SLRC SLR Investment Corporation

Solar Capital Ltd. (NASDAQ:SLRC), today reported net investment income of $16.8 million, or $0.40 per share, for the fourth quarter and $66.7 million, or $1.56 per share, for the fiscal year. Earnings were $4.9 million, or $0.11 per share, for the quarter ended December 31, 2014 and $48.5 million, or $1.13 per share, for the fiscal year ended December 31, 2014. Net asset value (NAV) per share was $22.05 at December 31, 2014.

Solar Capital Ltd. (the “Company”) also announced that its Board of Directors has declared a quarterly dividend of $0.40 per share for its first fiscal quarter of 2015, which will be payable on April 2, 2015 to stockholders of record on March 19, 2015. The specific tax characteristics will be reported to stockholders on Form 1099 after the end of the calendar year.

HIGHLIGHTS:

At December 31, 2014:

Investment portfolio fair value: $1.02 billionNumber of portfolio companies: 43Net assets: $936.6 millionNet asset value per share: $22.05

Portfolio Activity for the Quarter Ended December 31, 2014:

Investments made during the quarter: $115 millionInvestments prepaid and sold during the quarter: $224 million

Portfolio Activity for the Year Ended December 31, 2014:

Investments made during the year: $557 millionInvestments prepaid and sold during the year: $626 million

Operating Results for the Quarter Ended December 31, 2014:

Net investment income: $16.8 millionNet realized and unrealized loss: $11.9 millionNet increase in net assets from operations: $4.9 millionNet investment income per share: $0.40

Operating Results for the Year Ended December 31, 2014:

Net investment income: $66.7 millionNet realized and unrealized loss: $18.3 millionNet increase in net assets from operations: $48.5 millionNet investment income per share: $1.56

“Our consistently prudent investment approach, coupled with the strategic initiatives we implemented in 2014, have positioned us well for growth in 2015,” said Michael Gross, Chairman and CEO of Solar Capital Ltd. “We view our predominantly senior secured, floating rate investment portfolio, with no direct exposure to the oil and gas industry, as having a highly attractive risk-reward profile. With our substantial available capital and leverage capacity, we expect to increase our net investment income and grow our dividend through new originations in our core middle market lending business, our strategic investment in Crystal Financial, and our new Senior Secured Unitranche Loan Program joint venture with PIMCO.”

Conference Call and Webcast

The Company will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Thursday, February 26, 2015.

All interested parties may participate in the conference call by dialing (877) 474-9504 approximately 5-10 minutes prior to the call. International callers should dial (857) 244-7557. Participants should reference Solar Capital Ltd. and the participant passcode of 71422391 when prompted. This conference call also can be accessed by all interested parties through Solar Capital Ltd.’s website, www.solarcapltd.com. Additionally, a replay dial-in will be available until March 12, 2015 and can be accessed by dialing (888) 286-8010 and using the passcode 33069648. International callers should dial (617) 801-6888 to listen to the replay.

Portfolio and Investment Activity

During the quarter ended December 31, 2014, we invested approximately $115 million across eight portfolio companies and had investments prepaid or sold of approximately $224 million over the same period. During the quarter ended December 31, 2014, our portfolio company, Crystal Financial LLC (“Crystal Financial”), invested approximately $104 million and had investments repaid of approximately $36 million.

During the year ended December 31, 2014, we invested approximately $557 million across 30 portfolio companies. This compares to investing approximately $330 million in 19 portfolio companies for the previous fiscal year ended December 31, 2013. Investments sold or prepaid during the fiscal year ended December 31, 2014 totaled approximately $626 million versus approximately $658 million for the fiscal year ended December 31, 2013. During the year ended December 31, 2014, Crystal Financial invested approximately $264 million and had investments repaid or sold of approximately $232 million.

At December 31, 2014, measured at fair value, our portfolio consisted of 43 portfolio companies and was invested 58.8% in senior secured loans, 29.1% in Crystal Financial whose portfolio is 100% comprised of senior secured loans, 7.4% in subordinated debt, 2.3% in preferred equity and 2.4% in common equity and warrants excluding Crystal Financial.

The weighted average yield on our portfolio of income producing investments was 9.9% at December 31, 2014, measured at fair value.

At December 31, 2014, 86.3% or $854.1 million of our income producing investment portfolio* is floating rate and 13.7% or $135.5 million is fixed rate, measured at fair value.

Since inception, we and our predecessor companies have invested approximately $3.9 billion in 123 portfolio companies. Over the same period, we have completed transactions with more than 85 different sponsors.

* We have included Crystal Financial as 100% floating rate.

Results of Operations for the Fiscal Year Ended December 31, 2014 compared to the Fiscal Year Ended December 31, 2013

Investment Income

For the fiscal years ended December 31, 2014 and 2013, gross investment income totaled $121.9 million and $163.6 million, respectively. The decrease in gross investment income from 2013 to 2014 was primarily due to a smaller income producing portfolio from the net effect of portfolio repayments, as well as portfolio yield compression.

Expenses

Expenses totaled $55.2 million and $78.7 million, respectively, for the fiscal years ended December 31, 2014 and 2013. The decrease in expenses year over year was primarily due to a decrease in performance-based incentive fees on lower investment income, as well as decreases in debt expenses due to lower average borrowings.

Net Investment Income

The Company’s net investment income totaled $66.7 million and $84.9 million, or $1.56 and $1.91 per average share, for the fiscal years ended December 31, 2014 and 2013, respectively.

