- Earnings call transcript Q1 2023

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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 Fiscal 2023 First Quarter Conference Call. [Operator Instructions]

Adam Yates, Managing Director.

begin. may You

Adam Yates

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

As recorded is XXXX. conference a November Tuesday, XX, being reminder, this on call

Events webcast you our slide you e-mail Presentations. for presentation conference list, and alerts accompanying If our on website our sign and you can like today's added investorrelations@greatelmcap.com to to can would website, on distribution can directly or under be up found be www.greatelmgroup.com. call The

factors A in that available quarterly well those cause to materially update by link Great you includes is to differ Great results statements. our its that on that also the required could ask call not filings refer to the the webcast Elm forward-looking for forward-looking to Group's undertake from actual law. website as we Group statements results. with Elm announce does the unless was to as Today's conference release statements and important SEC press disseminated

diversified vehicles. management under a and other In Management, assets REIT we Investment Elm building addition, certain our to Great non-GAAP a a drive will investment companies. financial operating growth release. financial refer filings, our To traded website business Great holding of in publicly is visit is company Group's that during Information Financial SEC SEC under select Monomoy Capital Filings. to obtain measures verticals Great earnings seek Group and across please Reconciliations most comparable copies the management Elm measures. investment two today's and In BDC; included management operating across sustainable are in call, Corp.; Elm to

respiratory Elm a and Elm Equipment, Chief DME, care study Great Executive Hosting Reed, today is manage Durable In services. Group's operating distributor we call Great the equipment Officer. companies, Peter sleep Medical of

turn will over to call Peter. I now the

Peter Reed

In us Kleinman; you of XX% were the nearly for our operating CFO, everyone thank joined strong we revenues Pearson. segments. Adam Investment generated across President, joining our Brent and afternoon Management fiscal growth by XXXX, of today. our am Welcome, first year-over-year. I and both this up quarter

backlog potential of up during $XXX to $XXX both XX, have X% transactions deploying a first And rights the Assets million focused the the quarter under by XXXX. during proceeds, as and prudently At fees. September at provide to fiscal we AUM that of growth. to strong AUM Fee-paying expected further which Monomoy, grew on we GECC, are to management were of to increased million. offering related maintained quarter X% lead are

result, as in vehicles cycles invest we of will strategy an and of sustainable believe fees. management We U.S.-based returns Elm long-term capital attractive GEG's generate that Yesterday, launched Great solutions our and Mortgage, offer remain a permanent further to ongoing Stepping diversified a growth. affiliate to generate and GECC's managing drive continue scalable business GECC of to initiatives announced Finance portfolio capital enhance long-duration Commercial back, on wide to Healthcare portfolio diversify its revenue health care it the to to we range minority with growth fee of across that focused strategic Berkadia partner, a operators.

in into are vehicles specialty capital and investment positioned to dislocated attractive estate real deploy credit well finance diverse investments Our markets.

rate high investment bodes backdrop management incremental increasing scale, on typically for our rate performance returns excess and fixed which are also A will to fees As a hurdle. business drive interest management based AUM above in well higher growth continues fees margins. reflecting profits,

of the make intend into to Directors and strong offering business to and sheet that asset a maintain growth long-duration rights enhanced fixed recent by we expertise continue investments acquire management funds utilize management XXXX. liquid management addition, team. balance strategic of to and June in our Board rate, bond long existing our We In duration

Turning driven to by and strong year-over-year quarter Investment growth and quarter versus management prior fees performance, XX% highlighted AUM XX, consolidated approximately revenue Management year ended GECC related XX% basis. on September posted higher of for Monomoy. to results We our financial by a revenue the XXXX. grew by

business our Next, revenue to continued deliver durable strong medical equipment profitability. and in growth

