Heritage Global at LD Micro Main Event: Strategic Growth in Focus

On Tuesday, 21 October 2025, Heritage Global Inc. (NASDAQ:HGBL) presented at the LD Micro Main Event XIX Investor Conference, where CEO Ross Dove outlined the company’s strategic growth plans amidst current market challenges. While the company is experiencing steady profitability, it faces hurdles due to supply chain uncertainties. Nevertheless, Heritage Global is poised to capitalize on future market opportunities through strategic mergers and acquisitions.

Key Takeaways

• Heritage Global consistently generates a profit of $1 million to $2 million per quarter.
• The company is exploring mergers and acquisitions to boost profitability and expand into new markets.
• Significant growth is anticipated in the non-performing loan market due to rising consumer debt and the popularity of "buy now, pay later" models.
• Heritage Global is considering international expansion, particularly into Europe and the commercial real estate non-performing loan market.
• The company maintains a cautious approach to stock repurchases due to insider information and competitive considerations.

Financial Results

• Quarterly profitability ranges from $1 million to $2 million, with aspirations to increase this to $3 million to $5 million through strategic mergers and acquisitions.
• Heritage Global has a $10 million credit line with C Three Bank and approximately $30 million available for acquisitions, intending to spend around $20 million while retaining $10 million in reserves.

Operational Updates

• The industrial division focuses on auctions of surplus assets from large industrial clients like Pfizer, Amgen, and Boeing, and notable insolvency cases such as Enron and Solyndra.
• The financial assets division, NLEX, specializes in selling non-performing loans, including credit card, auto, and BNPL debt, with a focus on fintech sector growth.
• Current market conditions have led to a backlog of surplus assets due to supply chain uncertainties, but the company is adapting to the circular economy by facilitating the sale of used equipment.

Future Outlook

• Heritage Global projects significant growth in the non-performing loan market over the next two years, driven by increasing consumer debt and BNPL models.
• The company is actively seeking mergers and acquisitions to expand into Europe and the commercial real estate non-performing loan market.
• Efforts are underway to double annual revenue from $7 million to $14 million.

Q&A Highlights

• Heritage Global is monitoring opportunities in the federal government sector, including potential sales of student loans and liquidation of non-performing loans by regional banks.
• The company faces restrictions on its stock buyback program due to insider information and competitive considerations.
• Heritage Global differentiates itself from larger competitors with its expertise and partnerships, identifying Liquidity Services as a similar public company.

For a detailed account of the conference call, refer to the full transcript below.

Full transcript - LD Micro Main Event XIX Investor Conference:

Ross Dove, CEO, Heritage Global: Microphone for fifty years and I’m plenty tired of it. So let’s move here. I’m also now at a PowerPoint guy, so we’re probably gonna stay on one slide the whole time. There’s a deck on the internet. You guys can look at it.

I never do. So real simple. Raise your hand if you know who we are. Oh, it’s a new crowd. That’s pretty bad.

Everybody who knew who we are already knows me. I’ve been coming here for ten years and they didn’t come back because they don’t wanna hear the same speech over and over again. So, let’s start at the beginning. Heritage Global is about fifteen years old. Trades on the NASDAQ.

About an $80,000,000 market cap. We have one thing probably not in common with most of the companies here. We always make money. So we make money quarter after quarter after quarter. We’re a little stuck now making the same million to 2,000,000 a quarter.

I’m gonna explain to you why in a minute, and then ask you some questions, and then take some questions. But before I tell you why we’re stuck, let me tell you why we’re very profitable, let me tell you why we make money every quarter, and let me tell you why we have a fundamentally very strong business that’s very safe to invest in if you’re patient and give us some time. I told that to a lot of people when the stock was 30¢ here. Stock’s a buck 50 now. So they love me.

