HOUSTON, Aug. 9, 2011 (GLOBE NEWSWIRE) -- NGP Capital Resources Company (Nasdaq:NGPC) (the "Company") today announced its financial results for the three- and six-months ended June 30, 2011.
Highlights for the quarter ended June 30, 2011:
| Quarterly dividends declared: $0.18 per share, an increase of 6% from the second quarter of 2010 |
| Net asset value: $208.3 million, or $9.63 per share |
| Operating Results: |
| Total investment income: $9.1 million, increasing $3.0 from second quarter of 2010 |
| Net investment income: $4.4 million, increasing $1.1 million from second quarter of 2010 |
| Net realized capital gain on investments: $1.0 million, compared to $0 in second quarter of 2010 |
| Net unrealized loss on investments: $21.8 million, or $(1.01) per share |
| Net increase (decrease) in net assets resulting from operations per share: $(0.76), compared to $0.18 in the second quarter of 2010 |
| Portfolio and Investment Activity: |
| New investments made in portfolio companies during the quarter: $37.0 million |
| Redemption of portfolio securities during the quarter: $16.1 million |
| Total invested in portfolio companies at June 30, 2011: $199.7 million |
| Number of portfolio companies at June 30, 2011: 19 |
Portfolio and Investment Activity
During the quarter ended June 30, 2011, we funded a $7.7 million investment in Spirit Resources, LLC, a new portfolio company, and an additional $29.3 million to existing portfolio companies, including $25.0 million to acquire a limited term overriding royalty interest in certain offshore Gulf of Mexico oil and gas producing properties operated by ATP Oil & Gas Corporation. Also during the second quarter of 2011, we received principal repayments, realizations and settlements totaling $16.1 million.
In June 2011, we entered into definitive agreements to sell all of our interests in Alden Resources, LLC ("Alden") and Gatliff Services, LLC ("Gatliff") for $73.2 million in cash, subject to a working capital adjustment, and a contingent future payment of up to $6.8 million. This transaction resulted in the recognition of $4.5 million of previously unrecognized PIK interest income, and in revisions to values attributable to term loans, overriding royalty interests and equity interests in these portfolio companies. The combined investments in Alden and Gatliff generated an all in, cash-on-cash, return in excess of 16% per annum; however, the revisions to values from March 31, 2011 resulted in a net unrealized loss of $9.8 million, or $0.45 per share, in the second quarter. This transaction closed on July 28, 2011.
Primarily as a result of continued deterioration in the ethanol market and the resulting decline in the fair value of the collateral securing our investments, we reduced the carrying value of our investments in and receivables from BioEnergy Holding LLC ("BioEnergy") and its affiliate, Bionol Clearfield LLC ("Bionol"), to zero. On July 20, 2011, BioEnergy and Bionol filed for protection under Chapter 7 of the U.S. Bankruptcy Code, with the intention of selling Bionol's ethanol plant. Bionol has been involved in an arbitration case in connection with a contractual dispute with the former major purchaser of its ethanol; however, we believe it is unlikely that the ultimate outcome of these events will provide any significant realization on our investment. This reduction in carrying value resulted in an unrealized loss of $10.2 million, or $0.47 per share, during the second quarter, and a reduction in previously accrued interest income of $0.6 million.
At June 30, 2011, our targeted investment portfolio consisted of nineteen portfolio companies with values totaling $199.7 million. The weighted average yield on targeted portfolio investments (exclusive of capital gains or losses) was 9.1% at June 30, 2011.
Operating Results – Three months ended June 30, 2011
Investment income totaled $9.1 million for the quarter ended June 30, 2011, compared to $6.0 million in the corresponding quarter of 2010. This increase is primarily attributable the recognition of $4.5 million of previously reserved PIK interest income on Alden's Tranche B Term Loan, partially offset by the reserve of $0.6 million of previously recorded interest income from BioEnergy and Bionol and $0.6 million of fee income recorded in the second quarter of 2010 related to a specific transaction. Operating expenses for the second quarter of 2011 were $3.4 million, increasing $0.4 million, or 13%, compared to the second quarter of 2010. The increase is primarily attributable to increased management and incentive fees due to incentive fees earned on higher investment income, and increased interest expense due to increased average borrowings. The resulting net investment income, including a $1.3 million provision for income taxes, was $4.4 million for the quarter ended June 30, 2011, compared to $3.3 million in the quarter ended June 30, 2010.
