Investor Relations

Press Release

TICC Announces Results of Operations for the Quarter Ended June 30, 2017

Company Release - 8/8/2017 8:00 AM ET

GREENWICH, Conn., Aug. 08, 2017 (GLOBE NEWSWIRE) -- TICC Capital Corp. (Nasdaq:TICC) (“TICC,” the “Company,” “we,” “us” or “our”) announced today its financial results for the quarter ended June 30, 2017.

  • As of June 30, 2017, net asset value per share was $7.51 compared with the net asset value per share as of March 31, 2017 of $7.53.

  • For the quarter ended June 30, 2017, we recorded net investment income of approximately $7.5 million, or approximately $0.15 per share. In the second quarter, we also recorded net realized capital gains of approximately $0.5 million, and net unrealized appreciation of approximately $1.0 million.   In total we had a net increase in net assets from operations of approximately $9.1 million, or approximately $0.18 per share.

  • Our core net investment income (“Core NII”) for the quarter ended June 30, 2017 was approximately $0.18 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.

  • Total investment income for the second quarter of 2017 amounted to approximately $17.0 million, which represents an increase of approximately $0.5 million from the first quarter of 2017.

    - For the quarter ended June 30, 2017, we recorded investment income from our portfolio as follows:

         -  approximately $6.8 million from our debt investments,

         -  approximately $9.4 million from our CLO equity investments, and

         -  approximately $0.8 million from all other sources.

  • Our total expenses for the quarter ended June 30, 2017 were approximately $9.5 million, up by approximately $0.9 million compared to the first quarter of 2017.  The primary driver of that increase was higher interest expense for the quarter on our outstanding debt.

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

  • As announced previously, our board of directors had declared the following distribution on our common stock:
    
Quarter EndingRecord DatePayment Date   Amount Per Share  
    September 30, 2017      September 15, 2017       September 29, 2017  $0.20

       

  • During the second quarter of 2017:

    - We made investments of approximately $89.3 million, consisting of approximately $31.3 million in corporate loan and stock investments and approximately $58.0 million in CLO investments.  We received proceeds of approximately $22.9 million from sales of our CLO investments.

    - We received or were entitled to receive proceeds of approximately $94.6 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 approximately $31.4 million partial redemption of the TICC CLO 2012-1 LLC Class A-1 Notes.

  • As of June 30, 2017, the weighted average yield of our debt investments at current cost was approximately 9.5%, compared with 8.4% as of March 31, 2017.

  • As of June 30, 2017, the weighted average effective yield of our CLO equity investments at current cost was approximately 18.4%, compared with 17.3% as of March 31, 2017.

  • As of June 30, 2017, the weighted average cash distribution yield of our CLO equity investments at current cost was approximately 25.6%, compared with 24.4% as of March 31, 2017.

  • At June 30, 2017, we had no investments on non-accrual status.

  • On July 24, 2017, the Company provided a Notice of Optional Redemption to the trustee of TICC CLO 2012-1 LLC that it will be redeeming in full the outstanding amounts of each class of secured notes on August 25, 2017.  The Company intends to use the restricted cash held by TICC CLO 2012-1 LLC on the redemption date to redeem each class of secured notes, which is approximately $73.4 million in aggregate. The Company also intends to begin the process to wind down and dissolve TICC CLO 2012-1 LLC after the completion of this redemption.

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 June 30, 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 June 30, 2017 and June 30, 2016:

            
 Three Months Ended
June 30, 2017
 Three Months  Ended
June 30, 2016
  
 Amount   Per Share
Amounts
(basic)
    Amount   Per Share
Amounts
(basic)
   
Net investment income$  7,541,875 $  0.147  $  6,798,806 $  0.132   
CLO equity additional distributions                       1,737,958 $  0.034     9,494,983 $  0.184   
Core net investment income$  9,279,833 $  0.181  $  16,293,789 $  0.316   
            

We will host a conference call to discuss our second quarter results today, Tuesday, August 8, 2017 at 10:00 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 10111238.

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 June 30, 2017, and subsequent reports on Form 10-Q as they are filed.

