WALTHAM, Mass., Nov. 15, 2020 (GLOBE NEWSWIRE) -- Great Elm Capital Group, Inc. (NASDAQ: GEC) announced its financial results for the quarter ended September 30, 2020. Great Elm will host a conference call and webcast on Monday, November 16, 2020 at 8:00 a.m. Eastern Time to discuss its first fiscal quarter 2021 financial results. Please see below for details.
Select highlights from the first quarter 2021 include:
- Operating Companies:
? For the three months ended September 30, 2020, $14.6 million of revenue, $0.5 million of net loss and $2.8 million of adjusted EBITDA
? Having completed significant investments into the platform, DME management is focused on continuing organic growth, driving improved margins, and making add-on acquisitions
? New PAP patient setups declined 24.7% year over year but increased sequentially 2.8% as the business recovers from the effects of the COVID-19 pandemic
- Investment Management:
? For the three months ended September 30, 2020, $0.8 million of revenue, net loss of $0.1 million and $0.2 million of adjusted EBITDA
? Great Elm Capital Corp. (“GECC”), managed by our wholly owned subsidiary, Great Elm Capital Management, Inc. (“GECM”), raised gross proceeds of $31.7 million through the completion of a rights offering.
? GEC purchased approximately 3.0 million shares in the offering for $8.8 million
"We made significant progress toward the achievement of our strategic goals for both our DME and Investment Management businesses during the quarter, " remarked Peter A. Reed, Great Elm's Chief Executive Officer. "DME added key management talent, continued to improve operationally and is actively pursuing attractive add-on acquisition opportunities. For Investment Management, not only will the successful rights offering at GECC enable the pursuit of attractive acquisitions in the specialty finance sector, it enhances GECM's revenue, earnings and cash flow potential which ultimately benefits our shareholders."
Alignment of Interest
The employees and directors of Great Elm and GECM collectively own or manage 7.1 million shares or approximately 27% of Great Elm’s outstanding shares.
FINANCIAL REVIEW: SEGMENT FINANCIALS
As of September 30, 2020, Great Elm had four operating segments: Durable Medical Equipment, Investment Management, Real Estate and General Corporate.
Durable Medical Equipment
Three Months Ended September 30, 2020:
Revenue:
- During the three months ended September 30, 2020, Great Elm recognized $14.6 million in total revenue vs. $13.2 during the same period in the prior year.
Net Income (Loss):
- During the three months ended September 30, 2020, Great Elm recognized a net loss of $0.5 million vs. $0.8 million of net loss during the same period in the prior year.
Adjusted EBITDA:
- During the three months ended September 30, 2020, Great Elm recognized $2.8 million in adjusted EBITDA vs. $3.0 million during the same period in the prior year.
Commentary:
- During the quarter, PAP supply sales remained strong while rental revenues continued to be negatively impacted by suppressed referral pipelines for new equipment set-ups during the pandemic. We remain intently focused on exploring ways to lower DME’s cost of capital and obtaining additional funds for potential future acquisitions.
Investment Management
Three Months Ended September 30, 2020:
Revenue:
- During the three months ended September 30, 2020, Great Elm recognized total investment management revenue of $0.8 million vs. $0.9 million during the same period in the prior year.
Net Income (Loss):
- During the three months ended September 30, 2020, Great Elm recognized a net loss of $0.11 million vs. a net loss of $0.05 million during the same period in the prior year.
Adjusted EBITDA:
- During the three months ended September 30, 2020, Great Elm recognized adjusted EBITDA of $0.2 million vs. $0.4 million during the same period in the prior year.
Commentary:
- During the quarter, GECC benefitted from strong performance of its specialty finance investments, the redeployment of funds into attractive risk-adjusted opportunities and the rebounding of the valuations of certain of its investments following COVID related volatility in the prior quarter. Great Elm intends to continue to focus on attractive acquisition opportunities in the specialty finance sector going forward.
Real Estate
Three Months Ended September 30, 2020:
Revenue:
- During the three months ended September 30, 2020, Great Elm recognized $1.3 million in rental revenue vs. $1.3 million during the same period in the prior year.
Net Income (Loss):
- During the three months ended September 30, 2020, Great Elm recognized $0.1 million in net income vs. $0.1 million in net income during the same period in the prior year.
Adjusted EBITDA:
- During the three months ended September 30, 2020, Great Elm recognized $1.1 million in adjusted EBITDA vs. $1.1 million during the same period in the prior year.
Commentary
- Great Elm continues to manage the Fort Myers investment to monetize significant net operating loss carryforwards.
General Corporate
Three Months Ended September 30, 2020:
Revenue:
- During the three months ended September 30, 2020, Great Elm recognized $0.09 million in revenue vs. $0.02 million in revenue during the same period in the prior year.
Net Income (Loss):
- During the three months ended September 30, 2020, Great Elm recognized $3.4 million in net loss vs. net loss of $2.5 million during the same period in the prior year.
Adjusted EBITDA:
- During the three months ended September 30, 2020, Great Elm recognized $(1.1) million in adjusted EBITDA vs. $(1.7) million during the same period in the prior year.
Commentary:
- During the quarter, Great Elm made significant progress on reducing its corporate overhead, driven largely by a reduction in audit cost. Great Elm intends to continue to focus on reducing its corporate overhead going forward.
About Great Elm Capital Group, Inc.
Great Elm is a publicly-traded holding company that seeks to build a business across two operating verticals: Operating Companies and Investment Management. Great Elm’s website can be found at www.greatelmcap.com.
