|($ in thousands, except per share amounts)||Three Months Ended September 30,||Nine Months Ended September 30,|
|Services revenue (1)||$||3,824||$||2,993||$||11,718||$||9,533|
|Asset sales (2)||4,758||767||6,193||2,434|
|Net (loss) income||(371)||(3,637)||313||(4,917)|
|Net (loss) income per share - basic and diluted||$||(0.01)||$||(0.13)||$||0.01||$||(0.17)|
|(1)||Services revenue represents revenue generated from activities in which Heritage Global acted as an agent by either brokering a transaction or providing some other fee-based service.|
|(2)||Asset sales represent revenue generated from activities in which Heritage Global acted in a principal capacity, reselling assets that it had purchased.|
- Total revenues increased approximately 128% to $8.6 million from the year ago third quarter level of $3.8 million, while the cost of revenues increased by $4.9 million. The increase in total revenues and cost of revenues reflects the Company completing the sale of its real estate inventory for $4.1 million, as well as a higher volume of transactions and the timing of certain asset liquidation transactions.
- Gross profit, or total revenues and earnings of equity method investments net of costs of services revenue and asset sales, remained flat at $2.5 million for the third quarter of 2016.
- During the third quarter, Heritage Global completed a number of successful global online sales for clients, including StemCells Inc., Sunpower, Seven Stone Surface Fabrication, Entergy Vermont, Sanofi, Amgen and Pfizer.
- Selling, general and administrative expenses decreased 10% to $2.8 million during the current period, compared to $3.1 million in the 2015 third quarter.
- Heritage Global reported a net loss of $0.4 million or a net loss of $0.01 per share, compared to a net loss of $3.6 million or a loss of $0.13 per common share in the year ago period. The Company recorded a real estate inventory write-down charge during the 2015 third quarter of $2.7 million, which represented approximately 75% of the 2015 third quarter net loss. No charge was taken in the 2016 period. Excluding the real estate inventory write-down charge, the net loss for the comparable 2015 third quarter would have been $0.9 million, or a loss of $0.03 per common share.
- In July 2016 the Company completed the sale of its real estate inventory for $4.1 million in cash. Subsequently, the Company repaid $2.5 million of outstanding principal, plus accrued interest, on its third party debt, and terminated the loan agreement with the third party creditor (for more information, see the Form 8-K filed with the SEC on July 8, 2016). In August 2016 the Company repaid $0.8 million of the $1.7 million outstanding principal on its related party debt. As a result of both the real estate inventory sale and the debt repayments, Heritage Global expects to achieve approximately $0.4 million in annual cost savings.