SANTA MONICA, Calif.--(BUSINESS WIRE)--
TCP Capital Corp. ("we," "us," "our," "TCPC" or the "Company"), a
business development company ("BDC") (NASDAQ: TCPC), today announced its
financial results for the first quarter ended March 31, 2013 and filed
its Form 10-Q with the U.S. Securities and Exchange Commission.
FINANCIAL HIGHLIGHTS
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Net investment income for the quarter ended March 31, 2013 was $10.4
million, or $0.49 per share, after preferred dividends and net of
$0.15 per share in incentive compensation, compared to net investment
income of $12.7 million, or $0.59 per share, net of $0.05 per share in
excise taxes but without incentive compensation, for the quarter ended
December 31, 2012.
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Net increase in net assets resulting from operations for the quarter
ended March 31, 2013 was $12.8 million, or $0.60 per share, as
compared to $6.9 million, or $0.32 per share for the quarter ended
December 31, 2012. Net asset value was approximately $320.2 million or
$14.91 per share on March 31, 2013, as compared to approximately
$316.0 million or $14.71 per share on December 31, 2012. Estimated net
asset value per share as of April 30, 2013 was $15.14.
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Total acquisitions during the quarter ended March 31, 2013 were $40.3
million, as compared to $113.0 million for the quarter December 31,
2012. Total acquisitions net of total dispositions during the quarter
ended March 31, 2013 were $(10.7) million, as compared to $30.9
million for the quarter ended December 31, 2012.
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On May 8, 2013, our board of directors declared an increased second
quarter dividend of $0.36 per share payable on June 28, 2013 to
shareholders of record as of June 7, 2013.
"We are pleased with our first quarter results," said TCP Capital
Corp.'s Chairman and CEO, Howard Levkowitz. "Our strong net investment
income of $0.49 per share clearly demonstrates the earnings power of our
portfolio and allowed us to once again increase our regular quarterly
dividend to a rate of $0.36 per share.
"We continue to see a robust pipeline of deal flow across a variety of
industries. In the first five weeks of the second quarter, we have made
$62.5 million in new investments. We believe our diversified portfolio
is well positioned to deliver strong risk adjusted returns for the
remainder of 2013 and we will continue to take a highly selective
approach to making investments."
PORTFOLIO AND INVESTMENT ACTIVITY
As of March 31, 2013, our investment portfolio consisted of debt and
equity positions in 54 portfolio companies with a total fair value of
approximately $510.0 million. Debt positions represented approximately
93% of the portfolio fair value, 96% of which were senior secured debt.
Equity positions represented approximately 7% of our investment
portfolio.
As of March 31, 2013, the weighted average annual effective yield of our
debt portfolio was approximately 11.1%.(1) As of March 31,
2013, approximately 69% of our debt portfolio at fair value had floating
interest rates, over 96% of which had interest rate floors, and
approximately 31% of our debt portfolio had fixed interest rates. As of
March 31, 2013, we had no investments on non-accrual status.
During the three months ended March 31, 2013, we invested approximately
$40.3 million in one new and four existing portfolio companies. The
investments were comprised of $32.9 million in senior secured floating
rate loans and, $7.4 million in senior secured notes. Additionally, we
received proceeds from sales and repayments of investment principal of
approximately $51.0 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, with an emphasis on principal protection.
As of March 31, 2013, total assets were $530.0 million, net assets
applicable to common shareholders was $320.2 million and net asset value
per share was $14.91, as compared to $549.2 million, $316.0 million, and
$14.71 per share, respectively on December 31, 2012. Estimated net asset
value per share as of April 30, 2013 was $15.14.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the three months ended March 31, 2013 was
approximately $16.9 million, or $0.79 per share, including $0.14 of
prepayment income, $0.01 per share from original issue discount
accretion, and $0.01 per share from income paid in kind. Total
investment income was net of $0.6 million of depreciation expense from
aircraft we own and lease (through portfolio trusts), or $0.03 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 March 31, 2013 were
approximately $2.9 million, or $0.13 per share. Dividends accrued on the
preferred leverage facility were approximately $0.4 million, or $0.02
per share. We also incurred incentive compensation of $2.7 million, or
$0.13 per share, and a reserve for incentive compensation of an
additional $0.5 million, or $0.02 per share. Excluding incentive
compensation, annualized first quarter expenses, including all costs of
leverage (both interest expense and preferred dividends), were 4.1% of
average net assets.
