Great Elm (US:GEG)2025-05-07 21:12Financial Performance - Total revenues for the three months ended March 31, 2025, increased to $3,209,000, up 15.1% from $2,787,000 in the same period of 2024[15] - Operating loss for the three months ended March 31, 2025, was $2,555,000, compared to a loss of $1,869,000 for the same period in 2024, reflecting a 36.7% increase in losses[15] - Net loss attributable to Great Elm Group, Inc. for the three months ended March 31, 2025, was $4,497,000, compared to a loss of $3,100,000 in the same period of 2024, representing a 45.0% increase in net losses[15] - For the nine months ended March 31, 2025, Great Elm Group reported a net loss of $173,000 compared to a net loss of $364,000 for the same period in 2024[19] - Total revenues for the nine months ended March 31, 2025, were $10.708 million, compared to $8.916 million for the same period in 2024, reflecting an increase of approximately 20%[57] - Pro forma combined revenue for the three months ended March 31, 2025, was $3.262 million, down from $5.074 million in the same period of 2024, indicating a decline of approximately 35.6%[56] Assets and Liabilities - Total current assets decreased to $121,058,000 as of March 31, 2025, down from $127,570,000 as of June 30, 2024, a decline of 5.5%[13] - Cash and cash equivalents decreased to $31,528,000 as of March 31, 2025, down 34.5% from $48,147,000 as of June 30, 2024[13] - Total liabilities increased to $71,875,000 as of March 31, 2025, compared to $70,251,000 as of June 30, 2024, an increase of 2.3%[13] - Total stockholders' equity decreased to $65,315,000 as of March 31, 2025, down from $70,195,000 as of June 30, 2024, a decline of 7.0%[13] - Great Elm Group's total stockholders' equity as of March 31, 2025, was $65,315,000, a decrease from $72,471,000 as of March 31, 2024[19] Cash Flow and Investments - The net cash used in operating activities for the nine months ended March 31, 2025, was $(11,176,000), compared to $(18,537,000) for the same period in 2024[19] - Cash and cash equivalents at the end of the period on March 31, 2025, were $31,528,000, down from $44,085,000 at the end of March 31, 2024[21] - The net cash provided by (used in) investing activities for the nine months ended March 31, 2025, was $(803,000), compared to $(3,739,000) for the same period in 2024[21] - The Company repurchased stock totaling $6,317,000 during the nine months ended March 31, 2025[21] - Cash used in investing activities for the nine months ended March 31, 2025, was $0.8 million, including acquisitions totaling $2.5 million[133] Stock and Equity - Weighted average shares outstanding for basic shares was 26,915,000 for the three months ended March 31, 2025, compared to 30,066,000 for the same period in 2024, a decrease of 10.5%[15] - The company repurchased a total of 579,489 shares of common stock at an average price of $1.87 per share during the three months ended March 31, 2025[148] - The company had unrecognized compensation costs related to unvested restricted stock awards and stock options totaling $2.2 million as of March 31, 2025[115] Expenses - Interest expense for the three months ended March 31, 2025, was $1,039,000, slightly down from $1,074,000 in the same period of 2024[15] - The company incurred approximately $0.1 million in acquisition-related costs during the three and nine months ended March 31, 2025[54] - Investment management expenses for the three months ended March 31, 2025, rose by $1.2 million (53%) to $3,555,000 compared to $2,330,000 in the same period of 2024[128] Acquisitions and Goodwill - The Company acquired certain assets of Greenfield CRE for approximately $2.5 million, forming MCS as a wholly owned subsidiary to enhance its construction business[49][50]. - Goodwill from the acquisition is estimated at $470,000, primarily due to the assembled workforce and expected synergies[51]. - Revenues from MCS for the period from February 4, 2025, to March 31, 2025, amounted to approximately $0.3 million, with an operating loss of $0.2 million[54]. Accounting and Reporting - The company is evaluating the potential impact of recently issued accounting standards on its consolidated financial statements, including ASU 2023-09 and ASU 2024-03[46][47] - Great Elm Group, Inc. filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, including key financial statements[101] - The report includes condensed consolidated balance sheets and statements of operations, stockholders' equity, and cash flows[101] - Certifications from the Chief Executive Officer and Chief Financial Officer were filed pursuant to the Sarbanes-Oxley Act of 2002[31.1][31.2] Fair Value Measurements - The fair value of Level 3 assets as of March 31, 2025, was $12.834 million, with an unrealized gain of $4.1 million for the nine months ended March 31, 2025[88] - The total assets measured at fair value as of March 31, 2025, amounted to $47.955 million, with $20.423 million valued at net asset value[86] - Five investments with an aggregate fair value of $831,034 were transferred from Level 3 to Level 2 due to increased pricing transparency during the nine months ended March 31, 2025[91] Related Party Transactions - As of March 31, 2025, related party reimbursements due from Monomoy REIT amounted to $3.7 million, primarily for work-in-progress on a construction project[83] - The Company recognized $0.1 million of interest income related to the Monomoy Note for the three months ended March 31, 2025[82]