Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q1 2021 Earnings Presentation
29 slides from Great Elm Capital's earnings presentation, May 7, 2021
Slide 1: Great Elm Capital Corp. Investor Presentation
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation Quarter Ended March 31, 2021 May 7, 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 42.5% of GECC’s outstanding
Slide 4: First Quarter 2021 Overview: Capital Deployment and Monetization
First Quarter 2021 Overview: Capital Deployment and Monetization ▪ During Q1 2021, deployed $43.9 million, excluding SPACs, into 21 investments at a Deployment of weighted average current yield of 9.85% and a weighted average price of 96% of par Capital ▪ Deployed approximately $14.5 million into SP
Slide 5: First Quarter 2021: Net Investment Income Analysis
First Quarter 2021: Net Investment Income (“NII”) Analysis ▪ NII for the quarter ended March 31, 2021 was approximately $1.5 million, or $0.06 per share(1), as compared to NII of $1.6 million or $0.07 per share for the quarter ended December 31, 2020 ▪ NII was impacted by slower than anticipated dep
Slide 6: Net Asset Value Change from December 31, 2020 to March 31, 2021
Net Asset Value Change from December 31, 2020 to March 31, 2021 Net Asset Value at December 31, 2020 $79,615 $3.46 Portfolio Company Realized / Unrealized Gain / Loss Per Share Avanti Communications Group plc - 2nd Lien Secured Bond $4,271 $0.18 TRU Taj, LLC - Common Equity $2,509 $0.11 Crestwood Eq
Slide 7: Investment Activity: New Investments (January 1 – May 6, 2021)
Investment Activity: New Investments (January 1 – May 6, 2021) Investment Activity: New Investments1* Par Amount Market Interest Current Current Portfolio Company Investment Description Maturity Cost Notes / Quantity Discount Rate Yield (%)2 Yield ($)2 First Brands, Inc. 2nd Lien Term Loan 3/31/2028
Slide 8: Specialty Finance Investments: Prestige Capital Finance, LLC
Specialty Finance Investments: Prestige Capital Finance, LLC ▪ Prestige(1) 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 F
Slide 9: Significant Mutual Benefits
Prestige Capital Finance, LLC – Taking Advantage of Opportunities Significant Mutual Benefits Greater access to capital allows Prestige to “Overflow” opportunities that would allow GECC to increase the size of the transactions it can participate in certain of Prestige’s larger factoring pursue, whic
Slide 10: New $25.0 Million Revolving Credit Facility With City National Bank
Ample Dry Powder New $25.0 Million Revolving Credit Facility With City National Bank 3 Year Term with a Maturity Date of 5/5/2024(1) Establishes a strategic relationship with a large money center bank LIBOR rate plus 3.50% (subject to a 1.00% floor) Significantly improves flexibility and GECC’s abil
Slide 11: Portfolio Review
Portfolio Review (Quarter Ended 3/31/2021) May 2021 © 2021 Great Elm Capital Corp. 11
Slide 12: Portfolio Review: Quarter End Portfolio Detail
Portfolio Review: Quarter End Portfolio Detail Debt Investments: 33 87.2% $135.5 million 70.0% 10.9%1 Debt Investments Weighted Fair Value of Debt Of Invested Capital in Weighted Average Average Dollar Investments Debt Investments Current Yield of Price of Debt Debt Investments Investments Equity In
Slide 13: Portfolio Review: Quarter End Asset Type and Interest Rate Type
Portfolio Review: Quarter End Asset Type and Interest Rate Type Portfolio by Asset Type ($MM) Portfolio by Interest Rate Type ($MM) Other SPACs Equity 5% ▪ Weighted Investments 9% average fixed rate yield of Yield- Generating 12.7%1 Equities Fixed Floating 16% Rate Rate Debt 49% 51% ▪ Weighted 70% a
Slide 14: Portfolio Review: Quarter End Industry Breakdown
