Medley Capital Corporation
Announces Fourth Quarter and Fiscal Year Ended September 30, 2017
Financial Results
NEW YORK, NY (December 7, 2017) - Medley Capital
Corporation (NYSE: MCC) (the "Company") today announced financial
results for the quarter and year ended September 30,
2017.
Fourth Quarter Highlights
-
Declared a dividend of $0.16 per
share
-
Net investment income of $0.16 per
share
-
Net asset value (NAV) of $8.45 per
share
Portfolio Investments
The total value of our investments was $837.0
million at September 30, 2017. During the quarter ended September
30, 2017, the Company originated $58.0 million of new investments
and had $82.0 million of repayments resulting in net repayments of
$24.0 million. The majority of new investments were in 7 directly
originated senior secured loans to sponsor backed borrowers. As of
September 30, 2017, the Company had investments in securities of 64
portfolio companies with approximately 67.5% consisting of senior
secured first lien investments, 16.2% consisting of senior secured
second lien investments, and 16.3% in equities / warrants. As of
September 30, 2017, the weighted average yield based upon the cost
basis of our income bearing portfolio investments, excluding cash
and cash equivalents, was 10.8%.
Results of Operations: Three
Months Ended September 30, 2017
For the three months ended September 30, 2017, the
Company reported net investment income per share and net loss per
share of $0.16 and $0.22, respectively, calculated based upon the
weighted average shares outstanding. As of September 30, 2017, the
Company's NAV was $8.45 per share.
Investment Income
For the three months ended September 30, 2017,
gross investment income was $22.1 million and consisted of $18.8
million of portfolio interest income, $1.5 million of dividend
income, and $1.8 million of fee income.
Expenses
For the three months ended September 30, 2017,
total expenses were $13.5 million and consisted of the following:
base management fees of $4.3 million, interest and financing
expenses of $7.2 million, professional fees of $0.3 million,
administrator expenses of $0.9 million, directors fees of $0.2
million, and other general and administrative related expenses of
$0.6 million.
Net Investment Income
For the three months ended September 30, 2017, the
Company reported net investment income of $8.6 million, or $0.16,
on a weighted average per share basis.
Net Realized and Unrealized
Gains/Losses
For the three months ended September 30, 2017, the
Company reported a net realized loss of $11.7 million and net
unrealized depreciation, including the provision for income taxes
on unrealized depreciation on investments, of $8.4 million.
For the three months ended September 30, 2017, the
Company reported a loss on extinguishment of debt of $0.6
million.
Results of Operations: Year Ended
September 30, 2017
The Company reported net investment income and net
loss of $0.67 per share and $0.28 per share, respectively,
calculated based upon the weighted average shares outstanding, for
the year ended September 30, 2017.
Investment Income
For the year ended September 30, 2017, gross
investment income was $96.3 million and consisted of $85.5 million
of portfolio interest income, $4.2 million of dividend income, and
$6.6 million of fee income.
Expenses
For the year ended September 30, 2017, total
expenses, net of management and incentive fee waivers, were $59.6
million and consisted of the following: base management fees, net
of waiver, of $17.7 million, incentive fees, net of waiver, of $0.9
million, interest and financing expenses of $31.4 million,
professional fees of $2.2 million, administrator expenses of $3.8
million, directors fees of $0.6 million, and other general and
administrative related expenses of $3.0 million.
Net Investment Income
For the year ended September 30, 2017, the Company
reported net investment income of $36.4 million, or $0.67, on a
weighted average per share basis.
Net Realized and Unrealized
Gains/Losses
For the year ended September 30, 2017, the Company
reported a net realized loss on investments of $73.1 million and
net unrealized appreciation, including the provision for income
taxes on unrealized depreciation on investments, of $22.7
million.
For the year ended September 30, 2017, the Company
reported a loss on extinguishment of debt of $1.1 million.
Liquidity and Capital
Resources
On September 1, 2017, the Company voluntarily
prepaid $72.0 million of its senior secured term loan credit
facility (the "Term Loan Facility,") which reduced the balance to
$102.0 million from $174.0 million.
As of September 30, 2017, the Company had a cash
balance of $108.6 million and $68.0 million of total debt
outstanding under its $200.0 million senior secured revolving
credit facility.
The Company also had $102.0 million of debt
outstanding under the Term Loan Facility, $150.0 million
outstanding in SBA-guaranteed debentures, $74.0 million outstanding
in aggregate principal amount of 6.5% senior notes due 2021 and
$102.8 million outstanding in aggregate principal amount of 6.125%
senior notes due 2023.
