Click here to close now.

SYS-CON MEDIA Authors: Carmen Gonzalez, Liz McMillan, Pat Romanski, AppDynamics Blog, Roger Strukhoff

News Feed Item

Heritage Global Inc. Reports 2014 Q1 Operating Results

Heritage Global Inc. (OTCQB:HGBL, CSE:HGP), a leader in distressed and surplus capital assets valuations and transactions, today reported financial results for the first quarter ended March 31, 2014 as summarized below.

               
      Summary Financial Data      
      (unaudited)        
($ in thousands, except per share amounts)            

Three months

ended

March 31,

2014         2013
Total asset liquidation revenue(1) $   1,985 $   1,392
Earnings (loss) of equity accounted asset liquidation investments(2) (30 ) 802
Operating loss (777 ) (905 )
Net loss (25,571 ) (647 )
      Loss per diluted common share             $   (0.91 )         $   (0.02 )        
 
(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. Figure is net of tax of $0.
 

2014 Q1 Summary:

  • The Company’s operating loss was $777,000, down from an operating loss of $905,000 in the 2013 period.
  • Combined asset liquidation revenue and earnings (loss) of equity accounted asset liquidation investments (pre-tax) was approximately $2.0 million, compared to $2.2 million in the prior year period.
  • The Company did not record intellectual property licensing revenue during Q1 2014, but did receive $200,000 related to settlement of a patent infringement lawsuit in Q1 2013.
  • SG&A expenditures, including expenses paid to related parties, declined 19% to $2.1 million, versus $2.6 million in the year-ago quarter, principally reflecting the salaries and forfeiture of options by the former Co-CEOs and other employees that departed the Company effective June 30, 2013.
  • Total operating costs and expenses declined 18% to $2.7 million, largely due to the aforementioned SG&A reduction.
  • Net loss for the period was $25.6 million, or $0.91 per diluted common share. The Company decided to set up a valuation reserve, amounting to approximately $24.7 million, against its deferred income tax assets. The deferred income tax assets represent the future tax benefits of loss carryforwards from prior years. The reserve was a one-time, non-cash item.

Heritage Global Partners Managing Partner Ross Dove stated, “Heritage Global’s asset liquidation, advisory, going concern and investment banking businesses are all showing positive signs of growth. Successfully completed recent auctions included the assets of a GE Energy Management Division Plant in MN as well as ongoing online sales for Pfizer Inc. A sampling of upcoming auctions includes: a unique sale of the mobile fleet of PET and CT imaging equipment and trailers on behalf of Radiology Corporation of America in late May; North America’s two largest apparel manufacturing auctions on behalf of Riverside Manufacturing Company in early June; and also in early June, an equipment sale for Deluxe Laboratories, Inc.’s Hollywood film processing facility. Our European operation is starting to win significant contracts, with the most notable being the auction of the assets of Lufthansa Technik Airmotive Ireland’s Dublin plant. Our forward flow contract business is also growing as we sign new clients and expand our programs with existing clients. And our strategic alliance with Colliers International, to jointly pursue opportunities for turnkey brokerage of distressed manufacturing facilities, is generating new business.”

Heritage Global Partners Managing Partner Kirk Dove added, “On the expense side, we are benefitting from a streamlined operating structure with reduced corporate overhead as we integrate all of our operating platforms. Lastly, we wish to extend a warm welcome to our many new shareholders – many of them residing in Canada – as a result of Counsel Corporation’s recent move to dividend their entire Heritage Global holding to their shareholders as they turn their focus exclusively to their financial services business. Our shares were recently also listed on the Canadian Securities Exchange under the stock symbol HGP.”

About Heritage Global Inc. (www.heritageglobalinc.com)

Heritage Global Inc. (OTCQB:HGBL, CSE:HGP) is a value-driven, innovative leader in distressed and surplus capital assets valuations and transactions. The Company focuses on identifying, valuing, acquiring and monetizing distressed and surplus capital assets in 25 global manufacturing and technology sectors. It specializes in both acting as an advisor as well as acquiring turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, accounts receivable portfolios and related intellectual property.

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.

