B. Riley Financial, Inc. - 6.50 (RILYN) Q1 2022 Earnings Report, Transcript and Summary

00:04 Good afternoon, and welcome to B. Riley Financial's First Quarter 2022 Earnings Call. Earlier today, B. Riley issued a press release and presentation detailing its financial results for the first three months of 2022. Copies are available in the Investors section of the company's website at ir.brileyfin.com. As a reminder, this call is being recorded and the audio replay will be available on the company's Investor Relations website later today. 00:34 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. And before we conclude today's call, I will provide the necessary cautions regarding forward-looking statements. 00:57 I will now turn the call over to Mr. Bryant Riley. Please proceed.

01:03 Thanks. Welcome everyone. In many ways, our first quarter is personally as gratifying as any quarter we have reported since going public in 2014. To generate over $84 million in operating EBITDA in an environment in which our historically biggest profit drivers revenue were down almost 75%, I'm speaking of investment banking, which declined from $128 million to $34.2 million year-over-year in revenues, illustrates the steps we have taken over the last 10 years to insulate our overall business from a large market volatility. 01:37 Additionally, generating operating EBITDA of over $10 million in our brokerage business despite this large slowdown, while aggressively continuing our investment in M&A and fixed income personnel illustrates the commitment we have maintained towards expense management. 01:51 Given the slowdown in capital markets and the overall decline in the equity markets, I thought it would make sense to reiterate our dividend and business strategy and Tom and Phil will speak more specifically to the business units later in the call. 02:03 As we have said before, we group our businesses under two categories, episodic and recurring. The episodic businesses are represented by B. Riley Securities or brokerage and B. Riley Retail Solutions and can have large quarterly swings in profitability. The remaining businesses consisting of our wealth management, advisory, brands, asset management and communications businesses are much more predictable and recurring in nature. These recurring businesses along with a net margin from our loan book generate enough cash flow to cover dividend, tax and interest requirements. 02:35 Specifically, we estimate that the operating EBITDA required to cover these items is approximately $270 million per year. To the extent that we have strong cash flows from our episodic businesses, we will review those cash flows and look to either invest further in our business or return capital to shareholders incremental to our regular dividend as we did last year in which we paid $10 in special dividends. 02:56 In addition to these EBITDA generating assets, we have a diversified investment portfolio of approximately $1.3 billion, that includes public and private equity in businesses where we have deep conviction and capital appreciation and return over time and almost always have deep Board level involvement. 03:14 The returns from these investments are subject to being valued quarterly and can be volatile. We urge investors to take a long-term view of this portfolio and it reason we highlight our operating EBITDA as our primary measurement of the business. While we saw a decline in this portfolio during the quarter, which has continued into the second quarter, we have historically generated outsized returns on our investment book and are confident that our proprietary platform will continue to enable us to generate strong results for our shareholders. 03:42 Importantly, all of our investments are financed with a total cash and low covenant debt in which the vast majority does not mature for four years. This allows us to take a long-term view on these investments and while the mark-to-market changes can be painful, they're mitigated by our strong capital base. We have found that we are able to create meaningful value during market declines, like the one we are currently experiencing, and we'll look to be opportunistic in our investment portfolio. 04:08 With that, I will now speak to the first quarter. Operating revenues were $274 million while investment losses totaled $68 million, bringing our total revenues for the quarter to $206 million. Operating adjusted EBITDA for the quarter was $84.2 million, while investment EBITDA loss was $43.5 million, bringing our total adjusted EBITDA for the quarter to $40.7 million. Within the Capital Markets segment, underwriting, SPAC issuance and sales and trading saw declines in the quarter, while strength in capital markets came from ATM offerings, restructuring, interest from our loan book, securities lending and our growing asset management activity. 04:47 As mentioned, we have taken efforts over the last two years to broaden out our brokerage business and align with that strategy, we've continue to diversify our revenue mix with the integration of recent acquisition of National Holdings within Wealth Management and FocalPoint Securities within our institutional broker dealer. 05:04 Within our principal investments, communication segment will continue to build out the portfolio with our pending acquisitions of Lingo management and Bullseye Telecom. Before synergies, acquisition of Lingo and Bullseye are expected to contribute over $250 million in revenue and $30 million in EBITDA on an annualized basis. 05:24 As I previously touched on, another source of strong recurring cash flow comes from our loan and receivables investment book. As of quarter end, we maintained approximately $500 million of corporate loans, receivables generating an average interest rate of approximately 10%. Furthermore, we acquired a portfolio of loans receivable from Babcock Group in late 2021, which had a principal balance of approximately $380 million at quarter end and has so far performed above expectations and is generating a meaningfully higher rate of return in the rest of the loan book. 05:56 Combined, these assets are large contributor to our operating EBITDA and we are seeing significant opportunities to continue to put capital to work at far higher rates given the lack of capital available in the equity markets. 06:08 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.

