Heritage Global Inc. (NASDAQ:HGBL) Q1 2023 Earnings Conference Call May 11, 2023 5:00 PM ET

Company Participants

John Nesbett - IR

Ross Dove - CEO

Brian Cobb - CFO

Conference Call Participants

Mark Argento - Lake Street

Operator

Welcome to the Heritage Global Inc. First Quarter 2023 Earnings Call. [Operator Instructions]

I will now turn the call over to your host, John Nesbett, IMS Investor Relations. You may begin.

John Nesbett

Thank you, and good afternoon, everyone. Before we begin, I'd like to remind everyone that this conference call contains forward-looking statements based on our current expectations and projections about future events and are subject to change based on various important factors, 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 call. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.

Now I'd like to turn the call over to Heritage Global's Chief Executive Officer, Mr. Ross Dove. Ross, go ahead.

Ross Dove

Thanks, John, and good afternoon, everyone. Welcome to our first quarter 2023 earnings conference call. Let's start today's call with Brian Cobb, our Chief Financial Officer, who will discuss our financial performance. Brian, your turn.

Brian Cobb

Thanks, Ross.

Our 2023 first quarter performance reflected strong operating results, including record net operating income of $3.9 million, improved profitability of $0.08 per diluted share and EBITDA of $4 million. We saw growth from both our financial assets and our industrial assets divisions, with all four operating segments contributing to our profitability.

This quarter's performance is even more significant than a record result for two main reasons. Not only did we achieve a record quarter, but we did so without real estate sales in our joint ventures as seen in the last three quarters of 2022.

Although we continue to search for lucrative asset purchases that include a real estate component, this is evidence, even without real estate transactions, that we can continue to perform at a high level and grow profits in each of our segments. The second being the recent growth we have seen and the ability to deploy capital through our specialty lending segment.

Our total balance related to investments in loans to buyers of charged off and nonperforming receivable portfolios was $28.4 million as of March 31, 2023. We have seen an increase of more than $20 million in the total balance from one year ago and an increase of $6.7 million since December 31, 2022.