NEW YORK, Aug. 7, 2019 /PRNewswire/ -- Alcentra
Capital Corporation (NASDAQ: ABDC) (the "Company"), a provider of
debt financing solutions to middle-market companies based primarily
in the United States, today
announced its financial results for the second quarter of 2019.
Second Quarter 2019 Highlights
- Total investment income of $6.1
million
- Net investment income of $2.5
million, or $0.20 per
share
- Invested approximately $28.6
million of capital into 6 new portfolio investments,
including two new companies
- Received proceeds from repayments, loan dispositions and
amortization on investments of approximately $22.1 million
- Net asset value of $141.9
million, or $11.02 per share,
after taking into account the $0.15
special dividend paid on July 3,
2019
- Weighted average debt portfolio yield of approximately
10.7%
Suhail A. Shaikh, Chief Executive
Officer of the Company, stated, "Over the last several quarters we
have made significant progress in rotating our legacy portfolio
into our new strategy and stabilizing NAV amid a competitive
environment for direct lending. We are pleased with the higher
quality of the book today against the comparable period."
Second Quarter 2019 Financial Results
For the three months ended June 30,
2019, total investment income was $6.1 million, a decrease of approximately
$1.1 million from the $7.3 million of total investment income for the
three months ended June 30, 2018.
This decrease was due to continued portfolio rotation of legacy
investments to investments more senior in the capital structure of
our portfolio companies, and the associated decrease in
weighted-average yields. For the three months ended June 30, 2019, interest and PIK income comprised
$5.9 million. Net investment income
for the three months ended June 30,
2019 was $2.5 million, or
$0.20 per share, as compared to
$3.5 million, or $0.25 per share, for the three months ended
June 30, 2018.
For the three months ended June 30,
2019, total net expenses (after the waiver of management
fees) were $3.6 million, a decrease
of $0.2 million or 4.3%, from the
$3.8 million for the three months
ended June 30, 2018. Base management
fees were $0.8 million, a decrease of
$0.2 million, or 18.8%, from the
$1.0 million for the three months
ended June 30, 2018. This decrease
was due to the lower amount of gross assets outstanding between the
comparable periods. For the three months ended June 30, 2019, the Company recorded a net
realized gain of $1.6 million and net
change in unrealized depreciation from portfolio investments of
$1.1 million. As a result, after
considering the Company's provision for taxes on unrealized gains,
the Company's net increase in net assets resulting from operations
was $2.1 million for the three months
ended June 30, 2019.
General and administrative expenses for the three months ended
June 30, 2019 were $1.5 million, an increase of $0.6 million from the comparable period. This was
largely due to an increase in professional fees and directors'
fees, both primarily relating to stockholder activist activities
and the board of director's formal review process to evaluate
strategic alternatives for the Company. These were partially offset
by a decrease in our excise tax payable, consulting fees and a
reversal of accrued incentive fees.
Portfolio and Investment Activities
As of June 30, 2019, the fair
value of the Company's investment portfolio totaled $219.2 million and consisted of 28 companies and
1 rated debt security in a CLO. The average portfolio investment
size on an amortized cost and fair market basis was $7.2 million and $7.0
million, respectively. The Company received proceeds from
repayments, loan dispositions, and amortization on investments of
approximately $22.1 million during
the three months ended June 30,
2019.
New and add-on investments totaling approximately $28.6 million during the quarter ended
June 30, 2019 included the
following:
New portfolio company investment:
- Investment of $5.0 million in the
first lien tranche and $5.0 million
in the second lien tranche of Perforce Software, Inc.;
- Investment of $7.0 million in the
first lien tranche of Digital Room Holdings, Inc.
Existing portfolio company investments and committed capital
funding:
- Investment of $6.1 million in the
first lien tranche of Manna Pro Products, LLC.
- Investment of $4.8 million in the
second lien tranche of Pharmalogic Holdings Corp.
- Investment of $1.0 million in the
second lien tranche of BayMark Health Services, Inc.
