Great Elm Capital Corp. Announces First Quarter 2025 Financial Results

Company to Host Conference Call and Webcast at 8:30 AM ET on May 6, 2025

PALM BEACH GARDENS, Fla., May 05, 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 first quarter ended March 31, 2025.

First Quarter and Other Recent Highlights

   -- GECC increased its quarterly distribution by 5.7% for the first quarter 
      of 2025 to $0.37 per share, from $0.35 per share, which was paid on March 
      31, 2025. 
 
          -- The Board of Directors approved a quarterly dividend of $0.37 per 
             share for the second quarter of 2025, equating to a 14.7% 
             annualized yield on GECC's May 2, 2025 closing price of $10.09. 
 
   -- Total investment income ("TII") for the quarter ended March 31, 2025 was 
      a record $12.5 million. 
 
          -- Highest cash income quarter in the Company's history, with only 
             12% of GECC's TII attributable to PIK and accretion income. 
 
   -- Net investment income ("NII") for the quarter ended March 31, 2025 was 
      $4.6 million, or $0.40 per share, as compared to $2.1 million, or $0.20 
      per share, for the quarter ended December 31, 2024. 
 
          -- Increase in NII primarily driven by the receipt of distributions 
             from the CLO Formation JV, LLC ("CLO JV"), as well as income from 
             other new investments. 
 
          -- GECC received $3.8 million of cash distributions from the CLO JV 
             in the quarter ended March 31, 2025, as compared to $0.5 million 
             in the quarter ended December 31, 2024. Additionally, in April, 
             GECC received $4.3 million of cash distributions from the CLO JV. 
 
   -- Net assets were $132.3 million, or $11.46 per share, on March 31, 2025, 
      as compared to $136.1 million, or $11.79 per share, on December 31, 2024. 
 
          -- Decrease in NAV primarily driven by unrealized losses in certain 
             investment positions marked down amid broader market volatility, 
             which we expect would reverse over time assuming market conditions 
             stabilize. 
 
   -- GECC's asset coverage ratio was 163.8% as of March 31, 2025, as compared 
      to 169.7% as of December 31, 2024. 

Management Commentary

"We are pleased to report strong first quarter results, generating record total investment income of $12.5 million, driven by cash flows from our CLO JV and income from new investments, with NII that exceeded our increased quarterly distribution," said Matt Kaplan, GECC's Chief Executive Officer. "Looking ahead, we expect NII to increase in the second quarter, and we remain well positioned to cover our distributions over the course of 2025. We continue to closely monitor the uncertain macro environment and will look to thoughtfully deploy capital into opportunities with compelling risk-adjusted returns, with a focus on creating meaningful value for our shareholders."

Financial Highlights -- Per Share Data

 
                                   Q1/2024  Q2/2024  Q3/2024  Q4/2024  Q1/2025 
  Earnings Per Share ("EPS")       ($0.05)  ($0.14)    $0.33    $0.17    $0.04 
  Net Investment Income ("NII") 
   Per Share                         $0.37    $0.32    $0.39    $0.20    $0.40 
  Pre-Incentive Net Investment 
   Income Per Share                  $0.46    $0.40    $0.49    $0.20    $0.50 
  Net Realized and Unrealized 
   Gains / (Losses) Per Share      ($0.42)  ($0.46)  ($0.06)  ($0.03)  ($0.36) 
  Net Asset Value Per Share at 
   Period End                       $12.57   $12.06   $12.04   $11.79   $11.46 
  Distributions Paid / Declared 
   Per Share                         $0.35    $0.35    $0.35    $0.40    $0.37 
 
 

Portfolio and Investment Activity

As of March 31, 2025, GECC held total investments of $341.9 million at fair value, as follows:

   -- 57 debt investments in corporate credit, totaling approximately $213.2 
      million, representing 62.4% 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 
      $42.8 million, comprised of one debt investment of $29.7 million and one 
      equity investment of $13.0 million, representing 8.7% and 3.8%, 
      respectively, of the fair market value of the Company's total 
      investments. 
 
   -- CLO investments, totaling approximately $52.2 million, representing 15.3% 
      of the fair market value of the Company's total investments. 
 
   -- Three dividend paying equity investments, totaling approximately $9.3 
      million, representing 2.7% of the fair market value of the Company's 
      total investments. 
 
   -- Other equity investments, totaling approximately $24.4 million, 
      representing 7.1% of the fair market value of the Company's total 
      investments. 

As of March 31, 2025, the weighted average current yield on the Company's debt portfolio was 12.3%. 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 3.0 years.

During the quarter ended March 31, 2025, we deployed approximately $37.4 million into 16 investments((1) () at a weighted average current yield of 15.1%.

During the quarter ended March 31, 2025, we monetized, in part or in full, 36 investments for approximately $13.8 million((2) () , at a weighted average current yield of 12.3%. Monetizations include $7.4 million of mandatory debt paydowns and redemptions at a weighted average current yield of 11.3%.

Financial Review

Total investment income for the quarter ended March 31, 2025 was $12.5 million, or $1.08 per share. Total expenses for the quarter ended March 31, 2025 were approximately $7.9 million, or $0.69 per share, inclusive of excise tax expense.

Net realized and unrealized losses for the quarter ended March 31, 2025 were approximately $4.1 million, or $0.36 per share.

Liquidity and Capital Resources

As of March 31, 2025, cash totaled approximately $1.3 million.

As of March 31, 2025, total debt outstanding (par value) was $207.4 million, comprised of 5.875% senior notes due June 2026 $(GECCO)$, 8.75% senior notes due September 2028 $(GECCZ)$, 8.50% senior notes due April 2029 $(GECCI)$ and 8.125% senior notes due December 2029 $(GECCH)$, and $12.0 million outstanding on the $25.0 million revolving line of credit.

Distributions

The Company's Board of Directors has approved a quarterly cash distribution of $0.37 per share for the quarter ending June 30, 2025. The second quarter distribution will be payable on June 30, 2025 to stockholders of record as of June 16, 2025.

The distribution equates to a 14.7% annualized dividend yield on the Company's closing market price on May 2, 2025 of $10.09 and a 12.9% annualized dividend yield on the Company's March 31, 2025 NAV of $11.46 per share.

Conference Call and Webcast

GECC will discuss these results in a conference at 8:30 a.m. ET on May 6, 2025.

Conference Call Details

 
Date/Time:                      Tuesday, May 6, 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

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