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KCAP Financial, Inc. Announces Second Quarter 2013 Financial Results

Stocks in this article: KCAP

NEW YORK, Aug. 6, 2013 (GLOBE NEWSWIRE) -- KCAP Financial, Inc. (Nasdaq:KCAP) announced its second quarter 2013 financial results.

Financial Highlights

  • Net investment income for the three months ended June 30, 2013 was approximately $6.6 million, or $0.20 per share (basic) and $0.20 per share (diluted).  
  • KCAP declared a quarterly dividend of $0.28 per share.  
  • On June 18, 2013, KCAP completed the sale of notes in a $140 million debt securitization financing transaction, resulting in the addition of $105.25 million of attractively priced debt on the balance sheet.  
  • At June 30, 2013, the fair value of KCAP's investments totaled approximately $436.5 million.  
  • Net asset value per share of $8.24 as of June 30, 2013.

Dayl Pearson, President and Chief Executive Officer of KCAP Financial, Inc., noted, "Second quarter was a challenging credit environment.  Notwithstanding the market, our asset manager affiliate Trimaran Advisors was able to launch a new CLO, and in June we completed an attractively priced debt securitization. Although, on a per share basis our net investment income was below target, this was the result of our strategic decision to slow down our investing activity in a very frothy credit environment, particularly during April and May.  We will continue to prudently allocate our capital as we see opportunities for future earnings and growth."

Operating Results

For the three months ended June 30, 2013, we reported total investment income of approximately $11.2 million, as compared to approximately $9.5 million, in the prior year period, an increase of 18%. Investment income from debt securities increased 12% to approximately 3.0 million from approximately $2.7 million. Dividends from investments in CLO fund securities decreased 11% from $5.5 million to $4.9 million, and dividends from our Asset Manager Affiliates increased 175% from $1.2 million to $3.3 million. The decrease in CLO dividends is attributable to the acceleration of pre-payments in existing CLO funds that are past their reinvestment period, while the increase in dividends from the Asset Manager Affiliates is attributable to greater assets under management and incentive fees.

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