Full Circle Capital Corporation (Nasdaq:FULL) (the “Company”) today announced its financial results for the fourth quarter and full year of fiscal 2013 ended June 30, 2013. Financial Highlights for the Fourth Quarter of Fiscal 2013
- Net asset value of $8.01 per share at June 30, 2013.
- Total investment income was $3.3 million, an increase of 17.1% compared to $2.8 million for the three months ended March 31, 2013.
- Net investment income was $1.4 million, or $0.180 per share, compared to $1.3 million, or $0.173 per share, for the three months ended March 31, 2013.
- Net realized and unrealized gains were $0.5 million, or $0.06 per share. Combined with net investment income, this resulted in a net increase in net assets from operations of $1.9 million, or $0.24 per share. This is an increase of 25.2% compared to a net increase in net assets from operations of $1.5 million, or $0.20 per share, for the three months ended March 31, 2013.
- Monthly distributions of $0.077 per share were paid on May 15, 2013, June 14, 2013 and July 15, 2013, totaling $0.231 per share for the quarter.
- Total portfolio investments at June 30, 2013 were $88.2 million, a 22.0% increase compared to portfolio investments of $72.3 million at June 30, 2012 and nearly even with portfolio investments of $88.1 million at March 31, 2013.
- Weighted average portfolio interest rate was 12.90% at June 30, 2013 compared to 12.69% at March 31, 2013.
- New originations and expansion of facilities to existing borrowers totaled $3.5 million. Realizations were $3.1 million reflecting the full payoff of one existing loan facility to Matt Martin Real Estate Management, LLC at par plus accrued interest and fees.
- At June 30, 2013, 89% of portfolio company investments, based on fair value, were first lien senior secured loans.
- On June 3, 2013 Full Circle Capital closed a new three-year, $32.5 million revolving credit facility with Sovereign Bank, N.A. Borrowings under the facility bear interest based on a tiered rate structure, depending upon utilization, ranging from LIBOR plus 3.25% to 4.00% per annum, or from Sovereign’s prime rate plus 1.25% to 2.00% per annum, based on Full Circle’s election at the time of borrowing. This represents a significant improvement in the cost of debt capital from Full Circle’s prior revolving credit facility, which bore interest at LIBOR plus 5.50% per annum.
- On June 28, 2013 Full Circle Capital issued $18.75 million ($21.1 million including the subsequent exercise of the overallotment option) of seven-year, 8.25% Notes that will mature on June 30, 2020. The Notes can be called any time after June 30, 2016 and pay interest quarterly beginning September 30, 2013.
|Record Date||Payment Date||Per Share Amount|
|October 31, 2013||November 15, 2013||$0.077|
|November 29, 2013||December 13, 2013||$0.077|
|December 31, 2013||January 15, 2014||$0.077|
Management Commentary“In the fourth quarter of fiscal 2013, we made substantial progress by completing two strategic initiatives that will provide balance sheet stability and that are expected to be important drivers of increasing returns to our stockholders. We expanded and diversified our debt capital resources by refinancing our senior revolving line of credit at significantly lower borrowing costs, and we issued $21 million of seven year notes, which provide us with fixed rate borrowings over a relatively longer term,” said John Stuart, Chairman and Chief Executive Officer of Full Circle Capital Corporation. “As we invest the funds from our senior leverage line, the overall benefits of this strategy -- the significantly lower marginal cost of debt capital and greater interest margin -- should become more evident in our financial results. With a fixed interest rate on a portion of our debt capital, and floating rate debt investments comprising 84% of our portfolio, we believe that Full Circle Capital is well situated for a rising rate environment. In summary, these strategic actions place us in a strong position for continued growth of our investment portfolio and net investment income.” “During fiscal 2013 we were successful in deploying our available capital and increased our investment portfolio by 22% to $88.2 million. We added five new portfolio companies that fit well within our investment strategy to invest in senior secured loans to smaller and lower middle-market companies with a significant level of risk protection and a desirable yield. Combined with the full repayments we received from two existing borrowers, we now have debt investments in 19 companies that collectively yield 12.90%, on a weighted average basis,” concluded Mr. Stuart. Michael J. Sell Appointed Chief Financial Officer Michael J. Sell has been appointed Chief Financial Officer of Full Circle Capital Corporation, effective September 30, 2013. Mr. Sell replaces William E. Vastardis, who has resigned his position as CFO to focus on his position as President of Vastardis Fund Services LLC. Vastardis Fund Services will continue to act as Full Circle Capital Corporation’s Sub-Administrator and Mr. Vastardis will also continue to serve Full Circle Capital Corporation as Assistant Secretary and Assistant Treasurer.
