WALTHAM, Massachusetts (September 13, 2022)--Great Elm Group, Inc. saw adjusted earnings for its durable medical equipment (DME) business grow 37% in fiscal 2022 compared to the previous year, according to its earnings report for the fourth quarter and the full year ended June 30, which were announced September 13.
That figure excludes a $2.3 million decline in government stimulus benefits from the prior year. With that reduction included, adjusted earnings before taxes, depreciation and amortization (EBITDA) for fiscal 2022 was $13.8 million compared to $12.4 million in fiscal 2021.
"DME demonstrated strong core profitability despite challenging supply chain conditions, which improved gradually over the course of fiscal 2022," the company said in its report.
Great Elm is a diversified holding company. Its DME subsidiary includes Great Elm Healthcare, LLC, which provides DME to customers with respiratory needs in the Pacific Northwest, Arizona and the Midwestern United States and also operates sleep testing center and provides power mobility and other home medical equipment.
During the three months ended June 30, 2022, DME reported $16.5 million in total revenue, compared to $15.4 million during the same period in the prior year. The increase in revenue was primarily attributable to more favorable intake and collections processes driving lower revenue reserve rates. For the year ended June 30, 2022, DME reported total revenue of $63.5 million, compared to $57.6 million for the same period in the prior year.
During the three months ended June 30, 2022, DME recognized a net loss of $0.2 million, compared to net income of $5.9 million for the same period in the prior year. The decrease in net income is attributed primarily to $4.7 million increase in net intercompany charges in the current period related to DME preferred stock that eliminates in general corporate. In addition, the prior period benefitted from $2.3 million in government stimulus whereas no benefit was received during the three months ended June 30, 2022. These decreases were partially offset by stronger operating income. For the year ended June 30, 2022, DME recognized a net loss of $3.8 million, compared to a net loss of $2.5 million for the same period in the prior year. The fiscal year decrease is attributed primarily to a reduction in government stimulus of $2.3 million as compared to the prior year partially offset by stronger operating income.
During the three months ended June 30, 2022, DME Adjusted EBITDA was $3.6 million, compared to $4.3 million in the prior-year period. For the year ended June 30, 2022, DME Adjusted EBITDA was $13.8 million, compared to $12.4 million in fiscal 2021 despite $2.3 million less of government stimulus payments. The growth in core profitability was primarily driven by more favorable revenue and gross margins partially offset by higher employee-related costs associated with acquired AMPM and MedOne employees, two companies acquired in March 2021 and August 2021, respectively.