Fiscal Fourth Quarter 2023 Highlights
- GEG collected incentive fees from
Great Elm Capital Corp. (“GECC") for the first time in the Company’s history, totaling$1.0 million for the fourth quarter. - As of
June 30, 2023 , GEG had approximately$85 million of cash andU.S. Treasuries on its balance sheet to deploy across its growing alternative asset management platform. - Fee paying assets under management totaled
$448.7 million as ofJune 30, 2023 , representing approximately 2% sequential growth fromMarch 31, 2023 , and up approximately 10% year-over-year. - Assets under management totaled
$639.8 million as ofJune 30, 2023 , representing approximately 1% sequential growth fromMarch 31, 2023 , and up approximately 5% year-over-year. - Total revenue for the fourth quarter grew 96% to
$3.0 million , compared to$1.5 million for the prior-year period, largely attributed to incentive fees from GECC. - Net loss from continuing operations was
($5.3) million for the fourth quarter, comparable to the prior-year period. - Adjusted EBITDA for the fourth quarter was
$0.4 million , compared to$0.3 million for the prior-year period.
Full Fiscal Year 2023 Highlights
- During fiscal year 2023 and subsequent to year end, GEG hired key executives, bringing years of asset management experience to its team.
- On
September 6, 2022 , GEG added experienced operations professionalNichole Milz as Chief Operating Officer. - On
May 5, 2023 , GEG's Board of Directors appointedJason Reese , the Executive Chairman of GEG’s Board of Directors since 2020, to the additional role of Chief Executive Officer. - On
May 15, 2023 , GEG’s Board of Directors appointedKeri Davis as Chief Financial Officer ofGreat Elm , expanding upon her role as Chief Financial Officer of GECC. - On
September 6, 2023 , GEG’s Monomoy team added senior construction executiveAndrew Wright as Vice President of Real Estate.
- On
- On
January 3, 2023 , GEG sold its Durable Medical Equipment (“DME”) business for$80 million . After settling all obligations, the transaction resulted in approximately$26 million in net cash proceeds and 346,028 shares of Quipt Home Medical Corp. (“Quipt”) common stock. - On
January 17, 2023 , GEG exercised a put right for the remaining 19% of the equity interests inForest Investments, Inc. (“Forest”), following its sale of 61% of the equity interests in Forest onDecember 30, 2022 , resulting in combined cash proceeds from the Forest sales of approximately$45 million . - Total revenue for the fiscal year ended
June 30, 2023 grew 92% to$8.7 million , compared to$4.5 million for fiscal 2022. - Net income from continuing operations for the fiscal year ended
June 30, 2023 of$14.5 million , compared to net loss from continuing operations of($19.3) million in fiscal 2022. - Adjusted EBITDA of
$1.0 million for the fiscal year endedJune 30, 2023 , compared to an adjusted EBITDA loss of($1.3) million in fiscal 2022.
Management Commentary
Discussion of Financial Results for the Fiscal Fourth Quarter Ended
During the three months ended
During the three months ended
During the three months ended
Discussion of Financial Results for the Fiscal Year Ended
Total revenue for the fiscal year ended
For the fiscal year ended
Adjusted EBITDA for the fiscal year ended
Fiscal 2023 Fourth Quarter and Full Year Conference Call & Webcast Information | ||
When: | ||
Call: | All interested parties are invited to participate in the conference call by dialing +1 (888) 440-4537; international callers should dial +1 (646) 960-0669. Participants should enter the Conference ID 2595129 when asked. | |
Webcast: | The conference call will be webcast simultaneously and can be accessed here. A copy of the slide presentation accompanying the conference call, can be found here. |
About
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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 described herein. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made and represent Great Elm’s assumptions and expectations in light of currently available information. These statements involve risks, variables and uncertainties, and Great Elm’s actual performance results may differ from those projected, and any such differences may be material. For information on certain factors that could cause actual events or results to differ materially from Great Elm’s expectations, please see Great Elm’s filings with the
Non-GAAP Financial Measures
The
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it either in isolation from, or as a substitute for, analyzing Great Elm’s results as reported under US GAAP. Non-GAAP financial measures reported by
Included in the financial tables below is a reconciliation of Adjusted EBITDA to the most directly comparable US GAAP financial measure, net income from continuing operations.
