(HGBL) 2023 Q1 法說會逐字稿

Welcome to the Heritage Global Inc. first quarter 2023 earnings call. (Operator Instructions)

歡迎來到 Heritage Global Inc. 2023 年第一季度財報電話會議。 （操作員說明）

I will now turn the call over to your host, John Nesbett, IMS Investor Relations. You may begin.

我現在將把電話轉給你的主持人，IMS 投資者關係部的 John Nesbett。你可以開始了。

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 call. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.

謝謝，大家下午好。在我們開始之前，我想提醒大家，本次電話會議包含基於我們當前對未來事件的預期和預測的前瞻性陳述，並且可能會根據各種重要因素而發生變化。鑑於這些風險、不確定性和假設，您不應過分依賴這些前瞻性陳述，這些陳述僅代表本次電話會議之日的情況。有關可能影響這些預期的因素的更多詳細信息，請參閱我們向美國證券交易委員會提交的文件。

Now, I'd like to turn the call over to Heritage Global's Chief Executive Officer, Mr. Ross Dove. Ross, go ahead.

現在，我想將電話轉給 Heritage Global 的首席執行官 Ross Dove 先生。羅斯，繼續。

Thanks, John, and good afternoon, everyone. Welcome to our first quarter 2023 earnings conference call. Let's start today's call with Brian Cobb, our Chief Financial Officer, who will discuss our financial performance.

謝謝，約翰，大家下午好。歡迎參加我們 2023 年第一季度的收益電話會議。讓我們從今天的電話會議開始，我們的首席財務官布賴恩·科布 (Brian Cobb) 將討論我們的財務業績。

Brian, your turn.

布賴恩，輪到你了。

Thanks, Ross.

謝謝，羅斯。

Our 2023 first-quarter performance reflected strong operating results, including record net operating income of $3.9 million, improved profitability of $0.08 per diluted share, and EBITDA of $4 million. We saw growth from both our financial assets and our industrial assets divisions with all four operating segments contributing to our profitability.

我們 2023 年第一季度的業績反映了強勁的經營業績，包括創紀錄的 390 萬美元淨營業收入、每股攤薄收益提高 0.08 美元，以及 400 萬美元的 EBITDA。我們的金融資產和工業資產部門都實現了增長，所有四個運營部門都為我們的盈利能力做出了貢獻。

This quarter's performance is even more significant than our record result for two main reasons. Not only did we achieve a record quarter, but we did so without real estate sales in our joint ventures as seen in the last three quarters of 2022. Although we continue to search for lucrative asset purchases that include a real estate component, this is evidence, even without real estate transactions, that we can continue to perform at a high level and grow profits in each of our segments.

由於兩個主要原因，本季度的業績甚至比我們創紀錄的業績更為顯著。我們不僅實現了創紀錄的季度業績，而且正如 2022 年最後三個季度所見，我們在合資企業中沒有進行房地產銷售。儘管我們繼續尋找包括房地產部分在內的有利可圖的資產購買，但這證明，即使沒有房地產交易，我們也可以繼續保持高水平，並在我們的每個部門增加利潤。

The second being the recent growth we have seen in the ability to deploy capital through our specialty lending segment. Our total balance related to investments in loans to buyers of charged-off in non-performing receivable portfolios was $28.4 million as of March 31, 2023. We have seen an increase of more than $20 million in the total balance from one year ago and an increase of $6.7 million since December 31, 2022.

第二個是我們最近看到的通過專業貸款部門部署資本的能力的增長。截至 2023 年 3 月 31 日，我們與向不良應收賬款組合中註銷的買家貸款投資相關的總餘額為 2840 萬美元。我們發現總餘額比一年前增加了超過 2000 萬美元，並且自 2022 年 12 月 31 日以來增加了 670 萬美元。

Beyond Q1, our 2023 outlook is very promising. As more businesses face challenges in the difficult economy, our industrial assets division sees increased activity as downsizing in facility closures occur and companies look for ways to responsibly dispose of assets. The slowing economy has also contributed to increased volumes in our financial assets division as consumers are more reliant on credit cards and installment loans to make purchases. As consumer debt grows, so does the volume of charged-off consumer loans being sold by financial institutions. And we anticipate that we'll continue to capitalize on the increasing asset flow as we move through in 2023.

