FULL Full Circle Capital Corp. (MM)

Full Circle Capital Corporation (Nasdaq: FULL) (the “Company”) today announced its financial results for the third quarter of fiscal 2013 ended March 31, 2013.

Financial Highlights for the Third Quarter of Fiscal 2013

• Net asset value of $8.00 per share at March 31, 2013.
• Total investment income was $2.8 million, including income from fees, dividends and other sources of $0.4 million.
• Net investment income was $1.3 million, or $0.18 per share.
• Net unrealized gains were $0.2 million, or $0.02 per share. Combined with net investment income, this resulted in a net increase in net assets from operations of $1.5 million, or $0.20 per share.
• Monthly distributions of $0.077 per share were paid on February 15, 2013, March 15, 2013 and April 15, 2013, totaling $0.23 per share for the quarter.
• Total portfolio investments at March 31, 2013 were $88.1 million, a 33.3% increase compared to portfolio investments of $66.1 million at March 31, 2012 and a 13.6% increase compared to portfolio investments of $77.6 million at December 31, 2012.
• Weighted average portfolio interest rate was 12.69% at March 31, 2013.
• New originations were $14.4 million, consisting of three new debt facilities to Modular Process Control, LLC, Pristine Environments, Inc. and The Selling Source, LLC. Repayments were $2.6 million including the full payoff of two existing loans at par plus interest and fees.
• At March 31, 2013, 89% of portfolio company investments were first lien senior secured loans.

On May 3, 2013, the Board of Directors declared monthly distributions for the first quarter of fiscal 2014 as follows:

Record Date       Payment Date       Per Share Amount July 31, 2013       August 15, 2013       $0.077 August 30, 2013 September 13, 2013 $0.077 September 30, 2013       October 15, 2013       $0.077  

These distributions equate to a $0.924 annualized distribution rate, or a current annualized yield of 12.0%, based on the closing price of the Company’s common stock of $7.72 per share on May 8, 2013.

Management Commentary

“Continued growth of our investment portfolio in the third fiscal quarter, combined with the attractive terms of our new investments that closed at the end of or subsequent to the end of the quarter, furthers our goal of growing net investment income,” said John Stuart, Chairman and Chief Executive Officer of Full Circle Capital Corp. “In preparation for further portfolio growth, we have been adding professional staff and we are actively pursuing avenues to increase and improve our funding sources in today’s more attractive interest rate environment. Our flexible uni-tranche lending solutions continue to attract a good flow of appropriate investment opportunities to borrowers that fit within our investment criteria.”

Third Quarter Fiscal 2013 Results

The Company’s net asset value at March 31, 2013 was $8.00 per share. During the quarter, the Company generated $2.4 million of interest income, of which 100% was paid in cash. Income from fees, dividends and other sources totaled $0.4 million. The Company recorded net investment income of $1.3 million, or $0.18 per share. Net unrealized gains were $0.2 million, or $0.02 per share. Net increase in net assets from operations was $1.5 million, or $0.20 per share. Per share amounts for the quarter ended March 31, 2013 are based on approximately 7.6 million weighted average shares outstanding compared to 6.2 million at March 31, 2012 and 6.7 million at December 31, 2012, reflecting the 1.35 million share equity offering that the Company completed in November 2012.

During the quarter, the Company originated $14.4 million in three new loan facilities. Additional funding to existing borrowers, excluding regular borrowing under revolvers, was $1.3 million during the quarter. Repayments during the third quarter were $2.6 million including the full payoff of two loans at par plus interest and fees.

At March 31, 2013, the Company’s portfolio included investments in 22 companies, of which 19 were debt investments. The average portfolio company debt investment at March 31, 2013 was $4.2 million. The weighted average interest rate on investments was 12.69%. At fair value, 89% of portfolio investments were first lien loans, 4% were second lien loans and 7% were equity investments. Approximately 86% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company’s loans was 54% at March 31, 2013 compared to 61% at March 31, 2012 and 59% at December 31, 2012.

Subsequent Events

On April 15, 2013, the Company funded $1.4 million of a $1.7 million senior secured credit facility to Takoda Resources, Inc., a provider of seismic data acquisition services in Canada. The senior secured note bears interest at 16.00% and has a final maturity date of April 1, 2016.

On May 1, 2013, the Company extended the maturity of the senior secured loan to Attention Transit Advertising Systems, Inc. through September 30, 2016.

Conference Call Details

Management will host a conference call to discuss these results on Friday, May 10, 2013 at 10:00 a.m. EDT. To participate in the conference call, please call 866-305-6438 (domestic call-in) or 706-679-7161 (international call-in) and reference code # 63888747.

A live webcast of the conference call and the accompanying slide presentation will be available at http://ir.fccapital.com/CorporateProfile.aspx?iid=4151676. All participants should call or access the website approximately 10 minutes before the conference begins.

A telephone replay of the conference call will be available from 1:00 p.m. EDT on May 10, 2013 until 11:59 p.m. EDT on May 13, 2013 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation # 63888747. An archived replay of the conference call and slide presentation will also be available in the investor relations section of the company’s website.

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 smaller and 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 web site www.fccapital.com.

