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Full Circle Capital Corporation Announces Third Quarter Fiscal 2015 Earnings

- Raised $37.9 Million in Net Proceeds Through Successful Rights Offering -

- Net Investment Income of $2.0 Million or $0.17 per Share -

- Closed $15.7 Million in New Investments Thus Far in Calendar 2015 -

GREENWICH, Conn., May 11, 2015 (GLOBE NEWSWIRE) -- Full Circle Capital Corporation (Nasdaq:FULL) (the "Company") today announced its financial results for the third quarter of fiscal 2015 ended March 31, 2015.

Financial Highlights for the Fiscal Third Quarter Ended March 31, 2015:

  • Successfully completed rights offering, generating approximately $37.9 million in net proceeds and the issuance of approximately 11.2 million shares of common stock. The proceeds will be used by the Company for the origination of new investments in accordance with its investment objective, and for working capital and other general corporate purposes.
  • Originated $2.0 million in investments. Repayments or realizations from portfolio companies and sales were $6.4 million.
  • Increased total investment income 35% to $4.3 million, compared with $3.2 million for the prior-year quarter.
  • Net investment income ("NII") grew 40.6% to $2.0 million, or $0.17 per share, compared with $1.4 million, or $0.15 per share, in the prior-year quarter.
  • Net realized and unrealized losses were $0.3 million, consisting of unrealized gains on investments of $3.2 million and realized losses on investments of $3.5 million.
  • Net increase in net assets from operations was $1.7 million, or $0.14 per share.
  • Per share amounts are based on approximately 12 million weighted average shares outstanding compared to 9.4 million weighted average shares outstanding for the third quarter of fiscal 2014, reflecting capital markets activities completed during calendar 2014 and 2015.

As of March 31, 2015:

  • Net asset value was $4.43 per share and portfolio fair value was $121.0 million
  • Weighted average portfolio interest rate was 10.53%.
  • 89% of portfolio company investments were first lien senior secured loans.

On May 5, 2015, the Board of Directors declared monthly distributions for the first quarter of fiscal 2016 as follows:

Record Date Payment Date Per Share Amount
July 31, 2015 August 14, 2015 $0.035
August 31, 2015 September 15, 2015 $0.035
September 30, 2015 October 15, 2015 $0.035

These distributions equate to a $0.42 annualized distribution rate, or a current annualized yield of 12.0%, based on the closing price of the Company's common stock of $3.50 per share on May 8, 2015.

"Our fiscal third quarter was highlighted by the successful completion of our rights offering, and we appreciate the strong vote of confidence shown by our shareholders in our current positioning and overall investment strategy," said Gregg Felton, President and Chief Executive Officer of Full Circle Capital Corporation. "With the proceeds from the rights offering, we began to deploy capital in April toward new opportunities from our transaction pipeline as we closed on $13.7 million in new investments. We expect to continue to invest our available capital over the next couple of quarters but intend to focus on those selective investments which offer the appropriate risk-reward characteristics."

"The current annualized distribution rate of 42 cents reflects the near doubling of our share count and we believe our distribution has been set at a sustainable level," added Mr. Felton. "Furthermore, in order to better ensure that we are able to cover the distribution while we hold excess uninvested capital, our investment adviser has agreed to waive its base management and incentive fees to the extent required in order for the Company to earn net investment income sufficient to fully support each monthly distribution through the end of fiscal 2016. With this further alignment of management and shareholder interests, as well as our broadened investment approach, we believe we are well positioned to build shareholder value."

Third Quarter Fiscal 2015 Results

The Company's net asset value at March 31, 2015 was $4.43 per share. During the quarter, the Company generated $4.3 million of interest income compared to $2.5 million in the third quarter of fiscal 2014, an increase of 70.8%. Income from fees and other sources in the quarter totaled $0.1 million, compared to $0.7 million in the prior-year quarter.

The Company recorded NII of $2.0 million, or $0.17 per share, in the quarter ended March 31, 2015 compared to $1.4 million, or $0.15 per share, in the quarter ended March 31, 2014. Per share amounts for the quarter ended March 31, 2015 are based on approximately 12 million weighted average shares outstanding compared to 9.4 million weighted average shares outstanding for the quarter ended March 31, 2014, reflecting additional capital raises completed by Full Circle Capital in calendar 2014 and 2015.

Net realized and unrealized losses in the quarter were $0.3 million. Net unrealized appreciation of $3.2 million, inclusive of the reversal of previously unrealized losses now realized, was comprised of $1.1 million of net unrealized appreciation on equity investments and $2.1 million of net unrealized appreciation on debt investments. Realized losses on investments were $3.5 million. Net increase in net assets resulting from operations was $1.7 million, or $0.14 per share.

During the quarter ended March 31, 2015 the Company added $2.0 million in new loans to one new portfolio company. Repayments from portfolio companies during the second quarter were $6.4 million from three portfolio companies.

