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B. Riley Securities Provides Business and Financial Update Following Carve-Out Transaction

1. B. Riley Securities focuses on transparency after its carve-out from BRF. 2. The company raised $16.5 billion in 2024 despite macro uncertainties. 3. B. Riley Securities expects long-term value creation post-carve-out. 4. It stands debt-free with $68 million in cash post-capture. 5. Adjusted revenues showed a loss of $14.5 million on significant income.

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Why Bullish?

The carve-out enhances financial transparency and positioning, likely boosting investor confidence. Historical examples show that successful restructuring can lead to improved market performance.

How important is it?

The transformation through a carve-out is significant for B. Riley's future, influencing market perceptions and stock performance.

Why Long Term?

While short-term results show losses, the strategic focus on long-term value implies future growth. This mirrors prior market reactions where restructuring led to sustained performance improvements over time.

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BRFCDIV
, /PRNewswire/ -- B. Riley Securities Holdings, Inc. ("B. Riley Securities," "BRS" or the "Company"), a leading middle market investment bank, today provided a business and financial update following its previously announced carve-out transaction with B. Riley Financial, Inc. ("BRF"), and in anticipation of BRS' future filings of financial statements and quotation on the OTC Markets. Andy Moore, Chairman and Co-CEO, B. Riley Securities, stated:"We remain relentlessly focused on delivering for our clients. With our previously announced carve-out from BRF, we are able to provide greater financial transparency and a clearer view into the underlying strength of our business. We are committed to providing our stakeholders with increased visibility into our strategy and vision for value creation. Although transactional activity has been tempered by macro uncertainty, volatility has often presented compelling opportunities for us to gain market share with differentiated, client-focused execution. As a trusted partner to middle market companies and those who invest in them, we take a long-term view in positioning BRS for sustainable growth and maximizing shareholder value." Jimmy Baker, Co-CEO & Head of Capital Markets at B. Riley Securities, commented:"We are proud of how our team navigated a challenging 2024. Over the course of last year, we raised $16.5 billion in debt and equity on behalf of our clients and expanded our capabilities in key areas including Convertibles and Liability Management. In addition, our advisory practice is now more closely aligned with our core clients' interests with a sharpened strategic focus on Capital Markets. We have also continued to invest in talent across Equity Research, Sales & Trading, and Investment Banking. It will take time for the full impact of our previously announced carve-out and the contribution of our new team members to materialize in our financial results. Our focus remains firmly on long-term value creation and making BRS a destination for top middle market talent while creating opportunities for growth and leadership within our firm." Adjusted Year 2024 Financial HighlightsOn an adjusted basis, BRS delivered total revenue of $217.7 million, adjusted net revenue of $211.0 million, a net loss of $14.5 million, and adjusted net income of $33.1 million. The adjusted basis referred to gives effect to the March 2025 contributions of Cascadia Investments Inc. (OTCMKTS: CDIV) and other subsidiaries to BRS as part of the carve-out, as if those contributions had been completed on January 1, 2024. For a reconciliation of non-GAAP measures to their corresponding GAAP measures and additional disclosures, see "Note Regarding Use of Non-GAAP Financial Measures" and the tables below. In January 2025, the Company repaid all $12.4 million of its outstanding debt. Reflecting primarily the impact of pre-carve out distributions to BRF, losses pertaining to a legacy investment, cash use in connection with year-end compensation and repayment of debt as discussed above, BRS stands completely debt-free with $68 million in cash and securities owned as of the carve-out effective date. About B. Riley Securities (BRS)BRS provides a full suite of investment banking and capital markets services to corporations, financial sponsors, and institutional investors across all industry verticals. Investment banking services include initial, secondary, and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, SPACs, corporate restructuring and liability management. Widely recognized for its thematic proprietary equity research, clients benefit from BRS' extensive network, industry expertise, and proven execution capabilities of its end-to-end financial services platform. For more information, visit www.brileysecurities.com. Note Regarding Use of Non-GAAP Financial MeasuresCertain information set forth herein, including adjusted net revenue and adjusted net income (loss), may be considered non-GAAP financial measures. B. Riley Securities believes this information is useful to investors because it provides a basis for measuring the operating