Heritage Global Inc. Reports Profitable First Quarter 2025 Results
May 8, 2025 04:05 PM Eastern Daylight Time
SAN DIEGO – (BUSINESS WIRE) – Heritage Global Inc. (NASDAQ: HGBL) (“Heritage Global,” “HG” or “the Company”), an asset services company specializing in financial and industrial asset transactions, today reported financial results for the first quarter ended March 31, 2025.
First Quarter 2025 Summary of Financial Results (unaudited):
| ($ in thousands, except per share amounts) | Three Months Ended
March 31 |
||
| 2025 | 2024 | ||
| Operating income | $ 1,403 | $ 2,558 | |
| Net income | $ 1,064 | $ 1,799 | |
| Net income per share – diluted | $ 0.03 | $ 0.05 | |
| (Non-GAAP Financial Measures) (1) | |||
| EBITDA | $ 1,521 | $ 2,699 | |
| Adjusted EBITDA | $ 1,801 | $ 2,927 | |
(1) EBITDA and Adjusted EBITDA are commonly used non-GAAP financial measures utilized by management as a supplemental tool to evaluate the underlying operating performance of the Company on an ongoing basis and should be considered together with Heritage Global’s GAAP financial measures. Definitions and disclosures regarding non-GAAP financial information including reconciliations are included at the end of the press release.
First Quarter 2025 Review:
- The Company recorded operating income of $1.4 million for the first quarter of 2025, compared to operating income of $2.6 million in the first quarter of 2024.
- EBITDA totaled $1.5 million in the first quarter of 2025 versus EBITDA of $2.7 million in the first quarter of 2024, and Adjusted EBITDA was $1.8 million compared to $2.9 million in the prior-year quarter.
- Net income was $1.1 million or $0.03 per diluted share for the first quarter of 2025, compared to net income of $1.8 million or $0.05 per diluted share in the prior-year quarter.
- The Company had net working capital of $14.7 million at March 31, 2025 as compared to working capital of $18.5 million at December 31, 2024. The decrease in net working capital was primarily the result of the acquisition of a new corporate headquarters, ongoing share repurchases, and an opportunistic investment in the purchase of a complete pharmaceutical plant as described below.
- The Company repurchased 490,651 shares in the open market during the first quarter ended March 31, 2025 for a total of $1.0 million, or an average cost of $2.12 per share. As of March 31, 2025, the Company had approximately $2.0 million in remaining aggregate dollar value of shares that may be purchased under the repurchase program.
Heritage Global Chief Executive Officer Ross Dove commented, “Our first quarter results delivered a solid start to the year, with continued profitability and a strong balance sheet. Heritage remains well positioned in the current economic environment which is driving an increased level of equipment and asset auctions as well as increases in charged off credit cards and non-performing consumer loans. 2025 got off to a slower start than we anticipated, however our pipeline grew throughout the quarter with a particularly strong March, positioning us well for our expectation of sequential improvement in Q2 and increasing confidence in a strong 2025. Our balance sheet includes a sufficient amount of available cash and net working capital of almost $15 million, providing us the flexibility to pursue our M&A strategy as well as to opportunistically stay active in our share buyback program.”
Brian Cobb, Chief Financial officer, stated, “During the quarter, along with certain partners, Heritage Global Partners entered into a purchase agreement for a pharmaceutical plant and its associated equipment assets in Huntsville, Alabama, and executed a lease agreement with the seller for both the plant and equipment assets. We believe this transaction will generate strong returns in line with historical performance, stemming from both lease agreements and the anticipated future sale of the equipment and building.”
First Quarter Conference Call
Management will host a webcast and conference call today, Thursday, May 8, 2025, at 5:00 p.m. ET to discuss financial results for first quarter 2025. Analysts and investors may participate via conference call, using the following dial-in information:
- 1-800-274-8461 (Domestic)
- 1-203-518-9814 (International)
- Conference ID: HGBLQ1
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 May 22, 2025. To access the replay, dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The replay pin number is 11158642. A webcast replay can also be accessed on the Investor Relations section of the Company’s website.
About Heritage Global Inc.
