Expands Revolving Line of Credit to $45
Million
Declares Monthly Distributions of $0.067 Per
Share for a Total of $0.201 Per Share for Third Fiscal Quarter
2014, Equal to Annualized Distribution Rate of $0.804 Per
Share
Full Circle Capital Corporation (Nasdaq: FULL) (the “Company”)
today announced its financial results for the first quarter of
fiscal 2014 ended September 30, 2013.
Financial Highlights for the First Quarter
of Fiscal 2014
- Net asset value of $7.48 per share at
September 30, 2013.
- Total investment income was $3.2
million, an increase of 14.9% compared to $2.8 million for the
three months ended September 30, 2012.
- Net investment income was $1.2 million,
or $0.16 per share, compared to $1.2 million, or $0.20 per share,
for the three months ended September 30, 2012.
- Net realized and unrealized losses were
$3.5 million, or $0.46 per share. Combined with net investment
income, this resulted in a net decrease in net assets from
operations of $2.3 million, or $0.30 per share.
- Total portfolio investments at
September 30, 2013 were $94.6 million, a 25.3% increase compared to
portfolio investments of $75.5 million at September 30, 2012 and a
7.3% increase compared to portfolio investments of $88.2 million at
June 30, 2013.
- Weighted average portfolio interest
rate was 12.75% at September 30, 2013.
- New originations and expansion of
facilities to existing borrowers were $10.0 million, including
three new portfolio companies.
- At September 30, 2013, 92% of portfolio
company investments were first lien senior secured loans.
On November 1, 2013, the Board of Directors declared monthly
distributions for the third quarter of fiscal 2014 as follows:
Record Date
Payment Date
Per Share Amount January 31, 2014 February 14, 2014 $0.067
February 28, 2014 March 14, 2014 $0.067 March 31, 2014
April 15, 2014
$0.067
These distributions equate to an $0.804 annualized distribution
rate, or a current annualized yield of 10.1%, based on the closing
price of the Company’s common stock of $7.99 per share on November
7, 2013.
Management Commentary
“While we are disappointed in this quarter’s results, the
strategic actions that we completed toward the end of fiscal 2013
remain a significant element in our plans for growth and increasing
returns to stockholders. More recently, we made an important
addition to our senior management team and expanded our revolving
line of credit to $45 million. The adjustment to our monthly
distributions reflects, in part, the increase in equity investments
over the past year, which do not generate current cash income, but
which we believe have the potential for future appreciation. As we
harvest these positions, proceeds will be redeployed into yield
oriented instruments and amounts available for distribution should
grow accordingly. Further, we believe that continued reduction in
our weighted average cost of debt capital, combined with continued
portfolio growth, will benefit returns over the longer term,” said
John Stuart, Chairman and Co-Chief Executive Officer of Full Circle
Capital Corporation. “Subsequent to quarter end, we secured a $12.5
million increase in our revolving line of credit to $45.0 million
and received portfolio repayments of $13.7 million, of which $5.0
million has been reinvested, providing us with resources we believe
will be ample to continue to grow our investment portfolio and net
investment income. While we have grown our investment portfolio
over the last year, we believe this will accelerate with the
addition of Gregg Felton, our newly appointed Co-Chief Executive
Officer and President. Gregg has a successful investment track
record and broad industry relationships that we believe will
facilitate deal sourcing in our target markets.”
“We now have debt investments in 20 portfolio companies, which
yielded 12.75% during the first quarter with no loans on
non-accrual status. Valuations, which are reviewed and updated on a
quarterly basis and can fluctuate from quarter to quarter,
negatively impacted our recent results. Currently 92% of the
portfolio is invested in first lien senior secured debt, with 86%
floating rate loans. Looking ahead, we are revitalized by the
benefits expected from our strategic actions, our strengthened
management team and resulting expanded opportunities that we see
for Full Circle Capital in the future,” concluded Mr. Stuart.
First Quarter Fiscal 2014
Results
The Company’s net asset value at September 30, 2013 was $7.48
per share. During the quarter, the Company generated $3.0 million
of interest income, of which 100% was paid in cash. Income from
fees, dividends and other sources totaled $0.2 million. The Company
recorded net investment income of $1.2 million, or $0.16 per share.
Net realized and unrealized losses were $3.5 million, or $0.46 per
share; the predominance of these losses were unrealized and relate
to fair value adjustments at quarter end. Net decrease in net
assets from operations was $2.3 million, or $0.30 per share. Per
share amounts for the quarter ended September 30, 2013 are based on
approximately 7.6 million weighted average shares outstanding
compared to 6.2 million at September 30, 2012, reflecting the 1.35
million share equity offering that the Company completed in
November 2012.
During the quarter, the Company originated $9.0 million in three
new loan facilities. There were no prepayments or realizations
during the first quarter.
At September 30, 2013, the Company’s portfolio included
investments in 25 companies, of which 22 were debt investments. The
average portfolio company debt investment at September 30, 2013 was
$4.0 million. The weighted average interest rate on investments was
12.75%. At fair value, 92% of portfolio investments were first lien
loans, 1% 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 61% at September 30, 2013 compared to 62% at
September 30, 2012 and 60% at June 30, 2013.
Conference Call Details
Management will host a conference call to discuss these results
on Friday, November 8, 2013 at 10:00 a.m. ET. To participate in the
conference call, please call 866-305-6438 (domestic call-in) or
706-679-7161 (international call-in) and reference code #
91671341.
