- Net Investment Income Grows 64.8% to
$2.4 Million -
- Closed $38.1 Million
in New Investments Thus Far in Calendar 2015 -
- Announces Authorization of Two Million
Share Repurchase Program -
Full Circle Capital Corporation (Nasdaq:FULL) (the "Company") today
announced its financial results for the fiscal fourth quarter and
full year ended June 30, 2015.
Financial Highlights for the Fiscal Fourth Quarter Ended June
30, 2015:
- Originated $26.1 million in new investments.
- Increased total investment income by 30.0% to $4.4 million,
compared with $3.4 million for the prior-year quarter.
- Net investment income ("NII") grew by 64.8% to $2.4 million, or
$0.11 per share, compared with $1.5 million, or $0.15 per share, in
the prior-year quarter.
- Net realized and unrealized losses were $3.0 million,
consisting of net unrealized gains on investments of $0.2 million
and net realized losses on investments of $3.2 million.
- Net decrease in net assets from operations was $0.5 million, or
$0.02 per share.
- Per share amounts are based on approximately 23.2 million
weighted average shares outstanding compared to 10.3 million
weighted average shares outstanding for the fourth quarter of
fiscal 2014, reflecting share issuances completed during calendar
2014 and 2015.
As of June 30, 2015:
- Net asset value was $4.30 per share and portfolio fair value
was $152.1 million
- Weighted average portfolio interest rate was 9.99%
- 81% of portfolio company investments were first lien senior
secured loans
On August 4, 2015, the Board of Directors declared monthly
distributions for the second quarter of fiscal 2016 of $0.035 per
share payable in November and December 2015, and January
2016. These distributions equate to a $0.42 annualized amount
or a current annualized yield of 13.4%, based on the closing price
of the Company's common stock of $3.13 per share on September 11,
2015.
Stock Repurchase Program
In August 2015, the Company's board of directors authorized an
increase in the amount of shares of its common stock that may be
repurchased under its existing stock repurchase program from one
million shares to two million shares. The shares may only be
repurchased in the open market and at prices below the then most
recently reported net asset value per share of the shares.
Full Circle Capital intends to enter into and implement a Rule
10b5-1 repurchase plan shortly after today's earnings announcement
to implement the stock repurchase program. Depending upon
market conditions and other factors, Full Circle Capital's
management also has the discretion to make open market repurchases
in addition to any made pursuant to the Rule 10b5-1 repurchase
plan.
"Our fiscal fourth quarter was focused on the deployment of our
available capital, which resulted in the origination of $26.1
million in investments during the quarter, and an additional $10.0
million in investments subsequent to the quarter end, spread among
a diverse group of companies," said Gregg Felton, President and
Chief Executive Officer of Full Circle Capital Corporation. "We
believe we have taken considerable care in selecting and funding
these investments, and that they will provide a proper alignment of
reward and acquired risk."
"The waiver by our investment adviser of a portion of the base
management and incentive fees in the quarter contributed toward
ensuring that we were able to cover our monthly distributions with
sufficient net investment income," added Mr. Felton. "Looking
ahead, we believe the recent investments of our available capital
from the equity issuance earlier this year, combined with continued
portfolio growth, position us to generate the necessary investment
income over time to enable us to cover the monthly distributions
absent any fee waivers; however, to further demonstrate
management's and our investment adviser's commitment to
shareholders' interests, the waiver will remain in place through
the end of fiscal 2016."
"Finally, to further align our interests with that of our
shareholders, our Board has recently increased the number of shares
that we can repurchase from one million to two million and we plan
to enter into a 10b5-1 plan very shortly to begin implementing the
share buyback. With our currently available investment
capacity, we believe this is a prudent use of our capital that will
be accretive to shareholders while still maintaining significant
funds to deploy into additional investments and further grow the
Company," concluded Mr. Felton.
Fourth Quarter Fiscal 2015 Results
The Company's net asset value at June 30, 2015 was $4.30 per
share. During the quarter, the Company generated $4.4 million of
interest income compared to $2.9 million in the fourth quarter of
fiscal 2014, an increase of 51.4%. Income from fees and other
sources in the quarter totaled $0.1 million, compared to $0.5
million in the prior-year quarter.
The Company produced NII of $2.4 million, or $0.11 per share, in
the quarter ended June 30, 2015 compared to $1.5 million, or $0.15
per share, in the quarter ended June 30, 2014.
