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HIGHLIGHTS
-- For the quarter ended June 30, 2009, we recorded net investment income
of approximately $3.2 million, or approximately $0.12 per share, net
unrealized appreciation on investments of approximately $9.8 million and
net realized losses on investments of approximately $3.3 million. In
total, we had a net increase in net assets resulting from operations of
approximately $0.36 per share for the second quarter.
-- Total investment income for the second quarter amounted to
approximately $4.9 million, down approximately 51% from the second
quarter of 2008 largely due to fewer portfolio investments as a
result of de-levering activities throughout 2008, as well as a lower
return on our debt investment portfolio.
-- Expenses for the second quarter of 2009 were approximately $1.7
million, down approximately 61% from the second quarter of 2008 due
largely to the elimination of interest expense associated with our
de-levering actions during 2008 to repay all debt under our previous
credit facility and lower investment advisory fees. The primary
components of our expenses were approximately $1.0 million in
investment advisory fees and approximately $300,000 in professional
fees for valuation, legal and auditing services.
-- During the quarter ended June 30, 2009, we incurred net unrealized
appreciation of approximately $9.8 million comprised of $14.6 million
in unrealized appreciation, $7.7 million in unrealized depreciation
and approximately $2.9 million relating to the reversal of prior
period net unrealized depreciation.
-- For the quarter ended June 30, 2009, we had net realized losses on
investments of approximately $3.3 million.
-- Our Board of Directors has declared a distribution of $0.15 per share
for the third quarter of 2009.
-- Payable Date: September 30, 2009
-- Record Date: September 10, 2009
-- During the second quarter, the Board considered the possibility of a
share repurchase program, as it has done historically. The Board
identified certain benefits to implementing a repurchase program,
notably the prospects for increasing our per share book value and for
generating a positive IRR on that invested capital. While we are
sensitive to other issues which would arise as a result of a repurchase,
specifically the greater concentration risk of our existing investments
to our portfolio and the foregone opportunities to purchase other
attractive risk-adjusted investments, we nonetheless believe there is
now merit to having a share repurchase program in place and available to
be implemented as appropriate. With that in mind, our Board has
authorized a share repurchase program which would provide for the
purchase of up to $10 million worth of shares to be implemented at the
discretion of our management team. Under the repurchase program, TICC
may, but is not obligated to, repurchase its outstanding common stock in
the open market from time to time. The timing and number of shares to be
repurchased in the open market will depend on a number of factors,
including market conditions and alternative investment opportunities.
In addition, any repurchases will be conducted in accordance with the
Investment Company Act of 1940, as amended. We have not yet been active
in the repurchase program and there are no assurances that we will
engage in repurchases, but if market conditions warrant, we now have the
ability to take advantage of situations where we believe share
repurchases would be advantageous to the company and to our
shareholders.
-- During the second quarter, we completed 4 new investments with a face
amount of approximately $13.4 million and a total cost value of
approximately $9.3 million for an aggregate discount of approximately
30% from par. Each of those investments represents the senior secured
1st lien notes issued by the respective companies.
-- As of June 30, 2009, we placed our investment in Integra Telecomm, Inc.
on non-accrual status as the company is not paying cash interest on the
2nd lien term loan pending completion of a restructuring. However, we
believe that the associated debt outstanding will be fully recovered.
-- At June 30, 2009, the weighted average yield of our debt investments
(excluding cash equivalents and assuming no interest income from any
investments on non-accrual status) was approximately 7.8%.
-- At June 30, 2009, the weighted average yield of our debt investments,
excluding our investments on non-accrual status as of June 30, 2009, was
approximately 10.0%.
-- At June 30, 2009, our cash position stood at approximately $31.4 million
and, of that amount, approximately $3.6 million was reserved for trades
purchased and not yet settled.
-- At June 30, 2009, net asset value per share was $7.66 compared with the
net asset value at March 31, 2009 of $7.46 and at December 31, 2008 of
$7.68.
SUBSEQUENT EVENTS
-- On July 30, 2009, the Board of Directors declared a distribution of $0.15
per share for the third quarter, payable on September 30, 2009 to
shareholders of record as of September 10, 2009.
