(HGBL) 2023 Q3 法說會逐字稿

Ladies and gentlemen, greetings, and welcome to the Heritage Global, Inc. third-quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Nesbett with IMS Investor Relations. Please go ahead, sir.

女士們、先生們，大家好，歡迎參加 Heritage Global, Inc. 2023 年第三季財報電話會議。此時，所有參與者都處於只聽模式。正式演講後將舉行簡短的問答環節。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，IMS 投資者關係部門的 John Nesbett。請繼續，先生。

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 date of this call. For more details on 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. Ross?

謝謝大家，大家下午好。在開始之前，我想提醒大家，本次電話會議包含基於我們目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改變。鑑於這些風險、不確定性和假設，您不應過度依賴這些前瞻性陳述，這些陳述僅代表截至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。現在，我想將電話轉給 Heritage Global 的執行長 Ross Dove 先生。羅斯？

Thank you, John, and thank you, everyone, for attending and listening. Before Brian gives you an overview of what we feel was an extremely good quarter, I wanted to take a few moments upfront to walk everyone through our non-cash $900,000 loan loss reserve. The reasons why we took it and how we feel about it. So our largest borrower came to us and said that they would like to extend the term of their loan, that they believe they'll definitely be able to payoff full; however, the collection curves have slowed and they've asked for an extension.

謝謝約翰，也謝謝大家的出席與聆聽。在 Brian 向您概述我們認為非常好的季度之前，我想先花一些時間向大家介紹一下我們 90 萬美元的非現金貸款損失準備金。我們接受它的原因以及我們對此的感受。所以我們最大的借款人來找我們說他們想延長貸款期限，他們相信他們一定能夠全額還清；然而，收集曲線已經放緩，他們要求延期。

The first thing I thought about them asking for an extension is: thank God, I'm only 71 years old, so I've got plenty of time to extend it. So we feel comfortable that it's going to work but we took the $900,000 charge because the buyer is asking for an extension. So over time, we'll have to figure out whether or not that charge or that non-cash reserve will stay on the books. For now, we believe it was prudent and the safest thing to do.

聽到他們要求延期，我首先想到的是：感謝上帝，我只有71歲，所以我有足夠的時間來延期。所以我們覺得它會起作用，但我們收取了 90 萬美元的費用，因為買家要求延期。因此，隨著時間的推移，我們必須弄清楚該費用或非現金儲備是否會保留在帳面上。目前，我們認為這是謹慎且最安全的做法。

So after I thought about it for a long time, I started thinking about a story from a very early in my career that my grandfather, our founder, told me. He said to me: kid, never worry too much about the money that people owe you, worry far more about the people you owe money to. So the good news there is our loan book has grown to $35 million plus, while our bank debt is only $7 million. So with that perspective in mind, I feel very comfortable about our future here.

因此，在我思考了很長一段時間之後，我開始思考我的祖父、我們的創辦人告訴我的一個我職業生涯早期的故事。他對我說：孩子，永遠不要太擔心別人欠你的錢，更要擔心你欠錢的人。好消息是我們的貸款帳簿已增至 3,500 萬美元以上，而我們的銀行債務僅為 700 萬美元。因此，考慮到這一點，我對我們在這裡的未來感到非常放心。

So everybody looking at the market right now, and I'll talk about it later on after Brian speaks, says it looks like there's rocky roads coming ahead. After 50 years doing this, I can tell you over and over again that rocky roads have been ice-cream to liquidators and we think our time is going to get better and better over the next two or three years. The $13 million guidance we gave for this year, I'm still confirming after we took the loan loss reserve and I'm positive that next year, in the year after, you'll see growth.

所以現在每個人都在關注市場，我會在布萊恩講話後談論這個問題，他說前面的道路似乎崎嶇不平。經過 50 年的努力，我可以一遍又一遍地告訴你們，對於清算人來說，崎嶇不平的道路一直是冰淇淋，我們認為我們的時代在未來兩三年內會變得越來越好。我們今年給予的 1300 萬美元的指導，在我們扣除貸款損失準備金後，我仍在確認，並且我確信明年，後年，你會看到增長。

With that, I'll turn it over to Brian to walk you through the quarter. Once he does walk you through the quarter, I'll walk you through why I see there's growth over the next two years, three years, and beyond. Brian, go ahead. You're up.