             
HERITAGE GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(in thousands of US dollars, except share and per share amounts)
 
Three Months Ended
March 31,
  2014         2013
Revenue:
Asset liquidation
Asset sales $ 975 $ 446
Commissions and other   1, 010     946
Total asset liquidation revenue 1, 985 1, 392
Intellectual property licensing   --     200
Total revenue   1, 985   1, 592
 
Operating costs and expenses:
Asset liquidation 404 356
Inventory maintenance 61 74
Patent licensing and maintenance 11 150
Selling, general and administrative, including expenses paid to related parties 2, 138 2, 598
Depreciation and amortization     118     121
Total operating costs and expenses   2, 732   3, 299
( 747) (1, 707)
Earnings (loss) of equity accounted asset liquidation investments (net of tax of $0)     (30)     802
Operating loss   ( 777)   ( 905)
Other income (expenses):
Interest expense – third party (71) (95)
Interest expense – related party     (67)   --
Total other income (expenses)   ( 138)     (95)
Loss before undernoted ( 915) (1, 000)
Income tax expense (recovery) 24, 667 ( 353)
Earnings of other equity accounted investments (net of $0 tax)     11   --
Net loss (25, 571) ( 647)
Other comprehensive loss:
Currency translation adjustment (net of tax of $0)     (6)     (7)
Comprehensive loss $   (25, 577) $   ( 654)
 
Weighted average common shares outstanding – basic and diluted (in thousands) 28, 167 28, 945
Net loss per share – basic and diluted $ (0 .91) $ (0 .02)
 

The notes contained in our Quarterly Report on Form 10-Q are an integral part of these condensed consolidated financial statements.

   
 
HERITAGE GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands of US dollars, except share and per share amounts)
                   
March 31,

2014

December 31,

2013

ASSETS        
Current assets:
Cash and cash equivalents $ 2,802 $ 3,213
Amounts receivable (net of allowance for doubtful accounts of $0; 2013 - $0) 868 1,670
Deposits 17 17
Inventory – equipment 441 578
Other current assets 448 479
Income taxes recoverable 22 1
Deferred income tax assets     -- 1,366
Total current assets 4,598 7,324
Non-current assets:
Inventory – real estate 6,328 6,078
Asset liquidation investments 1,011 1,380
Investments 1,747 1,769
Property, plant and equipment, net 34 32
Intangible assets, net 4,697 4,810
Goodwill 5,301 5,301
Deferred income tax assets     -- 23,301
Total assets $     23,716 $ 49,995
 
LIABILITIES AND EQUITY                                                  
Current liabilities:
Accounts payable and accrued liabilities $ 5,368 $ 6,510
Debt payable to third parties 1,248 1,438
Debt payable to a related party 3,057 2,550
Total current liabilities 9,673 10,498
Commitments and contingencies
 
Equity:

Preferred stock, $10.00 par value, authorized 10,000,000 shares; issued and

outstanding 575 Class N shares at March 31, 2014 and 579 Class N shares

at December 31, 2013, liquidation preference of $575 at March 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 March 31, 2014 and 28,167,248 shares at
December 31, 2013 282 282
Additional paid-in capital 283,330 283,207
Accumulated deficit (269,525) (243,954)
Accumulated other comprehensive loss (50) (44)
Total equity 14,043 39,497
Total liabilities and equity $ 23,716 $ 49,995
 

 

