Los Angeles, November 5th / PRNewswire / -- BRC Group Holdings, Inc. (Nasdaq ticker: RILY) ("BRC Group" or "the Company") is a diversified holding company that today announced its financial results for the three months and nine months ending September 30, 2026.

Highlights of the third quarter of 2026 and the nine months up to September 30, as well as recent progress

• Revenues: As of the beginning of this year to date, the total revenue has been 624.2 million US dollars, of which operational revenue amounted to 617.9 million US dollars. The revenue for the third quarter was 33 million US dollars, as the operational revenue of 161.3 million US dollars was offset by an investment loss of 128.3 million US dollars.
• Net Loss: As of the beginning of the year to date, the net loss attributable to common shareholders is $13.2 million, which is a loss of $0.40 per diluted share. In the third quarter, the net loss attributable to common shareholders was $243 million, or a loss of $6.04 per diluted share, mainly reflecting the company's pre-tax loss of $226.7 million from investments in Babcock and Wilcox, as well as a non-cash impairment of $14.6 million on the investment in GA Group; the company's other securities positions recorded a small net gain.
• After operational adjustments, EBITDA: As of the beginning of the year to date, the figure after operational adjustments, EBITDA, is 103.3 million US dollars. In the third quarter, the figure after operational adjustments, EBITDA, decreased by 17.4 million US dollars, reflecting the reversal of unrealized gains recognized in structured equity financing during the second quarter, as well as a net write-down of SpaceX associated equity. From the beginning of the year to date, the adjusted figure, EBITDA, is 104.3 million US dollars, while in the third quarter there was a loss of 219.1 million US dollars.
• Balance Sheet: To date at the beginning of the year, $238.1 million of senior notes have been fully redeemed, of which $142.1 million were redeemed in September. After the end of the quarter, the sale of GA Group further reduced the Oaktree fixed loan debt.
• Strategic Measures: On November 3, the company sold its remaining equity in GA Group to a related party of Oaktree in order to reduce debt and increase liquidity; on October 22, it regained 100% ownership of B. Riley Securities Holdings; and on September 28, it signed a final agreement to acquire Sangoma Technologies in order to expand the scale of its communication platform.

Bryant Riley, the chairman and co-CEO stated:

In the first nine months of this year, despite a decline in the value of our portfolio in the third quarter, our business operations have demonstrated the resilience of a diversified platform. Over the past few months, we have taken key strategic actions to strengthen our core businesses and allocate capital to the areas with the strongest cash flow opportunities at the moment. Earlier this week, we completed the sale of the remaining equity in GA Group. This business has created considerable value for shareholders over more than a decade, and this sale further focuses our strategic priorities, reduces debt, and enhances liquidity to support our operations, as well as to adopt a long-term perspective on investments during periods of market imbalance. In line with this focus, we have agreed to acquire Sangoma, a company with predictable cash flows that will bring meaningful scale and recurring revenue to our communication platform, and it is highly complementary to our existing businesses, creating opportunities for operational synergies. We have also resumed full ownership of B. Riley Securities and continue to advance its integration with B. Riley Wealth.

The third quarter was a challenging period for small and medium-sized issuers, as rising interest rates and widening credit spreads suppressed trading activity, while equity capital market issuance was concentrated among the largest issuers. Against this backdrop, B. Riley Securities and B. Riley Wealth continued to focus on creating value for all their clients and partners. Whether it's helping to address market imbalances, creating opportunities in the capital markets, or providing strategic consulting, our platform is designed to support our clients through every cycle. Although the average transaction size was smaller, which impacted underwriting fee revenue this quarter, we still saw an increase in demand for restructuring and consulting services. We added two senior bankers and expanded our institutional research coverage to over 430 companies. In various business segments, we benefited from the growing recurring consulting fees in wealth management, as well as increasing revenue from our communications business portfolio; at the same time, we continued to focus on improving the profitability of our consumer goods business.

"We enter the end of the year with a robust portfolio of equity, debt, and M&A consulting projects, and look forward to showcasing the full capabilities of our platform at the upcoming Convergence Conference in December."

