Microphone for 50 years, and I'm plenty tired of it. Let's move here. I'm also not a PowerPoint guy, so we're probably going to stay on one slide the whole time. There's a deck on the internet. You guys can look at it. I never do. Real simple, raise your hand if you know who we are. Oh, it's a new crowd. That's pretty bad. Everybody who knew who we are already knows me. I've been coming here for 10 years, and they didn't come back because they don't want to hear the same speech over and over again. Let's start at the beginning. Heritage Global is about 15 years old, trades on the NASDAQ, about an $80 million market cap. We have one thing probably not in common with most of the companies here. We always make money. We make money quarter after quarter after quarter.
We're a little stuck now making the same $1 million- $2 million a quarter. I'm going to explain to you why in a minute and then ask you some questions and then take some questions. Before I tell you why we're stuck, let me tell you why we're very profitable. Let me tell you why we make money every quarter. Let me tell you why we have a fundamentally very strong business that's very safe to invest in if you're patient and give us some time. I told that to a lot of people when the stock was $0.30 here. The stock's above $0.50 now. They love me. I'm telling you once again, we're at good value. We have two different divisions in one company: industrial and financial.
Industrial is a combination of an old-fashioned auctioneer, a business that went through a bunch of different reiterations, that was founded by my grandfather, that I grew up in. It was a business from the factory floor. You know, $5 bid could have bid $10, $10 bid could have bid $15. It was that kind of old auction business, born on a ladder that's now an e-commerce business that sells everything online. We have two kinds of clients. We have big multinational clients like a Pfizer, like an Amgen, like a Boeing, like a Northrop Grumman, like a Halliburton, et cetera. Very large industrial clients. We're very well known in the insolvency world. We've had a storied history in the insolvency world way back before Heritage . We did the Osborne Computer, the biggest failure computer company. That was a big deal in the 1980s.
After that, we did Drexel Burnham Lambert, the Mike Milken investment bank failure. That was a big auction in the 1990s. We did Enron afterwards. That was the big auction of the decade there. We did the Obama solar-funded Solyndra. That was the big insolvency auction of that decade. We're very well known, you know, as the guys who did Enron, as the guys who did Solyndra. In an insolvency world, if it turns into that and we're not rooting for that, we're going to be a significant winner if there's insolvency closures. What's happening there right now, as we stay profitable, we have quarters where we make $1 million and quarters where we make $2 million. Why do we make $2 million? Because there was M&A in that quarter that created surplus assets or because we had some larger auctions because they're plant closings.
Our steady core business, we can make at least $1 million. If it gets good, we can make $2 million. Right now, you know, we're not having a record year. Why aren't we having a record year? Because nobody is having a record year in the asset trading business selling industrial assets. What we've created in the economy right now is a future record year. They're building up massive inventories, but everybody is in wait-and-see mode. I don't know if I can do an auction even though I have surplus assets because I don't know what's happening with the supply chain. I've heard 25 x in a quarter. Everyone has surplus they want to sell. Every big manufacturer is right-sizing. They're laying off people. They're moving to lean manufacturing.
The problem is they're slower at selling used equipment than they want to be because they're afraid, what if I sell the used equipment and I have a problem in the supply chain buying the new equipment? It's about to burst loose. That's why I say it's a great entry now because at some point, these companies have to basically, as they move to AI manufacturing, as they move to lean manufacturing, they have to sell the older equipment and buy the new equipment. Our clients, like a Pfizer, who's got $100 billion in the bank, is continuing to do M&A. As they do M&A, they don't need the equipment at all. They need the intellectual property. They need the scientists. They need the patents. They don't need another capsule plant. They don't need another tablet plant. As M&A progresses, we grow on the industrial side with M&A.
That's really at its very beginnings right now. Everybody can kind of see, without question, on the industrial side, it's a growth company. I announced about two years ago that we're going to focus 100% of our company on stopping making $1 million- $2 million, figuring out how to make $3 million to $4 million or $5 million, so that it's a true growth company that's not run like a stable family business. The only way to do that at this point is through M&A. We have 100 people running hard. Those 100 people running hard are really proud of themselves when we made $2 million in 90 days. They think, man, we busted our ass. We kicked ass. We made $2 million. I say, yeah, but all those investors are pissed off we didn't make $3 million. We don't know what to do about that.
