Great Elm Capital Group, Inc. Reports Second Quarter 2019 Financial Results

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WALTHAM, Mass., Feb. 11, 2019 (GLOBE NEWSWIRE) -- Great Elm Capital Group, Inc. (NASDAQ: GEC, “Great Elm”) has announced its financial results for the quarter ended December 31, 2018. Great Elm will host a conference call and webcast on Monday, February 11, 2019 at 8:30 a.m. Eastern time to discuss its second quarter 2019 financial results.

Select highlights from the second fiscal quarter of 2019 include:

“Since we completed our acquisitions and merger of Valley Healthcare Group (“VHG”) and Northwest Medical (“NWM”) in September 2018, these combined businesses have experienced faster than anticipated growth in referrals, new patient setups, revenue and adjusted EBITDA,” remarked Peter A. Reed, Great Elm’s Chief Executive Officer. “We will continue to invest in the business to support its rapid growth and we intend to supplement that organic growth with add-on acquisitions.”

The employees of Great Elm and Great Elm Capital Management, Inc. (“GECM”) collectively own over 1.8 million shares of GEC stock, representing greater than 7% of its shares outstanding. Additionally, the directors of Great Elm collectively own or manage greater than 11% of Great Elm’s shares. Altogether, insiders collectively own or manage greater than 18% of the company’s shares outstanding, which Great Elm believes fosters a strong alignment of interest between employees, directors and the company’s shareholders.

Great Elm is a diversified, publicly-traded holding company that seeks to build long-term shareholder value across three verticals: Investment Management, Real Estate, and Operating Companies.

Great Elm’s management team believes the Investment Management business is scalable, offers attractive margins and, when coupled with growth in assets under management, provides for the potential to generate incremental EBITDA.

Great Elm intends to grow assets under management organically, through capital raises and through M&A. Growth in assets under management is expected to result in increased management fee revenue for GECM. 

In July 2018, Great Elm launched Great Elm Opportunities I, LP (“GEOF”) with a co-investment in a senior secured loan in the consumer staples industry. Great Elm believes that GEOF, which targets the type of asymmetric risk / reward opportunities on which the Great Elm management team has historically focused, represents a compelling area for growth in the Investment Management business.

_______________ This includes restricted shares that are subject to both performance and service vesting and is based on the share count pro forma for the vesting of said restricted shares.

Alongside Great Elm Capital Corp. (“GECC”), GEOF and existing SMAs, we continue to seek additional avenues for growth, potentially launching additional private funds and pursuing opportunistic acquisitions in the business development company space.

Great Elm continues to focus on credit tenant lease financings and ground lease structures across a variety of commercial, government and other properties. Great Elm’s substantial tax assets can make it a value-added partner or lessor.

In September 2018, Great Elm closed on its first operating company purchase when it acquired and merged together VHG and NWM, two healthcare services companies focused on the supply and distribution of respiratory-related durable medical equipment.  DME, a subsidiary of Great Elm, acquired an 80.1% equity interest in these businesses, which were valued at a combined enterprise value of $63.6 million (excluding financing, closing and professional fees and expenses and contingent consideration) and represented a 4.9x multiple of LTM pro forma adjusted EBITDA for the period ended June 30, 2018.

In 2Q19, DME generated $3.6 million of adjusted EBITDA, exceeding original performance expectations.  In addition to driving organic revenue and EBITDA growth, the DME operating team is aggressively working to realize additional, potential synergies by the end of calendar year 2019. The team is also pursuing potential M&A opportunities with complementary product profiles that increase market penetration and extend existing geographic markets.

Away from the DME business, the Great Elm team continues to evaluate acquisition opportunities across multiple industries in partnership with industry experts and / or operating executives.

As of December 31, 2018, Great Elm had four operating segments: Investment Management, Real Estate, Durable Medical Equipment and General Corporate.

Great Elm will host a conference call and webcast on Monday, February 11, 2019 at 8:30 a.m. Eastern time to discuss its second quarter 2019 financial results.

All interested parties are invited to participate in the conference call by dialing +1 (844) 559-0750; international callers should dial +1 (647) 689-5386Participants should enter the Conference ID 7995336 when asked. For a copy of the slide presentation that will be referenced during the course of our conference call, please visit: .

The conference call will be webcast simultaneously at:

Great Elm is a publicly-traded holding company that is seeking to build a business across three operating verticals: Investment Management, Real Estate and Operating Companies. Great Elm’s website can be found at .

Statements in this press release that are “forward-looking” statements, including statements regarding expected growth, 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 SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Additional information relating to Great Elm’s financial position and results of operations is also contained in Great Elm’s annual and quarterly reports filed with the SEC and available for download at its website or at the SEC website .

The SEC has adopted rules to regulate the use in filings with the SEC, and in public disclosures, of financial measures that are not in accordance with US GAAP, such as adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). Adjusted EBITDA is derived from methodologies other than in accordance with US GAAP. Great Elm believes that Adjusted EBITDA is an important measure for investors to use in evaluating Great Elm’s businesses. In addition, Great Elm’s management reviews Adjusted EBITDA as they evaluate acquisition opportunities.

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 Great Elm may not be comparable to similarly titled amounts reported by other companies.

Set forth below is a reconciliation of Adjusted EBITDA to the most directly comparable US GAAP financial measure, net income. The information in the table below includes forecasts, projections and other predictive statements that represent Great Elm’s assumptions and expectations in light of currently available information. These forecasts, projections and other predictive statements involve risks, variables and uncertainties. Great Elm’s actual performance results may differ from those projected in in the table below, and any such differences may be material.


(1)  Our durable medical equipment business began in September 2018 and there was no related activity prior to that date.(2)  General Corporate net loss includes net loss attributable to discontinued operations.(3)  Unrecognized incentive fees earned include amounts earned under investment management agreements which are not recognized under US GAAP.(4)  Acquisition related costs include transaction costs and change in the fair value of the contingent consideration liability since the initial valuation at the acquisition date.(5)  Our real estate business began in March 2018 and there was no related activity prior to that date.

More news and information about Great Elm Capital Group, Inc.

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Globe Newswire: 11:00 GMT Monday 11th February 2019

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