Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 08, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | B. Riley Financial, Inc. | |
Entity Central Index Key | 0001464790 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity File Number | 001-37503 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 25,827,322 | |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Cash and cash equivalents | $ 124,231 | $ 104,268 |
Restricted cash | 471 | 471 |
Due from clearing brokers | 10,879 | 23,818 |
Securities and other investments owned, at fair value | 287,786 | 408,213 |
Securities borrowed | 674,163 | 814,331 |
Accounts receivable, net | 46,450 | 46,624 |
Due from related parties | 4,391 | 5,832 |
Advances against customer contracts | 11,121 | 27,347 |
Loans receivable, at fair value (includes $216,302 from related parties at March 31, 2020) | 326,299 | 43,338 |
Loans receivable, at cost (includes $157,080 from related parties at December 31, 2019) | 225,848 | |
Prepaid expenses and other assets | 114,686 | 81,808 |
Operating lease right-of-use assets | 46,213 | 47,809 |
Property and equipment, net | 12,223 | 12,727 |
Goodwill | 223,697 | 223,697 |
Other intangible assets, net | 212,500 | 220,525 |
Deferred income taxes | 35,786 | 31,522 |
Total assets | 2,130,896 | 2,318,178 |
Liabilities: | ||
Accounts payable | 6,858 | 4,477 |
Accrued expenses and other liabilities | 103,452 | 130,714 |
Deferred revenue | 73,709 | 67,121 |
Due to related parties and partners | 1,061 | 1,750 |
Due to clearing brokers | 5,126 | |
Securities sold not yet purchased | 14,298 | 41,820 |
Securities loaned | 670,859 | 810,495 |
Mandatorily redeemable noncontrolling interests | 4,508 | 4,616 |
Operating lease liabilities | 59,430 | 61,511 |
Notes payable | 714 | 38,167 |
Loan participations sold | 12,405 | 12,478 |
Term loan | 61,932 | 66,666 |
Senior notes payable | 853,523 | 688,112 |
Total liabilities | 1,867,875 | 1,927,927 |
B. Riley Financial, Inc. stockholders' equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 2,531 and 2,349 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively; liquidation preference of $63,273 and $58,723 as of March 31, 2020 and December 31, 2019, respectively. | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 25,988,565 and 26,972,332 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively. | 3 | 3 |
Additional paid-in capital | 308,472 | 323,109 |
(Accumulated deficit) retained earnings | (70,232) | 39,536 |
Accumulated other comprehensive loss | (3,208) | (1,988) |
Total B. Riley Financial, Inc. stockholders' equity | 235,035 | 360,660 |
Noncontrolling interests | 27,986 | 29,591 |
Total equity | 263,021 | 390,251 |
Total liabilities and equity | $ 2,130,896 | $ 2,318,178 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Loans receivable from related parties | $ 216,302 | $ 157,080 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Preferred stock, issued | 2,531 | 2,349 |
Preferred stock, outstanding | 2,531 | 2,349 |
Preferred Stock, Liquidation preference | $ 63,273 | $ 58,723 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 25,988,565 | 26,972,332 |
Common stock, outstanding | 25,988,565 | 26,972,332 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ (206) | $ 142,128 |
Operating expenses: | ||
Direct cost of services | 19,952 | 14,116 |
Cost of goods sold | 769 | 1,119 |
Selling, general and administrative expenses | 87,744 | 94,964 |
Restructuring charge | 147 | |
Impairment of tradenames | 4,000 | |
Interest expense - Securities lending and loan participations sold | 8,473 | 6,804 |
Total operating expenses | 120,938 | 117,150 |
Operating (loss) income | (121,144) | 24,978 |
Other income (expense): | ||
Interest income | 246 | 637 |
Loss from equity investments | (236) | (3,762) |
Interest expense | (15,654) | (10,770) |
(Loss) income before income taxes | (136,788) | 11,083 |
Benefit (provision) for income taxes | 37,539 | (3,104) |
Net (loss) income | (99,249) | 7,979 |
Net loss attributable to noncontrolling interests | (584) | (44) |
Net (loss) income attributable to B. Riley Financial, Inc. | (98,665) | 8,023 |
Preferred stock dividends | 1,055 | |
Net (loss) income available to common shareholders | $ (99,720) | $ 8,023 |
Basic (loss) income per common share | $ (3.83) | $ 0.31 |
Diluted (loss) income per common share | $ (3.83) | $ 0.3 |
Weighted average basic common shares outstanding | 26,028,613 | 26,217,215 |
Weighted average diluted common shares outstanding | 26,028,613 | 26,687,531 |
Services and fees [Member] | ||
Revenues: | ||
Total revenues | $ 159,381 | $ 103,896 |
Trading (losses) income and fair value adjustments on loans [Member] | ||
Revenues: | ||
Total revenues | (182,442) | 25,867 |
Interest income - Loans and Securities lending [Member] | ||
Revenues: | ||
Total revenues | 21,851 | 11,420 |
Sale of goods [Member] | ||
Revenues: | ||
Total revenues | $ 1,004 | $ 945 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (99,249) | $ 7,979 |
Other comprehensive (loss) income: | ||
Change in cumulative translation adjustment | (1,220) | 170 |
Other comprehensive (loss) income, net of tax | (1,220) | 170 |
Total comprehensive (loss) income | (100,469) | 8,149 |
Comprehensive (loss) income attributable to noncontrolling interests | (584) | (44) |
Comprehensive (loss) income attributable to B. Riley Financial, Inc. | $ (99,885) | $ 8,193 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interests | Total |
Balance at Beginning at Dec. 31, 2018 | $ 2 | $ 258,638 | $ 1,579 | $ (2,161) | $ 602 | $ 258,660 | |
Balance at Beginning, shares at Dec. 31, 2018 | 26,603,355 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Vesting of restricted stock, net of shares withheld for employer taxes | (714) | (714) | |||||
Vesting of restricted stock, net of shares withheld for employer taxes, shares | 78,911 | ||||||
Common stock repurchased and retired | (2,650) | (2,650) | |||||
Common stock repurchased and retired, shares | (157,050) | ||||||
Share based payments | 2,614 | 2,614 | |||||
Dividends on common stock | (2,134) | (2,134) | |||||
Dividends on preferred stock | |||||||
Net income (loss) | 8,023 | (44) | 7,979 | ||||
Other comprehensive income (loss) | 170 | 170 | |||||
Balance at End at Mar. 31, 2019 | $ 2 | 257,888 | 7,468 | (1,991) | 558 | 263,925 | |
Balance at End, shares at Mar. 31, 2019 | 26,525,216 | ||||||
Balance at Beginning at Dec. 31, 2019 | $ 3 | 323,109 | 39,536 | (1,988) | 29,591 | 390,251 | |
Balance at Beginning, shares at Dec. 31, 2019 | 2,349 | 26,972,332 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Preferred stock issued | 4,630 | 4,630 | |||||
Preferred stock issued, shares | 182 | ||||||
Vesting of restricted stock, net of shares withheld for employer taxes | (520) | (520) | |||||
Vesting of restricted stock, net of shares withheld for employer taxes, shares | 38,298 | ||||||
Common stock repurchased and retired | (24,068) | (24,068) | |||||
Common stock repurchased and retired, shares | (1,022,065) | ||||||
Share based payments | 5,321 | 5,321 | |||||
Dividends on common stock | 10,048 | (10,048) | |||||
Dividends on preferred stock | (1,055) | (1,055) | |||||
Net income (loss) | (98,665) | (584) | (99,249) | ||||
Distribution to noncontrolling interest | (1,021) | (1,021) | |||||
Other comprehensive income (loss) | (1,220) | (1,220) | |||||
Balance at End at Mar. 31, 2020 | $ 3 | $ 308,472 | $ (70,232) | $ (3,208) | $ 27,986 | $ 263,021 | |
Balance at End, shares at Mar. 31, 2020 | 2,531 | 25,988,565 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends on common stock per share | $ 0.35 | $ 0.08 |
Dividends on Preferred stock per share | $ 429.69 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (99,249) | $ 7,979 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 4,956 | 4,913 |
Provision for doubtful accounts | 724 | 233 |
Share-based compensation | 5,322 | 2,614 |
Fair value adjustments, non-cash | 17,926 | 49 |
Non-cash interest and other | (2,827) | 736 |
Effect of foreign currency on operations | 179 | 130 |
Loss from equity investments | 236 | 3,762 |
Deferred income taxes | (4,254) | (390) |
Impairment of intangibles and loss on disposal of fixed assets | 4,046 | 88 |
Gain on extinguishment of debt | (1,556) | |
Income allocated for mandatorily redeemable noncontrolling interests | 175 | 169 |
Change in operating assets and liabilities: | ||
Due from clearing brokers | 12,939 | 15,320 |
Securities and other investments owned | 125,061 | (15,274) |
Securities borrowed | 140,168 | 104,104 |
Accounts receivable and advances against customer contracts | 15,674 | (2,845) |
Prepaid expenses and other assets | (37,151) | (3,706) |
Accounts payable, accrued expenses and other liabilities | (22,097) | (1,251) |
Amounts due to/from related parties and partners | 752 | (1,236) |
Securities sold, not yet purchased | (27,522) | (1,675) |
Deferred revenue | 6,589 | 893 |
Securities loaned | (139,636) | (105,689) |
Net cash provided by operating activities | 455 | 8,924 |
Cash flows from investing activities: | ||
Purchases of loans receivable | (115,328) | (20,154) |
Repayments of loans receivable | 42,128 | 5,500 |
Sale of loan receivable to related party | 1,800 | |
Repayment of loan participations sold | (244) | |
Purchases of property, equipment and other | (438) | (1,746) |
Proceeds from sale of property, equipment and intangible assets | 1 | 12 |
Purchase of equity investments | (10,558) | |
Dividends and distributions from equity investments | 589 | 433 |
Net cash used in investing activities | (71,492) | (26,513) |
Cash flows from financing activities: | ||
Repayment of asset based credit facility | (37,096) | |
Repayment of notes payable | (357) | (357) |
Proceeds from term loan | 10,000 | |
Repayment of term loan | (4,810) | |
Proceeds from issuance of senior notes | 171,078 | 4,987 |
Redemption of senior notes | (1,829) | |
Payment of debt issuance costs | (2,724) | (145) |
Payment of employment taxes on vesting of restricted stock | (505) | (714) |
Common dividends paid | (9,609) | (2,606) |
Preferred dividends paid | (1,055) | |
Repurchase of common stock | (24,068) | (2,650) |
Distribution to noncontrolling interests | (1,323) | (274) |
Proceeds from issuance of preferred stock | 4,630 | |
Net cash provided by financing activities | 92,332 | 8,241 |
Increase (decrease) in cash, cash equivalents and restricted cash | 21,295 | (9,348) |
Effect of foreign currency on cash, cash equivalents and restricted cash | (1,332) | 23 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 19,963 | (9,325) |
Cash, cash equivalents and restricted cash, beginning of period | 104,739 | 180,278 |
Cash, cash equivalents and restricted cash, end of period | 124,702 | 170,953 |
Supplemental disclosures: | ||
Interest paid | 21,785 | 17,435 |
Taxes paid | $ 574 | $ 192 |
Organization and Nature of Busi
Organization and Nature of Business Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF BUSINESS OPERATIONS | NOTE 1—ORGANIZATION AND NATURE OF BUSINESS OPERATIONS B. Riley Financial, Inc. and its subsidiaries (collectively, the "Company") provide investment banking and financial services to corporate, institutional and high net worth clients, and asset disposition, valuation and appraisal and capital advisory services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional services firms throughout the United States, Australia, Canada, and Europe and with the acquisitions of United Online, Inc. ("UOL" or "United Online") on July 1, 2016 and magicJack VocalTec Ltd. ("magicJack") on November 14, 2018, provide consumer Internet access and cloud communication services. The Company acquired a majority ownership interest in BR Brand Holding, LLC on October 28, 2019, which provides licensing of trademarks. The Company operates in five operating segments: (i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, consulting, research, sales and trading and wealth management services to corporate, institutional and high net worth clients; (ii) Auction and Liquidation, through which the Company provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property; (iii) Valuation and Appraisal, through which the Company provides valuation and appraisal services to clients with independent appraisals in connection with asset based loans, acquisitions, divestitures and other business needs; (iv) Principal Investments - United Online and magicJack, through which the Company provides consumer Internet access and related subscription services from United Online and cloud communication services primarily through the magicJack devices; and (v) Brands, which is focused on generating revenue through the licensing of trademarks. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( a) Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of (a) Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations, and (b) GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership of a 50% partnership interest, appointment of executive officers and significant influence over the operations. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company's management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. (b) Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities and loan receivables, allowance for doubtful accounts, the fair value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests, fair value of share based arrangements, accounting for income tax valuation allowances, recovery of contract assets and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. On January 30, 2020, the World Health Organization ("WHO") announced a global health emergency because of a new strain of coronavirus (the "COVID-19 outbreak"). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company's results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company's results of operations, financial position and cash flows may be materially adversely affected. (c) Interest Expense — Securities Lending Activities and Loan Participations Sold Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $7,921 and $6,804 for the three months ended March 31, 2020 and 2019, respectively. Loan participations sold as of March 31, 3020 totaled $12,405. Interest expense from loan participations sold totaled $552 for the three months ended March 31, 2020. (d) Concentration of Risk Revenues in the Capital Markets, Valuation and Appraisal and Principal Investments — United Online and magicJack segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation segment are primarily generated in the United States, Australia, Canada and Europe. Revenues in the Brands segment are primarily generated in the United States and Canada. The Company's activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company's exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidations services contract, the Company sometimes conducts operations with third parties through collaborative arrangements. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation's ("FDIC") insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements. (e) Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $841 and $362 for the three months ended March 31, 2020 and 2019, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. (f) Share-Based Compensation The Company's share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company's employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of operations over the requisite service or performance period the award is expected to vest. The fair value of the liability-classified award will be subsequently remeasured at each reporting date through the settlement date. Change in fair value during the requisite service period will be recognized as compensation cost over that period. In June 2018, the Company adopted the 2018 Employee Stock Purchase Plan ("Purchase Plan") which allows eligible employees to purchase common stock through payroll deductions at a price that is 85% of the market value of the common stock on the last day of the offering period. In accordance with the provisions of ASC 718, Compensation — Stock Compensation (g) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company's measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. (h) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. (i) Restricted Cash As of March 31, 2020 and December 31, 2019, restricted cash balance of $471 related to one of the Company's telecommunication suppliers. (j) Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The Company accounts for securities lending transactions in accordance with ASC "Topic 210: Balance Sheet," which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets. (k) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property and equipment was $932 and $1,536 for the three months ended March 31, 2020 and 2019, respectively. (l) Loans Receivable Loans receivable, at fair value are loans held for investment that are accounted for at fair value under the fair value option. The Company adopted ASU 2016-13 and its amendment ASU 2019-05 effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were measured at amortized cost as of December 31, 2019. As of March 31, 2020 and December 31, 2019, loans receivable, at fair value totaled $326,299 and $43,338, respectively, with various maturities through December 2024. As of March 31, 2020 and December 31, 2019, loans receivable, at fair value had principal balances totaling $339,630 and $32,691, respectively, with cost basis, net of unamortized costs, origination fees, premiums and discounts, totaling $333,466 and $32,578, respectively. During the three months ended March 31, 2020, the Company recorded unrealized losses of $17,926 on the loans receivable, at fair value, which is included in trading (losses) income and fair value adjustments on loans on the condensed consolidated statement of operations. Loans receivable, at cost are measured at historical cost and reported at their outstanding principal balances net of any unearned income, charge-offs, unamortized deferred fees and costs on originated loans, and for purchased loans, net of any unamortized premiums or discounts. As of December 31, 2019, loans receivable at cost had a carrying value of $225,848. Interest income on loans receivable is recognized based on the stated rate of the loan and the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statement of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. (m) Securities and Other Investments Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of March 31, 2020 and December 31, 2019, the Company's securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities: March 31, December 31, 2020 2019 Securities and other investments owned: Equity securities $ 234,867 $ 353,162 Corporate bonds 18,429 19,020 Other fixed income securities 5,243 8,414 Partnership interests and other 29,247 27,617 $ 287,786 $ 408,213 Securities sold not yet purchased: Equity securities $ 124 $ 5,360 Corporate bonds 13,361 33,436 Other fixed income securities 813 3,024 $ 14,298 $ 41,820 (n) Fair Value Measurements The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company's securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management's determination of fair value is based on the best available information which may incorporate management's own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer's securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company's partnership and investment fund interests are valued based on the Company's proportionate share of the net assets of the partnerships and funds; the value for these investments are derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value ("NAV") in accordance with ASC "Topic 820: Fair Value Measurements." The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at March 31, 2020 Using Quoted prices Fair value at in active markets for identical Other observable Significant unobservable March 31, assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 234,867 $ 139,751 $ — $ 95,116 Corporate bonds 18,429 — 18,429 — Other fixed income securities 5,243 — 5,243 — Investment funds valued at net asset value (1) 29,247 Total securities and other investments owned 287,786 139,751 23,672 95,116 Loans receivable, at fair value 326,299 — — 326,299 Total assets measured at fair value $ 614,085 $ 139,751 $ 23,672 $ 421,415 Liabilities: Securities sold not yet purchased: Equity securities $ 124 $ 124 $ — $ — Corporate bonds 13,361 — 13,361 — Other fixed income securities 813 — 813 — Total securities sold not yet purchased 14,298 124 14,174 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,508 — — 4,508 Total liabilities measured at fair value $ 18,806 $ 124 $ 14,174 $ 4,508 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2019 Using Quoted prices in active markets for Other Significant Fair value at December 31 identical observable inputs unobservable inputs 2019 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 353,162 $ 243,911 $ — $ 109,251 Corporate bonds 19,020 — 19,020 — Other fixed income securities 8,414 — 8,414 — Investment funds valued at net asset value (1) 27,617 Total securities and other investments owned 408,213 243,911 27,434 109,251 Loans receivable, at fair value 43,338 — — 43,338 Total assets measured at fair value $ 451,551 $ 243,911 $ 27,434 $ 152,589 Liabilities: Securities sold not yet purchased: Equity securities $ 5,360 $ 5,360 $ — $ — Corporate bonds 33,436 — 33,436 — Other fixed income securities 3,024 — 3,024 — Total securities sold not yet purchased 41,820 5,360 36,460 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — — 4,616 Total liabilities measured at fair value $ 46,436 $ 5,360 $ 36,460 $ 4,616 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC "Topic 820 Fair Value Measurements." The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. As of March 31, 2020 and December 31, 2019, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $421,415 and $152,589, respectively, or 19.8% and 6.6%, respectively, of the Company's total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The following table summarizes the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment and valuation technique as of March 31, 2020: Fair value at March 31, Weighted 2020 Valuation Technique Unobservable Input Range Average Assets: Equity securities $ 95,116 Market approach Multiple of revenue 2.2x - 4.9x 3.7x Multiple of EBITDA 6.0x - 10.0x 6.6x Multiple of PV-10 0.28x 0.28x Market