Closed $37.9 Million in Direct and Managed
Investments in the First Quarter
Declared Monthly Distributions of $0.067 Per
Share for a Total of $0.201 Per Share for Third Quarter Fiscal
2015, Equal to Annualized Distribution Rate of $0.80 Per
Share
Full Circle Capital Corporation (Nasdaq:FULL) (the “Company”)
today announced its financial results for the first quarter of
fiscal 2015 ended September 30, 2014.
Financial Highlights for the First Quarter
of Fiscal 2015
- Originations to four new companies and
expansion of facilities to existing borrowers totaled $37.9
million, of which $27.9 million was funded directly by the Company
and $10.0 million was funded through FC Capital Investment
Partners, LLC, a vehicle managed by the Company. Repayments or
realizations from portfolio companies and sales were $16.0 million
from three portfolio companies.
- Total investment income was $4.1
million, an increase of 28.1% compared with $3.2 million for the
three months ended September 30, 2013.
- Net investment income (NII) increased
48.1% to $1.8 million compared with $1.2 million for the three
months ended September 30, 2013. On a per share basis, NII was
$0.16 for both three month periods.
- Net realized and unrealized losses were
$1.6 million, or $0.14 per share. Unrealized losses on investments
were $2.0 million, or $0.17 per share. Realized gains on
investments were $0.4 million, or $0.03 per share.
- Net increase in net assets from
operations was $0.2 million, or $0.02 per share.
- Net asset value was $6.24 per share at
September 30, 2014.
- Per share amounts are based on
approximately 11.9 million weighted average shares outstanding
compared to 7.6 million weighted average shares outstanding for the
first quarter of fiscal 2014, reflecting the common equity
offerings completed during calendar 2014.
- Total portfolio investments at
September 30, 2014 were $131.5 million compared to $125.2 million
at June 30, 2014 and $94.6 million at September 30, 2013.
- Weighted average portfolio interest
rate was 10.53% at September 30, 2014.
- At September 30, 2014, 95% of portfolio
company investments were first lien senior secured loans.
On November 3, 2014, the Board of Directors declared monthly
distributions for the third quarter of fiscal 2015 as follows:
Record Date Payment Date Per Share
Amount January 30, 2015 February 13, 2015
$0.067 February 27, 2015 March 13, 2015 $0.067 March 31,
2015 April 15, 2015 $0.067
These distributions equate to a $0.804 annualized distribution
rate, or a current annualized yield of 13.8%, based on the closing
price of the Company’s common stock of $5.84 per share on November
7, 2014.
Management Commentary
“In the first quarter Full Circle Capital’s net investment
income increased 48.1%, reflecting the 39.0% growth in our
investment portfolio, at fair value, over the last twelve months,”
said John Stuart, Chairman and Co-Chief Executive Officer of Full
Circle Capital Corporation. “We believe this growth was driven by
strategic actions we have made over the past year that include a
broadening of our investment approach supported by an expanded
investment team, as well as resolution of certain underperforming
legacy positions. In particular, we restructured the Blackstrap
Broadcasting, LLC loan facility and the loan returned to performing
status as of September 22, 2014. Given the timing of this event at
the very end of the quarter, there was no material benefit to the
first quarter’s earnings. We expect to realize the full impact
beginning in the second quarter, which translates to approximately
$1.2 million of annual interest income. We have also lowered our
cost of capital as we expanded our revolving credit facility and
benefitted from the expense reimbursement which was initiated this
quarter. As previously announced, Full Circle Advisors has agreed
to bear any annual operating expenses of Full Circle Capital above
1.50% of Net Asset Value in fiscal 2015 and above 1.75% of Net
Asset Value in fiscal 2016 and beyond. We expect that these expense
initiatives combined with our current level of investment will
allow Full Circle to cover the current stockholder distribution
rate on a sustainable basis, an important goal of management and
the Board of Directors.”
Gregg Felton, President and Co-Chief Executive Officer,
commented, “We are pleased with the robust origination activity
that continued in the first quarter resulting in new investments of
$37.9 million; $27.9 million of this amount was funded directly by
Full Circle Capital and the balance of $10.0 million was funded by
FC Capital Investment Partners LLC, a vehicle managed by the
Company. The new investments included four new portfolio companies,
and led to our highest ever portfolio asset level of $131.5 million
at quarter end. Our pipeline remains strong, with significant
investment opportunities, including in our newer healthcare and
real estate strategies. At the end of the quarter, we proactively
sold certain of our more liquid investment positions in favor of
some higher return opportunities in our pipeline. We will consider
recycling other portfolio positions as we view a primary share
issuance as unattractive at current trading levels.”
