Net Investment Income of $0.40 per share and
Net Increase in Net Assets of $0.45 per share
Record Investment Portfolio of $457.7
Million as of March 31, 2019
Declares Second Quarter 2019 Distribution of
$0.36 Per Share
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the
“Company,” "TPVG," “we,” “us,” or “our”), the leading financing
provider to venture growth stage companies backed by a select group
of venture capital firms in the technology, life sciences and other
high growth industries, today announced its financial results for
the first quarter ended March 31, 2019 and its second quarter 2019
distribution of $0.36 per share.
First Quarter 2019 Highlights
- Earned net investment income of $9.9
million, or $0.40 per share;
- Generated a net increase in net assets
of $11.1 million, or $0.45 per share, resulting in a net asset
value of $13.59 per share;
- Signed $250.0 million of new term
sheets at TriplePoint Capital LLC (“TPC”), and TPVG closed $191.0
million of new debt commitments to venture growth stage
companies;
- Funded $89.5 million in debt
investments with a 13.0% weighted average annualized portfolio
yield at origination;
- Grew the investment portfolio to a
record level of $457.7 million as of March 31, 2019;
- Achieved a 16.5% weighted average
annualized portfolio yield on debt investments, including the
impact of prepayments;
- Realized a 11.9% return on average
equity, based on net investment income, during the quarter;
and
- Declared a second quarter distribution
of $0.36 per share, payable on June 14, 2019; bringing total
distributions to $7.44 per share since the Company’s Initial Public
Offering.
“The first quarter marked the fifth anniversary of our initial
public offering. Our brand, reputation, focus on venture growth
stage companies and our track record continue to differentiate us
in the market,” said Jim Labe, Chairman and Chief
Executive Officer of TPVG. “We are pleased to grow our platform and
our investment portfolio while delivering attractive returns to our
stockholders.”
“We continue to have strong demand for venture growth stage
lending from high quality venture capital-backed companies,”
said Sajal Srivastava, President and Chief Investment Officer
of the Company. “We will maintain our disciplined underwriting as
we capitalize on these opportunities.”
PORTFOLIO AND INVESTMENT ACTIVITY
During the first quarter of 2019, the Company entered into
$191.0 million of new debt commitments with nine companies, funded
debt investments totaling $89.5 million to nine companies and
acquired warrant investments valued at $1.8 million in eight
companies. Debt investments funded during the quarter carried a
weighted average annualized portfolio yield of 13.0% at
origination. During the quarter, the Company had $57.6 million of
early principal prepayments, $5.0 million of repayments at or near
maturity and principal amortization of $7.9 million. The weighted
average annualized portfolio yield on debt investments for the
first quarter was 16.5%, including the impact of prepayments and
other activity, and 13.8% excluding the impact of prepayments and
other activity. The Company calculates weighted average portfolio
yield as the annualized rate of the interest income recognized
during the period divided by the average amortized cost of debt
investments in the portfolio at the beginning of each month in the
period.1
As of March 31, 2019, the Company held 86 debt investments with
29 companies and 66 warrant and equity investments in 60 companies.
The total cost and fair value of these investments were $458.2
million and $457.7 million, respectively.
Total portfolio investment activity for the three months ended
March 31, 2019 and 2018 was as follows:
For the Three Months Ended March 31, (in
thousands) 2019 2018 Beginning portfolio
at fair value $ 433,417 $ 372,103 New debt investments, net (1)
87,639 36,968 Scheduled principal payments from debt investments
(12,960 ) (5,876 ) Early principal payments, repayments and
recoveries (57,553 ) (8,348 ) Accretion of debt investment fees
3,235 2,948 Payment-in-kind coupon 771 605 New warrant investments
1,814 615 New equity investments 500 250 Proceeds and dispositions
of investments (322 ) (3 ) Net realized (losses) gains (29 ) 8 Net
unrealized gains on investments 1,183 1,988
Ending portfolio at fair value $ 457,695 $
401,258
(1) Debt balance is net of fees and discounts applied to the
loan at origination.
