This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk00: 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.
spk07: 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.
spk05: 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?
spk01: Thanks, Phil. This quarter, we continue to diversify and expand our opportunity set, both in terms of new businesses as well as in our ability to attract quality talent. Adding complementary practices like cybersecurity advisory, our financial sponsors group, and our real estate division has enabled us to provide superior execution capabilities while continuing to deliver on the core services we've become known for. While clients are the obvious beneficiary of our expanded capabilities, our investment banks advisory consultants, and wealth managers have also benefited. Every day, we see more and more collaboration and referral activity across our operating groups, and there is no greater validation of our platform strategy than from our internal B. Reilly stakeholders, our colleagues. We believe our philosophy and diverse platform continue to be our key differentiator. This has enabled us to successfully recruit several experienced and accomplished professionals across our divisions amid this highly competitive market for talent. Last quarter, we stated our intent to build out asset management and fixed income. Since then, we've welcomed back former colleague Wes Cummins and his team at 272 Capital. He and his team employ a small-cap strategy rooted in fundamental research, which closely aligns with our own. Wes serves as president of our asset management division and will continue to oversee the funds of 272 Capital in addition to B. Riley's private funds. And to support the growth of our fixed income division, we also recently named Tim Sullivan head of fixed income with B-Riley Securities. Tim's experience complements the firm's established leadership in structured products, including our market-leading senior notes offering franchise and specialization in corporate debt issuances. Year-to-date, our team has led over $1.5 billion of corporate debt and preferred stock offerings. In wealth management, we opened a new branch location in Warrington, Virginia. led by three seasoned financial advisors who joined us from BB&T Truist. And in New York, we recently welcomed a sophisticated advisor from UBS who is focused on serving ultra-high net worth individuals. Our ability to attract talented professionals of this caliber speaks to the value of being able to offer a unique array of services under one roof. We continue to actively recruit across all our business lines. with particular focus on investment banking to support our growing capital markets business and M&A practice. As Bryant noted at the top of the call, our strong quarter was driven by investment banking, including several significant transactions involving contributions from other B. Reilly divisions. Noteworthy banking deals from the quarter include Greenwich Generation's $2 billion merger with Support.com, in which we served as buy-side advisor, RumbleOn's $575 million business combination with RideNow, in which we led both a common follow-on and debt raise, and also served as capital markets and buy-side advisor. Chara Solutions' $135 million senior notes offering, in which we served as lead book runner. And Tellurian's $120 million secondary offering, in which we served as sole book runner. And Double Down Interactive's $113 million August IPO. Our SPAC group also continued its momentum, contributing meaningfully to the quarter's results. A key offering of our equity research department, our proprietary corporate access events have helped differentiate us in our approach to bringing unique small and mid-cap market investment ideas to our clients and partners. During the quarter, we led 50 virtual events, as well as an exclusive in-person conference in LA, which featured 35 companies and 50 institutional investors. Looking ahead, this December, we are hosting an in-person crypto conference in New York. B-Riley Securities has quickly established a leadership position in the emerging cryptocurrency arena, being the first bank to bring a crypto miner public with Stronghold Digital Mining's recent IPO. In wealth management, our legacy business, B-Riley Wealth, and our recently acquired national holdings continue to perform steadily with revenue, EBITDA, and fee-based assets up both on a year-over-year and sequential basis. Perhaps what is more gratifying, however, is the dedication and skill our coworkers are displaying as we work towards combining these businesses. In retail liquidation, despite domestic headwinds, this group has managed to keep active with projects in Europe. As we enter the holiday shopping season, The team has been busy working with returning retail clients to model store closings in preparation for the potential fallout from ongoing supply chain issues. And in advisory services, which includes our Legacy Glass Ratner Financial Consulting Group and Legacy Great American Appraisal Division, the coordination of these businesses continues to bear fruit in generating referrals across our platform. We recently added senior hires to our restructuring division, valuation services practice, and to our risk compliance and cyber practice. This group's focus remains on the legal and lender community and corporate compliance markets. Despite a challenging environment for both legacy businesses, they both have found ways to be meaningful contributors for the overall B. Reilly enterprise. Our principal investment companies, MagicJack and United Online, continue to perform above our expectations while providing cash flow to our platforms. We are still working to obtain necessary regulatory approval to complete the second tranche of our investment lingo, which should enhance our results in future quarters. Lastly, after a difficult period following the beginning of the pandemic, volumes within our brand investment business have dramatically increased. We remain optimistic about growth in this business in 2022. And finally, a point that cannot be overstated is how incredibly proud we are to represent and work alongside our colleagues. Our coworkers continue to step up and rise to the occasion despite the challenges created by the ongoing pandemic. Our people have shown dedication on and off the playing field, both in the normal course of business, as well as by participating in any number of View Valley sponsored programs. We continue to be inspired every day by the people we work with. In echoing Brian's sentiment at the top of the call, With a common goal and shared purpose, it is our commitment to continue to keep our eye on the ball and focus on delivering for our employees and our stakeholders. With that, we will now open the line for questions, and then we'll turn the call back to Brian for closing remarks.
