LOS ANGELES, Feb. 23, 2022 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ:RILY), a diversified financial services company, today announced results for the three- and twelve-month period ended December 31, 2021.

Fourth Quarter 2021 Financial Highlights

Net income of $62.2 million, $2.08 diluted EPS
Total revenues of $422.1 million
Total adjusted EBITDA ⁽¹⁾ of $138.0 million
Operating revenues ⁽²⁾ of $353.3 million
Operating adjusted EBITDA ⁽³⁾ of $106.1 million

Full Year 2021 Financial Highlights

Net income of $437.6 million, $15.09 diluted EPS
Total revenues of $1,740.6 million
Total adjusted EBITDA ⁽¹⁾ of $762.5 million
Operating revenues ⁽²⁾of $1,353.9 million
Operating adjusted EBITDA ⁽³⁾ of $422.0 million
Strengthened wealth management, asset management and M&A capabilities
Significantly lowered cost of debt
Declared dividends of $10.00 per common share for FY 2021

Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, said: "We are pleased to report another strong quarter and full year of results thanks to our talented and ambitious team. By adding to our wealth management, asset management and M&A businesses through acquisition and hiring exceptional talent in all areas, we continue to provide unique capabilities to our clients and partners. In 2021, we strengthened our balance sheet and reduced our cost of capital, allowing us the flexibility to invest across the platform and return capital to shareholders with share buybacks and dividend payments. Over the past four quarters, B. Riley has declared $10.00 in common dividends thanks to the strong cash flow of our episodic and recurring businesses."

Tom Kelleher, Co-Chief Executive Officer of B. Riley Financial, added: "Operating revenue for the full year 2021 increased 70% to $1.4 billion compared to $799 million for the full year 2020. Our efforts to cross-sell throughout the platform is gaining traction and creating opportunities. Furthermore, we have continued to expand our platform as we recently welcomed the addition of FocalPoint Securities, which will enhance our firm's investment banking efforts, with a specific emphasis on M&A advisory and financial sponsors. We also completed the purchase of a portfolio of loan receivables from Badcock Home Furniture which we believe will add an attractive and consistent income stream."

Mr. Riley continued: "Over the past couple of months capital markets have slowed significantly. While we have been a large beneficiary of these markets, we also recognize the strength and differentiation of our business model if they are to continue to soften. When we took the business public in 2014 our business was highly correlated to two cyclical businesses, brokerage and liquidation. Since that time, we have taken aggressive steps to diversify the cash flow profile of our company by adding several non-correlated companies such as our communications, brands and financial consulting businesses in addition to our recent accounts receivables portfolio. In addition, the credit and current income portion of our investment portfolio provides approximately $85 million of interest and dividend income. Combined, our non-cyclical businesses and assets provide enough cash flow to cover the vast majority of our annual operating expenses, interest and dividend. Clearly, we expect strong profits from B. Riley Securities this year and every year. As a reminder, that business has generated a majority of our capital markets operating segment income in each of the last three years. However, we believe our diversification is a competitive advantage and will enable us to invest when others may need to contract."

Declaration of Common Dividend

B. Riley has declared a regular quarterly cash dividend of $1.00 per common share which is payable on or about March 23 to common stockholders of record as of March 9. Including this $1.00 regular dividend, the Company will have paid $10.00 in common dividends to shareholders related to the FY 2021 period.

Share Repurchases

Under the prior share repurchase plan, effective as of October 27, 2020, the Company repurchased approximately 495,000 of its common shares for an aggregate amount of approximately $12.6 million through December 31, 2021. During the fourth quarter of 2021, B. Riley's Board of Directors approved a new annual share repurchase program for up to $50 million.

Financial Summary


	Three Months Ended				Twelve Months Ended
	December 31,				December 31,

(Dollars in thousands, except for share data)		2021		2020		2021		2020

Net income available to common shareholders	$	62,182	$	170,114	$	437,597	$	200,438

Basic income per common share	$	2.26	$	6.72	$	15.99	$	7.83
Diluted income per common share	$	2.08	$	6.55	$	15.09	$	7.56

For the fourth quarter, net income available to common shareholders was $62.2 million, or $2.08 diluted earnings per share (EPS). For the full year, net income available to common shareholders was $437.6 million, or $15.09 diluted EPS.


