News Column

Full Circle Capital Corporation Announces Third Quarter Fiscal 2014 Earnings

May 8, 2014

Closed $24.5 Million in New Loan Originations

Declares Monthly Distributions of $0.067 Per Share for a Total of $0.201 Per Share for First Fiscal Quarter 2015, Equal to Annualized Distribution Rate of $0.80 Per Share

RYE BROOK, N.Y.--(BUSINESS WIRE)-- Full Circle Capital Corporation (Nasdaq: FULL) (the “Company”) today announced its financial results for the third quarter of fiscal 2014 ended March 31, 2014.

Financial Highlights for the Third Quarter of Fiscal 2014

  • Total investment income was $3.2 million, an increase of 14.3% compared to $2.8 million for the three months ended March 31, 2013.
  • Net investment income was $1.4 million, or $0.15 per share, compared to $1.3 million, or $0.18 per share, for the three months ended March 31, 2013.
  • Net realized and unrealized gains were $2.0 million, or $0.21 per share. Unrealized gains on investments were $1.8 million, or $0.18 per share. Realized gains were $0.2 million, or $0.02 per share.
  • The above resulted in a net increase in net assets from operations of $3.4 million, or $0.36 per share.
  • Net asset value was $7.20 per share at March 31, 2014.
  • Per share amounts are based on approximately 9.4 million weighted average shares outstanding compared to 7.6 million weighted average shares outstanding for the third quarter of 2013, reflecting the common equity offerings completed in January and February, 2014.
  • Total portfolio investments at March 31, 2014 were $90.1 million compared to $88.1 million at March 31, 2013 and $75.9 million at December 31, 2013.
  • Weighted average portfolio interest rate was 11.41% at March 31, 2014.
  • New originations and expansion of facilities to existing borrowers totaled $25.9 million, including five new portfolio companies, during the three months ended March 31, 2014. Repayments and realizations totaled $9.3 million.
  • At March 31, 2014, 86% of portfolio company investments were first lien senior secured loans.

    On May 2, 2014, the Board of Directors declared monthly distributions for the first quarter of fiscal 2015 as follows:

    Record Date     Payment Date   Per Share Amount
    July 31, 2014     August 15, 2014   $0.067
    August 29, 2014September 15, 2014$0.067
    September 30, 2014     October 15, 2014   $0.067
     


    These distributions equate to a $0.804 annualized distribution rate, or a current annualized yield of 10.65%, based on the closing price of the Company’s common stock of $7.55 per share on May 7, 2014.

    Management Commentary

    “Increased origination activity since the beginning of 2014 has resulted in the closing of six new opportunities to date, totaling $29.0 million. This effectively replaced the $29.0 million of realizations we received in the second and third quarters, resulting in an investment portfolio of $90.1 million at the end of the third quarter. With $45 million in funding capacity at March 31st, we believe we are well positioned to execute on our expanded opportunity set,” said John Stuart, Chairman and Co-Chief Executive Officer of Full Circle Capital Corporation.

    Gregg Felton, President and Co-Chief Executive Officer commented, “The broadening of our investment strategies contributed to an accelerated level of investment activity in the third quarter. We intend to further broaden our origination channels and to continue to expand our investment team to execute on our growing pipeline of investment opportunities.”

    Third Quarter Fiscal 2014 Results

    The Company’s net asset value at March 31, 2014 was $7.20 per share. During the quarter, the Company generated $2.5 million of interest income. Income from fees, dividends and other sources totaled $0.7 million. The Company recorded net investment income of $1.4 million, or $0.15 per share. Net realized and unrealized gains were $2.0 million, or $0.21 per share. Unrealized gains on investments were $1.8 million, or $0.18 per share and realized gains were $0.2 million, or $0.02 per share. Net increase in net assets from operations was $3.4 million, or $0.36 per share. Per share amounts for the quarter ended March 31, 2014 are based on approximately 9.4 million weighted average shares outstanding compared to 7.6 million weighted average shares outstanding for the quarter ended March 31, 2013. This increase reflects the common equity offerings that Full Circle Capital completed in January and February, 2014.

    During the quarter, the Company originated $24.5 million in five new loan facilities. Repayments and realizations from portfolio companies totaled $9.3 million during the three month period.

    At March 31, 2014, the Company’s portfolio included debt investments in 21 companies. The average portfolio company debt investment at March 31, 2014 was $3.7 million. The weighted average interest rate on debt investments was 11.41%. At fair value, 86% of portfolio investments were first lien loans, 0% were second lien loans and 14% were equity investments. Approximately 82% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company’s loans was 64% at March 31, 2014 compared to 54% at March 31, 2013.