As of June 30, 2019, the Company
had one debt investment (Southern Technical Institute, Inc.) on
non-accrual status.
A risk rating of the portfolio companies is available on the
Company's website presentation
(https://investors.alcentracapital.com/events-presentations) and in
the MD&A section of the Form 10-Q for the quarter ended
June 30, 2019 filed with the
Securities and Exchange Commission (the "SEC").
Liquidity and Capital Resources
At June 30, 2019, the Company had
$7.8 million in cash, $26.6 million of borrowings outstanding on its
$115.0 million senior secured
revolving credit facility and $55.0
million outstanding of Alcentra Capital InterNotes.
Subsequent Events
- On July 3, 2019, the Company paid
a quarterly dividend of $0.18 per
share and a special dividend of $0.15
per share to stockholders of record as of June 28, 2019.
- On August 5, 2019, the Board
approved the 2019 third quarter dividend of $0.18 per share for stockholders of record as of
September 26, 2019, payable on
October 3, 2019.
Second Quarter 2019 Financial Results Conference Call
Management will host a conference call to discuss the Company's
operating and financial results at 9:30 am,
ET on August 8, 2019. To participate in the conference
call, please dial (844) 832-0218 approximately 10 minutes prior to
the call. International callers should dial (484) 756-4314. Please
reference conference ID 8334206#.
A live webcast of the conference call will be available
at http://investors.alcentracapital.com/events-presentations.
Please access the website 15 minutes prior to the start of the call
to download and install any necessary audio software.
An archived webcast replay will be available on the Company's
website until August 8, 2020.
ABOUT ALCENTRA CAPITAL CORPORATION
Alcentra Capital provides customized debt and equity financing
solutions to middle-market companies, which Alcentra Capital
generally defines as U.S. based companies having between
$15.0 million and $75.0 million of EBITDA. Alcentra Capital's
investment objective is to provide attractive risk-adjusted returns
by generating current income from its debt investments. Alcentra
Capital seeks to partner with business owners, management teams and
financial sponsors by providing customized financing for change of
ownership transactions, recapitalizations, strategic acquisitions,
business expansion and other growth initiatives.
Alcentra Capital, which is externally managed by Alcentra NY,
LLC, is a closed-end, non-diversified management investment company
that has elected to be treated as a business development company
under the Investment Company Act of 1940. In addition, for tax
purposes, Alcentra Capital has elected to be treated as a regulated
investment company under Subchapter M of the Internal Revenue
Code.
Cautionary Statement Regarding Forward-Looking
Statements
Statements included herein may constitute "forward-looking
statements," which relate to future events or the Company's future
performance or financial condition. These statements speak only as
of the date of this press release, are based on the Company's
current plans, expectations, estimates, projections, beliefs and
assumptions and involve risks and uncertainties that could cause
actual future events or results to be different than those
described in or implied by such forward-looking statements,
including those relating to the impact of activist stockholder
activities and the strategic alternatives review process on, among
other things, the Company's professional and consulting fees and
expenses and on management distractions, the nature and timing of
any possible transaction or other strategic alternative, or of any
potential or anticipated benefits from any such transaction or
other alternative, as well as those risks and uncertainties
described in the Company's annual report on Form 10-K filed with
the SEC on March 12, 2019 and in the Company's other
filings made with the SEC from time to time. As a result, any
forward-looking statements are not guarantees. In addition, there
is no assurance that the Company will purchase additional shares at
any specific discount levels or in any specific amounts under its
repurchase program. There is no assurance that the market price of
the Company's shares, either absolutely or relative to net asset
value, will increase as a result of any share repurchases, or that
any repurchase program will enhance stockholder value over the long
term. You should not place undue reliance on any
forward-looking statements. Except as required by applicable law or
regulation, the Company does not undertake any obligation to update
its forward-looking statements to reflect future events or
circumstances.