“Mike Sell has worked closely with Bill Vastardis and me for several years in various finance and accounting roles at both Full Circle Capital and at Vastardis Fund Services. We believe Mike’s background, experience and deep knowledge of our business have prepared him well for this expanded role and we look forward to his continued contribution to our growth,” commented Mr. Stuart. “We thank Bill for his important contribution to our progress to date and look forward to his continued involvement with Full Circle Capital.”Mr. Vastardis commented, “I have been happy to serve as CFO of Full Circle Capital over the past three years from the time of its formation and IPO. I am confident that Mike Sell is well prepared to take the reins as CFO and I look forward to continuing to work with the Full Circle Capital team.” Mr. Sell, 35, initially joined Full Circle Funding, LP as a Vice President in June 2008. From August 2010 through September 2012, Mr. Sell was employed by Vastardis Fund Services, where he focused on business development company accounting and financial reporting. In September 2012, Mr. Sell rejoined Full Circle Service Company and was appointed as Full Circle Capital’s Assistant Secretary in December 2012. Prior to joining Full Circle Funding, LP, from 2004 to 2008, Mr. Sell was actively involved in operational and portfolio analysis for two hedge fund of funds. Mr. Sell began his career at PricewaterhouseCoopers, LLP as a senior assurance associate focused on the financial services industry. Mr. Sell earned a Bachelor of Science degree in Accountancy and Finance from Miami University in 2000 and a Master of Accountancy from Miami University in 2001. Fourth Quarter Fiscal 2013 Results The Company’s net asset value at June 30, 2013 was $8.01 per share. During the quarter, the Company generated $2.9 million of interest income, of which 100% was paid in cash. Income from fees, dividends and other sources totaled $0.4 million, resulting in $3.3 million of total investment income. The Company recorded net investment income of $1.4 million, or $0.18 per share. Net unrealized and realized gains were $0.5 million, or $0.06 per share. Net increase in net assets from operations was $1.9 million, or $0.24 per share. Per share amounts for the quarter ended June 30, 2013 are based on approximately 7.6 million weighted average shares outstanding compared to 6.2 million at June 30, 2012 and 7.6 million at March 31, 2013, reflecting the 1.35 million share equity offering that the Company completed in November 2012.
During the quarter, the Company originated $1.7 million in one new loan facility. Additional funding to existing borrowers, excluding regular borrowing under revolvers, was $1.75 million during the quarter. Realizations during the fourth quarter were $3.1 million reflecting the full payoff of one loan at par plus interest and fees.At June 30, 2013, the Company’s portfolio included investments in 22 companies, of which 19 were debt investments. The average portfolio company debt investment at June 30, 2013 was $4.3 million. The weighted average interest rate on investments was 12.90%. At fair value, 89% of portfolio investments were first lien loans, 3% were second lien loans and 8% were equity investments. Approximately 84% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company’s loans was 60% at June 30, 2013 compared to 62% at June 30, 2012 and 54% at March 31, 2013. Subsequent Portfolio Activity On August 1, 2013, the Company funded $4.5 million of a $9.0 million senior secured credit facility to Infinite Aegis Group, LLC, a provider of both revenue cycle management services to healthcare service providers including large hospital systems and doctor-owned clinics, and owns and operates urgent care and occupational care centers in Colorado. The senior secured credit facility bears interest at one-month LIBOR plus 12% and has a final maturity of July 31, 2017. Of the $9.0 million facility, $4.0 million was funded by another lender. On September 4, 2013, the Company funded $1.5 million of a $5.0 million senior secured credit facility to Franklin Place Shops — Red, LLC. Franklin Place Shops — Red, LLC is a manager and owner of commercial real estate assets in northwest Ohio. The senior secured credit facility bears interest at 12% and has a final maturity of March 3, 2014. Of the $5.0 million facility, $3.5 million was funded by other lenders.
