HOUSTON, Aug. 6, 2014 (GLOBE NEWSWIRE) -- NGP Capital Resources Company (Nasdaq:NGPC) (the "Company") today announced its financial results for the second quarter of 2014.
|Highlights for the quarter ended June 30, 2014:|
|Total investment income: $5.5 million|
|Net investment income: $1.5 million, or $0.07 per share|
|Net realized gains on investments: $0.5 million, or $0.03 per share|
|Net unrealized depreciation on investments: $2.0 million, or $0.10 per share|
|Net asset value: $175.6 million, or $8.57 per share|
|Quarterly dividends declared: $0.16 per share|
|Portfolio and investment activity:|
|New investments in portfolio securities during the quarter: $0.4 million|
|Redemption of portfolio securities during the quarter: $18.9 million|
|Fair value of portfolio investments at June 30, 2014: $183.7 million|
|Weighted average yield on portfolio investments: 10.6%|
|Number of portfolio companies at June 30, 2014: 14|
Portfolio and Investment Activity
During the second quarter of 2014, we invested $0.4 million with existing portfolio companies and received proceeds from sales, redemptions and repayments of portfolio securities totaling $18.9 million.
On July 11, 2014, subsequent to the end of the quarter, Crossroads Energy Development, LLC ("Crossroads") fully repaid its Senior Secured Term Loan in the amount of $9.0 million and repurchased our overriding royalty interest and warrants in Crossroads for a combined $1.4 million, resulting in a realized capital gain of approximately $1.0 million, or $0.05 per common share. This investment was outstanding for 13 months and generated an internal rate of return of 31.0% and a return on investment of 1.3x.
In June 2014, we sold $3.0 million face amount of our Talos Production, LLC ("Talos") 9.75% Senior Unsecured Notes (the "Talos Notes") at an average price of 105.8, resulting in a realized capital gain of $0.2 million, or $0.01 per common share.
In April 2014, we sold our $13.0 million face amount of Midstates Petroleum Company ("Midstates") 10.75% Senior Subordinated Notes (the "Midstates Notes") at an average price of 108.1, resulting in a realized capital gain of $0.7 million, or $0.03 per common share. Our investment in the Midstates Notes, which originated in October 2012, generated an internal rate of return of 14.6% with a return on investment of 1.2x.
During the second quarter of 2014, we entered into negotiations with a third party regarding the sale of the assets of Spirit Resources, LLC ("Spirit"), and we lowered our estimated fair value of our investments in Spirit by $3.2 million, or $0.16 per share, during the second quarter to reflect the status of such negotiations, representing a 30% reduction in the estimated fair value of such investments from March 31, 2014.
Investment income totaled $5.5 million for the second quarter of 2014, decreasing 43% compared to $9.6 million in the corresponding quarter of 2013. The decrease in 2014 was primarily attributable to "make whole" interest income earned in 2013 totaling $2.5 million, or $0.12 per share, from the repayments of loans from Castex Energy Development Fund, LLC ("CDF") and Resaca Exploitation, Inc. ("Resaca"), and as a result of a decrease in the size of our investment portfolio due to repayments and settlements in excess of new investments between the two periods. Our portfolio balance, on a cost basis, decreased from $212.6 million to $195.0 million during the second quarter of 2014, primarily as a result of net sales, redemptions and settlements in excess of new portfolio investments. In comparison, the average balance of our portfolio during the second quarter of 2013 was $235.6 million. The weighted average yield on portfolio investments increased from 9.9% at June 30, 2013 to 10.6% at June 30, 2014.
Operating expenses for the second quarter of 2014 were $4.0 million, decreasing $0.1 million, or 2%, compared to the second quarter of 2013. Lower interest costs and lower management and incentive fees on the smaller portfolio balance were largely offset by higher legal and professional fees and other general and administrative expenses. Professional fees included $0.2 million, or $0.01 per share, of third party costs associated with our process of evaluating strategic alternatives to enhance stockholder value, and other general and administrative expenses included $0.6 million, or $0.03 per share, of costs incurred in connection with our shelf registration statement which went effective last year and expired during the second quarter of 2014.
The resulting net investment income was $1.5 million, or $0.07 per share, for the quarter ended June 30, 2014, compared to $5.5 million, or $0.26 per share, for the quarter ended June 30, 2013.