接下來，我會將其交給布萊恩，讓他帶領您完成本季的工作。一旦他確實向您介紹了本季度，我將向您介紹為什麼我認為未來兩年​​、三年甚至更長時間都會出現增長。布萊恩，繼續。你起來了。

Thank you, Ross. This was another very positive quarter for the company, where we delivered strong operating results on both sides of our business. Within our industrial assets division, we are seeing increased option interest, specifically in the biotech and pharmaceutical sector, as the industry continues to consolidate. Industrial posted a solid third quarter operating income of $2.1 million, with strong results from its core auction business.

謝謝你，羅斯。對於公司來說，這是另一個非常積極的季度，我們的業務雙方都取得了強勁的營運業績。在我們的工業資產部門中，隨著產業的不斷整合，我們看到選擇興趣不斷增加，特別是在生物技術和製藥領域。 Industrial 公佈第三季營業收入為 210 萬美元，其核心拍賣業務表現強勁。

It is important to note that in the comparable quarter last year, we realized $1.5 million in earnings from equity method investments, related to a real estate building closure. And we did not have any real estate transactions this quarter. Our financial asset division posted an excellent quarter as well, with operating income for the three and nine months ended up 18% and 110% compared to the prior year periods, respectively. We are seeing sustained tailwinds with the current state of the economy, given consumer debt at record levels and high volumes of charged-off portfolios.

值得注意的是，去年同期，我們透過權益法投資實現了 150 萬美元的收益，這與房地產建築關閉有關。本季我們沒有任何房地產交易。我們的金融資產部門也取得了出色的季度業績，三個月和九個月的營業收入與去年同期相比分別成長了 18% 和 110%。鑑於消費者債務達到創紀錄水平以及大量沖銷的投資組合，我們看到當前經濟狀況持續有利。

The brokerage segment is positioned to capitalize from continued growth in the volume of nonperforming loans and charged-off credit card accounts. In this environment however, the offsetting impact is that consumers have less capacity to pay their debts, resulting in lower collections in the near-term, which we are seeing across the industry. We recognize that there exists an elevated risk related to the underlying collateral, and thus our loan book due to the reduced collection rates. And as Ross mentioned, we are working diligently with our partners to complete amended agreements with our largest borrower to extend their maturity.

經紀業務的定位是從不良貸款和沖銷信用卡帳戶數量的持續增長中獲利。然而，在這種環境下，抵銷的影響是消費者償還債務的能力下降，導致短期內收款減少，我們在整個產業都看到了這一點。我們認識到，由於催收率降低，與基礎抵押品以及我們的貸款帳簿相關的風險較高。正如羅斯所提到的，我們正在與合作夥伴努力合作，與我們最大的借款人完成修訂協議，以延長其期限。

In light of the situation, with this particular borrower as well as overall macro trends in the collections market, we felt it was prudent to increase our noncash credit loss reserves by approximately $900,000, resulting in a total balance of $1.4 million as of September 30, 2023. The increase to our credit loss reserve runs through the income statement against SG&A and as an offset of that earnings from equity method investments, were they roughly evenly split between the two accounts. This situation is not having an impact on our other operating businesses, including NLEX, which continues to perform at record levels.

鑑於這一特定借款人的情況以及催收市場的整體宏觀趨勢，我們認為將非現金信用損失準備金增加約 90 萬美元是謹慎的做法，截至 9 月 30 日，總餘額為 140 萬美元， 2023 年。我們的信用損失準備金的增加貫穿於SG&A 的損益表，並作為權益法投資收益的抵消，如果它們在兩個帳戶之間大致平均分配的話。這種情況並沒有對我們的其他營運業務產生影響，包括 NLEX，該業務繼續保持創紀錄的水平。

Turning to the financial results, consolidated net operating income was $2.8 million in the third quarter. Excluding the total impact of our credit loss reserve adjustments, consolidated net operating income was approximately $3.6 million. Net income was $2 million or $0.05 per diluted share and including our credit loss reserve adjustments, earnings per share was $0.07. For the quarter, we reported adjusted EBITDA of $3.1 million.

