Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q2 2017 Earnings Presentation
23 slides from Great Elm Capital's earnings presentation, Aug 14, 2017
Slide 1: Investor Presentation – Quarter Ended June 30, 2017
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation – Quarter Ended June 30, 2017 Exhibit 99.2 © 2017 Great Elm Capital Corp. August 14, 2017
Slide 2: Disclaimer
© 2017 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: About GECC
© 2017 Great Elm Capital Corp. About GECC GECC Investment Objective Investment Strategy Externally managed special situations-focused BDC Common stock trades as “GECC” and baby bonds as “FULLL” $0.083 per share monthly distribution1 Seek to generate both current income and capital appreciation, whil
Slide 4: Realized Investments (through August 11, 2017)
© 2017 Great Elm Capital Corp. Realized Investments (through August 11, 2017) Past performance is not indicative of future results. It should not be assumed that the realization of other positions will be profitable or equal the performance of the positions realized in the quarter ended June 30, 201
Slide 5: 310E53RD, LLC
© 2017 Great Elm Capital Corp. Background Catalyst Outcome 310E53RD, LLC’s 1st lien term loan was a component of the Full Circle portfolio that we acquired in our merger with Full Circle. The term loan was valued at a slight discount to par in the merger transaction and carried an L + 1,000 basis po
Slide 6: Tallage Adams, LLC
© 2017 Great Elm Capital Corp. Outcome The Tallage Adams senior secured loan was a component of the MAST-contributed portfolio. The loan was contributed at a premium to par and carried an L + 1,000 bps interest rate (with a LIBOR floor of 100 bps). Tallage Adams, a Massachusetts-based LLC, purchased
Slide 7: Financial & Portfolio Review (Quarter Ended 6/30/2017)
© 2017 Great Elm Capital Corp. Financial & Portfolio Review (Quarter Ended 6/30/2017)
Slide 8: Financial & Portfolio Highlights
© 2017 Great Elm Capital Corp. Financial & Portfolio Highlights Q4/20162 Q1/2017 Q2/2017 Earnings Per Share (“EPS”) ($1.39) $0.27 ($0.20) Net Investment Income (“NII”) Per Share $0.00 $0.32 $0.29 NII Per Share Excluding One-Time Merger / Formation Costs $0.28 N/A N/A Net Realized Gains Per Share $0.
Slide 9: Financial Review
© 2017 Great Elm Capital Corp. Financial Review Total investment income for the quarter ended June 30, 2017 was approximately $6.2 million, or $0.52 per share Net expenses for the quarter ended June 30, 2017 were approximately $2.8 million, or $0.24 per share Net investment income for the quarter en
Slide 10: Financial Review - Quarter Ended 6/30/2017
© 2017 Great Elm Capital Corp. Financial Review - Quarter Ended 6/30/2017 In thousands Per Share4 Total Investment Income $ 6,237 $ 0.52 Interest Income5 6,138 0.51 Dividend & Other Income 99 0.01 Net Operating Expenses 2,759 0.24 Management fees 546 0.05 Incentive fees 871 0.07 Total Investment Man
Slide 11: Portfolio Highlights - Quarter Ended 6/30/2017
© 2017 Great Elm Capital Corp. Portfolio Highlights - Quarter Ended 6/30/2017 13.17% Weighted average current yield on portfolio; 99.7% of the portfolio (based on fair value of investments) invested in 1st lien and/or senior secured instruments 62.1% Percentage of NAV invested in our largest five po
Slide 12: Portfolio Overview - Quarter Ended 6/30/2017
© 2017 Great Elm Capital Corp. Portfolio Overview - Quarter Ended 6/30/2017 20 Debt Investments $131.2 million Fair Value Invested in Debt Instruments 48.6% in Floating Rate Instruments 13.17% Weighted Average Current Yield 99.7% Of Invested Capital in Debt Instruments (100% of fair value in first l
Slide 13: Q2 Portfolio Activity
© 2017 Great Elm Capital Corp. Q2 Portfolio Activity $21.4 million Capital deployed into four companies (one new, three existing) with a weighted average dollar price of $0.99 and a weighted average current yield of 11.05%7 $37.6 million Monetized (in part or full) 13 investments, including the comp
Slide 14: Portfolio Breakdown by Asset Type and Interest Rate Type
© 2017 Great Elm Capital Corp. Portfolio Breakdown by Asset Type and Interest Rate Type Portfolio by Asset Type Portfolio by Interest Rate Type Weighted average fixed rate coupon of 10.09%
Slide 15: Portfolio Breakdown by Industry
© 2017 Great Elm Capital Corp. Portfolio Breakdown by Industry
Slide 16: Subsequent Events (through August 11, 2017)
Subsequent Events (through August 11, 2017) In July 2017, we purchased $5.0 million par value of Tru Taj, LLC bonds at a price of approximately 97% of par value. Such debt security bears interest at a rate of 12.00% and matures August 15, 2021 In July and August, we purchased an additional $5.0 mill
Slide 17: Capital Activity
© 2017 Great Elm Capital Corp. Capital Activity
Slide 18: Distribution Policy & Declared Distributions
© 2017 Great Elm Capital Corp. Distribution Policy & Declared Distributions On May 12, 2017, we announced our Q3 distribution amount and schedule; we generated $0.29 in NII per share during the quarter, a 1.16x distribution coverage. On August 8, 2017, we declared our monthly Q4 distribution amount
Slide 19: Stock Buyback Program & Self-Tender
© 2017 Great Elm Capital Corp. Stock Buyback Program & Self-Tender Post the closing of the merger in November 2016, we commenced our stock buyback program, executed through a 10b5-1 plan, to repurchase shares whenever they trade below 90% of the last published NAV Our Board of Directors approved $15
Slide 20: Stock Buyback Program & Self-Tender - Monthly Activity
© 2017 Great Elm Capital Corp. Stock Buyback Program & Self-Tender - Monthly Activity Month Total Number of Shares Purchased Average Price Per Share November 2016 16,030 $ 10.79 December 2016 82,142 $ 10.72 Total 2016 98,172 $ 10.73 January 2017 132,434 $ 11.48 February 2017 72,678 $ 11.26 March 201
Slide 21: Baby Bond Offering
© 2017 Great Elm Capital Corp. Baby Bond Offering On July 31, 2017, we filed a registration statement with the SEC for a baby bond offering to commence as early as September The intended use of proceeds is to pay off the currently callable 8.25% notes of 2020 (NASDAQ: FULLL) that were assumed in the
Slide 22: Contact Information
Contact Information © 2017 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
Slide 23: Appendix: General Risks
© 2017 Great Elm Capital Corp. 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 pri