 

TICC CAPITAL CORP. 
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES 
(unaudited) 
  
     June 30, 2017   December 31, 2016 
         
ASSETS       
         
 Non-affiliated/non-control investments (cost: $467,724,988 @ 6/30/17; $616,542,612 @ 12/31/16)$  440,238,676  $  578,297,069  
 Affiliated investments (cost: $10,467,049 @ 6/30/17; $7,497,229 @ 12/31/16)   14,517,716     11,626,007  
   Total investments at fair value (cost: $478,192,037 @ 6/30/17;    
      $624,039,841 @ 12/31/16) 454,756,392   589,923,076  
 Cash and cash equivalents 88,751,878   8,261,698  
 Restricted cash 61,134,714     3,451,636  
 Interest and distributions receivable 6,820,485   9,682,672  
 Securities sold not settled 10,209,285     7,406  
 Other assets 1,487,698   1,130,018  
  Total assets$  623,160,452  $  612,456,506  
         
LIABILITIES       
         
 Accrued interest payable$  1,608,262  $  1,731,111  
 Investment advisory fee and net investment income incentive fee payable to affiliate   3,392,314     3,673,381  
 Securities purchased not settled   2,956,250     -  
 Accrued expenses   989,825   1,089,043  
 Notes payable - TICC CLO 2012-1 LLC, net of discount and deferred issuance costs   71,092,564     125,853,720  
 Convertible senior notes payable, net of deferred issuance costs   94,369,112     94,116,753  
 6.50% unsecured notes due 2024, net of deferred issuance costs   62,179,537     -  
  Total liabilities 236,587,864   226,464,008  
         
         
         
NET ASSETS       
 Common stock, $0.01 par value, 100,000,000 share authorized; 51,479,409 and 51,479,409 shares issued        
   and outstanding, respectively 514,794   514,794  
 Capital in excess of par value 558,822,643   558,822,643  
 Net unrealized depreciation on investments (23,435,645)  (34,116,765) 
 Accumulated net realized losses on investments (100,530,769)  (95,605,057) 
 Distributions in excess of net investment income (48,798,435)  (43,623,117) 
  Total net assets 386,572,588   385,992,498  
  Total liabilities and net assets$  623,160,452  $  612,456,506  
         
Net asset value per common share$  7.51  $  7.50  
         

 

TICC CAPITAL CORP. 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(unaudited) 
           
   Three Months Ended
June 30, 2017
 Three Months Ended
June 30, 2016
 Six Months Ended
June 30, 2017
 Six Months Ended
June 30, 2016
 
           
INVESTMENT INCOME        
From non-affiliated/non-control investments:        
 Interest income - debt investments$  6,717,197  $  8,370,025  $  13,789,404  $  16,835,836  
 Income from securitization vehicles and investments   9,426,014     7,980,865     17,995,617   13,902,416  
 Commitment, amendment fee income and other income   768,682     389,965     1,510,171   849,826  
   Total investment income from non-affiliated/non-control investments   16,911,893     16,740,855     33,295,192   31,588,078  
From affiliated investments:        
 Interest income - debt investments   100,260     80,287     182,441   159,712  
 Total investment income from affiliated investments   100,260     80,287     182,441   159,712  
From control investments:        
 Interest income - debt investments   -     225,385     -   567,219  
 Total investment income from  control investments   -     225,385     -   567,219  
   Total investment income   17,012,153     17,046,527     33,477,633   32,315,009  
EXPENSES         
 Compensation expense   203,339     178,955     438,373   420,140  
 Investment advisory fees   2,182,173     2,411,762     4,452,175   6,117,485  
 Professional fees   589,841     1,182,148     1,342,234   3,207,533  
 Interest expense   4,633,367     4,434,109     8,347,620   8,792,881  
 General and administrative   651,417     796,981     1,217,163   1,689,884  
   Total expenses before incentive fees   8,260,137     9,003,955     15,797,565   20,227,923  
 Net investment income incentive fees   1,210,141     1,243,766     2,263,621   1,243,766  
   Total expenses   9,470,278     10,247,721     18,061,186   21,471,689  
Net investment income   7,541,875     6,798,806     15,416,447   10,843,320  
           
