Great Elm Capital Corp. Reports Strong Year-End Financial Results

Great Elm Capital Corp. Financial Performance Overview

Great Elm Capital Corp. (“we,” “our,” the “Company” or “GECC”) (NASDAQ: GECC), a prominent business development company, has announced its financial results for the fourth quarter and full year ending December 31, 2024. This report highlights the company’s resilient performance during an economically challenging landscape.

Key Highlights from the Fourth Quarter

In December 2024, GECC raised $13.2 million of equity, reflecting strong investor confidence and robust market support. This capital raise was spearheaded by Summit Grove Partners, LLC (“SGP”), complemented by a $3.3 million investment from Great Elm Group, Inc. (“GEG”).

Net Investment Income (NII) Insights

For the quarter ended December 31, 2024, GECC reported a net investment income of $2.1 million, equivalent to $0.20 per share. This reflects a decrease from $4.1 million, or $0.39 per share, for the quarter ended September 30, 2024. Factors such as the timing of distributions from CLO Formation JV, LLC (“CLO JV”) and certain financing-related expenses had an adverse impact on NII.

Asset Management and Growth Metrics

• The Company’s net assets totaled $136.1 million on December 31, 2024, translating to $11.79 per share, showing a slight dip from $12.04 per share on September 30, 2024.
• GECC’s asset coverage ratio was reported at 169.7%, indicating a solid foundation for ongoing investment activities.
• In recognition of its strong operational performance, GECC declared a $0.05 per common share special distribution.
• The Board has also approved an increase in the quarterly dividend by 5.7%, bringing it to $0.37 per share, demonstrating the Company’s commitment to delivering shareholder value.

Management's Perspective

“2024 was a strong year for GECC as we successfully raised nearly $150 million in capital through various equity and note issuances, which included a notable $50 million at net asset value”, commented Matt Kaplan, GECC’s Chief Executive Officer. He further noted, “We have significantly expanded our portfolio and enhanced our cash-generation potential through CLO JV.”

Investment Portfolios and Activity

As of December 31, 2024, GECC maintained a total investment portfolio valued at $324.3 million. Within this sum, the Company holds:

• 52 debt investments, which account for approximately $207 million, representing 63.8% of the Company’s total investments.
• An investment of $43.2 million in Great Elm Specialty Finance, split into debt and equity within the portfolio.
• Approximately $40.1 million invested in the CLO JV.
• Three dividend-paying equity investments cumulatively totaling $10.7 million.
• Other equity investments valued at $23.3 million.

Yield and Recent Deployments

The weighted average current yield on the debt portfolio stood at an impressive 12.4%. During the last quarter, the company deployed about $47.2 million into 18 investments with a weighted average current yield of 12.9%.

Furthermore, GECC has monetized 48 investments for approximately $57.5 million, which affirms the operational efficiency of the Company.

Liquidity and Financial Health

As of December 31, 2024, GECC's liquidity was solid, reflecting cash and investments totaling around $8.4 million. The Company maintained a substantial availability of $25 million on its undrawn revolving line of credit, supporting future investment strategies.

Moving Forward

Looking ahead to 2025, Great Elm Capital Corp. is positioned to capitalize on attractive investment opportunities, driven by anticipated cash distributions from CLOs and an increase in portfolio investments conducive to favorable risk-adjusted returns.

Conference Call and Future Engagements

Great Elm Capital Corp. will present these results during a conference call scheduled for 8:30 a.m. ET. The management team encourages investors and stakeholders to participate by dialing in five minutes prior to the start.

Frequently Asked Questions

What were GECC’s total net assets as of December 31, 2024?

The total net assets reported were $136.1 million, translating to approximately $11.79 per share.

What factors impacted GECC's net investment income in Q4 2024?

The net investment income was primarily affected by the timing of distributions from the CLO JV and certain isolated financing-related expenses.

How much did GECC raise from equity during 2024?

GECC raised nearly $150 million through various equity and note issuances throughout the year.

When is the next dividend payable to shareholders?

The next quarterly cash distribution of $0.37 per share is scheduled to be payable on March 31, 2025.

What is GECC's strategy going forward?

The strategy centers on enhancing cash flow from investments and pursuing further capital deployments into promising investment opportunities.

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