	Three Months Ended				Twelve Months Ended
	December 31,				December 31,

(Dollars in thousands)		2021		2020		2021		2020

Operating Revenues ⁽²⁾	$	353,252	$	270,046	$	1,353,885	$	798,703
Investment Gains ⁽⁴⁾		68,858		140,160		386,676		104,018
Total Revenues	$	422,110	$	410,206	$	1,740,561	$	902,721

Operating Adjusted EBITDA ⁽³⁾	$	106,097	$	126,787	$	422,029	$	311,673
Investment Adjusted EBITDA ⁽⁵⁾		31,928		133,699		340,465		95,145
Total Adjusted EBITDA ⁽¹⁾	$	138,025	$	260,486	$	762,494	$	406,818

For the three months ended December 31, 2021:

Total revenues increased 3% to $422.1 million from $410.2 million for the prior year period.
Total adjusted EBITDA⁽¹⁾of $138.0 million compared to $260.5 million for the prior year period.
Operating revenues⁽²⁾ increased 31% to $353.3 million from $270.0 million for the prior year period.
Operating adjusted EBITDA⁽³⁾ of $106.1 million compared to $126.8 million for the prior year period.
Quarterly investment gains⁽⁴⁾ were $68.9 million which reflect certain strategic investments held by the Company.

For the full year:

Total revenues increased 93% to $1.7 billion from $902.7 million for the prior year period.
Total adjusted EBITDA ⁽¹⁾ increased 87% to $762.5 million from $406.8 million for the prior year period.
Operating revenues⁽²⁾ increased 70% to $1.4 billion from $798.7 million for the prior year period.
Operating adjusted EBITDA⁽³⁾ increased 35% to $422.0 million from $311.7 million for the prior year period.

As of December 31, 2021, cash and investments⁽⁶⁾ totaled approximately $2.6 billion including cash and cash equivalents of $278.9 million. Total cash and investments,⁽⁶⁾ net of debt, was approximately $606 million.

Segment Financial Summary and Highlights


	Operating Revenues⁽²⁾				Investment Gains ⁽⁴⁾				Total Segment Revenue
	Three Months Ended December 31,				Three Months Ended December 31,				Three Months Ended December 31,
(Dollars in thousands)	2021		2020		2021		2020		2021		2020
Capital Markets		$ 176,935		$ 180,214		$ 67,718		$ 139,750		$ 244,653		$ 319,964
Wealth Management		103,803		20,851		1,140		410		104,943		21,261
Auction and Liquidation		5,718		15,667		-		-		5,718		15,667
Financial Consulting		27,877		26,480		-		-		27,877		26,480
Principal Investments		33,872		21,383		-		-		33,872		21,383
Brands		5,047		5,451		-		-		5,047		5,451

	Segment Operating Income (Loss)⁽⁷⁾				Investment Income ⁽⁵⁾				Total Segment Income (Loss)
	Three Months Ended December 31,				Three Months Ended December 31,				Three Months Ended December 31,
(Dollars in thousands)	2021		2020		2021		2020		2021		2020
Capital Markets		$ 87,203		$ 101,253		$ 30,788		$ 133,289		$ 117,991		$ 234,542
Wealth Management		4,916		1,250		1,140		410		6,056		1,660
Auction and Liquidation		(2,706)		7,460		-		-		(2,706)		7,460
Financial Consulting		6,628		6,873		-		-		6,628		6,873
Principal Investments		5,846		7,300		-		-		5,846		7,300
Brands		3,605		4,054		-		-		3,605		4,054

For the three months ended December 31, 2021:

Capital Markets segment revenues decreased 24% to $244.7 million for the fourth quarter. Excluding investment gains ⁽⁴⁾ of $67.7 million, segment operating revenues⁽²⁾ decreased 2% year-over-year to $176.9 million, and segment operating income ⁽⁷⁾ decreased 14% to $87.2 million for the quarter. Performance was primarily driven by investment banking and fees generated from several significant debt and equity capital markets transactions completed during the quarter.

