– Net Investment Income Grows 64.8% to $2.4 Million –
– Closed $38.1 Million in New Investments Thus Far in Calendar 2015 –
– Announces Authorization of Two Million Share Repurchase Program –
GREENWICH, Conn., Sept. 14, 2015 (GLOBE NEWSWIRE) — Full Circle Capital Corporation (Nasdaq:FULL) (the “Company”) today announced its financial results for the fiscal fourth quarter and full year ended June 30, 2015.
Financial Highlights for the Fiscal Fourth Quarter Ended June 30, 2015:
- Originated $26.1 million in new investments.
- Increased total investment income by 30.0% to $4.4 million, compared with $3.4 million for the prior-year quarter.
- Net investment income (“NII”) grew by 64.8% to $2.4 million, or $0.11 per share, compared with $1.5 million, or $0.15 per share, in the prior-year quarter.
- Net realized and unrealized losses were $3.0 million, consisting of net unrealized gains on investments of $0.2 million and net realized losses on investments of $3.2 million.
- Net decrease in net assets from operations was $0.5 million, or $0.02 per share.
- Per share amounts are based on approximately 23.2 million weighted average shares outstanding compared to 10.3 million weighted average shares outstanding for the fourth quarter of fiscal 2014, reflecting share issuances completed during calendar 2014 and 2015.
As of June 30, 2015:
- Net asset value was $4.30 per share and portfolio fair value was $152.1 million
- Weighted average portfolio interest rate was 9.99%
- 81% of portfolio company investments were first lien senior secured loans
On August 4, 2015, the Board of Directors declared monthly distributions for the second quarter of fiscal 2016 of $0.035 per share payable in November and December 2015, and January 2016. These distributions equate to a $0.42 annualized amount or a current annualized yield of 13.4%, based on the closing price of the Company’s common stock of $3.13 per share on September 11, 2015.
Stock Repurchase Program
In August 2015, the Company’s board of directors authorized an increase in the amount of shares of its common stock that may be repurchased under its existing stock repurchase program from one million shares to two million shares. The shares may only be repurchased in the open market and at prices below the then most recently reported net asset value per share of the shares.
Full Circle Capital intends to enter into and implement a Rule 10b5-1 repurchase plan shortly after today’s earnings announcement to implement the stock repurchase program. Depending upon market conditions and other factors, Full Circle Capital’s management also has the discretion to make open market repurchases in addition to any made pursuant to the Rule 10b5-1 repurchase plan.
“Our fiscal fourth quarter was focused on the deployment of our available capital, which resulted in the origination of $26.1 million in investments during the quarter, and an additional $10.0 million in investments subsequent to the quarter end, spread among a diverse group of companies,” said Gregg Felton, President and Chief Executive Officer of Full Circle Capital Corporation. “We believe we have taken considerable care in selecting and funding these investments, and that they will provide a proper alignment of reward and acquired risk.”
“The waiver by our investment adviser of a portion of the base management and incentive fees in the quarter contributed toward ensuring that we were able to cover our monthly distributions with sufficient net investment income,” added Mr. Felton. “Looking ahead, we believe the recent investments of our available capital from the equity issuance earlier this year, combined with continued portfolio growth, position us to generate the necessary investment income over time to enable us to cover the monthly distributions absent any fee waivers; however, to further demonstrate management’s and our investment adviser’s commitment to shareholders’ interests, the waiver will remain in place through the end of fiscal 2016.”
“Finally, to further align our interests with that of our shareholders, our Board has recently increased the number of shares that we can repurchase from one million to two million and we plan to enter into a 10b5-1 plan very shortly to begin implementing the share buyback. With our currently available investment capacity, we believe this is a prudent use of our capital that will be accretive to shareholders while still maintaining significant funds to deploy into additional investments and further grow the Company,” concluded Mr. Felton.
Fourth Quarter Fiscal 2015 Results
The Company’s net asset value at June 30, 2015 was $4.30 per share. During the quarter, the Company generated $4.4 million of interest income compared to $2.9 million in the fourth quarter of fiscal 2014, an increase of 51.4%. Income from fees and other sources in the quarter totaled $0.1 million, compared to $0.5 million in the prior-year quarter.
The Company produced NII of $2.4 million, or $0.11 per share, in the quarter ended June 30, 2015 compared to $1.5 million, or $0.15 per share, in the quarter ended June 30, 2014.
Net realized and unrealized losses in the quarter were $3.0 million. Net unrealized appreciation of $0.2 million was comprised of $3.4 million of net unrealized appreciation on equity investments and $3.2 million of net unrealized depreciation on debt investments. Realized losses on investments were $3.2 million. Net decrease in net assets resulting from operations was $0.5 million, or $0.02 per share.
During the quarter ended June 30, 2015 the Company added $26.1 million in new investments in six new portfolio companies and two current portfolio companies.