Conference Call DetailsManagement will host a conference call to discuss these results on Friday, September 13, 2013 at 10:00 a.m. EDT. To participate in the conference call, please call 866-305-6438 (domestic call-in) or 706-679-7161 (international call-in) and reference code # 47058024. 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. EDT on September 13, 2013 until 11:59 p.m. EDT on September 16, 2013 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation # 47058024. 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|
|June 30, 2013||June 30, 2012|
|Control Investments at Fair Value (Cost of $18,139,543 and $6,639,648,|
|Affiliate Investments at Fair Value (Cost of $17,954,622 and $6,802,017,|
|Non-Control/Non-Affiliate Investments at Fair Value (Cost of $53,220,538 and|
|Total Investments at Fair Value (Cost of $89,314,703 and $98,623,282,|
|Deposit with Broker||-||2,350,000|
|Due from Portfolio Investment||105,030||11,140|
|Receivable from Notes Offering||2,299,704||-|
|Deferred Offering Expenses||86,834||67,685|
|Deferred Debt Issuance Costs||1,086,895||-|
|Deferred Credit Facility Fees||543,846||50,000|
|Due to Affiliate||728,371||580,353|
|Due to Broker||-||22,500,041|
|Accrued Offering Expenses||-||19,697|
|Line of Credit||25,584,147||18,544,660|
|Notes Payable 8.25% due June 30, 2020||21,145,525||-|
|Components of Net Assets|
|Common Stock, par value $0.01 per share (100,000,000 authorized; 7,569,382|
|and 6,219,382 issued and outstanding, respectively)||$||75,694||$||62,194|
|Paid-in Capital in Excess of Par||66,319,579||57,455,232|
|Distributions in Excess of Net Investment Income||(200,200)||(122,763)|
|Accumulated Net Realized Losses||(4,410,832)||(175,366)|
|Accumulated Net Unrealized Losses||(1,140,202)||(3,776,512)|
|Net Asset Value Per Share||$||8.01||$||8.59|
|FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three Months EndedJune 30,||Year EndedJune 30,|
|Interest Income from Non-Control/Non-Affiliate|
|Interest Income from Affiliate Investments||637,255||969,071||1,587,281||1,203,935|
|Interest Income from Control Investments||470,459||225,754||1,504,343||708,854|
|Dividend Income from Control Investments||36,706||-||223,474||57,216|
|Other Income from Non-Control/Non-Affiliate|
|Other Income from Affiliate Investments||80,054||101,101||143,631||155,187|
|Other Income from Control Investments||12,500||12,500||50,000||143,889|
|Total Investment Income||3,330,080||2,481,143||12,046,023||9,827,011|
|Total Advisory Fees||728,373||581,998||2,771,684||2,384,431|
|Allocation of Overhead Expenses||84,552||52,070||310,412||316,173|
|Total Administration Fees||209,774||204,984||834,577||895,783|
|Professional Services Expense||183,065||189,121||567,126||625,101|
|Total Gross Operating Expenses||1,965,558||1,409,196||6,665,442||5,307,300|
|Management Fee Waiver and Expense Reimbursement||-||-||-||(313,792)|
|Total Net Operating Expenses||1,965,558||1,409,196||6,665,442||4,993,508|
|Net Investment Income||1,364,522||1,071,947||5,380,581||4,833,503|
|Net Change in Unrealized Gain (Loss) on|
|Net Realized Gain (Loss) on Investments||(168,640)||(302,405)||(4,215,748)||(175,366)|
|Net Increase in Net Assets Resulting from|
|Earnings per Common Share Basic and Diluted||$||0.24||$||(0.11)||$||0.54||$||0.43|
|Net Investment Income per Common Share Basic|
|Weighted Average Shares of Common Share|
|Outstanding Basic and Diluted||7,569,382||6,219,382||7,018,286||6,219,382|
|FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES|
|Year endedJune 30, 2013||Year endedJune 30, 2012||For the period from August 31, 2010 (commencement of operations) to June 30, 2011||For the period from April 16, 2010 (date of inception) to June 30, 2010|
|Per Share Data (1)|
|Net asset value at beginning of period||$||8.59||$||9.08||$||9.40||$||15.00||(3)|
|Dilution from offering||(0.18)||(2)|
|Net investment income (loss)||0.77||0.78||0.70||(125.45)|
|Change in unrealized gain (loss)||0.37||(0.32)||(0.29)|
|Realized gain (loss)||(0.60)||(0.03)||0.06|
|Net asset value at end of period||$||8.01||$||8.59||$||9.08||$||(110.45)|
|(1)||Financial highlights are based on weighted average shares outstanding.|
|(2)||Dilution from offering is based on the change in net asset value from the follow on offering on November 27, 2012.|
|(3)||For the period from April 16, 2010 (date of inception) to June 30, 2010, the net asset value at issuance was $15.00.|