Full Circle Capital Corporation Announces Second Quarter Fiscal 2013 Earnings

Full Circle Capital Corporation Announces Second Quarter Fiscal 2013 Earnings

Net Investment Income Increases to $0.22 Per Share, Up 10% Quarter-Over-Quarter

Announces Monthly Distributions of $0.077 per Share for a Total of $0.231 Per Share for Fourth Fiscal Quarter 2013, Equal to Annualized Distribution Rate of $0.924 Per Share


RYE BROOK, N.Y.--(BUSINESS WIRE)-- Full Circle Capital Corporation (NAS: FULL) (the "Company") today announced its financial results for the second quarter of fiscal 2013 ended December 31, 2012.

Financial Highlights for the Second Quarter of Fiscal 2013

  • Net asset value was $8.03 per share at December 31, 2012.

  • Total investment income was $3.1 million, including income from fees, dividends and other sources of $0.5 million.

  • Net investment income was $1.5 million, or $0.22 per share.

  • Monthly distributions of $0.077 per share were paid on November 15, 2012, December 14, 2012 and January 15, 2013, totaling $0.23 per share for the quarter.

  • Net realized losses were $(3.2) million, or $(0.49) per share, and net unrealized gains were $1.3 million, or $0.20 per share, and combined with net investment income, resulted in a net decrease in net assets from operations of $(0.4) million, or $(0.06) per share.

  • Total portfolio investments at December 31, 2012 were $77.6 million (excluding U.S. treasury bills of $22.0 million), compared to $75.5 million (excluding U.S. treasury bills of $25.0 million) at September 30, 2012.

  • Weighted average portfolio interest rate was 12.55% at December 31, 2012.

  • New originations were $3.9 million, consisting of a new debt facility to SOLEX Fine Foods, LLC. Additional funding to existing borrowers totaled $1.6 million (excluding regular borrowing under revolvers).

  • At December 31, 2012, 88% of portfolio company investments were first lien senior secured loans.

  • At December 31, 2012, debt outstanding was $20.0 million consisting of $16.6 million drawn under the Company's $35.0 million senior credit facility and $3.4 million of senior unsecured notes.

  • On November 27, 2012 the Company raised $10.1 million of net equity capital through a public offering of 1.35 million common shares priced at $7.90 per share.

On February 5, 2013, the Board of Directors declared monthly distributions for the fourth quarter of fiscal 2013 as follows:

Record Date

Payment Date

Per Share Amount

April 30, 2013

May 15, 2013

$0.077

May 31, 2013

June 14, 2013

$0.077

June 28, 2013

July 15, 2013

$0.077

These distributions equate to a $0.924 annualized distribution rate, or a current annualized yield of 11.9%, based on the closing price of the Company's common stock of $7.76 per share on February 8, 2013.

Management Commentary

"Net investment income per share increased 10% sequentially to $0.22, marking the second consecutive quarter of such growth. While growing net investment income, we have continued to increase our investment portfolio which totaled $77.6 million at quarter end, the largest level since our IPO in 2010," said John Stuart, Chairman and Chief Executive Officer of Full Circle Capital Corp. "Our primary strategy of investing in first lien senior secured loans to smaller and lower middle-market companies with a desirable yield continues to produce highly competitive portfolio metrics. We now have debt investments in 18 companies with first lien senior secured loans comprising 88% of the total investment portfolio. The weighted average yield on the portfolio was 12.55% for the quarter, within our current target range. Our positions are further supported by a loan-to-value ratio of 59%, with floating rate flexibility in 84% of our investments."

"With the capital raised during the quarter, we have additional resources to continue to expand our investment portfolio. Originations and additional funding to existing borrowers totaled $5.5 million for the second quarter and subsequent to the end of the quarter we added, net of payoffs, a $2.0 million investment to our portfolio. Our flexible uni-tranche lending solutions continue to attract quality credit opportunities allowing us to remain highly selective in the current market environment."

Second Quarter Fiscal 2013 Results

The Company's net asset value at December 31, 2012 was $8.03 per share. During the quarter, the Company generated $2.6 million of interest income, of which 100% was paid in cash. Income from fees, dividends and other sources totaled $0.5 million. The Company recorded net investment income of $1.5 million, or $0.22 per share. Net realized losses were $(3.2) million, or $(0.49) per share, and unrealized gains were $1.3 million, or $0.20 per share, both primarily related to the disposition of one investment. Net decrease in net assets from operations was $(0.4) million, or $(0.06) per share. Per share amounts for the quarter ended December 31, 2012 are based on approximately 6.7 million weighted average shares outstanding.

During the quarter, the Company originated a $3.9 million new loan facility, which was fully funded at closing. Additional funding to existing borrowers, excluding regular borrowing under revolvers, was $1.6 million during the quarter.

At December 31, 2012, the Company's portfolio included investments in 21 companies, of which 18 were debt investments. The average portfolio company debt investment at December 31, 2012 was $4.0 million. The weighted average interest rate on investments was 12.55%. At fair value, 88% of portfolio investments were first lien loans, 4% were second lien loans and 8% were equity investments. Approximately 84% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company's loans was 59% at December 31, 2012 compared to 62% at September 30, 2012.

