B. Riley financials remain pressured as firm delays report

by Rick Green

B. Riley Financial Inc. estimated that it lost $270 million to $280 million in the three months through September, as the company continues to review its financials and delay filing quarterly reports to shareholders. 

The investment and brokerage firm, which has watched its stock slump 77% this year, needs more time to formally file its third-quarter results with the Securities and Exchange Commission, it said in a regulatory filing on Wednesday.

Its loss for that period probably amounted $8.85 to $9.18 per diluted common share, the company said. That doesn’t include a gain of as much as $250 million that the company expects to book when completing the sale of a majority stake in its Great American business this month.

Wednesday’s notice is the fourth time this year that B. Riley hasn’t been able to meet the SEC’s filing date. Shareholders are still waiting on the second quarter’s report. The firm also missed deadlines before belatedly posting results for full-year 2023, as well as this year’s first quarter.

The setbacks and uncertainties have contributed to this year’s drop in the company’s stock, which Nasdaq has threatened to delist for failing to make timely filings. The shares closed at $4.85 in regular New York trading on Wednesday.

The delays reflect in part the collapse of Franchise Group Inc., a key holding of B. Riley that slid into bankruptcy in early November. B. Riley has all but written off an investment tied to that business. 

Auditors also criticized B. Riley for weak controls in the annual report that came out in April. Some of the previously reported data was revised, and B. Riley has said in filings it might need the rest of this year to fix problems cited by the auditors.

“The company is working diligently” to file the second- and third-quarter reports as soon as possible, it said Wednesday. 

Co-founder Bryant Riley has said the firm will refocus on its core financial services operating business, which has played a central role in making markets for more than 1,500 securities tied to small and mid-sized companies. 

“Despite the negative headlines, we are in far better shape than folks give us credit for,” he said in a Nov. 4 email to employees. “We are turning a corner.”