NGP Capital Resources Company (NGPC) Q2 2012 Earnings Call August 7, 2012 11:00 am ET Executives Stephen K. Gardner – President and Chief Executive Officer L. Scott Biar – Chief Financial Officer, Chief Compliance Officer, Treasurer and Secretary R. Kelly Plato – Senior Vice President Analysts Greg Mason – Stifel, Nicolaus & Co., Inc. Pavel Molchanov – Raymond James & Associates Presentation Operator
For the second quarter of 2012, we have reported total investment income of $5.3 million and net investment income of $2.6 million or $0.12 per share. Our net asset value declined slightly to $9.29 per share, and our weighted average yield on portfolio investments remained strong at an annualized rate of 11.4%.During the second quarter, we funded $28 million of new investments, most notably the $25 million participation in a $2 billion senior note offering by Everest Acquisition, LLC, which recently acquired what had been El Paso Corporation’s U.S. oil and gas exploration and production assets. Everest is owned by a group of investors led by Apollo Global Management, LLC, Riverstone Holdings, LLC and others. In early July, just after the end of the quarter, we entered into two new investments totaling $75 million bringing our year to date new investment activity to over $110 million or $75 million net of redemptions and repayments, and our current investment portfolio is valued at roughly $225 million. That’s the highest aggregate value of our investment portfolio since the first quarter of 2009. Kelly will provide more details on the new investments later in the call. At June 30, 2012, our targeted investment portfolio consisted of 18 portfolio companies with an aggregate value of $149.4 million. We had net cash on our balance sheet of $50 million as of June 30. Factoring in the $75 million of new investments made after quarter end, we currently have approximately $27.5 million outstanding on our investment credit facility leaving us with $45 million available for new investment. Also during the second quarter, we repurchased 250,029 shares of our common stock or roughly 1.2% of our shares outstanding at an average price of $6.51 per share for a total cost of $1.6 million. These repurchases added $0.04 per share to our net asset value during the quarter. We have remaining authorization under the plan to repurchase up to an additional $8.4 million of stock subject to applicable securities laws and regulations that set certain restrictions on the method, timing, price and volume of stock purchases.
Now, I’ll turn the call over to Scott Biar, our Chief Financial Office, and he will discuss the details of our quarterly performance. Scott?L. Scott Biar Thank you, Steve. For the quarter ended June 30, 2012, total investment income was $5.3 million or $0.25 per share compared to $5.6 million or $0.26 per share in the first quarter of 2012, and $9.1 million or $0.42 per share in the second quarter of 2012. The year-over-year decline is attributable to $3.9 million of unusual interest income activity in the second quarter of 2011 including the recognition of $4.5 million of previously unrecognized PIK interest income on Tranche B of a Term Loan with Alden Resources, which we sold in July of 2011. And the reserve is 600,000 of previously recognized interest income on BioEnergy and Bionol Clearfield. The small sequential decline is primarily a function of slightly lower average investment portfolio balance due to the timing of principal pay downs and new investments during the first half of 2012. Operating expenses for the second quarter of 2012 totaled $2.7 million, increasing less than 1% compared to the first quarter of 2012, and decreasing $700,000 or 21% compared to the second quarter of 2011. The year-over-year decrease was primarily attributable to lower management fees to our investment advisor as a result of lower total asset balances, and because the second quarter of 2011 included $300,000 of investment income incentive fees that did not reoccur in 2012. Read the rest of this transcript for free on seekingalpha.com