SOURCE: TICC Capital Corp.

August 07, 2014 08:00 ET

TICC Announces Results of Operations for the Quarter Ended June 30, 2014 and Announces Quarterly Distribution of $0.29 per Share

GREENWICH, CT--(Marketwired - Aug 7, 2014) - TICC Capital Corp. (NASDAQ: TICC) announced today its financial results for the quarter ended June 30, 2014, and a distribution of $0.29 per share for the third quarter of 2014.

 HIGHLIGHTS

  • For the quarter ended June 30, 2014, we recorded net investment income of approximately $17.4 million, or approximately $0.29 per share. Excluding the impact of a capital gains incentive fee accrual reversal of approximately $856,000, our core net investment income(1) was approximately $16.6 million, or approximately $0.28 per share. In the second quarter, we also recorded net realized capital losses of approximately $7.8 million and net unrealized appreciation of approximately $3.5 million (which includes the reversal of net unrealized depreciation associated with the second quarter realization events). In total, we had a net increase in net assets resulting from operations of approximately $13.1 million or approximately $0.22 per share for the second quarter.
    • Total investment income for the second quarter of 2014 amounted to approximately $29.9 million, which represents an increase of approximately $1.3 million from the first quarter of 2014.
      • For the quarter ended June 30, 2014, we recorded investment income from our portfolio as follows:
        • approximately $13.3 million from our debt investments,
        • approximately $14.8 million from our collateralized loan obligation ("CLO") equity investments, and
        • approximately $1.8 million from all other sources.  
    • Our weighted average credit rating on a fair value basis was 2.1 at the end of the second quarter of 2014 (compared to 2.2 at the end of the first quarter of 2014).
  • Our operating expenses before the capital gains incentive fee for the quarter ended June 30, 2014 were approximately $13.4 million, up from the first quarter of 2014 by approximately $0.3 million.
  • The capital gains incentive fee accrual calculation for the quarter ended June 30, 2014, resulted in an accrual reversal of approximately $856,000. The capital gains incentive fee accrual, as reported under generally accepted accounting principles, is calculated on the basis of net realized and unrealized gains and losses at the end of each period.  The accrued capital gains incentive fee related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only have become payable on June 30, 2014 to our investment adviser in the event of a complete liquidation of our portfolio as of period end and the termination of our Investment Advisory Agreement ("Advisory Agreement").

    The amount of the capital gains incentive fee, if any, which will actually be payable is determined in accordance with the terms of our Advisory Agreement and is calculated as of the end of each calendar year (or upon termination of the Advisory Agreement).  The terms of our Advisory Agreement state that the capital gains incentive fee calculation is based on net realized gains, if any, offset by gross unrealized depreciation for the calendar year.  No effect is given to gross unrealized appreciation in this calculation.
  • Our Board of Directors has declared a distribution of $0.29 per share for the third quarter of 2014.
    • Payable Date: September 30, 2014
    • Record Date: September 16, 2014
  • During the second quarter of 2014, we made approximately $178.3 million in additional investments. The additional investments consisted of approximately $152.2 million in corporate securities and $26.1 million in CLO equity.

    • For the second quarter of 2014, we received proceeds of approximately $150.0 million from repayments, sales and amortization payments on our debt investments. 

  • As of June 30, 2014, the weighted average yield of our income producing investments on a cost basis was approximately 12.2%, compared with 12.9% as of March 31, 2014. At June 30, 2014, we did not have any investments on non-accrual status.

  • As of June 30, 2014, net asset value per share was $9.71 compared with the net asset value per share as of March 31, 2014 of $9.78. 

(1) Supplemental Information Regarding Core Net Investment Income
On a supplemental basis, we provide information relating to core net investment income, which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Core net investment income represents net investment income excluding our capital gains incentive fee. As the capital gains incentive fee, for generally accepted accounting purposes, is based on the hypothetical liquidation of the entire portfolio (and as any capital gains incentive fee may be non-recurring), we believe that core net investment income is a useful indicator of operations exclusive of any capital gains incentive fee. We note that such amount is excluded from the core net investment income amount presented below.

The following table provides a reconciliation of net investment income to core net investment income for the three months ended June 30, 2014:

               
  Three Months Ended
June 30, 2014
 
  Amount     Per Share
Amounts
 
Net investment income $ 17,416,580     $ 0.29  
Capital gains incentive fee   (856,158 )     (0.01 )
               
Core net investment income $ 16,560,422     $ 0.28  
               

We will host a conference call to discuss our second quarter results today, Thursday, August 7, 2014 at 10:00 AM ET. Please call 888-339-0740 to participate. A replay of the conference call will be available for approximately 30 days. The replay number is 877-344-7529, and the replay passcode is 10050587.

A presentation containing further detail regarding our year-end and quarterly results of operations has been posted under the Investor Relations section of our website at www.ticc.com.

The following financial statements are unaudited and without footnotes. Readers who would like additional information should obtain our Form 10-K for the period ended December 31, 2013, and subsequent reports on Form 10-Q as they are filed.

