Bryant Riley – Chairman and Co-Chief Executive Officer Tom Kelleher – Co-Chief Executive Officer Phil Ahn – Chief Financial Officer and Chief Operating Officer

Wes Cummins – Nokomis Capital Heath Winter – ArbitrOption Capital

Thanks, operator, and thanks to everyone joining us for our call this afternoon. This is an exciting time for B.

Riley Financial. As you can see from our results, we experienced strength in most of our businesses, which we believe speaks to the power of our combined platform and the diverse revenue streams up from offers.

Our Q2 results exceeded our previous guidance with $41.4 million in adjusted EBITDA and $17 million in net income, which we’ve previously estimated to be in the range of $38 million to $40 million for adjusted EBITDA and $14.3 million to $15.3 million for net income. We’ve emphasized our B.

Riley FBR and Great American retail liquidations division as the primary contributors to our second quarter results and our guidance. However, it’s important to note that each of our segments contributed to the strength in our Q2 results.

We continue to see steady growth in our Appraisal businesses and cash flow generated by United Online business. These contributions combined with our continued focus on expense management helped improve our overall profit margins.

We’re seeing more opportunities than ever through our combined platform, which has allowed us to create unique opportunities on both multiple parts of our businesses. Examples like Bon Ton, Toys "R" Us and most recently our participation in Vintage Capital’s acquisition of Rent-A-Center demonstrate our ability to be effective in this strategy.

Taken together, we believe these results speak to the collective efforts our team has taken to build on our franchise and to drive momentum across our B. Riley Financial platform.

And with some of that momentum, we’ve recently announced some executive leadership changes to help continue the strength in our position as we look forward. Andy Moore is now CEO of B.

Riley FBR, our investment banking and institutional brokerage business. Andy has demonstrated his business throughout his decades of long tenure with B.

Riley and most notably during the merger of B. Riley and FBR.

His deep knowledge of our firm gives us the highest confidence in his ability to continue to evolve the business with the focus on growth, while preserving our core values. Kenny Young was appointed as President of the parent company, B.

Riley Financial, which is fitting, given his unique role in the evolution of our business as previous board member and long-standing business partner of B. Riley prior to joining the firm, and through his contributions to our principles investment platform, which he will continue to lead.

We believe Kenny’s leadership and deep operational expertise will help accelerate our ability to execute on our strategy, as we focus on our long-term growth. Last, but not least, Tom Kelleher, who joins me as co-CEO of B.

Riley Financial, a role which we are formalizing, but he has been operating in for some time. Tom’s contribution to this company over the last 20 years has helped us grow from a two-person single office LA-based research firm to the nearly 1,000 person strong diversified financial services firm we are today.

We mentioned our continued focus on growth and to that end, we’re excited to welcome our newest colleagues from GlassRatner to B. Riley Financial.

GlassRatner is a firm highly regarded in the financial advisory space, particularly as it relates to M&A advisory, restructuring, crisis management and litigation matters. The addition of GlassRatner as the new dedicated business consulting services vertical for B.

Riley. This combination not only adds new capabilities, but also offers complimentary services to our existing suite of services, which we can leverage to provide clients with the more holistic end-to-end solutions.

And before I dive into discussions of our individual segments, I will hand it over to Phil Ahn, our CFO to discuss our Q2 financial performance. Phil?

Thanks, Bryant, and welcome, everyone. Our revenues for the second quarter of 2018 totaled $125.5 million, up from $66.7 million for the same year ago period.

The significant year-over-year increase reflects contributions related to our – from our acquisitions of FBR and Wunderlich Securities, which we completed in June and July of last year, respectively. Now turning to our revenue mix by segment.

Our Capital Market segment is primarily driven by results from our combined investment banking and institutional brokerage business of B. Riley FBR as well as results from Wunderlich Securities, which we have recently predate B.

Riley Wealth Management. Our Capital Markets segment also includes results from our asset management and securities lending businesses.

For the second quarter of 2018, Capital Markets segment revenues totaled $77.8 million, which includes $71.2 million in revenues generated from services and fees as well as $6.6 million in revenues generated from interest income via our securities lending business. Revenues for this segment increased from $23.9 million from the same year ago period.

Segment income of $12 million for the second quarter of 2018 compares to a loss of $4.8 million in the same year ago period. Again, the year-over-year increase for this segment is primarily driven by the addition of revenues associated with our acquisitions of FBR and Company and Wunderlich Securities in 2017.

Next is our Auction and Liquidation segment. This segment is primarily driven by results from our Great American retail liquidations division.