Net change in unrealized appreciation/(depreciation) on investments        
 Non-Affiliate/non-control investments   1,499,946     43,225,203     10,759,231   20,331,060  
 Affiliated investments   (466,884)    1,167,429   (78,111)  2,103,166  
 Control investments   -     4,400,000     -    5,750,000  
   Total net change in unrealized appreciation/(depreciation) on investments   1,033,062     48,792,632     10,681,120   28,184,226  
           
Net realized gains/(losses) on investments        
 Non-Affiliated/non-control investments   542,959     (4,327,598)    (4,925,712)  (4,877,603) 
 Control investments   -     (3,000,000)    -   (3,000,000) 
   Total net realized gains/(losses) on investments   542,959     (7,327,598)    (4,925,712)  (7,877,603) 
           
Net increase in net assets resulting from operations$  9,117,896  $  48,263,840  $  21,171,855  $  31,149,943  
           
Net increase in net assets resulting from net investment income per common share:          
  Basic$  0.15  $  0.13  $  0.30  $  0.21  
  Diluted$  0.15  $  0.13  $  0.30  $  0.21  
Net increase in net assets resulting from operations per common share:        
  Basic$  0.18  $  0.94  $  0.41  $  0.60  
  Diluted$  0.18  $  0.81  $  0.41  $  0.57  
Weighted average shares of common stock outstanding:        
  Basic 51,479,409   51,479,409   51,479,409   52,241,381  
  Diluted 59,727,707   61,512,561   59,727,707   62,274,533  
                 
Distributions per share$  0.20  $  0.29  $  0.40  $  0.58  
           


TICC CAPITAL CORP.

FINANCIAL HIGHLIGHTS - UNAUDITED

           
 Three Months
Ended
Three Months
Ended
Six Months
Ended
Six  Months
Ended
 
 June 30,
2017
June 30,
2016
June 30,
2017
June 30,
2016
 
 Per Share Data                 
 Net asset value at beginning of period  $  7.53  $  5.89  $  7.50  $  6.40  
 Net investment income(1)    0.15     0.13     0.30     0.21  
 Net realized and unrealized capital gains (losses)(2)     0.03     0.81     0.11     0.39  
 Net change in net asset value from operations     0.18     0.94     0.41     0.60  
 Distributions per share from net investment income     (0.20)     (0.29)     (0.40)     (0.58)  
 Distributions based on weighted average share impact     -      -      -      0.01  
 Total distributions(3)     (0.20)     (0.29)     (0.40)     (0.57)  
 Effect of shares repurchased, gross     -      -      -      0.11  
 Net asset value at end of period  $  7.51  $  6.54  $  7.51  $  6.54  
 Per share market value at beginning of period $  7.38  $  4.80  $  6.61  $  6.08  
 Per share market value at end of period  $  6.34  $  5.27  $  6.34  $  5.27  
 Total return(4)     (11.38)%    15.83%    1.62%    (3.03)% 
 Shares outstanding at end of period   51,479,409   51,479,409   51,479,409   51,479,409  
                   
 Ratios/Supplemental Data                 
 Net assets at end of period (000’s)   386,573   336,639   386,573   336,639  
 Average net assets (000’s)   387,162   319,971   387,017   323,472  
 Ratio of expenses to average net assets(5)    9.78%  12.81%    9.33%    13.28% 
 Ratio of net investment income to average net assets(5)    7.79%  8.50%    7.97%    6.70% 
 Portfolio turnover rate  18.36%  11.79%  25.23%    13.53% 
                   
                   
_____________

(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 June 30, 2017 and 2016:
           
   Three Months
Ended
 Three Months
Ended
 Six Months
Ended
 Six  Months
Ended
 
 Ratio of expenses to average net assets: June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 
 Expenses before incentive fees   8.53  11.26  8.16  12.51 
 Net investment income incentive fees     1.25    1.55    1.17    0.77 
 Capital gains incentive fees     - %    - %    - %    - % 
 Ratio of expenses, excluding interest expense,  5.00  7.27  5.02  7.84 
 to average net assets   

 

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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