Investor Relations

Press Release

TICC Announces Results of Operations for the Quarter Ended March 31, 2017

Company Release - 5/8/2017 8:30 AM ET

GREENWICH, CT -- (Marketwired) -- 05/08/17 -- TICC Capital Corp. (NASDAQ: TICC) ("TICC," the "Company," "we," "us" or "our") announced today its financial results for the quarter ended March 31, 2017.

  • As of March 31, 2017, net asset value per share was $7.53 compared with the net asset value per share as of December 31, 2016 of $7.50.

  • For the quarter ended March 31, 2017, we recorded net investment income of approximately $7.9 million, or approximately $0.15 per share. In the first quarter, we also recorded net realized capital losses of approximately $5.5 million, and net unrealized appreciation of approximately $9.6 million. In total we had a net increase in net assets from operations of approximately $12.1 million, or approximately $0.23 per share.

  • Our core net investment income ("Core NII") for the quarter ended March 31, 2017 was approximately $0.20 per share.

    • Core NII represents net investment income adjusted for additional cash distributions received, or entitled to be received (if any, in either case), on our collateralized loan obligation ("CLO") equity investments and also excludes any capital gains incentive fees we recognize but have no obligation to pay in any period. (See additional information under "Supplemental Information Regarding Core Net Investment Income" below).

    • While our experience has been that cash flow distributions have historically represented useful indicators of our CLO equity investments' annual taxable income, we believe that current and future cash flow distributions may represent less accurate indicators of taxable income with respect to our CLO equity investments than they have in the past. In general, we currently expect our annual taxable income to be higher than our GAAP earnings for the current fiscal year.

  • Total investment income for the first quarter of 2017 amounted to approximately $16.5 million, which represents a decrease of approximately $2.4 million from the fourth quarter of 2016.

    • For the quarter ended March 31, 2017, we recorded investment income from our portfolio as follows:

      • approximately $7.2 million from our debt investments,

      • approximately $8.6 million from our CLO equity investments, and

      • approximately $0.7 million from all other sources.

  • Our total expenses for the quarter ended March 31, 2017 were approximately $8.6 million, down by approximately $3.0 million compared to the fourth quarter of 2016. The primary driver of that decrease was lower interest expense for the quarter on our outstanding debt.

  • Our weighted average credit rating on a fair value basis was 2.3 at the end of the first quarter of 2017 (compared to 2.2 at the end of the fourth quarter of 2016).

  • As announced previously, our board of directors had declared the following distributions on our common stock:

Quarter Ending Record Date Payment Date Amount Per Share
June 30, 2017 June 16, 2017 June 30, 2017 $0.20
September 30, 2017 September 15, 2017 September 29, 2017 $0.20
  • During the first quarter of 2017:

    • We made investments of approximately $47.6 million, consisting of approximately $8.4 million in corporate loan investments and approximately $39.2 million in CLO equity. We received proceeds of approximately $62.6 million from sales of our CLO investments.

    • We received or were entitled to receive proceeds of approximately $70.2 million from repayments, sales and amortization payments on our corporate loan and common stock investments. A portion of those proceeds along with a portion of prior quarter repayments, sales and amortization payments were applied towards an approximate $24.5 million partial redemption of the TICC CLO 2012-1 LLC Class A-1 Notes.

  • As of March 31, 2017, the weighted average yield of our debt investments at current cost was approximately 8.4%, compared with 8.3% as of December 31, 2016.

  • As of March 31, 2017, the weighted average effective yield of our CLO equity investments at current cost was approximately 17.3%, compared with 17.0% as of December 31, 2016.

  • As of March 31, 2017, the weighted average cash distribution yield of our CLO equity investments at current cost was approximately 24.4%, compared with 23.8% as of December 31, 2016.

  • At March 31, 2017, we had no investments on non-accrual status.

  • On April 12, 2017, we completed an underwritten public offering of $64,370,225 in aggregate principal amount of 6.50% unsecured notes (the "Unsecured Notes"). The Unsecured Notes will mature on March 30, 2024, and may be redeemed in whole or in part at any time or from time to time at our option on or after March 30, 2020. We intend to use the net proceeds from this offering to repay or repurchase a portion of the outstanding indebtedness under our 7.50% Convertible Notes due November 1, 2017 (the "Convertible Notes"), which amounts to approximately $94.5 million plus accrued interest as of March 31, 2017. We note that our unrestricted cash balance (including the proceeds from the Unsecured Notes) currently exceeds the amount outstanding of our Convertible Notes.

