NEW YORK, NY (May 9, 2018) -
Medley Capital Corporation (NYSE: MCC) (TASE: MCC) (the "Company")
today announced financial results for its fiscal second quarter
ended March 31, 2018.
Second Quarter Highlights
· Net
asset value ("NAV") of $7.02 per share
· Declared a dividend of
$0.10 per share
· Net investment income
of $0.07 per share
· Base management fees
waived by $380,000 during the quarter related to legacy asset
disposition
· Redeemed $13.0 million
in aggregate principal amount of unsecured notes due 2023 (the
"2023 Notes")
Post Quarter-End Highlights
·
Legacy assets declined from 21.2% at December 31, 2017 to
11.2%
· Legacy asset portfolio
reduced by approximately $100 million from December 31, 2017,
primarily from repayments and asset sales
Portfolio
Investments
The total value of our investments
was $746.8 million at March 31, 2018. During the quarter ended
March 31, 2018, the Company originated $20.2 million of new
investments and had $79.5 million of repayments resulting in net
repayments of $59.3 million. As of March 31, 2018, the Company had
investments in securities of 64 portfolio companies with
approximately 65.8% consisting of senior secured first lien
investments, 10.6% consisting of senior secured second lien
investments, 9.5% in MCC Senior Loan Strategy JV and 14.1% in
equities / warrants. As of March 31, 2018, the weighted average
yield based upon the cost basis of our income bearing portfolio
investments, excluding cash and cash equivalents, was 10.4%.
Results of
Operations
For the three months ended March
31, 2018, the Company reported net investment income per share and
net loss per share of $0.07 and $(0.53), respectively, calculated
based upon the weighted average shares outstanding. For the six
months ended March 31, 2018, the Company reported net investment
income per share and net loss per share of $0.20 and $(1.11),
respectively, calculated based upon the weighted average shares
outstanding. As of March 31, 2018, the Company's NAV was $7.02 per
share.
Investment
Income
For the three months ended March
31, 2018, total investment income was $17.0 million and consisted
of $14.3 million of portfolio interest income, $2.2 million of
dividend income, and $0.5 million of fee income.
For the six months ended March 31,
2018, total investment income was $37.7 million and consisted of
$31.8 million of portfolio interest income, $3.6 million of
dividend income, and $2.3 million of fee income.
Expenses
For the three months ended March
31, 2018, total expenses net of the voluntary base management fee
waiver were $13.4 million and consisted of the following: base
management fees net of fees waived under the voluntary waiver of
$3.4 million, interest and financing expenses of $7.5 million,
professional fees of $0.6 million, administrator expenses of $1.0
million, directors' fees of $0.3 million, and other general and
administrative related expenses of $0.6 million.
For the six months ended March 31,
2018, total expenses net of the voluntary base management fee
waiver were $26.7 million and consisted of the following: base
management fees net of fees waived under the voluntary waiver of
$7.4 million, interest and financing expenses of $14.2 million,
professional fees of $1.1 million, administrator expenses of $1.8
million, directors' fees of $0.4 million, and other general and
administrative related expenses of $1.8 million.
Net Investment
Income
For the three and six months ended
March 31, 2018, the Company reported net investment income of $3.6
million and $10.8 million, respectively, or $0.07 and $0.20,
respectively, on a weighted average per share basis.
Net Realized and
Unrealized Gains/Losses
For the three and six months ended
March 31, 2018, the Company reported net realized losses from
investments of $(23.3) million and $(23.4) million,
respectively.
For the three and six months ended
March 31, 2018, the Company reported a loss on extinguishment of
debt of $(1.2) million and $(1.2) million, respectively.
For the three and six months ended
March 31, 2018, the Company reported net unrealized depreciation on
investments of $(8.1) million and $(47.3) million,
respectively.
Liquidity and
Capital Resources
On January 31, 2018, the Company
voluntarily prepaid the remaining $102.0 million outstanding on the
senior secured term loan facility.
On February 7, 2018, the Company
elected to reduce the total commitment of the senior secured
revolving credit facility (the "Revolving Facility") to $150.0
million from $200.0 million in order to decrease long-term interest
expense by approximately $0.5 million, annually.
As of March 31, 2018, the Company
had a cash balance of $65.4 million.
As of March 31, 2018, the Company
had $12.0 million of total debt outstanding under its $150.0
million Revolving Facility, $150.0 million outstanding in
SBA-guaranteed debentures, $74.0 million outstanding in aggregate
principal amount of unsecured notes due 2021, $89.8 million
outstanding in aggregate principal amount of the 2023 Notes, and
$121.1 million of unsecured notes due 2024.
Dividend
Declaration
On May 4, 2018, the Company's
Board of Directors declared a dividend of $0.10 per share, payable
on June 21, 2018, to stockholders of record at the close of
business on June 6, 2018. The Company has identified 69%, or
$0.0689 per share, of this distribution as an interest-related
dividend generally exempt from U.S. nonresident withholding tax.