Wealth Management segment revenues and segment income increased to $104.9 million and $6.1 million, respectively, reflecting the addition of National Holdings which was acquired in February 2021. Combined wealth management assets under management were over $32 billion as of December 31, 2021.

Auction and Liquidation segment revenues totaled $5.7 million. Results for this segment vary from quarter-to-quarter and year-to-year due to the episodic impact of large retail liquidation engagements.

Financial Consulting segment revenues increased to $27.9 million from $26.5 million in prior year period. Segment income decreased to $6.6 million, down from $6.9 million for the prior year period.

Principal Investments segment companies, magicJack, United Online, and Marconi Wireless, acquired during the quarter, continued to perform above expectations, contributing recurring cash flow to the Company.

Brands generated quarterly segment revenues of $5.0 million related to the licensing of brand trademarks.


	Operating Revenues⁽²⁾				Investment Gains ⁽⁴⁾				Total Segment Revenue
	Twelve Months Ended December 31,				Twelve Months Ended December 31,				Twelve Months Ended December 31,
(Dollars in thousands)	2021		2020		2021		2020		2021		2020
Capital Markets		$ 698,040		$ 442,376		$ 379,053		$ 103,214		$ 1,077,093		$ 545,590
Wealth Management		374,361		72,345		7,623		804		381,984		73,149
Auction and Liquidation		73,517		88,764		-		-		73,517		88,764
Financial Consulting		94,312		91,622		-		-		94,312		91,622
Principal Investments		93,347		87,138		-		-		93,347		87,138
Brands		20,308		16,458		-		-		20,308		16,458

	Segment Operating Income (Loss)⁽⁷⁾				Investment Income ⁽⁵⁾				Total Segment Income (Loss)
	Twelve Months Ended December 31,				Twelve Months Ended December 31,				Twelve Months Ended December 31,
(Dollars in thousands)	2021		2020		2021		2020		2021		2020
Capital Markets		$ 344,029		$ 206,533		$ 332,842		$ 94,341		$ 676,871		$ 300,874
Wealth Management		8,311		2,097		7,623		804		15,934		2,901
Auction and Liquidation		8,054		25,769		-		-		8,054		25,769
Financial Consulting		16,894		22,543		-		-		16,894		22,543
Principal Investments		27,158		33,360		-		-		27,158		33,360
Brands		14,385		(1,789)		-		-		14,385		(1,789)

For the full year:

Capital Markets operating revenues ⁽²⁾ increased to $698.0 million with segment operating income ⁽⁷⁾ of $344.0 million, compared to operating revenues ⁽²⁾ of $442.4 million and segment operating income ⁽⁷⁾of $206.5 million in the prior year period.

Wealth Management annual revenues increased to $382.0 million from $73.1 million in prior year period. Segment income increased to $15.9 million, up from $2.9 million for the prior year period. The increases are primarily from the addition of National Holdings.

Auction and Liquidation generated annual revenues of $73.5 million and segment income of $8.1 million related to retail liquidation and store closing projects completed during 2021.

Financial Consulting annual revenues increased to $94.3 million from $91.6 million in prior year period. Segment income decreased to $16.9 million, down from $22.5 million for the prior year period.

Principal Investments companies continued to outperform initial investment estimates and provide steady cash flow for the B. Riley platform. For the full year, magicJack, United Online and Marconi Wireless contributed revenues of $93.3 million and segment income of $27.2 million.

Brands contributed licensing revenue of $20.3 million in 2021.

Supplemental Financial Data

Additional metrics related to operating results and investments can be found in the Fourth Quarter and Full Year 2021 Financial Supplement on B. Riley's investor relations website.

Conference Call Details

Management will host an investor call to discuss its fourth quarter and full year results today, Wednesday, February 23, 2022 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time). Investors may access the live broadcast and archived recording via the Company's investor relations website at ir.brileyfin.com.

