GECCZ Great Elm Capital Corporation

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2024

Great Elm Capital Corp.

(Exact name of Registrant as Specified in Its Charter)

Maryland	814-01211	81-2621577
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3801 PGA Boulevard, Suite 603, Palm Beach Gardens, FL		33410
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 375-3006

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	GECC	Nasdaq Global Market
5.875% Notes due 2026	GECCO	Nasdaq Global Market
8.75% Notes due 2028	GECCZ	Nasdaq Global Market
8.50% Notes due 2029	GECCI	Nasdaq Global Market
8.125% Notes due 2029	GECCH	Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

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Item 2.02 Results of Operations and Financial Condition.

On October 31, 2024, Great Elm Capital Corp. issued the press release furnished as exhibit 99.1 to this report.

The foregoing information (including the exhibit hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are furnished with this report but shall not be deemed filed:

Exhibit Number		Description
99.1		Earnings Press Release, dated October 31, 2024.
104		The cover page of this Current Report on Form 8-K, formatted as inline XBRL.

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		GREAT ELM CAPITAL CORP.
Date: October 31, 2024		/s/ Keri A. Davis
		By:		Keri A. Davis
		Title:		Chief Financial Officer

 

 

 

 

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Great Elm Capital Corp. Announces

Third Quarter 2024 Financial Results

 

Company to Host Conference Call and Webcast at 8:30 AM ET Today

 

PALM BEACH GARDENS, Florida, October 31, 2024 – Great Elm Capital Corp. (“we,” “our,” the “Company” or “GECC”) (NASDAQ: GECC), a business development company, today announced its financial results for the third quarter ended September 30, 2024.

 

Third Quarter and Other Recent Highlights:

 

Management Commentary

“We had a strong third quarter, reporting NII that exceeded our quarterly distribution and generating record total investment income of $11.7 million,” said Matt Kaplan, GECC’s Chief Executive Officer. “Along with managing our stable portfolio, we successfully refinanced our GECCM Notes, extending our debt maturity profile. We look forward to closing a very successful 2024 on firm footing, after completing multiple substantial capital raises at NAV and launching our CLO joint venture. Our innovative JV approach utilizing the CLO structure has increased our exposure to first lien bank loans with long term, non-recourse financing, and is already delivering strong cash income. Looking ahead, we believe we remain well-positioned to maintain our dividend coverage and deliver attractive risk-adjusted returns to our shareholders.”

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Financial Highlights – Per Share Data

	Q3/2023	Q4/2023	Q1/2024	Q2/2024	Q3/2024
Earnings Per Share (“EPS”)	$1.02	$0.55	($0.05)	($0.14)	$0.33
Net Investment Income (“NII”) Per Share	$0.40	$0.43	$0.37	$0.32	$0.39
Pre-Incentive Net Investment Income Per Share	$0.50	$0.54	$0.46	$0.40	$0.49
Net Realized and Unrealized Gains / (Losses) Per Share	$0.62	$0.12	($0.42)	($0.46)	($0.06)
Net Asset Value Per Share at Period End	$12.88	$12.99	$12.57	$12.06	$12.04
Distributions Paid / Declared Per Share	$0.35	$0.45	$0.35	$0.35	$0.35

 

Portfolio and Investment Activity

As of September 30, 2024, GECC held total investments of $333.3 million at fair value, as follows:

 

As of September 30, 2024, the weighted average current yield on the Company’s debt portfolio was 12.8%. Floating rate instruments comprised approximately 72% of the fair market value of debt investments (up from 69% last quarter) and the Company’s fixed rate debt investments had a weighted average maturity of 2.0 years.

 

During the quarter ended September 30, 2024, we deployed approximately $73.6 million into 29 investments(1) at a weighted average current yield of 11.5%.

 

During the quarter ended September 30, 2024, we monetized, in part or in full, 38 investments for approximately $39.1 million(2), at a weighted average current yield of 10.9%. Monetizations include $13.2 million of mandatory debt paydowns and redemptions at a weighted average current yield of 13.1%.

