Heritage Global Inc. · NASDAQ:HGBL
Heritage Global — Investor Presentation (May 2020)
23 slides from Heritage Global's investor presentation, May 2020
Slide 1: Investor Presentation
Acquisition/disposition/valuation/lending services for surplus and distressed assets Investor Presentation May 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This communication includes forward-looking statements based on our current expectations and projections about future events. For these statements, Heritage Global Inc. (the “Company”) claims the protection of the safe harbor for forward-looking statements contained in the
Slide 3: Company Overview
Company Overview Heritage Global Inc. is a diversified financial services company providing acquisition, disposition, valuation, and lending services for surplus and distressed assets. Specialty Charged-Off Financing SPECIAL Portfolios Solutions SITUATIONS Asset Sales Advisory Auction ASSET ADVISORY
Slide 4: Representative Clients
Representative Clients 4 Heritage Global Inc. | www.hginc.com
Slide 5: Value Creation – Investment Highlights
Value Creation – Investment Highlights MARKET DATA1 Global Competitive FINANCIAL TRENDS2 Platform Advantages Revenue Tickers • $23.9 Million • OTCQB: HGBL • CSE: HGP Net Income • $3.3 Million Price Adjusted EBITDA 3 • $1.50 Shareholder Sustainable Value Growth • $3.7 Million Market Cap Diluted EPS •
Slide 6: Competitive Advantages
Competitive Advantages Capital Assets Financial Services Proprietary Trading Durability Countercyclical Platforms * Auction volumes/supply * Non Performing Asset * Diversification volumes Domain * Integrated services offering/turnkey solution * Specialty lending Expertise provider Pro-cyclical * Cor
Slide 7: Leadership Team
Leadership Team Ross Dove Kirk Dove Scott West James Sklar Chief Executive Officer Chief Operating Officer Chief Financial Officer General Counsel • Over 30 years experience in • Over 30 years experience in • Over 25 years executive • Over 25 years of legal the auction industry. the auction industry
Slide 8: Positioned to Grow in All Cycles
Positioned to Grow in All Cycles Macro HGBL Headwinds Tailwinds Wider spreads on principal asset/loan activities Lower asset prices/volumes Favorable lending cycle Pressure on Net Interest Margins Higher nonperforming assets/net charge-offs Declining Net Interest Income Building surplus inventories
Slide 9: Expected COVID-19 Impact
Expected COVID-19 Impact* Rising Supply of • Accelerating auction volumes for HGP Distressed Assets Stepped Up • Building surplus equipment to be auctioned M&A Activity Ongoing • Increasing demand for HGP’s online auctions Social Distancing Rising Charged-Off • Expanding volumes for NLEX Consumer Lo
Slide 10: Sustainable Growth
Sustainable Growth Vision: Become the dominant solution and most respected and trusted firm to corporations, trustees and lenders needing to monetize challenged assets across all classes and geographies. Principal Deals External Product & Growth Services Opportunities Growth Development Drivers Busi
Slide 11: Global Platform
Global Platform HERITAGE GLOBAL PARTNERS SALES Puerto Rico Costa Rica Mexico Canada Spain England France Ireland Germany Italy China South Korea Australia 11 Heritage Global Inc. | www.hginc.com
Slide 12: Financial Performance
Financial Performance 1 Profitability 2 Diversification 3 Financial Flexibility • Inflection point • Across/within business units • Building EBITDA1 • Building scale across platforms • Agency vs. principal revenue streams • Strong balance sheet • Rising operating leverage • More predictable and fore
Slide 13: Financial Performance – Operating Efficiencies Action Plan
Financial Performance – Operating Efficiencies Action Plan Drive Increasingly Operating Leverage Manage Leverage Build Scale Synergies Expenses • Within businesses • Maintain high • Corporate level • Processes & • Across platforms incremental systems • Business unit level margins • Centralized • Fav
Slide 14: Value Creation
Value Creation Investor Relations Strengthening * Investor targeting & & Leveraging outreach Improving EPS the Balance * Enhance messaging, disclosures, reporting Quality, Sheet Financial Visibility, & * Upsized credit facility Performance Sustainability * Business lines of credit * Healthy & achiev
Slide 15: Appendix
Appendix
Slide 16: Heritage Global Partners
Heritage Global Partners 1 Services Aerospace & Aviation Biotech & Pharma Heritage Global Partners is a full service, global auction and asset advisory firm. 2 Differentiating Factors Domain expertise and infrastructure via management’s experience, expertise, relationships, and track records. Broadl
Slide 17: Heritage National Loan Exchange ("NLEX")
Heritage National Loan Exchange (“NLEX”) 1 Services SCOPE OF SERVICES NLEX is a loan sale advisor of charged-off and nonperforming asset portfolios via an electronic auction exchange platform. Portfolio Evaluation Compliance/ Buyer Due Transparency Diligence 2 Differentiating Factors For 20+ years,
Slide 18: Heritage Global Capital
Heritage Global Capital 1 Services FUNDING PROCESS Heritage Global Capital provides specialty financing solutions to small- and medium-sized investors in charged-off and nonperforming asset portfolios and other asset-based classes. 2 Differentiating Factors Decades of domain expertise and the abilit
Slide 19: Heritage Global Valuations
Heritage Global Valuations 1 Services REPRESENTATIVE CLIENTS Industrial and wholesale inventory/equipment valuations to assist financial institutions in making lending decisions 2 Differentiating Factors Decades of valuation/liquidation experience leveraging HGBL’s industrial auction group, as well
Slide 20: Heritage Global Patents & Trademarks
Heritage Global Patents & Trademarks 1 Services RECENT SALES Proactively manage/streamline corporate Intellectual Property portfolios via sealed-bid and online auctions OIM Squared Artificial Intelligence Receivership Sold $1,040,000 to credit bidder 2 Differentiating Factors Wisewear Pioneered the
Slide 21: Peer Comparables
Peer Comparables Valuation Comparisons Date: 5/27/20 Stock Mkt Cap EV EV/EBITDA Price/EPS EPS % Chg Dividend Company Ticker Price ($M) ($M) Yield 2019 2020 2021 2019 2020 2021 2019 2020 2021 20/19 21/20 2019 YTD Auctioneers KAR Auction Services, Inc. KAR $14.20 $1,834 $5,017 9.7x 14.5x 10.5x 13.7x 4
Slide 22: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of EBITDA and Adjusted EBITDA (Non-GAAP Measures) 1 ($ thousands) 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2018 2019 Net Income $1,289 $1,685 $369 $408 $612 $1,494 $1,216 $577 $38 $3,751 $3,899 Add back: Depreciation & amortization 84 76 79 80
Slide 23: InvestorRelations@hginc.com
InvestorRelations@hginc.com (858) 242-4741