Ladies and gentlemen, thank you for standing by, and welcome to the Great Elm Capital Group's Fiscal First Quarter 2021 Earnings Call. [Operator Instructions] I would now like to hand the conference over to one of your speakers for today, Adam Yates, Managing Director. Please go ahead, sir.

Thank you, Carol, and good morning, everyone. Thank you for joining us for Great Elm Capital Group's Fiscal First Quarter 2021 Earnings Conference Call. As a reminder, this webcast is being recorded on Monday, November 16, 2020. If you'd like to be added to our distribution list, you can either e-mail investorrelations@greatelmcap.com or sign-up for alerts directly on our website. The slide presentation accompanying this morning's conference call and webcast can be found on Great Elm Capital Group's website, www.greatelmcap.com under Events and Presentations. 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. I'd like to call your attention to the customary safe harbor statement regarding forward-looking information. Also, please note that nothing in today's call constitutes an offer to sell or a solicitation of offers to purchase our securities. Today's conference call includes forward-looking statements and projections, and we ask that you refer to Great Elm Capital Group's filings with the SEC for important factors that could cause actual results to differ materially from these projections. Great Elm Capital Group does not undertake to update its forward-looking statements unless required by law. To obtain copies of the SEC filings, please visit Great Elm Capital Group's website under Financial Info and select SEC Filings. Hosting our call this morning is Peter Reed, Great Elm Capital Group's Chief Executive Officer. I will now turn the call over to Peter.

