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MVC Capital Announces Fourth Quarter And Full Year Fiscal 2012 Results

Stocks in this article: MVC

Forward-Looking Statements

The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in the company's periodic filings with the Securities and Exchange Commission.

MVC Capital, Inc.
Consolidated Balance Sheets
     
  October 31, October 31,
  2012 2011
     
ASSETS    
     
Assets    
Cash and cash equivalents  $ 36,160,558  $ 28,317,460
Restricted cash and cash equivalents  6,480,000  6,925,000
Investments at fair value    
Non-control/Non-affiliated investments (cost $54,629,419 and $90,292,464)  34,197,990  51,182,558
Affiliate investments (cost $128,521,214 and $126,356,770)  178,396,856  187,953,099
Control investments (cost $149,281,248 and $141,569,773)  191,575,802  213,079,430
Total investments at fair value (cost $332,431,881 and $358,219,007)  404,170,648  452,215,087
Dividends and interest receivables, net of reserves  4,559,703  3,277,126
Fee and other receivables  3,314,116  4,595,741
Escrow receivables  991,563  1,146,899
Prepaid expenses  753,501  629,868
Prepaid taxes  591  --
     
Total assets  $ 456,430,680  $ 497,107,181
     
LIABILITIES AND SHAREHOLDERS' EQUITY
     
Liabilities    
Term loan  $ 50,000,000  $ 50,000,000
Provision for incentive compensation (Note 5)  15,655,438  23,938,058
Management fee payable  2,027,571  2,303,655
Management fee payable - Asset Management  1,054,433  297,250
Professional fees payable  767,835  703,293
Other accrued expenses and liabilities   734,501  288,111
Portfolio fees payable - Asset Management  140,293  --
Consulting fees payable  34,476  64,999
Taxes payable  --  2,099
     
Total liabilities  70,414,547  77,597,465
     
Shareholders' equity    
Common stock, $0.01 par value; 150,000,000 shares authorized; 23,916,982 and 23,916,982 shares outstanding, respectively   283,044  283,044
Additional paid-in-capital  425,651,660  428,428,139
Accumulated earnings  64,524,665  40,499,006
Dividends paid to stockholders  (92,010,775)  (80,171,868)
Accumulated net realized loss  (46,401,983)  (25,755,440)
Net unrealized appreciation  71,738,767  93,996,080
Treasury stock, at cost, 4,387,466 and 4,387,466 shares held, respectively  (37,769,245)  (37,769,245)
     
Total shareholders' equity  386,016,133  419,509,716
     
Total liabilities and shareholders' equity  $ 456,430,680  $ 497,107,181
     
Net asset value per share  $ 16.14  $ 17.54
     
The accompanying notes are an integral part of these consolidated financial statements.    

MVC Capital, Inc.
Consolidated Statements of Operations
       
       
  For the Year Ended For the Year Ended  For the Year Ended
  October 31, 2012 October 31, 2011 October 31, 2010
Operating Income:      
Dividend income      
Non-control/Non-affiliated investments  $ 7,755  $ 246,234  $  --
Affiliate investments  2,481,234  341,043  1,893,133
Control investments  12,000,000  --   --
       
Total dividend income  14,488,989  587,277  1,893,133
       
Payment-in-kind dividend income      
Affiliate investments   249,347  230,358  382,398
       
Total payment-in-kind dividend income  249,347  230,358  382,398
       
Interest income      
Non-control/Non-affiliated investments  2,050,801  2,356,210  6,720,255
Affiliate investments  3,111,318   2,978,289  2,751,668
Control investments  2,423,174  2,353,376  2,388,872
       
Total interest income  7,585,293   7,687,875  11,860,795
       
Payment-in-kind interest income      
Non-control/Non-affiliated investments  44,304  268,423  1,972,985
Affiliate investments  2,024,462  1,920,686  2,256,028
Control investments  812,929  755,254  949,897
       
Total payment-in-kind interest income  2,881,695  2,944,363  5,178,910
       
Fee income      
Non-control/Non-affiliated investments   68,056  1,086,961  352,679
Affiliate investments  1,105,226  1,130,131  2,717,090
Control investments   766,631  566,426  626,780
       
