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 fourth quarter and year ended December 31,
2013 and filed its annual report on Form 10-K with the U.S. Securities
and Exchange Commission.
FINANCIAL HIGHLIGHTS
-
Net investment income before taxes for the quarter ended December 31,
2013 was $12.7 million, or $0.40 per share on a diluted basis, after
preferred dividends and $0.09 per share in incentive compensation on
net investment income. Net investment income before taxes for the year
ended December 31, 2013 was $43.2 million, or $1.67 per share on a
diluted basis, after preferred dividends and $0.41 per share in
incentive compensation on net investment income.
-
Net increase in net assets resulting from operations for the quarter
ended December 31, 2013 was $14.4 million, or $0.46 per share. Net
increase in net assets resulting from operations for the year ended
December 31, 2013 was $49.5 million, or $1.91 per share.
-
Net Asset Value per share at December 31, 2013 increased to $15.18 per
share from $15.06 at September 30, 2013 and $14.71 at December 31,
2012.
-
Total acquisitions during the quarter ended December 31, 2013 were
$116.5 million and total acquisitions net of total dispositions were
$57.4 million.
-
On December 18, 2013, we closed a follow-on offering of 5,175,000
shares of our common stock at $16.00 per share for net proceeds of
approximately $79.9 million.
-
On March 6, 2014, our board of directors declared a first quarter
dividend of $0.36 per share payable on March 31, 2014 to shareholders
of record as of March 17, 2014.
"We are very pleased with our results for the quarter and year ended
December 31, 2013," said TCP Capital Corp.'s Chairman and CEO, Howard
Levkowitz. "We were able to out earn our dividend run rate by $0.04 per
share for the quarter and by $0.19 for the year while increasing our NAV
by $0.47 per share over the course of the year. In addition, we
increased the value of our investment portfolio to $766 million from
$518 million while maintaining strong credit quality. So far in 2014, we
see a strong pipeline of deal flow across a variety of sectors, and we
will continue to take a highly selective approach to choosing
investments that deliver strong risk-adjusted returns to our
shareholders."
PORTFOLIO AND INVESTMENT ACTIVITY
As of December 31, 2013, our investment portfolio consisted of debt and
equity positions in 67 portfolio companies with a total fair value of
approximately $766.3 million. Debt positions represented approximately
95% of the portfolio fair value, 98% of which were senior secured debt.
Equity positions represented approximately 5% of our investment
portfolio.
As of December 31, 2013, the weighted average annual effective yield of
our debt portfolio was approximately 10.9%.(1) As of December
31, 2013, approximately 71% of our debt portfolio at fair value had
floating interest rates, approximately 92% of which had interest rate
floors, and approximately 29% of our debt portfolio had fixed interest
rates. As of December 31, 2013, we had no debt investments on
non-accrual status.
During the three months ended December 31, 2013, we invested
approximately $117 million in seven new and two existing portfolio
companies. The investments were comprised of approximately $90 million
in senior secured loans, $20 million in senior secured notes and $7
million in equity investments. Additionally, we received proceeds from
sales and repayments of investment principal of approximately $59
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 December 31, 2013, total assets were $803.3 million, net assets
applicable to common shareholders was $549.6 million and net asset value
per share was $15.18, as compared to $729.3 million, $401.5 million, and
$15.06 per share, respectively on September 30, 2013.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the three months ended December 31, 2013 was
approximately $21.0 million, or $0.66 per share, including $0.06 per
share from prepayment income, $0.01 per share from original issue
discount accretion and $0.04 per share from income paid in kind. 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 investment income was net of $0.6
million of depreciation expense from aircraft we own and lease (through
portfolio trusts), or $0.02 per share.
Total operating expenses for the three months ended December 31, 2013
were approximately $4.7 million, or $0.15 per share. Dividends accrued
on the preferred leverage facility were approximately $0.4 million, or
$0.01 per share. We also incurred incentive compensation from net
investment income of $3.0 million, or $0.09 per share, incentive
compensation from realized gains of $0.3 million, or $0.01 per share,
and an increase in the reserve for incentive compensation of $0.3
million, or $0.01 per share. Excluding incentive compensation,
annualized second quarter expenses, including all costs of leverage
(both interest expense and preferred dividends), were 4.0% of average
net assets.
Net investment income before taxes for the three months ended December
31, 2013 was approximately $16.3 million, or $0.51 per share, before
related incentive compensation and preferred dividends. Pre-tax net
investment income after related incentive compensation and preferred
dividends was $12.7 million, or $0.40 per share.