Forward-Looking Statements

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,” “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

        March 31, 2013

June 30, 2012

(Unaudited) (Audited) Assets Control Investments at Fair Value (Cost of $18,249,221 and $6,639,648, respectively) $ 19,106,610 $ 6,777,511 Affiliate Investments at Fair Value (Cost of $12,013,078 and $6,802,017, respectively) 10,363,544 5,112,142 Non-Control/Non-Affiliate Investments at Fair Value (Cost of $74,677,524 and $85,181,617, respectively)   73,671,713     82,957,117   Total Investments at Fair Value (Cost of $104,939,823 and $98,623,282, respectively) 103,141,867 94,846,770   Cash 481,563 639,149 Deposit with Broker 1,550,000 2,350,000 Interest Receivable 993,334 902,711 Principal Receivable 147,603 513,372 Dividends Receivable 53,682 - Due from Portfolio Investment 7,917 11,140 Receivable for Investments Sold 1,126,196 - Prepaid Expenses 105,768 43,053 Other Assets 109,420 25,499 Deferred Offering Expenses 48,083 67,685 Deferred Credit Facility Fees   100,000     50,000     Total Assets   107,865,433     99,449,379     Liabilities Due to Affiliate 690,784 580,353 Accounts Payable 48,971 115,741 Accrued Liabilities 38,985 79,651 Due to Broker 15,000,125 22,500,041 Payable for Investments Acquired 4,155,951 - Dividends Payable 582,842 478,892 Interest Payable 114,245 142,518 Other Liabilities 479,358 140,458 Accrued Offering Expenses 12,904 19,697 Line of Credit 22,797,755 18,544,660 Distribution Notes   3,404,583     3,404,583     Total Liabilities   47,326,503     46,006,594     Net Assets $ 60,538,930   $ 53,442,785     Components of Net Assets Common Stock, par value $0.01 per share (100,000,000 authorized; 7,569,382 and 6,219,382 issued and outstanding, respectively) $ 75,694 $ 62,194 Paid-in Capital in Excess of Par 67,420,152 57,455,232 Distributions in Excess of Net Investment Income (936,486 ) (122,763 ) Accumulated Net Realized Losses (4,222,474 ) (175,366 ) Accumulated Net Unrealized Losses   (1,797,956 )   (3,776,512 ) Net Assets $ 60,538,930   $ 53,442,785     Net Asset Value Per Share $ 8.00   $ 8.59      

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

          Three Months EndedMarch 31, Nine Months EndedMarch 31, 2013     2012 2013     2012 Investment Income Interest Income from Non-Control/Non-Affiliate Investments $ 1,615,618 $ 1,940,034 $ 5,609,673 $ 5,870,076 Interest Income from Affiliate Investments 389,518 - 950,026 234,864 Interest Income from Control Investments 435,300 228,456 1,033,884 483,100 Dividend Income from Control Investments 80,178 55,393 186,768 57,216 Other Income from Non-Control/Non-Affiliate Investments 305,935 138,688 834,515 515,137 Other Income from Affiliate Investments 3,992 - 63,577 54,086 Other Income from Control Investments   12,500     26,389     37,500     131,389   Total Investment Income   2,843,041     2,388,960     8,715,943     7,345,868     Operating Expenses Management Fee 362,743 291,919 1,041,905 878,569 Incentive Fee   328,044     277,588     1,001,406     923,864   Total Advisory Fees   690,787     569,507     2,043,311     1,802,433     Allocation of Overhead Expenses 84,552 89,211 225,860 264,103 Sub-Administration Fees 50,000 78,114 173,429 234,343 Officers’ Compensation   75,160     74,800     225,514     192,353   Total Costs Incurred Under Administration Agreement   209,712     242,125     624,803     690,799     Directors’ Fees 24,625 32,125 86,375 86,375 Interest Expense 379,310 211,491 1,214,392 578,456 Professional Services Expense 108,998 121,301 384,061 435,980 Bank Fees 3,975 2,774 12,295 9,740 Other   113,470     91,063     334,647     294,321   Total Gross Operating Expenses 1,530,877 1,270,386 4,699,884 3,898,104   Management Fee Waiver and Expense Reimbursement   -     -     -     (313,792 ) Total Net Operating Expenses   1,530,877     1,270,386     4,699,884     3,584,312     Net Investment Income 1,312,164 1,118,574 4,016,059 3,761,556 Net Change in Unrealized Gain (Loss) on Investments 168,654 404,773 1,978,556 (512,907 ) Net Realized Gain (Loss) on Investments   -     467     (4,047,108 )   127,039   Net Increase in Net Assets Resulting from Operations $ 1,480,818   $ 1,523,814   $ 1,947,507   $ 3,375,688     Earnings per Common Share Basic and Diluted $ 0.20 $ 0.25 $ 0.28 $ 0.54 Net Investment Income per Common Share Basic and Diluted $ 0.18 $ 0.18 $ 0.59 $ 0.61 Weighted Average Shares of Common Share Outstanding Basic and Diluted 7,569,382 6,219,382 6,835,258 6,219,382            

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)

          Three months endedMarch 31, 2013 Three months endedMarch 31, 2012 Nine months endedMarch 31, 2013 Nine months endedMarch 31, 2012 Per Share Data 1 : Net asset value at beginning of period $ 8.03 $ 8.92 $ 8.59 $ 9.08 Dilution from offering 2 - - (0.17 ) Offering costs - - (0.01 ) - Net investment income 0.18 0.18 0.59 0.61 Change in unrealized gain (loss) 0.02 0.07 0.28 (0.08 ) Realized gain (loss) 0.00 - (0.59 ) 0.02 Dividends declared   (0.23 )   (0.23 )   (0.69 )   (0.69 ) Net asset value at end of period $ 8.00   $ 8.94   $ 8.00   $ 8.94          

1

   

Financial highlights are based on weighted average shares outstanding.

 

2

Dilution from offering is based on the change in net asset value from the secondary offering on November 27, 2012.