Date and Time:	Wednesday,8 February 23, 2022 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial In:	1-877-300-8521 (toll-free) or 1-412-317-6026 (international)
Audio Webcast:	https://ir.brileyfin.com/events-and-presentations

Replay (expires Wednesday, March 2, 2022)
Dial In:	1-844-512-2921; 10164067 (pin)
Replay Link:	https://ir.brileyfin.com/events-and-presentations

About B. Riley Financial

B. Riley Financial provides collaborative solutions tailored to fit the capital raising and business advisory needs of its clients and partners. B. Riley operates through several subsidiaries that offer a diverse range of complementary end-to-end capabilities spanning investment banking and institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. For more information, please visit www.brileyfin.com.

Footnotes (See "Note Regarding Use of Non-GAAP Financial Measures" for further discussion of these non-GAAP terms.)

(1)	Adjusted EBITDA includes earnings before interest, taxes, depreciation, amortization, restructuring costs, share-based payments, gain on extinguishment of loans, impairment of tradenames, and transaction related and other costs. For a definition of adjusted EBITDA and a reconciliation to GAAP financial measures, please see the Appendix hereto.
(2)	Operating revenue is defined as the sum of revenues from services and fees, interest income - loans and securities lending, and sale of goods.
(3)	Operating adjusted EBITDA is defined as adjusted EBITDA excluding trading income (losses) and fair value adjustments on loans and other investment related expenses.
(4)	Investment gains (loss) is defined as trading income and fair value adjustments on loans.
(5)	Investment adjusted EBITDA and investment income (loss) are defined as trading income (losses) and fair value adjustments on loans, less other investment related expenses.
(6)	Total cash and investments is defined as the sum of cash and cash equivalents, restricted cash, due from clearing brokers net of due to clearing brokers, securities and other investments owned, at fair value net of (i) securities sold not yet purchased and (ii) noncontrolling interest related to investments, advances against customer contracts, loans receivable, at fair value net of loan participations sold, and other investments reported in prepaid and other assets.
(7)	Segment operating income (loss) is defined as segment income (loss) excluding trading income (losses) and fair value adjustments on loans and other investment related expenses.

Note Regarding Use of Non-GAAP Financial Measures

Certain of the information set forth herein, including operating revenues, adjusted EBITDA, operating adjusted EBITDA, and investment adjusted EBITDA, may be considered non-GAAP financial measures. B. Riley Financial believes this information is useful to investors because it provides a basis for measuring the Company's available capital resources, the operating performance of its business and its revenues and cash flow, (i) excluding in the case of operating revenues, trading income (losses) and fair value adjustments on loans, (ii) excluding in the case of adjusted EBITDA, net interest expense, provisions for or benefit from income taxes, depreciation, amortization, fair value adjustment, restructuring costs, gain on extinguishment of loans, impairment of trade names, stock-based compensation and transaction and other expenses, (iii) excluding in the case of operating adjusted EBITDA, the aforementioned adjustments for adjusted EBITDA as well as trading income (losses) and fair value adjustments on loans, and other investment related expenses, (iv) including in the case of investment adjusted EBITDA, trading income (losses) and fair value adjustments on loans, net of other investment related expenses, and (v) including in the case of total cash and investments, net of debt, total cash, net securities and investments, and other minus total debt, that would normally be included in the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles ("GAAP"). In addition, the Company's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance, management compensation, capital resources, and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies.

Forward-Looking Statements

Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date of this press release. Such forward-looking statements include, but are not limited to, statements regarding our excitement and the expected growth of our business segments. Factors that could cause such actual results to differ materially from those contemplated or implied by such forward-looking statements include, without limitation, the risks associated with the unpredictable and ongoing impact of the COVID-19 pandemic and other risks described from time to time in B. Riley Financial, Inc.'s periodic filings with the SEC, including, without limitation, the risks described in B. Riley Financial, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2020 and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021, and September 30, 2021 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable). Additional information will be set forth in our Annual Report on Form 10-K for the year ended December 31, 2021. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and B. Riley Financial, Inc. undertakes no duty to update this information.

