- Strategic Alternatives Review Proceeding -   - Receives $29.3 Million in Repayments -   - Net Investment Income of $1.7 Million or $0.08 per Share -

GREENWICH, Conn., May 13, 2016 (GLOBE NEWSWIRE) -- Full Circle Capital Corporation (Nasdaq:FULL) (the "Company") today announced its financial results for the fiscal third quarter ended March 31, 2016.

Financial Highlights for the Fiscal Third Quarter Ended March 31, 2016:
  • Received $29.3 million in repayments.
  • Total investment income of $3.7 million, compared with $4.3 million for the prior-year quarter.
  • Net investment income ("NII") was $1.7 million, or $0.08 per share, compared with $2.0 million, or $0.17 per share, in the prior-year quarter.
  • Net unrealized losses were $2.8 million, consisting of net unrealized losses on investments of $4.5 million, partially offset by net unrealized gains on an open swap contract of $1.7 million. Net realized gains were $0.1 million.
  • Net decrease in net assets from operations was $1.0 million, or $0.04 per share.
  • Per share amounts are based on approximately 22.5 million weighted average shares outstanding for the third quarter of fiscal 2016, compared to approximately 12.0 million weighted average shares outstanding for the third quarter of fiscal 2015.  The increase in weighted average shares outstanding reflects share issuances completed during calendar 2015 offset by share repurchases during the first and second quarters of fiscal 2016.

As of March 31, 2016:
  • Net asset value was $3.61 per share and aggregate investment portfolio fair value was $91.3 million
  • Weighted average portfolio interest rate was 10.27%.
  • 89% of portfolio company investments were first lien senior secured loans.

Update on Strategic Alternatives

As noted previously, in November 2015, the Company's Board of Directors formed a Special Committee, composed solely of independent directors Mark C. Biderman, Edward H. Cohen and Thomas A. Ortwein, Jr., to consider various strategic alternatives potentially available to the Company.  The process being conducted by the Special Committee is ongoing.

In order to maximize the types of potential strategic alternatives available to the Company, the Company has opted not to reinvest any cash proceeds received by the Company in connection with loan repayments and sales and has limited its origination activities.  As a result of this change in investment strategy, the Company's loan assets and related investment income have declined.  Accordingly, the Board of Directors suspended the declaration of any future distributions to stockholders.  

Third Quarter Fiscal 2016 ResultsThe Company's net asset value at March 31, 2016 was $3.61 per share. During the quarter, the Company generated $3.4 million of interest income compared to $4.3 million in the third quarter of fiscal 2015, a decrease of 19.1%. Income from fees and other sources in the quarter totaled $0.2 million, compared to $0.1 million in the prior-year quarter.

The Company produced NII of $1.7 million, or $0.08 per share, in the quarter ended March 31, 2016 compared to $2.0 million, or $0.17 per share, in the quarter ended March 31, 2015. 

Net unrealized losses of $2.8 million were comprised of $6.3 million of net unrealized depreciation on equity investments, $1.8 million of net unrealized appreciation on debt investments and $1.7 million of net unrealized appreciation on an open swap contract. Realized gains on investments were $0.1 million.  Net decrease in net assets resulting from operations was $1.0 million, or $0.04 per share.

Since the beginning of calendar 2016, the Company has restructured terms with respect to two of its portfolio companies and received approximately $37 million in repayments.

At March 31, 2016, the Company's portfolio included debt investments in 25 companies at an average of $3.6 million per investment.  The weighted average interest rate on all outstanding debt investments was 10.27% at March 31, 2016, while the weighted average interest rate of the Company's performing debt investments was 11.93%. At fair value, 88.5% of portfolio investments were first lien loans, 11.2% were second lien loans and 0.3% were equity investments. Approximately 76% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company's loans was 63% at March 31, 2016, compared to 66% at March 31, 2015. 

Subsequent Events

On April 6, 2016, the senior secured note to Fuse, LLC was sold for total proceeds of approximately $5.5 million.  At March 31, 2016 the Company had unrealized losses of approximately $1.7 million which were realized on April 6, 2016.

On April 11, 2016, Modular Process Control, LLC completed a restructuring whereby the loans and warrant were extinguished for consideration including $0.8 million in cash and $0.8 million of an unsecured promissory note.  At March 31, 2016, the Company had unrealized losses of approximately $6.4 million, of which approximately $5.5 million were realized as part of the restructuring on April 11, 2016.