06:23 Thanks, Bryant. As Bryant noted, our fourth quarter results were impacted by a slowdown in the capital markets and losses incurred in the investment book due to current market conditions. For the first quarter on a consolidated basis, B. Riley reported first quarter total revenues of $205.6 million, down 66% from the prior year period. Operating revenues were $274 million for the quarter, a year-over-year decrease of 18%, primarily related to lower investment banking activity. 06:51 Total adjusted EBITDA in the first quarter was $40.7 million and operating adjusted EBITDA was $84.2 million. Net loss available to common shareholders was $12.1 million or $0.43 loss per diluted share. 07:05 Now turning to our reportable segments in the first quarter, starting with our Capital Markets segment, which includes operating results from investment banking, institutional brokerage and fund management, as well as our results from our investment portfolio. Excluding investment losses, our Capital Markets segment operating revenues for the quarter totaled $130.5 million, which represents a decrease of 37% year-over-year. 07:29 Segment operating income was $57.9 million, which was down 45% year-over-year primarily due to lower investment banking revenues and was partially offset by strong activity on our ATM offerings, sales and trading and securities lending businesses. Wealth Management segment revenues increased 14% to $77.5 million, up from $67.9 million in the prior year period. Segment loss in the first quarter was $10.1 million driven primarily by reduced market activity, combined with the impact of a settlement charge related to litigation prior to B. Riley's acquisition of National Holdings in 2021. 08:06 Auction and Liquidation segment revenues were $3.4 million and segment loss was $0.8 million. Results from the segment were impacted by a slow retail liquidation environment in the first quarter compared to the prior year period. As stated on prior calls, results from this segment tend to be variable due to the episodic nature of large retail liquidation engagements. 08:28 Financial Consulting segment revenues increased to $25.9 million, up from $21.4 million in the prior year period. Segment income increased to $4.9 million, up from $3.3 million in the prior year. Increases in this segment were driven primarily by strong results in both our financial restructuring advisory business, as well as our appraisal valuation business. 08:50 Our principal investments communications companies magicJack, United Online and [Credo] (ph) Marconi contribute revenues of $32.7 million and segment income of $8.8 million. These companies continue to provide a steady stream of cash flows for our B. Riley platform. 09:06 And lastly, our Brand segment continues to make contributions to the overall B. Riley platform, having generated segment revenues of $4.6 million and segment income of $3.2 million. Note, that this segment excludes the dividend and contributions from our investments in Hurley, Justice and bebe, which are picked up in our capital market segment, as well as other income. 09:26 As a reminder, adjusted EBITDA in our metrics for operating 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. 09:47 Now turning to some highlights from our balance sheet. At March 31, B Riley Financial had approximately $214 million in unrestricted cash and cash equivalents, $1.3 billion in net securities and other investments owned and $882 million of loans receivable. At quarter end, we had total cash and investments balance of approximately $2.5 billion, which includes approximately $49 million in other investments reported in prepaid and other assets. Net of debt, B. Riley Financial's cash and investments totaled approximately $406 million at March 31. 10:24 And finally, our Board of Directors has approved a regular quarterly dividend of $1 per common share, which will be paid on or about May 20 to common stockholders as of record on May 11. 10:35 That completes my financial summary. Now I'll turn the call over to our Co-CEO Tom Kelleher. Tom?