Dividend Declaration
On October 31, 2017, the Company's Board of
Directors declared a dividend of $0.16 per share payable on
December 22, 2017 to stockholders of record at the close of
business on November 22, 2017. The specific tax characteristics of
the dividend will be reported to stockholders on Form 1099 after
the end of the calendar year.
Webcast/Conference Call
The Company will host an earnings conference call
and audio webcast at 10:00 a.m. (Eastern Time) on Thursday,
December 7, 2017.
All interested parties may participate in the
conference call by dialing (888) 637-5728 approximately 5-10
minutes prior to the call, international callers should dial (484)
747-6636. Participants should reference Medley Capital Corporation
and the Conference ID: 99307854. Following the call you may access
a replay of the event via audio webcast. This conference call will
be broadcast live over the Internet and can be accessed by all
interested parties through the Company's website,
http://www.medleycapitalcorp.com. To listen to the live call,
please go to the Company's website at least 15 minutes prior to the
start of the call to register and download any necessary audio
software. For those who are not able to listen to the live
broadcast, a replay will be available shortly after the call on the
Company's website.
Financial Statements
| Medley
Capital Corporation |
| |
|
| Consolidated
Statements of Assets and Liabilities |
| (in
thousands, except share and per share data) |
| |
|
|
|
|
| |
September 30, 2017 |
|
September 30, 2016 |
| |
|
|
|
| ASSETS |
|
|
|
| Investments at fair value |
|
|
|
Non-controlled/non-affiliated investments
(amortized cost of $625,108 and $813,814, respectively) |
$ 575,496 |
|
$ 767,302 |
Affiliated investments (amortized cost of
$91,027 and $10,000, respectively) |
90,071 |
|
10,000 |
Controlled investments (amortized cost of
$197,918 and $189,077, respectively) |
171,424 |
|
136,882 |
| Total investments at fair value |
836,991 |
|
914,184 |
| Cash and cash equivalents |
108,572 |
|
104,485 |
| Interest receivable |
9,371 |
|
8,982 |
| Other assets |
3,322 |
|
893 |
| Fees Receivable |
765 |
|
1,404 |
| Deferred offering costs |
307 |
|
243 |
| Receivable for dispositions and investments sold |
232 |
|
689 |
| Total assets |
$ 959,560 |
|
$ 1,030,880 |
|
|
|
|
| LIABILITIES |
|
|
|
Revolving credit facility payable
(net of debt issuance costs of $1,777 and
$3,590, respectively) |
$ 66,223 |
|
$ 10,410 |
Term loan payable (net of debt issuance
costs of $1,046 and $2,197, respectively) |
100,954 |
|
171,803 |
Notes payable (net of debt issuance
costs of $4,123 and $4,630, respectively) |
172,752 |
|
172,883 |
SBA debentures payable (net of debt
ssuance costs of $2,846 and $3,525,
respectively) |
147,154 |
|
146,475 |
| Management and incentive fees payable |
4,312 |
|
4,559 |
| Interest and fees payable |
3,760 |
|
1,714 |
| Accounts payable and accrued expenses |
1,864 |
|
2,663 |
| Deferred tax liability |
912 |
|
2,004 |
| Administrator expenses payable |
860 |
|
990 |
| Deferred revenue |
259 |
|
370 |
| Due to affiliate |
81 |
|
90 |
| Total liabilities |
$ 499,131 |
|
$ 513,961 |
| |
|
|
|
| NET ASSETS |
|
|
|
Common stock, par value $0.001 per share,
100,000,000
common shares authorized, 54,474,211 and 54,474,211
common shares issued and outstanding, respectively |
$ 54 |
|
$ 54 |
| Capital in excess of par value |
705,046 |
|
705,326 |
| Accumulated undistributed net investment income |
9,528 |
|
10,812 |
| Accumulated net realized gain/(loss) from investments |
(176,663) |
|
(99,000) |
Net unrealized appreciation/(depreciation) on
investments,
net of deferred taxes |
(77,536) |
|
(100,273) |
| Total net assets |
460,429 |
|
516,919 |
| Total liabilities and net assets |
$ 959,560 |
|
$ 1,030,880 |
| |
|
|
|
|
| NET ASSET VALUE PER SHARE |
$ 8.45 |
|
$ 9.49 |
| Medley
