UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________________________
FORM 8-K
Current
Report Pursuant to Section 13 or 15(d) of
the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 11, 2015
FULL CIRCLE CAPITAL CORPORATION
(Exact name of registrant as specified
in its charter)
| Maryland |
814-00809
|
27-2411476 |
|
(State or other jurisdiction
of incorporation) |
(Commission
File Number) |
(I.R.S. Employer Identification No.) |
102 Greenwich Avenue, 2nd
Floor
Greenwich, CT 06830
(Address of principal
executive offices and zip code)
Registrant’s
telephone number, including area code: (203) 900-2100
Check the appropriate box below if the Form 8-K is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On May 11, 2015, Full Circle Capital Corporation
(the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2015. The text
of the press release is included as an exhibit to this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(a) Not applicable.
| Exhibit No. |
Description |
| |
|
| 99.1 |
Press release dated May 11, 2015 |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: |
May 11, 2015 |
FULL CIRCLE CAPITAL CORPORATION |
| |
|
|
| |
|
|
| |
|
By: /s/ Michael J. Sell |
| |
|
Michael J. Sell |
| |
|
Chief Financial Officer, Treasurer and Secretary |
Exhibit 99.1
FULL CIRCLE CAPITAL CORPORATION ANNOUNCES
THIRD QUARTER FISCAL 2015 EARNINGS
-
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 -
Greenwich,
Connecticut – May 11, 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.
| Company
Contact: |
Investor
Relations Contacts: |
| John Stuart, Chairman |
Garrett Edson/Brad Cohen |
| Gregg J. Felton, President and Chief Executive Officer |
ICR, LLC |
| Full Circle Capital Corporation |
(203) 818 – 1089 |
| (203) 900 – 2100 |
|
| info@fccapital.com |
|
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 March 31, | | |
Nine Months Ended 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
March 31. 2015 | | |
Three months ended
March 31, 2014 | | |
Nine months ended
March 31, 2015 | | |
Nine months ended
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. |
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