TICC Announces Results of Operations for the Quarter Ended September 30, 2015 and Quarterly Distribution of $0.29 per Share
/EINPresswire.com/ -- GREENWICH, CT -- (Marketwired) -- 11/06/15 -- TICC Capital Corp. (NASDAQ: TICC) (the "Company," "we," "us," or "our") announced today its financial results for the quarter ended September 30, 2015, and announced a distribution of $0.29 per share for the fourth quarter of 2015.
HIGHLIGHTS
- For the quarter ended September 30, 2015, we recorded GAAP net investment income of approximately $10.9 million, or approximately $0.18 per share. In the third quarter, we also recorded net realized capital gains of $0.4 million, and unrealized depreciation of $41.0 million. In total we had a net decrease in net assets from operations of approximately $29.7 million, or $0.50 per share.
- Our core net investment income ("Core NII" also previously referred to as "estimated distributable net investment income") for the quarter ended September 30, 2015 was approximately $0.34 per share.
- Core NII represents that portion of our estimated annual taxable net investment income available for distribution to our common shareholders attributable to the quarter. The Company's distribution policy is based, to a significant extent, on our Core NII.
- Core NII represents that portion of our estimated annual taxable net investment income available for distribution to our common shareholders attributable to the quarter. The Company's distribution policy is based, to a significant extent, on our Core NII.
- Total investment income for the third quarter of 2015 amounted to approximately $23.1 million, which represents a decrease of approximately $0.6 million from the second quarter of 2015.
- For the quarter ended September 30, 2015, we recorded GAAP investment income from our portfolio as follows:
- approximately $14.1 million from our debt investments,
- approximately $8.6 million from our CLO equity investments,
- approximately $0.4 million from all other sources.
- approximately $14.1 million from our debt investments,
- While reportable GAAP earnings from our CLO equity class investments for the three months ended September 30, 2015 was approximately $8.6 million, we received or were entitled to receive approximately $18.0 million in distributions. Our experience has been that cash flows have historically represented a reasonable estimate of CLO equity investment taxable earnings. In general, we currently expect our annual taxable income to be higher than our GAAP earnings on the basis of the difference between cash distributions actually received (and record date distributions to be received) and the effective yield income. Our distribution policy will be based upon our estimate of that taxable income (as required for a regulated investment company).
- Our weighted average credit rating on a fair value basis was 2.2 at the end of the third quarter of 2015 (compared to 2.1 at the end of the second quarter of 2015).
- As of the end of the third quarter of 2015 we had no loans held on non-accrual status.
- For the quarter ended September 30, 2015, we recorded GAAP investment income from our portfolio as follows:
- Our total expenses for the quarter ended September 30, 2015 were approximately $12.3 million, compared to total expenses of approximately $12.9 million for the quarter ended June 30, 2015.
- Our Board of Directors has declared a distribution of $0.29 per share for the fourth quarter of 2015.
- Payable Date: December 31, 2015
- Record Date: December 16, 2015
- Payable Date: December 31, 2015
- As of September 30, 2015, the weighted average yield of our debt investments at current cost stood at approximately 7.2%, compared with 7.6% as of June 30, 2015.
- As of September 30, 2015, the weighted average effective yield (GAAP) of CLO equity investments at current cost was approximately 11.3%, compared with 12.6% as of June 30, 2015
- As of September 30, 2015, the weighted average cash yield of cash income producing CLO equity investments at current cost was approximately 25.4% which also stood at 25.4% as of June 30, 2015.
- We note that the cash yield calculated on the CLO equity investments is based on the cash distributions we received or were entitled to receive at each respective period end and excludes the CLO equity investments which have not yet made their inaugural payment.
- We note that the cash yield calculated on the CLO equity investments is based on the cash distributions we received or were entitled to receive at each respective period end and excludes the CLO equity investments which have not yet made their inaugural payment.
- As of September 30, 2015, net asset value per share was $7.81 compared with the net asset value per share as of June 30, 2015 of $8.60.
- Our Board of Directors has authorized a new program for the purpose of repurchasing up to $75 million worth of our common stock. Under the new repurchase program, we may, but are not obligated to, repurchase our outstanding common stock in the open market from time to time through June 30, 2016.