Total revenues for this segment increased to $26.8 million, up from $21.8 million from the same year ago period and $15.5 million in the first quarter of 2018. This increase was primarily driven by our participation in large retail liquidation projects in the second quarter.

Segment income increased to $16.3 million for the second quarter of 2018 compared to $7.3 million in the same year ago period. As we’ve previously mentioned, we expect results from this segment for our business to vary from quarter-to-quarter due to the episodic nature of a project-based retail liquidations engagements.

Turning to our Valuation and Appraisal segment, which includes results from our Great American appraisals businesses, revenues for this segment increased to $9.5 million for the second quarter of 2018, up from $8 million for the same year ago period. Segment income increased to $2.9 million for the second quarter, up from $2.3 million for the same year ago period.

Results for this segment continued to demonstrate steady contribution quarter-over-quarter. And now for our final segment, Principal Investments, which currently consists of United Online.

For the second quarter of 2018, United Online contributed revenues of $11.4 million with a segment income of $4.7 million. This compares to $11.4 million in revenues and the segment income of $4.9 million for the first quarter of 2018.

While it is our expectation that reported results from United Online will gradually diminish over time, we will continue to provide meaningful cash flow in future years. In addition to United Online, we look forward to contributions from our previously announced acquisition of magicJack to our principal investment segments results in future quarters, which remains pending as we await regulatory approval.

We’ll provide an update on the deal once all customary closing conditions have been satisfied and the deal has been completed. Now turning to our profitability metrics, which are attributable to B.

Riley Financial as a whole. As Bryant mentioned at the top of the call, our Q2 results exceeded our guidance for net income and adjusted EBITDA, which we attribute to the better-than-expected results from our brokerage and our retail liquidation businesses.

Net income for the second quarter of 2018 totaled $17 million or $0.64 per diluted share. This compares to $3.3 million or $0.15 per diluted share for the same year ago period.

Adjusted net income, which is a non-GAAP metric increased to $22.8 million or $0.86 per diluted share for the second quarter of 2018. This compares to $8.8 million or $0.40 per diluted share for the same year ago period.

Adjusted EBITDA, which is another non-GAAP metric increased to $41.4 million for the second quarter of 2018 compared to $17.6 million for the same year ago period. For more information about adjusted EBITDA and adjusted net income and a reconciliation to the nearest GAAP measures, you can refer to the session in today’s earnings release regarding use of non-GAAP financial measures.

Now turning to our balance sheet. As of June 30, some highlights of our balance sheet include $191 million in unrestricted cash and cash equivalents, $35 million due from clearing brokers, $143 million in net securities and other investments held at fair value, $200 million in advances against customer contracts and $491 million in total debt.

When taken together, the balance sheet reflects over $75 million in net cash and investments after deducting the debt. Our total B.

Riley Financial stockholders’ equity was $263 million as of June 30. Our shares outstanding at the end of the quarter were approximately $26.1 million.

Lastly, our Board of Directors approved a special dividend of $0.22 per share in addition to our regular quarterly dividend of $0.08 per share, which will be paid on or about August 31, 2018 to stockholders of record as of August 16, 2018. That completes my financial summary.

Now I’ll turn the call back over to Bryant. Bryant?

Thanks, Tom. As mentioned in my earlier remarks, we believe our overall results speak to the continued momentum in our business, which accelerated around this time last year when we added FBR and Wunderlich to our B.

Riley Financial. Since then we’ve continued to focus on consolidating internal operations and vendors, efforts which have contributed to greater efficiencies across the business and significantly improved our profit margins.

But for us, most notably, our team is in focus on driving collaboration to partner on opportunities that has the potential to benefit all of our companies. Our success from this effort is evidenced by a number of recent high-impact engagements that our teams have collaborated on by leveraging the resources, relationships and collective expertise offered across the B.

Riley Financial network. Moving to the brokerage side of our Capital Markets segment.

In Q2, we successfully completed two large SPAC IPOs for Trinity Merger Corp. and LF Acquisition Corp, which represented $500 million of gross proceeds raised by B.

Riley FBR as the sole bookrunner on both these deals. Trinity was our largest sold IPO to date bringing proceeds of $345 million.

We also closed a major restructuring deal in Q2 and saw strong performance from our aftermarket or ATM business, which also contributed to our results for the quarter. Our 19th Annual Investor Conference in May was our largest and most successful conference to date.

We believe this is a testament to B. Riley FBR’s commitment to our clients and research segments, despite a challenging backdrop for our active small cap investor clients, as it relates to secondary revenue.

