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| 8-K - 8-K - Full Circle Capital Corp | v377958_8k.htm |
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Exhibit 99.1 |
FULL CIRCLE CAPITAL CORPORATION ANNOUNCES
THIRD QUARTER FISCAL 2014 EARNINGS
Closed $24.5 Million in New Loan Originations
Declares Monthly Distributions of $0.067 Per Share for a Total of $0.201 Per Share for First Fiscal Quarter 2015, Equal to Annualized Distribution Rate of $0.80 Per Share
RYE BROOK, NY, May 8, 2014 – Full Circle Capital Corporation (Nasdaq: FULL) (the “Company”) today announced its financial results for the third quarter of fiscal 2014 ended March 31, 2014.
Financial Highlights for the Third Quarter of Fiscal 2014
| Ø | Total investment income was $3.2 million, an increase of 14.3% compared to $2.8 million for the three months ended March 31, 2013. |
| Ø | Net investment income was $1.4 million, or $0.15 per share, compared to $1.3 million, or $0.18 per share, for the three months ended March 31, 2013. |
| Ø | Net realized and unrealized gains were $2.0 million, or $0.21 per share. Unrealized gains on investments were $1.8 million, or $0.18 per share. Realized gains were $0.2 million, or $0.02 per share. |
| Ø | The above resulted in a net increase in net assets from operations of $3.4 million, or $0.36 per share. |
| Ø | Net asset value was $7.20 per share at March 31, 2014. |
| Ø | Per share amounts are based on approximately 9.4 million weighted average shares outstanding compared to 7.6 million weighted average shares outstanding for the third quarter of 2013, reflecting the common equity offerings completed in January and February, 2014. |
| Ø | Total portfolio investments at March 31, 2014 were $90.1 million compared to $88.1 million at March 31, 2013 and $75.9 million at December 31, 2013. |
| Ø | Weighted average portfolio interest rate was 11.41% at March 31, 2014. |
| Ø | New originations and expansion of facilities to existing borrowers totaled $25.9 million, including five new portfolio companies, during the three months ended March 31, 2014. Repayments and realizations totaled $9.3 million. |
| Ø | At March 31, 2014, 86% of portfolio company investments were first lien senior secured loans. |
On May 2, 2014, the Board of Directors declared monthly distributions for the first quarter of fiscal 2015 as follows:
| Record Date | Payment Date | Per Share Amount |
| July 31, 2014 | August 15, 2014 | $0.067 |
| August 29, 2014 | September 15, 2014 | $0.067 |
| September 30, 2014 | October 15, 2014 | $0.067 |
These distributions equate to a $0.804 annualized distribution rate, or a current annualized yield of 10.65%, based on the closing price of the Company’s common stock of $7.55 per share on May 7, 2014.
Management Commentary
“Increased origination activity since the beginning of 2014 has resulted in the closing of six new opportunities to date, totaling $29.0 million. This effectively replaced the $29.0 million of realizations we received in the second and third quarters, resulting in an investment portfolio of $90.1 million at the end of the third quarter. With $45 million in funding capacity at March 31st, we believe we are well positioned to execute on our expanded opportunity set,” said John Stuart, Chairman and Co-Chief Executive Officer of Full Circle Capital Corporation.
Gregg Felton, President and Co-Chief Executive Officer commented, “The broadening of our investment strategies contributed to an accelerated level of investment activity in the third quarter. We intend to further broaden our origination channels and to continue to expand our investment team to execute on our growing pipeline of investment opportunities.”
Third Quarter Fiscal 2014 Results
The Company’s net asset value at March 31, 2014 was $7.20 per share. During the quarter, the Company generated $2.5 million of interest income. Income from fees, dividends and other sources totaled $0.7 million. The Company recorded net investment income of $1.4 million, or $0.15 per share. Net realized and unrealized gains were $2.0 million, or $0.21 per share. Unrealized gains on investments were $1.8 million, or $0.18 per share and realized gains were $0.2 million, or $0.02 per share. Net increase in net assets from operations was $3.4 million, or $0.36 per share. Per share amounts for the quarter ended March 31, 2014 are based on approximately 9.4 million weighted average shares outstanding compared to 7.6 million weighted average shares outstanding for the quarter ended March 31, 2013. This increase reflects the common equity offerings that Full Circle Capital completed in January and February, 2014.
