for share repurchases up to $50,000 of the Company's outstanding common shares and the reauthorized program expires in October 2023. (d) Preferred Stock During the three months ended March 31, 2023 and 2022, the Company issued zero and 19 depository shares of the Series A Preferred Stock, respectively. There were 2,834 shares issued and outstanding as of March 31, 2023 and December 31, 2022. Total liquidation preference for the Series A Preferred Stock as of March 31, 2023 and December 31, 2022 was $70,854. Dividends on the Series A preferred paid during the three months ended March 31, 2023 and 2022 were $0.4296875 per depository share, respectively. During the three months ended March 31, 2023 and 2022, the Company issued 18 and 4 depository shares of the Series B Preferred Stock. There were 1,729 and 1,710 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively. Total liquidation preference for the Series B Preferred Stock as of March 31, 2023 and December 31, 2022 was $43,228 and $42,761, respectively. Dividends on the Series B preferred paid during the three months ended March 31, 2023 and 2022 were $0.4609375 per depository share, respectively. |
NET CAPITAL REQUIREMENTS
NET CAPITAL REQUIREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Broker-Dealer [Abstract] | |
NET CAPITAL REQUIREMENTS | NET CAPITAL REQUIREMENTSB. Riley Securities (“BRS”) and B. Riley Wealth Management (“BRWM”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and 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 maintenance of minimum net capital and requires 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 March 31, 2023, BRS had net capital of $146,827, which was $142,696 in excess of required minimum net capital of $4,131; and BRWM had net capital of $11,105, which was $8,780 in excess of required minimum net capital of $2,325.As of December 31, 2022, BRS had net capital of $175,503, which was $169,458 in excess of its required minimum net capital of $6,045; and BRWM had net capital of $11,144, which was $8,615 in excess of its required minimum net capital of $2,529. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS The Company provides asset management and placement agent services to unconsolidated funds affiliated with the Company (the “Funds”). In connection with these services, the Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Funds. As of March 31, 2023 and December 31, 2022, amounts due from related parties of $372 and $1,081, respectively, were due from the Funds for management fees and other operating expenses. In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P. (“Whitehawk”), a limited partnership controlled by Mr. J. Ahn, who is the brother of Phil Ahn, the Company’s Chief Financial Officer and Chief Operating Officer. Whitehawk has agreed to provide investment advisory services for two of the funds, GACP I, L.P. and GACP II, L.P. During the three months ended March 31, 2023 and 2022, management fees paid for investment advisory services by Whitehawk was $1,142 and $1,079, respectively. The Company periodically participates in loans and financing arrangements for which the Company has an equity ownership and representation on the board of directors (or similar governing body). The Company may also provide consulting services or investment banking services to raise capital for these companies. These transactions can be summarized as follows: Babcock and Wilcox During the three months ended March 31, 2023 and 2022, the Company earned zero and $53, respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities. One of the Company’s wholly owned subsidiaries entered into a services agreement with B&W that provided for the President of the Company to serve as the Chief Executive Officer of B&W until November 30, 2020 (the “Executive Consulting Agreement”), unless terminated by either party with thirty days written notice. The agreement was extended through December 31, 2023. Under this agreement, fees for services provided are $750 per annum, paid monthly. In addition, subject to the achievement of certain performance objectives as determined by B&W’s compensation committee of the board, a bonus or bonuses may also be earned and payable to the Company. In March 2022, a $1,000 performance fee was approved in accordance with the Executive Consulting Agreement. The Company is also a party to indemnification agreements for the benefit of B&W, and the B. Riley Guaranty, each as disclosed above in Note 17 – Commitments and Contingencies. The Arena Group Holdings, Inc. (fka the Maven, Inc.) The Company has loans receivable due from the Arena Group Holdings, Inc. (fka the Maven, Inc.) ("Arena") included in loans receivable, at fair value of $97,062 and $98,729 as of March 31, 2023 and December 31, 2022, respectively. Interest on these loans is payable at 10% per annum with maturity dates through December 2023. During the three months ended March 31, 2023 and 2022, the Company earned zero and $2,021 underwriting and financial advisory and other fees from Arena in connection with Arena's capital raising activities, respectively. California Natural Resources Group, LLC On November 1, 2021, the Company extended a $34,393 bridge promissory note bearing interest at up to 10.0% per annum to California Natural Resources Group, LLC (“CalNRG”). On January 3, 2022, CalNRG repaid the promissory note using proceeds from a new credit facility with a third party bank (the “CalNRG Credit Facility”). The Company has guaranteed CalNRG’s obligations, up to $10,375, under the CalNRG Credit Facility. Faze Clan On March 9, 2022, the Company loaned $10,000 to Faze Clan, Inc. (“Faze”) pursuant to a bridge credit agreement (the “Bridge Agreement”). On April 25, 2022, the Company loaned an additional $10,000 pursuant to the Bridge Agreement. All principal and accrued interest pursuant to the Bridge Agreement was repaid upon closing of Faze’s business combination (the “Business Combination”) with BRPM 150, which following the Business Combination changed its name to Faze Holdings. As a result of the Business Combination, BRPM 150 is no longer a VIE of the Company. On July 19, 2022, in connection with the Business Combination, the Company purchased 5,342,500 shares of Faze Holdings Class A common stock for $10.00 per share. During the year ended December 31, 2022, the Company earned $41,885 of incentive fees for the de-consolidation of BRPM 150 and $9,632 of underwriting and financial advisory fees from Faze and BRPM 150 in connection with the Business Combination and capital raising activities. Lingo On May 31, 2022, the Company converted $17,500 of a loan receivable with Lingo into equity and the Company's ownership interest in Lingo increased from 40% to 80%. On February 24, 2023, the Company acquired the remaining 20% ownership in Lingo, increasing the Company's ownership interest to 100%. Targus On October 18, 2022, the Company acquired all of the issued and outstanding shares of Targus for total purchase consideration of $247,546 as more fully discussed in Note 4. At the time of the acquisition, the chief executive officer of Targus was also a member of the Company’s board of directors. Upon closing the acquisition, the individual resigned from the Company’s board of directors and continues to serve as the chief executive officer of Targus. Other During the three months ended March 31, 2023, the Company sold a loan receivable including accrued interest in the amount of $7,600 to two related parties. BRC Partners Opportunity Fund, LP (“BRCPOF”) purchased $3,519 of the loan receivable including accrued interest and 272 Capital L.P. (“272LP”) purchased $4,081 of the loan receivable including accrued interest, both of the partnerships are private equity funds managed by one of the Company’s subsidiaries. Our executive officers and members of our board of directors have 70.4% financial interest, which includes a financial interest of Bryant Riley, our Co-Chief Executive Officer, of 41.0% in the BRCPOF as of March 31, 2023. Our executive officers and members of our board of directors have a 13.6% financial interest in the 272LP as of March 31, 2023. The Company often provides consulting or investment banking services to raise capital for companies in which the Company has significant influence through equity ownership, representation on the board of directors (or similar governing body), or both. During the three months ended March 31, 2023 and 2022, the Company earned $784 and $1,880 of fees related to these services, respectively. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS The Company’s business is classified into six reportable operating segments: the Capital Markets segment, Wealth Management segment, Auction and Liquidation segment, Financial Consulting segment, Communications segment, and Consumer segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. During the fourth quarter of 2022, the Company realigned its segment reporting structure to reflect organizational changes from recent acquisitions and the manner in which capital is allocated. The Consumer segment includes the previously reported Brands segment and Targus, which the Company acquired in the fourth quarter of 2022. The Company has also re-aligned its previously reported Principal Investments - Communications and Other segment into the Communications segment and the All Other category that is reported with Corporate and Other below. The following is a summary of certain financial data for each of the Company’s reportable segments: Three Months Ended March 31, 2023 2022 Capital Markets segment: (As Restated) Revenues - Services and fees $ 57,929 $ 61,223 Trading income (loss) and fair value adjustments on loans 50,296 (19,800) Interest income - Loans and securities lending 77,186 61,426 Total revenues 185,411 102,849 Selling, general and administrative expenses (65,711) (34,117) Interest expense - Securities lending and loan participations sold (32,424) (11,766) Depreciation and amortization (1,256) (1,893) Segment income 86,020 55,073 Wealth Management segment: Revenues - Services and fees 48,542 76,957 Trading income and fair value adjustments on loans 1,272 522 Total revenues 49,814 77,479 Selling, general and administrative expenses (47,322) (85,742) Restructuring charge (33) — Depreciation and amortization (1,086) (1,833) Segment income (loss) 1,373 (10,096) Auction and Liquidation segment: Revenues - Services and fees 5,444 3,355 Revenues - Sale of goods 216 — Total revenues 5,660 3,355 Direct cost of services (3,128) (2,335) Cost of goods sold (52) — Selling, general and administrative expenses (2,280) (1,820) Segment income (loss) 200 (800) Financial Consulting segment: Revenues - Services and fees 25,010 25,936 Selling, general and administrative expenses (21,149) (20,943) Depreciation and amortization (78) (81) Segment income 3,783 4,912 Communications segment: Revenues - Services and fees 85,052 30,087 Revenues - Sale of goods 1,867 1,878 Total revenues 86,919 31,965 Direct cost of services (44,733) (9,316) Cost of goods sold (2,168) (2,251) Selling, general and administrative expenses (22,544) (8,245) Restructuring charge (60) — Depreciation and amortization (6,631) (3,184) Segment income 10,783 8,969 Consumer segment: Revenues - Services and fees 4,309 4,557 Revenues - Sale of goods 65,694 — Total revenues 70,003 4,557 Cost of goods sold (45,406) — Selling, general and administrative expenses (20,112) (756) Depreciation and amortization (2,839) (583) Segment income 1,646 3,218 Consolidated operating income from reportable segments 103,805 61,276 All Other: Revenues - Services and fees 9,273 699 Direct cost of services (6,536) — Corporate and other expenses (21,619) (16,002) Interest income 2,574 67 Dividend income 13,204 7,861 Realized and unrealized losses on investments (28,442) (49,112) Change in fair value of financial instruments and other (209) 5,981 (Loss) income on equity investments (10) 6,775 Interest expense (47,561) (30,436) Income (loss) before income taxes 24,479 (12,891) (Provision for) benefit from income taxes (7,919) 3,695 Net income (loss) 16,560 (9,196) Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests (595) 866 Net income (loss) attributable to B. Riley Financial, Inc. 17,155 (10,062) Preferred stock dividends 2,012 2,002 Net income (loss) available to common shareholders $ 15,143 $ (12,064) The following table presents revenues by geographical area: Three Months Ended March 31, 2023 2022 (As Restated) Revenues: Revenues - Services and fees: North America $ 234,930 $ 200,861 Europe 629 1,953 Total Revenues - Services and fees 235,559 202,814 Trading income (loss) and fair value adjustments on loans North America 51,568 (19,278) Revenues - Sale of goods North America 37,947 1,878 Australia 3,459 — Europe, Middle East, and Africa 17,428 — Asia 6,224 — Latin America 2,719 — Total Revenues - Sale of goods 67,777 1,878 Revenues - Interest income - Loans and securities lending: North America 77,186 61,426 Total Revenues: North America 401,631 244,887 Australia 3,459 — Europe, Middle East, and Africa 18,057 1,953 Asia 6,224 — Latin America 2,719 — Total Revenues $ 432,090 $ 246,840 The following table presents long-lived assets, which consists of property and equipment, net, by geographical area: March 31, 2023 December 31, 2022 Long-lived Assets - Property and Equipment, net: North America $ 26,770 $ 26,276 Europe 532 577 Asia Pacific 165 162 Australia 110 126 Total $ 27,577 $ 27,141 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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation. The Company consolidates all entities that it controls through a majority voting interest. In addition, the Company performs an analysis to determine whether its variable interest or interests give it a controlling financial interest in a variable interest entity (“VIE”) including ongoing reassessments of whether it is the primary beneficiary of a VIE. See Note 3(o) for further discussion. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 16, 2023. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, allowance for doubtful accounts, the fair value of loans receivables, intangible assets and goodwill, share based arrangements, contingent consideration, and accounting for income tax valuation allowances, recovery of contract assets and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. |
Interest Expense — Securities Lending Activities | 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 and totaled $32,424 and $11,766 during the three months ended March 31, 2023 and 2022, respectively. |
Concentration of Risk | Concentration of Risk Revenues in the Capital Markets, Financial Consulting, Wealth Management, and Communications segments are primarily generated in the United States. Revenues in the Auction and Liquidation segment and Consumer segment are primarily generated in the United States, Australia, Canada, and Europe. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements. |
Advertising Expenses | Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $5,121 and $1,763 during the three months ended March 31, 2023 and 2022, respectively. Advertising expense was included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Restricted Cash | Restricted Cash As of March 31, 2023 and December 31, 2022, restricted cash included $2,351 and $2,308 of cash collateral for leases, respectively. Cash, cash equivalents and restricted cash consist of the following: March 31, December 31, Cash and cash equivalents $ 209,971 $ 268,618 Restricted cash 2,351 2,308 Total cash, cash equivalents and restricted cash $ 212,322 $ 270,926 |
Loans Receivable | Under ASC 326 - Financial Instruments – Credit Losses , the Company elected the irrevocable fair value option for all outstanding loans receivable that were previously measured at amortized cost. Under the fair value option, loans receivables are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the condensed consolidated statements of operations. These loans are no longer subject to evaluation for impairment through an allowance for loan loss as such losses will be captured through fair value changes. Loans receivable, at fair value totaled $772,085 and $701,652 as of March 31, 2023 and December 31, 2022, respectively. The loans have various maturities through March 2027. As of March 31, 2023 and December 31, 2022, the historical cost of loans receivable accounted for under the fair value option was $795,996 and $769,022, respectively, which included principal balances of $799,616 and $772,873 respectively, and unamortized costs, origination fees, premiums and discounts, totaling $3,620 and $3,851, respectively. During the three months ended March 31, 2023 and 2022, the Company recorded net unrealized gains of $43,459 and $10,937, respectively, on the loans receivable at fair value, which was included in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. Loans receivable, at fair value on non-accrual was $39,552 and $7,153 as of March 31, 2023 and December 31, 2022, respectively, which represented approximately 5.1% and 1.0% of total loans receivable, at fair value as of March 31, 2023 and December 31, 2022, respectively. The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of March 31, 2023, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc. (“B&W”) as further described in Note 17. In accordance with the new credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. As of March 31, 2023, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure. Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statements of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. Badcock Loan Receivable On December 20, 2021, the Company entered into a Master Receivables Purchase Agreement with W.S. Badcock Corporation, a Florida corporation (“WSBC”), an indirect wholly owned subsidiary of Franchise Group, Inc., a Delaware corporation (“FRG”). The Company paid $400,000 in cash to WSBC for the purchase of certain consumer credit receivables of WSBC. On September 23, 2022, the Company's subsidiary, B Riley Receivables II, LLC (“BRRII”), a Delaware limited liability company, entered into a Master Receivables Purchase Agreement (“2022 Badcock Receivable”) with WSBC. This purchase of $168,363 consumer credit receivables of WSBC was partially financed by a $148,200 term loan discussed in Note 11. During the three months ended March 31, 2023, BRRII entered into Amendment No. 2 and No. 3 to the 2022 Badcock Receivable with WSBC for a total of $145,278 in additional consumer credit receivables. The accounting for these transactions resulted in the Company recording a loan receivable from WSBC with the recognition of interest income at an imputed rate based on the cash flows expected to be received from the collection of the consumer receivables that serve as collateral for the loan. The loan receivable was measured at fair value on the condensed consolidated balance sheets. |