This information is subject to change and the specific tax
characteristics of the distribution 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
Wednesday, May 9, 2018.
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: 7547139. 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 Operations
(in thousands, except share and per share
data)
|
March 31, 2018 |
|
September 30, 2017 |
|
(unaudited) |
|
|
ASSETS |
|
|
|
Investments at fair value |
|
|
|
Non-controlled/non-affiliated investments (amortized cost of
$558,126 and $625,108, respectively) |
$ |
480,365 |
|
|
$ |
575,496 |
|
Affiliated investments (amortized cost of $95,394
and $91,027, respectively) |
93,793 |
|
|
90,071 |
|
Controlled investments (amortized cost of $217,609 and $197,918,
respectively) |
172,657 |
|
|
171,424 |
|
Total investments at fair value |
746,815 |
|
|
836,991 |
|
Cash
and cash equivalents |
65,430 |
|
|
108,572 |
|
Interest receivable |
9,427 |
|
|
9,371 |
|
Other
assets |
3,200 |
|
|
3,322 |
|
Fees receivable |
692 |
|
|
765 |
|
Deferred offering costs |
351 |
|
|
307 |
|
Receivable for dispositions and investments
sold |
179 |
|
|
232 |
|
Total
assets |
$ |
826,094 |
|
|
$ |
959,560 |
|
|
|
|
|
LIABILITIES |
|
|
|
Revolving credit facility payable (net of debt
issuance costs of $1,289 and $1,777, respectively) |
$ |
10,711 |
|
|
$ |
66,223 |
|
Term
loan payable (net of debt issuance costs of $0 and $1,046,
respectively) |
- |
|
|
100,954 |
|
Notes payable (net of debt issuance costs of $9,378
and $4,123, respectively) |
275,771 |
|
|
172,752 |
|
SBA
debentures payable (net of debt issuance costs of $2,563 and
$2,846, respectively) |
147,437 |
|
|
147,154 |
|
Management and incentive fees payable |
3,396 |
|
|
4,312 |
|
Interest and fees payable |
2,725 |
|
|
3,760 |
|
Accounts payable and accrued expenses |
1,805 |
|
|
1,864 |
|
Administrator expenses payable |
966 |
|
|
860 |
|
Deferred tax liability |
631 |
|
|
912 |
|
Deferred revenue |
250 |
|
|
259 |
|
Due to affiliate |
127 |
|
|
81 |
|
Total
liabilities |
$ |
443,819 |
|
|
$ |
499,131 |
|
|
|
|
|
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 |
|
|
705,046 |
|
Accumulated undistributed net investment
income |
2,856 |
|
|
9,528 |
|
Accumulated net realized gain/(loss) from investments |
(201,173 |
) |
|
(176,663 |
) |
Net unrealized appreciation/(depreciation) on
investments, net of deferred taxes |
(124,508 |
) |
|
(77,536 |
) |
Total
net assets |
382,275 |
|
|
460,429 |
|
Total liabilities and net assets |
$ |
826,094 |
|
|
$ |
959,560 |
|
|
|
|
|
NET ASSET VALUE PER SHARE |
$ |
7.02 |
|
|
$ |
8.45 |
|
Medley Capital
Corporation
Consolidated
Statements of Operations
(in thousands, except share and per share
data)
|
For the three months ended March 31 |
|
For the six months ended March 31 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
INVESTMENT INCOME: |
|
|
|
|
|
|
|
Interest from investments |
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments: |
|
|
|
|
|
|
|
Cash |
$ |
10,967 |
|
|
$ |
16,890 |
|
|
$ |
24,057 |
|
|
$ |
35,035 |
|
Payment-in-kind |
872 |
|
|
2,825 |
|
|
2,514 |
|
|
5,686 |
|
Affiliated investments: |
|
|
|
|
|
|
|
Cash |
491 |
|
|
488 |
|
|
1,068 |
|
|
1,031 |
|
Payment-in-kind |
770 |
|
|
100 |
|
|
1,619 |
|
|
201 |
|
Controlled investments: |
|
|
|
|
|
|
|
Cash |
426 |
|
|
354 |
|
|
856 |
|
|
696 |
|
Payment-in-kind |
815 |
|
|
1,071 |
|
|
1,534 |
|
|
3,043 |
|
Total interest income |
14,341 |
|
|
21,728 |
|
|
31,648 |
|
|
45,692 |
|
Dividend income, net of provisional taxes ($0 and $0,
respectively) |
2,173 |
|
|
1,050 |
|
|
3,616 |
|
|
1,695 |
|
Interest from cash and cash equivalents |
26 |
|
|
41 |
|
|
58 |
|
|
64 |
|
Fee
income |
495 |
|
|
1,538 |
|
|
2,344 |
|
|
2,962 |
|
Total investment income |
17,035 |
|
|
24,357 |
|
|
37,666 |
|
|
50,413 |
|
|
|
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
|
|
|
Base
management fees |