在第一季度之後，我們對 2023 年的展望非常樂觀。隨著越來越多的企業在困難的經濟中面臨挑戰，我們的工業資產部門看到活動增加，因為工廠關閉的規模縮小，公司正在尋找負責任地處置資產的方法。經濟放緩也導致我們金融資產部門的交易量增加，因為消費者更加依賴信用卡和分期貸款進行購買。隨著消費者債務的增長，金融機構出售的已註銷消費貸款的數量也在增加。我們預計，到 2023 年，我們將繼續利用不斷增加的資產流量。

We remain optimistic that the current economic landscape will continue to produce tailwinds on both sides of our business and drive continued financial success.

我們仍然樂觀地認為，當前的經濟形勢將繼續為我們的業務雙方帶來順風，並推動持續的財務成功。

Turning to the financial details of the first quarter, consolidated net operating income was a record $3.9 million as compared to $875,000 in the first quarter of 2022. Net income was $2.8 million or $0.08 per basic and diluted share compared to net income of $645,000 or $0.02 per basic and diluted share in the first quarter of 2022. EBITDA of $4 million increased substantially as compared to EBITDA of $1 million in the first quarter of 2022; and adjusted EBITDA grew to $4.2 million for the first quarter of 2023, up from $1.1 million in the first quarter of 2022. Our balance sheet remains strong with stockholders' equity of $51.2 million as of March 31, 2023, compared to $48.3 million as of December 31, 2022, and a net working capital of $8.6 million.

談到第一季度的財務細節，合併淨營業收入達到創紀錄的 390 萬美元，而 2022 年第一季度為 875,000 美元。淨收入為 280 萬美元或基本和稀釋後每股收益 0.08 美元，而淨收入為 645,000 美元或 0.02 美元2022 年第一季度每股基本和稀釋後的每股收益。與 2022 年第一季度的 100 萬美元的 EBITDA 相比，EBITDA 大幅增加了 400 萬美元；調整後的 EBITDA 從 2022 年第一季度的 110 萬美元增至 2023 年第一季度的 420 萬美元。我們的資產負債表依然強勁，截至 2023 年 3 月 31 日，股東權益為 5,120 萬美元，而截至 2023 年 3 月 31 日，股東權益為 4,830 萬美元2022 年 12 月 31 日，淨營運資金為 860 萬美元。

With that, I'll now turn the call back over to Ross.

有了這個，我現在將把電話轉回給羅斯。

Thank you, Brian. You did that so well that you didn't leave me that much to add to it, but I'll do my best anyway.

謝謝你，布萊恩。你做得很好，沒有給我留下太多可以補充的東西，但無論如何我都會盡力而為。

So coming off a record year, it was really exciting that we were able right after a record year to post our best quarter since our inception. So that was our best quarter in the 12 years we've been running Heritage by a mile. And as Brian said, that quarter was all-organic de novo growth hitting our stride against all five revenue streams. There was no extraordinary win in that quarter, it was just pure blocking and tackling an entire team of 100 people performing at a very high level.

因此，在創紀錄的一年之後，我們能夠在創紀錄的一年之後發布自成立以來最好的季度，真是令人興奮。所以這是我們 12 年來最好的一個季度，我們一直在運行 Heritage 一英里。正如布賴恩所說，那個季度是全有機的從頭增長，使我們在所有五個收入來源中都取得了長足的進步。那個季度並沒有什麼非凡的勝利，只是純粹的攔網和鏟球，整個 100 人的團隊都在非常高的水平上表現。

So now you say to yourself, okay, they had a great year and then it's followed by a great quarter. What does that mean going forward? How can I look at the future and what can I access from that performance? So these guys still have more hat tricks in the bag, can these guys still grow at record levels? So the question you want to say to yourself is very simple. After a decade in business, working hard, is Heritage in a position now where it's truly not just a market leader but a build-to-last company?

