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B. Riley Financial (NASDAQ:RILY) said Tuesday it expects Q4 2022 operating adjusted EBITDA of $90M-$100M, bringing expected full-year 2022 operating adjusted EBITDA to $355M-$365M. The guidance came after one of its debtors, Core Scientific (CORZ), had filed for bankruptcy last week.
The high end of the Q4 guidance comes in just under its Q3 operating adjusted EBITDA of $106.2M.
The financial company estimated investment losses of $125M-$150M for Q4 2022 and investment losses of $405M-$430M for the full year, as estimated mark-to-market losses reflect continued softness in small cap markets.
Chairman and Co-CEO Bryant Riley said, “It is important to put these numbers into perspective. Over the past two years, we have delivered operating adjusted EBITDA in excess of $775M (at the lower end of our fourth quarter guidance).”
In addition, returns from its investment portfolio were close to flat, compared with an ~11% decline in the Russell 2000 for the same period, he said.
Investments related to digital asset mining and crypto service businesses were valued at ~$52M at Sept. 30, 2022, including $49M in loans receivable and $3M in equities and senior notes, representing ~2% of total cash and investments at quarter-end. Potential Q4 2022 exposure of related investments is estimated to be ~$39M, of which $26M represents a loan to a borrower that has since filed for bankruptcy.
B. Riley (RILY) estimated total cash and investments to be ~$2.15B and total debt to be ~$2.5B at year-end.
On Dec. 14, B. Riley (RILY), one of the largest creditors of crypto miner Core Scientific (CORZ), had proposed a debt restructuring for Core to avoid bankruptcy. On Dec. 21, CORZ filed for Chapter 11 bankruptcy proceedings.
Image and article originally from seekingalpha.com. Read the original article here.