Great Elm Capital Corp. · NASDAQ:GECC
Great Elm Capital — Q1 2017 Earnings Presentation
24 slides from Great Elm Capital's earnings presentation, May 15, 2017
Slide 1: Investor Presentation – Quarter Ended March 31, 2017
Great Elm Capital Corp. (NASDAQ: GECC) Investor Presentation – Quarter Ended March 31, 2017 May 12, 2017 © 2017 Great Elm Capital Corp. Exhibit 99.2
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 distribution 1 Seek to generate both current income and capital appreciation, whi
Slide 4: Realized Investments (through May 10, 2017)
© 2017 Great Elm Capital Corp. Realized Investments (through May 10, 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 March 31, 2017
Slide 5: Optima Specialty Steel, Inc.
© 2017 Great Elm Capital Corp. Optima Specialty Steel, Inc. (“Optima”) Background Catalyst Outcome Optima’s 12.5% Senior Secured Notes due 12/15/2016 were a component of the MAST-contributed portfolio. These notes were contributed at a discount to par. Shortly after the merger closed, in December 20
Slide 6: Everi Payments, Inc.
© 2017 Great Elm Capital Corp. Everi Payments, Inc. (“Everi”) Background Catalyst Outcome Everi’s 10.0% Senior Unsecured Notes due 1/15/2022 were a component of the MAST-contributed portfolio. Approximately $12.3 million of the notes were contributed at a discount to par. On 3/14/2017, Everi reporte
Slide 7: Chester Downs & Marina LLC
© 2017 Great Elm Capital Corp. Chester Downs & Marina LLC (“Chester Downs”) Background Catalyst Outcome GECC purchased $6 million of Chester Downs’ 9.25% Senior Secured Bonds due 2/1/2020 during 4Q16 at a discount to par. On 3/31/2017, Chester Downs reported 4Q16 results, which were weaker year-over
Slide 8: Trilogy International, LLC
© 2017 Great Elm Capital Corp. Trilogy International, LLC (“Trilogy”) Background Catalyst Outcome $10 million of Trilogy’s 13.375% Senior Secured Notes due 5/15/2019 were a component of the MAST-contributed portfolio. These notes were contributed at a slight premium to par. Trilogy’s fundamentals we
Slide 9: JN Medical Corporation
© 2017 Great Elm Capital Corp. JN Medical Corporation (“JN Medical”) Background Catalyst Outcome JN Medical’s Libor + 11.0% Senior Secured Term Loan due 6/30/2016 was a component of the Full Circle portfolio that we acquired in our merger with Full Circle. This term loan was valued at a discount to
Slide 10: Financial & Portfolio Review (Quarter Ended 3/31/2017)
© 2017 Great Elm Capital Corp. Financial & Portfolio Review (Quarter Ended 3/31/2017)
Slide 11: Financial & Portfolio Highlights
© 2017 Great Elm Capital Corp. Financial & Portfolio Highlights Q4/2016 2 Q1/2017 Earnings Per Share (“EPS”) ($1.39) $0.27 Net Investment Income (“NII”) Per Share $0.00 $0.32 NII Per Share Excluding One-Time Merger / Formation Costs $0.28 N/A Net Realized Gains Per Share $0.02 $0.16 Net Unrealized L
Slide 12: Financial Review
© 2017 Great Elm Capital Corp. Financial Review Total investment income for the quarter ended March 31, 2017 was approximately $7.3 million, or $0.58 per share Net expenses for the quarter ended March 31, 2017 were approximately $3.2 million, or $0.26 per share Net investment income for the quarter
Slide 13: Financial Review - Quarter Ended 3/31/2017
© 2017 Great Elm Capital Corp. Financial Review - Quarter Ended 3/31/2017 In thousands Per Share 3 Total Investment Income $ 7,315 $ 0.58 Interest Income 4 6,826 0.54 Other Income 443 0.04 Net Operating Expenses 3,221 0.26 Management Fee 593 0.05 Incentive Fee 1,023 0.08 Total Advisory Fees 1,616 0.
Slide 14: Portfolio Highlights
© 2017 Great Elm Capital Corp. Portfolio Highlights 12.63% Weighted average current yield on portfolio; 94.0% of the portfolio (based on fair value of investments) invested in 1st lien and/or senior secured instruments 57.3% Percentage of NAV invested in our largest five positions, consistent with o
Slide 15: Portfolio Overview as of March 31, 2017
© 2017 Great Elm Capital Corp. Portfolio Overview as of March 31, 2017 23 Debt Investments $149.6 million Fair Value Invested in Debt Instruments 47% in Floating Rate Instruments 12.63% Weighted Average Current Yield 98.3% Of Invested Capital in Debt Instruments (94.0% in first lien / senior secured
Slide 16: Q1 Portfolio Activity
© 2017 Great Elm Capital Corp. Q1 Portfolio Activity $75.9 million Capital deployed into eight companies (two new, six existing) with a weighted average dollar price of $0.98 and a weighted average current yield of 12.29% 6 $78.8 million Monetized (in part or full) 17 investments, including the comp
Slide 17: 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 10.11%
Slide 18: Portfolio Breakdown by Industry
© 2017 Great Elm Capital Corp. Portfolio Breakdown by Industry
Slide 19: Subsequent Events (through May 10, 2017)
© 2017 Great Elm Capital Corp. Subsequent Events (through May 10, 2017) During April 2017, we sold our position in Chester Downs & Marina LLC for approximately $6.3 million, including accrued interest. We realized approximately $0.3 million in realized gains on the disposition of the investment Duri
Slide 20: Capital Activity
© 2017 Great Elm Capital Corp. Capital Activity
Slide 21: Distribution Policy & Declared Distributions
© 2017 Great Elm Capital Corp. Distribution Policy & Declared Distributions On March 29, 2017, we announced our Q2 distribution amount and schedule; we generated $0.32 in NII during the quarter, a 1.3x distribution coverage On May 12, 2017, we announced our Q3 distribution amount and schedule: We in
Slide 22: 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 23: Contact Information
Contact Information © 2017 Great Elm Capital Corp. Investor Relations Meaghan K. Mahoney Senior Vice President 200 Clarendon Street, 51st Floor Boston, MA 02116 Phone: +1 (617) 375-3006 investorrelations@greatelmcap.com
Slide 24: 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