    Subsequent Events

    On April 7, 2014, the Board of Directors authorized a share repurchase program which provides for the purchase of up to 1 million shares of outstanding common stock, to be implemented at the discretion of management. Under the repurchase program, Full Circle may, but is not obligated to, repurchase our outstanding common stock in the open market from time to time. The timing and number of shares to be repurchased in the open market will depend on a number of factors, including market conditions and alternative investment opportunities.

    On April 30, 2014, the Company closed on approximately $4.5 million of a $150.0 million senior secured second lien term loan to RCS Capital Corporation, a financial services company. The secured second lien term loan is guaranteed by all existing and subsequent direct and indirect domestic subsidiaries of RCS Capital Corporation, and bears interest at LIBOR plus 9.50% with a minimum LIBOR of 1.00% per annum and has a final maturity of April 29, 2021.

    Conference Call Details

    Management will host a conference call to discuss these results on Friday, May 9, 2014 at 10:00 a.m. ET. To participate in the conference call, please call 866-305-6438 (domestic call-in) or 706-679-7161 (international call-in) and reference code # 42776941.

    A live webcast of the conference call and the accompanying slide presentation will be available at http://ir.fccapital.com/CorporateProfile.aspx?iid=4151676. All participants should call or access the website approximately 10 minutes before the conference begins.

    A telephone replay of the conference call will be available from 1:00 p.m. ET on May 9, 2014 until 11:59 p.m. ET on May 12, 2014 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation # 42776941. An archived replay of the conference call and slide presentation will also be available in the investor relations section of the company’s website.

    About Full Circle Capital Corporation

    Full Circle Capital Corporation (www.fccapital.com) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Full Circle lends to and invests in senior secured loans and, to a lesser extent, mezzanine loans and equity securities issued by lower middle-market companies that operate in a diverse range of industries. Full Circle’s investment objective is to generate both current income and capital appreciation through debt and equity investments. For additional information visit the company’s web site www.fccapital.com.

    Forward-Looking Statements

    This press release contains forward-looking statements which relate to future events or Full Circle's future performance or financial condition. Any statements that are not statements of historical fact (including statements containing the words “believes,” “should,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Full Circle's filings with the Securities and Exchange Commission. Full Circle undertakes no duty to update any forward-looking statements made herein.

     

    FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

             
    March 31, 2014June 30, 2013
    Unaudited Audited
    Assets  
    Control Investments at Fair Value (Cost of $19,842,061 and $18,139,543, respectively)

     

    $ 20,201,058 $ 19,115,440
    Affiliate Investments at Fair Value (Cost of $19,427,127 and $17,954,622, respectively)

     

     

    19,335,138 16,547,903

    Non-Control/Non-Affiliate Investments at Fair Value (Cost of $65,692,689 and $53,220,538, respectively)

     

      60,587,005   52,511,158
    Total Investments at Fair Value (Cost of $104,961,877 and $89,314,703, respectively) 100,123,201 88,174,501
     
    Cash 6,861,986 18,029,115
    Deposit with Broker 1,050,000 -
    Interest Receivable

     

    973,594 1,097,970
    Principal Receivable 420,720 104,768
    Dividends Receivable 80,293 36,705
    Due from Affiliate 1,332 -
    Due from Portfolio Investment 137,337 105,030
    Receivable from Notes Offering - 2,299,704
    Prepaid Expenses 107,459 61,198
    Other Assets 700,710 1,437,273
    Deferred Offering Expenses - 86,834
    Deferred Debt Issuance Costs

     

    987,344 1,086,895
    Deferred Credit Facility Fees

     

      507,550   543,846
     
    Total Assets   111,951,526   113,063,839
     
    Liabilities
    Due to Affiliates

     

    736,897 728,371
    Accounts Payable 186,565 471,297
    Accrued Liabilities 28,967 10,172
    Due to Broker 10,000,073 -
    Payable for Investments Acquired 5,940,000 -
    Dividends Payable 676,143 582,842
    Interest Payable 31,015 134,167
    Other Liabilities 494,316 358,696
    Accrued Offering Expenses 11,000 -
    Line of Credit

     

    - 25,584,147
    Notes Payable 8.25% due June 30, 2020

     

    21,145,525 21,145,525
    Distribution Notes

     

      -   3,404,583
     
    Total Liabilities   39,250,501   52,419,800
     
    Net Assets $ 72,701,025 $ 60,644,039
     
    Components of Net Assets
    Common Stock, par value $0.01 per share (100,000,000 authorized; 10,091,682 and 7,569,382 issued and outstanding, respectively) $ 100,917 $ 75,694
    Paid-in Capital in Excess of Par 83,887,972 66,319,579
    Distributions in Excess of Net Investment Income (1,091,069) (200,200)
    Accumulated Net Realized Losses (5,358,119) (4,410,832)
    Accumulated Net Unrealized Losses   (4,838,676)   (1,140,202)
    Net Assets $ 72,701,025 $ 60,644,039
     
