- Raised $37.9 Million
in Net Proceeds Through Successful Rights Offering -
- Net Investment Income of $2.0 Million
or $0.17 per Share -
- Closed
$15.7 Million in New Investments Thus Far in
Calendar 2015 -
Full Circle Capital Corporation (Nasdaq:FULL) (the "Company") today
announced its financial results for the third quarter of fiscal
2015 ended March 31, 2015.
Financial Highlights for the Fiscal Third Quarter Ended March
31, 2015:
- Successfully completed rights offering, generating
approximately $37.9 million in net proceeds and the issuance of
approximately 11.2 million shares of common stock. The proceeds
will be used by the Company for the origination of new investments
in accordance with its investment objective, and for working
capital and other general corporate purposes.
- Originated $2.0 million in investments. Repayments or
realizations from portfolio companies and sales were $6.4
million.
- Increased total investment income 35% to $4.3 million, compared
with $3.2 million for the prior-year quarter.
- Net investment income ("NII") grew 40.6% to $2.0 million, or
$0.17 per share, compared with $1.4 million, or $0.15 per share, in
the prior-year quarter.
- Net realized and unrealized losses were $0.3 million,
consisting of unrealized gains on investments of $3.2 million and
realized losses on investments of $3.5 million.
- Net increase in net assets from operations was $1.7 million, or
$0.14 per share.
- Per share amounts are based on approximately 12 million
weighted average shares outstanding compared to 9.4 million
weighted average shares outstanding for the third quarter of fiscal
2014, reflecting capital markets activities completed during
calendar 2014 and 2015.
As of March 31, 2015:
- Net asset value was $4.43 per share and portfolio fair value
was $121.0 million
- Weighted average portfolio interest rate was 10.53%.
- 89% of portfolio company investments were first lien senior
secured loans.
On May 5, 2015, the Board of Directors declared monthly
distributions for the first quarter of fiscal 2016 as follows:
Record Date |
Payment Date |
Per Share Amount |
July 31, 2015 |
August 14, 2015 |
$0.035 |
August 31, 2015 |
September 15, 2015 |
$0.035 |
September 30, 2015 |
October 15, 2015 |
$0.035 |
These distributions equate to a $0.42 annualized distribution
rate, or a current annualized yield of 12.0%, based on the closing
price of the Company's common stock of $3.50 per share on May 8,
2015.
"Our fiscal third quarter was highlighted by the successful
completion of our rights offering, and we appreciate the strong
vote of confidence shown by our shareholders in our current
positioning and overall investment strategy," said Gregg Felton,
President and Chief Executive Officer of Full Circle Capital
Corporation. "With the proceeds from the rights offering, we began
to deploy capital in April toward new opportunities from our
transaction pipeline as we closed on $13.7 million in new
investments. We expect to continue to invest our available capital
over the next couple of quarters but intend to focus on those
selective investments which offer the appropriate risk-reward
characteristics."
"The current annualized distribution rate of 42 cents reflects
the near doubling of our share count and we believe our
distribution has been set at a sustainable level," added Mr.
Felton. "Furthermore, in order to better ensure that we are able to
cover the distribution while we hold excess uninvested capital, our
investment adviser has agreed to waive its base management and
incentive fees to the extent required in order for the Company to
earn net investment income sufficient to fully support each monthly
distribution through the end of fiscal 2016. With this further
alignment of management and shareholder interests, as well as our
broadened investment approach, we believe we are well positioned to
build shareholder value."
Third Quarter Fiscal 2015 Results
The Company's net asset value at March 31, 2015 was $4.43 per
share. During the quarter, the Company generated $4.3 million of
interest income compared to $2.5 million in the third quarter of
fiscal 2014, an increase of 70.8%. Income from fees and other
sources in the quarter totaled $0.1 million, compared to $0.7
million in the prior-year quarter.