Net realized losses for the three months ended December 31, 2013 were
$44.6 million, or $1.40 per share primarily due to a charge of $45.1
million from the tender of all of our shares of common stock of Bally
Total Fitness Holding Corporation ("BTF"). The tender price was slightly
higher than the fair value as of September 30, 2013 and had a de minimis
impact on net asset value. This charge was previously included in
unrealized losses at the beginning of the quarter. The initial BTF
investment was acquired at a significant discount as part of our legacy
distressed debt strategy and generated substantial cash interest income.
During the three months ended December 31, 2013, we recognized $47.7
million, or $1.50 per share, in net unrealized appreciation from the
reversal of unrealized losses on BTF and mark to market adjustments
throughout our portfolio. Net realized and unrealized gains for the
three months ended December 31, 2013 were $3.1 million, or $0.10 per
share.
Net increase in net assets applicable to common shareholders resulting
from operations for the three months ended December 31, 2013 was $14.4
million, or $0.46 per share.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2013, available liquidity was approximately $132.9
million, comprised of approximately $11.9 million in cash and cash
equivalents (net of approximately $11.1 million in net outstanding
commitments), and $121 million in available capacity under the credit
facilities.
Total leverage outstanding at December 31, 2013 was $229.0 million,
comprised of $95.0 million on our revolving credit facilities and $134.0
million on our preferred equity facility. The weighted average interest
rate on amounts outstanding on the total leverage facility as of
December 31, 2013 was 1.38%.
|
Leverage Program ($350 million):
|
|
|
|
Rate
|
|
|
|
Maturity
|
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$116mm Partnership Credit Facility
|
|
|
|
LIBOR + 0.44%
|
|
|
|
July 2016 |
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$100mm TCPC Funding Credit Facility
|
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LIBOR + 2.75%*
|
|
|
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May 2016*
|
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$134mm Preferred Equity Facility
|
|
|
|
LIBOR + 0.85%
|
|
|
|
July 2016 |
* Rate reduced to LIBOR + 2.50% effective March 15, 2014,
available credit increased to $150mm, and maturity date extended to May
2017. See Recent Developments.
RECENT DEVELOPMENTS
On February 21, 2014, the Company announced the expansion of the TCPC
Funding Facility from $100 million in available debt to $150 million in
available debt. The facility's maturity date was also extended from May
15, 2016 to May 15, 2017 and its interest rate was reduced from LIBOR
plus 2.75% per annum to LIBOR plus 2.50% per annum, subject to certain
minimum borrowing requirements. The amendment is effective March 15,
2014.
On March 6, 2014, the Company's board of directors declared a first
quarter regular cash dividend of $0.36 per share payable on March 31,
2014 to stockholders of record as of the close of business on March 17,
2014.
CONFERENCE CALL AND WEBCAST
TCP Capital Corp. will host a conference call on Thursday, March 6, 2014
at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) to discuss its
quarterly financial 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 58603926 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 Fourth Quarter 2013 Investor Presentation under Events
and Presentations. The conference call will be webcast simultaneously in
the investor relations section of our website at http://investors.tcpcapital.com/.
An archived replay of the call will be available approximately two hours
after the live call, through March 13, 2014. 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 58603926.
|
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TCP Capital Corp. |
|
Consolidated Statements of Assets and Liabilities
|
|
|
|
|
|
|
|
December 31, 2013 |
|
December 31, 2012 |
|
Assets
|
|
|
|
|
|
|
|
Investments, at fair value:
|
|
|
|
|
|
|
|
Companies less than 5% owned (cost of $684,569,508 and $508,302,758,
respectively)
|
|
|
|
$ 678,326,915 |
|
$ 440,772,190 |
|
Companies 5% to 25% owned (cost of $73,946,547 and $55,803,421,
respectively)
