Q4 2023 Great Elm Group Inc Earnings Call
Speaker 1: Good morning, my name is Rob and I will be your conference operator today. At this time I would like to welcome everyone to the Great Elm Group fiscal 2023 fourth quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks there will be a question and answer session. If you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press the star one.
Good morning, My name is Rob and I will be your conference operator today at this time I would like to welcome everyone to the Great Elm Group fiscal 2023 fourth quarter earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you like.
Ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again Presti Star one. Thank you Adam you're managing director you May begin your conference.
Speaker 1: Thank you. Adam Yee, Managing Director. You may begin your conference.
Speaker 2: Good morning, everyone. Thank you for joining us for great Elm groups, fiscal 4th quarter, 2023 earnings conference call. As a reminder, this conference call is being recorded on Thursday, September 21st, 2020.
Good morning, everyone.
For joining us for great Elm groups fiscal fourth quarter 2023 earnings Conference call. As a reminder, this conference call is being recorded on Thursday September 21 2023.
Speaker 2: If you'd like to be added to our distribution list, you can email GEGInvestorRelations at greatelmcap.com or you can sign up for alerts directly on our website www.greatelmgroup.com.
If you'd like to be added to our distribution list you can email G. G investor relations at Great Elm capped dot com or you can sign up for alerts directly on our website Www dot great Elm group dotcom.
Speaker 2: The slide presentation accompanying today's conference call and webcast can be found on our website under events and presentations.
The slide presentation accompanying today's conference call and webcast can be found on our website under events and presentations.
Speaker 2: 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.
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.
Speaker 2: Today's conference call includes four 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.
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.
Speaker 2: Great Elm Group does not undertake to update its forward-looking statements unless required by law.
Great on group does not undertake to update its forward looking statements unless required by law.
Speaker 2: In addition, during today's call, management will refer to certain non-GAAP financial measures.
In addition, during today's call management will refer to certain non-GAAP financial measures.
Speaker 2: Reconciliations to the most comparable financial measures are included in our earnings.
Reconciliations to the most comparable financial measures are included in our earnings release.
Speaker 2: To obtain copies of our SEC filings, please visit Great Elm Group's website under Financial Information and select SEC Filings.
To obtain copies of our SEC filings. Please visit great Elm group's website under financial information and select SEC filings.
Speaker 2: On the call today, we have Jason Reese, CEO , Adam Kleinman, General Counsel, Nicole Mills, COO, and Kerry Davis, our newly appointed CFO . I will now turn the call over to Jason Reese, CEO . Welcome, everyone.
On the call today, we have Jason Reid CEO , Adam Kleinman General Counsel, Nicole Mills, CLO and carry Davis, our newly appointed CFO I will now turn the call over to Jason Riis CEO .
Welcome everyone and thank you for joining us.
Speaker 2: This year, 2023 was a transformative year for Great UHM Group as we completed our transition from a diversified holding company to a focused alternative asset manager with a strong financial and operational foundation.
Fiscal year 2023 was a transformative year for Great group as we completed our transition from a diversified holding company to a focused alternative asset manager with a strong financial and operational Foundation.
Speaker 2: In May, I stepped in as Great Olems CEO and outlined three simple goals for the business.
May I stepped in as great on CEO and outlines three simple goals for the business.
Speaker 2: One, improve our profitability, two, expand our platform, and three, grow our assets under management.
One improve our profitability.
To expand our platform and three grow our assets under management.
Speaker 2: We've made significant strides over the past fiscal year to lay the groundwork for success in each of these goals.
Made significant strides over the past fiscal year to lay the groundwork for success in each of these goals.
Speaker 2: I'm going to walk through these goals outlined on slide 3 and highlight what we have accomplished to date as well as our strategic expansion initiatives underway for fiscal 24. 1st.
I'm going to walk through these goals outlined on slide three and highlight what we have accomplished to date as well as our strategic expansion initiatives underway for fiscal 'twenty four.
First <unk>.
Proving our profitability.
Speaker 2: While there is a lot of noise in our financials over the full year, GEG ended the final quarter of fiscal 23 with a milestone, earning cash incentive fees from GECC for the first time in the company's history. This comes on the back of GECC posting a strong quarter recording the highest cash net investment income in its history.