price of related security $0.63 - $1.02/share $0.68 Discounted cash flow Market interest rate 33.1% 33.1% Option pricing model Annualized volatility 100.0% 100% Loans receivable at fair value 326,299 Discounted cash flow Market interest rate 9.9% -30.4% 17.0% Market approach Market price of related security $0.63 - $0.77/share $0.65 Total level 3 assets measured at fair value $ 421,415 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,508 Market approach Operating income multiple 6.0x 6.0x The changes in Level 3 fair value hierarchy during the three months ended March 31, 2020 and 2019 are as follows: Level 3 Level 3 Changes During the Period Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Year Adjustments Earnings Settlements of Level 3 Period Three Months Ended March 31, 2020 Equity securities $ 109,251 $ (15,135 ) $ — $ 1,000 $ — $ 95,116 Loans receivable at fair value 43,338 (17,926 ) 1,289 73,750 225,848 326,299 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — (108 ) — — 4,508 Three Months Ended March 31, 2019 Equity securities $ 24,577 $ (18 ) $ — $ (45 ) $ — $ 24,514 Corporate bonds — — — — 1,330 1,330 Loans receivable at fair value 33,731 35 475 (200 ) — 34,041 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — (104 ) — — 4,529 The Company adopted ASU 2016-13 and its amendment ASU 2019-05 effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were measured at amortized cost as of December 31, 2019. The loans receivable, at fair value are included in transfers into level 3 fair value assets in the above table. During the three months ended March 31, 2019, there was a transfer of one financial asset from level 1 to level 3 in the fair value hierarchy as a result of the asset's principal market becoming inactive during the quarter. The amount reported in the table above for the three months ended March 31, 2020 and 2019 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments. As of March 31, 2020, the senior notes payable had a carrying amount of $853,523 and fair value of $666,428. The carrying amount of the term loan approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk. During the three months ended March 31, 2020 and 2019, except for the impact of the intangible impairment charge as described in Note 7- Goodwill and Intangible Assets, there were no assets or liabilities measured at fair value on a non-recurring basis. The fair value of the indefinite-lived intangible assets was determined based on a discounted cash flow model using a rate of 14.0%. The indefinite-lived intangible assets are level 3 assets in the fair value hierarchy. (o) Foreign Currency Translation The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country's currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders' equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction gains (loss) were $949 and ($186) during the three months ended March 31, 2020 and 2019, respectively. These amounts are included in selling, general and administrative expenses in the Company's condensed consolidated statements of operations. (p) Common Stock Warrants The Company issued 821,816 warrants to purchase common stock of the Company (the "Wunderlich Warrants") in connection with the acquisition of Wunderlich Securities, Inc. ("Wunderlich") on July 3, 2017. The Wunderlich Warrants entitle the holders of the warrants to acquire shares of the Company's common stock from the Company at an exercise price of $17.50 per share, subject to, among other matters, the proper completion of an exercise notice and payment. The exercise price and the number of shares of Company common stock issuable upon exercise are subject to customary anti-dilution and adjustment provisions, which include stock splits, subdivisions or reclassifications of the Company's common stock. The Wunderlich Warrants expire on July 3, 2022. On May 16, 2019, the Company repurchased 638,311 warrants for $2,777 ($4.35 per warrant). As of March 31, 2020, Wunderlich Warrants to purchase 183,505 shares of common stock were outstanding. On October 28, 2019, the Company issued 200,000 warrants to purchase common stock of the Company (the "BR Brands Warrants") in connection with the acquisition of a majority ownership interest in BR Brand Holdings LLC ("BR Brand"). The BR Brand Warrants entitle the holders of the warrants to acquire shares of the Company's common stock from the Company at an exercise price of $26.24 per share. One-third of the BR Brand Warrants immediately vested and became exercisable upon issuance, and the remaining two-thirds of warrants will vest and become exercisable following the first and/or second anniversaries of the closing, subject to BR Brand's (or another related joint venture with Bluestar Alliance LLC) satisfaction of specified financial performance targets. The BR Brand warrants expire three years after the last vesting event occurs. Exercise Expiration Issued and Outstanding Warrants as of Beginning Warrants Warrants Issued and Outstanding Warrants as of End of Price Date of Period Issued Repurchased Period For the year ended December 31, 2019 Wunderlich Warrants $ 17.50 July 3, 2022 821,816 — (638,311 ) 183,505 BR Brand Warrants $ 26.24 October 28, 2024 — 200,000 — 200,000 Total 821,816 200,000 (638,311 ) 383,505 For the three months ended March 31, 2020 Wunderlich Warrants $ 17.50 July 3, 2022 183,505 — — 183,505 BR Brand Warrants $ 26.24 October 28, 2024 200,000 — — 200,000 Total 383,505 — — 383,505 (q) Equity Investment bebe stores, inc. At March 31, 2020, the Company had a 30.5% ownership interest in bebe stores, inc. ("bebe"). The equity ownership in bebe is accounted for under the equity method of accounting and is included in prepaid expenses and other assets in the condensed consolidated balance sheets. National Holdings Corporation On November 14, 2018, the Company entered into an agreement to acquire shares of National Holdings Corporation ("National Holdings"), a Nasdaq-listed issuer, from Fortress Biotech, Inc. for an aggregate purchase price totaling approximately $22.9 million. The transaction was completed in two tranches. In the first tranche, which was completed in the fourth quarter of 2018, the Company acquired shares representing 24% of the total outstanding shares of National Holdings. The second tranche was completed in the first quarter of 2019. As of March 31, 2020, the Company had purchased 6,159,550 shares of National Holdings' common stock, representing 46.8% of National Holdings' outstanding shares, at $3.25 per share. The carrying value for the National Holdings investment is included in prepaid expenses and other assets in the condensed consolidated balance sheets. The equity ownership in National Holdings is accounted for under the equity method of accounting. As of March 31, 2020, the carrying values of the Company's investments in bebe and National Holdings exceeded their fair values based on their quoted market prices. In light of these facts, the Company evaluated its investments in bebe and National Holdings for impairment. The Company utilized no bright- line tests in such evaluations. Based on the available facts and information regarding the operating results of both entities, the Company's ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor these investments and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions. (r) Loan Participations Sold As of March 31, 2020, the Company has sold investments ("Loan Participations Sold") to third parties ("Participants") that are accounted for as secured borrowings under ASC Topic 860, Transfers and Servicing. Under ASC Topic 860, a partial loan transfer does not qualify for sale accounting in order for sale treatment to be allowed. A participation or other partial loan transfer that meets the definition of a participating interest is classified as loan receivable and the portion transferred is recorded as a secured borrowing under loan participations sold in the condensed consolidated balance sheet. The Participants are entitled to payments made by the borrower of the related loan equal to the current Loan Participations Sold outstanding at the interest rates for the respective investment. In the event that the borrower defaults, the Participants have rights to payments from such borrower, but do not have recourse to the Company. The terms of the Lo |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 3—ACQUISITIONS Membership Interest Purchase Agreement with BR Brand Acquisition LLC On October 11, 2019, the Company and B. Riley Brand Management LLC, an indirect wholly-owned subsidiary of the Company (the "B. Riley Member"), entered into a Membership Interest Purchase Agreement (the "MIPA") with BR Brand Acquisition LLC (the "BR Brand Member") and BR Brand, pursuant to which the B. Riley Member acquired a majority of the equity interest in BR Brand. The closing of the transactions in accordance with the MIPA (the "Closing") occurred on October 28, 2019. The B. Riley Member completed the Closing of a majority of the equity interest in BR Brand pursuant to the terms of the MIPA in exchange for (i) aggregate consideration of $116,500 in cash and (ii) warrant consideration of $990 from the issuance by the Company to Bluestar Alliance LLC ("Bluestar"), an affiliate of the BR Brand Member, of a warrant to purchase up to 200,000 shares of the Company's common stock at an exercise price per share equal to $26.24. One-third of the shares of common stock issuable under the warrant immediately vested and became exercisable upon issuance at the Closing, and the remaining two-thirds of such shares of common stock will vest and become exercisable following the first and/or second anniversaries of the Closing, subject to BR Brand's (or another related joint venture with Bluestar) satisfaction of specified financial performance targets. The fair value of the non-controlling interest in the amount of $29,373 was determined based on the relative fair value of the net assets acquired. The Company incurred $570 of transaction costs in connection with the acquisition. In connection with the Closing, (i) the BR Brand Member has caused the transfer of certain trademarks, domain names, license agreements and related assets from existing brand owners to BR Brand and (ii) the Company, Bluestar and certain of their affiliates (including the B. Riley Member and the BR Brand Member) entered into an amended and restated operating agreement for BR Brand and certain other commercial agreements. The Company evaluated the transaction under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 805, Business Combinations, and Accounting Standards Update ("ASU") 2017-01, Business Combinations: Clarifying the Definition of a Business. Based on this evaluation, the Company has determined that the acquisition did not meet the definition of a business and, therefore, has accounted for the transaction as an acquisition of assets. The fair value of the assets acquired, including transaction costs, have been reflected in the accompanying financial statements as follows: Consideration paid by B. Riley: Cash acquisition consideration $ 116,500 Transaction costs 570 Total cash consideration 117,070 Warrant consideration 990 Total consideration $ 118,060 Tangible assets acquired and assumed: Cash and cash equivalents $ 2,160 Accounts receivable 1,751 Deferred revenue (1,332 ) Tradename 136,176 Customer list 8,678 Non-controlling interest (29,373 ) Total $ 118,060 |
Restructuring Charge
Restructuring Charge | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring Charge [Abstract] | |
RESTRUCTURING CHARGE | NOTE 4— RESTRUCTURING CHARGE The Company did not record any restructuring charges for the three months ended March 31, 2020. The Company recorded restructuring charges in the amount of $147 for the three months ended March 31, 2019. The restructuring charge of $147 during the three months ended March 31, 2019 was primarily related to severance costs for magicJack employees from a reduction in workforce in the Principal Investments – United Online and magicJack segment. The following tables summarize the changes in accrued restructuring charge during the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Balance, beginning of period $ 1,600 3,855 Restructuring charge — 147 Cash paid (316 ) (636 ) Non-cash items — 18 Balance, end of period $ 1,284 $ 3,384 The following tables summarize the restructuring activities by reportable segment during the three months ended March 31, 2019: Three Months Ended March 31, 2019 Principal Investments - United Online Capital Markets and Corporate Total Restructuring charge: Employee termination costs $ — $ 176 $ — $ 176 Facility closure and consolidation charge (recovery) (29 ) — — (29 ) Total restructuring charge $ (29 ) $ 176 $ — $ 147 |
Securities Lending
Securities Lending | 3 Months Ended |
Mar. 31, 2020 | |
Securities Lending [Abstract] | |
SECURITIES LENDING | NOTE 5—SECURITIES LENDING The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of March 31, 2020 and December 31, 2019: Amounts not offset in the consolidated balance Gross amounts Net amounts sheets but eligible for offset in the included offsetting Gross amounts consolidated balance in the consolidated upon counterparty recognized sheets (1) balance sheets default (2) Net amounts As of March 31, 2020 Securities borrowed $ 674,163 $ — $ 674,163 $ 674,163 $ — Securities loaned $ 670,859 $ — $ 670,859 $ 670,859 $ — As of December 31, 2019 Securities borrowed $ 814,331 $ — $ 814,331 $ 814,331 $ — Securities loaned $ 810,495 $ — $ 810,495 $ 810,495 $ — (1) Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of (2) Includes the amount of cash collateral held/posted. |
Accounts Receivable
Accounts Receivable | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 6—ACCOUNTS RECEIVABLE The components of accounts receivable, net, include the following: March 31, December 31, 2020 2019 Accounts receivable $ 34,500 $ 36,385 Investment banking fees, commissions and other receivables 9,607 8,043 Unbilled receivables 4,581 3,710 Total accounts receivable 48,688 48,138 Allowance for doubtful accounts (2,238 ) (1,514 ) Accounts receivable, net $ 46,450 $ 46,624 Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended March 31, 2020 2019 Balance, beginning of period $ 1,514 696 Add: Additions to reserve 1,141 233 Less: Write-offs (417 ) (163 ) Less: Recovery — — Balance, end of period $ 2,238 $ 766 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 7—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $223,697 at both March 31, 2020 and December 31, 2019. Intangible assets consisted of the following: As of March 31, 2020 As of December 31, 2019 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 2 to 16 Years $ 99,008 $ 30,528 $ 68,480 $ 99,008 $ 27,269 $ 71,739 Domain names 7 Years 230 123 107 233 117 116 Advertising relationships 8 Years 100 47 53 100 44 56 Internally developed software and other intangibles 0.5 to 5 Years 11,765 5,456 6,309 11,765 4,843 6,922 Trademarks 7 to 10 Years 4,600 1,465 3,135 4,600 1,324 3,276 Total 115,703 37,619 78,084 115,706 33,597 82,109 Non-amortizable assets: Tradenames 134,416 — 134,416 138,416 — 138,416 Total intangible assets $ 250,119 $ 37,619 $ 212,500 $ 254,122 $ 33,597 $ 220,525 Amortization expense was $4,024 and $3,377 for the three months ended March 31, 2020 and 2019, respectively. At March 31, 2020, estimated future amortization expense was $11,689, $15,218, $14,564, $12,573 and $8,486 for the years ended December 31, 2020 (remaining nine months), 2021, 2022, 2023 and 2024, respectively. The estimated future amortization expense after December 31, 2024 was $15,553. In the first quarter of 2020, in accordance with ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, the Company made a qualitative assessment of the impact of the COVID-19 outbreak on goodwill and other intangible assets. The Company determined that the COVID-19 outbreak was a triggering event for testing the indefinite-lived tradenames in the Brands segment and made a determination that the indefinite-lived tradenames in the Brands segment were impaired. In the three months ended March 31, 2020, the Company recognized an impairment charge of $4,000 for the indefinite-lived tradenames in the Brands segment. We will continue to monitor the impacts of the COVID-19 outbreak in future quarters. Changes in our forecasts could cause the book values of indefinite-lived tradenames to exceed fair values which may result in additional impairment charges in future periods. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Line of Credit Facility [Abstract] | |
NOTES PAYABLE | NOTE 8—NOTES PAYABLE Asset Based Credit Facility On April 21, 2017, the Company amended its credit agreement (as amended, the "Credit Agreement") governing its asset based credit facility with Wells Fargo Bank, National Association ("Wells Fargo Bank") to increase the maximum borrowing limit from $100,000 to $200,000. Such amendment, among other things, also extended the expiration date of the credit facility from July 15, 2018 to April 21, 2022. The Credit Agreement continues to allow for borrowings under the separate credit agreement (a "UK Credit Agreement") which was dated March 19, 2015 with an affiliate of Wells Fargo Bank which provides for the financing of transactions in the United Kingdom. Such facility allows the Company to borrow up to 50 million British Pounds. Any borrowings on the UK Credit Agreement reduce the availability on the asset based $200,000 credit facility. The UK Credit Agreement is cross collateralized and integrated in certain respects with the Credit Agreement. Cash advances and the issuance of letters of credit under the credit facility are made at the lender's discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts more fully described in Note 2(c). All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The Company paid Wells Fargo Bank a closing fee in the amount of $500 in connection with the April 2017 amendment to the Credit Agreement. The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. Interest expense totaled $277 and $481 for the three months ended March 31, 2020 and 2019, respectively. There was no outstanding balance on this credit facility at March 31, 2020. The outstanding balance on this credit facility was $37,096 at December 31, 2019. At March 31, 2020, there were no open letters of credit outstanding. We are in compliance with all financial covenants in the asset based credit facility at March 31, 2020. Other Notes Payable Notes payable include notes payable to a clearing organization for one of the Company's broker dealers. The notes payable accrue interest at the prime rate plus 2.0% (6.75% at March 31, 2020) payable annually, maturing January 31, 2022. At March 31, 2020 and December 31, 2019, the outstanding balance for the notes payable was $714 and $1,071, respectively. Interest expense was $15 and $23 for the three months ended March 31, 2020 and 2019, respectively. |
Term Loan
Term Loan | 3 Months Ended |
Mar. 31, 2020 | |
Long-term Construction Loan [Abstract] | |
TERM LOAN | NOTE 9—TERM LOAN On December 19, 2018, BRPI Acquisition Co LLC ("BRPAC"), a Delaware limited liability company, UOL, and YMAX Corporation, Delaware corporations (collectively, the "Borrowers"), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into a credit agreement (the "BRPAC Credit Agreement") with the Banc of California, N.A. in the capacity as agent (the "Agent") and lender and with the other lenders party thereto (the "Closing Date Lenders"). Certain of the Borrowers' U.S. subsidiaries are guarantors of all obligations under the BRPAC Credit Agreement and are parties to the BRPAC Credit Agreement in such capacity (collectively, the "Secured Guarantors"; and together with the Borrowers, the "Credit Parties"). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares outstanding membership interests of BRPAC are pledged as collateral. The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties, (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security and other related agreements. The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties', and their subsidiaries' ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding BRPAC Credit Agreement. Under the BRPAC Credit Agreement, the Company borrowed $80,000 due December 19, 2023. Pursuant to the terms of the BRPAC Credit Agreement, the Company may request additional optional term loans in an aggregate principal amount of up to $10,000 at any time prior to the first anniversary of the agreement date (the "Option Loan") with a final maturity date of December 19, 2023. On February 1, 2019, the Credit Parties, the Closing Date Lenders, the Agent and City National Bank, as a new lender (the "New Lender"), entered into the First Amendment to the Credit Agreement and Joinder (the "First Amendment") pursuant to which, among other things, (i) New Lender became a party to the BRPAC Credit Agreement, (ii) the New Lender extended to Borrowers the Option Loan in the amount of $10,000, (iii) the aggregate outstanding principal amount of the term loans was increased from $80,000 to $90,000; and (iv) the amortization schedule under the BRPAC was amended as set forth in the First Amendment. Additionally, in connection with the Option Loan, the Borrowers executed a term note in favor of New Lender dated February 1, 2019 in the amount of $10,000. Borrowings under the BRPAC Credit Agreement bear interest at a rate equal to (a) the LIBOR rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two and one-half percent (2.5%) to three percent (3.0%) per annum, based upon the Borrowers' ratio of consolidated funded indebtedness to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the preceding four fiscal quarters or other applicable period. At March 31, 2020, the interest rate on the BRPAC Credit Agreement was at 3.74%. Interest payments are to be made each one, three or six months. Amounts outstanding under the BRPAC Credit Agreement are due in quarterly installments commencing on March 31, 2019 with any remaining amounts outstanding due at maturity. For the $80,000 loan, quarterly installments from March 31, 2020 to December 31, 2022 are in the amount of $4,244 per quarter and from March 31, 2023 to December 31, 2023 are $2,122 per quarter. For the $10,000 loan, quarterly installments from March 31, 2020 to December 31, 2022 are $566 per quarter and from March 31, 2023 to December 31, 2023 are $265 per quarter. As of March 31, 2020 and December 31, 2019, the outstanding balance on the term loan was $61,932 (net of unamortized debt issuance costs of $524) and $66,666 (net of unamortized debt issuance costs of $600), respectively. Interest expense on the term loan during the three months ended March 31, 2020 and 2019 was $829 (including amortization of deferred debt issuance costs of $76) and $1,278 (including amortization of deferred debt issuance costs of $88), respectively. We are in compliance with all financial covenants in the BRPAC Credit Agreement at March 31, 2020. |
