Medley Capital Corporation Announces June 30, 2018 Financial Results; Board Declares Dividend of $0.10 Per Share for the Fiscal Third Quarter of 2018
Third Quarter Highlights
- Net asset value ("NAV") of $6.43 per share
- Declared a dividend of $0.10 per share
- Net investment income of $0.02 per share
- Legacy Assets declined from 20.4% to 10.9%
The total value of our investments was $634.9 million at June 30, 2018. During the quarter ended June 30, 2018, the Company originated $29.8 million of investments and had $117.7 million of repayments resulting in net repayments of $87.9 million. As of June 30, 2018, the Company had investments in securities of 62 portfolio companies with approximately 63.7% consisting of senior secured first lien investments, 7.5% consisting of senior secured second lien investments, 0.2% in unsecured debt, 12.3% in MCC Senior Loan Strategy JV and 16.3% in equities / warrants. As of June 30, 2018, the weighted average yield based upon the cost basis of our income bearing portfolio investments, excluding cash and cash equivalents, was 10.0%.
Results of Operations
For the three months ended June 30, 2018, the Company reported net investment income per share and net loss per share of $0.02 and $(0.49), respectively, calculated based upon the weighted average shares outstanding. For the nine months ended June 30, 2018, the Company reported net investment income per share and net loss per share of $0.21 and $(1.60), respectively, calculated based upon the weighted average shares outstanding. As of June 30, 2018, the Company's NAV was $6.43 per share.
For the three months ended June 30, 2018, total investment income was $13.9 million and consisted of $11.2 million of portfolio interest income, $1.9 million of dividend income, and $0.8 million of fee income.
For the nine months ended June 30, 2018, total investment income was $51.6 million and consisted of $42.9 million of portfolio interest income, $5.5 million of dividend income, and $3.2 million of fee income.
For the three months ended June 30, 2018, total expenses were $13.0 million and consisted of the following: base management fees of $3.5 million, interest and financing expenses of $6.8 million, professional fees of $0.7 million, administrator expenses of $0.9 million, directors' fees of $0.5 million, and other general and administrative related expenses of $0.6 million.
For the nine months ended June 30, 2018, total expenses net of the voluntary base management fee waiver were $39.8 million and consisted of the following: base management fees net of fees waived under the voluntary waiver of $11.0 million, interest and financing expenses of $21.0 million, professional fees of $1.8 million, administrator expenses of $2.8 million, directors' fees of $0.9 million, and other general and administrative related expenses of $2.3 million.
Net Investment Income
For the three and nine months ended June 30, 2018, the Company reported net investment income of $0.9 million and $11.7 million, respectively, or $0.02 and $0.21, respectively, on a weighted average per share basis.
Net Realized and Unrealized Gains/Losses
For the three and nine months ended June 30, 2018, the Company reported net realized losses from investments of $(35.0) million and $(58.4) million, respectively.
For the three and nine months ended June 30, 2018, the Company reported a loss on extinguishment of debt of $(10,848) and $(1.2) million, respectively.
For the three months ended June 30, 2018, the Company reported net unrealized appreciation on investments of $7.2 million, respectively.
For the nine months ended June 30, 2018, the Company reported net unrealized depreciation on investments of $(40.0) million, respectively.
Liquidity and Capital Resources
As of June 30, 2018, the Company had a cash balance of $144.0 million, of which, $71.9 million was held in Medley SBIC, LP.
As of June 30, 2018, the Company had $1.5 million of total debt outstanding under its $150.0 million senior secured revolving credit facility, $150.0 million outstanding in SBA-guaranteed debentures, $74.0 million outstanding in aggregate principal amount of 6.5% unsecured notes due 2021, $89.8 million outstanding in aggregate principal amount of 6.125% unsecured notes due 2023, and $121.1 million of 5.30% unsecured notes due 2024.
On August 2, 2018, the Company's Board of Directors declared a dividend of $0.10 per share, payable on September 20, 2018, to stockholders of record at the close of business on September 5, 2018. The Company has identified 31%, or $0.0306 per share, of this distribution as an interest-related dividend generally exempt from U.S. nonresident withholding tax. This information is subject to change and the specific tax characteristics of the distribution will be reported to stockholders on Form 1099 after the end of the Calendar year.
The Company will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on August 10, 2018.
All interested parties may participate in the conference call by dialing (888) 637-5728 approximately 10-15 minutes prior to the call. International callers should dial (484) 747-6636. Participants should reference Medley Capital Corporation and the Conference ID: 5269769. Following the call you may access a replay of the event via audio webcast. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's website, http://www.medleycapitalcorp.com. To listen to the live call, please go to the Company's website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the Company's website.