Despite this trend, we continue to demonstrate our commitment to providing an outlet for our research and we will be hosting our inaugural Healthcare Conference in New York on September 4. On the Wealth Management side, we completed the rebrand of Wunderlich Securities to B.

Riley Wealth Management to better align our business in the external marketplace and drive further brand recognition of our diversified platform and resources. Moving to direct lending, Great American Capital Partners launched and completed five new loans with a gross transaction size of over $200 million during the second quarter and two additional loans in July with the total of approximately $50 million.

During the quarter, we also successfully closed GACP II, which was oversubscribed and received strong support from a range of institutional investors. With the close of Fund II, our overall direct lending fund strategy has capital commitments totaling over $700 million.

Moving to Auction and Liquidation. Great American participated in a record level of store closing activity in the second quarter, driven by our involvement in the largest retail liquidations engagements in the recent history, which includes Bon Ton stores and Toys "R" Us.

The team is currently working to clear the remaining Bon Ton inventory with the liquidation scale scheduled to conclude at the end of August. We expect current industry headwind to continue as large retailers focus on real estate consolidation and purging excess inventory.

We believe this creates opportunity for us to get involved in more creative retail liquidation deal structures and take advantage of our unique platform, especially as the trends in retail continue to accelerate. Our Great American valuation and appraisal business continues to maintain steady earnings growth quarter-after-quarter.

We’re continuing to expand our revenue sources by applying cross-platform approach to leverage our relationships and expertise in industry verticals beyond our core Appraisal customer. Now moving on to Principal Investment segment.

United Online continues to serve as a significant source of steady income for us and is performing to our expectations. And as Phil mentioned, we’re still awaiting regulatory approval to close our pending acquisition of magicJack, but we look forward to discussing its contribution for this segment in future quarters once the deal has closed.

As always, we needed to mention we are only as good as the people we work with. We’re very excited to add GlassRatner Group to the team, and we look forward to working with them to enhance shareholder value.

We are undoubtedly pleased with the quarter as it demonstrates the power of the platform when several of our operating units outperformed in the same quarter. With that, we’re ready to open the call for your questions.

Hey, thanks. Hey, Bryant, I got just a couple of questions.

One, on Bon Ton, you don’t really recognize any of the revenue until the full process is completed. Am I thinking about that right?

Or do you recognize some as you go through the process?

So very little. The Bon Ton is so different and that we’ve really acquired the whole company, so we own the real estate, we own the inventory, we own the IP.

So what we mentioned on the call that the inventory sale will end at the end of August, the real estate could go on for another six months and there is other assets throughout the company that will be sold over a period of time. So that one’s a little trickier.

Usually, in general, liquidation, we do not recognize anything until either we’re far into profitability and it swings over a quarter or until it’s over. Phil anything you want to add to that?

No, I think that’s right. The liquidation sale, the inventory liquidation sale is set to conclude at the end of August, but the real estate sales will continue beyond there.

Okay. And then I know you can’t comment on the actual process, but the Rent-A-Center is kind of a big deal and may be a different deal than I’ve seen that you guys do in the past.

May be if you could just comment if that – you think that opens up more opportunity in that area?

So I think we’ve talked about previously that one of the things that we think makes us unique is our willingness to use our balance sheet to create opportunities, whether it’s Principal Investments or whether it’s back stopping a transaction And now, given our direct lending fund and distribution through institutions and obviously the wealth management with over $8 billion of assets, the ability for us to be able to do that is extensive. And if you look at our balance sheet, Wes, we still got $70 million in net cash.

And if you take our trailing 12 months and you add in magicJack’s public numbers, you’ve got $120 million of EBITDA there. So we think we have lots of room in our balance sheet to do some interesting things.

We will be aggressive looking for ways to create value for our shareholders, and we think that, that area of creating a – using our balance sheet to create some of those dynamics and really interesting investments is absolutely something we will do more of.

Okay. thanks.

All right. Thanks, Wes.

Sorry, go ahead.

Hi. Heath Winter with ArbitrOption Capital calling.

A quick question for you. With regard to the magicJack transaction and where we stand in the process at this point.

Is this where you expected it to be, or are things taking longer than you’d anticipated?

I would like to tell you exactly how I feel about magicJack. And if I knew the answer as to what I can tell you, I would.

It’s obviously a public company and I have been told that anything around the public company transaction, I just can’t speak to. And I say that honestly, I say that I wish I could, but I just have been told not to speak to the actual process.

I apologize.

Okay. Well thanks, again, everyone who joined on the call and a special thanks to our employees, partners and investors for your continued support.

We look forward to updating you on your next call. Thank you, everyone.