    Net Asset Value Per Share $ 7.20 $ 8.01
     
     

    FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

             
    Three Months Ended

    March 31,
    Nine Months Ended

    March 31,
    2014     20132014     2013
    Investment Income  
    Interest Income from Non-Control/Non-Affiliate Investments $ 1,308,432 $ 1,615,618 $ 4,839,103 $ 5,609,673
    Interest Income from Affiliate Investments 673,896 389,518 1,984,549 950,026
    Interest Income from Control Investments 510,038 435,300 1,452,149 1,033,884
    Dividend Income from Control Investments 80,293 80,178 114,704 186,768
    Other Income from Non-Control/Non-Affiliate Investments

     

    603,190 305,935 1,966,552 834,515
    Other Income from Affiliate Investments

     

    3,275 3,992 12,156 63,577
    Other Income from Control Investments

     

      12,500   12,500   37,500   37,500
    Total Investment Income   3,191,624   2,843,041   10,406,713   8,715,943
     
    Operating Expenses
    Management Fee

     

    364,352 362,743 1,156,099 1,041,905
    Incentive Fee

     

      351,594   328,044   1,141,230   1,001,406
    Total Advisory Fees   715,946   690,787   2,297,329   2,043,311
     
    Allocation of Overhead Expenses

     

    43,604 84,552 142,315 225,860
    Sub-Administration Fees

     

    50,000 50,000 150,000 173,429
    Officers’ Compensation

     

      75,529   75,160   226,396   225,514
    Total Costs Incurred Under Administration Agreement   169,133   209,712   518,711   624,803
     
    Directors’ Fees 26,125 24,625 86,375 86,375
    Interest Expense

     

    623,091 379,310 2,062,570 1,214,392
    Professional Services Expense 112,629 108,998 467,110 384,061
    Bank Fees 9,941 3,975 45,409 12,295
    Other   128,380   113,470   379,015   334,647
    Total Operating Expenses 1,785,245 1,530,877 5,856,519 4,699,884
     
    Net Investment Income 1,406,379 1,312,164 4,550,194 4,016,059
    Net Change in Unrealized Gain (Loss) on Investments 1,751,729 168,654 (3,698,474) 1,978,556
    Net Realized Gain (Loss) on:
    Investments 224,320 - (946,449) (4,047,108)
    Foreign Currency Transactions   (906)   -   (838)   -
    Net Realized Gain (Loss)   223,414   -   (947,287)   (4,047,108)
     
    Net Increase (Decrease) in Net Assets Resulting from Operations $ 3,381,522 $ 1,480,818 $ (95,567) $ 1,947,507
     
    Earnings (Loss) per Common Share Basic and Diluted

     

    $ 0.36 $ 0.20 $ (0.01) $ 0.28
    Net Investment Income per Common Share Basic and Diluted $ 0.15 $ 0.18 $ 0.56 $ 0.59
    Weighted Average Shares of Common Share Outstanding Basic and Diluted 9,419,350 7,569,382 8,177,036 6,835,258
     
     

    FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

    FINANCIAL HIGHLIGHTS (unaudited)

             
    Three monthsThree monthsNine monthsNine months
    endedendedendedended
    March 31, 2014March 31, 2013March 31, 2014March 31, 2013  
     
    Per Share Data (1) :
    Net asset value at beginning of period $ 7.09 $ 8.03 $ 8.01 $ 8.59
    Dilution from offering - (3) - - (0.17) (2)
    Offering costs (0.03) - (0.03) (0.01)
    Net investment income (loss) 0.15 0.18 0.56 0.59
    Change in unrealized gain (loss) 0.18 0.02 (0.53) 0.28
    Realized gain (loss) 0.02 0.00 (0.14) (0.59)
    Dividends declared   (0.21)   (0.23)   (0.67)   (0.69)  
    Net asset value at end of period $ 7.20 $ 8.00 $ 7.20 $ 8.00  
    (1)   Financial highlights are based on weighted average shares outstanding.
    (2) Dilution from offering is based on the change in net asset value from a follow on offering on November 27, 2012.
    (3) Dilution from offering is based on the change in net asset value from the follow-on offerings on January 14, 2014 and February 27, 2014.





    Company Contact:

    Full Circle Capital Corporation

    John E. Stuart, Co-CEO

    914-220-6300

    jstuart@fccapital.com

    or

    Investor Relations Contacts:

    LHA

    Stephanie Prince/Jody Burfening

    212-838-3777

    sprince@lhai.com

    Source: Full Circle Capital Corporation


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    Source: Business Wire