Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q1 2018 Earnings Presentation
29 slides from Great Elm Capital's earnings presentation, May 9, 2018
Slide 1: Investor Presentation – Quarter Ended March 31, 2018
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation – Quarter Ended March 31, 2018 May 9, 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 May 8, 2018)
© 2018 Great Elm Capital Corp. Realized Investments (through May 8, 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 March 31, 2018 a
Slide 5: PR Wireless realized investment
© 2018 Great Elm Capital Corp. Background Catalyst Outcome The PR Wireless first lien term loan was a legacy Full Circle Capital Corporation (“Full Circle”) investment. Given GECC’s special situations, total return investment focus, GECM increased its exposure to this investment as the loan traded a
Slide 6: Financial & Portfolio Review (Quarter Ended 3/31/2018)
© 2018 Great Elm Capital Corp. Financial & Portfolio Review (Quarter Ended 3/31/2018)
Slide 7: Financial Highlights: Per Share Data
© 2018 Great Elm Capital Corp. Financial Highlights: Per Share Data Q1/20173 Q2/20173 Q3/20173 Q4/20173 Q1/20183 Earnings Per Share (“EPS”) $0.27 $(0.20) ($0.77) $0.47 ($0.38) Net Investment Income (“NII”) Per Share $0.32 $0.29 $0.32 $0.60 $0.36 NII Per Share Excluding One-Time Merger / Formation Co
Slide 8: Financial Highlights: Portfolio
© 2018 Great Elm Capital Corp. Financial Highlights: Portfolio Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Capital Deployed $73.3 million $17.9 million $49.3 million $46.1 million $63.2 million Investments Monetized $78.8 million $37.6 million $18.9 million $39.7 million $29.1 million Total Fair Value o
Slide 9: Financial Review
© 2018 Great Elm Capital Corp. Financial Review Total investment income for the quarter ended March 31, 2018 was approximately $7.5 million, or $0.70 per share Net expenses for the quarter ended March 31, 2018 were approximately $3.6 million, or $0.34 per share Net investment income for the quarter
Slide 10: 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 11: Portfolio Highlights: Quarter Ended 3/31/2018
© 2018 Great Elm Capital Corp. Portfolio Highlights: Quarter Ended 3/31/2018 14.8% Weighted average current yield on portfolio8 99.8% Percentage of the portfolio (based on fair value of investments) invested in 1st lien and/or senior secured instruments $0.73 Weighted average dollar price of debt in
Slide 12: Portfolio Overview: Quarter Ended 3/31/2018
© 2018 Great Elm Capital Corp. Portfolio Overview: Quarter Ended 3/31/2018 30 Debt Investments $194.3 million Fair Value Invested in Debt Instruments 54.4% in Floating Rate Instruments 14.8%11 Weighted Average Current Yield 99.8% Of Invested Capital in Debt Instruments (100% of fair value in first l
Slide 13: Portfolio Activity: Quarter Ended 3/31/2018
© 2018 Great Elm Capital Corp. Portfolio Activity: Quarter Ended 3/31/2018 $63.2 million Capital deployed into 13 investments (seven new investments, six additional investments) with a weighted average dollar price of $0.99 and a weighted average current yield of 10.2%12 $29.1 million Monetized (in
Slide 14: Portfolio Activity: New Investments
Portfolio Activity: New Investments Almonde, Inc. – acquired $10.0 million face value of this second lien loan of 2025 in the secondary market at a price of 99.5% of par value; this loan bears interest at a rate of LIBOR + 7.25% per annum with a LIBOR floor of 1.00% Aptean Holdings, Inc. – acquired
Slide 15: Portfolio Activity: Additional Investments
Portfolio Activity: Additional Investments International Wire Group Inc. – acquired an additional $4.5 million face value of this second lien bond in the secondary market at a price of 95.0% of par value Michael Baker International, LLC – acquired an additional approximately $4.5 million face value
Slide 16: Portfolio Activity
© 2018 Great Elm Capital Corp. Portfolio Activity Q1/2017 Q2/2017 Q3/2017 Q4/2017 Q1/2018 Dollar Value of New Investments14 $73.3 million $17.9 million $49.3 million $49.1 million $63.2 million Weighted Average Price of New Debt Investments $0.98 $0.99 $0.96 $0.97 $0.99 Weighted Average Current Yiel
Slide 17: Portfolio Breakdown: Asset Type and Interest Rate Type
Portfolio Breakdown: Asset Type and Interest Rate Type ($ in Thousands) Portfolio by Asset Type Portfolio by Interest Rate Type Investments: Investments at Fair Value % of Total Portfolio 1st Lien / Senior Secured Debt $194,308 99.8% Unsecured Debt - 0.0% Equity / Other 442 0.2% Total Investments at
Slide 18: Portfolio Breakdown: Asset Type
© 2018 Great Elm Capital Corp. Portfolio Breakdown: Asset Type (End of Period Investments - % of FMV)
Slide 19: Portfolio Breakdown: Interest Rate
© 2018 Great Elm Capital Corp. Portfolio Breakdown: Interest Rate (End of Period Investments - % of FMV)
Slide 20: 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 21: Monetization of the Legacy Full Circle Assets
Monetization of the Legacy Full Circle Assets © 2018 Great Elm Capital Corp. In the year and a half 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 Circl
Slide 22: Avanti: Update
Avanti: Update About Avanti: Avanti Communications Group plc (“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. It is a carrier’s ca
Slide 23: Subsequent Events (through May 8, 2018)
Subsequent Events (through May 8, 2018) © 2018 Great Elm Capital Corp. In April 2018, the senior secured term loan to PR Wireless was sold at par, resulting in a realized gain of approximately $800,000 In April 2018, we purchased an additional $1.8 million of par value of Aptean Holdings, Inc. secon
Slide 24: Capital Activity
© 2018 Great Elm Capital Corp. Capital Activity
Slide 25: Distribution Policy & Declared Distributions
© 2018 Great Elm Capital Corp. Distribution Policy & Declared Distributions On March 9, 2018, we declared our monthly Q2/2018 distribution amount and schedule; we generated $0.36 in NII per share during the quarter, a 1.45x distribution coverage (18) There can be no assurance that any such supplemen
Slide 26: Leverage
© 2018 Great Elm Capital Corp. Leverage On May 3, 2018 at the Annual Stockholders’ Meeting, a majority of stockholders approved the application of the modified minimum asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act of 1940, as amended, in accordance with the
Slide 27: Appendix
© 2018 Great Elm Capital Corp. Appendix
Slide 28: 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 29: 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