GEG - Earnings call transcript Q2 2022

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Operator

Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Great Elm Group Second Quarter 2022 Financial Results. All lines have been placed on mute to prevent any background noise. After the speakers presentation there will be a question and answer session. Managing Yates, Adam Instructions] Director. [Operator

You may begin.

Adam Yates

and us for you, earnings call. good second morning, joining for conference you Thank Great XXXX everyone. quarter Thank Elm fiscal Group's

Friday, conference being As call reminder, XXXX. this recorded a on February XX, is

under results undertake Information required call attain a conference Great to offer that nothing an these to materially the differ Great Group does Financial in and and link our conference SEC that filings, on you the press to be is includes refer statements forward-looking website, you Elm our forward-looking to to or you I factors under webcast distribution call our of website copies presentation was attention www.greatelmgroup.com. select website filings. where customary can The Elm can today's not the your results. If alerts announce purchase could from found website by the and statements for today's that greatelmcap.com list, regarding Great sign actual to cause Presentations. important Group's filings information. forward-looking to at its slide our in would safe to up To and Also, A call be that statement to sell we SEC note SEC with call investorrelations directly also like the like can to Group's update you quarterly would projections. on projections, offers ask constitutes and please added securities. webcast of as Elm e-mail available on Events well unless release accompanying solicitation for law. visit to disseminated as Today's harbor please our

of investment our with management; which through respiratory or equipment In Investment seek those structure publicly In and our Corp., in strategy. employs For brief under in companies Elm services. a Great vehicles distributor may Officer. verticals: -- is operating managed collective management, and Elm to Hosting Group's Peter Great strategy. moment not Executive Great take Management, traded Great the Management, to and care driving Capital manage a fleet review today Peter. Capital Elm other both by I a companies, Equipment, a each two GECM. the assets increase efforts BDC holding the turn and Great general or DME, operating of company, to will familiar objective Reed, create and is Great Elm Medical shareholder call our we Elm now over I'll we to Chief be Group, distinct call study the value investment Durable Elm who is

Peter Reed

business joined CFO, thank general Great at continue I continuum Welcome, everyone, business, at a Brent I'll in return quarter, us morning Pearson. growth progress Investment solid achieved This company then will and discuss Adam by and overview Kleinman; our COO, Brent today. this and you with financial President and greater and for detail, joining our results highlights in begin will key and I'm the our our remarks. and specialty GECC. on of Elm a to lending in reported for Group, within DME. was Management quarter for closing a finance sales make building we operating profits we And our of

quarterly business DME AMPM After reported on successful strong the results In initiatives. our for despite and addition, challenges the in chain. number strategic we work of we continue MedOne, to of acquisitions, integration supply a recent

pandemic DME. following We growing the the fiscal observe and year, revenue product we conditions prolonged service at and to offerings increasing our and demand on continue are in prior across focused profitability

due the fees for on in are calculated. management which quarter investment to was increase higher the such assets slightly an the On revenue side, average

is to key One of our AUM. at GEG areas the generating focus of increase fee

GEG's year aware, be GECC's. may not As does match you fiscal

As fiscal audit as to have ended which disclose limits has information year. we other December compared about XX, its to such, GECC, completed whose process, the GECC quarters year not in the

has to of GECC and the to through acquisitions medium-sized risk-adjusted to turn build-out good platform provider broad businesses which and of is and finance array a has has as Collectively, specialty this returns specialty recent believe at progress a more medium-sized of its capital attractive companies wide variety remarks. will is family loans important in of with few on Prestige Capital finance across market this providing the recently, leading One capital to States. we to Lenders industry platform. the uncorrelated acquisition businesses. financial of Sterling GECC it increasingly shareholders. the ways GECC's Commercial XXXX. of Funding, I'll solutions small- GECC quarter to asset-based Coupled then an of With by for our and United Brent businesses in and grow small more working that the been results offer assets a Sterling middle initiative of Credit, evidenced the that, to offer closing discuss I'll for its detail, since return Brent? made solutions over most

Brent Pearson

to provide brief welcome you may and in our team overview, Thanks, of filings a our all greater detail to course, review or to reach have. with I'll of Peter. you out questions

$X.X ended revenue $X.X quarter and a net loss of December million we of XX, of EBITDA adjusted consolidated the $XX.X million. reported XXXX, During million,

Equipment the continuing revenue begin reports a unallocated Durable Great Durable the corporate with EBITDA million. For two Equipment. Investment year, general million We'll well period same adjusted activity. review $X.X of Management a $X.X of we results as and $XX.X Medical segments, operations net our each of Elm including of from last Medical loss as of and consolidated of million, operating reported

in generated sales period For as a $XX.X second record was recent in gross quarter, million $XX.X driven the contributions for million DME from well resupply and the revenues revenue last compared increase fiscal to; year. AMPM as The from same acquisitions, MedOne. by

revenue has million as $X.X in to the compared to period. improved our as at DME, business We improved sustainable in significantly into prior intake reserves and the reduction of resulting process, compared year investments previous XX.X% period. the increasing XX.X% year our addition, margins to collections In prior the gross in a

reserves, million. net by includes DME addition In period improved driven the compared the added recurring The purposes. back the prior on embedded prior in efficiencies, Adjusted Great XX%. extinguishment of which to of EBITDA, million Elm's nearly the an derivative, $X.X income prior as of reported EBITDA net note nonrecurring to DME $X.X operations consolidation reducing the net the revenue of of $X.X vendor pricing impacted segment margins also eliminated to the million improved income period. in loss loss the million are year, non-GAAP to in period. in a for adjustment was year a and prior $X.X of same period of in a Corbel valuation the the $X.X also increase comparison by year measure, The the million comparison is compared is