2026 Third Quarter and Nine-Month Financial Summary as of September 30

• Net (loss) income attributable to common stockholders: The third-quarter results of 2026 mainly reflect a pre-tax loss of $226.7 million arising from the company's investments in Babcock and Wilcox. As of September 30, 2026, the company's investment in Babcock and Wilcox was valued at $160.3 million. Excluding Babcock and Wilcox, the transactional results and realized and unrealized gains from the company's other investments amounted to a net income of $4.8 million for the quarter. The company also recognized a non-cash impairment of $14.6 million, reducing the carrying amount of the GA Group investment to its subsequent selling price. Over the nine-month period, the net loss reflects the aforementioned items from the third quarter, as well as the loss of income from the sale and derecognition of businesses during the same period last year, and income from operations outside of continuing operations last year.
• Revenue: In the third quarter, revenue mainly reflected losses from transactions in the capital markets, a decline in ATM, private equity, and underwriting income. However, this was offset by an increase in mergers and acquisitions and consulting income. At the same time, there was a decrease in ancillary rights and commissions from the wealth management business. Revenue decreased by 9% over nine months, primarily due to reduced gains from capital market transactions, decreased income from the company's other businesses as a result of asset divestitures last year, and a decline in service income from the communications business unit.
• After adjustment, EBITDA: In the third quarter, after adjustment, EBITDA decreased, mainly due to an increase in company investment losses, which were primarily driven by Babcock and Wilcox. Over the nine-month period, after adjustment, EBITDA reflects a decline in service and fee revenues, as well as a reduction in equity investment income, but this was offset by a decrease in sales, general, and administrative expenses.
• After operational adjustments, EBITDA: In the third quarter, after operational adjustments, EBITDA decreased by $17.4 million, reflecting the reversal of unrealized income from structured equity financing in the second quarter, as well as a net write-down of SpaceX associated equity. Over the nine-month period, EBITDA was supported by a net increase in the value of associated equity related to investment funds holding SpaceX since the beginning of the year, as well as a reduction in sales, general and administrative expenses.
• Debt and Leverage: As of September 30, 2026, net debt decreased by 10%, to $64.7 million, from $562.3 million; whereas as of December 31, 2025, it was $627 million. During the same period, total debt fell to $1.14 billion, below the previous level of $1.43 billion, mainly driven by debt repayments and the exchange of senior notes. After the quarter ended, the sale of GA Group further reduced the amount of fixed-rate loan debt, as detailed below.
• Cash: As of September 30, 2026, cash, cash equivalents, and restricted cash totaled $145.7 million, compared to $229.3 million as of December 31, 2025.
• Total Investment: As of September 30, 2026, the total investment decreased to $408.6 million, lower than the $520.5 million as of December 31, 2025. Of this, own securities and other investments amounted to $369.8 million, which is less than the $446.8 million. This decrease includes an impairment of $14.6 million on the investment in GA Group.

Segmented Operations: Summary of Financial Results for the Third Quarter of 2026 and the Nine Months Ended September 30

• Capital Market: Third-quarter performance mainly reflected a trading loss of $125.7 million, which primarily came from Babcock and Wilcox. From the beginning of the year to date, performance has shown a decline in trading profits. Additionally, against the backdrop of smaller average trading volumes in the small and mid-cap markets, revenues from ATM, private placements, and underwriting have decreased, but these were partially offset by higher merger and acquisition as well as consulting revenues.
• Wealth Management: The growth from the beginning of the year to date has been mainly driven by trading activities and associated benefits. The third-quarter performance reflected a decline in associated benefits, reduced trading earnings, and lower commissions, but these were offset to some extent by higher consulting fees. As of September 30, 2026, B. Riley Wealth managed assets of approximately $12.8 billion.
• Communication Business Group (“CBG”) (Reporting Divisions Lingo, magicJack, Marconi Wireless and UOL): The revenue growth under the consolidated scope reflects successful cost reduction measures, and its impact outweighs the revenue decline caused by expected customer churn.
• Consumer Goods: Declining revenue reflects weak consumer demand, but this is partially offset by lower sales discounts and customer project-related factors. The expansion of losses in this segment is mainly due to a decrease in sales volume.

Intends to acquire Sangoma

On September 28, 2026, the Company signed a definitive agreement to acquire BJW_KEEP_00001_ (Toronto Stock Exchange: BJW_KEEP_00002_; Nasdaq: BJW_KEEP_00003_), a business communications solutions provider, for a total enterprise value of US$203.7 million. Shareholders of BJW_KEEP_00004_ will receive cash and common stock of the Company, and are expected to hold approximately 4% of the Company's pro forma outstanding shares. The transaction is expected to be funded by a US$212.3 million committed senior secured term loan from the Company's telecommunications subsidiaries, which will replace their existing credit arrangements (with an outstanding balance of US$71.5 million as of September 30, 2026), thereby increasing the subsidiaries' incremental debt by US$140.8 million. The total equity contribution is expected to be US$54 million, of which the Company will contribute US$38 million and the telecommunications subsidiaries US$16 million. The transaction is not subject to financing conditions and is expected to be completed no later than early 2027, but is still subject to shareholder, court and regulatory approvals and other customary conditions.

