Capitala Finance Corp. Reports Third Quarter 2017 Results
Third Quarter Highlights
-
Net investment income of
$4.4 million , or$0.28 per share, for the third quarter of 2017 -
Net asset value per share of
$14.21 atSeptember 30, 2017 -
Reduced non-performing investments from 18.0% at
June 30, 2017 to 12.6% atSeptember 30, 2017 , on a cost basis
Management Commentary
Commenting on the Company’s third quarter report,
Third Quarter 2017 Financial Results
Total investment income was
Total expenses for the third quarter of 2017 were
Net investment income for the third quarter of 2017 was
Net realized losses totaled
Net unrealized appreciation, inclusive of the written call option,
totaled
For the third quarter of 2017, the Company recorded
The net decrease in net assets resulting from operations was
Investment Activity
During the third quarter of 2017, the Company invested
Investment Portfolio
As of
At
Liquidity and Capital Resources
At
Subsequent Events
On
Third Quarter 2017 Financial Results Conference Call
Management will host a conference call to discuss the operating and
financial results at
About
About
Forward-Looking Statements
This press release contains certain forward-looking statements. Words
such as “believes,” “intends,” “expects,” “projects,” “anticipates,” and
“future” or similar expressions are intended to identify 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 the Company’s filings
with the
Capitala Finance Corp. | ||||||||||
Consolidated Statements of Assets and Liabilities | ||||||||||
(in thousands, except share and per share data) | ||||||||||
As of | ||||||||||
September 30, 2017 | December 31, 2016 | |||||||||
(unaudited) | ||||||||||
ASSETS | ||||||||||
Investments at fair value | ||||||||||
Non-control/non-affiliate investments (amortized cost of $276,221 and $391,706, respectively) | $ | 274,795 | $ | 393,525 | ||||||
Affiliate investments (amortized cost of $76,414 and $39,279, respectively) | 98,101 | 61,464 | ||||||||
Control investments (amortized cost of $102,079 and $82,791, respectively) | 98,210 | 86,650 | ||||||||
Total investments at fair value (amortized cost of $454,714 and $513,776, respectively) | 471,106 | 541,639 | ||||||||
Cash and cash equivalents | 52,307 | 36,281 | ||||||||
Interest and dividend receivable | 4,246 | 5,735 | ||||||||
Due from related parties | 74 | 182 | ||||||||
Prepaid expenses | 409 | 506 | ||||||||
Other assets | 82 | 72 | ||||||||
Total assets | $ | 528,224 | $ | 584,415 | ||||||
LIABILITIES | ||||||||||
SBA debentures (net of deferred financing costs of $2,454 and $2,911, respectively) | $ | 168,246 | $ | 167,789 | ||||||
2021 Notes (net of deferred financing costs of $0 and $3,025, respectively) | - | 110,413 | ||||||||
2022 Notes (net of deferred financing costs of $2,618 and $0, respectively) | 72,382 | - | ||||||||
2022 Convertible Notes (net of deferred financing costs of $1,658 and $0, respectively) | 50,430 | - | ||||||||
Credit Facility (net of deferred financing costs of $1,096 and $759, respectively) | (1,096 | ) | 43,241 | |||||||
Due to related parties | - | 35 | ||||||||
Management and incentive fee payable | 2,228 | 6,426 | ||||||||
Interest and financing fees payable | 1,512 | 2,657 | ||||||||
Accounts payable and accrued expenses | - | 536 | ||||||||
Deferred tax liability | 2,660 | - | ||||||||
Written call option at fair value (proceeds of $20 and $20, respectively) | 5,555 | 2,736 | ||||||||
Total liabilities | $ | 301,917 | $ | 333,833 | ||||||
Commitments and contingencies | ||||||||||
NET ASSETS | ||||||||||
Common stock, par value $.01, 100,000,000 common shares authorized, 15,930,631 and 15,868,045 common shares issued and outstanding, respectively |
$ | 159 | $ | 159 | ||||||
Additional paid in capital | 240,897 | 240,184 | ||||||||
Undistributed net investment income | 15,684 | 22,973 | ||||||||
Accumulated net realized losses from investments | (38,630 | ) | (37,881 | ) | ||||||
Net unrealized appreciation on investments, net of deferred taxes | 13,732 | 27,863 | ||||||||
Net unrealized depreciation on written call option | (5,535 | ) | (2,716 | ) | ||||||
Total net assets | $ | 226,307 | $ | 250,582 | ||||||
Total liabilities and net assets | $ | 528,224 | $ | 584,415 | ||||||