 

Financial Review

Total investment income for the quarter ended September 30, 2024 was $11.7 million, or $1.12 per share. Net expenses for the quarter ended September 30, 2024 were approximately $7.7 million, or $0.73 per share.

 

Net realized and unrealized losses for the quarter ended September 30, 2024 were approximately $0.6 million, or $0.06 per share.

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Liquidity and Capital Resources

As of September 30, 2024, cash and money market fund investments totaled approximately $26.0 million.

As of September 30, 2024, total debt outstanding (par value) was $235.3 million, comprised of 6.75% senior notes due January 2025 (NASDAQ: GECCM), 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) and 8.125% senior notes due December 2029 (NASDAQ: GECCH).

Subsequent to quarter-end, the Company used the net proceeds from the GECCH Notes issuance and cash on hand to redeem all GECCM Notes. As of October 30, 2024, pro-forma total debt outstanding (par value) was $195.4 million.

 

Distributions

The Company’s Board of Directors has approved a quarterly cash distribution of $0.35 per share for the quarter ending December 31, 2024. The fourth quarter distribution will be payable on December 31, 2024 to stockholders of record as of December 16, 2024.

The distribution equates to a 14.0% annualized dividend yield on the Company’s closing market price on October 30, 2024 of $10.03 and an 11.6% annualized dividend yield on the Company’s September 30, 2024 NAV of $12.04 per share.

 

Conference Call and Webcast

GECC will discuss these results in a conference call today at 8:30 a.m. ET.

 

Conference Call Details

 

Date/Time: Thursday, October 31, 2024 – 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. For additional information, please visit http://www.greatelmcc.com.

 

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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. 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) 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

 

 

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GREAT ELM CAPITAL CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited)

Dollar amounts in thousands (except per share amounts)

		September 30, 2024				December 31, 2023
Assets
Investments
Non-affiliated, non-controlled investments, at fair value (amortized cost of $259,732 and $179,626, respectively)		$	256,777			$	183,335
Non-affiliated, non-controlled short-term investments, at fair value (amortized cost of $85,484 and $10,807, respectively)			85,474				10,807
Affiliated investments, at fair value (amortized cost of $12,378 and $13,423, respectively)			-				1,067
Controlled investments, at fair value (amortized cost of $80,642 and $46,300, respectively)			76,506				46,210
Total investments			418,757				241,419
Cash and cash equivalents			305				953
Receivable for investments sold			3,121				840
Interest receivable			3,652				2,105
Dividends receivable			622				1,001
Due from portfolio company			1				37
Deferred financing costs			262				335
Prepaid expenses and other assets			306				135
Total assets		$	427,026			$	246,825
Liabilities
Notes payable (including unamortized discount of $5,317 and $2,896, respectively)		$	229,967			$	140,214
Payable for investments purchased			66,043				3,327
Interest payable			170				32
Accrued incentive fees payable			2,594				1,431
Distributions payable			-				760
Due to affiliates			1,445				1,195
Accrued expenses and other liabilities			981				1,127
Total liabilities		$	301,200			$	148,086
Commitments and contingencies		$	-			$	-
Net Assets
Common stock, par value $0.01 per share (100,000,000 shares authorized, 10,449,888 shares issued and outstanding and 7,601,958 shares issued and outstanding, respectively)		$	104			$	76
Additional paid-in capital			319,438				283,795
Accumulated losses			(193,716	)			(185,132	)
Total net assets		$	125,826			$	98,739
Total liabilities and net assets		$	427,026			$	246,825
Net asset value per share		$	12.04			$	12.99

 

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GREAT ELM CAPITAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Dollar amounts in thousands (except per share amounts)

 

