Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q3 2021 Earnings Presentation
26 slides from Great Elm Capital's earnings presentation, Nov 5, 2021
Slide 1: Investor Presentation: Quarter Ended September 30, 2021
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation Quarter Ended September 30, 2021 November 5, 2021 © 2021 Great Elm Capital Corp.
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 are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,”
Slide 3: About GECC
About GECC ▪ Externally managed, total-return-focused BDC ▪ Liquid balance sheet Great Elm Capital Corp. ▪ Directors of GECC, employees of GECM and officers and directors of GECM’s parent, including investment funds managed by directors of GECM’s parent, own approximately 37.0% of GECC’s outstanding
Slide 4: Third Quarter 2021 Overview: Capital Deployment and Monetization
Third Quarter 2021 Overview: Capital Deployment and Monetization Deployment of ▪ During Q3 2021, deployed $71.1 million, excluding SPACs, into 25 investments at a Capital weighted average current yield of 10.0% and a weighted average price of 99% of par ▪ During Q3 2021, monetized $30.0 million, exc
Slide 5: Third Quarter 2021: Net Investment Income Analysis
Third Quarter 2021: Net Investment Income (“NII”) Analysis ▪ NII for the quarter ended September 30, 2021 was approximately $1.6 million, or $0.07 per share(1), as compared to NII of $2.1 million or $0.09 per share for the quarter ended June 30, 2021 ▪ NII was impacted by certain one-time items prim
Slide 6: Net Asset Value Change from June 30, 2021 to September 30, 2021
Net Asset Value Change from June 30, 2021 to September 30, 2021 $ in $000s Net Asset Value at June 30, 2021 $91,667 $3.90 Portfolio Company Realized / Unrealized Gain / Loss Per Share Avanti Communications Group plc - 2nd Lien Secured Bond ($3,607) ($0.15) TRU Taj – Common Equity ($1,724) ($0.07) Cr
Slide 7: Investment Activity: New Investments (July 1 – October 29, 2021)
Investment Activity: New Investments (July 1 – October 29, 2021) $ in $000s Investment Activity: New Investments1* Par Amount Market Interest Current Current Portfolio Company Investment Description Maturity Cost / Quantity Discount Rate Yield (%)2 Yield ($)2 CURO Group Holdings Corp 1st Lien Note 8
Slide 8: Specialty Finance Investments: Prestige Capital Finance, LLC
Specialty Finance Investments: Prestige Capital Finance, LLC ▪ Prestige is a leading provider of “spot factoring” services, providing clients with an opportunity to sell individual accounts receivable for an upfront payment Over 30 years in business and through Wide Assortment of $6+ billion of Func
Slide 9: Acquisition of Lenders Funding, LLC
Acquisition of Lenders Funding, LLC Private funding and risk sharing source for factors and asset-based lenders ▪ Purchases participations in factoring and asset-based lending transactions as well as provides working capital to customers under a variety of lending programs ▪ Founded by CEO Robert Za
Slide 10: Building a Specialty Finance Lending Ecosystem: Significant Mutual Benefits
Building a Specialty Finance Lending Ecosystem Significant Mutual Benefits Greater access to capital allows Prestige to Increases visibility into the broader specialty increase the size of the transactions it can finance market through relationships developed pursue, which may further enhance its gr
Slide 11: Meaningful Growth in Specialty Finance
Meaningful Growth in Specialty Finance GECC has increased its Specialty Finance allocation over the past 18 months and continues to build on the strategy of creating a portfolio of specialty finance solutions across the continuum of lending. 22.5% 19.7% 20.0% Specialty Finance as a % of Portfolio Fa
Slide 12: Investment Takeaways
Investment Takeaways Portfolio Distributions to Repositioning Moving Ample Liquidity Shareholders in Right Direction ▪ A diversified portfolio, primarily ▪ Cash distribution of $0.10 per share ▪ Credit facility provides ample capital comprised of secured loans, secured authorized for first quarter o