Thank you, Adam, and good morning, everyone. Thank you for joining us today. I'm joined this morning by our President and COO, Adam Kleinman; our CFO, Brent Pearson; and 2 senior members of our investment team, Adam Yates and John Ehlinger. We will walk through an update on our operating companies, Investment Management, Real Estate and general corporate business segments as well as their associated financials. Where relevant in our prepared remarks, we will point you to the corresponding slide in the presentation that Adam referenced. There are a number of objectives on which we're focused to achieve long-term success for GEC and our shareholders. We are focused on growing DME EBITDA and free cash flow, both organically and via M&A. We are focused on increasing the free cash flow generated by our Investment Management business. We believe that the best way to achieve this increase is by successfully monetizing existing investments and growing assets under management as we've recently done. We've also focused on continuing to reduce our corporate overhead as we grow cash flows in both our DME and Investment Management businesses. This multipronged approach is the foundation for how we plan to increase equity value per share at GEC throughout fiscal year 2021 and beyond. Please turn to Slide 4 to review a note to shareholders. We have good momentum in both our DME business and our Investment Management business. Despite the negative impact of COVID-19, DME grew revenue by 10.4% year-over-year in the quarter. DME generated $2.8 million of adjusted EBITDA during the quarter, down from $3.0 million last year as certain operating costs increased. Importantly, DME has resumed its search for attractive, add-on acquisition candidates. It is looking for businesses with complementary product lines in our existing or tangential geographic markets. In our Investment Management business, Great Elm Capital Corp., or GECC, has developed an attractive pipeline of potential investments in the specialty finance sector. We're focused on opportunities in this sector in part of this -- of the performance of GECC's investment in Prestige Capital, which has exceeded internal expectations. In order to capitalize on our pipeline, GECC successfully completed a rights offering in October, raising gross proceeds of $31.7 million. We are actively deploying the rights offering proceeds, and we expect the increase in GECC's AUM to result in an increase in Investment Management's revenue and profitability. Importantly, we remain confident in the quality of our businesses and are well positioned to capitalize on new potential opportunities for growth. Please turn to Slide 6. During the quarter ended September 30, 2020, we reported consolidated revenue, net loss and adjusted EBITDA of $16.7 million, $3.9 million and $3.0 million, respectively. Both revenue and adjusted EBITDA grew year-over-year. We are intently focused on growing both revenue and profitability at a faster pace across our verticals. Please turn to Slide 8 to discuss drivers of shareholder value. We have clear objectives in each of our verticals. In our operating companies, we're focused on acquiring undercapitalized companies with significant growth potential, both organic and through M&A. In Investment Management, we seek to increase assets under management, both in GECC and in other investment vehicles managed by GECM. In Real Estate, we're managing our existing investment in Fort Myers to monetize our substantial tax assets. Please turn to Slide 9. It is very important for us to maintain long-term alignment with you, our shareholders. Our team collectively owns almost 2 million shares or 7% of the company. Including our Board of Directors and their funds under management, insiders collectively own or manage circa 27% of the shares outstanding. We believe this fosters a significant and long-term alignment of interest among the employees, Directors and other shareholders. Let's turn to Slide 11 for an overview of our operating company activity. DME generated $14.6 million of revenue and $2.8 million of adjusted EBITDA during the quarter. DME managed to generate meaningful year-over-year revenue growth in the fiscal first quarter despite the challenging environment. Sales growth of PAP supplies was strong, offset by moderate decline in rental revenues. During the quarter, physician referrals and new PAP patient setups were periodically disrupted due to COVID. Consequently, new PAP patient setups declined 24.7% year-over-year, driven by reduced physician referrals. Physician referrals and new PAP patient setups did improve throughout the quarter, although not yet rebounding to pre-COVID levels. After a sustained period of investment in the scalability of the platform, DME management is focused on growing revenue and enhancing margins. Additionally, DME has resumed its search for add-on acquisition candidates. In the near term, we are focused on acquiring businesses in existing or tangential geographic markets with significant product overlap. We're seeking incremental debt capital at DME to fund our pipeline of attractive add-on acquisitions. Please turn to Slide 12 to walk through the financial update for our DME segment. Total revenue for the quarter was approximately $14.6 million. DME generated a net loss of $458,000 and adjusted EBITDA was approximately $2.8 million. DME's unlevered free cash flow of $1.2 million was aided by minimal maintenance capital expenditure necessary to run the business. Net of $1.1 million of payments on equipment financing, levered free cash flow was a use of $840,000 during the quarter. Turning to Slide 14, let's discuss the operating environment for our Investment Management business. Revenue and profitability were stable quarter-over-quarter. Net assets at GECC grew to approximately $60.5 million at quarter end as compared to the $53.2 million at June 30, 2020, and $50.8 million at March 31, 2020. Notably, GECC's investment in Prestige Capital has exceeded internal expectations. The profitability of that investment, the recent growth that it has experienced and its outlook for future growth has helped GECC to develop an attractive pipeline of potential investment opportunities in the specialty finance sector. As I mentioned earlier, GECC recently closed on a successful rights offering, raising $31.7 million in gross proceeds in order to capitalize on this attractive pipeline. This was an important step in our plan to increase GECM's AUM. Increasing GECM's AUM should increase our revenue, earnings and cash flow. Please turn to Slide 15 to discuss characteristics of the Investment Management vertical. We believe Investment Management is an attractive business for Great Elm due to its scalable business model, high margins and the potential for free cash flow generation. Over the long term, we plan to grow our Investment Management business by increasing assets under management, either through additional GECC capital raises, BDC M&A or by growing other investment vehicles. With significant embedded operating leverage and an established infrastructure, we believe the Investment Management business has the potential to generate free cash flow on a meaningful scale. On Slide 16, we break out the segment financials for Investment Management. Total revenues, which include both management fees and administration fees, were approximately $773,000 and increase quarter-over-quarter. We've generated a modest net loss, and adjusted EBITDA was approximately $242,000. Potential adjusted EBITDA growth should translate to a commensurate amount of free cash flow generation. Please turn to Slide 18 to discuss Real Estate. Our Real Estate investment has been characterized by a limited amount of upfront capital deployed, a significant amount of nonrecourse leverage to finance our acquisition in 2008 and continued taxable income to help monetize our NOLs. Let's turn to Slide 9 (sic) [ 19 ]. As you see on the chart, assuming no appreciation in the property value, GEC's equity in the Fort Myers investment will continue to grow between now and the lease expiry in 2030. As cash flows from the rental stream are utilized to amortize debt, equity growth from 1x our investment in acquisition to greater than 7x in 2030, all without deploying any additional capital. Turning to Slide 20. Let's walk through the segment financials for Real Estate. During the quarter, we generated approximately $1.3 million in rental income, $67,000 in net income and $1.11 million of adjusted EBITDA. While not generating levered free cash flow for Great Elm, as we discussed on the prior slide, we continue to build equity value in this investment through the amortization of debt. On Slide 22, we have a review of Great Elm's General Corporate segment financial detail. This quarter's $3.4 million net loss was in large part driven by a $1.9 million unrealized loss on the investment in GECC shares. As of September 30, 2020, GEC's consolidated cash balance is approximately $22.5 million. GEC is actively looking for new investment opportunities. Beyond the financial review, on Slide 27, we have a summary of how we plan to continue to drive shareholder value. We intend to achieve this goal through growth at Great Elm DME and Investment Management, enhanced by reduced corporate overhead. That concludes a review of Great Elm's fiscal first quarter 2021 financial results. Let's open up the call for Q&A.

[Operator Instructions] And as we have no questions at this time, I'll turn the call back over to Adam Yates for final comments.

Thank you again for joining us this morning to discuss Great Elm Capital Group's Fiscal First Quarter 2021 Financial Results. We appreciate your support, and we look forward to creating long-term shareholder value together. Please do not hesitate to reach out to us if we can be helpful with anything in follow-up and have a great day.

Ladies and gentlemen, this does conclude today's conference call. Thank you again for participating. You now disconnect.