Heritage Global Chief Executive Officer Ross Dove commented, "We delivered solid results in 2024, strengthened our balance sheet, and returned capital to shareholders via our share repurchase program. While we had a tough comparison to a particularly strong 2023, Heritage delivered full year net operating income of more than $9 million and we enter 2025 with a strong and growing pipeline of opportunities. As expected, we saw improved sequential performance in our industrial assets division in the fourth quarter. While second half 2024 was light on disposition activity, we anticipate increased auction activity in 2025. We continue to compete for and win auction business from blue chip partners, reflecting our strong track record of success for the sale of industrial assets. At our financial assets division, we remain focused on selectively capitalizing on the continuing high levels of consumer spending that are driving increased charge offs. As we begin to move through 2025, we are optimistic about the strength of our pipeline and the market opportunities we are seeing across our businesses. We remain intent on expanding and leveraging our capabilities to drive growth and continued profitability.
"Subsequent to the quarter, we secured a $4.1 million mortgage for the purchase of a new corporate headquarters building which will provide us expanded office and warehouse space to support the Company’s long-term growth while also giving us a real estate asset in what we believe is an attractive business district of San Diego," Mr. Dove concluded.
Brian Cobb, Chief Financial Officer, stated, "In the second quarter of 2024 Heritage Global Capital's largest borrower was placed into default and the loans extended to this borrower were placed into non-accrual status. Throughout the balance of 2024, this borrower continued to remit 100% of net collections generated from the underlying portfolio assets to both HGC and senior lenders. While net collections continue to be lower than the contractual monthly minimums, the borrower is actively working in tandem with its lenders to improve collection rates and we believe that these ongoing efforts will both improve the long-term cash flows to the lenders and strengthen the financial position of this borrower."
Fourth Quarter and Year-End Conference Call
Management will host a webcast and conference call on Thursday, March 13, 2025, at 5:00 p.m. ET to discuss financial results for fourth quarter and year-end 2024. Analysts and investors may participate via conference call, using the following dial-in information:
To access the webcast, individuals can use this link. The conference call will also be available in the Investor Relations section of the Company’s website. To listen to a live broadcast, go to the site or click on the webcast link at least 10 minutes prior to the scheduled start time in order to register.
Replay
A replay of the call will be available approximately three hours after the call ends through March 27, 2025. To access the replay, dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The replay pin number is 11158220. A webcast replay can also be accessed on the Investor Relations section of the Company’s website.
About Heritage Global Inc. ("HG")
Heritage Global Inc. (NASDAQ: HGBL) values and monetizes industrial & financial assets by providing acquisition, disposition, valuation, and lending services for surplus and distressed assets. This aids in facilitating the circular economy by diverting useful industrial assets from landfills and operating an ethical supply chain by overseeing post-sale account activity of financial assets. Specialties consist of acting as an adviser, in addition to acquiring or brokering turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, real estate, and charged-off account receivable portfolios through its two business units: Industrial Assets and Financial Assets.
Definitions and Disclosures Regarding non-GAAP Financial Information
The Company defines EBITDA as net income/loss plus depreciation and amortization, interest and other expense, and provision for income taxes. Adjusted EBITDA reflects EBITDA adjusted further to eliminate the effects of stock-based compensation. Management uses EBITDA and Adjusted EBITDA in assessing the Company’s results, evaluating the Company’s performance and in reaching operating and strategic decisions. Management believes that the presentation of EBITDA and Adjusted EBITDA, when considered together with our GAAP financial statements and the reconciliation to the most directly comparable GAAP financial measure, is useful in providing investors a more complete understanding of the factors and trends affecting the underlying performance of the Company on a historical and ongoing basis. The Company’s use of EBITDA and Adjusted EBITDA is not meant to be, and should not be, considered in isolation or as a substitute for, or superior to, any GAAP financial measure. You should carefully evaluate the financial information, below, which reconciles our GAAP reported net income to EBITDA and Adjusted EBITDA for the periods presented (in thousands).
Forward-Looking Statements
This communication includes forward-looking statements based on our current expectations and projections about future events. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. While the Company believes the forward-looking statements contained in this communication are accurate, these forward-looking statements represent the Company’s beliefs only as of the date of this communication, and there are a number of factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements, including variability in magnitude and timing of asset liquidation transactions, the collectability of the charged off receivables that secure our loan portfolio, the impact of changes in the U.S. national and global economies, and interest rate and foreign exchange rate sensitivity, as well as other factors beyond the Company’s control. Unless required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.