Capital Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated
Statements of Operations |
| (in
thousands, except share and per share data) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
For the three months |
|
For the years |
| |
|
|
|
ended September 30 |
|
ended September 30 |
| |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
|
|
|
|
|
|
|
|
|
|
| INVESTMENT INCOME: |
|
|
|
|
|
|
|
|
| Interest from investments |
|
|
|
|
|
|
|
|
| Non-controlled/non-affiliated investments: |
|
|
|
|
|
|
|
|
| Cash |
|
|
$ 14,334 |
|
$ 21,155 |
|
$ 65,399 |
|
$ 98,057 |
| Payment-in-kind |
|
|
1,779 |
|
1,862 |
|
9,970 |
|
8,010 |
|
Affiliated investments: |
|
|
|
|
|
|
|
|
|
|
| Cash |
|
|
458 |
|
167 |
|
1,950 |
|
667 |
| Payment-in-kind |
|
|
416 |
|
- |
|
775 |
|
- |
|
Controlled investments: |
|
|
|
|
|
|
|
|
|
|
| Cash |
|
|
728 |
|
44 |
|
2,046 |
|
950 |
| Payment-in-kind |
|
|
1,103 |
|
1,234 |
|
5,100 |
|
4,531 |
| Total interest income |
|
|
18,818 |
|
24,462 |
|
85,240 |
|
112,215 |
| Dividend income, net of provisional taxes |
|
1,487 |
|
713 |
|
4,232 |
|
1,047 |
| Interest from cash and cash equivalents |
|
54 |
|
16 |
|
164 |
|
32 |
| Fee income |
|
1,788 |
|
2,004 |
|
6,620 |
|
7,455 |
| Total
investment income |
|
|
|
22,147 |
|
27,195 |
|
96,256 |
|
120,749 |
|
|
|
|
|
|
|
|
|
|
|
|
| EXPENSES: |
|
|
|
|
|
|
|
|
| Base management fees |
|
4,312 |
|
4,589 |
|
17,773 |
|
19,470 |
| Incentive fees |
|
- |
|
1,633 |
|
896 |
|
11,492 |
| Interest and financing expenses |
|
7,164 |
|
7,706 |
|
31,403 |
|
30,277 |
| Administrator expenses |
|
860 |
|
990 |
|
3,848 |
|
3,915 |
| General and administrative |
|
651 |
|
848 |
|
2,555 |
|
2,336 |
| Professional fees |
|
262 |
|
450 |
|
2,192 |
|
2,277 |
| Directors fees |
|
175 |
|
147 |
|
647 |
|
544 |
| Insurance |
|
99 |
|
100 |
|
397 |
|
494 |
Expenses before management
and incentive fee waivers |
|
13,523 |
|
16,463 |
|
59,711 |
|
70,805 |
| Management fee waiver |
|
- |
|
(31) |
|
(48) |
|
(143) |
| Incentive fee waiver |
|
- |
|
(1,633) |
|
(44) |
|
(3,504) |
Total
expenses net of management and
incentive fee waivers |
|
|
|
13,523 |
|
14,799 |
|
59,619 |
|
67,158 |
| Net investment income before excise taxes |
|
8,624 |
|
12,396 |
|
36,637 |
|
53,591 |
| Excise tax expense |
|
- |
|
- |
|
(267) |
|
- |
| NET INVESTMENT INCOME |
|
8,624 |
|
12,396 |
|
36,370 |
|
53,591 |
|
|
|
|
|
|
|
|
|
|
|
|
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS: |
|
|
|
|
|
|
|
|
| Net realized gain/(loss) from investments |
|
|
|
|
|
|
|
|
| Non-controlled/non-affiliated investments |
|
434 |
|
(15,684) |
|
(40,008) |
|
(39,383) |
| Affiliated investments |
|
3,163 |
|
- |
|
3,392 |
|
- |
| Controlled investments |
|
(15,312) |
|
- |
|
(36,470) |
|
- |
| Net realized gain/(loss) from investments |
|
(11,715) |
|
(15,684) |
|
(73,086) |
|
(39,383) |
| Net unrealized appreciation/(depreciation) on
investments |
|
|
|
|
|
|
|
|
| Non-controlled/non-affiliated investments |
|
(17,180) |
|
2,598 |
|
(7,611) |
|
(4,572) |
| Affiliated investments |
|
(2,553) |
|
- |
|
501 |
|
- |
| Controlled investments |
|
11,002 |
|
(3,024) |
|
28,754 |
|
(37,685) |
Net unrealized appreciation/
(depreciation) on investments |
|
(8,731) |
|
(426) |
|
21,644 |
|
(42,257) |
Change in provision for deferred taxes on
unrealized (appreciation)/depreciation on investments |
|
309 |
|
486 |
|
1,092 |
|
87 |
| Loss on extinguishment of debt |
|
(640) |
|
- |
|
(1,097) |
|
- |
| Net
gain/(loss) on investments |
|
|
|
(20,777) |
|
(15,624) |
|
(51,447) |
|
(81,553) |
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS |
|
$ (12,153) |
|
$ (3,228) |
|
$ (15,077) |
|
$ (27,962) |
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE - BASIC AND DILUTED
EARNINGS PER COMMON SHARE |
|
$ (0.22) |
|
$ 0.06 |
|
$ (0.28) |
|
$ (0.50) |
WEIGHTED AVERAGE - BASIC AND DILUTED
NET INVESTMENT INCOME PER COMMON SHARE |
|
$ 0.16 |
|
$ 0.23 |
|
