WALTHAM, Mass., May 10, 2019 (GLOBE NEWSWIRE) -- Great Elm Capital Group, Inc. (NASDAQ: GEC) announced its financial results for the quarter ended March 31, 2019. Great Elm will host a conference call and webcast on Friday, May 10, 2019 at 8:00 a.m. Eastern Time to discuss its third quarter 2019 financial results. Please see below for details.

Select highlights from the third fiscal quarter of 2019 include:

• Operating Company growth:
  
  • $3.2 million of adjusted EBITDA for the three months ended March 31, 2019
  • Potential DME acquisition candidate currently under LOI
  • Continue to diligence operating company opportunities across multiple industries
• Investment Management growth:
  • For the three months ended March 31, 2019, year-over-year management fees approximately unchanged
  • For the nine months ended March 31, 2019, year-over-year management fee growth of approximately 19.7%
  • For the three and nine months ended March 31, 2019, year-over-year adjusted EBITDA growth of approximately 62.0% and 20.7%, respectively

“The market for CPAP and BiPAP continues to grow and Great Elm DME is growing faster than the market,” remarked Peter A. Reed, Great Elm’s Chief Executive Officer. “We will continue to invest in the business to support its ongoing growth, and we intend to supplement this organic growth with add-on acquisitions.”

Alignment of Interest

The employees of Great Elm and Great Elm Capital Management, Inc. (“GECM”) collectively own over 1.8 million shares of GEC stock, representing greater than 7% of its outstanding shares.1Additionally, the directors of Great Elm collectively own or manage greater than 11% of Great Elm’s shares.1 Altogether, insiders collectively own or manage greater than 18% of the company’s outstanding shares, which Great Elm believes fosters a strong alignment of interest between employees, directors and the company’s shareholders.

BUSINESS OVERVIEW

Great Elm is a diversified, publicly-traded holding company that seeks to build long-term shareholder value across three verticals: Operating Companies, Investment Management and Real Estate.

Operating Companies

In the third quarter of 2019, DME generated $3.2 million of adjusted EBITDA. Performance in the quarter was negatively impacted by approximately $382 thousand due to temporary delays in filling prescriptions related to the integration of Valley Healthcare Group and Northwest Medical.

The DME operating team is aggressively working to realize potential synergies by the end of calendar year 2019. The team is also pursuing potential M&A opportunities with complementary product profiles that increase market penetration and extend existing geographic markets.

In addition to the DME business, the Great Elm team continues to evaluate acquisition opportunities across multiple industries in partnership with industry experts and/or operating executives.

Investment Management

Great Elm’s management team believes the Investment Management business is scalable, offers attractive margins and, when coupled with growth in assets under management, provides for the potential to generate incremental EBITDA.

Great Elm intends to grow assets under management through capital raises and M&A. Growth in assets under management is expected to result in increased management fee revenue for GECM.

Alongside Great Elm Capital Corp. (“GECC”), Great Elm Opportunities Fund I, LP (“GEOF”) and existing separately managed accounts, we continue to seek avenues for growth, potentially launching additional private funds and pursuing opportunistic acquisitions in the business development company space.

Real Estate

Great Elm continues to focus on credit tenant lease financings and ground lease structures across a variety of commercial, government and other properties. Great Elm’s substantial tax assets can make it a value-added partner or lessor.

FINANCIAL REVIEW: SEGMENT FINANCIALS

As of March 31, 2019, Great Elm had four operating segments: Durable Medical Equipment, Investment Management, Real Estate and General Corporate.

Durable Medical Equipment

Three Months Ended March 31, 2019:

Revenue:

• During the three months ended March 31, 2019, Great Elm recognized $11.8 million in total revenue.

Net Income (Loss):

• During the three months ended March 31, 2019, Great Elm recognized a $0.5 million net loss.

Adjusted EBITDA:

• During the three months ended March 31, 2019, Great Elm recognized $3.2 million in adjusted EBITDA.

Investment Management

Three Months Ended March 31, 2019:

Revenue:

• During the three months ended March 31, 2019, Great Elm recognized management fee revenue of $0.7 million vs. $0.7 million during the same period the prior year.
• During the three months ended March 31, 2019, Great Elm recognized total investment management revenue of $1.1 million vs. ($0.8) million during the same period the prior year.

Net Income (Loss):

• During the three months ended March 31, 2019, Great Elm recognized a net loss of $0.2 million vs. a net loss of $2.1 million during the same period the prior year.

Adjusted EBITDA:

• During the three months ended March 31, 2019, Great Elm recognized adjusted EBITDA of $1.0 million vs. $0.6 million during the same period the prior year.

Real Estate

Three Months Ended March 31, 2019:

Revenue:

• During the three months ended March 31, 2019, Great Elm recognized $1.3 million in rental revenue vs. $0.3 million during the same period in the prior year.2

Net Income (Loss):

• During the three months ended March 31, 2019, Great Elm recognized $38 thousand in net income vs. $23 thousand during the same period in the prior year.2

Adjusted EBITDA:

• During the three months ended March 31, 2019, Great Elm recognized $1.1 million in adjusted EBITDA vs. $0.3 million during the same period in the prior year.2

General Corporate

Three Months Ended March 31, 2019:

Revenue:

• During the three months ended March 31, 2019, Great Elm recognized ($5) thousand in revenue vs. no revenue during the same period the prior year.

Net Income (Loss):

• During the three months ended March 31, 2019, Great Elm recognized $4.8 million in net income vs. a net loss of $2.4 million during the same period the prior year.

Adjusted EBITDA:

• During the three months ended March 31, 2019, Great Elm recognized ($1.5) million in adjusted EBITDA vs. ($1.4) million during the same period the prior year.

About Great Elm Capital Group, Inc.

Great Elm is a publicly-traded holding company that is seeking to build a business across three operating verticals: Operating Companies, Investment Management and Real Estate. Great Elm’s website can be found at www.greatelmcap.com.