|
Alcentra Capital
Corporation and Subsidiary
|
|
|
|
|
Consolidated
Statements of Assets and Liabilities
|
|
|
|
|
As of
June 30, 2019
(Unaudited)
|
|
As of
December 31,
2018
|
|
Assets
|
|
|
Portfolio
investments, at fair value
|
|
|
Non-controlled,
non-affiliated investments, at fair value (cost of $213,022,113
and
$212,280,172,
respectively)
|
|
$
|
204,633,762
|
|
$
|
205,411,779
|
|
Non-controlled,
affiliated investments, at fair value (cost of $26,581,387 and
$26,385,612, respectively)
|
|
|
14,573,438
|
|
|
12,980,016
|
|
Controlled, affiliated
investments, at fair value (cost $0 and $15,212,562,
respectively)
|
|
|
—
|
|
|
16,406,021
|
|
Cash
|
|
|
7,796,536
|
|
|
11,049,499
|
|
Dividends and
interest receivable
|
|
|
1,404,187
|
|
|
454,883
|
|
Receivable for
investments sold
|
|
|
2,674,457
|
|
|
644,733
|
|
Deferred financing
costs
|
|
|
1,066,348
|
|
|
1,366,393
|
|
Deferred tax
asset
|
|
|
4,263,462
|
|
|
5,385,694
|
|
Prepaid expenses and
other assets
|
|
|
354,583
|
|
|
79,410
|
|
Total
Assets
|
|
$
|
236,766,773
|
|
$
|
253,778,428
|
|
|
|
Liabilities
|
|
|
Credit facility
payable
|
|
$
|
26,565,008
|
|
$
|
28,536,441
|
|
Notes payable (net of
deferred note offering costs of $642,731 and $855,433,
respectively)
|
|
|
54,357,269
|
|
|
54,144,567
|
|
Payable for
investments purchased
|
|
|
5,925,000
|
|
|
18,550,000
|
|
Other accrued
expenses and liabilities
|
|
|
251,183
|
|
|
535,096
|
|
Directors' fees
payable
|
|
|
197,154
|
|
|
36,125
|
|
Professional fees
payable
|
|
|
886,641
|
|
|
554,173
|
|
Interest and credit
facility expense payable
|
|
|
1,176,846
|
|
|
1,069,139
|
|
Management fee
payable
|
|
|
701,305
|
|
|
765,659
|
|
Income-based
incentive fees payable
|
|
|
198,805
|
|
|
890,796
|
|
Distributions
payable
|
|
|
4,248,937
|
|
|
2,433,102
|
|
Unearned structuring
fee revenue
|
|
|
—
|
|
|
81,643
|
|
Income tax
liability
|
|
|
320,630
|
|
|
379,155
|
|
Total
Liabilities
|
|
|
94,828,778
|
|
|
107,975,896
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
Net
Assets
|
|
|
Common stock, par
value $0.001 per share (100,000,000 shares authorized,
12,875,566
and 13,105,295 shares issued and outstanding,
respectively)
|
|
|
12,876
|
|
|
13,105
|
|
Additional paid-in
capital
|
|
|
197,118,476
|
|
|
198,594,662
|
|
Distributable
earnings (accumulated loss)
|
|
|
(55,193,357)
|
|
|
(52,805,235)
|
|
Total Net
Assets
|
|
|
141,937,995
|
|
|
145,802,532
|
|
Total Liabilities
and Net Assets
|
|
$
|
236,766,773
|
|
$
|
253,778,428
|
|
|
|
Net Asset Value Per
Share*
|
|
$
|
11.02
|
|
$
|
11.13
|
|
|
|
|
|
|
|
|
|
|
|
|
*The Company's net
asset value per share as of June 30, 2019 was $11.17, excluding the
impact of the $0.15 per share special distribution paid to
stockholders of record as of June 28, 2019. As a supplement to
generally accepted accounting principles ("GAAP") financial
measures, the Company has provided this non-GAAP financial measure.