10:43 Thanks, Phil. The first quarter presented challenging conditions for our Capital Markets business and investment book, given lower activity levels as well as increased market volatility. As Bryant mentioned, these are headwinds faced by the entire industry, but ones that we were able to partially mitigate given our efforts to build a diversified platform complete with non-correlated assets that can help drive performance even during difficult times. 11:07 While remaining active at looking at new opportunities, the firm strengthened our market position by continuing to build our previously announced initiatives as well as working to integrate lease acquisitions. Some highlights include, the expansion of our fixed-income division leadership team by adding long time industry veteran Robert Hamel, who will work alongside our Head of Fixed Income, Tim Sullivan. The addition of Ji Pak and Mary Jo Collins also to our fixed-income division, both are highly seasoned and great additions to the team and demonstrates the group's ability to attract top talent. 11:40 All-in, the group has added -- has added over two dozen professionals under Tim Sullivan's leadership. The addition of a compliance risk and the resilience consulting practice to our Advisory Group, the continued integration of National Holdings with our legacy B. Riley Wealth Group, development of additional funds to be offered by 272 capital and the addition of FocalPoint Securities, which significantly increases our M&A private capital markets capabilities. 12:07 Now turning to some of our divisions, as Bryant noted, activity in investment banking decelerated during the quarter. However, ATM offerings, sales and trading, and securities lending businesses remained stable from the prior quarter. In addition, our direct lending activity and loan book continues to provide a steady stream of interest income and cash flow to the B. Riley platform. 12:31 In Wealth Management, we continue to integrate our legacy B. Riley Wealth Group and the recently acquired National Holdings with one goal in mind, to create one robust wealth management platform with the ability to scale, while delivering outstanding differentiated services and investment opportunities to B. Riley clients. As with any large integration, there are challenges, but we believe in the growth potential of this business and its ability to meaningfully contribute to both our steady and episodic cash flow profiles. 13:01 In our auctions and liquidation segment, performance continue to be impacted by historical slowdown in the retail liquidation market here in the United States. However, our strong client relationships continue to drive revenue despite reduced activity. In the first quarter, we completed several store closings and in Europe, we are pursuing an increasing number of opportunities. 13:21 As we have stated before on our earnings call, the retail liquidation business is episodic in nature and will vary from quarter to quarter. Our advisory services business, which includes our legacy GlassRatner Financial Consulting Group and legacy Great American [indiscernible] continues to perform consistently and generate referral opportunities across the platform. GlassRatner delivered its best quarter ever from a revenue perspective. 13:47 Overall, our Financial Restructuring business continues to gain market share in a difficult environment. Looking ahead, we're excited about the future contributions and prospects for this business as operating conditions normalize. Our principal investment business including magicJack and United Online continue to deliver strong performance and generate healthy cash flows. Also, we are making progress with the integration of our recent CREDO Mobile acquisition and we are expecting to close our pending acquisitions of Lingo Management and Bullseye Telecom this summer. We expect all of these businesses to contribute meaningful cash flow over the long term. 14:26 Lastly, activity in our brand investments business is accelerating and volume levels have further recovered. Across the enterprise, brand investments delivered almost $40 million in reoccurring EBITDA and will remain an important contributor of cash flow over the coming years. Our enthusiasm for this space is only growing and we believe our brands business will continue to deliver meaningful value to our shareholders. 14:49 In closing, while the first quarter presented a number of industry-wide challenges, the benefits of our diversified platform and non-episodic businesses has never been clear. Our ability to drive cash flow and provide direct returns to our shareholders remains intact and we are confident our platform will drive accelerated growth as market conditions stabilize. In the meantime our teams will remain focused on capturing growth opportunities as well as delivering value to our clients. 15:16 With that, we will now open the line for questions. And then turn the call over to Bryant for closing remarks. Thanks.

15:24 Thank you. We will now begin the question-and-answer session [Operator Instructions]. Our first question comes from Sean Haydon of Charles Lane Capital. Please go ahead.

16:06 Hey guys. Congrats on a good quarter in a tough environment. Fist question here, on that and the Wealth Management section, can you quantify the settlement charge that you took there?

16:24 Yeah. So maybe you can get into more detail, but -- but the one -- the biggest one was about $4.5 million, it was from an issue that happened long before we bought the business and actually before the current management team is there. And so that's the rough number.

16:48 Okay. And are we through most of that or should we expect anything else in the future?

