FSIC Reports Third Quarter 2016 Financial Results and Declares Regular Distribution for Fourth Quarter

PHILADELPHIA, Nov. 9, 2016 /PRNewswire/ -- FS Investment Corporation (NYSE: FSIC), a publicly traded business development company focused on providing customized credit solutions to private middle market U.S. companies, announced its operating results for the quarter ended September 30, 2016, and announced that its board of directors has declared its fourth quarter 2016 regular distribution.

Financial Highlights for the Quarter Ended September 30, 2016¹

• Net investment income of $0.20 per share, compared to $0.26 per share for the quarter ended September 30, 2015.
• Adjusted net investment income of $0.20 per share, compared to $0.21 per share for the quarter ended September 30, 2015.²
• Total net realized gain of $0.01 per share and total net change in unrealized appreciation of $0.26 per share, compared to a total net realized loss of $0.09 per share and a total net change in unrealized depreciation of $0.20 per share for the quarter ended September 30, 2015.
• Paid cash distributions to stockholders totaling $0.22275 per share.³
• Total purchases of $217.3 million versus $290.8 million of sales and repayments.
• Net asset value of $9.42 per share, compared to $9.18 per share as of June 30, 2016.

"Corporate credit markets rallied in the third quarter of 2016 amid generally solid U.S. economic conditions and stable commodity prices," said Michael C. Forman, Chairman and Chief Executive Officer of FSIC. "Given the continued strength of the credit markets, we took gains where appropriate and continued to free up capital to take advantage of a very healthy pipeline of new investments."

Declaration of Regular Distribution for Fourth Quarter 2016

FSIC's board of directors has declared a regular cash distribution for the fourth quarter of $0.22275 per share, which will be paid on or about January 4, 2017, to stockholders of record as of the close of business on December 21, 2016.

  Summary Consolidated Results

Portfolio Highlights as of September 30, 2016

• Total fair value of investments was $3.9 billion.
• Core investment strategies⁴ represented 97% of the portfolio by fair value as of September 30, 2016, including 85% from direct originations and 12% from opportunistic investments. Broadly syndicated/other investments represented the remaining 3% of the portfolio by fair value.
• Gross portfolio yield prior to leverage (based on amortized cost and excluding non-income producing assets)⁵ was 10.2%, unchanged from June 30, 2016. 
• Total commitments to direct originations (including unfunded commitments) made during the third quarter of 2016 was $144.2 million in 7 companies, 6 of which were existing portfolio companies.
• As of September 30, 2016, approximately 0.7% of investments were on non-accrual based on fair value.⁶

  Total Portfolio Activity

Direct Origination Activity

Leverage and Liquidity as of September 30, 2016

• Debt to equity ratio was 76%, based on $1.73 billion in total debt outstanding and stockholders' equity of $2.29 billion. FSIC's weighted average effective interest rate (including the effect of non-usage fees) was 3.95%.
• Cash and foreign currency of approximately $113.7 million and availability under its financing arrangements of $218.7 million, subject to borrowing base and other limitations.
• Nineteen unfunded debt investments with aggregate unfunded commitments of $137.2 million.

Conference Call Information

FSIC will host a conference call at 10:00 a.m. (Eastern Time) on Thursday, November 10, 2016, to discuss its third quarter 2016 results. All interested parties are welcome to participate. You can access the conference call by dialing (877) 443-2408 and using the conference ID 51809117 approximately 10 minutes prior to the call. The conference call will also be webcast, which can be accessed from the Investor Relations section of FSIC's website at www.fsinvestmentcorp.com under Presentations and Reports.

A replay of the call will be available for a period of 30 days following the call by visiting the Investor Relations section of FSIC's website at www.fsinvestmentcorp.com under Presentations and Reports. 

Supplemental Information

An investor presentation of financial information will be made available prior to the call in the Investor Relations section of FSIC's website at www.fsinvestmentcorp.com under Presentations and Reports.

About FS Investment Corporation

FS Investment Corporation (NYSE: FSIC) is a publicly traded business development company ("BDC") focused on providing customized credit solutions to private middle market U.S. companies. FSIC seeks to invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market companies to achieve the best risk-adjusted returns for its investors. In connection with its debt investments, FSIC may receive equity interests such as warrants or options.