Senior Notes Payable
Senior Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Notes Payable [Abstract] | |
SENIOR NOTES PAYABLE | NOTE 10—SENIOR NOTES PAYABLE Senior notes payable, net, are comprised of the following: March 31, December 31, 2020 2019 7.50% Senior notes due May 31, 2027 $ 125,536 $ 117,954 7.25% Senior notes due December 31, 2027 122,545 120,126 7.375% Senior notes due May 31, 2023 127,358 122,140 6.875% Senior notes due September 30, 2023 113,109 105,952 6.75% Senior notes due May 31, 2024 110,476 106,589 6.50% Senior notes due September 30, 2026 134,657 124,226 6.375% Senior notes due February 28, 2025 130,942 — 864,623 696,987 Less: Unamortized debt issuance costs (11,100 ) (8,875 ) $ 853,523 $ 688,112 During the three months ended March 31, 2020, the Company issued $38,828 of senior notes due with maturities dates ranging from May 2023 to December 2027 pursuant to At the Market Issuance Sales Agreements with B. Riley FBR, Inc. which governs the program of at-the-market sales of the Company's senior notes. A series of prospectus supplements were filed by the Company with the SEC which allowed the Company to sell these senior notes. On February 12, 2020, the Company issued $132,250 of senior notes due in February 2025 ("6.375% 2025 Notes") pursuant to the prospectus supplement dated February 10, 2020. Interest on the 6.375% 2025 Notes is payable quarterly at 6.375%. The 6.375% 2025 Notes are unsecured and due and payable in full on February 28, 2025. In connection with the issuance of the 6.375% 2025 Notes, the Company received net proceeds of $129,233 (after underwriting commissions, fees and other issuance costs of $3,017). During March 2020, the Company repurchased bonds with an aggregate face value of $3,443 for $1,829 resulting in a gain net of expenses and original issue discount of $1,556 during the three months ended March 31, 2020. As part of the repurchase, the Company paid $30 in interest accrued through the date of each respective repurchase. At March 31, 2020 and December 31, 2019, the total senior notes outstanding was $853,523 (net of unamortized debt issue costs of $11,100) and $688,112 (net of unamortized debt issue costs of $8,875) with a weighted average interest rate of 6.94% and 7.05%, respectively. Interest on senior notes is payable on a quarterly basis. Sales Agreement Prospectus to Issue Up to $150,000 of Senior Notes On February 14, 2020, the Company entered into a new At Market Issuance Sales Agreement (the "February 2020 Sales Agreement") with B. Riley FBR, Inc. governing a program of at-the-market sales of certain of the Company's senior notes. The most recent sales agreement prospectus was filed by the Company with the SEC on February 14, 2020 (the "February 2020 Sales Agreement Prospectus"). The Sales Agreement Prospectus allows the Company to sell up to $150,000 of certain of the Company's senior notes pursuant to an effective Registration Statement on Form S-3. As of March 31, 2020, the Company had $148,415 remaining availability under the February 2020 Sales Agreement. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 11—REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers by reportable segment for the three months ended March 31, 2020 and 2019 is as follows: Three Months Ended March 31, 2020 Reportable Segment Principal Investments - Capital Auction and Valuation and United Markets Liquidation Appraisal magicJack Brands Total Corporate finance, consulting and investment banking fees $ 67,382 $ — $ — $ — $ — $ 67,382 Wealth and asset management fees 20,320 — — — — 20,320 Commissions, fees and reimbursed expenses 14,470 16,178 8,788 — — 39,436 Subscription services — — — 18,833 — 18,833 Service contract revenues — 4,483 — — — 4,483 Advertising, licensing and other — — — 3,889 3,801 7,690 Total revenues from contracts with customers 102,172 20,661 8,788 22,722 3,801 158,144 Interest income - Loans and securities lending 21,851 — — — — 21,851 Trading losses on investments (164,516 ) — — — — (164,516 ) Fair value adjustment on loans (17,926 ) — — — — (17,926 ) Other 2,241 — — — — 2,241 Total revenues $ (56,178 ) $ 20,661 $ 8,788 $ 22,722 $ 3,801 $ (206 ) Three Months Ended March 31, 2019 Reportable Segment Principal Investments - Capital Auction and Valuation and United Markets Liquidation Appraisal magicJack Brands Total Corporate finance, consulting and investment banking fees $ 17,836 $ — $ — $ — $ — $ 17,836 Wealth and asset management fees 17,535 — — — — 17,535 Commissions, fees and reimbursed expenses 10,897 7,633 8,583 — — 27,113 Subscription services — — — 22,398 — 22,398 Service contract revenues — 13,076 — — — 13,076 Advertising, licensing and other — — — 5,137 — 5,137 Total revenues from contracts with customers 46,268 20,709 8,583 27,535 — 103,095 Interest income - Loans and securities lending 11,420 — — — — 11,420 Trading gains on investments 25,916 — — — — 25,916 Fair value adjustment on loans (49 ) — — — — (49 ) Other 1,746 — — — — 1,746 Total revenues $ 85,301 $ 20,709 $ 8,583 $ 27,535 $ — $ 142,128 Contract Balances The timing of the Company's revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Receivables related to revenues from contracts with customers totaled $46,450 and $46,624 at March 31, 2020 and December 31, 2019, respectively. The Company had no significant impairments related to these receivables during the three months ended March 31, 2020. The Company's deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, Valuation and Appraisal engagements and subscription services where the performance obligation has not yet been satisfied. Deferred revenue at March 31, 2020 and December 31, 2019 was $73,709 and $67,121, respectively. During the three months ended March 31, 2020 and 2019, the Company recognized revenue of $13,987 and $13,234 that was recorded as deferred revenue at the beginning of the respective year. Contract Costs Contract costs include: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable; (2) costs to fulfill Auction and Liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation where the revenue is recognized over time when the performance obligation is satisfied; and (3) commissions paid to obtain magicJack contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period. The capitalized costs to fulfill a contract were $460 and $450 at March 31, 2020 and December 31, 2019, respectively, and are recorded in prepaid expenses and other assets in the condensed consolidated balance sheets. For the three months ended March 31, 2020 and 2019, the Company recognized expenses of $72 and $601 related to capitalized costs to fulfill a contract, respectively. There were no significant impairment charges recognized in relation to these capitalized costs during the three months ended March 31, 2020 and 2019. Remaining Performance Obligations and Revenue Recognized from Past Performance The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at March 31, 2020. Corporate finance and investment banking fees and retail liquidation engagement fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price at March 31, 2020. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12—INCOME TAXES The Company's effective income tax rate was a benefit of 27.4% and provision of 28.0% for the three months ended March 31, 2020 and 2019, respectively. As of March 2020, the Company had federal net operating loss carryforwards of $53,932 and state net operating loss carryforwards of $64,088. The Company's federal net operating loss carryforwards will expire in the tax years commencing in December 31, 2032 through December 31, 2037. The state net operating loss carryforwards will expire in the tax years commencing in December 31, 2029. The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company's net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company's actual taxable income. As of March 31, 2020, the Company believes that the existing net operating loss carryforwards will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets and has not provided a valuation allowance. The Company does not believe that it is more likely than not that the Company will be able to utilize the benefits related to capital loss carryforwards and has provided a valuation allowance in the amount of $61,945 against these deferred tax assets. The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain federal, state and local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2016 to 2019. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 13— EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Basic common shares outstanding exclude 387,365 common shares in 2020 and 387,365 common shares in 2019 that are held in escrow and subject to forfeiture. The common shares held in escrow includes 387,365 common shares that are subject to forfeiture to indemnify the Company for certain representations and warranties in connection with the acquisition of Wunderlich. The shares that remain in escrow are subject to forfeiture upon the final settlement of claims as more fully described in the related escrow instructions. Dilutive common shares outstanding includes contingently issuable shares that are currently in escrow and subject to release if the conditions for the final settlement of claims in accordance with the escrow instructions were satisfied at the end of the respective years. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share were 1,820,178 and 1,952,868 for the three months ended March 31, 2020 and 2019, respectively, because to do so would have been anti-dilutive. Basic and diluted earnings per share were calculated as follows: Three Months Ended March 31, 2020 2019 Net (loss) income attributable to B. Riley Financial, Inc. $ (98,665 ) $ 8,023 Preferred stock dividends (1,055 ) — Net (loss) income applicable to common shareholders $ (99,720 ) $ 8,023 Weighted average common shares outstanding: Basic 26,028,613 26,217,215 Effect of dilutive potential common shares: Restricted stock units and warrants — 352,938 Contingently issuable shares — 117,378 Diluted 26,028,613 26,687,531 Basic income per common share $ (3.83 ) $ 0.31 Diluted income per common share $ (3.83 ) $ 0.30 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14—COMMITMENTS AND CONTINGENCIES (a) Legal Matters The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company's securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company's business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against the Company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, the Company cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations. On August 11, 2017, a putative class action lawsuit titled Freedman v. magicJack VocalTec Ltd. et al., Case 9-17-cv-80940, was filed against magicJack and its Board of Directors in the United States District Court for the Southern District of Florida (Case No: 9:17-cv-80940-RLR). Oral arguments were held on for January 17, 2020 and the Company is awaiting the court's decision. The Company cannot estimate the amount of potential liability, if any, that could arise from this matter. On January 5, 2017, complaints filed in November 2015 and May 2016 naming MLV & Co. ("MLV"), a broker-dealer subsidiary of FBR, as a defendant in putative class action lawsuits alleging claims under the Securities Act, in connection with the offerings of Miller Energy Resources, Inc. ("Miller") have been consolidated. The Master Consolidated Complaint, styled Gaynor v. Miller et al., is pending in the United States District Court for the Eastern District of Tennessee, and, like its predecessor complaints, continues to allege claims under Sections 11 and 12 of the Securities Act against nine underwriters for alleged material misrepresentations and omissions in the registration statement and prospectuses issued in connection with six offerings (February 13, 2013; May 8, 2013; June 28, 2013; September 26, 2013; October 17, 2013 (as to MLV only) and August 21, 2014) with an alleged aggregate offering price of approximately $151,000. The Court ordered mediation before a federal magistrate took place on August 6, 2019, with no resolution. In December 2019, the Court remanded the case to state court. In July 2017, an arbitration claim was filed with FINRA by Dominick & Dickerman LLC and Michael Campbell against WSI and Gary Wunderlich with respect to the acquisition by Wunderlich Investment Company, Inc. ("WIC") (the parent corporation of WSI) of certain assets of Dominick & Dominick LLC in 2015. The Claimants allege that respondents overvalued WIC so that the purchase price paid to the Claimants in shares of WIC stock was artificially inflated. On April 7, 2020, the arbitration panel issued an award against B. Riley Wealth Management, LLC (formerly, Wunderlich Securities, Inc.) and Gary Wunderlich holding each party jointly and severally liable for damages, costs and expenses in an aggregate amount of $11,400. The Company recorded a loss accrual in the consolidated financial statements during the three months ended March 31, 2020. The Company filed a petition to vacate the arbitration award in the U.S. District Court for the Southern District of New York on May 5, 2020. In December 2015, magicJack received a Letter of Inquiry (the "2015 LOI") from the Enforcement Bureau (the "Bureau") of the Federal Communications Commission ("FCC") in which the Bureau indicated that it was investigating whether magicJack was subject to the FCC's rules applicable to interconnected VoIP providers. magicJack believes that it is not an interconnected VoIP provider under current regulations and is not subject to the FCC rules. Previously, magicJack received similar letters of inquiry in 2010 and 2013, neither of which resulted in any enforcement action. magicJack responded to the 2015 LOI in February 2016. magicJack is currently participating in discussions with the FCC regarding a potential settlement. (b) Tax Contingencies magicJack believes that it files all required tax returns and pays all required federal, state and municipal taxes (such as sales, excise, utility, and ad valorem taxes), fees and surcharges. magicJack is the subject of inquiries and examinations by various states and municipalities in the normal course of business. In accordance with generally accepted accounting principles, magicJack makes a provision for a liability for taxes when it is both probable that a liability has been incurred and the amount of the liability can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. magicJack believes any possible claims are without merit and vigorously defends its rights. However, if a government entity were to prevail in any matter, it could have a material adverse effect on magicJack's financial condition, results of operation and cash flows. In addition, it is at least reasonably possible that a potential loss may exist for tax contingencies in addition to the provisions taken by magicJack. Historically, magicJack considered the requirements to collect sales taxes under the auspices of a 1991 Supreme Court case, Quill Corp. v. North Dakota, which established the precedent that a physical presence in the respective state is required for an entity to be subject to a state's sales and use tax requirements. Accordingly, magicJack had concluded that it did not have nexus for sales tax in those states in which it had no physical presence (i.e., it had no employees regularly and systematically there and it had no property there). On June 21, 2018, via South Dakota v. Wayfair, Inc. (No. 17-494) ("Wayfair") the U.S. Supreme Court reversed its prior ruling and eliminated the "physical presence" requirement. In consideration of the ruling, magicJack made the decision to start collecting sales tax on direct sales of its magicJack device and access right renewals in states that have adopted similar "Economic Nexus" laws. magicJack began registering for, collecting and remitting sales tax to identified jurisdictions during the third quarter of 2018. The Company will continue to monitor the situation and add additional states if deemed necessary. Though the South Dakota law is to be applied prospectively, it is not certain if other states may try to enact laws on a retrospective basis based on the Wayfair ruling, and the Company cannot estimate the likelihood of liability or the potential amount of assessments that could arise from prior periods if other states tried to apply the ruling on a retrospective basis. In a letter dated September 12, 2019, the Company received notice that the State of California has selected the Company's 2016 and 2017 California corporate income tax returns for examination. The Company has received the initial information document request and the first meeting with the auditor scheduled in March 2020 was rescheduled to a date to be determined due to COVID -19. The Company believes that the positions taken in its 2016 and 2017 California corporate income tax returns are reasonable and appropriate, however, the Company cannot be sure of the ultimate outcome of the examination and cannot estimate the likelihood of liability or the amount of potential assessments, if any, that could arise from the examination. (c) Franchise Group Commitment Letter, Loan Participant Guaranty and CIBC Guarantee Franchise Group Commitment Letter and Loan Participant Guaranty Commitment Letter On February 14, 2020, affiliates of Franchise Group, Inc. (collectively with all of its affiliates, "FRG") entered into an ABL Credit Agreement (the "Franchise Credit Agreement"), with GACP Finance Co., LLC ("GACP Finance") as administrative agent and collateral agent, and the lenders from time to time party thereto, pursuant to which the lenders provided an asset based credit facility to FRG in an aggregate principal amount of $100,000 In connection with the Franchise Credit Agreement, the Company entered into a commitment letter, dated as of February 14, 2020 (the "Commitment Letter"), pursuant to which the Company committed to provide a $100,000 asset based lending facility to FRG, on April 14, 2020 if, on or before such date, the obligations under the Franchise Credit Agreement are not refinanced in full. On May 1, 2020, the Company extended its commitment under the Commitment Letter until 30 days prior to the maturity date which is currently set forth in the Franchise Credit Agreement as September 30, 2020. The Loan Participant Guaranty On February 14, 2020, FRG, the lenders from time to time party thereto and GACP Finance as administrative agent, entered into a Credit Agreement (the "Term Loan Credit Agreement"), pursuant to which the lenders provided a term loan facility to FRG in an aggregate principal amount of $575,000. On February 19, 2020, the Company entered into a limited guaranty (the "Loan Participant Guaranty") to one of the lenders under the Term Loan Credit Agreement (the "Loan Participant") pursuant to which the Company guaranteed the payment when due of certain obligations, including principal, interest, and other amounts payable to the Loan Participant under the Term Loan Credit Agreement in an amount not to exceed $50,000 plus certain expenses of the Loan Participant and certain protective advances related to such guaranteed obligations (the "Loan Participant Guaranteed Obligations"). The Loan Participant may require payment of the Loan Participant Guaranteed Obligations by the Company upon the occurrence of certain guarantor events of default, including payment or bankruptcy events of default, in each case pursuant to the Term Loan Credit Agreement. The Loan Participant Guaranty remains in effect until the date that the Loan Participant Guaranteed Obligations have been paid in full. The Loan Participant Guaranteed Obligations are unsecured obligations of the Company and rank equally in right of payment with all of the Company's other existing and future unsecured and unsubordinated indebtedness. The Loan Participant Guaranteed Obligations are effectively subordinated in right of payment to all of the Company's existing and future secured indebtedness and structurally subordinated to all existing and future indebtedness of the Company's subsidiaries, including trade payables. CIBC Guaranty On February 14, 2020, the Company entered into a limited guaranty (the "CIBC Guaranty") in favor of CIBC Bank USA ("CIBC"), pursuant to which the Company guaranteed the payment when due of certain obligations, including all principal, interest, and other amounts that shall be at any time payable by FRG under FRG's credit agreement with CIBC and the lenders party thereto, dated as of May 16, 2019, as amended (the "CIBC Credit Agreement") in an amount not to exceed $125,000 plus certain expenses of CIBC related to such guaranteed obligations (the "CIBC Guaranteed Obligations"). CIBC may require payment of the CIBC Guaranteed Obligations by the Company upon the occurrence of either (a) the failure of FRG to pay any principal of any loan or any reimbursement obligation in respect of any letter of credit disbursement or (b) the failure of FRG to pay any interest on any loan or on any reimbursement obligation in respect of any letter of credit disbursement within five business days of the date due, in each case pursuant to the CIBC Credit Agreement. The CIBC Guaranty remains in effect until the earlier of (a) the date that the CIBC Guaranteed Obligations have been paid in full or (b) June 30, 2020. The CIBC Guaranteed Obligations are unsecured obligations of the Company and rank equally in right of payment with all of the Company's other existing and future unsecured and unsubordinated indebtedness. The CIBC Guaranteed Obligations are effectively subordinated in right of payment to all of the Company's existing and future secured indebtedness and structurally subordinated to all existing and future indebtedness of the Company's subsidiaries, including trade payables. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED PAYMENTS | NOTE 15—SHARE-BASED PAYMENTS (a) Amended and Restated 2009 Stock Incentive Plan Share- based compensation expense for restricted stock units under the Company's Amended and Restated 2009 Stock Incentive Plan (the "Plan") was $4,109 and $1,726 for the three months ended March 31, 2020 and 2019, respectively. The restricted stock units generally vest over a period of one to three years based on continued service. Performance based restricted stock units generally vest based on both the employee's continued service and the Company's common stock price, as defined in the grant, achieving a set threshold during the three-year period following the grant. In determining the fair value of restricted stock units on the grant date, the fair value is adjusted for (a) estimated forfeitures, (b) expected dividends based on historical patterns and the Company's anticipated dividend payments over the expected holding period and (c) the risk-free interest rate based on U.S. Treasuries for a maturity matching the expected holding period. As of March 31, 2020, the expected remaining unrecognized share-based compensation expense of $15,238 will be expensed over a weighted average period of 1.3 years. A summary of equity incentive award activity for the three months ended March 31, 2020 was as follows: Weighted Average Shares Fair Value Nonvested at January 1, 2020 2,263,988 $ 12.35 Granted 5,575 24.54 Vested (16,157 ) 19.30 Nonvested at March 31, 2020 2,253,406 $ 12.33 The total fair value of shares vested during the three months ended March 31, 2020 was $312. (b) Amended and Restated FBR & Co. 2006 Long-Term Stock Incentive Plan In connection with the acquisition of FBR & Co. on June 1, 2017, the equity awards previously granted or available for issuance under the FBR & Co. 2006 Long-Term Stock Incentive Plan (the "FBR Stock Plan") may be issued under the Plan. The share-based compensation expense in connection with the FBR Stock Plan restricted stock awards was $791 and $767 during the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the expected remaining unrecognized share-based compensation expense of $3,833 will be expensed over a weighted average period of 1.6 years. A summary of equity incentive award activity for the three months ended March 31, 2020 was as follows: Weighted Average Shares Fair Value Nonvested at January 1, 2020 485,033 $ 18.33 Vested (41,963 ) 15.66 Forfeited (5,306 ) 19.18 Nonvested at March 31, 2020 437,764 $ 18.57 The total fair value of shares vested under the FBR Stock Plan during the three months ended March 31, 2020 was $657. (c) 2018 Employee Stock Purchase Plan In connection with the Company's Purchase Plan, share based compensation was $165 and $121 for the three months ended March 31, 2020 and 2019, respectively. At March 31, 2020, there were 592 shares reserved for issuance under the Purchase Plan. |