Supplemental Information Regarding Core Net Investment Income
On a supplemental basis, we provide information relating to core net investment income and its ratio to net assets, which are non-GAAP measures. These measures are provided in addition to, but not as a substitute for, net investment income. Our non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. It should be noted that the current description of core net investment income differs from prior descriptions due to the change in the method of accounting for CLO equity investment income, effective January 1, 2015. Core net investment income represents net investment income adjusted for additional taxable income on our CLO equity investments and also excludes our capital gains incentive fee.
Income from CLO equity investments, for generally accepted accounting purposes, is recorded using the effective yield method. This method requires the calculation of an effective yield to expected redemption based upon an estimation of the amount and timing of future cash flows, including recurring cash flows as well as future principal payments; the difference between the actual cash received (and record date distributions to be received), and the effective yield calculation is an adjustment to cost. Accordingly, investment income recognized on CLO equity investments in the GAAP statement of operations differs from the estimated taxable net investment income (which is generally based upon the cash distributions actually received and record date distributions to be received by us during the period), and the resulting difference is referred to below as "CLO equity additional estimated taxable income." In addition, since 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), such fees are excluded when calculating core net investment income. We believe that core net investment income is a useful indicator of performance during this period. Further, because the RIC requirements are to distribute taxable earnings, and capital gains incentive fees may not be fully currently tax deductible, core net investment income provides a better indication of estimated taxable income for the period.
The following tables provide a reconciliation of net investment income to core net investment income (for the three months ended September 30, 2015 and 2014, respectively):
Three Months Ended Three Months Ended
September 30, 2015 September 30, 2014
--------------------- ----------------------
Per Share Per Share
Amounts Amounts
Amount (basic) Amount (basic)
----------- --------- ----------- ---------
Net investment income $10,874,618 $ 0.18 $17,520,528 $ 0.29
CLO equity additional
estimated taxable income 9,343,218 0.16 - -
Capital gains incentive fee - - (837,963) (0.01)
----------- --------- ----------- ---------
Core net investment income $20,217,836 $ 0.34 $16,682,565 $ 0.28
=========== ========= =========== =========
We will host a conference call to discuss our third quarter results today, Friday, November 6, 2015 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 10075944.
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-Q for the period ended September 30, 2015, and subsequent reports on Form 10-Q as they are filed.
TICC CAPITAL CORP.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
September
30, December 31,
2015 2014
------------ --------------
ASSETS
Non-affiliated/non-control investments
(cost: $970,201,027 @ 9/30/15; $999,433,538
@12/31/14) $908,962,186 $ 967,612,035
Affiliated investments (cost: $7,367,738 @
9/30/15; $4,268,722 @ 12/31/14) 5,314,226 1,585,303
Control investments (cost: $16,750,000
9/30/15; $16,800,000 @ 12/31/14) 12,904,375 14,960,000
------------ --------------
Total investments at fair value (cost:
$994,318,765 @ 9/30/15; $1,020,502,260 @
12/31/14) 927,180,787 984,157,338
------------ --------------
Cash and cash equivalents 21,216,120 20,505,323
Restricted cash 18,637,328 20,576,250
Deferred debt issuance costs 4,601,098 5,669,747
Interest and distributions receivable 12,597,507 11,442,289
Securities sold not settled 10,242 -
Other assets 308,726 290,245
------------ --------------
Total assets 984,551,808 $1,042,641,192
============ ==============
LIABILITIES
Accrued interest payable $ 4,964,485 $ 2,596,564
Investment advisory fee and net investment
income incentive fee payable to affiliate 5,830,902 6,183,486
Securities purchased not settled 2,850,000 11,343,179
Credit facility 150,000,000 150,000,000
Accrued expenses 940,623 629,127
Notes payable - TICC CLO 2012-1 LLC, net of
discount 236,407,052 236,075,775
Convertible senior notes payable 115,000,000 115,000,000
------------ --------------
Total liabilities 515,993,062 521,828,131
------------ --------------
COMMITMENTS AND CONTINGENCIES (Note 14)
