8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report: November 12, 2019

(Date of earliest event reported)

Garrison Capital Inc.

(Exact Name of Registrant as Specified in Its Charter) 

Delaware	814-00878	90-0900145
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1290 Avenue of the Americas, Suite 914 New York, New York		10104
(Address of Principal Executive Offices)		(Zip Code)

(212) 372-9590

(Registrant’s telephone number, including area code) 

Not Applicable

(Former Name or Former Address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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.☐

Item 2.02. Results of Operations and Financial Condition.

On November 14, 2019, Garrison Capital, Inc. (the “Company”) will host an earnings conference call to discuss its financial results for the third fiscal quarter ended September 30, 2019.  In connection therewith, the Company has posted an earnings presentation on the Company’s website (www.garrisoncapitalbdc.com).  A copy of this earnings presentation is attached hereto as Exhibit 99.1.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, is being furnished and shall not be deemed “filed” for any purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such Section.  The information in this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Forward-Looking Statements

This Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this Current Report on Form 8-K may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

  (d)   Exhibits.

99.1 Garrison Capital Inc., Earnings Presentation; Third Quarter ended September 30, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GARRISON CAPITAL INC.
Date:  November 12, 2019	By:	/s/ Daniel Hahn
	Name:	Daniel Hahn
	Title:	Chief Financial Officer and Treasurer

EX-99.1

Garrison Capital Inc. Third Quarter 2019 Earnings Presentation Exhibit 99.1

DISCLAIMER Some of the statements in this presentation constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation involve risks and uncertainties, including statements as to: our future operating results; changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets, which could result in changes to the value of our assets; our business prospects and the prospects of our current and prospective portfolio companies; the impact of investments that we expect to make; the impact of increased competition; our contractual arrangements and relationships with third parties; the dependence of our future success on the general economy, including general economic trends, and its impact on the industries in which we invest; the ability of our prospective portfolio companies to achieve their objectives; the relative and absolute performance of our investment adviser, including in identifying suitable investments for us; our expected financings and investments; the adequacy of our cash resources and working capital; our ability to make distributions to our stockholders; our ability to complete a strategic transaction on a timely basis, or at all; the effects of legislation and regulations and changes thereto; the timing of cash flows, if any, from the operations of our prospective portfolio companies; and the impact of future acquisitions and divestitures. We use words such as “anticipates,” “believes,” “expects,” “intends” and similar expressions to identify forward-looking statements. Actual results could differ materially from those anticipated in our forward-looking statements for any reason, and future results could differ materially from historical performance. We have based the forward-looking statements included in this presentation on information available to us on the date of this presentation, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the U.S. Securities and Exchange Commission, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

FINANCIAL RESULTS EARNINGS OVERVIEW Earned net investment income of $0.21 per share for the third quarter of 2019, which was lower than prior quarter due to: Lower interest income primarily driven by a lower interest-bearing portfolio and a decrease in LIBOR; this was offset by Lower interest expense also driven by lower average debt outstanding and a lower LIBOR; as well as Reduced expenses due to not earning an incentive fee and lower general and administrative expenses during the quarter Net realized and unrealized losses on investments totaled $19.9 million, or $1.24 per share, for the third quarter 2019 due to: $18.9 million of negative credit-related adjustments from our investments in GIG Co Holdings, LLC (fka Confluence Outdoor, LLC), Gold Coast Bakeries, LLC, HRI Holding Corp. and four syndicated investments; and A net $1.0 million of negative market-related fair value adjustments across the remaining portfolio Declared a Q4 2019 dividend of $0.15 per share payable on December 20, 2019 to shareholders of record as of December 6, 2019 QUARTERLY EARNINGS ($ in thousands, except per share data) Q3 2019   Q2 2019   Q1 2019   Q4 2018   Q3 2018 Total investment income $ 9,713   $ 10,704   $ 10,229   $ 9,561   $ 9,312 Total expenses 6,290   7,230   6,982   6,401   5,578 Net investment income 3,423   3,474   3,247   3,160   3,734 Net realized gain/(loss) on investments 151   (2,365)   (7,133)   13   (27) Net change in unrealized (loss)/gain on investments (20,040)   284   6,296   (8,886)   (2,220) Loss on refinancing of debt - - - (2,218) - Net (decrease)/increase in net assets resulting from operations (16,466)   1,393   2,410   (7,931)   1,487                   Net investment income per share 0.21   0.22   0.20   0.20   0.23 Net realized/unrealized losses from investments per share (1.24)   (0.13)   (0.05)   (0.56)   (0.14) Loss on refinancing of debt per share -   -   -   (0.14)   - Net (losses)/earnings per share (1.03)   0.09   0.15   (0.50)   0.09 Dividends declared per common share 0.23   0.23   0.23   0.23   0.28 Net asset value per share 9.04   10.30   10.44   10.52   11.25