Net Capital Requirements
Net Capital Requirements | 3 Months Ended |
Mar. 31, 2020 | |
Brokers and Dealers [Abstract] | |
NET CAPITAL REQUIREMENTS | NOTE 16—NET CAPITAL REQUIREMENTS B. Riley FBR, MLV and B. Riley Wealth Management ("BRWM"), the Company's broker-dealer subsidiaries, are registered with the SEC as broker-dealers and are members of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company's broker-dealer subsidiaries are subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the subsidiaries to maintain minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As such, they are subject to the minimum net capital requirements promulgated by the SEC. As of March 31, 2020, B. Riley FBR had net capital of $103,271, which was $100,994 in excess of its required net capital of $2,277; MLV had net capital of $91, which was $50 in excess of its required net capital of $41; and BRWM had net capital of $5,569, which was $4,975 in excess of its required net capital of $594. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17—RELATED PARTY TRANSACTIONS At March 31, 2020, amounts due from related parties of $4,391 includes $32 from GACP I, L.P. ("GACP I") and $14 from GACP II, L.P. ("GACP II") for management fees and other operating expenses, $5 due from B. Riley Principal Merger Corp, a company that consummated its initial public offering on April 11, 2019, and our wholly owned subsidiary, B. Riley Principal Sponsor Co. LLC, is the Sponsor, and $4,340 due from John Ahn, President of Great American Partners, LLC, our indirect wholly owned subsidiary ("GACP"), pursuant to a Secured Line of Promissory Note connected with a Transfer Agreement as further discussed below. At March 31, 2020, amounts due to related parties includes $353 due to CA Global Partners ("CA Global") for operating expenses related to wholesale and industrial liquidation engagements managed by CA Global on behalf of GA Global Ptrs, and is included in due to related parties and partners on the accompanying condensed balance sheets. During the three months ended March 31, 2020, the Company sold a portion of a loan receivable to GACP for $1,800. At March 31, 2020, the Company had sold loan participations to B. Riley Partners Opportunity Fund, a private equity fund managed by one of our subsidiaries, in the amount of $12,405, and recorded interest expense of $552 during the three months ended March 31, 2020 related to B. Riley Partners Opportunity Fund's loan participations. Our executive officer's and board of directors have a 69.8% financial interest, which includes a financial interest of Bryant Riley, our Co-Chief Executive Officer, of 48.8% in the B. Riley Partners Opportunity Fund at March 31, 2020. At December 31, 2019, amounts due from related parties of $5,832 included $145 from GACP I and $12 from GACP II for management fees and other operating expenses, $13 due from B. Riley Principal Merger Corp, and $3,846 due from John Ahn, pursuant to a Secured Line of Promissory Note connected with a Transfer Agreement as further discussed below. At December 31, 2019, the Company had outstanding loan to participations to B. Riley Partners Opportunity Fund in the amount of $12,478 On April 1, 2019, the Company entered into a Transfer Agreement (the "Transfer Agreement") with GACP II, a fund managed by GACP, and John Ahn, the President of GACP. The Transfer Agreement provides for among other things, the transfer to Mr. J. Ahn 55.56% of the Company's limited partnership interest in GACP II (the "Transferred Interest"), which represents a capital commitment in the aggregate amount of $5,000. In connection with the Transfer Agreement, the Company provided Mr. J. Ahn with a non-recourse, secured line of credit in an aggregate amount of up to $5,003 pursuant to the terms of a Secured Line of Credit Promissory Note (the "Note") dated April 1, 2019, to fund the purchase price of the Transferred Interest. We also entered into a Security Agreement with Mr. J. Ahn on April 1, 2019, which granted to the Company a security interest in the Transferred Interest to secure Mr. J. Ahn's obligations under the Note. The Note is subject to an interest rate per annum of 7.00%. As of March 31, 2020, the principal and accrued interest on the Note were $4,291 (amount transferred as of March 31, 2020) and $49, respectively. For the three months ended March 31, 2020 interest earned on the Note was $74 The Company periodically participates in loans and financing arrangements in respect of companies in which the Company has an equity ownership and representation on the board of directors or equivalent body. The Company may also provide consulting services or investment banking services to raise capital for these companies. These transactions can be summarized as follows: Sonim The Company has a loan receivable due from Sonim Technologies, Inc. ("Sonim") that is included in loans receivable at fair value with a fair value of $9,155 and $9,603 at March 31, 2020 and December 31, 2019, respectively. The principal amount due on the loan at March 31, 2020 was $10,170, interest is payable at 10.0% per annum with a maturity date of September 1, 2022. During the three months ended March 31, 2020, the Company received principal payments in the amount of $88. A portion of the loan receivable is convertible into common stock of Sonim at $8.87 per share depending on when the Company elects to exercise its' option to convert the principal balance of the loan into common stock of Sonim. The original loan was made in October 2017 in connection with the Company's initial investment in common stock and preferred stock that was purchased from Sonim's existing shareholders. In October 2017, the Company also entered into a management services agreement with Sonim to provide advisory and consulting services for management fees of up to $200 per year. The management services agreement was terminated in September 2019. Babcock and Wilcox The Company has a last-out term loan receivable due from Babcock & Wilcox Enterprises, Inc. ("B&W") that is included in loans receivable, at fair value with a fair value of $104,998 at March 31, 2020. As of December 31, 2019, the last-out term loan was included in loans receivable, at cost with a carrying value of $109,147. The carrying value of the loan was comprised of the principal amount of $113,330 less original issue discount of $4,183 at December 31, 2019. Interest is payable monthly at the fixed rate of 12.0% per annum. The loan was made to B&W as part of various amendments to B&W's existing credit agreement with other lenders not related to the Company. In connection with making the loan to B&W, in April 2019 the Company received warrants to purchase 1,666,667 shares of common stock of B&W with an exercise price of $0.01 per share. The option to exercise the warrants expires on April 5, 2022. One of the Company's wholly owned subsidiaries entered into a services agreement with B&W that provided for the President of the Company to serve as the Chief Executive Officer of B&W until November 30, 2020 (the "Executive Consulting Agreement"), unless terminated by either party with thirty days written notice. Under this agreement, fees for services provided are $750 per annum, paid monthly. In addition, subject to the achievement of certain performance objectives as determined by B&W's compensation committee of the board, a bonus or bonuses may also be earned and payable to the Company. On January 31, 2020, the Company provided B&W with $30,000 of additional last-out term loans pursuant to new amendments to B&W's existing credit agreement discussed above. The additional last-out term loan receivable due from B&W is included in loans receivable, at fair value with a fair value of $27,603 at March 31, 2020. Pursuant to the new amendment, the Company also agreed upon a term sheet pursuant to which B&W would undertake a refinancing transaction on or prior to May 11, 2020 (the "Refinancing") and B&W and the existing lenders would amend and restate the credit agreement. As part of the Refinancing, the size of the B&W's board of directors may also be reduced to five members, with the Company retaining the ability to appoint two members. On January 31, 2020, the Company also entered into a letter agreement with B&W (the "Backstop Commitment Letter") pursuant to which the Company agreed to fund any shortfall in the $200,000 of new debt or equity financing required as part of the terms of the Refinancing to the extent such amounts have not been raised from third parties on the same terms contemplated by the Refinancing. The Company, B&W and the lenders that are a party to B&W's existing credit agreement are in negotiations to amend and restate B&W's existing credit agreement, which would include, among other things, an extension of the maturity of amounts outstanding under the credit facility, the termination of the Backstop Commitment Letter, the commitment by an affiliate of the Company to provide up to $70,000 in additional term loan financing incrementally over the duration of the amended credit facility, and a limited guaranty by the Company of B&W's obligations under the amended credit facility. Maven The Company has loans receivable due from theMaven, Inc. ("Maven") that are included in loans receivable, at fair value with a fair value of $25,572 and $21,150 at March 31, 2020 and December 31, 2019, respectively. The Company also has a loan receivable due from Maven that is included loans receivable, at fair value with a fair value of $44,323 March 31, 2020. As of December 31, 2019, the loan was included in loans receivable, at cost with a carrying value of $47,933. The loan receivable was comprised of the principal balance due in the amount of $49,921, less original issue discount of $1,988 at December 31, 2019. Interest on these loans is payable at rates of 12.0% to 15.0% per annum with maturity dates through June 2022. Franchise Group The Company has a loan receivable due from Vitamin Shoppe, a subsidiary of Franchise Group, Inc., ("Vitamin Shoppe") that is included in loans receivable, at fair value with a fair value of $4,651 and $4,951 at March 31, 2020 and December 31, 2019, respectively. Interest is payable at 13.7% per annum with a maturity date of December 16, 2022. During the three months ended March 31, 2020, the Company recognized $7,160 of advisory fees from FRG in connection with FRG's capital rasing and acquisition transactions. The Company also entered into a Commitment Letter, Loan Participant Guaranty and CIBC Guarantee with FRG as disclosed above in Note 14 – Commitments and Contingencies. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 18—BUSINESS SEGMENTS The Company's business is classified into the Capital Markets segment, Auction and Liquidation segment, Valuation and Appraisal segment, Principal Investments — United Online and magicJack segment, and Brands segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. The following is a summary of certain financial data for each of the Company's reportable segments: Three Months Ended March 31, 2020 2019 Capital Markets segment: Revenues - Services and fees $ 104,413 48,014 Trading (losses) income and fair value adjustments on loans (182,442 ) 25,867 Interest income - Loans and securities lending 21,851 11,420 Total revenues (56,178 ) 85,301 Selling, general and administrative expenses (54,711 ) (63,389 ) Restructuring recovery — 29 Interest expense - Securities lending and loan participations sold (8,473 ) (6,804 ) Depreciation and amortization (1,105 ) (1,276 ) Segment (loss) income (120,467 ) 13,861 Auction and Liquidation segment: Revenues - Services and fees 20,661 20,709 Direct cost of services (14,816 ) (6,274 ) Cost of goods sold (29 ) (14 ) Selling, general and administrative expenses (1,526 ) (2,915 ) Depreciation and amortization (1 ) (2 ) Segment income 4,289 11,504 Valuation and Appraisal segment: Revenues - Services and fees 8,788 8,583 Selling, general and administrative expenses (6,867 ) (7,187 ) Depreciation and amortization (41 ) (33 ) Segment income 1,880 1,363 Principal Investments - United Online and magicJack segment: Revenues - Services and fees 21,718 26,590 Revenues - Sale of goods 1,004 945 Total revenues 22,722 27,535 Direct cost of services (5,136 ) (7,842 ) Cost of goods sold (740 ) (1,105 ) Selling, general and administrative expenses (5,463 ) (7,020 ) Depreciation and amortization (2,879 ) (3,463 ) Restructuring charge — (176 ) Segment income 8,504 7,929 Brands segment: Revenues - Services and fees 3,801 — Selling, general and administrative expenses (904 ) — Depreciation and amortization (714 ) — Impairment of tradenames (4,000 ) — Segment loss (1,817 ) — Consolidated operating (loss) income from reportable segments (107,611 ) 34,657 Corporate and other expenses (13,533 ) (9,679 ) Interest income 246 637 Loss on equity investments (236 ) (3,762 ) Interest expense (15,654 ) (10,770 ) (Loss) income before income taxes (136,788 ) 11,083 Benefit (provision) for income taxes 37,539 (3,104 ) Net (loss) income (99,249 ) 7,979 Net loss attributable to noncontrolling interests (584 ) (44 ) Net (loss) income attributable to B. Riley Financial, Inc. (98,665 ) 8,023 Preferred stock dividends 1,055 — Net (loss) income available to common shareholders $ (99,720 ) $ 8,023 The following table presents revenues by geographical area: Three Months Ended March 31, 2020 2019 Revenues: Revenues - Services and fees: North America $ 158,466 $ 103,820 Australia 664 15 Europe 251 61 Total Revenues - Services and fees $ 159,381 $ 103,896 Trading (losses) income and fair value adjustments on loans $ (182,442 ) $ 25,867 North America Revenues - Sale of goods North America $ 1,004 $ 945 Revenues - Interest income - Loans and securities lending: North America $ 21,851 $ 11,420 Total Revenues: North America $ (1,121 ) $ 142,052 Australia 664 15 Europe 251 61 Total Revenues $ (206 ) $ 142,128 During the three months ended March 31, 2020 and 2019, long-lived assets, which consist of property and equipment and other assets, of $12,223 and $12,727, respectively, were located in North America. Segment assets are not reported to, or used by, the Company's Chief Operating Decision Maker to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | ( a) Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of (a) Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations, and (b) GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership of a 50% partnership interest, appointment of executive officers and significant influence over the operations. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company's management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. |
Use of Estimates | (b) Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities and loan receivables, allowance for doubtful accounts, the fair value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests, fair value of share based arrangements, accounting for income tax valuation allowances, recovery of contract assets and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. On January 30, 2020, the World Health Organization ("WHO") announced a global health emergency because of a new strain of coronavirus (the "COVID-19 outbreak"). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company's results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company's results of operations, financial position and cash flows may be materially adversely affected. |
Interest Expense — Securities Lending Activities and Loan Participations Sold | (c) Interest Expense — Securities Lending Activities and Loan Participations Sold Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $7,921 and $6,804 for the three months ended March 31, 2020 and 2019, respectively. Loan participations sold as of March 31, 3020 totaled $12,405. Interest expense from loan participations sold totaled $552 for the three months ended March 31, 2020. |
Concentration of Risk | (d) Concentration of Risk Revenues in the Capital Markets, Valuation and Appraisal and Principal Investments — United Online and magicJack segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation segment are primarily generated in the United States, Australia, Canada and Europe. Revenues in the Brands segment are primarily generated in the United States and Canada. The Company's activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company's exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidations services contract, the Company sometimes conducts operations with third parties through collaborative arrangements. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation's ("FDIC") insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements. |
Advertising Expenses | (e) Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $841 and $362 for the three months ended March 31, 2020 and 2019, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. |
Share-Based Compensation | (f) Share-Based Compensation The Company's share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company's employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of operations over the requisite service or performance period the award is expected to vest. The fair value of the liability-classified award will be subsequently remeasured at each reporting date through the settlement date. Change in fair value during the requisite service period will be recognized as compensation cost over that period. In June 2018, the Company adopted the 2018 Employee Stock Purchase Plan ("Purchase Plan") which allows eligible employees to purchase common stock through payroll deductions at a price that is 85% of the market value of the common stock on the last day of the offering period. In accordance with the provisions of ASC 718, Compensation — Stock Compensation |
Income Taxes | (g) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company's measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. |
Cash and Cash Equivalents | (h) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Restricted Cash | (i) Restricted Cash As of March 31, 2020 and December 31, 2019, restricted cash balance of $471 related to one of the Company's telecommunication suppliers. |
Securities Borrowed and Securities Loaned | (j) Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The Company accounts for securities lending transactions in accordance with ASC "Topic 210: Balance Sheet," which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets. |
Property and Equipment | (k) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property and equipment was $932 and $1,536 for the three months ended March 31, 2020 and 2019, respectively. |
Loans Receivable | (l) Loans Receivable Loans receivable, at fair value are loans held for investment that are accounted for at fair value under the fair value option. The Company adopted ASU 2016-13 and its amendment ASU 2019-05 effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were measured at amortized cost as of December 31, 2019. As of March 31, 2020 and December 31, 2019, loans receivable, at fair value totaled $326,299 and $43,338, respectively, with various maturities through December 2024. As of March 31, 2020 and December 31, 2019, loans receivable, at fair value had principal balances totaling $339,630 and $32,691, respectively, with cost basis, net of unamortized costs, origination fees, premiums and discounts, totaling $333,466 and $32,578, respectively. During the three months ended March 31, 2020, the Company recorded unrealized losses of $17,926 on the loans receivable, at fair value, which is included in trading (losses) income and fair value adjustments on loans on the condensed consolidated statement of operations. Loans receivable, at cost are measured at historical cost and reported at their outstanding principal balances net of any unearned income, charge-offs, unamortized deferred fees and costs on originated loans, and for purchased loans, net of any unamortized premiums or discounts. As of December 31, 2019, loans receivable at cost had a carrying value of $225,848. Interest income on loans receivable is recognized based on the stated rate of the loan and the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statement of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. |
