Great Elm Capital Corp. Announces Second Quarter 2025 Financial Results

About this update from Great Elm Group, Inc.

Company to Host Conference Call and Webcast at 8:30 AM ET on August 5, 2025 PALM BEACH GARDENS, Fla. , Aug. 04, 2025 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (“we,” “our,” the “Company” or “GECC”) (NASDAQ: GECC), a business development company, today announced its financial results for the second quarter ended June 30, 2025 . Second Quarter and Other Recent Highlights Total investment income (“TII”) for the quarter ended June 30, 2025 was a record $14.3 million . Highest cash generative quarter in GECC’s history, with cash income comprising over 90% of TII. Net investment income (“NII”) for the quarter ended June 30, 2025 was $5.9 million , or $0.51 per share, as compared to $4.6 million , or $0.40 per share, for the quarter ended March 31, 2025 . Increase in NII primarily driven by a distribution on preference shares in an insurance-related investment as well as from higher income on CLO investments. GECC received $4.3 million of cash distributions from the CLO JV in the quarter ended June 30, 2025 , as compared to $3.8 million in the quarter ended March 31, 2025 . Net assets were $140.0 million , or $12.10 per share, on June 30, 2025 , as compared to $132.3 million , or $11.46 per share, on March 31, 2025 . Increase in net asset value (“NAV”) primarily driven by unrealized gains on a CoreWeave related investment as well as NII exceeding the quarterly distribution by 38%, or $0.14 per share. GECC’s asset coverage ratio was 169.5% as of June 30, 2025 , as compared to 163.8% as of March 31, 2025 . The Board of Directors approved a quarterly dividend of $0.37 per share for the third quarter of 2025, equating to a 13.5% annualized yield on GECC’s August 1, 2025 closing price of $10.98 . Management Commentary “We continued our strong momentum in 2025 with a standout second quarter, generating record total investment income and NII that exceeded our recently increased quarterly distribution. Our substantial NII this quarter was driven by robust cash generation, including a strong distribution from preference shares in an insurance related investment and continued solid performance from our CLO JV,” said Matt Kaplan , GECC’s Chief Executive Officer. “NAV also improved meaningfully in the quarter, benefitting from unrealized gains on our CoreWeave related investment. Looking ahead, while we expect third quarter NII will step down due to the uneven cadence of cash flows from our CLO JV, we remain well-positioned for our NII to exceed our distribution for the full year. We will continue to closely monitor the macro environment and seek to deploy capital into opportunities offering compelling risk-adjusted returns, with a focus on driving lasting value for our shareholders.” Financial Highlights – Per Share Data Q2/2024 Q3/2024 Q4/2024 Q1/2025 Q2/2025 Earnings Per Share (“EPS”) ( $0.14 ) $0.33 $0.17 $0.04 $1.02 Net Investment Income (“NII”) Per Share $0.32 $0.39 $0.20 $0.40 $0.51 Pre-Incentive Net Investment Income Per Share $0.40 $0.49 $0.20 $0.50 $0.64 Net Realized and Unrealized Gains / (Losses) Per Share ( $0.46 ) ( $0.06 ) ( $0.03 ) ( $0.36 ) $0.51 Net Asset Value Per Share at Period End $12.06 $12.04 $11.79 $11.46 $12.10 Distributions Paid / Declared Per Share $0.35 $0.35 $0.40 $0.37 $0.37 Portfolio and Investment Activity As of June 30, 2025 , GECC held total investments of $335.1 million at fair value, as follows: 55 debt investments in corporate credit, totaling approximately $197.3 million , representing 58.9% of the fair market value of the Company’s total investments. Secured debt investments comprised a substantial majority of the fair market value of the Company’s debt investments. An investment in Great Elm Specialty Finance, totaling approximately $36.4 million , comprised of one debt investment of $23.9 million and one equity investment of $12.4 million , representing 7.1% and 3.7%, respectively, of the fair market value of the Company’s total investments. CLO investments, totaling approximately $55.4 million , representing 16.5% of the fair market value of the Company’s total investments. Three dividend paying equity investments, totaling approximately $8.4 million , representing 2.5% of the fair market value of the Company’s total investments. Other equity investments, totaling approximately $37.5 million , representing 11.2% of the fair market value of the Company’s total investments. As of June 30, 2025 , the weighted average current yield on