|
|
|
|
69,068,808
|
|
54,421,689
|
|
Companies more than 25% owned (cost of $42,588,724 and $44,964,189
respectively)
|
|
|
|
18,867,236
|
|
22,489,208
|
|
Total investments (cost of $801,104,779 and $609,070,368,
respectively)
|
|
|
|
766,262,959
|
|
517,683,087
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
22,984,182
|
|
18,035,189
|
|
Accrued interest income:
|
|
|
|
|
|
|
|
Companies less than 5% owned
|
|
|
|
6,282,353
|
|
4,039,149
|
|
Companies 5% to 25% owned
|
|
|
|
415,061
|
|
482,634
|
|
Companies more than 25% owned
|
|
|
|
41,691
|
|
53,524
|
|
Receivable for investments sold
|
|
|
|
3,605,964
|
|
7,727,415
|
|
Deferred debt issuance costs
|
|
|
|
2,969,085
|
|
696,018
|
|
Unrealized appreciation on swaps
|
|
|
|
-
|
|
179,364
|
|
Options (cost $51,750)
|
|
|
|
14,139
|
|
-
|
|
Prepaid expenses and other assets
|
|
|
|
753,768
|
|
345,722
|
|
Total assets
|
|
|
|
803,329,202
|
|
549,242,102
|
|
|
|
|
|
|
|
|
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Liabilities
|
|
|
|
|
|
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Debt
|
|
|
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95,000,000
|
|
74,000,000
|
|
Payable for investments purchased
|
|
|
|
14,706,942
|
|
21,814,819
|
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Incentive allocation payable
|
|
|
|
3,318,900
|
|
-
|
|
Payable to the Investment Manager
|
|
|
|
1,121,108
|
|
109,200
|
|
Interest payable
|
|
|
|
430,969
|
|
119,233
|
|
Unrealized depreciation on swaps
|
|
|
|
331,183
|
|
-
|
|
Accrued expenses and other liabilities
|
|
|
|
3,136,010
|
|
2,685,015
|
|
Total liabilities
|
|
|
|
118,045,112
|
|
98,728,267
|
|
|
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Preferred equity facility
|
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|
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|
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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
|
|
|
|
134,000,000
|
|
134,000,000
|
|
Accumulated dividends on Series A preferred equity facility
|
|
|
|
504,252
|
|
526,285
|
|
Total preferred limited partner interests
|
|
|
|
134,504,252
|
|
134,526,285
|
|
|
|
|
|
|
|
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Non-controlling interest
|
|
|
|
|
|
|
|
General Partner interest in Special Value Continuation Partners, LP |
|
|
|
1,168,583
|
|
-
|
|
|
|
|
|
|
|
|
|
Net assets applicable to common shareholders
|
|
|
|
$ 549,611,255
|
|
$ 315,987,550
|
|
|
|
|
|
|
|
|
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Composition of net assets applicable to common shareholders
|
|
|
|
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|
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|
Common stock, $0.001 par value; 200,000,000 shares authorized,
36,199,916 and 21,477628
shares issued and outstanding as of
December 31, 2013 and December 31, 2012, respectively
|
|
|
|
36,200
|
|
21,478
|
|
Paid-in capital in excess of par
|
|
|
|
667,842,020
|
|
444,234,060
|
|
Accumulated net investment income
|
|
|
|
24,016,095
|
|
22,526,179
|
|
Accumulated net realized losses
|
|
|
|
(105,800,278)
|
|
(59,023,861)
|
|
Accumulated net unrealized depreciation
|
|
|
|
(35,314,199)
|
|
(91,770,306)
|
|
Non-controlling interest
|
|
|
|
(1,168,583)
|
|
-
|
|
Net assets applicable to common shareholders
|
|
|
|
$ 549,611,255 |
|
$ 315,987,550 |
|
|
|
|
|
|
|
|
|
Net assets per share
|
|
|
|
$ 15.18 |
|
$ 14.71 |
|
|
|
|
|
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TCP Capital Corp. |
|
Consolidated Statements of Operations
|
|
|
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|
|
Year Ended December 31,
|
|
|
|
|
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2013
|
|
2012 (1) |
|
2011 (1) |
|
Investment income
|
|
|
|
|
|
|
|
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
Companies less than 5% owned
|
|
|
|
$ 60,323,117 |
|
$ 42,139,023 |
|
$ 38,290,363 |
|
Companies 5% to 25% owned
|
|
|
|
5,445,021
|
|
5,850,394
|
|
3,822,995
|
|
Companies more than 25% owned
|
|
|
|
1,210,926
|
|
1,253,915
|
|
-
|
|
Dividend income:
|
|
|
|
|
|
|
|
|
|
Companies 5% to 25% owned
|
|
|
|
-
|
|
1,811,189
|
|
10,610,159
|
|
Other income:
|
|
|
|
|
|
|
|
|
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Companies less than 25% owned
|
|
|
|
1,470,116
|
|
