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Garrison Capital
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8-K 2018-03-06

GARS 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3: Quantitative and Qualitative Disclosures About Market Risk
Item 4: Controls and Procedures
Part II - Other Information
Item 1: Legal Proceedings
Item 1A: Risk Factors
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Item 3: Defaults Upon Senior Securities
Item 4: Mine Safety Disclosures
Item 5: Other Information
Item 6: Exhibits
EX-31.1 gars-ex311_6.htm
EX-31.2 gars-ex312_9.htm
EX-32.1 gars-ex321_8.htm
EX-32.2 gars-ex322_7.htm

Garrison Capital Earnings 2020-03-31

Balance SheetIncome StatementCash Flow

10-Q 1 gars-10q_20200331.htm 10-Q gars-10q_20200331.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to  

Commission File Number 814-00878

Garrison Capital Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

90-0900145

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

1290 Avenue of the Americas, Suite 914

New York, New York 10104

(Address of principal executive offices)

(Registrant’s telephone number, including area code): (212) 372-9590

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share

GARS

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes        No   

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. 

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

  

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes        No   

As of May 8, 2020 the Registrant had 16,049,352 shares of common stock, $0.001 par value, outstanding.

 


Table of Contents

 

 

 

 

 

Page

Part I.

 

Financial Information

 

 

 

 

 

 

 

Item 1.

 

Financial Statements

 

1

 

 

 

 

 

 

 

Consolidated Statements of Financial Condition as of March 31, 2020 (unaudited) and December 31, 2019

 

1

 

 

 

 

 

 

 

Consolidated Schedules of Investments as of March 31, 2020 (unaudited) and December 31, 2019

 

2

 

 

 

 

 

 

 

Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2020 and March 31, 2019

 

20

 

 

 

 

 

 

 

Consolidated Statements of Changes in Net Assets (unaudited) for the three months ended March 31, 2020 and March 31, 2019

 

21

 

 

 

 

 

 

 

Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2020 and March 31, 2019

 

22

 

 

 

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

 

23

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

49

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

65

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

65

 

 

 

 

 

Part II.

 

Other Information

 

 

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

66

 

 

 

 

 

Item 1A.

 

Risk Factors

 

66

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

68

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

68

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

68

 

 

 

 

 

Item 5.

 

Other Information

 

68

 

 

 

 

 

Item 6.

 

Exhibits

 

68

 

 

 

 


 

Garrison Capital Inc. and Subsidiaries

Consolidated Statements of Financial Condition

($ in thousands, except share and per share amounts)

 

Part I. Financial Information

Item 1. Financial Statements

 

 

March 31, 2020

 

 

December 31, 2019

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Cash

 

$

2,227

 

 

$

1,251

 

Restricted cash

 

 

29,628

 

 

 

39,056

 

Due from counterparties

 

 

143

 

 

 

1,413

 

Investments, at fair value

 

 

 

 

 

 

 

 

Non-control/non-affiliate investments (amortized cost of $402,669 and $433,940, respectively)

 

 

365,471

 

 

 

417,401

 

Non-control/affiliate investments (amortized cost of $3,663 and $3,663, respectively)

 

 

629

 

 

 

1,472

 

Accrued interest receivable

 

 

2,514

 

 

 

2,887

 

Other assets

 

 

1,370

 

 

 

969

 

Total assets

 

$

401,982

 

 

$

464,449

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Due to counterparties

 

$

84

 

 

$

9,413

 

Debt (Note 4)

 

 

292,480

 

 

 

313,750

 

Management fee payable (Note 5)

 

 

1,300

 

 

 

1,516

 

Administrator fee payable (Note 5)

 

 

149

 

 

 

 

Accrued interest payable

 

 

1,191

 

 

 

1,734

 

Accrued expenses and other payables

 

 

1,034

 

 

 

1,483

 

Total liabilities

 

$

296,238

 

 

$

327,896

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets

 

 

 

 

 

 

 

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 16,758,779 shares issued and 16,049,352 shares outstanding as of both March 31, 2020 and December 31, 2019

 

$

17

 

 

$

17

 

Paid-in-capital in excess of par

 

 

249,124

 

 

 

249,124

 

Total distributable earnings/(loss)

 

 

(143,397

)

 

 

(112,588

)

Total net assets

 

 

105,744

 

 

 

136,553

 

Total liabilities and net assets

 

$

401,982

 

 

$

464,449

 

 

 

 

 

 

 

 

 

 

Shares of common stock outstanding

 

 

16,049,352

 

 

 

16,049,352

 

Net asset value per share

 

$

6.59

 

 

$

8.51

 

 

See accompanying notes to consolidated financial statements.

1


 

Garrison Capital Inc. and Subsidiaries

Consolidated Schedule of Investments

March 31, 2020 (unaudited)

($ in thousands, except share amounts)

 

Security Description

 

Base Rate

 

 

Spread

 

 

All In Rate

 

 

Maturity

 

Par / Shares

 

 

Cost

 

 

Fair Value

 

 

% of Net Assets

 

Non-Control/Non-Affiliate Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace and Defense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Constellis Borrower LLC, Common Stock

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

30,342

 

 

$

1,035

 

 

$

 

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,035

 

 

 

 

 

 

 

Building Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Valterra Products Holdings, LLC, Class A LLC Units

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

185,847

 

 

 

186

 

 

 

1,125

 

 

 

1.06

 

Valterra Products Holdings, LLC, Class B LLC Units

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

20,650

 

 

 

21

 

 

 

125

 

 

 

0.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

207

 

 

 

1,250

 

