Great Elm Group Inc (GEG) 2024 Q3 法說會逐字稿

Thank you for standing by. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Great Elm Group's fiscal third quarter 2024 earnings conference call. (Operator Instructions)

謝謝你的支持。我叫米歇爾，今天我將擔任你們的會議操作員。此時此刻，我歡迎大家參加 Great Elm 集團 2024 年第三季財報電話會議。（操作員說明）

I would now like to turn the call over to Adam Yates, Managing Director. Please go ahead.

我現在想將電話轉給董事總經理 Adam Yates。請繼續。

Hello, everyone. Thank you for joining us for Great Elm Group's fiscal third quarter 2024 earnings conference call. As a reminder, this conference call is being recorded on Thursday, May 9, 2024. If you would like to be added to our distribution list. You can email GEG Investor Relations at Great Elm cap.com, where you can sign up for alerts directly on our website, www.greatelmgroup.com.

大家好。感謝您參加 Great Elm Group 2024 年第三季財報電話會議。謹此提醒，本次電話會議於 2024 年 5 月 9 日星期四錄製。如果您想要新增到我們的通訊群組清單中。您可以向 Great Elm cap.com 的 GEG 投資者關係部發送電子郵件，您可以直接在我們的網站 www.greatelmgroup.com 上註冊提醒。

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.

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。

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 site under Financial Info 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。如需我們的 SEC 文件副本，請造訪 Great Elm Group 網站的「財務資訊」並選擇 SEC 文件。

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

今天的電話會議由執行長傑森·里斯 (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。

I will now turn the call over to Jason Reese, CEO.

我現在會把電話轉給執行長 Jason Reese。

Welcome, everyone, and thank you for joining us today. For discussing third quarter results, I want to highlight several milestone achievements in our alternative credit and real estate platform businesses where we're growing assets and driving increased profitability.

歡迎大家，感謝您今天加入我們。在討論第三季業績時，我想強調我們的另類信貸和房地產平台業務中的幾項里程碑式成就，我們在這些業務中正在增加資產並推動盈利能力的提高。

First Elm’s BDC Great Elm Capital Corp., accomplished two capital raising initiatives. In February, GECC raised $24 million of equity capital at net asset value from an SPV. GEG supporting this capital raised by investing $6 million in conjunction with an institutional investors $18 million investment in a special purpose vehicle, which includes invested $24 million of new GECC common shares.

First Elm 的 BDC Great Elm Capital Corp. 完成了兩項融資計劃。2 月份，GECC 按資產淨值從 SPV 籌集了 2,400 萬美元的股本。GEG 透過與機構投資者聯合投資 600 萬美元來支持這筆資金，投資額為 1,800 萬美元，投資於特殊目的工具，其中包括投資的 2,400 萬美元的新 GECC 普通股。

We are working with our SPV partner to broaden their relationship with Great Elm, which we believe will provide strategic benefits over time for both parties. As I've noted before, accomplishing this capital raise at NAV was a huge success for Great Elm Group and clear evidence of our commitment to further scale GECC. In April, GECC completed an underwritten public offering of $34.5 million of five-year notes at a more than 50 basis points spread improvement as compared to GECC's August 2023 note issuance.

我們正在與 SPV 合作夥伴合作，擴大他們與 Great Elm 的關係，我們相信隨著時間的推移，這將為雙方帶來戰略利益。正如我之前指出的，以 NAV 完成本次融資對 Great Elm Group 來說是一個巨大的成功，也是我們進一步擴大 GECC 規模的承諾的明確證據。4 月，GECC 完成了 3,450 萬美元五年票據的公開承銷，與 GECC 2023 年 8 月發行的票據相比，利差改善了 50 個基點以上。

Overall, these actions have resulted in our BDC raising nearly $60 million of fresh capital contributing to significant growth in our assets under management. Importantly, these capital raises increased GEG's basis for earning fees from GECC and enable us to receive both significant recurring asset management fee revenue as well as potential incentive fee revenue on this incremental capital.

