RILYK - B. Riley: Q4 EBITDA Shows Positive Direction, But Economic Tailwinds Are Waning

2025-03-04 03:42:40 ET

Summary

• B. Riley's Q4 preliminary income showed significant losses from continuing operations but slightly positive adjusted EBITDA, which caused a positive aftermarket stock price reaction.
• Recent positive developments include regaining Nasdaq compliance, securing a $160M loan from Oaktree, redeeming senior notes, and causing a potential short squeeze on RILY shares.
• Looking at the trends in baby bonds and preferred shares, the market is bracing for solvency pressures in mid-2026, with the March 2026 RILYK appearing much stronger.
• Despite mild improvements, my long-term view on RILY is negative because I expect that deal volumes in investment banking will slow with the economic cycle, exacerbating its challenges.
• Although I remain curious regarding B. Riley's reputational risk factor, recent transaction data suggests it has had decent deal volumes despite negative media attention.

B. Riley ( RILY ) announced its preliminary Q4 results on Monday. Its net income is estimated at $48 to $68M, or $1.57 to $2.22 per share. That is mainly due to $236M to $247M in income from discontinued operations related to the divestiture of Great American. Looking at continuing operations, B. Riley still has a net loss of around $178M to $187M, of which ~$75M is estimated impairment of intangibles and $49M are trading losses. It also completed the sale of Atlantic Coast Recycling for $70M in cash, signaling its ongoing effort to liquidate non-core assets. ...

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