B. Riley delays Q3 report, warns of loss from Franchise bankruptcy

(Reuters) – B. Riley Financial on Wednesday warned of a third-quarter loss and said it would delay its earnings report due to hold-ups in finalizing the valuations of some loans and investments.

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

The bank expects net loss from continuing operations to be between $130 million and $135 million, or $4.26 to $4.43 per share, mainly due 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 bigger hit from its ill-fated investment.

Including discontinued operations, it expects to post a loss of about $290 million to $300 million or $8.85 to $9.18 per share.

B. Riley, whose shares have slumped 77% this year, said it was “working diligently” to file the September quarter report. It is also yet to file the report for the three months ended June 30.

The bank said its debt is expected to be about $2.06 billion at the end of September, a decrease of $100 million from June end. It repaid about $82 million to Japanese investment bank Nomura in the quarter.