First Quarter and Other Recent Highlights:
- In
February 2024 , the Company raised$24 million of equity at Net Asset Value from a special purchase vehicle (“SPV”), supported by a$6 million investment byGreat Elm Group (“GEG”) into the SPV. - In
April 2024 , the Company issued$34.5 million of 8.50% notes due 2029 (the “GECCI Notes”) to further bolster liquidity and provide balance sheet flexibility. - Net investment income (“NII”) for the quarter ended
March 31, 2024 was$3.2 million , or$0.37 per share, as compared to$3.3 million , or$0.43 per share, for the quarter endedDecember 31, 2023 .- Fifth consecutive quarter of NII per share covering the base dividend.
- Net assets were
$118.8 million , or$12.57 per share, onMarch 31, 2024 , as compared to$98.7 million , or$12.99 per share, onDecember 31, 2023 .- NAV adversely impacted by
$0.55 per share in the quarter from write-downs on certain investments in illiquid assets originated by prior management.
- NAV adversely impacted by
- GECC’s asset coverage ratio improved to 180.2% as of
March 31, 2024 , as compared to 169.0% as ofDecember 31, 2023 , and 159.8% as ofMarch 31, 2023 .- Asset coverage ratio pro forma for April bond issuance of approximately 166.9%.
- The Board of Directors approved a quarterly dividend of
$0.35 per share for the second quarter of 2024, equating to a 13.5% annualized yield on the Company’s closing market price onMay 1, 2024 of$10.36 .
Management Commentary
“With 2024 underway, we were pleased to generate NII that covered the dividend for the fifth consecutive quarter,” said
Financial Highlights – Per Share Data
Q1/2023 | Q2/2023 | Q3/2023 | Q4/2023 | Q1/2024 | ||||||
Earnings Per Share (“EPS”) | ( | |||||||||
Net Investment Income (“NII”) Per Share | ||||||||||
Pre-Incentive Net Investment Income Per Share | ||||||||||
Net Realized and Unrealized Gains / (Losses) Per Share | ( | |||||||||
Net Asset Value Per Share at Period End | ||||||||||
Distributions Paid / Declared Per Share | ||||||||||
Portfolio and Investment Activity
As of
- 44 debt investments in corporate credit, totaling approximately
$184.5 million and representing 70.2% 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 comprised of 1 debt investment totaling approximately
$28.7 million and 1 equity investment totaling approximately$15.9 million and representing 10.9% and 8.1%, respectively, of the fair market value of the Company’s total investments. - 3 dividend paying equity investments, including our CLO investment, totaling approximately
$21.2 million , representing 8.1% of the fair market value of the Company’s total investments. - Other equity investments, totaling approximately
$12.5 million , representing 4.8% of the fair market value of the Company’s total investments.
As of
During the quarter ended
During the quarter ended
Financial Review
Total investment income for the quarter ended
Net realized and unrealized losses for the quarter ended
Liquidity and Capital Resources
As of
As of
Subsequent to quarter-end, the Company issued
Distributions
The Company’s Board of Directors has approved a quarterly cash distribution of
The distribution equates to a 13.5% annualized dividend yield on the Company’s closing market price on
Conference Call and Webcast
GECC will discuss these results in a conference call today at
Conference Call Details | ||
Date/Time: | ||
Participant Dial-In Numbers: | ||
( | 800-717-1738 | |
(International): | 646-307-1865 | |
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 conference call link here.
About
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. 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 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. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are: conditions in the credit markets, rising interest rates, 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
This press release does not constitute an offer of any securities for sale.
Endnotes:
(1) 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.
