BRC Group Holdings, Inc.

Good afternoon and welcome to B. Reilly Financial's third quarter 2021 earnings call. Earlier today, B. Reilly issued a press release and presentation detailing its financial results for the third quarter. Copies are available in the investor section of the company's website at ir.breillysin.com. As a reminder, this call is being recorded. An audio replay will be available on the company's investor relations website later today. Joining us today from B. Riley are Bryant Riley, chairman, 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, operator, and welcome, everyone. We are pleased to report another solid quarter for B. Reilly Financial. On previous calls, we've discussed our strategy to grow our steady state and recurring businesses, and we've continued to deliver on that strategy, both on a top and bottom line basis. Year to date, as of September 30th, we generated total revenues and total adjusted EBITDA of $1.3 billion and $624.5 million, respectively. This represents a year-over-year revenue increase of 168% and a 327% increase in our adjusted EBITDA. In the same period, operating revenues totaled $1 billion for the first nine months, with operating adjusted EBITDA of $315.9 million. This reflects a year-over-year increase of 89% in operating revenues and a 71% increase in operating adjusted EBITDA. Over the last year, B. Reilly Securities has taken major strides in establishing itself as a preferred banking partner for small and mid-cap companies. Outside of the bulge bracket firms, there are few banks with the capabilities to lead and participate in equity transactions of more than $100 million, and year-to-date, B. Reilly Securities has raised nearly $3 billion in that capacity. Our investment banking division continues to gain market share in IPO underwriting, follow-on offerings, debt raises, ATMs, and SPAC-related transactions. We acknowledge that our diversified business can be difficult to analyze. Our ultimate goal is to continue to utilize our cash flows to enhance our business, make accretive acquisitions, and to return capital to our shareholders. To that end, we believe a recurring dividend is an important measuring stick for our shareholders. In line with our stated commitment, we have increased our regular quarterly dividend to $1 per share and declared a special dividend of $3 per share for a total third quarter dividend of $4 per common share. Upon payment of our third quarter dividend, we will have returned a total of $9 per share in common stock dividends to shareholders for the first three quarters. The increase in our regular dividend reflects our increasing confidence in our recurring cash flows as well as a continued growth in our episodic businesses. Our balance sheet continues to be very strong and our capital base has continued to increase, reflecting the growing cash flows and strong fundamentals of our business. At the same time, we have made meaningful progress reducing our debt expense by recently redeeming two of our higher-rated bond series while also issuing debt at a rate that is approximately 200 basis points lower. We will continue to seek ways to reduce our overall cost of capital in the coming quarters. Taken together, we have never been more confident in the power of our combined platform and our ability to capitalize on the opportunities we see ahead. Early today, B. Reilly Financial is ranked number two on Fortune Magazine's fastest-growing companies list for 2021, which ranks the top-performing publicly traded companies based on revenue, profits, and total returns over the three-year period ending June 30, 2021. It's extremely humbling and gratifying to earn external recognition of our accomplishments and continued momentum. We appreciate the trust and partnership of our clients and shareholders and are especially grateful for the world-class team at B. Reilly and their continued dedication. As always, our focus will remain on delivering for all of our stakeholders. Finally, before that, I turn the call over to Phil. I want to take a moment to welcome our new board member, Renee LeBran, who currently serves on our audit and governance committees. Renee has been involved in the venture capital industry for over 20 years and has extensive experience advising early-stage growth companies on capital raising and M&A initiatives. Among her many accomplishments, Renee co-founded the Women's Founders Network, which is dedicated to supporting female entrepreneurs by providing access to mentorship, visibility, and capital. She is a terrific addition to our board, and we could not be more pleased to welcome her to B. Riley. With that, I'll now turn the call over to Phil Ahn, our CFO and COO, who will provide more context around our quarterly metrics, and then Tom Kelleher, our co-CEO, will discuss some highlights across our operating units. Over to you, Phil.

Thanks, Bryant. As Bryant noted, we reported strong results for our third quarter ending September 30. On a consolidated basis, B. Reilly reported total revenues of $381.5 million, up 69% from the prior year period. Total adjusted EBITDA was $114.1 million, which was up 21% year over year. Net income available to common shareholders was $48.6 million, or $1.69 per diluted share, This compares to net income of $47.3 million and $1.75 per dealer to share for the prior year period. Our third quarter results included operating revenues of $363.3 million, a year-over-year increase of 87%, and operating adjusted EBITDA of $101 million, which was up 50% year-over-year. During the quarter, we also saw modest investment gains of approximately 18 million, which includes both realized and unrealized gains on certain strategic investments that we hold. Overall, our strong quarter was largely driven by momentum in our investment banking division. This was enhanced by contributions from our recently expanded wealth management division and continued cash flow generation from our principal investments companies and our brands businesses. Turning to our reportable segments, starting with capital markets, which includes our investments and operating results from investment banking, institutional brokerage, and fund management. Excluding investment gains, capital market segment operating revenues totaled $161.7 million, which represented an increase of 98% year-over-year. Segment operating income was $76.1 million, which was up 129% year-over-year. Now turning to our wealth management segment, Segment revenues and segment income increased to $118.8 million and $6.6 million, respectively. This increase was primarily related to the addition of national holdings, which we acquired in February. Our option and liquidation segment revenues and segment income totaled $37.1 million and $6.3 million, respectively. As noted on prior calls, results from this segment tend to be variable due to the episodic nature of large retail liquidation engagements. Financial consulting segment revenues and segment income totaled $21.3 million and $2.8 million, respectively. Results from our legacy Glass-Ratner Consulting Division and our Appraisal Division were impacted by the overall market conditions in the restructuring and ABL lending markets. Our principal investments companies, MagicJack and United Online, contributed revenues of $19.3 million and segment income of $6.5 million. These companies continue to provide steady cash flow to our platform. And lastly, our brand segment continues to make contributions to the overall B. Reilly platform, having generated segment revenues of $6.4 million and segment income of $4.7 million related to the licensing of brand trademarks. As a reminder, adjusted EBITDA and our metrics for operating and investment results are non-GAAP financial measures. Please refer to our earnings release for a definition of these terms and for reconciliation to the nearest GAAP measures. Investors can also find additional details relating to these metrics and related reconciliations in the financial supplement on our investor relations website. Now turning to some highlights from our balance sheet. At September 30th, B-Rolly Financial had $378 million in unrestricted cash and cash equivalents, $933 million in net securities and other investments owned, and $351 million of loans receivable. At quarter end, we had a total cash and investments balance or approximately $2.3 billion, which includes $43 million of other investments reported in prepaid and other assets. At quarter end, our total debt balance was approximately $1.7 billion. In net of our debt, B Reilly Financial's cash and investments totaled approximately $593 million at September 30th. Finally, as Bryant mentioned, we declared a total third quarter dividend of $4 per common share. This includes an increase in our regular quarterly dividend from 50 cents to a dollar per share. Additionally, we declared a special one-time dividend of $3 per common share. $4 in total Q3 dividend payments will be paid on or about November 23rd to common shareholders of record as of November 9th. That completes my financial summary. Now I'll turn the call over to our co-CEO, Tom Kelleher. Tom?