Contacts

Investors	Media
Mike Frank	Jo Anne McCusker / Scott Cianciulli
ir@brileyfin.com	press@brileyfin.com
(212) 409-2424	(212) 739-6753

B. RILEY FINANCIAL, INC.
Consolidated Balance Sheets
(Dollars in thousands, except par value)
		December 31,		December 31,
		2021		2020
		(Unaudited)
Assets
Assets:
	Cash and cash equivalents	$	278,933	$	103,602
	Restricted cash		927		1,235
	Due from clearing brokers		29,657		7,089
	Securities and other investments owned, at fair value		1,532,095		777,319
	Securities borrowed		2,090,966		765,457
	Accounts receivable, net		49,673		40,806
	Due from related parties		2,074		986
	Loans receivable, at fair value (includes $167,744 and $295,809 from related parties as of December 31, 2021 and 2020, respectively)		873,186		390,689
	Prepaid expenses and other assets		463,502		93,174
	Operating lease right-of-use assets		56,969		48,799
	Property and equipment, net		12,870		11,685
	Goodwill		250,568		227,046
	Other intangible assets, net		207,651		190,745
	Deferred tax assets, net		2,848		4,098
	Total assets	$	5,851,919	$	2,662,730
Liabilities and Equity
Liabilities:
	Accounts payable	$	6,326	$	2,722
	Accrued expenses and other liabilities		343,750		173,178
	Deferred revenue		69,507		68,651
	Deferred tax liabilities, net		93,055		34,248
	Due to related parties and partners		—		327
	Due to clearing brokers		69,398		13,672
	Securities sold not yet purchased		28,623		10,105
	Securities loaned		2,088,685		759,810
	Operating lease liabilities		69,072		60,778
	Notes payable		357		37,967
	Loan participations sold		—		17,316
	Revolving credit facility		80,000		—
	Term loans		346,385		74,213
	Senior notes payable, net		1,606,560		870,783
	Total liabilities		4,801,718		2,123,770

Commitments and contingencies
Redeemable noncontrolling interests in equity of subsidiaries			345,000		—
B. Riley Financial, Inc. stockholders' equity:
	Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,512 and 3,971 shares		—		—
	issued and outstanding as of December 31, 2021 and 2020, respectively; liquidation
	preference of $112,790 and $99,260 as of December 31, 2021 and 2020, respectively.
	Common stock, $0.0001 par value; 100,000,000 shares authorized;27,591,028 and 25,777,796 shares		3		3
	issued and outstanding as of December 31, 2021 and 2020, respectively.
	Additional paid-in capital		413,486		310,326
	Retained earnings		248,862		203,080
	Accumulated other comprehensive loss		(1,080)		(823)
	Total B. Riley Financial, Inc. stockholders' equity		661,271		512,586
Noncontrolling interests			43,930		26,374
	Total equity		705,201		538,960
	Total liabilities and equity	$	5,851,919	$	2,662,730

B. RILEY FINANCIAL, INC.
Consolidated Statements of Income
(Dollars in thousands, except share data)

				Three Months Ended				Twelve Months Ended
				December 31,				December 31,
				2021		2020		2021		2020
				(Unaudited)		(Unaudited)		(Unaudited)
Revenues:
	Services and fees			$	315,848	$	237,270	$	1,172,957	$	667,069
	Trading income and fair value adjustments on loans				68,858		140,160		386,676		104,018
	Interest income - Loans and securities lending				33,443		30,116		122,723		102,499
	Sale of goods				3,961		2,660		58,205		29,135
		Total revenues			422,110		410,206		1,740,561		902,721
Operating expenses:
	Direct cost of services				12,955		9,250		54,390		60,451
	Cost of goods sold				5,559		1,018		26,953		12,460
	Selling, general and administrative expenses				270,712		137,088		906,196		428,537
	Restructuring charge				—		—		—		1,557
	Impairment of tradenames				—		—		—		12,500
	Interest expense - Securities lending and loan participations sold				12,362		11,782		52,631		42,451
		Total operating expenses			301,588		159,138		1,040,170		557,956
			Operating income		120,522		251,068		700,391		344,765
Other income (expense):
	Interest income				54		27		229		564
	(Loss) gain on extinguishment of loans and other				(4,471)		—		3,796		—
	Income (loss) from equity investments				1,629		(478)		2,801		(623)
	Interest expense				(26,441)		(16,712)		(92,455)		(65,249)
		Income before income taxes			91,293		233,905		614,762		279,457
Provision for income taxes					(23,847)		(62,060)		(163,960)		(75,440)
		Net income			67,446		171,845		450,802		204,017
Net income (loss) attributable to noncontrolling interests					3,274		251		5,748		(1,131)
		Net income attributable to B. Riley Financial, Inc.			64,172		171,594		445,054		205,148
Preferred stock dividends					1,990		1,480		7,457		4,710
		Net income available to common shareholders		$	62,182	$	170,114	$	437,597	$	200,438