總體而言，這些行動使我們的 BDC 籌集了近 6000 萬美元的新資本，從而促進了我們管理的資產的顯著增長。重要的是，這些融資增加了銀娛從 GECC 賺取費用的基礎，使我們能夠從增量資本中獲得大量經常性資產管理費收入以及潛在的激勵費收入。

Further, the innovative investment structure embedded in this transaction, specifically utilizing an SPV to purchase equity in the BDC also provides us with a template for future capital raising endeavors and investment opportunities. It should be noted that the financial accounting rules have guided us to mark our $6 million investment in the SPV to material lesser value.

此外，本次交易中蘊含的創新投資結構，特別是利用 SPV 購買 BDC 股權，也為我們未來的融資活動和投資機會提供了範本。應該指出的是，財務會計規則指導我們將我們對 SPV 的 600 萬美元投資標記為實質較小價值。

This unrealized loss is the source of the vast majority of our net loss this quarter. We believe this unrealized loss is temporary and will reverse over time as the SPV receives distributions from the BDC. Subsequent to quarter end, our real estate platform business Monomoy BTS signed a contract to sell its first built-to-suit property.

這種未實現的虧損是我們本季淨虧損的絕大部分來源。我們認為，這種未實現的損失是暫時的，隨著 SPV 收到 BDC 的分配，這種損失將會隨著時間的推移而扭轉。季末後，我們的房地產平台業務 Monomoy BTS 簽署了出售其首個客製化房產的合約。

This sale is expected to close in the fiscal fourth quarter and will create value for our shareholders. We believe the Monomoy BTS will be able to generate additional shareholder value over time through our anticipated sale of our second build-to-suit property in the fiscal first quarter of 2025 and by executing on our considerable BTS pipeline.

此次出售預計將在第四財季完成，並將為我們的股東創造價值。我們相信，隨著時間的推移，Monomoy BTS 將能夠透過我們預計在 2025 財年第一季出售我們的第二個客製化物業以及透過執行我們大量的 BTS 管道來產生額外的股東價值。

Also in April in response to tenant demand we launched Monomoy BTS construction management, a consulting business that allows our customers to leverage our seasoned team to oversee in-house construction projects to owner representative services. This new business provides an accretive revenue stream to Great Elm without adding significantly to our operating costs.

同樣在四月份，為了滿足租戶的需求，我們推出了 Monomoy BTS 施工管理，這是一項諮詢業務，使我們的客戶能夠利用我們經驗豐富的團隊來監督內部施工項目，並提供業主代表服務。這項新業務為 Great Elm 提供了增加的收入來源，同時又不會顯著增加我們的營運成本。

We are encouraged by the initial demand and growth opportunities for this new venture. In addition to these key strategic developments, Great Elm Group had a solid fiscal third quarter of 2024. We continue to grow our fee-paying assets under management on both the sequential quarter and year over year basis, including the net proceeds from GECC's April capital raising initiatives, fee-paying AUM, and AUM increased 19% and 14% from the prior year quarter, respectively.

我們對這個新企業的最初需求和成長機會感到鼓舞。除了這些關鍵的策略發展之外，Great Elm Group 2024 年第三季的財報也十分穩健。我們管理的付費資產持續較上年同期成長，包括 GECC 4 月份融資計畫的淨收益、付費資產管理規模和資產管理規模較上年分別成長 19% 和 14%分別為四分之一。

We generated total revenues of $2.8 million, a 47% increase from the prior year period and adjusted EBITDA of $1.2 million compared to an adjusted EBITDA loss of $0.3 million for the prior year period. We ended the quarter with nearly $70 million in cash and marketable securities to deploy across our growing alternative asset management platform.

我們的總營收為 280 萬美元，比去年同期成長 47%，調整後 EBITDA 為 120 萬美元，而去年同期調整後 EBITDA 虧損為 30 萬美元。本季末，我們擁有近 7,000 萬美元的現金和有價證券，可部署在我們不斷發展的另類資產管理平台上。

Moving to our two anchor fee-paying vehicles, GECC and Monomoy, we have increased AUM and sustained fee revenue across both platforms. We are pleased with the continued performance of both during the quarter and seek to further accelerate the momentum at these key businesses.

