Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q4 2019 Earnings Presentation
31 slides from Great Elm Capital's earnings presentation, Mar 24, 2020
Slide 1: Investor Presentation – Quarter Ended December 31, 2019
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation – Quarter Ended December 31, 2019 March 24, 2020 © 2020 Great Elm Capital Corp. Exhibit 99.1
Slide 2: Disclaimer
© 2020 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, total-return-focused BDC with a strong balance sheet Common stock trades as “GECC” on NASDAQ $0.083 per share monthly distribution1 Employees and affiliates of Great Elm Capital Management, Inc., GECC’s investment manage
Slide 4: Highlights and Recent Achievements
Highlights and Recent Achievements A portion of our second quarter 2020 distributions will be paid in shares of our common stock in order to maximize our liquidity and further strengthen our balance sheet NII in excess of declared distributions every quarter since inception LTM total distribution yi
Slide 5: Portfolio Review (Quarter Ended 12/31/2019)
Portfolio Review (Quarter Ended 12/31/2019) © 2020 Great Elm Capital Corp.
Slide 6: Portfolio Review
Portfolio Review 10.8% Weighted average current yield on debt portfolio1 88.1% Percentage of the total portfolio (based on fair value of investments) invested in 1st lien and/or secured debt instruments $0.87 Weighted average dollar price of debt investments in the portfolio2 As of December 31, 2019
Slide 7: Portfolio Review (Continued)
Portfolio Review (Continued) 28 Debt Investments $174.1 million Fair Value Invested in Debt Instruments 72.7% in Floating Rate Instruments (Based on % of Fair Value) 10.8%1 Weighted Average Current Yield 88.1% Of Invested Capital in Debt Instruments (100% of fair value in first lien / secured) 7 Equ
Slide 8: Portfolio Review: New & Additional Investments
Portfolio Review: New & Additional Investments During Q4 / 2019, we purchased four investments (two new, two existing), deploying approximately $12.0 million This deployment activity does not include revolver draws or PIK interest. Viasat, Inc. – Purchased approximately $2.0 million of receivables a
Slide 9: Portfolio Review: Asset Type and Interest Rate Type
Portfolio Review: Asset Type and Interest Rate Type Portfolio by Asset Type Portfolio by Interest Rate Type Weighted average fixed rate yield of 12.4%1 Weighted average floating rate yield of 10.3%1 (1) Weighted average fixed and floating rate current yield is based upon the stated coupon rate and f
Slide 10: Portfolio Review: Asset Type (End of Period Investments - % of FMV)
Portfolio Review: Asset Type (End of Period Investments - % of FMV) © 2020 Great Elm Capital Corp.
Slide 11: Portfolio Review: Interest Rate (End of Period Investments - % of FMV)
Portfolio Review: Interest Rate (End of Period Investments - % of FMV) © 2020 Great Elm Capital Corp.
Slide 12: Portfolio Review: Industry Breakdown
Portfolio Review: Industry Breakdown Amounts in the above table do not include investments in short-term securities, including United States Treasury Bills and money market mutual funds. © 2020 Great Elm Capital Corp. September 30, 2018 Investments at Fair Value Percentage of Fair Value Wireless Tel
Slide 13: Portfolio Review: Portfolio Rotation
Portfolio Review: Portfolio Rotation © 2020 Great Elm Capital Corp. Since inception, we have consistently monetized higher dollar priced investments and deployed capital into lower dollar priced investments, building total return In addition, substantially all new debt investments since inception ha
Slide 14: Portfolio Review: Portfolio Rotation (Continued)
Portfolio Review: Portfolio Rotation (Continued) Q4/2018 Q1/2019 Q2/2019 Q3/2019 Q4/2019 Dollar Value of New Investments1 $34.8 million $54.5 million $61.7 million $46.1 million $15.1 million Weighted Average Price of New Debt Investments $0.92 $0.97 $0.98 $0.97 $0.97 Weighted Average Current Yield
Slide 15: Subsequent Events (Through March 20, 2020)
Subsequent Events (Through March 20, 2020) © 2020 Great Elm Capital Corp.