spk06: Thanks.
spk00: Thank you. We will now begin the question and answer session. If you wish to ask a question, you may press star and 1 on your touchtone telephone to join the question queue. you will hear a tone acknowledging your request. If you are using a speakerphone, please lift the handset before pressing any keys. To remove yourself from the question queue, you may press star and two. If you would like to ask a question at this time, please press star and one. We will pause for a moment as callers join the queue. Our first question comes from Keith Rosenbloom With Cruiser Capital, please proceed.
spk04: Thank you. Guys, what a great quarter, and what a great reflection of the business here. I just wanted to – you're welcome. I wanted to try and level set here and just make sure I'm on the right page. I'm looking at the business, and it seems to trade at a PE of 3. You now raised your dividend yield, so I guess it's got a stated yield of 6%. But it looks like, you know, obviously with all the specials, it's much demonstrably higher. Brian, you own 20% of the company. You just initiated a buyback. You look at other investment banks. They all have much higher multiples and pay lower dividend yields. You have no research coverage. There's no sell-side research coverage of you. And I wonder, is there some better description of the business in terms of what you're doing, Brian, that might better describe who you are? Or are these discounts to your comps just so blatant and so unwarranted that perhaps it confuses people?
spk07: Yeah, Keith, we've talked about this a lot internally, and it's part of why – you know, we've been pretty aggressive about cash returns and now implementing a, you know, more meaningful annual dividend. We're confusing. I don't think we're confusing. You know, the way that I would, you know, describe us is that we are an investment bank slash merchant bank that utilizes our balance sheet to create fees, to create investment opportunities, and, you know, make money for our clients and shareholders. And The simplistic way to look at the business, in my mind, is to take the bucket of recurring EBITDA that we have, and I include that kind of a steady state of interest income because we'll always have a loan book. And if you take that number, you get into a number of, you know, somewhere around $180 to $200 million. And then you have a broker-dealer and you have a liquidation business that can go up and down. I mean, we'd be fooling ourselves if we said that we're going to always be up and to the right. So the way that we looked at it, especially when we were looking at our dividend, is we said, you know, over the last three years, our broker-dealer has done roughly $10 million, $11 million a monthly EBITDA. Over the last year, it's done closer to $21 million. And our retail has done about $1 million to $3 million in the last, you know, few years per month. And so we look at our dividend, and we said, you know, what is our break-even to pay a $4 dividend? It's underwriting the broker-dealer to $5 million a month, not the $10 that we've averaged over the last three years or the $20 in the last year. and underwriting the liquidation at half a million. And so we have lots of room to pay a dividend, lots of room to be cautious because markets do sometimes run in cycles. And so I think you can take that dividend yield and say that provides a level of security. And in the meantime, you know, we're going to take the excess free cash flows that we would expect because we're underwriting to a very low number to make sure that we felt good about our dividend coverage. And, you know, the last trillion, 12 months, our operating even does in $430 million in our Total EBITDA has been much more than that. And our free cash flow has been $592 million with investment. So we've been able to take a lot of money and invest it in the business. I think you may have seen we're adding to our fixed income practice. We've made acquisitions. We've added to our research side. And so we've been able to do all of those things. But when you talk about a public company that owns a dial-up business, a business like MagicJack Brands, liquidation, and a broker-dealer versus... A pure play broker-dealer, there are going to be a lot of people, I think, you know, have funds that are competitors of yours that are going to say, I want a pure play broker-dealer. I don't want to be messed with. I don't want to be surprised. I don't know what they're necessarily going to look at. It's a really broad mandate, and we want that broad mandate. We think that's really important. So that's why we are being really adamant about making sure you know what we're doing and what our philosophy is, and we've returned a lot of cash. But I think that's also – I think it's a lot of our kind of secret sauce is we have a broad mandate, but I think it also creates a discount. And the answer to how you fix that, I don't know.