轉向我們的兩個主要收費工具 GECC 和 Monomoy，我們增加了 AUM，並維持了兩個平台的費用收入。我們對本季兩者的持續表現感到滿意，並尋求進一步加速這些關鍵業務的發展勢頭。

GECC had another strong quarter with NII exceeding the regular quarterly dividend. GECC will pay a $700,000 of incentive fees to GEG the fourth consecutive quarter incentive fees, bringing GEG's cash incentive fees from GECC to approximately $3.7 million over the last 12 months. Total fees earned by GEG from GECC in the quarter were $1.6 million.

GECC 又一個強勁的季度，NII 超過了常規季度股息。GECC 將連續第四個季度向 GEG 支付 70 萬美元的獎勵費，使過去 12 個月內 GECC 從 GECC 獲得的現金獎勵費達到約 370 萬美元。本季 GEG 從 GECC 賺取的總費用為 160 萬美元。

GECC remains well positioned to continue delivering fee revenues to GEG on the back of its capital raising initiatives successful portfolio repositioning and the recent expansion into CLO product. Combined, these initiatives should drive increased fee revenue as the BDC continues to grow and perform.

憑藉其成功的融資計劃、投資組合重新定位以及最近向 CLO 產品的擴張，GECC 仍處於有利位置，可以繼續為 GEG 提供費用收入。結合起來，隨著​​ BDC 的不斷發展和表現，這些措施應該會推動費用收入的增加。

Monomoy REIT also continues to make significant progress calendar year to date to redeployed $11.6 million of capital to acquire six properties with in-place leases, amending two existing tenant leases for meaningful term extensions and expansion projects and execute a renewal options at six properties with key tenants.

年初至今，Monomoy REIT 仍繼續取得重大進展，重新部署了1,160 萬美元的資本，收購了六處擁有就地租約的房產，修改了兩處現有租戶租約，以實現有意義的期限延長和擴建項目，並對六處擁有關鍵房產的房產執行了續約選擇。

Lastly, Monomoy we successfully refinanced a sizable debt facility without any material impact these annual debt service and freed up an additional $10 million of capital for portfolio growth. As referenced earlier, our build-to-suit business continues to make meaningful progress on its two construction projects in Florida and Mississippi.

最後，Monomoy 成功地為一筆規模相當大的債務融資進行了再融資，對這些年度償債沒有產生任何重大影響，並額外釋放了 1000 萬美元的資金用於投資組合增長。如前所述，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。

With inaugural to BTS projects nearing completion, we have developed a considerable pipeline of future BTS project. We're extremely encouraged by Great Elm's future growth. BTS and construction management and its potential for creating shareholder value in fiscal 2025 and beyond.

隨著首個 BTS 專案接近完成，我們已經開發了相當多的未來 BTS 專案。Great Elm 未來的發展讓我們深受鼓舞。BTS 和施工管理及其在 2025 財年及以後創造股東價值的潛力。

I'd like to conclude my comments by tying back to the three for driving goals we've consistently outlined in prior quarters. Enhance our fiscal performance, expand our platform and grow our AUM. I am extremely pleased with our continued progress towards these goals. Our accomplishments underscore our commitment to reposition Great Elm in the alternative asset management space by growing our core businesses and adding accretive products.

我想透過回顧我們在前幾個季度一貫概述的三個推動目標來結束我的評論。提高我們的財務績效、擴大我們的平台並增加我們的資產管理規模。我對我們在實現這些目標方面不斷取得的進展感到非常高興。我們的成就強調了我們透過發展核心業務和增加增值產品來重新定位 Great Elm 在另類資產管理領域的承諾。

Additionally, we continue to actively evaluate multiple strategic initiatives. Moving ahead, we remain steadfast in pursuing opportunities to expand our businesses and allocate capital to promising new platform opportunities offering attractive risk-adjusted returns. We remain very excited to the future Great Elm.

