Declares Fourth Quarter 2017 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 third quarter of 2017. TPVG also declared a fourth quarter 2017
distribution of $0.36 per share.
Third Quarter 2017 Highlights:
- Signed a record $267.0 million of new
term sheets and closed $121.9 million of new debt commitments to
venture growth stage companies;
- Funded a record $82.8 million in debt
investments and $0.3 million in equity investments to eleven
portfolio companies;
- Achieved a 15.4% weighted average
annualized portfolio yield on debt investments for the third
quarter;
- Earned GAAP net investment income of
$4.4 million ($0.27 per share);
- Realized $1.0 million of gains from the
sale of warrants and equity investments ($0.07 per share);
- Issued $74.8 million of 5.75% notes due
2022 (NYSE: TPVY), redeemed $54.6 million of 6.75% notes due 2020
(NYSE: TPVZ);
- Appointed Andrew J. Olson as Chief
Financial Officer;
- Portfolio company Blue Bottle Coffee,
Inc. announced selling a majority stake to Nestlé S.A.;
- Net asset value of $214.8 million, or
$13.39 per share, at September 30, 2017;
- Declared a fourth quarter distribution
of $0.36 per share, payable on December 1, 2017; bringing total
distributions to $5.54 per share since IPO;
- Subsequent to the third quarter, raised
approximately $21.6 million in a private placement from investment
funds managed by the Alternative Investments & Manager
Selection Group of Goldman Sachs Asset Management, L.P. (“GSAM
AIMS”) purchasing 1.6 million shares at $13.54 per share.
Year-To-Date 2017 Highlights:
- Recognized total investment income of
$40.4 million, or $2.53 per share;
- Earned GAAP net investment income of
$21.1 million, or $1.32 per share;
- Signed $459.7 million of debt term
sheets and closed $264.9 million of new debt commitments to venture
growth stage companies;
- Funded $155.4 million in debt and
equity investments to 18 portfolio companies;
- Achieved a 17.4% weighted average
annualized portfolio yield on debt investments for the nine months
ending September 30, 2017;
- Received $204.5 million of repayments
and prepayments from nine portfolio companies; and
- Paid $17.3 million of distributions, or
$1.08 per share.
“The record level of new signed term sheets, customer fundings
and our strong portfolio growth reflect the strength and brand of
the TriplePoint global platform,” said Jim Labe, chairman and chief
executive officer of TPVG. “We will continue to leverage our three
R’s – Reputation, Relationships and References – to capitalize on
the favorable conditions in the venture capital markets and strong
demand for venture growth stage lending.”
“We welcome GSAM AIMS as a shareholder and the financial
flexibility provided by this new capital,” said Sajal Srivastava,
president and chief investment officer of the Company. “Our
successful strategy of working with a select group of venture
capital investors and their high-quality venture growth stage
companies enables us to deploy our capital and grow our investment
portfolio in a disciplined fashion to maximize total return to our
shareholders.”
Portfolio and Investment Activity:
During the third quarter of 2017, the Company entered into
$121.9 million of new debt commitments, funded twelve debt
investments totaling $82.8 million of principal, funded two equity
investments totaling $0.3 million and acquired warrants valued at
$1.5 million. The new debt investments funded during the quarter
had a 13.8% weighted average annualized portfolio yield at
origination. During the quarter, the Company had $21.8 million of
prepayments, resulting in a weighted average annualized portfolio
yield on debt investments for the third quarter of 15.4%. 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 September 30, 2017, the Company held 53 debt investments
with 19 companies and 44 warrant and equity investments with 41
companies. The total cost and fair value of these investments were
$309.2 million and $311.1 million, respectively. Total portfolio
investment activity for the three and nine months ended September
30, 2017 and 2016 was as follows:
For the Three Months Ended September 30,
For the Nine Months Ended September 30, (dollars in
thousands) 2017 2016 2017
2016 Beginning portfolio at fair value $ 253,804 $ 299,649 $
374,311 $ 271,717 New debt investments 79,996 14,659 146,485 91,932
Principal payments from debt investments (3,136 ) (1,650 ) (7,796 )
(5,768 ) Early principal prepayments and repayments (21,750 )
(10,000 ) (204,524 ) (41,115 ) Accretion of debt investment fees
775 2,296 637 4,821 Payment-in-kind coupon 611 316 1,501 1,284 New
warrants 1,538 334 2,939 1,677 New equity investments 304 196 3,703
196 Proceeds from the sale of investments (1,417 ) (1,885 ) (1,491
) (1,892 ) Net realized gains (losses) on investments 1,044 1,081
(2,351 ) (20,906 ) Net change in unrealized gains (losses) on
investments (633 ) 3,861 (2,278 )
6,911 Ending portfolio at fair value $ 311,136
$ 308,857 $ 311,136 $ 308,857
Signed Term Sheets:
During the third quarter of 2017, TriplePoint Capital LLC
(“TPC”) entered into $267.0 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 September 30, 2017, the Company’s unfunded commitments
totaled $158.2 million, of which $50.0 million is dependent upon
customers reaching certain milestones. Of the $158.2 million of
unfunded commitments, $31.0 million will expire during 2017, $97.2
million will expire during 2018 and $30.0 million will expire
during 2019, 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:
For the third quarter of 2017, total investment and other income
was $10.4 million, as compared to $12.5 million for the third
quarter of 2016, resulting in a weighted average annualized
portfolio yield of 15.4% and 15.1%, respectively. The decline is
largely due to a lower average portfolio balance as compared to a
year ago as well as lower income from expirations / terminations of
unfunded commitments. For the nine months ended September 30, 2017,
the Company’s total investment and other income was $40.4 million,
as compared to $33.0 million for the nine months ended September
30, 2016, representing a weighted average annualized portfolio
yield on its debt investments of 17.4% and 14.7%, respectively.