所以現在你對自己說，好吧，他們度過了美好的一年，然後是一個偉大的季度。前進是什麼意思？我如何看待未來，我可以從該表現中獲得什麼？所以這些傢伙還有更多的帽子戲法，這些傢伙還能以創紀錄的水平成長嗎？所以你想對自己說的問題很簡單。經過 10 年的努力經營，Heritage 現在是否真的不僅是市場領導者，而且是一家經久不衰的公司？

So the answer for me is, I believe everyone coming together and staying together with very little turnover, gaining clients across the board in industrial and financial, that this company has the right strategy and it operated with the right tactics. And I'm proud to say as a CEO, that is the oldest guy here, I look at everybody younger to me and I say to them all, stick around because Heritage is built to last. It has years and years of growth if we all perform.

所以我的答案是，我相信每個人都聚在一起，並以很少的營業額保持在一起，在工業和金融領域獲得了全面的客戶，這家公司有正確的戰略，並以正確的策略運作。作為首席執行官，我很自豪地說，他是這裡最年長的人，我看著每個比我年輕的人，我對他們所有人說，留下來，因為 Heritage 經久不衰。如果我們都表現出色，它就會有年復一年的增長。

So why do I say that? Because I think at this point in time, every one of our revenue streams from industrial-type financial is positioned with true growth drivers already existing and already in place.

那我為什麼這麼說呢？因為我認為在這個時間點，我們來自工業型金融的每一個收入流都定位於已經存在並且已經到位的真正增長動力。

Let me do a real quick update on the growth drivers across both sides of the business. In financial assets, you've got a quarter-century-old business called NLEX that sells every kind of non-performing loan from credit card loans to auto loans. And it's a growth company because alternative lending in fintech continues to grow and we continue to garner more share there while maintaining our legacy clients. As we maintain our legacy clients and grow new clients, there is the potential for exponential growth year over year for quite a while.

讓我對業務雙方的增長動力做一個真正的快速更新。在金融資產領域，有一家擁有 25 年曆史的名為 NLEX 的公司，它出售從信用卡貸款到汽車貸款的各種不良貸款。這是一家成長型公司，因為金融科技領域的另類借貸業務持續增長，我們在維持老客戶的同時繼續獲得更多份額。隨著我們維護我們的老客戶並發展新客戶，在相當長的一段時間內，我們有可能逐年呈指數增長。

On top of that, the pandemic is now over with and we're seeing increased consumer spending in all of the segments we operated. As consumer spending continues to increase, defaults naturally follow to some extent; and as defaults follow, then charged-offs follow. So right now, we're looking at a great last year and a very promising multi-year future.

最重要的是，大流行現在已經結束，我們看到我們經營的所有部門的消費者支出都有所增加。隨著消費者支出的持續增加，違約自然會在一定程度上隨之而來；隨著默認值的出現，然後是註銷。所以現在，我們正在展望一個偉大的去年和一個非常有前途的多年未來。

Simultaneous to that, the people that we've onboarded has grown. We have more onboarded clients in our lending divisions than ever, and they're winning more portfolios, they're relying upon us more, and that business has literally the best predictability of any of our revenue streams and the most clear path to exponential growth. Every time we fund that business, we wind up growing the business automatically. So that's a business that in the end will constantly year after year improve as long as funding stays static, even. If funding grows, then that business truly has legs. So that's on that side of the business.

與此同時，我們入職的人數也在增加。我們貸款部門的入職客戶比以往任何時候都多，他們贏得了更多的投資組合，他們更加依賴我們，而且該業務實際上具有我們所有收入流中最好的可預測性以及實現指數增長的最明確途徑.每次我們為該業務提供資金時，我們都會自動發展業務。因此，只要資金保持不變，這項業務最終將年復一年地不斷改進，甚至。如果資金增長，那麼該業務就真正站穩了腳跟。這就是業務的那一面。

Now switching over to the industrial platform. The industrial platform is really positioned in the right place now, strategically and tactically. The acquisition of American Lab Trading has proved highly synergistic with our auction division. In fact, on a monthly basis, they're finding assets that we can auction as long as assets that they can resell. So packaging that together, that's a business with true growth. Our valuation business is more and more needed as we potentially move into recessionary times. And there's a greater concern with asset values.

