BRC Group Holdings, Inc.

Good afternoon and welcome to B. Riley Financial's second quarter 2021 earnings call. Earlier today, B. Riley issued a press release and presentation detailing its financial results for the second quarter. Copies are available in the investor section of the company's website at ir.brileyfin.com. 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. Riley are Bryant Riley, Chairman and Co-Founder and Co-CEO, Tom Kelleher, Co-Founder and Co-CEO, and Philip Ahn, CFO and COO. After management's remarks, we will open the line for questions. And 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. Welcome, everyone. I'll start with a brief overview on the current state of our business and where we see opportunities ahead. Phil Ahn, our CFO and COO, will cover key financial metrics, and then our co-CEO, Tom Kelleher, will share more detail about our individual business units. For the second quarter, we reported total revenues of $336.8 million, and total adjusted EBITDA of $124.9 million. Our solid performance demonstrated continued strength from across our businesses with operating revenues and operating EBITDA doubling on a year-over-year basis. Over the last few years, we have worked to establish a steady base of recurring revenue businesses with enhancements to our consulting and appraisal, wealth management, brands, and principal investment businesses. Together, these steady-state businesses generated revenues in excess of $135 million during the quarter, and continue to provide steady EBITDA and cash flow for our overall platform. Enhancing the results from our steady businesses is the earnings upside created by investment banking, which has benefited from momentum in capital markets, and our liquidation business, which continues to be profitable in spite of the slowdown in retail bankruptcy filings. At the same time, we continue to leverage our platform to source opportunistic investments that are extremely proprietary to B. Reilly. This strategy has delivered value not only to us, but to our partners and shareholders, and we are seeing more and more of these types of opportunities than we ever have. As we continue to invest in further enhancing our platform, we are always on the lookout for complementary businesses that can expand our reach and market share. A recent example of this is our acquisition of National Holdings, which will continue to integrate into our business. We are extremely pleased with this team of talented professionals, and similarly, our new colleagues are appreciating the breadth of product that our platform offers. In expanding our platform both through key hires and acquisitions, we've also created increased synergies and cross-selling opportunities. Importantly, our diversified business model continues to deliver for us and our stakeholders, and we believe there will be more opportunities for us to capitalize in the near future. We are often asked if there are any gaps in our business, and asset management and the build-out of fixed income continues to be a key focus for us as a natural complement to our existing businesses. We will continue to take advantage of market opportunities in our core segments while seeking to establish additional recurring revenue streams that are both non-correlated and counter-cyclical. Taken together, our platform strategy has allowed us to build a solid balance sheet and lower our cost of capital, while enabling us to return $8.50 in common stock dividends to shareholders over the last three quarters. As always, our number one focus is performing for our employees, clients, partners, and our shareholders. And as we look ahead, we continue to see multiple pathways to grow shareholder value. With that, I'll turn the call over to Phil Ahn to discuss some financial metrics from the quarter. Phil?

Thanks, Brian. On a consolidated basis, B. Riley reported total revenues of $336.8 million for the second quarter, which represents a year-over-year increase of 26% compared to $266.5 million for the prior year period. Net income available to common shareholders was $73.9 million, or $2.58 per diluted share. This compares to $82.8 million, or $3.07 per diluted share in the prior year period. Our second quarter results included operating revenues of $304.1 million, which was up 100% year over year, and operating adjusted EBITDA of $92.1 million, which was up 97% year over year. Our strong operating results were further enhanced by our second quarter investment gains of $32.7 million, which relate to both realized and unrealized gains in our investments. In terms of our reportable segments, capital markets is our largest segment and includes our investments and operating results from investment banking, institutional brokerage, and our fund management businesses. Excluding our investment gains, operating revenues for our capital markets segment increased to $151.5 million for the quarter, up 78% year-over-year. Segment operating income was $74.7 million, up 153% year-over-year. Our wealth management segment revenues increased to $90.3 million compared to $15.8 million in the prior year period. The majority of this increase was due to the addition of national holdings for the full quarter, which we acquired in February of this year. Auction liquidation revenues increased to 17.3 million, up 109% year-over-year, and segment income was 3.6 million. Financial consulting revenues increased to 23.7 million, up 26% year-over-year, and segment income was 4.2 million. Our principal investments companies, MagicJack and United Online contributed revenues of $19.6 million and segment income of $7.3 million. And lastly, our brand segment generated revenues of $4.4 million and segment income of $3 million related to the licensing of brand trademarks. As a reminder, adjusted EBITDA in our metrics for operating and investment results are non-GAAP financial measures. For a definition of these terms and for reconciliation to the nearest GAAP measures, please refer to our earnings release. Additional details related to our operating metrics can also be found in the financial supplement to be located on our investor relations website. Now turning to our highlights from our balance sheet, at June 30th, B Reilly Financial had $297 million in unrestricted cash and cash equivalents, approximately $1 billion in net securities and other investments owned, and $266 million of loans receivable, net of loans participation sold. At quarter end, we had total cash and investments balance of approximately $2 billion, which includes approximately $53 million of other equity investments included in our prepaid and other assets. Net of debt, B-Rally Financial's cash and investments totaled approximately $568 million at June 30th. In terms of other recent developments, in June, we closed a $280 million senior credit facility comprised of a four-year $200 million term loan and an $80 million revolver. And earlier this week, we completed the full redemption of our 7.25% senior notes due 2027 for approximately $125 million, including accrued interest. These activities are consistent with our goal to lower our cost of capital while augmenting our capital base as we continue to pursue multiple opportunities and seek to grow shareholder value. To that end, we declared a total quarterly dividend of $2 per common share, This includes our regular 50-cent quarterly dividend and a special dividend of $1.50. The quarterly dividend will be paid on or about August 26th to stockholders of record as of August 13th. That completes my financial summary. Now I'll turn the call over to our co-CEO, Tom Kelleher, to share a few quarterly highlights from our individual operating units. Tom?