BRC Group Holdings, Inc. Q2 FY2024 earnings call

• Net loss for Q2 is in the range of $435 million to $475 million, with operating adjusted EBITDA expected to be $50 million to $55 million. Includes non-cash impairment charges: ~$28 million for Targus, $25 million deferred tax benefit, ~$330 million to $370 million write-down on Freedom VCM investment.
• FRG situation: Impacted by rapid consumer spending deterioration, Conn's bankruptcy, and former CEO misconduct; received SEC subpoenas but confident of no involvement in Brian Kahn's alleged misconduct.
• Dividend pause: Pausing dividend to retire debt and maintain a strong flexible balance sheet.
• Great American Group: Review advancing, focusing on asset appraisal and asset disposition.
• Advisory practice: Growth of acquired practice, and acquisition of Interface Consulting International to enhance forensic accounting and litigation support.
• Wealth Management: Rebuilt from money-losing to double-digit EBITDA.
• Institutional broker-dealer: B. Riley Securities provides value to clients.
• Market conditions: Improving core financial services environment, increased transactional activity, renewed optimism in small cap stocks, and interest in energy infrastructure, fintech, cryptocurrency.
• Annual conference: 24th Annual Institutional Investor Conference held in Beverly Hills.

Great American Group: In fiscal year 2023, generated approximately $153 million in revenue and approximately $35 million in operating income. Advisory practice: Formerly GlassRatner, initially generating ~$25 million in revenues and $5 million in EBITDA, six years later on an approximately $23 million EBITDA run rate. Wealth Management: Once a money-losing business, now generating double-digit EBITDA. B. Riley Securities: Delivers incredible value to clients. Communications and brands portfolios: Generate steady cash flow.

• Pausing dividend to retire debt and maintain a strong flexible balance sheet.
• Continuing to work towards maximizing value from existing principal positions.
• Advancing the review of the Great American Group business.

• Impact of FRG's issues on the valuation of the investment.
• Rapid deterioration in consumer spending affecting operating performance.
• Ongoing fallout from FRG's former CEO's alleged misconduct creating challenges with lenders and counterparties.
• Receipt of SEC subpoenas and potential scrutiny.
• Risk of actual results differing from forward-looking statements due to various factors as outlined in financial safe harbor statements.