At March 31, 2015, the Company's portfolio included debt investments in 27 companies at an average of $4.3 million per investment. The weighted average interest rate on debt investments was 10.53%. At fair value, 89% of portfolio investments were first lien loans, 7% were second lien loans and 4% were equity investments. Approximately 78% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company's loans was 66% at March 31, 2015 compared to 64% at March 31, 2014.

Subsequent Events

Subsequent to March 31, 2015, the Company has closed $13.7 million in new investments:

On April 1, 2015, the Company purchased $3.2 million of $23.5 million in subordinated notes issued by GC Pivotal, LLC, a data connectivity service company. The notes bear interest at 11.00% and have a final maturity of December 31, 2020.

On April 22, 2015 and May 4, 2015, the Company purchased an additional $5.0 million in principal of $210 million senior secured notes for US Shale Solutions, Inc., an oil and gas field services company, for $2.5 million. The notes bear interest at 12.50% and have a final maturity of September 1, 2017.

On April 29, 2015, the Company purchased $8.0 million of $43.0 million in senior secured notes issued by Sundberg America, LLC, an appliance parts distributor. The notes bear interest at 9.50% and have a final maturity of April 29, 2020.

Conference Call Details

Management will host a conference call at 4:30 pm ET today to discuss results. A live webcast of the conference call and accompanying slide presentation will be available at http://ir.fccapital.com. Please access the website approximately 10 minutes before the conference call begins.

To participate in the call, please call (888) 228-5271 (domestic toll-free) or (913) 312-1279 (international) and reference PIN: 8793012.

A webcast replay of the call, along with an archived copy of the presentation, will be available at http://ir.fccapital.com for one year following the call.

An audio replay will also be available until May 18, 2015, by dialing (877) 870-5176 (toll-free) or (858) 384-5517 (international), PIN: 8793012.

About Full Circle Capital Corporation

Full Circle Capital Corporation (www.fccapital.com) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Full Circle lends to and invests in senior secured loans and, to a lesser extent, mezzanine loans and equity securities issued by lower middle-market companies that operate in a diverse range of industries. Full Circle's investment objective is to generate both current income and capital appreciation through debt and equity investments. For additional information visit the company's website www.fccapital.com.

Forward-Looking Statements

This press release contains forward-looking statements which relate to future events or Full Circle's future performance or financial condition. Any statements that are not statements of historical fact (including statements containing the words "believes," "should," "plans," "anticipates," "expects," "estimates" and similar expressions) should also be considered to be forward-looking statements. These forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Full Circle's filings with the Securities and Exchange Commission. Full Circle undertakes no duty to update any forward-looking statements made herein.