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. ET on November 8, 2013 until 11:59 p.m. ET on November
10, 2013 by calling 855-859-2056 (domestic) or 404-537-3406
(international) and entering confirmation # 91671341. 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,” “should,” “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
September 30, 2013 June 30, 2013 Unaudited Audited
Assets
Control Investments at Fair Value (Cost of
$18,410,567 and$18,139,543, respectively)
(NOTE 2, 9) $ 19,807,387 $ 19,115,440
Affiliate Investments at Fair Value (Cost
of $18,115,216 and$17,954,622, respectively)
(NOTE 2, 9) 15,297,932 16,547,903
Non-Control/Non-Affiliate Investments at
Fair Value (Cost of$77,058,614 and $53,220,538, respectively)
(NOTE 2, 9) 74,515,985 52,511,158
Total Investments at Fair Value (Cost of
$113,584,397and $89,314,703, respectively)
109,621,304 88,174,501 Cash 99,147 18,029,115 Deposit with
Broker 2,500,000 - Interest Receivable (NOTE 2) 1,218,420 1,097,970
Principal Receivable 276,386 104,768 Dividends Receivable 34,411
36,705 Due from Affiliate 58,122 - Due from Portfolio Investment
49,488 105,030 Receivable from Notes Offering - 2,299,704 Prepaid
Expenses 175,857 61,198 Other Assets 755,158 1,437,273 Deferred
Offering Expenses 88,182 86,834 Deferred Debt Issuance Costs (NOTE
8) 1,066,158 1,086,895 Deferred Credit Facility Fees (NOTE 8)
513,546 543,846
Total
Assets 116,456,179 113,063,839
Liabilities Due to Affiliate (NOTE 5) 725,691 728,371
Accounts Payable 66,781 471,297 Accrued Liabilities 9,000 10,172
Due to Broker 15,000,180 - Dividends Payable 582,842 582,842
Interest Payable 51,198 134,167 Other Liabilities 314,343 358,696
Line of Credit (NOTE 8) 21,922,256 25,584,147 Notes Payable 8.25%
due June 30, 2020 (NOTE 8) 21,145,525 21,145,525 Distribution Notes
(NOTE 8) - 3,404,583
Total
Liabilities 59,817,816 52,419,800
Net Assets $ 56,638,363 $ 60,644,039
Components of Net Assets
Common Stock, par value $0.01 per share
(100,000,000authorized; 7,569,382 issued and outstanding)
$ 75,694 $ 75,694 Paid-in Capital in Excess of Par 66,319,579
66,319,579 Distributions in Excess of Net Investment Income
(704,500 ) (200,200 ) Accumulated Net Realized Losses (5,089,317 )
(4,410,832 ) Accumulated Net Unrealized Losses (3,963,093 )
(1,140,202 )
Net Assets $ 56,638,363 $
60,644,039
Net Asset Value Per Share $ 7.48
$ 8.01
FULL CIRCLE CAPITAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months EndedSeptember 30, 2013
Three Months EndedSeptember 30, 2012
Investment Income Interest Income from
Non-Control/Non-Affiliate Investments $ 1,881,138 $ 2,019,984
Interest Income from Affiliate Investments 653,718 279,941 Interest
Income from Control Investments 457,904 279,173 Dividend Income
from Control Investments 34,411 34,097 Other Income from
Non-Control/Non-Affiliate Investments 173,471 144,027 Other Income
from Affiliate Investments (NOTE 2) 5,044 3,581 Other Income from
Control Investments (NOTE 2) 12,500 12,500
Total Investment Income (NOTE 2) 3,218,186
2,773,303
Operating Expenses
Management Fee (NOTE 5) 409,258 334,036 Incentive Fee (NOTE 5)
314,739 307,932 Total Advisory Fees
723,997 641,968 Allocation of
Overhead Expenses (NOTE 5) 63,830 56,756 Sub-Administration Fees
(NOTE 5) 50,000 73,429 Officers’ Compensation (NOTE 5)
75,338 75,194 Total Costs Incurred Under
Administration Agreement 189,168 205,379
Directors’ Fees 28,625 28,625 Interest Expense (NOTE
8) 720,977 396,495 Professional Services Expense 195,861 165,161
Bank Fees 13,846 3,090 Other 101,485 94,340
Total Operating Expenses 1,973,959
1,535,058 Net Investment Income 1,244,227
1,238,245 Net Change in Unrealized Gain (Loss) on Investments
(2,822,891 ) 517,313 Net Realized Gain (Loss) on: Investments
(678,553 ) (860,667 ) Foreign Currency Transactions 68
- Net Realized Gain (Loss) (678,485 )
(860,667 )
Net Increase (Decrease) in Net Assets
Resulting from Operations
$ (2,257,149 ) $ 894,891 Earnings (loss) per Common
Share Basic and Diluted (NOTE 4) $ (0.30 ) $ 0.14 Net Investment
Income per Common Share Basic and Diluted (NOTE 7) $ 0.16 $ 0.20
Weighted Average Shares of Common Share Outstanding Basic and
Diluted 7,569,382 6,219,382
FULL CIRCLE CAPITAL CORPORATION AND
SUBSIDIARIES
FINANCIAL HIGHLIGHTS
Three months endedSeptember 30, 2013 Three
months endedSeptember 30, 2012 (Unaudited) (Unaudited)
Per Share Data (1) : Net asset value at
beginning of period $ 8.01 $ 8.59 Net investment income (loss) 0.16
0.20 Change in unrealized gain (loss) (0.37 ) 0.08 Realized gain
(loss) (0.09 ) (0.13 ) Dividends declared (0.23 )
(0.23 ) Net asset value at end of period $ 7.48 $ 8.51
(1) Financial highlights are based on weighted
average shares outstanding.
Company:Full Circle Capital CorporationJohn E. Stuart,
CEO, 914-220-6300jstuart@fccapital.comorInvestor
Relations:LHAStephanie Prince/Jody Burfening,
212-838-3777sprince@lhai.com
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