現在切換到工業平台。工業平台現在在戰略和戰術上確實處於正確的位置。事實證明，收購 American Lab Trading 與我們的拍賣部門具有高度協同效應。事實上，他們每月都在尋找我們可以拍賣的資產，只要他們可以轉售資產。因此，將它們打包在一起，這是一項真正增長的業務。隨著我們可能進入衰退時期，我們越來越需要估值業務。人們更關心資產價值。

So that business has true legs right now. And so basically, if you look at all of our businesses, every business has a growth driver. The obvious growth driver is in Heritage Global Partners, the auction company. The growth driver there is the entire industrial marketplace. It's moving to rightsizing. As it moves the rightsizing, as it moves the lean manufacturing, it moves the business process outsourcing. So these companies more and more are using industrial auctioneers.

因此，該業務現在擁有真正的優勢。所以基本上，如果你看看我們所有的業務，每個業務都有增長動力。明顯的增長動力來自拍賣公司 Heritage Global Partners。那裡的增長動力是整個工業市場。它正在轉向精簡。當它移動精益製造時，它移動了精益製造，它移動了業務流程外包。所以這些公司越來越多地使用工業拍賣師。

They're also looking more and more to prevent assets from going into landfill. The best way to prevent assets from going into landfill is to consign them to an auctioneer with a worldwide purchasing base. So over and over, I can say, not just this year, not just next year, but I like to look at this company for years to come. And I'm a long-term holder, and I believe we have a group of employees dedicated to staying here a long time and really building something of value.

他們也越來越多地尋求防止資產進入垃圾填埋場。防止資產進入垃圾填埋場的最佳方法是將它們委託給具有全球採購基礎的拍賣商。所以一遍又一遍，我可以說，不僅僅是今年，不僅僅是明年，但我喜歡在未來幾年關注這家公司。我是長期持有者，我相信我們有一群員工致力於長期留在這裡並真正創造有價值的東西。

Thank you all for hearing me out.

謝謝大家聽我說完。

(Operator Instructions) Mark Argento, Lake Street.

（操作員說明）Mark Argento，Lake Street。

Hey, Ross. Hey, Brian. Congrats on a great quarter. Really impressive. I just wanted to maybe drill down a little bit on the various segments. And historically, I know you guys have commented on unit-level profitability or I should say, division-level profitability. Any data or anything you guys can provide? I know you said at a high level, all four units -- four businesses contributed. But could you give us a little granularity into the financial assets versus industrial assets in terms of revenue contribution, operating income contribution? Anything there would be helpful.

嘿，羅斯。嘿，布萊恩。祝賀一個偉大的季度。真的令人印象深刻。我只是想深入了解各個細分市場。從歷史上看，我知道你們評論過單位層面的盈利能力，或者我應該說，部門層面的盈利能力。任何數據或任何你們可以提供？我知道你在高層說過，所有四個部門——四家企業都做出了貢獻。但是，您能否在收入貢獻、營業收入貢獻方面詳細介紹一下金融資產與工業資產的對比情況？那裡的任何東西都會有所幫助。

So I'll let Brian add on afterwards. But just at a high level, the biggest come back over the last literal year and over the last six to nine months, the biggest comeback has been in financial, not in industrial. The pandemic really had not a negative impact on industrial because the supply chain was clogged on new equipment. So used equipment sold at a premium and people needed it. However, on the financial asset side, as you know, the pandemic dramatically impacted the volume of assets we were receiving to sell.

所以我會讓布賴恩在之後補充。但就高水平而言，最大的回歸是在過去的一年和過去的六到九個月裡，最大的回歸是在金融領域，而不是在工業領域。大流行病確實沒有對工業產生負面影響，因為供應鏈因新設備而受阻。因此，二手設備以高價出售，人們需要它。但是，在金融資產方面，如您所知，大流行極大地影響了我們收到出售的資產數量。

That over with, we had -- and I don't want to say a resurgence in financial as much as a comeback. So we had a comeback and now we're starting to see a resurgence. So financial assets, I don't want to say it was a surprise, but it was the biggest higher performer going forward.