Basic income per common share				$	2.26	$	6.72	$	15.99	$	7.83
Diluted income per common share				$	2.08	$	6.55	$	15.09	$	7.56

Weighted average basic common shares outstanding					27,569,188		25,331,918		27,366,292		25,607,278
Weighted average diluted common shares outstanding					29,840,704		25,966,501		29,005,602		26,508,397

B. RILEY FINANCIAL, INC.
Segment Financial Information
(Unaudited)
(Dollars in thousands)

			Three Months Ended				Twelve Months Ended
			December 31,				December 31,
			2021		2020		2021		2020
Capital Markets segment:
	Revenues - Services and fees		$	143,492	$	150,098	$	575,317	$	339,877
	Trading income and fair value adjustments on loans			67,718		139,750		379,053		103,214
	Interest income - Loans and securities lending			33,443		30,116		122,723		102,499
	Total revenues			244,653		319,964		1,077,093		545,590
	Selling, general and administrative expenses			(113,690)		(73,118)		(345,455)		(198,962)
	Restructuring charge			—		—		—		(917)
	Interest expense - Securities lending and loan participations sold			(12,362)		(11,782)		(52,631)		(42,451)
	Depreciation and amortization			(610)		(522)		(2,136)		(2,386)
		Segment income		117,991		234,542		676,871		300,874
Wealth Management segment:
	Revenues - Services and fees			103,803		20,851		374,361		72,345
	Trading income and fair value adjustments on loans			1,140		410		7,623		804
	Total revenues			104,943		21,261		381,984		73,149
	Selling, general and administrative expenses			(96,799)		(19,142)		(357,130)		(68,368)
	Depreciation and amortization			(2,088)		(459)		(8,920)		(1,880)
		Segment income		6,056		1,660		15,934		2,901
Auction and Liquidation segment:
	Revenues - Services and fees			4,532		13,761		20,169		63,101
	Revenues - Sale of goods			1,186		1,906		53,348		25,663
	Total revenues			5,718		15,667		73,517		88,764
	Direct cost of services			(2,977)		(4,324)		(30,719)		(40,730)
	Cost of goods sold			(1,097)		(406)		(20,675)		(9,766)
	Selling, general and administrative expenses			(4,350)		(3,477)		(14,069)		(12,357)
	Restructuring charge			—		—		—		(140)
	Depreciation and amortization			—		—		—		(2)
		Segment (loss) income		(2,706)		7,460		8,054		25,769
Financial Consulting segment:
	Revenues - Services and fees			27,877		26,480		94,312		91,622
	Selling, general and administrative expenses			(21,166)		(19,476)		(77,062)		(68,232)
	Restructuring charge			—		—		—		(500)
	Depreciation and amortization			(83)		(131)		(356)		(347)
		Segment income		6,628		6,873		16,894		22,543
Principal Investments - Communications segment:
	Revenues - Services and fees			31,096		20,629		88,490		83,666
	Revenues - Sale of goods			2,776		754		4,857		3,472
	Total revenues			33,872		21,383		93,347		87,138
	Direct cost of services			(9,978)		(4,926)		(23,671)		(19,721)
	Cost of goods sold			(4,462)		(612)		(6,278)		(2,694)
	Selling, general and administrative expenses			(10,397)		(6,000)		(25,493)		(20,352)
	Depreciation and amortization			(3,189)		(2,545)		(10,747)		(11,011)
		Segment income		5,846		7,300		27,158		33,360
Brands segment:
	Revenues - Services and fees			5,047		5,451		20,308		16,458
	Selling, general and administrative expenses			(840)		(682)		(3,178)		(2,889)
	Depreciation and amortization			(602)		(715)		(2,745)		(2,858)
	Impairment of tradenames			—		—		—		(12,500)
		Segment income (loss)		3,605		4,054		14,385		(1,789)
Consolidated operating income from reportable segments				137,420		261,889		759,296		383,658

