Heritage Global (HGBL) Q1 2025 Earnings Call May 08, 2025 05:00 PM ET Company Participants John Nesbitt - Investor RelationsRoss Dove - CEO & DirectorBrian Cobb - Chief Financial OfficerMark Argento - President & Co-Founder Conference Call Participants None - Analyst Operator Good day, everyone, and welcome to the Heritage Global Inc. First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. Later, you'll have the opportunity to ask questions during the questi ...

Heritage Global (HGBL) Q1 2025 Earnings Call May 08, 2025 05:00 PM ET Speaker0 Good day, everyone, and welcome to the Heritage Global Inc. First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. Later, you'll have the opportunity to ask questions during the question and answer session. Please note today's call will be recorded and we will be standing by if you should need any assistance. It is now my pleasure to turn today's conference over to John Nesbett o ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR For the transition period from to UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Commission file number: 001-39471 HERITAGE GLOBAL INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organiz ...

Financial Data and Key Metrics Changes - The company reported a consolidated operating income of $1.5 million in Q4 2024, down from $4.6 million in Q4 2023 [21] - Adjusted EBITDA decreased to $2.1 million from $4.9 million year-over-year [21] - The company recorded a net loss of $200,000 or one cent per diluted share, compared to net income of $4.9 million or thirteen cents per diluted share in the same quarter last year [22] - Stockholders' equity increased to $65.2 million as of December 31, 2024, up from $61.1 million a year earlier [23] - The company ended the year with no long-term debt and a cash balance bolstered by operations and investment activities [24] Business Line Data and Key Metrics Changes - The industrial assets division reported operating income of $800,000 in Q4 2024, down from $1.6 million in the prior year [16] - The financial assets division reported total operating income of $1.9 million, while the brokerage business recorded $1.7 million, down from $2.7 million in Q4 2023 [18] Market Data and Key Metrics Changes - The company noted a significant increase in defaults and charge-offs, indicating a robust market for auctioneers in the coming months [10][13] - The demand for used equipment is at an all-time high due to supply chain tightening and potential tariff impacts on new equipment [12] Company Strategy and Development Direction - The company is focusing on expanding its warehouse and staffing to meet increased demand and asset flow [8] - M&A efforts are producing multiple prospects, with a focus on capitalizing on opportunities in the current economic environment [9][26] - The company is optimistic about the auction market in 2025, anticipating increased activity due to economic pressures leading to more defaults and asset liquidations [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic challenges and capitalize on market opportunities [14] - The CEO highlighted the importance of maintaining profitability and a strong balance sheet to seize new opportunities [27] - Management acknowledged the challenges faced in 2024 but remains positive about the future, citing a strong pipeline of opportunities [28] Other Important Information - The company repurchased approximately 1.3 million shares in the open market during fiscal 2024, with $3 million remaining under the share repurchase program [25] - A new mortgage loan agreement for $4.1 million was entered into for the company's new corporate headquarters, which will provide expanded office and warehouse space [26] Q&A Session Summary Question: Did you increase any more provisions on the loan book? - Management stated that they have not increased or substantially decreased the reserve against the loan book, maintaining a consistent reserve level [31] Question: What is needed to grow the brokerage business? - The CEO indicated that an increase in defaults would lead to more charge-offs, which would benefit the brokerage business in the future [39] Question: What is the capacity to serve the market now? - The CEO mentioned that the company has expanded its capacity significantly, allowing for more asset relocation and acquisitions [49] Question: Are you able to take advantage of higher interest rates on cash balances? - Management confirmed that they are utilizing short-term vehicles to earn interest income, but are primarily focused on deploying cash into the business [111] Question: What is the current status of non-accrual loans? - Management disclosed that the amount in non-accrual status is approximately $22 million to $23 million [75] Question: How is management compensation structured? - Management compensation is variable and based on performance, with bonuses tied to the company's profitability [89]

Heritage Global (HGBL) Q4 2024 Earnings Call March 13, 2025 05:00 PM ET Company Participants John Nesbett - Founder & PresidentRoss Dove - CEO & DirectorBrian Cobb - Chief Financial OfficerMark Argento - President & Co-FounderGeorge Sutton - Partner- Co-Director of Research Conference Call Participants None - AnalystDavid Marsh - Equity Research Analyst Operator Please note this call may be recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference ove ...

