Equus Announces First Quarter Net Asset Value
May 16 2013 - 8:06PM
Marketwired
Equus Total Return, Inc. (NYSE: EQS) (the
"Fund" or "Equus") reports net assets as of March 31, 2013, of
$31.4 million, a decrease of approximately $1.5 million since
December 31, 2012. Net assets per share decreased to $2.97 as of
March 31, 2013 from $3.11 as of December 31, 2012. Cash and cash
equivalents totaled $22.8 million as of March 31, 2013, a decrease
of $0.9 million since December 31, 2012. Comparative data is
summarized below (in thousands, except per share amounts):
As of the Quarter Ended 3/31/2013 12/31/2012 9/30/2012 6/30/2012 3/31/2012
--------- ---------- --------- --------- ---------
Net assets $ 31,416 $ 32,875 $ 31,664 $ 33,418 $ 37,651
Shares outstanding 10,562 10,562 10,562 10,562 10,562
Net assets per share $ 2.97 $ 3.11 $ 3.00 $ 3.16 $ 3.56
Cash and cash equivalents $ 22,761 $ 23,687 $ 26,246 $ 27,039 $ 16,296
Cash per share $ 2.15 $ 2.24 $ 2.48 $ 2.56 $ 1.54
Equus also reported a decrease in total Fund expenses of
approximately $50,000, or 7%, for the quarter ended March 31, 2013
as compared to the quarter ended March 31, 2012.
The overall decline in net asset value during the first quarter
of 2013 was principally due to operating expenses of the Fund and a
decrease in the fair values of the following portfolio
holdings:
- Spectrum Management, LLC ("Spectrum").
The Fund made its initial investment in Spectrum in 1999. Spectrum
uses proprietary electronic tracking equipment and software, and a
full suite of custom services to help client organizations, mainly
financial institutions, protect or recover high-value merchandise
and cash. Spectrum markets its services under the brand name
Electronic Tracking Systems or ETS. The company specializes in
assisting communities and law enforcement in recovery of stolen
property. In recent years, Spectrum has lost key customer accounts
and has had declining EBITDA, which decline has continued into
2013. As a result of these and other negative factors, the Fund
applied a liquidation approach for valuation purposes. Continued
deterioration of the business has resulted in a decrease in the
fair value of this investment from $0.4 million as of December 31,
2012 to $0.1 million as of March 31, 2013.
- Orco Property Group ("OPG"). The Fund
initially invested in the bonds of Orco Germany S.A., a controlled
subsidiary of OPG. In 2012, these bonds were converted into
1,573,666 ordinary shares of OPG and EUR 1.2 million ($1.5 million)
of OPG notes. 1,500,000 of the OPG shares were sold in October
2012. The decline in the fair value of the Fund's holding in OPG
from $1.7 million as of December 31, 2012 to $1.6 million as of
March 31, 2013 was a result of a decrease in the trading price of
the OPG shares and a change in the USD-Euro exchange rate.
- Equus Energy, LLC ("Equus Energy"). The
Fund established Equus Energy as a wholly-owned subsidiary of the
Fund in November 2011 to be used as a platform for energy-related
investments, with particular emphasis on oil and gas properties,
initially investing $250,000 in December 2011. On December 27, 2012
the Fund invested an additional $6.8 million in Equus Energy,
primarily to fund the purchase of $6.6 million in working interests
in 150 producing and non-producing oil and gas wells, including
associated development rights of approximately 23,000 acres
situated on 15 separate properties in Texas and Oklahoma. The wells
are operated by a number of experienced operators, including a
major multinational oil and gas conglomerate which has operating
responsibility for all of Equus Energy's 40 producing well
interests located in the Conger Field, a productive oil and gas
field on the edge of the Permian Basin that has experienced
successful gas and hydrocarbon extraction in multiple formations.
Equus Energy, which holds a 50% working interest in each of these
Conger Field wells, has partnered with the operator in an
aggressive recompletion program of existing Conger Field wells to
the Wolfcamp formation, a zone containing oil as well as gas and
natural gas liquids. One recompletion has been effected since the
closing date of the acquisition, with additional recompletions
scheduled for the remainder of 2013 and beyond. The decline in the
fair value of Equus Energy from $6.9 million as of December 31,
2012 to $6.6 million as of March 31, 2013 was principally related
to expenses incurred in connection with establishing accounting and
management reporting systems in respect of the acquired assets, in
addition to business development expenses incurred during the
quarter.
Significant events during the first quarter of 2013 included the
following:
- Interest Payment and Partial Principal
Repayment on OPG Notes. On March 1, 2013, the Fund received a
semi-annual interest payment of EUR 24,180 ($31,724) and a partial
principal repayment of EUR 6,901 ($9,054) in respect of EUR 1.2
million ($1.5 million) notes of OPG that the Fund received in
October 2012.
About Equus
The Fund is a business development company that trades as a
closed-end fund on the New York Stock Exchange, under the symbol
"EQS". Additional information on the Fund may be obtained from the
Fund's website at www.equuscap.com.
This press release may contain certain forward-looking
statements regarding future circumstances. These forward-looking
statements are based upon the Fund's current expectations and
assumptions and are subject to various risks and uncertainties that
could cause actual results to differ materially from those
contemplated in such forward-looking statements including, in
particular, the risks and uncertainties described in the Fund's
filings with the SEC. Actual results, events, and performance may
differ. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as to the date hereof.
Except as required by law, the Fund undertakes no obligation to
release publicly any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. The
inclusion of any statement in this release does not constitute an
admission by the Fund or any other person that the events or
circumstances described in such statements are material.
Contact: Patricia Baronowski Pristine Advisers, LLC (631)
756-2486
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