Great Elm Group, Inc. · NASDAQ:GEG

Great Elm — Great Elm Capital Group — FY2020 Earnings Presentation

34 slides from Great Elm's earnings presentation, Sep 18, 2020

  1. Slide 1: Investor Presentation – Quarter and Full Year Ended June 30, 2020

    Great Elm Capital Group, Inc. Investor Presentation – Quarter and Full Year Ended June 30, 2020 September 18, 2020 © 2020 Great Elm Capital Group, Inc. Exhibit 99.2

  2. Slide 2: Disclaimer

    © 2020 Great Elm Capital Group, Inc. Disclaimer Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, profitability and outlook involve risks and uncertainties that may individually or collectively impact the matters described herein.

  3. Slide 3: Table of Contents

    © 2020 Great Elm Capital Group, Inc. SlideSection 4A Note to Shareholders 5Performance Overview 7 Organizational Overview 10Operating Companies: Great Elm DME 13Investment Management 17Real Estate 21General Corporate 23Financial Review 26Summary 28Q&A 29Appendix Table of Contents

  4. Slide 4: A Note to Shareholders

    A Note to Shareholders We have good momentum in our key business segments: DME and Investment Management DME: fiscal Q4 year-over-year revenue growth of 7.9% despite a significant negative impact from COVID-19 DME: fiscal Q4 net income of $2.8 million and adjusted EBITDA of $7.0 million, up from ($1

  5. Slide 5: Performance Overview

    Performance Overview © 2020 Great Elm Capital Group, Inc.

  6. Slide 6: Performance Overview: Quarter Ended June 30, 2020

    Performance Overview: Quarter Ended June 30, 20201 © 2020 Great Elm Capital Group, Inc. (1) Numbers in millions. (2) Prior year non-GAAP adjustments have been updated to conform to current year presentation by removing adjustments associated with the adoption of ASC 606 Contracts with Customers. (3)

  7. Slide 7: Organizational Overview

    Organizational Overview © 2020 Great Elm Capital Group, Inc.

  8. Slide 8: Organizational Overview: Drivers of Shareholder Value

    © 2020 Great Elm Capital Group, Inc. Organizational Overview: Drivers of Shareholder Value Operating Companies Real Estate Investment Management Target undercapitalized small and mid-sized companies where we can partner with management to accelerate earnings and cash flow growth Focus on companies t

  9. Slide 9: Organizational Overview: Alignment of Interest

    © 2020 Great Elm Capital Group, Inc. Organizational Overview: Alignment of Interest When combined, insider ownership totals approximately 27% of the outstanding shares We believe this level of insider ownership results in a significant and long-term alignment of interest between the shareholders and

  10. Slide 10: Operating Companies: Great Elm DME

    Operating Companies: Great Elm DME © 2020 Great Elm Capital Group, Inc.

  11. Slide 11: Great Elm DME fiscal 4Q20 results

    In fiscal 4Q20, Great Elm DME, Inc. (“DME”) generated $13.9 million of revenue, $2.8 million of net income and $7.0 million of adjusted EBITDA1 Meaningful revenue growth in PAP supplies category, moderate revenue growth in PAP rental Having invested heavily in the platform, management is focused on

  12. Slide 12: Operating Companies: DME Segment Financial Detail

    Operating Companies: DME Segment Financial Detail © 2020 Great Elm Capital Group, Inc. (1) Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix Profitability was enhanced in the quarter from the receipt of $5.1 million from governmental assistance

  13. Slide 13: Investment Management

    Investment Management © 2020 Great Elm Capital Group, Inc.

  14. Slide 14: Investment Management: A Focus on Liquidity and Opportunity

    Investment Management: A Focus on Liquidity and Opportunity In fiscal 4Q20, Investment Management generated $0.7 million of revenue, ($0.0) million of net income and $0.2 million of adjusted EBITDA1 Revenue and profitability were stable The fair value of managed portfolio investments, primarily at G

  15. Slide 15: Investment Management: A Scalable, High Margin Business

    © 2020 Great Elm Capital Group, Inc. Investment Management: A Scalable, High Margin Business AUM Growth High Margins Scalable Model Free Cash Flow AUM GROWTH Grow GECC’s AUM through the issuance of additional debt and equity, supplemented by accretive acquisitions of other BDCs, resulting in an incr

  16. Slide 16: Investment Management: Segment Financial Detail

    Investment Management: Segment Financial Detail © 2020 Great Elm Capital Group, Inc. Near-Term Drivers of Incremental Free Cash Flow: We believe GECC will continue to grow its investment portfolio, including via incremental capital raises, which will drive incremental management fee revenue The Full

  17. Slide 17: Real Estate

    Real Estate © 2020 Great Elm Capital Group, Inc.

