Great Elm Capital Corp. Announces Second Quarter 2023 Financial Results
Second Quarter and Other Recent Highlights:
- Net investment income (“NII”) for the quarter ended
June 30, 2023grew 19% to $3.4 million, or $0.44per share, as compared to $2.8 million, or $0.37per share, for the quarter ended March 31, 2023.
- Second consecutive quarter of NII more than covering the dividend.
- NII growth was driven by strategic capital deployment and rotation into higher-yielding, secured floating rate investments.
- Highest cash income quarter in the Company’s history, with only 13% of GECC’s
$9.0 millionTotal Investment Income attributable to PIK and accretion income.
- Net assets were
$92.9 million, or $12.21per share, on June 30, 2023, as compared to $90.3 million, or $11.88per share, on March 31, 2023, and $97.6 million, or $12.84per share, on June 30, 2022.
- GECC’s asset coverage ratio was approximately 161.5% as of
June 30, 2023, as compared to 159.8% as of March 31, 2023, and 166.9% as of June 30, 2022.
- The Board of Directors approved a quarterly dividend of
$0.35per share for the third quarter of 2023, equating to a 16.7% annualized yield on the Company’s closing market price on August 2, 2023of $8.37.
“We are very pleased with our second quarter performance, as we generated another quarter of record total investment income, our NII once again exceeded our quarterly dividend and we grew NAV for the second consecutive quarter,” said
Financial Highlights – Per Share Data
|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
- 40 debt investments in corporate credit, totaling approximately
$167.9 millionand representing 71.0% 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.
- 8 debt investments in specialty finance, totaling approximately
$30.9 millionand representing 13.1% of the fair market value of the Company’s total investments.
- 4 equity investments in specialty finance companies, totaling approximately
$23.3 million, representing 9.8% of the fair market value of the Company’s total investments.
- 3 dividend paying equity investments, totaling approximately
$7.9 million, representing 3.3% of the fair market value of the Company’s total investments.
- Other equity investments, totaling approximately
$6.4 million, representing 2.7% of the fair market value of the Company’s total investments.
In July, GECC exited its entire equity and subordinated note investments in Lenders Funding at valuations consistent with the
During the quarter ended
During the quarter ended
Total investment income for the quarter ended
Net realized and unrealized gains for the quarter ended
Liquidity and Capital Resources
The Company’s Board of Directors has approved a quarterly cash distribution of
The distribution equates to a 16.7% 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|
|Participant Dial-In Numbers:|
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 “Investor Relations” section of Great Elm Capital Corp.’s website here after the issuance of the earnings release.
The call and presentation will also be simultaneously webcast over the internet via the “News & Events” section of GECC’s website or by clicking on the conference call link here.
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.
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.
(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:
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
Dollar amounts in thousands (except per share amounts)
|Non-affiliated, non-controlled investments, at fair value (amortized cost of
|Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of
|Affiliated investments, at fair value (amortized cost of
|Controlled investments, at fair value (amortized cost of
|Cash and cash equivalents||3,352||587|
|Receivable for investments sold||90||396|
|Due from portfolio company||3||1|
|Deferred financing costs||146||226|
|Prepaid expenses and other assets||260||3,288|
|Notes payable (including unamortized discount of
|Revolving credit facility||5,000||10,000|
|Payable for investments purchased||77,049||70,022|
|Accrued incentive fees payable||2,116||565|
|Due to affiliates||1,174||1,042|
|Accrued expenses and other liabilities||511||480|
|Commitments and contingencies||$||-||$||-|
|Common stock, par value
|Additional paid-in capital||284,107||284,107|
|Total net assets||$||92,850||$||84,809|
|Total liabilities and net assets||$||322,477||$||310,112|
|Net asset value per share||$||12.21||$||11.16|
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Dollar amounts in thousands (except per share amounts)
|For the Three Months Ended
||For the Six Months Ended
|Interest income from:|
|Non-affiliated, non-controlled investments||$||5,836||$||3,016||$||11,312||$||6,275|
|Non-affiliated, non-controlled investments (PIK)||590||223||1,039||469|
|Affiliated investments (PIK)||-||-||-||58|
|Controlled investments (PIK)||-||-||233||-|
|Total interest income||7,081||3,734||13,711||7,775|
|Dividend income from:|
|Non-affiliated, non-controlled investments||327||454||645||957|
|Total dividend income||1,027||1,389||1,961||2,656|
|Other income from:|
|Non-affiliated, non-controlled investments||869||390||1,715||640|
|Total other income||869||390||1,715||640|
|Total investment income||$||8,977||$||5,513||$||17,387||$||11,071|
|Incentive fee waiver||-||-||-||(4,854||)|
|Net investment income before taxes||$||3,368||$||1,188||$||6,235||$||7,243|
|Net investment income||$||3,368||$||1,188||$||6,207||$||7,142|
|Net realized and unrealized gains (losses):|
|Net realized gain (loss) on investment transactions from:|
|Non-affiliated, non-controlled investments||$||542||$||1,033||$||2,387||$||(18,900||)|
|Total net realized gain (loss)||542||(109,751||)||2,387||(129,684||)|
|Net change in unrealized appreciation (depreciation) on investment transactions from:|
|Non-affiliated, non-controlled investments||3,054||(11,424||)||5,835||5,112|
|Total net change in unrealized appreciation (depreciation)||1,292||104,045||4,768||112,915|
|Net realized and unrealized gains (losses)||$||1,834||$||(5,706||)||$||7,155||$||(16,769||)|
|Net increase (decrease) in net assets resulting from operations||$||5,202||$||(4,518||)||$||13,362||$||(9,627||)|
|Net investment income per share (basic and diluted):||(1||)||$||0.44||$||0.23||$||0.82||$||1.46|
|Earnings per share (basic and diluted):||(1||)||$||0.68||$||(0.87||)||$||1.76||$||(1.97||)|
|Weighted average shares outstanding (basic and diluted):||(1||)||7,601,958||5,194,910||7,601,958||4,878,439|
(1) Weighted average shares outstanding and per share amounts have been adjusted for the periods shown to reflect the six-for-one reverse stock split effected on
Source: Great Elm Capital Corp.