TCP Capital Corp. Announces Third Quarter 2012 Financial Results; Net
Investment Income of $0.43 Per Share; And Declares Dividends
Declares Fourth Quarter Dividend of $0.35 Per Share
Declares a Special Dividend of $0.05 Per Share
SANTA MONICA, Calif. -- November 08, 2012
TCP Capital Corp. (“we,” “us,” “our,” “TCPC” or the “Company”), a business
development company (NASDAQ: TCPC), today announced its financial results for
the third quarter ended September 30, 2012 and filed its quarterly report on
Form 10-Q with the U.S. Securities and Exchange Commission.
*Net investment income for the quarter ended September 30, 2012 was $9.2
million after preferred dividends, or $0.43 per share, compared to net
investment income of $8.5 million, or $0.40 per share for the quarter
ended June 30, 2012.
*Net increase in net assets resulting from operations for the quarter ended
September 30, 2012 was $9.5 million, or $0.44 per share, as compared to
$6.0 million, or $0.28 per share for the quarter ended June 30, 2012. Net
asset value was approximately $317.6 million or $14.79 per share on
September 30, 2012, as compared to approximately $315.6 million or $14.70
per share on June 30, 2012.
*Total acquisitions during the quarter ended September 30, 2012 were $80.0
million, as compared to $90.4 million for the quarter ended June 30, 2012.
Total acquisitions net of total dispositions during the quarter ended
September 30, 2012 were $36.6 million, as compared to $50.8 million for
the quarter ended June 30, 2012.
*On November 7, 2012, our board of directors declared a fourth quarter
dividend of $0.35 per share and a special dividend of $0.05 per share,
both payable on December 31, 2012 to shareholders of record as of December
“We are pleased with our strong results for the third quarter, which marks our
second quarter as a public company,” said TCP Capital Corp.’s Chairman and
CEO, Howard Levkowitz.“The portfolio’s performance and the effective
deployment of the remaining proceeds from our April IPO and other liquidity
enabled us to generate higher net investment income of $0.43 per share. Our
third quarter net investment income more than covers our fourth quarter
dividend, which clearly demonstrates the earnings power of our portfolio. With
net leverage of 0.56x, and approximately $71 million in liquidity at the end
of the third quarter, we have room to grow the TCPC portfolio.”
PORTFOLIO AND INVESTMENT ACTIVITY
As of September 30, 2012, our investment portfolio consisted of debt and
equity positions in 46 portfolio companies with a total fair value of
approximately $490.1 million. Debt positions represented approximately 89% of
the portfolio fair value, 95% of which were senior secured debt. Equity
positions represented approximately 11% of our investment portfolio.
As of September 30, 2012, the weighted average annual effective yield of our
debt portfolio was approximately 11.3%.^(1) As of September 30, 2012,
approximately 55% of our debt portfolio at fair value had floating interest
rates, 93% of which had interest rate floors, and approximately 45% of our
debt portfolio had fixed interest rates. As of September 30, 2012,
approximately 0.2% of our investments at fair value were on non-accrual
During the three months ended September 30, 2012, we invested approximately
$80.0 million across seven new and three existing portfolio companies. The
investments were comprised of $64.5 million in senior secured floating rate
loans, $15.0 million in senior secured notes, and $0.5 million in equity
securities. Additionally, we received proceeds from sales and repayments of
investment principal of approximately $43.9 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, while minimizing losses.
As of September 30, 2012, total assets were $521.3 million, net assets
applicable to common shareholders was $317.6 million and net asset value per
share was $14.79, as compared to $472.0 million, $315.6 million, and $14.70
per share, respectively on June 30, 2012.
CONSOLIDATED RESULTS OF OPERATIONS
Total investment income for the three months ended September 30, 2012 was
approximately $12.1 million, or $0.56 per share, including $0.01 per share
from original issue discount accretion, $0.03 per share from net market
discount accretion, and $0.03 per share from income paid in kind. Total
investment income was net of $0.5 million of depreciation expense from
aircraft we own and lease (through portfolio trusts), or $0.02 per share. 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 operating expenses for the three months ended September 30, 2012 were
approximately $2.5 million, or $0.12 per share. Dividends accrued on the
preferred leverage facility were approximately $0.4 million, or $0.02 per
share. Annualized expenses, including all costs of leverage (both interest
expense and preferred dividends), as a percentage of average net assets were
Net investment income for the three months ended September 30, 2012 was
approximately $9.6 million before preferred dividends. Net investment income
after preferred dividends was $9.2 million, or $0.43 per share.
Net realized gains for the three months ended September 30, 2012 were $8.4
million, or $0.39 per share. The net realized gains during the period and the
corresponding reversal of previously recognized unrealized gains were due
primarily to the partial exit of our equity investment in International Wire
Group Holdings, Inc., during the period. During the three months ended
September 30, 2012 we recognized $8.1 million in net unrealized depreciation.
Net increase in net assets applicable to common shareholders resulting from
operations was $9.5 million, or $0.44 per share, as compared to $6.0 million,
or $0.28 per share for the quarter ended June 30, 2012.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2012, available liquidity was approximately $70.8 million,
comprised of approximately $2.8 million in cash and cash equivalents (net of
approximately $8.8 million in net outstanding acquisitions), and $68 million
in available capacity under the credit facility.
Total leverage outstanding at September 30, 2012 was $182.0 million, comprised
of $48.0 million on our revolving credit facility and $134.0 million on our
preferred equity facility. Borrowings on our revolving credit facility bear
interest at a rate of LIBOR plus 0.44%, and amounts drawn on our preferred
equity facility bear interest at a rate of LIBOR plus 0.85%. The weighted
average interest rate on amounts outstanding on the total leverage facility as
of September 30, 2012 was 0.96%.
Leverage Program ($250 Rate Maturity
$116mm Senior Secured LIBOR + July 2014
Credit Facility 0.44%
$134mm Preferred Equity LIBOR + July 2016
On November 7, 2012, our Board of Directors declared a fourth quarter dividend
of $0.35 per share and a special dividend of $0.05 per share, both payable on
December 31, 2012 to shareholders of record as of December 17, 2012.
Effective November 7, 2012, our Board of Directors elected an additional
independent director, Peter E. Schwab, who is not an “interested person” of
the Company as defined in the Investment Company Act of 1940. Mr. Schwab is a
member of the Audit Committee.
CONFERENCE CALL AND WEBCAST
TCP Capital Corp. will host a conference call on Thursday, November 8, 2012 at
1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) to discuss its third quarter
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 35503974 when prompted.
The conference call will be webcast simultaneously in the investor relations
section of its website at http://investors.tcpcapital.com/. An archived replay
of the call will be available approximately two hours after the live call,
through November 15, 2012. 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 35503974.
ABOUT TCP CAPITAL CORP.
TCP Capital Corp.'s investment objective is to seek to achieve high total
returns while minimizing losses. TCP Capital Corp. seeks to achieve its
investment objective primarily through investments in debt securities of
middle-market companies, which it typically defines as those with enterprise
values between $100 million and $1.5 billion. TCP Capital Corp. is a
publicly-traded [NASDAQ: TCPC] business development company (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, visit www.tcpcapital.com.
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 http://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 initial public
offering prospectus dated April 3, 2012 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 http://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
any prepayment and make-whole fee income and any debt investments on
TCP Capital Corp.
Wendy Webb, 310-566-1042
Press spacebar to pause and continue. Press esc to stop.