Great Elm Group, Inc. · NASDAQ:GEG
Great Elm — Q3 FY2021 Earnings Presentation
26 slides from Great Elm's earnings presentation, May 14, 2021
Slide 1: Conference Call Presentation, Fiscal Third Quarter 2021
Great Elm Group, Inc. Conference Call Presentation Fiscal Third Quarter Ended March 31, 2021 May 14, 2021 NASDAQ: GEG
Slide 2: Disclaimer
Disclaimer edit Master title style Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, profitability, acquisition opportunities and outlook involve risks and uncertainties that may individually or collectively impact the matters des
Slide 3: Notable Highlights – Third Quarter Fiscal 2021
Notable edit Master Highlights title style – Third Quarter Fiscal 2021 ▪ Overall, we see positive momentum in all aspects of our business ▪ DME is beginning to see signs of business recovery following pandemic impacts ▪ DME acquisition program resumed this quarter, and optimistic for future acquisit
Slide 4: Consolidated Financials: Q3 FY 2021 Summary
edit Master title Consolidated style Financials: Q3 FY 2021 Summary (in millions) Three Months Ended Nine Months Ended March 31, March 31, March 31, March 31, 2021 2020 2021 2020 Revenue By Segment DME $ 13.1 $ 14.1 $ 42.3 $ 41.8 Investment Management 0.7 0.8 2.3 2.6 Real Estate 1.3 1.3 3.8 3.8 Gene
Slide 5: DME closes AMPM Acquisition
edit Master Operating title style DME closes AMPM Acquisition Companies: ▪ AMPM Acquisition ▪ On March 1, 2021 closed the acquisition of Advanced Medical DME, LLC and PM Sleep Lab, LLC (“AMPM”), providers of sleep testing, PAP, and other respiratory products and services in 9 locations throughout Ka
Slide 6: DME Financial Detail
edit Master Operating title style DME Financial Detail Companies: (in thousands) Three Months Ended Nine Months Ended March 31, March 31, March 31, March 31, 2021 2020 2021 2020 Total Net Revenue: Sales and Services Revenue - Medical Equipment $ 7,309 $ 7,549 $ 23,728 $ 21,497 Sales and Services Rev
Slide 7: Investment Management: A Scalable, High Margin Business
edit MasterManagement: Investment title style A Scalable, High Margin Business AUM GROWTH HIGH MARGINS Grow GECC’s AUM through the issuance of AUM Growth Given the largely fixed cost nature of the additional debt and equity, supplemented by Investment Management business, we expect accretive acquisi
Slide 8: Investment Management: Solid Progress and Momentum Increasing
Investment edit MasterManagement: title style Solid Progress and Momentum Increasing ▪ In fiscal 3Q21, Investment Management generated $0.7 million of revenue, $0.3 million of net loss and $16 thousand of adjusted EBITDA1 ▪ Revenue and profitability were stable and reflect the decreases in average a
Slide 9: Investment Management Segment Financial Detail
Investment edit MasterManagement: title style Segment Financial Detail (in thousands) Three Months Ended Nine Months Ended March 31, March 31, March 31, March 31, 2021 2020 2021 2020 Total revenues $ 728 $ 829 $ 2,261 $ 2,585 GAAP Net Income $ (299) $ 491 $ (715) $ 451 Stock based compensation 181 (
Slide 10: Real Estate Overview
Real editEstate: MasterOverview title style Our current Real Estate investment is attractive for the following reasons: Limited Equity High Level of Capital Non-Recourse Deployed Leverage Generates stable, Monetization of consistent cash Significant NOLs flows Great Elm Group, Inc. | NASDAQ: GEG 10
Slide 11: Fort Myers – Organic Equity Growth
editEstate: Real MasterFort titleMyers style – Organic Equity Growth $65.00 8.0x 7.1x ▪ Assuming a constant $60.00 7.0x Debt and Equity Values ($ in Millions 7.0x property value of 6.5x $61.2 million, GEG’s Multiple of Invested Capital 6.0x $55.00 5.9x equity value grows 5.3x as cash flows from 5.0x
Slide 12: Real Estate Segment Financial Detail
editEstate: Real MasterSegment title style Financial Detail (in thousands) Three Months Ended Nine Months Ended March 31, March 31, March 31, March 31, 2021 2020 2021 2020 Total revenues $ 1,276 $ 1,276 $ 3,824 $ 3,820 GAAP Net Income $ 73 $ 67 $ 211 $ 187 Interest expense, net 645 654 1,942 1,967 D
Slide 13: General Corporate: Segment Financial Detail
edit Master General title style Corporate: Segment Financial Detail (in thousands) Three Months Ended Nine Months Ended March 31, March 31, March 31, March 31, 2021 2020 2021 2020 Total revenue $ 162 $ 34 $ 298 $ 114 Operating costs and expenses: Public company costs (1,162) (746) (2,427) (2,904) St