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2015 June 30, 2014
Unaudited
Assets
Control Investments at Fair Value (Cost of $19,288,955 and $20,253,149, respectively) $ 8,746,959 $ 17,539,057
Affiliate Investments at Fair Value (Cost of $24,237,661 and $20,177,115, respectively) 17,258,161 14,588,417
Non-Control/Non-Affiliate Investments at Fair Value (Cost of $97,774,155 and $123,605,311, respectively) 94,976,588 118,063,285
Total Investments at Fair Value (Cost of $141,300,771 and $164,035,575, respectively) 120,981,708 150,190,759
Cash 2,187,047 --
Deposit with Broker -- 2,525,000
Interest Receivable 1,595,553 1,016,726
Principal Receivable 102,800 207,233
Due from Affiliates 349,623 4,273
Due from Portfolio Investments 151,911 135,288
Stock Subscriptions Receivable 39,220,724 --
Prepaid Expenses 135,703 57,470
Other Assets 1,320,968 750,326
Deferred Offering Expenses 189,324 --
Deferred Debt Issuance Costs 872,948 947,937
Deferred Credit Facility Fees 339,753 449,350
Total Assets 167,448,062 156,284,362
Liabilities
Due to Affiliates 983,634 891,966
Bank Overdraft -- 821,316
Accrued Liabilities 50,001 184,857
Due to Broker -- 25,000,221
Payable for Investments Acquired -- 24,900,172
Distributions Payable 800,585 766,683
Interest Payable 91,524 45,254
Other Liabilities 655,766 1,076,800
Accrued Offering Expenses 1,201,303 35,828
Line of Credit 27,207,560 8,435,463
Notes Payable 8.25% due June 30, 2020 33,809,749 21,145,525
Total Liabilities 64,800,122 83,304,085
Commitments and contingencies -- --
Net Assets $ 102,647,940 $ 72,980,277
Components of Net Assets
Common Stock, par value $0.01 per share (100,000,000 authorized; 11,949,034 and 11,443,034 issued and outstanding, respectively; 11,205,921 and 0 subscribed, respectively) $ 119,490 $ 114,430
Paid-in Capital in Excess of Par 133,657,741 92,103,666
Distributions in Excess of Net Investment Income (1,163,168) (131,251)
Accumulated Net Realized Losses (9,647,060) (5,261,752)
Accumulated Net Unrealized Losses (20,319,063) (13,844,816)
Net Assets $ 102,647,940 $ 72,980,277
Net Asset Value Per Share $ 4.43 $ 6.38
FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
2015 2014 2015 2014
Investment Income
Interest Income from Non-Control/Non-Affiliate Investments $ 3,310,605 $ 1,308,432 $ 9,486,149 $ 4,839,103
Interest Income from Affiliate Investments 629,108 673,896 1,835,289 1,984,549
Interest Income from Control Investments 317,431 510,038 1,280,177 1,452,149
Dividend Income from Control Investments -- 80,293 -- 114,704
Other Income from Non-Control/Non-Affiliate Investments 38,256 603,190 573,587 1,966,552
Other Income from Affiliate Investments 625 3,275 94,667 12,156
Other Income from Control Investments 12,500 12,500 37,500 37,500
Total Investment Income 4,308,525 3,191,624 13,307,369 10,406,713
Operating Expenses
Management Fee 545,564 364,352 1,699,451 1,156,099
Incentive Fee 419,559 351,594 1,335,651 1,141,230
Total Advisory Fees 965,123 715,946 3,035,102 2,297,329
Allocation of Overhead Expenses 53,511 43,604 127,028 142,315
Sub-Administration Fees 65,195 50,000 194,999 150,000
Officers' Compensation 75,913 75,529 227,739 226,396
Total Costs Incurred Under Administration Agreement 194,619 169,133 549,766 518,711
Directors' Fees 49,750 26,125 138,446 86,375
Interest Expenses 1,119,639 623,091 3,299,116 2,062,570
Professional Services Expense 149,698 112,629 509,292 467,110
Bank Fees 8,910 9,941 30,099 45,409
Other 142,326 128,380 402,720 379,015
Total Gross Operating Expenses 2,630,065 1,785,245 7,964,541 5,856,519
Expense Reimbursement (299,476) -- (830,523) --
Total Net Operating Expenses 2,330,589 1,785,245 7,134,018 5,856,519
Net Investment Income 1,977,936 1,406,379 6,173,351 4,550,194
Net Change in Unrealized Gain (Loss) on Investments 3,165,547 1,751,729 (6,474,247) (3,698,474)
Net Realized Gain (Loss) on:
Non-Control/Non-Affiliate Investments (3,458,023) 224,320 (4,186,132) (946,449)
Affiliate Investments 44,461 -- 44,461 --
Control Investments (71,953) -- (242,389) --
Foreign Currency Transactions -- (906) (1,248) (838)
Net Realized Gain (Loss) (3,485,515) 223,414 (4,385,308) (947,287)
Net Increase (Decrease) in Net Assets Resulting from Operations 1,657,968 3,381,522 (4,686,204) (95,567)
Earnings (Loss) per Common Share Basic and Diluted $ 0.14 $ 0.36 $ (0.39) $ (0.01)
Net Investment Income per Common Share Basic and Diluted $ 0.17 $ 0.15 $ 0.52 $ 0.56
Weighted Average Shares of Common Stock Outstanding Basic 11,949,034 9,419,350 11,925,027 8,177,036
Weighted Average Shares of Common Stock Outstanding Diluted 11,990,011 9,419,350 11,925,027 8,177,036
FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
Three months ended Three months ended Nine months ended Nine months ended
March 31. 2015 March 31, 2014 March 31, 2015 March 31, 2014
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Per Share Data (1) :
Net asset value at beginning of period $ 5.48 $ 7.09 $ 6.38 $ 8.01
Accretion (dilution) from offering(s) (2) (0.96) 0.00 (0.92) 0.00
Offering costs (0.06) (0.03) (0.06) (0.03)
Net investment income 0.17 0.15 0.52 0.56
Net change in unrealized gain (loss) 0.29 0.18 (0.52) (0.53)
Net realized gain (loss) (0.29) 0.02 (0.37) (0.14)
Dividends from net investment income (0.17) (0.15) (0.52) (0.56)
Return of capital (0.03) (0.06) (0.08) (0.11)
Net asset value at end of period $ 4.43 $ 7.20 $ 4.43 $ 7.20
(1) Financial highlights are based on weighted average shares outstanding.
(2) Accretion and dilution from offering(s) is based on the net change in net asset value from each follow-on offering.

CONTACT: Company Contact: John Stuart, Chairman Gregg J. Felton, President and Chief Executive Officer Full Circle Capital Corporation (203) 900 - 2100 info@fccapital.com Investor Relations Contacts: Garrett Edson/Brad Cohen ICR, LLC (203) 818 - 1089

Source:Full Circle Capital Corporation