談到財務業績，第三季合併淨營業收入為 280 萬美元。排除信用損失準備金調整的整體影響，合併淨營業收入約為 360 萬美元。淨利潤為 200 萬美元，即稀釋後每股收益 0.05 美元，包括我們的信用損失準備金調整，每股收益為 0.07 美元。本季度，我們報告調整後 EBITDA 為 310 萬美元。

Our balance sheet remains strong with stockholders' equity of $56 million as of September 30, 2023, up from $48 million at December 31, 2022, and a net working capital of $13.8 million. Additionally, our total balance related to investments in loans to buyers of charged-off nonperforming receivable portfolios was $35.9 million as of September 30, 2023; of which $20.6 million is classified as notes receivable and $15.3 million is classified as equity method investments. The total increase in our loan book was $6 million during the quarter and $14 million year-to-date. So I'll wrap this up by reiterating that this was a great quarter for us with strong macro tailwinds and both sides of our business performing well and benefiting from increased asset volume. With that, Ross, I'll pass it back to you.

我們的資產負債表依然強勁，截至 2023 年 9 月 30 日，股東權益為 5,600 萬美元，高於 2022 年 12 月 31 日的 4,800 萬美元，淨營運資本為 1,380 萬美元。此外，截至 2023 年 9 月 30 日，我們與已核銷的不良應收帳款投資組合買家貸款投資相關的總餘額為 3,590 萬美元；其中 2,060 萬美元被歸類為應收票據，1,530 萬美元被歸類為權益法投資。本季我們的貸款總額增加了 600 萬美元，年初至今增加了 1,400 萬美元。因此，我在總結這一點時重申，對於我們來說，這是一個偉大的季度，宏觀經濟強勁，我們的業務雙方都表現良好，並受益於資產規模的增加。羅斯，我會把它傳回給你。

Thank you, Brian. So over the next 30 days, we should really have a lot more visibility to report back to you on our ability to come up with an extension that works for our senior lender and works for us, and we'll let you know, basically, more detail exactly where we're at and how we hopefully avoid as a default, which we are very promising we believe we can as of today. During that next 30 days, we'll also be able to add guidance to our Q4 numbers. Q4 looks like it has the potential to be a record quarter.

謝謝你，布萊恩。因此，在接下來的 30 天內，我們確實應該有更多的知名度來向您報告我們是否有能力提出適用於我們的高級貸方和我們的延期，我們基本上會讓您知道，更詳細地說明我們目前的處境以及我們希望如何避免違約，我們非常有信心，我們相信從今天起我們可以做到這一點。在接下來的 30 天內，我們還可以為第四季度的數據添加指導。第四季看起來有可能成為創紀錄的季度。

We don't have all of the numbers in yet, and we're still conducting auctions. But let me tell you why we're so bullish: across the board, where I think each of our divisions could have a record quarter that would have offset, really, any loan loss reserve, in my opinion, as we're growing our business pretty dramatically. On the NLEX side, we are now, as you can see, are basically each month adding new clients. And not just are we adding new clients, our existing clients are giving us more and more supply of assets to sell because they have more and more need to sell the assets as nonperforming loans are growing more rapidly now than they even were last year.

我們還沒有掌握所有的數字，我們仍在進行拍賣。但讓我告訴你為什麼我們如此樂觀：總的來說，我認為我們的每個部門都可能有一個創紀錄的季度，在我看來，隨著我們不斷增長我們的貸款損失準備金，這實際上可以抵消任何貸款損失準備金。生意相當引人注目。在 NLEX 方面，正如您所看到的，我們現在基本上每個月都在增加新客戶。我們不僅增加了新客戶，我們的現有客戶也為我們提供了越來越多的待售資產供應，因為他們越來越需要出售資產，因為不良貸款現在的成長速度甚至比去年還要快。

Defaults are growing and as defaults grow, ultimately, charge-offs grow. So the flood of assets into our marketplace is growing at a faster pace than it has been in the past. NLEX had a record quarter in the brokerage business this last quarter and is forecasting a record quarter once again. I've already addressed Heritage Global capital is struggling at some point with the amount of loans being paid off as fast as we anticipated. We don't have any other borrowers asking for an extension at this point in time.

