PHILADELPHIA and NEW YORK, Feb. 1,
2021 /PRNewswire/ -- FS KKR Capital Corp. (NYSE: FSK) and FS
KKR Capital Corp. II (NYSE: FSKR), two leading business development
companies ("BDCs" or the "Companies") managed and advised by FS/KKR
Advisor, LLC, announced today certain preliminary estimates of
financial results for the fourth quarter ended December 31, 2020. The Companies also are
providing information on earnings releases and conference calls to
discuss fourth quarter and fiscal year ended December 31, 2020 financial results. The
Companies are providing these preliminary estimates of results to
give investors timely information in conjunction with the proposed
merger of FSK and FSKR, which was announced on November 24, 2020.
Daniel Pietrzak, Co-President and
CIO of each Company, described the quarter's investment activity
as, "The fourth quarter was active from an investment perspective
as both financial and strategic buyers took advantage of an
improved operating environment still coupled with record low
interest rates. Our strong relationships provided our investment
teams with what we believe were numerous high quality investment
opportunities and allowed us to be selective in our transaction
approval process. We look forward to discussing the details of our
activity during the quarter, as well as our outlook for 2021, on
our earnings conference calls on March 2,
2021."
FSK Preliminary Estimated Financial Results for Fourth
Quarter Ended December 31,
2020(1)
FSK's net asset value per share is estimated to be between
$24.95 and $25.05 as of December 31,
2020, compared to $24.46 as of
September 30, 2020. Net investment
income per share for the fourth quarter is estimated to be between
$0.59 and $0.61 as compared to FSK's guidance of
$0.57. Adjusted net investment income
per share is estimated to be between $0.68 and $0.70 as
compared to FSK's guidance of $0.64.(2) Net debt-to-equity,
adjusted for available cash, receivables for investments sold, and
payables for investments purchased, is estimated to approximate
1.19x as of December 31, 2020,
compared to 1.20x at September 30,
2020.
FSKR Preliminary Estimated Financial Results for Fourth
Quarter Ended December 31,
2020(1)
FSKR's net asset value per share is estimated to be between
$25.00 and $25.10 as of December 31,
2020, compared to $24.66 as of
September 30, 2020. Net investment
income per share for the fourth quarter is estimated to be between
$0.57 and $0.59 as compared to FSKR's guidance range of
$0.52 to $0.55 per share. Adjusted net investment income
per share is estimated to be between $0.59 and $0.61 as
compared to FSKR's guidance range of $0.52 to $0.55.(2) Net debt-to-equity,
adjusted for available cash, receivables for investments sold, and
payables for investments purchased, is estimated to approximate
0.85x as of December 31, 2020,
compared to 0.73x at September 30,
2020.
Please note that the preliminary estimates above for both FSK
and FSKR are subject to change as each Company's financial closing
procedures are finalized. In addition, neither Deloitte &
Touche LLP, each Company's independent registered public accounting
firm, nor any other independent accountants, have audited,
reviewed, compiled, or performed any procedures with respect to the
accompanying preliminary financial data.
FSK Earnings Release and Conference Call Information
FSK plans to release its fourth quarter and full year 2020
results after the close of trading on the New York Stock Exchange
on Monday, March 1, 2021.
FSK will host a conference call at 8:00am
(Eastern Time) on Tuesday, March 2, 2021, to discuss its
fourth quarter and full year 2020 financial and operating results.
All interested parties are welcome to participate and can access
the conference call by dialing (833) 818-6808 and using the
conference ID 7480289 approximately 10 minutes prior to the call.
The conference call also will be webcast, which can be accessed
from the Investor Relations section of FSK's website at
www.fskkradvisor.com/fsk, under Events and Presentations.
An investor presentation containing certain financial
information will be available by visiting the Investor Relations
section of FSK's website at www.fskkradvisor.com/fsk, under Events
and Presentations after the close of trading on the New York Stock
Exchange on Monday, March 1,
2021.
A replay of the call will be available shortly after the end of
the call by visiting the Investor Relations section of FSK's
website, under Events and Presentations or by dialing (855)
859-2056 and using conference ID 7480289.
FSKR Earnings Release and Conference Call Information
FSKR plans to release its fourth quarter and full year 2020
results after the close of trading on the New York Stock Exchange
on Monday, March 1, 2021.