Securities and Other Investments Owned and Securities Sold Not Yet Purchased | Securities and Other Investments Owned and Securities Sold Not Yet PurchasedSecurities and other investments owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of March 31, 2023 and December 31, 2022, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities: March 31, December 31, Securities and other investments owned: Equity securities $ 929,582 $ 1,046,710 Corporate bonds 65,470 8,539 Other fixed income securities 5,248 3,956 Partnership interests and other 48,930 70,063 $ 1,049,230 $ 1,129,268 Securities sold not yet purchased: Equity securities $ 6,122 $ 4,466 Corporate bonds 480 1,162 Other fixed income securities 1,204 269 $ 7,806 $ 5,897 The Company owns certain equity securities that are accounted for under the fair value option where the Company would otherwise use the equity method of accounting. Investments become subject to the equity method of accounting when the Company possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. The ability to exercise significant influence is presumed when the Company possesses more than 20% of the voting interests of the investee. However, the Company may have the ability to exercise significant influence over the investee when the Company owns less than 20% of the voting interests of the investee depending on the facts and circumstances that demonstrate that the ability to exercise influence is present, such as when the Company has representation on the board of directors of such investee. The following tables contain summarized financial information with respect to two of the Company's individually greater than 20% investments, where the Company has a voting interest in each investee of 41% and 43%, respectively, which has been aggregated and included below for purposes of the disclosure a quarter in arrears (for balance sheet information the period ended December 31, 2022 and September 30, 2022 correspond to the period ended March 31, 2023 and December 31, 2022, respectively, of the Company and for income statement information the three months ended December 31, 2022 and 2021 correspond to the three months ended March 31, 2023 and 2022, respectively, of the Company), which is the period in which the most recent financial information is available: December 31, 2022 September 30, 2022 Total assets $ 197,101 $ 202,520 Total liabilities $ 6,789 $ 5,737 Equity attributable to investee $ 190,312 $ 196,783 For the three months ended December 31, 2022 2021 Revenues $ 27,971 $ 27,209 Net income (loss) attributable to investees $ 11,808 $ 12,882 The following tables contain summarized financial information with respect to B&W, where the Company owns a 31% voting interest, included below for purposes of the disclosure a quarter in arrears (for balance sheet information the period ended December 31, 2022 and September 30, 2022 correspond to the period ended March 31, 2023 and December 31, 2022, respectively, of the Company and for income statement information the three months ended December 31, 2022 and 2021 correspond to the three months ended March 31, 2023 and 2022, respectively, of the Company), which is the period in which the most recent financial information is available: December 31, September 30, Total assets $ 942,655 $ 881,567 Total liabilities $ 944,744 $ 898,695 Equity attributable to investee $ (2,089) $ (17,128) For the three months ended December 31, 2022 2021 Revenues $ 249,877 $ 192,295 Net income attributable to investees $ 2,021 $ 25,874 |
Fair Value Measurements | 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 has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company’s partnership and investment fund interests are valued based on the Company’s proportionate share of the net assets of the partnerships and funds; the value for these investments is derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value (“NAV”) in accordance with ASC 820 - Fair Value Measurements. As of March 31, 2023 and December 31, 2022, partnership and investment fund interests valued at NAV of $48,930 and $70,063, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets. Securities and other investments owned also include investments in nonpublic entities that do not have a readily determinable fair value and do not report NAV per share. These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, we evaluate whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold. Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements, including the level in the fair value hierarchy that was used. As of March 31, 2023 and December 31, 2022, investments in nonpublic entities valued using a measurement alternative of $86,920 and $94,109, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets. The Company measures certain assets at fair value on a nonrecurring basis. These assets include equity method investments when they are deemed to be other-than-temporarily impaired, investments adjusted to their fair value by applying the measurement alternative, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired. The Company did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, funds held in trust represents amounts invested in a mutual fund that invests in U.S. Treasury securities that were purchased with funds raised through the initial public offering of B. Riley Principal 250 Merger Corporation (“BRPM 250”), which is a consolidated special purpose acquisition corporation (“SPAC”). As of March 31, 2023 and December 31, 2022, the Company had $176,182 and $174,437, respectively, of funds held in trust related to the SPAC. The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of the class A public common shares of the SPAC as set forth in the trust agreement. The funds held in trust are included within Level 1 of the fair value hierarchy and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. The Company has warrant liabilities related to warrants of the SPAC that are held by investors in BRPM 250. The warrants are accounted for as liabilities in accordance with ASC 815 - Derivatives and Hedging and are measured at fair value at inception and on a recurring basis using quoted prices in over-the-counter markets. Warrant liabilities are included in Level 1 of the fair value hierarchy and included in accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets in the amount of $381 and $173 for BRPM 250 as of March 31, 2023 and December 31, 2022, respectively. Changes in fair value of warrants are included within change in fair value of financial instruments and other as part of other income (expense) in the consolidated statements of operations. 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 March 31, 2023 and December 31, 2022. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of March 31, 2023 Using Fair value as of March 31, 2023 Quoted prices in active markets Other observable inputs Significant unobservable inputs Assets: Funds held in trust account $ 176,182 $ 176,182 $ — $ — Securities and other investments owned: Equity securities 842,662 483,621 — 359,041 Corporate bonds 65,470 53,716 11,754 — Other fixed income securities 5,248 — 5,248 — Total securities and other investments owned 913,380 537,337 17,002 359,041 Loans receivable, at fair value 772,085 — — 772,085 Total assets measured at fair value $ 1,861,647 $ 713,519 $ 17,002 $ 1,131,126 Liabilities: Securities sold not yet purchased: Equity securities $ 6,122 $ 6,122 $ — $ — Corporate bonds 480 — 480 — Other fixed income securities 1,204 — 1,204 — Total securities sold not yet purchased 7,806 6,122 1,684 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,654 — — 4,654 Warrant liabilities 381 381 — — Contingent consideration 28,884 — — 28,884 Total liabilities measured at fair value $ 41,725 $ 6,503 $ 1,684 $ 33,538 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2022 Using Fair value at December 31, 2022 Quoted prices in active markets Other observable inputs Significant unobservable inputs Assets: Funds held in trust account $ 174,437 $ 174,437 $ — $ — Securities and other investments owned: Equity securities 952,601 584,136 — 368,465 Corporate bonds 8,539 — 8,539 — Other fixed income securities 3,956 — 3,956 — Total securities and other investments owned 965,096 584,136 12,495 368,465 Loans receivable, at fair value 701,652 — — 701,652 Total assets measured at fair value $ 1,841,185 $ 758,573 $ 12,495 $ 1,070,117 Liabilities: Securities sold not yet purchased: Equity securities $ 4,466 $ 4,466 $ — $ — Corporate bonds 1,162 — 1,162 — Other fixed income securities 269 — 269 — Total securities sold not yet purchased 5,897 4,466 1,431 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,648 — — 4,648 Warrant liabilities 173 173 — — Contingent consideration 31,046 — — 31,046 Total liabilities measured at fair value $ 41,764 $ 4,639 $ 1,431 $ 35,694 As of March 31, 2023 and December 31, 2022, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $1,131,126 and $1,070,117, respectively, or 17.1% and 17.5%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The following table summarizes the significant unobservable inputs in the fair value measurement of Level 3 financial assets and liabilities by category of investment and valuation technique as of March 31, 2023 and December 31, 2022: Fair value at March 31, 2023 Valuation Unobservable Range Weighted Assets: Equity securities $ 297,136 Market approach Multiple of EBITDA 1.5x - 16.0x 6.3x Multiple of Sales 3.8x 3.8x Market price of related security $0.01 - $14.05 $7.33 57,974 Discounted cash flow Market interest rate 23.8% 23.8% 3,931 Option pricing model Annualized volatility 30.0% - 510.0% 80.0% Loans receivable at fair value 744,018 Discounted cash flow Market interest rate 9.7% - 35.6% 18.1% 28,067 Market approach Market price of related security $13.25 $13.25 Total level 3 assets measured at fair value $ 1,131,126 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,654 Market approach Operating income multiple 6.0x 6.0x Contingent consideration 28,884 Discounted cash flow EBITDA volatility 75% 75% Asset volatility 69.0% 69.0% Market interest rate 8.5% 8.5% Revenue volatility 5.1% 5.1% Total level 3 liabilities measured at fair value $ 33,538 Fair value at December 31, Valuation Technique Unobservable Input Range Weighted Assets: Equity securities $ 304,172 Market approach Multiple of EBITDA 1.5x - 10.5x 6.0x Multiple of Sales 3.0x 3.0x Market price of related security $10.01 - $18.88 $16.91 57,267 Discounted cash flow Market interest rate 23.8% 23.8% 7,026 Option pricing model Annualized volatility 0.3% - 26.1% 70.0% Loans receivable at fair value 694,499 Discounted cash flow Market interest rate 6.0% - 83.5% 23.9% 7,153 Market approach Multiple of EBITDA 4.5x 4.5x Total level 3 assets measured at fair value $ 1,070,117 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,648 Market approach Operating income multiple 6.0x 6.0x Contingent consideration 31,046 Discounted cash flow EBITDA volatility 80.0% 80.0% Asset volatility 69.0% 69.0% Market interest rate 8.5% 8.5% Total level 3 liabilities measured at fair value $ 35,694 The changes in Level 3 fair value hierarchy during the three months ended March 31, 2023 and 2022 were as follows: Level 3 Level 3 Changes During the Period Level 3 Fair Relating to Purchases, Transfer in Three Months Ended March 31, 2023 Equity securities $ 368,465 $ (9,016) $ — $ 6,487 $ (6,895) $ 359,041 Loans receivable at fair value 701,652 43,459 231 26,743 — 772,085 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,648 — 308 (302) — 4,654 Contingent consideration 31,046 (3,447) — 1,285 — 28,884 Three Months Ended March 31, 2022 Equity securities $ 377,549 $ (4,543) $ — $ 19,912 $ (4,254) $ 388,664 Loans receivable at fair value 873,186 10,937 3,238 (4,970) — 882,391 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,506 — 247 (251) — 4,502 Contingent consideration — — — 22,464 — 22,464 The amount reported in the table above as of March 31, 2023 and December 31, 2022 included the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments. As of March 31, 2023 and December 31, 2022, the senior notes payable had a carrying amount of $1,722,977 and $1,721,751, respectively, and fair value of $1,258,532 and $1,431,787, respectively. The carrying amount of the term loans approximates fair value because the effective yield of such instruments are consistent with current market rates of interest for instruments of comparable credit risk. The investments in nonpublic entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. These investments are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments. Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators of impairment. If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value. The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022. These investments were measured due to an observable price change or impairment during the periods below. Fair Value Measurement Using Total Quoted prices in active markets Other observable inputs Significant unobservable inputs As of March 31, 2023 Investments in nonpublic entities that do not report NAV $ 4,271 $ — $ — $ 4,271 As of December 31, 2022 Investments in nonpublic entities that do not report NAV $ 20,251 $ — $ 18,659 $ 1,592 |
Derivative and Foreign Currency Translation | Derivative and Foreign Currency Translation The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain loans receivable and Auction and Liquidation engagements with operations outside the United States. As of March 31, 2023 and December 31, 2022, there were no forward exchange contracts outstanding. The forward exchange contracts were entered into to improve the predictability of cash flows related to a retail store liquidation engagement and a loan receivable. The net gain from forward exchange contracts was zero and $68 during the three months ended March 31, 2023 and 2022, respectively. This amount was reported as a component of selling, general and administrative expenses in the condensed consolidated statements of operations. The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction losses were $234 and gains were $296 during the three months ended March 31, 2023 and 2022, respectively. These amounts were included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations. As disclosed in Note 3(o) below, the Company has consolidated a VIE, BRPM 250, which has outstanding warrants that were issued in its initial public offerings. The warrants have been recorded as a liability since the warrants contain a provision to be settled in cash in the event of a qualifying cash tender offer for BRPM 250, which is outside the control of the Company. The outstanding warrants are considered derivative instruments with the warrant liability measured at fair value at each reporting date until exercised or upon expiration, with changes in fair value reported in other income in the condensed consolidated statements of operations. As of March 31, 2023 and December 31, 2022, the warrant liability for BRPM 250 totaled $381 and $173, respectively, which was included in accrued expenses and other liabilities in the condensed consolidated balance sheet. |
Redeemable Noncontrolling Interests in Equity of Subsidiaries | Redeemable Noncontrolling Interests in Equity of SubsidiariesThe Company records redeemable noncontrolling interests in equity of subsidiaries to reflect the economic interests of the class A ordinary shareholders in the BRPM 250 sponsored SPAC and the 20% noncontrolling interest of Lingo Management, LLC (“Lingo”), which on February 24, 2023, the Company acquired, increasing its ownership interest in Lingo to 100%. These interests are presented as redeemable noncontrolling interests in equity of subsidiaries within the condensed consolidated balance sheet, outside of the permanent equity section. The class A ordinary shareholders of BRPM 250 have redemption rights that are considered to be outside of the Company’s control. Remeasurements to the redemption value of the redeemable noncontrolling interest in equity of subsidiaries are recorded within retained earnings (accumulated deficit). The operating agreement with Lingo has provisions which result in the noncontrolling interest being accounted for as temporary equity. Net income (losses) are reflected in net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in the condensed consolidated statement of operations. Changes to redeemable noncontrolling interest consist of the following: Three Months Ended March 31, 2023 Balance, December 31, 2022 $ 178,622 Net loss (146) Purchase of Lingo minority interest (11,190) Remeasurement adjustments for Lingo and BRPM 250 7,681 Balance, March 31, 2023 $ 174,967 |
Equity Investments | Equity Investment As of March 31, 2023 and December 31, 2022, equity investments of $41,816 and $41,298, respectively, were included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. The Company’s share of earnings or losses from equity method investees was included in income from equity investments in the accompanying condensed consolidated statements of operations. bebe stores, inc. As of March 31, 2023 and December 31, 2022, the Company had a 41.3% and 40.1% ownership interest in bebe stores, inc. (“bebe”), respectively. The equity ownership in bebe was accounted for under the equity method of accounting and was included in prepaid expenses and other assets in the condensed consolidated balance sheets. The common stock of bebe is publicly traded. The fair value of bebe as of March 31, 2023 and December 31, 2022 was $22,573 and $25,423, respectively. The carrying value of the investment in bebe as of March 31, 2023 and December 31, 2022 was $40,937 and $40,383, respectively. As of March 31, 2023, the carrying value of the Company’s equity method investment in bebe exceeded the fair value based on the quoted market prices. In consideration of these facts, the Company evaluated its investment for other than temporary impairment under ASC 323. The Company did not utilize bright-line tests in the evaluation. Based on the available facts and information regarding the operating results of bebe, the Company’s ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor the investment and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions. Other Equity Investments The Company had other equity method investments over which the Company exercises significant influence but that did not meet the requirements for consolidation, the largest ownership interest being a 40% ownership interest in Lingo, which was acquired in November 2020. On May 31, 2022, the Company's ownership increased to 80% and Lingo's operating results were consolidated with the Company. On February 24, 2023, the Company acquired the remaining 20% ownership in Lingo, increasing the Company's ownership interest from 80% to 100%. The equity ownership in these other investments was accounted for at the applicable times under the equity method of accounting and was included in prepaid expenses and other assets in the condensed consolidated balance sheets. |