I’m telling you once again, we’re a good value. We have two different divisions in one company, industrial and financial. Industrial is a combination of an old fashioned auctioneer, a business that’s went through a bunch of different reiterations that was founded by my grandfather that I grew up in. It was a business from the factory floor, you know, $5 bid it could have been $10.10 dollar bid it could have been 15. It was that kind of old auction business done on born on a ladder that’s now an e commerce business that sells everything online.

We have two kinds of clients. We have big multinational clients like a Pfizer, like an Amgen, like a Boeing, like a Northrop Grumman, like a Halliburton, etcetera. Very large industrial clients. And we’re very well known in the insolvency world. We’ve had a storied history in the insolvency world.

Way back before Heritage, we did Osborn Computer, the biggest failure computer company. So that was a big deal in the eighties. After that, we did Drexel, Burnham Lambert, the Mike Milken investment bank failure. That was a big auction in the nineties. We did Enron afterwards.

That was the big auction of the decade there. We did the Obama solar funded Solyndra. That was the big insolvency auction of that decade. So we’re very well known, you know, as the guys who did Enron, as the guys who did Solyndra. So in an insolvency world, if it turns into that, and we’re not rooting for that, we’re going to be a significant winner if there’s insolvency closures.

What’s happening there right now, as we stay profitable, we have quarters where we make a million and quarters where we make 2,000,000. Why do we make 2,000,000? Because there was m and a in that quarter that created surplus assets or because we had some larger auctions because they’re plant closings. Our steady core business, we can make at least a million. If it gets good, we can make 2,000,000.

Right now, we have, you know, we’re not having a record year. Why aren’t we having a record year? Because nobody is having a record year in the asset trading business selling industrial assets. What we’ve created in the economy right now is a future record year. They’re building up massive inventories, but everybody is in wait and see mode.

I don’t know if I can do an auction even though I have surplus assets because I don’t know what’s happening with the supply chain. I’ve heard 25 times in a quarter. So everyone has surplus they wanna sell. Every big manufacturer is right sizing. They’re laying off people.

They’re moving to lean manufacturing. The problem is they’re slower at selling used equipment than they wanna be because they’re afraid, what if I sell the used equipment and I have a problem in the supply chain buying the new equipment? So it’s it’s about to burst loose. So that’s why I say it’s a great entry now because at some point, these companies have to basically, as they move to AI manufacturing, as they move to lean manufacturing, they have to sell the older equipment and buy the new equipment. So, you know, our clients, like a Pfizer, who’s got a $100,000,000,000 in the bank, is continuing to do m and a.

As they do m and a, they don’t need the equipment at all. They need the intellectual property. They need the scientists. They need the patents. But they don’t need another capsule plant.

They don’t need another tablet plant. So as m and a progresses, we grow on the industrial side with m and a. And that’s really in its very beginnings right now. So everybody can kind of see without question on the industrial side, it’s a growth company. I’ve announced about two years ago that we’re gonna focus a 100% of our company on stopping making a million to 2, figuring out how to make 3 to 4,000,000 or 5,000,000.

So that it’s a true growth company that’s not run like a stable family business. The only way to do that at this point is through m and a. We have a 100 people running hard. Those 100 people running hard are really proud of themselves when we made $2,000,000 in ninety days. They think, man, we busted our ass.

We kicked ass. We made $2,000,000. And I say, yeah, but all those investors are pissed off we didn’t make 3,000,000. Well, we don’t know what to do about that. And I said, that’s my fault.

You guys just keep making a million or 2,000,000 and let me save the money, which I’ve been able to do for the last two, two and a half years by squirreling away the money. We now have the capital for m and a. So I worked for two and a half years looking at m and a. We now have the money for m and a without having to sell stock, and without having to take on too much debt. We’re gonna announce one over here not too long down the future.

So you’re gonna see that business expand and grow through us expanding from not just a North American auctioneer, but an international auctioneer. On the other side over here and by the way, stop me at any time because at some point in time, I’m gonna quit talking and force you guys to ask questions. So start thinking about your questions right now because you’re not getting out of the room. They padlocked the door unless you at least give me like eight to ten minutes of you asking me questions so that I don’t have to keep doing this. Over here, financial assets.

