- Net Investment Income Grows 31.6% to
$2.4 Million -
- Repurchases 472,407 Shares During
the Quarter -
Full Circle Capital Corporation (Nasdaq:FULL) (the "Company") today
announced its financial results for the fiscal first quarter ended
September 30, 2015.
Financial Highlights for the Fiscal First Quarter Ended
September 30, 2015:
- Originated $10.0 million in new investments and received $13.0
million in repayments.
- Increased total investment income by 16.0% to $4.7 million,
compared with $4.1 million for the prior-year quarter.
- Net investment income ("NII") grew by 31.6% to $2.4 million, or
$0.11 per share, compared with $1.8 million, or $0.16 per share, in
the prior-year quarter.
- Net unrealized losses were $7.5 million, consisting of net
unrealized losses on investments of $7.7 million and net unrealized
gains on an open swap contract of $0.2 million. Net realized gains
were $0.1 million.
- Net decrease in net assets from operations was $4.9 million, or
$0.21 per share.
- For the quarter ended September 30, 2015, the Company
repurchased 472,407 shares under its share repurchase program at a
weighted average price of $3.19 per share. The shares repurchased
were accretive to net asset value as of June 30, 2015 by $0.02 per
share.
- Per share amounts are based on approximately 23.2 million
weighted average shares outstanding for the first quarter of fiscal
2016, compared to 11.9 million weighted average shares outstanding
for the first quarter of fiscal 2015. The increase in weighted
average shares outstanding reflects share issuances completed
during calendar 2014 and 2015 offset by share repurchases during
the first quarter of fiscal 2016.
As of September 30, 2015:
- Net asset value was $4.00 per share and portfolio fair value,
including the fair value of the Company's open swap
contract, was $142.3 million.
- Weighted average portfolio interest rate was 8.93%.
- 82% of portfolio company investments were first lien senior
secured loans.
On November 3, 2015, the Company's Board of Directors declared
monthly distributions for the third quarter of fiscal 2016 of
$0.035 per share payable in February, March and April
2016. These distributions equate to a $0.42 annualized amount,
or a current annualized yield of 13.5%, based on the closing price
of the Company's common stock of $3.11 per share on November 6,
2015.
Share 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 share repurchase program from one
million shares to two million shares.
For the quarter ended September 30, 2015, the Company
repurchased 472,407 shares under its share repurchase program at a
weighted average price of $3.19 per share. The shares
repurchased were accretive to net asset value as of June 30, 2015
by $0.02 per share.
Subsequent to the quarter end, the Company repurchased an
additional 290,780 shares under the share repurchase program as of
November 6, 2015 at a weighted average share price of $3.16.
"We funded a few select investments during our first fiscal
quarter 2016 that we believe are properly aligned between reward
and acquired risk, while receiving $13 million in repayments
throughout the quarter from several of the companies in our
portfolio," said Gregg Felton, President and Chief Executive
Officer of Full Circle Capital Corporation. "With the waiver by our
investment adviser, which is in place throughout fiscal 2016, we
once again ensured that we were able to cover our monthly
distributions with sufficient net investment income."
"In addition, while we are always seeking additional accretive
investments, we saw an opportunity in the quarter to repurchase
shares and utilized capital through a 10b5-1 plan to repurchase
nearly 475,000 shares in the quarter," added Mr. Felton.
"We have continued to repurchase shares subsequent to the
quarter end under our share repurchase program as we believe the
repurchases represent one of our most attractive uses of capital at
the currently discounted share price. Looking ahead, we
continue to be mindful of market dislocations and expect to be
selective in deploying the capital raised earlier this year,"
concluded Mr. Felton.
First Quarter Fiscal 2016 Results
The Company's net asset value at September 30, 2015 was $4.00
per share. During the quarter, the Company generated $4.2 million
of interest income compared to $3.9 million in the first quarter of
fiscal 2015, an increase of 8.2%. Income from fees and other
sources in the quarter totaled $0.5 million, compared to $0.2
million in the prior-year quarter.
The Company produced NII of $2.4 million, or $0.11 per share, in
the quarter ended September 30, 2015, compared to $1.8 million, or
$0.16 per share, in the quarter ended September 30, 2014.
Net unrealized losses of $7.5 million were comprised of $1.3
million of net unrealized depreciation on equity investments, $6.4
million of net unrealized depreciation on debt investments and $0.2
million of net unrealized appreciation on an open swap contract.
Realized gains on investments were $0.1 million. Net decrease
in net assets resulting from operations was $4.9 million, or $0.21
per share.
