Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q4 2024 Earnings Presentation
36 slides from Great Elm Capital's earnings presentation, Mar 11, 2025
Slide 1: Investor Presentation Quarter Ended December 31, 2024
Investor Presentation Quarter Ended December 31, 2024 March 11, 2025 NASDAQ: GECC
Slide 2: Forward Looking Statement
Forward Looking Statement Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements include statements regarding our future business plans and expectations. These statements are often, but not a
Slide 3: Fourth Quarter 2024 Overview
Fourth Quarter 2024 Overview TII of $9.1 million in 4Q 24 vs $11.7 million in 3Q 24 • Uneven CLO JV distributions impacted TII in the quarter; GECC received CLO JV cash distributions of Investment $3.2 million in 3Q 24, $0.5 million in 4Q 24, and has received $3.8 million to date in 1Q 25 Income NII
Slide 4: Quarterly Cash Distributions Quarter Ending March 31, 2025
Quarterly Cash Distributions Quarter Ending March 31, 2025 March $0.37 31st 13.7% 12.6% Per Share Payable Date Annualized Dividend Annualized Dividend Yield on Stock Price Yield on NAV On December 16, 2024, the The first quarter 2025 The cash distribution The cash distribution Company announced that
Slide 5: Evolution & Growth of Great Elm
Evolution & Growth of Great Elm Over the Past Two Years (2023 & 2024) – Market Cap Doubled & NAV Increased by 60% – – Distributed $2.95 per Share of Cash to Shareholders – – Grew NAV per Share by $0.63 (+5.7%) from $11.16 to $11.79 – – Stock Generated 79% Total Return(1) – Focus on Cash Generation M
Slide 6: 5 Year NAV Bridge
5 Year NAV Bridge ($mm) 2023 + 2024: Upgrade Quality and Increase Scale 2022: New Management Repositions $48.7 $136.1 Business and Portfolio 2020 + 2021: Legacy Management $25.0 $19.4 $86.9 $3.9 $10.5 $38.9 $84.8 ($23.7) ($26.3) $9.4 $74.6 ($13.0) ($17.5) ($26.0) 12/31/19 NII Distrib. Asset Other 12
Slide 7: Growth + Cash Yield Enhancement
Growth + Cash Yield Enhancement Investable Assets ($mm)1 TII Yield2 $350 Cash Accretion + PIK 16.0% $300 14.0% $250 12.0% 10.0% $200 8.0% 6.0% $150 4.0% 2.0% $100 0.0% 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 1 Investible assets is calculated as such: Total Investments, excluding treasuries
Slide 8: About GECC
About GECC Great Elm Capital Corp. Investment Objective Portfolio Overview Externally managed, total-return- To generate current income and • $324.3 million of portfolio fair value focused BDC capital appreciation by investing • $136.1 million of net asset value (“NAV”) Significant insider ownership
Slide 9: GECC: $147mm of Equity & Debt Issued
GECC: $147mm of Equity & Debt Issued GECC issued $49mm of equity and $98mm of debt in 2024 In February 2024, issued 1.85 million shares at $12.97 (then-current NAV) for $24 million • GEG participated in $6 million of the $24 million; a strategic institutional investor participated in $49 million of
Slide 10: Total Investment Income (TII)
Total Investment Income (TII) TII for the quarter ended December 31, 2024 was $9.1 million, compared to $11.7 million for the quarter ended September 30, 2024 • Sequential decline in TII driven primarily by timing of distributions from the CLO JV $000s Cash Accretion + PIK $12,000 $10,000 $8,000 $6,
Slide 11: Net Investment Income (NII)
Net Investment Income (NII) NII for the quarter ended December 31, 2024 was $2.1 million, or $0.20 per share1, compared to NII of $4.1 million, or $0.39 per share1, for the quarter ended September 30, 2024 • Decline in NII driven by CLO JV distribution timing and certain isolated financing charges r
Slide 12: 4Q 2024 NAV Per Share Bridge