The Company believes that this non-GAAP financial measure is useful
as it highlights the NAV per common share for the quarter excluding
the impact of the special distribution that was paid and shows the
Company's pro forma NAV after payment of regular
distributions.
|
|
Alcentra Capital
Corporation and Subsidiary
|
|
|
|
|
Consolidated
Statements of Operations
|
|
|
|
|
For the three
months ended June
30, 2019
(Unaudited)
|
|
For the three
months ended June
30, 2018
(Unaudited)
|
|
For the six
months
ended June 30,
2019
(Unaudited)
|
|
For the six
months
ended June 30,
2018
(Unaudited)
|
|
|
Investment
Income:
|
|
|
From non-controlled,
non-affiliated investments:
|
|
|
Interest income from
portfolio investments
|
$
|
5,753,089
|
|
$
|
5,865,711
|
|
|
$
|
11,559,398
|
|
$
|
11,608,097
|
|
|
Paid-in-kind interest
income from portfolio
investments
|
|
28,797
|
|
|
45,481
|
|
|
|
113,301
|
|
|
245,131
|
|
|
Other income from
portfolio investments
|
|
177,118
|
|
|
611,812
|
|
|
|
284,875
|
|
|
2,119,116
|
|
|
Dividend income from
portfolio investments
|
|
—
|
|
|
30,756
|
|
|
|
—
|
|
|
61,512
|
|
|
From non-controlled,
affiliated investments:
|
|
|
Interest income from
portfolio investments
|
|
41,762
|
|
|
129,080
|
|
|
|
78,241
|
|
|
206,533
|
|
|
Paid in-kind income
from portfolio investments
|
|
93,190
|
|
|
90,004
|
|
|
|
189,603
|
|
|
213,130
|
|
|
Other income from
portfolio investments
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
From controlled,
affiliated investments:
|
|
|
Interest income from
portfolio investments
|
|
—
|
|
|
481,106
|
|
|
|
208,538
|
|
|
981,996
|
|
|
Paid in-kind income
from portfolio investments
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
Other income from
portfolio investments
|
|
45,979
|
|
|
—
|
|
|
|
133,095
|
|
|
—
|
|
|
Total investment
income
|
|
6,139,935
|
|
|
7,253,950
|
|
|
|
12,567,051
|
|
|
15,435,515
|
|
|
|
|
Expenses:
|
|
|
Management
fees
|
|
841,566
|
|
|
1,036,122
|
|
|
|
1,707,184
|
|
|
2,270,985
|
|
|
Income-based
incentive fees/(reversal of accruals)
|
|
(204,867)
|
|
|
—
|
|
|
|
(691,991)
|
|
|
—
|
|
|
Professional
fees
|
|
774,386
|
|
|
379,082
|
|
|
|
1,399,615
|
|
|
733,152
|
|
|
Valuation
services
|
|
86,250
|
|
|
(10,038)
|
|
|
|
157,500
|
|
|
53,933
|
|
|
Interest and credit
facility expense
|
|
1,322,878
|
|
|
1,745,485
|
|
|
|
2,740,328
|
|
|
3,440,372
|
|
|
Amortization of
deferred financing costs
|
|
206,429
|
|
|
103,570
|
|
|
|
412,545
|
|
|
207,551
|
|
|
Directors'
fees
|
|
215,000
|
|
|
116,826
|
|
|
|
374,676
|
|
|
213,028
|
|
|
Insurance
expense
|
|
91,492
|
|
|
56,519
|
|
|
|
147,327
|
|
|
112,507
|
|
|
Amortization of
deferred note offering costs
|
|
109,340
|
|
|
119,267
|
|
|
|
242,703
|
|
|
245,961
|
|
|
Consulting
fees
|
|
133,315
|
|
|
176,702
|
|
|
|
244,916
|
|
|
481,740
|
|
|
Excise tax
|
|
(78,019)
|
|
|
365,308
|
|
|
|
390,413
