Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q2 2021 Earnings Presentation
27 slides from Great Elm Capital's earnings presentation, Aug 3, 2021
Slide 1: Great Elm Capital Corp. Investor Presentation, Quarter Ended June 30, 2021
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation Quarter Ended June 30, 2021 August 3, 2021 © 2021 Great Elm Capital Corp.
Slide 2: Forward Looking Statement
Forward Looking Statement Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,”
Slide 3: About GECC
About GECC ▪ Externally managed, total-return-focused BDC ▪ Liquid balance sheet Great Elm Capital Corp. ▪ Directors of GECC, employees of GECM and officers and directors of GECM’s parent, including investment funds managed by directors of GECM’s parent, own approximately 42.5% of GECC’s outstanding
Slide 4: Second Quarter 2021 Overview: Capital Deployment and Monetization
Second Quarter 2021 Overview: Capital Deployment and Monetization Deployment of ▪ During Q2 2021, deployed $49.9 million, excluding SPACs, into 25 investments at a Capital weighted average current yield of 9.29% and a weighted average price of 98% of par ▪ During Q2 2021, monetized $35.1 million, ex
Slide 5: Second Quarter 2021: Net Investment Income (NII) Analysis
Second Quarter 2021: Net Investment Income (“NII”) Analysis ▪ NII for the quarter ended June 30, 2021 was approximately $2.1 million, or $0.09 per share(1), as compared to NII of $1.5 million or $0.06 per share for the quarter ended March 31, 2021 NII by Quarter $ in $000s $7,000 $6,000 $5,000 $4,00
Slide 6: Net Asset Value Change from March 31, 2021 to June 30, 2021
Net Asset Value Change from March 31, 2021 to June 30, 2021 $ in $000s Net Asset Value at March 31, 2021 $91,531 $3.89 Portfolio Company Realized / Unrealized Gain / Loss Per Share Avanti Communications Group plc - 2nd Lien Secured Bond $(6,066) $(0.26) California Pizza Kitchen, Inc. - Common Equity
Slide 7: Investment Activity: New Investments (April 1 – July 30, 2021)
Investment Activity: New Investments (April 1 – July 30, 2021) Investment Activity: New Investments1* Par Amount Market Interest Current Current Portfolio Company Investment Description Maturity Cost / Quantity Discount Rate Yield (%)2 Yield ($)2 Arrow BidCo LLC 2nd Lien Note 3/15/2024 $4,000 $3,997
Slide 8: Specialty Finance Investments: Prestige Capital Finance, LLC
Specialty Finance Investments: Prestige Capital Finance, LLC ▪ Prestige(1) is a leading provider of “spot factoring” services, providing clients with an opportunity to sell individual accounts receivable for an upfront payment Over 30 years in business and through Wide Assortment of $6+ billion of F
Slide 9: Prestige Capital Finance: Significant Mutual Benefits
Prestige Capital Finance, LLC – Taking Advantage of Opportunities Significant Mutual Benefits Greater access to capital allows Prestige to “Overflow” opportunities that would allow GECC to increase the size of the transactions it can participate in certain of Prestige’s larger factoring pursue, whic
Slide 10: Investment Takeaways
Investment Takeaways Portfolio Distributions to Repositioning Moving Ample Liquidity Shareholders in Right Direction ▪ A diversified portfolio, primarily ▪ Cash distribution of $0.10 per share ▪ Solid Cash Balance comprised of secured loans, secured authorized for third quarter of 2021 ▪ Credit faci
Slide 11: Portfolio Review
Portfolio Review (Quarter Ended 6/30/2021) August 2021 © 2021 Great Elm Capital Corp. 11
Slide 12: Portfolio Review: Quarter End Portfolio Detail
Portfolio Review: Quarter End Portfolio Detail Debt Investments: 42 90.0% $155.7 million 74.4% 11.1%1 Debt Investments Weighted Fair Value of Debt Of Invested Capital in Weighted Average Average Dollar Investments Debt Investments Current Yield of Price of Debt Debt Investments Investments Equity In
Slide 13: Portfolio Review: Quarter End Asset Type and Interest Rate Type
Portfolio Review: Quarter End Asset Type and Interest Rate Type Portfolio by Asset Type ($MM) Portfolio by Interest Rate Type ($MM) Other SPACs Equity Investments 5% ▪ Weighted 9% average fixed Yield- Generating rate yield of Equities Floating 12.2%1 12% Fixed Rate 44% Rate ▪ Weighted Debt 56% 74% a