-- On July 31, 2009, we placed our investment in WAICCS Las Vegas, LLC on
non-accrual status effective July 31st and revised its maturity date to
July 31st as the company is now in default.
We will host a conference call to discuss our second quarter results today, Thursday, August 6th at 10:00 AM ET. Please call 800-860-2442 to participate. A replay of the conference call will be available for approximately 30 days. The replay number is 877-344-7529, the replay passcode is 432862.
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, 2008, and subsequent reports on Form 10-Q as they are filed.
TICC CAPITAL CORP.
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
June 30, 2009 December 31, 2008
----------------- -----------------
(unaudited)
ASSETS
Investments, at fair value (cost:
$265,141,324 @ 6/30/09; $282,299,228
@ 12/31/08)
Non-affiliated/non-control
investments (cost: $245,080,142
@ 6/30/09; $261,923,603 @
12/31/08) $ 156,421,576 $ 168,094,127
Control investments (cost:
$20,061,182 @ 6/30/09;
$20,375,625 @ 12/31/08) 20,825,000 21,500,000
----------------- -----------------
Total investments at fair value 177,246,576 189,594,127
----------------- -----------------
Cash and cash equivalents 31,414,446 14,069,251
Interest receivable 641,281 1,151,703
Prepaid expenses and other assets 159,318 147,806
----------------- -----------------
Total assets $ 209,461,621 $ 204,962,887
================= =================
LIABILITIES
Investment advisory fee payable to
affiliate $ 983,984 $ 1,287,451
Securities purchased not settled 3,640,736 0
Accrued expenses 427,333 308,686
----------------- -----------------
Total liabilities 5,052,053 1,596,137
----------------- -----------------
NET ASSETS
Common stock, $0.01 par value,
100,000,000 shares authorized,
and 26,673,718 and 26,483,546
issued and outstanding, respectively 266,736 264,835
Capital in excess of par value 319,407,882 318,662,914
Net unrealized depreciation on
investments (87,894,748) (92,705,101)
Accumulated net realized losses
on investments (25,214,479) (21,899,323)
Distributions in excess of
investment income (2,155,823) (956,575)
----------------- -----------------
Total net assets 204,409,568 203,366,750
----------------- -----------------
Total liabilities and net
assets $ 209,461,621 $ 204,962,887
================= =================
Net asset value per common
share $ 7.66 $ 7.68
TICC CAPITAL CORP.
STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 2009 June 30, 2008 June 30, 2009 June 30, 2008
------------- ------------- ------------- -------------
INVESTMENT INCOME
From
non-affiliated/
non-control
investments:
Interest
income - debt
investments $ 4,269,217 $ 8,933,424 $ 8,718,758 $ 19,382,948
Interest
income - cash
and cash
equivalents 0 68,691 0 124,683
Other income 22,029 323,645 62,029 531,425
------------- ------------- ------------- -------------
Total
investment
income from
non-affiliated/
non-control
investments 4,291,246 9,325,760 8,780,787 20,039,056
------------- ------------- ------------- -------------
From control
investments:
Interest
income - debt
investments 628,953 748,660 1,262,720 1,515,187
------------- ------------- ------------- -------------
Total
investment
income from
control
investments 628,953 748,660 1,262,720 1,515,187
------------- ------------- ------------- -------------
Total
investment
income 4,920,199 10,074,420 10,043,507 21,554,243
------------- ------------- ------------- -------------
EXPENSES
Compensation
expense 225,953 222,000 451,905 444,000
Investment
advisory fees 983,984 1,904,271 1,925,035 4,084,126
Professional
fees 266,812 375,689 570,217 725,616
Interest
expense 0 1,514,197 0 3,811,630
General and
admin-
istrative 200,656 286,089 335,320 446,041
------------- ------------- ------------- -------------
Total expenses 1,677,405 4,302,246 3,282,477 9,511,413
------------- ------------- ------------- -------------
Net investment
income 3,242,794 5,772,174 6,761,030 12,042,830
------------- ------------- ------------- -------------
Net change in
unrealized
appreciation
or
depreciation
on investments 9,793,597 (955,331) 4,810,353 (23,354,727)
------------- ------------- ------------- -------------
Net realized
(losses) gains
on investments (3,337,193) 932,944 (3,315,156) 899,125
------------- ------------- ------------- -------------
Net increase
(decrease) in
net assets
resulting from
operations $ 9,699,198 $ 5,749,787 $ 8,256,227 $ (10,412,772)
============= ============= ============= =============
Net increase in
net assets
resulting from
net investment
income per
common share:
Basic and
diluted
(1) $ 0.12 $ 0.25 $ 0.25 $ 0.54
Net increase
(decrease) in
net assets
resulting from
operations per
common share:
Basic and
diluted
(1) $ 0.36 $ 0.25 $ 0.31 $ (0.47)
Weighted
average shares
of common
stock
outstanding:
Basic and
diluted
(1) 26,585,951 22,708,251 26,535,592 22,363,146
(1) In accordance with SFAS 128-Earnings per Share, the weighted-average
shares of common stock outstanding used in computing basic and diluted
earnings per share for the six months ended June 30, 2008 was
increased retroactively by a factor of 1.021 to recognize the bonus
element associated with rights to acquire shares of common stock that
were issued to shareholders on May 23, 2008.
