Heritage Global Inc.

Thank you for standing by. This is the conference operator. Welcome to the Heritage Global Inc. fourth quarter 2020 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during a conference call, You may signal operator by pressing star and zero. I would now like to turn the conference over to John Nesbitt, IMS Investor Relations.

Please go ahead. Thank you and good afternoon, everyone. Before we begin, I'd like to remind everyone that this conference call contains forward-looking statements based on our current expectations and projections about future events and are subject to change based on various important factors. In light of these risks, uncertainties, and assumptions, You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details and factors that could affect these expectations, please see our filings with the Securities and Exchange Commission. Now I'd like to turn the call over to Heritage Global's Chief Executive Officer, Mr. Ross Dove. Go ahead, Ross.

Thanks, John, and good afternoon, everyone. Welcome to our fourth quarter and full year 2020 Earnings Conference Call. As you all know, 2020 was quite the ride, yet despite the public health and economic challenges presented by the COVID-19 pandemic, Heritage closed the year with record fourth quarter results as reflected in net income of $6.3 million and substantially improved EBITDA of $3.5 million. We believe these results demonstrate the strength and the resilience of our diverse business model. which has enabled us to continue to drive momentum in our business despite the challenging economic landscape. We saw a particular strength during the quarter from our industrial assets division where the close of several large transactions contributed significantly to the growth in the fourth quarter. We expect to experience continued robust supply on the auction side of the business and as the pandemic continues to drive the liquidation of industrial equipment and assets, the reality is there are many companies out there that need to reduce and monetize surplus equipment as they reposition themselves to emerge viably from the pandemic economy. And we are seeing strong growth in our online auction volumes. With our visibility of the marketplace today, we expect to see continued and increasing demand for our industrial re-commercing capabilities. We are similarly optimistic about our prospects in our financial assets division. Over the course of the calendar year, we expect to see an increase in the release of non-performing loans into the marketplace. The National Loan Exchange, or NLEX as we refer to it, is poised to benefit from the increased activity. Specifically, the current stay-at-home economy has resulted from COVID-19 restrictions has produced increased online shopping activity, which has driven rapid growth of the buy now, pay later, or as they say, BNPL sales. And this is resulting in an increase of charged off inventories of these assets in the U.S. NLAC is competitively positioned to provide an effective and efficient debt sale process between our BNPL issuers In fact, we recently announced the closure of a sale of 25 million portfolio of BNPL charged-off accounts, and we believe to see similar opportunities in the coming year and beyond. Likewise, Harris Global Capital continues to ramp up its business, providing specialty financing solutions for small and medium-sized investors of charged-off and non-performing loan portfolios. Looking ahead, We expect the challenging economic landscape to endure for some time, presenting increased opportunities for both sides of our business. Our industrial assets business is a well-established and respected partner in the liquidation of surplus and distressed assets, and we believe the current economy will drive rising demand for our expertise and proven success with brokered asset sales and online auctions. Thank you very much. Thank you for joining us.