During the quarter, the Company originated $24.5 million in five new loan facilities. Repayments and realizations from portfolio companies totaled $9.3 million during the three month period.
At March 31, 2014, the Company’s portfolio included debt investments in 21 companies. The average portfolio company debt investment at March 31, 2014 was $3.7 million. The weighted average interest rate on debt investments was 11.41%. At fair value, 86% of portfolio investments were first lien loans, 0% were second lien loans and 14% were equity investments. Approximately 82% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company’s loans was 64% at March 31, 2014 compared to 54% at March 31, 2013.
Subsequent Events
On April 7, 2014, the Board of Directors authorized a share repurchase program which provides for the purchase of up to 1 million shares of outstanding common stock, to be implemented at the discretion of management. Under the repurchase program, Full Circle may, but is not obligated to, repurchase our outstanding common stock in the open market from time to time. The timing and number of shares to be repurchased in the open market will depend on a number of factors, including market conditions and alternative investment opportunities.
On April 30, 2014, the Company closed on approximately $4.5 million of a $150.0 million senior secured second lien term loan to RCS Capital Corporation, a financial services company. The secured second lien term loan is guaranteed by all existing and subsequent direct and indirect domestic subsidiaries of RCS Capital Corporation, and bears interest at LIBOR plus 9.50% with a minimum LIBOR of 1.00% per annum and has a final maturity of April 29, 2021.
Conference Call Details
Management will host a conference call to discuss these results on Friday, May 9, 2014 at 10:00 a.m. ET. To participate in the conference call, please call 866-305-6438 (domestic call-in) or 706-679-7161 (international call-in) and reference code # 42776941.
A live webcast of the conference call and the accompanying slide presentation will be available at http://ir.fccapital.com/CorporateProfile.aspx?iid=4151676. All participants should call or access the website approximately 10 minutes before the conference begins.
A telephone replay of the conference call will be available from 1:00 p.m. ET on May 9, 2014 until 11:59 p.m. ET on May 12, 2014 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation # 42776941. An archived replay of the conference call and slide presentation will also be available in the investor relations section of the company’s website.
About Full Circle Capital Corporation
Full Circle Capital Corporation (www.fccapital.com) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Full Circle lends to and invests in senior secured loans and, to a lesser extent, mezzanine loans and equity securities issued by lower middle-market companies that operate in a diverse range of industries. Full Circle’s investment objective is to generate both current income and capital appreciation through debt and equity investments. For additional information visit the company’s web site www.fccapital.com.
Forward-Looking Statements
This press release contains forward-looking statements which relate to future events or Full Circle's future performance or financial condition. Any statements that are not statements of historical fact (including statements containing the words “believes,” “should,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Full Circle's filings with the Securities and Exchange Commission. Full Circle undertakes no duty to update any forward-looking statements made herein.
FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
| March 31, 2014 | June 30, 2013 | |||||||||
| Unaudited | Audited | |||||||||
| Assets | ||||||||||
Control Investments at Fair Value (Cost of $19,842,061 and $18,139,543, respectively) |
$ | 20,201,058 | $ | 19,115,440 | ||||||
Affiliate Investments at Fair Value (Cost of $19,427,127 and $17,954,622, respectively) |
19,335,138 | 16,547,903 | ||||||||
Non-Control/Non-Affiliate Investments at Fair Value (Cost of $65,692,689 and $53,220,538, respectively) |
60,587,005 | 52,511,158 | ||||||||
| Total Investments at Fair Value (Cost of $104,961,877 and $89,314,703, respectively) | 100,123,201 | 88,174,501 | ||||||||
| Cash | 6,861,986 | 18,029,115 | ||||||||
| Deposit with Broker | 1,050,000 | - | ||||||||
| Interest Receivable | 973,594 | 1,097,970 | ||||||||
| Principal Receivable | 420,720 | 104,768 | ||||||||
| Dividends Receivable | 80,293 | 36,705 | ||||||||
| Due from Affiliate | 1,332 | - | ||||||||
| Due from Portfolio Investment | 137,337 | 105,030 | ||||||||
| Receivable from Notes Offering | - | 2,299,704 | ||||||||
| Prepaid Expenses | 107,459 | 61,198 | ||||||||
| Other Assets | 700,710 | 1,437,273 | ||||||||
| Deferred Offering Expenses | - | 86,834 | ||||||||
| Deferred Debt Issuance Costs | 987,344 | 1,086,895 | ||||||||
| Deferred Credit Facility Fees | 507,550 | 543,846 | ||||||||
| Total Assets | 111,951,526 | 113,063,839 | ||||||||
| Liabilities | ||||||||||
| Due to Affiliates | 736,897 | 728,371 | ||||||||
| Accounts Payable | 186,565 | 471,297 | ||||||||
| Accrued Liabilities | 28,967 | 10,172 | ||||||||
| Due to Broker | 10,000,073 | - | ||||||||
| Payable for Investments Acquired | 5,940,000 | - | ||||||||
| Dividends Payable | 676,143 | 582,842 | ||||||||
| Interest Payable | 31,015 | 134,167 | ||||||||
| Other Liabilities | 494,316 | 358,696 | ||||||||
| Accrued Offering Expenses | 11,000 | - | ||||||||
| Line of Credit | - | 25,584,147 | ||||||||
| Notes Payable 8.25% due June 30, 2020 | 21,145,525 | 21,145,525 | ||||||||
| Distribution Notes | - | 3,404,583 | ||||||||
| Total Liabilities | 39,250,501 | 52,419,800 | ||||||||
| Net Assets | $ | 72,701,025 | $ | 60,644,039 | ||||||
| Components of Net Assets | ||||||||||
Common Stock, par value $0.01 per share (100,000,000 authorized; 10,091,682 and 7,569,382 issued and outstanding, respectively) |
$ | 100,917 | $ | 75,694 | ||||||
| Paid-in Capital in Excess of Par | 83,887,972 | 66,319,579 | ||||||||
| Distributions in Excess of Net Investment Income | (1,091,069) | (200,200) | ||||||||
| Accumulated Net Realized Losses | (5,358,119) | (4,410,832) | ||||||||
| Accumulated Net Unrealized Losses | (4,838,676) | (1,140,202) | ||||||||
| Net Assets | $ | 72,701,025 | $ | 60,644,039 | ||||||
| Net Asset Value Per Share | $ | 7.20 | $ | 8.01 | ||||||
FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
| Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| Investment Income | ||||||||||||||||||
| Interest Income from Non-Control/Non-Affiliate Investments | $ | 1,308,432 | $ | 1,615,618 | $ | 4,839,103 | $ | 5,609,673 | ||||||||||
| Interest Income from Affiliate Investments | 673,896 | 389,518 | 1,984,549 | 950,026 | ||||||||||||||
| Interest Income from Control Investments | 510,038 | 435,300 | 1,452,149 | 1,033,884 | ||||||||||||||
| Dividend Income from Control Investments | 80,293 | 80,178 | 114,704 | 186,768 | ||||||||||||||
| Other Income from Non-Control/Non-Affiliate Investments | 603,190 | 305,935 | 1,966,552 | 834,515 | ||||||||||||||
| Other Income from Affiliate Investments | 3,275 | 3,992 | 12,156 | 63,577 | ||||||||||||||
| Other Income from Control Investments | 12,500 | 12,500 | 37,500 | 37,500 | ||||||||||||||