結束了，我們有——我不想說金融復甦和捲土重來一樣多。所以我們捲土重來，現在我們開始看到復蘇。所以金融資產，我不想說這是一個驚喜，但它是未來表現最好的。

Brian, if you can add to that, go head.

布賴恩，如果你能補充一點，那就去吧。

Yes. So to add on to that, as we look at each of the operating segments, it's very evenly split when you look to operating income now. Now, Ross is correct with the comeback from Q1 of 2022 to Q1 of 2023. You see a larger increase in the financial assets division driven by the higher volumes.

是的。因此，除此之外，當我們查看每個運營部門時，當您現在查看營業收入時，它的分配非常平均。現在，羅斯對從 2022 年第一季度到 2023 年第一季度的回歸是正確的。你會看到金融資產部門在交易量增加的推動下出現了更大的增長。

And I'll also point out that we had a fantastic quarter from our refurbishment and resale segment, and that's the ALT acquisition. They had a larger purchase in Q4, which we sold -- resold in Q1, which contributed to the increase in the overall industrial assets division. So $2.5 million, $2.6 million approximately the contribution from each division this quarter.

我還要指出，我們的翻新和轉售部門有一個很棒的季度，那就是 ALT 的收購。他們在第四季度進行了較大的購買，我們在第一季度將其轉售，這有助於整體工業資產部門的增長。因此，本季度每個部門的貢獻約為 250 萬美元，約 260 萬美元。

That's super helpful. And on the financial asset side of the house, given -- just moving paper digits versus physical goods. The scalability and the margin profile on that business, I would assume incremental margins are high. Any kind of thoughts on the margin profile there as that business scales?

這非常有幫助。在房子的金融資產方面，給定 - 只是移動紙質數字與實物商品。該業務的可擴展性和利潤率概況，我認為增量利潤率很高。隨著業務規模的擴大，對利潤率有何看法？

So the margin on both sides of the business is just dramatically changed with everything being on an e-commerce platform and a lower physical touch on the industrial side of the platform. We used to physically go cold bids, Mark, in an auction. Fly people out and the buyers had a fly out to go bid on the assets. So that dramatically changed over there. And it gives us huge scalability that everything can sell worldwide over the Internet without the buyer having to travel to the site.

因此，隨著一切都在電子商務平台上，而平台工業方面的物理接觸較少，業務雙方的利潤率發生了巨大變化。馬克，我們曾經在拍賣會上親自出價。將人們飛出去，而買家則飛出去競標資產。所以那裡發生了巨大的變化。它為我們提供了巨大的可擴展性，任何東西都可以通過互聯網在全球範圍內銷售，而買家無需前往該網站。

On the financial asset side, the leverage was always there that people didn't have to physically look at the assets. So on that side, it's not so much a switch to an e-commerce platform as the scalability is that the more volume we have, but we don't need an increased OpEx to do the volume. Our staff is there and ready.

在金融資產方面，槓桿始終存在，人們不必親自查看資產。因此，在這方面，與其說是轉向電子商務平台，不如說是可擴展性，我們擁有的數量越多，但我們不需要增加運營支出來完成數量。我們的工作人員已準備就緒。

So literally, we're in a position of this company that if we can garner more supply across the board, we don't have to raise substantially any of our internal costs to sell more supply. So we view ourselves as a highly leveraged company that we can really leverage more supply without adding more cost, if that makes sense.

所以從字面上看，我們在這家公司的位置是，如果我們能夠全面獲得更多供應，我們就不必大幅提高任何內部成本來銷售更多供應。因此，我們將自己視為一家槓桿率很高的公司，如果有意義的話，我們可以在不增加成本的情況下真正利用更多的供應。

Yeah. So that makes sense. Just briefly to the balance sheet, in particular, the loan book for the non-performing loan buyers. Obviously, grown fairly substantially over the last year and even sequentially from Q4. I think, you said it was a $28 million or somewhere around there. What is your current capacity? And then more importantly, the ability to deploy additional capital sounds like fairly high at this point, maybe could you help us just think through that (multiple speakers).

