B. Riley Financial (NASDAQ: RILY) reported Q4 EPS of $0.83, versus $0.03 reported last year. Revenue for the quarter came in at $165.2 million, versus $102.03 million reported last year.

Q4 2019 Highlights

• Revenues of $165.2 million vs. $102.0 million for Q4 2018
• Net income of $16.9 million or $0.59 per diluted share
• Adjusted EBITDA of $50.3 million vs. $11.2 million for Q4 2018
• Adjusted net income of $23.6 million or $0.83 per diluted share

Q4 2019 Financial Summary

• Fourth quarter 2019 revenue increased to $165.2 million from $102.0 million for the fourth quarter of 2018, despite a loss in the Auction and Liquidation segment during the quarter. Net income increased to $16.9 million, or $0.59 per diluted share, compared to a loss of $8.8 million, or $0.34 per diluted share, for the fourth quarter of 2018.
• Capital Markets: Revenues increased to $172.2 million from $60.6 million for the fourth quarter of 2018. Segment income increased to $88.6 million from a loss of $12.5 million for the fourth quarter of 2018. The significant increase was primarily driven by investment banking as well as investment gains related to the Company\'s proprietary equity positions.
• Auction and Liquidation: For the fourth quarter of 2019, this segment recognized negative revenue of $44.4 million and a segment loss of $60.8 million. The negative revenue is attributed to a significant loss accrual related to a large liquidation project which is expected to be completed during 2020. The total estimated loss for this project through completion is included in fourth quarter 2019 results.
• Valuation and Appraisal: Revenues were $9.7 million compared to $11.3 million for the fourth quarter of 2018. Segment income was $2.7 million compared to $3.4 million for the same year-ago period. While the fourth quarter of 2018 represented an exceptional quarter for revenue growth in this segment, results have remained relatively steady from quarter-to-quarter and year-to-year.
• Principal Investments: Revenues increased to $23.7 million from $20.0 million for the fourth quarter of 2018. Segment income increased to $8.8 million compared to $5.7 million for the fourth quarter of 2018. Results for this segment are primarily driven by United Online and magicJack.

"Our strong quarterly performance was driven by record investment banking revenues as well as significant gains from our investment portfolio which helped more than offset a large loss in our liquidation segment. Meanwhile, our consulting, appraisal, wealth management and principal investment businesses continue to perform steadily as we pursue new opportunities to create additional value from our platform. Our recently acquired brand portfolio also contributed to our fourth quarter results and we expect this to be a more meaningful component of earnings as we look ahead," said Bryant Riley, Chairman and Co-Chief Executive Officer, B. Riley Financial.

Riley added, "Our results demonstrate the strength of B. Riley Financial\'s diversified platform and successful execution of our core strategy to create increased value while also delivering dividends to our shareholders. Over the last few years, we have meaningfully transformed our business by building and purchasing assets with steadier and more recurring revenue streams. In 2019, these recurring businesses contributed more than 50 percent of pre-tax income before corporate overhead and approximately 40 percent of adjusted EBITDA. As we look ahead to 2020, and with a full year of brand investments, we expect these percentages to grow. Additionally, we continue to view our balance sheet as a differentiator for gaining market share across all of our operating subsidiaries and as an engine for driving incremental cash flows from our more episodic capital markets and retail liquidation businesses. The platform we have created allows us to opportunistically pursue unique investment situations which helps us to deliver shareholder value in excess of our day-to-day operations."

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