Net realized and unrealized losses in the quarter were $3.0
million. Net unrealized appreciation of $0.2 million was comprised
of $3.4 million of net unrealized appreciation on equity
investments and $3.2 million of net unrealized depreciation on debt
investments. Realized losses on investments were $3.2
million. Net decrease in net assets resulting from operations
was $0.5 million, or $0.02 per share.
During the quarter ended June 30, 2015 the Company added $26.1
million in new investments in six new portfolio companies and two
current portfolio companies.
At June 30, 2015, the Company's portfolio included debt
investments in 32 companies with an average of $4.2 million per
investment. The weighted average interest rate on debt
investments was 9.99% at June 30, 2015. At fair value, 80.7% of the
Company's portfolio investments were first lien loans, 7.3% were
second lien loans and unsecured notes and 12.0% were equity
investments. While gross exposure to equity investments is 12.0%,
net exposure to equity investments is 5.5% as the net exposure to
Granite Ridge, LLC is $2.6 million when taking the deposit on the
swap contract into account. Approximately 73% of the debt
investment portfolio, at fair value, bore interest at floating
rates. The loan-to-value ratio on the Company's loans was 59% at
June 30, 2015 compared to 60% at June 30, 2014.
Subsequent Events
Subsequent to June 30, 2015, the Company has closed $10.0
million in new investments in two new portfolio companies and one
existing portfolio company, and received $12.8 million in
repayments:
On July 1, 2015, the Company issued a $6.0 million mortgage note
to 310E53RD, LLC, a real estate holding company. The note
bears interest at LIBOR plus 10.00% with a LIBOR floor of 0.15% and
has a final maturity of July 1, 2017.
On July 1, 2015, the senior secured credit facility and
revolving commitment with Butler Burgher Group, LLC, was fully
repaid at par plus accrued interest and fees for total proceeds of
$8.6 million.
On July 17, 2015, the Company purchased $3.0 million of a $175.0
million senior secured term loan to Liquidnet Holdings, Inc., an
equities trading platform, at 96.375% of par. The credit
facility bears interest at LIBOR plus 6.75% with a LIBOR floor of
1.00% and has a final maturity of May 22, 2019.
On July 31, 2015, the Company purchased an additional $1.0
million of senior secured notes to Lee Enterprises, Incorporated.
The notes bear interest at 9.50% and have a final maturity of March
15, 2022.
On September 3, 2015, the senior secured credit facility with GW
Power, LLC and Greenwood Fuels WI, LLC was partially repaid for
total proceeds of $2.2 million.
On September 4, 2015, Blackberry Ltd announced that it has
entered into a definitive agreement to acquire Good Technology
Corporation for $425 million in cash. Upon closing of the
transaction, the Company is expected to receive an $11 million
repayment on its first lien notes, which would reflect a 110%
redemption on the Company's initial investment. The Company
has not received an indication of what value, if any, is expected
to be received related to the warrants.
On September 10, 2015, the company sold the full $2.0 million of
the second lien term loan with GK Holdings, Inc. for total proceeds
of $1.96 million plus accrued interest.
Conference Call Details
Management will host a conference call on Tuesday, September 15,
2015 at 8:30 am ET 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) 737-3713 (domestic
toll-free) or (913) 312-6694 (international) and reference PIN:
1555289.
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 September 22, 2015,
by dialing (877) 870-5176 (toll-free) or (858) 384-5517
(international), PIN: 1555289.