Slide 13: Portfolio Review
Portfolio Review (Quarter Ended 9/30/2021) November 2021 © 2021 Great Elm Capital Corp. 13
Slide 14: Portfolio Review: Quarter End Portfolio Detail
Portfolio Review: Quarter End Portfolio Detail Debt Investments: 46 92.1% $185.7 million 75.3% 11.3%1 Debt Investments Weighted Fair Value of Debt Of Invested Capital in Weighted Average Average Dollar Investments Debt Investments Current Yield of Price of Debt Debt Investments Investments Equity In
Slide 15: Portfolio Review: Quarter End Asset Type and Interest Rate Type
Portfolio Review: Quarter End Asset Type and Interest Rate Type Portfolio by Asset Type ($MM) Portfolio by Interest Rate Type ($MM) Other SPACs Equity Investments 4% ▪ Weighted Yield- 7% average fixed Generating rate yield of Equities 14% Floating 12.68%1 Rate Fixed 38% Rate ▪ Weighted Debt 75% 62%
Slide 16: Portfolio Review: Quarter End Industry Breakdown
Portfolio Review: Quarter End Industry Breakdown September 30, 2021 December 31, 2020 Industry by % of Fair Value at September 30, 2021 Investments at Percentage of Investments at Percentage of Industry Fair Value Fair Value Fair Value Fair Value Specialty Finance $ 48.5 19.67% $ 15.8 10.39% Special
Slide 17: Portfolio Review: Quarterly Investment Activity
Portfolio Review: Quarterly Investment Activity New Investments vs. Monetized Investments Q3/2020 Q4/2020 Q1/2021 Q2/2021 Q3/2021 Dollar Value of New Investments1 $34.5 million $35.3 million $58.4 million $49.9 million $71.1 million Weighted Average Price of New Debt $0.91 $0.94 $0.96 $0.98 $0.99 In
Slide 18: GECC SPAC Holdings
GECC SPAC Holdings SPAC Investments at 9/30/2021: 197 $9.3 million 3.8% Investments in Units, Total Market Value of Of Invested Capital in Warrants and SPAC Instruments SPAC Investments Common Stock Exit prior to Utilize bearing equity Identify Relationships risk Pre-IPO to Receive Opportunity to ge
Slide 19: Financial Review
Financial Review (Quarter Ended 9/30/2021) November 2021 © 2021 Great Elm Capital Corp. 19
Slide 20: Financial Review: Per Share Data
Financial Review: Per Share Data Financial Highlights – Per Share Data Q3/20201 Q4/20201 Q1/20211 Q2/20211 Q3/20211 Earnings Per Share (“EPS”) $0.72 ($0.43) $0.53 $0.11 ($0.13) Net Investment Income (“NII”) $0.18 $0.07 $0.06 $0.09 $0.07 Per Share Net Realized Gains / (Losses) Per ($0.02) $0.03 ($0.1
Slide 21: Financial Review: Quarterly Operating Results
Financial Review: Quarterly Operating Results Q3/2020 Q4/2020 Q1/2021 Q2/2021 Q3/2021 $ in $000s Per Share1 Per Share1 Per Share1 Per Share1 Per Share1 Total Investment Income2 $5,951 $0.56 $5,749 $0.26 $5,295 $0.23 $6,233 $0.27 $7,373 $0.31 Interest Income 4,375 0.41 4,664 0.21 4,179 0.18 5,092 0.2
Slide 22: Financial Review: Portfolio
Financial Review: Portfolio Financial Highlights - Portfolio Q3/2020 Q4/2020 Q1/2021 Q2/2021 Q3/2021 Capital Deployed $34.5 million $35.3 million $58.4 million $49.9 million $71.1 million Investments Monetized $18.2 million $43.8 million $28.3 million $35.5 million $30.0 million Total Fair Value of
Slide 23: Summary
Summary November 2021 © 2021 Great Elm Capital Corp. 23
Slide 24: Capital Activity: Declared Quarterly Cash Distribution
Capital Activity: Declared Quarterly Cash Distribution ▪ GECC’s Board authorized the distribution for the quarter ending March 31, 2022 at $0.10 Distributions per share, with the record and payment dates to be set by the officers of GECC pursuant to authority granted by the Board On an annualized ba
Slide 25: 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 26: Contact Information
Contact Information Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 investorrelations@greatelmcap.com Adam Prior The Equity Group Inc. +1 (212) 836-9606 aprior@equityny.com November 2021 © 2021 Great Elm Capital Corp. 26