Great Elm seeks ‘stabilization in fragmented industry’

Friday, May 15, 2020

WALTHAM, Mass. – Despite the challenges of the current business environment, Great Elm DME is “exploring” opportunities in related markets and with other respiratory-focused DME companies, said CEO Peter Reed on an earnings call last week.

“These opportunities may result in relationships that provide stabilization in a fragmented industry,” he said. “In addition, these opportunities could help to further diversify our payer and product mix.”

Great Elm DME is part of Great Elm Capital Group and was formed in 2018 when the holding company combined Mesa, Ariz.-based Valley Healthcare Group with Portland, Ore.-based Northwest Medical.

The company grew 20.2% year over year in the third quarter of its fiscal year 2020, with growth in all major product categories, particularly the “key” PAP category, said Reed.

“New patient setups hit a new high this quarter,” he said.

Great Elm DME has taken a proactive approach to the COVID-19 pandemic to ensure it can continue to provide critical respiratory services, said Reed.

“Toward the end of the quarter, local shelter-in-place orders negatively impacted physician referrals,” he said. “The decline in referrals continued past quarter end.”

For the three months ended March 31, 2020, Great Elm DME generated $14.1 million in revenues, $1.4 million in net loss and $2.5 million in adjusted EBITDA.

The company had approximately $1.5 million in capital expenditures, much of which was devoted to revenue-generating equipment, said Reed.