SIGNED TERM SHEETS
During the first quarter of 2019, TPC entered into $250.0
million of non-binding term sheets to venture growth stage
companies. These opportunities are subject to underwriting
conditions including, but not limited to, the completion of due
diligence, negotiation of definitive documentation and investment
committee approval, as well as compliance with TPC’s allocation
policy. Accordingly, there is no assurance that any or all of these
transactions will be completed or assigned to the Company, even
though the Company is the primary vehicle through which TPC focuses
its venture growth stage business.
UNFUNDED COMMITMENTS
As of March 31, 2019, the Company’s unfunded commitments totaled
$379.7 million, of which $102.0 million is dependent upon portfolio
companies reaching certain milestones. Of the $379.7 million of
unfunded commitments, $218.7 million will expire during 2019,
$131.0 million will expire during 2020 and $30.0 million will
expire in 2021 if not drawn prior to expiration. Since these
commitments may expire without being drawn, unfunded commitments do
not necessarily represent future cash requirements or future
earning assets for the Company.
RESULTS OF OPERATIONS
Total investment and other income was $17.5 million for the
first quarter of 2019, representing a weighted average annualized
portfolio yield of 16.5% on debt investments, as compared to $12.6
million and 14.0%, for the first quarter of 2018. The increase in
investment income was driven by higher weighted average principal
outstanding on our investment portfolio and an increase in
prepayments and other income.
Operating expenses for the first quarter of 2019 were $7.6
million as compared to $6.7 million for the first quarter of 2018.
Operating expenses for the first quarter of 2019 consisted of $2.2
million of interest expense and amortization of deferred credit
facility costs, $1.8 million of base management fees, $2.5 million
of income incentive fees, $0.4 million of administration agreement
expenses and $0.7 million of general and administrative expenses.
Operating expenses for the first quarter of 2018 consisted of $2.5
million of interest expense and amortization of deferred credit
facility costs, $1.5 million of base management fees, $1.5 million
of income incentive fees, $0.4 million of administration agreement
expenses and $0.7 million of general and administrative
expenses.
For the first quarter of 2019, the Company recorded net
investment income of $9.9 million, or $0.40 per share, as compared
to $5.9 million, or $0.34 per share, for the first quarter of 2018.
Revenue increased in the first quarter of 2019, as compared to the
first quarter of 2018, primarily due to an increase in weighted
average principal outstanding on debt investments and an increase
in principal prepayments and other income.
During the first quarter of 2019, the Company recorded $(29
thousand), or $(0.00) per share, of net realized losses on
investments, compared to net realized gains on investments of $8
thousand, or $0.00 per share, for the first quarter of 2018. Net
unrealized appreciation on investments for the first quarter of
2019 was $1.2 million, or $0.05 per share, mainly resulting from
market-related changes affecting fair value estimates, as compared
to net unrealized appreciation on investments of $2.0 million, or
$0.11 per share, for the first quarter of 2018.
The Company’s net increase in net assets resulting from
operations for the first quarter of 2019 was approximately $11.1
million, or $0.45 per share, as compared to approximately $7.9
million, or $0.45 per share, for the first quarter of 2018.
CREDIT QUALITY
The Company maintains a credit watch list with portfolio
companies placed into one of five categories, with Clear, or 1,
being the highest rating and Red, or 5, being the lowest.
Generally, all new loans receive an initial grade of White (2)
unless the portfolio company’s credit quality meets the
characteristics of another risk category.
As of March 31, 2019, the weighted average investment ranking of
the Company’s debt investment portfolio was 1.95, as compared to
1.87 at the end of the prior quarter. During the three months ended
March 31, 2019, portfolio company credit category changes,
excluding fundings and repayments, consisted of the following: one
portfolio company with a principal balance of $14.6 million was
upgraded from White (2) to Clear (1) and two portfolio companies
with a combined principal balance of $29.2 million were downgraded
from Clear (1) to White (2). Additional information regarding our
credit rating methodology is detailed in our Form 10-Q for the
three months ended March 31, 2019.
