Great Elm Group Inc (GEG) 2024 Q2 法說會逐字稿

Hello, and welcome to the Great Elm Group Fiscal Second Quarter 2024 earnings call. (Operator Instructions) I will now turn the conference over to Adam Yates, Managing Director. Please go ahead.

您好，歡迎參加 Great Elm Group 2024 年第二季財報電話會議。（操作員指示）我現在將會議轉交給董事總經理 Adam Yates。請繼續。

Good morning, everyone. Thank you for joining us for Great Elm Group's Fiscal Second Quarter 2024 earnings conference call. As a reminder, this conference call is being recorded on Wednesday, February 14, 2024. If you would like to be added to our distribution list, you can email GEG. Investor Relations at Great Elm cap.com or you can sign up for alerts directly on our website, www.greatelmgroup.com.

大家，早安。感謝您參加 Great Elm Group 2024 年第二季財報電話會議。謹此提醒，本次電話會議於 2024 年 2 月 14 日星期三錄製。如果您想要新增到我們的通訊群組清單中，您可以向 GEG 發送電子郵件。投資者關係請造訪 Great Elm cap.com，或者您可以直接在我們的網站 www.greatelmgroup.com 上註冊接收提醒。

The slide presentation accompanying today's conference call and webcast can be found on our website under Events and Presentations. A link to the webcast is also available on our website as well as in the press release that was disseminated to announce the quarterly results. Today's conference call includes forward-looking statements, and we ask that you refer to Great Elm Group's filings with the SEC for important factors that could cause actual results to differ materially from these statements. Great Elm Group does not undertake to update its forward-looking statements unless required by law.

今天的電話會議和網路廣播附帶的幻燈片演示可以在我們網站的「活動和演示」下找到。我們的網站以及公佈季度業績的新聞稿中也提供了網路廣播的連結。今天的電話會議包含前瞻性陳述，我們要求您參考 Great Elm Group 向 SEC 提交的文件，以了解可能導致實際結果與這些陳述有重大差異的重要因素。除非法律要求，Great Elm Group 不承諾更新其前瞻性聲明。

In addition, during today's call, management will refer to certain non-GAAP financial measures. Reconciliations to the most comparable financial measures are included in our earnings release. To obtain copies of our SEC filings. Please visit Great Elm Group's website under Financial Information and select SEC filings.

此外，在今天的電話會議中，管理階層將提及某些非公認會計準則財務指標。我們的收益發布中包含了對最具可比性的財務指標的調節。取得我們向 SEC 提交的文件的副本。請造訪 Great Elm Group 網站的「財務資訊」並選擇 SEC 備案。

On the call today we have Jason Reese, CEO; Adam Kleinman, President and General Counsel; Nichole Milz, COO; and Keri Davis, CFO. I will now turn the call over to Jason Reese, CEO.

今天的電話會議有執行長 Jason Reese 主持。 Adam Kleinman，總裁兼總法律顧問；尼科爾·米爾茲，首席營運長；和財務長 Keri Davis。我現在會把電話轉給執行長 Jason Reese。

Welcome, everyone, and thank you for joining us. Before diving into second quarter earnings, I want to highlight a pivotal transaction for our alternative credit platform that closed last week. On [thursday], GEG. announced a $24 million equity capital raise at RBBC. Great Elm Capital Corporation GEG provided significant support in this capital raise by investing $6 million alongside an institutional investor in a special purpose vehicle that acquired $24 million of common stock in GECC at net asset value, institutional investor aims to establish a strategic relationship with Great Elm.

歡迎大家，感謝您加入我們。在深入討論第二季收益之前，我想先強調一下我們的另類信貸平台上週完成的一項關鍵交易。[星期四]，銀娛。宣布向 RBBC 籌集 2400 萬美元股權資本。Great Elm Capital Corporation 銀娛在本次融資中提供了大力支持，與一家機構投資者一起向特殊目的工具投資了600 萬美元，該工具以資產淨值收購了GECC 價值2,400 萬美元的普通股，機構投資者旨在與Great Elm 建立策略關係。

This transaction is a step change for GEJ increases GEG's basis for earning fees from GECC, giving the company, the ability to add significant recurring asset management fee revenue and the potential to earn incentive fee revenue on this incremental capital. Most importantly, the investment structure embedded in this transaction provides a template for future capital raising and investment opportunities.

這筆交易是 GEJ 的一步改變，增加了 GEG 從 GECC 賺取費用的基礎，使該公司能夠大幅增加經常性資產管理費收入，並有可能利用這一增量資本賺取激勵費收入。最重要的是，本次交易的投資結構為未來的融資和投資機會提供了範本。

Great Elm Group also launched the Great Elm credit income fund during the fiscal second quarter with $13 million of total capital GEG seeded this private fund with a $6 million investment alongside several additional investors. The Credit Income Fund will focus on direct lending, syndicated credit, special situations, and we'll leverage our existing operational and origination platforms to manage and source investments.