While there was a lot of noise in our financials over the full year G. G ended the final quarter of fiscal 'twenty, three with a milestone burning cash incentive fees from J E. T. C for the first time in the company's history.
This comes on the back of GEC, posting a strong quarter recording the highest cash net investment income in its history.
Speaker 2: As a result of this performance, GEG collected nearly $2 million in fees from GECC in August 2023, including $1 million of incentive fees.
As a result of this performance <unk> collected nearly $2 million in fees from GE ECC in August 2023, including $1 million of incentive fees.
Speaker 2: Going forward, we believe that we are well positioned to continue collecting incentives fees from GECC, which will further bolster GEG's profitability.
Going forward, we believe that we are well positioned to continue collecting incentive fees from GEC, which will further bolster <unk> profitability.
Speaker 2: In addition, Monomoy continues to grow. Over the course of the year we added 17 properties to the REITs portfolio deploying nearly $25 million of capital and we sold four properties for $7 million.
In addition motto mortgage continues to grow over the course of the year. We added 17 properties did a REIT portfolio deploying nearly $25 million of capital and we sold four properties for $7 million.
Speaker 2: In January , we closed on two land parcels, beginning construction on two build-to-suit projects in Florida and Mississippi, successfully launching our Monomoy BTS business.
In January we closed on two land parcels and beginning construction on two build to suit projects ink Lora and Mississippi successfully launching our mono might Bcf stations and just this month, we added senior construction executive Andy right to our team as Vice President of real estate. We're excited for continued growth in this.
Speaker 2: And just this month, we added Senior Construction Executive Andy Wright to our team as Vice President of Real Estate. We're excited for continued growth in this business in fiscal 24.
Business in fiscal 'twenty four.
Speaker 2: During the year, we built out our infrastructure, providing a solid foundation to scale our businesses without adding material incremental overhead expense. This should lead to significant operating leverage as we grow our business, allowing for high contribution margins going forward. Coming to our second goal.
During the year, we built out our infrastructure, providing a solid foundation to scale, our business without adding material incremental overhead expense. This should lead to significant operating leverage as we grow our business, allowing for high contribution margins going forward.
Moving to our second goal expanding the platform.
Speaker 2: During fiscal 23, we made key changes to our management team, onboarding several seasoned professionals with many years of asset management experience. We made our last team addition in fiscal fourth quarter 23, welcoming Carrie Davis to serve as GEG's chief financial officer, in addition to her role as CFO at GECC.
During fiscal 'twenty three we made key changes to our management team Onboarding several seasoned professionals with many years of asset management experience. We made our last team addition, and fiscal fourth quarter twenty-three welcoming Harry Davis to serve as <unk> Chief Financial Officer. In addition to her role as CFO .
C C.
Speaker 2: Terry brings wealth of asset management experience to our accounting and finance function at GEJ.
Terry brings a wealth of asset management experience to our accounting and finance function at J&J.
Speaker 2: In addition to boosting our bench strength, we're focused on adding new vehicles to our platform.
In addition to boosting our bench strength, we're focused on adding new vehicles to our platform throughout the fiscal fourth quarter. Our team has worked to develop a structure complementary funds and we look forward to launching a new fund offering in fiscal 'twenty four.
Speaker 2: Throughout the fiscal fourth quarter, our team has worked to develop and structure complimentary funds, and we look forward to launching a new fund offering in fiscal 24. Additionally, at GCC, our management team is executing upon the expansion of the specialty finance platform, further growing GECC's access to differentiated investment opportunities and expanding its access.
Additionally, at GCC, our management team is executing upon the expansion of the specialty finance platform furthering growing G E C C diff.
Differentiated investment opportunities and expanding its asset base.
Speaker 2: Finally, we continue to work diligently to source and acquire management rights to long duration asset management businesses. The third goal I mentioned...
Finally, we continue to work diligently to source and acquire management rights, the long duration asset management businesses.
The third goal I mentioned is to grow our assets under management.
