SAN DIEGO & TORONTO--(BUSINESS WIRE)--Heritage Global Inc. (OTCQB: HGBL, CSE: HGP), a leader in asset liquidation transactions, valuations and advisory services, today reported financial results for the fourth quarter and twelve-month periods ended December 31, 2014 as summarized below.
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Summary Financial Data
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| ($ in thousands, except per share amounts) |
Three months ended |
Twelve months ended |
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2014 |
2013 |
2014 |
2013 |
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| Total asset liquidation revenue(1) | $ | 3,287 | $ | 2,479 | $ | 14,186 | $ | 8,068 | |||||
| Earnings (loss) of asset liquidation investments(2) | 196 | (65) | 143 | 1,200 | |||||||||
| Operating loss | (514) | (1,159) | (1,900) | (2,937) | |||||||||
| Net loss | (171) | (4,746) | (26,514) | (6,396) | |||||||||
| Loss per diluted common share | $ | (0.00) | $ | (0.17) | $ | (0.94) | $ | (0.22) | |||||
| (1) | Represents revenue generated from activities where Heritage Global acted in a principal capacity or had majority interest in a transaction. | |
| (2) | Represents equity income from activities where Heritage Global acted as a member of a syndicate in a transaction. | |
2014 Q4 Summary:
- Heritage Global Partners achieved an approximate 33% increase in total asset liquidation revenue to $3.3 million, compared to the year ago fourth quarter level. Combined asset liquidation revenue and earnings of equity accounted asset liquidation investments (pre-tax) rose to approximately $3.5 million, up from $2.4 million in the prior year quarter.
- Heritage Global successfully completed two global online sales featuring late model high quality biopharmaceutical laboratory and R&D assets previously owned by Boehringer Ingelheim, a world-leading pharmaceutical company.
- Heritage Equity Partners, a premier boutique investment banking and M&A advisor to distressed organizations and special situations, and a division of Heritage Global, acted as investment banker and advisor to Gaspari Nutrition, Inc. in its successful December 2014 approved sale of substantially all of its assets to a subsidiary of Total Produce, Allegro Nutrition.
- National Loan Exchange (NLEX), acquired in Q2 2014, contributed approximately $0.9 million of net asset liquidation revenue during the quarter.
- The Company reported a net loss of $0.2 million, or approximately break-even on a per diluted common share basis. This was a significant improvement versus the $4.7 million net loss, or $0.17 per diluted share, generated in Q4 2013.
Heritage Global Partners Managing Partner Ross Dove stated, “The 2014 fourth quarter capped off a very solid year for Heritage Global as we generated a 75 percent increase in asset liquidation revenue to $14.2 million for the period. Importantly, all of the Company’s divisions contributed to this improved performance, helping us drive top-line growth. Among the key developments during the past year was our acquisition of National Loan Exchange, a leading North American charged-off receivables broker, and the forging of an exclusive strategic alliance with Troostwijk Auctions focused on monetizing global energy industry assets on behalf of regional and multinational European corporations. We are off to a good start in 2015 and focused on growing our business and supporting our worldwide clientele through the balance of this year and beyond.”
About Heritage Global Inc. (www.heritageglobalinc.com)
Heritage Global Inc. (OTCQB: HGBL, CSE: HGP) is a value-driven, innovative leader in tangible and intangible asset valuations and transactions. Heritage Global focuses on identifying, valuing, acquiring and monetizing underlying assets in 28 global manufacturing and technology sectors. Heritage Global specializes both in acting as an adviser, as well as acquiring or brokering turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, accounts receivable portfolios and related intellectual property, and entire business enterprises.
Forward-Looking Statements
The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. All statements, other than statements of historical facts, which address the Company's expectations, should be considered as forward-looking statements. Such statements are based on knowledge of the environment in which the Company currently operates, but because of the factors listed herein, as well as other factors beyond the Company's control, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that may cause actual results to differ from anticipated results include, but are not limited to, obtaining necessary approvals and other risks detailed from time to time in the Company's securities and other regulatory filings.
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HERITAGE GLOBAL INC.
