B. Riley Financial Warns of Third-Quarter Loss

(Reuters) – B. Riley Financial on Wednesday warned of a third-quarter loss and announced a delay in its earnings report due to issues in finalizing valuations of some loans and investments.

The California-based bank has been in turmoil since August, when it suspended its dividend and indicated a markdown from its investment in Vitamin Shoppe-parent Franchise Group (NASDAQ:FRG).

Expected Losses

The bank expects a net loss from continuing operations to be between $130 million and $135 million, or $4.26 to $4.43 per share. This is largely attributed to a nearly $120 million decline in the valuation of its investment in the retailer.

Earlier this month, Franchise Group filed for bankruptcy, prompting B. Riley to warn of a potentially larger financial impact from its troubled investment.

Including discontinued operations, the bank forecasts a loss of about $290 million to $300 million, or $8.85 to $9.18 per share.

Share Price Decline

B. Riley, whose shares have plummeted 77% this year, stated that it is "working diligently" to file the September quarter report. The bank has also yet to submit its report for the three months ending on June 30.

The bank anticipates that its debt will be around $2.06 billion at the end of September, a decrease of $100 million from the end of June. It has repaid approximately $82 million to Japanese investment bank Nomura during the quarter.