Speaker 2: As I just discussed, we're actively seeking to grow and scale our platform, both organically and through strategic partnerships and acquisitions. Organically, our success in fiscal 23 is evidenced by our growth in fee-paying assets under management of 10% year over year. Entering fiscal 24, we have an actionable opportunity set of new product launches and strategic transactions to further our AUM growth objective.
As I just discussed we're actively seeking to grow and scale our platform, both organically and through strategic partnerships and acquisitions organically. Our success in fiscal 'twenty three is evidenced by our growth in fee paying assets under management of 10%.
Year over year.
Entering fiscal 'twenty four we have an actionable opportunity set of new product launches and strategic transactions to further <unk> growth objective.
Speaker 2: We are working on initiatives to leverage GEG's infrastructure and liquid balance sheet to support growth at GECC and Monomoy, as well as to support the launch or acquisition of future complimentary investment bids.
We are working on initiatives to leverage <unk> infrastructure and liquid balance sheet to support growth at <unk> and <unk> as well as to support the launch of our acquisition of future complementary investment vehicles.
Speaker 2: Before I turn the call over to Kerry to discuss our financial results for fiscal 23 and the 4th quarter, I would like to recap many of the changes implemented at GEG over 22 and 23 laid out on slide 7.
Before I turn the call over to Carey to discuss our financial results for fiscal 'twenty, three and the fourth quarter I would like to recap many of the changes implemented <unk> over 'twenty two 'twenty three laid out on slide seven.
Speaker 2: In March of 22, team management and board changes were made at GECC, which has been successfully repositioned.
In March of 'twenty, two key management and board changes were made in <unk>, which has been successfully repositioned in.
Speaker 2: In May of 22, Monomoy was acquired, doubling her AUI.
In may of 'twenty, two <unk> was acquired doubling our AUM.
Speaker 2: Also in May, Dave Matter joined our board after retiring from BlackRock, where he was Co-Chief Investment Officer of BlackRock Alternative Advisors, bringing extensive investment expertise and contacts to Grada.
Also in May Dave matter joined our board after retiring from Blackrock, where he was co chief investment officer of Blackrock alternative advisors, bringing extensive investment expertise and contacts to great out.
Speaker 2: In June 22, we issued $27 million of five-year baby bonds to grow our capital.
In June 22, we issued $27 million of five year baby bonds to grow our capital base.
Speaker 2: In August 22, an amendment was approved to reset GEC's incentive fee and we collected $1 million in August 23, as I mentioned earlier.
All of these 22, an amendment was approved to reshape gec's incentive fee and we collected $1 million in August 23, as I mentioned earlier.
Speaker 2: Around the end of the calendar year, we closed two large strategic business divestitures, leaving GEG with ample liquidity to execute on our goals.
Around the end of the calendar year, we closed two large strategic business divestitures, leading G G with ample liquidity to execute on our goals.
Speaker 2: In May of 23, I took on the role of CEO and we asked Kerry Davis to step up as CFO .
May of 'twenty, three I took on the role of CEO and we asked Terry Davis do step up as CFO .
Speaker 2: Today, we enter fiscal 24 with a rock solid balance sheet and streamlined organization poised to execute on our key goals. With that, I'll turn it over to Terry.
Today, we enter fiscal 'twenty, four with a rock solid balance sheet and streamlined organization poised to execute on our key goals.
With that I'll turn it over to Terry.
Speaker 3: 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.
Thank you Jason I'll provide a brief overview of the quarter and of course, we welcome all of you to review our filings in greater detail or reach out to our team with any questions.
Speaker 3: As previously discussed, Great Elm completed two significant transactions during the fiscal year, which are highlighted on slide 8.
As previously discussed greenhouse completed two significant transactions during the fiscal year, which are highlighted on slide eight.
Speaker 3: On January 3rd, we sold a majority interest in the durable medical equipment business to a subsidiary of Quip for a total purchase price of $80 million.
On January 3rd we saw the majority interest in the durable medical equipment to a subsidiary of equipped for a total purchase price of $80 million.
Speaker 3: After repayment of obligations, we received approximately $26 million in cash, as well as just over 346,000 shares of QuickCommons stock.