Great Elm Group 也在第二財季推出了 Great Elm 信貸收入基金，總資本為 1,300 萬美元，GEG 與其他幾位投資者一起向該私募基金投資了 600 萬美元。信貸收入基金將專注於直接貸款、銀團信貸、特殊情況，我們將利用現有的營運和發起平台來管理和尋找投資。

Management is focused on raising third party capital in the funds, providing another opportunity to grow our AUM and enhance recurring fee revenue. These investments made alongside other capital partners serve as a testament to GEG, utilizing its strong liquid balance sheet to scale existing businesses, launching new fund products and deploy capital into new platform opportunities along with growing our recurring revenue. We believe that GEG's investments in these vehicles will deliver a strong return. In addition to these key strategic developments GEG had a solid fiscal second quarter '24.

管理層專注於籌集基金中的第三方資本，為增加我們的資產管理規模和提高經常性費用收入提供了另一個機會。這些與其他資本合作夥伴一起進行的投資是銀娛的明證，利用其強大的流動性資產負債表來擴大現有業務，推出新的基金產品並將資本部署到新的平台機會中，同時增加我們的經常性收入。我們相信銀娛對這些工具的投資將帶來豐厚的回報。除了這些關鍵的策略發展外，GEG 24 年第二季的財政狀況也十分穩健。

We continue to grow our fee-paying assets under management on both a sequential quarter and year-over-year basis. We generated total revenue of $2.8 million, a 50% increase from the prior year period and adjusted EBITDA of $0.6 million, up from $0.1 million from the prior year period. We ended the quarter with approximately $69 million in cash and marketable securities to deploy across our growing alternative asset management platform, reflecting on our two anchor fee-paying vehicles, [non-employee] and GECC, we have increased both fee revenue and AUM across both.

我們管理的付費資產持續按季度和同比增長。我們的總營收為 280 萬美元，比去年同期成長 50%，調整後 EBITDA 為 60 萬美元，比去年同期的 10 萬美元有所增加。本季結束時，我們擁有約6,900 萬美元的現金和有價證券，可部署在我們不斷增長的另類資產管理平台上，這反映在我們的兩個主要付費工具（非員工）和GECC 上，我們的費用收入和資產管理規模均增加兩個都。

We will seek to accelerate the momentum at these core businesses and are pleased with continued solid performance from both during the quarter. GECC. once again had a solid quarter. GECC will pay incentive fees to GEG for the third consecutive quarter of approximately $750,000, bringing total fees earned by GEG from GECC to $1.7 million for the quarter. GECC. remains well positioned to continue paying GEG incentive fees moving forward as we see the results of the successful portfolio repositioning efforts. Additionally, NII continues to exceed the regular quarterly dividend and GECC. declared a special dividend in December. Net asset value at GECC. grew to $12.99 per share as of December 31, post calendar 2023, we have 30% return on equity. Additionally, modestly made great strides during the quarter as the we acquired three properties with in-place leases, deploying $4 million of capital amended nine existing tenant leases for meaningful term extensions and executed five year renewal options on two properties with key tenants. In addition, our build-to-suit business continued to make meaningful progress on its two construction projects in Florida and Mississippi. The real estate team remains on track to complete these projects within our current fiscal year with a robust pipeline of new properties and open requirements from significant tenants. We remain confident of continued growth at minimally rate and VPs through fiscal '24.

我們將尋求加速這些核心業務的發展勢頭，並對本季這兩項業務持續穩健的業績感到滿意。GECC。再次擁有一個穩定的季度。GECC 將連續第三季向 GEG 支付約 75 萬美元的獎勵費，使本季度 GEG 從 GECC 賺取的總費用達到 170 萬美元。GECC。隨著我們看到投資組合重新定位工作的成功成果，銀娛仍處於有利地位，可以繼續支付銀娛激勵費。此外，NII 繼續超過常規季度股息和 GECC。 12月宣布派發特別股息。GECC 的資產淨值。截至 2023 年 12 月 31 日，我們的股本回報率增至 12.99 美元，股本回報率為 30%。此外，我們在本季度取得了長足的進步，我們收購了三處就地租賃的房產，部署了400 萬美元的資本，修改了九個現有租戶的租約，以實現有意義的期限延長，並對兩處擁有主要租戶的房產執行了五年續約選擇。此外，我們的客製化業務在佛羅裡達州和密西西比州的兩個建設項目上繼續取得有意義的進展。房地產團隊仍有望在本財年內完成這些項目，並擁有大量新房產和重要租戶的開放需求。我們仍對 24 財年以最低成長率和副總裁的持續成長充滿信心。

During the fiscal second quarter, our book value remained steady at $2.25 per share, which is why we intend to repurchase shares in the open market as part of our $10 million common stock repurchase program approved in November '23.