the Company’s debt portfolio was 12.5%(1). Floating rate instruments comprised approximately 73% of the fair market value of debt investments (comparable to last quarter) and the Company’s fixed rate debt investments had a weighted average maturity of 2.8 years. During the quarter ended June 30, 2025 , we deployed approximately $22.6 million into 26 investments(2) at a weighted average current yield of 14.1%. During the quarter ended June 30, 2025 , we monetized, in part or in full, 38 investments for approximately $35.0 million (3), at a weighted average current yield of 11.1%. Monetizations include $21.5 million of mandatory debt paydowns and redemptions at a weighted average current yield of 11.4%. Financial Review Total investment income for the quarter ended June 30, 2025 was $14.3 million , or $1.24 per share. Total expenses for the quarter ended June 30, 2025 were approximately $8.4 million , or $0.72 per share, inclusive of excise tax expense. Net realized and unrealized gains for the quarter ended June 30, 2025 were approximately $5.8 million , or $0.51 per share. Liquidity and Capital Resources As of June 30, 2025 , cash and money market fund investments totaled approximately $4.4 million . In addition, GECC had availability of $19.0 million under its $25.0 million revolving line of credit (the “Revolver”) with $6.0 million drawn as of June 30, 2025 . As of June 30, 2025 , total debt outstanding (par value) was $201.4 million , comprised of 5.875% senior notes due June 2026 (NASDAQ: GECCO), 8.75% senior notes due September 2028 (NASDAQ: GECCZ), 8.50% senior notes due April 2029 (NASDAQ: GECCI), 8.125% senior notes due December 2029 (NASDAQ: GECCH), and $6.0 million outstanding on the $25.0 million Revolver. Distributions The Company’s Board of Directors has approved a quarterly cash distribution of $0.37 per share for the quarter ending September 30, 2025 . The third quarter distribution will be payable on September 30, 2025 to stockholders of record as of September 15, 2025 . The distribution equates to a 13.5% annualized dividend yield on the Company’s closing market price on August 1, 2025 of $10.98 and a 12.2% annualized dividend yield on the Company’s June 30, 2025 NAV of $12.10 per share. Conference Call and Webcast GECC will discuss these results in a conference at 8:30 a.m. ET on August 5, 2025 . Conference Call Details Date/Time: Tuesday, August 5, 2025 – 8:30 a.m. ET Participant Dial-In Numbers: ( United States ): 877-407-0789 (International): 201-689-8562 To access the call, please dial-in approximately five minutes before the start time and, when asked, provide the operator with passcode “GECC”. An accompanying slide presentation will be available in pdf format via the “Events and Presentations” section of Great Elm Capital Corp.’s website here after the issuance of the earnings release. Webcast The call and presentation will also be simultaneously webcast over the internet via the “Events and Presentations” section of GECC’s website or by clicking on the webcast link here . About Great Elm Capital Corp. GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses and CLOs. For additional information, please visit http://www.greatelmcc.com . Cautionary Statement Regarding Forward-Looking Statements 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 always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. The key factors that could cause actual results to differ materially from those projected in the forward-looking statements include, without limitation: conditions in the credit markets, our expected financings and investments, including interest rate volatility, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission . GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. This press release does not constitute an offer of any securities for sale. Endnotes: (1) Weighted average current yield is based upon the stated coupon rate and fair value of outstanding debt securities at the measurement date and excludes two non-accrual investments with a fair value of $3.9 million as of 6/30/25. (2) This includes new deals, additional fundings (inclusive of those on revolving credit facilities), refinancings and capitalized PIK income. Amounts included herein do not include investments in short-term securities, including United States Treasury Bills. (3) This includes scheduled principal payments, prepayments, sales and repayments (inclusive of those on revolving credit facilities). Amounts included herein do not include investments in short-term securities, including