Supplemental Non-cash Disclosures | Supplemental Non-cash DisclosuresDuring the three months ended March 31, 2023, non-cash investing activities included $15,000 of a convertible note receivable which was included in loans receivable, at fair value, that converted into an equity security, $1,190 of loans receivable, at fair value, was credited to the consideration paid for the purchase of the Lingo noncontrolling interest, and $2,111 of common stock issued as part of the purchase price consideration for a business acquisition. During the three months ended March 31, 2023, non-cash financing activities included $7,000 in seller financing related to the purchase of the Lingo noncontrolling interest. During the three months ended March 31, 2022, non-cash investing activities included $20,320 in issuance of the Company's common stock as part of the purchase price consideration from the FocalPoint acquisition and $22,661 in seller financing for deferred cash consideration. |
Variable Interest Entities | Variable Interest Entities The Company holds interests in various entities that meet the characteristics of a VIE but are not consolidated as the Company is not the primary beneficiary. Interests in these entities are generally in the form of equity interests, loans receivable, or fee arrangements. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed. The Company, has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered variable interest entities under the accounting guidance. The Company earns fees from the Funds in the form of placement agent fees and carried interest. For placement agent fees, the Company receives a cash fee of generally 7% to 10% of the amount of raised capital for the Funds and the fee is recognized at the time the placement services occurred. The Company receives carried interest as a percentage allocation (8% to 15%) of the profits of the Funds as compensation for asset management services provided to the Funds and it is recognized under the ownership model of ASC 323 - Investments – Equity Method and Joint Ventures as an equity method investment with changes in allocation recorded currently in the results of operations. As the fee arrangements under such agreements are arm’s length and contain customary terms and conditions and represent compensation that is considered fair value for the services provided, the fee arrangements are not considered variable interests and accordingly, the Company does not consolidate such VIEs. Placement agent fees attributable to such arrangements during the three months ended March 31, 2023 and 2022 were zero and $12,051, respectively, and were included in services and fees in the condensed consolidated statements of operations. The carrying value of the Company’s investments in the VIEs that were not consolidated is shown below. March 31, December 31, Securities and other investments owned, at fair value $ 35,383 $ 33,743 Loans receivable, at fair value 58,611 46,700 Other assets 2,570 3,755 Maximum exposure to loss $ 96,564 $ 84,198 B. Riley Principal 150 and 250 Merger Corporations In 2021, the Company along with BRPM 150 and BRPM 250, both newly formed special purpose acquisition companies incorporated as Delaware corporations, consummated the initial public offerings of 17,250,000 units of BRPM 150 and 17,250,000 units of BRPM 250. Each Unit of BRPM 150 and BRPM 250 consisted of one share of class A common stock and one-third of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of BRPM 150 or BRPM 250 class A common stock at an exercise price of $11.50 per share. The BRPM 150 and BRPM 250 Units were each sold at a price of $10.00 per unit, generating gross proceeds to BRPM 150 of $172,500 and BRPM 250 of $172,500. These proceeds which totaled $345,000 were deposited in a trust account established for the benefit of the BRPM 150 and BRPM 250 class A public shareholders and was included in prepaid expenses and other assets in the condensed balance sheet. These proceeds are invested only in U.S. treasury securities in accordance with the governing documents of BRPM 150 and BRPM 250. Under the terms of the BRPM 150 and BRPM 250 initial public offerings, BRPM 150 and BRPM 250 are required to consummate a business combination transaction within 24 months (or 27 months under certain circumstances) of the completion of their respective initial public offerings. In connection with the completion of the initial public offerings of BRPM 150 and BRPM 250, the Company invested in the private placement units of BRPM 150 and BRPM 250. Both BRPM 150 and BRPM 250 are determined to be VIE’s because each of the entities do not have enough equity at risk to finance their activities without additional subordinated financial support. The Company has determined that the class A shareholders of BRPM 150 and BRPM 250 do not have |
Recent Accounting Standards | Recent Accounting Standards Not yet adopted In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820). This update clarifies that a contractual restriction on the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security’s unit of account. Therefore, a contractual sale restriction should not be considered when measuring an equity security’s fair value. The update also prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. Specific disclosures related to equity securities subject to contractual sale restrictions are required and include the fair value of such equity securities on the balance sheet, the nature and remaining duration of the corresponding restrictions, and any circumstances that could cause a lapse in the restrictions. The amendments in this update are effective for the Company for fiscal periods beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. Investment companies as defined by Topic 946 should apply the amendments in this update to an equity security with a contract containing a sale restriction that was executed or modified on or after the date of adoption. For an equity security with a contract containing a sale restriction that was executed before the date of adoption, investment companies should continue to account for the equity security under their historical accounting policy for measuring such securities until the contractual restrictions expire or are modified. The Company has not yet adopted this update and is currently evaluating the effect, if any, this new standard will have on its financial position and results of operations. Recently adopted In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about an entity’s use of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. An entity should also consider whether the existence of a supplier finance program changes the appropriate presentation of the payables in the program from trade payables to borrowings. The Company adopted the ASU effective January 1, 2023. The ASU had no impact on the consolidated results of operations, cash flows, and financial position and was immaterial to the financial statement disclosures. |
RESTATEMENT OF PREVIOUSLY ISS_2
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of condensed consolidated statement of cash flows | The following tables present the corrections by financial statement line item within the condensed consolidated statement of operations for all periods presented: Three Months Ended March 31, 2022 As Previously Restatement Adjustments Restatement Reference As Restated Statement of Operations Revenues: Services and fees $ 210,675 $ (7,861) (a) $ 202,814 Trading (loss) income and fair value adjustments on loans (68,390) 49,112 (b) (19,278) Interest income - Loans and securities lending 61,426 — 61,426 Sale of goods 1,878 — 1,878 Total revenues 205,589 41,251 246,840 Operating expenses: Direct cost of services 11,651 — 11,651 Cost of goods sold 2,251 — 2,251 Selling, general and administrative expenses 175,199 — 175,199 Interest expense - Securities lending and loan participations sold 11,766 — 11,766 Total operating expenses 200,867 — 200,867 Operating income 4,722 41,251 45,973 Other income (expense): Interest income 67 — 67 Dividend income — 7,861 (a) 7,861 Realized and unrealized gains (losses) on investments — (49,112) (b) (49,112) Change in fair value of financial instruments and other 5,981 — 5,981 Income from equity method investments 6,775 — 6,775 Interest expense (30,436) — (30,436) Loss before income taxes (12,891) — (12,891) Provision for income taxes 3,695 — 3,695 Net loss (9,196) — (9,196) Net income attributable to noncontrolling interests and redeemable noncontrolling interests 866 — 866 Net loss attributable to B. Riley Financial, Inc. (10,062) — (10,062) Preferred stock dividends 2,002 — 2,002 Net loss available to common shareholders $ (12,064) $ — $ (12,064) Basic loss per common share $ (0.43) $ (0.43) Diluted loss per common share $ (0.43) $ (0.43) Weighted average basic common shares outstanding 27,855,033 27,855,033 Weighted average diluted common shares outstanding 27,855,033 27,855,033 (a) To reclassify dividends received from investments from Services and fees to Dividend income. (b) To reclassify realized and unrealized gains (losses) on investments from Trading income (loss) and fair value on loans to Realized and unrealized gains (losses) on investments. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of cash and cash equivalents | Cash, cash equivalents and restricted cash consist of the following: March 31, December 31, Cash and cash equivalents $ 209,971 $ 268,618 Restricted cash 2,351 2,308 Total cash, cash equivalents and restricted cash $ 212,322 $ 270,926 |
Restrictions on cash and cash equivalents | Cash, cash equivalents and restricted cash consist of the following: March 31, December 31, Cash and cash equivalents $ 209,971 $ 268,618 Restricted cash 2,351 2,308 Total cash, cash equivalents and restricted cash $ 212,322 $ 270,926 |
Schedule of securities and other investments owned and securities sold not yet purchased at fair value | As of March 31, 2023 and December 31, 2022, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities: March 31, December 31, Securities and other investments owned: Equity securities $ 929,582 $ 1,046,710 Corporate bonds 65,470 8,539 Other fixed income securities 5,248 3,956 Partnership interests and other 48,930 70,063 $ 1,049,230 $ 1,129,268 Securities sold not yet purchased: Equity securities $ 6,122 $ 4,466 Corporate bonds 480 1,162 Other fixed income securities 1,204 269 $ 7,806 $ 5,897 |
Equity Method Investments | December 31, 2022 September 30, 2022 Total assets $ 197,101 $ 202,520 Total liabilities $ 6,789 $ 5,737 Equity attributable to investee $ 190,312 $ 196,783 For the three months ended December 31, 2022 2021 Revenues $ 27,971 $ 27,209 Net income (loss) attributable to investees $ 11,808 $ 12,882 December 31, September 30, Total assets $ 942,655 $ 881,567 Total liabilities $ 944,744 $ 898,695 Equity attributable to investee $ (2,089) $ (17,128) For the three months ended December 31, 2022 2021 Revenues $ 249,877 $ 192,295 Net income attributable to investees $ 2,021 $ 25,874 |
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 March 31, 2023 and December 31, 2022. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of March 31, 2023 Using Fair value as of March 31, 2023 Quoted prices in active markets Other observable inputs Significant unobservable inputs Assets: Funds held in trust account $ 176,182 $ 176,182 $ — $ — Securities and other investments owned: Equity securities 842,662 483,621 — 359,041 Corporate bonds 65,470 53,716 11,754 — Other fixed income securities 5,248 — 5,248 — Total securities and other investments owned 913,380 537,337 17,002 359,041 Loans receivable, at fair value 772,085 — — 772,085 Total assets measured at fair value $ 1,861,647 $ 713,519 $ 17,002 $ 1,131,126 Liabilities: Securities sold not yet purchased: Equity securities $ 6,122 $ 6,122 $ — $ — Corporate bonds 480 — 480 — Other fixed income securities 1,204 — 1,204 — Total securities sold not yet purchased 7,806 6,122 1,684 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,654 — — 4,654 Warrant liabilities 381 381 — — Contingent consideration 28,884 — — 28,884 Total liabilities measured at fair value $ 41,725 $ 6,503 $ 1,684 $ 33,538 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2022 Using Fair value at December 31, 2022 Quoted prices in active markets Other observable inputs Significant unobservable inputs Assets: Funds held in trust account $ 174,437 $ 174,437 $ — $ — Securities and other investments owned: Equity securities 952,601 584,136 — 368,465 Corporate bonds 8,539 — 8,539 — Other fixed income securities 3,956 — 3,956 — Total securities and other investments owned 965,096 584,136 12,495 368,465 Loans receivable, at fair value 701,652 — — 701,652 Total assets measured at fair value $ 1,841,185 $ 758,573 $ 12,495 $ 1,070,117 Liabilities: Securities sold not yet purchased: Equity securities $ 4,466 $ 4,466 $ — $ — Corporate bonds 1,162 — 1,162 — Other fixed income securities 269 — 269 — Total securities sold not yet purchased 5,897 4,466 1,431 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,648 — — 4,648 Warrant liabilities 173 173 — — Contingent consideration 31,046 — — 31,046 Total liabilities measured at fair value $ 41,764 $ 4,639 $ 1,431 $ 35,694 |
Schedule of fair value measurement inputs and valuation techniques | The following table summarizes the significant unobservable inputs in the fair value measurement of Level 3 financial assets and liabilities by category of investment and valuation technique as of March 31, 2023 and December 31, 2022: Fair value at March 31, 2023 Valuation Unobservable Range Weighted Assets: Equity securities $ 297,136 Market approach Multiple of EBITDA 1.5x - 16.0x 6.3x Multiple of Sales 3.8x 3.8x Market price of related security $0.01 - $14.05 $7.33 57,974 Discounted cash flow Market interest rate 23.8% 23.8% 3,931 Option pricing model Annualized volatility 30.0% - 510.0% 80.0% Loans receivable at fair value 744,018 Discounted cash flow Market interest rate 9.7% - 35.6% 18.1% 28,067 Market approach Market price of related security $13.25 $13.25 Total level 3 assets measured at fair value $ 1,131,126 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,654 Market approach Operating income multiple 6.0x 6.0x Contingent consideration 28,884 Discounted cash flow EBITDA volatility 75% 75% Asset volatility 69.0% 69.0% Market interest rate 8.5% 8.5% Revenue volatility 5.1% 5.1% Total level 3 liabilities measured at fair value $ 33,538 Fair value at December 31, Valuation Technique Unobservable Input Range Weighted Assets: Equity securities $ 304,172 Market approach Multiple of EBITDA 1.5x - 10.5x 6.0x Multiple of Sales 3.0x 3.0x Market price of related security $10.01 - $18.88 $16.91 57,267 Discounted cash flow Market interest rate 23.8% 23.8% 7,026 Option pricing model Annualized volatility 0.3% - 26.1% 70.0% Loans receivable at fair value 694,499 Discounted cash flow Market interest rate 6.0% - 83.5% 23.9% 7,153 Market approach Multiple of EBITDA 4.5x 4.5x Total level 3 assets measured at fair value $ 1,070,117 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,648 Market approach Operating income multiple 6.0x 6.0x Contingent consideration 31,046 Discounted cash flow EBITDA volatility 80.0% 80.0% Asset volatility 69.0% 69.0% Market interest rate 8.5% 8.5% Total level 3 liabilities measured at fair value $ 35,694 |
Schedule of fair value measurement of level 3 financial assets and liabilities | The changes in Level 3 fair value hierarchy during the three months ended March 31, 2023 and 2022 were as follows: Level 3 Level 3 Changes During the Period Level 3 Fair Relating to Purchases, Transfer in Three Months Ended March 31, 2023 Equity securities $ 368,465 $ (9,016) $ — $ 6,487 $ (6,895) $ 359,041 Loans receivable at fair value 701,652 43,459 231 26,743 — 772,085 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,648 — 308 (302) — 4,654 Contingent consideration 31,046 (3,447) — 1,285 — 28,884 Three Months Ended March 31, 2022 Equity securities $ 377,549 $ (4,543) $ — $ 19,912 $ (4,254) $ 388,664 Loans receivable at fair value 873,186 10,937 3,238 (4,970) — 882,391 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,506 — 247 (251) — 4,502 Contingent consideration — — — 22,464 — 22,464 |
Schedule of financial assets measured on nonrecurring basis | The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of March 31, 2023 and December 31, 2022. These investments were measured due to an observable price change or impairment during the periods below. Fair Value Measurement Using Total Quoted prices in active markets Other observable inputs Significant unobservable inputs As of March 31, 2023 Investments in nonpublic entities that do not report NAV $ 4,271 $ — $ — $ 4,271 As of December 31, 2022 Investments in nonpublic entities that do not report NAV $ 20,251 $ — $ 18,659 $ 1,592 |
Redeemable Noncontrolling Interest | Changes to redeemable noncontrolling interest consist of the following: Three Months Ended March 31, 2023 Balance, December 31, 2022 $ 178,622 Net loss (146) Purchase of Lingo minority interest (11,190) Remeasurement adjustments for Lingo and BRPM 250 7,681 Balance, March 31, 2023 $ 174,967 |