|
|
|
365,308
|
|
|
Other
expenses
|
|
251,851
|
|
|
(209,200)
|
|
|
|
314,299
|
|
|
160,511
|
|
|
Total
expenses
|
|
3,749,621
|
|
|
3,879,643
|
|
|
|
7,439,515
|
|
|
8,285,048
|
|
|
Waiver of management
fees
|
|
(140,261)
|
|
|
(109,281)
|
|
|
|
(284,531)
|
|
|
(109,281)
|
|
|
Net
expenses
|
|
3,609,360
|
|
|
3,770,362
|
|
|
|
7,154,984
|
|
|
8,175,767
|
|
|
Net investment
income and foreign currency
transactions
|
|
2,530,575
|
|
|
3,483,588
|
|
|
|
5,412,067
|
|
|
7,259,748
|
|
|
|
|
Realized Gain
(Loss) and Net Change in Unrealized Appreciation (Depreciation)
From Portfolio Investments
|
|
|
Net realized gain
(loss) on:
|
|
|
Non-controlled,
non-affiliated investments
|
|
1,604,042
|
|
|
(10,108,277)
|
|
|
|
(111,716)
|
|
|
(10,123,092)
|
|
|
Non-controlled,
affiliated investments
|
|
—
|
|
|
(10,167,517)
|
|
|
|
—
|
|
|
(10,167,517)
|
|
|
Controlled, affiliated
investments
|
|
—
|
|
|
—
|
|
|
|
1,193,458
|
|
|
—
|
|
|
Foreign currency
transactions
|
|
25,078
|
|
|
—
|
|
|
|
65,494
|
|
|
—
|
|
|
Net realized gain
(loss) from portfolio investments
and foreign currency transactions
|
|
1,629,120
|
|
|
(20,275,794)
|
|
|
|
1,147,236
|
|
|
(20,290,609)
|
|
|
Net change in
unrealized appreciation (depreciation) on:
|
|
|
Non-controlled,
non-affiliated investments
|
|
(1,339,551)
|
|
|
4,213,571
|
|
|
|
(1,519,958)
|
|
|
3,880,145
|
|
|
Non-controlled,
affiliated investments
|
|
324,231
|
|
|
9,319,907
|
|
|
|
1,397,647
|
|
|
9,212,533
|
|
|
Controlled, affiliated
investments
|
|
—
|
|
|
—
|
|
|
|
(1,193,459)
|
|
|
220,904
|
|
|
Foreign currency
translation
|
|
(127,563)
|
|
|
—
|
|
|
|
(11,628)
|
|
|
—
|
|
|
Net change in
unrealized appreciation
(depreciation) from portfolio investments and
foreign currency translation
|
|
(1,142,883)
|
|
|
13,533,478
|
|
|
|
(1,327,398)
|
|
|
13,313,582
|
|
|
Benefit (Provision)
for income taxes on unrealized
gain (loss) on investments
|
|
(871,877)
|
|
|
1,019,717
|
|
|
|
(1,124,675)
|
|
|
1,017,228
|
|
|
Net realized gain
(loss) and net change in unrealized
appreciation (depreciation) from portfolio
investments
|
|
(385,640)
|
|
|
(5,722,599)
|
|
|
|
(1,304,837)
|
|
|
(5,959,799)
|
|
|
Net Increase
(Decrease) in Net Assets Resulting from
Operations
|
$
|
2,144,935
|
|
$
|
(2,239,011)
|
|
|
$
|
4,107,230
|
|
$
|
1,299,949
|
|
|
|
|
Basic and
diluted:
|
|
|
Net investment income
per share
|
$
|
0.20
|
|
$
|
0.25
|
|
|
$
|
0.42
|
|
$
|
0.52
|
|
|
Earnings (loss) per
share
|
$
|
0.17
|
|
$
|
(0.16)
|
|
|
$
|
0.32
|
|
$
|
0.09
|
|
|
Weighted Average
Shares of Common Stock Outstanding
|
|
12,875,566
|
|
|
13,725,423
|
|
|
|
12,890,887
|
|
|
13,960,729
|
|
|
|
|
|
|
|
|
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content:http://www.prnewswire.com/news-releases/alcentra-capital-corporation-announces-second-quarter-2019-financial-results-300898395.html
SOURCE Alcentra Capital Corporation