4Q 2024 NAV Per Share Bridge Net assets were approximately $11.79 per share1 ($136.1 million) on December 31, 2024, as compared to $12.04 per share1 ($125.8 million) on September 30, 2024. $0.20 $12.04 ($0.35) $11.79 ($0.05) ($0.03) ($0.02) 9/30/24 NAV 4Q24 NII 4Q24 Regular 4Q24 Special Net Realized
Slide 13: Q4 2024 Portfolio Review
Q4 2024 Portfolio Review March 11, 2025 ©2025 Great Elm Capital Corp. 13
Slide 14: Total Quarter End Portfolio Detail
Total Quarter End Portfolio Detail1 Debt Investments 96.1%2 $235.4 72.6% 52 Weighted million Of Portfolio 12.4%2 Debt Average Price as Weighted Average Current Fair Value of in Debt Investments % of Par Investments Yield of Debt Investments Debt Investments Equity Investments Fair Value % of Portfol
Slide 15: Portfolio Asset Mix
Portfolio Asset Mix End of Period Investments1 12/31/20242 $332.0 $322.9 5% $288.2 7% 7% 11% 3% 3% $258.2 7% 4% 1L 5% 4% $236.4 $235.3 $230.6 5% 12% $226.9 5% 4% 5% 10% 2L 3% 3% 3% 3% 3% 3% 6% 10% 3% 4% Specialty Finance 5% 11% 8% 7% 13% 13% 12% 12% 17% 16% 22% 23% 7% 7% CLO JV 23% 52% 25% 9% 8% Uns
Slide 16: Total Quarter End Asset Mix
Total Quarter End Asset Mix Portfolio by Asset Type ($322.9mm)1 Debt Investments by Rate Type ($235.4mm)1 Other Equity 7% Yielding Equity 3% Weighted CLO JV average fixed Fixed Rate 13% rate yield of 28% SF - Equity 11.3%2 Corporate Floating 4% Credit Rate SF - Debt 64% 72% Weighted average 9% float
Slide 17: Corporate Portfolio Overview
Corporate Portfolio Overview March 11, 2025 ©2025 Great Elm Capital Corp. 17
Slide 18: Corporate Portfolio Investment Mix Type
Corporate Portfolio1 Investment Mix Type ($mm) $255.5 6% $239.6 $215.4 10% $202.8 14% 4% 9% $178.3 6% 7% 6% 6% 5% 4% 7% 8% 9% 4% 7% 9% 11% 10% 16% 65% 71% 70% 67% 67% 4Q23 1Q24 2Q24 3Q24 4Q24 1L 2L Unsecured Yielding Equity Other Equity 1 Excludes fair value of non-accrual investments in the respect
Slide 19: Corporate Portfolio: Fixed and Floating Rate Exposure
Corporate Portfolio: Fixed and Floating Rate Exposure Portfolio by Rate Type1 12/31/2024 10% Weighted Average Value % of ($mm) Corp. Price Coupon Maturity CY Fixed Rate $35.2 15% 99.42 9.9% 1.8 yrs 10.0% Floating Rate $170.5 71% 94.78 12.2% 3.3 yrs 12.8% 18% Total Credit $205.7 86% 95.54 11.8% 3.1 y
Slide 20: Corporate Portfolio: Industry Breakdown
Corporate Portfolio1: Industry Breakdown December 31, 2024 Percentage of Fair Value Industry Investments at Fair Value ($ in 000s) % of Fair Value Technology $29,812 12.4% Technology Transportation Equipment Mfg $26,141 10.9% 12% 12.4% Transportation Equipment Mfg Chemicals $26,131 10.9% Chemicals 2
Slide 21: CLO Joint Venture Overview
CLO Joint Venture Overview March 11, 2025 ©2025 Great Elm Capital Corp. 21
Slide 22: CLO Formation JV, LLC ("CLO JV")
CLO Formation JV, LLC ("CLO JV") Innovative Structure for Financing 1st Lien Loans and Holding CLO Investments • CLO JV holds majority positions in CLO Subordinated Notes (colloquially referred to as CLO Equity) • Provides GECC exposure to diverse portfolio of broadly syndicated first lien loans Ove
Slide 23: CLO JV Portfolio Composition
CLO JV Portfolio Composition Combined underlying CLO portfolios S&P Ratings Distribution CLO Underlying Asset Mix 1% 2% 0.6% 0.6% 2.3% 16.6% 71.9% 98% A BBB BB B CCC 1st Lien 2nd Lien Unsecured March 11, 2025 ©2025 Great Elm Capital Corp. 23
Slide 24: CLO Issuer Concentration
CLO Issuer Concentration Top 10 Issuers represent 9.5% of the combined CLOs, with no single issuer representing > 1.2% weighting Aggregate Issuer Concentration Sector Composition Issuer Total Exposure % Weighting Diversified Financials Tenneco $11,666,971 1.2% Chemicals Gray Television 10,958,707 1.