違約率不斷增加，隨著違約率的增加，沖銷最終也會增加。因此，湧入我們市場的資產正在以比過去更快的速度成長。 NLEX 上個季度的經紀業務創下了創紀錄的季度紀錄，並且預計將再次創下紀錄。我已經說過，Heritage Global 資本在某些時候正陷入困境，因為償還貸款的速度與我們預期的一樣快。目前我們沒有其他借款人要求延期。

We don't currently anticipate that we will. So we're working through our one large buyer and their issues, and we're being prudent in new loans. We expect our financial asset business to stay profitable and the loan book to grow, albeit a little bit more cautiously and slowly over the next couple of years. And we're very bullish across both the businesses going forward.

我們目前預計不會。因此，我們正在解決我們的一個大買家及其問題，並且我們對新貸款持謹慎態度。我們預計我們的金融資產業務將保持盈利，貸款規模將增長，儘管在未來幾年將更加謹慎和緩慢。我們對這兩項業務的未來都非常樂觀。

On the industrial side, we're having, literally, the most auctions conducted in one quarter we've had since the inception of Heritage Global Partners. If you look at our calendar, you'll see that there's literally almost an auction every day. We have an extremely robust full calendar. We have an extremely robust pipeline into Q1 and beyond, and we're very, very comfortable that there's multiple years of growth.

在工業方面，毫不誇張地說，我們在一個季度內進行了自 Heritage Global Partners 成立以來最多的拍賣活動。如果您查看我們的日曆，您會發現幾乎每天都有拍賣。我們有一個非常強大的完整日曆。我們在第一季及以後擁有極其強大的管道，我們對多年的成長感到非常非常滿意。

There's still, literally, hundreds and hundreds of biotech companies that are struggling and are going to need assets to be sold, so that stays solid. Along with that same solid, our valuation business is dramatically growing right now. Why is it growing? Because when we moving into times with a little bit more rocky roads, in those times, valuation businesses are more needed.

從字面上看，仍然有成百上千的生物技術公司陷入困境，需要出售資產，這樣才能保持穩定。除了同樣的實力之外，我們的估值業務目前正在急劇成長。為什麼會成長？因為當我們進入道路崎嶇的時代時，就更需要估值業務。

American Lab Trading has massively upgraded its inventory. And basically, at this point in time, there's growth over the next two or three years as they continue to upgrade their inventory and more and more buyers as we move into a more difficult economy, want the savings of buying used equipment. So we're bullish across financial and industrial, and we're looking at that charge very seriously. And at the same time, we're extremely confident in the future and open to any questions anyone has.

美國實驗室貿易公司大規模升級了庫存。基本上，在這個時間點上，隨著他們繼續升級庫存，未來兩三年會有成長，隨著我們進入更困難的經濟，越來越多的買家希望節省購買二手設備的費用。因此，我們看好金融和工業領域，並且非常認真地對待這項指控。同時，我們對未來充滿信心，並對任何人提出的任何問題持開放態度。

And once again, thank you all for your time. We greatly appreciate it. Thank you for being shareholders. And we'll keep on trying to perform at the very best we can and feeling pretty good about where we sit today. Thank you.

再次感謝大家抽出寶貴的時間。我們非常感激。感謝各位股東。我們將繼續努力發揮出最好的水平，並對我們今天所處的位置感覺良好。謝謝。

(Operator Instructions) Mark Argento, Lake Street Capital Markets.

（操作員說明）Mark Argento，Lake Street Capital Markets。

Hi, Mark.

嗨，馬克。

(multiple speakers), Brian. Just feeling a little bit of the onion on the loan loss reserve. Just maybe give a little color on the particular type of portfolio, consumer credit versus a student loan or whatnot. Have you guys done a pretty in-depth work in terms of from a semi exposure, just given the environment we're in?

