BRC Group Holdings, Inc.

Good afternoon, and welcome to the B. Reilly Financial's fourth quarter and full year 2023 earnings call. My name is Jordan, and I will be your call coordinator. Earlier today, B. Reilly issued a press release and financial supplement detailing its results for the fourth quarter and full year 2023, which can be found on its investor relations website at ir.breillyfin.com. Today's call includes prepared remarks from the company, followed by a question and answer session. Joining us today from B. Riley are Bryant Riley, Chairman, Co-Founder and Co-CEO, Tom Keller, Co-Founder and Co-CEO, and Philip Ahn, CFO and COO. After management's remarks, we will open the line for questions. Please note that all participants will be on a listen-only mode until the Q&A portion of the call. As a reminder, this call is being recorded. An audio replay will be available on the company's investor relations website later today. And before we conclude today's call, I will provide the necessary cautions regarding forward-looking statements. Now, I will turn the call over to Mr. Bryant Riley. Mr. Riley, please proceed.

Thank you for joining our call this afternoon. Before we get into our results, I want to thank everyone who attended our investor day in December. and I want to encourage anyone looking to understand the complexities of our business to refer to our comprehensive presentation, which is posted to our investor relations website. At that event, we also addressed the attention on B. Riley related to our role in taking franchise group private while Brian Kahn was CEO. Given the current scrutiny surrounding this matter and the time and resources it has required to complete our review, our annual report on Form 10-K for the year will be delayed. This remains a focus for our team, and we're working to complete it soon. Now, in terms of our results, 2023 was a strong year for the majority of our subsidiaries. However, the strength across our core business was masked by non-cash write-downs related to targets and unrealized investment losses. Despite a choppy operating environment for certain of our core businesses, we delivered increased revenues of over 50% at $1.6 billion for the year and $368 million of operating EBITDA. As we look ahead, our focus remains on turning the best path forward for our business, employees, and shareholders. With these considerations in mind, this afternoon we announced that we have obtained Mollison Company to conduct a review of strategic alternatives for our appraisal and retail liquidation businesses, formerly known as Great American Group. Those who have followed us know that Great American has played a significant role in V. Riley's history and overall success. We became a public company in 2014 through a combination with Great American. Since then, we have consistently stated our intention to use our balance sheet opportunistically to invest in and acquire businesses that can benefit from our platform and, in turn, create value for our shareholders. In line with that strategy, in 2016, our second year as a public company, we acquired United Online, and we formed our principal investments group to enhance the value of our platform longer term with additional sources of steady and recurring cash flow. In the seven years since, we have bought and built a number of high-quality businesses, and in the process, we meaningfully expanded our core financial services, including investment banking, brokerage, wealth management, business consulting, forensic accounting, among others. Each of these companies' founding partners and entrepreneurs who have joined the B-Riley platform have benefited from the knowledge and experience of our teams, and together, we capitalize on our growing market share. This is particularly true of Great American, which is led by an exceptional management team that has done a tremendous job growing the business organically since our combination 10 years ago. Together, we have executed a number of strategic initiatives to grow these businesses organically. In 2023, our appraisal and liquidation businesses generated approximately $153 million in revenue and $35 million in operating income, a year-over-year increase of 35% and 69% respectively. Our appraisal business has historically been a steady recurring performer and has seen strong growth over the last year. Our retail liquidation business is more episodic, but over the years has provided meaningful profits, which we have used to deliver returns to our shareholders and reinvest in our business. Together, Great American is a uniquely positioned asset with strategic relevance to many types of platforms, and we expect there will be a robust interest in this process. Great American is one example of the underappreciated value that is hidden in plain sight across our platform. This business is currently carried on our balance sheet at a book value of approximately $35 million. I'm not going to speculate on a sale price, but it's easy to do the math on the multiple. We will continue to explore options with an eye towards repurchasing our bonds of common stock while investing in the rest of our core wealth management, advisory, and institutional businesses. At our core, we are a financial services company that caters to both businesses and investors. We partner with entrepreneurs. We help them build, sell, expand, and fix their businesses. We are a trusted advisor to founders, operators, company boards, financial institutions, and law firms. We lean in with our balance sheet to support our clients, and we hold a large investment book that is marked almost daily, reported quarterly, and is volatile because of the dynamic investments we make. To put this into perspective, over the last four years, our corporate businesses delivered approximately $5 billion in operating revenue and $1.5 billion in operating EBITDA. During that same time, our prop book was effectively flat, which is not reflective of the opportunities our investments have created to enhance our operating results. Obviously, the external dynamics surrounding our firm has created significant dislocation in market value of both our common stock and publicly traded bonds. Our view is this has created an incredible opportunity for us. We have reduced our dividend by 50% based on the many opportunities we have to reinvest in our business, including repurchasing our debt at attractive prices. That brings me to Franchise Group. It has been roughly six months since we've taken a private transaction, and our team has helped FRG execute two transactions in line with our stated investment thesis. First was Badcock's merger with Kahn's in December. This transaction resulted in FRG owning just under 50% ownership interest in a publicly traded company that has significantly increased in value since the merger was completed. Second was FRG's sale of Sylvan Learning to Unleashed Brands earlier this month. The undisclosed purchase price was higher than what we had underwritten. FRG acquired Sylvan in 2021 for approximately $81 million. As challenging as the consumer environment has been, we remain confident in our long-term thesis for FRG. Our thesis on FRG is just that, a long-term view that the underlying businesses are expected to create significant value to our shareholders. And we are working on FRG with the same vigor we have in all of our past transactions to maximize the value of our investment. Before I turn the call over to Phil, I want to express my appreciation to our employees for their continued resiliency and the clients across our businesses who have reached out to express their support for B. Reilly amid the growing noise surrounding our brand on social media. Fundamental research does not involve personal attacks, Photoshopping memes, or incessant harassment of our employees and business partners. This behavior alone should speak volumes about these authors. To be clear, this is not a comment about short-selling. Short-selling serves a purpose in maintaining healthy capital markets, and as a public company, we have responded to constructive feedback, including from short-sellers. I appreciate we are a complex business, but I am extremely proud of the business we have built, the businesses we have grown, and the value we have delivered to all of our stakeholders. We have continued to deliver on our stated strategy year after year, and to fully appreciate this, it's important to understand our history and where we came from. We started this business in 1997 with every dollar we had and formed a two-person fundamental stock research firm. We invested opportunistically to build out our platform and to enable our clients' success. This is our core business, and this is where we will continue to invest. Over the next few weeks, our executive team will be on the road, and I look forward to catching up with our clients, partners, and investors. We appreciate your continued trust and support, and be rightly. With that, I will now turn the call over to Phil to discuss key metrics for the quarter. Tom will discuss results from our business segments before we open up for questions. Over to you, Phil.

Thanks, Brian.