So, NLEX is a 30 old business. You can see that I’m the only guy in a room that can talk about I have a thirty year old business. And I was not even young then. So thirty years ago, what happened was there was a massive s and l crisis. And in the s and l crisis, every savings and loan close, we won a government contract to sell all of the non performing crap.

All of the stuff that nobody else wanted to sell. Non performing credit card loans, commercial loans, every bad loan that every S and L ever made, we won the contract to sell. From When we did? In the nineteen nineties. Yes.

Yeah. In the nineteen nineties. So what happened is we had two years where we made a bunch of money, bought my dad a brand new Cadillac, put a swimming pool in the backyard. We were killing it. You know what I’m saying?

Then all of a sudden, it ended. And we’re, oh, man. This is no fun at all. We were making, you know, a million bucks a year. And now, the government says, we’re done.

Goodbye. You’re fired. Your contract’s expired. There are no more savings and loans. So we sat there and said, what are we gonna do now?

We sold $2,000,000,000 worth of assets. We have this incredible database and we said, alright, let’s go out to the world’s money center banks. And so we were the only ones, the originator at NLEX, who went into the Bank of America, went into Citicorp, went to Wall Street, went to American Express, had a meeting with them and said, we can sell the worst crap that you have. Every huge mistake you have that’s worth nothing, give to us. They said, nobody ever said that before.

We had a meeting with Diners Club. Diners Club said, you really think you could have got $4,000,000 for that paper? We said, yeah. They said, you’d have to go to the Bronx dumps to find it now. We thought it was worth nothing.

So, we created NLEX selling non performing credit cards, non performing auto loans, really bad charged off real estate. Did it for two decades or maybe two and a half decades. Woke up one day and said, wow. This is a growth business. Because all of a sudden, it was a growth business for two reasons.

After the pandemic, people kept spending like crazy even though they were no longer getting free government money. They built up a trillion dollars in credit card debt because they couldn’t stop spending as if the government was paying them to spend. So they built up the largest amount of debt ever in credit card debt. The regional banks have the most charge offs ever. So that business grows after that happens.

It doesn’t even probably grow this quarter or next quarter. It grows next year because it takes a long time for the charge offs to convert to something we sell. So it means the next two years we’re really gonna kick butt there. What else is gonna happen there? We’ve seen this massive amount of money go into Fintech.

We were never a fintech auctioneer before. We reinvented ourselves as a fintech auctioneer early on, and we got companies like LendingClub, like PayPal to give us their bad stuff, just like we got the banks to. Then all of a sudden, somebody came along and it must have been like There’s a Jewish word for it, it’s called a mitzvah, which is like a big break. Somebody came along and said, hey, you’re a liquidator. We invented this thing called buy now pay later.

We invented it just for you guys. And, that’s really almost what happened. We said, oh my god, you’re actually lending money to people that don’t have to pay you now, they have to pay you later. So they get to go on a yacht, take a vacation on the yacht, go gamble in the casino, have all the cocktails they want, get off the yacht and then pay you. We said, some of those people are not gonna pay you guys.

I can just tell you. So now, buy now pay later is a significant part of the non performing loans we sell. It’s we sell them on a monthly basis, along with the trillion dollars in credit card loans, along with the auto loans. That business has been not exactly flat. It’s been growing a little bit, but it it grows really big in the next two years.

Why does it grow big in the next two years? Because we sell charge offs. The first thing that happens is somebody stops paying. When they stop paying, the lender tries to collect in full. When the lender can’t collect in full, they hire a collection agency to try to make a deal and collect half the money.

When they can’t do either one of them, they then say, I give up. I’m so sick of these people. I’m so sick of this loan. I don’t care what I get for it. Just give it to Ross Stubb.