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 |
|
|
|
|
June 30,
2015 |
June 30,
2014 |
|
|
|
Assets |
|
|
Control Investments at Fair Value (Cost of
$11,409,596 and $20,253,149, respectively) |
$ 5,812,064 |
$ 17,539,057 |
Affiliate Investments at Fair Value (Cost of
$24,434,726 and $20,177,115, respectively) |
16,019,272 |
14,588,417 |
Non-Control/Non-Affiliate Investments at Fair
Value (Cost of $136,351,581 and $123,605,311, respectively) |
130,282,423 |
118,063,285 |
Total Investments at Fair Value
(Cost of $172,195,903 and $164,035,575, respectively) |
152,113,759 |
150,190,759 |
|
|
|
Open Swap Contract Asset, at Fair Value |
-- |
-- |
Cash |
3,736,563 |
-- |
Deposit with Broker |
-- |
2,525,000 |
Interest Receivable |
1,903,606 |
1,016,726 |
Principal Receivable |
23,287 |
207,233 |
Distributions Receivable |
15,141 |
-- |
Due from Affiliates |
605,749 |
4,273 |
Due from Portfolio Investments |
180,300 |
135,288 |
Receivable on Swap Contract |
1,081 |
-- |
Prepaid Expenses |
66,105 |
57,470 |
Other Assets |
1,483,578 |
750,326 |
Deferred Offering Expenses |
328,168 |
-- |
Deferred Credit Facility Fees |
267,645 |
449,350 |
|
|
|
Total Assets |
160,724,982 |
155,336,425 |
|
|
|
Liabilities |
|
|
Due to Affiliates |
1,052,489 |
891,966 |
Bank Overdraft |
-- |
821,316 |
Accrued Liabilities |
179,378 |
184,857 |
Deposit from Swap Counterparty |
10,380,000 |
|
Due to Broker |
-- |
25,000,221 |
Payable for Investments Acquired |
15,020,000 |
24,900,172 |
Distributions Payable |
813,240 |
766,683 |
Interest Payable |
57,605 |
45,254 |
Other Liabilities |
305,957 |
1,076,800 |
Accrued Offering Expenses |
7,258 |
35,828 |
Line of Credit |
-- |
8,435,463 |
Notes Payable 8.25% due June 30, 2020 (plus
unamortized premium of $158,504 and $0 and less deferred debt
issuance costs of $833,541 and $947,937, respectively. |
32,970,488 |
20,197,588 |
|
|
|
Total Liabilities |
60,786,415 |
82,356,148 |
Commitments and contingencies |
-- |
-- |
|
|
|
Net Assets |
$ 99,938,567 |
$ 72,980,277 |
|
|
|
Components of Net
Assets |
|
|
Common Stock, par value $0.01 per share
(100,000,000 authorized; 23,235,430 and 11,443,034 issued and
outstanding, respectively) |
$ 232,354 |
$ 114,430 |
Paid-in Capital in Excess of Par |
132,487,067 |
92,103,666 |
Distributions in Excess of Net Investment
Income |
(119,318) |
(131,251) |
Accumulated Net Realized Losses |
(12,579,392) |
(5,261,752) |
Accumulated Net Unrealized Losses |
(20,082,144) |
(13,844,816) |
Net Assets |
$ 99,938,567 |
$ 72,980,277 |
|
|
|
Net Asset Value Per
Share |
$ 4.30 |
$ 6.38 |
|
|
|
|
|
|
FULL CIRCLE CAPITAL
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
June
30, |
June
30, |
|
2015 |
2014 |
2015 |
2014 |
Investment Income |
|
|
|
|
Interest Income from
Non-Control/Non-Affiliate Investments |
$ 3,558,167 |
$ 1,647,626 |
$ 13,044,316 |
$ 6,486,729 |
Interest Income from Affiliate
Investments |
610,424 |
716,812 |
2,445,713 |
2,701,361 |
Interest Income from Control Investments |
184,892 |
511,258 |
1,465,069 |
1,963,407 |
Dividend Income from Control Investments |
36,247 |
-- |
36,247 |
114,704 |
Other Income from Non-Control/Non-Affiliate
Investments |
27,174 |
521,407 |
542,164 |
2,487,959 |
Other Income from Affiliate Investments |
4,004 |
4,436 |
98,671 |
16,592 |
Other Income from Control Investments |
12,500 |
12,500 |
50,000 |
50,000 |
Other Income from Non-Investment Sources |
8,566 |
2,941 |
67,163 |
2,941 |
Total Investment Income |
4,441,974 |
3,416,980 |
17,749,343 |
13,823,693 |
|
|
|
|
|
Operating Expenses |
|
|
|
|
Management Fee |
580,607 |
475,595 |
2,280,058 |
1,631,694 |
Incentive Fee |
462,349 |
370,132 |
1,798,000 |
1,511,362 |
Total Advisory Fees |
1,042,956 |
845,727 |
4,078,058 |
3,143,056 |
|
|
|
|
|
Allocation of Overhead Expenses |
44,531 |
