BRC Group Holdings, Inc.

Good afternoon and welcome to B. Reilly Financial's fourth quarter and full year 2020 earnings call. B. Reilly Financial has issued a press release and presentation detailing its financial results for the fourth quarter and fiscal year 2020. Copies are available in the investor section of the company's website at ir.breillyfin.com. Today's conference call will include a discussion of non-GAAP financial measures. Information reconciling these non-GAAP measures to the company's GAAP financial results can be found in the earnings release. As a reminder, today's call is being recorded. An audio replay will also be available on the company's website later today. Joining us today from B. Reilly are Bryant Reilly, Chairman, Co-Founder and Co-CEO, Tom Kelleher, Co-Founder and Co-CEO, and Philip Ohn, CFO and COO. After management's remarks, we will open the line for questions. Before we conclude today's call, I will provide the necessary cautions regarding forward-looking statements. I will now turn the call over to Mr. Bryant Riley. Mr. Riley, please proceed.

Thanks, and welcome, everyone. URiley Financial reported record revenues and profitability for both the fourth quarter and full year of 2020. For the fourth quarter, we reported revenues in excess of $410 million and total revenues of over $902 million for the full year. Based on our performance in 2020, despite an otherwise challenging year, we are increasingly confident in the earnings power of the platform we've developed. Our results demonstrated increased profitability from across our businesses and particularly our brokerage business. Investment banking delivered impressive results in Q4, contributing to record consolidated quarterly operating revenues of 270 million and record quarterly operating EBITDA of 126.8 million. Importantly, we have been beneficiaries of not only increased deal flow, but also from a number of larger and more significant deals across our equity capital markets and advisory businesses. We saw strong momentum from IPOs, SPACs, and a quarterly best for our ATM desk. In addition to our higher operating results, we were a beneficiary of the improved equity markets, which resulted in investment gains of over $140 million for the quarter, resulting in total gains for the year of approximately $104 million, a sharp recovery in our investment book from the markdown in Q1. With retail liquidation activity, continued growth in our consulting and advisory businesses, and steady contributions from appraisal, principal investments, and brands, we believe we have built a platform to not only withstand volatile markets, but also to benefit amid disruption. As our businesses have grown, we are in the fortunate position of generating material-free cash flow from our core operations in addition to our investment portfolio. While we continue to see extremely attractive uses for our capital, we also believe it is important to return a portion of our profits directly to our shareholders with the cash flow that we generate. As a result, we feel strongly that a balanced capital allocation policy includes substantial returns of capital to our partners. To that end, we have declared a total dividend of $3.50 per share, which includes an increase to our regular annual dividend to $2.50 per quarter and a special $3 dividend. Given the prospects and momentum we see across our businesses, we would expect our dividends to grow over time. In addition to our dividend policy, we repurchased over 2.1 million shares during the year. While B-Riley's momentum has never been stronger, we recognize there's always work to be done. We continue to look at other opportunities to lower our cost of capital and reflect our current state of operations. In addition, while we were always on the lookout for accretive acquisitions, we're seeing more and more opportunities to enhance our business by bringing on great people and new offerings onto our platform. Tom will talk about some of these later on in the call. As you will see from our press release earlier today, we're in the final closing process of our acquisition of national holdings, which, again, Tom will talk more about later on. The acquisition of National is an important milestone in B-Riley's 25-year history, and we could not be more excited to onboard this talented team to our platform. We should note we have a longstanding history with the National team as a prior board member and investor, and also through our respective teams working together as co-underwriters on a number of deals. We build a great mutual respect between our firms and our respective management teams. Together with our B. Reilly Wealth Management Division, National and B. Reilly have a combined platform of close to 900 registered reps and client assets north of $30 billion. With our combined institutional and retail distribution, we believe this merger enhances our position as a leader in small and mid-capital markets, which is reflected in our continued market share gains. A key benefit of our growth is our increasing operating leverage and the opportunities we are seeing, which are significant both in terms of number and in size. With over $300 million of cash and investments, net of debt at year-end, we will continue to work to capitalize on the opportunities we see ahead, while, as previously mentioned, continuing to take a balanced approach of returning capital to our shareholders. Lastly, we've said it before, but we can't say it enough. Our success relies on our people, and we feel incredibly fortunate for the world-class team we have here at B. Reilly and the new ones joining us from National. With that, I'll turn it over to Phil Onn, our CFO and COO, to discuss our financial metrics. Phil?