Schedule of investments in the VIE | The carrying value of the Company’s investments in the VIEs that were not consolidated is shown below. March 31, December 31, Securities and other investments owned, at fair value $ 35,383 $ 33,743 Loans receivable, at fair value 58,611 46,700 Other assets 2,570 3,755 Maximum exposure to loss $ 96,564 $ 84,198 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The fair value of acquisition consideration and preliminary purchase price allocation was as follows: Consideration paid: Cash $ 112,686 Fair value of seller financing 54,000 Fair value of 2,400,000 RILYO shares issued in senior notes at $24.59 per share 59,016 Fair value of 227,491 B. Riley common shares issued at $42.11 per share 9,580 Fair value of 215,876 stock options attributable to service period prior to acquisition 5,749 Fair value of deferred payments 6,515 Total consideration $ 247,546 Assets acquired and liabilities assumed: Cash and cash equivalents $ 18,810 Accounts receivable 91,039 Prepaid and other assets 90,289 Right-of-use assets 7,665 Property and equipment 8,320 Other intangible assets 89,000 Accounts payable (54,553) Accrued expenses and other liabilities (61,677) Deferred income taxes (9,989) Contingent consideration (2,212) Lease liability (7,665) Net tangible assets acquired and liabilities assumed 169,027 Goodwill 78,519 Total $ 247,546 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets: Category Useful life Fair Value Customer relationships 9 years $ 50,000 Internally developed software and other intangibles 1 to 3 years 4,000 Tradenames N/A 35,000 Total $ 89,000 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information is presented to illustrate the estimated effects of the acquisition of Targus as if it had occurred on January 1, 2021. The pro forma amounts include the historical operating results of the Targus prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include adjustments and consequential tax effects to reflect incremental depreciation and amortization expense to be incurred based on preliminary fair values of the identifiable intangible assets acquired, the incremental interest expense associated with the issuance of debt to finance the acquisition, and the adjustments to exclude acquisition related costs incurred during the year ended December 31, 2022 and to recognize these costs during the year ended December 31, 2021 as if incurred on January 1, 2021. The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations of the combined company were, nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition. Pro Forma (unaudited) Three Months Ended March 31, 2022 Revenues $ 341,287 Net loss $ (7,313) Net loss attributable to B. Riley Financial, Inc. $ (8,179) Net loss attributable to common shareholders $ (10,181) |
RESTRUCTURING CHARGE (Tables)
RESTRUCTURING CHARGE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of changes in accrued restructuring charge | The following tables summarize the changes in accrued restructuring charge during the three months ended March 31, 2023 and 2022: Three Months Ended 2023 2022 Balance, beginning of period $ 2,335 $ 624 Restructuring charge 93 — Cash paid (438) (27) Non-cash items 6 2 Balance, end of period $ 1,996 $ 599 |
Restructuring activities by reportable segment | The following table summarizes the restructuring activities by reportable segment during the three months ended March 31, 2023. There were no restructuring charges during the three months ended March 31, 2022. Wealth Management Communications Total Restructuring charges for the three months ended March 31, 2023: Employee termination $ — $ 60 $ 60 Facility closure and consolidation 33 — 33 Total restructuring charge $ 33 $ 60 $ 93 |
SECURITIES LENDING (Tables)
SECURITIES LENDING (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Securities Lending [Abstract] | |
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 March 31, 2023 and December 31, 2022: Gross amounts recognized Gross amounts offset in the consolidated balance sheets (1) Net amounts included in the consolidated balance sheets Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default (2) Net amounts As of March 31, 2023 Securities borrowed $ 2,942,843 $ — $ 2,942,843 $ 2,942,843 $ — Securities loaned $ 2,937,982 $ — $ 2,937,982 $ 2,937,982 $ — As of December 31, 2022 Securities borrowed $ 2,343,327 $ — $ 2,343,327 $ 2,343,327 $ — Securities loaned $ 2,334,031 $ — $ 2,334,031 $ 2,334,031 $ — _________________________ (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) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of components of accounts receivable, net | The components of accounts receivable, net, include the following: March 31, December 31, Accounts receivable $ 116,411 $ 144,120 Investment banking fees, commissions and other receivables 10,766 8,654 Total accounts receivable 127,177 152,774 Allowance for doubtful accounts (6,324) (3,664) Accounts receivable, net $ 120,853 $ 149,110 |
Schedule of allowance for doubtful accounts | Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended 2023 2022 Balance, beginning of period $ 3,664 $ 3,658 Add: Additions to reserve 3,173 405 Less: Write-offs (488) (960) Less: Recovery (25) — Balance, end of period $ 6,324 $ 3,103 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaids and other assets | Prepaid expenses and other assets consist of the following: March 31, December 31, Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries $ 176,182 $ 174,437 Inventory 113,107 101,675 Equity method investments 41,816 41,298 Prepaid expenses 23,699 17,623 Unbilled receivables 14,857 14,144 Other receivables 67,902 66,403 Other assets 54,309 45,116 Prepaid expenses and other assets $ 491,872 $ 460,696 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2023 were as follows: Capital Wealth Auction and Financial Communications Consumer Segment All Other Total Balance as of December 31, 2022 $ 162,018 $ 51,195 $ 1,975 $ 23,680 $ 193,195 $ 75,753 $ 4,779 $ 512,595 Acquisition of other business — — — 7,273 — — 2,428 9,701 Other — — — 36 (1,101) 2,766 — 1,701 Balance as of March 31, 2023 $ 162,018 $ 51,195 $ 1,975 $ 30,989 $ 192,094 $ 78,519 $ 7,207 $ 523,997 During the three months ended March 31, 2023, the changes in goodwill included $36 of foreign currency translation amounts, $(1,101) of working capital settlements as described in Note 4, and $2,766 related to certain purchase price accounting adjustments. |
Schedule of intangible assets | Intangible assets consisted of the following: As of March 31, 2023 As of December 31, 2022 Useful Life Gross Carrying Value Accumulated Amortization Intangibles Net Gross Carrying Value Accumulated Amortization Intangibles Net Amortizable assets: Customer relationships 1.0 to 16 Years $ 270,511 $ (94,872) $ 175,639 $ 268,253 $ (87,049) $ 181,204 Domain names 7 years 185 (176) 9 185 (169) 16 Advertising relationships 8 years 100 (84) 16 100 (81) 19 Internally developed software and other intangibles 0.5 to 5 Years 28,295 (14,522) 13,773 28,295 (12,714) 15,581 Trademarks 3 to 10 Years 21,532 (5,185) 16,347 23,309 (6,307) 17,002 Total 320,623 (114,839) 205,784 320,142 (106,320) 213,822 Non-amortizable assets: Tradenames 160,276 — 160,276 160,276 — 160,276 Total intangible assets $ 480,899 $ (114,839) $ 366,060 $ 480,418 $ (106,320) $ 374,098 |
SENIOR NOTES PAYABLE (Tables)
SENIOR NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of senior notes payable, net | Senior notes payable, net, are comprised of the following: March 31, December 31, 6.750% Senior notes due May 31, 2024 $ 199,232 $ 199,232 6.500% Senior notes due September 30, 2026 180,532 180,532 6.375% Senior notes due February 28, 2025 146,432 146,432 6.000% Senior notes due January 31, 2028 266,058 266,058 5.500% Senior notes due March 31, 2026 217,440 217,440 5.250% Senior notes due August 31, 2028 405,483 405,483 5.000% Senior notes due December 31, 2026 324,714 324,714 1,739,891 1,739,891 Less: Unamortized debt issuance costs (16,914) (18,140) $ 1,722,977 $ 1,721,751 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other liabilities | Accrued expenses and other liabilities consist of the following: March 31, December 31, Accrued payroll and related expenses $ 60,141 $ 86,798 Dividends payable 18,360 33,923 Income taxes payable 12,100 14,760 Other tax liabilities 19,617 23,426 Contingent consideration 28,884 31,046 Accrued expenses 79,520 68,180 Other liabilities 44,713 64,841 Accrued expenses and other liabilities $ 263,335 $ 322,974 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues from contracts with customers | Revenue from contracts with customers by the Company's six reportable operating segments and the All Other category during the three months ended March 31, 2023 and 2022 was as follows: Capital Wealth Auction and Financial Communications Segment Consumer All Other Total Revenues for the three months ended March 31, 2023 Corporate finance, consulting and investment banking fees $ 39,149 $ — $ — $ 14,515 $ — $ — $ — $ 53,664 Wealth and asset management fees 664 43,310 — — — — — 43,974 Commissions, fees and reimbursed expenses 9,218 3,928 5,444 10,495 — — — 29,085 Subscription services — — — — 83,008 — — 83,008 Sale of goods — — 216 — 1,867 65,694 — 67,777 Advertising, licensing and other — — — — 2,044 4,309 9,273 15,626 Total revenues from contracts with customers 49,031 47,238 5,660 25,010 86,919 70,003 9,273 293,134 Interest income - Loans and securities lending 77,186 — — — — — — 77,186 Trading (loss) gain on investments 7,020 1,272 — — — — — 8,292 Fair value adjustment on loans 43,276 — — — — — — 43,276 Other 8,898 1,304 — — — — — 10,202 Total revenues $ 185,411 $ 49,814 $ 5,660 $ 25,010 $ 86,919 $ 70,003 $ 9,273 $ 432,090 Capital Wealth Auction and Financial Communications Segment Consumer All Other Total Revenues for the three months ended March 31, 2022 Corporate finance, consulting and investment banking fees $ 41,673 $ — $ — $ 16,970 $ — $ — $ — $ 58,643 Wealth and asset management fees 2,400 64,222 — — — — — 66,622 Commissions, fees and reimbursed expenses 12,045 12,849 3,355 8,966 — — — 37,215 Subscription services — — — — 27,813 — — 27,813 Sale of goods — — — — 1,878 — — 1,878 Advertising, licensing and other — — — — 2,274 4,557 699 7,530 Total revenues from contracts with customers 56,118 77,071 3,355 25,936 31,965 4,557 699 199,701 Interest income - Loans and securities lending 61,426 — — — — — — 61,426 Trading (loss) gain on investments (30,738) 522 — — — — — (30,216) Fair value adjustment on loans 10,938 — — — — — — 10,938 Other 5,105 (114) — — — — 4,991 Total revenues $ 102,849 $ 77,479 $ 3,355 $ 25,936 $ 31,965 $ 4,557 $ 699 $ 246,840 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Basic and diluted earnings per share were calculated as follows: Three Months Ended 2023 2022 Net income (loss) attributable to B. Riley Financial, Inc. $ 17,155 $ (10,062) Preferred stock dividends (2,012) (2,002) Net income (loss) applicable to common shareholders $ 15,143 $ (12,064) Weighted average common shares outstanding: Basic 28,585,337 27,855,033 Effect of dilutive potential common shares: Restricted stock units and warrants 928,098 — Diluted 29,513,435 27,855,033 Basic income (loss) per common share $ 0.53 $ (0.43) Diluted income (loss) per common share $ 0.51 $ (0.43) |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | The following is a summary of certain financial data for each of the Company’s reportable segments: Three Months Ended March 31, 2023 2022 Capital Markets segment: (As Restated) Revenues - Services and fees $ 57,929 $ 61,223 Trading income (loss) and fair value adjustments on loans 50,296 (19,800) Interest income - Loans and securities lending 77,186 61,426 Total revenues 185,411 102,849 Selling, general and administrative expenses (65,711) (34,117) Interest expense - Securities lending and loan participations sold (32,424) (11,766) Depreciation and amortization (1,256) (1,893) Segment income 86,020 55,073 Wealth Management segment: Revenues - Services and fees 48,542 76,957 Trading income and fair value adjustments on loans 1,272 522 Total revenues 49,814 77,479 Selling, general and administrative expenses (47,322) (85,742) Restructuring charge (33) — Depreciation and amortization (1,086) (1,833) Segment income (loss) 1,373 (10,096) Auction and Liquidation segment: Revenues - Services and fees 5,444 3,355 Revenues - Sale of goods 216 — Total revenues 5,660 3,355 Direct cost of services (3,128) (2,335) Cost of goods sold (52) — Selling, general and administrative expenses (2,280) (1,820) Segment income (loss) 200 (800) Financial Consulting segment: Revenues - Services and fees 25,010 25,936 Selling, general and administrative expenses (21,149) (20,943) Depreciation and amortization (78) (81) Segment income 3,783 4,912 Communications segment: Revenues - Services and fees 85,052 30,087 Revenues - Sale of goods 1,867 1,878 Total revenues 86,919 31,965 Direct cost of services (44,733) (9,316) Cost of goods sold (2,168) (2,251) Selling, general and administrative expenses (22,544) (8,245) Restructuring charge (60) — Depreciation and amortization (6,631) (3,184) Segment income 10,783 8,969 Consumer segment: Revenues - Services and fees 4,309 4,557 Revenues - Sale of goods 65,694 — Total revenues 70,003 4,557 Cost of goods sold (45,406) — Selling, general and administrative expenses (20,112) (756) Depreciation and amortization (2,839) (583) Segment income 1,646 3,218 Consolidated operating income from reportable segments 103,805 61,276 All Other: Revenues - Services and fees 9,273 699 Direct cost of services (6,536) — Corporate and other expenses (21,619) (16,002) Interest income 2,574 67 Dividend income 13,204 7,861 Realized and unrealized losses on investments (28,442) (49,112) Change in fair value of financial instruments and other (209) 5,981 (Loss) income on equity investments (10) 6,775 Interest expense (47,561) (30,436) Income (loss) before income taxes 24,479 (12,891) (Provision for) benefit from income taxes (7,919) 3,695 Net income (loss) 16,560 (9,196) Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests (595) 866 Net income (loss) attributable to B. Riley Financial, Inc. 17,155 (10,062) Preferred stock dividends 2,012 2,002 Net income (loss) available to common shareholders $ 15,143 $ (12,064) |
Schedule of revenues by geographical area | The following table presents revenues by geographical area: Three Months Ended March 31, 2023 2022 (As Restated) Revenues: Revenues - Services and fees: North America $ 234,930 $ 200,861 Europe 629 1,953 Total Revenues - Services and fees 235,559 202,814 Trading income (loss) and fair value adjustments on loans North America 51,568 (19,278) Revenues - Sale of goods North America 37,947 1,878 Australia 3,459 — Europe, Middle East, and Africa 17,428 — Asia 6,224 — Latin America 2,719 — Total Revenues - Sale of goods 67,777 1,878 Revenues - Interest income - Loans and securities lending: North America 77,186 61,426 Total Revenues: North America 401,631 244,887 Australia 3,459 — Europe, Middle East, and Africa 18,057 1,953 Asia 6,224 — Latin America 2,719 — Total Revenues $ 432,090 $ 246,840 |
Long-Lived Assets by Geographic Areas | The following table presents long-lived assets, which consists of property and equipment, net, by geographical area: March 31, 2023 December 31, 2022 Long-lived Assets - Property and Equipment, net: North America $ 26,770 $ 26,276 Europe 532 577 Asia Pacific 165 162 Australia 110 126 Total $ 27,577 $ 27,141 |
ORGANIZATION AND NATURE OF BU_2
ORGANIZATION AND NATURE OF BUSINESS OPERATIONS (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 6 |
RESTATEMENT OF PREVIOUSLY ISS_3
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues: | ||
Services and fees | $ 235,559 | $ 202,814 |
Trading (loss) income and fair value adjustments on loans | (19,278) | |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Sale of goods | 1,878 | |
Total revenues | 432,090 | 246,840 |
Operating expenses: | ||
Direct cost of services | 54,397 | 11,651 |
Cost of goods sold | 2,251 | |
Selling, general and administrative expenses | 212,627 | 175,199 |
Interest expense - Securities lending and loan participations sold | 32,424 | 11,766 |
Total operating expenses | 347,167 | 200,867 |
Operating income | 84,923 | 45,973 |
Other income (expense): | ||
Interest income | 2,574 | 67 |
Dividend income | 13,204 | 7,861 |
Realized and unrealized gains (losses) on investments | (28,442) | (49,112) |
Change in fair value of financial instruments and other | (209) | 5,981 |
Income from equity method investments | (10) | 6,775 |
Interest expense | (47,561) | (30,436) |
Income (loss) before income taxes | 24,479 | (12,891) |
(Provision for) benefit from income taxes | (7,919) | 3,695 |
Net income (loss) | 16,560 | (9,196) |
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (595) | 866 |
Net income (loss) attributable to B. Riley Financial, Inc. | 17,155 | (10,062) |
Preferred stock dividends | 2,012 | 2,002 |
Net income (loss) available to common shareholders | 15,143 | (12,064) |
Net income (loss) available to common shareholders | $ 15,143 | $ (12,064) |
Basic (loss) income per common share (in dollars per share) | $ 0.53 | $ (0.43) |
Diluted (loss) income per common share (in dollars per share) | $ 0.51 | $ (0.43) |
Weighted average basic common shares outstanding (in shares) | 28,585,337 | 27,855,033 |
Weighted average diluted common shares outstanding (in shares) | 29,513,435 | 27,855,033 |
As Previously Reported | Dividend Income and Investment Gain (Loss) Classification Error | ||
Revenues: | ||
Services and fees | $ 210,675 | |
Trading (loss) income and fair value adjustments on loans | (68,390) | |
Interest income - Loans and securities lending | 61,426 | |
Sale of goods | 1,878 | |
Total revenues | 205,589 | |
Operating expenses: | ||
Direct cost of services | 11,651 | |
Cost of goods sold | 2,251 | |
Selling, general and administrative expenses | 175,199 | |
Interest expense - Securities lending and loan participations sold | 11,766 | |
Total operating expenses | 200,867 | |
Operating income | 4,722 | |
Other income (expense): | ||
Interest income | 67 | |
Dividend income | 0 | |
Realized and unrealized gains (losses) on investments | 0 | |
Change in fair value of financial instruments and other | 5,981 | |
Income from equity method investments | 6,775 | |
Interest expense | (30,436) | |
Income (loss) before income taxes | (12,891) | |
(Provision for) benefit from income taxes | 3,695 | |
Net income (loss) | (9,196) | |
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | 866 | |
Net income (loss) attributable to B. Riley Financial, Inc. | (10,062) | |
Preferred stock dividends | 2,002 | |
Net income (loss) available to common shareholders | (12,064) | |
Net income (loss) available to common shareholders | $ (12,064) | |
Basic (loss) income per common share (in dollars per share) | $ (0.43) | |
Diluted (loss) income per common share (in dollars per share) | $ (0.43) | |
Weighted average basic common shares outstanding (in shares) | 27,855,033 | |
Weighted average diluted common shares outstanding (in shares) | 27,855,033 | |
Restatement Adjustments | Dividend Income and Investment Gain (Loss) Classification Error | ||
Revenues: | ||
Services and fees | $ (7,861) | |