 

 

1.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Services and Supplies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Faraday Holdings, LLC, LLC Units

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

2,752

 

 

 

140

 

 

 

550

 

 

 

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

140

 

 

 

550

 

 

 

0.52

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Financial Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prosper Marketplace Inc., Series B Preferred Stock⁽¹⁾⁽²⁾

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

912,865

 

 

 

551

 

 

 

320

 

 

 

0.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

551

 

 

 

320

 

 

 

0.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diversified Telecommunication Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fusion Connect, Inc., Common Stock*

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

121,871

 

 

 

2,602

 

 

 

2,602

 

 

 

2.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,602

 

 

 

2,602

 

 

 

2.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Healthcare Equipment and Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Juniper TGX Investment Partners, LLC, LLC Units

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

3,146

 

 

 

671

 

 

 

2,244

 

 

 

2.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

671

 

 

 

2,244

 

 

 

2.12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Household Products and Durables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oneida Group Inc., Common Stock

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

1,085,565

 

 

 

4,160

 

 

 

795

 

 

 

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,160

 

 

 

795

 

 

 

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet Software and Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emtec Global Services Holdings, LLC, Preferred Stock**

 

N/A

 

 

N/A

 

 

N/A

 

 

N/A

 

 

319,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Equity Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

9,366

 

 

$

7,761

 

 

 

7.33

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace and Defense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

McNally Industries, LLC, Delayed Draw Term Loan**

 

1.61%

 

 

5.75%

 

 

7.36%

 

 

8/9/2024

 

 

50

 

 

$

49

 

 

$

49

 

 

0.05%

 

McNally Industries, LLC, Revolver**

 

1.61%

 

 

5.75%

 

 

7.36%

 

 

8/9/2024

 

 

44

 

 

 

44

 

 

 

43

 

 

 

0.04

 

McNally Industries, LLC, Term Loan**

 

1.61%

 

 

5.75%

 

 

7.36%

 

 

8/9/2024

 

 

6,848

 

 

 

6,759

 

 

 

6,752

 

 

 

6.39

 

New Constellis Borrower LLC, Term Loan*⁽⁵⁾

 

1.00%

 

 

11.00%

 

 

12.00%

 

 

3/27/2025

 

 

481

 

 

 

481

 

 

 

1

 

 

 

 

Novetta Solutions, Term Loan*

 

1.00%

 

 

5.00%

 

 

6.00%

 

 

10/17/2022

 

 

1,959

 

 

 

1,931

 

 

 

1,874

 

 

 

1.77

 

Peraton Corp. (fka MHVC Acquisition Corp.), Initial Term Loan (First Lien)*

 

1.62%

 

 

5.25%

 

 

6.87%

 

 

4/29/2024

 

 

1,312

 

 

 

1,309

 

 

 

1,214

 

 

 

1.15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,573

 

 

 

9,933

 

 

 

9.35

 

See accompanying notes to consolidated financial statements.

2


 

Garrison Capital Inc. and Subsidiaries

 

Consolidated Schedule of Investments - (continued)

 

March 31, 2020 (unaudited)

 

($ in thousands, except share amounts)

 

Security Description

 

Base Rate

 

 

Spread

 

 

All In Rate

 

 

Maturity

 

Par / Shares

 

 

Cost

 

 

Fair Value

 

 

% of Net Assets

 

Non-Control/Non-Affiliate Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Investments (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Air Freight and Logistics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gruden Acquisition, Inc., Term Loan (First Lien)*

 

1.45%

 

 

5.50%

 

 

6.95%

 

 

8/18/2022

 

 

2,433

 

 

$

2,419

 

 

$

2,355

 

 

 

2.23

%

Kane is Able, Inc., Term Loan*

 

1.50%

 

 

7.00%

 

 

8.50%

 

 

3/13/2024

 

 

6,504

 

 

 

6,394

 

 

 

6,341

 

 

 

6.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,813

 

 

 

8,696

 

 

 

8.23

 

Auto Components

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Challenge Mfg. Company, LLC, Term Loan B*

 

1.00%

 

 

8.50%

 

 

9.50%

 

 

4/20/2022

 

 

7,352

 

 

 

7,314

 

 

 

7,205

 

 

 

6.81

 

GC EOS Buyer, Inc., Initial Term Loan (First Lien)*

 

0.99%

 

 

4.50%

 

 

5.49%

 

 

8/1/2025

 

 

3,448

 

 

 

3,441

 

 

 

3,148

 

 

 

2.98

 

Holley Purchaser, Inc., Term Loan*

 

1.78%

 

 

5.00%

 

 

6.78%

 

 

10/24/2025

 

 

6,537

 

 

 

6,455

 

 

 

5,686

 

 

 

5.38

 

Shipston Equity Holdings, LLC, Term Loan*⁽⁴⁾

 

1.91%

 

 

9.39%

 

 

11.30%

 

 

9/28/2023

 

 

5,847

 

 

 

5,806

 

 

 

5,555

 

 

 

5.25

 

Winter Park Intermediate, Inc., Initial Term Loan (First Lien)*

 

1.04%

 

 

4.75%

 

 

5.79%

 

 

4/4/2025

 

 

2,618

 

 

 

2,596

 

 

 

2,417

 

 

 

2.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,612

 

 

 

24,011

 

 

 

22.71

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CPG International LLC (fka CPG International Inc.), New Term Loan*

 

2.18%

 

 

3.75%

 

 

5.93%

 

 

5/5/2024

 

 

1,277

 

 

 

1,261

 

 

 

1,221

 

 

 

1.15