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Three Months |
Twelve Months |
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| December 31, | December 31, | ||||||||||||
| (In thousands of US dollars, except per share amounts) | 2014 | 2013 | 2014 | 2013 | |||||||||
| Revenue: | |||||||||||||
| Asset liquidation: | |||||||||||||
| Asset sales | $ | 48 | $ | 247 | $ | 6,260 | $ | 2,046 | |||||
| Commissions and other | 3,239 | 2,232 | 7,926 | 6,022 | |||||||||
| Total asset liquidation revenue | 3,287 | 2,479 | 14,186 | 8,068 | |||||||||
| Intellectual property licensing | - | - | - | 824 | |||||||||
| Total revenue | 3,287 | 2,479 | 14,186 | 8,892 | |||||||||
| Operating costs and expenses: | |||||||||||||
| Asset liquidation | 212 | 1,030 | 4,631 | 2,706 | |||||||||
| Patent licensing and maintenance | 11 | 25 | 43 | 191 | |||||||||
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Selling, general and administrative, including expenses paid to |
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| related parties | 3,565 | 2,404 | 10,989 | 9,660 | |||||||||
| Depreciation and amortization | 209 | 114 | 566 | 472 | |||||||||
| Total operating costs and expenses | 3,997 | 3,573 | 16,229 | 13,029 | |||||||||
| (710) | (1,094) | (2,043) | (4,137) | ||||||||||
| Earnings (loss) of asset liquidation investments | 196 | (65) | 143 | 1,200 | |||||||||
| Operating loss | (514) | (1,159) | (1,900) | (2,937) | |||||||||
| Other income (expenses): | |||||||||||||
| Gain on sale of equity-method investment | 551 | - | 551 | - | |||||||||
| Earnings of other equity-method investments | 97 | 65 | 261 | 126 | |||||||||
| Interest expense – third party | (264) | (80) | (514) | (388) | |||||||||
| Interest expense – related party | (41) | (77) | (190) | (168) | |||||||||
| Total other income (expenses) | 343 | (92) | 108 | (430) | |||||||||
| Income (loss) before income tax expense | (171) | (1,251) | (1,792) | (3,367) | |||||||||
| Income tax expense | - | 3,495 | 24,722 | 3,029 | |||||||||
| Net loss | (171) | (4,746) | (26,514) | (6,396) | |||||||||
| Other comprehensive income (loss): | |||||||||||||
| Currency translation adjustment (net of tax of $0) | 1 | (24) | 10 | (37) | |||||||||
| Comprehensive loss | (170) | $ | (4,770) | $ | (26,504) | $ | (6,433) | ||||||
| Weighted average common shares outstanding – basic and diluted | |||||||||||||
| (in thousands) | 28,167 | 28,167 | 28,167 | 28,610 | |||||||||
| Net loss per share – basic and diluted: | $ | (0.00) | $ | (0.17) | $ | (0.94) | $ | (0.22) | |||||
The notes contained in our Annual Report on Form 10-K are an integral part of these condensed consolidated financial statements.
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HERITAGE GLOBAL INC.
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| 2014 | 2013 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 3,633 | $ | 3,213 | |||
| Accounts receivable (net of allowance for doubtful accounts of $31; 2013 - $0) | 3,043 | 1,670 | |||||
| Deposits | 173 | 17 | |||||
| Inventory – equipment | 139 | 578 | |||||
| Other current assets | 587 | 480 | |||||
| Deferred income tax assets | - | 1,366 | |||||
| Total current assets | 7,575 | 7,324 | |||||
| Non-current assets: | |||||||
| Inventory – real estate | 6,508 | 6,078 | |||||
| Asset liquidation investments | 978 | 1,380 | |||||
| Other equity-method investments | 156 | 1,769 | |||||
| Property, plant and equipment, net | 150 | 32 | |||||
| Identifiable intangible assets, net | 7,657 | 4,810 | |||||
| Goodwill | 8,846 | 5,301 | |||||
| Deferred income tax assets | - | 23,301 | |||||
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Total assets |
$ | 31,870 | $ | 49,995 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 7,131 | $ | 6,510 | |||
| Debt payable to third parties | 539 | 1,438 | |||||
| Debt payable to a related party | 2,985 | 2,550 | |||||
| Contingent consideration | 803 | — | |||||
| Total current liabilities | 11,458 | 10,498 | |||||
| Non-current liabilities: | |||||||
| Debt payable to third parties | 2,580 | — | |||||
| Contingent consideration | 3,395 | — | |||||
| Deferred tax liabilities | 960 | — | |||||
| Total liabilities | 18,393 | 10,498 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Preferred stock, $10.00 par value, authorized 10,000,000 shares; issued and | |||||||
| outstanding 575 Class N shares at December 31, 2014 and 579 Class N | |||||||
| shares at December 31, 2013, liquidation preference of $575 at December 31, | |||||||
| 2014 and $579 at December 31, 2013 | 6 | 6 | |||||
| Common stock, $0.01 par value, authorized 300,000,000 shares; issued and | |||||||
| outstanding 28,167,408 shares at December 31, 2014 and 28,167,248 shares | |||||||
| at December 31, 2013 | 282 | 282 | |||||
| Additional paid-in capital | 283,691 | 283,207 | |||||
| Accumulated deficit | (270,468) | (243,954) | |||||
| Accumulated other comprehensive loss | (34) | (44) | |||||
| Total stockholders’ equity | 13,477 | 39,497 | |||||
| Total liabilities and stockholders’ equity | $ | 31,870 | $ | 49,995 | |||
The notes contained in our Annual Report on Form 10-K are an integral part of these condensed consolidated financial statements.