Securities and Other Investments Owned and Securities Sold Not Yet Purchased | (m) Securities and Other Investments Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of March 31, 2020 and December 31, 2019, the Company's securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities: March 31, December 31, 2020 2019 Securities and other investments owned: Equity securities $ 234,867 $ 353,162 Corporate bonds 18,429 19,020 Other fixed income securities 5,243 8,414 Partnership interests and other 29,247 27,617 $ 287,786 $ 408,213 Securities sold not yet purchased: Equity securities $ 124 $ 5,360 Corporate bonds 13,361 33,436 Other fixed income securities 813 3,024 $ 14,298 $ 41,820 |
Fair Value Measurements | (n) Fair Value Measurements The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company's securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management's determination of fair value is based on the best available information which may incorporate management's own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer's securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company's partnership and investment fund interests are valued based on the Company's proportionate share of the net assets of the partnerships and funds; the value for these investments are derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value ("NAV") in accordance with ASC "Topic 820: Fair Value Measurements." The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of March 31, 2020 and December 31, 2019. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at March 31, 2020 Using Quoted prices Fair value at in active markets for identical Other observable Significant unobservable March 31, assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 234,867 $ 139,751 $ — $ 95,116 Corporate bonds 18,429 — 18,429 — Other fixed income securities 5,243 — 5,243 — Investment funds valued at net asset value (1) 29,247 Total securities and other investments owned 287,786 139,751 23,672 95,116 Loans receivable, at fair value 326,299 — — 326,299 Total assets measured at fair value $ 614,085 $ 139,751 $ 23,672 $ 421,415 Liabilities: Securities sold not yet purchased: Equity securities $ 124 $ 124 $ — $ — Corporate bonds 13,361 — 13,361 — Other fixed income securities 813 — 813 — Total securities sold not yet purchased 14,298 124 14,174 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,508 — — 4,508 Total liabilities measured at fair value $ 18,806 $ 124 $ 14,174 $ 4,508 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2019 Using Quoted prices in active markets for Other Significant Fair value at December 31 identical observable inputs unobservable inputs 2019 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 353,162 $ 243,911 $ — $ 109,251 Corporate bonds 19,020 — 19,020 — Other fixed income securities 8,414 — 8,414 — Investment funds valued at net asset value (1) 27,617 Total securities and other investments owned 408,213 243,911 27,434 109,251 Loans receivable, at fair value 43,338 — — 43,338 Total assets measured at fair value $ 451,551 $ 243,911 $ 27,434 $ 152,589 Liabilities: Securities sold not yet purchased: Equity securities $ 5,360 $ 5,360 $ — $ — Corporate bonds 33,436 — 33,436 — Other fixed income securities 3,024 — 3,024 — Total securities sold not yet purchased 41,820 5,360 36,460 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — — 4,616 Total liabilities measured at fair value $ 46,436 $ 5,360 $ 36,460 $ 4,616 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC "Topic 820 Fair Value Measurements." The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. As of March 31, 2020 and December 31, 2019, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $421,415 and $152,589, respectively, or 19.8% and 6.6%, respectively, of the Company's total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The following table summarizes the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment and valuation technique as of March 31, 2020: Fair value at March 31, Weighted 2020 Valuation Technique Unobservable Input Range Average Assets: Equity securities $ 95,116 Market approach Multiple of revenue 2.2x - 4.9x 3.7x Multiple of EBITDA 6.0x - 10.0x 6.6x Multiple of PV-10 0.28x 0.28x Market price of related security $0.63 - $1.02/share $0.68 Discounted cash flow Market interest rate 33.1% 33.1% Option pricing model Annualized volatility 100.0% 100% Loans receivable at fair value 326,299 Discounted cash flow Market interest rate 9.9% -30.4% 17.0% Market approach Market price of related security $0.63 - $0.77/share $0.65 Total level 3 assets measured at fair value $ 421,415 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,508 Market approach Operating income multiple 6.0x 6.0x The changes in Level 3 fair value hierarchy during the three months ended March 31, 2020 and 2019 are as follows: Level 3 Level 3 Changes During the Period Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Year Adjustments Earnings Settlements of Level 3 Period Three Months Ended March 31, 2020 Equity securities $ 109,251 $ (15,135 ) $ — $ 1,000 $ — $ 95,116 Loans receivable at fair value 43,338 (17,926 ) 1,289 73,750 225,848 326,299 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — (108 ) — — 4,508 Three Months Ended March 31, 2019 Equity securities $ 24,577 $ (18 ) $ — $ (45 ) $ — $ 24,514 Corporate bonds — — — — 1,330 1,330 Loans receivable at fair value 33,731 35 475 (200 ) — 34,041 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — (104 ) — — 4,529 The Company adopted ASU 2016-13 and its amendment ASU 2019-05 effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were measured at amortized cost as of December 31, 2019. The loans receivable, at fair value are included in transfers into level 3 fair value assets in the above table. During the three months ended March 31, 2019, there was a transfer of one financial asset from level 1 to level 3 in the fair value hierarchy as a result of the asset's principal market becoming inactive during the quarter. The amount reported in the table above for the three months ended March 31, 2020 and 2019 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments. As of March 31, 2020, the senior notes payable had a carrying amount of $853,523 and fair value of $666,428. The carrying amount of the term loan approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk. During the three months ended March 31, 2020 and 2019, except for the impact of the intangible impairment charge as described in Note 7- Goodwill and Intangible Assets, there were no assets or liabilities measured at fair value on a non-recurring basis. The fair value of the indefinite-lived intangible assets was determined based on a discounted cash flow model using a rate of 14.0%. The indefinite-lived intangible assets are level 3 assets in the fair value hierarchy. |
Foreign Currency Translation | (o) Foreign Currency Translation The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country's currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders' equity as a component of accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. Transaction gains (loss) were $949 and ($186) during the three months ended March 31, 2020 and 2019, respectively. These amounts are included in selling, general and administrative expenses in the Company's condensed consolidated statements of income. |
Common Stock Warrants | (p) Common Stock Warrants The Company issued 821,816 warrants to purchase common stock of the Company (the "Wunderlich Warrants") in connection with the acquisition of Wunderlich Securities, Inc. ("Wunderlich") on July 3, 2017. The Wunderlich Warrants entitle the holders of the warrants to acquire shares of the Company's common stock from the Company at an exercise price of $17.50 per share, subject to, among other matters, the proper completion of an exercise notice and payment. The exercise price and the number of shares of Company common stock issuable upon exercise are subject to customary anti-dilution and adjustment provisions, which include stock splits, subdivisions or reclassifications of the Company's common stock. The Wunderlich Warrants expire on July 3, 2022. On May 16, 2019, the Company repurchased 638,311 warrants for $2,777 ($4.35 per warrant). As of March 31, 2020, Wunderlich Warrants to purchase 183,505 shares of common stock were outstanding. On October 28, 2019, the Company issued 200,000 warrants to purchase common stock of the Company (the "BR Brands Warrants") in connection with the acquisition of a majority ownership interest in BR Brand Holdings LLC ("BR Brand"). The BR Brand Warrants entitle the holders of the warrants to acquire shares of the Company's common stock from the Company at an exercise price of $26.24 per share. One-third of the BR Brand Warrants immediately vested and became exercisable upon issuance, and the remaining two-thirds of warrants will vest and become exercisable following the first and/or second anniversaries of the closing, subject to BR Brand's (or another related joint venture with Bluestar Alliance LLC) satisfaction of specified financial performance targets. The BR Brand warrants expire three years after the last vesting event occurs. Exercise Expiration Issued and Outstanding Warrants as of Beginning Warrants Warrants Issued and Outstanding Warrants as of End of Price Date of Period Issued Repurchased Period For the year ended December 31, 2019 Wunderlich Warrants $ 17.50 July 3, 2022 821,816 — (638,311 ) 183,505 BR Brand Warrants $ 26.24 October 28, 2024 — 200,000 — 200,000 Total 821,816 200,000 (638,311 ) 383,505 For the three months ended March 31, 2020 Wunderlich Warrants $ 17.50 July 3, 2022 183,505 — — 183,505 BR Brand Warrants $ 26.24 October 28, 2024 200,000 — — 200,000 Total 383,505 — — 383,505 |
Equity Investment | (q) Equity Investment bebe stores, inc. At March 31, 2020, the Company had a 30.5% ownership interest in bebe stores, inc. ("bebe"). The equity ownership in bebe is accounted for under the equity method of accounting and is included in prepaid expenses and other assets in the condensed consolidated balance sheets. National Holdings Corporation On November 14, 2018, the Company entered into an agreement to acquire shares of National Holdings Corporation ("National Holdings"), a Nasdaq-listed issuer, from Fortress Biotech, Inc. for an aggregate purchase price totaling approximately $22.9 million. The transaction was completed in two tranches. In the first tranche, which was completed in the fourth quarter of 2018, the Company acquired shares representing 24% of the total outstanding shares of National Holdings. The second tranche was completed in the first quarter of 2019. As of March 31, 2020, the Company had purchased 6,159,550 shares of National Holdings' common stock, representing 46.8% of National Holdings' outstanding shares, at $3.25 per share. The carrying value for the National Holdings investment is included in prepaid expenses and other assets in the condensed consolidated balance sheets. The equity ownership in National Holdings is accounted for under the equity method of accounting. As of March 31, 2020, the carrying values of the Company's investments in bebe and National Holdings exceeded their fair values based on their quoted market prices. In light of these facts, the Company evaluated its investments in bebe and National Holdings for impairment. The Company utilize no bright- line tests in such evaluations. Based on the available facts and information regarding the operating results of both entities, the Company's ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor these investments and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions. |
Loan Participations Sold | (r) Loan Participations Sold As of March 31, 2020, the Company has sold investments ("Loan Participations Sold") to third parties ("Participants") that are accounted for as secured borrowings under ASC Topic 860, Transfers and Servicing. Under ASC Topic 860, a partial loan transfer does not qualify for sale accounting in order for sale treatment to be allowed. A participation or other partial loan transfer that meets the definition of a participating interest is classified as loan receivable and the portion transferred is recorded as a secured borrowing under loan participations sold in the condensed consolidated balance sheet. The Participants are entitled to payments made by the borrower of the related loan equal to the current Loan Participations Sold outstanding at the interest rates for the respective investment. In the event that the borrower defaults, the Participants have rights to payments from such borrower, but do not have recourse to the Company. The terms of the Loan Participations Sold are commensurate with the terms of the related loan. As of March 31, 2020, the Company had entered into participation agreements for a total of $12,405. In addition, the interest income and interest expense related to the Loan Participations Sold resulted in interest income and interest expense which is presented gross on the condensed consolidated statement of operations. |
Supplemental Non-cash Disclosures | (s) Supplemental Non-cash Disclosures During the three months ended March 31, 2020, non-cash investing activities included $4,633 non-cash conversion of an equity method investment. |
Reclassifications | (t) Reclassifications As of December 31, 2019, loans receivable recorded at fair value of $43,338 were previously included in securities and other investments owned, at fair value. These loans receivable amounts have been reclassified and reported in loans receivable, at fair value to conform to the 2020 presentation. During the three months ended March 31, 2019, trading income and fair value adjustments on loans of $25,867 was previously included in services and fees income in the capital markets segment. These trading income and fair value adjustments on loans amounts have been reclassified and reported in trading (loss) income and fair value adjustments on loans to conform to the 2020 presentation. During the three months ended March 31, 2019, interest income earned on loans of $2,090 was previously included in services and fees income in the capital markets segment. These interest income amounts have been reclassified and reported in interest income – loans and securities lending to conform to the 2020 presentation. During the three months ended March 31, 2019, expenses of $4,421, were previously included in direct cost of services in the valuation and appraisal segment. These expenses have been reclassified and reported in selling, general and administrative expenses to conform to the 2020 presentation. |
Variable Interest Entity | (u) Variable Interest Entity In 2018, the operations of GACP II, LP, a private debt investment limited partnership (the "Partnership") commenced operations. The Company's investment in the Partnership is a variable interest entity ("VIE") since the unaffiliated limited partners do not have substantive kick- out or participating rights to remove the Company's subsidiary that is the general partner managing the Partnership. The Company has determined that it is not the primary beneficiary due to the fact that its fee arrangements are considered at-market and thus not deemed to be variable interests, and it does not hold any other interests in the Partnership that are considered to be more than insignificant. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed. The carrying value of the Company's investments in the VIE that was not consolidated is shown below. March 31, 2020 Partnership investments $ 14,751 Due from related party 14 Maximum exposure to loss $ 14,765 |
Recent Accounting Standards | (v) Recent Accounting Standards Recently adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments − Credit Losses (Topic 326): In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments − Credit Losses (Topic 326); Targeted Transition Relief," which allows entities to irrevocably elect, upon adoption of ASU 2016-13, the fair value option on financial instruments that (1) were previously recorded at amortized cost and (2) are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC 825-10. The Company adopted the new credit losses standard effective January 1, 2020. Pursuant to ASU 2016-13 and its amendment ASU 2019-05, the Company elected the irrevocable fair value option for all outstanding loans receivable that were previously measured at amortized cost. Under the fair value option, loans receivable are now measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the consolidated statements of operations. These loans are no longer subject to evaluation for impairment through an allowance for loan loss as such losses will be captured through fair value changes. The impact of adopting ASC 326 was immaterial to the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of securities and other investments owned and securities sold not yet purchased at fair value | March 31, December 31, 2020 2019 Securities and other investments owned: Equity securities $ 234,867 $ 353,162 Corporate bonds 18,429 19,020 Other fixed income securities 5,243 8,414 Partnership interests and other 29,247 27,617 $ 287,786 $ 408,213 Securities sold not yet purchased: Equity securities $ 124 $ 5,360 Corporate bonds 13,361 33,436 Other fixed income securities 813 3,024 $ 14,298 $ 41,820 |
Schedule of financial assets and liabilities measured on recurring basis | Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at March 31, 2020 Using Quoted prices Fair value at in active markets for identical Other observable Significant unobservable March 31, assets inputs inputs 2020 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 234,867 $ 139,751 $ — $ 95,116 Corporate bonds 18,429 — 18,429 — Other fixed income securities 5,243 — 5,243 — Investment funds valued at net asset value (1) 29,247 Total securities and other investments owned 287,786 139,751 23,672 95,116 Loans receivable, at fair value 326,299 — — 326,299 Total assets measured at fair value $ 614,085 $ 139,751 $ 23,672 $ 421,415 Liabilities: Securities sold not yet purchased: Equity securities $ 124 $ 124 $ — $ — Corporate bonds 13,361 — 13,361 — Other fixed income securities 813 — 813 — Total securities sold not yet purchased 14,298 124 14,174 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,508 — — 4,508 Total liabilities measured at fair value $ 18,806 $ 124 $ 14,174 $ 4,508 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2019 Using Quoted prices in active markets for Other Significant Fair value at December 31 identical observable inputs unobservable inputs 2019 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Equity securities $ 353,162 $ 243,911 $ — $ 109,251 Corporate bonds 19,020 — 19,020 — Other fixed income securities 8,414 — 8,414 — Investment funds valued at net asset value (1) 27,617 Total securities and other investments owned 408,213 243,911 27,434 109,251 Loans receivable, at fair value 43,338 — — 43,338 Total assets measured at fair value $ 451,551 $ 243,911 $ 27,434 $ 152,589 Liabilities: Securities sold not yet purchased: Equity securities $ 5,360 $ 5,360 $ — $ — Corporate bonds 33,436 — 33,436 — Other fixed income securities 3,024 — 3,024 — Total securities sold not yet purchased 41,820 5,360 36,460 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — — 4,616 Total liabilities measured at fair value $ 46,436 $ 5,360 $ 36,460 $ 4,616 (1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC "Topic 820 Fair Value Measurements." The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. |
Schedule of changes in Level 3 fair value hierarchy | Fair value at March 31, Weighted 2020 Valuation Technique Unobservable Input Range Average Assets: Equity securities $ 95,116 Market approach Multiple of revenue 2.2x - 4.9x 3.7x Multiple of EBITDA 6.0x - 10.0x 6.6x Multiple of PV-10 0.28x 0.28x Market price of related security $0.63 - $1.02/share $0.68 Discounted cash flow Market interest rate 33.1% 33.1% Option pricing model Annualized volatility 100.0% 100% Loans receivable at fair value 326,299 Discounted cash flow Market interest rate 9.9% -30.4% 17.0% Market approach Market price of related security $0.63 - $0.77/share $0.65 Total level 3 assets measured at fair value $ 421,415 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,508 Market approach Operating income multiple 6.0x 6.0x Level 3 Level 3 Changes During the Period Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Year Adjustments Earnings Settlements of Level 3 Period Three Months Ended March 31, 2020 Equity securities $ 109,251 $ (15,135 ) $ — $ 1,000 $ — $ 95,116 Loans receivable at fair value 43,338 (17,926 ) 1,289 73,750 225,848 326,299 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,616 — (108 ) — — 4,508 Three Months Ended March 31, 2019 Equity securities $ 24,577 $ (18 ) $ — $ (45 ) $ — $ 24,514 Corporate bonds — — — — 1,330 1,330 Loans receivable at fair value 33,731 35 475 (200 ) — 34,041 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,633 — (104 ) — — 4,529 |
Schedule of warrants | Exercise Expiration Issued and Outstanding Warrants as of Beginning Warrants Warrants Issued and Outstanding Warrants as of End of Price Date of Period Issued Repurchased Period For the year ended December 31, 2019 Wunderlich Warrants $ 17.50 July 3, 2022 821,816 — (638,311 ) 183,505 BR Brand Warrants $ 26.24 October 28, 2024 — 200,000 — 200,000 Total 821,816 200,000 (638,311 ) 383,505 For the three months ended March 31, 2020 Wunderlich Warrants $ 17.50 July 3, 2022 183,505 — — 183,505 BR Brand Warrants $ 26.24 October 28, 2024 200,000 — — 200,000 Total 383,505 — — 383,505 |