I said, that's my fault. You guys just keep making $1 million- $2 million. Let me save the money, which I've been able to do for the last two, two and a half years by squirreling away the money. We now have the capital for M&A. I worked for two and a half years looking at M&A. We now have the money for M&A without having to sell stock and without having to take on too much debt. We're going to announce one over here not too long down in the future. You're going to see that business expand and grow through us expanding from not just a North American auctioneer, but an international auctioneer. On the other side over here, and by the way, stop me at any time because at some point in time, I'm going to quit talking and force you guys to ask questions.
Start thinking about your questions right now because you're not getting out of the room. They padlocked the door unless you at least give me like 8- 10 minutes of you asking me questions so that I don't have to keep doing this. Over here, financial assets. NLEX is a 30-year-old business. You can see that I'm the only guy in the room that can talk about I have a 30-year-old business. I was not even young then. Thirty years ago, what happened was there was a massive S&L crisis. In the S&L crisis, every savings and loan closed. We won a government contract to sell all of the non-performing crap, all of the stuff that nobody else wanted to sell, non-performing credit card loans, commercial loans, every bad loan that every S&L ever made. We won the contract to sell.
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In the 1990s.
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Yeah, in the 1990s. What happened is we had two years where we made a bunch of money, bought my dad a brand new Cadillac, put a swimming pool in the backyard. We were killing it, you know what I'm saying? All of a sudden, it ended. We're, oh, man, this is no fun at all. We were making, you know, $1 million a year. Now the government says, we're done. Goodbye. You're fired. Your contract's expired. There are no more savings and loans. We sat there and said, what are we going to do now? We've sold $2 billion worth of assets. We have this incredible database. We said, all right, let's go out to the world's money center banks.
We were the only ones, the originator at NLEX, who went into Bank of America, went into Citicorp, went to Wall Street, went to American Express, had a meeting with them, and said, we can sell the worst crap that you have, every huge mistake you have that's worth nothing, give to us. They said, nobody ever said that before. We had a meeting with Diners Club. Diners Club said, you really think you could have got $4 million for that paper? We said, yeah. They said, you'd have to go to the Bronx dumps to find it now. We thought it was worth nothing. We created NLEX selling non-performing credit cards, non-performing auto loans, really bad charged-off real estate. Did it for two decades or maybe two and a half decades. Woke up one day and said, wow.
This is a growth business because all of a sudden, it was a growth business for two reasons. After the pandemic, people kept spending like crazy, even though they were no longer getting free government money. They built up $1 trillion in credit card debt because they couldn't stop spending as if the government was paying them to spend. They built up the largest amount of debt ever in credit card debt. The regional banks have the most charge-offs ever. That business grows after that happens. It doesn't even probably grow this quarter or next quarter. It grows next year because it takes a long time for the charge-offs to convert to something we sell. It means the next two years, we're really going to kick butt there. What else is going to happen there? We've seen this massive amount of money go into fintech.
We were never a fintech auctioneer before. We reinvented ourselves as a fintech auctioneer early on. We got companies like LendingClub, like PayPal to give us their bad stuff, just like we got the banks to. All of a sudden, somebody came along, and it must have been like, there's a Jewish word for it. It's called a mitzvah, which is like a big break. Somebody came along and said, hey, you're a liquidator. We invented this thing called buy now, pay later. We invented it just for you guys. That's really almost what happened. We said, oh my god, you're actually lending money to people that don't have to pay you now. They have to pay you later.
They get to go on a yacht, take a vacation on the yacht, go gamble in the casino, have all the cocktails they want, get off the yacht, and then pay you. We said, some of those people are not going to pay you, guys. I can just tell you. Now buy now, pay later is a significant part of the non-performing loans we sell. We sell them on a monthly basis, along with the trillion dollars in credit card loans, along with the auto loans. That business has been not exactly flat. It's been growing a little bit, but it grows really big in the next two years. Why does it grow big in the next two years? We sell charge-offs. The first thing that happens is somebody stops paying. When they stop paying, the lender tries to collect in full.
