TICC Announces Results of Operations for the Quarter Ended September 30, 2013 and Announces Quarterly Distribution of $0.29 per Share


GREENWICH, CT--(Marketwired - Nov 7, 2013) - TICC Capital Corp. (NASDAQ: TICC) announced today its financial results for the quarter ended September 30, 2013, and a distribution of $0.29 per share for the fourth quarter of 2013.

HIGHLIGHTS

  • For the quarter ended September 30, 2013, we recorded net investment income of approximately $12.2 million, or approximately $0.23 per share. Excluding the impact of a capital gains incentive fee accrual of approximately $2.3 million, our core net investment income(1) was approximately $14.5 million, or approximately $0.28 per share. In the third quarter, we also recorded net unrealized appreciation of approximately $12.7 million and net realized capital losses of approximately $1.3 million. In total, we had a net increase in net assets resulting from operations of approximately $23.6 million or approximately $0.45 per share for the third quarter.
    • Total investment income for the third quarter of 2013 amounted to approximately $27.4 million which represents an increase of approximately $2.0 million over the second quarter of 2013.
      • For the quarter ending September 30, 2013, TICC recorded earned income from our investment portfolio as follows:
        • approximately $13.7 million from our syndicated and bilateral investments,
        • approximately $12.2 million from our CLO equity investments,
        • approximately $0.7 million from our CLO debt investments, and
        • approximately $0.8 million from all other income.
    • As of the end of the third quarter of 2013 there were no loans on non-accrual status.
    • Our weighted average credit rating on a fair value basis stood at 2.1 at the end of the third quarter of 2013 (compared to 2.2 at the end of the second quarter of 2013).

  • Our operating expenses before the capital gains incentive fee for the quarter ended September 30, 2013 were approximately $12.9 million, up from the second quarter of 2013 by approximately $572,000 due largely to increased interest expense, as well as higher investment advisory fees.

  • The capital gains incentive fee increased by approximately $2.3 million for the quarter ended September 30, 2013. The capital gains incentive fee accrual, as reported under generally accepted accounting principles, is calculated on the basis of net realized and unrealized gains and losses at the end of each period. The accrued capital gains incentive fee related to the hypothetical liquidation of the portfolio (and assuming no other changes in realized or unrealized gains and losses) would only have become payable on September 30, 2013 to our investment adviser in the event of a complete liquidation of our portfolio as of period end and the termination of the Investment Advisory Agreement ("Agreement").

    The amount of the capital gains incentive fee, if any, which will actually be payable is determined in accordance with the terms of the Agreement and is calculated as of the end of each calendar year (or upon termination of the Agreement). The terms of the Agreement state that the capital gains incentive fee calculation is based on net realized gains, if any, offset by gross unrealized depreciation for the calendar year. No effect is given to gross unrealized appreciation in this calculation. 

  • Our Board of Directors has declared a distribution of $0.29 per share for the fourth quarter of 2013.
    • Payable Date: December 31, 2013
    • Record Date: December 17, 2013

  • During the third quarter of 2013, we made approximately $85.0 million in additional investments. The additional investments consisted of approximately $62.1 million in corporate securities, $17.2 million in CLO equity and $5.7 million in CLO debt.

    • It is worth noting that for the nine months ended September 30, 2013, we invested approximately $492.3 million, consisting primarily of $351.1 million in corporate securities, $124.1 million in CLO equity, and $17.1 million in CLO debt.

    • For the third quarter of 2013, we received proceeds of approximately $61.9 million from repayments, sales and amortization payments on our debt investments. 

  • At September 30, 2013, the weighted average yield of our debt investments was approximately 8.7%, compared with 8.5% at June 30, 2013. 

  • At September 30, 2013, net asset value per share was $9.90 compared with the net asset value per share at June 30, 2013 of $9.75. 

(1) Supplemental Information Regarding Core Net Investment Income

On a supplemental basis, we provide information relating to core net investment income which is a non-GAAP measure. This measure is provided in addition to, but not as a substitute for, net investment income. Core net investment income represents net investment income excluding our capital gains incentive fee. As the capital gains incentive fee, for generally accepted accounting purposes, is based on the hypothetical liquidation of the entire portfolio (and as any capital gains incentive fee may be non-recurring), we believe that core net investment income is a useful indicator of operations exclusive of any capital gains incentive fee. We note that such amount is excluded from the core net investment income amount presented below.