INVESTMENT PORTFOLIO PORTFOLIO HIGHLIGHTS Excludes the non-cash debt-to-equity restructuring of our investment in GIG Co Holdings, LLC (fka Confluence Outdoors, LLC) in Q2 2019 Represents the weighted average yield at amortized cost and is comprised of the income earned from the all-in interest rate plus the accretion of any original issue discount or premium as of the balance sheet date to par at each investments contractual maturity date, excluding the effect of any scheduled principal amortization payments. For those investments valued based on an estimated recovery rate, the weighted average yield calculation is based on redeeming the investment at the current expected recovery rate rather than at par. Calculation excludes consumer loan portfolio investment, unfunded revolvers, debt investments placed on non-accrual and equity investments       Par ($ in millions) Q3 2019 Q2 2019(1) Q1 2019 Q4 2018 Q3 2018   Quarterly Average       Originations $ - $ - $ 6.6 $ - $ 7.8   $ 2.9   Club deals 6.9 4.4 14.5 57.7 7.1   18.1   Purchases 18.5 2.6 20.3 21.5 12.9   15.2   Follow-on investments to existing portfolio companies 2.9 17.6 17.2 35.9 23.3   19.3   Total additions 28.3 24.6 58.6 115.1 51.1   55.5   Less: Total repayments/sales (34.7) (19.3) (37.3) (34.1) (68.2)   (38.7)       Net (repayments)/additions $ (6.4) $ 5.3 $ 21.3 $ 81.0 $ (17.1)   $ 16.8                     Summary Q3 2019 Q2 2019(1) Q1 2019 Q4 2018 Q3 2018   Quarterly Average   Investments made to new portfolio companies 10 2 10 19 10   10   Weighted average yield of total additions(2) 8.2% 8.5% 8.4% 8.5% 8.5%   8.4%   Full repayments/sales from existing portfolio companies 6 1 4 3 4   4   Weighted average yield of total repayments/sales(2) 8.2% 7.5% 8.1% 10.1% 11.0%   9.0%               PORTFOLIO ACTIVITY TREND As of September 30, 2019, our total portfolio comprised of 123 investments across 104 portfolio companies which included total par outstanding on our debt investments of $474.7 million with a weighted average yield at amortized cost of 8.5% Total new par additions totaled $28.3 million across 10 new portfolio companies at a weighted average yield at cost of 8.2% during Q3 2019 Total repayments and sales totaled $34.7 million across 6 portfolio companies at a weighted average yield at cost of 8.2% during Q3 2019 Non-accrual assets increased to 6.5% and 4.9% of the debt portfolio at amortized cost and fair value, respectively

PORTFOLIO TRENDS $ in millions, Percentages based on fair value unless otherwise noted* Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018  Portfolio Summary: Total portfolio, at fair value $ 459.8 $ 486.7 $ 480.9 $ 454.0 $ 383.0 Total number of portfolio companies 104 100 99 93 77  Total number of investments 123 119 119 118 98 Average size of debt investments $ 4.2 $ 4.5 $ 4.6 $ 4.6 $ 4.6 Weighted average price of debt investments 95.1 97.1 97.0 95.7 97.2 Portfolio Yields:(1) Weighted average yield on debt investments at amortized cost(2) 8.5% 8.9% 8.9% 9.1% 9.2% Weighted average yield on debt investments at fair value(2) 9.2% 9.6% 9.4% 10.2% 9.6% Weighted average yield on total portfolio at amortized cost 7.6% 8.5% 8.4% 8.5% 8.7% Weighted average yield on total portfolio at fair value 8.4% 9.3% 9.1% 9.9% 9.1% Portfolio Structure: First lien senior secured debt investments 98.1% 96.1% 98.4% 98.3% 97.6% Equity and other investments 1.9% 3.9% 1.6% 1.7% 2.4% Floating rate debt investments 100.0% 99.9% 99.8% 99.7% 99.6% Fixed rate debt investments 0.0% 0.1% 0.2% 0.3% 0.4% Portfolio Sourcing: Originated(3) 22.9% 23.1% 24.9% 25.3% 29.9% Club(4) 39.0% 39.1% 41.3% 37.8% 35.0% Purchased(5) 38.1% 37.8% 33.8% 36.9% 35.1% Portfolio Credit Quality: Performing debt investments 95.1% 99.3% 97.1% 99.5% 99.3% Non-accrual debt investments 4.9% 0.7% 2.9% 0.5% 0.7% Weighted average debt / EBITDA of our portfolio companies(2)(6) 4.1x 3.9x 3.9x 3.8x 3.7x Weighted average risk rating of our debt investments 2.4 2.3 2.4 2.4 2.3 Weighted average yield represents the portfolio’s return from the all-in interest rate plus the annualized accretion income from (i) any original issue discount or premium when calculating weighted average yield at amortized cost and (ii) any market discount or premium when calculating weighted average yield at fair value as of the balance sheet date to par at each investments contractual maturity date, excluding the effect of any scheduled principal amortization payments. For those investments valued based on an estimated recovery rate, the weighted average yield calculation is based on redeeming the investment at the current expected recovery rate rather than at par Calculation excludes consumer loan portfolio investment, unfunded revolvers, debt investments placed on non-accrual and equity investments Originated positions include investments where we have sourced and led the execution of the deal Club positions include debt investments with a total tranche size less than $250.0 million where we provide direct lending to a borrower with a small number of other lenders but do not lead the deal Purchased positions include debt investments with a total tranche size greater than $250.0 million that was sourced from a bank loan syndication or the secondary market Excludes first-lien debt investments which were valued by performing a liquidation analysis of the underlying assets which serve as collateral for those loans * Table as of each respective quarter end and excludes investments with a fair value of zero from all figures except for the total number of portfolio companies and total number of investments