Schedule of investments in the VIE | March 31, 2020 Partnership investments $ 14,751 Due from related party 14 Maximum exposure to loss $ 14,765 |
Restructuring Charge (Tables)
Restructuring Charge (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring Charge [Abstract] | |
Schedule of changes in accrued restructuring charge | Three Months Ended March 31, 2020 2019 Balance, beginning of period $ 1,600 3,855 Restructuring charge — 147 Cash paid (316 ) (636 ) Non-cash items — 18 Balance, end of period $ 1,284 $ 3,384 |
Schedule of restructuring activities by reportable segment | Three Months Ended March 31, 2019 Principal Investments - United Online Capital Markets and Corporate Total Restructuring charge: Employee termination costs $ — $ 176 $ — $ 176 Facility closure and consolidation charge (recovery) (29 ) — — (29 ) Total restructuring charge $ (29 ) $ 176 $ — $ 147 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation for acquisition | The fair value of the assets acquired, including transaction costs, have been reflected in the accompanying financial statements as follows: Consideration paid by B. Riley: Cash acquisition consideration $ 116,500 Transaction costs 570 Total cash consideration 117,070 Warrant consideration 990 Total consideration $ 118,060 Tangible assets acquired and assumed: Cash and cash equivalents $ 2,160 Accounts receivable 1,751 Deferred revenue (1,332 ) Tradename 136,176 Customer list 8,678 Non-controlling interest (29,373 ) Total $ 118,060 |
Securities Lending (Tables)
Securities Lending (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Securities Lending [Abstract] | |
Schedule of contractual gross and net securities borrowing and lending balances | Amounts not offset in the consolidated balance Gross amounts Net amounts sheets but eligible for offset in the included offsetting Gross amounts consolidated balance in the consolidated upon counterparty recognized sheets (1) balance sheets default (2) Net amounts As of March 31, 2020 Securities borrowed $ 674,163 $ — $ 674,163 $ 674,163 $ — Securities loaned $ 670,859 $ — $ 670,859 $ 670,859 $ — As of December 31, 2019 Securities borrowed $ 814,331 $ — $ 814,331 $ 814,331 $ — Securities loaned $ 810,495 $ — $ 810,495 $ 810,495 $ — (1) Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of (2) Includes the amount of cash collateral held/posted. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Schedule of components of accounts receivable, net | March 31, December 31, 2020 2019 Accounts receivable $ 34,500 $ 36,385 Investment banking fees, commissions and other receivables 9,607 8,043 Unbilled receivables 4,581 3,710 Total accounts receivable 48,688 48,138 Allowance for doubtful accounts (2,238 ) (1,514 ) Accounts receivable, net $ 46,450 $ 46,624 |
Schedule of allowance for doubtful accounts | Three Months Ended March 31, 2020 2019 Balance, beginning of period $ 1,514 696 Add: Additions to reserve 1,141 233 Less: Write-offs (417 ) (163 ) Less: Recovery — — Balance, end of period $ 2,238 $ 766 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | As of March 31, 2020 As of December 31, 2019 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 2 to 16 Years $ 99,008 $ 30,528 $ 68,480 $ 99,008 $ 27,269 $ 71,739 Domain names 7 Years 230 123 107 233 117 116 Advertising relationships 8 Years 100 47 53 100 44 56 Internally developed software and other intangibles 0.5 to 5 Years 11,765 5,456 6,309 11,765 4,843 6,922 Trademarks 7 to 10 Years 4,600 1,465 3,135 4,600 1,324 3,276 Total 115,703 37,619 78,084 115,706 33,597 82,109 Non-amortizable assets: Tradenames 134,416 — 134,416 138,416 — 138,416 Total intangible assets $ 250,119 $ 37,619 $ 212,500 $ 254,122 $ 33,597 $ 220,525 |
Senior Notes Payable (Tables)
Senior Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Notes Payable [Abstract] | |
Schedule of senior notes payable | March 31, December 31, 2020 2019 7.50% Senior notes due May 31, 2027 $ 125,536 $ 117,954 7.25% Senior notes due December 31, 2027 122,545 120,126 7.375% Senior notes due May 31, 2023 127,358 122,140 6.875% Senior notes due September 30, 2023 113,109 105,952 6.75% Senior notes due May 31, 2024 110,476 106,589 6.50% Senior notes due September 30, 2026 134,657 124,226 6.375% Senior notes due February 28, 2025 130,942 — 864,623 696,987 Less: Unamortized debt issuance costs (11,100 ) (8,875 ) $ 853,523 $ 688,112 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues from contracts with customers | Three Months Ended March 31, 2020 Reportable Segment Principal Investments - Capital Auction and Valuation and United Markets Liquidation Appraisal magicJack Brands Total Corporate finance, consulting and investment banking fees $ 67,382 $ — $ — $ — $ — $ 67,382 Wealth and asset management fees 20,320 — — — — 20,320 Commissions, fees and reimbursed expenses 14,470 16,178 8,788 — — 39,436 Subscription services — — — 18,833 — 18,833 Service contract revenues — 4,483 — — — 4,483 Advertising, licensing and other — — — 3,889 3,801 7,690 Total revenues from contracts with customers 102,172 20,661 8,788 22,722 3,801 158,144 Interest income - Loans and securities lending 21,851 — — — — 21,851 Trading losses on investments (164,516 ) — — — — (164,516 ) Fair value adjustment on loans (17,926 ) — — — — (17,926 ) Other 2,241 — — — — 2,241 Total revenues $ (56,178 ) $ 20,661 $ 8,788 $ 22,722 $ 3,801 $ (206 ) Three Months Ended March 31, 2019 Reportable Segment Principal Investments - Capital Auction and Valuation and United Markets Liquidation Appraisal magicJack Brands Total Corporate finance, consulting and investment banking fees $ 17,836 $ — $ — $ — $ — $ 17,836 Wealth and asset management fees 17,535 — — — — 17,535 Commissions, fees and reimbursed expenses 10,897 7,633 8,583 — — 27,113 Subscription services — — — 22,398 — 22,398 Service contract revenues — 13,076 — — — 13,076 Advertising, licensing and other — — — 5,137 — 5,137 Total revenues from contracts with customers 46,268 20,709 8,583 27,535 — 103,095 Interest income - Loans and securities lending 11,420 — — — — 11,420 Trading gains on investments 25,916 — — — — 25,916 Fair value adjustment on loans (49 ) — — — — (49 ) Other 1,746 — — — — 1,746 Total revenues $ 85,301 $ 20,709 $ 8,583 $ 27,535 $ — $ 142,128 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Three Months Ended March 31, 2020 2019 Net (loss) income attributable to B. Riley Financial, Inc. $ (98,665 ) $ 8,023 Preferred stock dividends (1,055 ) — Net (loss) income applicable to common shareholders $ (99,720 ) $ 8,023 Weighted average common shares outstanding: Basic 26,028,613 26,217,215 Effect of dilutive potential common shares: Restricted stock units and warrants — 352,938 Contingently issuable shares — 117,378 Diluted 26,028,613 26,687,531 Basic income per common share $ (3.83 ) $ 0.31 Diluted income per common share $ (3.83 ) $ 0.30 |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Amended and Restated 2009 Stock Incentive Plan [Member] | |
Schedule of equity incentive award activity | Weighted Average Shares Fair Value Nonvested at January 1, 2020 2,263,988 $ 12.35 Granted 5,575 24.54 Vested (16,157 ) 19.30 Nonvested at March 31, 2020 2,253,406 $ 12.33 |
Amended and Restated FBR & Co. 2006 Long-Term Stock Incentive Plan [Member] | |
Schedule of equity incentive award activity | Weighted Average Shares Fair Value Nonvested at January 1, 2020 485,033 $ 18.33 Vested (41,963 ) 15.66 Forfeited (5,306 ) 19.18 Nonvested at March 31, 2020 437,764 $ 18.57 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of reportable segments | Three Months Ended March 31, 2020 2019 Capital Markets segment: Revenues - Services and fees $ 104,413 48,014 Trading (losses) income and fair value adjustments on loans (182,442 ) 25,867 Interest income - Loans and securities lending 21,851 11,420 Total revenues (56,178 ) 85,301 Selling, general and administrative expenses (54,711 ) (63,389 ) Restructuring recovery — 29 Interest expense - Securities lending and loan participations sold (8,473 ) (6,804 ) Depreciation and amortization (1,105 ) (1,276 ) Segment (loss) income (120,467 ) 13,861 Auction and Liquidation segment: Revenues - Services and fees 20,661 20,709 Direct cost of services (14,816 ) (6,274 ) Cost of goods sold (29 ) (14 ) Selling, general and administrative expenses (1,526 ) (2,915 ) Depreciation and amortization (1 ) (2 ) Segment income 4,289 11,504 Valuation and Appraisal segment: Revenues - Services and fees 8,788 8,583 Selling, general and administrative expenses (6,867 ) (7,187 ) Depreciation and amortization (41 ) (33 ) Segment income 1,880 1,363 Principal Investments - United Online and magicJack segment: Revenues - Services and fees 21,718 26,590 Revenues - Sale of goods 1,004 945 Total revenues 22,722 27,535 Direct cost of services (5,136 ) (7,842 ) Cost of goods sold (740 ) (1,105 ) Selling, general and administrative expenses (5,463 ) (7,020 ) Depreciation and amortization (2,879 ) (3,463 ) Restructuring charge — (176 ) Segment income 8,504 7,929 Brands segment: Revenues - Services and fees 3,801 — Selling, general and administrative expenses (904 ) — Depreciation and amortization (714 ) — Impairment of tradenames (4,000 ) — Segment loss (1,817 ) — Consolidated operating (loss) income from reportable segments (107,611 ) 34,657 Corporate and other expenses (13,533 ) (9,679 ) Interest income 246 637 Loss on equity investments (236 ) (3,762 ) Interest expense (15,654 ) (10,770 ) (Loss) income before income taxes (136,788 ) 11,083 Benefit (provision) for income taxes 37,539 (3,104 ) Net (loss) income (99,249 ) 7,979 Net loss attributable to noncontrolling interests (584 ) (44 ) Net (loss) income attributable to B. Riley Financial, Inc. (98,665 ) 8,023 Preferred stock dividends 1,055 — Net (loss) income available to common shareholders $ (99,720 ) $ 8,023 |
Schedule of revenues by geographical area | Three Months Ended March 31, 2020 2019 Revenues: Revenues - Services and fees: North America $ 158,466 $ 103,820 Australia 664 15 Europe 251 61 Total Revenues - Services and fees $ 159,381 $ 103,896 Trading (losses) income and fair value adjustments on loans $ (182,442 ) $ 25,867 North America Revenues - Sale of goods North America $ 1,004 $ 945 Revenues - Interest income - Loans and securities lending: North America $ 21,851 $ 11,420 Total Revenues: North America $ (1,121 ) $ 142,052 Australia 664 15 Europe 251 61 Total Revenues $ (206 ) $ 142,128 |
Organization and Nature of Bu_2
Organization and Nature of Business Operations (Details) | 3 Months Ended |
Mar. 31, 2020Number | |
Organization and Nature of Business Operations (Textual) | |
Number of operating segment | 5 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Securities and other investments owned: | ||
Securities and other investments owned | $ 287,786 | $ 408,213 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 14,298 | 41,820 |
Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 18,429 | 19,020 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 13,361 | 33,436 |
Other Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 5,243 | 8,414 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 813 | 3,024 |
Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 29,247 | 27,617 |
Equity Securities [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 234,867 | 353,162 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | $ 124 | $ 5,360 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Securities and other investments owned: | |||
Total securities and other investments owned | $ 287,786 | $ 408,213 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 14,298 | 41,820 | |
Corporate Bonds [Member] | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 13,361 | 33,436 | |
Other Fixed Income Securities [Member] | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 813 | 3,024 | |
Equity Securities [Member] | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 124 | 5,360 | |
Equity Securities [Member] | Significant unobservable inputs (Level 3) [Member] | |||
Securities and other investments owned: | |||
Total assets measured at fair value | 95,116 | ||
Fair Value, Measurements, Recurring [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 287,786 | 408,213 | |
Investment funds valued at net asset value | 29,247 | [1] | 27,617 |
Total assets measured at fair value | 614,085 | 451,551 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 14,298 | 41,820 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,508 | 4,616 | |
Total liabilities measured at fair value | 18,806 | 46,436 | |
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 139,751 | 243,911 | |
Total assets measured at fair value | 139,751 | ||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 124 | 5,360 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | |||
Total liabilities measured at fair value | 124 | 5,360 | |
Fair Value, Measurements, Recurring [Member] | Other observable inputs (Level 2) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 23,672 | 27,434 | |
Total assets measured at fair value | 23,672 | 27,434 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 14,174 | 36,460 | |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | |||
Total liabilities measured at fair value | 14,174 | 36,460 | |
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 95,116 | 109,251 | |
Total assets measured at fair value | 421,415 | 152,589 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | |||
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,508 | 4,616 | |
Total liabilities measured at fair value | 4,508 | 4,616 | |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 18,429 | 19,020 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 13,361 | 33,436 | |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | |||
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Other observable inputs (Level 2) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 18,429 | 19,020 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 13,361 | 33,436 | |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Significant unobservable inputs (Level 3) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | |||
Fair Value, Measurements, Recurring [Member] | Other Fixed Income Securities [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 5,243 | 8,414 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 813 | 3,024 | |
Fair Value, Measurements, Recurring [Member] | Other Fixed Income Securities [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | |||
Fair Value, Measurements, Recurring [Member] | Other Fixed Income Securities [Member] | Other observable inputs (Level 2) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 5,243 | 8,414 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 813 | 3,024 | |
Fair Value, Measurements, Recurring [Member] | Other Fixed Income Securities [Member] | Significant unobservable inputs (Level 3) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | |||
Fair Value, Measurements, Recurring [Member] | Loans Receivable At Fair Value [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 326,299 | 43,338 | |
Fair Value, Measurements, Recurring [Member] | Loans Receivable At Fair Value [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | |||
Fair Value, Measurements, Recurring [Member] | Loans Receivable At Fair Value [Member] | Other observable inputs (Level 2) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | |||
Fair Value, Measurements, Recurring [Member] | Loans Receivable At Fair Value [Member] | Significant unobservable inputs (Level 3) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 326,299 | 43,338 | |
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 234,867 | 353,162 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 124 | 5,360 | |
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 139,751 | 243,911 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | 124 | 5,360 | |
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | Other observable inputs (Level 2) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | |||
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | |||
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | Significant unobservable inputs (Level 3) [Member] | |||
Securities and other investments owned: | |||
Total securities and other investments owned | 95,116 | 109,251 | |
Securities sold not yet purchased: | |||
Total securities sold not yet purchased | |||
[1] | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy in accordance with ASC "Topic 820 Fair Value Measurements." The fair value amounts presented in the tables above for investment funds valued at net asset value are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Fair value liabilities | $ 421,415 |
Equity Securities [Member] | |
Fair value assets | $ 95,116 |
Equity Securities [Member] | Market Approach [Member] | Multiple of Revenue [Member] | |
Weighted Average | 3.7x |
Equity Securities [Member] | Market Approach [Member] | Multiple of Revenue [Member] | Minimum [Member] | |
Range | 2.2x |
Equity Securities [Member] | Market Approach [Member] | Multiple of Revenue [Member] | Maximum [Member] | |
Range | 4.9x |
Equity Securities [Member] | Market Approach [Member] | Multiple of EBITDA [Member] | |
Weighted Average | 6.6x |
Equity Securities [Member] | Market Approach [Member] | Multiple of EBITDA [Member] | Minimum [Member] | |
Range | 6.0x |
Equity Securities [Member] | Market Approach [Member] | Multiple of EBITDA [Member] | Maximum [Member] | |
Range | 10.0x |
Equity Securities [Member] | Market Approach [Member] | Multiple Of EV-10 [Member] | |
Range | 0.28x |
Weighted Average | 0.28x |
Equity Securities [Member] | Market Approach [Member] | Market Price Of Related Security [Member] | |
Weighted Average | 0.68 |
Equity Securities [Member] | Market Approach [Member] | Market Price Of Related Security [Member] | Minimum [Member] | |
Range | 0.63 |
Equity Securities [Member] | Market Approach [Member] | Market Price Of Related Security [Member] | Maximum [Member] | |
Range | 1.02 |
Equity Securities [Member] | Discounted Cash Flow [Member] | Market Interest Rate [Member] | |
Range | 33.1% |
Weighted Average | 33.1% |
Equity Securities [Member] | Option Pricing Model [Member] | Annualized Volatility [Member] | |
Range | 100.0% |
Weighted Average | 100% |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | |
Fair value liabilities | $ 4,508 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | Market Approach [Member] | Operating Income Multiple [Member] | |
Range | 6.0x |
Weighted Average | 6.0x |
Loans Receivables At Fair Value [Member] | |
Fair value liabilities | $ 326,299 |
Loans Receivables At Fair Value [Member] | Discounted Cash Flow [Member] | Market Interest Rate [Member] | |
Weighted Average | 17.0% |
Loans Receivables At Fair Value [Member] | Discounted Cash Flow [Member] | Market Interest Rate [Member] | Minimum [Member] | |
Range | 9.9% |
Loans Receivables At Fair Value [Member] | Discounted Cash Flow [Member] | Market Interest Rate [Member] | Maximum [Member] | |
Range | 30.4% |
Loans Receivable At Fair Value [Member] | Market Approach [Member] | Market Price Of Related Security [Member] | |
Weighted Average | 0.65 |
Loans Receivable At Fair Value [Member] | Market Approach [Member] | Market Price Of Related Security [Member] | Minimum [Member] | |
Range | 0.63 |
Loans Receivable At Fair Value [Member] | Market Approach [Member] | Market Price Of Related Security [Member] | Maximum [Member] | |
Range | 0.77 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Loans receivable at fair value [Member] | ||
Changes in Level 3 fair value hierarchy | ||
Balance at Beginning of Period | $ 43,338 | $ 33,731 |
Fair Value Adjustments | (17,926) | 35 |
Relating to Undistributed Earnings | 1,289 | 475 |
Purchases, Sales and Settlements | 73,750 | (200) |
Transfer in and/or out of Level 3 | 225,848 | |
Balance at End of Period | 326,299 | 34,041 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | ||
Changes in Level 3 fair value hierarchy | ||
Balance at Beginning of Period | 4,616 | 4,633 |
Fair Value Adjustments | ||
Relating to Undistributed Earnings | (108) | (104) |
Purchases, Sales and Settlements | ||
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 4,508 | 4,529 |
Corporate bonds [Member] | ||
Changes in Level 3 fair value hierarchy | ||
Balance at Beginning of Period | ||
Fair Value Adjustments | ||
Relating to Undistributed Earnings | ||
Purchases, Sales and Settlements | ||
Transfer in and/or out of Level 3 | 1,330 | |
Balance at End of Period | 1,330 | |
Equity Securities [Member] | ||
Changes in Level 3 fair value hierarchy | ||
Balance at Beginning of Period | 109,251 | 24,577 |
Fair Value Adjustments | (15,135) | (18) |
Relating to Undistributed Earnings | ||
Purchases, Sales and Settlements | 1,000 | (45) |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | $ 95,116 | $ 24,514 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Issued and Outstanding Warrants, beginning balance | 383,505 | 821,816 |
Warrants Issued | 200,000 | |
Warrants Repurchased | (638,311) | |
Issued and Outstanding Warrants, ending balance | 383,505 | 383,505 |
Wunderlich Warrants [Member] | ||
Exercise Price | $ 17.50 | $ 17.50 |
Expiration Date | Jul. 3, 2022 | Jul. 3, 2022 |
Issued and Outstanding Warrants, beginning balance | 183,505 | 821,816 |
Warrants Issued | ||
Warrants Repurchased | (638,311) | |
Issued and Outstanding Warrants, ending balance | 183,505 | 183,505 |
BR Brands Warrants [Member] | ||
Exercise Price | $ 26.24 | $ 26.24 |
Expiration Date | Oct. 28, 2024 | Oct. 28, 2024 |
Issued and Outstanding Warrants, beginning balance | 200,000 | |
Warrants Issued | 200,000 | |
Warrants Repurchased | ||
Issued and Outstanding Warrants, ending balance | 200,000 | 200,000 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details 5) - Variable Interest Entity, Primary Beneficiary [Member] $ in Thousands | Mar. 31, 2020USD ($) |
Variable Interest Entity [Line Items] | |
Partnership investments | $ 14,751 |
Due from related party | 14 |
Maximum exposure to loss | $ 14,765 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Advertising costs | $ 841 | $ 362 | ||
Share based compensation expense | 5,322 | 2,614 | ||
Net of unamortized costs, origination fees, premiums and discounts | 333,466 | $ 32,578 | ||
Cash collateral | 471 | 471 | ||
Transaction (losses) gains | 949 | (186) | ||
Depreciation and amortization | 932 | 1,536 | ||
Loan accrued interest | 30 | |||
Interest expense | 15,654 | 10,770 | ||