Net Realized and Unrealized Loss

Net realized and unrealized loss for the fiscal years ended December 31, 2014 and 2013 totaled approximately $18.3 million and $9.6 million, respectively.

Net Increase in Net Assets Resulting From Operations

For the fiscal years ended December 31, 2014 and 2013, the Company had a net increase in net assets resulting from operations of $48.5 million and $75.3 million, respectively. For the same periods, earnings per average share were $1.13 and $1.69, respectively.

Liquidity and Capital Resources

At December 31, 2014, the Company had approximately $145.3 million of cash and a total of $490 million of unused credit capacity, subject to borrowing base limitations.

Financial Statements and Tables

 

SOLAR CAPITAL LTD.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except share amounts)

    December 31, 2014 December 31, 2013 Assets Investments at fair value: Companies less than 5% owned (cost: $659,552 and $688,685, respectively) $ 652,288 $ 680,720 Companies 5% to 25% owned (cost: $8,511 and $7,789, respectively) 4,646 7,789 Companies more than 25% owned (cost: $339,380 and $394,285, respectively)   363,804     399,890   Total investments (cost: $1,007,443 and $1,090,759, respectively) 1,020,738 1,088,399 Cash and cash equivalents 635,075 585,278 Foreign currency (cost: $275 and $1,702, respectively) 265 1,701 Interest receivable 4,549 5,623 Dividends receivable 8,258 8,605 Deferred financing costs 3,263 3,300 Derivatives — — Receivable for investments sold 13,138 14,870 Prepaid expenses and other assets   1,048     666   Total assets $ 1,686,334   $ 1,708,442   Liabilities Revolving credit facilities $ — $ — Unsecured senior notes 100,000 100,000 Senior secured notes 75,000 75,000 Term loan 50,000 50,000 Distributions payable 16,986 17,698 Payable for investments and cash equivalents purchased 492,475 454,887 Management fee payable 6,109 5,780 Performance-based incentive fee payable 4,198 4,633 Administrative services expense payable 2,427 2,085 Interest payable 1,504 1,499 Other liabilities and accrued expenses   1,067     1,223   Total liabilities $ 749,766   $ 712,805         Net Assets

Common stock, par value $0.01 per share, 200,000,000 and 200,000,000 common sharesauthorized, respectively, and 42,465,162 and 44,244,195 shares issued and outstanding,respectively

$ 425 $ 442 Paid-in capital in excess of par 991,963 1,110,545 Distributions in excess of net investment income (8,599 ) (17,344 ) Accumulated net realized loss (60,506 ) (92,706 ) Net unrealized appreciation (depreciation)   13,285     (5,300 ) Total net assets $ 936,568   $ 995,637   Net Asset Value Per Share $ 22.05   $ 22.50      

SOLAR CAPITAL LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share amounts)

   

Year endedDecember 31, 2014

Year endedDecember 31, 2013

INVESTMENT INCOME: Interest: Companies less than 5% owned $ 84,791 $ 106,523 Companies 5% to 25% owned 564 6,333 Companies more than 25% owned 3,349 10,728 Dividends: Companies 5% to 25% owned — 5,565 Companies more than 25% owned   33,233     34,444   Total investment income   121,937     163,593     EXPENSES: Management fees 24,651 26,794 Performance-based incentive fees 7,411 21,234 Interest and other credit facility expenses 14,448 20,051 Administrative services expense 5,362 4,741 Other general and administrative expenses   3,358     5,428   Total expenses   55,230     78,248   Net investment income before income tax expense 66,707 85,345 Income tax expense   —     410   Net investment income $ 66,707   $ 84,935    

REALIZED AND UNREALIZED GAIN (LOSS) ONINVESTMENTS, CASH EQUIVALENTS, FOREIGNCURRENCIES AND DERIVATIVES:

Net realized gain (loss) on investments and cash equivalents: Companies less than 5% owned $ (6,667 ) $ (31,679 ) Companies 5% to 25% owned 1,176 (14,273 ) Companies more than 25% owned   (25,337 )   472   Net realized loss on investments and cash equivalents (30,828 ) (45,480 ) Net realized gain (loss) on foreign currencies and derivatives:   (6,012 )   1,055   Net realized loss   (36,840 )   (44,425 ) Net change in unrealized gain (loss) on investments and cash equivalents 15,655 34,189

Net change in unrealized gain (loss) on foreign currencies andderivatives

  2,930     611   Net change in unrealized gain (loss)   18,585     34,800  

Net realized and unrealized gain (loss) oninvestments, cash equivalents, foreigncurrencies and derivatives

  (18,255 )   (9,625 )  

NET INCREASE IN NET ASSETS RESULTING FROMOPERATIONS

$ 48,452   $ 75,310   EARNINGS PER SHARE $ 1.13   $ 1.69    

About Solar Capital Ltd.

Solar Capital Ltd. is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. The Company invests primarily in leveraged, middle market companies in the form of senior secured loans, unitranche loans, mezzanine loans, and equity securities.

Forward-Looking Statements

Statements included herein may constitute “forward-looking statements,” which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, conditions 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 our filings with the Securities and Exchange Commission. Solar Capital Ltd. undertakes no duty to update any forward-looking statements made herein.

Solar Capital Ltd.Investor RelationsRichard Pivirotto(646) 308-8770