NET ASSETS
Common stock, $0.01 par value, 100,000,000
share authorized; 59,987,986 and 60,303,769
shares issued
and outstanding, respectively 599,880 603,038
Capital in excess of par value 620,635,767 623,018,818
Net unrealized appreciation on investments (67,137,978) (36,344,922)
Accumulated net realized losses on
investments (65,368,395) (63,212,472)
Distributions in excess of investment income (20,170,528) (3,251,401)
------------ --------------
Total net assets 468,558,746 520,813,061
------------ --------------
Total liabilities and net assets $984,551,808 $1,042,641,192
============ ==============
Net asset value per common share $ 7.81 $ 8.64
TICC CAPITAL CORP.CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September September September September
30, 2015 30, 2014 30, 2015 30, 2014
------------ ------------ ------------ ------------
INVESTMENT INCOME
From non-
affiliated/non-
control
investments:
Interest income -
debt investments $ 13,720,125 $ 12,727,990 $ 39,025,069 $ 38,350,310
Income from
securitization
vehicles and
investments 8,617,121 15,170,869 26,396,541 45,047,290
Commitment,
amendment fee
income and other
income 372,935 1,877,067 1,985,306 4,267,879
------------ ------------ ------------ ------------
Total investment
income from non-
affiliated/non-
control
investments 22,710,181 29,775,926 67,406,916 87,665,479
------------ ------------ ------------ ------------
From affiliated
investments:
Interest income -
debt investments 78,616 50,436 221,097 65,139
------------ ------------ ------------ ------------
Total investment
income from
affiliated
investments 78,616 50,436 221,097 65,139
------------ ------------ ------------ ------------
From control
investments:
Interest income -
debt investments 345,591 349,361 1,026,283 1,036,691
------------ ------------ ------------ ------------
Total investment
income from
control
investments 345,591 349,361 1,026,283 1,036,691
------------ ------------ ------------ ------------
Total investment
income 23,134,388 30,175,723 68,654,296 88,767,309
------------ ------------ ------------ ------------
EXPENSES
Compensation
expense 89,660 472,903 965,293 1,399,476
Investment advisory
fees 5,255,583 5,366,277 15,574,269 15,764,248
Professional fees 818,926 603,940 2,330,702 1,601,883
Interest expense
and other debt
financing expenses 5,031,343 4,963,796 14,969,915 14,805,182
General and
administrative 488,939 384,543 1,673,389 1,567,799
------------ ------------ ------------ ------------
Total expenses
before incentive
fees 11,684,451 11,791,459 35,513,568 35,138,588
------------ ------------ ------------ ------------
Net investment
income incentive
fees 575,319 1,701,699 (929,933) 4,806,278
Capital gains
incentive fees - (837,963) - (3,872,853)
------------ ------------ ------------ ------------
Total incentive
fees 575,319 863,736 (929,933) 933,425
------------ ------------ ------------ ------------
Total expenses 12,259,770 12,655,195 34,583,635 36,072,013
------------ ------------ ------------ ------------
Net investment
income 10,874,618 17,520,528 34,070,661 52,695,296
------------ ------------ ------------ ------------
Net change in
unrealized
appreciation/deprec
iation on
investments
Non-Affiliate/non-
control
investments (37,399,544) (15,123,443) (34,358,991) (18,359,672)
Affiliated
investments (1,610,530) (198,545) 5,571,560 3,728,836
Control investments (2,005,625) - (2,005,625) (740,000)
------------ ------------ ------------ ------------
Total net change
in unrealized
appreciation/depr
eciation on
investments (41,015,699) (15,321,988) (30,793,056) (15,370,836)
------------ ------------ ------------ ------------
Net realized
gains/(losses) on
investments
Non-Affiliated/non-
control
investments 406,343 (3,460,465) 4,606,405 (6,925,632)
Affiliated
investments - - (6,762,328) (5,264,838)
------------ ------------ ------------ ------------
Total net realized
gains/(losses) on
investments 406,343 (3,460,465) (2,155,923) (12,190,470)
------------ ------------ ------------ ------------
Net (decrease)
increase in net
assets resulting
from operations $(29,734,738) $ (1,261,925) $ 1,121,682 $ 25,133,990
============ ============ ============ ============
Net increase in net
assets resulting
from net investment
income per common
share:
Basic $ 0.18 $ 0.29 $ 0.57 $ 0.90
Diluted $ 0.18 $ 0.28 $ 0.57 $ 0.85
Net (decrease)
increase in net
assets resulting
from operations per
common share:
Basic $ (0.50) $ (0.02) $ 0.02 $ 0.43
Diluted $ (0.50) $ (0.02) $ 0.02 $ 0.43
Weighted average
shares of common
stock outstanding:
Basic 59,987,986 60,268,078 59,997,565 58,307,825
Diluted 70,021,138 70,301,230 70,030,717 68,340,977
Distributions per
share $ 0.29 $ 0.29 $ 0.85 $ 0.87
TICC CAPITAL CORP.