Trading (loss) income and fair value adjustments on loans | 49,112 | |
Interest income - Loans and securities lending | 0 | |
Sale of goods | 0 | |
Total revenues | 41,251 | |
Operating expenses: | ||
Direct cost of services | 0 | |
Cost of goods sold | 0 | |
Selling, general and administrative expenses | 0 | |
Interest expense - Securities lending and loan participations sold | 0 | |
Total operating expenses | 0 | |
Operating income | 41,251 | |
Other income (expense): | ||
Interest income | 0 | |
Dividend income | 7,861 | |
Realized and unrealized gains (losses) on investments | (49,112) | |
Change in fair value of financial instruments and other | 0 | |
Income from equity method investments | 0 | |
Interest expense | 0 | |
Income (loss) before income taxes | 0 | |
(Provision for) benefit from income taxes | 0 | |
Net income (loss) | 0 | |
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | 0 | |
Net income (loss) attributable to B. Riley Financial, Inc. | 0 | |
Preferred stock dividends | 0 | |
Net income (loss) available to common shareholders | 0 | |
Net income (loss) available to common shareholders | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 23, 2022 USD ($) | Jul. 19, 2022 USD ($) | Jul. 29, 2022 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) $ / shares shares | Mar. 31, 2023 EUR (€) | Feb. 24, 2023 | Jan. 12, 2023 USD ($) | May 31, 2022 | Apr. 30, 2022 | Nov. 30, 2020 | |
Accounting Policies [Line Items] | |||||||||||||
Advertising costs | $ 5,121,000 | $ 1,763,000 | |||||||||||
Restricted cash | 2,351,000 | $ 2,308,000 | |||||||||||
Net of unamortized costs, origination fees, premiums and discounts | 3,620,000 | 3,851,000 | |||||||||||
Unrealized gains (losses) | 43,459,000 | 10,937,000 | |||||||||||
Financing receivable, nonaccrual | $ 39,552,000 | $ 7,153,000 | |||||||||||
Nonaccrual to outstanding, percent | 5.10% | 1% | 5.10% | ||||||||||
Loans receivable, at fair value | $ 772,085,000 | $ 701,652,000 | |||||||||||
Equity method investments, fair value disclosure | 370,502,000 | 371,948,000 | |||||||||||
Partnership investment interests | 48,930,000 | 70,063,000 | |||||||||||
Investment securities | 86,920,000 | 94,109,000 | |||||||||||
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries | 176,182,000 | 174,437,000 | |||||||||||
Warrant liability | 381,000 | 173,000 | |||||||||||
Fair value assets | 1,861,647,000 | 1,841,185,000 | |||||||||||
Senior notes payable | 1,722,977,000 | 1,721,751,000 | |||||||||||
Fair value | 1,258,532,000 | 1,431,787,000 | |||||||||||
Forward exchange contracts | € | € 0 | ||||||||||||
Transaction gains (losses) | (234,000) | 296,000 | |||||||||||
Equity investments | 41,816,000 | 41,298,000 | |||||||||||
Total assets | 6,618,190,000 | 6,111,202,000 | |||||||||||
Total liabilities | 6,002,859,000 | 5,426,687,000 | |||||||||||
Revenues | 432,090,000 | 246,840,000 | |||||||||||
Redemption value | 174,967,000 | 178,622,000 | |||||||||||
Issuance of common stock | $ 2,111,000 | 20,320,000 | |||||||||||
Non-cash financing activity | 15,000 | ||||||||||||
Agent fees | $ 0 | 12,051,000 | |||||||||||
Sold price per unit (in dollars per share) | $ / shares | $ 10 | ||||||||||||
Assets held in trust | $ 345,000,000 | ||||||||||||
Consummate business combination transaction term | 24 months | ||||||||||||
Consummate business combination transaction term, circumstance based | 27 months | ||||||||||||
Bebe Stores Inc. ("bebe") | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Equity method investments, fair value disclosure | 22,573,000 | 25,423,000 | |||||||||||
Equity investments | 40,937,000 | 40,383,000 | |||||||||||
Secured Debt | Term Loan | Line of Credit | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Principal amount | $ 148,200,000 | $ 49,890,000 | $ 78,296,000 | ||||||||||
BRPM 150 | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Gross proceeds | $ 172,500,000 | ||||||||||||
BRPM 250 | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Gross proceeds | $ 172,500,000 | ||||||||||||
FaZeClan Holdings, Inc | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Decrease in prepaid expenses and other assets | $ 172,584,000 | ||||||||||||
De-consolidation of BRPM 150 | $ 172,500,000 | ||||||||||||
FaZeClan Holdings, Inc | Incentive Fee | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Revenue from related parties | 41,885,000 | ||||||||||||
Common Class A | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Exercise price per share (in dollars per share) | $ / shares | $ 11.50 | ||||||||||||
Minimum | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Cash fee percentage | 7% | ||||||||||||
Carried interest percentage | 8% | ||||||||||||
Maximum | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Cash fee percentage | 10% | ||||||||||||
Carried interest percentage | 15% | ||||||||||||
FocalPoint Securities, LLC ("FocalPoint") | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Business combination, deferred cash consideration | $ 22,661,000 | ||||||||||||
Lingo | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Business combination, step acquisition, equity interest in acquiree | 20% | 80% | 40% | 40% | |||||||||
Business acquisition, percentage of voting interests acquired | 20% | 20% | |||||||||||
Subsequent acquisition, percentage | 100% | 80% | |||||||||||
Consideration transferred, liabilities incurred | 7,000,000 | ||||||||||||
Net tangible assets acquired and liabilities assumed | 1,190,000 | ||||||||||||
Warrant | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Warrant liability | 381,000 | 173,000 | |||||||||||
IPO | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Consummated units (in shares) | shares | 17,250,000 | ||||||||||||
IPO | Common Class A | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Class of warrant or right, number of securities called by each warrant or right (in shares) | shares | 1 | ||||||||||||
Significant unobservable inputs (Level 3) | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Loans receivable, at fair value | 772,085,000 | 701,652,000 | |||||||||||
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries | 0 | 0 | |||||||||||
Warrant liability | 0 | 0 | |||||||||||
Fair value assets | 1,131,126,000 | 1,070,117,000 | |||||||||||
W.S. Badcock Corporation | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Payments to acquire finance receivables | $ 168,363,000 | 145,278,000 | $ 400,000,000 | ||||||||||
Loans receivable, at fair value | 324,328,000 | 318,109,000 | |||||||||||
Fair Value, Measurements, Recurring | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Loans receivable carrying value | 795,996,000 | 769,022,000 | |||||||||||
Loans receivable | $ 799,616,000 | $ 772,873,000 | |||||||||||
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Percentage of total assets measured in Level 3 of the hierarchy level | 17.10% | 17.50% | 17.10% | ||||||||||
Loans Receivable | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Loans receivable fair value | $ 772,085,000 | $ 701,652,000 | |||||||||||
Fixed Income Securities | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Interest expense | 32,424,000 | 11,766,000 | |||||||||||
Forward Contracts | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Net gain (loss) forward exchange contract | $ 0 | $ 68,000 | |||||||||||
Bebe Stores Inc. ("bebe") | |||||||||||||
Accounting Policies [Line Items] | |||||||||||||
Ownership, percentage | 41.30% | 40.10% | 41.30% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Cash and cash equivalents | $ 209,971 | $ 268,618 |
Restricted cash | 2,351 | 2,308 |
Total cash, cash equivalents and restricted cash | $ 212,322 | $ 270,926 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of securities and other investments owned and securities sold not yet purchased at fair value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Securities and other investments owned: | ||
Total securities and other investments owned | $ 1,049,230 | $ 1,129,268 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 7,806 | 5,897 |
Corporate bonds | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 65,470 | 8,539 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 480 | 1,162 |
Other fixed income securities | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 5,248 | 3,956 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,204 | 269 |
Partnership interests and other | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 48,930 | 70,063 |
Equity securities | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 929,582 | 1,046,710 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | $ 6,122 | $ 4,466 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of equity method investments (Details) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2023 USD ($) investment | Dec. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment, number of investments | investment | 2 | ||||
Total assets | $ 6,618,190 | $ 6,111,202 | |||
Total liabilities | 6,002,859 | 5,426,687 | |||
Equity attributable to investee | 381,185 | 446,514 | |||
Revenues | 432,090 | $ 246,840 | |||
Net income (loss) attributable to investees | $ 17,155 | $ (10,062) | |||
Investment One and Two | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total assets | 197,101 | $ 202,520 | |||
Total liabilities | 6,789 | 5,737 | |||
Equity attributable to investee | 190,312 | 196,783 | |||
Revenues | 27,971 | 27,209 | |||
Net income (loss) attributable to investees | 11,808 | 12,882 | |||
B&W | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Total assets | 942,655 | 881,567 | |||
Total liabilities | 944,744 | 898,695 | |||
Equity attributable to investee | (2,089) | (17,128) | |||
Revenues | 249,877 | 192,295 | |||
Net income (loss) attributable to investees | $ 2,021 | $ 25,874 | |||
Investment One | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Rate of equity interests | 41% | ||||
Investment Two | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Rate of equity interests | 43% | ||||
B&W | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Rate of equity interests | 31% | 31% |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of financial assets and liabilities measured on recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries | $ 176,182 | $ 174,437 |
Securities and other investments owned: | ||
Total securities and other investments owned | 913,380 | 965,096 |
Loans receivable, at fair value | 772,085 | 701,652 |
Total assets measured at fair value | 1,861,647 | 1,841,185 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 7,806 | 5,897 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,654 | 4,648 |
Warrant liabilities | 381 | 173 |
Contingent consideration | 28,884 | 31,046 |
Total liabilities measured at fair value | 41,725 | 41,764 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets: | ||
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries | 176,182 | 174,437 |
Securities and other investments owned: | ||
Total securities and other investments owned | 537,337 | 584,136 |
Loans receivable, at fair value | 0 | 0 |
Total assets measured at fair value | 713,519 | 758,573 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 6,122 | 4,466 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 0 | 0 |
Warrant liabilities | 381 | 173 |
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 6,503 | 4,639 |
Other observable inputs (Level 2) | ||
Assets: | ||
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries | 0 | 0 |
Securities and other investments owned: | ||
Total securities and other investments owned | 17,002 | 12,495 |
Loans receivable, at fair value | 0 | 0 |
Total assets measured at fair value | 17,002 | 12,495 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,684 | 1,431 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 0 | 0 |
Warrant liabilities | 0 | 0 |
Contingent consideration | 0 | 0 |
Total liabilities measured at fair value | 1,684 | 1,431 |
Significant unobservable inputs (Level 3) | ||
Assets: | ||
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries | 0 | 0 |
Securities and other investments owned: | ||
Total securities and other investments owned | 359,041 | 368,465 |
Loans receivable, at fair value | 772,085 | 701,652 |
Total assets measured at fair value | 1,131,126 | 1,070,117 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 0 | 0 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,654 | 4,648 |
Warrant liabilities | 0 | 0 |
Contingent consideration | 28,884 | 31,046 |
Total liabilities measured at fair value | 33,538 | 35,694 |
Equity securities | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 842,662 | 952,601 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 6,122 | 4,466 |
Equity securities | Quoted prices in active markets for identical assets (Level 1) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 483,621 | 584,136 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 6,122 | 4,466 |
Equity securities | Other observable inputs (Level 2) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 0 | 0 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 0 | 0 |
Equity securities | Significant unobservable inputs (Level 3) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 359,041 | 368,465 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 0 | 0 |
Corporate bonds | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 65,470 | 8,539 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 480 | 1,162 |
Corporate bonds | Quoted prices in active markets for identical assets (Level 1) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 53,716 | 0 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 0 | 0 |
Corporate bonds | Other observable inputs (Level 2) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 11,754 | 8,539 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 480 | 1,162 |
Corporate bonds | Significant unobservable inputs (Level 3) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 0 | 0 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 0 | 0 |
Other fixed income securities | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 5,248 | 3,956 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,204 | 269 |
Other fixed income securities | Quoted prices in active markets for identical assets (Level 1) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 0 | 0 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 0 | 0 |
Other fixed income securities | Other observable inputs (Level 2) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 5,248 | 3,956 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 1,204 | 269 |
Other fixed income securities | Significant unobservable inputs (Level 3) | ||
Securities and other investments owned: | ||
Total securities and other investments owned | 0 | 0 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of significant unobservable inputs of level 3 financial assets and liabilities (Details) $ in Thousands | Mar. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value | $ 772,085 | $ 701,652 |
Total assets measured at fair value | 1,861,647 | 1,841,185 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,654 | 4,648 |
Contingent consideration | 28,884 | 31,046 |
Total liabilities measured at fair value | 41,725 | 41,764 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value | 772,085 | 701,652 |
Total assets measured at fair value | 1,131,126 | 1,070,117 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,654 | 4,648 |
Contingent consideration | 28,884 | 31,046 |
Total liabilities measured at fair value | $ 33,538 | $ 35,694 |
Significant unobservable inputs (Level 3) | Market interest rate | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | 0.085 | 0.085 |
Significant unobservable inputs (Level 3) | Revenue volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | 0.051 | |
Significant unobservable inputs (Level 3) | Weighted Average | Market interest rate | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | 0.085 | 0.085 |
Significant unobservable inputs (Level 3) | Weighted Average | Revenue volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | 0.051 | |
Significant unobservable inputs (Level 3) | Market approach | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value | $ 297,136 | $ 304,172 |
Fair value | 28,067 | 7,153 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | $ 4,654 | $ 4,648 |
Significant unobservable inputs (Level 3) | Market approach | Multiple of EBITDA | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Loans receivable at fair value, measurement input | 13.25 | 4.5 |
Significant unobservable inputs (Level 3) | Market approach | Multiple of Sales | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 3 | |
Significant unobservable inputs (Level 3) | Market approach | Operating income multiple | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Mandatorily redeemable noncontrolling interesting, measurement input | 6 | 6 |
Significant unobservable inputs (Level 3) | Market approach | Minimum | Multiple of EBITDA | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 1.5 | 1.5 |
Significant unobservable inputs (Level 3) | Market approach | Minimum | Multiple of Sales | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 3.8 | |
Significant unobservable inputs (Level 3) | Market approach | Minimum | Market price of related security | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | $ / shares | 0.01 | 10.01 |
Significant unobservable inputs (Level 3) | Market approach | Maximum | Multiple of EBITDA | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 16 | 10.5 |
Significant unobservable inputs (Level 3) | Market approach | Maximum | Market price of related security | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | $ / shares | 14.05 | 18.88 |
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Multiple of EBITDA | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 6.3 | 6 |
Loans receivable at fair value, measurement input | 13.25 | 4.5 |
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Multiple of Sales | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 3.8 | 3 |
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Market price of related security | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | $ / shares | 7.33 | 16.91 |
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Operating income multiple | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Mandatorily redeemable noncontrolling interesting, measurement input | 6 | 6 |
Significant unobservable inputs (Level 3) | Discounted cash flow | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value | $ 57,974 | $ 57,267 |
