BRC Group Holdings, Inc. Q4 FY2025 earnings call

• Over nearly 30 years, BRC Group has been opportunistic, recently sold some businesses to strengthen balance sheet. Communication business group generates consistent cash flow. Broker-dealer executes complex transactions and grows. Investment portfolio anchored by Babcock and Wilcox delivered results. In 2025, net income available to common shareholders $299.4 million, EPS $9.80. Welcomed new CFO, enhanced finance staff, changed auditing partner. Announced BRC Specialty Finance. Delaware Court of Chancery dismissed derivative action. In 2025, sold businesses like Atlantic Coast Recycling, portion of W-2 wealth management, Glass-Ratner Advisory, etc. Executed Transition Services Agreements. Completed wealth management clearing arrangement consolidation. Rebranded to BRC Group Holdings in 2026. Deploying AI tools, standardized around Claude.

Capital market segment: Fourth quarter revenues $93 million, full-year $265 million; segment income $53 million and $89 million. Wealth segment: Fourth quarter revenues $47 million, full-year $176 million; operating segment income $8 million and $15 million. Communications business group: Fourth quarter aggregate revenues $63 million, full-year $250 million; aggregate income $13 million and $47 million. Targets business (consumer product segment): Fourth quarter revenues $49 million, full-year $182 million; operating segment loss $4 million and $16 million

• No specific numerical guidance provided beyond general statements about continuing growth, leveraging opportunities, and managing balance sheet and debt related to senior note redemptions.

• Tariffs, conflicts, chip shortages remain risks to the Targets business. - Uncertainties related to senior note redemptions and market conditions affecting balance sheet and liquidity.

Q: Amar with Imperial Capital asked about using investment portfolio and other levers for remaining debt.

A: Scott and Brian said they would be opportunistic, considering bond swaps, buying/selling investments, etc.

Q: Sean Hayden of Charles Lane Capital asked about BRS and balance sheet.

A: BRS is integrated, serving clients with short-term loans, etc.

Q: Amar asked about valuing Great American business and returns on JOANN liquidation investments.

A: GA Group is valued using hypothetical liquidation at book value method, and the JOANN deal was a successful equity participation.

Q: Jonathan of JH Lane Partners asked about selling Babcock shares and governance changes.

A: Babcock shares are subject to 144A requirements but not restrictive, and there have been no new board members, with procedures in place.