是的。所以這是有道理的。簡單介紹一下資產負債表，特別是不良貸款購買者的貸款賬簿。顯然，去年增長相當可觀，甚至從第四季度開始連續增長。我想，你說那是 2800 萬美元左右。你目前的能力是多少？然後更重要的是，在這一點上部署額外資本的能力聽起來相當高，也許你能幫助我們考慮一下（多位發言者）。

That's a great question for the Heritage CFO to shine. So Brian, it's on you.

對於 Heritage CFO 來說，這是一個很好的問題。所以布賴恩，就靠你了。

Yeah. Thanks, Mark. So the growth in our lending balance currently is $28.4 million, that consists of notes receivable and the investments in equity method. That balance is really correlated with asset supply and kind of the performance on the brokerage side. So as we see the volumes in transaction level on the brokerage side goes up, we see our onboarding clients, our borrowers winning more deals, and the ability to deploy capital to our onboarded list of clients is greater.

是的。謝謝，馬克。因此，我們目前貸款餘額的增長為 2840 萬美元，其中包括應收票據和權益法投資。這種平衡確實與資產供應和經紀方面的表現相關。因此，當我們看到經紀方面的交易量上升時，我們看到我們的入職客戶、我們的借款人贏得了更多交易，並且將資本部署到我們的入職客戶名單的能力也更強。

So we see a great potential for that business to continue to grow that balance over this year with the assumption that our asset on a transaction volume overall stays high. So more growth for that matter.

因此，假設我們的交易量資產總體保持高位，我們認為該業務在今年繼續增長平衡的巨大潛力。因此，更多的增長就此而言。

In the current capacity to bill for additional catalog right now, where does that sit?

以目前為附加目錄計費的能力，它在哪裡？

Let me answer first. What you have to look at is we have free cash flow every quarter, we reported $4 million in EBITDA this quarter, we're very confident we're going to have ongoing free cash flow. So our free cash flow is not needed for operations. It's not needed for headcount growth. So our free cash flow can contribute on a regular basis through exponential growth in our lending business.

讓我先回答。您需要注意的是，我們每個季度都有自由現金流，本季度我們報告的 EBITDA 為 400 萬美元，我們非常有信心我們將擁有持續的自由現金流。因此，運營不需要我們的自由現金流。員工人數增長不需要它。因此，我們的自由現金流可以通過貸款業務的指數增長定期做出貢獻。

So that's number one. So we're not in a position where we can't continue to fund based upon us contributing free cash flow to fund. And as you know, free cash flow does not have a debt component to it. So our ally is always going to be higher on free cash flow. Simultaneously, we have good debt instruments and good partners.

所以這是第一。因此，我們無法根據我們為基金貢獻自由現金流而繼續提供資金。如您所知，自由現金流沒有債務成分。所以我們的盟友在自由現金流方面總是會更高。同時，我們擁有良好的債務工具和良好的合作夥伴。

So if you want to add to that, Brian, go ahead.

所以如果你想補充一點，布賴恩，請繼續。

I think you covered it. So we would have our NOI, or our operating income roughly mirrors our EBITDA because the tax expense that we record on a quarterly basis is non-cash due to our NOLs. So I think that's another big piece to consider. Our total cash flows from operations is pretax. And then our principal remittances that we're getting from auto loans outstanding comes back at 4% or 5% a month that we also can recycle back out into loans.

我想你涵蓋了它。因此，我們會有 NOI，或者我們的營業收入大致反映了我們的 EBITDA，因為由於我們的 NOL，我們每季度記錄的稅收費用是非現金的。所以我認為這是另一個需要考慮的重要因素。我們的運營現金流總額為稅前。然後我們從未償還的汽車貸款中獲得的本金匯款以每月 4% 或 5% 的速度返回，我們也可以將其回收回貸款。

That's helpful. And just last one for me. Ross, you talked about building the company for the long duration. When you think about investing back into the business in areas where you could invest back in the business, either in technology, additional M&A, maybe you could just talk through what the priorities are right now to really take advantage of the strength of the business and get a little more aggressive -- with some M&A, obviously, the ALT acquisition is performing well. But what can you do while the sun is shining seriously here? The real [store client] really built this business for the long term.

