Great Elm (US:GEG)2021-11-12 11:17Revenue Performance - Total revenue for the three months ended September 30, 2021, was $16.5 million, an increase of 8% compared to $15.4 million in the same period of 2020[219]. - Durable medical equipment revenue increased by $1.0 million to $15.6 million for the three months ended September 30, 2021, driven by acquisitions and organic growth[220]. - Total revenue from the investment management business for the three months ended September 30, 2021, was $983,000, representing a 27% increase from $773,000 in 2020[235]. Income and Expenses - The company reported a pre-tax income of $105,000 for the three months ended September 30, 2021, compared to a pre-tax loss of $3.7 million in the same period of 2020[219]. - Operating costs decreased by $1.0 million, primarily due to $2.4 million in Employee Retention Credits claimed under the CARES Act[221]. - General and administrative expenses for the three months ended September 30, 2021, were $6.1 million, up from $5.2 million in 2020, mainly due to additional payroll costs from acquired AMPM and MedOne employees[229]. Revenue Sources - The durable medical equipment business generated $8.7 million in revenue from medical equipment sales and $1.3 million from sleep study services for the three months ended September 30, 2021[226]. - Rental revenue for the three months ended September 30, 2021, was $5.5 million, a slight increase from $5.4 million in the same period of 2020, primarily affected by reduced referral pipelines due to the COVID-19 pandemic[227]. - Management fees in the investment management segment increased to $0.9 million for the three months ended September 30, 2021, compared to $0.6 million in the same period of 2020, driven by growth in average assets[236]. Cash Flow and Investments - Cash flows used in operating activities for the three months ended September 30, 2021, were $1.0 million, primarily due to a net loss of $0.1 million and changes in prepaid assets and deferred revenues[249]. - Cash flows used in investing activities for the three months ended September 30, 2021, were $3.2 million, mainly due to the acquisition of MedOne for $1.3 million and $2.5 million in capital equipment purchases[251]. - As of September 30, 2021, the company had an unrestricted cash balance of $21.8 million and held 5,484,669 shares of GECC common stock valued at approximately $19.1 million[254]. Debt and Financial Obligations - The company had $34.3 million in face value of convertible notes outstanding as of September 30, 2021, accruing interest at 5.0% per annum[257]. - The DME Revolver allows borrowings up to $10 million and had an effective interest rate of 3.7% as of September 30, 2021[262]. - The Company had $3.0 million in equipment financing debt outstanding as of September 30, 2021, with implicit interest rates between 7% and 8%[264]. Compliance and Risk Management - The Company must comply with financial covenants based on HC LLC EBITDA levels for additional debt incurrence[261]. - The Series A-1 Preferred Stock includes covenants limiting additional indebtedness and requiring compliance with licenses and government approvals[261]. - No material changes in market risks were reported since the last annual report[266].