此外，我們持續積極評估多項策略措施。展望未來，我們將堅定不移地尋求擴大業務的機會，並將資本分配給有前途的新平台機會，提供有吸引力的風險調整回報。我們對未來的 Great Elm 仍然非常興奮。

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.

謝謝你，傑森。我將提供本季度的簡要概述，當然，歡迎大家更詳細地查看我們的文件或如有任何問題與我們的團隊聯繫。

Fiscal third quarter revenues grew by 47% year over year to $2.8 million, driven by income fee-paying assets under management related to GECC and Monomoy in recognition of incentive fees from GECC for the fourth consecutive quarter, generating approximately $0.7 million during the fiscal third quarter. AUM of $688 million as of March 31, was up 5% from the prior quarter and up 9% from the prior year quarter end.

Fiscal third quarter revenues grew by 47% year over year to $2.8 million, driven by income fee-paying assets under management related to GECC and Monomoy in recognition of incentive fees from GECC for the fourth consecutive quarter, generating approximately $0.7 million during the fiscal third四分之一.截至 3 月 31 日，資產管理規模為 6.88 億美元，季增 5%，季增 9%。

While fee-paying AUM grew to $493 million, up 7% quarter to date and up 13% from the prior year quarter end, inclusive of the net proceeds from GECC April capital raising initiatives. AUM was $716 million, up 9% from December 31, and 14% from the prior year quarter end and fee-paying AUM was $521 million, up 13% from December 31, and 19% from prior year quarter end.

付費資產管理規模增至 4.93 億美元，季迄今成長 7%，較去年季度末成長 13%，其中包括 GECC 4 月融資計畫的淨收益。管理資產規模為7.16 億美元，較12 月31 日成長9%，較上年季末成長14%；付費資產管理規模為5.21 億美元，較12 月31 日成長13%，較上年季末成長19%。

Great Elm Group generated a net loss from continuing operations of $2.9 million for the quarter as compared to $0.5 million for the prior year period. As previously mentioned, this quarter's loss was primarily due to unrealized loss of Great Elm's investment and Great Elm strategic partnership.

Great Elm Group 本季持續營運淨虧損為 290 萬美元，而去年同期為 50 萬美元。如前所述，本季虧損主要是由於 Great Elm 投資和 Great Elm 戰略合作夥伴關係的未實現損失。

Adjusted EBITDA for the quarter was $1.2 million compared to an adjusted EBITDA loss of $0.3 million in the prior year period. As of March 31, we had approximately $69 million of combined cash and marketable securities on our balance sheet to deploy across our growing alternative asset management platform.

本季調整後 EBITDA 為 120 萬美元，而上年同期調整後 EBITDA 虧損為 30 萬美元。截至 3 月 31 日，我們的資產負債表上約有 6,900 萬美元的現金和有價證券，可部署在我們不斷發展的另類資產管理平台上。

Please refer to slide 6 that provides an overview of our financial position and highlights our book value per share of approximately $2.15. This concludes my financial review of the quarter.

請參閱投影片 6，其中概述了我們的財務狀況，並強調了我們每股帳面價值約 2.15 美元。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 up for questions.

這樣，我們會將電話轉給接線生提出問題。

(Operator Instructions)

（操作員說明）

It seems that we don't have any questions from the line. I will now turn the conference back over to Jason Reese, CEO for the closing remarks.

看來我們沒有收到任何來自線路的問題。現在，我將把會議轉回執行長 Jason Reese 致閉幕詞。

Thank you again for joining us today. We remain extremely excited about Great Elm's future and look forward to speaking with you.

再次感謝您今天加入我們。我們對 Great Elm 的未來仍然感到非常興奮，並期待與您交談。

Thank you. That concludes today's conference call. Thank you all for joining. You may now.

謝謝。今天的電話會議到此結束。感謝大家的加入。你現在可以了。