16:55 This is -- the wealth management business in the national side is tough there, I should say, lot of brokers, a lot of them are independent, there was a lot of noise in that business for a number of years which have been cleaned up, I think, in terms of the quality of the -- of the brokers under the previous team, but there's just always going to be noise there and it's got a lot of benefits. We are working to consolidate those businesses. We're excited about the people that are remaining. We're looking at all the deals to make sure that they are beneficial to both the brokers and to us. But I couldn't tell you that everything is cleaned up there. I mean, [indiscernible] the enterprise value of the business we bought, it was roughly $19 million. We expected some continued clean up, it's a noisy, but in the whole scheme of things, if we sit here two years from now, I think we're going to be really happy we made that acquisition.

17:57 Yeah, I hear you on that. And then good to see, obviously, the dividend is safe, no worries about that, but any thoughts to giving or to repurchasing shares kind of at an accelerated pace given where the stock price is?

18:14 Look, I think you're always balancing out on the long-term benefits of the business with buying your own business versus buying another business and you have to do the math on all of those things and I think traditionally, we've been pretty aggressive about thinking through those. So, I would just say to you that I -- last quarter you saw meaningful insider buying at higher levels. Clearly, the markets sold off a bit, but I think from an operating side, anybody who bought internally then would say, boy, we were -- we're really excited about the resiliency of some of these kind of non-episodic businesses and probably more excited than they were and the opportunities that we're seeing, including the back half receivable, loans that we're putting out. We are putting out loans into public companies that are collateralized by not only the businesses, but also the ability to raise capital through ATM is at 20% kind of IRRs, not always but sometimes and helping our client. 19:19 So, it's a balancing act, but we feel really good about the position we're in, because while you’d love to have a super robust capital markets biz, if we're able to provide value to our clients at rates that they understand and maybe enable them not to have to sell common at what they think are distressed levels and can hold off on that, but in the meantime, we're getting good returns for our -- for our shareholders, that's really attractive. So that's a long way of saying we're -- we're not going to be shy about actively managing our balance sheet and, obviously, buying back shares is one of the components we will look at.

19:56 Great. And then just another question here on FocalPoint. I understand that it's very recent, but when should we expect to kind of see some contribution from that in the numbers?

20:11 Yeah, you actually saw a negative contribution this quarter and often in M&A, especially one that's not as large as a Houlihan Lokey our [indiscernible] whatever. A lot of deals closed at the end of the year. And so -- and we recognize that. So they actually lost a little bit of money in Q1, but in terms of our enthusiasm and their win rate and the things that they're seeing, it's a 10 and you will see that benefit starting in Q2 and I think really in Q3 and Q4. 20:44 So that acquisition and the integration of that and kind of the matching of the teams is just been off the charts and we've seen a lot of cross referrals already. So I think Q3, Q4, more than Q2 but you're going to start to see some nice -- some nice revenue there.

21:02 Got it. Alright guys, good quarter and thanks for taking my questions.

21:07 All right. Thanks, Sean.

21:11 Our next question comes from Anthony Perrella of Punch & Associates. Please go ahead.

21:19 Good Afternoon, gentlemen. Thanks for taking the question. First question is just on the fixed income build out as we continue to add to the team there. If you could add a little bit of color on just kind of how you see earnings potential once the team is fully ramped up in relation to the capital markets business as a whole, that would be great?.

21:41 So I would just more speak to how we're building it up and then trying to budget in a capital markets business is something that we never budget the upside to. We have not had the broker dealer, even though we've always budgeted to what is our breakeven and then our incremental margins are in and around 50%. And that's -- so it's a really difficult thing to budget. I would say that we are going to -- the reason that we are adding that business is we found a leader that we -- has had a lot of success, managing fixed income business for Imperial and other firms like Jefferies and was always in a leadership position, has a great reputation and if you look at our business, we are one of the -- I think one of the biggest capital -- equity capital markets firms and particularly with small cap out there and we had very little debt business. We have baby bonds, which ultimately in a lot of ways resemble work through the equity capital markets side. 22:43 But we do direct lending, we have unbelievable client relationships, we do appraisals on 1,000 companies, we touch a ton of other companies through our Advisory business. And so, we think that there is a lot of business out there for us when that gets up and running and we're already seeing being added some deals we wouldn't have been added to, obviously we'll get a little bit of volatility, which we were hopeful for when we started this, it's been a pretty boring kind of fixed income environment, not a lot of distress, not a lot of volatility analysis and all of a sudden that's changed and I think we're going to be really well positioned to that. 23:17 So I would -- what I would say, the way to look at it is, this will be an investing year. I would like to say, we will be profitable by the fourth quarter, we were not -- we did this operating EBITDA number at the same time, we lost money at FocalPoint and we just kind of got it started and we've invested in fixed income, and we are not making money there. So, we're continuing to invest and I would just say that I think by Q4 or Q1, we will start to be profitable and we'll have a -- we will run at tight just like we do on the equity side. And I can't give you a budget for what that looks like because it's -- it's such a variable market, it's just hard to do.