Slide 16: Subsequent Events
Subsequent Events The first quarter of 2020 has been characterized by remarkable volatility in the leveraged credit markets, driven in part by the impact of the global Coronavirus outbreak and violent swings in commodity prices We believe we must take every opportunity to bolster liquidity in order
Slide 17: Subsequent Events (Continued)
Subsequent Events (Continued) In January and February: We bought $8.0 million of par value of Greenway Health, LLC secured revolving loan at 90% of par value We bought $5.4 million of par value of ASP Chromaflo Technologies secured term loan at approximately 98% of par value We bought $4.4 million o
Slide 18: Subsequent Events (Continued)
Subsequent Events (Continued) In January, February and March: We sold all $15.9 million of par value of Commercial Barge Line Company secured term loan at approximately 34% of par value We sold $4.0 million of par value of Finastra Group Holdings, Ltd. Secured term loan at 91% of par value We sold $
Slide 19: Financial Review (Quarter Ended 12/31/2019)
Financial Review (Quarter Ended 12/31/2019) © 2020 Great Elm Capital Corp.
Slide 20: Financial Review: Per Share Data
Financial Review: Per Share Data Q4/20181 Q1/20191 Q2/20191 Q3/20191 Q4/20191 Earnings Per Share (“EPS”) ($1.18) $0.76 ($0.43) ($0.96) ($0.16) Net Investment Income (“NII”) Per Share $0.25 $0.26 $0.29 $0.26 $0.25 Net Realized Gains / (Losses) Per Share $0.04 $0.06 $0.04 $0.02 $0.002 Net Unrealized G
Slide 21: Financial Review: Portfolio
Financial Review: Portfolio Q4/2018 Q1/2019 Q2/2019 Q3/2019 Q4/2019 Capital Deployed $34.8 million $54.5 million $61.7 million $46.1 million $15.1 million Investments Monetized $40.0 million $59.9 million $36.6 million $44.6 million $9.6 million Total Fair Value of Investments at Period End1 $184.2
Slide 22: Financial Review: Quarterly Operating Results
Financial Review: Quarterly Operating Results (1) 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 financial statements. (2) Tota
Slide 23: Capital Activity
Capital Activity © 2020 Great Elm Capital Corp.
Slide 24: Capital Activity: Distribution Policy & Declared Distributions
Capital Activity: Distribution Policy & Declared Distributions In December 2019, we announced a special distribution of $0.05 per share. Including the base distributions, our declared distributions to stockholders over the past 12 months totaled $1.05 per share, representing 12.1% on the December 31
Slide 25: Capital Activity: Distribution Yield as a Percentage of Market Value
Capital Activity: Distribution Yield as a Percentage of Market Value © 2020 Great Elm Capital Corp. * Partial period ** Annualized distribution yield is calculated by dividing the declared distribution by the closing price at quarter end and annualizing over four periods. The special distribution is
Slide 26: Capital Activity: Historical Distribution Coverage
Capital Activity: Historical Distribution Coverage © 2020 Great Elm Capital Corp. * Partial period ended December 31, 2016; Adjusted NII excludes one-time merger / formation costs. NII has covered the base distribution every quarter since inception
Slide 27: Summary
Summary © 2020 Great Elm Capital Corp.
Slide 28: Summary
Summary Earned or out-earned declared distributions every quarter since inception Declared a special distribution of $0.05 per share in December 2019, resulting in a LTM distribution yield of 12.1% on 12/31/2019 NAV and 13.4% on 12/31/2019 closing market value To date, 44 consecutive monthly base di
Slide 29: Appendix
Appendix © 2020 Great Elm Capital Corp.
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 Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com © 2020 Great Elm Capital Corp.