（多名發言者），布萊恩。只是覺得貸款損失準備金上有點洋蔥。也許只是對特定類型的投資組合、消費信貸與學生貸款等進行一些說明。鑑於我們所處的環境，你們是否在半曝光方面做了相當深入的工作？

It's a mixed portfolio of all different types of consumer loans. There is some auto blended with some credit card, not a lot of student loans. So, primarily that, with fintech stuff, at the same time, a combination of BNPL and peer-to-peer loans. So it's really across all the consumer sectors, and it's been performing, obviously, with collections every month.

它是所有不同類型消費貸款的混合投資組合。有一些汽車與一些信用卡混合在一起，而不是許多學生貸款。因此，首先是金融科技，同時是 BNPL 和 P2P 貸款的結合。所以它確實涉及所有消費領域，而且顯然每個月都有系列產品表現出色。

They were a little aggressive in how fast they thought they could collect. So by being a little aggressive and how fast, the market changed after they stopped the stimulus and they're going through the same issue that every single person in the collection business is going through. If you saw that the big public companies, PRA and [Oncor], also announced the collection curves have slowed. So it's an industry-wide issue that collection curves have slowed, and that's why we're working with the market.

他們對於收集的速度有點激進。因此，透過採取一點激進和多快的速度，在他們停止刺激措施後，市場發生了變化，他們正在經歷與收藏業務中的每個人都經歷過的相同的問題。如果您看到大型上市公司 PRA 和 [Oncor] 也宣布收款曲線已經放緩。因此，回收曲線放緩是一個全行業的問題，這就是我們與市場合作的原因。

All makes sense. And then when you're thinking about putting additional capital out at this point, how do you take, -- how do you price the credit, in terms of the rates go up, the terms change? What are you seeing in terms of pricing and you guys are putting on additional capital (multiple speakers)?

一切都有道理。然後，當您考慮在此時投入額外資本時，您如何看待——如何根據利率上升、條款變化來定價信貸？你們在定價方面看到了什麼，你們正在投入額外的資本（多位演講者）？

So the first we're going to do is make sure that when we put in any money out of all: two things, do we get a little bigger downpayment? And that we understand that it's going to take a longer cycle to get paid back. So the biggest thing on our underwriting, is understanding that we thought could be a three-year payback could turn into a five-year payback. So we're going to have to do the analytics on whether it makes sense not to do a loan that comes back in five years.

因此，我們要做的第一件事是確保當我們投入任何資金時：有兩件事，我們是否會獲得更大的首付？我們知道，需要更長的周期才能獲得回報。因此，我們承保中最重要的事情是了解我們認為三年投資回報可能會變成五年投資回報。因此，我們必須分析不提供五年後歸還的貸款是否有意義。

So that's the real difference. The loans, basically are going to extend right now. If people are going after judgments, the courts are crowded, there's way more product on the market, way more people buying products. So we're looking at the loan curves extending not just this year and not just next year, but maybe for the next couple of years, while we go through this massive volume increase.

這就是真正的區別。貸款基本上現在就會延長。如果人們追求判決，法庭就會擁擠不堪，市場上的產品就會多得多，購買產品的人就會多得多。因此，我們關注的貸款曲線不僅會在今年、明年延伸，而且可能會在未來幾年內延伸，同時我們會經歷如此大規模的數量成長。

Got it. And in terms of loan loss reserve, is that something that you guys look at obviously, quarterly annually? And what's the probability of having to continue to tweak that materially here going forward?

知道了。就貸款損失準備金而言，你們每年每季都會明顯關注這一點嗎？未來必須繼續進行實質調整的可能性有多高？

So, obviously, we're looking at it every quarter always. We think that it's sufficient and we don't anticipate doing it again. At least from everything we see today, we think that what we did was conservative and aggressive in taking the $900,000. So by making a conservative and aggressive, we think we've got ourselves covered for next year and beyond.