FSKR will host a conference call at 10:00am (Eastern Time) on Tuesday, March 2, 2021,
to discuss its fourth quarter and full year 2020 financial and
operating results. All interested parties are welcome to
participate and can access the conference call by dialing (833)
519-1290 and using the conference ID 3992843 approximately 10
minutes prior to the call. The conference call also will be
webcast, which can be accessed from the Investor Relations section
of FSKR's website at www.fskkradvisor.com/fskr, under Events and
Presentations.
An investor presentation containing certain financial
information will be available by visiting the Investor Relations
section of FSKR's website at www.fskkradvisor.com/fskr, under
Events and Presentations after the close of trading on the New York
Stock Exchange on Monday, March 1,
2021.
A replay of the call will be available shortly after the end of
the call by visiting the Investor Relations section of FSKR's
website, under Events and Presentations or by dialing (855)
859-2056 and using conference ID 3992843.
About FS/KKR Advisor, LLC
FS/KKR Advisor, LLC (FS/KKR) is a partnership between FS
Investments and KKR Credit that serves as the investment adviser to
BDCs with approximately $15 billion in assets under
management as of September 30, 2020. The BDCs managed by
FS/KKR are FS KKR Capital Corp. (NYSE: FSK) and FS KKR Capital
Corp. II (NYSE: FSKR).
FS Investments is a leading asset manager dedicated to helping
individuals, financial professionals and institutions design better
portfolios. The firm provides access to alternative sources of
income and growth, and focuses on setting industry standards for
investor protection, education and transparency. FS Investments is
headquartered in Philadelphia, PA with offices
in New York, NY, Orlando, FL and Leawood,
KS. Visit www.fsinvestments.com to learn more.
KKR Credit is a subsidiary of KKR & Co. Inc., a leading
global investment firm that manages multiple alternative asset
classes, including private equity, credit and real assets, with
strategic manager partnerships that manage hedge funds. KKR aims to
generate attractive investment returns for its fund investors by
following a patient and disciplined investment approach, employing
world-class people, and driving growth and value creation with KKR
portfolio companies. KKR invests its own capital alongside the
capital it manages for fund investors and provides financing
solutions and investment opportunities through its capital markets
business. References to KKR's investments may include the
activities of its sponsored funds. For additional information about
KKR & Co. Inc. (NYSE: KKR), please visit KKR's website
at www.kkr.com and on Twitter @KKR_Co.
Contact Information
Investor Relations Contact
Robert Paun
robert.paun@fsinvestments.com
Media (FS Investments)
Melanie
Hemmert
media@fsinvestments.com
Non-GAAP Financial Measures
This press release contains certain financial measures that have
not been prepared in accordance with generally accepted accounting
principles in the United States
(GAAP). Each of FSK and FSKR uses these non-GAAP financial measures
internally in analyzing financial results and believes that the use
of these non-GAAP financial measures is useful to investors as an
additional tool to evaluate ongoing results and trends and in
comparing each of FSK's and FSKR's financial results with other
business development companies.
Non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable GAAP financial
measures, and should be read only in conjunction with FSK's
consolidated financial statements prepared in accordance with GAAP.
A reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measures has been provided in this press
release, and investors are encouraged to review the
reconciliation.
Reconciliation of Non-GAAP Financial
Measures(1)
|
|
Estimated Ranges
for the Three Months Ended
|
|
|
December 31,
2020
|
|
|
FSK
|
|
FSKR
|
|
GAAP net investment
income per share
|
|
$
0.59
|
|
$
0.61
|
|
$
0.57
|
|
$
0.59
|
|
Plus capital gains
incentive fees per share
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Plus excise taxes per
share
|
|
0.08
|
|
0.08
|
|
—
|
|
—
|
|
Plus one-time
expenses per share(3)
|
|
0.01
|
|
0.01
|
|
0.02
|
|
0.02
|
|
Adjusted net
investment income per share(2)
|
|
$
0.68
|
|
$
0.70
|
|
$
0.59
|
|
$
0.61
|
- Per share data was derived by using the weighted average shares
of FSK's and FSKR's common stock, as applicable, outstanding during
the applicable period. Per share numbers may not sum due to
rounding.
- Adjusted net investment income is a non-GAAP financial measure.
