- As of June 30, 2017, net asset value per share was $7.51 compared with the net asset value per share as of March 31, 2017 of $7.53.
- For the quarter ended June 30, 2017, we recorded net investment income of approximately $7.5 million, or approximately $0.15 per share. In the second quarter, we also recorded net realized capital gains of approximately $0.5 million, and net unrealized appreciation of approximately $1.0 million. In total we had a net increase in net assets from operations of approximately $9.1 million, or approximately $0.18 per share.
- Our core net investment income ("Core NII") for the quarter ended June 30, 2017 was approximately $0.18 per share.- Core NII represents net investment income adjusted for additional cash distributions received, or entitled to be received (if any, in either case), on our collateralized loan obligation ("CLO") equity investments and also excludes any capital gains incentive fees we recognize but have no obligation to pay in any period. ( See additional information under "Supplemental Information Regarding Core Net Investment Income" below).- While our experience has been that cash flow distributions have historically represented useful indicators of our CLO equity investments' annual taxable income, we believe that current and future cash flow distributions may represent less accurate indicators of taxable income with respect to our CLO equity investments than they have in the past.
- Total investment income for the second quarter of 2017 amounted to approximately $17.0 million, which represents an increase of approximately $0.5 million from the first quarter of 2017.- For the quarter ended June 30, 2017, we recorded investment income from our portfolio as follows: - approximately $6.8 million from our debt investments, - approximately $9.4 million from our CLO equity investments, and - approximately $0.8 million from all other sources.
- Our total expenses for the quarter ended June 30, 2017 were approximately $9.5 million, up by approximately $0.9 million compared to the first quarter of 2017. The primary driver of that increase was higher interest expense for the quarter on our outstanding debt.
- Our weighted average credit rating on a fair value basis was 2.2 at the end of the second quarter of 2017 (compared to 2.3 at the end of the first quarter of 2017).
- As announced previously, our board of directors had declared the following distribution on our common stock:
|Quarter Ending||Record Date||Payment Date||Amount Per Share|
|September 30, 2017||September 15, 2017||September 29, 2017||$0.20|
- During the second quarter of 2017:- We made investments of approximately $89.3 million, consisting of approximately $31.3 million in corporate loan and stock investments and approximately $58.0 million in CLO investments. We received proceeds of approximately $22.9 million from sales of our CLO investments.- We received or were entitled to receive proceeds of approximately $94.6 million from repayments, sales and amortization payments on our corporate loan and common stock investments. A portion of those proceeds along with a portion of prior quarter repayments, sales and amortization payments were applied towards an approximately $31.4 million partial redemption of the TICC CLO 2012-1 LLC Class A-1 Notes.
- As of June 30, 2017, the weighted average yield of our debt investments at current cost was approximately 9.5%, compared with 8.4% as of March 31, 2017.
- As of June 30, 2017, the weighted average effective yield of our CLO equity investments at current cost was approximately 18.4%, compared with 17.3% as of March 31, 2017.
- As of June 30, 2017, the weighted average cash distribution yield of our CLO equity investments at current cost was approximately 25.6%, compared with 24.4% as of March 31, 2017.
- At June 30, 2017, we had no investments on non-accrual status.
- On July 24, 2017, the Company provided a Notice of Optional Redemption to the trustee of TICC CLO 2012-1 LLC that it will be redeeming in full the outstanding amounts of each class of secured notes on August 25, 2017. The Company intends to use the restricted cash held by TICC CLO 2012-1 LLC on the redemption date to redeem each class of secured notes, which is approximately $73.4 million in aggregate. The Company also intends to begin the process to wind down and dissolve TICC CLO 2012-1 LLC after the completion of this redemption.