289,073
|
|
1,068,872
|
|
Companies 5% to 25% owned
|
|
|
|
458,627
|
|
359,099
|
|
1,065,287
|
|
Companies more than 25% owned
|
|
|
|
701,239
|
|
490,066
|
|
-
|
|
Total investment income
|
|
|
|
69,609,046
|
|
52,192,759
|
|
54,857,676
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
Management and advisory fees
|
|
|
|
8,820,229
|
|
6,908,942
|
|
6,787,188
|
|
Interest expense
|
|
|
|
1,194,158
|
|
190,702
|
|
321,532
|
|
Amortization of deferred debt issuance costs
|
|
|
|
852,618
|
|
441,495
|
|
440,289
|
|
Administrative expenses
|
|
|
|
849,228
|
|
-
|
|
-
|
|
Legal fees, professional fees and due diligence expenses
|
|
|
|
797,568
|
|
1,165,318
|
|
331,589
|
|
Commitment fees
|
|
|
|
292,671
|
|
225,560
|
|
180,467
|
|
Director fees
|
|
|
|
288,336
|
|
199,333
|
|
180,960
|
|
Insurance expense
|
|
|
|
189,139
|
|
130,140
|
|
114,446
|
|
Custody fees
|
|
|
|
149,860
|
|
99,947
|
|
91,886
|
|
Professional fees relating to the Conversion
|
|
|
|
-
|
|
411,523
|
|
-
|
|
Other operating expenses
|
|
|
|
867,353
|
|
619,461
|
|
801,593
|
|
Total operating expenses
|
|
|
|
14,301,160
|
|
10,392,421
|
|
9,249,950
|
|
Net investment income before taxes
|
|
|
|
55,307,886
|
|
41,800,338
|
|
45,607,726
|
|
Excise tax expense
|
|
|
|
977,624
|
|
1,479,978
|
|
-
|
|
Net investment income
|
|
|
|
54,330,262
|
|
40,320,360
|
|
45,607,726
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gain (loss) on investments and
foreign currency
|
|
|
|
|
|
|
|
|
|
Net realized gain (loss):
|
|
|
|
|
|
|
|
|
|
Investments in companies less than 5% owned
|
|
|
|
(40,379,889)
|
|
(29,574,293)
|
|
17,818,481
|
|
Investments in companies 5% to 25% owned
|
|
|
|
(7,004,857)
|
|
13,584,105
|
|
261,308
|
|
Net realized gain (loss)
|
|
|
|
(47,384,746)
|
|
(15,990,188)
|
|
18,079,789
|
|
Net change in net unrealized appreciation/depreciation
|
|
|
|
56,456,107
|
|
3,205,937
|
|
(56,958,670)
|
|
Net realized and unrealized gain (loss)
|
|
|
|
9,071,361
|
|
(12,784,251)
|
|
(38,878,881)
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on Series A preferred equity facility
|
|
|
|
(1,516,585)
|
|
(1,542,932)
|
|
(1,456,281)
|
|
Net change in accumulated dividends on Series A preferred equity
facility
|
|
|
|
22,033
|
|
(59,867)
|
|
(88,549)
|
|
Dividends to Series Z preferred shareholders
|
|
|
|
-
|
|
-
|
|
(752)
|
|
Net change in reserve for dividends to Series Z preferred
shareholders
|
|
|
|
-
|
|
-
|
|
27
|
|
Distributions of incentive allocation to the General Partner from:
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
(10,567,142)
|
|
-
|
|
-
|
|
Net realized gains
|
|
|
|
(645,691)
|
|
-
|
|
-
|
|
Net change in reserve for incentive allocation
|
|
|
|
(1,168,583)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets applicable to common
|
|
|
|
|
|
|
|
|
|
shareholders resulting from operations
|
|
|
|
$ 49,525,655 |
|
$ 25,933,310 |
|
$ 5,183,290 |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per common share
|
|
|
|
$ 1.91 |
|
$ 1.21 |
|
N/A
|
|
Basic and diluted weighted average common shares outstanding
|
|
|
|
25,926,493
|
|
21,475,847
|
|
N/A
|
|
|
|
(1) Prior to the Conversion on April 2, 2012, the
Company's portfolio had different objectives.
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ABOUT TCP CAPITAL CORP.
TCP Capital Corp. (NASDAQ: TCPC) is a specialty finance company focused
on performing credit lending to middle-market companies with established
market positions. TCPC focuses on companies with differentiated products
and strong regional or national operations and where it has deep
industry knowledge and expertise. TCPC's investment objective is to seek
to achieve high total returns through current income and capital
appreciation, with an emphasis on principal protection. TCPC is a
publicly-traded business development company, or 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 information, 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 prospectus dated December 10, 2013 and its preliminary
prospectus supplement dated December 16, 2013 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.
(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.
TCP Capital Corp.
Jessica Ekeberg, 310-566-1094
investor.relations@tcpcapital.com
Source: TCP Capital Corp.
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