First Quarter Fiscal 2015
Results
The Company’s net asset value at September 30, 2014 was $6.24
per share. During the quarter, the Company generated $3.9 million
of interest income compared to $3.0 million in the first quarter of
fiscal 2014, an increase of 29.6%. Income from fees and other
sources totaled $0.2 million. The Company recorded net investment
income of $1.8 million, or $0.16 per share. Net realized and
unrealized losses were $1.6 million, or $0.14 per share. Net
unrealized depreciation of $2.0 million was comprised of $1.5
million of net unrealized depreciation on equity investments and
$0.5 million of net unrealized depreciation on debt investments.
Realized gains on investments were $0.4 million, or $0.03 per
share.
Net increase in net assets from operations was $0.2 million, or
$0.02 per share. Per share amounts for the quarter ended September
30, 2014 are based on approximately 11.9 million weighted average
shares outstanding compared to 7.6 million weighted average shares
outstanding for the quarter ended September 30, 2013. This increase
reflects the common equity offerings that Full Circle Capital
completed in calendar 2014.
During the quarter, new originations and expansion of facilities
to existing borrowers were $27.9 million, including four new loan
facilities totaling $21.2 million. Repayments from portfolio
companies during the first quarter were $3.6 million from one
portfolio company. Additionally, Full Circle Capital sold two
portfolio positions during the first quarter for total proceeds of
$12.6 million.
At September 30, 2014, the Company’s portfolio included debt
investments in 27 companies. The average portfolio company debt
investment at September 30, 2014 was $4.6 million. The weighted
average interest rate on debt investments was 10.53%. At fair
value, 95% of portfolio investments were first lien loans, 0% were
second lien loans and 5% were equity investments. Approximately 75%
of the debt investment portfolio, at fair value, bore interest at
floating rates. The loan-to-value ratio on the Company’s loans was
62% at September 30, 2014 compared to 61% at September 30,
2013.
Subsequent Events
On October 9, 2014, the Company funded a $2.75 million senior
secured credit facility to Ads Direct Media, Inc., an internet
advertising agency. The credit facility bears interest at one month
LIBOR plus 13.00% with a LIBOR floor of 0.50% and has a final
maturity of October 6, 2017.
On October 10, 2014, the Company funded $6.0 million of a $60
million second lien secured loan to Bioventus LLC, a specialty
pharmaceutical company. The credit facility bears interest at one
month LIBOR plus 10.00% with a LIBOR floor at 1.00% and has a final
maturity of April 10, 2020.
On October 15, 2014, the senior secured credit facility with
Esselte Holdings Inc., Esselte AB was paid off in full at par plus
accrued interest for total proceeds of $1,758,967.
On October 27, 2014, the senior secured credit facility with
PEAKS Trust 2009-1 was partially paid off at par plus accrued
interest for total proceeds of $2,352,405.
Conference Call Details
Management will host a conference call to discuss these results
on Tuesday, November 11, 2014 at 10:00 a.m. EST. To participate in
the conference call, please call 866-305-6438 (domestic call-in) or
706-679-7161 (international call-in) and reference code #
31577094.