spk06: I mean, I think we just keep grinding and keep making a lot of money, and the rest will take care of itself.
spk04: Can I just get two quick follow-ups in? Sure. So Tom just talked about the crypto currency business in terms of crypto trading. Maybe you could just give a little perspective on what that could mean to you in terms of contribution on the trading crypto side. And then also, I know you guys have put an effort into building the asset management business. Can you speak to where you think that contribution, those management fees might look like? in a year from now from your asset management side of the business?
spk07: So let me start with the asset management side because I think maybe Tom, I don't know if Tom's going to correct, we're not trading crypto. We are, we have been very active in raising capital for miners, as you know. I know you participate in some of those. So that's become a really big effort and the most important part of that is every one of those deals that we've done is meaningfully higher. We've made a lot of people a lot of money and created a lot of capital for miners to build their business. And we're having a conference specifically for that vertical. As it relates to asset management, if you look at our competitors, we are the only group that really does not have a meaningful asset management business. And we have a retail wealth management component with over $30 billion. And we think that an asset management business run by Wes Cummins, who we've known for a long time, we are very confident he's going to put up really good numbers, and we're going to give great products to our in-house wealth managers, but also to other institutions. So we're making sure that Wes is very much institutionalized and has his own infrastructure. But we recognize that that is a greenfield spot for us that we can really go after. I'd be disappointed in a year if we weren't managing over a billion dollars. And I guess it depends on how your returns are, but it's not going to be meaningful. That could be $20 million, $30 million of kind of income.
spk08: Thank you. All right. Thanks, Keith.
spk00: Once again, if you would like to ask a question at this time, please press star and 1. Our next question comes from Brian Roman with Boston Partners. Please go ahead.
spk06: I want to repeat Keith's comment.
spk03: That was a heck of a quarter. As a question about the dividend, I don't associate broker-dealers as yield-type stocks, and yet that's sort of how you're positioning this. And the reason I don't associate yield and broker-dealers is because the core investment banking business can, over time, be very volatile. What sort of scenario, how bad do things have to be for you to think that the dividend could be compromised, your new dividend?
spk07: So I'm going to do the math again that I did before.
spk03: Yeah, you did a great job for going over that. I'd like to hear that again.
spk07: Okay, so we're not a typical, you know, I think we're not, we differ from our competitors by having the operating businesses that we buy in, whether that's a cash flow business like Max Jack United Online or it's the brands we own. And if you just bucket those things and, you know, some of our more recurring business, we get to kind of an annual EBITDA number of in and around 140, 150 million. Okay. If you take our interest income, because we're always going to have a loan book.
spk03: I mean, one of the... I'm sorry, Brian, I'm sorry to interrupt you. That $140, $150 million, which is the number you just said, that is everything together? All the businesses?