Net asset value per share | $ | 14.21 | $ | 15.79 | ||||||
Capitala Finance Corp. | ||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
For the Three Months Ended September 30 | For the Nine Months Ended September 30 | |||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||
INVESTMENT INCOME | ||||||||||||||||||||
Interest and fee income: | ||||||||||||||||||||
Non-control/Non-affiliate investments | $ | 6,935 | $ | 10,520 | $ | 23,978 | $ | 31,870 | ||||||||||||
Affiliate investments | 1,187 | 1,150 | 3,344 | 4,754 | ||||||||||||||||
Control investments | 1,639 | 3,545 | 5,209 | 8,681 | ||||||||||||||||
Total interest and fee income | 9,761 | 15,215 | 32,531 | 45,305 | ||||||||||||||||
Payment-in-kind interest and dividend income: | ||||||||||||||||||||
Non-control/Non-affiliate investments | 1,103 | 1,176 | 3,810 | 2,966 | ||||||||||||||||
Affiliate investments | 611 | 101 | 1,254 | 293 | ||||||||||||||||
Control investments | 166 | 241 | 574 | 707 | ||||||||||||||||
Total payment-in-kind interest and dividend income | 1,880 | 1,518 | 5,638 | 3,966 | ||||||||||||||||
Dividend income: | ||||||||||||||||||||
Non-control/Non-affiliate investments | - | - | 168 | 206 | ||||||||||||||||
Affiliate investments | 555 | 29 | 612 | 86 | ||||||||||||||||
Control investments | 25 | 545 | 330 | 2,135 | ||||||||||||||||
Total dividend income | 580 | 574 | 1,110 | 2,427 | ||||||||||||||||
Other Income | 48 | 42 | 125 | 85 | ||||||||||||||||
Interest income from cash and cash equivalents | 43 | 8 | 85 | 15 | ||||||||||||||||
Total investment income | 12,312 | 17,357 | 39,489 | 51,798 | ||||||||||||||||
EXPENSES | ||||||||||||||||||||
Interest and financing expenses | 4,585 | 4,938 | 14,726 | 14,990 | ||||||||||||||||
Loss on extinguishment of debt | - | - | 2,732 | - | ||||||||||||||||
Base management fee | 2,417 | 2,619 | 7,436 | 8,049 | ||||||||||||||||
Incentive fees | - | 1,782 | 1,308 | 5,155 | ||||||||||||||||
General and administrative expenses | 900 | 889 | 2,941 | 2,984 | ||||||||||||||||
Expenses before incentive fee waiver | 7,902 | 10,228 | 29,143 | 31,178 | ||||||||||||||||
Incentive fee waiver | - | (312 | ) | (958 | ) | (1,673 | ) | |||||||||||||
Total expenses, net of incentive fee waiver | 7,902 | 9,916 | 28,185 | 29,505 | ||||||||||||||||
NET INVESTMENT INCOME | 4,410 | 7,441 | 11,304 | 22,293 | ||||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||||||||||||||||||||
Net realized gain (loss) from investments: | ||||||||||||||||||||
Non-control/Non-affiliate investments | (10,381 | ) | 1,192 | (5,336 | ) | 1,261 | ||||||||||||||
Affiliate investments | 98 | (18,222 | ) | 4,587 | (26,303 | ) | ||||||||||||||
Control investments | - | - | - | 145 | ||||||||||||||||
Total realized gain (loss) from investments | (10,283 | ) | (17,030 | ) | (749 | ) | (24,897 | ) | ||||||||||||
Net unrealized appreciation (depreciation) on investments: | ||||||||||||||||||||
Non-control/non-affiliate investments | 9,605 | (8,217 | ) | (3,245 | ) | (6,915 | ) | |||||||||||||
Affiliate investments | (1,472 | ) | 15,230 | (498 | ) | 3,060 | ||||||||||||||
Control investments | (4,946 | ) | 1,461 | (7,728 | ) | 8,412 | ||||||||||||||
Total unrealized gain (loss) from investments | 3,187 | 8,474 | (11,471 | ) | 4,557 | |||||||||||||||
Net unrealized depreciation on written call option | (407 | ) | (898 | ) | (2,819 | ) | (898 | ) | ||||||||||||
Change in provision for deferred taxes on unrealized appreciation on investments | (2,660 | ) | (2,660 | ) | ||||||||||||||||
Net gain (loss) on investments | (10,163 | ) | (9,454 | ) | (17,699 | ) | (21,238 | ) | ||||||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (5,753 | ) | $ | (2,013 | ) | $ | (6,395 | ) | $ | 1,055 | |||||||||
NET INCREASE IN NET ASSETS PER SHARE RESULTING FROM OPERATIONS – BASIC AND DILUTED | $ | (0.36 | ) | $ | (0.13 | ) | $ | (0.40 | ) | $ | 0.07 | |||||||||
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED | 15,911,160 | 15,829,878 | 15,891,636 | 15,807,801 | ||||||||||||||||
DISTRIBUTIONS PAID PER SHARE | $ | 0.39 | $ | 0.47 | $ | 0.78 | $ | 1.41 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171106005095/en/
Source:
Capitala Finance Corp.
Stephen Arnall, 704-376-5502
Chief
Financial Officer
sarnall@capitalagroup.com