performance of the Company's business and its revenues and cash flow, (i) excluding in the case of adjusted net revenue, trading gains (losses) on legacy investment positions (net of "regular way" fixed income trading revenue) and fair value adjustments on loans, and including Securities Lending interest expense and (ii) excluding in the case of adjusted net income, fair value adjustments, stock-based compensation, trading gains (losses) on legacy investment positions (net of "regular way" fixed income trading revenue), fair value adjustments on loans and other investment-related expenses, and including the estimated related tax expense or benefit on the aforementioned adjustments, 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. B. RILEY SECURITIES HOLDINGS, INC. Condensed Consolidated Balance Sheet as of December 31, 2024 (Unaudited) (in thousands) B. Riley Securities,Inc. (1) Other wholly owned unaudited subsidiaries (2) As AdjustedB. Riley Securities Holdings, Inc. Assets: Cash and cash equivalents $                     40,926 $                       1,213 $                     42,139 Receivables 70,006 (36,298) 33,708 Securities borrowed 43,022 - 43,022 Securities owned, at fair value 77,758 938 78,696 Operating lease right of use asset 6,884 1,721 8,605 Goodwill and intangibles 113,914 24,990 138,904 Property and equipment, net 2,049 - 2,049 Prepaid expenses and other assets 2,387 - 2,387 Total assets $                   356,946 $                     (7,436) $                   349,510 Liabilities: Securities loaned $                     27,942 $                            - $                     27,942 Financial instruments sold, not yet purchased, at fair value 5,675 - 5,675 Note payable 12,379 - 12,379 Accrued compensation and benefits 26,822 253 27,075 Accounts payable and accrued expenses 16,021 (1,279) 14,742 Operating lease liabilities 8,293 2,288 10,581 Total liabilities 97,132 1,262 98,394 Equity 259,814 (8,698) 251,116 Total liabilities & equity $                   356,946 $                     (7,436) $                   349,510 1) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to B. Riley Securities Holdings, Inc. as if the March 2025 contribution was made on December 31, 2024. B. RILEY SECURITIES HOLDINGS, INC. Condensed Consolidated Statements of Operations Year Ended December 31, 2024 (Unaudited) (in thousands) B. Riley Securities, Inc. (1) Other wholly owned unaudited subsidiaries (2) As AdjustedB. Riley Securities Holdings, Inc. Revenues Investment banking: $                   146,887 $                       7,045 $                   153,932 Institutional brokerage (18,824) (556) (19,380) Interest 78,229 76 78,305 Other income 3,866 945 4,811 Total revenues $                   210,158 $                       7,510 $                   217,668 Expenses Compensation and benefits $                   117,745 $                       1,363 $                   119,108 Interest 66,518 - 66,518 Other operating expenses 47,947 3,456 51,403 Total expenses 232,210 4,819 237,029 Operating net income (loss) (22,052) 2,691 (19,361) Other income/expense - (515) (515) Net income (loss) before income taxes (22,052) 2,176 (19,876) Income tax (benefit) expense (5,954) 587 (5,367) Net income (loss) $                   (16,098) $                       1,589 $                   (14,509) 1) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to the group subsequent to December 31, 2024. B. RILEY SECURITIES HOLDINGS, INC. Reconciliation of GAAP to Adjusted Full Year 2024 Results (Unaudited) (in thousands) B. Riley Securities, Inc. (1) Other wholly owned unaudited subsidiaries (2) As AdjustedB. Riley Securities Holdings, Inc. Reconciliation of GAAP to adjusted financials: GAAP revenue $                   210,158 $                       7,510 $                   217,668 Adjustments: Legacy positions losses (gains) (3) 59,182 556 59,738 Loans at fair value 63 - 63 Committed equity facility gains (losses) - (515) (515) Total adjustments 59,245 41 59,286 Adjusted revenue 269,403 7,551 276,954 Securities lending interest expense (65,939) - (65,939) Adjusted net revenue (a non-GAAP figure) $                   203,464 $                       7,551 $                   211,015 Net income $                   (16,098) $                       1,589 $                   (14,509) Adjustments: Fair value adjustment of contingent acquisition consideration (379) - (379) Share based compensation 5,757 - 5,757 Legacy positions losses (gains) (3) 59,182 556 59,738 Loans at fair value 63 - 63 Income tax-effect of above non-GAAP adjustments and certain discrete tax items (17,448) (150) (17,598) Adjusted net income $                     31,077 $                       1,995 $                     33,072 1) Focus report audit of B. Riley Securities as of and for the year ended December 31, 2024. 2) Reflects the contribution of Cascadia Investments Inc. and other immaterial subsidiaries contributed to the group subsequent to December 31, 2024. 3) Legacy investment positions held at BRS that are not, following the carve-out, part of BRS' go-forward strategy. Contact:Jo Anne McCuskerB. Riley Securities[email protected] SOURCE B. Riley Securities WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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