Thanks, Brian. Thanks, Brian. Welcome, everyone. As Brian mentioned, our fourth quarter and fiscal 2020 results represented an all-time high for B. Reilly Financial in terms of revenues and overall profitability. For the three months ended December 31, 2020, we reported record total quarterly revenues of $410.2 million, up from $165.2 million for the fourth quarter of 2019. Net income available to common shareholders totaled $170.1 million or $6.55 per diluted share up from 16.9 million or 59 cents per diluted share for the prior year quarter. Total adjusted EBITDA increased to 260.5 million up from 50.3 million in the fourth quarter of 2019. Operating revenues increased to 270 million up from 130.5 million for the prior year quarter. Operating adjusted EBITDA increased to 126.8 million up from $16.4 million for the prior year period. For the 12 months ended December 31, 2020, we reported record annual total revenues of $902.7 million, up from $652.1 million for 2019. Net income available to common shareholders was $200.4 million, or $7.56 per diluted share, up from $81.3 million, or $2.95 per diluted share for 2019. Total adjusted EBITDA increased to 406.8 million, up from 207.9 million for the prior year. Operating revenues increased to 798.7 million, up from 545.6 million for 2019. And operating adjusted EBITDA totaled 311.7 million for the year, up from 113.6 million for 2019. Strength in the equity markets also contributed to strong performance from our investment book. We saw investment gains of approximately 140 million for the fourth quarter, resulting in investment gains of approximately 104 million for the year. These investment gains primarily relate to mark-to-market valuations on strategic investments held by the company. Investment gains for the year represented a sharp recovery from the mark-to-market losses for the first quarter of 2020. With the growth and momentum of our platform, we continue to review our reportable financial metrics to provide our investors with greater visibility into our various business units. To that end, during the fourth quarter, we realigned our segment reporting to reflect some of our recent organizational changes, including the rebrand of our legacy Glass-Ratner consulting business and our appraisal business under the name of B. Reilly Advisory Services. As noted in our earnings release, we reclassified results from our consulting and appraisal businesses and our real estate business underneath the financial consulting segment. Consulting and real estate were previously reported in the capital market segment, and appraisal was previously reported as a standalone segment. We have recast our segment presentation in the relevant materials to reflect these changes. So now turning to our segment results, capital markets is our largest segment and includes investments and operating results for our investment banking, brokerage, wealth management, and fund management businesses. Excluding investment gains, capital markets generated operating revenue of 201.1 million and segment operating income of 102.5 million for the quarter. This compares to $127 million in operating revenues and segment operating income of $52.7 million for the fourth quarter of 2019. The significant increase was primarily driven by strong investment banking performance that Brian referred to earlier. Auction and liquidation fourth quarter results included segment revenues of $15.7 million and segment income of $7.5 million from retail liquidations and store closing projects completed by B. Reilly Retail Solutions, our former Great American Group. As we noted on prior earnings calls, our liquidation segment results can vary from quarter to quarter and year to year due to the impact of large retail liquidation projects. For the fourth quarter, financial consulting segment revenues were $26.5 million, up from $20.1 million for the prior year period. Segment income totaled $6.9 million, compared to $4.7 million for the prior year period. Results were primarily driven by bankruptcy, forensic accounting, and appraisal assignments performed by B. Reilly Advisory Services. Our principal investment segment, which includes results from MagicJack and United Online, contributed revenues of $21.4 million and segment income of $7.3 million for the fourth quarter. And our brand segment, which includes licensing revenues related to brand investments portfolios, generated revenues of $5.5 million and segment income of $4.1 million. Now, for the full year, capital markets generated operating revenues of $514.7 million and segment operating income of $208.6 million. up from 2019 annual operating revenues of $341.9 million and segment operating income of $77.4 million. Optional liquidation generated annual revenues of $88.8 million and segment income of $25.8 million. Financial consulting annual revenues increased to $91.6 million, up from $76.3 million in 2019. Segment income increased to $22.5 million, up from $17.8 million for the prior year. Principal investment segment companies continue to outperform initial investment estimates and provide steady cash flows to the B-Riley platform in 2020. For the full year, MagicJack and United Online contributed revenues of $87.1 million and segment income of $33.4 million. And finally, our brand segment, which was established in 2019, contributed licensing revenues of $16.5 million for 2020. Now some highlights from our balance sheet. As of December 31st, B. Reilly Financial had $103.6 million in unrestricted cash and cash equivalents, $767.2 million in net securities and other investments owned, and $373.4 million of loans receivables, net of loan participation sold. At year end, we had total cash and investments balance of approximately $1.3 billion, which includes $59.6 million of other equity investments included in our prepaid and other assets. Net of debt, BRI Financial's cash and investments totaled over $300 million at year-end. We repurchased 450,000 shares of common stock during the fourth quarter and over 2.1 million shares in 2020. Lastly, as Brian noted, we continued to review our dividend policy to align with our performance and outlook. We've increased our regular quarterly dividend to 50 cents per share from our previous quarterly dividend of 37.5 cents, In addition, our board has declared a special one-time dividend of $3 a share related to our fourth quarter performance. The fourth quarter dividend is payable on or about March 24th to stockholders of record as of March 10th. Upon payment of this dividend, we will have returned approximately $4.47 per share in common dividends related to our fiscal 2020 earnings. That completes my financial summary. I'll turn the call over to our co-CEO, Tom Kelleher, to discuss our individual operating units. Tom?