所以，顯然，我們每個季度都會關注它。我們認為這已經足夠了，我們預計不會再這樣做。至少從我們今天看到的一切來看，我們認為我們在拿90萬美元時所做的事情是保守而激進的。因此，透過保守和進取，我們認為我們已經為明年及以後做好了準備。

Great. Appreciate the extra color. I'll hop back in the queue.

偉大的。欣賞額外的顏色。我會跳回到隊列中。

Well, thank you very much, and we'll talk soon. Be good, Mark.

嗯，非常感謝您，我們很快就會再談。乖一點，馬克。

George Sutton, Craig Hallum.

喬治·薩頓，克雷格·哈勒姆。

Hi, George.

嗨，喬治。

Thank you. Hi, Ross. Sorry, I missed your earlier prepared comments. So if my questions are confused, there's a good reason. But it was very clear in listening to PRAA's call that they were talking about this rapid clip of charge-offs coming, they were talking about well above forward flow arrangements opportunities in the market. That would, correct me if I'm wrong, directly lead to brokered business, of which, you are the primary player. Is that a fair statement (multiple speakers)?

謝謝。嗨，羅斯。抱歉，我錯過了您之前準備的評論。因此，如果我的問題感到困惑，這是有充分理由的。但從 PRAA 的電話中可以清楚地看出，他們正在談論即將到來的快速沖銷，他們正在談論市場上遠高於遠期流動安排的機會。如果我錯了，請糾正我，這將直接導致經紀業務，而您是其中的主要參與者。這是一個公平的說法嗎（多位發言者）？

Yeah, in the prepared remarks, I told them that NLEX had a record Q3, having a true record Q4. And not just are we getting new sellers, but the current sellers are giving us more and more product now because they have more and more product to sell. So we're forecasting next year being the biggest year in the history of NLEX. So our marketplaces is really full.

是的，在準備好的發言中，我告訴他們 NLEX 第三季創下了紀錄，第四季也創下了真正的紀錄。我們不僅有了新的賣家，而且現有的賣家現在也為我們提供了越來越多的產品，因為他們有越來越多的產品可供銷售。因此，我們預測明年將是 NLEX 歷史上最重要的一年。所以我們的市場真的很滿。

This quarter coming up, Q4, I think will be the best quarter in history of NLEX. So right now, yeah, you're right. I mean, and I think it's sustainable for the next couple of years. If you listen to PRAA, you listen to Encore, they're all saying that the collection curves is slowing. But at the same time, the collection curves are slowing, the volume is growing literally quarter-by-quarter, George.

在即將到來的第四季度，我認為將是 NLEX 歷史上最好的季度。所以現在，是的，你是對的。我的意思是，我認為它在未來幾年是可持續的。如果你聽 PRAA，你聽 Encore，他們都說收藏曲線正在放緩。但與此同時，收集曲線正在放緩，數量確實在逐季度增長，喬治。

Now relative to the capacity that your buyers have on the brokerage side, how much, assuming this lender that you're specifically referencing in related to -- loan loss reserve? Thank you, very different than a charge-off for those listening. If they don't have capacity, how much does that impact your ability in the market, too? I get that normal (multiple speakers).

現在，相對於您的買家在經紀方面的能力，假設您特別提到的貸款損失準備金相關的貸方是多少？謝謝，這與聽眾的沖銷非常不同。如果他們沒有能力，這會對您的市場能力產生多大影響？我覺得很正常（多個發言者）。

So the absorption rate is still very, very strong. We're getting bids on everything we put out. The pricing is gone down to more normal levels. During the pandemic, there wasn't enough supply and people were paying very high prices and thinking that the collection curves were quicker than they are now.

所以吸收率還是非常非常強的。我們推出的所有產品都會收到投標。定價已降至更正常的水平。在大流行期間，供應不足，人們支付了非常高的價格，並認為收集曲線比現在更快。

But the absorption rate is 100%. We haven't had a portfolio that we've been unable to get bids on, and so we think that'll continue. A lot of these people really couldn't spend any money during the pandemic. And now, all of a sudden, they're basically back in business. So I think there's a solid base of buyers right now.