At June 30, 2015, the Company’s portfolio included debt investments in 32 companies with an average of $4.2 million per investment. The weighted average interest rate on debt investments was 9.99% at June 30, 2015. At fair value, 80.7% of the Company’s portfolio investments were first lien loans, 7.3% were second lien loans and unsecured notes and 12.0% were equity investments. While gross exposure to equity investments is 12.0%, net exposure to equity investments is 5.5% as the net exposure to Granite Ridge, LLC is $2.6 million when taking the deposit on the swap contract into account. Approximately 73% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company’s loans was 59% at June 30, 2015 compared to 60% at June 30, 2014.
Subsequent to June 30, 2015, the Company has closed $10.0 million in new investments in two new portfolio companies and one existing portfolio company, and received $12.8 million in repayments:
On July 1, 2015, the Company issued a $6.0 million mortgage note to 310E53RD, LLC, a real estate holding company. The note bears interest at LIBOR plus 10.00% with a LIBOR floor of 0.15% and has a final maturity of July 1, 2017.
On July 1, 2015, the senior secured credit facility and revolving commitment with Butler Burgher Group, LLC, was fully repaid at par plus accrued interest and fees for total proceeds of $8.6 million.
On July 17, 2015, the Company purchased $3.0 million of a $175.0 million senior secured term loan to Liquidnet Holdings, Inc., an equities trading platform, at 96.375% of par. The credit facility bears interest at LIBOR plus 6.75% with a LIBOR floor of 1.00% and has a final maturity of May 22, 2019.
On July 31, 2015, the Company purchased an additional $1.0 million of senior secured notes to Lee Enterprises, Incorporated. The notes bear interest at 9.50% and have a final maturity of March 15, 2022.
On September 3, 2015, the senior secured credit facility with GW Power, LLC and Greenwood Fuels WI, LLC was partially repaid for total proceeds of $2.2 million.
On September 4, 2015, Blackberry Ltd announced that it has entered into a definitive agreement to acquire Good Technology Corporation for $425 million in cash. Upon closing of the transaction, the Company is expected to receive an $11 million repayment on its first lien notes, which would reflect a 110% redemption on the Company’s initial investment. The Company has not received an indication of what value, if any, is expected to be received related to the warrants.
On September 10, 2015, the company sold the full $2.0 million of the second lien term loan with GK Holdings, Inc. for total proceeds of $1.96 million plus accrued interest.
Conference Call Details
Management will host a conference call on Tuesday, September 15, 2015 at 8:30 am ET to discuss results. A live webcast of the conference call and accompanying slide presentation will be available at http://ir.fccapital.com. Please access the website approximately 10 minutes before the conference call begins.
To participate in the call, please call (888) 737-3713 (domestic toll-free) or (913) 312-6694 (international) and reference PIN: 1555289.
A webcast replay of the call, along with an archived copy of the presentation, will be available at http://ir.fccapital.com for one year following the call.
An audio replay will also be available until September 22, 2015, by dialing (877) 870-5176 (toll-free) or (858) 384-5517 (international), PIN: 1555289.
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 website www.fccapital.com.
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|
|June 30, 2015||June 30, 2014|
|Control Investments at Fair Value (Cost of $11,409,596 and $20,253,149, respectively)||$ 5,812,064||$ 17,539,057|
|Affiliate Investments at Fair Value (Cost of $24,434,726 and $20,177,115, respectively)||16,019,272||14,588,417|
|Non-Control/Non-Affiliate Investments at Fair Value (Cost of $136,351,581 and $123,605,311, respectively)||130,282,423||118,063,285|
|Total Investments at Fair Value (Cost of $172,195,903 and $164,035,575, respectively)||152,113,759||150,190,759|
|Open Swap Contract Asset, at Fair Value||—||—|
|Deposit with Broker||—||2,525,000|
|Due from Affiliates||605,749||4,273|
|Due from Portfolio Investments||180,300||135,288|
|Receivable on Swap Contract||1,081||—|
|Deferred Offering Expenses||328,168||—|
|Deferred Credit Facility Fees||267,645||449,350|
|Due to Affiliates||1,052,489||891,966|
|Deposit from Swap Counterparty||10,380,000|
|Due to Broker||—||25,000,221|
|Payable for Investments Acquired||15,020,000||24,900,172|