Next, turning Management. Investment to

the the related of are to fiscal same the For professional reported $XX,XXX quarter impacted for the by to $X.X fiscal was second initiatives. employee-related quarter management such second Adjusted positive assets quarter, increased average primarily EBITDA in compared prior period which due investment growth the compared calculated. during on was EBITDA negative higher $X.X the Management year. was fees during same million the Adjusted prior increases period quarter year. in costs $XX,XXX revenue in Investment million Revenue the fees in total to for the to and

Moving segment. on corporate to our general

year. quarter for during Revenue prior second the compared period in current $XX year. Corporate negative to earned and I'll financial during in Elm $X.X execute liquidity rationalizing to same of the our investments. fees the back on turn Investments, position revenue Elm's overhead For quarter, from million General Forest healthy for along result EBITDA was of in position increased of focus Inc. my to prior negative our $X.X agreement earned the same place and put the cash, GEG's General We revenue adjusted management to corporate December fiscal us continues to quarter, million with from compared exclusive $XXX,XXX in Great XXXX. Peter Great of put into majority-owned a DME period quarter in management management a remarks. liquid under it increased strategy. million the review This best with recognized subsidiary, in the segment in corporate closing concludes fees a ended the $XX,XXX as the

Peter Reed

turn believe corporate closing, with comment we our will on team outstanding Overall, are operator call well for of our funds under investment or manage at and of topic to Brent. which shares. including and the Elm, simplification efforts, familiar, other solid with will that directors, XX% growth. extent our future company for Great a shareholders with questions. own Thanks, management Elm's to Great over us collectively of In operating that, open their the With I businesses, employees you we approximately aligned many to which the together is performance the positioned leave management

Operator

[Operator question Investment from Instructions] Greenwich with Our Brian Management. first Alexitch is

open. Your line is

Brian Alexitch

you, I faith obviously there is have intertwined. I that both -- follow for they're and questions two GEG since GECC actually.

attractive pretty It they're businesses questions they seem the NOLs mean, that solid not business returns acquiring seems would the for not NOLs? would I seems of equity. Prestige, businesses, of sort you GEG -- One your it like I like the the And utilize on that investments. utilize It or or is they had compelling Sterling, generating financing why the acquire are level? is at specialty those

So wonder put the why corporation? just I versus BDC the it

Peter Reed

I ROE. very it's and Brian, they attractive question do think an earn excellent

they, happy Elm very Group. otherwise, probably for that. NOLs utilize And we're Great So with would

point you So good raised a there.

to as income a GECC, to attractive lot doesn't does the attractive a pay those make -- ability earnings also other and investors, make yield can an the then for tax up hand, that proposition GECC On out shareholders. dividends they and any of out for pay distribute which its generate their those earnings think to we as

again chunk those dividends or through out, As point the are the dividends -- where NOLs end to able the utilized flowing stream. you up GEG those be income of

So benefit attractive. businesses, GECC does a the they GEG those I very with from you, are shareholder large agree as which from definitely

Brian Alexitch

Got it.

you Okay. investment people an the the piece business important -- of NOLs. Interesting. piece sorry, are missing. that's dividends I that Maybe that in didn't either the allow the utilize realize a story to in

is, I I noticed filing had for the that Elm from system Great question second representative you U.K. through you're management. The

does month, of last GECC resigned taking since that Of course, liquidity the for the pave of way not manager in insiders. Board are you the guys the from Avanti investment the

time But a you and at you some do Of insider. where course, as considered free you're there's insiders [indiscernible] do with being wish point, are the investment? stop the still to an probably period of then

Peter Reed

Sure.

appreciate its filed annual it hasn't about difficult financial of with specifics us still So question. for because your lot time It's statement. to a talk a I GECC

or you it's anyone So with but files for with a March, us, a but say at happy I'm all to GECC and broad-ranging lot -- in the can results it's that's easier after have about it I discussion moment. its

Brian Alexitch

hang file now you Okay. are guys quarters on good some the you guys of It suppose you've pandemic information. coming. but back, growth will it like like the X BDC looks I momentum. looks you I set Obviously, are until got building things guys and

Peter Reed

We going We're pushing. keep to agree.

Operator

And for Mr. Reed turn Instructions] remarks. [Operator we it no back questions. the have I'll further to that any call closing appears over

Peter Reed

Thank you you to we look with for again today, us follow-up. in joining and speaking forward

Operator

gentlemen, for concludes Thank webcast. this Ladies today's call participating. and conference you

disconnect. now may You

Great Elm (GEG) 11 Feb 222022 Q2 Earnings call transcript