OXFORD SQUARE CAPITAL CORP GREENWICH, CT -- (Marketwired) -- 02/26/15 -- TICC Capital Corp. (NASDAQ: TICC) announced today its financial results for the quarter and year ended December 31, 2014, and announced a distribution of $0.27 per share for the first quarter of 2015.
HIGHLIGHTS
- For the year ended December 31, 2014, we recorded approximately $117.3 million of total investment income and $65.5 million of net investment income, compared to $105.1 million of total investment income and $55.8 million of net investment income for the year ended December 31, 2013.
-
For the quarter ended December 31, 2014, we recorded net investment income of approximately $12.8 million, or approximately $0.21 per share (including the effect of approximately $0.05 per share of accelerated expenses, described below). In the fourth quarter, we also recorded net realized capital losses of approximately $7.3 million and net unrealized depreciation of approximately $33.9 million. In total, we had a net decrease in net assets resulting from operations of approximately $28.4 million or approximately $0.47 per share for the fourth quarter.
-
Total investment income for the fourth quarter of 2014 amounted to approximately $28.6 million, which represents a decrease of approximately $1.6 million from the third quarter of 2014.
-
For the quarter ended December 31, 2014, we recorded investment income from our portfolio as follows:
- approximately $12.9 million from our debt investments,
- approximately $14.5 million from our collateralized loan obligation ("CLO") equity investments, and
- approximately $1.2 million from all other sources.
-
For the quarter ended December 31, 2014, we recorded investment income from our portfolio as follows:
- As of the end of the fourth quarter of 2014 we held one loan on non-accrual status with a par amount of approximately $12.8 million and a fair value of approximately $6.7 million.
- Our weighted average credit rating on a fair value basis was 2.1 at the end of the fourth quarter of 2014 (compared to 2.1 at the end of the third quarter of 2014).
-
Our operating expenses before the capital gains incentive fee for the quarter ended December 31, 2014 were approximately $15.8 million, up from the third quarter of 2014 by approximately $2.3 million.
-
In connection with the October 27, 2014 redemption of the secured notes issued by TICC CLO LLC, we accelerated costs of approximately $3.1 million of discount and deferred debt issuance costs, representing approximately $0.05 per share for the fourth quarter.
- On October 27th, 2014, TICC Funding, LLC, our newly formed subsidiary, entered into a revolving credit facility ("Facility") with Citibank, N.A. Subject to certain exceptions, pricing under the Facility is based on three month LIBOR plus a spread of 1.50%. Pursuant to the terms of the credit agreement governing the Facility, TICC Funding has borrowed, on a revolving basis, the maximum aggregate principal amount of $150,000,000. The revolving basis period will end on October 27, 2016 ("Reinvestment Period"), subject to certain exceptions. Post Reinvestment Period, the Facility has a mandatory amortization schedule such that twenty-five percent (25.0%) and fifty percent (50.0%) of the principal amount outstanding as of October 27, 2016 will be due and payable, on January 18, 2017 and April 18, 2017, respectively, and the remaining principal amount outstanding and accrued and unpaid interest thereunder will be due and payable on October 27, 2017. We used part of the proceeds from the Facility to redeem all of the $101,250,000 secured notes issued by TICC CLO LLC. The secured notes previously issued under TICC CLO LLC were based on three month LIBOR plus a spread of 2.25%.
-
In connection with the October 27, 2014 redemption of the secured notes issued by TICC CLO LLC, we accelerated costs of approximately $3.1 million of discount and deferred debt issuance costs, representing approximately $0.05 per share for the fourth quarter.
-
Total investment income for the fourth quarter of 2014 amounted to approximately $28.6 million, which represents a decrease of approximately $1.6 million from the third quarter of 2014.
-
The capital gains incentive fee calculation for the quarter ended December 31, 2014, did not result in an accrual adjustment. 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 to our investment adviser on December 31, 2014 in the event of a complete liquidation of our portfolio as of year-end. As of December 31, 2014, the calculation of a capital gains incentive fee, using the assumptions above, resulted in no liability.
The amount of the capital gains incentive fee, if any, which will actually be payable is determined in accordance with the terms of the Investment Advisory Agreement ("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 was not earned for the calendar year 2014. -
Our Board of Directors has declared a distribution of $0.27 per share for the first quarter of 2015.
- Payable Date: March 31, 2015
- Record Date: March 17, 2015
-
During the fourth quarter of 2014, we made approximately $193.8 million in additional investments. The additional investments consisted of approximately $166.6 million in corporate securities and $27.2 million in CLO equity.
- It is worth noting that for the year ended December 31, 2014, we invested approximately $552.6 million, consisting of $405.4 million in corporate securities and $147.2 million in CLO equity.
-
For the fourth quarter of 2014, we received proceeds of approximately $112.0 million from repayments, sales and amortization payments on our debt investments.
- As of December 31, 2014, the weighted average yield of our debt investments stood at approximately 7.8%, compared with 8.0% as of September 30, 2014.