During the quarter ended September 30, 2015, the Company added
$10.0 million in new investments in two new portfolio companies and
one existing portfolio company, and received $13.0 million in
repayments.
At September 30, 2015, the Company's portfolio included debt
investments in 31 companies with an average of $4.0 million per
debt investment. The weighted average interest rate on all
outstanding debt investments was 8.93% at September 30, 2015, while
the weighted average interest rate of the Company's performing debt
investments was 11.03%. At fair value, 81.7% of the Company's
portfolio investments were first lien loans, 6.4% were second lien
loans and unsecured notes and 11.8% were equity investments. While
gross exposure to equity investments is 11.8%, net exposure to
equity investments is 4.8% as the net exposure to Granite Ridge,
LLC is $2.6 million when taking the deposit on the swap contract
into account. Approximately 71% of the debt investment
portfolio, at fair value, bore interest at floating rates. The
loan-to-value ratio on the Company's loans was 58% at September 30,
2015, compared to 62% at September 30, 2014.
Subsequent Events
On October 30, 2015, the Company sold its equity interest in
West World Media, LLC for total proceeds of $2.2 million.
On October 30, 2015, the senior secured revolving loan with
TransAmerican Asset Servicing Group, LLC was repaid for total
proceeds of approximately $0.5 million.
Conference Call Details
Management will host a conference call today at 4:30 pm 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) 203-7667 (domestic
toll-free) or (719) 457-2080 (international) and reference PIN:
6848048.
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 November 16, 2015,
by dialing (877) 870-5176 (toll-free) or (858) 384-5517
(international), PIN: 6848048.
About Full Circle Capital Corporation
Full Circle Capital Corporation (www.fccapital.com) is a
closed-end investment company that has elected to be regulated 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 |
|
|
|
|
September 30,
2015 |
June 30, 2015 |
Assets |
Unaudited |
|
Control Investments at Fair Value (Cost of
$11,362,184 and $11,409,596, respectively) |
$5,690,168 |
$5,812,064 |
Affiliate Investments at Fair Value (Cost of
$25,143,972 and $24,434,726, respectively) |
13,518,980 |
16,019,272 |
Non-Control/Non-Affiliate Investments at Fair
Value (Cost of $133,318,235 and $136,351,581, respectively) |
122,847,266 |
130,282,423 |
Total Investments at Fair Value
(Cost of $169,824,391 and $172,195,903, respectively) |
142,056,414 |
152,113,759 |
|
|
|
Open Swap Contract, at Fair Value |
225,000 |
-- |
Cash |
130,428 |
3,736,563 |
Interest Receivable |
1,783,402 |
1,903,606 |
Principal Receivable |
122,008 |
23,287 |
Distributions Receivable |
20,647 |
15,141 |
Due from Affiliates |
541,854 |
605,749 |
Due from Portfolio Investments |
69,532 |
180,300 |
Receivable on Open Swap Contract |
32,238 |
1,081 |
Prepaid Expenses |
274,058 |
66,105 |
Other Assets |
-- |
1,483,578 |
Deferred Offering Expenses |
367,820 |
328,168 |
Deferred Credit Facility Fees |
195,040 |
267,645 |
|
|
|
Total Assets |
145,818,441 |
160,724,982 |
|
|
|
Liabilities |
|
|
Due to Affiliates |
1,115,588 |
1,052,489 |
Accrued Liabilities |
49,632 |
179,378 |
Deposit from Swap Counterparty |
10,200,000 |
10,380,000 |
Payable for Investments Acquired |
-- |
15,020,000 |
Distributions Payable |
797,736 |
813,240 |
Interest Payable |
47,960 |
57,605 |
Other Liabilities |
466,683 |
305,957 |
Accrued Offering Expenses |
1,212 |
7,258 |
Line of Credit |
9,033,258 |
-- |
Notes Payable 8.25% due June 30, 2020 (plus
unamortized premium of $152,721 and $158,504 and less deferred debt
issuance costs of $793,700 and $833,541, respectively) |
33,004,546 |
32,970,488 |
|
|
|
Total Liabilities |
54,716,615 |
60,786,415 |
Commitments and contingencies |
-- |
-- |
|
|
|
Net Assets |
$91,101,826 |
$99,938,567 |
|