38,422 |
171,559 |
180,737 |
Sub-Administration Fees |
61,237 |
50,000 |
256,236 |
200,000 |
Officers' Compensation |
75,913 |
75,529 |
303,652 |
301,925 |
Total Costs Incurred Under
Administration Agreement |
181,681 |
163,951 |
731,447 |
682,662 |
|
|
|
|
|
Directors' Fees |
43,750 |
41,250 |
182,196 |
127,625 |
Interest Expenses |
1,006,442 |
630,917 |
4,305,558 |
2,693,487 |
Professional Services Expense |
191,032 |
143,252 |
700,324 |
610,362 |
Bank Fees |
9,832 |
10,775 |
39,931 |
56,184 |
Other |
116,880 |
100,581 |
519,600 |
479,596 |
|
|
|
|
|
Total Gross Operating
Expenses |
2,592,573 |
1,936,453 |
10,557,114 |
7,792,972 |
|
|
|
|
|
Management Fee Waiver and Expense
Reimbursement |
(590,319) |
-- |
(1,420,843) |
-- |
|
|
|
|
|
Total Net Operating
Expenses |
2,002,254 |
1,936,453 |
9,136,271 |
7,792,972 |
|
|
|
|
|
Net Investment Income |
2,439,720 |
1,480,527 |
8,613,072 |
6,030,721 |
Net Change in Unrealized Gain (Loss) on
Investments |
236,919 |
(9,006,140) |
(6,237,328) |
(12,704,614) |
Net Realized Gain (Loss) on: |
|
|
|
|
Non-Control/Non-Affiliate
Investments |
130,823 |
(1,152) |
(4,055,309) |
(947,601) |
Affiliate Investments |
276,933 |
-- |
321,394 |
-- |
Control Investments |
(3,600,000) |
-- |
(3,842,390) |
-- |
Swap Contract |
1,081 |
-- |
1,081 |
-- |
Foreign Currency
Transactions |
-- |
(63) |
(1,248) |
(901) |
Net Realized Gain (Loss) |
(3,191,163) |
(1,215) |
(7,576,472) |
(948,502) |
|
|
|
|
|
Net Increase (Decrease) in Net Assets
Resulting from Operations |
$ (514,524) |
$ (7,526,828) |
$ (5,200,728) |
$ (7,622,395) |
|
|
|
|
|
Earnings (Loss) per Common Share Basic and
Diluted |
$ (0.02) |
$ (0.73) |
$ (0.35) |
$ (0.88) |
Net Investment Income per Common Share Basic
and Diluted |
$ 0.11 |
$ 0.15 |
$ 0.63 |
$ 0.71 |
Weighted Average Shares of Common Stock
Outstanding Basic and Diluted |
23,224,818 |
10,269,882 |
14,803,637 |
8,698,814 |
|
|
|
|
|
|
|
|
|
|
FULL CIRCLE CAPITAL
CORPORATION AND SUBSIDIARIES |
FINANCIAL
HIGHLIGHTS |
|
|
|
|
|
|
|
|
|
|
|
For the |
|
|
|
|
|
period from |
|
|
|
|
|
August 31, 2010 |
|
|
|
|
|
(commencement of |
|
Year Ended |
Year Ended |
Year Ended |
Year Ended |
operations) to |
|
June 30,
2015 |
June 30,
2014 |
June 30,
2013 |
June 30,
2012 |
June 30,
2011 |
Per Share Data (1)(2) : |
|
|
|
|
|
Net asset value at beginning of period |
$ 6.38 |
$ 8.01 |
$ 8.59 |
$ 9.08 |
$ 9.40 |
Accretion (dilution) from offering(s)
(3) |
(0.92) |
0.03 |
(0.18) |
-- |
-- |
Offering costs |
(0.06) |
(0.04) |
(0.02) |
-- |
(0.04) |
Net investment income (loss) (4) |
0.63 |
0.71 |
0.77 |
0.78 |
0.70 |
Net change in unrealized gain (loss) |
(0.51) |
(1.36) |
0.37 |
(0.32) |
(0.29) |
Net realized gain (loss) |
(0.51) |
(0.11) |
(0.60) |
(0.03) |
0.06 |
Dividends from net investment income |
(0.63) |
(0.69) |
(0.78) |
(0.80) |
(0.75) |
Return of capital |
(0.08) |
(0.17) |
(0.14) |
(0.12) |
-- |
Net asset value at end of period |
$ 4.30 |
$ 6.38 |
$ 8.01 |
$ 8.59 |
$ 9.08 |
|
|
|
|
|
|
(1) Financial highlights are
based on weighted average shares outstanding. |
(2) Financial highlights for the
period from April 16, 2010 (inception) through June 30, 2010 are
not presented as the Company's operations were limited to
organization and offering activities only. |
(3) Accretion and dilution from
offering(s) is based on the net change in net asset value from each
follow-on offering. |
(4) Net investment income (loss)
per share is calculated based on the beginning of year and end of
year shares outstanding. |
CONTACT: Company Contact:
Gregg J. Felton, President and Chief Executive Officer
John Stuart, Chairman
Full Circle Capital Corporation
(203) 900 - 2100
info@fccapital.com
Investor Relations Contacts:
Garrett Edson/Brad Cohen
ICR, LLC
(203) 682-8200
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