Slide 25: Great Elm Specialty Finance
Great Elm Specialty Finance March 11, 2025 ©2025 Great Elm Capital Corp. 25
Slide 26: Specialty Finance Overview
Specialty Finance Overview The Specialty Finance Platform Operates Across the “Continuum of Lending” Equity ownership in Specialty Finance Companies (SFCs) generates two levels of proprietary investment exposure for investors: • We believe direct investments in SFCs are largely uncorrelated to the b
Slide 27: Great Elm Specialty Finance
Great Elm Specialty Finance Great Elm Specialty Finance (“GESF”) is a subsidiary of GECC formed to oversee Specialty Finance investments and all future specialty finance acquisitions, strategic partnerships, and direct origination opportunities • GESF oversees existing platforms – shaded below • In
Slide 28: GESF: Prestige Capital
GESF: Prestige Capital Provider of “spot factoring” services, providing clients with opportunities to sell individual accounts receivable for upfront payments Functional Risk Management Prestige purchases the individual The combination of clients’ capital needs accounts receivable of creditworthy an
Slide 29: GESF: Great Elm Commercial Finance
GESF: Great Elm Commercial Finance (fka Sterling Commercial Credit) Provider of asset-based loans to small and middle market companies throughout the United States Direct Lending Solution Diversified Products Sterling provides short term, asset-based Sterling offers a variety of product types loans
Slide 30: GESF: Great Elm Healthcare Finance
GESF: Great Elm Healthcare Finance Repositioned in 1Q 25 to hold Healthcare related real estate assets • Building a robust pipeline of proprietary deal flow alongside ABL originations ate Great Elm Commercial Finance Robust Underwriting Nationwide Lending Focus • Asset driven focus Industries: • Emp
Slide 31: Q4 2024 Financial Review
Q4 2024 Financial Review March 11, 2025 ©2025 Great Elm Capital Corp. 31
Slide 32: Financial Review: Per Share Data
Financial Review: Per Share Data Financial Highlights – Per Share Data 4Q 23 1Q 24 2Q 24 3Q 24 4Q 24 Earnings Per Share (“EPS”) $0.55 ($0.05) ($0.14) $0.33 $0.17 Net Investment Income (“NII”) $0.43 $0.37 $0.32 $0.39 $0.20 Per Share Pre-Incentive NII Per Share $0.54 $0.46 $0.40 $0.49 $0.20 Net Realiz
Slide 33: Financial Review: Quarterly Operating Results
Financial Review: Quarterly Operating Results 4Q 2023 1Q 2024 2Q 2024 3Q 2024 4Q 2024 $ in $000s Per Share1 Per Share1 Per Share1 Per Share1 Per Share1 Total Investment Income $9,161 $1.20 $8,909 $1.03 $9,548 $1.00 $11,727 $1.12 $9,139 $0.85 Interest Income 7,704 1.01 7,581 0.88 7,763 0.81 8,121 0.7
Slide 34: Financial Review: Portfolio
Financial Review: Portfolio Financial Highlights - Portfolio 4Q 23 1Q 24 2Q 24 3Q 24 4Q 24 Capital Deployed $29.9 million $64.2 million $108.9 million $73.6 million $47.2 million Investments Monetized $36.2 million $28.9 million $72.4 million $39.1 million $57.5 million Total Fair Value of Investmen
Slide 35: General Risks
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 risk. In
Slide 36: Contact Information
Contact Information Media & Investor Contact: Investors Relations investorrelations@greatelmcap.com March 11, 2025 ©2025 Great Elm Capital Corp. 36