Just go give it to those NLEX guys now and let them sell it for $5.10 cents on the dollar because I just want out. So, we are the bottom. But there is a business at the bottom, just like there’s a business at the top. And I spent a long career at the bottom. So, you know, at the bottom, when somebody closes a factory, their business may not be any good anymore, their business may be insolvent, but their forklift still works.

You know, their black and Decker machine still works. Their semiconductor equipment still works. So there is a business at the bottom. There is a business when a large corporation says, we’re modernizing the plant. All we have is the old gear.

We don’t want We we wanna get rid of the old gear because we’re buying all new gear. And they say, who would buy this old gear? In the old days, they would take it and they would scrap it and they would salvage it. Now, we’re in this thing called the circular economy, where if they take the equipment and they salvage it and scrap it, they’re not a good steward to the economy. They’re messing up the environment.

So now in the circular economy, they really are pressured to give it to somebody like me and to create a secondary market. So the big corporations, you know, are starting to speed up in their supply chain, the retention to the back end of the supply chain and their surplus. They had a lot of attention on the front end and now they had attention on the back end. So that is my twenty minute pitch in ten minutes. What can I tell you?

I can tell you that it’s a public company. We have a stock repurchase plan. I’ve watched this company go through a lot of iterations and the whole goal of this company is not to be a good solid operating company, but to be a company that’s a growth company. And we put an an inordinate amount of energy into the last two years into figuring out a strategy how to not make $7,000,000 a year, but how to make $14,000,000 a year. Can I promise you we’re gonna do it?

No. But I can sure as hell promise you we have a plan on how to do it. We have a reason to do it and we have a way to execute it and we have a young strong team of people committed to do it. Alright. So, I’ve given you guys plenty of time.

Somebody ask me a question. I got See, I’m doing good here. I got a couple. You first. We have zero debt.

We have a $10,000,000 credit line with c three bank. We may create debt through our m and a process because we’re not gonna raise our price because our stock’s too cheap. But we have our our We’re at zero right now. Next. You, sir.

Unidentified speaker: Is there any opportunity for the federal government side

Unidentified speaker: of the clients now with all the Department of Labor changes and regulations

Ross Dove, CEO, Heritage Global: and regulations? There’s massive changes in the federal government that we’re obviously looking at. You saw the new announcement that Donald Trump wants to sell student loans. It’s the complete opposite. Biden didn’t want anybody to pay on their student loans.

So nobody wanted to buy student loans because they were afraid that the government was gonna give forgiveness. Now we have the switch side where the new administration wants to sell them. If they’re gonna sell student loans and we believe and we sold them plenty in the past, you know, private sector ones, and we believe there’s not gonna be government interference and that people will actually be able to collect on them, then there’s a big opportunity on the government there. There’s gonna be a big opportunity on the government with the government forcing a lot of regional banks to sell a lot of assets right now. We have the highest ever concentration of troubled regional banks in the last fifteen years.

You know, the the most banks with the most non performing loans. At some point, the FDIC says, these regional banks have to liquidate a non performing loans. We’re talking to them all. Everyone has been in the wait and see period. That’s But we’re still making money.

We’re still making 7 figures every quarter. But once this wait and see period breaks through, yeah, there is government work and government pressured work. There’s also government work to a whole bunch of contractors if the government really keeps what they’re saying now and starts to force more accountability in the government contractors and starts creating layoffs, then all of a sudden, all the government contractors that are working for the government, that are manufacturers, they wind up doing layoffs and selling assets. So we’re all over that. Next.

There you go. I’ve been buying back stock. We announced the stock buyback program. You cannot buy back stock at certain times in the life cycle of the company where you have information that you’re not ready to make public. So buying back stock has a lot of restrictions on it.

You can only buy back a percentage of the stock that trades that day. You can’t buy it back if you have information that you’re not ready to make public for various reasons. And it’s not all about transparency. Sometimes it’s you don’t want to make a public announcement to your competitors. So yeah, buying back stock is part of our capital allocation.

It happens some quarters. Some quarters, there’s reasons no. And it’s an ongoing discussion. But we have several million dollars set aside just for buyback. When we’ll deploy it?