Liquidity available in SBIC Subsidiary Liquidity available in CLO Subsidiary Liquidity available in GARS ($ in millions) $80.0 $60.0 $40.0 $20.0 $- $28.0 $34.5 $41.0 $66.8 $50.4 Weighted Average Cost of Funds Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Our U.S. GAAP debt to equity ratio was 2.31x while our regulatory debt to equity ratio was 1.87x(1) as of September 30, 2019 As of September 30, 2019, there was $5.8 million of undrawn SBIC Debentures and our $25.0 million CLO Revolver was fully undrawn Given our regulatory debt to equity ratio of 1.87x(1), our availability to incur additional leverage has been significantly reduced to $9.8 million to remain in compliance with our regulatory asset coverage requirement Weighted average cost of funds decreased to 4.1% as of September 30, 2019 from 4.4% as of June 30, 2019 based on a decline in LIBOR and a lower average debt outstanding during the quarter PORTFOLIO LEVERAGE & CAPITAL STRUCTURE LIQUIDITY & CAPITAL STRUCTURE PORTFOLIO LEVERAGE Regulatory debt to equity ratio excludes SBIC leverage and unfunded commitments ($ in millions) Weighted Average 4.1% 4.4% 4.5% 4.4% 4.8% Cost of Funds

Assets September 30, 2019 June 30, 2019 Variance ($ in thousands, except per share data) (unaudited) (unaudited) $ % Investments, at fair value $ 459,843 $ 486,705 (26,862) -5.5% Cash and cash equivalents 1,134 853 281 32.9% Cash and cash equivalents, restricted 16,333 29,131 (12,798) -43.9% Due from counterparties 79 2,219 (2,140) -96.4% Due from affiliate 43 - 43 N/A Accrued interest receivable 3,219 3,312 (93) -2.8% Other assets 1,061 1,465 (404) -27.6% Total assets 481,712 523,685 (41,973) -8.0%           Liabilities         Debt 330,607 347,172 (16,565) -4.8% Due to counterparties 1,472 5,895 (4,423) -75.0% Payables to affiliates 2,191 2,503 (312) -12.5% Accrued interest payable 1,462 2,169 (707) -32.6% Accrued expenses and other payables 804 613 191 3.2% Total liabilities 336,536 358,352 (21,816) -6.1% Total net assets 145,176 165,333 (20,157) -12.2% Total liabilities and net assets 481,712 523,685 (41,973) -8.0% Net asset value per share $ 9.04 $ 10.30 $ (1.26) -12.2% COMPARATIVE STATEMENT OF FINANCIAL CONDITION

  Three Months Ended     Investment income September 30, 2019 June 30, 2019 Variance ($ in thousands, except per share data) (unaudited) (unaudited) $ % Interest income $ 9,283 $ 9,796 (513) -5.2% Payment-in-kind 219 791 (572) -72.3% Other income 211 117 94 80.3% Total investment income 9,713 10,704 (991) -9.3% Expenses         Interest expense 3,625 3,860 (235) -6.1% Management fee 1,652 1,680 (28) -1.7% Incentive fee - 543 (543) -100.0% Professional fees 289 308 (19) -6.2% Directors' fees 76 77 (1) -1.3% Administrator expenses 323 329 (6) -1.8% Other expenses 325 433 (108) -24.9% Total expenses 6,290 7,230 (940) -13.0% Net investment income 3,423 3,474 (51) -1.5%           Realized and unrealized losses         Net realized gains/(losses) on investments 151 (2,365) 2,516 106.4% Net change in unrealized (losses)/gains on investments (20,040) 284 (20,324) N/M Net realized and unrealized losses (19,889) (2,081) (17,808) N/M Net (decrease)/increase in net assets resulting from operations (16,466) 1,393 (17,859) N/M Net investment income per common share $ 0.21 $ 0.22 $ (0.01) -4.5% Basic (losses)/earnings per common share $ (1.03) $ 0.09 $ (1.12) N/M Basic weighted average common shares outstanding 16,049,352 16,049,352 - - Dividends and distributions declared per common share $ 0.23 $ 0.23 $ - - COMPARATIVE STATEMENT OF QUARTERLY OPERATING RESULTS

GARRISON CAPITAL INC. 1290 Avenue of the Americas, 9th Floor New York, NY 10104 Tel: 212-372-9590 Fax: 212-372-9525 Contact Information CONTACT INFORMATION