(2) 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
investorrelations@greatelmcap.com
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES Dollar amounts in thousands (except per share amounts) | ||||||||
Assets | ||||||||
Investments | ||||||||
Non-affiliated, non-controlled investments, at fair value (amortized cost of | $ | 218,060 | $ | 183,335 | ||||
Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of | 8,335 | 10,807 | ||||||
Affiliated investments, at fair value (amortized cost of | 214 | 1,067 | ||||||
Controlled investments, at fair value (amortized cost of | 44,586 | 46,210 | ||||||
Total investments | 271,195 | 241,419 | ||||||
Cash and cash equivalents | 334 | 953 | ||||||
Receivable for investments sold | 2,595 | 840 | ||||||
Interest receivable | 3,827 | 2,105 | ||||||
Dividends receivable | 763 | 1,001 | ||||||
Due from portfolio company | 38 | 37 | ||||||
Deferred financing costs | 311 | 335 | ||||||
Prepaid expenses and other assets | 64 | 135 | ||||||
Total assets | $ | 279,127 | $ | 246,825 | ||||
Liabilities | ||||||||
Notes payable (including unamortized discount of | $ | 140,469 | $ | 140,214 | ||||
Revolving credit facility | 5,000 | - | ||||||
Payable for investments purchased | 10,411 | 3,327 | ||||||
Interest payable | 37 | 32 | ||||||
Accrued incentive fees payable | 1,466 | 1,431 | ||||||
Distributions payable | - | 760 | ||||||
Due to affiliates | 1,560 | 1,195 | ||||||
Accrued expenses and other liabilities | 1,389 | 1,127 | ||||||
Total liabilities | $ | 160,332 | $ | 148,086 | ||||
Commitments and contingencies | $ | - | $ | - | ||||
Net Assets | ||||||||
Common stock, par value | $ | 94 | $ | 76 | ||||
Additional paid-in capital | 307,599 | 283,795 | ||||||
Accumulated losses | (188,898 | ) | (185,132 | ) | ||||
Total net assets | $ | 118,795 | $ | 98,739 | ||||
Total liabilities and net assets | $ | 279,127 | $ | 246,825 | ||||
Net asset value per share | $ | 12.57 | $ | 12.99 |
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Dollar amounts in thousands (except per share amounts) | ||||||||
For the Three Months Ended | ||||||||
2024 | 2023 | |||||||
Investment Income: | ||||||||
Interest income from: | ||||||||
Non-affiliated, non-controlled investments | $ | 5,987 | $ | 5,476 | ||||
Non-affiliated, non-controlled investments (PIK) | 630 | 449 | ||||||
Affiliated investments | 33 | 30 | ||||||
Controlled investments | 931 | 442 | ||||||
Controlled investments (PIK) | - | 233 | ||||||
Total interest income | 7,581 | 6,630 | ||||||
Dividend income from: | ||||||||
Non-affiliated, non-controlled investments | 386 | 318 | ||||||
Controlled investments | 385 | 616 | ||||||
Total dividend income | 771 | 934 | ||||||
Other commitment fees from non-affiliated, non-controlled investments | 525 | 802 | ||||||
Other income from: | ||||||||
Non-affiliated, non-controlled investments | 32 | 44 | ||||||
Total other income | 32 | 44 | ||||||
Total investment income | $ | 8,909 | $ | 8,410 | ||||
Expenses: | ||||||||
Management fees | $ | 940 | $ | 869 | ||||
Incentive fees | 798 | 710 | ||||||
Administration fees | 385 | 295 | ||||||
Custody fees | 36 | 22 | ||||||
Directors’ fees | 54 | 52 | ||||||
Professional services | 388 | 536 | ||||||
Interest expense | 2,807 | 2,821 | ||||||
Other expenses | 303 | 238 | ||||||
Total expenses | $ | 5,711 | $ | 5,543 | ||||
Net investment income before taxes | $ | 3,198 | $ | 2,867 | ||||
Excise tax | $ | 5 | $ | 28 | ||||
Net investment income | $ | 3,193 | $ | 2,839 | ||||
Net realized and unrealized gains (losses): | ||||||||
Net realized gain (loss) on investment transactions from: | ||||||||
Non-affiliated, non-controlled investments | $ | 2,356 | $ | 1,845 | ||||
Total net realized gain (loss) | 2,356 | 1,845 | ||||||
Net change in unrealized appreciation (depreciation) on investment transactions from: | ||||||||
Non-affiliated, non-controlled investments | (3,533 | ) | 2,781 | |||||
Affiliated investments | (850 | ) | 163 | |||||
Controlled investments | (1,624 | ) | 532 | |||||
Total net change in unrealized appreciation (depreciation) | (6,007 | ) | 3,476 | |||||
Net realized and unrealized gains (losses) | $ | (3,651 | ) | $ | 5,321 | |||
Net increase (decrease) in net assets resulting from operations | $ | (458 | ) | $ | 8,160 | |||
Net investment income per share (basic and diluted): | $ | 0.37 | $ | 0.37 | ||||
Earnings per share (basic and diluted): | $ | (0.05 | ) | $ | 1.07 | |||
Weighted average shares outstanding (basic and diluted): | 8,659,344 | 7,601,958 |
Source:
2024 GlobeNewswire, Inc., source