XML 40 R27.htm IDEA: XBRL DOCUMENT v3.25.0.1
Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting Information, Additional Information [Abstract]  
Segment Information

Note 17 – Segment Information

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by the Chief Operating Decision Maker (CODM), which was determined to be Ross Dove, CEO, for making decisions and assessing performance as the source of the Company’s reportable segments. The Company manages its business primarily on differentiated revenue streams for services offered. The Company’s reportable segments consist of the Auction and Liquidation segment, Refurbishment & Resale segment, Brokerage segment, and Specialty Lending segment. The Auction and Liquidation segment, through HGP, operates as a global full-service auction, appraisal and asset advisory firm, including the acquisition of turnkey manufacturing facilities and used industrial machinery and equipment. The Refurbishment & Resale segment, through ALT, acquires, refurbishes and supplies specialized laboratory equipment. The Brokerage segment, through NLEX, brokers charged-off receivables in the U.S. and Canada on behalf of financial institutions. The Specialty Lending segment, through HGC, provides specialty financing solutions to investors in charged-off and nonperforming asset portfolios.

Our CODM evaluates the performance of the Company's reportable segments based primarily on operating income and routinely receives internal reports that analyze operating income for the reporting segments. The CODM is not routinely provided detailed information regarding significant operating expenses by segment, and such information is not considered critical for allocating resources or assessing the performance of each segment. The Company’s operating expenses are comprised mainly of fixed and variable compensation, marketing, outside services such as audit, legal and information technology, occupancy, and other regulatory costs incurred as a public entity. Additionally, earnings from equity method investments related to significant transactions involving real estate, machinery and equipment in the Company's Auction and Liquidation segment and Joint Venture lending activity related to the Company's Specialty Lending segment are significant in the computation of segment operating income and reported separately as shown in the table below.

Notwithstanding the foregoing, the reported segment operating income for ALT and HGC represents incremental costs for managing these segments as part of their sister segments (HGP for ALT and NLEX for HGC). As such, the reported operating income for ALT and HGC does not represent their true standalone contribution, as the Company does not attempt to allocate existing fixed divisional overhead costs of the sister divisions to the newer segments.

Similarly, corporate overhead cost is not allocated to the operating divisions for management reporting purposes. Further, the Company does not utilize segmented asset information to evaluate the performance of its reportable segments and does not include intercompany transfers between segments for management reporting purposes.

The following table sets forth certain financial information for the Company's reportable segments (in thousands):

 

 

 

Year Ended December 31, 2024

 

 

 

Auction and Liquidation

 

 

Refurbishment & Resale

 

 

Brokerage

 

 

Specialty Lending

 

 

Corporate and other

 

 

Consolidated

 

Gross profit [1]

 

$

10,560

 

 

$

4,103

 

 

$

14,069

 

 

$

2,503

 

 

$

—

 

 

$

31,235

 

Operating expenses [2]

 

 

(7,911

)

 

 

(3,655

)

 

 

(6,717

)

 

 

(1,800

)

 

 

(4,774

)

 

 

(24,857

)

Earnings from equity method investments

 

 

1,391

 

 

 

—

 

 

 

—

 

 

 

1,297

 

 

 

—

 

 

 

2,688

 

Operating income (loss)

 

$

4,040

 

 

$

448

 

 

$

7,352

 

 

$

2,000

 

 

$

(4,774

)

 

$

9,066

 

 

 

 

Year Ended December 31, 2023

 

 

 

Auction and Liquidation

 

 

Refurbishment & Resale

 

 

Brokerage

 

 

Specialty Lending

 

 

Corporate and other

 

 

Consolidated

 

Gross profit [1]

 

$

13,545

 

 

$

6,285

 

 

$

16,762

 

 

$

3,223

 

 

$

—

 

 

$

39,815

 

Operating expenses [2]

 

 

(8,767

)

 

 

(3,438

)

 

 

(7,816

)

 

 

(2,280

)

 

 

(4,254

)

 

 

(26,555

)

Earnings from equity method investments

 

 

140

 

 

 

—

 

 

 

—

 

 

 

919

 

 

 

—

 

 

 

1,059

 

Operating income (loss)

 

$

4,918

 

 

$

2,847

 

 

$

8,946

 

 

$

1,862

 

 

$

(4,254

)

 

$

14,319

 

 

[1] Within the Company’s Industrial Asset division, management allocates gross profit resulting from certain auctions from Auctions and Liquidation (HGP) to Refurbishment & Resale (ALT). From time to time, ALT may source and refer an auction project to HGP or directly sell lab equipment inventory through the auction channel. In these instances, the profits relates to these transactions are allocated to ALT rather than accounted for under the segment profit or loss of HGP. In 2024, the total amount of gross profit allocated to ALT from

HGP was approximately $1.4 million, as compared to the total amount of gross profit allocated to ALT in 2023 of approximately $3.8 million.

[2] All financing arrangements are originated with Corporate and other. Management may determine from time to time that interest incurred from financing arrangements are directly attributable to a specific segment. As a result, interest incurred may be charged to the segment and included in that segment’s profit or loss as a charge to operating expense. In 2024, the total amount of interest allocated to Specialty Lending (HGC) from Corporate and other was approximately $0.3 million, as compared to the total amount of interest allocated to HGC in 2023 of approximately $0.5 million.