Adjusted net investment income is presented for all periods as GAAP
net investment income excluding (i) the accrual for the capital
gains incentive fee for realized and unrealized gains; (ii) excise
taxes; and (iii) certain non-recurring operating expenses that are
one-time in nature and are not representative of ongoing operating
expenses incurred during FSK's and FSKR's normal course of business
(referred to herein as one-time expenses). Each of FSK and FSKR
uses this non-GAAP financial measure internally in analyzing
financial results and believes that the use of this non-GAAP
financial measure is useful to investors as an additional tool to
evaluate ongoing results and trends and in comparing its financial
results with other business development companies. The presentation
of this additional information is not meant to be considered in
isolation or as a substitute for financial results prepared in
accordance with GAAP. A reconciliation of GAAP net investment
income to adjusted net investment income can be found above.
- FSK's one-time expenses for the three months ended December 31, 2020 consist of approximately
$1 million resulting from the
acceleration of deferred financing costs associated with the
termination of one of FSK's debt facilities. FSKR's one-time
expenses for the three months ended December
31, 2020 consist of approximately $3
million in expenses associated with the proposed
merger.
Forward-Looking Statements
Statements included herein may constitute "forward-looking"
statements as that term is defined in Section 27A of the
Securities Act, and Section 21E of the Exchange Act, as
amended by the Private Securities Litigation Reform Act of 1995,
including statements with regard to future events or the future
performance or operations of the Companies. Words such as
"believes," "expects," "projects," and "future" or similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. Certain
factors could cause actual results to differ materially from those
projected in these forward-looking statements. Factors that could
cause actual results to differ materially include changes in the
economy, risks associated with possible disruption to a
Company's operations or the economy generally due to
terrorism, natural disasters or pandemics such
as COVID-19, future changes in laws or regulations and
conditions in a Company's operating area, failure to obtain
requisite stockholder approval for the Proposals (as defined
below) set forth in the Proxy Statement (as defined below), failure
to consummate the business combination transaction involving the
Companies, the price at which shares of FSK's and FSKR's common
stock trade on the New York Stock Exchange, uncertainties as to the
timing of the consummation of the business combination transaction
involving the Companies, unexpected costs, charges or expenses
resulting from the business combination transaction involving the
Companies and failure to realize the anticipated benefits of
the business combination transaction involving the Companies. Some
of these factors are enumerated in the filings the
Companies made with the U.S. Securities and Exchange
Commission (the "SEC") and are also contained in the Proxy
Statement. The inclusion of forward-looking statements should not
be regarded as a representation that any plans, estimates or
expectations will be achieved. Any forward-looking statements speak
only as of the date of this communication. Except as required by
federal securities laws, the Companies undertake no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Readers are
cautioned not to place undue reliance on any of these
forward-looking statements.
Additional Information and Where to Find It
This communication relates to a proposed business combination
involving the Companies, along with related proposals for which
stockholder approval will be sought (collectively, the
"Proposals"). On December 23, 2020,
FSK filed with the SEC a preliminary registration statement on Form
N-14 (333-251667) that includes a preliminary joint proxy statement
of the Companies (the "Proxy Statement") and a prospectus of
FSK. This communication does not constitute an offer to sell
or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval. No offer of securities shall
be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act. STOCKHOLDERS OF THE
COMPANIES ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE
SEC, INCLUDING THE PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS THERETO, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANIES, THE BUSINESS COMBINATION
TRANSACTION INVOLVING THE COMPANIES AND THE
PROPOSALS. Investors and security holders will be able to
obtain the documents filed with the SEC free of charge at the SEC's
web site, http://www.sec.gov, FSK's website,
https://www.fskkradvisor.com/fsk or FSKR's website,
https://www.fskkradvisor.com/fskr.
Participants in the Solicitation
The Companies and their respective directors, executive officers
and certain other members of management and employees, including
employees of FS/KKR Advisor, LLC, FS Investments, KKR Credit
Advisors (US) LLC and their respective affiliates, may be deemed to
be participants in the solicitation of proxies from the
stockholders of the Companies in connection with the Proposals.
Information regarding the persons who may, under the rules of the
SEC, be considered participants in the solicitation of the
Companies' stockholders in connection with the Proposals will be
contained in the definitive Proxy Statement when such document
becomes available. This document may be obtained free of charge
from the sources indicated above.
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SOURCE FS KKR Capital Corp.; FS KKR Capital Corp. II