Fair value | 744,018 | 694,499 |
Contingent consideration | $ 28,884 | $ 31,046 |
Significant unobservable inputs (Level 3) | Discounted cash flow | Market interest rate | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 0.238 | 0.238 |
Significant unobservable inputs (Level 3) | Discounted cash flow | EBITDA volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | $ / shares | 0.75 | 0.800 |
Significant unobservable inputs (Level 3) | Discounted cash flow | Asset volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | 0.690 | 0.690 |
Significant unobservable inputs (Level 3) | Discounted cash flow | Minimum | Market interest rate | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Loans receivable at fair value, measurement input | 0.097 | 0.060 |
Significant unobservable inputs (Level 3) | Discounted cash flow | Maximum | Market interest rate | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Loans receivable at fair value, measurement input | 0.356 | 0.835 |
Significant unobservable inputs (Level 3) | Discounted cash flow | Weighted Average | Market interest rate | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 0.238 | 0.238 |
Loans receivable at fair value, measurement input | 0.181 | 0.239 |
Significant unobservable inputs (Level 3) | Discounted cash flow | Weighted Average | EBITDA volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | $ / shares | 0.75 | 0.800 |
Significant unobservable inputs (Level 3) | Discounted cash flow | Weighted Average | Asset volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent earnout, measurement input, percent | 0.690 | 0.690 |
Significant unobservable inputs (Level 3) | Option pricing model | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value | $ 3,931 | $ 7,026 |
Significant unobservable inputs (Level 3) | Option pricing model | Minimum | Annualized volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 0.300 | 0.003 |
Significant unobservable inputs (Level 3) | Option pricing model | Maximum | Annualized volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 5.100 | 0.261 |
Significant unobservable inputs (Level 3) | Option pricing model | Weighted Average | Annualized volatility | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Equity securities, measurement input | 0.800 | 0.700 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of fair value measurement of level 3 financial assets and liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Equity securities | Significant unobservable inputs (Level 3) | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance at beginning of period | $ 368,465 | $ 377,549 |
Fair Value Adjustments | (9,016) | (4,543) |
Relating to Undistributed Earnings | 0 | 0 |
Purchases, Sales and Settlements | 6,487 | 19,912 |
Transfer in and/or out of Level 3 | (6,895) | (4,254) |
Balance at end of period | 359,041 | 388,664 |
Loans receivable at fair value | Significant unobservable inputs (Level 3) | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance at beginning of period | 701,652 | 873,186 |
Fair Value Adjustments | 43,459 | 10,937 |
Relating to Undistributed Earnings | 231 | 3,238 |
Purchases, Sales and Settlements | 26,743 | (4,970) |
Transfer in and/or out of Level 3 | 0 | 0 |
Balance at end of period | 772,085 | 882,391 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | Significant unobservable inputs (Level 3) | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance at beginning of period | 4,648 | 4,506 |
Fair Value Adjustments | 0 | 0 |
Relating to Undistributed Earnings | 308 | 247 |
Purchases, Sales and Settlements | (302) | (251) |
Transfer in and/or out of Level 3 | 0 | 0 |
Balance at end of period | 4,654 | 4,502 |
Contingent consideration | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Balance at beginning of period | 31,046 | 0 |
Fair Value Adjustments | (3,447) | 0 |
Relating to Undistributed Earnings | 0 | 0 |
Purchases, Sales and Settlements | 1,285 | 22,464 |
Transfer in and/or out of Level 3 | 0 | 0 |
Balance at end of period | $ 28,884 | $ 22,464 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of financial assets measured on nonrecurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in nonpublic entities that do not report NAV | $ 4,271 | $ 20,251 |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in nonpublic entities that do not report NAV | 0 | 0 |
Other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in nonpublic entities that do not report NAV | 0 | 18,659 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in nonpublic entities that do not report NAV | $ 4,271 | $ 1,592 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Redeemable noncontrolling interest (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Redeemable Noncontrolling Interest [Roll Forward] | |
Balance, December 31, 2022 | $ 178,622 |
Balance, March 31, 2023 | 174,967 |
Lingo, BRPM 150 and 250 | |
Redeemable Noncontrolling Interest [Roll Forward] | |
Balance, December 31, 2022 | 178,622 |
Net loss | (146) |
Purchase of Lingo minority interest | (11,190) |
Remeasurement adjustments for Lingo and BRPM 250 | 7,681 |
Balance, March 31, 2023 | $ 174,967 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of investments in the VIE (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Securities and other investments owned, at fair value | $ 1,049,230 | $ 1,129,268 |
Other assets | 54,309 | 45,116 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Securities and other investments owned, at fair value | 35,383 | 33,743 |
Loans receivable, at fair value | 58,611 | 46,700 |
Other assets | 2,570 | 3,755 |
Maximum exposure to loss | $ 96,564 | $ 84,198 |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Oct. 18, 2022 | May 31, 2022 | Feb. 28, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Feb. 24, 2023 | Apr. 30, 2022 | Nov. 30, 2020 | |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 523,997 | $ 512,595 | ||||||
Senior Notes | 6.750% Senior notes due May 31, 2024 | ||||||||
Business Acquisition [Line Items] | ||||||||
Interest rate | 6.75% | |||||||
Targus | ||||||||
Business Acquisition [Line Items] | ||||||||
Total consideration | $ 247,546 | |||||||
Cash | 112,686 | |||||||
Fair value of deferred payments | 6,515 | |||||||
Lease liability | 7,665 | |||||||
Goodwill | 78,519 | |||||||
Other intangible assets | 89,000 | |||||||
Acquisition related costs | 1,921 | |||||||
Goodwill, period change | 2,766 | |||||||
Net tangible assets acquired and liabilities assumed | 169,027 | |||||||
Targus | Other Notes Payable | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred, liabilities incurred | 54,000 | |||||||
Targus | Senior Notes | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred, liabilities incurred | $ 59,016 | |||||||
Lingo | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred, liabilities incurred | $ 7,000 | |||||||
Lease liability | $ 32,172 | |||||||
Goodwill | 34,412 | |||||||
Other intangible assets | 63,000 | |||||||
Financing receivable converted to equity | $ 17,500 | |||||||
Business combination, step acquisition, equity interest in acquiree | 80% | 20% | 40% | 40% | ||||
Remeasurement gain | 6,790 | |||||||
Total fair value of assets | $ 116,500 | |||||||
Business acquisition, percentage of voting interests acquired | 20% | 20% | ||||||
Fair value of noncontrolling interest | $ 8,021 | |||||||
Series of Individually Immaterial Business Acquisitions | ||||||||
Business Acquisition [Line Items] | ||||||||
Cash | 145,987 | |||||||
Consideration transferred, liabilities incurred | 52,969 | |||||||
Equity interests issued and issuable | 20,320 | |||||||
Goodwill | $ 150,824 | 151,925 | ||||||
Other intangible assets | 52,860 | |||||||
Net tangible assets acquired and liabilities assumed | $ 2,522 | |||||||
Working capital adjustments | $ (1,101) |
ACQUISITIONS - Purchase Price A
ACQUISITIONS - Purchase Price Allocation Schedule (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 18, 2022 | Mar. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 523,997 | $ 512,595 | |
Targus | |||
Business Acquisition [Line Items] | |||
Cash | $ 112,686 | ||
Fair value of deferred payments | 6,515 | ||
Total consideration | 247,546 | ||
Cash and cash equivalents | 18,810 | ||
Accounts receivable | 91,039 | ||
Prepaid and other assets | 90,289 | ||
Right-of-use assets | 7,665 | ||
Property and equipment | 8,320 | ||
Other intangible assets | 89,000 | ||
Accounts payable | (54,553) | ||
Accrued expenses and other liabilities | (61,677) | ||
Deferred income taxes | (9,989) | ||
Contingent consideration | (2,212) | ||
Lease liability | (7,665) | ||
Net tangible assets acquired and liabilities assumed | 169,027 | ||
Goodwill | 78,519 | ||
Total | $ 247,546 | ||
Targus | Share-Based Payment Arrangement, Option | |||
Business Acquisition [Line Items] | |||
Equity interest issued or issuable, number of shares (in shares) | 215,876 | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 5,749 | ||
Targus | Common Stock | |||
Business Acquisition [Line Items] | |||
Equity interest issued or issuable, number of shares (in shares) | 227,491 | ||
Business acquisition, share price (in dollars per share) | $ 42.11 | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 9,580 | ||
Targus | Common Stock | Share-Based Payment Arrangement, Option | |||
Business Acquisition [Line Items] | |||
Business combination, consideration transferred, equity interests issued and issuable | 15,328 | ||
Targus | Other Notes Payable | |||
Business Acquisition [Line Items] | |||
Consideration transferred, liabilities incurred | 54,000 | ||
Targus | Senior Notes | |||
Business Acquisition [Line Items] | |||
Consideration transferred, liabilities incurred | $ 59,016 | ||
Equity interest issued or issuable, number of shares (in shares) | 2,400,000 | ||
Business acquisition, share price (in dollars per share) | $ 24.59 |
ACQUISITIONS - Intangible Asset
ACQUISITIONS - Intangible Assets (Details) - Targus $ in Thousands | Oct. 18, 2022 USD ($) |
Indefinite-Lived Intangible Assets [Line Items] | |
Total | $ 89,000 |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 9 years |
Fair Value | $ 50,000 |
Internally developed software and other intangibles | |
Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 4,000 |
Internally developed software and other intangibles | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 1 year |
Internally developed software and other intangibles | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 3 years |
Tradenames | |
Indefinite-Lived Intangible Assets [Line Items] | |
Tradenames | $ 35,000 |
ACQUISITIONS - Pro forma (Detai
ACQUISITIONS - Pro forma (Details) - Targus $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 341,287 |
Net loss | (7,313) |
Net loss attributable to B. Riley Financial, Inc. | (8,179) |
Net loss attributable to common shareholders | $ (10,181) |
RESTRUCTURING CHARGE - Addition
RESTRUCTURING CHARGE - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring and Related Activities [Abstract] | ||
Restructuring charge | $ 93 | $ 0 |
RESTRUCTURING CHARGE - Schedule
RESTRUCTURING CHARGE - Schedule of changes in accrued restructuring charge (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of period | $ 2,335 | $ 624 |
Restructuring charge | 93 | 0 |
Cash paid | (438) | (27) |
Non-cash items | 6 | 2 |
Balance, end of period | $ 1,996 | $ 599 |
RESTRUCTURING CHARGE - Schedu_2
RESTRUCTURING CHARGE - Schedule of summarize the restructuring activities by reportable segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Employee termination | $ 60 | |
Facility closure and consolidation | 33 | |
Total restructuring charge | 93 | $ 0 |
Wealth Management Segment | ||
Segment Reporting Information [Line Items] | ||
Employee termination | 0 | |
Facility closure and consolidation | 33 | |
Total restructuring charge | 33 | |
Communications | ||
Segment Reporting Information [Line Items] | ||
Employee termination | 60 | |
Facility closure and consolidation | 0 | |
Total restructuring charge | $ 60 |
SECURITIES LENDING (Details)
SECURITIES LENDING (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Securities borrowed | ||
Gross amounts recognized | $ 2,942,843 | $ 2,343,327 |
Gross amounts offset in the consolidated balance sheets | 0 | 0 |
Net amounts included in the consolidated balance sheets | 2,942,843 | 2,343,327 |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | 2,942,843 | 2,343,327 |
Net amounts | 0 | 0 |
Securities loaned | ||
Gross amounts recognized | 2,937,982 | 2,334,031 |
Gross amounts offset in the consolidated balance sheets | 0 | 0 |
Net amounts included in the consolidated balance sheets | 2,937,982 | 2,334,031 |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | 2,937,982 | 2,334,031 |
Net amounts | $ 0 | $ 0 |
ACCOUNTS RECEIVABLE - Schedule
ACCOUNTS RECEIVABLE - Schedule of components of accounts receivable, net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 116,411 | $ 144,120 |
Investment banking fees, commissions and other receivables | 10,766 | 8,654 |
Total accounts receivable | 127,177 | 152,774 |
Allowance for doubtful accounts | (6,324) | (3,664) |
Accounts receivable, net | $ 120,853 | $ 149,110 |
ACCOUNTS RECEIVABLE - Schedul_2
ACCOUNTS RECEIVABLE - Schedule of allowance for doubtful accounts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | $ 3,664 | $ 3,658 |
Add: Additions to reserve | 3,173 | 405 |
Less: Write-offs | (488) | (960) |
Less: Recovery | (25) | 0 |
Balance, end of period | $ 6,324 | $ 3,103 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries | $ 176,182 | $ 174,437 |
Inventory | 113,107 | 101,675 |
Equity method investments | 41,816 | 41,298 |
Prepaid expenses | 23,699 | 17,623 |
Unbilled receivables | 14,857 | 14,144 |
Other receivables | 67,902 | 66,403 |
Other assets | 54,309 | 45,116 |
Prepaid expenses and other assets | $ 491,872 | $ 460,696 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 523,997 | $ 512,595 | |
Amortization expense | 10,473 | $ 6,816 | |
Estimated future amortization expense remainder of fiscal year | 23,998 | ||
Estimated future amortization expense 2023 | 26,786 | ||
Estimated future amortization expense 2024 | 22,198 | ||
Estimated future amortization expense 2025 | 18,897 | ||
Estimated future amortization expense 2026 | 26,132 | ||
Estimated future amortization expense after 2026 | $ 87,773 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of carrying amount of goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 512,595 |
Acquisition of other business | 9,701 |
Other | 1,701 |
Ending Balance | 523,997 |
Capital Markets Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 162,018 |
Acquisition of other business | 0 |
Other | 0 |
Ending Balance | 162,018 |
Wealth Management Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 51,195 |
Acquisition of other business | 0 |
Other | 0 |
Ending Balance | 51,195 |
Auction and Liquidation Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 1,975 |
Ending Balance | 1,975 |
Financial Consulting Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 23,680 |
Acquisition of other business | 7,273 |
Other | 36 |
Ending Balance | 30,989 |
Communications Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 193,195 |
Ending Balance | 192,094 |
Consumer Segment | |
Goodwill [Roll Forward] | |
Beginning Balance | 75,753 |
Acquisition of other business | 0 |
Other | 2,766 |
Ending Balance | 78,519 |
All Other | |
Goodwill [Roll Forward] | |
Beginning Balance | 4,779 |
Ending Balance | 7,207 |
Auction and Liquidation segment: | |
Goodwill [Roll Forward] | |
Acquisition of other business | 0 |
Other | 0 |
Communications | |
Goodwill [Roll Forward] | |
Acquisition of other business | 0 |
Other | (1,101) |
Other Segments | |
Goodwill [Roll Forward] | |
Acquisition of other business | 2,428 |
Other | $ 0 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 320,623 | $ 320,142 |
Accumulated Amortization | (114,839) | (106,320) |
Intangibles Net | 205,784 | 213,822 |
Tradenames | 160,276 | 160,276 |
Gross Carrying Value | 480,899 | 480,418 |
Intangibles Net | 366,060 | 374,098 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 270,511 | 268,253 |
Accumulated Amortization | (94,872) | (87,049) |
Intangibles Net | $ 175,639 | 181,204 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 1 year | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 16 years | |
Domain names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 7 years | |
Gross Carrying Value | $ 185 | 185 |
Accumulated Amortization | (176) | (169) |
Intangibles Net | $ 9 | 16 |
Advertising relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 8 years | |
Gross Carrying Value | $ 100 | 100 |
Accumulated Amortization | (84) | (81) |
Intangibles Net | 16 | 19 |
Internally developed software and other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 28,295 | 28,295 |
Accumulated Amortization | (14,522) | (12,714) |
Intangibles Net | $ 13,773 | 15,581 |
Internally developed software and other intangibles | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 6 months | |
Internally developed software and other intangibles | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years | |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 21,532 | 23,309 |
Accumulated Amortization | (5,185) | (6,307) |
Intangibles Net | $ 16,347 | $ 17,002 |
Trademarks | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years | |
Trademarks | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 10 years |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Interest expense | $ 47,561,000 | $ 30,436,000 | |
Other Notes Payable | Clearing Organization | |||
Debt Instrument [Line Items] | |||
Interest expense | 174,000 | 232,000 | |
Notes payable outstanding | 19,882,000 | $ 25,263,000 | |
Accrued interest, percentage | 2% | ||
Wells Fargo Bank, National Association | |||
Debt Instrument [Line Items] | |||
Line of credit, outstanding | 0 | $ 0 | |
Credit facility | 0 | ||
Wells Fargo Bank, National Association | Asset Based Credit Facility | |||
Debt Instrument [Line Items] | |||
Borrowing capacity credit facility | 200,000,000 | ||
Interest expense | $ 18,000 | $ 108,000 | |
Wells Fargo Bank, National Association | Asset Based Credit Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Credit facility success fees, percentage | 1% | ||
Funding fees, percentage | 0.05% | ||
Wells Fargo Bank, National Association | Asset Based Credit Facility | Minimum | Secured Overnight Financing Rate (SOFR) | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 2.25% | ||
Wells Fargo Bank, National Association | Asset Based Credit Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Credit facility success fees, percentage | 10% | ||
