Full Circle Capital Corporation Announces First Quarter Fiscal 2013 Earnings

Full Circle Capital Corporation (Nasdaq: FULL) (the “Company”) today announced its financial results for the first quarter of fiscal 2013 ended September 30, 2012.

For the quarter ended September 30, 2012, the Company recorded net investment income of $1.2 million, or $0.20 per share, net realized losses of $(0.9) million, or $(0.14) per share, and net unrealized gains of $0.5 million, or $0.08 per share, resulting in a net increase in net assets from operations of $0.9 million, or $0.14 per share. Net asset value was $8.51 per share at September 30, 2012.

On November 5, 2012, the Board of Directors declared monthly distributions for the third quarter of fiscal 2013 as follows:
               
Record Date         Payment Date         Per Share Amount
January 31, 2013 February 15, 2013 $0.077
February 28, 2013 March 15, 2013 $0.077
March 29, 2013         April 15, 2013         $0.077
 

The declared monthly distributions equate to a $0.924 annualized distribution rate or a current annualized yield of 11.2%, based on the closing price of the Company’s common stock of $8.28 per share on November 7, 2012.

Financial Highlights for the First Quarter of Fiscal 2013

  • Net asset value was $8.51 per share at September 30, 2012.
  • Weighted average portfolio interest rate was 12.84% at September 30, 2012.
  • Total investment income was $2.8 million, including fee income from structuring fees and other sources of $0.2 million.
  • Net investment income was $1.2 million, or $0.20 per share.
  • Net realized losses were $(0.9) million, or $(0.14) per share, and net unrealized gains were $0.5 million, or $0.08 per share, resulting in a net increase in net assets from operations of $0.9 million, or $0.14 per share.
  • Total portfolio investments at September 30, 2012 were $75.5 million (excluding U.S. treasury bills of $25.0 million), compared to $72.3 million (excluding U.S. treasury bills of $22.5 million) at June 30, 2012.
  • New originations were $3.25 million, consisting of a new debt facility to Global Energy Efficiency Holdings Inc. Additional funding to existing borrowers totaled $0.6 million (excluding revolvers).
  • At September 30, 2012, 93% of portfolio company investments were first lien senior secured loans.
  • At September 30, 2012, debt outstanding was $26.5 million consisting of $23.1 million drawn under the Company’s $35.0 million senior credit facility and $3.4 million of senior unsecured notes.
  • Paid monthly distributions of $0.077 per share on August 15, 2012, September 14, 2012 and October 15, 2012.

Management Commentary

“Fiscal 2013 began on a strong note as we recorded an 18% increase in net investment income per share in the first quarter over the fourth quarter of fiscal 2012, reflecting portfolio growth. Our aggregate investments in portfolio companies now total $75.5 million, the highest total since becoming a public company two years ago,” said John Stuart, Chairman and Chief Executive Officer of Full Circle Capital Corp. “The flexibility offered by our uni-tranche lending solutions remains an attractive debt solution to our targeted market of lower and smaller middle market companies. Within this market environment, we remain highly selective of our investment opportunities as we are near full deployment at current liquidity levels.”

“Our consistently strong investment portfolio metrics reflect our primary strategy of investing in first lien senior secured loans to smaller and lower middle-market companies with a desirable yield. We now have debt investments in 17 companies with first lien senior secured loans comprising 93% of the total investment portfolio. While the yield on the portfolio remains approximately 13%, we have retained flexibility in these investments with floating rate loans accounting for 93% of the portfolio, which we believe to be among the top tier of the BDC universe.”

First Quarter Fiscal 2013 Results

The Company’s net asset value at September 30, 2012 was $8.51 per share. During the quarter, the Company generated $2.6 million of interest income, of which 100% was paid in cash. Fee income from structuring fees and other sources totaled $0.2 million. The Company recorded net investment income of $1.2 million, or $0.20 per share, net realized losses of $(0.9) million, or $(0.14) per share, and unrealized gains of $0.5 million, or $0.08 per share, resulting in a net increase in net assets from operations of $0.9 million, or $0.14 per share.

During the quarter, the Company originated a $3.25 million new loan facility of which $3.0 million was funded at closing. Net funding to existing borrowers, including revolver draws and repayments, was $0.3 million during the quarter.

At September 30, 2012, the Company’s portfolio included investments in 20 companies, of which 17 were debt investments. The average portfolio company debt investment at September 30, 2012 was $4.3 million. The weighted average interest rate on investments was 12.84%. At fair value, 93% of portfolio investments were first lien loans, 5% were second lien loans and 2% were equity investments. Approximately 93% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company’s loans was 62% at September 30, 2012 and June 30, 2012.

Conference Call Details

Management will host a conference call to discuss these results on Friday, November 9, 2012 at 10:00 a.m. ET. To participate in the conference call, please call 866-305-6438 (domestic call-in) or 706-679-7161 (international call-in) and reference code # 55040729.

A live webcast of the conference call and the accompanying slide presentation will be available at http://ir.fccapital.com/CorporateProfile.aspx?iid=4151676. All participants should call or access the website approximately 10 minutes before the conference begins.

A telephone replay of the conference call will be available from 1:00 p.m. ET on November 9, 2012 until 11:59 p.m. ET on November 15, 2012 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation # 55040729. An archived replay of the conference call and slide presentation will also be available in the investor relations section of the company’s website.

