Great Elm DME reports ‘meaningful organic growth’

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Friday, February 14, 2020

WALTHAM, Mass. – Great Elm DME has “hit new highs” with PAP and ventilator patient set-ups, CEO Peter Reed said on an earnings call last week.

The company generated revenues of $14.4 million for the quarter and $27.6 million for the sixth months ended Dec. 31, 2019. Adjusted EBITDA was $3.5 million.

“We’ve been pleased with the business’ rate of organic growth,” said Reed. “We experienced meaningful growth in all major product categories, including new PAP and ventilator set-ups, each hitting new highs this quarter.”

Great Elm DME is the DME segment of Great Elm Capital Group, formed in 2018 when the holding company combined Mesa, Ariz.-based Valley Healthcare Group with Portland, Ore.-based Northwest Medical. Great Elm also operates in investment management and real estate.

As Great Elm DME looks to further its growth, plans include acquiring “complementary, patient-focused” businesses, said Reed.

“The respiratory market is fragmented and ripe for consolidation,” he said. “(We) will target tangential or overlapping markets to our existing geographical footprint in Arizona, the Midwest and the Pacific Northwest.”

Great Elm DME also plans to explore complementary product lines and to invest heavily in infrastructure, including employees, process and technology, to increase scalability, said Reed.

Other highlights from the call:

During the quarter, Great Elm DME invested $311,000 to upgrade its existing sleep equipment, including beds at its sleep centers.

The company reported free cash flow of $2.1 million.

It paid down a “meaningful” portion of debt.