Declares Fourth Quarter Dividend of $0.35 Per Share
Declares
a Special Dividend of $0.05 Per Share
SANTA MONICA, Calif.--(BUSINESS WIRE)--
TCP Capital Corp. ("we," "us," "our," "TCPC" or the "Company"), a
business development company (NASDAQ: TCPC), today announced its
financial results for the third quarter ended September 30, 2012 and
filed its quarterly report on Form 10-Q with the U.S. Securities and
Exchange Commission.
FINANCIAL HIGHLIGHTS
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Net investment income for the quarter ended September 30, 2012 was
$9.2 million after preferred dividends, or $0.43 per share, compared
to net investment income of $8.5 million, or $0.40 per share for the
quarter ended June 30, 2012.
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Net increase in net assets resulting from operations for the quarter
ended September 30, 2012 was $9.5 million, or $0.44 per share, as
compared to $6.0 million, or $0.28 per share for the quarter ended
June 30, 2012. Net asset value was approximately $317.6 million or
$14.79 per share on September 30, 2012, as compared to approximately
$315.6 million or $14.70 per share on June 30, 2012.
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Total acquisitions during the quarter ended September 30, 2012 were
$80.0 million, as compared to $90.4 million for the quarter ended June
30, 2012. Total acquisitions net of total dispositions during the
quarter ended September 30, 2012 were $36.6 million, as compared to
$50.8 million for the quarter ended June 30, 2012.
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On November 7, 2012, our board of directors declared a fourth quarter
dividend of $0.35 per share and a special dividend of $0.05 per share,
both payable on December 31, 2012 to shareholders of record as of
December 17, 2012.
"We are pleased with our strong results for the third quarter, which
marks our second quarter as a public company," said TCP Capital Corp.'s
Chairman and CEO, Howard Levkowitz. "The portfolio's performance and the
effective deployment of the remaining proceeds from our April IPO and
other liquidity enabled us to generate higher net investment income of
$0.43 per share. Our third quarter net investment income more than
covers our fourth quarter dividend, which clearly demonstrates the
earnings power of our portfolio. With net leverage of 0.56x, and
approximately $71 million in liquidity at the end of the third quarter,
we have room to grow the TCPC portfolio."
PORTFOLIO AND INVESTMENT ACTIVITY
As of September 30, 2012, our investment portfolio consisted of debt and
equity positions in 46 portfolio companies with a total fair value of
approximately $490.1 million. Debt positions represented approximately
89% of the portfolio fair value, 95% of which were senior secured debt.
Equity positions represented approximately 11% of our investment
portfolio.
As of September 30, 2012, the weighted average annual effective yield of
our debt portfolio was approximately 11.3%.(1) As of
September 30, 2012, approximately 55% of our debt portfolio at fair
value had floating interest rates, 93% of which had interest rate
floors, and approximately 45% of our debt portfolio had fixed interest
rates. As of September 30, 2012, approximately 0.2% of our investments
at fair value were on non-accrual status.
During the three months ended September 30, 2012, we invested
approximately $80.0 million across seven new and three existing
portfolio companies. The investments were comprised of $64.5 million in
senior secured floating rate loans, $15.0 million in senior secured
notes, and $0.5 million in equity securities. Additionally, we received
proceeds from sales and repayments of investment principal of
approximately $43.9 million. We expect to continue to invest in senior
secured loans, bonds and subordinated debt, as well as select equity
investments, to obtain a high level of current income and create the
potential for appreciation, while minimizing losses.
As of September 30, 2012, total assets were $521.3 million, net assets
applicable to common shareholders was $317.6 million and net asset value
per share was $14.79, as compared to $472.0 million, $315.6 million, and
$14.70 per share, respectively on June 30, 2012.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the three months ended September 30, 2012
was approximately $12.1 million, or $0.56 per share, including $0.01 per
share from original issue discount accretion, $0.03 per share from net
market discount accretion, and $0.03 per share from income paid in kind.
Total investment income was net of $0.5 million of depreciation expense
from aircraft we own and lease (through portfolio trusts), or $0.02 per
share. This reflects our policy of recording interest income, adjusted
for amortization of premium and accretion of discount, on an accrual
basis. Origination, structuring, closing, commitment, and similar
upfront fees received in connection with the outlay of capital are
generally amortized or accreted into interest income over the life of
the respective debt investment.
Total operating expenses for the three months ended September 30, 2012
were approximately $2.5 million, or $0.12 per share. Dividends accrued
on the preferred leverage facility were approximately $0.4 million, or
$0.02 per share. Annualized expenses, including all costs of leverage
(both interest expense and preferred dividends), as a percentage of
average net assets were 3.6%.
Net investment income for the three months ended September 30, 2012 was
approximately $9.6 million before preferred dividends. Net investment
income after preferred dividends was $9.2 million, or $0.43 per share.