| Total Investment Income | 3,191,624 | 2,843,041 | 10,406,713 | 8,715,943 | ||||||||||||||
| Operating Expenses | ||||||||||||||||||
| Management Fee | 364,352 | 362,743 | 1,156,099 | 1,041,905 | ||||||||||||||
| Incentive Fee | 351,594 | 328,044 | 1,141,230 | 1,001,406 | ||||||||||||||
| Total Advisory Fees | 715,946 | 690,787 | 2,297,329 | 2,043,311 | ||||||||||||||
| Allocation of Overhead Expenses | 43,604 | 84,552 | 142,315 | 225,860 | ||||||||||||||
| Sub-Administration Fees | 50,000 | 50,000 | 150,000 | 173,429 | ||||||||||||||
| Officers’ Compensation | 75,529 | 75,160 | 226,396 | 225,514 | ||||||||||||||
| Total Costs Incurred Under Administration Agreement | 169,133 | 209,712 | 518,711 | 624,803 | ||||||||||||||
| Directors’ Fees | 26,125 | 24,625 | 86,375 | 86,375 | ||||||||||||||
| Interest Expense | 623,091 | 379,310 | 2,062,570 | 1,214,392 | ||||||||||||||
| Professional Services Expense | 112,629 | 108,998 | 467,110 | 384,061 | ||||||||||||||
| Bank Fees | 9,941 | 3,975 | 45,409 | 12,295 | ||||||||||||||
| Other | 128,380 | 113,470 | 379,015 | 334,647 | ||||||||||||||
| Total Operating Expenses | 1,785,245 | 1,530,877 | 5,856,519 | 4,699,884 | ||||||||||||||
| Net Investment Income | 1,406,379 | 1,312,164 | 4,550,194 | 4,016,059 | ||||||||||||||
| Net Change in Unrealized Gain (Loss) on Investments | 1,751,729 | 168,654 | (3,698,474) | 1,978,556 | ||||||||||||||
| Net Realized Gain (Loss) on: | ||||||||||||||||||
| Investments | 224,320 | - | (946,449) | (4,047,108) | ||||||||||||||
| Foreign Currency Transactions | (906) | - | (838) | - | ||||||||||||||
| Net Realized Gain (Loss) | 223,414 | - | (947,287) | (4,047,108) | ||||||||||||||
| Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 3,381,522 | $ | 1,480,818 | $ | (95,567) | $ | 1,947,507 | ||||||||||
| Earnings (Loss) per Common Share Basic and Diluted | $ | 0.36 | $ | 0.20 | $ | (0.01) | $ | 0.28 | ||||||||||
| Net Investment Income per Common Share Basic and Diluted | $ | 0.15 | $ | 0.18 | $ | 0.56 | $ | 0.59 | ||||||||||
| Weighted Average Shares of Common Share Outstanding Basic and Diluted | 9,419,350 | 7,569,382 | 8,177,036 | 6,835,258 | ||||||||||||||
FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (unaudited)
| Three months ended March 31, 2014 |
Three months ended March 31, 2013 |
Nine months ended March 31, 2014 |
Nine months ended March 31, 2013 |
||||||||||||
| Per Share Data (1) : | |||||||||||||||
| Net asset value at beginning of period | $ | 7.09 | $ | 8.03 | $ | 8.01 | $ | 8.59 | |||||||
| Dilution from offering | - | (3) | - | - | (0.17) | (2) | |||||||||
| Offering costs | (0.03) | - | (0.03) | (0.01) | |||||||||||
| Net investment income (loss) | 0.15 | 0.18 | 0.56 | 0.59 | |||||||||||
| Change in unrealized gain (loss) | 0.18 | 0.02 | (0.53) | 0.28 | |||||||||||
| Realized gain (loss) | 0.02 | 0.00 | (0.14) | (0.59) | |||||||||||
| Dividends declared | (0.21) | (0.23) | (0.67) | (0.69) | |||||||||||
| Net asset value at end of period | $ | 7.20 | $ | 8.00 | $ | 7.20 | $ | 8.00 | |||||||
| (1) | Financial highlights are based on weighted average shares outstanding. |
| (2) | Dilution from offering is based on the change in net asset value from a follow on offering on November 27, 2012. |
| (3) | Dilution from offering is based on the change in net asset value from the follow-on offerings on January 14, 2014 and February 27, 2014. |
| Company Contact: | Investor Relations Contacts: | |
| John E. Stuart, Co-CEO | Stephanie Prince/Jody Burfening | |
| Full Circle Capital Corporation | LHA | |
| 914-220-6300 | 212-838-3777 | |
| jstuart@fccapital.com | sprince@lhai.com |