Subsequent Events

On January 31, 2013 the Company received a full payoff of its senior secured term loan to The Selling Source, LLC, receiving $2.4 million in principal, interest and fees. On February 1, 2013, the Company invested $4.0 million in a new senior secured term loan to The Selling Source, LLC, bearing interest at 12.50% and maturing February 1, 2017.

Conference Call Details

Management will host a conference call to discuss these results on Tuesday, February 12, 2013 at 10:00 a.m. ET. To participate in the conference call, please call 866-305-6438 (domestic call-in) or 706-679-7161 (international call-in) and reference code # 96405426.

A live webcast of the conference call and the accompanying slide presentation will be available at http://ir.fccapital.com/CorporateProfile.aspx?iid=4151676. All participants should call or access the website approximately 10 minutes before the conference begins.

A telephone replay of the conference call will be available from 1:00 p.m. ET on February 12, 2013 until 11:59 p.m. ET on February 14, 2013 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation # 96405426. An archived replay of the conference call and slide presentation will also be available in the investor relations section of the company's website.

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 smaller and 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 web site 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," "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

December 31, 2012

June 30, 2012

(Unaudited)

(Audited)

Assets

Control Investments at Fair Value (Cost of $18,137,713 and

$6,639,648, respectively)

$

18,570,697

$

6,777,511

Affiliate Investments at Fair Value (Cost of $11,296,481 and

$6,802,017, respectively)

9,282,442

5,112,142

Non-Control/Non-Affiliate Investments at Fair Value (Cost of

$72,151,382 and $85,181,617, respectively)

71,765,827

82,957,117

Total Investments at Fair Value (Cost of $101,585,576 and

$98,623,282, respectively)

99,618,966

94,846,770

Cash

304,077

639,149

Deposit with Broker

2,250,000

2,350,000

Interest Receivable

848,630

902,711

Principal Receivable

251,751

513,372

Dividends Receivable

72,493

-

Due from Portfolio Investment

364,535

11,140

Receivable for Investments Sold

1,126,196

-

Prepaid Expenses

107,717

43,053

Other Assets

10,550

25,499

Deferred Offering Expenses

-

67,685

Deferred Credit Facility Fees

100,000

50,000

Total Assets

105,054,915

99,449,379

Liabilities

Due to Affiliate

710,556

580,353

Accounts Payable

19,337

115,741

Accrued Liabilities

47,455

79,651

Due to Broker

22,000,733

22,500,041

Dividends Payable

582,842

478,892

Interest Payable

100,479

142,518

Other Liabilities

759,692

140,458

Accrued Offering Expenses

-

19,697

Line of Credit

16,622,598

18,544,660

Distribution Notes

3,404,583

3,404,583

Total Liabilities

44,248,275

46,006,594

Net Assets

$

60,806,640

$

53,442,785

Components of Net Assets

Common Stock, par value $0.01 per share

(100,000,000 authorized; 7,569,382 and 6,219,382 issued

and outstanding, respectively)

$

75,694

$

62,194

Paid-in Capital in Excess of Par

67,420,152

57,455,232

Distributions in Excess of Net Investment Income

(500,122

)

(122,763

)

Accumulated Net Realized Losses

(4,222,474

)

(175,366

)

Accumulated Net Unrealized Losses

(1,966,610

)

(3,776,512

)

Net Assets

$

60,806,640

$

53,442,785

Net Asset Value Per Share

$

8.03

$

8.59

FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended

Six Months Ended

December 31,

December 31,

2012

2011

2012

2011

Investment Income

Interest Income from Non-Control/Non-Affiliate Investments

$

1,974,071

$

2,104,779

$

3,994,055

$

3,930,042

Interest Income from Affiliate Investments

280,567

-

560,508

234,864

Interest Income from Control Investments

319,411

227,071

598,584

254,644

Dividend Income from Control Investments

72,493

1,823

106,590

1,823

Other Income from Non-Control/Non-Affiliate Investments

384,553

64,992

528,580

376,449

Other Income from Affiliate Investments

56,004

-

59,585

54,086

Other Income from Control Investments

12,500

-

25,000

105,000

Total Investment Income

3,099,599

2,398,665

5,872,902

4,956,908

Operating Expenses

Management Fee

345,126

300,690

679,162

586,650

Incentive Fee

365,430

274,674

673,362

646,276

Total Advisory Fees

710,556

575,364

1,352,524

1,232,926

Allocation of Overhead Expenses

84,552

89,207

141,308

174,892

Sub-Administration Fees

50,000

78,115

123,429

156,229

Officers' Compensation

75,160

71,629

150,354

117,553

Total Costs Incurred Under Administration Agreement

209,712

238,951

415,091

448,674

Directors' Fees

33,125

26,125

61,750

54,250

Interest Expense

438,587

244,405

835,082

366,965

Professional Services Expense

109,902

93,806

275,063

314,679

Bank Fees

5,230

3,285

8,320

6,966

Other

126,837

118,089

221,177

203,258

Total Gross Operating Expenses

1,633,949

1,300,025

3,169,007

2,627,718