SOURCE: TICC Capital Corp.

May 12, 2014 08:00 ET

TICC Announces Results of Operations for the Quarter Ended March 31, 2014 and Announces Quarterly Distribution of $0.29 per Share

GREENWICH, CT--(Marketwired - May 12, 2014) -  TICC Capital Corp. (NASDAQ: TICC) announced today its financial results for the quarter ended March 31, 2014, and a distribution of $0.29 per share for the second quarter of 2014.

HIGHLIGHTS

  • For the quarter ended March 31, 2014, we recorded net investment income of approximately $17.8 million, or approximately $0.33 per share. Excluding the impact of a capital gains incentive fee accrual reversal of approximately $2.2 million, our core net investment income(1) was approximately $15.6 million, or approximately $0.29 per share. In the first quarter, we also recorded net realized capital losses of approximately $0.9 million and net unrealized depreciation of approximately $3.6 million (which includes the reversal of net unrealized appreciation associated with the first quarter realization events). In total, we had a net increase in net assets resulting from operations of approximately $13.3 million or approximately $0.24 per share for the first quarter.

    • Total investment income for the first quarter of 2014 amounted to approximately $28.7 million, which represents a decrease of approximately $1.8 million from the fourth quarter of 2013.

      • For the quarter ended March 31, 2014, we recorded investment income from our portfolio as follows:
        • approximately $12.5 million from our syndicated and bilateral investments,
        • approximately $15.1 million from our CLO equity investments,
        • approximately $0.5 million from our CLO debt investments, and
        • approximately $0.6 million from all other sources.

    • Our weighted average credit rating on a fair value basis was 2.2 at the end of the first quarter of 2014 (compared to 2.1 at the end of the fourth quarter of 2013).

  • Our operating expenses before the capital gains incentive fee for the quarter ended March 31, 2014 were approximately $11.4 million, down from the fourth quarter of 2013 by approximately $1.2 million.

  • The capital gains incentive fee calculation for the quarter ended March 31, 2014, resulted in an accrual reversal of approximately $2.2 million. 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 March 31, 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 second quarter of 2014.
    • Payable Date: June 30, 2014
    • Record Date: June 16, 2014

  • During the first quarter of 2014, we made approximately $87.0 million in additional investments. The additional investments consisted of approximately $58.6 million in corporate securities and $28.4 million in collateralized loan obligation, or "CLO," equity.

    • For the first quarter of 2014, we received proceeds of approximately $55.4 million from repayments, sales and amortization payments on our debt investments. 

  • As of March 31, 2014, the weighted average yield of our income producing investments on a cost basis was approximately 12.9%, compared with 13.2% as of December 31, 2013. At March 31, 2014, we had one investment on non-accrual status with a fair value of approximately $3.5 million.

  • As of March 31, 2014, net asset value per share was $9.78 compared with the net asset value per share as of December 31, 2013 of $9.85. 

(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 March 31, 2014:

             
    Three Months Ended
March 31, 2014
 
    Amount     Per Share
Amounts
 
Net investment income   $ 17,758,187     $ 0.33  
Capital gains incentive fee     (2,178,731 )     (0.04 )
                 
Core net investment income   $ 15,579,456     $ 0.29  
                 

We will host a conference call to discuss our fourth quarter and year end results today, Monday, May 12, 2014 at 10:00 AM ET. Please call 888-317-6016 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 10045654.

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)  
   
  March 31, 2014     December 31, 2013  
ASSETS              
               
  Non-affiliated/non-control investments (cost: $933,480,317 @ 3/31/14; $901,728,071 @ 12/31/13) $ 944,447,895     $ 915,546,744  
  Control investments (cost: $16,900,000 @ 3/31/14; $16,900,000 @ 12/31/13)   15,310,000       16,050,000  
    Total investments at fair value (cost: $950,380,317 @ 3/31/14; $918,628,071 @ 12/31/13)   959,757,895       931,596,744  
  Cash and cash equivalents   74,574,917       14,933,074  
  Restricted cash   40,952,607       32,428,248  
  Deferred debt issuance costs   7,673,573       7,985,580  
  Interest and distributions receivable   10,494,070       11,133,972  
  Other assets   115,925       88,122  
      Total assets $ 1,093,568,987     $ 998,165,740  
               
LIABILITIES              
               
  Accrued interest payable $ 4,687,607     $ 2,596,893  
  Investment advisory fee payable to affiliate   6,631,426       7,144,480  
  Accrued capital gains incentive fee to affiliate   1,694,121       3,872,853  
  Securities purchased not settled   39,511,310       6,994,852  
  Accrued expenses   1,111,221       637,896  
  Notes payable - TICC CLO LLC, net of discount   100,080,371       100,041,226  
  Notes payable - TICC CLO 2012-1 LLC, net of discount   235,743,534       235,635,114  
  Convertible senior notes payable   115,000,000       115,000,000  
      Total liabilities   504,459,590       471,923,314  
               