- As of December 31, 2014, the weighted average yield of our CLO equity investments remained approximately 23.3%, compared with 23.3% as of September 30, 2014.
-
As of December 31, 2014, net asset value per share was $8.64 compared with the net asset value per share as of September 30, 2014 of $9.40.
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 and year ended December 31, 2014:
Three Months Ended Year Ended
December 31, 2014 December 31, 2014
------------------------- --------------------------
Per Share Per Share
Amount Amounts Amount Amounts
------------ ------------ ------------ ------------
Net investment income $ 12,762,549 $ 0.21 $ 65,457,844 $ 1.113
Capital gains
incentive fee
(reversal) - - (3,872,853) (0.066)
------------ ------------ ------------ ------------
Core net investment
income $ 12,762,549 $ 0.21 $ 61,584,991 $ 1.047
============ ============ ============ ============
We will host a conference call to discuss our fourth quarter and year end results today, Thursday, February 26, 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 1061289.
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, 2014, and subsequent reports on Form 10-Q as they are filed.
TICC CAPITAL CORP.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
December 31, December 31,
2014 2013
---------------- ----------------
ASSETS
Non-affiliated/non-control
investments (cost: $999,433,538
@12/31/14; $901,728,071 @ 12/31/13) $ 967,612,035 $ 915,546,744
Affiliated investments (cost:
$4,268,722 @ 12/31/14; $0 @
12/31/13) 1,585,303 -
Control investments (cost:
$16,800,000 @ 12/31/14; $16,900,000
@ 12/31/13) 14,960,000 16,050,000
---------------- ----------------
Total investments at fair value
(cost: $1,020,502,260 @ 12/31/14;
$918,628,071 @ 12/31/13) 984,157,338 931,596,744
---------------- ----------------
Cash and cash equivalents 20,505,323 14,933,074
Restricted cash 20,576,250 32,428,248
Deferred debt issuance costs 5,669,747 7,985,580
Interest and distributions
receivable 11,442,289 11,133,972
Other assets 290,245 88,122
---------------- ----------------
Total assets 1,042,641,192 $ 998,165,740
================ ================
LIABILITIES
Accrued interest payable $ 2,596,564 $ 2,596,893
Investment advisory fee payable to
affiliate 6,183,486 7,144,480
Accrued capital gains incentive fee
to affiliate - 3,872,853
Securities purchased not settled 11,343,179 6,994,852
Credit facility 150,000,000 -
Accrued expenses 629,127 637,896
Notes payable - TICC CLO LLC, net of
discount - 100,041,226
Notes payable - TICC CLO 2012-1 LLC,
net of discount 236,075,775 235,635,114
Convertible senior notes payable 115,000,000 115,000,000
---------------- ----------------
Total liabilities 521,828,131 471,923,314
---------------- ----------------
COMMITMENTS AND CONTINGENCIES (Note 7)
NET ASSETS
Common stock, $0.01 par value,
100,000,000 share authorized;
60,303,769 and 53,400,745 shares
issued and outstanding,
respectively 603,038 534,007
Capital in excess of par value 623,018,818 561,336,766
Net unrealized (depreciation)
appreciation on investments (36,344,922) 12,968,673
Accumulated net realized losses on
investments (63,212,472) (45,439,234)
Distributions in excess of
investment income (3,251,401) (3,157,786)
---------------- ----------------
Total net assets 520,813,061 526,242,426
---------------- ----------------
Total liabilities and net assets $ 1,042,641,192 $ 998,165,740
================ ================
Net asset value per common share $ 8.64 $ 9.85
TICC CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2014 2013 2012
------------ ------------ ------------
INVESTMENT INCOME
From non-affiliated/non-control
investments:
Interest income - debt
investments $ 50,855,738 $ 52,133,176 $ 38,597,973
Distributions from
securitization vehicles and
equity investments 59,516,739 47,241,423 25,755,438
Commitment, amendment fee income
and other income 5,451,167 4,278,203 5,247,571
------------ ------------ ------------
Total investment income from
non-affiliated/non-control
investments 115,823,644 103,652,802 69,600,982
------------ ------------ ------------
From affiliated investments:
Interest income - debt
investments 116,738 - -
------------ ------------ ------------
Total investment income from
affiliated investments 116,738 - -
------------ ------------ ------------
From control investments:
Interest income - debt
investments 1,384,358 1,439,341 1,511,897
Distributions from equity
investments - - 62,041
------------ ------------ ------------
Total investment income from
control investments 1,384,358 1,439,341 1,573,938
------------ ------------ ------------
Total investment income 117,324,740 105,092,143 71,174,920
------------ ------------ ------------
EXPENSES
Compensation expense 1,860,683 1,647,971 1,183,056
Investment advisory fees 21,150,190 19,096,229 11,222,713
Professional fees 2,149,699 1,996,290 1,873,892