spk07: That is everything together except for the broker-dealer. Okay, fine. Because as you said, there are volatile businesses. There are two volatile businesses. are the broker-dealer, which is obviously volatile and very strong right now, right? And then the liquidation business, which is really low. You know, the liquidation business two years ago was doing $30 million in EBITDA, and now it's doing closer to, you know, $10 million to $15 million because a lot of liquidation. This is our business that helps... you know, when a company goes, a retailer goes bankrupt, we'll buy the inventory and we'll take over the stores. And so that business right now, as you can imagine, the economy we're in is much slower. But we call those our episodic businesses, okay? Everything else we bucket and we look at as more of a recurring business. That could include a business we bought like Glass Ratner, which is an hourly advisory business that is going to do, you know, $10 to $12 million a year. We do appraisals. That business is very recurring. We do $10 to $12 million there. So if you add up that whole bucket, you get to roughly $140, $150 million in EBITDA, okay? Then if you take our balance sheet, which has got about $2.2 billion of investable capital, if you take about half a billion dollars of that, that's in loans to clients, to interesting opportunities. We get a lot of proprietary books. Just assume that somewhere in around that number, and it might be more, it might be less, but for the purposes of this conversation, that's generating roughly $50 million of interest income. So you take those two pieces and you have $200 million of EBITDA, okay? The broker-dealer, so first we'll go with the broker-dealer. Over the last year, the monthly EBITDA for the broker-dealer has been approximately $21 million a month. Over the last three years, looking back, and it's obviously been growing a lot, over the last three years, the broker-dealer EBITDA monthly has been about $10 million a month, right? So $120 million and then call it $240 million annual. When we looked at our dividends that did exactly what you did and said, where would it have to go for us to be more nervous about it? We underwrote in a monthly EBITDA on the broker-dealer $5 million a month. So if it went to $5 million a month, we would be generating about the right amount of cash to equally match the dividends. So $20 million now, $10 million over three years, we underwrote the $5 million. On the liquidation business, we did the same analysis twice. Last three years, it's averaged $2 million a month. Last year, it's averaged $1 million a month. We underwrote that to about $10 million a year. And then, you know, we've got a billion-five investment book. We believe that we're able to put that money to work. Our returns on investment capital have been very strong. But from a pure operating point of view, those are the numbers. That's the wiggle room you have. And we don't have – I don't think we have any – month-to-month debt, the vast majority of it. We just call it the two nearest term debt to us, so we don't have anything to do, I think, with the vast majority in 27. So let's say we've missed by $2 million in a month. We're not at the end of the world. We know we have a good business and we'll catch up. So that was the rough math. And if we get to a spot where we feel like that number is 350, we will adjust. I mean, we have a philosophy that we are part of our job as a share in the returns that we make with our shareholders. And that's really one of our philosophies. And that's what you're seeing with this dividend.
spk03: So let me ask the question differently. I'm looking at Bloomberg right now. You have about 28 million shares outstanding, 28 million shares times $4 a share is about $100 million, a little bit more of cash flow that goes out the door for paying the dividend. Are you sort of looking, and you've been paying all these special dividends, are you going forward looking at the recurring businesses as ostensibly covering the dividend and absent a large investment, the episodic businesses producing special dividends over time?
spk07: You're close. You're not quite there yet. But you're close.
spk06: You're close enough to think of it that way.
spk03: Okay, fine.
spk08: That's good. That's helpful. Thank you. You're welcome.
spk00: The next question comes from Sean Hayden with Charles Lane Capital. Please go ahead.
spk02: Hey, guys. I'd like to say congratulations on the quarter as well, and thanks for the dividend. Question on the wealth management unit. How far along are you in the integration process of national, and what should we think about as far as the operating margin there, the income margin, however you refer to it? So right now you're about mid-single digits. Do you see any lift in there? that margin going forward once everything is kind of steady state and no longer being integrated?