The following table provides a reconciliation of net investment income to core net investment income for the three and nine months ended September 30, 2013:

                     
    Three Months Ended
September 30, 2013
  Nine Months Ended
September 30, 2013
 
    Amount   Per Share
Amounts
  Amount     Per Share
Amounts
 
Net investment income   $ 12,238,709   $ 0.232   $ 38,845,830     $ 0.772  
Capital gains incentive fee     2,270,014     0.043     (414,404 )     (0.008 )
Core net investment income   $ 14,508,723   $ 0.275   $ 38,431,426     $ 0.764  
                             
                             

We will host a conference call to discuss our third quarter end results today, Thursday, November 7, 2013 at 10:00 AM ET. Please call 888-317-6016 to participate. A replay of the conference call will be available for approximately 30 days. The replay number is 877-344-7529, and the replay passcode is 10036486.

The following financial statements are unaudited and without footnotes. Readers who would like additional information should obtain our Form 10-K for the period ended December 31, 2012, and subsequent reports on Form 10-Q as they are filed.

   
TICC CAPITAL CORP.  
   
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)  
   
  September 30, 2013   December 31, 2012  
             
ASSETS            
             
  Non-affiliated/non-control investments (cost: $908,253,220 @ 9/30/13; $634,081,527 @ 12/31/12) $ 925,230,532   $ 651,099,873  
  Control investments (cost: $17,000,000 @ 9/30/13; $17,256,179 @ 12/31/12)   16,150,000     16,450,000  
    Total investments at fair value (cost: $925,253,220 @ 9/30/13; $651,337,706 @ 12/31/12)   941,380,532     667,549,873  
  Cash and cash equivalents   29,016,511     51,392,949  
  Restricted cash   28,568,347     21,240,508  
  Deferred debt issuance costs   8,304,521     8,154,925  
  Interest and distributions receivable   9,221,072     5,986,122  
  Securities sold not settled   4,911,617     1,516,875  
  Other assets   248,612     181,788  
      Total assets $ 1,021,651,212   $ 756,023,040  
   
LIABILITIES            
             
  Accrued interest payable $ 4,745,820   $ 4,234,376  
  Investment advisory fee payable to affiliate   6,724,619     4,930,908  
  Accrued capital gains incentive fee to affiliate   4,650,831     6,617,810  
  Securities purchased not settled   25,800,000     -  
  Accrued expenses   1,141,597     302,971  
  Notes payable - TICC CLO LLC, net of discount   100,001,227     99,882,627  
  Notes payable - TICC CLO 2012-1 LLC, net of discount   235,524,451     115,451,819  
  Convertible senior notes payable   115,000,000     115,000,000  
      Total liabilities   493,588,545     346,420,511  
             
COMMITMENTS (Note 14)            
             
NET ASSETS            
  Common stock, $0.01 par value, 100,000,000 shares authorized, and 53,326,368 and            
  41,371,286 issued and outstanding, respectively   533,264     413,713  
  Capital in excess of par value   569,499,065     451,157,297  
  Net unrealized appreciation on investments   16,127,312     16,212,167  
  Accumulated net realized losses on investments   (46,779,660 )   (53,906,504 )
  Distributions in excess of investment income   (11,317,314 )   (4,274,144 )
      Total net assets   528,062,667     409,602,529  
      Total liabilities and net assets $ 1,021,651,212   $ 756,023,040  
Net asset value per common share $ 9.90   $ 9.90  
             
             
 
TICC CAPITAL CORP.
 
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
    Three Months
Ended
September 30, 2013
    Three Months
Ended
September 30, 2012
  Nine Months
Ended
September 30, 2013
    Nine Months
Ended
September 30, 2012
                             
INVESTMENT INCOME                            
From non-affiliated/non-control investments:                            
  Interest income - debt investments   $ 14,039,082     $ 8,908,966   $ 38,334,197     $ 27,159,248
  Distributions from securitization vehicles and equity investments     12,256,961       6,025,634     31,676,007       17,919,415
  Commitment, amendment fee income and other income     787,777       278,613     3,505,135       4,524,825
    Total investment income from non-affiliated/non-control investments     27,083,820       15,213,213     73,515,339       49,603,488
From control investments:                            
  Interest income - debt investments     364,557       377,401     1,088,641       1,136,010
  Distributions from equity investments     -       -     -       62,041
  Total investment income from control investments     364,557       377,401     1,088,641       1,198,051
    Total investment income     27,448,377       15,590,614     74,603,980       50,801,539
EXPENSES                            
  Compensation expense     310,415       289,361     924,818       839,049
  Investment advisory fees     4,932,640       2,796,873     13,912,382       7,390,894
  Professional fees     386,793       420,696     1,474,966       1,647,733
  Interest expense and other debt financing expenses     4,977,313       1,398,975     13,980,611       3,052,056
  General and administrative     540,512       423,884     1,453,455       1,151,363
    Total expenses before incentive fees     11,147,673       5,329,789     31,746,232       14,081,095
  Net investment income incentive fees     1,791,981       1,003,437     4,426,322       4,360,917
  Capital gains incentive fees     2,270,014       4,649,814     (414,404 )     4,559,957
    Total incentive fees     4,061,995       5,653,251     4,011,918       8,920,874
    Total expenses     15,209,668       10,983,040     35,758,150       23,001,969
Net investment income     12,238,709       4,607,574     38,845,830       27,799,570
Net change in unrealized appreciation on investments     12,692,043       21,471,506     (84,855 )     22,844,614
Net realized (losses) gains on investments     (1,341,975 )     1,777,564     7,126,844       3,555,702
Net increase in net assets resulting from operations   $ 23,588,777     $ 27,856,644   $ 45,887,819     $ 54,199,886
                             