The following table shows the credit rankings for the Company’s
debt investments at fair value as of March 31, 2019 and December
31, 2018.
As of March 31, 2019 As of December 31,
2018
Category(dollars in thousands)
Fair Value
% of
DebtInvestmentPortfolio
# of PortfolioCompanies
Fair Value
% of
DebtInvestmentPortfolio
# of PortfolioCompanies
Clear (1) $ 81,225 19.1 % 4 $ 112,032 27.6 % 7 White (2) 293,911
69.3 20 245,544 60.6 17 Yellow (3) 40,163 9.5 3 38,982 9.6 3 Orange
(4) 6,886 1.6 1 6,789 1.7 1 Red (5) 2,211 0.5 1 2,000
0.5 1 $ 424,396
100.0 % 29 $ 405,347
100.0
% 29
NET ASSET VALUE
As of March 31, 2019, the Company’s net assets were $337.2
million, or $13.59 per share, as compared to $334.5 million, or
$13.50 per share, as of December 31, 2018.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2019, the Company had total liquidity of $171.2
million, consisting of cash of $42.0 million and available capacity
under its revolving credit facility of $129.2 million, subject to
existing advance rates, terms and covenants.
DISTRIBUTION
The Company’s board of directors declared a quarterly
distribution of $0.36 per share for the second quarter of 2019,
payable on June 14, 2019, to stockholders of record as of May 31,
2019.
SUBSEQUENT EVENTS
Since April 1, 2019:
- The Company closed $17.1 million of
additional debt commitments;
- The Company funded $39.8 million in new
investments; and
- TPC’s direct originations platform
entered into $95.0 million of additional non-binding signed term
sheets with venture growth stage companies.
CONFERENCE CALL
The Company will host a conference call at 5:00 p.m. Eastern
Time today, May 1, 2019, to discuss its financial results for the
first quarter ended March 31, 2019. To listen to the call,
investors and analysts should dial 1 (844) 826-3038 (domestic) or 1
(412) 317-5184 (international) and ask to join the TriplePoint
Venture Growth BDC Corp. call. Please dial in at least five minutes
before the scheduled start time. A replay of the call will be
available through June 1, 2019, by dialing 1 (877) 344-7529
(domestic) or 1 (412) 317-0088 (international) and entering
conference ID10131105. The conference call will also be available
via a live audio webcast in the investor relations section of the
Company’s website, http://www.tpvg.com. An online archive of the
webcast will be available on the Company’s website for 30 days
after the call.
ABOUT TRIPLEPOINT VENTURE GROWTH BDC CORP.
The Company serves as the primary financing source for the
venture growth stage business segment of TriplePoint Capital
LLC, the leading global provider of financing across all stages of
development to technology, life sciences and other high growth
companies backed by a select group of venture capital
firms. The Company’s investment objective is to maximize its
total return to stockholders primarily in the form of current
income and, to a lesser extent, capital appreciation by primarily
lending with warrants to venture growth stage companies. The
Company is an externally managed, closed-end, non-diversified
management investment company that has elected to be regulated as a
business development company under the Investment Company Act of
1940, as amended. More information is available
at http://www.tpvg.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release constitute
forward-looking statements. Forward-looking statements are not
guarantees of future performance, condition or results and involve
a number of substantial risks and uncertainties, many of which are
difficult to predict and are generally beyond the Company's
control. Words such as "anticipates," "expects," "intends,"
"plans," "will," "may," "continue," "believes," "seeks,"
"estimates," "would," "could," "should," "targets," "projects," and
variations of these words and similar expressions are intended to
identify forward-looking statements. 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 the Company’s filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management’s
opinions only as of the date hereof. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by law.