Medley Capital Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)
|June 30, 2018||September 30, 2017|
|Investments at fair value|
|Non-controlled/non-affiliated investments (amortized cost of $421,439 and $625,108, respectively)||$||358,757||$||575,496|
|Affiliated investments (amortized cost of $98,688 and $91,027, respectively)||98,014||90,071|
|Controlled investments (amortized cost of $231,810 and $197,918, respectively)||178,097||171,424|
|Total investments at fair value||634,868||836,991|
|Cash and cash equivalents||144,002||108,572|
|Deferred offering costs||355||307|
|Receivable for dispositions and investments sold||150||232|
|Revolving credit facility payable (net of debt issuance costs of $1,151 and $1,777, respectively)||$||349||$||66,223|
|Term loan payable (net of debt issuance costs of $0 and $1,046, respectively)||-||100,954|
|Notes payable (net of debt issuance costs of $8,818 and $4,123, respectively)||276,330||172,752|
|SBA debentures payable (net of debt issuance costs of $2,422 and $2,846, respectively)||147,578||147,154|
|Management and incentive fees payable||3,533||4,312|
|Interest and fees payable||7,012||3,760|
|Accounts payable and accrued expenses||2,087||1,864|
|Administrator expenses payable||950||860|
|Deferred tax liability||438||912|
|Due to affiliate||152||81|
|Common stock, par value $0.001 per share, 100,000,000 common shares authorized, 54,474,211 and 54,474,211 common shares issued and outstanding, respectively||$||54||$||54|
|Capital in excess of par value||705,046||705,046|
|Accumulated undistributed net investment income||(1,688||)||9,528|
|Accumulated net realized gain/(loss) from investments||(236,183||)||(176,663||)|
|Net unrealized appreciation/(depreciation) on investments, net of deferred taxes||(117,068||)||(77,536||)|
|Total net assets||350,161||460,429|
|Total liabilities and net assets||$||788,769||$||959,560|
|NET ASSET VALUE PER SHARE||$||6.43||$||8.45|
Medley Capital Corporation
Consolidated Statements of Operations
(in thousands, except share and per share data)
|For the three months ended June 30||For the nine months ended June 30|
|Interest from investments|
|Total interest income||11,142||20,729||42,790||66,422|
|Dividend income, net of provisional taxes ($0 and $0, respectively)||1,925||1,050||5,541||2,745|
|Interest from cash and cash equivalents||65||46||123||109|
|Total investment income||13,945||23,695||51,611||74,108|
|Base management fees||3,533||4,450||11,376||13,461|
|Interest and financing expenses||6,754||7,321||20,983||24,238|
|General and administrative||474||424||1,903||1,904|
|Expenses before management and incentive fee waivers||13,041||14,137||40,170||46,187|
|Management fee waiver||-||(11||)||(380||)||(48||)|
|Incentive fee waiver||-||-||-||(44||)|
|Total expenses net of management and incentive fee waivers||13,041||14,126||39,790||46,095|
|Net investment income before excise taxes||904||9,569||11,821||28,013|
|Excise tax expense||-||-||(158||)||(267||)|
|NET INVESTMENT INCOME||904||9,569||11,663||27,746|
|REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:|
|Net realized gain/(loss) from investments|
|Net realized gain/(loss) from investments||(35,000||)||(55,083||)||(58,352||)||(61,371||)|
|Net unrealized appreciation/(depreciation) on investments|
|Net unrealized appreciation/(depreciation) on investments||7,247||47,730||(40,006||)||30,374|
|Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments||194||783||474||783|
|Loss on extinguishment of debt||(11||)||-||(1,168||)||(456||)|
|Net gain/(loss) on investments||(27,570||)||(6,570||)||(99,052||)||(30,670||)|
|NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS||$||(26,666||)||$||2,999||$||(87,389||)||$||(2,924||)|
|WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE||$||(0.49||)||$||0.06||$||(1.60||)||$||0.05|
|WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT INCOME PER COMMON SHARE||$||0.02||$||0.18||$||0.21||$||0.51|
|WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED||54,474,211||54,474,211||54,474,211||54,474,211|
|DIVIDENDS DECLARED PER COMMON SHARE||$||0.10||$||0.16||$||0.42||$||0.60|
ABOUT MEDLEY CAPITAL CORPORATION
Medley Capital Corporation is a closed-end, externally managed business development company ("BDC") that trades on the New York Stock Exchange (NYSE:MCC) and the Tel Aviv Stock Exchange (TASE:MCC). Medley Capital Corporation's investment objective is to generate current income and capital appreciation by lending to privately-held middle market companies, primarily through directly originated transactions, to help these companies expand their businesses, refinance and make acquisitions. Our portfolio generally consists of senior secured first lien loans and senior secured second lien loans. Medley Capital Corporation is externally managed by MCC Advisors LLC, which is an investment adviser registered under the Investment Advisers Act of 1940, as amended. For additional information, please visit Medley Capital Corporation at www.medleycapitalcorp.com.
ABOUT MCC ADVISORS LLC
MCC Advisors LLC is a subsidiary of Medley Management Inc. (NYSE: MDLY, "Medley"). Medley is an alternative asset management firm offering yield solutions to retail and institutional investors. Medley's national direct origination franchise, is a premier provider of capital to the middle market in the U.S. Medley has over $5 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE:MCC) (TASE:MCC) and Sierra Income Corporation, a credit interval fund, Sierra Total Return Fund (NASDAQ: SRNTX) and several private investment vehicles. Over the past 15 years, Medley has provided capital to over 400 companies across 35 industries in North America.1 For additional information, please visit Medley Management Inc. at www.mdly.com.
Medley LLC, the operating company of Medley Management Inc., has outstanding bonds which trade on the New York Stock Exchange under the symbols (NYSE:MDLX) and (NYSE:MDLQ). Medley Capital Corporation is dual-listed on the New York Stock Exchange (NYSE:MCC) and the Tel Aviv Stock Exchange (TASE:MCC) and has outstanding bonds which trade on both the New York Stock Exchange under the symbols (NYSE:MCV), (NYSE:MCX) and the Tel Aviv Stock Exchange under the symbol (TASE: MCC.B1).
Statements included herein may contain "forward-looking statements". 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 assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission. Except as required by law, 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.
SOURCE: Medley Capital Corporation
Investor Relations Contact:
Head of Capital Markets & Risk Management
Medley Management Inc.
Medley Management Inc. is the parent company of Medley LLC and several registered investment advisors (collectively, "Medley"). Assets under management refers to assets of our funds, which represents the sum of the net asset value of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). Assets under management are as of June 30, 2018.
Source: Medley Capital Corporation via Globenewswire