  18. Slide 18: Real Estate: Overview

    © 2020 Great Elm Capital Group, Inc. Real Estate: Overview Our current Real Estate investment is attractive for the following reasons: Limited Equity Capital Deployed High Level of Non-Recourse Leverage Monetization of Significant NOLs

  19. Slide 19: Real Estate: Fort Myers – Organic Equity Growth

    Real Estate: Fort Myers – Organic Equity Growth © 2020 Great Elm Capital Group, Inc. Debt and Equity Values ($ in Millions) Multiple of Invested Capital Assuming a constant property value of $61.2 million, the chart at the right depicts the growth in GEC’s equity value as cash flows from the rental

  20. Slide 20: Real Estate: Segment Financial Detail

    Real Estate: Segment Financial Detail © 2020 Great Elm Capital Group, Inc. (1) Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix

  21. Slide 21: General Corporate

    General Corporate © 2020 Great Elm Capital Group, Inc.

  22. Slide 22: General Corporate: Segment Financial Detail

    General Corporate: Segment Financial Detail © 2020 Great Elm Capital Group, Inc. (1) Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix As of June 30, 2020, GEC’s consolidated cash balance was approximately $41 million GEC is actively looking for

  23. Slide 23: Financial Review

    © 2020 Great Elm Capital Group, Inc. Financial Review

  24. Slide 24: Financial Review: 4Q20 Consolidating Balance Sheets

    Financial Review: 4Q20 Consolidating Balance Sheets (Unaudited) © 2020 Great Elm Capital Group, Inc. Slide 24 $ in thousands Durable Medical Equipment Investment Management Real Estate General Corporate Eliminations Consolidated ASSETS Cash and cash equivalents, including restricted cash $4,851.2516

  25. Slide 25: Financial Review: 4Q20 Consolidating Income Statement

    Financial Review: 4Q20 Consolidating Income Statement (Unaudited) © 2020 Great Elm Capital Group, Inc. (1) Please refer to the disclaimers on slide 2 and the Adjusted EBITDA reconciliation tables in the Appendix

  26. Slide 26: Summary

    Summary © 2020 Great Elm Capital Group, Inc.

  27. Slide 27: Summary: Drivers of Shareholder Value

    © 2020 Great Elm Capital Group, Inc. Summary: Drivers of Shareholder Value Seek to enhance the value of our existing property through property improvement and lease modification Operating Companies Real Estate Investment Management Focus on growing Great Elm DME, Inc. both organically and via an exp

  28. Slide 28: Q&A

    Q&A © 2020 Great Elm Capital Group, Inc.

  29. Slide 29: Appendix

    Appendix © 2020 Great Elm Capital Group, Inc.

  30. Slide 30: Appendix: Non-GAAP Reconciliation

    Appendix: Non-GAAP Reconciliation © 2020 Great Elm Capital Group, Inc. (1) Our durable medical equipment business began in September 2018. Prior year figures represent activity for the period September 1, 2018 through June 30, 2019, where applicable. (2) Prior year non-GAAP adjustments have been upd

  31. Slide 31: Appendix: Non-GAAP Reconciliation (Continued)

    Appendix: Non-GAAP Reconciliation (Continued) © 2020 Great Elm Capital Group, Inc. (1) Our durable medical equipment business began in September 2018. Prior year figures represent activity for the period September 1, 2018 through June 30, 2019, where applicable. (2) Prior year non-GAAP adjustments h

  32. Slide 32: Appendix: Non-GAAP Reconciliation (Continued)

    Appendix: Non-GAAP Reconciliation (Continued) © 2020 Great Elm Capital Group, Inc. (1) Our durable medical equipment business began in September 2018. Prior year figures represent activity for the period September 1, 2018 through June 30, 2019, where applicable. (2) Prior year non-GAAP adjustments h

  33. Slide 33: Appendix: Non-GAAP Reconciliation (Continued)

    Appendix: Non-GAAP Reconciliation (Continued) © 2020 Great Elm Capital Group, Inc. (1) Our durable medical equipment business began in September 2018. Prior year figures represent activity for the period September 1, 2018 through June 30, 2019, where applicable. (2) Prior year non-GAAP adjustments h

  34. Slide 34: Appendix: Contact Information

    Appendix: Contact Information Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com © 2020 Great Elm Capital Group, Inc.

Great Elm Capital Group — FY2020 Earnings Presentation on 6ix