TriplePoint Venture Growth BDC
Corp.
Consolidated Statements of Assets and
Liabilities
(in thousands, except per share data)
March 31, 2019 December 31, 2018 Assets
(unaudited) Investments at fair value (amortized cost of
$458,176 and $435,084, respectively) $ 457,695 $ 433,417 Short-term
investments at fair value (cost of $49,994 and $19,999,
respectively) 49,994 19,999 Cash 35,973 3,382 Restricted cash 6,014
6,567 Deferred credit facility costs and other assets 4,700
3,689
Total assets $ 554,376 $
467,054 Liabilities Revolving credit facility
payable $ 80,776 $ 23,000 2022 Notes, net 73,071 72,943 Payable for
U.S. Treasury bill assets 49,994 19,999 Other payables, accrued
expenses, and liabilities 13,336 16,581
Total liabilities
$ 217,177 $ 132,523 Net
assets Preferred stock, par value $0.01 per share (50,000
shares authorized; no shares issued and outstanding, respectively)
$ — $ — Common stock, par value $0.01 per share (450,000 shares
authorized; 24,820 and 24,780 shares issued and outstanding,
respectively) 248 248 Paid-in capital in excess of par value
331,847 331,329 Total distributable earnings 5,104 2,954
Total
net assets $ 337,199 $ 334,531
Total liabilities and net assets $ 554,376
$ 467,054 Net asset value per share
$ 13.59 $ 13.50
TriplePoint Venture Growth BDC
Corp.
Consolidated Statements of
Operations
(in thousands, except per share data)
(unaudited)
For the Three Months Ended March 31, 2019
2018 Investment income Interest income from
investments $ 17,147 $ 12,616 Other income 344
3
Total investment and other income 17,491
12,619 Operating expenses Base management fee
1,761 1,528 Income incentive fee 2,479 1,487 Capital gains
incentive fee — — Interest expense and amortization of fees 2,203
2,518 Administration agreement expenses 422 407 General and
administrative expenses 711 732
Total
operating expenses 7,576 6,672 Net
investment income 9,915
5,947 Net realized and unrealized gains
(losses) Net realized (losses) gains on investments (29 ) 8 Net
change in unrealized gains on investments 1,183
1,988
Net realized and unrealized gains (losses)
1,154 1,996 Net
increase in net assets resulting from operations $
11,069 $ 7,943 Basic and diluted
net investment income per share $ 0.40 $ 0.34 Basic and diluted net
increase in net assets per share $ 0.45 $ 0.45 Basic and diluted
weighted average shares of common stock outstanding 24,782 17,730
Weighted Average Portfolio Yield on
Debt Investments
For the Three Months Ended March 31, 2019
2018 Weighted average portfolio yield on debt
investments 16.5 % 14.0 % Coupon income 10.7 % 10.5 % Net
amortization and accretion of premiums and discounts 0.9 % 0.9 %
Net accretion of end-of-term payments 2.2 % 2.2 % Impact of
prepayments 2.7 % 0.4 %
Weighted average portfolio yield on debt investments for periods
shown are the annualized rate of the interest income recognized
during the period divided by the average amortized cost of debt
investments in the portfolio at the beginning of each month in the
period.
1 The Company’s weighted average annualized portfolio yield on
debt investments may be higher than an investor’s yield on an
investment in shares of its common stock. The weighted average
annualized portfolio yield on debt investments does not reflect
operating expenses that may be incurred by the Company. In
addition, the Company’s weighted average annualized portfolio yield
on debt investments disclosed above does not consider the effect of
any sales commissions or charges that may be incurred in connection
with the sale of shares of its common stock.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190501005924/en/
INVESTOR RELATIONS AND MEDIA CONTACTAbernathy MacGregor
GroupAlan Oshiki / Sheila Ennis212-371-5999 /
415-745-3294aho@abmac.com / sbe@abmac.com
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