Summary of Great Elm Capital Corp. Q3 2025 Earnings Call

1Key Financial Results and Metrics

Net Investment Income (NII): $2.4 million ($0.20 per share), down from $5.9 million ($0.51 per share) in Q2 2025.

Net Asset Value (NAV): Declined to $10.01 per share from $12.10 in Q2 2025, primarily due to losses from First Brands.

Total Debt: Approximately $205 million, with no outstanding balance on a $50 million revolver.

Cash and Money Market Securities: Approximately $25 million.

Dividends: A cash distribution of $0.37 per share for Q4 2025 was approved, equating to a 14.8% annualized yield based on September NAV.

2Strategic Updates and Business Highlights

Successfully raised equity at NAV and doubled the size of the revolver while reducing interest rates.

Notable success with Nice-Pak, generating a 38% IRR over three years.

Focus on securing first lien senior secured investments to enhance portfolio quality.

Great Elm Specialty Finance increased its distribution to GECC to approximately $450,000, up from $120,000 in the previous quarter.

Strategic repositioning efforts in Great Elm Specialty Finance are yielding positive results, with a robust deal pipeline.

3Forward Guidance and Outlook

Anticipated rebound in NII for Q4 2025 due to increased CLO distributions and normalized interest expenses.

Expecting to harvest over $20 million from non-yielding assets to reinvest in cash-generating opportunities.

Confidence in the ability to rebuild NAV and deliver attractive risk-adjusted returns.

4Bad News, Challenges, or Points of Concern

Significant impact from First Brands’ bankruptcy, which adversely affected NAV by approximately $16.5 million and led to loans being placed on nonaccrual status.

Decline in CLO distributions, down to $1.5 million in Q3 from $4.3 million in Q2.

Elevated interest expenses due to refinancing efforts, including a $1 million write-off of deferred costs.

NAV decline raises concerns about portfolio exposure and risk management.

5Notable Q&A Insights

Future capital distributions from CoreWeave are expected, with the current $20 million expected to include these distributions.

The company is focused on secured, income-generating opportunities and is not reaching for yield in a tight market.

The $4.3 million received in Q4 from CLOs is likely close to the total expected for the quarter, indicating stable cash flow from this source. Overall, Great Elm Capital Corp. reported a challenging third quarter primarily due to the impact of First Brands' bankruptcy, but remains optimistic about future income generation and portfolio diversification strategies.