TICC CAPITAL CORP.
FINANCIAL HIGHLIGHTS (UNAUDITED)
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Per Share Data
Net asset value at
beginning of period $ 7.46 $ 10.81 $ 7.68 $ 11.94
----------- ----------- ----------- -----------
Net investment
income(1) 0.12 0.25 0.25 0.54
Net realized and
unrealized capital
gains (losses) (2) 0.24 0.01 0.06 (1.01)
----------- ----------- ----------- -----------
Total from investment
operations 0.36 0.26 0.31 (0.47)
----------- ----------- ----------- -----------
Total distributions(3) (0.15) (0.30) (0.30) (0.66)
----------- ----------- ----------- -----------
Effect of shares
issued, net of
offering expenses (0.01) (1.02) (0.03) (1.06)
----------- ----------- ----------- -----------
Net asset value at end
of period $ 7.66 $ 9.75 $ 7.66 $ 9.75
=========== =========== =========== ===========
Per share market value
at beginning of period $ 3.51 $ 7.52 $ 3.80 $ 9.23
Per share market value
at end of period $ 4.41 $ 5.46 $ 4.41 $ 5.46
Total return(4) 29.91% (23.40%) 25.13% (34.61%)
Shares outstanding at
end of period 26,673,718 26,189,851 26,673,718 26,189,851
Ratios/Supplemental
Data
Net assets at end of
period (000's) $ 204,410 $ 255,459 $ 204,410 $ 255,459
Average net assets
(000's) $ 199,114 $ 239,778 $ 201,479 $ 249,956
Ratio of expenses to
average net assets(5) 3.37% 7.18% 3.26% 7.61%
Ratio of expenses,
excluding interest
expense, to average
net assets(5) 3.37% 5.07% 3.26% 4.95%
Ratio of net investment
income to average net
assets(5) 6.51% 9.63% 6.71% 9.64%
(1) Represents per share net investment income for the period, based upon
average shares outstanding.
(2) Net realized and unrealized capital gains (losses) include rounding
adjustment 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 tax character of distributions will be determined at the end of
the fiscal year. However, if the character of such distributions
were determined as of June 30, 2009, distributions for 2009 would
not have been characterized as a tax return of capital to the
Company's stockholders; this tax return of capital may differ from
the return of capital calculated with reference to net investment
income for financial reporting purposes.
(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 dividend reinvestment prices
obtained under the Company's dividend reinvestment plan. Total
return is not annualized.
(5) Annualized. Effective December 30, 2008, the Company had fully
repaid all amounts under the revolving credit facility and reduced
the commitment amount thereunder to zero, effectively terminating
the facility.
About TICC Capital Corp.
We are a publicly traded business development company principally engaged in providing capital to small to mid-size technology-related companies. While the structures of our financings vary, we look to invest primarily in the debt of established technology-related businesses. Companies interested in learning more about financing opportunities should contact Debdeep Maji at (203) 983-5285 or visit our website at www.ticc.com.
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: Bruce Rubin 203-983-5280 Patrick Conroy 203-983-5282
SOURCE: TICC Capital Corp.
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