Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q2 2018 Earnings Presentation
26 slides from Great Elm Capital's earnings presentation, Aug 10, 2018
Slide 1: Investor Presentation – Quarter Ended June 30, 2018
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation – Quarter Ended June 30, 2018 August 10, 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: Financial & Portfolio Review (Quarter Ended 6/30/2018)
© 2018 Great Elm Capital Corp. Financial & Portfolio Review (Quarter Ended 6/30/2018)
Slide 5: Financial Highlights: Per Share Data
© 2018 Great Elm Capital Corp. Financial Highlights: Per Share Data Q2/20173 Q3/20173 Q4/20173 Q1/20183 Q2/20183 Earnings Per Share (“EPS”) $(0.20) ($0.77) $0.47 ($0.38) $0.25 Net Investment Income (“NII”) Per Share $0.29 $0.32 $0.60 $0.36 $0.57 Net Realized Gains / (Losses) Per Share $0.11 $0.01 $0
Slide 6: Financial Highlights: Portfolio
© 2018 Great Elm Capital Corp. Financial Highlights: Portfolio Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Capital Deployed $17.9 million $49.3 million $46.1 million $63.2 million $37.9 million Investments Monetized $37.6 million $18.9 million $39.7 million $29.1 million $27.7 million Total Fair Value o
Slide 7: Financial Review
© 2018 Great Elm Capital Corp. Financial Review Total investment income for the quarter ended June 30, 2018 was approximately $7.2 million, or $0.67 per share Net expenses for the quarter ended June 30, 2018 were approximately $1.1 million, or $0.10 per share Net investment income for the quarter en
Slide 8: 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 9: Portfolio Highlights: Quarter Ended 6/30/2018
© 2018 Great Elm Capital Corp. Portfolio Highlights: Quarter Ended 6/30/2018 11.1% Weighted average current yield on portfolio8 93.0% Percentage of the portfolio (based on fair value of investments) invested in 1st lien and/or senior secured instruments $0.87 Weighted average dollar price of debt in
Slide 10: Portfolio Overview: Quarter Ended 6/30/2018
© 2018 Great Elm Capital Corp. Portfolio Overview: Quarter Ended 6/30/2018 29 Debt Investments $185.4 million Fair Value Invested in Debt Instruments 54.8% in Floating Rate Instruments (Based on % of Fair Value) 11.1%11 Weighted Average Current Yield 85.4% Of Invested Capital in Debt Instruments (10
Slide 11: Portfolio Activity: Quarter Ended 6/30/2018
© 2018 Great Elm Capital Corp. Portfolio Activity: Quarter Ended 6/30/2018 $37.9 million Capital deployed into eight investments with a weighted average dollar price of $0.99 and a weighted average current yield of 10.9%12 $27.7 million Monetized (in part or full) 12 investments at a weighted averag
Slide 12: Portfolio Activity: Additional Investments
Portfolio Activity: Additional Investments © 2018 Great Elm Capital Corp. Additional Investments During Q2/2018, we made investments in five companies (all existing portfolio companies), deploying approximately $13.8 million. A brief snapshot of these investments is as follows: This deployment activ
Slide 13: Portfolio Activity
© 2018 Great Elm Capital Corp. Portfolio Activity Q2/2017 Q3/2017 Q4/2017 Q1/2018 Q2/2018 Dollar Value of New Investments14 $17.9 million $49.3 million $49.1 million $63.2 million $37.9 million Weighted Average Price of New Debt Investments $0.99 $0.96 $0.97 $0.99 $0.99 Weighted Average Current Yiel
Slide 14: Portfolio Breakdown: Asset Type and Interest Rate Type
Portfolio Breakdown: Asset Type and Interest Rate Type ($ in Thousands) Portfolio by Asset Type Portfolio by Interest Rate Type Investments: Investments at Fair Value % of Total Portfolio 1st Lien / Senior Secured Debt $185,418 93.0% Unsecured Debt - 0.0% Equity / Other 13,971 7.0% Total Investments
Slide 15: Portfolio Breakdown: Asset Type
© 2018 Great Elm Capital Corp. Portfolio Breakdown: Asset Type (End of Period Investments - % of FMV)
Slide 16: Portfolio Breakdown: Interest Rate
© 2018 Great Elm Capital Corp. Portfolio Breakdown: Interest Rate (End of Period Investments - % of FMV)
Slide 17: 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 18: Monetization of the Legacy Full Circle Assets
Monetization of the Legacy Full Circle Assets © 2018 Great Elm Capital Corp. In the 21 months 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 19: 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. It is a carrier’s carrier, selling managed service whole
Slide 20: Subsequent Events (through August 8, 2018)
Subsequent Events (through August 8, 2018) © 2018 Great Elm Capital Corp. In July 2018, we purchased an additional $2 million of par value of Commercial Barge Line Company’s first lien term loan at a price of approximately 72% of par value In July 2018, we purchased $478 thousand of par value of PFS
Slide 21: Subsequent Events (through August 8, 2018)
Subsequent Events (through August 8, 2018) © 2018 Great Elm Capital Corp. In August 2018, we purchased an additional $2.65 million face value of SESAC HoldCo II LLC’s second lien loan in the secondary market at a price just below par In August 2018, we sold our entire position in Foresight Energy LP
Slide 22: Capital Activity
© 2018 Great Elm Capital Corp. Capital Activity
Slide 23: 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 24: Appendix
© 2018 Great Elm Capital Corp. Appendix
Slide 25: 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 26: 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