Net realized gains for the three months ended September 30, 2012 were
$8.4 million, or $0.39 per share. The net realized gains during the
period and the corresponding reversal of previously recognized
unrealized gains were due primarily to the partial exit of our equity
investment in International Wire Group Holdings, Inc., during the
period. During the three months ended September 30, 2012 we recognized
$8.1 million in net unrealized depreciation.
Net increase in net assets applicable to common shareholders resulting
from operations was $9.5 million, or $0.44 per share, as compared to
$6.0 million, or $0.28 per share for the quarter ended June 30, 2012.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2012, available liquidity was approximately $70.8
million, comprised of approximately $2.8 million in cash and cash
equivalents (net of approximately $8.8 million in net outstanding
acquisitions), and $68 million in available capacity under the credit
facility.
Total leverage outstanding at September 30, 2012 was $182.0 million,
comprised of $48.0 million on our revolving credit facility and $134.0
million on our preferred equity facility. Borrowings on our revolving
credit facility bear interest at a rate of LIBOR plus 0.44%, and amounts
drawn on our preferred equity facility bear interest at a rate of LIBOR
plus 0.85%. The weighted average interest rate on amounts outstanding on
the total leverage facility as of September 30, 2012 was 0.96%.
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Leverage Program ($250 million):
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Rate
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Maturity
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$116mm Senior Secured Credit Facility
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LIBOR + 0.44%
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July 2014 |
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$134mm Preferred Equity Facility
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LIBOR + 0.85%
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July 2016 |
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RECENT DEVELOPMENTS
On November 7, 2012, our Board of Directors declared a fourth quarter
dividend of $0.35 per share and a special dividend of $0.05 per share,
both payable on December 31, 2012 to shareholders of record as of
December 17, 2012.
Effective November 7, 2012, our Board of Directors elected an additional
independent director, Peter E. Schwab, who is not an "interested person"
of the Company as defined in the Investment Company Act of 1940. Mr.
Schwab is a member of the Audit Committee.
CONFERENCE CALL AND WEBCAST
TCP Capital Corp. will host a conference call on Thursday, November 8,
2012 at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) to discuss its
third quarter results. All interested parties are invited to participate
in the conference call by dialing (866) 393-0571; international callers
should dial (206) 453-2872. Participants should enter the Conference ID
35503974 when prompted. The conference call will be webcast
simultaneously in the investor relations section of its website at http://investors.tcpcapital.com/.
An archived replay of the call will be available approximately two hours
after the live call, through November 15, 2012. For the replay, please
visit http://investors.tcpcapital.com/events.cfm
or dial (855) 859-2056. For international replay, please dial (404)
537-3406. For all replays, please reference program ID number 35503974.
ABOUT TCP CAPITAL CORP.
TCP Capital Corp.'s investment objective is to seek to achieve high
total returns while minimizing losses. TCP Capital Corp. seeks to
achieve its investment objective primarily through investments in debt
securities of middle-market companies, which it typically defines as
those with enterprise values between $100 million and $1.5 billion. TCP
Capital Corp. is a publicly-traded [NASDAQ: TCPC] business development
company (BDC) regulated under the Investment Company Act of 1940 and is
externally managed by its advisor, Tennenbaum Capital Partners, LLC, a
leading alternative investment manager. For more, visit www.tcpcapital.com.
FORWARD-LOOKING STATEMENTS
Prospective investors considering an investment in TCP Capital Corp.
should consider the investment objectives, risks and expenses of the
company carefully before investing. This information and other
information about the company are available in the company's filings
with the Securities and Exchange Commission ("SEC"). Copies are
available on the SEC's website at www.sec.gov
and the company's website at http://www.tcpcapital.com.
Prospective investors should read these materials carefully before
investing.
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on estimates, projections, beliefs
and assumptions of management of the company at the time of such
statements and are not guarantees of future performance. Forward-looking
statements involve risks and uncertainties in predicting future results
and conditions. Actual results could differ materially from those
projected in these forward-looking statements due to a variety of
factors, including, without limitation, changes in general economic
conditions or changes in the conditions of the industries in which the
company makes investments, risks associated with the availability and
terms of financing, changes in interest rates, availability of
transactions, and regulatory changes. Certain factors that could cause
actual results to differ materially from those contained in the
forward-looking statements are included in the "Risks" section of the
company's initial public offering prospectus dated April 3, 2012 and the
company's subsequent periodic filings with the SEC. Copies are available
on the SEC's website at www.sec.gov
and the company's website at http://www.tcpcapital.com.
Forward-looking statements are made as of the date of this press
release, and are subject to change without notice. The company has no
duty and does not undertake any obligation to update or revise any
forward-looking statements based on the occurrence of future events, the
receipt of new information, or otherwise.
(1) Weighted average annual effective yield includes
amortization of deferred debt origination fees and accretion of original
issue discount, but excludes any prepayment and make-whole fee income
and any debt investments on non-accrual status.
TCP Capital Corp.
Wendy Webb, 310-566-1042
investor.relations@tcpcapital.com
Source: TCP Capital Corp.
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