Alcentra Capital Corporation Announces Fourth Quarter 2014 Results, Fiscal Year 2014 Results
David Scopelliti Named Senior Vice President of Alcentra Capital Corporation
NEW YORK, March 18, 2015 /PRNewswire/ -- Alcentra Capital Corporation (NASDAQ: ABDC) ("Alcentra" or the "Company"), announced today its financial results for the fourth quarter of 2014. The Company reported net investment income of $4.5 million or $0.34 per share, for the fourth quarter 2014, and, including net realized and unrealized gains of $0.2 million, earnings of $4.7 million1 before a provision for taxes on unrealized appreciation from portfolio investments, or $0.35 per share1, for the same period.
For the 8-month post-IPO period from May 8, 2014 through December 31, 2014, the Company reported net investment income of $11.6 million or $0.86 per share, and, including net realized and unrealized gains of $4.8 million, earnings of $16.4 million1 before a provision for taxes on unrealized appreciation from portfolio investments, or $1.22 per share1, for the same period.
Mr. Paul J. Echausse, the Company's President and Chief Executive Officer, said, "The fourth quarter was our best quarter in terms of originations. We grew the portfolio by $43.3 million on a net basis. Since our IPO on May 8, 2014, the portfolio has grown by approximately $73.7 million on a net basis for the 8 month post-IPO period, a 39.8% growth in the portfolio. Our gross originations were approximately $110.1 million which includes 16 new portfolio company investments. The investment amounts referenced herein are net of amortized costs."
"The weighted average yield on our debt portfolio was 11.7% at year end and the weighted average leverage on our portfolio is 3.4x EBITDA. In addition the yield on our debt portfolio has declined by 50 basis points since our IPO, and the weighted average leverage has declined by approximately 0.3 times EBITDA (from 3.7x EBITDA to 3.4x EBITDA). At a time when the BDC industry is focused on portfolio leverage, credit quality and the quality of investment originations, the aforementioned statistics are compelling," observed Mr. Echausse.
"We continue to find investments with companies that demonstrate good growth opportunities at reasonable leverage. We invested in six opportunities in the fourth quarter (five new portfolio companies and one refinancing of an existing portfolio company). I would like to point out a few year-end statistics that reinforce our differentiated investment strategy:
Net realized and unrealized gains of $4.7 million since the May 8, 2014 IPO demonstrates the opportunity for capital appreciation associated with our investment focus on growth companies;
The weighted average yield on our debt portfolio is 11.7% and the weighted average leverage in the debt portfolio is 3.4x EBITDA; thus demonstrating that we can generate good yields in our debt portfolio at moderate leverage;
$101.8 million of the portfolio (41.4%) had a first dollar loss at 0.0x-1.0x EBITDA; $93.0 million of the portfolio (37.8%) had a first dollar loss at 1.0x-3.0x EBITDA; $32.5 million of the portfolio (13.2%) had a first dollar loss of 3.0x-4.0x EBITDA; and $18.1 million of the portfolio (7.4%) had a first dollar loss of 4.0x-4.5x EBITDA; and $0.5 million of the portfolio (<1%) had a first dollar loss >4.5x EBITDA;
Our average portfolio company investment was approximately $8.8 million and there were no non-performing loans in the portfolio.
"With our focus on growth companies, we have assembled a portfolio that combines a good yield on our debt portfolio at moderate leverage, strong credit statistics with capital appreciation. We continue to remain disciplined at this point in the economic cycle," concluded Mr. Echausse.
At December 31, 2014, net asset value ("NAV") per share was $14.87, which is an increase of $0.24 from the $14.63 NAV at the time of our IPO.
1 Earnings and earnings per share before a provision for taxes on unrealized appreciation from portfolio investments are non-GAAP financial measures that are calculated by subtracting the provision of taxes on unrealized gain on investments from Net Increase in Net Assets from Operations. Reconciliations of these numbers to the most directly comparable GAAP financial measure are set forth in Schedule 1 hereto.
