Heritage (US:HGBL)2023-03-24 20:01Financial Performance - Total revenues increased to $46.9 million in 2022, up from $25.8 million in 2021, representing an increase of approximately 82%[115] - Gross profit rose to $26.0 million in 2022, compared to $18.4 million in 2021, an increase of approximately $7.6 million or 42%[120] - Operating income for 2022 was $11.1 million, compared to $3.0 million in 2021, marking a significant increase[115] - Net income rose significantly from $3,053 thousand in 2021 to $15,493 thousand in 2022, marking an increase of 408%[127] - EBITDA increased from $3,474 thousand in 2021 to $11,656 thousand in 2022, representing a growth of 236%[127] - Adjusted EBITDA also saw a substantial rise from $4,082 thousand in 2021 to $12,196 thousand in 2022, an increase of 199%[127] Expenses - Selling, general and administrative expenses increased to $21.3 million in 2022, up from $14.8 million in 2021, reflecting a 44% increase[121] - Total selling, general and administrative expense increased by 44% from $14,811 thousand in 2021 to $21,326 thousand in 2022[123] - The total depreciation and amortization expense for both 2022 and 2021 was $0.5 million, primarily related to intangible assets[123] Cash Flow and Assets - Cash provided by operating activities was $6.5 million in 2022, a turnaround from cash used of $2.6 million in 2021, indicating a change of approximately $9.1 million[105] - Current assets increased to $23.9 million at December 31, 2022, compared to $23.3 million at December 31, 2021, primarily due to a $2.3 million increase in notes receivable[95] - Cash and cash equivalents decreased to $12.7 million at December 31, 2022, from $13.6 million at December 31, 2021[104] Liabilities and Equity - Current liabilities rose to $16.2 million at December 31, 2022, up from $14.2 million at December 31, 2021, an increase of $2.0 million[96] - The company had stockholders' equity of $48.3 million at December 31, 2022, compared to $32.6 million at December 31, 2021[101] Future Expectations - The company expects future net cash flows from operating activities to continue as the primary source of cash for ongoing operations[100] - The company expects an adjustment to retained earnings between $0.3 million and $0.4 million due to the adoption of ASU 2016-13 effective January 1, 2023[128] Acquisitions and Credits - The acquisition of American Laboratory Trading in August 2021 was for approximately $5.6 million, with fair value assessments conducted for purchase price allocation[146] - The company recorded a $0.6 million receivable related to the Employee Retention Credit as of December 31, 2022[144] Other Financial Information - The deferred revenue balance as of December 31, 2022, was $0.4 million, primarily related to customer deposits on asset sales[132] - Goodwill is tested for impairment annually on October 1, with a qualitative approach followed by a quantitative analysis if necessary[148] - The company recorded a net deferred tax asset balance of approximately $9.4 million in Q4 2022, indicating a belief that a significant portion of net operating loss carryforwards will be utilized[150] - Stock-based compensation is primarily in the form of options, with fair value calculated using the Black-Scholes model and expensed over the vesting period[151] - As of December 31, 2022, the company had not recorded an allowance for credit losses related to notes receivable outstanding[141]