We recorded net realized capital gains of $0.5 million, or $0.03 per common share, during the second quarter of 2014, including gains totaling $0.9 million on the sale of our Midstates Notes and the partial sale of our Talos Notes, partially offset by a $0.4 million loss resulting from adjustments to liabilities recorded to satisfy obligations related to certain previously disposed investments. In the second quarter of 2013, we recorded net realized capital gains of $1.1 million resulting from a $1.8 million gain from the sale of our Class B LP units of CDF, partially offset by a $0.2 million loss on the disposition of our Resaca warrants and a $0.5 million loss resulting from adjustments to liabilities recorded to satisfy obligations related to certain previously disposed investments.
During the second quarter of 2014, we recorded $2.0 million, or $0.10 per share, of net unrealized depreciation on portfolio investments, primarily due to decreases in the estimated fair value of our investments in Spirit of $3.2 million, reversal of previously recorded unrealized gains on the Midstates Notes, due to realizations, of $0.7 million, partially offset by increases in the estimated fair value of our investments in OCI Holdings, LLC Subordinated Notes and Preferred Units of $0.8 million, Castex 2005, LP Preferred Units of $0.5 million and net increases in the value of remaining investments of $0.6 million. During the corresponding period in 2013, we recorded $3.0 million, or $0.15 per share, of net unrealized depreciation on investments, primarily due to decreases in the estimated fair value of our investments in Spirit preferred units of $1.6 million, Midstates Notes of $1.4 million, Talos Notes of $0.9 million and net increases in remaining investments of $0.9 million.
Overall, we had a net decrease in net assets resulting from operations of $32,000 for the three months ended June 30, 2014. After declaring dividends during the period of $0.16 per common share, our net asset value decreased from $8.73 per common share as of March 31, 2014 to $8.57 per common share as of June 30, 2014.
Liquidity and Capital Resources
At June 30, 2014, we had cash and cash equivalents totaling $35.3 million. The amount outstanding under our revolving credit facility at June 30, 2014 was $42.0 million, and an additional $30.0 million was available for borrowing. We repaid the entire balance outstanding under the Investment Facility during July 2014. At June 30, 2014, the amount outstanding under our Treasury Facility was $45.0 million, and there was no additional amount available for borrowing. We repaid the entire balance outstanding under the Treasury Facility in July 2014.
Conference Call at 11:00 a.m. Eastern Time on August 6, 2014
We invite all interested persons to participate in our conference call on Wednesday, August 6, 2014 at 11:00 a.m. Eastern Time. The dial-in number for the call is (877) 303-7617. International callers should dial (760) 666-3609. The call will also be accessible via the internet, on our Investor Relations page at www.ngpcrc.com.
|NGP CAPITAL RESOURCES COMPANY|
|CONSOLIDATED BALANCE SHEETS|
|(In Thousands, Except Share and Per Share Amounts)|
|June 30,||December 31,|
|Investments in portfolio securities at fair value|
|Control investments - majority owned|
|(cost: $28,642 and $27,459, respectively)||$ 18,584||$ 24,218|
|(cost: $17,720 and $17,510, respectively)||16,170||17,043|
|(cost: $148,604 and $176,988, respectively)||148,909||170,110|
|Total portfolio investments||183,663||211,371|
|Investments in U.S. Treasury Bills at fair value|
|(cost: $46,000 and $46,000, respectively)||46,000||46,000|
|Cash and cash equivalents||35,260||29,298|
|Accounts receivable and other current assets||886||464|
|Total current assets||39,666||35,252|
|Total assets||$ 269,329||$ 292,623|
|Liabilities and net assets|
|Accounts payable and accrued expenses||$ 2,124||$ 1,313|
|Management and incentive fees payable||1,306||1,387|
|Income taxes payable||38||91|
|Total current liabilities||51,748||51,071|
|Commitments and contingencies|
|Common stock, $.001 par value, 250,000,000 shares authorized; 20,499,188 shares issued and outstanding||20||20|
|Paid-in capital in excess of par||247,759||247,759|
|Undistributed net investment income (loss)||(3,757)||(583)|
|Undistributed net realized capital gain (loss)||(60,254)||(51,176)|
|Net unrealized appreciation (depreciation) on investments||(8,187)||(7,468)|
|Total net assets||175,581||188,552|
|Total liabilities and net assets||$ 269,329||$ 292,623|
|Net asset value per share||$ 8.57||$ 9.20|
|NGP CAPITAL RESOURCES COMPANY|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|(In Thousands, Except Per Share Data)|
|For The Three Months Ended||For The Six Months Ended|
|June 30,||June 30,|
|Control investments - majority owned||$ 446||$ 492||$ 1,024||$ 893|
|Royalty income, net of amortization:|