但吸收率是100%。我們還沒有無法獲得投標的投資組合，因此我們認為這種情況將繼續下去。疫情期間，很多人確實沒錢花。現在，突然之間，他們基本上恢復了營業。所以我認為現在有堅實的買家基礎。

Quick question on the biotech side. So we're somewhat stunned by the number of auctions that you had. How much is that impacting the buyer side, in terms of their willingness to pay up in these auctions? and understanding that if I don't buy today, there's a number of other auctions coming?

關於生物技術方面的快速問題。因此，我們對你們舉辦的拍賣數量感到有點震驚。就買家在這些拍賣中支付的意願而言，這對他們有多大影響？並了解如果我今天不購買，還會有許多其他拍賣會到來？

It's been really good because most of what we're doing is not for the Fortune 1,000, big Pfizers of the world, the engines in the world. Most of what we're doing is for companies that are struggling that, basically, have newer equipment. So because we're selling much newer equipment, because we're getting it from venture-type companies that equipment is one, two, three, four years old, we're getting very aggressive bids. And what happens? To people may not understand: when times get tighter, there's an increase not a decrease in the volume of people that will buy used equipment.

這真的很好，因為我們所做的大部分工作並不是為了財富 1000 強、世界上的大型輝瑞公司、世界上的引擎。我們所做的大部分工作都是為那些陷入困境、基本上擁有更新設備的公司提供的。因此，因為我們正在銷售更新的設備，因為我們從創投公司獲得這些設備已有一年、兩年、三年、四年的歷史，所以我們得到了非常積極的出價。會發生什麼事？人們可能不明白：當時間變得緊張時，購買二手設備的人數是增加而不是減少。

So people that won't look at used equipment, when they're getting $20 million funding from their BCs and they can buy everything brand new, shiny without any worries, are now not getting that kind of money. And so as they're trying to, basically, balance their supply chain, they're more and more looking at used equipment. We're selling used equipment; now, the guys that are buying used equipment for the first time.

因此，那些不看二手設備的人，當他們從BC獲得2000萬美元的資金並且可以毫無後顧之憂地購買一切全新、閃亮的東西時，現在卻得不到那麼多錢。因此，當他們基本上試圖平衡供應鏈時，他們越來越多地關註二手設備。我們出售二手設備；現在，那些第一次購買二手設備的人。

Got you. Okay. That's it for me. Thank you.

明白你了。好的。對我來說就是這樣。謝謝。

Thank you.

謝謝。

(Operator Instructions) Michael Diana, Maxim Group.

（操作員說明）Michael Diana，Maxim 集團。

Hi, Michael.

嗨，邁克爾。

Hey, Ross. You talked about absorption rates, in other words, the demand for the charged-off loans. And you said the absorption rates were still high, although the pricing maybe is a little softer. So can you remind us how you get paid on these sales of the charge (multiple speakers) -- and how that dynamic will impact your revenue?

嘿，羅斯。您談到了吸收率，換句話說，就是對沖銷貸款的需求。你說吸收率仍然很高，儘管定價可能有點軟。那麼您能否提醒我們您如何從這些費用銷售（多個發言者）中獲得報酬 - 以及這種動態將如何影響您的收入？

So we're never a principle, we're never at financial risk at all, we're 100% a broker. We give no guarantees on the pricing. We tried to give them guidance on what we think it's worth to make sure that they're going to be happy with our performance and we get paid, basically, a commission, a seller's commission. So it's the same way that CBRE or Cushman & Wakefield would get paid a brokerage.

所以我們從來都不是原則，我們根本不存在財務風險，我們是 100% 的經紀人。我們對定價不提供任何保證。我們試圖向他們提供我們認為值得的指導，以確保他們對我們的表現感到滿意，並且我們基本上得到佣金，賣方佣金。因此，這與 CBRE 或 Cushman & Wakefield 獲得經紀佣金的方式相同。

So it's a brokerage fee and we get paid at closing. So we're really focused. We make more money on a 100% on volume. So if the pricing is lower, that is not as big an impact as long as we're selling more and more loan portfolios. So if the pricing goes from $0.1 to $0.08, it's not that huge a difference in how much money we're making. There's differences if we go from doing 200 to 300 offerings in a year.