Operating expenses for the third quarter of 2017 were $6.1
million as compared to $6.0 million for the third quarter of 2016.
Operating expenses for the third quarter of 2017 consisted of $2.3
million of interest expense and amortization of deferred credit
facility costs including $0.3 million of interest overlap related
to the repayment of the 6.75% notes due in 2020 (“2020 Notes”),
$1.6 million of base management fees, $1.1 million of income
incentive fees, $0.3 million of administration agreement expenses
and $0.8 million of general and administrative expenses. Operating
expenses for the third quarter of 2016 consisted of $2.0 million of
interest expense and amortization of deferred credit facility
costs, $1.4 million of base management fees, $1.6 million of income
incentive fees, $0.4 million of administration agreement expenses
and $0.6 million of general and administrative expenses. The
Company’s operating expenses were $19.3 million and $14.8 million
for the nine months ended September 30, 2017 and 2016,
respectively.
For the third quarter of 2017, the Company recorded net
investment income of $4.4 million, or $0.27 per share, as compared
to $6.5 million, or $0.40 per share for the third quarter of 2016.
Net investment income for the nine months ended September 30, 2017
was $21.1 million, or $1.32 per share compared to $18.2 million, or
$1.12 per share during the nine months ended September 30,
2016.
During the third quarter of 2017, the Company recorded net
realized gains on the sale of portfolio investments of $1.0
million, or $0.07 per share, offset by a non-cash realized loss on
debt extinguishment of $(1.1) million, or $(0.07) per share, due to
the acceleration of unamortized issuance costs in connection with
the redemption of its 6.75% Notes due 2020 and issuance of its
5.75% Notes due 2022. Net unrealized losses for the third quarter
of 2017 were $(0.6) million, or $(0.04) per share, due to the
reversal of unrealized gains of $(0.8) million due to realized
activity offset by $0.2 million of unrealized appreciation. This
compares to net unrealized gains of $3.9 million, or $0.24 per
share, for the third quarter of 2016. The Company’s net realized
and unrealized losses were $(5.7) million and $(14.0) million for
the nine months ended September 30, 2017 and 2016,
respectively.
The Company’s net increase in net assets resulting from
operations for the third quarter of 2017 was approximately $3.7
million, or $0.23 per share, as compared to a net increase in net
assets of $11.4 million, or $0.71 per share, for the third quarter
of 2016. For the nine months ended September 30, 2017, the
Company’s net increase in net assets resulting from operations was
approximately $15.4 million, or $0.96 per share, as compared to a
$4.2 million, or $0.26 per share, for the nine months ended
September 30, 2016.
Credit Quality:
The Company maintains a credit watch list with borrowers placed
into one of five categories, with Clear, or 1, being the highest
rating and Red, or 5, being the lowest. All new loans are initially
assigned a rating of White, or 2. As of September 30, 2017, the
weighted average investment ranking of the Company’s debt
investment portfolio was 2.02, as compared to 2.06 at the end of
the prior quarter. During the three months ended September 30,
2017, there were four changes within the credit categories. Two
portfolio companies were upgraded from White (2) to Clear (1) and
two portfolio companies were downgraded from White (2) to Yellow
(3). Additional information regarding our credit rating methodology
is detailed in our Form 10-Q for the three months ended September
30, 2017.
The following table shows the credit rankings for the Company’s
debt investments at fair value as of September 30, 2017 and as of
June 30, 2017.
As of September 30, 2017 As of June 30,
2017 Category (dollars in thousands) Fair Value
Percentage of DebtInvestment
Portfolio
Number of
PortfolioCompanies
Fair Value
Percentage of DebtInvestment
Portfolio
Number of
PortfolioCompanies
Clear (1) $ 65,602 22.4 % 4 $ 38,711 16.4 % 2 White (2) 167,332
57.2 10 155,609 66.0 11 Yellow (3) 47,210 16.1 3 29,777 12.6 1
Orange (4) 12,539 4.3 2 11,802 5.0 2 Red (5) — — — —
— — $ 292,683 100.0 % 19 $ 235,899 100.0 % 16
Net Asset Value:
As of September 30, 2017, the Company’s net assets were $214.8
million, or $13.39 per share, as compared to $216.5 million, or
$13.52 per share, as of June 30, 2017.