United States Treasury Bills. Media & Investor Contact: Investor Relations [email protected] GREAT ELM CAPITAL CORP. CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited) Dollar amounts in thousands (except per share amounts) June 30, 2025 December 31, 2024 Assets Investments Non-affiliated, non-controlled investments, at fair value (amortized cost of $247,896 and $244,378 , respectively) $ 250,099 $ 240,958 Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of $68,216 and $8,448 , respectively) 68,206 8,448 Affiliated investments, at fair value (amortized cost of $12,378 and $12,378 , respectively) - - Controlled investments, at fair value (amortized cost of $93,284 and $87,014 , respectively) 84,954 83,304 Total investments 403,259 332,710 Cash and cash equivalents 960 - Receivable for investments sold 75 5,065 Interest receivable 3,279 3,306 Dividends receivable 853 364 Due from portfolio company 32 32 Due from affiliates 107 160 Deferred financing costs 188 237 Prepaid expenses and other assets 573 154 Total assets $ 409,326 $ 342,028 Liabilities Notes payable (including unamortized discount of $4,923 and $5,705 , respectively) $ 190,477 $ 189,695 Revolving credit facility 6,000 - Payable for investments purchased 66,144 11,194 Interest payable 79 32 Accrued incentive fees payable 3,636 1,712 Distributions payable - 577 Due to affiliates 1,500 1,385 Accrued expenses and other liabilities 1,458 1,320 Total liabilities $ 269,294 $ 205,915 Commitments and contingencies $ - $ - Net Assets Common stock, par value $0.01 per share (100,000,000 shares authorized, 11,568,378 shares issued and outstanding and 11,544,415 shares issued and outstanding, respectively) $ 116 $ 115 Additional paid-in capital 332,385 332,111 Accumulated losses (192,469 ) (196,113 ) Total net assets $ 140,032 $ 136,113 Total liabilities and net assets $ 409,326 $ 342,028 Net asset value per share $ 12.10 $ 11.79 GREAT ELM CAPITAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Dollar amounts in thousands (except per share amounts) For the Three Months Ended June 30 , For the Six Months Ended June 30 , 2025 2024 2025 2024 Investment Income: Interest income from: Non-affiliated, non-controlled investments $ 6,560 $ 5,968 $ 12,962 $ 11,955 Non-affiliated, non-controlled investments (PIK) 644 811 1,255 1,441 Affiliated investments - 31 - 64 Controlled investments 765 953 1,718 1,884 Total interest income 7,969 7,763 15,935 15,344 Dividend income from: Non-affiliated, non-controlled investments 2,332 1,045 2,568 1,431 Controlled investments 3,904 525 7,280 910 Total dividend income 6,236 1,570 9,848 2,341 Other commitment fees from non-affiliated, non-controlled investments - 175 - 700 Other income from: Non-affiliated, non-controlled investments 72 40 815 72 Non-affiliated, non-controlled investments (PIK) - - 174 - Total other income 72 40 989 72 Total investment income $ 14,277 $ 9,548 $ 26,772 $ 18,457 Expenses: Management fees $ 1,278 $ 1,068 $ 2,550 $ 2,008 Incentive fees 1,470 764 2,620 1,562 Administration fees 383 396 738 781 Custody fees 37 36 75 72 Directors’ fees 53 54 106 108 Professional services 459 413 883 801 Interest expense 4,318 3,473 8,569 6,280 Other expenses 307 286 615 589 Total expenses $ 8,305 $ 6,490 $ 16,156 $ 12,201 Net investment income before taxes $ 5,972 $ 3,058 $ 10,616 $ 6,256 Excise tax $ 68 $ - $ 136 $ 5 Net investment income $ 5,904 $ 3,058 $ 10,480 $ 6,251 Net realized and unrealized gains (losses): Net realized gain (loss) on investment transactions from: Non-affiliated, non-controlled investments $ 459 $ 155 $ 723 $ 2,511 Affiliated investments - (625 ) - (625 ) Total net realized gain (loss) 459 (470 ) 723 1,886 Net change in unrealized appreciation (depreciation) on investment transactions from: Non-affiliated, non-controlled investments 7,679 (3,856 ) 5,613 (7,389 ) Affiliated investments - 827 - (23 ) Controlled investments (2,299 ) (885 ) (4,620 ) (2,509 ) Total net change in unrealized appreciation (depreciation) 5,380 (3,914 ) 993 (9,921 ) Net realized and unrealized gains (losses) $ 5,839 $ (4,384 ) $ 1,716 $ (8,035 ) Net increase (decrease) in net assets resulting from operations $ 11,743 $ (1,326 ) $ 12,196 $ (1,784 ) Net investment income per share (basic and diluted): $ 0.51 $ 0.32 $ 0.91 $ 0.69 Earnings per share (basic and diluted): $ 1.02 $ (0.14 ) $ 1.06 $ (0.20 ) Weighted average shares outstanding (basic and diluted): 11,556,857 9,551,037 11,550,739 9,105,190 Source: Great Elm Capital Corp.

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