Net increase in net assets resulting from net investment income per common share:                            
      Basic   $ 0.23     $ 0.12   $ 0.77     $ 0.75
      Diluted   $ 0.22     $ 0.12   $ 0.74     $ 0.75
Net increase in net assets resulting from operations per common share:                            
      Basic   $ 0.45     $ 0.71   $ 0.91     $ 1.47
      Diluted   $ 0.41     $ 0.70   $ 0.85     $ 1.47
Weighted average shares of common stock outstanding:                            
      Basic     52,751,722       39,383,076     50,314,364       36,859,005
      Diluted     62,784,874       39,880,940     60,347,516       37,026,172
                             
                             
 
TICC CAPITAL CORP.
 
FINANCIAL HIGHLIGHTS (UNAUDITED)
 
    Three
Months Ended
September 30, 2013
(unaudited)
    Three
Months Ended
September 30, 2012
(unaudited)
    Nine
Months Ended
September 30, 2013
(unaudited)
    Nine
Months Ended
September 30, 2012
(unaudited)
 
Per Share Data                                
Net asset value at beginning of period   $ 9.75     $ 9.47     $ 9.90     $ 9.30  
Net investment income(1)     0.23       0.12       0.77       0.75  
Net realized and unrealized capital gains     0.22       0.59       0.14       0.72  
Total from net investment operations     0.45       0.71       0.91       1.47  
Distributions per share from net investment income     (0.29 )     (0.29 )     (0.87 )     (0.83 )
Distributions based on weighted average share impact     (0.01 )     (0.03 )     (0.04 )     (0.08 )
Total distributions(2)     (0.30 )     (0.32 )     (0.91 )     (0.91 )
Effect of shares issued, net of offering expenses     --       (0.01 )     --       (0.01 )
Net asset value at end of period   $ 9.90     $ 9.85     $ 9.90     $ 9.85  
Per share market value at beginning of period   $ 9.62     $ 9.69     $ 9.90     $ 8.65  
Per share market value at end of period   $ 9.74     $ 10.40     $ 9.74     $ 10.40  
Total return(3)(4)     4.26 %     10.32 %     4.90 %     30.55 %
Shares outstanding at end of period     53,326,368       41,312,780       53,326,368       41,312,780  
Ratios/Supplemental Data                                
Net assets at end of period (000's)     528,063       406,897       528,063       406,897  
Average net assets (000's)     520,602       374,696       499,240       349,297  
Ratio of expenses to average net assets:                                
  Expenses before incentive fees(4)     8.57 %     5.69 %     8.48 %     5.37 %
  Net investment income incentive fees(4)     1.38 %     1.07 %     1.18 %     1.67 %
  Capital gains incentive fees(4)     1.74 %     4.96 %     (0.11 )%     1.74 %
Total ratio of expenses to average net assets(4)     11.69 %     11.72 %     9.55 %     8.78 %
Ratio of expenses, excluding interest expense, to average net assets(4)     7.86 %     10.23 %     5.82 %     7.62 %
Ratio of net investment income to averagenet assets(4)     9.40 %     4.92 %     10.37 %     10.61 %
                                 
                                 
(1) Represents per share net investment income for the period, based upon average shares outstanding.
(2) 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 tax character of distributions will be determined at the end of the fiscal year.
(3) Total return equals the increase or decrease of ending market value over beginning market value, plus distributions, divided by the beginning market value, assuming dividend reinvestment prices obtained under the Company's dividend reinvestment plan. Total return is not annualized.
(4) Annualized.
   
   

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 obligations. Companies interested in learning more about financing opportunities should contact Debdeep Maji at (203) 983-5285.

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.

Contact Information:

Contact:
Bruce Rubin
203-983-5280
Patrick Conroy
203-983-5282

Company ProfileTICC Capital Corp.