Selling remaining equity of GA Group

On November 3, 2026, the company sold its remaining equity in Great American Holdings, LLC (“GA Group”) to related parties of Oaktree Capital Management, L.P (“Oaktree”). The company received a total cash consideration of $62.3 million, of which $51.7 million was used to repay the term loan debt owed to related parties of Oaktree. At the same time, the company revised its credit agreement with Oaktree, adding a new term loan of $26.5 million and canceling any future prepayment premiums. In exchange, the company paid a transaction fee of $3.3 million in kind. After the transaction, the balance of the Oaktree term loan decreased from $65.6 million to $43.7 million, and the company increased its liquidity by $36.5 million after deducting the transaction fees. In the third quarter, the company recognized a non-cash impairment of $14.6 million, reducing the carrying amount of its investment in GA Group to the sale price. The company will submit unaudited pro forma financial information by no later than November 9, 2026, by revising its current 8-K report.

Change in non-GAAP indicator caliber

The company has updated the calculation method for its post-operational adjustments EBITDA, incorporating adjustments that management believes are more effective in distinguishing between investment activities and the results of operating business. The updated calculation method has been consistently applied across all comparable periods. As a result, it is no longer included in the income and losses related to the company's equity investments in Great American Holdings and LLC, as well as in the non-controlling interests related to investment income and losses of B. Riley Securities Holdings, Inc and their subsidiaries.

Performance Teleconference

Management will discuss the company's financial performance and operational highlights, followed by a Q&A session with analysts and investors.

• Date: Thursday, November 5, 2026
• Time: 4:30 PM Eastern Time (1:30 PM Pacific Time)
• Link: https :// ir.brcgh.com / events-and-presentations

Investors can listen to the conference call through the " Events and Presentations " page on the company's website ir.brcgh.com. The recording of the conference call will be retained until Thursday, November 19, 2026.

Regarding BRC Group Holdings, Inc.

BRC Group Holdings, Inc (Nasdaq ticker: RILY) is a diversified holding company that operates in the fields of financial services, communications, and retail, while also investing in equity, debt, and venture capital. Its core financial services platform provides customized one-stop solutions for small and medium-sized companies at various stages of their corporate lifecycle. Its investment banking business offers comprehensive services including capital markets, sales, trading, research, corporate banking, mergers and acquisitions, and restructuring. Its wealth management business provides financial planning services such as brokerage, investment management, insurance, and tax preparation. Its communications business offers services to both consumers and businesses, including traditional telephony, mobile and cloud telephony, internet and data services, security, and email. Its consumer goods and retail business supplies mobile computing accessories and household items. BRC Group allocates capital both within and outside its core financial services platform to create value for shareholders through opportunistic investments. For more information, please visit www.brcgh.com.

Explanation regarding non-GAAP financial indicators

Some of the information listed in this article, including operating revenue, investment income (losses), adjusted EBITDA, operating adjusted EBITDA, total investment, and net debt, may be considered non-GAAP financial indicators, that is, measurement criteria different from the most directly comparable indicators under U.S. Generally Accepted Accounting Principles (“GAAP”). BRC Group Holdings, Inc. These indicators are considered useful to investors for the following reasons: Operating revenue and investment income (losses) distinguish between the income generated from the company's operating activities and the gains and losses on the investment portfolio; adjusted EBITDA and operating adjusted EBITDA are performance indicators that exclude items that management believes do not reflect the results of ongoing operations, while operating adjusted EBITDA further excludes gains and losses related to investments; total investment and net debt provide a basis for assessing the company's capital resources and leverage.

For the purposes of this document, the calculation of various indicators is as follows: (i) Operating revenue includes services and fees, loan interest income, securities lending interest income, fixed-income spreads, trading income from variable-rate transactions, as well as commodity sales; (ii) Investment income (loss) includes the net amount of trading income (loss) and adjustments to the fair value of loans, less trading income from fixed-income spreads and variable-rate transactions; (iii) After adjustments, EBITDA does not include income (loss) from operations other than continuing operations, net interest expenses, income or losses from income tax provisions, depreciation, amortization, restructuring costs, gains or losses from debt settlement, gains from cheap acquisitions, gains from business sales and derecognization, gains from exchange of senior notes, impairment of goodwill, impairment of investments held at cost and equity method, share-based payments, and other transaction-related expenses; (iv) After operating adjustments, EBITDA On top of the aforementioned adjustments, EBITDA further excludes the net amount of trading income (loss), the net amount after deducting fixed-income and variable-rate transaction spreads, adjustments to the fair value of loans, realized and unrealized investment income (loss) (after deducting variable-rate transaction spreads), investment income (loss) attributable to non-controlling interests, as well as income (loss) related to the company's equity investments in Great American Holdings and LLC; (v) Total investments include the net amount of own securities and other investments, less (a) securities that have not been sold and are measured at fair value, and (b) non-controlling interests related to continuing operations' investments, net receivable loans measured at fair value (less the portion of sold loans), equity investments, and other investments listed in prepaid and other assets; (vi) Net debt includes the net amount of term loans, senior notes payable, revolving credit lines, and notes payable, less (a) cash and cash equivalents, and (b) restricted cash.(c) The net amount to be charged to the clearing broker, less the net amount payable to the clearing broker, as well as (d) the total investment.