spk07: So, I would say, let me just comment on that transaction. I would say, and you've known us for a long time, and I think you would say we're somewhat understated. I would say, you know, on a scale of 1 to 10, the way that integration has taken place and the way the business leaders have worked with each other is a 10. And so, To think that, just put in perspective, to think in two months out we're doing $9 million of EBITDA, a $36 million run rate, I think is amazing. And I think that we've had total buy-in, not total, but a lot of buy-in from the wealth managers. We've spent a lot of time with them introducing us to our products. They participated in a lot of our deals. And so from the perspective of revenue momentum, I think we're in – I think we're in really good shape. Is there more work to do on the operating side? Yeah. I mean, that's going to – you know, you've got leases. You've got a lot of things that, you know, when you have two wealth managers merge, you've got negotiations with vendors. You've got – you know, that you will be able to carve out more expense savings. I couldn't tell you that we have an EBITDA target because – We're just – our target is to be as profitable as we can at all times. But realize they're two very different businesses. The national business is an independent management business. Now, you're still working with them, and you're still distributing product to them, and you're making them part of the team. But that's a different kind of payout structure than a W-2 wealth manager where they're 100% employees, and you're paying for all their insurance and all that stuff. Yeah. So they're a little bit different. So the margin you're going to get on an independent wealth management business is going to be less than a W-2, but there's less risk, obviously, because they're paying for a lot of the things they're doing. So that's a long-winded answer of saying I'm thrilled that we did $9 million. I think that we're just at the start of it. I think we're going to get a lot of recruits. I think we're a really exciting place to come to, and we've got great leadership that are out there recruiting all the time. Can that business be a $50, $60 million EBITDA business in a year? I think it could. I mean, you know, this is a lot of challenges the market over, and this is me kind of putting my finger in the air and looking at where the numbers are, but I could see that.
spk02: Okay. Yeah, that's helpful. Thanks. And then on brand, I mean, it looks like, you know, that's really taking shape there. Do you guys have any – targets in mind, or are you just trying to be opportunistic when it comes to the brand portfolio?
spk07: Yeah. Yeah, sorry. So, you know, one of the things that over time that I have found valuable is you meet a lot of great people in this business, and if you can partner with people you've known or you've seen in action, maybe short or long time, that's how you can, I think, really leverage your business. And so you will see that, you know, like people like Kenny Young, who was the CEO of another company, became our president. Or, you know, Brian Kahn and Vintage Group, we've done a ton of deals with Franchise Group because we've known them forever. And that list goes on and on. And I would say the brand side, We got to know the founders of Blue Star over a long period of time, and we think they're amazing at what they do, and we are committed to partnering with them if they see opportunities. We don't have to, but we've committed. And so we are there for them as a capital provider and partner, and it's really up to them. I would say that you are going to find more brand opportunities in periods of distress. than you would in a really good economy. So, you know, when a lot of the apparel companies, like, for example, Justice, right, brick-and-mortar business, went bankrupt, it's an unbelievable brand. It's going to be in 2,800 Walmarts. Like, the commercials of Walmart often lead with, you know, the Justice brand. So we own 40-some percent of that. That's our partners. So we don't have a number we want to get to. We don't have a desire to buy five more. We're just going to be really opportunistic.
spk06: All right, great. Well, again, congrats on the quarter. Thanks. Thanks, Sean. Appreciate all your support.
spk00: This concludes our question and answer session. I'd now like to turn the call back over to Mr. Bryant Riley for his closing remarks.
spk07: Well, thank you, operator, and thanks, everyone, for participating. You know, really exciting day being able to return the kind of capital we are to our shareholders and our partners at our firm, and And being recognized by Fortune as a number two growing firm, super humble and really thankful for all the people that have helped us get there. So look forward to next quarter's call. Thank you, everyone.
spk00: Thank you. Before we conclude today's call, I will provide B. Riley Financial's Safe Harbor Statement, which includes important cautions regarding forward-looking statements made during this call. Statements made during this call about B. Reilly Financial's future expectations, plans and prospects, and any other statements regarding matters that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors include the unpredictable and ongoing impact of the COVID-19 pandemic, as well as the other risk factors explained in detail in the company's filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of each statement. All forward-looking statements are made as of today and accept as required by law. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise. Thank you for joining us today for B Reilly Financial's third quarter 2021 results earnings conference call. You may now
Disclaimer