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TheStreet Open House

MCG Capital Corporation Reports Second Quarter 2011 Results

Stock quotes in this article: MCGC

MCG Capital Corporation (Nasdaq: MCGC) (“MCG” or the “Company”) announced today its financial results for the quarter ended June 30, 2011. MCG will host an investment community conference call today, August 4, 2011 at 10:30 a.m. (Eastern Time). Slides and financial information to be reviewed during the investor conference call will be available on MCG’s website at http://www.mcgcapital.com prior to the call.

HIGHLIGHTS

-- Distributable net operating income, or DNOI, for the quarter ended June 30, 2011 was $11.6 million, or $0.15 per share. DNOI refers to net operating income adjusted for amortization of employee restricted stock awards.

-- Net operating income for the quarter ended June 30, 2011 was $11.2 million, or $0.15 per share.

-- Net loss for the quarter ended June 30, 2011 was $10.2 million, or $0.13 per share.

-- Net investment loss for the quarter ended June 30, 2011 was $21.4 million, which included a $24.8 million reduction in the fair value of Broadview Networks Holdings, Inc., or Broadview, resulting from a change in the methodology used to value this portfolio company from a projected forward EBITDA and new owner cash flow basis to a trailing EBITDA basis.

-- During the quarter ended June 30, 2011, MCG had $107.8 million of advances and originations, including $52.5 million in investments to five new portfolio companies. Payoffs and portfolio monetization activities totaled $178.2 million during the quarter.

-- MCG’s ratio of total assets to total borrowings and other senior securities was 232% as of June 30, 2011.

DIVIDEND DECLARATION

MCG also announced today that its board of directors declared a dividend of $0.17 per share. The dividend is payable as follows:

Record date: September 14, 2011
Payable date: October 14, 2011
 

OVERVIEW

Today, MCG reported a second quarter 2011 net loss of $10.2 million, or $0.13 per basic and diluted share, which represented a $9.5 million, or $0.12 per share, decrease from the net loss of $0.8 million, or $0.01 per share, reported for the comparable period in 2010. The incremental net loss resulted primarily from an $8.5 million increase in MCG’s net investment loss before income tax provision and a $3.5 million reduction in gain on extinguishment of debt, partially offset by a $3.0 million reduction in operating expense.

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