Liquidity and Capital Resources:
As of September 30, 2017, the Company had total cash of $8.5
million, with available capacity of $174.5 million under its
revolving credit facility. Subsequent to the end of the third
quarter, the Company raised $22.6 million of proceeds from the
issuance of common stock in a private placement with $21.6 million
from GSAM AIMS and $1.0 million from Jim Labe, Sajal Srivastava,
and Andrew Olson.
Distribution:
The Company’s board of directors declared a quarterly
distribution of $0.36 per share for the fourth quarter of 2017
payable on December 1, 2017, to stockholders of record as of
November 17, 2017.
Subsequent Events:
Since September 30, 2017:
- The Company funded $35.5 million in new
investments;
- MongoDB, Inc. priced its initial public
offering on October 19, 2017, raising gross proceeds of $192
million; and
- TPC’s direct originations platform
entered into $10.0 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, November 6, 2017, to discuss its financial results for
the third quarter ended September 30, 2017. To listen to the call,
investors and analysts should dial 1 (866) 652-5200 (domestic) or 1
(412) 317-6060 (international) and ask to join the TriplePoint
Venture Growth call. Please dial in at least five minutes before
the scheduled start time. A replay of the call will be available
through December 6, 2017, by dialing 1 (877) 344-7529 or 1 (412)
317-0088 (international) and entering conference ID 10114090. The
conference call also will 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. 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.
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.
TRIPLEPOINT VENTURE GROWTH BDC
CORP
CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES
(in thousands, except per share
data)
September 30, 2017 December 31, 2016
Assets (unaudited) Investments at fair value
(amortized cost of $309,219 and $370,116, respectively) $ 311,136 $
374,311 Short-term investments at fair value (cost of $94,962 and
$39,990, respectively) 94,962 39,990 Cash 5,145 7,776 Restricted
cash 3,327 7,702 Deferred credit facility costs and other assets
3,035 4,443
Total assets $
417,605 $ 434,222
Liabilities Revolving
credit facility payable $ 25,500 $ 115,000 2020 Notes, net — 53,288
2022 Notes, net 72,302 — Payable for U.S. Treasury bill assets
94,962 39,990 Other payables, accrued expenses, and liabilities
10,082 10,081
Total liabilities
$ 202,846 $ 218,359
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;
16,043 and 15,981 shares issued and outstanding, respectively) 160
160 Paid-in capital in excess of par value 232,317 231,518
Undistributed net investment income 4,862 1,025 Accumulated net
realized losses (24,498 ) (21,035 ) Accumulated net unrealized
gains on investments 1,918 4,195
Total net assets $ 214,759 $ 215,863
Total
liabilities and net assets $ 417,605 $ 434,222
Net asset value per share $ 13.39 $ 13.51
TRIPLEPOINT VENTURE GROWTH BDC
CORP
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
data)
For the Three Months Ended September 30, For the
Nine Months Ended September 30, 2017 2016
2017 2016 Investment income Interest
income from investments $ 10,310 $ 11,207 $ 39,061 $ 31,214 Other
income 109 1,295 1,344 1,772
Total
investment and other income 10,419 12,502 40,405 32,986
Operating expenses Base management fee 1,567 1,376 4,805
4,076 Income incentive fee 1,066 1,568 4,520 1,568 Capital gains
incentive fee — — — — Interest expense and amortization of fees
2,306 2,036 6,861 5,733 Administration agreement expenses 346 395
1,058 1,190 General and administrative expenses 767
632 2,044 2,238
Total operating expenses
6,052 6,007 19,288 14,805
Net investment
income 4,367 6,495 21,117 18,181
Net realized and unrealized gains (losses) Net
realized gains (losses) on investments 1,044 1,081 (2,351 ) (20,906
) Net change in unrealized (losses) gains on investments (620 )
3,859 (2,277 ) 6,906 Net realized loss on extinguishment of debt
(1,112 ) — (1,112 ) —
Net realized
and unrealized (losses) gains (688 ) 4,940
(5,740 ) (14,000 )
Net increase (decrease) in net
assets resulting from operations $ 3,679 $ 11,435 $ 15,377 $
4,181 Basic and diluted net investment income per share $
0.27 $ 0.40 $ 1.32 $ 1.12 Basic and diluted net increase (decrease)
in net assets per share $ 0.23 $ 0.71 $ 0.96 $ 0.26 Basic and
diluted weighted average shares of common stock outstanding 16,023
16,091 16,001 16,227
WEIGHTED AVERAGE PORTFOLIO YIELD ON
DEBT INVESTMENTS
For the Three Months
EndedSeptember 30,
For the Nine Months
EndedSeptember 30,
2017 2016 2017 2016
Weighted average portfolio yield on debt investments 15.4 %
15.1 % 17.4 % 14.7 % Coupon income 10.4 % 10.5 % 10.4 % 10.5 % Net
amortization and accretion of premiums and discounts 0.9 % 0.8 %
0.7 % 0.7 % Net accretion of end-of-term payments 2.2 % 2.4 % 1.9 %
2.6 % Impact of prepayments 1.9 % 1.4 % 4.4 % 0.9 %
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171106006277/en/
Investor Relations and Media ContactAbernathy MacGregor
GroupAlan Oshiki, 212-371-5999aho@abmac.comSheila Ennis,
415-745-3294sbe@abmac.com
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