BRC Group Holdings, Inc. Q4 FY2024 earnings call

• Established joint venture with Oaktree for Great American Group, received ~$203 million in cash plus 44% ownership.
• Financed brand assets, received ~$236 million in gross proceeds.
• Signed agreement to sell portion of traditional W-2 Wealth Management business to Stifel, expected to close early in Q2 2025 with ~$26 million cash consideration.
• Completed full redemption of February 2025 senior notes.
• Secured new $160 million senior secured credit facility with Oaktree.
• Sold Atlantic Coast recycling for ~$70 million in cash proceeds, expecting ~$30 million gain in Q1.
• Focus on reinvesting in core businesses like B. Riley Securities, B. Riley Wealth, and advisory services.

B. Riley Securities: Uniquely positioned as top provider to the middle market, ended 2024 December strong with potential to recover operating EBITDA. B. Riley Wealth: After transaction with Stifel, retains core group of ~170 independent advisers and 81 W-2 advisers with ~$15 billion in client assets under management, remained profitable. GlassRatner (advisory services): Performed well across core expertise, had a record year in 2024 with consistent growth. Communications segment: Provides steady cash flow and EBITDA.

• Preliminary Q4 net income available to common shareholders: $48 million to $68 million (includes ~$236 million to $247 million from discontinued operations).
• Diluted net income per share: $1.57 to $2.22; net loss from continuing operations: $178 million to $187 million.
• Operating adjusted EBITDA from continuing operations: $12 million to $14 million.
• As of Dec 31, 2024: Cash, cash equivalents, restricted cash ~$257 million; total debt $1.78 billion, net of cash and investments ~$991 million (down $221 million from Q3).
• Deadline to file 10-K is March 17, 2025; may file Form 12b-25 for 15-day extension if unable to file by then.

• Potential delay in filing 10-K leading to Form 12b-25 filing.
• Uncertainties related to debt maturities in 2026 and 2028.
• Risks associated with forward-looking statements and potential differences between actual results and expectations.

Q: Can you give us a sense of what you intend to accomplish in the next six months to sort of beef up liquidity and the balance sheet?

A: Our focus is on investing in our core businesses (broker-dealer, wealth management, advisory) and being opportunistic with asset monetization, proactively working to align the balance sheet.

Q: Can you talk a little bit about your core business, specifically BRS, Wealth Management, and Advisory?

A: B. Riley Securities is uniquely positioned for the middle market, B. Riley Wealth retains a core group with ~$15 billion in AUM and remained profitable, GlassRatner had a record year in 2024 with consistent growth.

Q: Further asset monetization, is most from Principal Investment Group?

A: We focus on monetizing non-core assets selectively, need to grow our businesses and address debt maturities.

Q: Wealth management business after transaction?

A: Remaining wealth management group has ~$15 billion in client assets under management, down from ~$24 billion before sales.

Q: Ability to buy back debt under new credit agreement?

A: No ability to buy bonds in the open market under the senior facility.