MVC Capital, Inc. (NYSE: MVC), a publicly traded business development company that makes private equity and debt investments, today announced its financial results for the second fiscal quarter ended April 30, 2011.
As of April 30, 2011, the Company's net assets were approximately $414.3 million, or $17.32 per share, compared with net assets of approximately $415.9 million, or $17.33 per share, at the beginning of the quarter and $434.7 million, or $17.89 per share, at the end of the same period last year. During the quarter, the Valuation Committee, which is comprised of three independent directors, adjusted the fair values of 12 portfolio companies, resulting in a net increase of approximately $2.7 million or $0.11 per share. In arriving at these determinations and consistent with the Company's valuation procedures and ASC 820 (formerly FAS 157), the Valuation Committee took into account many factors, including the performance of the portfolio companies, as well as the impact of changes in market multiples within certain sectors and fluctuations in currency valuations.
In the second quarter of 2011, the Company earned approximately $2.7 million in interest and dividend income and approximately $1.8 million in fee and other income, representing a decrease in total operating income of approximately $792,000 as compared to the same quarter in 2010. The primary reasons for the decline in total operating income were a result of the prepayment of investments that provide current income, reserves against non-performing loans as well as the reduction in dividend income received from exited portfolio companies.
The Company reported net operating income of approximately $65,000 for the second quarter, as compared to a net operating loss of approximately $892,000 for the same quarter in 2010, due primarily to a lower incentive compensation accrual. The Company continued to manage its expenses allowing for similar expense levels across most operating line items (excluding incentive compensation) as compared to the same period last year.