		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
Investment Income:
Interest income from:
Non-affiliated, non-controlled investments		$	6,321			$	6,357			$	18,276			$	17,669
Non-affiliated, non-controlled investments (PIK)			826				552				2,267				1,591
Affiliated investments			-				33				64				95
Controlled investments			974				650				2,858				1,715
Controlled investments (PIK)			-				-				-				233
Total interest income			8,121				7,592				23,465				21,303
Dividend income from:
Non-affiliated, non-controlled investments			584				254				2,015				899
Controlled investments			3,002				525				3,912				1,841
Total dividend income			3,586				779				5,927				2,740
Other commitment fees from non-affiliated, non-controlled investments			-				802				700				2,406
Other income from:
Non-affiliated, non-controlled investments			20				103				92				214
Total other income			20				103				92				214
Total investment income		$	11,727			$	9,276			$	30,184			$	26,663
Expenses:
Management fees		$	1,201			$	899			$	3,209			$	2,652
Incentive fees			1,018				763				2,580				2,315
Administration fees			375				420				1,156				1,056
Custody fees			38				19				110				62
Directors’ fees			52				51				160				156
Professional services			409				422				1,210				1,392
Interest expense			4,210				3,344				10,490				8,934
Other expenses			277				267				866				770
Total expenses		$	7,580			$	6,185			$	19,781			$	17,337
Net investment income before taxes		$	4,147			$	3,091			$	10,403			$	9,326
Excise tax		$	75			$	39			$	80			$	67
Net investment income		$	4,072			$	3,052			$	10,323			$	9,259
Net realized and unrealized gains (losses):
Net realized gain (loss) on investment transactions from:
Non-affiliated, non-controlled investments		$	227			$	1,637			$	2,738			$	4,024
Affiliated investments			(1	)			-				(626	)			-
Controlled investments			-				(3,461	)			-				(3,461	)
Realized loss on repurchase of debt			(3	)			-				(3	)			-
Total net realized gain (loss)			223				(1,824	)			2,109				563
Net change in unrealized appreciation (depreciation) on investment transactions from:
Non-affiliated, non-controlled investments			715				2,581				(6,674	)			8,416
Affiliated investments			1				25				(22	)			177
Controlled investments			(1,537	)			3,926				(4,046	)			2,707
Total net change in unrealized appreciation (depreciation)			(821	)			6,532				(10,742	)			11,300
Net realized and unrealized gains (losses)		$	(598	)		$	4,708			$	(8,633	)		$	11,863
Net increase (decrease) in net assets resulting from operations		$	3,474			$	7,760			$	1,690			$	21,122
Net investment income per share (basic and diluted):		$	0.39			$	0.40			$	1.08			$	1.22
Earnings per share (basic and diluted):		$	0.33			$	1.02			$	0.18			$	2.77
Weighted average shares outstanding (basic and diluted):			10,449,888				7,601,958				9,556,695				7,601,958

 

 

 

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v3.24.3

Document and Entity Information	Oct. 31, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 31, 2024
Entity Registrant Name	Great Elm Capital Corp.
Entity Central Index Key	0001675033
Entity Incorporation, State or Country Code	MD
Securities Act File Number	814-01211
Entity Tax Identification Number	81-2621577
Entity Address, Address Line One	3801 PGA Boulevard
Entity Address, Address Line Two	Suite 603
Entity Address, City or Town	Palm Beach Gardens
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33410
City Area Code	617
Local Phone Number	375-3006
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	GECC
Security Exchange Name	NASDAQ
5.875% Notes due 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	5.875% Notes due 2026
Trading Symbol	GECCO
Security Exchange Name	NASDAQ
8.75% Notes due 2028 [Member]
Document Information [Line Items]
Title of 12(b) Security	8.75% Notes due 2028
Trading Symbol	GECCZ
Security Exchange Name	NASDAQ
8.50% Notes due 2029 [Member]
Document Information [Line Items]
Title of 12(b) Security	8.50% Notes due 2029
Trading Symbol	GECCI
Security Exchange Name	NASDAQ
8.125% Notes due 2029 [Member]
Document Information [Line Items]
Title of 12(b) Security	8.125% Notes due 2029
Trading Symbol	GECCH
Security Exchange Name	NASDAQ

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