Why did RILYL's operating profit plummet in Q3 2024?

B. Riley Financial's operating profit plummeted by 65.91% in Q3 2024, primarily due to the following factors:

1. **Interest Rate Increase and Loan Restructuring**: B. Riley Financial's bankers increased the interest rate on the company's key loan and reduced the borrowing limit as it struggles with a debt load of about $2 billion. This move led to an amendment with a group of lenders that allowed B. Riley to avoid paying some interest in cash but added it to the total outstanding amount. The company had to reduce its term loan principal to $100 million by September 30, 2025, and eliminated a revolving credit line. This restructuring had a significant impact on the company's cash flow and profitability.
2. **Debt Financing and Asset Sales**: The company committed to a debt financing arrangement for its B. Riley and bebe brands businesses, which was expected to yield around $236 million. This financing was collateralized by the brands' assets and was non-recourse to B. Riley. The company had acquired the brand portfolio for approximately $222 million and had already received $179 million in distributions. The proceeds from these transactions were primarily used to reduce the Nomura Senior Secured Debt to about $125 million by the end of the year. These moves were part of a strategy to strengthen the balance sheet and focus on core businesses.

In conclusion, B. Riley Financial's operating profit decline in Q3 2024 was primarily due to interest rate increase and loan restructuring and debt financing and asset sales.