I guess I really can’t tell you when we’ll deploy it. But I can tell you, it is set aside and there will be a point in time when we could either deploy it or pull it back and use it to do a different kind of transaction. I only got five minutes left. We could do this all over again. I’m just warming up.

Yes.

Unidentified speaker: Competitive landscape look like, particularly in

Unidentified speaker: the industrial side, like digital auctions and stuff

Unidentified speaker: like that?

Ross Dove, CEO, Heritage Global: Alright. So, on the industrial side, there are some very large companies. We can beat them a lot on transactions. So, there is a company called Hilco that just sold the ORIX. You know, we can buy a deal for 2,000,000.

They only have $50,000,000,000 available. So, you know, 50,000,000,000 versus our 10,000,000. But, you know, every deal doesn’t cost 50,000,000,000. So they’re very big. There’s a company called Gordon Brothers that has an investment with a stream bank.

B Riley used to own a company called Great American that Howard Marks bought. So there’s three very large companies that are private, who knows what their revenue is, that also do auctions. There’s one publicly traded company. Well forget Ritchie Brothers because they’re primarily outside the building. We’re primarily manufacturing.

So liquidity services, LQDT is a public company that’s somewhat similar. I love it when people compare us to them because if they have a quarter and they make 4,000,000 and we have a quarter when we make 1,000,000, they’re like 12 times our market cap. So, it’s like the greatest comparison ever for an argument that we’re worth triple what we’re worth. So, the analysts get that but you get beat up being microcapped. I think they have an $800,000,000 valuation.

But that’s on the stock side competitive. On the operating side, running the company, most of the people we compete with we’re also partners with. They’re mostly legacy businesses that I knew their dad. Some parts of them I knew their grandfather. Their sons run them.

And there’s about 50 global industrial auctioneers. You know, one week we could be competing against them. The next week we could be buying a deal with them. So there’s 50 of them and a lot of them are specialties. One guy’s great at plastics.

One guy’s great at metalworking. You know, they would think we’re great at pharma. So a lot of them is different niches where we partner. But there’s 50 of them. Alright.

We got two minutes left. Somebody gets to answer my question. Am I on the right track trying to get a deal done over here to expand into Europe and double my business? Trying to get a deal done over here that specializes more in commercial real estate non performing loans and not just consumer loans? Or should I be doing something else?

Anybody got an answer? Anybody wanna help me? Yes. What’s gonna happen in commercial real estate is very simple. There’s the fallout from securitization is growing and growing and growing.

Why is the fallout from securitization growing and growing and growing? Because even if somebody is making the payments on their loan, and they have an office building, that office building is now half vacant. So when it’s half vacant, they don’t just look at the fact that the payment is current, they look at what the future could mean and it gets kicked back out of the securitization. It goes back to the bank. And at some point, the bank needs to monetize that asset because they can’t slip it into the securitization like they used to, And it becomes a sub performing loan or a non performing loan.

They take a write down on it. And so, an acquisition of the people that do that kind of work fits us like a glove in my mind. Anybody else? Nobody’s got any advice from me at all? Alright.

Last question.

Unidentified speaker: Is the average when the chicken size and acquisitions actually looked at?

Ross Dove, CEO, Heritage Global: The other On the acquisition? So, it’s really pretty simple. I have $30,000,000 available. I’m not gonna spend all $30,000,000. So, if I was gonna do a couple acquisitions, I wouldn’t spend over $20,000,000.

This is just in theory because we’re an old fashioned company that I would always wanna have at least $10,000,000 in the bank. So between debt and cash, I wouldn’t go over 20,000,000. And then if I bought two more next year, I’d have to go make the money to buy them again. So, it took a long time to buy them because lots of people do m and a by using stock or a bunch of debt. But if you do it the old fashioned way I was taught, where you have to earn the money first, it’s a lot harder.

I don’t wanna go that far. I thank you all very much. Really appreciated you being here.

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