SOURCE: TICC Capital Corp.

March 12, 2013 08:00 ET

TICC Announces Results of Operations for the Quarter and the Year Ended December 31, 2012 and Announces Quarterly Distribution of $0.29 per Share

GREENWICH, CT--(Marketwire - Mar 12, 2013) - TICC Capital Corp. (NASDAQ: TICC) announced today its financial results for the quarter and year ended December 31, 2012, and a distribution of $0.29 per share for the first quarter of 2013.

 HIGHLIGHTS

  • For the year ended December 31, 2012, we recorded approximately $71.2 million of total investment income and $37.2 million of net investment income, compared to $45.2 million of total investment income and $30.0 million of net investment income for the year ended December 31, 2011.

  • For the quarter ended December 31, 2012, we recorded net investment income of approximately $9.4 million, or approximately $0.23 per share. Excluding the impact of a capital gains incentive fee accrual increase of approximately $949,000, our core net investment income(1) was approximately $10.3 million, or approximately $0.25 per share. In the fourth quarter, we also recorded net realized capital gains of approximately $13.3 million and net unrealized depreciation of approximately $8.6 million (which includes the reversal of net unrealized appreciation associated with the fourth quarter realization events). In total, we had a net increase in net assets resulting from operations of approximately $14.1 million or approximately $0.34 per share for the fourth quarter.

    • Total investment income for the fourth quarter of 2012 amounted to approximately $20.4 million which represents an increase of approximately $4.8 million over the third quarter of 2012.

    • As of the end of the fourth quarter of 2012 there was one loan on non-accrual status with a par amount of approximately $1.9 million and a fair value of approximately $0.5 million.

    • Our weighted average credit rating on a fair value basis was 2.1 at the end of the fourth quarter of 2012 (compared to 2.2 at the end of the third quarter of 2012).

  • Our operating expenses before the capital gains incentive fee for the quarter ended December 31, 2012 were approximately $10.0 million, up from the third quarter of 2012 by approximately $3.7 million due largely to increased interest expense and other debt financing expenses as well as higher investment advisory fees.

  • The capital gains incentive fee expense was approximately $949,000 for the quarter ended December 31, 2012, and for the year ended December 31, 2012 that expense was approximately $5.5 million. The capital gains incentive fee expense, 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 expense related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only become payable to our investment adviser in the event of a complete liquidation of our portfolio as of period end.

    The amount of the capital gains incentive fee which will actually be payable is determined in accordance with the terms of the Investment Advisory Agreement (the "Agreement") and is calculated as of the end of each calendar year (or upon termination of the Agreement). The terms of the 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. Based on the terms of the Agreement, a capital gains incentive fee of approximately $1.6 million was payable as of December 31, 2012.

  • Our Board of Directors has declared a distribution of $0.29 per share for the first quarter of 2013.

    • Payable Date: March 29, 2013

    • Record Date: March 22, 2013

  • During the fourth quarter of 2012, we invested approximately $247.0 million in additional investments, in addition to the prior three quarters' investment of approximately $247.6 million, for a total deployment of approximately $494.6 million for the year ended December 31, 2012.

  • At December 31, 2012, the weighted average yield of our debt investments was approximately 9.4%, compared with 10.3% at September 30, 2012.

  • At December 31, 2012, net asset value per share was $9.90 compared with the net asset value per share at September 30, 2012 of $9.85.

  • On February 25, 2013, we completed the sale of $60,000,000 of incremental senior debt in connection with the collateralized loan obligation transaction that originally closed on August 23, 2012. The issuance of additional notes was proportional across all existing classes of notes originally issued.

(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. However, it should be noted that for the year ended December 31, 2012, based upon the terms of the Investment Advisory Agreement, a capital gains incentive fee of approximately $1.6 million was incurred. 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 and year ended December 31, 2012:

                 
    Three Months Ended
December 31, 2012
  Year Ended
December 31, 2012
    Amount   Per Share
Amounts
  Amount   Per Share
Amounts
Net investment income   $ 9,377,784   $ 0.227   $ 37,177,354   $ 0.979
Capital gains incentive fee     949,104     0.023     5,509,061     0.145
                         
Core net investment income   $ 10,326,888   $ 0.250   $ 42,686,415   $ 1.124
                         

We will host a conference call to discuss our fourth quarter and year end results today, Tuesday, March 12, 2013 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 10026163.

