NEW YORK, May 09, 2016 (GLOBE NEWSWIRE) -- Garrison Capital Inc., a business development company (NASDAQ:GARS), today announced its financial results for the first fiscal quarter ended March 31, 2016.
References to “we,” “us,” “our,” the “Company” and “Garrison Capital” refer to Garrison Capital Inc. and its consolidated subsidiaries.
First Quarter 2016 Highlights
- Net investment income for the quarter ended March 31, 2016 was $5.9 million, or $0.36 per share;
- Net realized loss on investments for the quarter ended March 31, 2016 was $(0.1) million, or $(0.01) per share;
- Net change in unrealized loss from investments for the quarter ended March 31, 2016 was $(8.5) million, or $(0.52) per share;
- Net decrease in net assets resulting from operations for the quarter ended March 31, 2016 was $(2.7) million, or $(0.17) per share; and
- Our board of directors declared a second quarter 2016 distribution of $0.35 per share, payable on June 24, 2016 to stockholders of record as of June 10, 2016.
Consolidated Results of Operations
Consolidated operating results for the three months ended March 31, 2016 and December 31, 2015 are as follows:
|Three Months Ended |
March 31, 2016
|Three Months Ended |
December 31, 2015
|($ in thousands, except per share data)||(Unaudited)||(Unaudited)|
|Net investment income||$||5,859||$||6,842|
|Total investment income||11,056||11,480|
|Net realized (loss) on investments||(95||)||(373||)|
|Net change in unrealized (loss) on investments||(8,462||)||(16,736||)|
|Net (decrease) in net assets resulting from operations||(2,698||)||(10,267||)|
|Net investment income per share||0.36||0.41|
|Net realized/unrealized (loss) from investments per share||(0.53||)||(1.03||)|
|Net (loss) per share||(0.17||)||(0.62||)|
|Net asset value per share||13.50||13.98|
Total investment income for the three months ended March 31, 2016 was $11.1 million and net investment income was $5.9 million. Total expenses for the three months ended March 31, 2016 were $5.2 million.
Net realized loss on investments of $(0.1) million for the three months ended March 31, 2016 were primarily driven by $(0.4) million of realized loss in our GLC Trust 2013-2 consumer loan portfolio. This was offset by $0.3 million of realized gains from repayments and sales of portfolio investments.
The net change in unrealized loss on investments of $(8.5) million for the three months ended March 31, 2016 was driven primarily by $(6.7) million of negative credit related adjustment of four portfolio investments, a $(1.7) million negative market-related adjustment on seven portfolio investments and a $(0.2) million decrease in the market value of one energy investment. This was offset by a $0.1 million reversal of prior period unrealized losses due to the partial repayment of five portfolio investments.
Portfolio and Investment Activities
For the three months ended March 31, 2016, we originated one new investment, closed one club deal, purchased one new investment, and closed add-on investments for a total increase to par in our portfolio of $36.0 million with a weighted average yield of 10.5%. For the three months ended March 31, 2016, repayments in our portfolio consisted of the sale of five transitory investments, and other partial repayments for a total of $36.3 million of par with a weighted average yield of 8.1%.
See below for portfolio activity table.
|Par (in millions)||Q1 2015||Q2 2015||Q3 2015||Q4 2015||Q1 2016||Average|
|Total add-on investments||0.9||13.3||5.6||4.7||3.4||5.6|
|Less: Total Repayments/Sales(1)||(29.9||)||(70.2||)||(59.8||)||(29.0||)||(36.3||)||(45.0||)|
|Summary||Q1 2015(2)||Q2 2015(2)||Q3 2015(2)||Q4 2015(3)||Q1 2016(4)||Average|
|Number of new investments||2||5||4||17||3||6|
|Weighted average yield of additions||12.2||%||10.4||%||10.5||%||8.9||%||10.5||%||10.5||%|
|Number of repayments/sales(1)||3||8||6||2||5||5|
|Weighted average yield of repayments/sales||11.6||%||10.4||%||10.3||%||10.0||%||8.1||%||10.1||%|
(1) Q1 2016 repayments represent investment repayments. There were no position restructures in Q1 2016
(2) Activity includes repayment of certain investments in which we continue to hold an equity investment in the portfolio company
(3) Weighted average yield of additions consists of four core portfolio additions at a weighted average yield 10.5% and 13 transitory portfolio additions at a weighted average yield of 7.0%. Excludes non-accrual portfolio companies
(4) Q1 2016 activity excludes $16.0 million of transitory loans across five portfolio companies that were both purchased and sold during the first quarter. Excludes non-accrual portfolio companies
The following table shows select information of our portfolio as of March 31, 2016 and December 31, 2015.