Net investment income for the three months ended March 31, 2013 was
approximately $14.0 million, or $0.65 per share, before preferred
dividends and incentive compensation. Net investment income after
preferred dividends and incentive compensation was $10.4 million, or
$0.49 per share.
Net realized gains for the three months ended March 31, 2013 were $0.5
million, or $0.02 per share. During the three months ended March 31,
2013, we recognized $1.8 million, or $0.09 per share, in net unrealized
appreciation from mark to market adjustments throughout our portfolio.
Net increase in net assets applicable to common shareholders resulting
from operations was $12.8 million, or $0.60 per share, as compared to
$6.9 million, or $0.32 per share for the quarter ended December 31, 2012.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2013, available liquidity was approximately $57.0
million, comprised of approximately $11.0 million in cash and cash
equivalents (net of approximately $0.2 million in net outstanding
investment commitments), and $46 million in available capacity under the
credit facility.
Total leverage outstanding at March 31, 2013 was $204.0 million,
comprised of $70.0 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 March 31, 2013 was 0.91%.
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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 May 1, 2013, the stockholders of the Company voted to add an
additional director, Rajneesh Vig, to the Board of Directors effective
as of May 1, 2013.
On May 8, 2013, the Company's board of directors declared a second
quarter cash dividend of $0.36 per share payable on June 28, 2013 to
stockholders of record as of the close of business on June 7, 2013.
CONFERENCE CALL AND WEBCAST
TCP Capital Corp. will host a conference call on Thursday, May 9, 2013
at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) to discuss its first
quarter results. All interested parties are invited to participate in
the conference call by dialing (877) 322-9844; international callers
should dial (631) 291-4534. Participants should enter the Conference ID
34766747 when prompted. For a slide presentation that we intend to refer
to on the earnings conference call, please visit the Investor Relations
section of our website (www.tcpcapital.com)
and click on the First Quarter 2013 Investor Presentation under
Events and Presentations. 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 May 16, 2013. 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 34766747.
(1) Weighted average annual effective yield includes
amortization of deferred debt origination fees and accretion of original
issue discount, but excludes market discount, any prepayment and
make-whole fee income, and any debt investments on non-accrual status.
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TCP Capital Corp. |
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Consolidated Statements of Assets and Liabilities
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March 31, 2013 |
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December 31, 2012 |
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(unaudited)
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Assets
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Investments, at fair value:
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Unaffiliated issuers (cost of $514,388,646 and $508,302,758,
respectively)
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$
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449,148,562
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$
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440,772,190
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Controlled companies (cost of $44,370,322 and $44,964,189
respectively)
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21,612,031
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22,489,208
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Other affiliates (cost of $40,912,250 and $55,803,421, respectively)
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39,234,352
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54,421,689
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Total investments (cost of $599,671,218 and $609,070,368,
respectively)
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509,994,945
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517,683,087
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Cash and cash equivalents
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11,177,328
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18,035,189
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Accrued interest income:
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Unaffiliated issuers
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6,585,365
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4,039,149
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Controlled companies
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50,689
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53,524
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Other affiliates
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486,707
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482,634
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Receivable for investments sold
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-
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7,727,415
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Deferred debt issuance costs
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587,454
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696,018
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Unrealized appreciation on swaps
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349,347
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179,364
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Prepaid expenses and other assets
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779,018
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345,722
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Total assets
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$
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530,010,853
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$
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549,242,102
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Liabilities
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Credit facility payable
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70,000,000
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74,000,000
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Incentive allocation payable
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2,723,742
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-
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Payable for investments purchased
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157,292
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21,814,819
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Interest payable
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151,170
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119,233
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Payable to the Investment Manager
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105,549
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109,200
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Accrued expenses and other liabilities
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1,698,354
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2,685,015
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Total liabilities
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74,836,107
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98,728,267
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Preferred equity facility
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Series A preferred limited partner interests in Special Value
Continuation Partners, LP;
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$20,000/interest liquidation preference; 6,700 interests authorized,
issued and outstanding
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134,000,000
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134,000,000
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Accumulated dividends on Series A preferred equity facility
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510,274
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526,285
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Total preferred limited partner interests
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134,510,274
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134,526,285
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General Partner interest in Special Value Continuation Partners,
LP
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471,078
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-
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Net assets applicable to common shareholders
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$
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320,193,394
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$
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315,987,550
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Composition of net assets applicable to common shareholders
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Common stock, $0.001 par value; 200,000,000 shares authorized,
21,478,732 and
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21,477,628 shares issued and outstanding as of March 31, 2013 and
December 31, 2012, respectively
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21,479
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21,478
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Paid-in capital in excess of par
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444,251,674
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444,234,060
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Accumulated net investment income
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24,359,019
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22,526,179
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Accumulated net realized losses
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(58,506,203
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)