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 determined in accordance with GAAP. Our non-GAAP measures may differ from similar measures by other companies, even if similar terms are used to identify such measures. Core net investment income represents net investment income adjusted for additional cash distributions received, or entitled to be received (if any, in either case), on our CLO equity investments and also excludes any capital gains incentive fees we recognize but have no obligation to pay in any period. The Company did not recognize any capital gains incentive fees for the quarter ended March 31, 2017.

Income from investments in the "equity" class securities of CLO vehicles, for GAAP purposes, is recorded using the effective interest method based upon an effective yield to the expected redemption utilizing estimated cash flows compared to the cost, resulting in an effective yield for the investment; the difference between the actual cash received or distributions entitled to be received and the effective yield calculation is an adjustment to cost. Accordingly, investment income recognized on CLO equity securities in the GAAP statement of operations differs from the cash distributions actually received by us during the period (referred to below as "CLO equity additional distributions").

Further, in order to continue to qualify to be taxed as a regulated investment company ("RIC"), we are required, among other things, to distribute at least 90% of our investment company taxable income annually. Therefore, core net investment income may provide a better indication of estimated taxable income for a reporting period than does GAAP net investment income, although we can offer no assurance that will be the case as the ultimate tax character of our earnings cannot be determined until tax returns are prepared after the end of a fiscal year. We note that these non-GAAP measures may not be useful indicators of taxable earnings, particularly during periods of market disruption and volatility.

The following table provides a reconciliation of net investment income to core net investment income for the three months ended March 31, 2017 and March 31, 2016:

Three Months Ended
March 31, 2017
Three Months Ended
March 31, 2016
Amount Per Share
Amounts
Amount Per Share
Amounts
Net investment income $ 7,874,572 $ 0.153 $ 4,044,516 $ 0.076
CLO equity additional distributions 2,547,993 0.049 11,434,828 0.216
Core net investment income $ 10,422,565 $ 0.202 $ 15,479,344 $ 0.292

We will host a conference call to discuss our first quarter results today, Monday, May 8, 2017 at 9:00 AM ET. Please call 1-888-339-0740 to participate. A replay of the conference call will be available for approximately 30 days. The replay number is 1-877-344-7529, and the replay passcode is 10106761.

A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.ticc.com.

The following financial statements are unaudited and without footnotes. Readers who would like additional information should obtain our Form 10-Q for the period ended March 31, 2017, and subsequent reports on Form 10-Q as they are filed.