Media & Investor Contact:
Investor Relations
geginvestorrelations@greatelmcap.com
Consolidated Balance Sheets
Dollar amounts in thousands (except per share data)
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 60,165 | $ | 22,281 | ||||
Receivables from managed funds | 3,308 | 2,445 | ||||||
Investments in marketable securities | 24,595 | - | ||||||
Investments, at fair value (cost | 32,611 | 48,042 | ||||||
Prepaid and other current assets | 717 | 665 | ||||||
Assets of | ||||||||
Investments, at fair value (cost | - | 1,797 | ||||||
Prepaid expenses | - | 746 | ||||||
Real estate under development | 1,742 | - | ||||||
Current assets held for sale | - | 8,464 | ||||||
Total current assets | 123,138 | 84,440 | ||||||
Identifiable intangible assets, net | 12,115 | 13,250 | ||||||
Right-of-use assets | 497 | 733 | ||||||
Other assets | 143 | 103 | ||||||
Non-current assets held for sale | - | 69,561 | ||||||
Total assets | $ | 135,893 | $ | 168,087 | ||||
LIABILITIES, NON-CONTROLLING INTEREST AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 191 | $ | 8 | ||||
Accrued expenses and other current liabilities | 5,418 | 3,845 | ||||||
Current portion of related party payables | 1,409 | 486 | ||||||
Current portion of lease liabilities | 359 | 341 | ||||||
Liabilities of | - | 11 | ||||||
Current liabilities held for sale | - | 15,003 | ||||||
Total current liabilities | 7,377 | 19,694 | ||||||
Lease liabilities, net of current portion | 142 | 472 | ||||||
Long-term debt (face value | 25,808 | 25,532 | ||||||
Related party payables, net of current portion | 926 | 1,120 | ||||||
Related party notes payable, net of current portion | - | 6,270 | ||||||
Convertible notes (face value | 37,129 | 35,187 | ||||||
Redeemable preferred stock of subsidiaries (held by related parties, face value | - | 34,099 | ||||||
Other liabilities | 669 | 908 | ||||||
Non-current liabilities held for sale | - | 2,551 | ||||||
Total liabilities | 72,051 | 125,833 | ||||||
Contingently redeemable non-controlling interest | - | 2,225 | ||||||
Stockholders' equity | ||||||||
Preferred stock, | - | - | ||||||
Common stock, | 30 | 29 | ||||||
Additional paid-in-capital | 3,315,378 | 3,312,763 | ||||||
Accumulated deficit | (3,251,566 | ) | (3,279,296 | ) | ||||
63,842 | 33,496 | |||||||
Non-controlling interest | - | 6,533 | ||||||
Total stockholders' equity | 63,842 | 40,029 | ||||||
Total liabilities, non-controlling interest and stockholders' equity | $ | 135,893 | $ | 168,087 |
Consolidated Statements of Operations
Amounts in thousands (except per share data)
For the twelve months ended | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 8,663 | $ | 4,516 | ||||
Operating costs and expenses: | ||||||||
Investment management expenses | 10,196 | 6,616 | ||||||
Depreciation and amortization | 1,152 | 524 | ||||||
Selling, general and administrative | 8,480 | 5,982 | ||||||
Expenses of | 46 | 135 | ||||||
Total operating costs and expenses | 19,874 | 13,257 | ||||||
Operating loss | (11,211 | ) | (8,741 | ) | ||||
Dividends and interest income | 6,209 | 3,161 | ||||||
Net realized and unrealized gain (loss) on investments | 15,247 | (7,571 | ) | |||||
Net realized and unrealized loss on investments of | (16 | ) | (525 | ) | ||||
Gain on sale of controlling interest in subsidiary | 10,524 | - | ||||||
Interest expense | (6,074 | ) | (5,546 | ) | ||||
Income (loss) before income taxes from continuing operations | 14,679 | (19,222 | ) | |||||
Income tax expense | (200 | ) | (83 | ) | ||||
Net income (loss) from continuing operations | 14,479 | (19,305 | ) | |||||
Discontinued operations: | ||||||||
Net income from discontinued operations | 13,201 | 4,268 | ||||||
Net income (loss) | $ | 27,680 | $ | (15,037 | ) | |||
Less: net (loss) income attributable to non-controlling interest, continuing operations | (1,554 | ) | 684 | |||||
Less: net income (loss) attributable to non-controlling interest, discontinued operations | 1,504 | (828 | ) | |||||
Net income (loss) attributable to | $ | 27,730 | $ | (14,893 | ) | |||
Basic net income (loss) per share from: | ||||||||
Continuing operations | $ | 0.55 | $ | (0.75 | ) | |||
Discontinued operations | 0.40 | 0.19 | ||||||
Basic net income (loss) per share | $ | 0.95 | $ | (0.56 | ) | |||
Diluted net income (loss) per share from: | ||||||||
Continuing operations | $ | 0.44 | $ | (0.75 | ) | |||
Discontinued operations | 0.29 | 0.19 | ||||||
Diluted net income (loss) per share | $ | 0.73 | $ | (0.56 | ) | |||
Weighted average shares outstanding | ||||||||
Basic | 28,910 | 26,784 | ||||||
Diluted | 40,980 | 26,784 |
Reconciliation from EBITDA to Adjusted EBITDA - Quarterly
Dollar amounts in thousands
For the three months ended | For the twelve months ended | |||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
Net income (loss) from continuing operations – GAAP | $ | (5,256 | ) | $ | (5,299 | ) | $ | 14,479 | $ | (19,305 | ) | |||||||||||||||||
Interest expense | 1,050 | 1,674 | 6,074 | 5,546 | ||||||||||||||||||||||||
Income tax expense | 198 | 166 | 200 | 83 | ||||||||||||||||||||||||
Depreciation and amortization | 282 | 217 | 1,152 | 524 | ||||||||||||||||||||||||
Non-cash compensation | 702 | 639 | 2,948 | 3,211 | ||||||||||||||||||||||||
Loss on investments, excluding investment in Forest | 2,187 | 2,762 | 9,167 | 8,096 | ||||||||||||||||||||||||
Gains related to sale of Forest | - | - | (34,922 | ) | - | |||||||||||||||||||||||
Transaction and integration related costs(1) | 634 | 188 | 1,105 | 499 | ||||||||||||||||||||||||
Change in contingent consideration | 603 | - | 783 | - | ||||||||||||||||||||||||
Adjusted EBITDA(2) | $ | 400 | $ | 347 | $ | 986 | $ | (1,346 | ) |
(1) Transaction and integration related costs include costs to sell, acquire and integrate acquired businesses.
(2) Adjusted EBITDA for prior periods has been adjusted to include dividend income earned during such periods consistent with the methodology for
Source:
2023 GlobeNewswire, Inc., source