B. Riley Financial Reports 63.5% Revenue Decline and $433.6 Million Net Loss in Q2 2024

B. Riley Financial, Inc. reported a significant decline in its financial performance for the second quarter of 2024, as detailed in its latest 10-Q filing. The company recorded total revenues of $148.4 million for the three months ended June 30, 2024, a decrease of 63.5% compared to $406.3 million in the same period last year. This decline was primarily driven by substantial losses in trading income and fair value adjustments on loans, which amounted to a loss of $31.3 million and a loss of $175.6 million, respectively. The net loss attributable to B. Riley Financial, Inc. was $433.6 million, a stark contrast to the net income of $46.4 million reported in the prior year.

In terms of operational changes, the company experienced a notable restructuring charge of $20 million during the quarter, primarily related to workforce reductions in its Consumer Products segment. Additionally, B. Riley's goodwill and tradenames impairment charges totaled $27.7 million, reflecting ongoing challenges in the Consumer Products segment, particularly with its Targus subsidiary. The company’s total assets decreased significantly to $3.2 billion as of June 30, 2024, down from $6.1 billion at the end of 2023, largely due to the decline in the fair value of its investments.

Strategically, B. Riley has been active in acquisitions and divestitures. The company completed the acquisition of Nogin in May 2024, which is expected to enhance its portfolio of principal investments. Furthermore, B. Riley announced plans to sell a portion of its Wealth Management business to Stifel Financial Corp. for an estimated net consideration of $27 million to $35 million, which is anticipated to close in early 2025. The company also engaged in a significant transaction involving its Great American Group businesses, which was transferred to a newly formed subsidiary, resulting in a gain of approximately $235 million.

The company’s operational metrics indicate a mixed performance across its segments. While the Capital Markets and Wealth Management segments saw increases in service fees, the Auction and Liquidation segment experienced a decline in revenues. The Communications segment also reported a decrease in subscription revenues. B. Riley's total liabilities decreased to $3.4 billion, down from $5.7 billion at the end of 2023, reflecting a reduction in its debt levels following the redemption of senior notes and other debt obligations.

Looking ahead, B. Riley Financial, Inc. expressed cautious optimism regarding its liquidity position, stating that its current cash, cash equivalents, and expected cash flows from operations should be sufficient to meet its working capital needs for at least the next 12 months. However, the company remains vigilant about market conditions and potential impacts from ongoing legal proceedings and the recent bankruptcy filings of Conn’s and Franchise Group, which could further affect its financial outlook.