23:59 That makes sense. Is it almost fair to characterize [indiscernible] almost a non-episodic business being added to the episodic earnings stream that should be less volatile on a quarter-to-quarter, year-to-year basis or is that the right way to think about it?

24:16 I would stick it in episodic bucket. I mean you don't -- you don't control the revenues, right? You don't control issuance. You don't control -- so I think that's actually going to be one of those businesses, again, we're just making sure we're always making money and we have high incremental margins and we are there to benefit in the markets or enables high revenue. So I think it's more than episodic side that I would put that in. 24:47 Now we talked about a couple of small business, telecom businesses we acquired and are in the process of acquiring Bullseye and Lingo. Those are slow growth, buying them for what we think will be ultimately 3.5 times to 4 times great free cash flow, synergistic with the infrastructure we've built on that side, that I would bucket into the, recurring side. 25:13 So far, we're hopeful we'll close at the end of July, Phil, I think the current thinking on both of those, but pre-synergy, you're talking about two business actually contribute $30 million. So far on an annualized basis Lingo which we have not closed because we haven't gotten approval, we are going to get approval soon. We had just been collecting some -- we had to loan them some money and we're getting some interest income probably about like $8 million run rate. So that's a big pickup in the recurring side that you'll see this year as we progress later and close those deals.

25:52 That great. And then just last one, you mentioned I think about two dozen hires so far, any idea kind of what percentage of the kind of full scale size, how many more hires are need to get the have full scale for you guys?

26:10 So I think that there is a level. I think that the level -- the smallest level is probably 30 or 40 people, but it's all going to be around opportunities and the people that look at this platform, and I think if I was in fixed income and I was at a bigger shop, I would look at this platform and say, what an opportunity, I've got a -- I got to get in a 24, I don't know, we've been around 25 years. We've got a lot of established relationships when we get it in ground floor on a fixed income business like that to me is really exciting. 26:44 So, but we'll see. We'll see -- we're not going to go and force the issue, we're not going and build our people and to build our people the market is really tight and people want too much, we will wait, we will be patient, but what we have found is, I do think it's resonating, what I -- the example -- what I was just saying. I think it's resonating that we are a unique opportunity in the fixed income side and I think the leadership there has a lot of respect in the market and is really leading some strong people to come over. So, maybe I would look at the low end 30, 40, in high end, we're going to get profitable, right? So we'll build out as we get profitable.

27:28 Makes sense. Tom. That's all I have. Thanks for taking my questions.

27:33 I appreciate it. Thank you.

27:35 [Operator Instructions] Our next question comes from Brett Hendrickson of Nokomis. Please go ahead.

27:49 I think -- I just want to make sure I heard you right, the press release talked about the Hurley and the Justice going into -- coming through the dividend, is all of the Hurley revenue come as a dividend or is some of that come as a royalty in the brand segment?

28:06 It all comes as a dividend. So just think of that business, Brett, and it's frustrating to me that we have to allocate it that way, but it's just because of -- we also have a valuation component of those, because we own a piece of them. So we have to get that asset evaluated every quarter. So it get stuck in the -- in the capital market side, but just think of the brand business is adding $35 million to $40 million of just incremental EBITDA with no CapEx obviously, that's kind of the run rate.

28:35 Sorry, how much?

28:37 $35 million, $40 million. So [Multiple Speakers] if you add those up here, I think it was $9 million, right? This quarter, that's $36 in and around and there has been growing those guys at Blue Star, the management are doing a great job and they're seeing more and more opportunities like Justice is just getting into Walmart. So, there's a lot more opportunities there.