|
|
Components of Net
Assets |
|
|
Common Stock, par value $0.01 per share
(100,000,000 authorized; 22,763,023 and 23,235,430 issued and
outstanding, respectively) |
$227,630 |
$232,354 |
Paid-in Capital in Excess of Par |
130,986,972 |
132,487,067 |
Distributions in Excess of Net Investment
Income |
(119,318) |
(119,318) |
Accumulated Net Realized Losses |
(12,450,481) |
(12,579,392) |
Accumulated Net Unrealized Losses |
(27,542,977) |
(20,082,144) |
Net Assets |
$91,101,826 |
$99,938,567 |
|
|
|
Net Asset Value Per
Share |
$4.00 |
$4.30 |
|
FULL CIRCLE CAPITAL
CORPORATION AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) |
|
|
|
|
Three Months Ended September
30, 2015 |
Three Months Ended September
30, 2014 |
Investment Income |
|
|
Interest Income from
Non-Control/Non-Affiliate Investments |
$3,411,254 |
$2,807,931 |
Interest Income from Affiliate
Investments |
614,458 |
540,560 |
Interest Income from Control Investments |
168,781 |
529,108 |
Dividend Income from Control Investments |
20,647 |
-- |
Other Income from Non-Control/Non-Affiliate
Investments |
496,519 |
176,006 |
Other Income from Affiliate Investments |
1,781 |
9,470 |
Other Income from Control Investments |
12,500 |
12,500 |
Other Income from Non-Investment Sources |
14,682 |
11,049 |
Total Investment Income |
4,740,622 |
4,086,624 |
|
|
|
Operating Expenses |
|
|
Management Fee |
611,929 |
572,558 |
Incentive Fee |
481,777 |
389,850 |
Total Advisory Fees |
1,093,706 |
962,408 |
|
|
|
Allocation of Overhead Expenses |
47,138 |
36,555 |
Sub-Administration Fees |
71,838 |
63,209 |
Officers' Compensation |
76,306 |
75,913 |
Total Costs Incurred Under
Administration Agreement |
195,282 |
175,677 |
|
|
|
Directors' Fees |
45,750 |
47,946 |
Interest Expenses |
1,003,829 |
1,002,383 |
Professional Services Expense |
339,552 |
219,668 |
Bank Fees |
8,741 |
10,271 |
Other |
126,655 |
108,871 |
|
|
|
Total Gross Operating
Expenses |
2,813,515 |
2,527,224 |
|
|
|
Management Fee Waiver and Expense
Reimbursement |
(497,109) |
(282,674) |
|
|
|
Total Net Operating
Expenses |
2,316,406 |
2,244,550 |
|
|
|
Net Investment Income |
2,424,216 |
1,842,074 |
Net Change in Unrealized Gain (Loss) on: |
|
|
Investments |
(7,685,833) |
(2,015,035) |
Open Swap Contract |
225,000 |
-- |
Net Change in Unrealized Gain (Loss) |
(7,460,833) |
(2,015,035) |
Net Realized Gain (Loss) on: |
|
|
Non-Control/Non-Affiliate
Investments |
82,361 |
402,907 |
Control Investments |
(53,106) |
-- |
Open Swap Contract |
99,656 |
-- |
Foreign Currency
Transactions |
-- |
(1,248) |
Net Realized Gain (Loss) |
128,911 |
401,659 |
Net Increase (Decrease) in Net Assets
Resulting from Operations |
$(4,907,706) |
$228,698 |
|
|
|
Earnings (Loss) per Common Share Basic and
Diluted |
$(0.21) |
$0.02 |
Net Investment Income per Common Share Basic
and Diluted |
$0.11 |
$0.16 |
Weighted Average Shares of Common Stock
Outstanding Basic and Diluted |
23,175,342 |
11,877,534 |
|
FULL CIRCLE CAPITAL
CORPORATION AND SUBSIDIARIES |
FINANCIAL
HIGHLIGHTS |
|
|
|
|
Three months ended September
30, 2015 |
Three months ended September
30, 2014 |
|
(Unaudited) |
(Unaudited) |
Per Share Data (1) : |
|
|
Net asset value at beginning of period |
$4.30 |
$6.38 |
Accretion from offering(s) (2) |
-- |
0.04 |
Accretion from share repurchases (3) |
0.02 |
-- |
Offering costs |
-- |
(0.00) |
Net investment income (loss) (4) |
0.11 |
0.16 |
Net change in unrealized gain (loss) |
(0.33) |
(0.17) |
Net realized gain (loss) |
0.01 |
0.03 |
Dividends from net investment income |
(0.11) |
(0.16) |
Return of capital |
-- |
(0.04) |
Net asset value at end of period |
$4.00 |
$6.24 |
|
|
|
(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. |
(3) Accretion from share
repurchases during the period is based on the net change in net
asset value from the share repurchases. |
(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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