After repayment of obligations, we received approximately 26 million in cash as well as just over 346000 shares of common stock.
Speaker 3: On December 30th, 2022, we sold 61% of our majority ownership interest in forest to J.P. Morgan for over $18 million.
On December 30th 2022 we go 61% of our majority ownership interest in foreign to JP Morgan for over $18 million.
Speaker 3: On January 17th, we exercised a right to put our remaining 19% interest in forest to an affiliate of J.P. Morgan for nearly $27 million.
On January 17, we exercise the right to put our low 19% interest in bars to an affiliate of J P. Morgan for nearly $27 million.
Speaker 3: The January sale brought our aggregate cash proceeds from the forest transactions to approximately $45 million.
The January sale brought our aggregate cash proceeds from the transactions to approximately 45 billion.
Speaker 3: As a result of these transactions, we realized material gains on those investments generated significant value for Great Elm shareholders and added over $70 million of cash to GEG's balance.
As a result of both transactions, we realize material gains.
Generated significant value for great out shareholder and added over $70 million of cash.
<unk>.
Speaker 3: In review of continuing operations, quarter-to-date revenues almost doubled year-over-year, driven by increased fee-paying assets under management related to GECC and Monomoy. We were pleased to recognize incentives of $1 million from GECC during the fourth fiscal quarter.
In review of continuing operation quarter to date revenues almost doubled year over year, driven by increased fee paying assets under management.
Notably.
We were pleased to recognize incentive fees of $1 million.
During the fourth fiscal quarter.
Speaker 3: AUM of $640 million as of June 30, 2023, increased 1% from the prior quarter end and was up 5% from the prior fiscal year end, while fee paying AUM grew to $449 million, up 2% quarter to date, and up 10% from the prior fiscal year end.
$640 million I think June 30 of 2023 increased 1% from the prior quarter and was up 5% from the prior fiscal year and well be paying AUN grew to $449 million up.
Up 10% quarter to date and up 10% from the prior fiscal year end.
Speaker 3: For the quarter grade on group generated a net loss from continuing operations of 5.3 million dollars comparable to the prior year.
For the quarter, Great algorithm generated a net loss from continuing operations of $5 3 million comparable to the prior year period.
Speaker 3: For the fiscal year 2023, grade on group generated net income from continuing operations of 14.5Million dollars compared to a net loss from continuing operations of 19.3Million dollars in the prior fiscal year.
For the fiscal year 2020, bringing great Albert generated net income from continuing operations of $14 5 million.
Compared to a net loss from continuing operations of $19 $3 million in the prior fiscal year.
Speaker 3: Suggested EBITDA for the quarter was $0.4 million compared to $0.3 million in the prior year period.
Adjusted EBITDA for the quarter was <unk> 4 million compared to zero point $3 million both prior year periods.
Speaker 3: For the fiscal year 2023 grade on group generated adjusted EBITDA of 1Million dollars compared to a net loss of 1.3Million dollars in the prior fiscal year.
For the fiscal year 2023, great off grid generated adjusted EBITDA of $1 million compared to a net loss of $1.3 million in the prior fiscal year.
Speaker 3: As of June 30th, Great Home Group had approximately $85 million of combined cash and marketable securities on our balance sheet to deploy across our growing alternative asset management platform.
As of June 30th Great on group had approximately $85 million of combined cash and marketable securities on our balance sheet to deploy across our growing alternative asset management platform.
Speaker 3: Please refer to slide six that provides an overview of our financial position and highlights our book value per share of approximately $2.16.
Please refer to slide six that provides an overview of our financial position and highlight that book value per share of approximately $2.
Yes.
Speaker 3: This concludes my financial review of the quarter. With that, we will turn the call over to the operator to open for questions.
This concludes my financial review of the quarter with that we will turn the call over to the operator to open for questions.
Speaker 1: At this time I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Was for just a moment.
Speaker 1: And again, if you would like to ask a question, please press star 1 on your telephone keypad.
And again, if you would like to ask a question. Please press star one on your telephone keypad.
Yeah.
Speaker 1: And our first question comes from a line of Nat Stewart from Capital Advisors. Your line is open.