3,776 |
|
|
4,496 |
|
|
7,844 |
|
|
9,011 |
|
Incentive fees |
- |
|
|
- |
|
|
- |
|
|
896 |
|
Interest and financing expenses |
7,470 |
|
|
9,144 |
|
|
14,229 |
|
|
16,917 |
|
Administrator expenses |
956 |
|
|
997 |
|
|
1,824 |
|
|
1,913 |
|
General and administrative |
672 |
|
|
783 |
|
|
1,429 |
|
|
1,480 |
|
Professional fees |
556 |
|
|
663 |
|
|
1,142 |
|
|
1,314 |
|
Directors fees |
251 |
|
|
150 |
|
|
398 |
|
|
320 |
|
Insurance |
130 |
|
|
99 |
|
|
263 |
|
|
199 |
|
Expenses before management and incentive fee waivers |
13,811 |
|
|
16,332 |
|
|
27,129 |
|
|
32,050 |
|
Management fee waiver |
(380 |
) |
|
(17 |
) |
|
(380 |
) |
|
(37 |
) |
Incentive fee waiver |
- |
|
|
- |
|
|
- |
|
|
(44 |
) |
Total expenses net of management and incentive fee
waivers |
13,431 |
|
|
16,315 |
|
|
26,749 |
|
|
31,969 |
|
Net
investment income before excise taxes |
3,604 |
|
|
8,042 |
|
|
10,917 |
|
|
18,444 |
|
Excise tax expense |
(24 |
) |
|
- |
|
|
(158 |
) |
|
(267 |
) |
NET
INVESTMENT INCOME |
3,580 |
|
|
8,042 |
|
|
10,759 |
|
|
18,177 |
|
|
|
|
|
|
|
|
|
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: |
|
|
|
|
|
|
|
Net realized gain/(loss) from investments |
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
(23,331 |
) |
|
10 |
|
|
(23,352 |
) |
|
(6,288 |
) |
Affiliated investments |
- |
|
|
- |
|
|
- |
|
|
- |
|
Controlled investments |
- |
|
|
- |
|
|
- |
|
|
- |
|
Net realized gain/(loss) from investments |
(23,331 |
) |
|
10 |
|
|
(23,352 |
) |
|
(6,288 |
) |
Net
unrealized appreciation/(depreciation) on investments |
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
6,323 |
|
|
(12,645 |
) |
|
(28,147 |
) |
|
(11,020 |
) |
Affiliated investments |
(4,929 |
) |
|
1,984 |
|
|
(646 |
) |
|
1,984 |
|
Controlled investments |
(9,454 |
) |
|
(9,183 |
) |
|
(18,459 |
) |
|
(8,319 |
) |
Net
unrealized appreciation/(depreciation) on investments |
(8,060 |
) |
|
(19,844 |
) |
|
(47,252 |
) |
|
(17,355 |
) |
Change in provision for deferred taxes on
unrealized (appreciation)/depreciation on investments |
190 |
|
|
- |
|
|
280 |
|
|
- |
|
Loss
on extinguishment of debt |
(1,158 |
) |
|
(456 |
) |
|
(1,158 |
) |
|
(456 |
) |
Net gain/(loss) on investments |
(32,359 |
) |
|
(20,290 |
) |
|
(71,482 |
) |
|
(24,099 |
) |
NET
INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
$ |
(28,779 |
) |
|
$ |
(12,248 |
) |
|
$ |
(60,723 |
) |
|
$ |
(5,922 |
) |
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE |
$ |
(0.53 |
) |
|
$ |
(0.22 |
) |
|
$ |
(1.11 |
) |
|
$ |
(0.11 |
) |
WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT
INCOME PER COMMON SHARE |
$ |
0.07 |
|
|
$ |
0.15 |
|
|
$ |
0.20 |
|
|
$ |
0.33 |
|
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED |
54,474,211 |
|
|
54,474,211 |
|
|
54,474,211 |
|
|
54,474,211 |
|
DIVIDENDS DECLARED PER COMMON SHARE |
$ |
0.16 |
|
|
$ |
0.22 |
|
|
$ |
0.32 |
|
|
$ |
0.44 |
|
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) and the Tel
Aviv Stock Exchange (TASE: 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. 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 75 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) (TASE: 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, Medley has 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
New York Stock Exchange under the symbols (NYSE:MDLX) and
(NYSE:MDLQ). Medley Capital Corporation is dual-listed on the New
York Stock Exchange (NYSE:MCC) and the Tel Aviv Stock Exchange
(TASE: MCC) and has outstanding bonds which trade on both the New
York Stock Exchange under the symbols (NYSE:MCV), (NYSE:MCX) and
the Tel Aviv Stock Exchange under the symbol (TASE: MCC.B1).
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
1Medley
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 December 31, 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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