Heritage Global Inc. (NASDAQ:HGBL) Q4 2022 Earnings Conference Call March 9, 2023 5:00 PM ET

Company Participants

John Nesbett - IR

Ross Dove - CEO

Brian Cobb - CFO

Conference Call Participants

Mark Argento - Lake Street

Michael Diana - Maxim Group

Operator

Thank you for standing by. This is the conference operator. Welcome to the Heritage Global Inc. Fourth Quarter and Year-end 2022 Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. [Operator Instructions].

I would now like to turn the conference over to John Nesbett. Please go ahead.

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 conference 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?

Ross Dove

Thank you, John. Good afternoon, everyone. Welcome to our fourth quarter and year end 2022 earnings conference call. Let's start the call today with Brian Cobb, our Chief Financial Officer, who will discuss our financial forms. Brian, you’re up.

Brian Cobb

Thanks, Ross. We closed 2022 with strong operating results in the fourth quarter, which included operating income of $3.1 million, improved profitability and EBITDA of $3.3 million driven by solid results from both our industrial and financial asset divisions.

Additionally, for the full year ended December 31, 2022, we achieved record net operating income of $11.1 million and delivered full year earnings per share of $0.42. Throughout 2022 activity and our industrial assets division showed continued momentum, and we closed out the fourth quarter with a 310% increase in asset sales to $6.5 million, compared to asset sales $1.6 million in the fourth quarter 2021.

Our industrial assets division sees increased activity as more businesses scale down their operations, and surplus assets and equipment becomes available for sale. A challenging economic landscape often accelerates auction activity as companies look to responsibly dispose of assets.

Our financial assets division is benefiting from increased volumes as the economy has slowed, and pandemic related stimulus checks have dried up, causing consumers to more frequently rely on credit cards and installment loans to make purchases. Predictably, as consumer debt grows, so does the volume of charge off consumer loans being sold by financial institutions, and we anticipate that we'll continue to see increasing asset flow as we move through 2023.