The Company recorded NII of $2.0 million, or $0.17 per share, in
the quarter ended March 31, 2015 compared to $1.4 million, or $0.15
per share, in the quarter ended March 31, 2014. Per share amounts
for the quarter ended March 31, 2015 are based on approximately 12
million weighted average shares outstanding compared to 9.4 million
weighted average shares outstanding for the quarter ended March 31,
2014, reflecting additional capital raises completed by Full Circle
Capital in calendar 2014 and 2015.
Net realized and unrealized losses in the quarter were $0.3
million. Net unrealized appreciation of $3.2 million, inclusive of
the reversal of previously unrealized losses now realized, was
comprised of $1.1 million of net unrealized appreciation on equity
investments and $2.1 million of net unrealized appreciation on debt
investments. Realized losses on investments were $3.5 million. Net
increase in net assets resulting from operations was $1.7 million,
or $0.14 per share.
During the quarter ended March 31, 2015 the Company added $2.0
million in new loans to one new portfolio company. Repayments from
portfolio companies during the second quarter were $6.4 million
from three portfolio companies.
At March 31, 2015, the Company's portfolio included debt
investments in 27 companies at an average of $4.3 million per
investment. The weighted average interest rate on debt investments
was 10.53%. At fair value, 89% of portfolio investments were first
lien loans, 7% were second lien loans and 4% were equity
investments. Approximately 78% of the debt investment portfolio, at
fair value, bore interest at floating rates. The loan-to-value
ratio on the Company's loans was 66% at March 31, 2015 compared to
64% at March 31, 2014.
Subsequent Events
Subsequent to March 31, 2015, the Company has closed $13.7
million in new investments:
On April 1, 2015, the Company purchased $3.2 million of $23.5
million in subordinated notes issued by GC Pivotal, LLC, a data
connectivity service company. The notes bear interest at
11.00% and have a final maturity of December 31, 2020.
On April 22, 2015 and May 4, 2015, the Company purchased an
additional $5.0 million in principal of $210 million senior secured
notes for US Shale Solutions, Inc., an oil and gas field services
company, for $2.5 million. The notes bear interest at 12.50%
and have a final maturity of September 1, 2017.
On April 29, 2015, the Company purchased $8.0 million of $43.0
million in senior secured notes issued by Sundberg America, LLC, an
appliance parts distributor. The notes bear interest at 9.50%
and have a final maturity of April 29, 2020.
Conference Call Details
Management will host a conference call at 4:30 pm ET today to
discuss results. A live webcast of the conference call and
accompanying slide presentation will be available at
http://ir.fccapital.com. Please access the website
approximately 10 minutes before the conference call begins.
To participate in the call, please call (888) 228-5271 (domestic
toll-free) or (913) 312-1279 (international) and reference PIN:
8793012.
A webcast replay of the call, along with an archived copy of the
presentation, will be available at http://ir.fccapital.com for one
year following the call.
An audio replay will also be available until May 18, 2015, by
dialing (877) 870-5176 (toll-free) or (858) 384-5517
(international), PIN: 8793012.
