B. Riley Financial, Inc. (NASDAQ:RILY) Q4 2022 Results Conference Call February 22, 2023 4:30 PM ET

Company Participants

Bryant Riley - Chairman, Co-Founder & Co-CEO

Tom Kelleher - Co-Founder, Co-CEO

Phil Ahn - CFO, COO

Conference Call Participants

Keith Rosenbloom - Cruiser Capital

Paul Dwyer - Punch & Associates

Sean Haydon - Charles Lane Capital

Operator

[Call Starts Abruptly] 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 Kelleher, Co-Founder and Co-CEO; and Phillip Ahn, CFO and COO. After management's remarks, we will open the line for questions. [Operator Instructions]

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, you may proceed.

Bryant Riley

Welcome, and thanks for joining our call this afternoon. Throughout 2022, we continue to execute our strategy amid a tough environment with markets taking back the investment gains we saw in 2021, contributing to a net loss of $168 million for the year. Despite the marks in our investment portfolio, we delivered operating revenues of $1.3 billion in 2022, which is close to where we were at the end of 2021 during the record year that produced operating revenues of $1.4 billion.

It is important to put this into perspective. The income and losses over the last 2 years were largely influenced by our investment portfolio. And over the course of 2021 and 2022, our investment book is effectively flat. During that period, we made approximately $10 per basic share and generated operating EBITDA of over $780 million.

Additionally, during that time, we continue to diversify our business and implement a strategy we began 5 years ago, which is to invest our excess episodic cash flows into recurring operating businesses that will generate strong cash flows even when our episodic businesses are slow. Our operating performance in 2022 highlights the benefits of this strategy.

To highlight this point further, consider that our investment banking and institutional brokerage business represented roughly 60% of our operating EBITDA in 2021 versus about 10% in 2022. During that same period, overall operating EBITDA declined by less than 20%.

Since our inception as a sub-$50 million market cap publicly traded company in 2014, we have delivered in excess of $21 per share or over $570 million in common stock dividends to our shareholders. We have had meaningfully up and down years, and through all cycles, our diversified platform has demonstrated strength and resiliency to yield meaningful returns for our business and our shareholders, including in previous down-market cycles.