In addition, when evaluating business performance, management compensation, capital resources, and cash flow, the company's management will use these non-GAAP financial indicators in conjunction with the most directly comparable GAAP financial indicators. Non-GAAP financial indicators should not be considered in isolation, nor should they replace financial information that meets the GAAP criteria; the non-GAAP financial indicators reported by the company may not be directly comparable to those reported by other companies with the same names.

Footnote

For further explanations regarding these terms that are not GAAP, please refer to "Explanations Regarding Non-GAAP Financial Indicators." The reconciliation tables of operating revenue, investment income (losses), adjusted EBITDA, operating adjusted EBITDA, total investment, and net debt with the corresponding GAAP indicators are included in the financial statements section of this press release.

• Operating revenue is defined as the sum of the following items: (i) services and fees, ( ii ) loan interest income, ( iii ) securities lending interest income, ( iv ) fixed-income spreads, (v) trading income from variable-rate transactions, and ( vi ) commodity sales.
• Investment income (loss) is defined as the sum of the following items: (i) net transaction income (loss), and ( ii ) fair value adjustments to loans, less transaction income generated by fixed-income spreads and variable-rate transaction spreads.
• After adjustment, EBITDA includes BRC Group Holdings and Inc. The continuing operations income is attributed to earnings after deducting interest, taxes, depreciation, amortization, restructuring costs, share-based payments, gains or losses from debt settlement, gains from cheap acquisitions, gains from business sales and derecognization, gains from senior note exchanges, goodwill, impairment of trade names and equity method investments, as well as transaction-related and other expenses.
• After the operational adjustments, EBITDA is defined as the adjusted EBITDA. Deductions include: (i) the net amount of trading income (loss), after deducting fixed income and the net amount of variable interest rate trading spreads; (ii) adjustments to the fair value of loans; (iii) the net amount of realized and unrealized investment income (losses), after deducting variable interest rate trading spreads; (iv) investment income (losses) attributable to non-controlling interests; and (v) income (losses) related to the company's equity investments in Great American Holdings and LLC ("GA Group").
• Net debt is defined as the sum of the following items: (a) the net amount of fixed-term loans, (b) the net amount of senior notes payable, (c) revolving credit lines, and (d) notes payable, less: (i) cash and cash equivalents, ( ii ) restricted cash, ( iii ) the net amount due to clearing brokers minus the net amount payable to clearing brokers, and ( iv ) total investments.
• Total investment is defined as the sum of the following items: (a) net amount of own securities and other investments, less (i) securities not yet sold measured at fair value and ( ii ) non-controlling interests related to continuing operations investments, (b) net amount of receivable loans measured at fair value (less shares of sold loans), (c) equity investments, and (d) other investments presented in prepaid and other assets.

Forward-looking Statements

Statements in this press release that are not descriptions of historical facts are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These include statements regarding the company's expected future financial and operating results, capital market project reserves, and the ability to convert commitments into completed transactions; the anticipated timing, progress, financing, and earnings from the acquisition of Sangoma Technologies Corporation; the integration of B. Riley Wealth and B. Riley Securities; the expected impact of selling GA Group equity; and the company's ability to implement prudent capital allocation and further reduce debt. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties, many of which are beyond the company's control and may result in significant differences between the company's actual performance and results and those anticipated. Such risks include, but are not limited to: macroeconomic conditions, including interest rate fluctuations and inflation; market volatility and its direct impact on the capital markets and wealth management sector, as well as the value of portfolios (including derivative interests); the cyclical nature of the company's capital market business and the uncertainty of transaction completion times; the risk that the acquisition of Sangoma may not be completed according to the expected terms or timeline, or may not be completed at all; the company's ability to successfully implement its merchant banking strategy and the impact of market conditions on portfolios; changes in regulatory and legal environments that affect the company's business units; and the risks described in the periodic reports submitted by the company to the U.S. Securities and Exchange Commission from time to time, including but not limited to the company's annual 10-K report as of December 31, 2025 (as amended), quarterly 10-Q reports as of March 31, 2026, June 30, 2026, and September 30, 2026.Forward-looking statements are only valid as of the date of issuance of this press release. Except as required by law, the company assumes no obligation to update them.

Contact Information

Mike Frank | Investor Relations | ir @ brcgh.com | (212) 409-2424

Jo Anne McCusker | Media Relations | press @ brcgh.com