Slide 14: 3Q21 Consolidating Balance Sheets (Unaudited)
Financial Review: edit Master 3Q21 Consolidating Balance Sheets (Unaudited) title style Durable Medical Investment Real Estate Corporate Elimination Consolidated $ in thousands Equipment Management ASSETS Cash and cash equivalents, including restricted cash $ 4,961 $ 822 $ 1,004 $ 18,518 $ - $ 25,30
Slide 15: 3Q21 Consolidating Income Statement (Unaudited)
Financial Review: edit Master 3Q21 Consolidating Income Statement (Unaudited) title style For the three months ended March 31, 2021 Durable Medical Investment Real Estate Corporate Elimination Consolidated $ in thousands Equipment Management Total Revenues $ 13,117 $ 739 $ 1,276 $ 162 $ (173) $ 15,1
Slide 16: Our Business Operating Segments
Our editBusiness Master title Operating style Segments Operating Companies Investment Management Real Estate Great Elm Durable Medical Equipment Great Elm Capital Management, Inc. ▪ Office property located in Fort Myers, (“DME”) Business (“GECM”) FL ▪ Distributor of respiratory care equipment ▪ SEC
Slide 17: Driving Shareholder Value
Driving edit Master Shareholder title styleValue Business Segment Strategy ▪ Target undercapitalized small and mid-sized companies where we can partner with management to accelerate earnings and cash flow growth Operating Companies ▪ Focus on growing Great Elm DME, Inc. both organically and via an e
Slide 18: Strong Shareholder Alignment
Strong Shareholder edit Master Alignment title style ▪ Employees of GEG/Great Elm Capital Management, Inc. (“GECM”) Employee Share Employee Share ▪ Employees of GEG collectively own approximately 2.0 million shares of GEG, collectively own approximately 1.9 million shares of GEG, representing Owners
Slide 19: Appendix
edit Master title style Appendix Great Elm Group, Inc. | NASDAQ: GEG 19
Slide 20: Corporate Reorganization and Financing Transaction
Corporate edit Master Reorganization title style and Financing Transaction OVERVIEW ▪ On December 29, 2020, we completed a reorganization of our corporate structure and executed a financing transaction with J.P. Morgan Broker-Dealer Holdings (“JPM”), wherein JPM invested a total of $37.7 million ▪ G
Slide 21: Organization Structure
Organization: edit Master title Structure style Great Elm Group, Inc. (“Great Elm” or “GEG”) (NASDAQ: GEG) Holds ~23.6% shares 100% 80.1% 80% Great Elm Capital Corp Great Elm Capital Great Elm Durable Forest Investments, Inc. Management, Inc. (“GECC”) (NASDAQ: GECC) (“GECM”) Medical Equipment (“Fore
Slide 22: Non-GAAP Reconciliation
Appendix: Non-GAAP edit Master title styleReconciliation For the three months ended March 31, 2021 Durable Medical Investment Real Estate Corporate Consolidated $ in thousands Equipment Management EBITDA: Net income (loss) - GAAP $ (5,059) $ (299) $ 73 $ 2,367 $ (2,918) Interest expense 1,280 25 645
Slide 23: Non-GAAP Reconciliation (Continued)
Appendix: Non-GAAP edit Master title styleReconciliation (Continued) For the three months ended March 31, 2020 Durable Medical Investment Real Estate Corporate Consolidated $ in thousands Equipment Management EBITDA: Net income (loss) - GAAP $ (1,398) $ 491 $ 67 $ (11,078) $ (11,918) Interest expens
Slide 24: Non-GAAP Reconciliation (Continued)
Appendix: Non-GAAP edit Master title styleReconciliation (Continued) For the nine months ended March 31, 2021 Durable Medical Investment Real Estate Corporate Consolidated $ in thousands Equipment Management EBITDA: Net income (loss) - GAAP $ (8,395) $ (714) $ 211 $ 1,171 $ (7,727) Interest expense
Slide 25: Non-GAAP Reconciliation (Continued)
Appendix: Non-GAAP edit Master title styleReconciliation (Continued) For the nine months ended March 31, 2020 Durable Medical Investment Real Estate Corporate Consolidated $ in thousands Equipment Management EBITDA: Net income (loss) - GAAP $ (2,893) $ 451 $ 187 $ (14,968) $ (17,223) Interest expens
Slide 26: Contact Information
Appendix: Contact edit Master Information title style Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com Jeehae Linford The Equity Group Inc. +1 (212) 836-9615 jlinford@equityny.com Great Elm Group, Inc. | NASDAQ: GEG 26