On April 19, 2016, the senior secured revolving term loan to ProGrade Ammo Group, LLC was repaid for net proceeds of approximately $1.6 million.  At March 31, 2016, the Company had unrealized losses of approximately $5.4 million which were realized on April 19, 2016.

Conference Call Details

The Company will not be holding an earnings call for this quarter.

About Full Circle Capital CorporationFull 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 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 website www.fccapital.com.

Forward-Looking StatementsThis 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," "should," "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
 
      March 31, 2016     June 30, 2015  
      (Unaudited)        
Assets                    
Control Investments at Fair Value (Cost of $408,606 and $11,409,596, respectively)       $    130,000       $   5,812,064    
Affiliate Investments at Fair Value (Cost of $20,003,978 and $24,434,726, respectively)            3,787,728           16,019,272    
Non-Control/Non-Affiliate Investments at Fair Value (Cost of $98,216,482 and $136,351,581, respectively)            87,357,234           130,282,423    
Total Investments at Fair Value (Cost of $118,629,066 and $172,195,903, respectively)            91,274,962           152,113,759    
                     
Cash           19,778,639           3,736,563    
Interest Receivable           1,098,038           1,903,606    
Principal Receivable           27,578           23,287    
Distributions Receivable           -           15,141    
Due from Affiliates           246,929           605,749    
Due from Portfolio Investments           256,340           180,300    
Receivable on Open Swap Contract           -           1,081    
Receivable for Investments Sold           2,849,194           -    
Prepaid Expenses           148,547           66,105    
Other Assets           28,483           1,483,578    
Deferred Offering Expenses           367,807           328,168    
Deferred Credit Facility Fees           50,624           267,645    
                     
Total Assets           116,127,141           160,724,982    
                     
Liabilities                    
Due to Affiliates           716,479           1,052,489    
Accrued Liabilities           289,282           179,378    
Deposit from Swap Counterparty           -           10,380,000    
Payable for Investments Acquired           -           15,020,000    
Distributions Payable           786,529           813,240    
Interest Payable           45,062           57,605    
Other Liabilities           187,826           305,957    
Accrued Offering Expenses           -           7,258    
Notes Payable 8.25% due June 30, 2020 (plus unamortized premium of $141,218 and $158,504 and less deferred debt issuance costs of $714,453 and $833,541, respectively)           33,072,290           32,970,488    
                     
Total Liabilities           35,097,468           60,786,415    
Commitments and contingencies           -           -    
                     
Net Assets       $   81,029,673       $   99,938,567    
                     
Components of Net Assets                    
Common Stock, par value $0.01 per share (100,000,000 authorized; 22,472,243 and 23,235,430 issued and outstanding, respectively)       $   224,722       $   232,354    
Paid-in Capital in Excess of Par           130,072,314           132,487,067    
Distributions in Excess of Net Investment Income           (763,276 )         (119,318 )  
Accumulated Net Realized Losses           (21,149,983 )         (12,579,392 )  
Accumulated Net Unrealized Losses           (27,354,104 )         (20,082,144 )  
Net Assets       $   81,029,673       $   99,938,567    
                     
Net Asset Value Per Share       $   3.61       $   4.30    

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
           
      Three Months Ended March 31,   Nine Months Ended March 31,
      2016   2015   2016   2015
Investment Income                          
Interest Income from Non-Control/Non-Affiliate Investments     $    3,164,723     $   3,310,605     $    9,804,079     $    9,486,149  
Interest Income from Affiliate Investments          143,205          629,108          1,093,647          1,835,289  
Interest Income from Control Investments          134,619          317,431          464,244          1,280,177  
Dividend Income from Control Investments          13,351         -          33,998         -  
Other Income from Non-Control/Non-Affiliate Investments          119,661           19,148          1,696,484          524,990  
Other Income from Affiliate Investments          933          625          4,314          94,667  
Other Income from Control Investments          94,385          12,500          119,385          37,500  
Other Income from Non-Investment Sources          (880 )       19,108          23,801         48,597  
Total Investment Income          3,669,997           4,308,525          13,239,952         13,307,369   
                           
Operating Expenses                          
Management Fee          451,381          545,564          1,612,167          1,699,451  
Incentive Fee          246,879          419,559          1,263,241          1,335,651  
Total Advisory Fees          698,260          965,123          2,875,408          3,035,102  
                           