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 website
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 |
|
|
|
|
March 31, 2015 |
June 30, 2014 |
|
Unaudited |
|
Assets |
|
|
Control Investments at Fair Value (Cost of
$19,288,955 and $20,253,149, respectively) |
$ 8,746,959 |
$ 17,539,057 |
Affiliate Investments at Fair Value (Cost of
$24,237,661 and $20,177,115, respectively) |
17,258,161 |
14,588,417 |
Non-Control/Non-Affiliate Investments at Fair
Value (Cost of $97,774,155 and $123,605,311, respectively) |
94,976,588 |
118,063,285 |
Total Investments at Fair Value (Cost of
$141,300,771 and $164,035,575, respectively) |
120,981,708 |
150,190,759 |
|
|
|
Cash |
2,187,047 |
-- |
Deposit with Broker |
-- |
2,525,000 |
Interest Receivable |
1,595,553 |
1,016,726 |
Principal Receivable |
102,800 |
207,233 |
Due from Affiliates |
349,623 |
4,273 |
Due from Portfolio Investments |
151,911 |
135,288 |
Stock Subscriptions Receivable |
39,220,724 |
-- |
Prepaid Expenses |
135,703 |
57,470 |
Other Assets |
1,320,968 |
750,326 |
Deferred Offering Expenses |
189,324 |
-- |
Deferred Debt Issuance Costs |
872,948 |
947,937 |
Deferred Credit Facility Fees |
339,753 |
449,350 |
|
|
|
Total Assets |
167,448,062 |
156,284,362 |
|
|
|
Liabilities |
|
|
Due to Affiliates |
983,634 |
891,966 |
Bank Overdraft |
-- |
821,316 |
Accrued Liabilities |
50,001 |
184,857 |
Due to Broker |
-- |
25,000,221 |
Payable for Investments Acquired |
-- |
24,900,172 |
Distributions Payable |
800,585 |
766,683 |
Interest Payable |
91,524 |
45,254 |
Other Liabilities |
655,766 |
1,076,800 |
Accrued Offering Expenses |
1,201,303 |
35,828 |
Line of Credit |
27,207,560 |
8,435,463 |
Notes Payable 8.25% due June 30, 2020 |
33,809,749 |
21,145,525 |
|
|
|
Total Liabilities |
64,800,122 |
83,304,085 |
Commitments and contingencies |
-- |
-- |
|
|
|
Net Assets |
$ 102,647,940 |
$ 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; 11,205,921 and 0 subscribed,
respectively) |
$ 119,490 |
$ 114,430 |
Paid-in Capital in Excess of Par |
133,657,741 |
92,103,666 |
Distributions in Excess of Net Investment
Income |
(1,163,168) |
(131,251) |
Accumulated Net Realized Losses |
(9,647,060) |
(5,261,752) |
Accumulated Net Unrealized Losses |
(20,319,063) |
(13,844,816) |
Net Assets |
$ 102,647,940 |
$ 72,980,277 |
|
|
|
Net Asset Value Per
Share |
$ 4.43 |
$ 6.38 |
|
FULL CIRCLE CAPITAL
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
March
31, |
March
31, |
|
2015 |
2014 |
2015 |
2014 |
Investment Income |
|
|
|
|
Interest Income from
Non-Control/Non-Affiliate Investments |
$ 3,310,605 |
$ 1,308,432 |
$ 9,486,149 |
$ 4,839,103 |
Interest Income from Affiliate
Investments |
629,108 |
673,896 |
1,835,289 |
1,984,549 |
Interest Income from Control Investments |
317,431 |
510,038 |
1,280,177 |
1,452,149 |
Dividend Income from Control Investments |
-- |
80,293 |
-- |
114,704 |
Other Income from Non-Control/Non-Affiliate
Investments |
38,256 |
603,190 |
573,587 |
1,966,552 |
Other Income from Affiliate Investments |
625 |
3,275 |
94,667 |
12,156 |
Other Income from Control Investments |
12,500 |
12,500 |
37,500 |
37,500 |
Total Investment Income |
4,308,525 |
3,191,624 |
13,307,369 |
10,406,713 |
|
|
|
|
|
Operating Expenses |
|
|
|
|
Management Fee |
545,564 |
364,352 |
1,699,451 |
1,156,099 |
Incentive Fee |
419,559 |
351,594 |
1,335,651 |
1,141,230 |
Total Advisory Fees |
965,123 |