Slide 14: Portfolio Review: Quarter End Industry Breakdown
Portfolio Review: Quarter End Industry Breakdown June 30, 2021 Industry by % of Fair Value at June 30, 2021 Investments at Percentage of Industry Fair Value Fair Value Wireless Telecommunications Services Wireless Telecommunications Services $ 34,941 16.69% Oil & Gas Oil & Gas 26,931 12.86% Specialt
Slide 15: Portfolio Review: Quarterly Investment Activity
Portfolio Review: Quarterly Investment Activity New Investments vs. Monetized Investments Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Dollar Value of New Investments1 $15.9 million $34.5 million $35.3 million $58.4 million $49.9 million Weighted Average Price of New Debt $0.92 $0.91 $0.94 $0.96 $0.98 In
Slide 16: GECC SPAC Holdings: Strategy and Intention
GECC SPAC Holdings: Strategy and Intention SPAC Investments at 6/30/2021: 106 issuers $9.7 million 4.6% Investments in Units, Total Market Value of Of Invested Capital in Warrants and SPAC Instruments SPAC Investments Common Stock Exit prior to Utilize bearing equity Identify Relationships risk Pre-
Slide 17: Financial Review
Financial Review (Quarter Ended 6/30/2021) August 2021 © 2021 Great Elm Capital Corp. 17
Slide 18: Financial Review: Per Share Data
Financial Review: Per Share Data Financial Highlights – Per Share Data Q2/20201 Q3/20201 Q4/20201 Q1/20211 Q2/20211 Earnings Per Share (“EPS”) $0.34 $0.72 ($0.43) $0.53 $0.11 Net Investment Income (“NII”) $0.09 $0.18 $0.07 $0.06 $0.09 Per Share Net Realized Gains / (Losses) Per $0.09 ($0.02) $0.03 (
Slide 19: Financial Review: Quarterly Operating Results
Financial Review: Quarterly Operating Results Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 $ in $000s Per Share1 Per Share1 Per Share1 Per Share1 Per Share1 Total Investment Income2 $4,768 $0.47 $5,951 $0.56 $5,749 $0.26 $5,295 $0.23 $6,233 $0.27 Interest Income 4,184 0.41 4,375 0.41 4,664 0.21 4,179 0.1
Slide 20: Financial Review: Portfolio
Financial Review: Portfolio Financial Highlights - Portfolio Q2/2020 Q3/2020 Q4/2020 Q1/2021 Q2/2021 Capital Deployed $15.9 million $34.5 million $35.3 million $58.4 million $49.9 million Investments Monetized $37.5 million $18.2 million $43.8 million $28.3 million $35.5 million Total Fair Value of
Slide 21: Summary
Summary August 2021 © 2021 Great Elm Capital Corp. 21
Slide 22: Capital Activity: Declared Quarterly Cash Distribution
Capital Activity: Declared Quarterly Cash Distribution ▪ GECC’s Board authorized the distribution for the quarter ending December 31, 2021 at Distributions $0.10 per share, with the record and payment dates to be set by the officers of GECC pursuant to authority granted by the Board On an annualized
Slide 23: Appendix
Appendix Financial Statements Balance Sheet General Risks Contact Information
Slide 24: Consolidated Statements of Operations
For the Three Months Ended June 30, For the Six Months Ended June 30, 2021 2020 2021 2020 Consolidated Statements of Investment Income: Interest income from: Non-affiliated, non-controlled investments $ 2,983 $ 2,616 $ 5,425 $ 7,082 Operations Non-affiliated, non-controlled investments (PIK) Affilia
Slide 25: Consolidated Statements of Assets and Liabilities
June 30, 2021 December 31, 2020 Assets Investments Consolidated Statements of Non-affiliated, non-controlled investments, at fair value (amortized cost of $167,643 and $147,494, respectively) $ 154,225 $ 112,116 Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of
Slide 26: Appendix: General Risks
Appendix: General Risks Debt instruments are subject to credit and interest rate risks. Credit risk refers to the likelihood that an obligor will default in the payment of principal or interest on an instrument. Financial strength and solvency of an obligor are the primary factors influencing credit
Slide 27: Contact Information
Contact Information Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com Adam Prior The Equity Group Inc. +1 (212) 836-9606 aprior@equityny.com August 2021 © 2021 Great Elm Capital Corp. 27