When the lender can't collect in full, they hire a collection agency to try to make a deal and collect half the money. When they can't do either one of them, they say, I give up. I'm so sick of these people. I'm so sick of this loan. I don't care what I get for it. Just give it to Ross Dove. Just go give it to those NLEX guys now and let them sell it for $0.05, $0.10 on the dollar because I just want out. We are the bottom. There is a business at the bottom, just like there's a business at the top. I spent a long career at the bottom. At the bottom, when somebody closes a factory, their business may not be any good anymore. Their business may be insolvent, but their forklift still works. Their BLACK+DECKER machine still works.
Their semiconductor equipment still works. There is a business at the bottom. There is a business when a large corporation says, we're modernizing the plant. All we have is the old gear. We want to get rid of the old gear because we're buying all new gear. They say, who would buy this old gear? In the old days, they would take it and they would scrap it and they would salvage it. Now we're in this thing called the circular economy, where if they take the equipment and they salvage it and scrap it, they're not a good steward to the economy. They're messing up the environment. In the circular economy, they really are pressured to give it to somebody like me and to create a secondary market.
The big corporations, you know, are starting to speed up in their supply chain, the retention to the back end of the supply chain, and their surplus. They had a lot of attention on the front end, and now they had attention on the back end. That is my 20-minute pitch in 10 minutes. What can I tell you? I can tell you that it's a public company. We have a stock repurchase plan. I've watched this company go through a lot of iterations. The whole goal of this company is not to be a good, solid operating company, but to be a company that's a growth company. We put an inordinate amount of energy into the last two years into figuring out a strategy, how to not make $7 million a year, but how to make $14 million a year. Can I promise you we're going to do it?
No, but I can sure as hell promise you we have a plan on how to do it. We have a reason to do it. We have a way to execute it. We have a young, strong team of people committed to do it. All right, I've given you guys plenty of time. Somebody ask me a question. I got to see I'm doing good here. I got a couple. You first.
Touch on debt for a minute. What kind of debt do you guys have?
We have zero debt. We have a $10 million credit line with C3b ank. We may create debt through our M&A process because we're not going to raise our price because our stock's too cheap. We're at zero right now. Next, you, sir.
Is there any opportunity for the federal government to decide where the economy is now with all the carbon closures and the institutional closures that are happening?
There are massive changes in the federal government that we're obviously looking at. You saw the new announcement that Donald Trump wants to sell student loans. It's the complete opposite. Biden didn't want anybody to pay on their student loans. Nobody wanted to buy student loans because they were afraid that the government was going to give forgiveness. Now we have the switch side where the new administration wants to sell them. If they're going to sell student loans, and we sold them plenty in the past, private sector ones, and we believe there's not going to be government interference and that people will actually be able to collect on them, then there's a big opportunity on the government there. There's going to be a big opportunity on the government with the government forcing a lot of regional banks to sell a lot of assets right now.
We have the highest ever concentration of troubled regional banks in the last 15 years, the most banks with the most non-performing loans. At some point, the FDIC says these regional banks have to liquidate non-performing loans. We're talking to them all. Everyone has been in the wait-and-see period. We're still making money. We're still making seven figures every quarter. Once this wait-and-see period breaks through, there is government work and government-pressured work. There's also government work to a whole bunch of contractors. If the government really keeps what they're saying now and starts to force more accountability into government contractors and starts creating layoffs, then all of a sudden, all the government contractors that are working for the government, that are manufacturers, they wind up doing layoffs and selling assets. We're all over that. Next. There you go.
Yeah, just based on where the stock is now, it seems like it's kind of going down. You'd say, wouldn't you guys be better off spending a ton of cash and buying back stock than giving it back additional cash?