在第二財季，我們的帳面價值穩定在每股 2.25 美元，這就是為什麼我們打算在公開市場回購股票，作為我們於 2023 年 11 月批准的 1,000 萬美元普通股回購計畫的一部分。

I'd like to conclude by reflecting upon the three goals we have consistently outlined in recent quarters, enhance our financial performance, broaden our platform and increase our AUM. I am extremely pleased with great strides we have made toward achieving these goals so far in fiscal 2024, our results demonstrate our commitment to reposition and gray down in the alternative asset management space by growing our core businesses and launching new products.

最後，我想回顧一下我們最近幾季一貫概述的三個目標：提高我們的財務表現、拓寬我們的平台並增加我們的資產管理規模。我對 2024 財年迄今為止我們在實現這些目標方面取得的巨大進步感到非常高興，我們的業績證明了我們致力於透過發展核心業務和推出新產品來重新定位和灰化另類資產管理領域。

Additionally, we continue to evaluate multiple strategic M&A opportunities in our promising pipeline. We will remain steadfast in pursuing opportunities to expand our business and invest capital in new platform opportunities that offer attractive risk adjusted returns.

此外，我們將繼續評估我們前景廣闊的管道中的多個策略併購機會。我們將堅定不移地尋求擴大業務的機會，並將資本投資於可提供有吸引力的風險調整回報的新平台機會。

With that, I'll turn it over to Keri.

這樣，我就把它交給 Keri 了。

Thank you, Jason, I'll provide a brief overview of the quarter and of course, welcome all of you to review our filings in greater detail or reach out to our team with any questions in review of continuing operations. Quarter-to-date revenues grew 50% year over year to $2.8 million, driven by increased fee-paying assets under management related to GECC in Monterrey and the recognition of incentive fees from GECC for the third consecutive quarter, generating approximately $0.7 million during the fiscal second quarter,

謝謝傑森，我將提供本季度的簡要概述，當然，歡迎大家更詳細地審查我們的文件，或就持續營運審查的任何問題聯繫我們的團隊。本季迄今的營收年增 50%，達到 280 萬美元，這得益於蒙特雷 GECC 相關管理的付費資產的增加以及 GECC 連續第三個季度確認的激勵費，本季度收入約為 70 萬美元。第二財季，

AUM of $655 million as of December 31, 2023 was up 2% from the prior quarter and up 6% from the prior year quarter end while fee-paying AUM grew to $461 million, up 2% quarter to date and up 5% from prior year quarter. For the quarter, Great Elm Group generated a net loss from continuing operations of $0.2 million compared to net income from continuing operations of $29.7 million in the prior year period.

截至2023 年12 月31 日，AUM 為6.55 億美元，較上一季成長2%，較上年季末成長6%，而付費AUM 增至4.61 億美元，較上一季成長2%，較上一季成長5%年季。本季度，Great Elm Group 持續營運業務淨虧損為 20 萬美元，而去年同期持續營運淨利為 2,970 萬美元。

Net income from continuing operations in the prior year period was inclusive of $22.2 million in net realized and unrealized gain on investments and $10.5 million gain related to the forest transaction. Adjusted EBITDA for the quarter was $0.6 million, up from $0.1 million generated in prior year periods as of December 31, Great Elm Group had approximately $69 million of combined cash and marketable securities on our balance sheet to deploy across growing alternative asset management platform.

上一年持續經營業務的淨利潤包括 2,220 萬美元的已實現和未實現淨投資收益以及與森林交易相關的 1,050 萬美元收益。本季調整後EBITDA 為60 萬美元，高於截至12 月31 日的上一年期間產生的10 萬美元。Great Elm Group 的資產負債表上擁有約6,900 萬美元的現金和有價證券組合，可部署在不斷成長的另類資產管理平台上。

Please refer to slide 6 provides an overview of our financial position and highlights our book value per share of approximately $2.25, which remains steady compared to September 30.

請參閱投影片 6，該投影片概述了我們的財務狀況，並強調了我們每股帳面價值約為 2.25 美元，與 9 月 30 日相比保持穩定。

This concludes my financial review of the quarter.

我對本季的財務回顧到此結束。

With that, we will turn the call over to the operator to open for questions.

這樣，我們將把電話轉給接線生以供提問。

Thank you. (Operator Instructions) There are no questions at this time. I will turn the call to Jason Reese.

謝謝。（操作員說明） 目前沒有任何問題。我會把電話轉給傑森·里斯。

Thank you again for joining us today, and we look forward to speaking with you in the future.

再次感謝您今天加入我們，我們期待將來與您交談。

This concludes today's conference call. We thank you for joining You may now disconnect your lines.

今天的電話會議到此結束。我們感謝您的加入 您現在可以斷開線路。