Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q3 2018 Earnings Presentation
31 slides from Great Elm Capital's earnings presentation, Nov 13, 2018
Slide 1: Investor Presentation – Quarter Ended September 30, 2018
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation – Quarter Ended September 30, 2018 November 13, 2018 © 2018 Great Elm Capital Corp. Exhibit 99.2
Slide 2: Disclaimer
© 2018 Great Elm Capital Corp. Disclaimer 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 “believe,” “expect
Slide 3: GECC Snapshot
GECC Snapshot GECC Investment Objective Investment Strategy Externally managed, special situations-focused BDC Common stock trades as “GECC” and baby bonds as “GECCL” and “GECCM” on NASDAQ $0.083 per share monthly distribution1 Great Elm Capital Group, Inc., the parent company of Great Elm Capital M
Slide 4: Realized Investments (through November 9, 2018)
© 2018 Great Elm Capital Corp. Realized Investments (through November 9, 2018) Past performance is not indicative of future results. It should not be assumed that the realization of other positions will be profitable or equal the performance of the positions realized in the quarter ended September 3
Slide 5: Foresight Energy LP
© 2018 Great Elm Capital Corp. Background Catalyst Outcome Foresight is a thermal coal producer in the United States, exclusively focused on the Illinois Basin, selling its coal to a diverse customer base. GECC made its $4.6 million par value acquisition of Foresight’s first lien loan in Q1/2018 at
Slide 6: NANA
© 2018 Great Elm Capital Corp. Background Catalyst Outcome NANA, an Alaska Native Regional Corporation, operates as a diversified holding company with (i) a Federal segment, which provides consulting services to the Federal Government, (ii) a Mining segment, which receives royalties from a zinc mine
Slide 7: RiceBran Technologies Corporation
© 2018 Great Elm Capital Corp. Background Catalyst Outcome Post our sale of RiceBran’s Revolver and Term Loan A in 2017, our sole exposure to this legacy Full Circle position was the company’s warrants In June and July 2018, RiceBran received several pieces of positive news, sending the company’s sh
Slide 8: Financial & Portfolio Review (Quarter Ended 9/30/2018)
© 2018 Great Elm Capital Corp. Financial & Portfolio Review (Quarter Ended 9/30/2018)
Slide 9: Financial Highlights: Per Share Data
© 2018 Great Elm Capital Corp. Financial Highlights: Per Share Data Q3/20173 Q4/20173 Q1/20183 Q2/20183 Q3/20183 Earnings Per Share (“EPS”) ($0.77) $0.47 ($0.38) $0.25 $0.46 Net Investment Income (“NII”) Per Share $0.32 $0.60 $0.36 $0.57 $0.25 Net Realized Gains / (Losses) Per Share $0.01 $0.02 $0.0
Slide 10: Financial Highlights: Portfolio
© 2018 Great Elm Capital Corp. Financial Highlights: Portfolio Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Capital Deployed $49.3 million $46.1 million $63.2 million $37.9 million $39.0 million Investments Monetized $18.9 million $39.7 million $29.1 million $27.7 million $38.0 million Total Fair Value o
Slide 11: Financial Review
© 2018 Great Elm Capital Corp. Financial Review Total investment income for the quarter ended September 30, 2018 was approximately $6.2 million, or $0.58 per share Net expenses for the quarter ended September 30, 2018 were approximately $3.5 million, or $0.33 per share Net investment income for the
Slide 12: Financial Review: Quarterly Operating Results
© 2018 Great Elm Capital Corp. Financial Review: Quarterly Operating Results (6) The per share figures are based on a weighted average of the shares outstanding for the preceding quarter, except where such amounts need to be adjusted to be consistent with the financial highlights of our consolidated
Slide 13: Portfolio Highlights: Quarter Ended 9/30/2018
© 2018 Great Elm Capital Corp. Portfolio Highlights: Quarter Ended 9/30/2018 11.6% Weighted average current yield on portfolio8 93.6% Percentage of the portfolio (based on fair value of investments) invested in 1st lien and/or senior secured instruments $0.875 Weighted average dollar price of debt i
Slide 14: Portfolio Overview: Quarter Ended 9/30/2018
© 2018 Great Elm Capital Corp. Portfolio Overview: Quarter Ended 9/30/2018 29 Debt Investments $190.2 million Fair Value Invested in Debt Instruments 56.6% in Floating Rate Instruments (Based on % of Fair Value) 11.6%11 Weighted Average Current Yield 85.6% Of Invested Capital in Debt Instruments (10
Slide 15: Portfolio Activity: Quarter Ended 9/30/2018