TICC CAPITAL CORP.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
March 31, 2017 December 31, 2016
ASSETS
Non-affiliated/non-control investments (cost: $514,037,364 @ 3/31/17; $616,542,612 @ 12/31/16) $ 485,051,106 $ 578,297,069
Affiliated investments (cost: $7,525,764 @ 3/31/17; $7,497,229 @ 12/31/16) 12,043,315 11,626,007
Total investments at fair value (cost: $521,563,128 @ 3/31/17; $624,039,841 @ 12/31/16) 497,094,421 589,923,076
Cash and cash equivalents 66,048,453 8,261,698
Restricted cash 17,215,482 3,451,636
Interest and distributions receivable 8,203,006 9,682,672
Securities sold not settled 4,706,274 7,406
Other assets 1,254,900 1,130,018
Total assets $ 594,522,536 $ 612,456,506
LIABILITIES
Accrued interest payable $ 3,395,969 $ 1,731,111
Investment advisory fee and net investment income incentive fee payable to affiliate 3,323,482 3,673,381
Securities purchased not settled 2,960,000 -
Accrued expenses 955,002 1,089,043
Notes payable - TICC CLO 2012-1 LLC, net of discount and deferred issuance costs 101,895,271 125,853,720
Convertible senior notes payable, net of deferred issuance costs 94,242,236 94,116,753
Total liabilities 206,771,960 226,464,008
NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized; 51,479,409 and 51,479,409 shares issued and outstanding, respectively 514,794 514,794
Capital in excess of par value 558,822,643 558,822,643
Net unrealized depreciation on investments (24,468,707 ) (34,116,765 )
Accumulated net realized losses on investments (101,073,728 ) (95,605,057 )
Distributions in excess of net investment income (46,044,426 ) (43,623,117 )
Total net assets 387,750,576 385,992,498
Total liabilities and net assets $ 594,522,536 $ 612,456,506
Net asset value per common share $ 7.53 $ 7.50
TICC CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31, 2017
Three Months Ended
March 31, 2016
INVESTMENT INCOME
From non-affiliated/non-control investments:
Interest income - debt investments $ 7,072,207 $ 8,465,811
Income from securitization vehicles and investments 8,569,603 5,921,551
Commitment, amendment fee income and other income 741,489 459,861
Total investment income from non-affiliated/non-control investments 16,383,299 14,847,223
From affiliated investments:
Interest income - debt investments 82,181 79,425
Total investment income from affiliated investments 82,181 79,425
From control investments:
Interest income - debt investments - 341,834
Total investment income from control investments - 341,834
Total investment income 16,465,480 15,268,482
EXPENSES
Compensation expense 235,034 241,185
Investment advisory fees 2,270,002 3,705,723
Professional fees 752,393 2,025,385
Interest expense 3,714,253 4,358,770
General and administrative 565,746 892,903
Total expenses before incentive fees 7,537,428 11,223,966
Net investment income incentive fees 1,053,480 -
Total expenses 8,590,908 11,223,966
Net investment income 7,874,572 4,044,516
Net change in unrealized appreciation/depreciation on investments
Non-Affiliate/non-control investments 9,259,285 (22,894,143 )
Affiliated investments 388,773 935,737
Control investments - 1,350,000
Total net change in unrealized appreciation/depreciation on investments 9,648,058 (20,608,406 )
Net realized losses on investments
Non-Affiliated/non-control investments (5,468,671 ) (550,005 )
Total net realized losses on investments (5,468,671 ) (550,005 )
Net increase/(decrease) in net assets resulting from operations $ 12,053,959 $ (17,113,895 )
Net increase in net assets resulting from net investment income per common share:
Basic $ 0.15 $ 0.08
Diluted $ 0.15 $ 0.08
Net increase/(decrease) in net assets resulting from operations per common share:
Basic $ 0.23 $ (0.32 )
Diluted $ 0.23 $ (0.32 )
Weighted average shares of common stock outstanding:
Basic 51,479,409 53,003,354
Diluted 59,727,707 63,036,506
Distributions per share $ 0.20 $ 0.29

TICC CAPITAL CORP.

FINANCIAL HIGHLIGHTS - UNAUDITED

Three Months Ended Three Months Ended
March 31, 2017 March 31, 2016
Per Share Data
Net asset value at beginning of period $ 7.50 $ 6.40
Net investment income(1) 0.15 0.08
Net realized and unrealized capital gains (losses)(2) 0.08 (0.42 )
Net change in net asset value from operations 0.23 (0.34 )
Distributions per share from net investment income (0.20 ) (0.29 )
Distributions based on weighted average share impact - 0.01
Total distributions(3) (0.20 ) (0.28 )
Effect of shares repurchased, gross - 0.11
Net asset value at end of period $ 7.53 $ 5.89
Per share market value at beginning of period $ 6.61 $ 6.08
Per share market value at end of period $ 7.38 $ 4.80
Total return(4) 14.67 % (16.28 )%
Shares outstanding at end of period 51,479,409 51,479,409
Ratios/Supplemental Data
Net assets at end of period (000's) 387,751 303,304
Average net assets (000's) 386,872 326,972
Ratio of expenses to average net assets(5) 8.88 % 13.73 %
Ratio of net investment income to average net assets(5) 8.14 % 4.95 %
Portfolio turnover rate 7.87 % 1.98 %

_____________
(1) Represents per share net investment income for the period, based upon average shares outstanding.
(2) Net realized and unrealized capital gains include rounding adjustments 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 ultimate tax character of our earnings cannot be determined until tax returns are prepared after the end of a fiscal year.
(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 distribution reinvestment prices obtained under the Company's distribution reinvestment plan, excluding any discounts. Total return is not annualized.
(5) Annualized.
(6) The following table provides supplemental performance ratios (annualized) measured for the three months ended March 31, 2017 and 2016:

Three Months Ended Three Months Ended
Ratio of expenses to average net assets: March 31, 2017 March 31, 2016
Expenses before incentive fees 7.79 % 13.73 %
Net investment income incentive fees 1.09 % - %
Ratio of expenses, excluding interest expense, to average net assets 5.04 % 8.40 %

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 obligation vehicles.

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, except as may be required by law.

Contact:
Bruce Rubin
203-983-5280

Source: TICC Capital Corp.

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