And our first question comes from the line of Nat Stewart from capital Advisors. Your line is open.
Speaker 4: Hi, good morning. It looks like things are getting on track here with GC.
Hi, good morning, it looks like things are getting on track here with T C.
Speaker 4: I'm just curious, I'm going to review your results today, but where you're seeing opportunities for growth, especially if you're looking for, you know, opportunities outside of DEC.
I'm just curious.
I'm going to appear your results today, but where are you seeing opportunities for growth, especially if you're looking for you know opportunities.
Opportunities outside of D C.
Speaker 4: GEG for acquisitions and so forth. Do you think real estate's going to be a key? Is that the area you're mostly focusing in? Or is there other BDC stuff you might look at?
M D G four acquisitions and so forth.
Or do you think are real estate is gonna be a Q is that the area, you're mostly focusing on or is there other BDC stuff you might look at.
Speaker 2: Hey Matt, this is Jason. Thank you for being on the call. I think we're both looking at credit opportunities. We really like the credit markets right now, what's happened with the banking system, what's happened with interest rates.
Hey, Matt This is Jason Thank you for being on the call.
I think we're both looking at credit opportunities, we really like the credit markets right now whats happened with the banking system.
What's happening with interest rates.
Speaker 2: There's a lot of opportunities for GECC as the VDC. We also think that there could be other vehicles that we could manage, either DeNova, where we start them up, or Acquire in the credit space. And we do like the real estate space quite a bit. There's certain areas of real estate, like industrial, that we're focused in, that we think are great areas right now.
So there's a lot of opportunities for GE ECC with BDC. We also think that there could be other vehicles that we could manage either de novo, where we start them up or acquire in the credit space and we do like the real estate space, you know quite a bit in certain areas of real estate like industrial.
All of that we're focused in that we think are great areas right now.
Speaker 2: while a lot of commercial real estate is distressed.
While a lot of commercial real estate is distressed.
Where we would not be focusing.
Speaker 4: Sure. Yeah, that makes a lot of sense. I look forward to what you guys come up with because it seems like the platform has a lot of potential if you can add a little bit of scale to it. So, keep up the good work. Thank you.
Sure.
Yes that makes a lot of sense.
Look forward to what you guys.
Come up with because it seems like the platform that has a lot of potential.
If you can add a little bit of scale to it so keep up the good work.
Thank you we think so too thank you Matt.
Speaker 1: And once again, if you'd like to ask a question, it is star 1 on your telephone keypad.
And once again, if you'd like to ask a question. It is star one on your telephone keypad.
Speaker 1: And there are no further questions at this time. I will now turn the call back over to CEO Jason Rees for some final closing remarks.
And there are no further questions at this time I will now turn the call back over to CEO , Jason <unk> for some final closing remarks.
Speaker 2: Well, thank you again for joining us today. We look forward to speaking with you in the future.
Well. Thank you again for joining US today, we look forward to speaking with you in the future.
Speaker 1: This concludes today's conference call. Thank you for your participation. You may now disconnect.
This concludes today's conference call. Thank you for your participation you may now disconnect.
[music].
Yeah.
[music].
Rob: Good morning, my name is Rob, and I will be your conference operator today. At this time I would like to welcome everyone to the great Ellen Group fiscal 2023 fourth quarter earnings conference call. All lines have been placed on mute to prevent any background noise.
Rob: After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you.
Adam Yates: Adam Yates, managing director, you may begin your conference.
Adam Yates: Good morning, everyone. Thank you for joining us for great Elm Group's fiscal fourth quarter 2023 earnings conference call. As a reminder, this conference call is being recorded on Thursday, September 21st, 2023. If you would like to be added to our distribution list, you can email GEG investor relations at greatelmcap.com where you can sign up for alerts directly on our website, www.greatelmgroup.com. The slide presentation accompanying today's conference call and webcast can be found on our website under events and presentations.
Adam Yates: 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 four 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 four looking statements unless required by law.
Adam Yates: In addition, during today's call, management will refer to certain non-gap financial measures. Reconciliation 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.
Adam Yates: On the call today, we have Jason Rees, CEO, Adam Kleinman, General Counsel, Nicole Mills, COO, and Kerry Davis are newly appointed CFO.