Total fee income  1,939,913  2,783,518  3,696,549
       
Fee income - Asset Management 1      
Portfolio fees  1,290,160  --  --
Management fees  1,009,577  396,333   --
       
Total fee income - Asset Management  2,299,737  396,333  --
       
Other income  442,138   1,341,241  509,712
       
Total operating income 29,887,112 15,970,965  23,521,497
       
Operating Expenses:      
Management fee   8,587,992  8,844,572  9,329,809
Interest and other borrowing costs  3,366,756  3,082,125  2,824,788
Portfolio fees - Asset Management 1  967,620  --  --
Management fee - Asset Management 1  757,183  297,250   --
Audit & tax preparation fees  769,500  560,800  548,500
Legal fees  635,238  884,472  487,000
Other expenses  590,859  1,209,693  832,391
Consulting fees  384,104  550,271   366,200
Directors' fees  348,833  329,000  346,800
Insurance  333,752  348,027   353,135
Administration  261,914  268,146  273,986
Printing and postage  129,942  80,280   103,396
Public relations fees  119,700  89,800  84,000
Net Incentive compensation (Note 5)  (5,937,431)  1,947,744  2,479,167
       
Total operating expenses 11,315,962  18,492,180  18,029,172
       
Less: Voluntary Expense Waiver by Adviser 2   (150,000)  (150,000)  (150,000)
Less: Voluntary Management Fee Waiver by Adviser 3  (58,728)  (100,635)  --
Less: Voluntary Incentive Fee Waiver by Adviser 4  (2,345,189)  --  --
Total waivers  (2,553,917)  (250,635)  (150,000)
       
Net operating income (loss) before taxes  21,125,067  (2,270,580) 5,642,325
       
Tax Expenses:      
Current tax expense   3,997  13,557  8,476
       
Total tax expense 3,997  13,557  8,476
       
Net operating income (loss)  21,121,070 (2,284,137)  5,633,849
       
       
Net Realized and Unrealized Gain (Loss) on Investments and foreign currency:      
       
Net realized (loss) gain on investments and foreign currency      
       
Non-control/Non-affiliated investments  (19,209,277)  (16,339,803)  (205,245)
Affiliate investments   --  (10,081,806)  36,111,253
Control investments  (1,309,156)  --  (3,717,209)
Foreign currency   --  --  (389)
       
Total net realized (loss) gain on investments and foreign currency  (20,518,433)  (26,421,609)   32,188,410
       
Net change in unrealized (depreciation) appreciation on investments  (22,257,313)  35,676,725  (21,689,497)
       
Net realized (loss) gain and net change in unrealized (depreciation) appreciation on investments and foreign currency  (42,775,746)  9,255,116  10,498,913
       
Net (decrease) increase in net assets resulting from operations $ (21,654,676) $ 6,970,979 $ 16,132,762
       
Net (decrease) increase in net assets per share resulting from operations $ (0.90) $  0.30 $ 0.66
       
Dividends declared per share $ 0.495 $ 0.480 $ 0.480
       
The accompanying notes are an integral part of these consolidated financial statements.
       
1 These items are related to the management of the MVC Private Equity Fund, L.P. ("PE Fund"). Please see Note 4 "Management" for more information.
       
2 Reflects TTG Advisers' voluntary waiver of $150,000 of expenses for the 2012, 2011 and 2010 fiscal years that the Company would otherwise be obligated to reimburse TTG Advisers under the Advisory Agreement. Please see Note 4 "Management" for more information.
       
3 Reflects TTG Advisers' voluntary agreement that any assets of the Company invested in exchange-traded funds or the Octagon High Income Cayman Fund Ltd. would not be taken into the calculation of the base management fee due to TTG Advisers under the Advisory Agreement. Please see Note 4 "Management" for more information.
       
4 Reflects TTG Advisers' voluntary waiver of the Incentive Fee associated with pre-incentive fee net operating income for the fiscal year ended October 31, 2012. Please see Note 4 "Management" for more information.
CONTACT: Investor Relations
         Jackie Rothchild
         MVC Capital
         914-510-9400
         or
         Jeffrey Goldberger
         KCSA Strategic Communications
         212-896-1249
         
         Media Inquiries
         Nathaniel Garnick
         Sard Verbinnen & Co
         212-687-8080

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