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(59,023,861
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Accumulated net unrealized depreciation
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(89,932,575
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(91,770,306
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Net assets applicable to common shareholders
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$
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320,193,394
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$
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315,987,550
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Net assets per share
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$
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14.91
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$
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14.71
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TCP Capital Corp. |
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Consolidated Statements of Operations (Unaudited)
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Three Months Ended March 31,
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2013
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2012 1
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Investment income
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Interest income:
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Unaffiliated issuers
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$
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15,240,367
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$
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8,152,548
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Controlled companies
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330,317
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-
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Other affiliates
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893,512
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1,682,714
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Dividend income:
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Other affiliates
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-
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1,811,189
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Other income:
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Unaffiliated issuers
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157,533
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-
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Controlled companies
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142,911
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-
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Other affiliates
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101,103
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167,874
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Total investment income
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16,865,743
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11,814,325
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Operating expenses
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Management and advisory fees
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1,964,738
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1,696,797
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Professional fees relating to the Conversion
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-
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411,523
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Administrative expenses
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167,808
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-
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Amortization of deferred debt issuance costs
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108,564
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109,771
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Legal fees, professional fees and due diligence expenses
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139,052
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90,785
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Interest expense
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136,407
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46,519
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Commitment fees
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22,589
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62,208
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Director fees
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71,809
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53,500
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Insurance expense
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36,273
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28,891
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Custody fees
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29,419
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23,034
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Other operating expenses
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192,971
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53,195
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Total operating expenses
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2,869,630
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2,576,223
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Net investment income before taxes
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13,996,113
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9,238,102
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Excise tax expense
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502,978
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Net investment income
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13,996,113
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8,735,124
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Net realized and unrealized gain (loss) on investments and
foreign currency
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Net realized gain (loss):
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Investments in unaffiliated issuers
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517,658
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(5,981,289
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)
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Investments in non-controlled affiliates
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-
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718,845
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Net realized gain (loss)
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517,658
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(5,262,444
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Net change in net unrealized appreciation/depreciation
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1,837,731
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374,743
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Net realized and unrealized gain (loss)
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2,355,389
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(4,887,701
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)
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Dividends paid on Series A preferred equity facility
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(393,413
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(371,492
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Net change in accumulated dividends on Series A
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preferred equity facility
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16,011
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(43,307
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Distributions of incentive allocation to the General Partner
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(2,723,742
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)
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-
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Net change in reserve for General Partner incentive allocation
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(471,078
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-
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Net increase in net assets applicable to common
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shareholders resulting from operations
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$
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12,779,280
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$
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3,432,624
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Basic and diluted earnings per common share
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$
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0.60
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N/A
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Basic and diluted weighted average common shares
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outstanding
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21,477,628
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N/A
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(1) The Consolidated Statement of Operations for the
three months ended March 31, 2012 reflects a portfolio prior to the
Conversion which
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had different objectives.
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ABOUT TCP CAPITAL CORP.
TCP Capital Corp.'s investment objective is to seek to achieve high
total returns through current income and capital appreciation, with an
emphasis on principal protection. TCP Capital Corp. seeks to achieve its
investment objective primarily through investments in debt securities of
middle-market companies. 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 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 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.
TCP Capital Corp.
Jessica Ekeberg, 310-566-1042
investor.relations@tcpcapital.com
Source: TCP Capital Corp.
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