Great Elm Capital (US:GECC)2025-11-04 21:43Investment Activity - The company generated total investments of $345.684 million for the year ended December 31, 2024, with dispositions amounting to $245.576 million[34]. - For the nine months ended September 30, 2025, the company acquired investments totaling $148.775 million and disposed of $127.474 million[36]. - The ending investment portfolio at fair value as of September 30, 2025, was $325.106 million, compared to $324.262 million at the end of 2024[37]. - The company formed a joint venture, CLO Formation JV, LLC, to invest primarily in subordinated note securities in CLOs[15]. - The company’s investment activity is influenced by factors such as the availability of capital for middle-market companies and the general economic environment[19]. Revenue and Income - The company’s primary revenue source is interest from debt investments, with additional revenue from dividends and capital gains[21]. - Total investment income for the three months ended September 30, 2025, was $10,642,000, a decrease from $11,727,000 in the same period of 2024, reflecting a decline of 9.3%[39]. - Interest income for the three months ended September 30, 2025, was $7,583,000, down from $8,121,000 in 2024, primarily due to a lower average coupon rate of 10.8% on approximately $224.1 million of principal[40]. - Dividend income decreased to $2,060,000 for the three months ended September 30, 2025, compared to $3,586,000 in 2024, a decline of 42.5%[41]. - Other income increased for the three months ended September 30, 2025, primarily due to non-refundable carry fees and early repayment fees[42]. Expenses and Fees - Total expenses for the three months ended September 30, 2025, were $7,971,000, an increase from $7,580,000 in the same period of 2024, representing a rise of 5.2%[44]. - Interest expense increased to $5,485,000 for the three months ended September 30, 2025, compared to $4,210,000 in 2024, reflecting a rise of 30.3% due to new note issuances[48]. - Management fees rose to $1,253,000 for the three months ended September 30, 2025, compared to $1,201,000 in 2024, an increase of 4.3% driven by portfolio growth[45]. - The company did not accrue any incentive fees for the three months ended September 30, 2025, due to decreased investment income and increased hurdles[46]. Gains and Losses - For the three months ended September 30, 2025, the net realized gain was $6.2 million, or $0.50 per share, compared to a net realized gain of $226,000, or $0.02 per share for the same period in 2024[49]. - The gross realized gain for the nine months ended September 30, 2025 was $7.4 million, or $0.62 per share, compared to $3.4 million, or $0.36 per share for the same period in 2024[49]. - The net change in unrealized depreciation for the three months ended September 30, 2025 was $(30.6) million, or $(2.48) per share, compared to $(821,000), or $(0.08) per share for the same period in 2024[52]. - Unrealized depreciation for the nine months ended September 30, 2025 was primarily driven by losses of approximately $17.0 million on investments in First Brands, Nice-Pak, and CLO JV[53]. Financial Position and Liquidity - As of September 30, 2025, the total fair value of the investment portfolio was $413,804,000, an increase from $332,710,000 as of December 31, 2024, representing a growth of 24.4%[38]. - The company believes it has sufficient liquidity to meet its short-term and long-term obligations for at least the next 12 months[61]. - Total contractual obligations as of September 30, 2025 amounted to $205.4 million, with $57.5 million due within one year[62]. - The company had approximately $46,000 in unfunded commitments to provide financing to certain portfolio companies as of September 30, 2025[58]. - The company’s revolving line of credit was increased to up to $50 million, with a potential increase to $90 million, and no borrowings were outstanding under the revolving line as of September 30, 2025[68][69]. Debt Instruments - As of September 30, 2025, the company had approximately $88.7 million in short-term investments and $220.7 million in debt instruments across 49 companies[57]. - The aggregate principal balance of the GECCO Notes outstanding was $57.5 million, with an interest rate of 5.875% due in 2026[71]. - The aggregate principal balance of the GECCI Notes outstanding as of September 30, 2025 was $56.5 million, with an interest rate of 8.50% due in 2029[73]. - The aggregate principal balance of the GECCH Notes outstanding as of September 30, 2025 was $41.4 million, with an interest rate of 8.125% due in 2029[74]. - The aggregate principal balance of the GECCG Notes outstanding as of September 30, 2025 was $50.0 million, with an interest rate of 7.75% due in 2030[75]. - The company redeemed all of the GECCM Notes on October 12, 2024, at 100% of the principal amount plus accrued interest[70]. Stock and Shareholder Actions - The last reported closing price for the company's common stock on October 30, 2025, was $7.64 per share[81]. - The company declared a distribution of $0.37 per share for the quarter ending December 31, 2025, payable in cash[84]. - The company authorized a new share repurchase program to repurchase up to $10 million of its outstanding common shares[86]. - Approximately $153.9 million in principal amount of the company's debt investments bore interest at variable rates as of September 30, 2025[87].