LOS ANGELES - B. Riley Financial, Inc. (NASDAQ: RILY), a diversified financial services company, has released its audited financial results for the fiscal year ending December 31, 2023, revealing adjustments to its preliminary figures.
The revisions, detailed in the company's Annual Report filed on Form 10-K, include a decrease in total revenues from $1.647 billion to $1.644 billion and an increase in net loss available to common shareholders from $86.4 million to $108 million.
The adjustments, primarily due to accrued fee income and trading income revisions, also reflect changes in unrealized gains and losses on investments, notably those related to the Hurley and Justice brand investments. Total assets were adjusted down from $6.10 billion to $6.07 billion, largely due to changes in the fair value of securities and other investments.
Adjusted EBITDA was reported at $210.2 million, a $29.6 million adjustment, and Operating Adjusted EBITDA at $363.0 million, after a $4.6 million adjustment. These non-GAAP financial measures are used by the company to provide a clearer picture of its operating performance and capital resources, excluding certain items such as trading income and fair value adjustments on loans.
The company also mentioned the completion of an independent investigation by the Audit Committee's legal counsel, Winston & Strawn LLP, concerning the historical relationship between the company and Brian Kahn, as well as related allegations made by short sellers. The investigation confirmed that the company and its executives had no involvement with or knowledge of any alleged misconduct.
In addition to the financial revisions, B. Riley Financial highlighted strategic activities since the end of the fiscal year, including the retirement of $115 million in outstanding bonds, reduction of additional indebtedness by approximately $55 million, and a strategic review process for Great American Group. The company also emphasized its commitment to its core businesses in securities, advisory, and wealth management.
The Annual Report provides further details on B. Riley Financial's investment in Freedom VCM, including the fair value of its 31% ownership stake, which totaled $287 million as of December 31, 2023. The company plans to amend a prior report to include updated historical financial statements for FRG, reflecting the sales of its Badcock and Sylvan Learning businesses as discontinued operations.
The information in this article is based on a press release statement from B. Riley Financial.
InvestingPro Insights
In light of B. Riley Financial's recent financial revisions, investors may consider the latest data and tips from InvestingPro to gauge the company's current market position. The company's market capitalization stands at $664.26 million, reflecting its value in the eyes of investors. Despite the reported net loss, B. Riley Financial has maintained a significant dividend yield of 9.21%, which might appeal to income-focused investors. This is in line with the InvestingPro Tips that highlight the company's consistent dividend payments over the past 11 years, underscoring a potential draw for those seeking regular income streams from their investments.
However, the company's price volatility is notable, with the stock having experienced a substantial drop of 39.15% over the last six months. This aligns with the InvestingPro Tips which point out the stock's high price volatility and weak gross profit margins. The gross profit margin for the last twelve months as of Q4 2023 was reported at just 2.78%, which may raise concerns about the company's ability to turn revenues into profits.
For investors looking for in-depth analysis and additional insights, there are more InvestingPro Tips available, including the company's liquidity position and long-term returns. B. Riley Financial's liquid assets exceeding short-term obligations is a positive sign, potentially indicating a lower risk of financial distress. Additionally, despite recent challenges, the company has shown a high return over the last decade. To explore these insights further, interested readers can visit InvestingPro and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a total of 9 InvestingPro Tips for B. Riley Financial.
With the next earnings date scheduled for April 25, 2024, investors will be keenly watching for any signs of a turnaround or further adjustments. The InvestingPro Fair Value estimate of $28.42 suggests potential undervaluation, which may interest value investors looking for opportunities. As always, due diligence and careful consideration of all available data and expert analysis are crucial when evaluating any investment.
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