這很有幫助。最後一個給我。羅斯，你談到了長期建設公司。當你考慮在你可以投資的領域重新投資業務時，無論是在技術上，還是在額外的併購方面，也許你可以談談現在的優先事項是什麼，以真正利用業務的優勢和變得更積極一些——顯然，通過一些併購，ALT 的收購表現良好。但是，當太陽在這裡嚴重照耀時，您能做什麼？真正的 [商店客戶] 確實建立了長期的業務。

So we're not an Apple or a Google. I'm not talking about size. With this massive war chest of free capital that the best deployment is to buy back your own stock. We're a growth company that's microcap and our best deployment of capital is not in a buyback. Our best deployment of capital is growth capital to enhance our profits.

所以我們不是蘋果或谷歌。我不是在談論尺寸。有了這個龐大的免費資金儲備，最好的部署就是回購自己的股票。我們是一家成長型公司，是微型資本，我們最好的資本配置不是回購。我們最好的資本配置是增長資本，以提高我們的利潤。

So what we're looking at is using our capital on a contributing basis every quarter and literally annually, we put that money back into our lending segment, which we think is our most predictable revenue and our most logical place to put back our free cash flow and our profit.

因此，我們正在考慮的是每個季度和實際上每年都在貢獻的基礎上使用我們的資本，我們將這些錢放回我們的貸款部門，我們認為這是我們最可預測的收入，也是我們最合乎邏輯的放回自由現金的地方流量和我們的利潤。

On top of that, we're always going to hold back enough opportunistic capital that on the industrial side, if we find a highly accretive deal, it will be financeable internally by us without us looking for future capital. So there's a balance there that we're constantly looking at quarter over quarter on making sure that we're financially capitalized for the future market, if that makes sense.

最重要的是，我們總是會阻止足夠的機會主義資本，在工業方面，如果我們找到一個高度增值的交易，我們將在內部為其提供資金，而無需我們尋找未來的資本。因此，如果有道理的話，我們會不斷地逐季審視，以確保我們在未來市場上有足夠的財務資本。

That's helpful. Appreciate the time. And again, congrats on a really, really strong quarter.

這很有幫助。珍惜時光。再次祝賀一個非常非常強勁的季度。

Well, thank you very much for congratulating us because we're quite happy with the quarter and we anticipate that we're in a good place right now, Mark.

嗯，非常感謝你祝賀我們，因為我們對這個季度非常滿意，我們預計我們現在處於一個好的位置，馬克。

(Operator Instructions) And at this time, there appears to be no further questions. I would like to turn the call back to management for closing remarks.

（操作員說明）此時，似乎沒有進一步的問題。我想將電話轉回管理層以作結束語。

This is Ross, the CEO of management. I want to thank you all for listening. I want to thank you all, to our existing shareholders for sticking with us. It really matters to us, and we're always available to talk to. And if there's anybody considering being a new shareholder, we're very, very available to talk to you, walk you through our business plan, and understand what you're looking for against what we think we can accomplish.

這是管理層的首席執行官羅斯。我要感謝大家的聆聽。我要感謝大家，感謝我們現有的股東支持我們。這對我們來說真的很重要，我們隨時可以與之交談。如果有人考慮成為新股東，我們非常非常願意與您交談，引導您完成我們的商業計劃，並了解您正在尋找什麼以及我們認為我們可以實現的目標。

And we look forward to encouraging people to take a hard look at Heritage because underneath the radar screen, looking at ourselves, we're pretty proud of what we're doing and we think we can do more and we're looking for more people to pay attention to us. So we're extremely appreciative for anybody who paid enough attention to listen in. And I thank you all graciously. Everyone, have a great day.

我們期待鼓勵人們認真審視 Heritage，因為在雷達屏幕下，審視我們自己，我們為自己正在做的事情感到非常自豪，我們認為我們可以做得更多，我們正在尋找更多的人關注我們。因此，我們非常感謝所有認真傾聽的人。我非常感謝你們所有人。大家，祝你有美好的一天。

This concludes today's conference call. Thank you for attending.

今天的電話會議到此結束。感謝您的出席。