COMMITMENTS AND CONTINGENCIES (Note 14)              
               
NET ASSETS              
  Common stock, $0.01 par value, 100,000,000 shares authorized, and 60,213,623 and 53,400,745 issued and outstanding, respectively   602,136       534,007  
  Capital in excess of par value   628,319,194       561,336,766  
  Net unrealized appreciation on investments   9,377,578       12,968,673  
  Accumulated net realized losses on investments   (46,346,196 )     (45,439,234 )
  Distributions in excess of investment income   (2,843,315 )     (3,157,786 )
      Total net assets   589,109,397       526,242,426  
      Total liabilities and net assets $ 1,093,568,987     $ 998,165,740  
Net asset value per common share $ 9.78     $ 9.85  
               
               
               
TICC CAPITAL CORP.
 
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
 
    Three Months
Ended
March 31, 2014
    Three Months
Ended
March 31, 2013
               
INVESTMENT INCOME              
From non-affiliated/non-control investments:              
  Interest income - debt investments   $ 12,658,228     $ 11,903,677
  Distributions from securitization vehicles and equity investments     15,051,235       8,753,204
  Commitment, amendment fee income and other income     605,619       714,516
    Total investment income from non-affiliated/non-control investments     28,315,082       21,371,397
From control investments:              
  Interest income - debt investments     341,766       360,062
  Distributions from equity investments     -       -
  Total investment income from control investments     341,766       360,062
    Total investment income     28,656,848       21,731,459
EXPENSES              
  Compensation expense     415,203       311,065
  Investment advisory fees     4,956,646       4,097,471
  Professional fees     730,438       637,188
  Interest expense and other debt financing expenses     4,907,648       4,278,827
  General and administrative     392,678       288,041
    Total expenses before incentive fees     11,402,613       9,612,592
  Net investment income incentive fees     1,674,779       1,252,310
  Capital gains incentive fees     (2,178,731 )     215,354
    Total incentive fees     (503,952 )     1,467,664
    Total expenses     10,898,661       11,080,256
Net investment income     17,758,187       10,651,203
               
Net change in unrealized appreciation on investments              
  Non-Affiliate/non-control investments     (2,851,095 )     3,614,668
  Control investments     (740,000 )     -
    Total net change in unrealized appreciation on investments     (3,591,095 )     3,614,668
               
Net realized (losses) gains on investments              
  Non-Affiliate/non-control investments     (906,962 )     6,576,175
  Control investments     -       -
    Total realized (losses) gains on investments     (906,962 )     6,576,175
               
Net increase in net assets resulting from operations   $ 13,260,130     $ 20,842,046
               
Net increase in net assets resulting from net investment income per common share:              
      Basic   $ 0.33     $ 0.23
      Diluted   $ 0.30     $ 0.22
Net increase in net assets resulting from operations per              
common share:              
      Basic   $ 0.24     $ 0.46
      Diluted   $ 0.23     $ 0.41
Weighted average shares of common stock outstanding:              
      Basic     54,376,444       45,565,784
      Diluted     64,409,596       55,598,936
               
Dividends Declared Per Share   $ 0.29     $ 0.29
               
               
               
TICC CAPITAL CORP.  
   
FINANCIAL HIGHLIGHTS (UNAUDITED)  
   
    Three Months
Ended
March 31,
2014
(unaudited)
    Three Months
Ended
March 31,
2013
(unaudited)
 
                 
Per Share Data                
Net asset value at beginning of period   $ 9.85     $ 9.90  
                 
Net investment income(1)     0.33       0.23  
Net realized and unrealized capital gains (2)     (0.09 )     0.23  
                 
Total from net investment operations     0.24       0.46  
                 
Distributions per share from net investment income     (0.29 )     (0.29 )
                 
Distributions based on weighted average share impact     (0.02 )     (0.05 )
                 
Total distributions(3)     (0.31 )     (0.34 )
                 
Effect of shares issued, net of offering expenses     -       -  
                 
Net asset value at end of period   $ 9.78     $ 10.02  
                 
Per share market value at beginning of period   $ 10.34     $ 10.12  
Per share market value at end of period   $ 9.78     $ 9.95  
Total return(4)     (2.61 )%     1.19 %
Shares outstanding at end of period     60,213,623       52,541,808  
Ratios/Supplemental Data                
Net assets at end of period (000's)     589,109       526,465  
Average net assets (000's)     532,398       453,330  
Ratio of expenses to average net assets:                
  Expenses before incentive fees(5)     8.57 %     8.48 %
  Net investment income incentive fees(5)     1.26 %     1.11 %
  Capital gains incentive fees(5)     (1.64 )%     0.19 %
                 
Total ratio of expenses to average net assets(5)     8.19 %     9.78 %
                 
Ratio of expenses, excluding interest expense, to average net assets(5)     4.50 %     6.00 %
                 
Ratio of net investment income to average net assets(5)     13.34 %     9.40 %
                 
(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. 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

    Patrick Conroy
    203-983-5282