About Full Circle Capital Corporation

Full Circle Capital Corporation ( www.fccapital.com) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Full Circle lends to and invests in senior secured loans and, to a lesser extent, mezzanine loans and equity securities issued by smaller and lower middle-market companies that operate in a diverse range of industries. Full Circle’s investment objective is to generate both current income and capital appreciation through debt and equity investments. For additional information visit the company’s web site www.fccapital.com.

Forward-Looking Statements

This press release contains forward-looking statements which relate to future events or Full Circle's future performance or financial condition. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Full Circle's filings with the Securities and Exchange Commission. Full Circle undertakes no duty to update any forward-looking statements made herein.
             
 

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
 
September 30, 2012 June 30, 2012
Assets (Unaudited) (Audited)

Control Investments at Fair Value (Cost of $8,605,711 and  $6,639,648, respectively)
$ 8,502,142 $ 6,777,511

Affiliate Investments at Fair Value (Cost of $7,914,999 and  $6,802,017, respectively)
5,988,684 5,112,142

Investments at Fair Value (Cost of $87,201,156 and  $85,181,617, respectively)
  85,971,841     82,957,117  

Total Investments at Fair Value (Cost of $103,721,866 and  $98,623,282, respectively)
100,462,667 94,846,770
 
Cash 66,504 639,149
Deposit with Broker 2,752,519 2,350,000
Interest Receivable 965,440 902,711
Dividends Receivable 34,097 -
Principal Receivable 1,231,808 513,372
Due from Portfolio Investment - 11,140
Due from Affiliate 37,335 -
Prepaid Expenses 160,015 43,053
Other Assets 27,554 25,499
Deferred Offering Expenses 71,781 67,685
Deferred Credit Facility Fees   100,000     50,000  
 
Total Assets   105,909,720     99,449,379  
 
Liabilities
Due to Affiliate 643,272 580,353
Accounts Payable 192,990 115,741
Accrued Liabilities 23,210 79,651
Due to Broker 25,000,604 22,500,041
Dividends Payable 478,892 478,892
Interest Payable 159,666 142,518
Other Liabilities 6,927 140,458
Accrued Offering Expenses - 19,697
Line of Credit 23,098,577 18,544,660
Distribution Notes   3,404,583     3,404,583  
 
Total Liabilities   53,008,721     46,006,594  
 
Net Assets $ 52,900,999   $ 53,442,785  
Components of Net Assets
Common Stock, par value $0.01 per share
(100,000,000 authorized; 6,219,382 issued
and outstanding) $ 62,194 $ 62,194
Paid-in capital in excess of par 57,455,232 57,455,232
Distributions in excess of Net Investment Income (321,195 ) (122,763 )
Accumulated Net Realized Gains (Losses) (1,036,033 ) (175,366 )
Accumulated Net Unrealized Losses   (3,259,199 )   (3,776,512 )
Net Assets $ 52,900,999   $ 53,442,785  
Net Asset Value Per Share $ 8.51   $ 8.59  
 
 
               
 

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
 
Three months ended

September 30, 2012
Three months ended

September 30, 2011
Investment Income
Interest Income $ 2,019,984 $ 1,825,263
Interest Income from Affiliate Investments 279,941 234,864
Interest Income from Control Investments 279,173 27,573
Dividend Income - -
Dividend Income from Control Investments 34,097 -
Other Income 144,027 311,457
Other Income from Affiliate Investments 3,581 54,086
Other Income from Control Investments 12,500   105,000  
 
Total Investment Income 2,773,303   2,558,243  
 
Operating Expenses
Management Fee 334,036 285,960
Incentive Fee 307,932   371,602  
Total Advisory Fees 641,968   657,562  
 
Allocation of Overhead Expenses 56,756 85,685
Sub-Administration Fees 73,429 78,114
Officers’ Compensation 75,194   45,924  
Total Administration Fees 205,379   209,723  
 
Directors’ Fees 28,625 28,125
Interest Expenses 396,495 122,560
Professional Services Expense 165,161 220,873
Bank Fees 3,090 3,681
Other 94,340   85,169  
 
Total Gross Operating Expenses 1,535,058 1,327,693
 
Management Fee Waiver and Expense Reimbursement -   (313,792 )
 
Total Net Operating Expenses 1,535,058   1,013,901  
 
Net Investment Income 1,238,245 1,544,342
Net Change in Unrealized Gain (Loss) on Investments 517,313 (70,815 )
Net Realized Gain (Loss) on Investments (860,667 ) 125,806  
 
Net Increase in Net Assets Resulting from Operations $ 894,891   $ 1,599,333  
 
Earnings per Common Share Basic and Diluted $ 0.14 $ 0.26

Weighted Average Shares of Common Stock  Outstanding Basic and Diluted
6,219,382 6,219,382
 
 
         
 

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

FINANCIAL HIGHLIGHTS (Unaudited)
 

Three months endedSeptember 30, 2012

Three months endedSeptember 30, 2011
   
Per Share Data (1) :
Net asset value at beginning of period   $ 8.59 $ 9.08
Net investment income 0.20 0.25
Change in unrealized gain (loss) 0.08 (0.01 )
Realized gain (loss) (0.13 ) 0.02
Dividends declared   (0.23 )   (0.23 )
Net asset value at end of period $ 8.51   $ 9.11  
 

1   Financial highlights are based on average weighted shares outstanding.
 
 

Copyright Business Wire 2010

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