| Highlights |
|
| ($ in mm, except per share calculation) |
|
| Portfolio results, as of December 31, 2014 |
|
| Total Assets |
$ 272.2 |
| Investment portfolio, at fair value |
$ 258.6 |
| Net Assets |
$ 200.9 |
| Weighted Average yield on debt investments |
11.70% |
| Net Asset Value per share |
$ 14.87 |
| Portfolio activity in the current quarter |
|
| Number of new investments |
5 |
| Add-on investments |
1 |
| Total capital deployed from IPO through December 31, 2014 |
$ 110.1 |
| Proceeds from repayments, sales, and amortizations |
$ 43.4 |
| Number of portfolio companies, end of period |
28 |
| Net investment income |
$ 11.6 |
| Net investment income per share |
$ 0.34 |
| Net increase in net assets from operations, before provision |
$ 4.7 |
| Net increase in net assets from operations per share (Before |
$ 1.22 |
| Dividend declared per share (paid April 6, 2015) |
$ 0.34 |
Capital Resources
As of December 31, 2014, we had $10.2 million of cash and $62.5 million drawn under our revolving credit facility and our net assets totaled $200.9 million
| Alcentra Capital Corporation and Subsidiary |
|
| Consolidated Statement of Assets and Liabilities |
|
| Alcentra Capital Corporation and Subsidiary |
|
| Assets |
As of |
| Portfolio investments, at fair value |
|
| Non-controlled, non-affiliated investments, at fair value (cost of $165,921,535 and $57,569,745, respectively) |
$ 167,325,100 |
| Non-controlled, affiliated investments, at fair value (cost $61,564,299 and $35,529,197, respectively) |
61,253,192 |
| Controlled, affiliated investments, at fair value (cost $26,596,938 and $27,274,576, respectively) |
30,055,562 |
| Total of portfolio investments, at fair value (cost $254,082,722 and $120,373,518, respectively) |
258,633,854 |
| Cash |
10,022,617 |
| Dividends and interest receivable |
1,417,500 |
| Receivable for investments sold |
4,753 |
| Due from Limited Partners |
- |
| Deferred financing costs |
1,986,520 |
| Deferred note offering costs |
25,743 |
| Prepaid expenses and other assets |
128,388 |
| Total Assets |
$ 272,219,375 |
| Liabilities |
|
| Credit facility payable |
$ 62,499,154 |
| Payable for investments purchased |
8,717 |
| Other accrued expenses and liabilities |
539,417 |
| Due to affiliate |
- |
| Directors' fees payable |
85,692 |
| Professional fees payable |
409,628 |
| Interest and credit facility expense payable |
216,476 |
| Management fee payable |
615,668 |
| Distributions payable |
4,595,700 |
| Unearned structuring fee revenue |
517,339 |
| Income Tax liability |
45,272 |
| Deferred tax liability |
1,697,004 |
| Capital contributions paid in advance |
- |
| Total Liabilities |
71,230,067 |
| Net Assets |
|
| General Partner |
- |
| Limited Partners |
- |
| Common stock, par value $0.001 per share (100,000,000 shares authorized, 13,516,766 shares issued and outstanding) |
13,517 |
| Additional paid-in capital |
197,838,155 |
| Accumulated net realized gain (loss) |
71,712 |
| Undistributed net investment income |
211,846 |
| Net unrealized appreciation (depreciation) on investments, net of provision for taxes of $1,742,276 and $0 as of December 31, 2014 and December 31, 2013, respectively |
2,854,078 |
| Total Net Assets |
200,989,308 |
| Total Liabilities and Net Assets |
$ 272,219,375 |
| Net Asset Value Per Share |
$ 14.87 |
| Alcentra Capital Corporation and Subsidiary |
|||
| Consolidated Statement of Operations |
|||
| Alcentra Capital Corporation |
Alcentra Capital Corporation |
||
| Investment Income: |
For the period from |
For the three months |
|
| From non-controlled, non-affiliated investments: |
|||
| Interest income from portfolio investments |
$ 7,099,277 |
$ 3,404,275 |
|
| Paid in-kind income from portfolio investments |
1,793,553 |
1,181,867 |
|
| Other income from portfolio investments |
316,063 |
(566,816) |
|
| Dividend income from portfolio investments |
576,520 |
201,860 |
|
| From non-controlled, affiliated investments: |
|||
| Interest income from portfolio investments |
2,676,843 |
1,133,912 |
|
| Paid in-kind income from portfolio investments |
1,201,757 |
537,378 |
|
| Other income from portfolio investments |
2,967 |
2,020 |
|
| Dividend income from portfolio investments |
- |
- |
|
| From controlled, affiliated investments: |
|||
| Interest income from portfolio investments |
1,701,725 |
544,233 |
|
| Paid in-kind income from portfolio investments |
625,083 |
231,673 |
|
| Other income from portfolio investments |
172,426 |
1 |
|
| Dividend income from portfolio investments |
- |
- |
|
| Total investment income |
16,166,214 |
6,670,403 |
|
| Expenses: |
|||
| Management fees |
2,506,937 |
1,056,912 |
|
| Incentive fees |
966,059 |
202,509 |
|
| Professional fees |
800,873 |
576,051 |
|
| Valuation services |
376,405 |
213,705 |
|
