Heritage Global Inc.

Good day everyone and welcome to today's Heritage Global Inc. Second Quarter 2025 earnings call. At this time all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the question and answer session. Please note this call will be recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to John Nesbit with IMS Investor Relations. Please go ahead.

Thank you and good afternoon everyone. Before we begin I would like to remind everyone that this conference call contains forward-looking statements based on 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. We speak only as of the date of this call. For more detailed factors that could affect these expectations please see our filings with the Securities and Exchange Commission. Now I would like to turn the call over to Heritage Global's Chief Executive Officer Mr. Ross Dove. Ross?

Thank you John. Hello and good afternoon everyone. Thank you for joining and once again thank you for your continued interest. As always Brian will drill down on the coroner's performance nuts and bolts across the board. Clearly it was a solid quarter and actually more importantly it was a solid quarter with no real concentration issues but a solid coroner countrywide. We are proud to say we blew by the 2 million in a wide goal to 2.2 million and it felt very encouraging. Let me start by trying to add some color beyond the numbers on how we are currently feeling, where we see ourselves headed, and with some of the reasons on the how and the why. So this last month I was at a CEO peer group conference, a virtual conference of micro-cap and small-cap CEOs. We were all asked around the horn to basically talk about how we felt in this virtual room briefly about the state of the economy, how our company was facing the challenges in the current macro economy, etc. I spoke last, pretty much everyone seemed to mirror each other's comments with the same safeguards I'm sure you're all hearing regularly. Typical flight to safety which makes sense in this macro geopolitical economy. They were saying it's very hard to forecast with so much uncertainty. They were saying we're unsure when to hear and how severe the impact of the tariffs will be on our supply chains. They were then again reiterating it's unclear if capital will be available near term. Then it was my turn. I heard myself say, wow, Heritage Global feels really very, very able, very stable, and very capable right now. I just have the sense we're built to last for whatever comes opportunistically. I know that sounded arrogant and this is an earnings call and not a sales pitch. So forgive me any over exuberance. Let me just focus on where that confidence right now is coming from. First off, I believe now and I've always believed very much in the context of SINLOA, -O-A, safety in numbers, law of averages. It's paramount to my CEO dashboard. I measure everything both short term and long term where I get my confidence from safety in numbers. Right now, our pipeline is very, very strong and it's not just strong. It's equally spread out across all of our revenue sectors, which is most important. It's also very important that we have a really good mixture of both new clients we're attempting to add and ongoing business from repeat clients in all of our sectors spread out pretty equally. Let me begin a bit on the industrial side before I'll then shift to the financial and back to Brian into more details. What we're seeing is a very healthy spread of both large successful multinational firms we do business with, increasingly and aggressively managing their surplus even more diligently, combined with a more meaningful move to get their surplus on the market and out the doors of their factories and warehouses. That's combined with a venture community and a buyout sector that is now really becoming a bit more Darwinian in their approach to where companies who are not performing on fast paths to profitability are under greater pressure to right size. And we're seeing increased surplus assets continue to plant closures and pressure on downsizing and right sizing. At both our ALT and our industrial auctions, what's happening now in this supply chain and this marketplace is the magic really happens when we're able to offer new and late model assets. The late model assets are really selling on the industrial side at a very large premium now with supply chain and tariff fears. So we're getting more and more late time assets and we're getting more and more bidders at our auctions. And we've done a fantastic job, in my opinion, at the leadership at ALT of upgrading our bio inventory to where we have really modern fresh assets and an aggressive base of buyers that are looking to buy secondhand equipment that's really in pristine condition. So industrial side, I feel very confident that's kind of the how and the why and why I said that I think we're stable and capable and able right now. Transfer over to the financial assets and back to my same statements. When it comes to selling charged off consumer loans, our team at Enlax has built the most respected and trusted brand in the industry. It's really well deserved our success because of the effort our team has put in. They've invested in best in class services for both the sellers and the buyers with the singular best data protections in the industry and the most transparent ease of use in their trusted offerings. They have a growing cadre of repeat sellers and they're adding new sellers and new bulk sailors on a regular basis literally week by week and month by month. So it's very, very strong approaching at Enlax. As we move through the year and into next year, I feel that this will continue on a regular basis that blowing by $2 million NOI was no fluke. It should continue and be pretty stable the next few quarters and onward past that. More important than that, being stable and able is not our goal. Our goal is to put a massive effort now into the next stage of our company, which is the giddy up and make hay stage. So we're now in a very, very serious acquisition mode. And that would be an understatement to tell you how serious we are. We're looking at multiple companies. We're sitting here because we've worked very hard and we've planned very well with what I'll brag to say is a fat wallet. And we got a fat wallet and we got an empty belly ready to fill up. So we're looking hard as we speak at multiple deals. I think that we're going to get some announcements done. Definitely within the next six to 12 months, our goal is even sooner. We're talking to multiple people at once. We know that that's the secret sauce to get the kind of growth we need to go from able and stable to really on a takeoff position to really build this thing into something significantly larger. I feel good about where we are. I feel proud of our team. And I'll let Brian walk you through the details of this quarter. I'll quiet down now and give him his turn. Before I do that, thank you all. And anytime you want to talk with us, we're available. We're around and we very much appreciate you guys joining in. Brian, go ahead and get down to the nuts and bolts.