The notes contained in our Quarterly Report on Form 10-Q are an integral part of these condensed consolidated financial statements.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Participants will reach the final if their IoT solution is liked. A community vote will determine the best solutions submitted in each country, after which an expert jury will select the national winners and the best international IoT solution. Each country's best solution can win a national marketing campaign worth up to €30,000 and become a partner in Deutsche Telekom's participating markets. The winning international solution can become partner of Deutsche Telekom Group across all eight coun...
Recent technology advances in miniaturization has positioned the wearables as the pinnacle of technology convergence with the human body. We inquire if wearables are mere standard miniaturized devices extended with the connectivity and present our views on considerations like design, applications, performance, efficiency, interoperability, usage scenarios, human device interaction and consequent trade-offs enabling wearables to impart optimal value.
In this session we look at creating interactive communications via the web by adding messaging, file transfer, and group communication (group chat and audio/video conferencing) into the web experience. We will also discuss potential applications of this technology in areas including B2B, B2C, P2P, and gaming. Peter is Technical Director at Acision. He graduated from The University of Edinburgh in 2000 with a BSc (Hons) in Computer Science. After graduation Peter worked on a PSTN switch dev...
WebRTC Summit has announced today that Peter Dunkley has been named summit chair of WebRTC Summit 2015 New York. The 4th International WebRTC Summit will take place on June 9-11, 2015, at the Javits Center in Manhattan, New York. @ThingsExpo anticipates 90% of WebRTC companies & developers will monetize their products & services through IoT by 2016. Peter Dunkley is Technical Director at Acision. He graduated from The University of Edinburgh in 2000 with a BSc (Hons) in Computer Science...
SYS-CON Events announced today the DevOps Foundation Certification Course, being held June ?, 2015, in conjunction with DevOps Summit and 16th Cloud Expo at the Javits Center in New York City, NY. This sixteen (16) hour course provides an introduction to DevOps – the cultural and professional movement that stresses communication, collaboration, integration and automation in order to improve the flow of work between software developers and IT operations professionals. Improved workflows will res...
BroadSoft on Tuesday announced that it is a recipient of the 2014 Frost & Sullivan Market Leadership Award in the Hosted/Cloud Internet Protocol (IP) Telephony market for Latin America. According to Frost & Sullivan market research, the Latin America (LATAM) hosted/cloud Internet Protocol (IP) telephony market, including integrated unified communications and collaboration (UC&C) applications, is currently experiencing a rapid growth trajectory and is expected to exhibit a tenfold rise in annual...
SOASTA, the leader in performance analytics, today reported record growth of the CloudTest community, exceeding 30,000 registered users of the CloudTest platform in Q1 2015. SOASTA also announced widespread adoption of its Web and mobile testing solutions, with more than 1,600 customers completing more than 285,000 tests using CloudTest during the quarter. This rapid growth shows that DevOps-driven digital businesses are embracing a more continuous approach to testing, and CloudTest is meeting t...
ProfitBricks, the provider of painless cloud infrastructure for IaaS, today announced the release of a Node.js SDK written against its recently launched REST API. This new JavaScript based library provides coverage for all existing ProfitBricks REST API functions. With additional libraries set to release this month, ProfitBricks continues to prove its dedication to the DevOps community and commitment to making cloud migrations and cloud management painless. Node.js is an open source, cross-pl...
GENBAND has announced that SageNet is leveraging the Nuvia platform to deliver Unified Communications as a Service (UCaaS) to its large base of retail and enterprise customers. Nuvia’s cloud-based solution provides SageNet’s customers with a full suite of business communications and collaboration tools. Two large national SageNet retail customers have recently signed up to deploy the Nuvia platform and the company will continue to sell the service to new and existing customers. Nuvia’s capabili...
Sonus Networks introduced the Sonus WebRTC Services Solution, a virtualized Web Real-Time Communications (WebRTC) offer, purpose-built for the Cloud. The WebRTC Services Solution provides signaling from WebRTC-to-WebRTC applications and interworking from WebRTC-to-Session Initiation Protocol (SIP), delivering advanced real-time communications capabilities on mobile applications and on websites, which are accessible via a browser.
Temasys has announced senior management additions to its team. Joining are David Holloway as Vice President of Commercial and Nadine Yap as Vice President of Product. Over the past 12 months Temasys has doubled in size as it adds new customers and expands the development of its Skylink platform. Skylink leads the charge to move WebRTC, traditionally seen as a desktop, browser based technology, to become a ubiquitous web communications technology on web and mobile, as well as Internet of Things...
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are conf...
“With easy-to-use SDKs for Atmel’s platforms, IoT developers can now reap the benefits of realtime communication, and bypass the security pitfalls and configuration complexities that put IoT deployments at risk,” said Todd Greene, founder & CEO of PubNub. PubNub will team with Atmel at CES 2015 to launch full SDK support for Atmel’s MCU, MPU, and Wireless SoC platforms. Atmel developers now have access to PubNub’s secure Publish/Subscribe messaging with guaranteed ¼ second latencies across PubN...
SYS-CON Events announced today that Vicom Computer Services, Inc., a provider of technology and service solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. They are located at booth #427. Vicom Computer Services, Inc. is a progressive leader in the technology industry for over 30 years. Headquartered in the NY Metropolitan area. Vicom provides products and services based on today’s requirements...
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the ...