Financial Data and Key Metrics Changes - Consolidated operating income was $2.6 million in Q1 2024, down from $3.9 million in Q1 2023 [15] - Adjusted EBITDA decreased to $2.9 million from $4.2 million year-over-year [15] - Net income was $1.8 million or $0.05 per diluted share, compared to $2.8 million or $0.08 per diluted share in the prior year [15] - Stockholders' equity increased to $63 million as of March 31, 2024, up from $61.1 million at the end of 2023 [15] Business Line Data and Key Metrics Changes - Financial Assets division reported operating income of $2.9 million in Q1 2024, a 16% increase from $2.5 million in the same period last year [5] - Specialty lending segment within Financial Assets saw an operating income of approximately $900,000, an 81% increase year-over-year [6] - Brokerage segment in Financial Assets recorded $2.1 million in operating income, slightly up from $2 million in the prior year [10] - Industrial Assets division's operating income was $800,000, down from $2.6 million in Q1 2023 due to fewer large auctions [12] Market Data and Key Metrics Changes - The company noted a strong pipeline of opportunities in the Financial Assets division, particularly in specialty lending and brokerage [11] - The Industrial Assets division is expected to see increased auction activity in Q2 2024, following a significant addition to the current pipeline [12] Company Strategy and Development Direction - The company is focusing on organic growth while increasing its emphasis on strategic M&A to drive long-term growth [16] - Plans to balance lending between financial and industrial assets, leveraging a database of nearly $1 billion in industrial assets [19] - Initiatives to monetize data-driven revenue are underway, aiming to expand revenue streams [20] - The company is exploring growth opportunities across various manufacturing sectors and geographies, particularly outside North America [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance and growth trajectory, highlighting a strong start to Q2 2024 [8] - There is an expectation of continued availability of charged-off products throughout the year, which could support future growth [38] Other Important Information - The company is working on expanding segment-specific disclosures to provide more transparency for shareholders by the end of 2024 [14] Q&A Session Summary Question: Criteria for M&A opportunities - Management looks for synergy and cultural fit in acquisitions, not just immediate financial accretion [24][25] Question: Performance of the Financial Assets business - The lending business is performing well, with expectations for growth in the charged-off loan segment as new clients are onboarded [26][30] Question: Economics of the pharmaceutical plant acquisition - Details on the transaction are still being finalized, with a focus on how revenue recognition will be handled [27][33] Question: Industrial lending offering - The company plans to provide capital to buyers of assets at auctions, expanding its lending capabilities in the industrial sector [35][36] Question: Charge-off volume expectations - Management sees a significant amount of product becoming available, indicating ongoing opportunities despite potential normalization in charge-off volumes [37][38]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39471 HERITAGE GLOBAL INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organiz ...

Financial Data and Key Metrics Changes - Consolidated operating income for Q4 2023 was $4.6 million, up from $3.1 million in Q4 2022, while adjusted EBITDA increased to $4.9 million from $3.4 million year-over-year [13][19] - Full year 2023 operating income reached $14.3 million, indicating strong performance across the business [19] - Net income for Q4 2023 was $4.9 million or $0.13 per diluted share, down from $10 million or $0.27 per diluted share in Q4 2022, primarily due to reduced income tax valuation allowance [22] Business Line Data and Key Metrics Changes - Specialty Lending segment reported a gross investment balance in notes receivable of $38.4 million, an increase of $16.3 million compared to the prior year [9] - Financial Assets division's operating income increased by 90% to $8.9 million, driven by an expanded client base and higher volumes of charged-off loans [20][42] - Core Auction and Resale segments saw growth in transaction volumes, with operating income of $7.8 million, down from $9.2 million in 2022 due to the absence of earnings from real estate joint ventures [10] Market Data and Key Metrics Changes - The addressable market has significantly increased due to the highest-ever consumer debt levels, which is expected to drive growth in the coming years [11][30] - The auction business is anticipated to maintain strong momentum into 2024, supported by high consumer debt and increased volumes of charged-off credit cards [42] Company Strategy and Development Direction - The company aims to leverage the growing addressable market and is focused on managing risk in its loan portfolio while redeploying principal remittances for higher quality collateral [47][59] - There is a strategic emphasis on synergistic growth through acquisitions, such as American Lab trading, which enhances the auction business [61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a solid and profitable year in 2024, despite the challenges of comparing against record performance in previous years [26][28] - The company is optimistic about the stability of profits over the next two to three years, given the current supply dynamics in the market [30] Other Important Information - The balance sheet remains strong, with stockholders' equity increasing to $61.1 million as of December 31, 2023, up from $48.3 million a year earlier [45] Q&A Session All Questions and Answers Question: How does the company view growth in 2024 given the macro environment? - Management indicated that while it is challenging to predict growth after a record year, the addressable market is larger than last year, suggesting potential for increased profitability [26][49] Question: What is the status of the loan book and reserves? - Management confirmed that no significant changes were made to the credit loss reserve in Q4, and they feel comfortable with the current position based on thorough analysis and borrower performance [50] Question: How sustainable is the growth at NLEX? - Management noted that the growth is supported by both macro dynamics and an increasing number of customers, indicating a favorable environment for continued growth [51]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-39471 HERITAGE GLOBAL INC. (Exact Name of Registrant as Specified in Its Charter) Florida 59-2291344 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39471 HERITAGE GLOBAL INC. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Org ...