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BlackRock Kelso Capital Corporation Declares Regular Quarterly Distribution Of $0.26 Per Share, Announces Financial Results For The Quarter And Year Ended December 31, 2013

Stocks in this article: BKCC

Recent Developments

During 2014, we exercised two tranches of our Arclin Cayman Holdings Ltd. warrants and subsequently entered an agreement to sell our entire debt and equity positions as well as our two remaining tranches of warrants for aggregate proceeds of $59.2 million and a realized gain of $37.2 million. Expected proceeds represent a further increase of $7.0 million above our year-end mark for this investment. Utilizing short and long term capital loss carryforwards to eliminate a capital gain distribution requirement will allow us to reinvest these proceeds in attractive opportunities without contributing to reductions in our net asset value.

Another one of our larger equity investments is currently being marketed for sale at price ranges that would produce significant gains to us, and further proceeds in which to deploy in income producing assets.

From January 1, 2014 through March 5, 2014, we have experienced a net reduction in our portfolio, including the sale of Arclin Cayman Holdings Ltd., of $112.9 million, further meeting liquidity needs and generating free cash flow in which to either reinvest or reduce outstanding debt under our credit facility.

Conference Call

BlackRock Kelso Capital will host a webcast/teleconference at 4:30 p.m. (Eastern Time) on Thursday March 6, 2014 to discuss its fourth quarter and full year 2013 financial results. All interested parties are welcome to participate. You can access the teleconference by dialing, from the United States, (800) 374-0176, or from outside the United States, (706) 679-3431, shortly before 4:30 p.m. and referencing the BlackRock Kelso Capital Corporation Conference Call (ID Number 12053733). A live, listen-only webcast will also be available via the investor relations section of www.blackrockkelso.com. Both the teleconference and webcast will be available for replay by 7:30 p.m. on Thursday, March 6, 2014 and ending at midnight on Thursday, March 13, 2014. To access the replay of the teleconference, callers from the United States should dial (855) 859-2056 and callers from outside the United States should dial (404) 537-3406 and enter the Conference ID Number 12053733.

Prior to the webcast/teleconference, an investor presentation that complements the earnings conference call will be posted to BlackRock Kelso Capital’s website within the presentations section of the investor relations page ( http://www.blackrockkelso.com/InvestorRelations/Presentations/index.htm).

 

BlackRock Kelso Capital Corporation

Consolidated Statements of Assets and Liabilities

(Unaudited)

 
   

 

December 31, 2013

   

December 31, 2012

Assets
Investments at fair value:
Non-controlled, non-affiliated investments (cost of $854,947,802 and $849,028,227) $ 881,305,181 $ 850,511,125
Non-controlled, affiliated investments (cost of $75,514,208 and $50,983,674) 134,096,291 67,750,172
Controlled investments (cost of $154,038,211 and $137,337,392)   202,570,992     143,336,244  
 
Total investments at fair value (cost of $1,084,500,221 and $1,037,349,293) 1,217,972,464 1,061,597,541
Cash and cash equivalents 18,474,784 9,122,141
Unrealized appreciation on forward foreign currency contracts 369,417
Receivable for investments sold 22,756,286 504,996
Interest receivable 11,033,061 14,048,248
Prepaid expenses and other assets   11,410,320     4,375,527  
 
Total Assets $ 1,281,646,915   $ 1,090,017,870  
 
Liabilities
Payable for investments purchased $ 21,000,000 $ 440,243
Debt 477,981,494 346,850,000
Interest payable 7,896,016 5,277,132
Distributions payable 19,344,682 19,196,418
Base management fees payable 5,803,497 5,626,893
Incentive management fees payable 34,725,204 20,277,930
Accrued administrative services 270,000 277,000
Other accrued expenses and payables   4,921,681     4,692,562  
 
Total Liabilities   571,942,574     402,638,178  
 
Net Assets

Common stock, par value $.001 per share, 200,000,000 common shares authorized,

75,827,692 and 75,257,888 issued and 74,402,185 and 73,832,381 outstanding

75,828 75,258
Paid-in capital in excess of par 894,649,992 917,534,577
Distributions in excess of taxable net investment income (19,373,748 ) (22,291,022 )
Accumulated net realized loss (286,693,363 ) (219,270,607 )
Net unrealized appreciation 130,522,308 20,808,162
Treasury stock at cost, 1,425,507 and 1,425,507 shares held   (9,476,676 )   (9,476,676 )
 