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 March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues: | ||||||||
| Services revenue | $ | 7,648 | $ | 8,983 | ||||
| Asset sales | 5,811 | 3,178 | ||||||
| Total revenues | 13,459 | 12,161 | ||||||
| Operating costs and expenses: | ||||||||
| Cost of services revenue | 1,675 | 1,480 | ||||||
| Cost of asset sales | 3,773 | 2,411 | ||||||
| Selling, general and administrative | 6,534 | 6,358 | ||||||
| Depreciation and amortization | 118 | 141 | ||||||
| Total operating costs and expenses | 12,100 | 10,390 | ||||||
| Earnings of equity method investments | 44 | 787 | ||||||
| Operating income | 1,403 | 2,558 | ||||||
| Interest income (expense), net | 56 | (92) | ||||||
| Income before income tax expense | 1,459 | 2,466 | ||||||
| Income tax expense | 395 | 667 | ||||||
| Net income | $ | 1,064 | $ | 1,799 | ||||
| Weighted average common shares outstanding – basic | 35,282,855 | 36,592,801 | ||||||
| Weighted average common shares outstanding – diluted | 36,056,645 | 37,367,268 | ||||||
| Net income per share – basic | $ | 0.03 | $ | 0.05 | ||||
| Net income per share – diluted | $ | 0.03 | $ | 0.05 | ||||
HERITAGE GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars, except share and per share amounts)
| March 31, 2025
(unaudited) |
December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 18,788 | $ | 21,749 | ||||
| Accounts receivable, net | 1,662 | 1,559 | ||||||
| Current portion of notes receivable, net | 3,420 | 3,416 | ||||||
| Inventory – equipment | 5,081 | 5,348 | ||||||
| Other current assets | 542 | 1,056 | ||||||
| Total current assets | 29,493 | 33,128 | ||||||
| Non-current portion of notes receivable, net | 6,307 | 6,558 | ||||||
| Equity method investments | 21,691 | 20,892 | ||||||
| Property and equipment, net | 9,048 | 1,643 | ||||||
| Right-of-use assets | 2,041 | 2,208 | ||||||
| Intangible assets, net | 3,296 | 3,362 | ||||||
| Goodwill | 7,446 | 7,446 | ||||||
| Deferred tax assets | 5,723 | 6,008 | ||||||
| Other assets | 1,638 | 64 | ||||||
| Total assets | $ | 86,683 | $ | 81,309 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 5,124 | $ | 5,979 | ||||
| Payables to sellers | 8,568 | 7,417 | ||||||
| Current portion of third party debt | 265 | 395 | ||||||
| Current portion of lease liabilities | 813 | 807 | ||||||
| Total current liabilities | 14,770 | 14,598 | ||||||
| Non-current portion of third party debt | 4,100 | — | ||||||
| Non-current portion of lease liabilities | 1,337 | 1,510 | ||||||
| Other non-current liabilities | 1,050 | — | ||||||
| Total liabilities | 21,257 | 16,108 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock | 6 | 6 | ||||||
| Common stock | 376 | 374 | ||||||
| Additional paid-in capital | 295,858 | 295,657 | ||||||
| Accumulated deficit | (226,780) | (227,844) | ||||||
| Treasury stock | (4,034) | (2,992) | ||||||
| Total stockholders’ equity | 65,426 | 65,201 | ||||||
| Total liabilities and stockholders’ equity | $ | 86,683 | $ | 81,309 | ||||
HERITAGE GLOBAL INC.
Reconciliation of EBITDA and Adjusted EBITDA (Non-GAAP Measures)
(In thousands of US dollars) (unaudited)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income | $ | 1,064 | $ | 1,799 | ||||
| Add back: | ||||||||
| Depreciation and amortization | 118 | 141 | ||||||
| Interest expense, net | (56) | 92 | ||||||
| Income tax expense | 395 | 667 | ||||||
| EBITDA | 1,521 | 2,699 | ||||||
| Management add back: | ||||||||
| Stock based compensation | 280 | 228 | ||||||
| Adjusted EBITDA | $ | 1,801 | $ | 2,927 | ||||
Contact
John Nesbett/Jennifer Belodeau
IMS Investor Relations
203/972.9200
InvestorRelations@hginc.com