Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q3 2017 Earnings Presentation
20 slides from Great Elm Capital's earnings presentation, Nov 6, 2017
Slide 1: Investor Presentation – Quarter Ended September 30, 2017
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation – Quarter Ended September 30, 2017 November 6, 2017 © 2017 Great Elm Capital Corp. Exhibit 99.2
Slide 2: Disclaimer
© 2017 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: About GECC
© 2017 Great Elm Capital Corp. About GECC GECC Investment Objective Investment Strategy Externally managed, special situations-focused BDC Common stock trades as “GECC” and baby bonds as “GECCL” $0.083 per share monthly distribution1 To generate both current income and capital appreciation, while se
Slide 4: Financial & Portfolio Review (Quarter Ended 9/30/2017)
© 2017 Great Elm Capital Corp. Financial & Portfolio Review (Quarter Ended 9/30/2017)
Slide 5: Financial & Portfolio Highlights
© 2017 Great Elm Capital Corp. Financial & Portfolio Highlights Q4/20163 Q1/2017 Q2/2017 Q3/20175 Earnings Per Share (“EPS”) ($1.39) $0.27 ($0.20) ($0.77) Net Investment Income (“NII”) Per Share $0.00 $0.32 $0.29 $0.32 NII Per Share Excluding One-Time Merger / Formation Costs $0.28 N/A N/A N/A Net R
Slide 6: Financial Review
© 2017 Great Elm Capital Corp. Financial Review Total investment income for the quarter ended September 30, 2017 was approximately $6.5 million, or $0.58 per share Net expenses for the quarter ended September 30, 2017 were approximately $2.9 million, or $0.26 per share Net investment income for the
Slide 7: Financial Review - Quarter Ended 9/30/2017
© 2017 Great Elm Capital Corp. Financial Review - Quarter Ended 9/30/2017 In Thousands Per Share6 Total Investment Income7 $ 6,466 $ 0.58 Interest Income 6,347 0.57 Dividend & Other Income 119 0.01 Net Operating Expenses 2,896 0.26 Management fees 547 0.05 Incentive fees 890 0.08 Total Investment Ma
Slide 8: Portfolio Highlights - Quarter Ended 9/30/2017
© 2017 Great Elm Capital Corp. Portfolio Highlights - Quarter Ended 9/30/2017 13.4% 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 $0.705 Weighted average dollar price of debt
Slide 9: Portfolio Overview - Quarter Ended 9/30/2017
© 2017 Great Elm Capital Corp. Portfolio Overview - Quarter Ended 9/30/2017 24 Debt Investments $152.8 million Fair Value Invested in Debt Instruments 50.3% in Floating Rate Instruments 13.4%11 Weighted Average Current Yield 99.8% Of Invested Capital in Debt Instruments (100% of fair value in first
Slide 10: Portfolio Activity - Quarter Ended 9/30/2017
© 2017 Great Elm Capital Corp. Portfolio Activity - Quarter Ended 9/30/2017 $49.5 million Capital deployed into five companies (three new, two existing) with a weighted average dollar price of $0.96 and a weighted average current yield of 10.6%12 $18.9 million Monetized (in part or full) six investm
Slide 11: Portfolio Breakdown by Asset Type and Interest Rate Type
© 2017 Great Elm Capital Corp. Portfolio Breakdown by Asset Type and Interest Rate Type Portfolio by Asset Type Portfolio by Interest Rate Type Investments: Investments at Fair Value % of Total Portfolio 1st Lien / Senior Secured Debt $ 152,788 99.8% Unsecured Debt $ - 0.0% Equity / Other $ 349 0.2%
Slide 12: Portfolio Breakdown by Industry
© 2017 Great Elm Capital Corp. Portfolio Breakdown by Industry Investments at Fair Value Percentage of Total Portfolio Wireless Telecommunications Services $ 36,858 24.1% Building Cleaning and Maintenance Services $ 17,541 11.5% Metals & Mining $ 12,655 8.3% Chemicals $ 9,962 6.5% Retail $ 9,263 6.0
Slide 13: Subsequent Events (through November 3, 2017)
Subsequent Events (through November 3, 2017) © 2017 Great Elm Capital Corp. On October 20, 2017, the 2020 Notes that were assumed in the merger were redeemed in full In October 2017, the loans to Geo Specialty Chemicals, Inc. were extended to now mature on April 30, 2019 In October 2017, the DIP loa
Slide 14: Capital Activity
© 2017 Great Elm Capital Corp. Capital Activity
Slide 15: Distribution Policy & Declared Distributions
© 2017 Great Elm Capital Corp. Distribution Policy & Declared Distributions On August 8, 2017, we declared our monthly Q4/2017 distribution amount and schedule. We generated $0.32 in NII per share during the quarter, a 1.28x distribution coverage On November 2, 2017, we declared our monthly Q1/2018
Slide 16: Stock Buyback Program & Self-Tender
© 2017 Great Elm Capital Corp. Stock Buyback Program & Self-Tender Post the closing of the merger in November 2016, we commenced our stock buyback program, executed through a 10b5-1 plan, to repurchase shares whenever they trade below 90% of the last published NAV Our Board of Directors approved $15
Slide 17: Stock Buyback Program & Self-Tender - Monthly Activity
© 2017 Great Elm Capital Corp. Stock Buyback Program & Self-Tender - Monthly Activity Month Total Number of Shares Purchased Average Price Per Share November 2016 16,030 $ 10.79 December 2016 82,142 $ 10.72 Total 2016 98,172 $ 10.73 January 2017 132,434 $ 11.48 February 2017 72,678 $ 11.26 March 201
Slide 18: Baby Bond Offering
© 2017 Great Elm Capital Corp. Baby Bond Offering On July 31, 2017, we filed a registration statement with the SEC for a baby bond offering to commence as early as September. The intended use of proceeds was to pay off the callable 8.25% notes of 2020 (NASDAQ: FULLL) that were assumed in the merger
Slide 19: Contact Information
Contact Information © 2017 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
Slide 20: Appendix: General Risks
© 2017 Great Elm Capital Corp. 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 pri