Allocation of Overhead Expenses          58,161          53,511          166,183          127,028  
Sub-Administration Fees          57,539          65,195          196,268          194,999  
Officers' Compensation          76,306          75,913          228,919          227,739  
Total Costs Incurred Under Administration Agreement          192,006          194,619          591,370          549,766  
                           
Directors' Fees          34,750          49,750          119,250          138,446  
Interest Expenses          931,933          1,119,639          2,910,262          3,299,116  
Professional Services Expense          218,058          149,698          771,583          509,292  
Bank Fees          7,396          8,910          23,197          30,099  
Other         118,845         142,326         414,686         402,720  
                           
Total Gross Operating Expenses         2,201,248         2,630,065         7,705,756         7,964,541  
                           
Fee Waivers and Expense Reimbursement         (246,879 )       (299,476 )       (967,372 )       (830,523 )
                           
Total Net Operating Expenses         1,954,369         2,330,589         6,738,384         7,134,018  
                           
Net Investment Income         1,715,628         1,977,936         6,501,568         6,173,351  
Net Change in Unrealized Gain (Loss) on:                          
Investments          (4,446,098 )       3,165,547         (7,271,960 )       (6,474,247 )
Open Swap Contract          1,650,000         -         -         -  
Net Change in Unrealized Gain (Loss)          (2,796,098 )       3,165,547         (7,271,960 )       (6,474,247 )
Net Realized Gain (Loss) on:                          
Non-Control/Non-Affiliate Investments           1,851,853          (3,458,023 )        (2,607,787 )        (4,186,132 )
Affiliate Investments          (348,339 )        44,461          1,363,984          44,461  
Control Investments          661,613          (71,953 )        (5,444,394 )        (242,389 )
Open Swap Contract          (2,085,281 )       -          (1,882,293 )       -  
Foreign Currency Transactions         -         -          (101 )        (1,248 )
Net Realized Gain (Loss)         79,846         (3,485,515 )        (8,570,591 )       (4,385,308 )
Net Increase (Decrease) in Net Assets Resulting from Operations     $   (1,000,624 )   $   1,657,968     $   (9,340,983 )   $   (4,686,204 )
                           
Earnings (Loss) per Common Share Basic and Diluted     $   (0.04 )   $   0.14     $   (0.41 )   $   (0.39 )
Net Investment Income per Common Share Basic and Diluted     $   0.08     $   0.17     $   0.29     $   0.52  
Weighted Average Shares of Common Stock Outstanding Basic         22,472,243         11,949,034         22,726,053         11,925,027  
Weighted Average Shares of Common Stock Outstanding Diluted         22,472,243         11,990,011         22,726,053         11,925,027  

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES 
FINANCIAL HIGHLIGHTS
 
    Three months ended March 31, 2016     Three months ended March 31, 2015     Nine months ended March 31, 2016   Nine months ended March 31, 2015
    (Unaudited)     (Unaudited)     (Unaudited)   (Unaudited)
Per Share Data (1) :                            
Net asset value at beginning of period   $   3.76       $   5.48       $   4.30     $   6.38  
Accretion (dilution) from offerings (2)       -           (0.96 )         -         (0.92 )
Accretion from share repurchases (3)       -           -           0.03         -  
Offering costs       -           (0.06 )         -         (0.06 )
Net investment income (loss) (4)       0.08           0.17           0.29         0.52  
Net change in unrealized gain (loss)       (0.12 )         0.29           (0.31 )       (0.52 )
Net realized gain (loss)       0.00           (0.29 )         (0.38 )       (0.37 )
Dividends from net investment income       (0.08 )         (0.17 )         (0.29 )       (0.52 )
Return of capital       (0.03 )         (0.03 )         (0.03 )       (0.08 )
Net asset value at end of period   $   3.61       $   4.43       $   3.61     $   4.43  

  (1 ) Financial highlights are based on weighted average shares outstanding.
  (2 ) Accretion and dilution from offering(s) is based on the net change in net asset value from each follow-on offering.
  (3 ) Accretion from share repurchases during the period is based on the net change in net asset value from the share repurchases.
  (4 ) Net investment income (loss) per share is calculated based on the beginning of year and end of year shares outstanding.

 
Company Contact:Gregg J. Felton, President and Chief Executive OfficerMichael J. Sell, Chief Financial Officer, Treasurer and SecretaryFull Circle Capital Corporation(203) 900 - 2100	info@fccapital.comInvestor Relations Contacts:Garrett Edson/Brad CohenICR, LLC(203) 682-8200

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