Income from investments in the "equity" class securities of CLO vehicles, for GAAP purposes, is recorded using the effective interest method based upon an effective yield to the expected redemption utilizing estimated cash flows compared to the cost, resulting in an effective yield for the investment; the difference between the actual cash received or distributions entitled to be received and the effective yield calculation is an adjustment to cost. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from the cash distributions actually received by us during the period (referred to below as "CLO equity additional distributions").Further, in order to continue to qualify to be taxed as a regulated investment company ("RIC"), we are required, among other things, to distribute at least 90% of our investment company taxable income annually. Therefore, core net investment income may provide a better indication of estimated taxable income for a reporting period than does GAAP net investment income, although we can offer no assurance that will be the case as the ultimate tax character of our earnings cannot be determined until tax returns are prepared after the end of a fiscal year. We note that these non-GAAP measures may not be useful indicators of taxable earnings, particularly during periods of market disruption and volatility. The following table provides a reconciliation of net investment income to core net investment income for the three months ended June 30, 2017 and June 30, 2016:
|Three Months Ended June 30, 2017||Three Months Ended June 30, 2016|
|Amount||Per Share Amounts(basic)||Amount||Per Share Amounts(basic)|
|Net investment income||$||7,541,875||$||0.147||$||6,798,806||$||0.132|
|CLO equity additional distributions||1,737,958||$||0.034||9,494,983||$||0.184|
|Core net investment income||$||9,279,833||$||0.181||$||16,293,789||$||0.316|
A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.ticc.com.The following financial statements are unaudited and without footnotes. Readers who would like additional information should obtain our Form 10-Q for the period ended June 30, 2017, and subsequent reports on Form 10-Q as they are filed.
|TICC CAPITAL CORP.|
|CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES|
|June 30, 2017||December 31, 2016|
|Non-affiliated/non-control investments (cost: $467,724,988 @ 6/30/17; $616,542,612 @ 12/31/16)||$||440,238,676||$||578,297,069|
|Affiliated investments (cost: $10,467,049 @ 6/30/17; $7,497,229 @ 12/31/16)||14,517,716||11,626,007|
|Total investments at fair value (cost: $478,192,037 @ 6/30/17;|
|$624,039,841 @ 12/31/16)||454,756,392||589,923,076|
|Cash and cash equivalents||88,751,878||8,261,698|
|Interest and distributions receivable||6,820,485||9,682,672|
|Securities sold not settled||10,209,285||7,406|
|Accrued interest payable||$||1,608,262||$||1,731,111|
|Investment advisory fee and net investment income incentive fee payable to affiliate||3,392,314||3,673,381|
|Securities purchased not settled||2,956,250||-|
|Notes payable - TICC CLO 2012-1 LLC, net of discount and deferred issuance costs||71,092,564||125,853,720|
|Convertible senior notes payable, net of deferred issuance costs||94,369,112||94,116,753|
|6.50% unsecured notes due 2024, net of deferred issuance costs||62,179,537||-|
|Common stock, $0.01 par value, 100,000,000 share authorized; 51,479,409 and 51,479,409 shares issued|
|and outstanding, respectively||514,794||514,794|
|Capital in excess of par value||558,822,643||558,822,643|
|Net unrealized depreciation on investments||(23,435,645||)||(34,116,765||)|
|Accumulated net realized losses on investments||(100,530,769||)||(95,605,057||)|
|Distributions in excess of net investment income||(48,798,435||)||(43,623,117||)|
|Total net assets||386,572,588||385,992,498|
|Total liabilities and net assets||$||623,160,452||$||612,456,506|
|Net asset value per common share||$||7.51||$||7.50|
|TICC CAPITAL CORP.|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|Three Months Ended June 30, 2017||Three Months Ended June 30, 2016||Six Months Ended June 30, 2017||Six Months Ended June 30, 2016|
|From non-affiliated/non-control investments:|
|Interest income - debt investments||$||6,717,197||$||8,370,025||$||13,789,404||$||16,835,836|
|Income from securitization vehicles and investments||9,426,014||7,980,865||17,995,617||13,902,416|
|Commitment, amendment fee income and other income||768,682||389,965||1,510,171||849,826|
|Total investment income from non-affiliated/non-control investments||16,911,893||16,740,855||33,295,192||31,588,078|
|From affiliated investments:|
|Interest income - debt investments||100,260||80,287||182,441||159,712|
|Total investment income from affiliated investments||100,260||80,287||182,441||159,712|