|Summary of portfolio characteristics ($ in millions)||March 31, 2016||December 31, 2015|
|Total Market Value||$||405.6||$||415.0|
|Number of portfolio companies||65||67|
|Average investment size(1)||$||6.2||$||6.2|
|Weighted average yield(2)||11.2||%||10.8||%|
|Weighted average price(1)||90.9||92.9|
|Second lien & mezzanine/subordinated||1.9||%||1.8||%|
|Equity & other||2.2||%||2.2||%|
|Weighted average debt/EBITDA(1) (2) (6)||3.7||x||3.6||x|
|Weighted average risk rating(1)||2.66||2.66|
(1) Excludes consumer loans and equity investments
(2) Excludes investments with a risk rating of four, unfunded revolvers and equity investments
(3) Q1 2016 includes the transfer of one portfolio company, total par of $4.8 million, to core from transitory, based on the current yield
(4) Originated positions include investments where we have sourced and led the execution of the deal
(5) Club positions include investments where we provide direct lending to a borrower with one or two other lenders but did not lead the deal
(6) Excludes non-operating portfolio companies, which we define as those investments collateralized by real estate, proved developed producing value (“PDP”) or other hard assets. PDPs are proven revenues that can be produced with existing wells. As of March 31, 2016, $31.7 million of par value and $30.9 million of market value was excluded
Liquidity and Capital Resources
As of March 31, 2016, we had cash of $23.6 million and restricted cash of $11.9 million.
In addition, our transitory portfolio, which we define as those investments that generally yield less than 9.0%, consists of nine portfolio companies with a total par value of $23.1 million and a fair value of $21.5 million. We view these investments as an additional source of liquidity to meet our investment objectives.
On May 2, 2016, our board of directors approved a distribution in the amount of $5.7 million, or $0.35 a share, which will be paid on June 24, 2016 to stockholders of record as of June 10, 2016.
Distributions are paid from taxable earnings and may include return of capital and/or capital gains. The specific tax characteristics of the distributions will be reported to stockholders on Form 1099-DIV after the end of the calendar year and in our periodic reports filed with the Securities and Exchange Commission.
Share Repurchase Program
On October 5, 2015, we adopted a share repurchase plan that provides for repurchase of up to $10.0 million of our common stock at prices below the Company's net asset value per share as reported in its most recent financial statements. Under the repurchase program, the Company may, but is not obligated to, repurchase shares of its outstanding common stock in the open market or in privately negotiated transactions from time to time. Any repurchases by the Company will comply with the requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and any applicable requirements of the Investment Company Act of 1940, as amended. Unless extended by the Company's board of directors, the repurchase program will terminate on the earlier of October 5, 2016 or the repurchase of $10.0 million of the Company's common stock. The Company's board of directors may amend this program, solely in its discretion, at any time prior to its termination.
The following table shows our share repurchase activity during the three months ended March 31, 2016 and December 31, 2015.
|($ in thousands, except per share data)||Three Months Ended||Three Months Ended|
|March 31, 2016||December 31, 2015|
|Dollar amount repurchased||$||3,140||$||3,314|
|Average price per share||$||11.51||$||13.19|
|Weighted average discount to net asset value||(17.73||)||%||(11.67||)||%|
Earnings Conference Call
We will host an earnings conference call at 10:00 a.m. (Eastern Time) on Tuesday, May 10, 2016 to discuss our first quarter financial results. All interested parties are welcome to participate. The conference call can be accessed at the following dial-in number: (888) 588-0798. International callers can access the conference call by dialing (706) 634-6548. All participants will need to enter the Conference ID 99782275. All participants are asked to dial-in to the conference call 10-15 minutes prior to the call so that their name and company information can be collected.
During the earnings conference call, the Company intends to refer to the Q1 2016 Garrison Capital Inc. Earnings Presentation, which will be available prior to the conference call on the Investor Relations section of the Company’s website (www.garrisoncapitalbdc.com) under Webcasts & Presentations.
An archived replay of the call will be available within two hours after the call until 11:59 p.m. (Eastern Time) on June 10, 2016. To hear the replay, please dial (855) 859-2056. International callers, please dial (404) 537-3406. For all replays, please enter the Conference ID 99782275.
ABOUT GARRISON CAPITAL INC.
Garrison Capital Inc. is a business development company that primarily invests in loans to U.S. based middle-market companies. The Company’s investment activities are managed by its investment adviser, Garrison Capital Advisers LLC, an affiliate of Garrison Investment Group LP (“Garrison Investment Group”). For more information, go to http://www.garrisoncapitalbdc.com.
ABOUT GARRISON INVESTMENT GROUP
Garrison Investment Group is an alternative investment and asset management firm founded in March 2007. Garrison Investment Group invests opportunistically in the debt of middle-market companies, primarily in the areas of corporate finance, real estate finance and structured finance. For more information, go to http://www.garrisoninv.com.
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Contact: Garrison Capital Inc. Brian Chase www.garrisoncapitalbdc.com (212) 372-9590
Source:Garrison Capital, Inc