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 third fiscal quarter ended July 31, 2011.
As of July 31, 2011, the Company's net assets were approximately $409.1 million, or $17.10 per share, compared with net assets of approximately $414.3 million, or $17.32 per share at the beginning of the quarter and $417.2 million, or $17.35 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 nine portfolio companies, resulting in a net decrease of approximately $2.6 million or $0.11 per share. In arriving at these determinations and consistent with the Company's valuation procedures and ASC 820, the Valuation Committee took into account a variety of factors, including the performance of the portfolio companies, the impact of changes in market multiples within certain sectors and fluctuations in currency valuations.
In the third quarter of 2011, the Company earned approximately $2.5 million in interest and dividend income and approximately $990,000 in fee and other income, representing a decrease in total operating income of approximately $1.8 million as compared to the same quarter in 2010. The decrease in operating income over the same period last year was primarily due to the repayment of investments that provided the Company with current income, reserves against non-performing loans and a decrease in dividend income from the sale of portfolio companies.
The Company nearly broke even on its net operating income for the third quarter, as compared to net operating income of $4.7 million for the same quarter in 2010. The Company decreased the provision for incentive compensation by approximately $463,000 during the quarter as a result of unrealized depreciation within the portfolio.