Jason Rees: I will now turn the call over to Jason Rees, CEO. Welcome, everyone, and thank you for joining us.
Jason Rees: This year, 2023 was a transformative year for Great Elm Group as we completed our transition from a diversified holding company to a focused alternative asset manager with a strong financial and operational foundation. In May, I stepped in as Great Elm CEO and outlined three simple goals for the business. One, improve our profitability. Two, expand our platform. And three, grow our assets under management. We've made significant strides over the past fiscal year to lay the groundwork for success in each of these goals. I'm going to walk through these goals outlined on slide three and highlight what we have accomplished to date as well as our strategic expansion initiatives underway for fiscal 24.
Jason Rees: First, improving our profitability. While there is a lot of noise in our financials over the full year, GEG ended the final quarter of fiscal 23 with a milestone earning cash incentives from GECC for the first time in the company's history. This comes on the back of GECC posting a strong quarter recording the highest cash net investment income in its history. As a result of this performance, GEG collected nearly $2 million in fees from GECC in August 2023, including $1 million of incentives.
Jason Rees: Going forward, we believe that we are well positioned to continue collecting incentives from GECC, which will further bolster GEG's profitability. In addition, Monomoid continues to grow. Over the course of the year, we added 17 properties to the REIT portfolio, deploying nearly $25 million of capital, and we sold four properties for $7 million. In January, we closed on two LAN parcels, beginning construction on two built-to-sue projects in Florida and Mississippi, successfully launching our Monomoid BTS business. And just this month, we added senior construction executive Andy Wright to our team as vice president of real estate. We're excited for continuing growth in this business in fiscal 24.
Jason Rees: During the year, we built out our infrastructure, providing a solid foundation to scale our businesses without adding material, incremental overhead expense. This should lead to significant operating leverage as we grow our business, allowing for high contribution margins going forward.
Jason Rees: Moving to our second goal, expanding the platform. During fiscal 23, we made key changes to our management team, onboarding several season professionals with many years of asset management experience. We made our last team addition in fiscal fourth quarter 23, welcoming Kerry Davis to serve as GEG's chief financial officer, in addition to her role as CFO at GECC. Kerry brings wealth of asset management experience to our counting and finance function at GEG.
Jason Rees: In addition to boosting our bench strength, we're focused on adding new vehicles to our platform. Throughout the fiscal fourth quarter, our team has worked to develop and structure complimentary funds, and we look forward to launching a new fund offering in fiscal 24. Additionally, at GECC, our management team is executing upon the expansion of the investment opportunities and expanding its asset base. Finally, we continue to work diligently to source and acquire our management rights to long duration asset management businesses.
Jason Rees: The third goal, I mentioned, is to grow our assets under management. I had just discussed we're actively seeking to grow and scale our platform, both organically and through strategic partnerships and acquisitions. Organically, our success in fiscal 23 is evidenced by our growth in seed paying assets under management of 10 percent year over year. Entering fiscal 24, we have an actionable opportunity set of new product launches and strategic transactions to further AUM growth objective. We are working on initiatives to leverage GEG's infrastructure and liquid balance to support growth at GECC and Monacoin, as well as to support the launch or acquisition of future complimentary investment vehicles.
Jason Rees: Before I turn the call over to Kerry to discuss our financial results for fiscal 23 and the fourth quarter, I would like to recap many of the changes implemented at GEG over 22 and 23 laid out on slide 7. In March of 22, key management and board changes were made at GECC, which has been successfully repositioned. In May of 22, Monomoi was acquired, doubling our AUM. Also in May, Dave Matter joined our board after retiring from BlackRock, where he was Co-Chief Investment Officer of BlackRock Alternative Advisors, bringing extensive investment expertise and contacts to gray down.
Jason Rees: In June 22, we issued $27 million of five-year baby bonds to grow our capital base. In August 22, an amendment was approved to reset GEC's incentive fee, and we collected $1 million in August 23, as I mentioned earlier. Around the end of the calendar year, we closed two large strategic business debt vestitures, leaving GEG with ample liquidity to execute on our goals. In May of 23, I took on the role of CEO, and we asked Keri Davis to step up as CFL.