Funding fees, percentage | 0.20% | ||
Wells Fargo Bank, National Association | Asset Based Credit Facility | Maximum | Secured Overnight Financing Rate (SOFR) | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 3.25% |
TERM LOANS AND REVOLVING CRED_2
TERM LOANS AND REVOLVING CREDIT FACILITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | 21 Months Ended | 27 Months Ended | 33 Months Ended | 51 Months Ended | ||||||||||||
Oct. 18, 2022 | Sep. 23, 2022 | Aug. 16, 2022 | Jun. 21, 2022 | Jun. 23, 2021 | Jun. 30, 2027 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2024 | Dec. 31, 2022 | Mar. 31, 2025 | Jun. 30, 2027 | Dec. 31, 2026 | Sep. 30, 2027 | Jan. 12, 2023 | Nov. 10, 2022 | Sep. 09, 2022 | Dec. 17, 2021 | Dec. 19, 2018 | |
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Interest expense | $ 47,561,000 | $ 30,436,000 | ||||||||||||||||||
Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Senior notes payable | $ 52,500,000 | |||||||||||||||||||
Revolving Credit Facility | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, term | 4 years | |||||||||||||||||||
Borrowing capacity credit facility | $ 200,000,000 | |||||||||||||||||||
Outstanding balance | 283,739,000 | $ 286,962,000 | ||||||||||||||||||
Amortization of deferred debt issuance costs | $ 150,000 | 143,000 | ||||||||||||||||||
Interest rate at period end | 9.69% | 9.23% | ||||||||||||||||||
Operating value | $ 135,000,000 | |||||||||||||||||||
Debt instrument, covenant, net asset value | 1,100,000,000 | |||||||||||||||||||
Unamortized debt issuance costs | $ 5,011,000 | $ 5,538,000 | ||||||||||||||||||
Term loan interest | $ 7,300,000 | |||||||||||||||||||
Interest rate | 9.69% | 9.23% | ||||||||||||||||||
Revolving credit facility | $ 77,000,000 | $ 74,700,000 | ||||||||||||||||||
Interest on revolving | 1,956,000 | 1,100,000 | ||||||||||||||||||
BRPAC Credit Agreement | United Online Software Development (India) Private Limited | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Covenant, pledged asset percentage | 65% | |||||||||||||||||||
BRPAC Credit Agreement | MagicJack VocalTec LTD | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Covenant, pledged asset percentage | 65% | |||||||||||||||||||
BRPAC Credit Agreement | Credit Parties | United Online Software Development (India) Private Limited | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Covenant, pledged asset percentage | 100% | |||||||||||||||||||
BRPAC Credit Agreement | BRPI Acquisition Co LLC | City National Bank | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Amortization of deferred debt issuance costs | 627,000 | 701,000 | ||||||||||||||||||
Forecast | BRPAC Credit Agreement | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Quarterly installments for term loan | $ 2,813,000 | $ 4,688,000 | $ 3,750,000 | |||||||||||||||||
Targus Credit Agreement | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, term | 5 years | |||||||||||||||||||
Aggregate principal amount | $ 28,000,000 | |||||||||||||||||||
Outstanding balance | 24,678,000 | 26,021,000 | ||||||||||||||||||
Debt issuance costs, gross | $ 522,000 | $ 580,000 | ||||||||||||||||||
Interest rate | 8.66% | 8.43% | ||||||||||||||||||
Targus Credit Agreement | Revolving Credit Facility | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, term | 5 years | |||||||||||||||||||
Borrowing capacity credit facility | $ 85,000,000 | |||||||||||||||||||
Targus Credit Agreement | Revolving Credit Facility | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Outstanding balance | $ 62,463,000 | $ 52,978,000 | ||||||||||||||||||
Interest expense | 1,689,000 | |||||||||||||||||||
Amount of unused commitment fees | $ 173,000 | |||||||||||||||||||
Targus Credit Agreement | Forecast | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Quarterly installments for term loan | $ 1,400,000 | |||||||||||||||||||
Targus Credit Agreement | Minimum | Revolving Credit Facility | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Interest rate | 6.66% | 6.03% | ||||||||||||||||||
Targus Credit Agreement | Maximum | Revolving Credit Facility | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Interest rate | 9.75% | 9.25% | ||||||||||||||||||
Second Amendment | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Aggregate principal amount | $ 100,000,000 | |||||||||||||||||||
Term Loan | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Amortization of deferred debt issuance costs | $ 509,000 | |||||||||||||||||||
Interest rate at period end | 9.59% | 9.23% | ||||||||||||||||||
Term loan facility amortize in equal installments percentage | 1.25% | |||||||||||||||||||
Interest rate | 9.59% | 9.23% | ||||||||||||||||||
Interest on the term loan | $ 4,102,000 | |||||||||||||||||||
Term Loan | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, term | 5 years | |||||||||||||||||||
Aggregate principal amount | $ 148,200,000 | 49,890,000 | $ 78,296,000 | |||||||||||||||||
Outstanding balance | 184,358,000 | $ 118,437,000 | ||||||||||||||||||
Debt issuance costs, gross | 3,837,000 | $ 2,377,000 | ||||||||||||||||||
Interest expense | 6,430,000 | |||||||||||||||||||
Amortization of deferred debt issuance costs | $ 1,744,000 | |||||||||||||||||||
Interest rate at period end | 11.40% | 11.01% | ||||||||||||||||||
Interest rate | 11.40% | 11.01% | ||||||||||||||||||
Term Loan | Revolving Credit Facility | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, term | 4 years | |||||||||||||||||||
Amortization of deferred debt issuance costs | $ 527,000 | |||||||||||||||||||
Secured loan | $ 80,000,000 | |||||||||||||||||||
Term Loan | BRPAC Credit Agreement | BRPI Acquisition Co LLC | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Outstanding balance | 64,061,000 | $ 68,674,000 | ||||||||||||||||||
Unamortized debt issuance costs | 74,000 | 72,000 | ||||||||||||||||||
Interest expense | $ 1,443,000 | $ 502,000 | ||||||||||||||||||
Term Loan | Amended BRPAC Credit Agreement | BRPI Acquisition Co LLC | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Interest rate at period end | 8.23% | 7.65% | ||||||||||||||||||
Interest rate | 8.23% | 7.65% | ||||||||||||||||||
Term Loan | Forecast | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Quarterly installments for term loan | $ 3,750,000 | |||||||||||||||||||
Lingo Credit Agreement | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Interest expense | $ 1,561,000 | |||||||||||||||||||
Amortization of deferred debt issuance costs | 75,000 | |||||||||||||||||||
Lingo Credit Agreement | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, term | 5 years | |||||||||||||||||||
Aggregate principal amount | $ 20,500,000 | $ 7,500,000 | ||||||||||||||||||
Senior notes payable | $ 45,000,000 | $ 73,000,000 | ||||||||||||||||||
Outstanding balance | 69,778,000 | $ 71,985,000 | ||||||||||||||||||
Debt issuance costs, gross | $ 940,000 | $ 1,016,000 | ||||||||||||||||||
Interest rate at period end | 8.48% | 7.89% | ||||||||||||||||||
Interest rate | 8.48% | 7.89% | ||||||||||||||||||
Lingo Credit Agreement | Forecast | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Quarterly installments for term loan | $ 2,281,000 | $ 2,738,000 | $ 3,650,000 | |||||||||||||||||
Fourth Amendment | BRPAC Credit Agreement | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Aggregate principal amount | $ 75,000,000 | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Interest bears | 4.50% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Minimum | BRPAC Credit Agreement | BRPI Acquisition Co LLC | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 2.75% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Targus Credit Agreement | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Targus Credit Agreement | Minimum | Revolving Credit Facility | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 2% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Targus Credit Agreement | Maximum | Revolving Credit Facility | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 2.75% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Term Loan | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 6.50% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Lingo Credit Agreement | Minimum | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 3% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Lingo Credit Agreement | Maximum | Secured Debt | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||||||||||||||||
Secured Overnight Financing Rate (SOFR) | Fourth Amendment | Maximum | BRPAC Credit Agreement | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 3.50% | |||||||||||||||||||
Base Rate | Targus Credit Agreement | Minimum | Revolving Credit Facility | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 1% | |||||||||||||||||||
Base Rate | Targus Credit Agreement | Maximum | Revolving Credit Facility | Line of Credit | ||||||||||||||||||||
Term Loans and Revolving Credit Facility (Details) [Line Items] | ||||||||||||||||||||
Debt instrument, basis spread on variable rate | 1.75% |
SENIOR NOTES PAYABLE - Schedule
SENIOR NOTES PAYABLE - Schedule of senior notes payable, net (Details) - Senior Notes - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Senior notes payable | $ 1,739,891 | $ 1,739,891 |
Less: Unamortized debt issuance costs | (16,914) | (18,140) |
Senior notes payable, net | 1,722,977 | 1,721,751 |
6.750% Senior notes due May 31, 2024 | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 199,232 | 199,232 |
Interest rate | 6.75% | |
6.500% Senior notes due September 30, 2026 | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 180,532 | 180,532 |
Interest rate | 6.50% | |
6.375% Senior notes due February 28, 2025 | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 146,432 | 146,432 |
Interest rate | 6.375% | |
6.000% Senior notes due January 31, 2028 | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 266,058 | 266,058 |
Interest rate | 6% | |
5.500% Senior notes due March 31, 2026 | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 217,440 | 217,440 |
Interest rate | 5.50% | |
5.250% Senior notes due August 31, 2028 | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 405,483 | 405,483 |
Interest rate | 5.25% | |
5.000% Senior notes due December 31, 2026 | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 324,714 | $ 324,714 |
Interest rate | 5% |
SENIOR NOTES PAYABLE - Addition
SENIOR NOTES PAYABLE - Additional information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jan. 05, 2022 | |
Debt Instrument [Line Items] | ||||
Senior notes outstanding, total | $ 1,722,977,000 | $ 1,721,751,000 | ||
Unamortized debt issuance expenses | 16,914,000 | $ 18,140,000 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of debt | $ 0 | $ 20,073,000 | ||
Debt, weighted average interest rate | 5.75% | 5.75% | ||
Interest expense on senior notes total | $ 26,227,000 | $ 24,409,000 | ||
Senior notes payable | 1,739,891,000 | $ 1,739,891,000 | ||
Senior Notes | Sales Agreement Prospectus | ||||
Debt Instrument [Line Items] | ||||
Outstanding notes payable | $ 70,000 | $ 70,000 | ||
Senior Notes | Sales Agreement Prospectus | Maximum | ||||
Debt Instrument [Line Items] | ||||
Senior notes payable | $ 250,000,000 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 60,141 | $ 86,798 |
Dividends payable | 18,360 | 33,923 |
Income taxes payable | 12,100 | 14,760 |
Other tax liabilities | 19,617 | 23,426 |
Contingent consideration | 28,884 | 31,046 |
Accrued expenses | 79,520 | 68,180 |
Other liabilities | 44,713 | 64,841 |
Accrued expenses and other liabilities | $ 263,335 | $ 322,974 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of revenues from contracts with customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | $ 293,134 | $ 199,701 |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Trading (loss) gain on investments | 8,292 | (30,216) |
Fair value adjustment on loans | 43,276 | 10,938 |
Other | 10,202 | 4,991 |
Total revenues | 432,090 | 246,840 |
Capital Markets Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 49,031 | 56,118 |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Trading (loss) gain on investments | 7,020 | (30,738) |
Fair value adjustment on loans | 43,276 | 10,938 |
Other | 8,898 | 5,105 |
Total revenues | 185,411 | 102,849 |
Wealth Management Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 47,238 | 77,071 |
Interest income - Loans and securities lending | 0 | 0 |
Trading (loss) gain on investments | 1,272 | 522 |
Fair value adjustment on loans | 0 | 0 |
Other | 1,304 | (114) |
Total revenues | 49,814 | 77,479 |
Auction and Liquidation Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 5,660 | 3,355 |
Interest income - Loans and securities lending | 0 | 0 |
Trading (loss) gain on investments | 0 | 0 |
Fair value adjustment on loans | 0 | 0 |
Other | 0 | 0 |
Total revenues | 5,660 | 3,355 |
Financial Consulting Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 25,010 | 25,936 |
Interest income - Loans and securities lending | 0 | 0 |
Trading (loss) gain on investments | 0 | 0 |
Fair value adjustment on loans | 0 | 0 |
Other | 0 | |
Total revenues | 25,010 | 25,936 |
Communications Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 86,919 | 31,965 |
Interest income - Loans and securities lending | 0 | 0 |
Trading (loss) gain on investments | 0 | 0 |
Fair value adjustment on loans | 0 | 0 |
Other | 0 | 0 |
Total revenues | 86,919 | 31,965 |
Consumer Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 70,003 | 4,557 |
Interest income - Loans and securities lending | 0 | 0 |
Trading (loss) gain on investments | 0 | 0 |
Fair value adjustment on loans | 0 | 0 |
Other | 0 | 0 |
Total revenues | 70,003 | 4,557 |
Other Segments | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 9,273 | 699 |
Total revenues | 9,273 | 699 |
Corporate finance, consulting and investment banking fees | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 53,664 | 58,643 |
Corporate finance, consulting and investment banking fees | Capital Markets Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 39,149 | 41,673 |
Corporate finance, consulting and investment banking fees | Wealth Management Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Corporate finance, consulting and investment banking fees | Auction and Liquidation Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Corporate finance, consulting and investment banking fees | Financial Consulting Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 14,515 | 16,970 |
Corporate finance, consulting and investment banking fees | Communications Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Corporate finance, consulting and investment banking fees | Consumer Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Corporate finance, consulting and investment banking fees | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Wealth and asset management fees | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 43,974 | 66,622 |
Wealth and asset management fees | Capital Markets Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 664 | 2,400 |
Wealth and asset management fees | Wealth Management Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 43,310 | 64,222 |
Wealth and asset management fees | Auction and Liquidation Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Wealth and asset management fees | Financial Consulting Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Wealth and asset management fees | Communications Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Wealth and asset management fees | Consumer Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Wealth and asset management fees | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Commissions, fees and reimbursed expenses | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 29,085 | 37,215 |
Commissions, fees and reimbursed expenses | Capital Markets Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 9,218 | 12,045 |
Commissions, fees and reimbursed expenses | Wealth Management Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 3,928 | 12,849 |
Commissions, fees and reimbursed expenses | Auction and Liquidation Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 5,444 | 3,355 |
Commissions, fees and reimbursed expenses | Financial Consulting Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 10,495 | 8,966 |
Commissions, fees and reimbursed expenses | Communications Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Commissions, fees and reimbursed expenses | Consumer Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Commissions, fees and reimbursed expenses | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Subscription services | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 83,008 | 27,813 |
Subscription services | Capital Markets Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Subscription services | Wealth Management Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Subscription services | Auction and Liquidation Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Subscription services | Financial Consulting Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Subscription services | Communications Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 83,008 | 27,813 |
Subscription services | Consumer Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Subscription services | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Sale of goods | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 67,777 | 1,878 |
Sale of goods | Capital Markets Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Sale of goods | Wealth Management Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Sale of goods | Auction and Liquidation Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 216 | 0 |
Sale of goods | Financial Consulting Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Sale of goods | Communications Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 1,867 | 1,878 |
Sale of goods | Consumer Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 65,694 | 0 |
Advertising, licensing and other | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 15,626 | 7,530 |
Advertising, licensing and other | Capital Markets Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Advertising, licensing and other | Wealth Management Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Advertising, licensing and other | Auction and Liquidation Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Advertising, licensing and other | Financial Consulting Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Advertising, licensing and other | Communications Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 2,044 | 2,274 |
