Heritage Global Inc. · NASDAQ:HGBL
Heritage Global — Investor Presentation (November 2020)
22 slides from Heritage Global's investor presentation, November 2020
Slide 1: Investor Presentation
An Asset Services company specializing in financial and industrial asset transactions Investor Presentation November 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. All statements contained in this communication other than statements of historical fact, including any statements regarding our future operating re
Slide 3: Company Overview
Company Overview Heritage Global Inc. is an asset liquidation services company specializing Company Snapshot in financial and industrial asset transactions. LTM Revenue2 Ticker • $23.5 Million Charged- Specialty PRODUCTS AND SERVICES • NASDAQ: HGBL Off Financing FINANCIAL Net Income2 Portfolios Solu
Slide 4: Investment Highlights
Investment Highlights • Diversified business lines serving financial and industrial asset liquidation markets. Differentiated • Multiple revenue streams: brokered auctions, principal auctions, advisory and secured lending. Business Model • Event driven and repeat, forward-flow contracts with industr
Slide 5: Leadership Team
Leadership Team Ross Dove Scott West Dave Ludwig Nick Dove James Sklar CEO, President & Director Chief Financial Officer President, Financial Assets President, Industrial Assets EVP, General Counsel & Secretary • Over 30 years experience • Over 25 years executive • Over 24 years experience in • 8+ y
Slide 6: Financial Assets
Financial Assets • Heritage Global, through its NLEX division, provides liquidity to issuers of consumer credit that are looking to monetize charged-off loans those which creditors have written off as uncollectable. • Revolving consumer credit remains at $1T1 and credit card charge-offs are the high
Slide 7: Financial Asset Services – Brokerage
Financial Asset Services – Brokerage 1 Services REPRESENTATIVE CLIENTS Heritage National Loan Exchange (NLEX) is a loan sale advisor of charged-off and nonperforming asset portfolios via an electronic auction exchange platform. 2 Differentiating Factors For 20+ years, NLEX has sold over $150 billion
Slide 8: Financial Asset Services – Secured Lending
Financial Asset Services – Secured Lending 1 Services FUNDING PROCESS Target Economics Heritage Global Capital (“HGC”) provides specialty financing solutions to small- and medium-sized Estimated Income Mix investors in charged-off and nonperforming asset portfolios and other asset-based classes. 2 D
Slide 9: Industrial Assets
Industrial Assets • Heritage Global advises enterprise and financial customers on the sale of industrial assets mostly from surplus and sometimes distressed circumstances while acting as an agent, guarantor or principal. • ~$600B of manufacturing machinery is sold each year1 and manufacturing outloo
Slide 10: Industrial Asset Services – Auctions
Industrial Asset Services – Auctions 1 Services Aerospace & Aviation Biotech & Pharma Heritage Global Partners (“HGP”) is a full service, global auction and asset advisory firm. 2 Differentiating Factors Domain expertise and infrastructure via management’s experience, expertise, relationships, and t
Slide 11: Industrial Asset Services – Valuations
Industrial Asset Services – 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 gr
Slide 12: Competitive Advantages
Competitive Advantages Principal & Advisory Industrial Assets Financial Services Services Durability Countercyclical Platforms * Rising industrial asset plant closures * Diversification * Rising non-performing loan Domain * Integrated services offering/turnkey solution volumes * Rising specialty len
Slide 13: Positioned to Grow in All Cycles
Positioned to Grow in All Cycles Macro HGBL CREATE Headwinds Tailwinds Wider spreads on distressed assets. Premium prices for used equipment in current supply chain. Growth in alternative lending. Pressure on Net Interest Margins. Higher nonperforming loans/net charge-offs. Declining Net Interest In
Slide 14: Expected Impact of COVID-19 and Post COVID-19 Economic Slowdown
Expected Impact of COVID-19 and Post COVID-19 Economic Slowdown Rising Supply of • Accelerating auction volumes for HGP. Distressed Assets Ongoing • Increasing demand for HGP’s online auctions. Social Distancing Rising Charged-Off Consumer • Expanding volumes for NLEX. Loan Sales Tightening Underwri
Slide 15: 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 financial and industrial assets. Principal Deals Increased Brand Increased Supply Recognition Growth Across Services Drivers
Slide 16: International Platform
International Platform HERITAGE GLOBAL PARTNERS SALES Puerto Rico Costa Rica Mexico Canada Spain England France Ireland Germany Italy China South Korea Australia 16 Heritage Global Inc. | www.hginc.com
Slide 17: Financial Performance
Financial Performance 1 Profitability 2 Flexibility 3 Recovery • Proven track record of profitability • Incremental leverage and revenue • Improving results across businesses • Attractive margin profile streams by taking different roles and • Strong operating leverage seen in • $82M NOL carry forwar
Slide 18: Action Plan
Financial Performance – Operating Efficiencies Action Plan Drive Increasingly Operating Leverage Manage Leverage Build Scale Synergies Expenses • Within businesses • Maintain high • Corporate level • Processes & • Across platforms incremental systems • Business unit level margins • Centralized • Fav
Slide 19: Value Creation
Value Creation Investor Relations Strengthening * Investor targeting & & Leveraging outreach Improving EPS the Balance * Enhance messaging, disclosures, reporting Quality, Sheet Financial Visibility, & * Upsized credit facility Performance Sustainability * Business lines of credit * History of profi
Slide 20: Appendix
Appendix
Slide 21: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Reconciliation of EBITDA and Adjusted EBITDA (Non-GAAP Measures)1 ($ thousands) 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 2016 2017 2018 2019 LTM Net Income $1,289 $1,685 $369 $408 $612 $1,494 $1,216 $577 $38 $2,039 $1,264 $14 ($249) $3,751 $3,899 $3
Slide 22: InvestorRelations@hginc.com
InvestorRelations@hginc.com (858) 242-4741
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