-financial tables follow-
| HERITAGE GLOBAL INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (In thousands of US dollars, except share and per share amounts) |
| (unaudited) |
| | | | | |
| | | Three Months Ended
December 31, | | Twelve Months Ended
December 31, |
| | | 2024 | | 2023 | | 2024 | | 2023 |
| Revenues: | | | | | | | | |
| Services revenue | | $ | 7,080 | | | $ | 9,440 | | | $ | 32,607 | | | $ | 39,480 | |
| Asset sales | | | 3,687 | | | | 5,844 | | | | 12,754 | | | | 21,065 | |
| Total revenues | | | 10,767 | | | | 15,284 | | | | 45,361 | | | | 60,545 | |
| | | | | | | | | |
| Operating costs and expenses: | | | | | | | | |
| Cost of services revenue | | | 1,140 | | | | 1,437 | | | | 5,805 | | | | 8,007 | |
| Cost of asset sales | | | 2,181 | | | | 3,041 | | | | 8,321 | | | | 12,724 | |
| Selling, general and administrative | | | 5,876 | | | | 6,494 | | | | 24,266 | | | | 26,040 | |
| Depreciation and amortization | | | 151 | | | | 141 | | | | 591 | | | | 514 | |
| Total operating costs and expenses | | | 9,348 | | | | 11,113 | | | | 38,983 | | | | 47,285 | |
| Earnings of equity method investments | | | 66 | | | | 384 | | | | 2,688 | | | | 1,059 | |
| Operating income | | | 1,485 | | | | 4,555 | | | | 9,066 | | | | 14,319 | |
| Interest income (expense), net | | | 90 | | | | (99 | ) | | | (93 | ) | | | (324 | ) |
| Income before income tax expense (benefit) | | | 1,575 | | | | 4,456 | | | | 8,973 | | | | 13,995 | |
| Income tax expense (benefit) | | | 1,778 | | | | (434 | ) | | | 3,791 | | | | 1,520 | |
| Net income (loss) | | $ | (203 | ) | | $ | 4,890 | | | $ | 5,182 | | | $ | 12,475 | |
| | | | | | | | | |
| Weighted average common shares outstanding – basic | | | 36,227,223 | | | | 36,706,017 | | | | 36,539,911 | | | | 36,677,098 | |
| Weighted average common shares outstanding – diluted | | | 36,817,159 | | | | 37,493,878 | | | | 37,240,815 | | | | 37,587,308 | |
| Net income (loss) per share – basic | | $ | (0.01 | ) | | $ | 0.13 | | | $ | 0.14 | | | $ | 0.34 | |
| Net income (loss) per share – diluted | | $ | (0.01 | ) | | $ | 0.13 | | | $ | 0.14 | | | $ | 0.33 | |
| HERITAGE GLOBAL INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands of US dollars, except share and per share amounts) |
| | | |
| | | December 31, |
| | | 2024 | | 2023 |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 21,749 | | | $ | 12,279 | |
| Accounts receivable, net | | | 1,559 | | | | 1,910 | |
| Current portion of notes receivable, net | | | 3,416 | | | | 6,581 | |
| Inventory – equipment | | | 5,348 | | | | 5,074 | |
| Other current assets | | | 1,056 | | | | 448 | |
| Total current assets | | | 33,128 | | | | 26,292 | |
| Non-current portion of notes receivable, net | | | 6,558 | | | | 10,890 | |
| Equity method investments | | | 20,892 | | | | 21,361 | |
| Right-of-use assets | | | 2,208 | | | | 2,539 | |
| Property and equipment, net | | | 1,643 | | | | 1,705 | |
| Intangible assets, net | | | 3,362 | | | | 3,753 | |
| Goodwill | | | 7,446 | | | | 7,446 | |
| Deferred tax assets | | | 6,008 | | | | 9,115 | |
| Other assets | | | 64 | | | | 67 | |
| Total assets | | $ | 81,309 | | | $ | 83,168 | |
| | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
| Current liabilities: | | | | |
| Accounts payable and accrued liabilities | | $ | 5,979 | | | $ | 7,237 | |
| Payables to sellers | | | 7,417 | | | | 4,975 | |
| Current portion of third party debt | | | 395 | | | | 1,733 | |
| Current portion of lease liabilities | | | 807 | | | | 789 | |
| Total current liabilities | | | 14,598 | | | | 14,734 | |
| Non-current portion of third party debt | | | — | | | | 5,495 | |
| Non-current portion of lease liabilities | | | 1,510 | | | | 1,859 | |
| Total liabilities | | | 16,108 | | | | 22,088 | |
| | | | | |
| Commitments and contingencies | | | | |
| | | | | |
| Stockholders’ equity: | | | | |
| Preferred stock | | | 6 | | | | 6 | |
| Common stock | | | 374 | | | | 372 | |
| Additional paid-in capital | | | 295,657 | | | | 294,522 | |
| Accumulated deficit | | | (227,844 | ) | | | (233,026 | ) |
| Treasury stock | | | (2,992 | ) | | | (794 | ) |
| Total stockholders’ equity | | | 65,201 | | | | 61,080 | |
| Total liabilities and stockholders’ equity | | $ | 81,309 | | | $ | 83,168 | |
| HERITAGE GLOBAL INC. |
| Reconciliation of EBITDA and Adjusted EBITDA (Non-GAAP Measures) |
| (In thousands of US dollars) (unaudited) |
| | | | | | |
| | | Three Months Ended
December 31, | | Twelve Months Ended
December 31, |
| | | 2024 | | 2023 | | 2024 | | 2023 |
| Net income (loss) | | $ | (203 | ) | | $ | 4,890 | | | $ | 5,182 | | | $ | 12,475 | |
| Add back: | | | | | | | | | | |
| Depreciation and amortization | | | 151 | | | | 141 | | | | 591 | | | | 514 | |
| Interest (income) expense, net | | | (90 | ) | | | 99 | | | | 93 | | | | 324 | |
| Income tax expense (benefit) | | | 1,778 | | | | (434 | ) | | | 3,791 | | | | 1,520 | |
| EBITDA | | | 1,636 | | | | 4,696 | | | | 9,657 | | | | 14,833 | |
| | | | | | | | | | | |
| Management add back: | | | | | | | | | | |
| Stock based compensation | | | 451 | | | | 194 | | | | 1,253 | | | | 776 | |
| Adjusted EBITDA | | $ | 2,087 | | | $ | 4,890 | | | $ | 10,910 | | | $ | 15,609 | |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250313920493/en/
Contacts
Investor Relations Contact:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
203/972.9200
InvestorRelations@hginc.com