FINANCIAL HIGHLIGHTS (UNAUDITED)
Three Three
Months Months Nine Months Nine Months
Ended Ended Ended Ended
September September September September
30, 30, 30, 30,
2015 2014 2015 2014
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Per Share Data
Net asset value at
beginning of period $ 8.60 $ 9.71 $ 8.64 $ 9.85
----------- ----------- ----------- -----------
Net investment
income(1)(3) 0.18 0.29 0.57 0.90
Net realized and
unrealized capital
losses(2)(3) (0.68) (0.31) (0.56) (0.47)
----------- ----------- ----------- -----------
Net change in net
asset value from
operations (0.50) (0.02) 0.01 0.43
----------- ----------- ----------- -----------
Distributions per
share from net
investment income (0.29) (0.29) (0.85) (0.87)
Distributions based on
weighted average
share impact - - - (0.01)
----------- ----------- ----------- -----------
Total distributions(4) (0.29) (0.29) (0.85) (0.88)
----------- ----------- ----------- -----------
Effect of shares
repurchased, gross - - 0.01 -
----------- ----------- ----------- -----------
Net asset value at end
of period $ 7.81 $ 9.40 $ 7.81 $ 9.40
=========== =========== =========== ===========
Per share market value
at beginning of
period $ 6.72 $ 9.90 $ 7.53 $ 10.34
Per share market value
at end of period $ 6.71 $ 8.83 $ 6.71 $ 8.83
Total return(5) 4.17% (7.88)% 0.60% (6.52)%
Shares outstanding at
end of period 59,987,986 60,357,746 59,987,986 60,357,746
Ratios/Supplemental
Data
Net assets at end of
period (000's) $ 468,559 567,252 468,559 567,252
Average net assets
(000's) 492,124 576,241 510,712 565,430
Ratio of expenses to
average net assets(6) 9.97% 8.79% 9.03% 8.51%
Ratio of net
investment income to
average net assets(6) 8.84% 12.16% 8.90% 12.43%
(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) During the first quarter of 2015, the Company identified a non-material
error in its accounting for income from CLO equity investments -- refer
to "Note 3. Change of Accounting for Collateralized Loan Obligation
Equity Income." Prospectively as of January 1, 2015, the Company records
income from its CLO equity investments using the effective yield method
in accordance with the accounting guidance in ASC 325-40, Beneficial
Interests in Securitized Financial Assets, based upon an estimation of
an effective yield to maturity utilizing assumed cash flows. An out-of-
period adjustment to net investment income incentive fees, in the amount
of $2.4 million, is reflected in the first quarter of 2015. Prior period
amounts are not materially affected.
(4) 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.
(5) Total return equals the increase or decrease of ending market value over
beginning market value, plus distributions, divided by the beginning
market value, assuming distribution reinvestment prices obtained under
the Company's distribution reinvestment plan, excluding any discounts.
Total return is not annualized.
(6) Annualized.
(7) The following table provides supplemental performance ratios
(annualized) measured for the three and nine months ended September 30,
2015 and 2014:
Three Three
Months Months Nine Months Nine Months
Ended Ended Ended Ended
September September September September
30, 30, 30, 30,
2015 2014 2015 2014
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Ratio of expenses
before incentive
fees to average net
assets 9.50% 8.19% 9.27% 8.29%
Ratio of net
investment income
incentive fees to
average net assets 0.47% 1.18% (0.24)% 1.13%
Ratio of capital
gains incentive fees
to average net
assets - (0.58)% - (0.91)%
Ratio of expenses,
excluding interest
expense, to average
net assets 5.88% 5.33% 5.12% 5.02%
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.
Bruce Rubin
203-983-5280
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