Total Net Assets   709,704,341     687,379,692  
 
Total Liabilities and Net Assets $ 1,281,646,915   $ 1,090,017,870  
 
Net Asset Value Per Share $ 9.54 $ 9.31
 
               
BlackRock Kelso Capital Corporation Consolidated Statement of Operations (Unaudited) Three months

ended December 31, 2013

Three months

ended December 31, 2012

Year ended December 31, 2013 Year ended December 31, 2012
Investment Income:
Interest income:
Non-controlled, non-affiliated investments

$

23,172,191

$ 26,994,492 $ 96,289,228 $ 108,797,089
Non-controlled, affiliated investments 1,071,707 911,860 7,030,676 4,965,190
Controlled investments   2,977,830     3,065,887     10,619,305     9,567,654  
 
Total interest income   27,221,728     30,972,239     113,939,209     123,329,933  
 
Fee income:
Non-controlled, non-affiliated investments 4,705,841 4,337,447 12,284,535 19,794,762
Non-controlled, affiliated investments 735,708
Controlled investments   100,000     57,522     2,738,680     193,692  
 
Total fee income   4,805,841     4,394,969     15,023,215     20,724,162  
 
Dividend income:
Non-controlled, non-affiliated investments 435,797 30,344 1,662,145 736,501
Non-controlled, affiliated investments 514,123 2,500,000 1,001,264 2,500,000
Controlled investments                
 
Total dividend income   949,920     2,530,344     2,663,409     3,236,501  
 
Total investment income   32,977,489     37,897,552     131,625,833     147,290,596  
 
Expenses:
Incentive management fees 14,456,193 17,314,127 31,148,437 22,491,789
Base management fees 5,803,497 5,626,892 21,629,665 22,504,433
Interest and credit facility fees 5,785,463 4,689,102 20,913,520 19,606,951
Professional fees 566,038 148,427 2,213,638 1,229,009
Investment advisor expenses 546,023 626,996 2,066,737 1,991,416
Amortization of debt issuance costs 554,008 634,679 1,985,234 2,524,915
Administrative services 168,214 111,951 775,643 528,559
Director fees 179,807 120,500 653,807 467,563
Other   337,764     309,067     2,601,077     2,284,429  
 
Total expenses   28,397,007     29,581,741     83,987,758     73,629,064  
 
Net Investment Income   4,580,482     8,315,811     47,638,075     73,661,532  
 
Realized and Unrealized Gain (Loss):
Net realized gain (loss):
Non-controlled, non-affiliated investments (6,327,166 ) 3,547 (32,307,657 ) (75,336,460 )
Non-controlled, affiliated investments 99,525 21 2,223,371
Controlled investments 1,708 (14,819,901 ) (31,888,848 ) (14,819,901 )
Foreign currency       (967,726 )   (166,934 )   (1,185,429 )
 
Net realized gain (loss)   (6,325,458 )   (15,684,555 )   (64,363,418 )   (89,118,419 )
 
Net change in unrealized appreciation or depreciation:
Non-controlled, non-affiliated investments 14,265,302 (4,342,245 ) 35,861,087 72,727,614
Non-controlled, affiliated investments 13,193,589 3,280,090 41,815,585 9,580,694
Controlled investments 5,879,923 9,031,808 32,568,273 (10,972,967 )
Foreign currency translation   (269,314 )   1,140,833     (530,799 )   1,472,779  
 
Net change in unrealized appreciation or depreciation   33,069,500     9,110,486     109,714,146     72,808,120  
 
Net realized and unrealized gain (loss)   26,744,042     (6,574,069 )   45,350,728     (16,310,299 )
 
Net Increase in Net Assets Resulting from Operations $ 31,324,524   $ 1,741,742   $ 92,988,803   $ 57,351,233  
 
Net Investment Income Per Share - basic $ 0.06   $ 0.11   $ 0.64   $ 1.00  
 
Earnings Per Share – basic $ 0.42   $ 0.02   $ 1.25   $ 0.78  
 
Average Shares Outstanding - basic   74,398,692     73,829,397     74,174,560     73,623,983  
 
Net Investment Income Per Share - diluted $ 0.07   $ 0.11   $ 0.64   $ 1.00  
 
Earnings Per Share – diluted $ 0.39   $ 0.02   $ 1.19   $ 0.78  
 
Average Shares Outstanding - diluted 84,295,419 73,829,397 82,715,571 73,623,983
Distributions Declared Per Share $ 0.26 $ 0.26 $ 1.04 $ 1.04
 

The Company reports its financial results on a GAAP basis; however, management believes that evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP basis financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and, for the reasons described below, considers them to be effective indicators, for both management and investors, of the Company’s financial performance over time. The Company’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

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