X% the For XXXX, from revenues were of stimulus quarter first fiscal up payments. with benefits government XX%, up adjusted EBITDA year-over-year excluding

constructive alignment differentiating important maintained Beyond financial perspective. our shareholder growth two strong fundamentals and from a and we factors outlook,

operating yield and financial net long-duration of the federal we other future approximately from As acquisitions vehicles. million XXXX, June which enhance earnings $XXX income of capital XX, have attractiveness loss taxes of carryforwards potential of

directors, and approximately employees collectively shareholders. or the management, and Elm interest management strong between reinforces which own their GEG's Great of outstanding addition, including shares funds manage under In of XX% alignment

that, our turn Brent it in to to With detail. for discuss results the more financial quarter I'll over

Brent Pearson

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

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

million, $X.X unallocated For of reports $X.X corporate reported Great activity. consolidated Equipment net million. the $XX.X year, we million Elm of and general Management Durable Medical the as of segments, results well and Investment two period of same adjusted income our including revenue each last as operating EBITDA of

We'll review investment begin management. the with

compared primarily period quarter, Management same Monomoy. first the $X.X of reported the prior agreement million with the to revenue management related acquired million in $X.X recently during year. Investment fiscal to the total For Increase

function was This was in year, Management expenses. to net of $XXX,XXX as fiscal to reported losses a primarily year by higher $XXX,XXX in compared was in offset partially quarter Xst year impact quarter, the comparison the prior million the $X.X a compared offset dividend For period. million XXXX income the loss to a GECC The period in the increased loss with net Adjusted partially shares. prior $X.X of of Investment on same higher revenue, by during period. operating higher EBITDA prior variance

Equipment. Medical Durable to turning Next,

in last was driven ongoing growth issues. MedOne $XX.X quarter, contributions revenue organic August million the by generated first revenue acquisition DME year. fiscal chain same $XX.X increase million XXXX to and full resupply compared For and of quarter global despite improved This in from reserves supply primarily revenue, a the period the for

stimulus to Elm's derivative an retention the million primarily million of prior reported in increase a benefit million the tax operations the eliminated recent of income of period. as increase $X.X year to was in received and most contributions was employee related reflected $X.X embedded the comparison fair million The partially the adjustment a to year-over-year the the government in Great in $X the year a DME form of net year as prior $X.X value higher well revenue period. absence which prior consolidation credits, in benefit in quarter period. offset by compared is This that of

was in improved year in the million related up year fiscal And period, government $X.X Adjusted in recognized $X.X first with EBITDA for adjusted period. compared The $X.X quarter stimulus segment such million to to prior year year-over-year the million EBITDA the the was primarily profitability decrease significantly excluding period. XX%. prior prior in benefits

Moving on to our General Corporate segment.

first subsidiaries segment consists the $XXX,XXX For consolidation. quarter, during Elm's to of year. in $XXX,XXX and Corporate revenue prior period in charged consulting compared revenue recorded fiscal the to same fees General eliminated General the are Corporate in Great

variance million recent reported General with valuation on the of quarter. net quarter eliminates which segment offering. in first The loss prior year-over-year our related embedded million charge of $X to primarily in public year a $X.X of a the with higher adjustment notes the compared million expense Corporate XXXX, interest the fiscal to the $X.X For loss DME derivative combined associated

for the prior we the in consideration well for investments negative note $X.X $X.X quarter, current reminder, quarter adjusted the million as a As of a as issued million other and growth year as with X-year the investments. proceeds Monomoy of strategic General notes acquisition Monomoy part compared to noncash into was the Corporate in upfront for promissory earmarked prior opportunistic period. the EBITDA negative

our in my ended exclusive the quarter we review This the position of of financial concludes balance terms with of healthy liquidity in cash $XX.X a liquid investments. Finally, million quarter. of sheet,

to questions. we'll call to that, with operator the And the for turn open over

Peter Reed

today us to future. look and in with you we Thank forward for you speaking again joining the

Operator

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

Great Elm (GEG) 15 Nov 222023 Q1 Earnings call transcript