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, 2012, and subsequent reports on Form 10-Q as they are filed.

   
TICC CAPITAL CORP.  
   
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)  
   
   
    December 31, 2012     December 31, 2011  
                 
ASSETS                
                 
  Non-affiliated/non-control investments (cost: $634,081,527 @ 12/31/12; $372,091,255 @ 12/31/11)   $ 651,099,873     $ 375,793,839  
  Control investments (cost: $17,256,179 @ 12/31/12; $17,434,371 @ 12/31/11)     16,450,000       15,675,000  
    Total investments at fair value     667,549,873       391,468,839  
  Cash and cash equivalents     51,392,949       4,494,793  
  Restricted cash     21,240,508       23,183,698  
  Deferred debt issuance costs     8,154,925       2,895,873  
  Interest and distributions receivable     5,986,122       1,837,882  
  Securities sold not settled     1,516,875       -  
  Other assets     181,788       238,485  
      Total assets   $ 756,023,040     $ 424,119,570  
   
LIABILITIES                
  Accrued interest payable   $ 4,234,376     $ 1,076,113  
  Investment advisory fee payable to affiliate     4,930,908       2,895,799  
  Accrued capital gains incentive fee to affiliate     6,617,810       1,108,749  
  Securities purchased not settled     -       13,352,500  
  Accrued expenses     302,971       873,592  
  Notes payable - TICC CLO LLC, net of discount     99,882,627       99,710,826  
  Notes payable - TICC CLO 2012-1 LLC, net of discount     115,451,819       -  
  Convertible senior notes payable     115,000,000       -  
      Total liabilities     346,420,511       119,017,579  
                 
NET ASSETS                
  Common stock, $0.01 par value, 100,000,000 shares authorized, and 41,371,286 and 32,818,428 issued and outstanding, respectively    
413,713
     
328,184
 
  Capital in excess of par value     451,157,297       376,991,540  
  Net unrealized appreciation on investments     16,212,167       1,943,213  
  Accumulated net realized losses on investments     (53,906,504 )     (70,308,108 )
  Distributions in excess of investment income     (4,274,144 )     (3,852,838 )
      Total net assets     409,602,529       305,101,991  
      Total liabilities and net assets   $ 756,023,040     $ 424,119,570  
Net asset value per common share   $ 9.90     $ 9.30  
                 
                 
                 
   
TICC CAPITAL CORP.  
   
CONSOLIDATED STATEMENTS OF OPERATIONS  
   
                 
    Year Ended
December 31, 2012
  Year Ended
December 31, 2011
    Year Ended
December 31, 2010
 
                       
INVESTMENT INCOME                      
From non-affiliated/non-control investments:                      
  Interest income - debt investments   $ 38,597,973   $ 29,604,441     $ 26,959,707  
  Distributions from securitization vehicles and equity investments     25,755,438     13,079,923       3,728,638  
  Commitment, amendment fee income and other income     5,247,571     920,945       968,317  
    Total investment income from non-affiliated/non-control investments     69,600,982     43,605,309       31,656,662  
From control investments:                      
  Interest income - debt investments     1,511,897     1,582,881       1,849,929  
  Distributions from equity investments     62,041     -       -  
  Total investment income from control investments     1,573,938     1,582,881       1,849,929  
    Total investment income     71,174,920     45,188,190       33,506,591  
EXPENSES                      
  Compensation expense     1,183,056     1,090,626       1,020,950  
  Investment advisory fees     11,222,713     7,317,273       5,043,973  
  Professional fees     1,873,892     1,190,999       1,033,650  
  Interest expense and other debt financing expenses     7,262,714     1,243,584       -  
  Insurance     68,826     68,450       75,419  
  Directors' fees     261,000     222,749       178,750  
  Transfer agent and custodian fees     128,692     116,592       105,389  
  General and administrative     1,027,607     587,314       401,366  
    Total expenses before incentive fees     23,028,500     11,837,587       7,859,497  
  Net investment income incentive fees     5,460,006     2,241,713       1,403,597  
  Capital gains incentive fees     5,509,061     1,108,749       -  
    Total incentive fees     10,969,067     3,350,462       1,403,597  
    Total expenses     33,997,567     15,188,049       9,263,094  
Net investment income     37,177,354     30,000,141       24,243,497  
Net change in unrealized (depreciation) appreciation on investments     14,268,954     (19,391,815 )     81,836,604  
Net realized gains on investments     16,876,880     3,600,539       (42,132,660 )
Net increase in net assets resulting from operations   $ 68,323,188   $ 14,208,865     $ 63,947,441  
                       