| Interest and credit facility expense |
1,016,505 |
420,581 |
|
| Amortization of deferred financing costs |
326,835 |
132,152 |
|
| Directors' fees |
192,608 |
85,692 |
|
| Insurance Expense |
183,882 |
183,882 |
|
| Other expenses |
212,248 |
(108,735) |
|
| Total expenses |
6,582,352 |
2,762,749 |
|
| Waiver of management and incentive fees by the Investment Advisor |
(2,017,870) |
(643,752) |
|
| Net expenses |
4,564,482 |
2,118,997 |
|
| Net investment income |
11,601,732 |
4,551,406 |
|
| Realized Gain (Loss) and Net Change in Unrealized Appreciation |
|||
| Net realized gain (loss) on: |
|||
| Non-controlled, non-affiliated investments |
178,297 |
160,422 |
|
| Non-controlled, affiliated investments |
29,203 |
29,203 |
|
| Controlled, affiliated investments |
71,711 |
71,711 |
|
| Net realized gain (loss) from portfolio investments |
279,211 |
261,336 |
|
| Net change in unrealized appreciation (depreciation) on: |
|||
| Non-controlled, non-affiliated investments |
1,403,565 |
585,204 |
|
| Non-controlled, affiliated investments |
(311,107) |
(1,279,678) |
|
| Controlled, affiliated investments |
3,458,624 |
624,805 |
|
| Net change in unrealized appreciation (depreciation) |
4,551,082 |
(69,669) |
|
| Benefit/(Provision) for taxes on unrealized gain on investments |
(1,697,004) |
(1,697,004) |
|
| Net realized gain (loss) and net change in unrealized appreciation |
|||
| investments |
3,133,289 |
(1,505,337) |
|
| - |
- |
||
| Net Increase in Net Assets from Operations |
$ 14,735,021 |
$ 3,046,069 |
|
| Basic and diluted: |
|||
| Net investment income per share |
$ 0.86 |
$ 0.34 |
|
| Earnings per share before provision for taxes on unrealized gains |
$ 1.22 |
$ 0.35 |
|
| Earnings per share after provision for taxes on unrealized gains |
$ 1.09 |
$ 0.23 |
|
| Weighted Average Shares of Common Stock Outstanding |
13,516,766 |
13,516,766 |
|
First Quarter 2015 Dividend Declaration
On March 10, 2015, the Company's Board of Directors declared the 2015 1st quarter calendar dividend of $0.34 per share, payable on April 6, 2015 to shareholders of record on March 31, 2015. The Company had previously paid a dividend of $0.34 per share on January 6, 2015 to shareholders of record on December 30, 2014.
David Scopelliti Named Senior Vice President
On March 10, 2015, the Company's Board of Directors elected David Scopelliti as a Senior Vice President. David joined the Company's external investment adviser, Alcentra NY, LLC, in September 2014 as a Senior Vice President. David has more than 25 years of experience in the leveraged finance industry. David replaces Scott Gold as an officer of Alcentra Capital Corporation. Scott will remain an officer of the Adviser and continue to work on originating investments for the Company and monitoring its portfolio companies.
About Alcentra Capital Corporation
Alcentra (www.alcentracapital.com) is an externally-managed, closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Alcentra's investment objective is to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies in the form of subordinated debt and, to a lesser extent, senior debt and minority equity investments. Alcentra's investment activities are managed by its investment adviser, Alcentra NY, LLC.
About Alcentra NY, LLC
Alcentra NY, LLC, our investment adviser, is part of BNY Alcentra Group Holdings, Inc. ("Alcentra Group"), one of the world's leading sub-investment grade credit asset managers focusing on the U.S. and European markets. Alcentra Group has an investment track record that spans across 75 separate investment funds totaling approximately $22 billion (including accounts managed by Alcentra NY, LLC, Alcentra Ltd, and assets managed by Alcentra Group personnel for affiliates under dual officer arrangements).
FORWARD-LOOKING STATEMENTS
Statements included herein may contain "forward-looking statements," which relate to future performance or financial condition. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission. Alcentra undertakes no duty to update any forward-looking statement made herein except as required by law. All forward-looking statements speak only as of the date of this press release.
Schedule 1
Reconciliation of Non-GAAP Financial Measures
| Three Months Ended |
Eight Month Period from May 8, 2014 |
|||
| Amount |
Per Share |
Amount |
Per Share |
|
| Net Increase in Net Assets from Operations |
$3,046,069 |
$.22 |
$14,735,021 |
$1.09 |
| Less: (Provision) for taxes on unrealized gain on investments |
$(1,697,004) |
- |
$(1,697,004) |
|
| Earnings before a provision for taxes on unrealized appreciation from portfolio investments |
$4,743,073 |
$.35 |
$16,432,025 |
$1.22 |
SOURCE Alcentra Capital Corporation
Related Links
http://www.alcentracapital.com
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