29:00 Yeah. So, what has worked, I see Hurley at more places in the retail and I think of you guys every time.

29:07 I have number side [indiscernible] was like hanging out in the [indiscernible]. So I just wanted something else.

29:16 And we're seeing it in some [indiscernible] places, I haven't changed my ways, I'm just [Multiple Speakers] but, so, anyways, the great expense leverage and capital markets. I did want to -- someone else already asked the same question I had around the wealth management lawsuit, but I want to make sure -- sorry, this phone is going off. I want to make sure that I heard you right, did you say $4.5 million with that lawsuit?

29:47 What was the exact number Phil ?

29:51 Yeah, I think [indiscernible] we had a reserve, but the charge that we took for the quarter is roughly $4.1 million.

29:59 Okay. And I know you said that business, I forget how you describe national, maybe you said it's kind of messy sometimes, but so then it does not imply wealth management lost money in the quarter. Even excluding the lawsuit or --

30:15 So, [indiscernible] wealth management has been nicely profitable, $502 million a month. National is going to gyrate more and I just -- so, the answer is, we lost a little bit of money, but I wouldn't read too much into it, it's just a little bit chunkier around events and we haven't been able to merge the businesses. So, we have -- in fact, we have two infrastructures and that doesn't mean we're -- there's just an opportunity to save money and contracts and all those things that we have not done yet, because we haven't merge those two businesses. So I would say, lost a little bit of money, but I would tell you, I wouldn't read too much into that. 30:58 Another side of it [Multiple Speakers] you have understand is that. The benefit that national also has is in all -- sometimes accretes to other parts of the businesses. They are -- there have been for referrals on M&A that goes into capital markets. There have been participants in our deals and help our deals get done. So there is another benefit that doesn't get picked up in the line item of the sub, but it's a big benefit.

31:26 Okay. Yeah. I'm aware of that synergy and that's good. And then kind of speaking of where stuff falls in your segments, Bryant? FocalPoint, does that -- some of that goes in the financial consulting and some of that goes in capital markets or where is that revenue and EBITDA contribution going to fall?

31:46 Phil, can you answer that in terms of the breakup.

31:52 Sorry, I'm sorry, can you say it again. The FocalPoint –

31:55 All of those revenues are going to be an advisory, right? is that the current -- is that where we're putting.

32:00 I think capital markets. The advisory is our restructuring -- is our structuring appraisal, real estate advisory, operations management advisory.

32:13 Okay. That's good. That should make capital market as a little less episodic or maybe episodic in a different way going forward. I mean let's make sure we got everything? [Multiple Speakers]

32:28 Just one clarification. I'm sorry, what I was referring to is, we call it advisory, we look to it as our financial consulting segment is what I was referring to on the restructuring side.

32:39 Yeah. I knew that that's the old GlassRatner businesses in the financial consulting side, is that right?

32:46 Right, correct.

32:47 Yeah. And then all of FocalPoint will stay in capital markets?

32:54 Okay, great. Thanks for your time and insight and keep up the hard work.

32:59All right. Thanks, Brett.

33:08 This concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Riley for his closing remarks.

33:16 And I guess I would conclude with -- I can't imagine being in better position for a highly volatile market than we are, thanks to members of our team across our business. We -- as the numbers demonstrate, we obviously are going to have big gyrations on our investment book and we made almost $400 million last year in that book and this first quarter, we lost some money and obviously as the markets – as the markets continue to come in, we'll lose some money there, but the base business is incredibly strong and I'm really excited about the cash flows that will be generated when we have both the base business -- excuse me, the recurring business and the episodic clicking at the same time, which we will. You don't know when that's going to happen but it will. And feel really good about our balance sheet and the opportunities and look forward to reporting next quarter. Thank you everybody within B. Riley and our shareholders to support and we'll talk in 90 days. Thank you very much.

34:14 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. Riley 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 other risk factors explained in detail in the company's filings with the Security and Exchange Commission. 35:01 Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. All forward-looking statements are made as of today and except 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. 35:20 Thank you for joining us for B. Riley Financial's first quarter 2022 earnings conference call. You may now disconnect.