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. EST on November 11, 2014 until 11:59 p.m. EST on November
14, 2014 by calling 855-859-2056 (domestic) or 404-537-3406
(international) and entering confirmation # 31577094. 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
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 , 2014 June 30, 2014 Unaudited
Assets Control Investments at Fair Value (Cost of
$20,616,819 and $20,253,149, respectively) $ 14,898,733 $
17,539,057 Affiliate Investments at Fair Value (Cost of $26,165,283
and $20,177,115, respectively) 21,427,795 14,588,417
Non-Control/Non-Affiliate Investments at Fair Value (Cost of
$100,607,151 and $123,605,311, respectively) 95,202,874
118,063,285 Total Investments at Fair Value
(Cost of $147,389,253 and $164,035,575, respectively) 131,529,402
150,190,759 Cash 73,644 - Deposit with Broker - 2,525,000
Interest Receivable 1,393,242 1,016,726 Principal Receivable
269,980 207,233 Due from Affiliate 336,685 4,273 Due from Portfolio
Investment 136,041 135,288 Receivable for Investments Sold
12,399,828 - Prepaid Expenses 182,654 57,470 Other Assets 738,451
750,326 Deferred Offering Expenses 47,581 - Deferred Debt Issuance
Costs 908,096 947,937 Deferred Credit Facility Fees 477,539
449,350
Total Assets
148,493,143 156,284,362
Liabilities Due to Affiliates 970,167 891,966 Bank Overdraft
- 821,316 Accrued Liabilities 91,925 184,857 Due to Broker -
25,000,221 Payable for Investments Acquired - 24,900,172
Distributions Payable 800,585 766,683 Interest Payable 93,785
45,254 Other Liabilities 1,074,730 1,076,800 Accrued Offering
Expenses 33,328 35,828 Line of Credit 37,065,023 8,435,463 Notes
Payable 8.25% due June 30, 2020 33,826,227
21,145,525
Total Liabilities 73,955,770
83,304,085
Commitments and
contingencies - -
Net
Assets $ 74,537,373 $ 72,980,277
Components of Net Assets Common Stock, par value $0.01 per
share (100,000,000 authorized; 11,949,034 and 11,443,034 issued and
outstanding, respectively) $ 119,490 $ 114,430 Paid-in Capital in
Excess of Par 95,828,760 92,103,666 Distributions in Excess of Net
Investment Income (690,933 ) (131,251 ) Accumulated Net Realized
Losses (4,860,093 ) (5,261,752 ) Accumulated Net Unrealized Losses
(15,859,851 ) (13,844,816 )
Net Assets $
74,537,373 $ 72,980,277
Net Asset Value Per
Share $ 6.24 $ 6.38
FULL CIRCLE CAPITAL CORPORATION AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30, 2014
Three Months Ended
September 30, 2013
Investment Income Interest Income from
Non-Control/Non-Affiliate Investments $ 2,807,931 $ 1,881,138
Interest Income from Affiliate Investments 540,560 653,718 Interest
Income from Control Investments 529,108 457,904 Dividend Income
from Control Investments - 34,411 Other Income from
Non-Control/Non-Affiliate Investments 187,055 173,471 Other Income
from Affiliate Investments 9,470 5,044 Other Income from Control
Investments 12,500 12,500 Total Investment
Income 4,086,624 3,218,186
Operating
Expenses Management Fee 572,558 409,258 Incentive Fee 389,850
314,739 Total Advisory Fees 962,408 723,997
Allocation of Overhead Expenses 36,555 63,830
Sub-Administration Fees 63,209 50,000 Officers’ Compensation 75,913
75,338 Total Costs Incurred Under Administration
Agreement 175,677 189,168 Directors’ Fees
47,946 28,625 Interest Expenses 1,002,383 720,977 Professional
Services Expense 219,668 195,861 Bank Fees 10,271 13,846 Other
108,871 101,485
Total Gross Operating
Expenses 2,527,224 1,973,959 Expense Reimbursement
(282,674 ) -
Total Net Operating Expenses
2,244,550 1,973,959 Net Investment Income
1,842,074 1,244,227 Net Change in Unrealized Loss on Investments
(2,015,035 ) (2,822,891 ) Net Realized Gain (Loss) on: Investments
402,907 (678,553 ) Foreign Currency Transactions (1,248 ) 68
Net Realized Gain (Loss) 401,659 (678,485 )
Net
Increase (Decrease) in Net Assets Resulting from Operations $
228,698 $ (2,257,149 ) Earnings (Loss) per Common
Share Basic and Diluted $ 0.02 $ (0.30 ) Net Investment Income per
Common Share Basic and Diluted $ 0.16 $ 0.16 Weighted Average
Shares of Common Stock Outstanding Basic and Diluted 11,877,534
7,569,382
FULL CIRCLE CAPITAL CORPORATION AND
SUBSIDIARIES
FINANCIAL HIGHLIGHTS
Three months endedSeptember 30, 2014 Three
months endedSeptember 30, 2013 Per Share
Data (1) : Net asset value at beginning of period
$ 6.38 $ 8.01 Accretion (dilution) from offering 0.04 - Offering
costs (0.00 ) - Net investment income 0.16 0.16 Change in
unrealized loss (0.17 ) (0.37 ) Realized gain (loss) 0.03 (0.09 )
Dividends from Net investment income (0.16 ) (0.16 ) Return of
capital (0.04 ) (0.07 ) Net asset value at end of
period $ 6.24 $ 7.48 (1) Financial highlights
are based on weighted average shares outstanding.
Full Circle Capital CorporationJohn Stuart, Co-Chief
Executive OfficerGregg J. Felton, Co-Chief Executive
Officer203-900–2100info@fccapital.comorInvestor
Relations:LHAStephanie PrinceJody
Burfening212-838-3777sprince@lhai.com
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