 
TICC CAPITAL CORP.
 
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
 
   
  June 30, 2014   December 31, 2013  
             
ASSETS            
             
  Non-affiliated/non-control investments (cost: $950,865,080 @ 6/30/14; $901,728,071 @ 12/31/13) $ 965,358,205   $ 915,546,744  
  Affiliated investments (cost: $4,166,699 @ 6/30/14; $0 @ 12/31/13)   4,183,399     0  
  Control investments (cost: $16,900,000 @ 6/30/14; $16,900,000 @ 12/31/13)   15,310,000     16,050,000  
    Total investments at fair value (cost: $971,931,779 @ 6/30/14; $918,628,071 @ 12/31/13)   984,851,604     931,596,744  
  Cash and cash equivalents   18,095,424     14,933,074  
  Restricted cash   44,447,219     32,428,248  
  Deferred debt issuance costs   7,358,099     7,985,580  
  Interest and distributions receivable   10,969,146     11,133,972  
  Securities sold not settled   2,226,747     -  
  Other assets   249,851     88,122  
      Total assets   1,068,198,090   $ 998,165,740  
   
LIABILITIES            
             
  Accrued interest payable $ 2,548,702   $ 2,596,893  
  Investment advisory fee payable to affiliate   6,871,124     7,144,480  
  Accrued capital gains incentive fee to affiliate   837,963     3,872,853  
  Securities purchased not settled   20,890,000     6,994,852  
  Accrued expenses   846,203     637,896  
  Notes payable - TICC CLO LLC, net of discount   100,119,968     100,041,226  
  Notes payable - TICC CLO 2012-1 LLC, net of discount   235,853,314     235,635,114  
  Convertible senior notes payable   115,000,000     115,000,000  
      Total liabilities   482,967,274     471,923,314  
             
COMMITMENTS AND CONTINGENCIES (Note 14)            
             
NET ASSETS            
  Common stock, $0.01 par value, 100,000,000 shares authorized, and 60,267,093 and 53,400,745 issued and outstanding, respectively   602,671     534,007  
  Capital in excess of par value   628,766,245     561,336,766  
  Net unrealized appreciation on investments   12,919,825     12,968,673  
  Accumulated net realized losses on investments   (54,169,239 )   (45,439,234 )
  Distributions in excess of investment income   (2,888,686 )   (3,157,786 )
      Total net assets   585,230,816     526,242,426  
      Total liabilities and net assets $ 1,068,198,090   $ 998,165,740  
Net asset value per common share $ 9.71   $ 9.85  
                 
 
 
TICC CAPITAL CORP.
 
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
               
                         
    Three Months
Ended
June 30, 2014
    Three Months
Ended
June 30, 2013
    Six Months
Ended
June 30, 2014
    Six Months
Ended
June 30, 2013
 
                                 
INVESTMENT INCOME                                
From non-affiliated/non-control investments:                                
  Interest income - debt investments   $ 12,964,092     $ 12,391,438     $ 25,622,320     $ 24,295,115  
  Distributions from securitization vehicles and equity investments     14,825,186       10,665,842       29,876,421       19,419,046  
  Commitment, amendment fee income and other income     1,785,193       2,002,842       2,390,812       2,717,358  
    Total investment income from non-affiliated/non-control investments     29,574,471       25,060,122       57,889,553       46,431,519  
From affiliated investments:                                
  Interest income - debt investments     14,703       -       14,703       -  
  Distributions from equity investments     -       -       -       -  
  Total investment income from affiliated investments     14,703       -       14,703       -  
From control investments:                                
  Interest income - debt investments     345,564       364,022       687,330       724,084  
  Distributions from equity investments     -       -       -       -  
  Total investment income from control investments     345,564       364,022       687,330       724,084  
    Total investment income     29,934,738       25,424,144       58,591,586       47,155,603  
EXPENSES                                
  Compensation expense     511,370       303,338       926,573       614,403  
  Investment advisory fees     5,441,325       4,882,271       10,397,971       8,979,742  
  Professional fees     267,505       450,985       997,943       1,088,173  
  Interest expense and other debt financing expenses     4,933,738       4,724,471       9,841,386       9,003,298  
  General and administrative     790,578       624,902       1,183,256       912,943  
    Total expenses before incentive fees     11,944,516       10,985,967       23,347,129       20,598,559  
  Net investment income incentive fees     1,429,800       1,382,031       3,104,579       2,634,341  
  Capital gains incentive fees     (856,158 )     (2,899,772 )     (3,034,889 )     (2,684,418 )
    Total incentive fees     573,642       (1,517,741 )     69,690       (50,077 )
    Total expenses     12,518,158       9,468,226       23,416,819       20,548,482  
Net investment income     17,416,580       15,955,918       35,174,767       26,607,121  
                                 