715,946 |
3,035,102 |
2,297,329 |
|
|
|
|
|
Allocation of Overhead Expenses |
53,511 |
43,604 |
127,028 |
142,315 |
Sub-Administration Fees |
65,195 |
50,000 |
194,999 |
150,000 |
Officers' Compensation |
75,913 |
75,529 |
227,739 |
226,396 |
Total Costs Incurred Under Administration
Agreement |
194,619 |
169,133 |
549,766 |
518,711 |
|
|
|
|
|
Directors' Fees |
49,750 |
26,125 |
138,446 |
86,375 |
Interest Expenses |
1,119,639 |
623,091 |
3,299,116 |
2,062,570 |
Professional Services Expense |
149,698 |
112,629 |
509,292 |
467,110 |
Bank Fees |
8,910 |
9,941 |
30,099 |
45,409 |
Other |
142,326 |
128,380 |
402,720 |
379,015 |
|
|
|
|
|
Total Gross Operating
Expenses |
2,630,065 |
1,785,245 |
7,964,541 |
5,856,519 |
|
|
|
|
|
Expense Reimbursement |
(299,476) |
-- |
(830,523) |
-- |
|
|
|
|
|
Total Net Operating
Expenses |
2,330,589 |
1,785,245 |
7,134,018 |
5,856,519 |
|
|
|
|
|
Net Investment Income |
1,977,936 |
1,406,379 |
6,173,351 |
4,550,194 |
Net Change in Unrealized Gain (Loss) on
Investments |
3,165,547 |
1,751,729 |
(6,474,247) |
(3,698,474) |
Net Realized Gain (Loss) on: |
|
|
|
|
Non-Control/Non-Affiliate
Investments |
(3,458,023) |
224,320 |
(4,186,132) |
(946,449) |
Affiliate Investments |
44,461 |
-- |
44,461 |
-- |
Control Investments |
(71,953) |
-- |
(242,389) |
-- |
Foreign Currency Transactions |
-- |
(906) |
(1,248) |
(838) |
Net Realized Gain (Loss) |
(3,485,515) |
223,414 |
(4,385,308) |
(947,287) |
Net Increase (Decrease) in Net Assets
Resulting from Operations |
1,657,968 |
3,381,522 |
(4,686,204) |
(95,567) |
|
|
|
|
|
Earnings (Loss) per Common Share Basic and
Diluted |
$ 0.14 |
$ 0.36 |
$ (0.39) |
$ (0.01) |
Net Investment Income per Common Share Basic
and Diluted |
$ 0.17 |
$ 0.15 |
$ 0.52 |
$ 0.56 |
Weighted Average Shares of Common Stock
Outstanding Basic |
11,949,034 |
9,419,350 |
11,925,027 |
8,177,036 |
Weighted Average Shares of Common Stock
Outstanding Diluted |
11,990,011 |
9,419,350 |
11,925,027 |
8,177,036 |
|
FULL CIRCLE CAPITAL
CORPORATION AND SUBSIDIARIES |
FINANCIAL
HIGHLIGHTS |
|
|
|
|
|
|
Three months ended |
Three months ended |
Nine months ended |
Nine months ended |
|
March 31. 2015 |
March 31, 2014 |
March 31, 2015 |
March 31, 2014 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Per Share Data (1) : |
|
|
|
|
Net asset value at beginning of period |
$ 5.48 |
$ 7.09 |
$ 6.38 |
$ 8.01 |
Accretion (dilution) from offering(s)
(2) |
(0.96) |
0.00 |
(0.92) |
0.00 |
Offering costs |
(0.06) |
(0.03) |
(0.06) |
(0.03) |
Net investment income |
0.17 |
0.15 |
0.52 |
0.56 |
Net change in unrealized gain (loss) |
0.29 |
0.18 |
(0.52) |
(0.53) |
Net realized gain (loss) |
(0.29) |
0.02 |
(0.37) |
(0.14) |
Dividends from net investment income |
(0.17) |
(0.15) |
(0.52) |
(0.56) |
Return of capital |
(0.03) |
(0.06) |
(0.08) |
(0.11) |
Net asset value at end of period |
$ 4.43 |
$ 7.20 |
$ 4.43 |
$ 7.20 |
|
|
|
|
|
(1) Financial highlights are
based on weighted average shares outstanding. |
(2) Accretion and dilution
from offering(s) is based on the net change in net asset value from
each follow-on offering. |
CONTACT: Company Contact:
John Stuart, Chairman
Gregg J. Felton, President and Chief Executive Officer
Full Circle Capital Corporation
(203) 900 - 2100
info@fccapital.com
Investor Relations Contacts:
Garrett Edson/Brad Cohen
ICR, LLC
(203) 818 - 1089
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