© 2018 Great Elm Capital Corp. Portfolio Activity: Quarter Ended 9/30/2018 $39.0 million Capital deployed into eight investments, including two new companies, with a weighted average dollar price of $0.89 and a weighted average current yield of 10.99%12 $38.0 million Monetized (in part or full) 17 i
Slide 16: Portfolio Activity: New & Additional Investments
Portfolio Activity: New & Additional Investments © 2018 Great Elm Capital Corp. During Q3/2018, we made investments in six companies (two new, four existing), deploying approximately $21.1 million. A brief snapshot of these investments is as follows: This deployment activity does not include revolve
Slide 17: Portfolio Activity: New & Additional Investments
Portfolio Activity: New & Additional Investments © 2018 Great Elm Capital Corp. During Q3/2018, we made investments in six companies (two new, four existing), deploying approximately $21.1 million. A brief snapshot of these investments is as follows: This deployment activity does not include revolve
Slide 18: Portfolio Activity
© 2018 Great Elm Capital Corp. Portfolio Activity Q3/2017 Q4/2017 Q1/2018 Q2/2018 Q3/2018 Dollar Value of New Investments14 $49.3 million $49.1 million $63.2 million $37.9 million $39.0 million Weighted Average Price of New Debt Investments $0.96 $0.97 $0.99 $0.99 $0.89 Weighted Average Current Yiel
Slide 19: Portfolio Breakdown: Asset Type and Interest Rate Type
Portfolio Breakdown: Asset Type and Interest Rate Type ($ in Thousands) Portfolio by Asset Type Portfolio by Interest Rate Type Investments: Investments at Fair Value % of Total Portfolio 1st Lien / Senior Secured Debt $190,216 93.6% Unsecured Debt - 0.0% Equity / Other 13,037 6.4% Total Investments
Slide 20: Portfolio Breakdown: Asset Type
© 2018 Great Elm Capital Corp. Portfolio Breakdown: Asset Type (End of Period Investments - % of FMV)
Slide 21: Portfolio Breakdown: Interest Rate
© 2018 Great Elm Capital Corp. Portfolio Breakdown: Interest Rate (End of Period Investments - % of FMV)
Slide 22: Portfolio Breakdown: Industry
© 2018 Great Elm Capital Corp. Portfolio Breakdown: Industry Amounts in the above table do not include investments in short-term securities, including United States Treasury Bills and money market mutual funds.
Slide 23: Monetization of the Legacy Full Circle Assets
Monetization of the Legacy Full Circle Assets © 2018 Great Elm Capital Corp. In the two years since the Full Circle merger closed, we have been working diligently to monetize what was largely viewed as a challenged legacy portfolio, as evidenced by the steep discount to NAV at which Full Circle’s sh
Slide 24: Avanti: Update
Avanti: Update About Avanti: Avanti is a leading provider of satellite-enabled data communications services in Europe, the Middle East and Africa. Avanti’s satellites utilize Ka-band frequencies, enabling higher speed and volume at lower cost. Avanti markets its services across the following six mar
Slide 25: Subsequent Events (through November 9, 2018)
Subsequent Events (through November 9, 2018) © 2018 Great Elm Capital Corp. In October 2018, we purchased an additional $5.8 million of par value of PFS Holdings Corp. first lien term loan at a price of approximately 60% of par value In October 2018, we purchased approximately $2.0 million of par va
Slide 26: Capital Activity
© 2018 Great Elm Capital Corp. Capital Activity
Slide 27: Distribution Policy & Declared Distributions
© 2018 Great Elm Capital Corp. Distribution Policy & Declared Distributions (18) There can be no assurance that any such supplemental amounts will be received or realized, or even if received and realized, distributed or available for distribution. Past distributions are not indicative of future dis
Slide 28: Block Trade of MAST Shares
Block Trade of MAST Shares © 2018 Great Elm Capital Corp. On October 22, 2018, MAST Capital Management, LLC (“MAST”) executed a block trade whereby MAST sold all of its GECC shares held in one of its funds, totaling 2,276,279 shares. The fund managed by MAST received $7.55 per share Neither GECC nor
Slide 29: Appendix
© 2018 Great Elm Capital Corp. Appendix
Slide 30: 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 31: Appendix: Contact Information
Appendix: Contact Information © 2018 Great Elm Capital Corp. Investor Relations Meaghan K. Mahoney Senior Vice President 800 South Street, Suite 230 Waltham, MA 02453 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com