FSIC is advised by FB Income Advisor, LLC, an affiliate of FS Investments, and is sub-advised by GSO / Blackstone Debt Funds Management LLC, an affiliate of GSO Capital Partners ("GSO"). GSO, with approximately $89.3 billion in assets under management as of September 30, 2016, is the credit platform of Blackstone, one of the world's leading managers of alternative investments. For more information, please visit www.fsinvestmentcorp.com.

About FS Investments

FS Investments is a leading asset manager that designs alternative investments to help institutional, advisory and individual investors build better portfolios. Its solutions provide access to alternative asset classes and top managers through a spectrum of structures, including business development companies, closed-end credit funds and operating companies. The firm is dedicated to setting industry standards for investor-centric service, education and transparency.

FS Investments was founded in 2007 as Franklin Square Capital Partners. It is headquartered in Philadelphia with offices in Orlando and Washington, DC. The firm currently manages six funds with over $18 billion in assets under management as of June 30, 2016, and co-manages an operating company. Its affiliated broker-dealer, FS Investment Solutions, LLC (member FINRA/SIPC), distributes its offerings.

Visit www.fsinvestments.com to learn more.

Forward-Looking Statements and Important Disclosure Notice

This announcement may contain certain forward-looking statements, including statements with regard to future events or the future performance or operations of FSIC. Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, risks associated with possible disruption in FSIC's operations or the economy generally due to terrorism or natural disasters, future changes in laws or regulations and conditions in FSIC's operating area, and the price at which shares of FSIC's common stock trade on the New York Stock Exchange. Some of these factors are enumerated in the filings FSIC makes with the SEC. FSIC undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The press release above contains summaries of certain financial and statistical information about FSIC. The information contained in this press release is summary information that is intended to be considered in the context of FSIC's SEC filings and other public announcements that FSIC may make, by press release or otherwise, from time to time. FSIC undertakes no duty or obligation to update or revise the information contained in this press release. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSIC, or information about the market, as indicative of FSIC's future results.

Individual investors and endowments may have different investment horizons, liquidity needs and risk tolerances. In addition, fees that may be incurred by an investor in a fund sponsored by FS Investments may be different than fees incurred by an endowment investing in similar assets as those in which the funds invest.

Other Information

The information in this press release is summary information only and should be read in conjunction with FSIC's quarterly report on Form 10-Q for the quarterly period ended September 30, 2016, which FSIC filed with the U.S. Securities and Exchange Commission (the "SEC") on November 9, 2016, as well as FSIC's other reports filed with the SEC. A copy of FSIC's quarterly report on Form 10-Q for the quarterly period ended September 30, 2016, and FSIC's other reports filed with the SEC can be found on FSIC's website at www.fsinvestmentcorp.com and the SEC's website at www.sec.gov.

Certain Information About Distributions

The determination of the tax attributes of FSIC's distributions is made annually as of the end of its fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination as to the tax attributes of the distributions made on a quarterly basis may not be representative of the actual tax attributes for a full year. FSIC intends to update stockholders quarterly with an estimated percentage of its distributions that resulted from taxable ordinary income. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.

The timing and amount of any future distributions on FSIC's shares of common stock are subject to applicable legal restrictions and the sole discretion of its board of directors. There can be no assurance as to the amount or timing of any such future distributions.

FSIC may fund its cash distributions to stockholders from any sources of funds legally available to it, including proceeds from the sale of shares of FSIC's common stock, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets and dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies. FSIC has not established limits on the amount of funds it may use from available sources to make distributions. There can be no assurance that FSIC will be able to pay distributions at a specific rate or at all.

Contact Information:

Investors:
Dominic Mammarella
Director, Investor Relations
[email protected]
215-220-4280

Media:
FS Investments Media Team
[email protected]
215-495-1174

Income Statement

Balance Sheet

Non-GAAP Financial Measures

This press release contains certain financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). FSIC uses these non-GAAP financial measures internally in analyzing financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing results and trends and in comparing FSIC's financial results with other BDCs.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with FSIC's consolidated financial statements prepared in accordance with GAAP. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures has been provided in this press release, and investors are encouraged to review the reconciliation.

Reconciliation of Non-GAAP Financial Measures¹

SOURCE FS Investment Corporation

Related Links

http://www.fsinvestmentcorp.com