|From control investments:|
|Interest income - debt investments||-||225,385||-||567,219|
|Total investment income from control investments||-||225,385||-||567,219|
|Total investment income||17,012,153||17,046,527||33,477,633||32,315,009|
|Investment advisory fees||2,182,173||2,411,762||4,452,175||6,117,485|
|General and administrative||651,417||796,981||1,217,163||1,689,884|
|Total expenses before incentive fees||8,260,137||9,003,955||15,797,565||20,227,923|
|Net investment income incentive fees||1,210,141||1,243,766||2,263,621||1,243,766|
|Net investment income||7,541,875||6,798,806||15,416,447||10,843,320|
|Net change in unrealized appreciation/(depreciation) on investments|
|Total net change in unrealized appreciation/(depreciation) on investments||1,033,062||48,792,632||10,681,120||28,184,226|
|Net realized gains/(losses) on investments|
|Total net realized gains/(losses) on investments||542,959||(7,327,598||)||(4,925,712||)||(7,877,603||)|
|Net increase in net assets resulting from operations||$||9,117,896||$||48,263,840||$||21,171,855||$||31,149,943|
|Net increase in net assets resulting from net investment income per common share:|
|Net increase in net assets resulting from operations per common share:|
|Weighted average shares of common stock outstanding:|
|Distributions per share||$||0.20||$||0.29||$||0.40||$||0.58|
|Three MonthsEnded||Three MonthsEnded||Six MonthsEnded||Six MonthsEnded|
|June 30,2017||June 30,2016||June 30,2017||June 30,2016|
|Per Share Data|
|Net asset value at beginning of period||$||7.53||$||5.89||$||7.50||$||6.40|
|Net investment income (1)||0.15||0.13||0.30||0.21|
|Net realized and unrealized capital gains (losses) (2)||0.03||0.81||0.11||0.39|
|Net change in net asset value from operations||0.18||0.94||0.41||0.60|
|Distributions per share from net investment income||(0.20)||(0.29)||(0.40)||(0.58)|
|Distributions based on weighted average share impact||-||-||-||0.01|
|Total distributions (3)||(0.20)||(0.29)||(0.40)||(0.57)|
|Effect of shares repurchased, gross||-||-||-||0.11|
|Net asset value at end of period||$||7.51||$||6.54||$||7.51||$||6.54|
|Per share market value at beginning of period||$||7.38||$||4.80||$||6.61||$||6.08|
|Per share market value at end of period||$||6.34||$||5.27||$||6.34||$||5.27|
|Total return (4)||(11.38)||%||15.83||%||1.62||%||(3.03)||%|
|Shares outstanding at end of period||51,479,409||51,479,409||51,479,409||51,479,409|
|Net assets at end of period (000's)||386,573||336,639||386,573||336,639|
|Average net assets (000's)||387,162||319,971||387,017||323,472|
|Ratio of expenses to average net assets (5)||9.78||%||12.81||%||9.33||%||13.28||%|
|Ratio of net investment income to average net assets (5)||7.79||%||8.50||%||7.97||%||6.70||%|
|Portfolio turnover rate||18.36||%||11.79||%||25.23||%||13.53||%|
|_____________(1) Represents per share net investment income for the period, based upon average shares outstanding.(2) Net realized and unrealized capital gains include rounding adjustments to reconcile change in net asset value per share.(3) Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company's taxable earnings fall below the total amount of the Company's distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company's stockholders. The ultimate tax character of our earnings cannot be determined until tax returns are prepared after the end of a fiscal year.(4) Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming distribution reinvestment prices obtained under the Company's distribution reinvestment plan, excluding any discounts. Total return is not annualized.(5) Annualized.(6) The following table provides supplemental performance ratios (annualized) measured for the three months ended June 30, 2017 and 2016:|
|Three MonthsEnded||Three MonthsEnded||Six MonthsEnded||Six MonthsEnded|
|Ratio of expenses to average net assets:||June 30, 2017||June 30, 2016||June 30, 2017||June 30, 2016|
|Expenses before incentive fees||8.53||%||11.26||%||8.16||%||12.51||%|
|Net investment income incentive fees||1.25||%||1.55||%||1.17||%||0.77||%|
|Capital gains incentive fees||-||%||-||%||-||%||-||%|
|Ratio of expenses, excluding interest expense,||5.00||%||7.27||%||5.02||%||7.84||%|
|to average net assets|
About TICC Capital Corp.TICC Capital Corp. is a publicly-traded business development company principally engaged in providing capital to established businesses, investing in syndicated bank loans and purchasing debt and equity tranches of collateralized loan obligation vehicles. Forward-Looking Statements This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. 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. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.