Net change in unrealized appreciation on investments                                
  Non-affiliated/non-control investments     (2,347,521 )     (16,391,566 )     (3,236,229 )     (12,776,898 )
  Affiliated investments     16,700       -       16,700       -  
  Control investments     5,873,068       -       3,170,681       -  
    Total net change in unrealized appreciation on investments     3,542,247       (16,391,566 )     (48,848 )     (12,776,898 )
                                 
Net realized (losses) gains on investments                                
  Non-affiliated/non-control investments     (2,558,205 )     1,892,644       (3,465,167 )     8,468,819  
  Affiliated investments     (5,264,838 )     -       (5,264,838 )     -  
  Control investments     -       -       -       -  
    Total realized (losses) gains on investments     (7,823,043 )     1,892,644       (8,730,005 )     8,468,819  
                                 
Net increase in net assets resulting from operations   $ 13,135,784     $ 1,456,996     $ 26,395,914     $ 22,299,042  
                                 
Net increase in net assets resulting from net investment income per common share:                                
  Basic   $ 0.29     $ 0.30     $ 0.61     $ 0.54  
  Diluted   $ 0.27     $ 0.28     $ 0.58     $ 0.51  
Net increase in net assets resulting from operations per common share:                                
  Basic   $ 0.22     $ 0.03     $ 0.46     $ 0.45  
  Diluted   $ 0.21     $ 0.05     $ 0.45     $ 0.44  
Weighted average shares of common stock outstanding:                                
  Basic     60,214,211       52,544,803       57,311,454       49,075,486  
  Diluted     70,247,363       62,577,955       67,344,606       59,108,638  
                                 
Dividends Declared Per Share   $ 0.29     $ 0.29     $ 0.58     $ 0.58  
 
 
TICC CAPITAL CORP.
 
FINANCIAL HIGHLIGHTS (UNAUDITED)
 
    Three
Months Ended
June 30, 2014
(unaudited)
  Three
Months Ended
June 30, 2013
(unaudited)
  Six
Months Ended
June 30, 2014
(unaudited)
  Six
Months Ended
June 30, 2013
(unaudited)
Per Share Data                                
Net asset value at beginning of period   $ 9.78     $ 10.02     $ 9.85     $ 9.90  
Net investment income(1)     0.29       0.30       0.61       0.54  
Net realized and unrealized capital gains(2)     (0.07 )     (0.27 )     (0.15 )     (0.09 )
Total from net investment operations     0.22       0.03       0.46       0.45  
Distributions per share from net investment income     (0.29 )     (0.29 )     (0.58 )     (0.58 )
Distributions based on weighted average share impact     --       (0.01 )     (0.02 )     (0.03 )
Total distributions(3)     (0.29 )     (0.30 )     (0.60 )     (0.61 )
Effect of shares issued, net of offering expenses     --       --       --       0.01  
Net asset value at end of period   $ 9.71     $ 9.75     $ 9.71     $ 9.75  
Per share market value at beginning of period   $ 9.78     $ 9.95     $ 10.34     $ 10.12  
Per share market value at end of period   $ 9.90     $ 9.62     $ 9.90     $ 9.62  
Total return(4)     4.19 %     (0.40 )%     1.47 %     0.78 %
Shares outstanding at end of period     60,267,093       52,632,665       60,267,093       52,632,665  
Ratios/Supplemental Data                                
Net assets at end of period (000's)     585,231       513,343       585,231       513,343  
Average net assets (000's)     587,170       523,048       559,935       488,381  
Ratio of expenses to average net assets:                                
Expenses before incentive fees(5)     8.14 %     8.40 %     8.34 %     8.44 %
Net investment income incentive fees(5)     0.97 %     1.06 %     1.11 %     1.08 %
Capital gains incentive fees(5)     (0.58 )%     (2.22 )%     (1.09 )%     (1.10 )%
Total ratio of expenses to average net assets(5)     8.53 %     7.24 %     8.36 %     8.42 %
Ratio of expenses, excluding interest expense, to average net assets(5)     5.17 %     3.63 %     4.85 %     4.73 %
Ratio of net investment income to averagenet assets(5)     11.86 %     12.20 %     12.56 %     10.90 %
   
(1) Represents per share net investment income for the period, based upon average shares outstanding.
(2) Net realized and unrealized capital gains include rounding adjustments to reconcile change in net asset value per share.
(3) Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company's taxable earnings fall below the total amount of the Company's distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company's stockholders. The tax character of distributions will be determined at the end of the fiscal year.
(4) Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's dividend reinvestment plan, excluding any discounts. Total return is not annualized.
(5) Annualized.

About TICC Capital Corp.

TICC Capital Corp. is a publicly-traded business development company principally engaged in providing capital to established businesses, investing in syndicated bank loans and purchasing debt and equity tranches of collateralized loan obligations. Companies interested in learning more about financing opportunities should contact Debdeep Maji at (203) 983-5285.

Forward-Looking Statements

This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," "estimates" and similar expressions) should also be considered to be forward-looking statements. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events.

Contact Information

  • Contact:
    Bruce Rubin
    203-983-5280