Corporate and other expenses				(16,898)		(10,821)		(58,905)		(38,893)
Interest income				54		27		229		564
(Loss) gain on extinguishment of loans and other				(4,471)		—		3,796		—
Income (loss) on equity investments				1,629		(478)		2,801		(623)
Interest expense				(26,441)		(16,712)		(92,455)		(65,249)
	Income before income taxes			91,293		233,905		614,762		279,457
Provision for income taxes				(23,847)		(62,060)		(163,960)		(75,440)
	Net income			67,446		171,845		450,802		204,017
Net income (loss) income attributable to noncontrolling interests				3,274		251		5,748		(1,131)
	Net income attributable to B. Riley Financial, Inc.			64,172		171,594		445,054		205,148
Preferred stock dividends				1,990		1,480		7,457		4,710
	Net income available to common shareholders		$	62,182	$	170,114	$	437,597	$	200,438

B. RILEY FINANCIAL, INC.
Adjusted EBITDA and Operating Adjusted EBITDA Reconciliation
(Unaudited)
(Dollars in thousands)

				Three Months Ended				Twelve Months Ended
				December 31,				December 31,
				2021		2020		2021		2020
Net income attributable to B. Riley Financial, Inc.				$	64,172	$	171,594	$	445,054	$	205,148
Adjustments:
	Provision for income taxes				23,847		62,060		163,960		75,440
	Interest expense				26,441		16,712		92,455		65,249
	Interest income				(54)		(27)		(229)		(564)
	Share based payments				12,503		4,321		36,011		18,588
	Depreciation and amortization				6,805		4,604		25,871		19,369
	Restructuring costs				—		—		—		1,557
	Gain on extinguishment of loans				—		—		(6,509)		—
	Impairment of tradenames				—		—		—		12,500
	Transactions related costs and other				4,311		1,222		5,881		9,531

		Total EBITDA adjustments			73,853		88,892		317,440		201,670

			Adjusted EBITDA	$	138,025	$	260,486	$	762,494	$	406,818
Operating EBITDA Adjustments:
	Trading income and fair value adjustments on loans				(68,858)		(140,160)		(386,676)		(104,018)
	Other investment related expenses				36,930		6,461		46,211		8,873

		Total Operating EBITDA Adjustments			(31,928)		(133,699)		(340,465)		(95,145)

Operating Adjusted EBITDA				$	106,097	$	126,787	$	422,029	$	311,673

B. RILEY FINANCIAL, INC.
Adjusted Net Income Reconciliation
(Unaudited)
(Dollars in thousands, except share data)

		Three Months Ended				Twelve Months Ended
		December 31,				December 31,
		2021		2020		2021		2020
Net income attributable to B. Riley Financial, Inc.		$	64,172	$	171,594	$	445,054	$	205,148
Adjustments:
	Share based payments		12,503		4,321		36,011		18,588
	Amortization of intangible assets		5,830		3,769		22,006		15,736
	Restructuring costs		—		—		—		1,557
	Gain on extinguishment of loans		—		—		(6,509)		—
	Impairment of tradenames		—		—		—		12,500
	Transactions related costs and other		4,311		1,222		5,881		9,531
	Income tax effect of adjusting entries		(6,135)		(2,473)		(15,722)		(15,929)
Adjusted net income attributable to B. Riley Financial, Inc.		$	80,681	$	178,433	$	486,721	$	247,131

Adjusted income per common share:
	Adjusted basic income per share	$	2.93	$	7.04	$	17.79	$	9.65
	Adjusted diluted income per share	$	2.70	$	6.87	$	16.78	$	9.32

Shares used to calculate adjusted basic net income per share			27,569,188		25,331,918		27,366,292		25,607,278
Shares used to calculate adjusted diluted net income per share			29,840,704		25,966,501		29,005,602		26,508,397

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SOURCE B. Riley Financial

B. Riley Financial Reports Fourth Quarter and Full Year 2021 Results