$ 0.67 |
|
$ 0.97 |
WEIGHTED AVERAGE COMMON STOCK
OUTSTANDING - BASIC AND DILUTED |
|
54,474,211 |
|
54,747,189 |
|
54,474,211 |
|
55,399,646 |
| DIVIDENDS DECLARED PER COMMON SHARE |
|
$ 0.16 |
|
$ 0.22 |
|
$ 0.76 |
|
$ 1.12 |
ABOUT MEDLEY CAPITAL
CORPORATION
Medley Capital Corporation is a closed-end,
externally managed business development company ("BDC") that trades
on the New York Stock Exchange (NYSE: MCC). Medley Capital
Corporation's investment objective is to generate current income
and capital appreciation by lending to privately-held middle market
companies, primarily through directly originated transactions, to
help these companies expand their businesses, refinance and make
acquisitions. Our portfolio generally consists of senior secured
first lien loans and senior secured second lien loans. In many of
our investments, we receive warrants or other equity participation
features, which we believe will increase the total investment
returns. Medley Capital Corporation is externally managed by MCC
Advisors LLC, which is an investment adviser registered under the
Investment Advisers Act of 1940, as amended. For additional
information, please visit Medley Capital Corporation at
www.medleycapitalcorp.com.
ABOUT MCC ADVISORS
LLC
MCC Advisors LLC is a subsidiary of Medley
Management Inc. (NYSE: MDLY, "Medley"). Medley is an alternative
asset management firm offering yield solutions to retail and
institutional investors. Medley's national direct origination
franchise, with over 85 people, is a premier provider of capital to
the middle market in the U.S. Medley has over $5 billion of assets
under management in two business development companies, Medley
Capital Corporation (NYSE: MCC) and Sierra Income Corporation, a
credit interval fund, Sierra Total Return Fund (NASDAQ:SRNTX) and
several private investment vehicles. Over the past 15 years, we
have provided capital to over 400 companies across 35 industries in
North America.[1] For
additional information, please visit Medley Management Inc. at
www.mdly.com.
Medley LLC, the operating company of Medley
Management Inc., has outstanding bonds which trade on the NYSE
under the symbols (NYSE:MDLX) and (NYSE:MDLQ). Medley Capital
Corporation (NYSE:MCC) has outstanding bonds which trade on the
NYSE under the symbols (NYSE:MCV) and (NYSE:MCX).
FORWARD-LOOKING
STATEMENTS
Statements included herein may contain
"forward-looking statements". Statements other than
statements of historical facts included in this press release may
constitute forward-looking statements and are not guarantees of
future performance or results and involve a number of assumptions,
risks and uncertainties, which change over time. Actual results may
differ materially from those anticipated in any forward-looking
statements as a result of a number of factors, including those
described from time to time in filings by the Company with the
Securities and Exchange Commission. Except as required by law, 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 press release.
SOURCE: Medley Capital Corporation
Investor Relations Contact:
Sam Anderson
Head of Capital Markets & Risk Management
Medley Management Inc.
212-759-0777
Media Contact:
Erin Clark
Teneo Strategy
646-214-8355
[1] Medley
Management Inc. is the parent company of Medley LLC and several
registered investment advisors (collectively, "Medley"). Assets
under management refers to assets of our funds, which represents
the sum of the net asset value of such funds, the drawn and undrawn
debt (at the fund level, including amounts subject to restrictions)
and uncalled committed capital (including commitments to funds that
have yet to commence their investment periods). Assets under
management are as of September 30, 2017.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Medley Capital Corporation via Globenewswire
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