Portfolio Review: Quarter End Industry Breakdown March 31, 2021 Investments at Percentage of Industry Fair Value Fair Value Wireless Telecommunications Services Wireless Telecommunications Services $ 38,178 19.72% Oil & Gas Oil & Gas 25,084 12.95% Restaurants Restaurants 18,906 9.76% Internet Media
Slide 15: Portfolio Review: Quarterly Investment Activity
Portfolio Review: Quarterly Investment Activity New Investments vs. Monetized Investments Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Dollar Value of New Investments1 $31.9 million $15.9 million $34.5 million $35.3 million $58.4 million Weighted Average Price of New Debt $0.99 $0.92 $0.91 $0.94 $0.96 In
Slide 16: SPAC Holdings: Understanding the Structure
SPAC Holdings: Understanding the Structure What is a Special Purpose Acquisition Company, or SPAC Newly formed corporation created for the purpose of raising capital in an IPO in anticipation of identifying and consummating a business combination. Pre-merger structure Investor Options Shareholders c
Slide 17: GECC SPAC Holdings: Strategy and Intention
GECC SPAC Holdings: Strategy and Intention SPAC Investments at 3/31/2021: 125 $10.0 million 5.2% 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
Slide 18: Financial Review
Financial Review (Quarter Ended 3/31/2021) May 2021 © 2021 Great Elm Capital Corp. 18
Slide 19: Financial Review: Per Share Data
Financial Review: Per Share Data Financial Highlights – Per Share Data Q1/20201 Q2/20201 Q3/20201 Q4/20201 Q1/20211 Earnings Per Share (“EPS”) ($3.33) $0.34 $0.72 ($0.43) $0.53 Net Investment Income (“NII”) $0.26 $0.09 $0.18 $0.07 $0.06 Per Share Net Realized Gains / (Losses) Per ($1.12) $0.09 ($0.0
Slide 20: Financial Review: Quarterly Operating Results
Financial Review: Quarterly Operating Results Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 $ in $000s Per Share1 Per Share1 Per Share1 Per Share1 Per Share1 Total Investment Income2 $6,429 $0.64 $4,768 $0.47 $5,951 $0.56 $5,749 $0.26 $5,295 $0.23 Interest Income 5,987 0.60 4,184 0.41 4,375 0.41 4,664 0.2
Slide 21: Financial Review: Portfolio
Financial Review: Portfolio Financial Highlights - Portfolio Q1/2020 Q2/2020 Q3/2020 Q4/2020 Q1/2021 Capital Deployed $31.9 million $15.9 million $34.5 million $35.3 million $58.4 million Investments Monetized $29.4 million $37.5 million $18.2 million $43.8 million $28.3 million Total Fair Value of
Slide 22: Summary
Summary May 2021 © 2021 Great Elm Capital Corp. 22
Slide 23: Capital Activity: Declared Quarterly Cash Distribution
Capital Activity: Declared Quarterly Cash Distribution ▪ GECC’s Board authorized the distribution for the quarter ending September 30, 2021 at $0.10 per share, with the record and payment dates to be set by the officers of GECC Distributions pursuant to authority granted by the Board ▪ The Board pre
Slide 24: 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 ▪ Solid Cash Balance comprised of secured loans, secured authorized for third quarter of 2021 ▪ New credit
Slide 25: Appendix
Appendix Financial Statements Balance Sheet General Risks Contact Information
Slide 26: Consolidated Statements of Operations
Consolidated Statements of Operations (unaudited) $ in $000s (except per share amounts) May 2021 © 2021 Great Elm Capital Corp. 26
Slide 27: Consolidated Statements of Assets and Liabilities
Consolidated Statements of Assets and Liabilities (unaudited) $ in $000s (except per share amounts) May 2021 © 2021 Great Elm Capital Corp. 27
Slide 28: 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 29: Contact Information
Contact Information Investor Relations 800 South Street, Suite 230 Waltham, MA 02453 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com Adam Prior The Equity Group Inc. +1 (212) 836-9606 aprior@equityny.com May 2021 © 2021 Great Elm Capital Corp. 29