Jason Rees: Today, we enter fiscal 24 with a rock solid balance sheet and streamlined organization poised to execute on our key goals.
Keri Davis: Without a turn it over, Keri. 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.
Keri Davis: As previously discussed, grid on completed two significant transactions during the fiscal year, which are highlighted on slide 8. On January 3, we sold majority interest in the durable medical equipment business to a subsidiary equipped for a total purchase price of $80 million. After repayment of obligations, we received approximately 26 million in cash, as well as just over 346,000 shares equipped common stock. On December 30, 2022, we sold 61% of our majority ownership interest in forest to JP Morgan for over $18 million.
Keri Davis: On January 17, we exercised the right to put our remaining 19% interest in forest to an affiliate of JP Morgan for nearly $27 million. The January sales brought our aggregate cash proceeds from the forest transactions to approximately $45 million. As a result of these transactions, we realized material gains among investments generated significant value for great-elb shareholders and added over $70 million a cash to GEG balance sheet. In review of continuing operations, quarter-to-date revenues almost doubled year-of-a-year, driven by increased fee-paying assets under management related to GECC and Monopoly.
Keri Davis: We were pleased to recognize incentives of $1 million in GECC during the fourth fiscal quarter. AUM of $640 million as in June 30, 2023 increased 1% from the prior quarter end and was up 5% from the prior fiscal year end. While fee-paying AUM grew to $449 million, up 2% quarter to date and up 10% from the prior fiscal year end. For the quarter, great-elb group generated a net loss from continuing operations of $5.3 million dollars comparable to the prior year period.
Keri Davis: For the fiscal year 2023, great-elb group generated net income from continuing operations of $14.5 million compared to a net loss from continuing operations of $19.3 million dollars in the prior fiscal year. The adjusted EBITDA for the quarter was $0.4 million compared to $0.3 million dollars in the prior year period. For the fiscal year of 2023, Gradom Groups generated a adjusted EBITDA of $1 million compared to a net loss of $1.3 million in the prior fiscal year.
Keri Davis: As of June 30th, Gradom Group had approximately $85 million to combine cash and marketable securities on our balance sheet to deploy across our growing alternative asset management platforms. Please refer to slide six that provides an overview of our financial position in highlands that both value per share of approximately $2.16.
Keri Davis: This concludes my financial review of the quarter.
Rob: With that, we will turn the call over to the operator to open for questions. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment. And again, if you would like to ask a question, please press star one on your telephone keypad.
Nat Stewart: And our first question comes from a line of Nat Stewart from Capital Advisors. Your line is open.
Jason Rees: Hi, good morning. It looks like things are getting on track here with CEC. I'm just curious that I'm going to review your results today, but where you're seeing opportunities for growth, especially if you're looking for, you know, opportunities outside of DEC, DG for acquisitions and so forth. Do you think real estate is going to be a key? Is that the area you're mostly focusing in or are there other BDC stuff you might look at?
Jason Rees: Hey, Matt, this is Jason. Thank you for being on the call. I think we're both looking at credit opportunities. We really like the credit markets right now. What happened with the banking system. What happened with interest rates. There's a lot of opportunities for DECC as the VDC. We also think that there could be other vehicles that we could manage. Which either the noble where we start them up or acquire in the credit space.
Jason Rees: And we do like the real estate space, you know, quite a bit. There's certain areas of real estate, like industrial that we're focused in that we think are great areas right now. While a lot of commercial real estate is distressed. Where we would not be focusing. Yeah, that makes a lot of sense. I look forward to what you guys come up with because it seems like the platform has a lot of potential.
Jason Rees: If you can add a little bit of scale to it, so keep up the good work. Thank you. We think so too. Thank you, Matt. And once again, if you'd like to ask a question, it is star one on your telephone keypad.
Rob: And there are no further questions at this time.
Jason Rees: I will now turn the call back over to CEO Jason Reese for some final closing remarks. Well, thank you again for joining us today. We look forward to speaking with you in the future.
Rob: This concludes today's conference call. Thank you for your participation.
Rob: You may now disconnect.