I've been buying back stock. We announced a stock repurchase program. You cannot buy back stock at certain times in the life cycle of the company where you have information that you're not ready to make public. Buying back stock has a lot of restrictions on it. You can only buy back a percentage of the stock that trades that day. You can't buy it back if you have information that you're not ready to make public for various reasons. It's not all about transparency. Sometimes you don't want to make a public announcement to your competitors. Yeah, buying back stock is part of our capital allocation. It happens some quarters. Some quarters, there's reasons no. It's an ongoing discussion. We have several million dollars set aside just for buyback. When we'll deploy it, I guess I really can't tell you when we'll deploy it.
I can tell you it is set aside. There will be a point in time when we could either deploy it or pull it back and use it to do a different kind of transaction. I only got five minutes left. We could do this all over again. I'm just warming up.
How does the competitive landscape look, particularly on the industrial side with digital auctions and stuff like that?
All right, so on the industrial side, there are some very large companies. We can beat them a lot on transactions. There is a company called Hilco that just sold to ORIX. You know, we can buy a deal for $2 million. They only have $50 billion available. You know, $50 billion versus our $10 million. Every deal doesn't cost $50 billion. They're very big. There's a company called Gordon Brothers that has an investment in the Stream Bank. B. Riley used to own a company called Great American that Howard Marks bought. There are three very large companies that are private, that who knows what their revenue is, that also do auctions. There's one publicly traded company. Forget Ritchie Brothers because they're primarily outside the building. We're primarily manufacturing. Liquidity Services (LQDT) is a public company that's somewhat similar.
I love it when people compare us to them because if they have a quarter and they make $4 million and we have a quarter when we make $1 million, they're like 12 x our market cap. It's like the greatest comparison ever for an argument that we're worth triple what we're worth. The analysts get that. You get beat up being microcaps. I think they have an $800 million valuation. That's on the stock side competitive. On the operating side, running the company, most of the people we compete with, we're also partners with. They're mostly legacy businesses that I knew their dad. Some parts of them I knew their grandfather. Their sons run them. There are about 50 global industrial auctioneers. One week we could be competing against them. The next week, we could be buying a deal with them. There are 50 of them.
A lot of them are specialties. One guy's great at plastics. One guy's great at metalworking. They would think we're great at pharma. A lot of them are different niches where we partner. There are 50 of them. All right, we've got two minutes left. Somebody gets to answer my question. Am I on the right track trying to get a deal done over here to expand into Europe and double my business, trying to get a deal done over here that specializes more in commercial real estate non-performing loans and not just consumer loans? Should I be doing something else? Anybody got an answer? Anybody want to help me? Yes.
Is going to be a forthcoming collapse in commercial real estate. How do you handle that?
Is going to happen in commercial real estate is very simple. The fallout from securitization is growing and growing and growing. Why is the fallout from securitization growing and growing and growing? Because even if somebody is making the payments on their loan and they have an office building, that office building is now half vacant. When it is half vacant, they do not just look at the fact that the payment is current. They look at what the future could mean, and it gets kicked back out of the securitization. It goes back to the bank. At some point, the bank needs to monetize that asset because they cannot slip it into securitization like they used to. It becomes a sub-performing loan or a non-performing loan. They take a write down on it.
An acquisition of the people that do that kind of work fits us like a glove in my mind. Anybody else? Nobody has any advice for me at all? All right, last question.
What is the average ticket size on acquisitions that you've looked at?
On the acquisition? It's really pretty simple. I have $30 million available. I'm not going to spend all $30 million. If I was going to do a couple of acquisitions, I wouldn't spend over $20 million. This is just in theory because we're an old-fashioned company that I would always want to have at least $10 million in the bank. Between debt and cash, I wouldn't go over $20 million. If I bought two more next year, I'd have to go make the money to buy them again. It took a long time to buy them because lots of people do M&A by using stock or a bunch of debt. If you do it the old-fashioned way I was taught, where you have to earn the money first, it's a lot harder.
Is $20 million for now in the acquisitions?
I don't want to go that far. Thank you all very much. Really appreciate you being here.