Great Elm Group, Inc. · NASDAQ:GEG
Great Elm — Q3 2023 Earnings Presentation
19 slides from Great Elm's earnings presentation, May 5, 2023
Slide 1: Fiscal Third Quarter Ended March 31, 2023
May 5, 2023 Fiscal Third Quarter Ended March 31, 2023 NASDAQ: GEG
Slide 2: GEG Completes its Transformation to a Focused Alternative Asset Manager
GEG Completes its Transformation to a Focused Alternative Asset Manager from a Diversified Holding Company • GEG is a publicly traded alternative asset manager growing a scalable and diversified portfolio of long-duration and permanent capital vehicles across credit, real estate, specialty finance a
Slide 3: Transition to Focused Alternative Asset Manager
Transition to Focused Alternative Asset Manager GECC appoints Jason Reese new CEO, new GEG acquires GECC shareholders GEG sells its appointed CEO of Chairman and two Management approve amendment Durable Medical GEG, completing new independent Agreements for to reset GEG’s Equipment the Company’s mem
Slide 4: Positioned to Achieve Strategic Goals
Positioned to Achieve Strategic Goals Experienced Executive Two anchor Jason Reese investment as CEO vehicles Pipeline of new business Liquid opportunities Balance Sheet Institutional Back Office with ability to Streamlined service a growing corporate platform structure May 5, 2023 4
Slide 5: Focus on Business Growth
Focus on Business Growth Great Elm Group, Inc. (GEG) is a publicly-traded, alternative asset manager focused on: • Growing a scalable and diversified portfolio of long-duration and permanent capital vehicles • Investing in credit, real estate, specialty finance and other alternative strategies GECC
Slide 6: Our Goals
Our Goals Going forward, we will focus on three simple goals Improve Execute on Grow AUM profitability expansion opportunities May 5, 2023 6
Slide 7: Fiscal Q2-Q3 Transactions Recap
Fiscal Q2-Q3 Transactions Recap Sale of Majority Interest in Forest for $45 Million Forest • $27 million from the right to put the GEG is Focused on remaining 19% ownership interest in GECC Scaling Alternative Asset Forest in January 2023 Management BDC • $18 million from sale of 61% of the DME • Gr
Slide 8: Summary Financial Position
Summary Financial Position GEG March 31, 2023 condensed balance sheet $ Million 3/31/2023 Cash and Cash Equivalents $ 84.1 Current Liabilities $ 5.6 Investments 35.1 Long-Term Debt 25.7 Other Current and LT Assets 17.9 Convertible Notes 36.2 Other Liabilities 1.4 Total Liabilities $ 68.9 Total Equit
Slide 9: GEG Appoints Jason Reese CEO
GEG Appoints Q2-Q3 Jason Reese Transactions RecapCEO Jason Reese is a successful entrepreneur and financial services executive, with over 30 years of experience founding and growing multiple financial services and real estate companies. Gordon Investment Corporation Mr. Reese served as Mr. Reese co-
Slide 10: GEG Board of Directors
GEG Board of Directors Extensive Experience and Track Records in Asset Management Jason Reese, Chairman & CEO Matthew Drapkin, Vice Chairman James Hugar Mr. Reese is our Chairman and Chief Executive Officer. Mr. Reese is the Mr. Drapkin is Chairman of the GECC Board and Chief Executive Mr. Hugar has
Slide 11: Fiscal 2023 Third Quarter Highlights
Fiscal 2023 Third Quarter Highlights May 5, 2023 11
Slide 12: Financial Highlights
Financial Highlights Revenue Net Income Adjusted EBITDA1 • FY 3Q23 revenue up 92% to • Net loss from continuing • FY 3Q23 Adjusted EBITDA of $1.9 million vs operations of $0.5 million for ($1.2) million, compared to FY 3Q22 of $1.0 million FY 3Q23, compared to net ($1.6) million in FY 3Q22 loss from
Slide 13: Assets Under Management
Assets Under Management AUM FPAUM 700 $631 500 $607 $438 600 $408 400 500 +4% +7% 400 300 300 200 200 100 100 0 0 6/30/2022 3/31/2023 6/30/2022 3/31/2023 $631 million of Assets Under Management $438 million of Fee-Paying AUM (“FPAUM”), (“AUM”), up 4% since June 30, 2022 up 7% since June 30, 2022 May
Slide 14: Results By Quarter
Results By Quarter (in thousands) Three Months Ended March 31, December 31, September 30, June 30, March 31, 2023 2022 2022 2022 2022 NON-GAAP RECONCILIATION Net income (loss) from continuing operations - GAAP $ (455) $ 29,693 $ (9,503) $ (5,237) $ (6,467) Interest expense 1,095 1,955 1,974 1,674 1,
Slide 15: Results Year-Over-Year
Results Year-Over-Year (in thousands) Three Months Ended March 31, Nine Months Ended March 31, 2023 2022 2023 2022 NON-GAAP RECONCILIATION Net income (loss) from continuing operations - GAAP $ (455) $ (6,467) $ 19,735 $ (14,006) Interest expense 1,095 1,286 5,024 3,872 Dividend income on investments
Slide 16: Financial Review: FY 3Q23 Balance Sheet
Financial Review: FY 3Q23 Balance Sheet (in thousands) March 31, 2023 June 30, 2022 ASSETS Cash and cash equivalents 84,118 22,281 Receivables from managed funds 2,421 2,445 Investments at fair value 35,104 48,042 Investments at fair value, consolidated funds - 2,543 Prepaid and other current assets
Slide 17: Financial Review: FY 3Q23 Income Statement
Financial Review: FY 3Q23 Income Statement (in thousands) Three Months Ended March 31, Nine Months Ended March 31, 2023 2022 2023 2022 Revenues 1,898 988 5,637 2,992 Operating costs and expenses: Investment management expenses 2,593 1,592 6,893 4,748 Depreciation and amortization 281 89 870 307 Sell
Slide 18: Contact Information
Contact Information Investor Relations Contact geginvestorrelations@greatelmcap.com May 5, 2023 18
Slide 19: Disclaimer
Disclaimer Statements in this presentation 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 described herein. Investors