Great Elm Capital Corp. (NASDAQ:GECC) Q4 2023 Earnings Call Transcript
Great Elm Capital Corp. (NASDAQ:GECC) Q4 2023 Earnings Call Transcript February 29, 2024
Great Elm Capital Corp. misses on earnings expectations. Reported EPS is $0.43 EPS, expectations were $0.44. Great Elm Capital Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings. Welcome to the Great Elm Capital Corporation's Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. At this time, I'll now turn the conference over to Garrett Edson, a representative of the company. Mr. Edson, you may now begin.
Garrett Edson: Good morning, and thank you everyone for joining us for Great Elm Capital Corp's fourth quarter and full year 2023 earnings conference call. If you like to be added to our distribution list, you can e-mail investorrelations@greatelmcap.com or you can sign up for alerts directly on our website, www.greatelmcc.com. I'd like to note the slide presentation posted on our website accompanying today's call. The slide presentation can be found on our website under Financial Information, Quarterly Results. On our website, you can also find our earnings release and SEC filings. I'd like to call your attention to the customary safe harbor statement regarding forward-looking information. Also, please note that nothing in today's call constitutes an offer to sell or a solicitation of offers to purchase our securities.
A professional banker meeting with a customer in her office to discuss his finances.
Today's conference call includes forward-looking statements, and we ask that you refer to Great Elm Capital Corp's filings with the SEC for important factors that could cause actual results to differ materially from these statements. Great Elm Capital Corp not undertake to update its forward-looking statements unless required by law. To obtain copies of SEC filings, please visit Great Elm Capital Corp's website under Financial Information SEC filings which is at the SEC's website. Hosting the call this morning is Matt Kaplan, Great Elm Capital Corp's Chief Executive Officer, who will be joined by Chief Financial Officer, Keri Davis, Chief Compliance Officer, Adam Kleinman; and Mike Keller, President of Great Elm Specialty Finance. I will now turn the call over to GECC's CEO, Matt Kaplan.
Matt Kaplan: Thank you, Garrett. Good morning, and thank you for joining us today. We finished 2023 on a high note, generating an approximately 30% return on equity for the year, and we have continued our momentum into 2024 with the closing of a $24 million equity raise at net asset value earlier this month. Before diving into our strong performance, I want to further highlight our capital raise. On February 8, GECC issued 1.850 million shares at a then current NAV of $12.97 per share, a 25% premium to the prior day's closing price. Great Elm Strategic Partnership 1 and SPV acquired the shares for gross proceeds to GECC of $24 million Great Elm Group invested $6 million and a strategic institutional investor invested the other $18 million in the SPV.
This non-dilutive equity raise increases the scale of GECC, which will provide operating efficiencies as we leverage our fixed cost base. And over time, we believe will lead to an improved cost of capital. The transaction comes on the heels of success from our repositioning efforts over the past two years, further enabling us to build upon our growth strategy and execute on our strong investment pipeline at greater scale. Shifting back to earnings, we are proud to have closed out the year with NII exceeding our base dividend for the fourth consecutive quarter and another quarter of increasing NAV positioning us for continued success in 2024. We continue to excel in the fourth quarter across all facets of our business. We generated an annualized ROE of approximately 18%, bringing our calendar year 2023 ROE to approximately 30%.
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