Interest expense from loan participations | 552 | |||
Loan participations sold | 12,478 | |||
Foreign Exchange Contract [Member] | ||||
Net loss from forward exchange contracts | 91 | |||
Fixed Income Securities [Member] | ||||
Interest expense | 7,921 | 6,804 | ||
2018 Employee Stock Purchase Plan [Member] | ||||
Description of stock based payment award | Eligible employees to purchase common stock through payroll deductions at a price that is 85% of the market value of the common stock on the last day of the offering period. | |||
Share based compensation expense | $ 165 | $ 121 | ||
Number of shares reserved for future issuance | 592 | |||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Total assets measured in Level 3 | $ 421,415 | $ 152,589 | ||
Percentage of total assets measured in Level 3 of the hierarchy level | 19.80% | 6.60% | ||
GA Retail Investments, L.P. [Member] | ||||
Ownership, percentage | 50.00% | |||
Great American Global Partners, LLC [Member] | ||||
Ownership, percentage | 50.00% | |||
Bebe Stores Inc. ("bebe") [Member] | ||||
Ownership, percentage | 30.50% |
Summary of Significant Accou_11
Summary of Significant Accounting Policies (Details Textual 1) - USD ($) $ / shares in Units, $ in Thousands | Nov. 14, 2018 | Oct. 28, 2019 | Jul. 03, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | May 16, 2019 |
Warrants expire date | Jul. 3, 2022 | ||||||
Loans receivable carrying value | $ 326,299 | $ 43,338 | |||||
Operating lease liabilities | 59,430 | 61,511 | |||||
Interest income | 2,090 | ||||||
Expenses | $ 4,421 | ||||||
Discounted cash flow model rate | 14.00% | ||||||
Conversion of loans receivable | $ 4,633 | ||||||
Senior notes payable | 853,523 | ||||||
Notes receivable unrealized losses | 17,926 | ||||||
Fair value adjustments on loans | $ 25,867 | ||||||
Loans Receivable [Member] | |||||||
Loans receivable carrying value | $ 225,848 | ||||||
Fair Value, Measurements, Recurring [Member] | |||||||
Loans receivable carrying value | 339,630 | $ 22,689 | |||||
Conversion of loans receivable | 43,338 | ||||||
Senior notes payable | $ 666,428 | ||||||
Warrant [Member] | |||||||
Exercise price (in dollars per share) | $ 17.50 | $ 4.35 | |||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 638,311 | ||||||
Warrants and Rights Outstanding | $ 2,777 | ||||||
Class of Warrant or Right, Outstanding | 183,505 | ||||||
Wunderlich Warrants [Member] | |||||||
Issuance of warrants to purchase | $ 821,816 | ||||||
BR Brands Warrants [Member] | |||||||
Issuance of warrants to purchase | $ 200,000 | ||||||
Exercise price (in dollars per share) | $ 26.24 | ||||||
National Holdings Corporation [Member] | |||||||
Payments to acquire businesses | $ 22,900 | ||||||
Number of shares acquire (in shares) | 6,159,550 | ||||||
Percentage of voting interests acquired | 46.80% | 24.00% | |||||
Number of share acquire (in dollars per share) | $ 3.25 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Oct. 11, 2019USD ($) |
Consideration paid by B. Riley: | |
Total consideration | $ 116,500 |
BR Brand Acquisition LLC [Member] | |
Consideration paid by B. Riley: | |
Cash acquisition consideration | 116,500 |
Transaction costs | 570 |
Total cash consideration | 117,070 |
Warrant consideration | 990 |
Total consideration | $ 118,060 |
Acquisitions (Details 1)
Acquisitions (Details 1) $ in Thousands | Oct. 11, 2019USD ($) |
Tangible assets acquired and assumed: | |
Total consideration | $ 116,500 |
BR Brand Acquisition LLC [Member] | |
Tangible assets acquired and assumed: | |
Cash and cash equivalents | 2,160 |
Accounts receivable | 1,751 |
Deferred revenue | (1,332) |
Tradename | 136,176 |
Customer list | 8,678 |
Non-controlling interest | (29,373) |
Total consideration | $ 118,060 |
Acquisitions (Details Textual)
Acquisitions (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | Oct. 11, 2019 | |
Total consideration | $ 116,500 | ||
Goodwill | $ 223,697 | $ 223,697 | |
Warrants issued | 200,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
BR Brands Warrants [Member] | |||
Warrants issued | 200,000 | ||
BR Brand Acquisition LLC [Member] | |||
Total consideration | 118,060 | ||
Warrant consideration | $ 990 | ||
Common stock, par value | $ 200,000 | ||
Exercise price (in dollars per share) | $ 26.24 | ||
Non-controlling interest | $ 29,373 | ||
Transaction costs | $ 570 |
Restructuring Charge (Details)
Restructuring Charge (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Summary of the changes in accrued restructuring charge | ||
Balance, beginning of period | $ 1,600 | $ 3,855 |
Restructuring charge | 147 | |
Cash paid | (316) | (636) |
Non-cash items | 18 | |
Balance, end of period | $ 1,284 | $ 3,384 |
Restructuring Charge (Details 1
Restructuring Charge (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring charge : | ||
Employee termination costs | $ 176 | |
Facility closure and consolidation charge (recovery) | (29) | |
Total restructuring charge | 147 | |
Capital Markets [Member] | ||
Restructuring charge : | ||
Employee termination costs | ||
Facility closure and consolidation charge (recovery) | (29) | |
Total restructuring charge | (29) | |
Principal Investments - United Online and magicJack [Member] | ||
Restructuring charge : | ||
Employee termination costs | 176 | |
Facility closure and consolidation charge (recovery) | ||
Total restructuring charge | 176 | |
Corporate [Member] | ||
Restructuring charge : | ||
Employee termination costs | ||
Facility closure and consolidation charge (recovery) | ||
Total restructuring charge |
Restructuring Charge (Details T
Restructuring Charge (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Charge (Textual) | ||
Restructuring charges | $ 147 | |
Principal Investments - United Online And magicJack [Member] | ||
Restructuring Charge (Textual) | ||
Restructuring charges | 176 | |
Severance costs | $ 147 |
Securities Lending (Details)
Securities Lending (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Securities borrowed | |||
Gross amounts recognized | $ 674,163 | $ 814,331 | |
Gross amounts offset in the consolidated balance sheets | [1] | ||
Net amounts included in the consolidated balance sheets | 674,163 | 814,331 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | [2] | 674,163 | 814,331 |
Net amounts | |||
Securities loaned | |||
Gross amounts recognized | 670,859 | 810,495 | |
Gross amounts offset in the consolidated balance sheets | [1] | ||
Net amounts included in the consolidated balance sheets | 670,859 | 810,495 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | [2] | 670,859 | 810,495 |
Net amounts | |||
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | ||
[2] | Includes the amount of cash collateral held/posted. |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Accounts receivable | $ 34,500 | $ 36,385 |
Investment banking fees, commissions and other receivables | 9,607 | 8,043 |
Unbilled receivables | 4,581 | 3,710 |
Total accounts receivable | 48,688 | 48,138 |
Allowance for doubtful accounts | (2,238) | (1,514) |
Accounts receivable, net | $ 46,450 | $ 46,624 |
Accounts Receivable (Details 1)
Accounts Receivable (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Receivables [Abstract] | ||
Balance, beginning of period | $ 1,514 | $ 696 |
Add: Additions to reserve | 724 | 233 |
Less: Write-offs | (417) | (163) |
Less: Recovery | ||
Balance, end of period | $ 2,238 | $ 766 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Amortizable assets: | ||
Gross Carrying Value | $ 115,703 | $ 115,706 |
Accumulated Amortization | 37,619 | 33,597 |
Intangibles Net | 78,084 | 82,109 |
Non-amortizable assets: | ||
Gross Carrying Value | 250,119 | 254,122 |
Accumulated Amortization | 37,619 | 33,597 |
Intangibles Net | 212,500 | 220,525 |
Customer relationships [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | 99,008 | 99,008 |
Accumulated Amortization | 30,528 | 27,269 |
Intangibles Net | $ 68,480 | 71,739 |
Customer relationships [Member] | Minimum [Member] | ||
Amortizable assets: | ||
Useful Life | 2 years | |
Customer relationships [Member] | Maximum [Member] | ||
Amortizable assets: | ||
Useful Life | 16 years | |
Domain names [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 230 | 233 |
Accumulated Amortization | 123 | 117 |
Intangibles Net | $ 107 | 116 |
Useful Life | 7 years | |
Advertising relationships [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 100 | 100 |
Accumulated Amortization | 47 | 44 |
Intangibles Net | $ 53 | 56 |
Useful Life | 8 years | |
Internally developed software and other intangibles [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 11,765 | 11,765 |
Accumulated Amortization | 5,456 | 4,843 |
Intangibles Net | $ 6,309 | 6,922 |
Internally developed software and other intangibles [Member] | Minimum [Member] | ||
Amortizable assets: | ||
Useful Life | 6 months | |
Internally developed software and other intangibles [Member] | Maximum [Member] | ||
Amortizable assets: | ||
Useful Life | 5 years | |
Trademarks [Member] | ||
Amortizable assets: | ||
Gross Carrying Value | $ 4,600 | 4,600 |
Accumulated Amortization | 1,465 | 1,324 |
Intangibles Net | $ 3,135 | 3,276 |
Trademarks [Member] | Minimum [Member] | ||
Amortizable assets: | ||
Useful Life | 7 years | |
Trademarks [Member] | Maximum [Member] | ||
Amortizable assets: | ||
Useful Life | 10 years | |
Tradenames [Member] | ||
Non-amortizable assets: | ||
Gross Carrying Value | $ 134,416 | 138,416 |
Accumulated Amortization | ||
Intangibles Net | $ 134,416 | $ 138,416 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Goodwill and Other Intangible Assets (Textual) | |||
Goodwill | $ 223,697 | $ 223,697 | |
Amortization expense | 4,024 | $ 3,377 | |
Estimated future amortization expense | |||
Estimated future amortization expense 2020 | 11,689 | ||
Estimated future amortization expense 2021 | 15,218 | ||
Estimated future amortization expense 2022 | 14,564 | ||
Estimated future amortization expense 2023 | 12,573 | ||
Estimated future amortization expense 2024 | 8,486 | ||
Estimated future amortization expense after 2024 | $ 15,553 | ||
Goodwill, change in goodwill allocation, description | The Company determined that the COVID-19 outbreak was a triggering event for testing the indefinite-lived tradenames in the Brands segment and made a determination that the indefinite-lived tradenames in the Brands segment were impaired. In the three months ended March 31, 2020, the Company recognized an impairment charge of $4,000 for the indefinite-lived tradenames in the Brands segment. We will continue to monitor the impacts of the COVID-19 outbreak in future quarters. |
Notes Payable (Details)
Notes Payable (Details) - USD ($) $ in Thousands | Apr. 21, 2017 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Mar. 19, 2015 |
Interest expense | $ 14,392 | $ 8,875 | |||
Clearing Organisation [Member] | |||||
Description of interest rate | The notes payable accrue interest at the prime rate plus 2.0% (6.75% at March 31, 2020) payable annually, maturing January 31, 2022. | ||||
Interest expense | $ 15 | 23 | |||
Credit facility | 714 | $ 1,071 | |||
Second Amended and Restated Credit Agreement [Member] | Asset Based Credit Facility [Member] | Wells Fargo Bank, National Association [Member] | |||||
Credit facility expiration date | Apr. 21, 2022 | ||||
Description of interest rate | The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. | ||||
Description of success fees | The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. | ||||
Interest expense | 277 | $ 481 | |||
Description of collateral | The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. | ||||
Payment for closing fee | $ 500 | ||||
Credit facility | $ 0 | $ 37,096 | |||
Second Amended and Restated Credit Agreement [Member] | Asset Based Credit Facility [Member] | Wells Fargo Bank, National Association [Member] | Maximum [Member] | |||||
Maximum borrowing capacity credit facility | 200 | ||||
Second Amended and Restated Credit Agreement [Member] | Asset Based Credit Facility [Member] | Wells Fargo Bank, National Association [Member] | Minimum [Member] | |||||
Maximum borrowing capacity credit facility | $ 100 | ||||
UK Credit Agreement [Member] | |||||
Credit facility | $ 200 | ||||
UK Credit Agreement [Member] | Line of Credit [Member] | Wells Fargo Bank, National Association [Member] | |||||
Maximum borrowing capacity credit facility | $ 500 |
Term Loan (Details)
Term Loan (Details) - USD ($) $ in Thousands | Dec. 19, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Feb. 01, 2019 |
Term Loan (Textual) | |||||
Interest expense | $ 14,392 | $ 8,875 | |||
Unamortized debt issuance costs | 11,100 | $ 8,875 | |||
BRPI Acquisition Co LLC [Member] | BRPAC Credit Agreement [Member] | Term Loan [Member] | |||||
Term Loan (Textual) | |||||
Principal amount | $ 61,932 | 66,666 | |||
Interest rate terms, description | (a) the LIBOR rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two and one-half percent (2.5%) to three percent (3.0%) per annum, based upon the Borrowers' ratio of consolidated funded indebtedness to adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the preceding four fiscal quarters or other applicable period. | ||||
Interest rate | 3.74% | ||||
Date of first required periodic payment | Feb. 1, 2019 | ||||
Frequency of periodic payment | Quarterly installments | ||||
Interest expense | $ 829 | 1,278 | |||
Amortization of deferred debt issuance costs | 76 | $ 88 | |||
Unamortized debt issuance costs | $ 600 | ||||
BRPI Acquisition Co LLC [Member] | Banc of California, N.A. [Member] | BRPAC Credit Agreement [Member] | Term Loan [Member] | |||||
Term Loan (Textual) | |||||
Description of collateral | The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties, (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security and other related agreements. | ||||
Principal amount | $ 80,000 | ||||
Debt maturity date | Dec. 19, 2023 | ||||
Additional borrowed amount (the "Option Loan") | $ 10,000 | ||||
Quarterly installments for term loan | 4,244 | ||||
BRPI Acquisition Co LLC [Member] | City National Bank [Member] | BRPAC Credit Agreement [Member] | |||||
Term Loan (Textual) | |||||
Additional borrowed amount (the "Option Loan") | $ 10,000 | ||||
BRPI Acquisition Co LLC [Member] | City National Bank [Member] | BRPAC Credit Agreement [Member] | Minimum [Member] | |||||
Term Loan (Textual) | |||||
Principal amount | 80,000 | ||||
Unamortized debt issuance costs | 524 | ||||
BRPI Acquisition Co LLC [Member] | City National Bank [Member] | BRPAC Credit Agreement [Member] | Maximum [Member] | |||||
Term Loan (Textual) | |||||
Principal amount | 90,000 | ||||
BRPI Acquisition Co LLC [Member] | City National Bank [Member] | BRPAC Credit Agreement [Member] | Term Loan [Member] | |||||
Term Loan (Textual) | |||||
Additional borrowed amount (the "Option Loan") | $ 10,000 | ||||
BRPI Acquisition Co LLC [Member] | City National Bank [Member] | BRPAC Credit Agreement [Member] | Term Loan [Member] | December 31, 2023 [Member] | |||||
Term Loan (Textual) | |||||
Quarterly installments for term loan | 2,122 | ||||
BRPI Acquisition Co LLC [Member] | City National Bank [Member] | BRPAC Credit Agreement [Member] | Term Loan [Member] | December 23, 2023 [Member] | |||||
Term Loan (Textual) | |||||
Additional borrowed amount (the "Option Loan") | 10,000 | ||||
Quarterly installments for term loan | 265 | ||||
BRPI Acquisition Co LLC [Member] | City National Bank [Member] | BRPAC Credit Agreement [Member] | Term Loan [Member] | December 23, 2022 [Member] | |||||
Term Loan (Textual) | |||||
Quarterly installments for term loan | $ 566 |
Senior Notes Payable (Details)
Senior Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Senior notes payable | $ 864,623 | $ 696,987 |
Less: Unamortized debt issuance costs | (11,100) | (8,875) |
Senior notes payable, net | 853,523 | 688,112 |
7.50% Senior Notes Due May 31, 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 125,536 | 117,954 |
7.25% Senior Notes Due December 31, 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 122,545 | 120,126 |
7.375% Senior notes due May 31, 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 127,358 | 122,140 |
6.875% Senior Notes Due September 30, 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 113,109 | 105,952 |
6.75% Senior notes due May 31, 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 110,476 | 106,589 |
6.50% Senior notes due September 30, 2026 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | 134,657 | 124,226 |
6.375% Senior notes due February 28, 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Senior notes payable | $ 130,942 |
Senior Notes Payable (Details T
Senior Notes Payable (Details Textual) - USD ($) $ in Thousands | Feb. 12, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Feb. 14, 2020 |
Notes Payable (Textual) | |||||
Senior notes payable | $ 864,623 | $ 696,987 | |||
Interest expense | $ 14,392 | $ 8,875 | |||
Unamortized debt issuance costs | 8,875 | ||||
Outstanding notes payable | $ 688,112 | ||||
Weighted average interest rate | 6.94% | 7.05% | |||
Net of expenses gain | $ 1,829 | ||||
Repurchased face value | 3,443 | ||||
Original issue discount | 1,556 | ||||
Accrued interest paid | 30 | ||||
Senior Notes [Member] | Market Issuance Sales Agreements [Member] | B. Riley FBR, Inc. [Member] | |||||
Notes Payable (Textual) | |||||
Senior notes payable | $ 38,828 | ||||
Senior Notes [Member] | Market Issuance Sales Agreements [Member] | B. Riley FBR, Inc. [Member] | Minimum [Member] | |||||
Notes Payable (Textual) | |||||
Maturity date | Oct. 31, 2021 | ||||
Senior Notes [Member] | Market Issuance Sales Agreements [Member] | B. Riley FBR, Inc. [Member] | Maximum [Member] | |||||
Notes Payable (Textual) | |||||
Maturity date | Dec. 31, 2027 | ||||
Senior Notes And Common Stock [Member] | December 2019 Sales Agreement [Member] | B. Riley FBR, Inc. [Member] | |||||
Notes Payable (Textual) | |||||
Outstanding notes payable | $ 148,415 | ||||
6.375% 2025 Notes [Member] | |||||
Notes Payable (Textual) | |||||
Senior notes payable | $ 132,250 | ||||
Interest rate | 6.375% | ||||
Net proceeds | $ 129,233 | ||||
Underwriting commissions, fees and other issuance costs | $ 3,017 | ||||
Maturity date | Feb. 28, 2025 | ||||
February 2020 Sales Agreement Prospectus [Member] | February 2020 Sales Agreement [Member] | |||||
Notes Payable (Textual) | |||||
Senior notes payable | $ 150,000 | ||||
7.50% Senior Notes [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 7.50% | ||||
Maturity date | May 31, 2027 | ||||
7.25% Senior Notes [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 7.25% | ||||
Maturity date | Dec. 31, 2027 | ||||
7.375% Senior Notes [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 7.375% | ||||
Maturity date | May 31, 2023 | ||||
6.875% Senior Notes [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 6.875% | ||||
Maturity date | Sep. 30, 2023 | ||||
6.75% Senior Notes [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 6.75% | ||||
Maturity date | May 31, 2024 | ||||
6.50% Senior Notes [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 6.50% | ||||
Maturity date | Sep. 30, 2026 | ||||
6.375% Senior Notes [Member] | |||||
Notes Payable (Textual) | |||||
Interest rate | 6.375% | ||||
Maturity date | Feb. 28, 2025 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other sources of revenue: | ||
Total revenues | $ (206) | $ 142,128 |
Revenue [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 158,144 | 103,095 |
Other sources of revenue: | ||
Total revenues | (206) | 142,128 |
Capital Markets [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 102,172 | 46,268 |
Other sources of revenue: | ||
Total revenues | (56,178) | 85,301 |
Auction and Liquidation Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 20,661 | 20,709 |
Other sources of revenue: | ||
Total revenues | 20,661 | 20,709 |
Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 8,788 | 8,583 |
Other sources of revenue: | ||
Total revenues | 8,788 | 8,583 |
Principal Investments - United Online And MagicJack [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 22,722 | 27,535 |
Other sources of revenue: | ||
Total revenues | 22,722 | 27,535 |
Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 3,801 | |
Other sources of revenue: | ||
Total revenues | 3,801 | |
Fair value adjustment on loans [Member] | ||
Other sources of revenue: | ||
Total revenues | (17,926) | (49) |
Corporate finance, consulting and investment banking fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 67,382 | 17,836 |
Corporate finance, consulting and investment banking fees [Member] | Capital Markets [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 67,382 | 17,836 |
Corporate finance, consulting and investment banking fees [Member] | Auction and Liquidation Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Corporate finance, consulting and investment banking fees [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Corporate finance, consulting and investment banking fees [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Corporate finance, consulting and investment banking fees [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Other [Member] | ||
Other sources of revenue: | ||
Total revenues | 2,241 | 1,746 |
Other [Member] | Capital Markets [Member] | ||
Other sources of revenue: | ||
Total revenues | 2,241 | 1,746 |
Other [Member] | Auction and Liquidation Segment [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Other [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Other [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Other [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Trading gains on investments [Member] | ||
Other sources of revenue: | ||
Total revenues | (164,516) | 25,916 |
Trading gains on investments [Member] | Capital Markets [Member] | ||
Other sources of revenue: | ||
Total revenues | (164,516) | 25,916 |
Trading gains on investments [Member] | Auction and Liquidation Segment [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Trading gains on investments [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Trading gains on investments [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Trading gains on investments [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Wealth and asset management fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 20,320 | 17,535 |
Wealth and asset management fees [Member] | Capital Markets [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 20,320 | 17,535 |