Advertising, licensing and other | Consumer Segment | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 4,309 | 4,557 |
Advertising, licensing and other | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 9,273 | 699 |
Product | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Total revenues from contracts with customers | 0 | 0 |
Interest Income Loans And Securities Lending | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Interest income - Loans and securities lending | 0 | 0 |
Trading Gains losses On Investments | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Trading (loss) gain on investments | 0 | 0 |
Fair Value Adjustment On Loans | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Fair value adjustment on loans | 0 | 0 |
Other | Other Segments | ||
Revenue from External Customer [Line Items] | ||
Other | $ 0 | $ 0 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 120,853 | $ 149,110 | |
Unbilled receivables | 14,857 | 14,144 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Recognized revenue | 22,502 | $ 14,939 | |
Capitalized costs | 7,190 | 5,990 | |
Capitalized cost, recognized | 1,015 | $ 915 | |
Service and Fee | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Deferred revenue | 84,019 | $ 85,441 | |
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 54,839 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months | ||
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 13,350 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | ||
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 7,449 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | ||
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 3,552 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | ||
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 1,780 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | ||
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue, remaining performance obligation, amount | $ 3,049 | ||
Revenue, remaining performance obligation, expected timing of satisfaction, period |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 32.40% | (28.70%) | |
Federal net operating loss carryforwards | $ 55,349 | ||
State net operating loss carryforwards | $ 46,981 | ||
Deferred tax assets valuation allowance | $ 66,308 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional information (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Number of antidilutive securities were excluded from the computation of diluted net income (loss) per share (in shares) | 1,999,273 | 1,350,062 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to B. Riley Financial, Inc. | $ 17,155 | $ (10,062) |
Preferred stock dividends | (2,012) | (2,002) |
Net income (loss) available to common shareholders | 15,143 | (12,064) |
Net income (loss) available to common shareholders | $ 15,143 | $ (12,064) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 28,585,337 | 27,855,033 |
Effect of dilutive potential common shares: | ||
Restricted stock units and warrants (in shares) | 928,098 | 0 |
Diluted (in shares) | 29,513,435 | 27,855,033 |
Basic (loss) income per common share (in dollars per share) | $ 0.53 | $ (0.43) |
Diluted (loss) income per common share (in dollars per share) | $ 0.51 | $ (0.43) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) € in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Jan. 20, 2022 USD ($) | Dec. 22, 2021 EUR (€) | Aug. 26, 2020 USD ($) | Aug. 10, 2020 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Payment Guarantee | |||||||
Related Party Transaction [Line Items] | |||||||
Guarantor obligations, current carrying value | $ 100 | ||||||
Guarantor obligation, decrease | $ 10 | ||||||
Babcock & Wilcox Enterprises, Inc. | |||||||
Related Party Transaction [Line Items] | |||||||
Services fees | $ 750 | ||||||
Indemnity amount | € 30,000 | $ 29,970 | |||||
Indemnity rider received | $ 600 | ||||||
Payments for other fees | $ 1,694 | ||||||
Babcock & Wilcox Enterprises, Inc. | Guarantees | |||||||
Related Party Transaction [Line Items] | |||||||
Services fees | $ 935 | ||||||
Babcock & Wilcox Enterprises, Inc. | Maximum | Guarantees | |||||||
Related Party Transaction [Line Items] | |||||||
Contractual obligation | $ 110,000 |
SHARE-BASED PAYMENTS (Details)
SHARE-BASED PAYMENTS (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Oct. 31, 2022 | Oct. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 13,746,000 | $ 17,013,000 | |||
Repurchase shares of common stock | $ 53,803,000 | ||||
Shares authorized (in shares) | 50,000,000 | ||||
Preferred stock, shares issued (in shares) | 4,563 | 4,545 | |||
Preferred stock, shares outstanding (in shares) | 4,563 | 4,545 | |||
Preferred stock, liquidation preference | $ 114,082,000 | $ 113,615,000 | |||
Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized amount | $ 50,000,000 | ||||
Repurchase shares of common stock (in shares) | 1,452,831 | ||||
Repurchase shares of common stock | $ 53,688,000 | $ 0 | |||
Shares repurchased, average price per share (in dollars per share) | $ 36.95 | ||||
Depositary Shares for Series A Preferred Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued (in shares) | 0 | 19 | |||
Dividends per share (in dollars per share) | $ 0.4296875 | $ 0.4296875 | |||
Series A Preferred Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Preferred stock, shares issued (in shares) | 2,834 | ||||
Preferred stock, shares outstanding (in shares) | 2,834 | ||||
Preferred stock, liquidation preference | $ 70,854,000 | $ 70,854,000 | |||
Depositary Shares for Series B Preferred Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued (in shares) | 18 | 4 | |||
Dividends per share (in dollars per share) | $ 0.4609375 | $ 0.4609375 | |||
Series B Preferred Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Preferred stock, shares issued (in shares) | 1,729 | 1,710 | |||
Preferred stock, shares outstanding (in shares) | 1,729 | 1,710 | |||
Preferred stock, liquidation preference | $ 43,228,000 | $ 42,761,000 | |||
2021 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 13,312,000 | $ 16,860,000 | |||
2021 Stock Incentive Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 502,824 | 161,559 | |||
Grant date fair value | $ 19,338,000 | $ 11,863,000 | |||
2021 Stock Incentive Plan | Restricted Stock Units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
2021 Stock Incentive Plan | Restricted Stock Units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
2021 Stock Incentive Plan | Restricted Stock Units, Performance Based | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 65,000 | ||||
Grant date fair value | $ 2,329,000 | ||||
2021 Stock Incentive Plan | Restricted Stock Units, Performance Based | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 2 years | ||||
2021 Stock Incentive Plan | Restricted Stock Units, Performance Based | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 298,000 | $ 153,000 | |||
Shares reserved for issuance (in shares) | 362,986 |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
B. Riley Securities (“BRS”) | ||
Broker-Dealer, Net Capital Requirement [Line Items] | ||
Net capital | $ 146,827 | $ 175,503 |
Excess capital | 142,696 | 169,458 |
Required minimum net capital | 6,045 | |
B. Riley Wealth Management (“BRWM”) | ||
Broker-Dealer, Net Capital Requirement [Line Items] | ||
Net capital | 4,131 | 11,144 |
Excess capital | 11,105 | 8,615 |
Required minimum net capital | $ 2,529 | |
National Securities Corporation (“NSC”) | ||
Broker-Dealer, Net Capital Requirement [Line Items] | ||
Net capital | 8,780 | |
Excess capital | $ 2,325 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Jul. 19, 2022 $ / shares shares | May 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) parties | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Feb. 24, 2023 | Oct. 18, 2022 USD ($) | Apr. 30, 2022 | Apr. 25, 2022 USD ($) | Mar. 09, 2022 USD ($) | Jan. 03, 2022 USD ($) | Dec. 31, 2021 $ / shares | Nov. 01, 2021 USD ($) | Nov. 30, 2020 | |
Related Party Transaction [Line Items] | |||||||||||||||
Due from related party | $ 372 | $ 1,081 | |||||||||||||
Fair value | 772,085 | 701,652 | |||||||||||||
Sold price per unit (in dollars per share) | $ / shares | $ 10 | ||||||||||||||
Underwriting and financial advisory and other fees | 784 | $ 1,880 | |||||||||||||
Lingo | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Financing receivable converted to equity | $ 17,500 | ||||||||||||||
Business combination, step acquisition, equity interest in acquiree | 80% | 20% | 40% | 40% | |||||||||||
Business acquisition, percentage of voting interests acquired | 20% | 20% | |||||||||||||
Subsequent acquisition, percentage | 80% | 100% | |||||||||||||
Targus | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Total purchase consideration | $ 247,546 | ||||||||||||||
Common Class A | FaZeClan Holdings, Inc | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Sold price per unit (in dollars per share) | $ / shares | $ 10 | ||||||||||||||
B. Riley Financial | Common Class A | FaZeClan Holdings, Inc | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Consummated units (in shares) | shares | 5,342,500 | ||||||||||||||
California Natural Resources Group, LLC | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Fair value | $ 10,000 | $ 34,393 | |||||||||||||
Interest rate | 10% | ||||||||||||||
California Natural Resources Group, LLC | Indirect Guarantee of Indebtedness | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Debt and lease obligation | $ 10,375 | ||||||||||||||
Babcock & Wilcox Enterprises, Inc. | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Underwriting and financial advisory fees | $ 0 | 53 | |||||||||||||
Service agreement, termination period | 30 days | ||||||||||||||
Services fees | $ 750 | ||||||||||||||
Performance fee | $ 1,000 | ||||||||||||||
The Arena Group Holdings, Inc. | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Interest on loan payable percentage | 10% | ||||||||||||||
Revenue from related parties | $ 0 | 2,021 | |||||||||||||
Investee | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Fair value | $ 10,000 | ||||||||||||||
Whitehawk Capital Partners, L.P. | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Management fees | 1,142 | $ 1,079 | |||||||||||||
Maven | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Loans receivable fair value | 97,062 | 98,729 | |||||||||||||
Incentive Fee | FaZeClan Holdings, Inc | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Revenue from related parties | 41,885 | ||||||||||||||
Underwriting and Financial Advisory Fee | Investee | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Revenue from related parties | $ 9,632 | ||||||||||||||
Loan Receivable Sold | Management | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Financing receivable sold | $ 7,600 | ||||||||||||||
Number of related parties | parties | 2 | ||||||||||||||
Loan Receivable Sold | Management | BRC Partners Opportunity Fund, LP | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Financing receivable sold | $ 3,519 | ||||||||||||||
Loan Receivable Sold | Management | 272 Capital L.P | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Financing receivable sold | $ 4,081 | ||||||||||||||
BRC Partners Opportunity Fund, LP | Management | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Ownership, percentage | 70.40% | ||||||||||||||
BRC Partners Opportunity Fund, LP | Management | Co-Chief Executive Officer | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Ownership, percentage | 41% | ||||||||||||||
272 Capital L.P | Management | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Ownership, percentage | 13.60% |
BUSINESS SEGMENTS - Narrative (
BUSINESS SEGMENTS - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 6 |
BUSINESS SEGMENTS - Schedule of
BUSINESS SEGMENTS - Schedule of reportable segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Services and fees | $ 235,559 | $ 202,814 |
Trading income (loss) and fair value adjustments on loans | 51,568 | (19,278) |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Sale of goods | 67,777 | 1,878 |
Revenues | 432,090 | 246,840 |
Direct cost of services | (54,397) | (11,651) |
Cost of goods sold | (47,626) | (2,251) |
Selling, general and administrative expenses | (212,627) | (175,199) |
Interest expense - Securities lending and loan participations sold | (32,424) | (11,766) |
Depreciation and amortization | (13,077) | (7,848) |
Restructuring charge | (93) | 0 |
Operating income | 84,923 | 45,973 |
Interest income | 2,574 | 67 |
Dividend income | 13,204 | 7,861 |
Realized and unrealized gains (losses) on investments | (28,442) | (49,112) |
Change in fair value of financial instruments and other | (209) | 5,981 |
(Loss) income from equity investments | (10) | 6,775 |
Interest expense | (47,561) | (30,436) |
Income (loss) before income taxes | 24,479 | (12,891) |
(Provision for) benefit from income taxes | (7,919) | 3,695 |
Net income (loss) | 16,560 | (9,196) |
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests | (595) | 866 |
Net income (loss) attributable to B. Riley Financial, Inc. | 17,155 | (10,062) |
Preferred stock dividends | 2,012 | 2,002 |
Net income (loss) available to common shareholders | 15,143 | (12,064) |
Net income (loss) available to common shareholders | 15,143 | (12,064) |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income | 103,805 | 61,276 |
Corporate And Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 9,273 | 699 |
Direct cost of services | (6,536) | 0 |
Corporate and other expenses | (21,619) | (16,002) |
Capital Markets Segment | ||
Segment Reporting Information [Line Items] | ||
Interest income - Loans and securities lending | 77,186 | 61,426 |
Revenues | 185,411 | 102,849 |
Capital Markets Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 57,929 | 61,223 |
Trading income (loss) and fair value adjustments on loans | 50,296 | (19,800) |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Revenues | 185,411 | 102,849 |
Selling, general and administrative expenses | (65,711) | (34,117) |
Interest expense - Securities lending and loan participations sold | (32,424) | (11,766) |
Depreciation and amortization | (1,256) | (1,893) |
Operating income | 86,020 | 55,073 |
Wealth Management Segment | ||
Segment Reporting Information [Line Items] | ||
Interest income - Loans and securities lending | 0 | 0 |
Revenues | 49,814 | 77,479 |
Wealth Management Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 48,542 | 76,957 |
Trading income (loss) and fair value adjustments on loans | 1,272 | 522 |
Revenues | 49,814 | 77,479 |
Selling, general and administrative expenses | (47,322) | (85,742) |
Depreciation and amortization | (1,086) | (1,833) |
Restructuring charge | (33) | 0 |
Operating income | 1,373 | (10,096) |
Auction and Liquidation Segment | ||
Segment Reporting Information [Line Items] | ||
Interest income - Loans and securities lending | 0 | 0 |
Revenues | 5,660 | 3,355 |
Auction and Liquidation Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 5,444 | 3,355 |
Sale of goods | 216 | 0 |
Revenues | 5,660 | 3,355 |
Direct cost of services | (3,128) | (2,335) |
Cost of goods sold | (52) | 0 |
Selling, general and administrative expenses | (2,280) | (1,820) |
Operating income | 200 | (800) |
Financial Consulting Segment | ||
Segment Reporting Information [Line Items] | ||
Interest income - Loans and securities lending | 0 | 0 |
Revenues | 25,010 | 25,936 |
Financial Consulting Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 25,010 | 25,936 |
Selling, general and administrative expenses | (21,149) | (20,943) |
Depreciation and amortization | (78) | (81) |
Operating income | 3,783 | 4,912 |
Communications Segment | ||
Segment Reporting Information [Line Items] | ||
Interest income - Loans and securities lending | 0 | 0 |
Revenues | 86,919 | 31,965 |
Communications Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 85,052 | 30,087 |
Sale of goods | 1,867 | 1,878 |
Revenues | 86,919 | 31,965 |
Direct cost of services | (44,733) | (9,316) |
Cost of goods sold | (2,168) | (2,251) |
Selling, general and administrative expenses | (22,544) | (8,245) |
Depreciation and amortization | (6,631) | (3,184) |
Restructuring charge | (60) | 0 |
Operating income | 10,783 | 8,969 |
Consumer Segment | ||
Segment Reporting Information [Line Items] | ||
Interest income - Loans and securities lending | 0 | 0 |
Revenues | 70,003 | 4,557 |
Consumer Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 4,309 | 4,557 |
Sale of goods | 65,694 | 0 |
Revenues | 70,003 | 4,557 |
Cost of goods sold | (45,406) | 0 |
Selling, general and administrative expenses | (20,112) | (756) |
Depreciation and amortization | (2,839) | (583) |
Operating income | $ 1,646 | $ 3,218 |
BUSINESS SEGMENTS - Schedule _2
BUSINESS SEGMENTS - Schedule of revenues by geographical area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Services and fees | $ 235,559 | $ 202,814 |
Trading income (loss) and fair value adjustments on loans | 51,568 | (19,278) |
Sale of goods | 67,777 | 1,878 |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Revenues | 432,090 | 246,840 |
North America | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 234,930 | 200,861 |
Trading income (loss) and fair value adjustments on loans | 51,568 | (19,278) |
Sale of goods | 37,947 | 1,878 |
Interest income - Loans and securities lending | 77,186 | 61,426 |
Revenues | 401,631 | 244,887 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Services and fees | 629 | 1,953 |
Australia | ||
Segment Reporting Information [Line Items] | ||
Sale of goods | 3,459 | 0 |
Revenues | 3,459 | 0 |
Europe, Middle East, and Africa | ||
Segment Reporting Information [Line Items] | ||
Sale of goods | 17,428 | 0 |
Revenues | 18,057 | 1,953 |
Asia | ||
Segment Reporting Information [Line Items] | ||
Sale of goods | 6,224 | 0 |
Revenues | 6,224 | 0 |
Latin America | ||
Segment Reporting Information [Line Items] | ||
Sale of goods | 2,719 | 0 |
Revenues | $ 2,719 | $ 0 |
BUSINESS SEGMENTS - Long-Lived
BUSINESS SEGMENTS - Long-Lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | ||
Long-Lived Assets | $ 27,577 | $ 27,141 |
North America | ||
Business Acquisition [Line Items] | ||
Long-Lived Assets | 26,770 | 26,276 |
Europe | ||
Business Acquisition [Line Items] | ||
Long-Lived Assets | 532 | 577 |
Asia Pacific | ||
Business Acquisition [Line Items] | ||
Long-Lived Assets | 165 | 162 |
Australia | ||
Business Acquisition [Line Items] | ||
Long-Lived Assets | $ 110 | $ 126 |