|Accrued Offering Expenses||7,258||35,828|
|Line of Credit||—||8,435,463|
|Notes Payable 8.25% due June 30, 2020 (plus unamortized premium of $158,504 and $0 and less deferred debt issuance costs of $833,541 and $947,937, respectively.||32,970,488||20,197,588|
|Commitments and contingencies||—||—|
|Net Assets||$ 99,938,567||$ 72,980,277|
|Components of Net Assets|
|Common Stock, par value $0.01 per share (100,000,000 authorized; 23,235,430 and 11,443,034 issued and outstanding, respectively)||$ 232,354||$ 114,430|
|Paid-in Capital in Excess of Par||132,487,067||92,103,666|
|Distributions in Excess of Net Investment Income||(119,318)||(131,251)|
|Accumulated Net Realized Losses||(12,579,392)||(5,261,752)|
|Accumulated Net Unrealized Losses||(20,082,144)||(13,844,816)|
|Net Assets||$ 99,938,567||$ 72,980,277|
|Net Asset Value Per Share||$ 4.30||$ 6.38|
|FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)|
|Three Months Ended||Year Ended|
|June 30,||June 30,|
|Interest Income from Non-Control/Non-Affiliate Investments||$ 3,558,167||$ 1,647,626||$ 13,044,316||$ 6,486,729|
|Interest Income from Affiliate Investments||610,424||716,812||2,445,713||2,701,361|
|Interest Income from Control Investments||184,892||511,258||1,465,069||1,963,407|
|Dividend Income from Control Investments||36,247||—||36,247||114,704|
|Other Income from Non-Control/Non-Affiliate Investments||27,174||521,407||542,164||2,487,959|
|Other Income from Affiliate Investments||4,004||4,436||98,671||16,592|
|Other Income from Control Investments||12,500||12,500||50,000||50,000|
|Other Income from Non-Investment Sources||8,566||2,941||67,163||2,941|
|Total Investment Income||4,441,974||3,416,980||17,749,343||13,823,693|
|Total Advisory Fees||1,042,956||845,727||4,078,058||3,143,056|
|Allocation of Overhead Expenses||44,531||38,422||171,559||180,737|
|Total Costs Incurred Under Administration Agreement||181,681||163,951||731,447||682,662|
|Professional Services Expense||191,032||143,252||700,324||610,362|
|Total Gross Operating Expenses||2,592,573||1,936,453||10,557,114||7,792,972|
|Management Fee Waiver and Expense Reimbursement||(590,319)||—||(1,420,843)||—|
|Total Net Operating Expenses||2,002,254||1,936,453||9,136,271||7,792,972|
|Net Investment Income||2,439,720||1,480,527||8,613,072||6,030,721|
|Net Change in Unrealized Gain (Loss) on Investments||236,919||(9,006,140)||(6,237,328)||(12,704,614)|
|Net Realized Gain (Loss) on:|
|Foreign Currency Transactions||—||(63)||(1,248)||(901)|
|Net Realized Gain (Loss)||(3,191,163)||(1,215)||(7,576,472)||(948,502)|
|Net Increase (Decrease) in Net Assets Resulting from Operations||$ (514,524)||$ (7,526,828)||$ (5,200,728)||$ (7,622,395)|
|Earnings (Loss) per Common Share Basic and Diluted||$ (0.02)||$ (0.73)||$ (0.35)||$ (0.88)|
|Net Investment Income per Common Share Basic and Diluted||$ 0.11||$ 0.15||$ 0.63||$ 0.71|
|Weighted Average Shares of Common Stock Outstanding Basic and Diluted||23,224,818||10,269,882||14,803,637||8,698,814|
|FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES|
|August 31, 2010|
|Year Ended||Year Ended||Year Ended||Year Ended||operations) to|
|June 30, 2015||June 30, 2014||June 30, 2013||June 30, 2012||June 30, 2011|
|Per Share Data (1)(2) :|
|Net asset value at beginning of period||$ 6.38||$ 8.01||$ 8.59||$ 9.08||$ 9.40|
|Accretion (dilution) from offering(s) (3)||(0.92)||0.03||(0.18)||—||—|
|Net investment income (loss) (4)||0.63||0.71||0.77||0.78||0.70|
|Net change in unrealized gain (loss)||(0.51)||(1.36)||0.37||(0.32)||(0.29)|
|Net realized gain (loss)||(0.51)||(0.11)||(0.60)||(0.03)||0.06|
|Dividends from net investment income||(0.63)||(0.69)||(0.78)||(0.80)||(0.75)|
|Return of capital||(0.08)||(0.17)||(0.14)||(0.12)||—|
|Net asset value at end of period||$ 4.30||$ 6.38||$ 8.01||$ 8.59||$ 9.08|
|(1) Financial highlights are based on weighted average shares outstanding.|
|(2) Financial highlights for the period from April 16, 2010 (inception) through June 30, 2010 are not presented as the Company’s operations were limited to organization and offering activities only.|
|(3) Accretion and dilution from offering(s) is based on the net change in net asset value from each follow-on offering.|
|(4) Net investment income (loss) per share is calculated based on the beginning of year and end of year shares outstanding.|
CONTACT: Company Contact: Gregg J. Felton, President and Chief Executive Officer John Stuart, Chairman Full Circle Capital Corporation (203) 900 - 2100 firstname.lastname@example.org Investor Relations Contacts: Garrett Edson/Brad Cohen ICR, LLC (203) 682-8200