Interest expense and other debt
financing expenses 22,907,942 18,960,677 7,262,714
Insurance 68,638 68,638 68,826
Directors' Fees 316,500 322,501 261,000
Transfer agent and custodian
fees 284,212 229,124 128,692
General and administrative 1,398,064 1,589,758 1,027,606
------------ ------------ ------------
Total expenses before
incentive fees 50,135,928 43,911,188 23,028,499
------------ ------------ ------------
Net investment income incentive
fees 5,603,821 6,580,705 5,460,006
Capital gains incentive fees (3,872,853) (1,192,382) 5,509,061
------------ ------------ ------------
Total incentive fees 1,730,968 5,388,323 10,969,067
------------ ------------ ------------
Total expenses 51,866,896 49,299,511 33,997,566
------------ ------------ ------------
Net investment income 65,457,844 55,792,632 37,177,354
------------ ------------ ------------
Net change in unrealized
appreciation on investments
Non-Affiliate/non-control
investments (49,550,856) (3,199,673) 14,340,762
Affiliated investments 1,227,261 - -
Control investments (990,000) (43,821) (71,808)
------------ ------------ ------------
Total net change in unrealized
appreciation on investments (49,313,595) (3,243,494) 14,268,954
------------ ------------ ------------
Net realized (losses) gains on
investments
Non-Affiliated/non-control
investments (14,788,183) 6,395,596 16,876,880
Affiliated investments (4,704,466) - -
------------ ------------ ------------
Total net realized (losses)
gains on investments (19,492,649) 6,395,596 16,876,880
------------ ------------ ------------
Net (decrease) increase in net
assets resulting from operations $ (3,348,400) $ 58,944,734 $ 68,323,188
============ ============ ============
Net increase in net assets
resulting from net investment
income per
common share:
Basic $ 1.11 $ 1.09 $ 0.98
Diluted $ 1.06 $ 1.03 $ 0.96
Net (decrease) increase in net
assets resulting from operations
per
common share:
Basic $ (0.06) $ 1.15 $ 1.80
Diluted $ (0.06) $ 1.09 $ 1.73
Weighted average shares of common
stock outstanding:
Basic 58,822,732 51,073,758 37,978,693
Diluted 68,855,884 61,106,910 40,575,776
TICC CAPITAL CORP.
FINANCIAL HIGHLIGHTS (UNAUDITED)
Year Ended Year Ended Year Ended Year Ended Year Ended
December December December December December
31, 31, 31, 31, 31,
2014 2013 2012 2011 2010
----------- ----------- ----------- ----------- -----------
Per Share Data
Net asset value
at beginning of
period $9.85 $9.90 $9.30 $9.85 $8.36
----------- ----------- ----------- ----------- -----------
Net investment
income (1) 1.11 1.09 0.98 0.92 0.89
Net realized and
unrealized
capital
(losses) gains
(2) (1.14) 0.06 0.82 (0.47) 1.19
----------- ----------- ----------- ----------- -----------
Total from net
investment
operations (0.03) 1.15 1.80 0.45 2.08
----------- ----------- ----------- ----------- -----------
Distributions
from net
investment
income (1.00) (1.16) (1.12) (0.99) (0.81)
Distributions
based on
weighted
average share
impact (0.03) (0.04) (0.04) -- --
Tax return of
capital
distributions (0.16) -- -- -- --
----------- ----------- ----------- ----------- -----------
Total
distributions
(3) (1.19) (1.20) (1.16) (0.99) (0.81)
Effect of shares
issued, net of
offering
expenses -- -- (0.04) (0.01) 0.22
Effect of shares
repurchased,
gross 0.01 -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value
at end of
period $8.64 $9.85 $9.90 $9.30 $9.85
=========== =========== =========== =========== ===========
Per share market
value at
beginning of
period $10.34 $10.12 $8.65 $11.21 $6.05
Per share market
value at end of
period $7.53 $10.34 $10.12 $8.65 $11.21
Total return (4) (17.22)% 14.68% 30.49% (14.19)% 102.39%
Shares
outstanding at
end of period 60,303,769 53,400,745 41,371,286 32,818,428 31,886,367
Ratios/Supplemen
tal Data
Net assets at
end of period
(000's) 520,813 526,242 409,603 305,102 314,118
Average net
assets (000's) 560,169 506,093 363,584 318,305 243,723
Ratio of
expenses to
average net
assets:
Expenses before
incentive fees 8.95% 8.68% 6.33% 3.72% 3.22%
Net investment
income
incentive fees 1.00% 1.30% 1.50% 0.70% 0.58%
Capital gains
incentive fees (0.69)% (0.24)% 1.52% 0.35% --
Total ratio of
expenses to
average net
assets 9.26% 9.74% 9.35% 4.77% 3.80%
Ratio of
expenses,
excluding
interest
expense, to
average net
assets 5.17% 6.00% 7.35% 4.38% 3.80%
Ratio of net
investment
income to
average net
assets 11.69% 11.02% 10.23% 9.42% 9.95%
(1) Represents per share net investment income for the period, based upon
average shares outstanding.
(2) Net realized and unrealized capital gains and losses 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.
(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.
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.
Contacts: Bruce Rubin 203-983-5280 Patrick Conroy 203-983-5282
Source: TICC Capital Corp.
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