| 10-Q | 2020-03-31 | Filed 2020-05-11 |
| 10-K | 2019-12-31 | Filed 2020-03-16 |
| 10-Q | 2019-09-30 | Filed 2019-11-12 |
| 10-Q | 2019-06-30 | Filed 2019-08-09 |
| 10-Q | 2019-03-31 | Filed 2019-05-07 |
| 10-K | 2018-12-31 | Filed 2019-03-05 |
| 10-Q | 2018-09-30 | Filed 2018-11-06 |
| 10-Q | 2018-06-30 | Filed 2018-08-07 |
| 10-Q | 2018-03-31 | Filed 2018-05-08 |
| 10-K | 2017-12-31 | Filed 2018-03-06 |
| 10-Q | 2017-09-30 | Filed 2017-11-07 |
| 10-Q | 2017-06-30 | Filed 2017-08-08 |
| 10-Q | 2017-03-31 | Filed 2017-05-09 |
| 10-K | 2016-12-31 | Filed 2017-03-07 |
| 10-Q | 2016-09-30 | Filed 2016-11-09 |
| 10-Q | 2016-06-30 | Filed 2016-08-09 |
| 10-Q | 2016-03-31 | Filed 2016-05-09 |
| 10-K | 2015-12-31 | Filed 2016-03-02 |
| 10-Q | 2015-09-30 | Filed 2015-11-04 |
| 10-Q | 2015-06-30 | Filed 2015-08-04 |
| 10-Q | 2015-03-31 | Filed 2015-05-05 |
| 10-K | 2014-12-31 | Filed 2015-03-04 |
| 10-Q | 2014-09-30 | Filed 2014-11-05 |
| 10-Q | 2014-06-30 | Filed 2014-08-06 |
| 10-Q | 2014-03-31 | Filed 2014-05-12 |
| 10-K | 2013-12-31 | Filed 2014-03-13 |
| 10-Q | 2013-09-30 | Filed 2013-11-07 |
| 10-Q | 2013-06-30 | Filed 2013-08-08 |
| 10-Q | 2013-03-31 | Filed 2013-05-13 |
| 8-K | 2020-06-24 | |
| 8-K | 2020-05-11 | |
| 8-K | 2020-03-12 | |
| 8-K | 2019-11-12 | |
| 8-K | 2019-08-12 | |
| 8-K | 2019-05-07 | |
| 8-K | 2019-03-05 | |
| 8-K | 2018-11-06 | |
| 8-K | 2018-10-23 | |
| 8-K | 2018-09-21 | |
| 8-K | 2018-08-14 | |
| 8-K | 2018-08-07 | |
| 8-K | 2018-05-08 | |
| 8-K | 2018-03-28 | |
| 8-K | 2018-03-06 |
| 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 |
| Balance Sheet | Income Statement | Cash Flow |
|---|---|---|
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, $0.001 par value, outstanding.
|
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| Page |
| Part I. |
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| Item 1. |
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| 1 | |
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| Consolidated Schedules of Investments as of March 31, 2020 (unaudited) and December 31, 2019 |
| 2 |
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| 20 | |
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| 23 | |
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| Item 2. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 49 |
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| Item 3. |
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| 65 | |
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| Item 4. |
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| 65 | |
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| Part II. |
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| Item 1. |
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| 66 | |
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| Item 1A. |
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| 66 | |
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| Item 2. |
|
| 68 | |
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| Item 3. |
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| 68 | |
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| Item 4. |
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| 68 | |
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| Item 5. |
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| 68 | |
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| Item 6. |
|
| 68 |
Garrison Capital Inc. and Subsidiaries
Consolidated Statements of Financial Condition
($ in thousands, except share and per share amounts)
|
|
| 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 |
|
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|
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|
|
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| Commitments and contingencies (Note 9) |
|
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| Net assets |
|
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| 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 |
|
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|
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|
|
|
|
|
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| Equity Investments |
|
|
|
|
|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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| Aerospace and Defense |
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
|
| 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 |
|
|
|
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
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| Commercial Services and Supplies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
| 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 | ||||