Net increase in net assets resulting from net investment income per common share:                      
      Basic   $ 0.98   $ 0.92     $ 0.89  
      Diluted   $ 0.96   $ 0.92     $ 0.89  
Net increase in net assets resulting from operations per common share:                      
      Basic   $ 1.80   $ 0.44     $ 2.35  
      Diluted   $ 1.73   $ 0.44     $ 2.35  
Weighted average shares of common stock outstanding:                      
      Basic     37,978,693     32,433,101       27,253,552  
      Diluted     40,575,776     32,433,101       27,253,552  
                       
                       
                       
TICC CAPITAL CORP.  
   
FINANCIAL HIGHLIGHTS (UNAUDITED)  
   
    Year Ended
 December 31, 2012
  Year Ended
 December 31, 2011
  Year Ended
 December 31, 2010
  Year Ended
 December 31, 2009
  Year Ended
 December 31, 2008
 
Per Share Data                                
Net asset value at beginning of period   $ 9.30   $ 9.85   $ 8.36   $ 7.68   $ 11.94  
Net investment income(1)     0.98     0.92     0.89     0.51     0.91  
Net realized and unrealized capital gains (losses)(2)     0.82     (0.47 )   1.19     0.81     (2.94 )
Total from net investment operations     1.80     0.45     2.08     1.32     (2.03 )
Distributions from net investment income     (1.12 )   (0.99 )   (0.81 )   (0.60 )   (0.98 )
Distributions based on weighted average share impact     (0.04 )   --     --     --     --  
Tax return of capital distributions     --     --     --     --     (0.08 )
Total distributions(3)     (1.16 )   (0.99 )   (0.81 )   (0.60 )   (1.06 )
Effect of shares issued, net of offering expenses     (0.04 )   (0.01 )   0.22     (0.04 )   (1.17 )
Net asset value at end of period   $ 9.90   $ 9.30   $ 9.85   $ 8.36   $ 7.68  
Per share market value at beginning of period   $ 8.65   $ 11.21   $ 6.05   $ 3.80   $ 9.23  
Per share market value at end of period   $ 10.12   $ 8.65   $ 11.21   $ 6.05   $ 3.80  
Total return(4)     30.49 %   (14.19 )%   102.39 %   81.15 %   (50.23 )%
Shares outstanding at end of period     41,371,286     32,818,428     31,886,367     26,813,216     26,483,546  
Ratios/Supplemental Data                                
Net assets at end of period (000's)     409,603     305,102     314,118     224,092     203,367  
Average net assets (000's)     363,584     318,305     243,723     206,183     251,320  
Ratio of expenses to average net assets:                                
Expenses before incentive fees     6.33 %   3.72 %   3.22 %   3.38 %   5.82 %
Net investment income incentive fees     1.50 %   0.70 %   0.58 %   0.02 %   0.19 %
Capital gains incentive fees     1.52 %   0.35 %   --     --     --  
Total ratio of expenses to average net assets     9.35 %   4.77 %   3.80 %   3.40 %   6.01 %
Ratio of expenses, excluding interest expense, to average net assets     7.35 %   4.38 %   3.80 %   3.40 %   4.10 %
Ratio of net investment income to average net assets     10.23 %   9.42 %   9.95 %   6.54 %   8.83 %
                                 
(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. For the year ending December 31, 2008, approximately $0.08 per share of the Company's distributions were characterized as a tax return of capital to the Company's stockholders.
(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.
     

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

  • Contacts:
    Bruce Rubin
    203-983-5280
    Patrick Conroy
    203-983-5282