所以這是一筆經紀費，我們在成交時得到報酬。所以我們真的很專注。我們在 100% 的銷量上賺更多的錢。因此，如果定價較低，只要我們出售越來越多的貸款組合，影響就不會那麼大。因此，如果定價從 0.1 美元到 0.08 美元，我們賺多少錢的差異並不大。如果我們從一年內提供 200 份產品到 300 份產品，就會有所不同。

Right, right. So you got a fixed percentage of the amount sold, right?

是的是的。所以你得到了銷售量的固定百分比，對嗎？

Yes.

是的。

So as you say, you can make it up in volume even if the pricing is --?

所以正如你所說，即使定價是——？

We can make up on volume. And the great news there is it's really easy to make it up in volume because in this business, you're not raising your OpEx. You don't need more people to sell more loans. We've got pretty much the staff in place that can handle the growth. Because in the end, it's different than the industrial auction business. You're not setting up the plants, you don't you don't have shippers, you don't have rigors, you're not checking out the plants here. You're literally just selling paper so there's tremendous leverage.

我們可以按量彌補。好消息是，在數量上彌補這一點非常容易，因為在這個行業，你不需要提高營運支出。您不需要更多的人來出售更多的貸款。我們已經擁有足夠的員工來應對成長。因為歸根究底，它與工業品拍賣業務不同。你不是在建立工廠，你沒有托運人，你沒有嚴格要求，你不是在這裡檢查工廠。你實際上只是在賣紙，所以有巨大的槓桿作用。

Okay, great. Thank you.

好的，太好了。謝謝。

Thank you, Michael.

謝謝你，麥可。

Thank you. As there are no further questions, I would now hand the conference over to the management for closing comments.

謝謝。由於沒有其他問題，我現在將會議交給管理層進行總結評論。

So thank everyone for listening in. We always appreciate having an audience of people that pay attention to want to learn about our company, that wants to get more knowledge about our company. We're very accessible. If anybody wants to contact us after this call and have any one-on-one discussion, we'd love to have a one-on-one discussion with you.

因此，感謝大家的傾聽。我們總是很高興有一群關注我們公司、想要了解更多關於我們公司的人。我們非常平易近人。如果有人想在本次電話會議後聯繫我們並進行一對一的討論，我們很樂意與您進行一對一的討論。

We think that next year is going to be the best year in the history of the company. And we have every reason to believe that and every indication to believe that looking at the pipeline across the board. So this is about as excited as we can get. We've got a lot of work to do and we're going to do that work.

我們認為明年將是公司歷史上最好的一年。我們有充分的理由相信這一點，也有一切跡象顯示我們全面審視管道。所以這讓我們感到非常興奮。我們還有很多工作要做，我們將會完成這些工作。

We realize that we're going to, basically, have to wait a little longer to get all of our money paid back. But as I said in their earnings call, I'm pretty glad that people owe me $35 million. So that's a good feeling. And if it takes a little longer to get paid back, we don't need the money tomorrow.

我們意識到，基本上，我們將不得不等待更長的時間才能收回所有的錢。但正如我在財報電話會議上所說，我很高興人們欠我 3500 萬美元。所以這是一種很好的感覺。如果需要更長的時間才能回本，我們明天就不需要錢了。

We have excellent cash flow. We have excellent operating leverage, and we're in a fantastic position if we have to wait another six months or a year, year-and-a-half, to get paid back on some of this. Because we did everything right to be strong enough that we can wait. So everybody have a great day and thank you all for listening.

我們擁有出色的現金流。我們擁有出色的營運槓桿，如果我們必須再等待六個月或一年、一年半才能獲得部分回報，那麼我們處於一個絕佳的位置。因為我們做了一切正確的事情，讓我們變得足夠強大，可以等待。祝大家有個愉快的一天，感謝大家的聆聽。

Thank you. The conference of Heritage Global, Inc. has now concluded. Thank you for your participation. You may now disconnect your lines.

謝謝。 Heritage Global, Inc. 的會議現已結束。感謝您的參與。現在您可以斷開線路。