|Control investments - majority owned||20||15||41||15|
|Total investment income||5,513||9,613||11,371||15,416|
|Interest expense and bank fees||551||998||1,164||1,813|
|Management and incentive fees||1,306||1,830||2,652||3,197|
|Other general and administrative expenses||1,496||858||2,540||1,667|
|Total operating expenses||4,021||4,127||7,946||7,595|
|Income tax provision (benefit), net||20||22||39||38|
|Net investment income||1,472||5,464||3,386||7,783|
|Net realized capital gain (loss) on investments|
|Control investments - majority owned||--||(464)||(325)||(464)|
|Total net realized capital gain (loss) on investments||534||1,064||(9,078)||836|
|Net unrealized appreciation (depreciation) on investments|
|Control investments - majority owned||(3,388)||(1,167)||(6,816)||(3,010)|
|Benefit (provision) for taxes on unrealized appreciation (depreciation) on investments||--||--||--||1|
|Total net unrealized appreciation (depreciation) on investments||(2,038)||(3,015)||(719)||(12,713)|
|Net increase (decrease) in net assets resulting from operations||$ (32)||$ 3,513||$ (6,411)||$ (4,094)|
|Net increase (decrease) in net assets resulting from operations per common share||$ (0.00)||$ 0.16||$ (0.31)||$ (0.20)|
|Dividends declared per common share||$ 0.16||$ 0.16||$ 0.32||$ 0.32|
|Weighted average shares outstanding - basic and diluted||20,499||20,780||20,499||20,899|
|For The Three Months Ended||For The Six Months Ended|
|June 30,||June 30,|
|Per Share Data (1)||2014||2013||2014||2013|
|Net asset value, beginning of period||$ 8.73||$ 9.05||$ 9.20||$ 9.57|
|Net investment income||0.07||0.26||0.17||0.37|
|Net realized and unrealized gain (loss) on investments||(0.07)||(0.10)||(0.48)||(0.57)|
|Net increase (decrease) in net assets resulting from operations||(0.00)||0.16||(0.31)||(0.20)|
|Net asset value, end of period||$ 8.57||$ 9.13||$ 8.57||$ 9.13|
|(1) Per Share Data is based on weighted average number of common shares outstanding for the period.|
|(2) Represents the impact of common stock repurchases.|
About NGP Capital Resources Company
NGP Capital Resources Company is a closed-end, non-diversified management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. We principally invest in private companies and from time to time, we may also invest in public companies. We invest primarily in senior secured and mezzanine loans according to our business plan and in some instances receive equity interests in portfolio companies in connection with such investments. Our manager is NGP Investment Advisor, LP, an affiliate of NGP Energy Capital Management, L.L.C. ("NGP ECM"). Founded in 1988, NGP ECM is a premier investment franchise in the natural resources industry, which together with its affiliates has managed approximately $13 billion in cumulative committed capital since inception. NGP ECM's investment platform includes Natural Gas Partners, NGP Global Agribusiness Partners, NGP Capital Resources Company and NGP Energy Technology Partners, L.P. www.ngpenergycapital.com.
This press release may contain forward-looking statements. We may use words such as "anticipates," "believes," "intends," "plans," "expects," "projects," "estimates," "will," "should," "may" and similar expressions to identify forward-looking statements. These forward-looking statements are subject to various risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, the future operating results of our portfolio companies, regulatory factors, changes in regional, national, or international economic conditions and their impact on the industries in which we invest, other changes in the conditions of the industries in which we invest and other factors enumerated in our filings with the Securities and Exchange Commission (the "SEC").
You should not place undue reliance on such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update our forward-looking statements made herein, unless required by law.
Persons considering an investment in NGP Capital Resources Company should consider the investment objectives, risks, and charges and expenses of the Company carefully before investing. Such information and other information about us is available in our annual report on Form 10-K, in our quarterly reports on Form 10-Q and in prospectuses we issue from time to time in connection with our offering of securities. Such materials are filed with the SEC and copies are available on the SEC's website, www.sec.gov, and in the Investor Relations section of our website at www.ngpcrc.com. Prospective investors should read such materials carefully before investing.
CONTACT: INVESTMENT CONTACT: Please send investment proposals to: NGP Capital Resources Company 713-752-0062 Steve Gardner (email@example.com), Michael Brown (firstname.lastname@example.org), or Hans Hubbard (email@example.com). INVESTOR RELATIONS CONTACT: L. Scott Biar (firstname.lastname@example.org), 713-752-0062.
Source:NGP Capital Resources Company