Wealth and asset management fees [Member] | Auction and Liquidation Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Wealth and asset management fees [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Wealth and asset management fees [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Wealth and asset management fees [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Commissions, fees and reimbursed expenses [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 39,436 | 27,113 |
Commissions, fees and reimbursed expenses [Member] | Capital Markets [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 14,470 | 10,897 |
Commissions, fees and reimbursed expenses [Member] | Auction and Liquidation Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 16,178 | 7,633 |
Commissions, fees and reimbursed expenses [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 8,788 | 8,583 |
Commissions, fees and reimbursed expenses [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Commissions, fees and reimbursed expenses [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Subscription services [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 18,833 | 22,398 |
Subscription services [Member] | Capital Markets [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Subscription services [Member] | Auction and Liquidation Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Subscription services [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Subscription services [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 18,833 | 22,398 |
Subscription services [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Service contract revenues [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 4,483 | 13,076 |
Service contract revenues [Member] | Capital Markets [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Service contract revenues [Member] | Auction and Liquidation Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 4,483 | 13,076 |
Service contract revenues [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Service contract revenues [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Service contract revenues [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Advertising, licensing and other [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 7,690 | 5,137 |
Advertising, licensing and other [Member] | Capital Markets [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Advertising, licensing and other [Member] | Auction and Liquidation Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Advertising, licensing and other [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Advertising, licensing and other [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 3,889 | 5,137 |
Advertising, licensing and other [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 3,801 | |
Interest income - Loans and securities lending [Member] | ||
Other sources of revenue: | ||
Total revenues | 21,851 | 11,420 |
Interest income - Loans and securities lending [Member] | Capital Markets [Member] | ||
Other sources of revenue: | ||
Total revenues | 21,851 | 11,420 |
Interest income - Loans and securities lending [Member] | Auction and Liquidation Segment [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Interest income - Loans and securities lending [Member] | Valuation and Appraisal Reportable Segment [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Interest income - Loans and securities lending [Member] | Principal Investments - United Online And MagicJack [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Interest income - Loans and securities lending [Member] | Brands [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Capital Markets Segment [Member] | Fair value adjustment on loans [Member] | ||
Other sources of revenue: | ||
Total revenues | (17,926) | (49) |
Auction and Liquidation Segment [Member] | Fair value adjustment on loans [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Valuation and Appraisal Reportable Segment [Member] | Fair value adjustment on loans [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Principal Investments - United Online and MagicJack Segment [Member] | Fair value adjustment on loans [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Brands [Member] | Fair value adjustment on loans [Member] | ||
Other sources of revenue: | ||
Total revenues |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue From Contracts With Customers | |||
Accounts receivable, net | $ 46,450 | $ 46,624 | |
Deferred revenue | 73,709 | 67,121 | |
Recognized revenue from contract | 13,987 | $ 13,234 | |
Prepaid expenses and other assets | 460 | 450 | |
Capitalized costs | $ 72 | $ 601 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 53,932 | |
U.S. federal corporate tax rate | 27.40% | 28.00% |
Deferred tax assets valuation allowance | $ 61,945 | |
Federal Tax Authority [Member] | Maximum [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Expiration date | Dec. 31, 2037 | |
Federal Tax Authority [Member] | Minimum [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Expiration date | Dec. 31, 2032 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 64,088 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net (loss) income attributable to B. Riley Financial, Inc. | $ (98,665) | $ 8,023 |
Preferred stock dividends | (1,055) | |
Net (loss) income applicable to common shareholders | $ (99,720) | $ 8,023 |
Weighted average common shares outstanding: | ||
Basic | 26,028,613 | 26,217,215 |
Effect of dilutive potential common shares: | ||
Restricted stock units and warrants | 352,938 | |
Contingently issuable shares | 117,378 | |
Diluted | 26,028,613 | 26,687,531 |
Basic income per common share | $ (3.83) | $ 0.31 |
Diluted income per common share | $ (3.83) | $ 0.3 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2017 | |
Earnings Per Share (Textual) | |||
Number of antidilutive securities were excluded from the computation of diluted net income (loss) per share | 1,820,178 | 1,952,868 | |
Escrow Subject to Cancellation Escrow Claims [Member] | Great American Group, LLC [Member] | Maximum [Member] | |||
Earnings Per Share (Textual) | |||
Number of shares held in escrow account | 66,000 | ||
Number of shares issued in escrow account to forfeiture for final settlement of claims | $ 387,365 | ||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Common Stock [Member] | |||
Earnings Per Share (Textual) | |||
Number of shares held in escrow account | 387,365 | 387,365 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Feb. 14, 2020 | May 16, 2019 | Aug. 11, 2017 | Jan. 05, 2017 | Feb. 19, 2020 | Dec. 31, 2019 |
Lawsuit filing date | August 11, 2017 | |||||
Name of defendant | Freedman v. magicJack VocalTec Ltd. | |||||
Name of plaintiff | Board of Directors. | |||||
Trial or alternative dispute resolution | United States District Court for the Southern District of Florida. | |||||
Aggregate principal amount | $ 688,112 | |||||
MLV & Co. [Member] | Arbitration Claim Against WSI and Gary Wunderlich [Member] | ||||||
Offering price | $ 151,000 | |||||
Franchise Group Intermediate L2, LLC, [Member] | ||||||
Aggregate principal amount | $ 125,000 | |||||
Franchise Group Intermediate Holdco, LLC, [Member] | ||||||
Aggregate principal amount | $ 100,000 | |||||
Asset based lending facility | 100,000 | |||||
Franchise Group Merger Sub AF, INC, [Member] | ||||||
Aggregate principal amount | $ 575,000 | $ 50,000 |
Share-Based Payments (Details)
Share-Based Payments (Details) - Amended and Restated 2009 Stock Incentive Plan [Member] - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Nonvested at beginning | shares | 2,263,988 |
Granted | shares | 5,575 |
Vested | shares | (16,157) |
Nonvested at end | shares | 2,253,406 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Nonvested at beginning | $ / shares | $ 12.35 |
Granted | $ / shares | 24.54 |
Vested | $ / shares | 19.30 |
Nonvested at end | $ / shares | $ 12.33 |
Share-Based Payments (Details 1
Share-Based Payments (Details 1) - Amended and Restated FBR & Co. 2006 Long-Term Stock Incentive Plan [Member] - Restricted Stock Units (RSUs) [Member] | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Nonvested at beginning | shares | 485,033 |
Vested | shares | (41,963) |
Forfeited | shares | (5,306) |
Nonvested at end | shares | 437,764 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Nonvested at beginning | $ / shares | $ 18.33 |
Vested | $ / shares | 15.66 |
Forfeited | $ / shares | 19.18 |
Nonvested at end | $ / shares | $ 18.57 |
Share-Based Payments (Details T
Share-Based Payments (Details Textual) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | |
Share-Based Payments (Textual) | |||
Share based compensation expense | $ 5,322 | $ 2,614 | |
Amended and Restated 2009 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share-Based Payments (Textual) | |||
Share based compensation expense | 4,109 | $ 1,726 | |
Unrecognized share based compensation expense | $ 15,238 | ||
Unrecognized share based compensation weighted average period | 1 year 3 months 19 days | ||
Total fair value of shares vested | $ 312 | ||
Weighted average grant date fair value, shares | $ 24.54 | ||
Granted | 5,575 | ||
Amended and Restated FBR & Co. 2006 Long-Term Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share-Based Payments (Textual) | |||
Share based compensation expense | 791 | $ 767 | |
Unrecognized share based compensation expense | $ 3,833 | ||
Unrecognized share based compensation weighted average period | 1 year 7 months 6 days | ||
Total fair value of shares vested | $ 657 | ||
Total grant date fair value of restricted stock units | 131,216 | ||
2018 Employee Stock Purchase Plan [Member] | |||
Share-Based Payments (Textual) | |||
Share based compensation expense | $ 165 | $ 121 | |
Number of shares reserved for future issuance | 592 |
Net Capital Requirements (Detai
Net Capital Requirements (Details) $ in Thousands | Mar. 31, 2020USD ($) |
FBR & Co. ("FBR") [Member] | |
Net Capital Requirements (Textual) | |
Net capital | $ 103,271 |
Excess capital | 100,994 |
FBR & Co. ("FBR") [Member] | Maximum [Member] | |
Net Capital Requirements (Textual) | |
Excess capital | 2,277 |
MLV & Co. [Member] | |
Net Capital Requirements (Textual) | |
Net capital | 91 |
Excess capital | 50 |
MLV & Co. [Member] | Maximum [Member] | |
Net Capital Requirements (Textual) | |
Excess capital | 41 |
B. Riley Wealth Management [Member] | |
Net Capital Requirements (Textual) | |
Net capital | 5,569 |
Excess capital | 4,975 |
B. Riley Wealth Management [Member] | Maximum [Member] | |
Net Capital Requirements (Textual) | |
Excess capital | $ 594 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 01, 2019 | Apr. 01, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2019 |
Related Party Transactions (Textual) | ||||||
Due from related party | $ 4,391 | $ 5,832 | $ 5,832 | |||
Transfer Agreement, description | The Company entered into a Transfer Agreement (the "Transfer Agreement") with GACP II, a fund managed by GACP, and John Ahn, the President of GACP. The Transfer Agreement provides for among other things, the transfer to Mr. J. Ahn 55.56% of the Company's limited partnership interest in GACP II (the "Transferred Interest"), which represents a capital commitment in the aggregate amount of $5,000. In connection with the Transfer Agreement, the Company provided Mr. J. Ahn with a non-recourse, secured line of credit in an aggregate amount of up to $5,003 pursuant to the terms of a Secured Line of Credit Promissory Note (the "Note") dated April 1, 2019, to fund the purchase price of the Transferred Interest. We also entered into a Security Agreement with Mr. J. Ahn on April 1, 2019, which granted to the Company a security interest in the Transferred Interest to secure Mr. J. Ahn's obligations under the Note. | The Company entered into a Transfer Agreement (the "Transfer Agreement") with GACP II, a fund managed by GACP, and John Ahn, the President of GACP. The Transfer Agreement provides for among other things, the transfer to Mr. J. Ahn 55.56% of the Company's limited partnership interest in GACP II (the "Transferred Interest"), which represents a capital commitment in the aggregate amount of $5,000. In connection with the Transfer Agreement, the Company provided Mr. J. Ahn with a non-recourse, secured line of credit in an aggregate amount of up to $5,003 pursuant to the terms of a Secured Line of Credit Promissory Note (the "Note") dated April 1, 2019, to fund the purchase price of the Transferred Interest. We also entered into a Security Agreement with Mr. J. Ahn on April 1, 2019, which granted to the Company a security interest in the Transferred Interest to secure Mr. J. Ahn's obligations under the Note. The Note is subject to an interest rate per annum of 7.00%. As of March 31, 2020, the principal and accrued interest on the Note were $4,291 (amount transferred as of March 31, 2020) and $49, respectively. For the three months ended March 31, 2020 interest earned on the Note was $74 | ||||
Interest expense | 14,392 | $ 8,875 | ||||
Management fee earned | $ 5 | 13 | 200 | |||
Debt issue discount | 8,875 | 8,875 | ||||
Aggregate principal amount | 688,112 | |||||
Executive Officer's And Board Of Directors [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Financial interest | 69.80% | |||||
Co-Chief Executive Officer [Member] | B. Riley Partners Opportunity Fund [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Financial interest | 48.80% | |||||
Franchise Group [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Financial interest | 13.70% | |||||
Maturity date | Dec. 16, 2022 | |||||
Loans receivable with a carrying value | $ 4,651 | 4,951 | 4,951 | |||
Advisory Fees | 7,160 | |||||
GACP I, L.P [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Due from related party | 4,391 | 145 | 145 | |||
GACP II, L.P [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Due from related party | 14 | 12 | 12 | |||
President [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Due from related party | 4,340 | |||||
CA Global Partners, LLC [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Due from related party | 353 | |||||
GACP [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Loans receivable with a carrying value | 1,800 | |||||
B. Riley Partners Opportunity Fund [Member] | B. Riley Partners Opportunity Fund's Loan Participations [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Due from related party | 12,478 | 3,846 | 3,846 | |||
Interest expense | 552 | |||||
Outstanding loan | 12,478 | |||||
Sonim [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Due from related party | $ 9,155 | $ 9,603 | $ 9,603 | |||
Financial interest | 10.00% | |||||
Principal amount due on loan | $ 10,170 | |||||
Received principal payments | $ 88 | |||||
Sonim [Member] | Convertible Common Stock [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Common stock per share | $ 8.87 | |||||
Maven [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Due from related party | $ 25,572 | $ 21,150 | ||||
Financial interest | 12.00% | 15.00% | 15.00% | |||
Principal amount due on loan | $ 49,921 | $ 49,921 | ||||
Debt issue discount | 1,988 | 1,988 | ||||
Loans receivable with a carrying value | $ 44,323 | 47,933 | 47,933 | |||
Warrant Maturity Date | Jun. 30, 2022 | |||||
Babcock and Wilcox [Member] | ||||||
Related Party Transactions (Textual) | ||||||
Financial interest | 12.00% | |||||
Principal amount due on loan | 113,330 | 113,330 | ||||
Management fee earned | $ 750 | |||||
Debt issue discount | 4,183 | 4,183 | ||||
Loans receivable with a carrying value | $ 104,998 | $ 109,147 | $ 109,147 | |||
Warrants Granted | 1,666,667 | |||||
Warrant Maturity Date | Apr. 5, 2022 | |||||
Exercise Price (in dollars per share) | $ 0.01 | |||||
Related party transaction, description | The Company provided B&W with $30,000 of additional last-out term loans pursuant to new amendments to B&W's existing credit agreement discussed above. The additional last-out term loan receivable due from B&W is included in loans receivable, at fair value with a fair value of $27,603 at March 31, 2020. Pursuant to the new amendment, the Company also agreed upon a term sheet pursuant to which B&W would undertake a refinancing transaction on or prior to May 11, 2020 (the "Refinancing") and B&W and the existing lenders would amend and restate the credit agreement. As part of the Refinancing, the size of the B&W's board of directors may also be reduced to five members, with the Company retaining the ability to appoint two members. On January 31, 2020, the Company also entered into a letter agreement with B&W (the "Backstop Commitment Letter") pursuant to which the Company agreed to fund any shortfall in the $200,000 of new debt or equity financing required as part of the terms of the Refinancing to the extent such amounts have not been raised from third parties on the same terms contemplated by the Refinancing. The Company, B&W and the lenders that are a party to B&W's existing credit agreement are in negotiations to amend and restate B&W's existing credit agreement, which would include, among other things, an extension of the maturity of amounts outstanding under the credit facility, the termination of the Backstop Commitment Letter, the commitment by an affiliate of the Company to provide up to $70,000 in additional term loan financing incrementally over the duration of the amended credit facility, and a limited guaranty by the Company of B&W's obligations under the amended credit facility. |
Business Segments (Details)
Business Segments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues - Services and fees | $ 159,381 | $ 103,896 |
Selling, general and administrative expenses | (87,744) | (94,964) |
Restructuring recovery (charge) | (147) | |
Interest expense - Securities lending and loan participations sold | 8,473 | 6,804 |
Depreciation and amortization | (4,956) | (4,913) |
Impairment of tradenames | 4,000 | |
Segment income/ loss | (121,144) | 24,978 |
Cost of goods sold | 769 | 1,119 |
Loss on equity investments | (236) | (3,762) |
Interest expense | (15,654) | (10,770) |
(Loss) income before income taxes | (136,788) | 11,083 |
Benefit (provision) for income taxes | 37,539 | (3,104) |
Net (loss) income | (99,249) | 7,979 |
Net loss attributable to noncontrolling interests | (584) | (44) |
Net (loss) income attributable to B. Riley Financial, Inc. | (98,665) | 8,023 |
Preferred stock dividends | 1,055 | |
Capital Markets Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues - Services and fees | 104,413 | 48,014 |
Trading (losses) income and fair value adjustments on loans | (182,442) | 25,867 |
Interest income - Loans and Securities lending | 21,851 | 11,420 |
Total revenues | (56,178) | 85,301 |
Selling, general and administrative expenses | (54,711) | (63,389) |
Restructuring recovery (charge) | 29 | |
Interest expense - Securities lending and loan participations sold | (8,473) | (6,804) |
Depreciation and amortization | (1,105) | (1,276) |
Segment income/ loss | (120,467) | 13,861 |
Auction and Liquidation segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues - Services and fees | 20,661 | 20,709 |
Selling, general and administrative expenses | (1,526) | (2,915) |
Depreciation and amortization | (1) | (2) |
Segment income/ loss | 4,289 | 11,504 |
Direct cost of services | (14,816) | (6,274) |
Cost of goods sold | (29) | (14) |
Valuation and Appraisal segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues - Services and fees | 8,788 | 8,583 |
Selling, general and administrative expenses | (6,867) | (7,187) |
Depreciation and amortization | (41) | (33) |
Segment income/ loss | 1,880 | 1,363 |
Principal Investments - United Online and magicJack segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues - Services and fees | 21,718 | 26,590 |
Revenues - Sale of goods | 1,004 | 945 |
Total revenues | 22,722 | 27,535 |
Selling, general and administrative expenses | (5,463) | (7,020) |
Restructuring recovery (charge) | (176) | |
Depreciation and amortization | (2,879) | (3,463) |
Segment income/ loss | 8,504 | 7,929 |
Direct cost of services | (5,136) | (7,842) |
Cost of goods sold | (740) | (1,105) |
Consolidated operating (loss) income from reportable segments | (107,611) | 34,657 |
Corporate and other expenses (including gain on extinguishment of debt of $1,556 during the three months ended March 31, 2020) | (13,533) | (9,679) |
Interest income | 246 | 637 |
Loss on equity investments | (236) | (3,762) |
Interest expense | (15,654) | (10,770) |
(Loss) income before income taxes | (136,788) | 11,083 |
Benefit (provision) for income taxes | 37,539 | (3,104) |
Net (loss) income | (99,249) | 7,979 |
Net loss attributable to noncontrolling interests | (584) | (44) |
Net (loss) income attributable to B. Riley Financial, Inc. | (98,665) | 8,023 |
Preferred stock dividends | $ 1,055 | |
Net (loss) income available to common shareholders | $ (99,720) | $ 8,023 |
Brands Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues - Services and fees | $ 3,801 | |
Selling, general and administrative expenses | (904) | |
Depreciation and amortization | (714) | |
Impairment of tradenames | (4,000) | |
Segment income/ loss | $ (1,817) |
Business Segments (Details 1)
Business Segments (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Total Revenues - Services and fees | $ 159,381 | $ 103,896 |
Trading (losses) income and fair value adjustments on loan | (182,442) | 25,867 |
Total Revenues | (206) | 142,128 |
North America [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Revenues - Services and fees | 158,466 | 103,820 |
Trading (losses) income and fair value adjustments on loan | ||
Revenues - Sale of goods | 1,004 | 945 |
Revenues - Interest income - Loans and securities lending | 21,851 | 11,420 |
Total Revenues | (1,121) | 142,052 |
Australia [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Revenues - Services and fees | 664 | 15 |
Total Revenues | 664 | 15 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Total Revenues - Services and fees | 251 | 61 |
Total Revenues | $ 251 | $ 61 |
Business Segments (Details Text
Business Segments (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Business Segment (Textual) | ||
Corporate and other expenses including restructuring recovery | $ (147) | |
North America | ||
Business Segment (Textual) | ||
Property and equipment, net | $ 12,223 | $ 12,727 |