We had a net realized capital gain of $1.0 million in the second quarter of 2011, resulting from the sale of our royalty interest in Greenleaf Investments, LLC. We recorded no realized gains or losses in the second quarter of 2010.
During the three months ended June 30, 2011, we recorded net increases in unrealized depreciation on portfolio investments totaling $21.8 million, primarily as a result of the BioEnergy writedown totaling $10.2 million and unrealized losses on Alden and Gatliff totaling $9.8 million.
Overall, we had a net decrease in net assets resulting from operations of $16.4 million, or $0.76 per common share, for the three months ended June 30, 2011 and dividends declared during the period of $0.18 per common share, resulting in net asset value per common share of $9.63 as of June 30, 2011.
Liquidity and Capital Resources
At June 30, 2011, we had cash and cash equivalents of $50.0 million. We had $40.0 million outstanding under our Investment Facility at June 30, 2011, and $24.3 million available for borrowing. In addition, we received $73.2 million in July in connection with the sale of our interests in Alden and Gatliff.
Conference Call at 11:00 a.m. Eastern Time on August 9, 2011
We invite all interested persons to participate in our conference call on Tuesday, August 9, 2011 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. We will maintain an audio replay of the call from 2:00 p.m. Eastern Time on August 9, 2011 through midnight August 15, 2011. The replay dial-in numbers are (855) 859-2056 in the U.S. and (404) 537-3406 for international callers. The replay pass code is 85106464. 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 | ||||
| June 30, 2011 | December 31, 2010 | |||
| (Unaudited) | ||||
| Assets | ||||
| Investments in portfolio securities at fair value | ||||
| Control investments - majority owned | ||||
| (cost: $101,989,595 and $89,502,910, respectively) | $ 74,221,913 | $ 70,973,316 | ||
| Affiliate investments | ||||
| (cost: $36,083,334 and $34,146,328, respectively) | 13,463,505 | 33,064,028 | ||
| Non-affiliate investments | ||||
| (cost: $113,556,532 and $114,852,057, respectively) | 112,012,623 | 112,025,645 | ||
| Investments in U.S. Treasury Bills at fair value | ||||
| (cost: $30,600,298 and $0, respectively) | 30,599,663 | -- | ||
| Total investments | 230,297,704 | 216,062,989 | ||
| Cash and cash equivalents | 50,010,276 | 68,456,908 | ||
| Accounts receivable and other current assets | 1,242,430 | 3,095,882 | ||
| Interest receivable | 1,397,457 | 2,236,122 | ||
| Prepaid assets | 1,342,941 | 1,736,732 | ||
| Total current assets | 53,993,104 | 75,525,644 | ||
| Deferred tax assets | 5,615,099 | -- | ||
| Total assets | $ 289,905,907 | $ 291,588,633 | ||
| Liabilities and net assets | ||||
| Current liabilities | ||||
| Accounts payable and accrued expenses | $ 485,831 | $ 525,111 | ||
| Management and incentive fees payable | 1,591,714 | 1,376,032 | ||
| Dividends payable | 3,893,076 | 3,893,076 | ||
| Income taxes payable | 18,052 | 50,350 | ||
| Current portion of long-term debt | 30,000,000 | -- | ||
| Deferred tax liabilities | 5,630,437 | -- | ||
| Total current liabilities | 41,619,110 | 5,844,569 | ||
| Deferred tax liabilities | -- | 18,136 | ||
| Long-term debt, less current portion | 40,000,000 | 50,000,000 | ||
| Total liabilities | 81,619,110 | 55,862,705 | ||
| Net assets | ||||
| Common stock, $.001 par value, 250,000,000 shares authorized; | ||||
| 21,628,202 shares issued and outstanding | 21,628 | 21,628 | ||
| Paid-in capital in excess of par | 293,789,803 | 293,789,803 | ||
| Undistributed net investment income (loss) | (8,234,138) | (7,845,925) | ||
| Undistributed net realized capital gain (loss) | (32,319,233) | (32,778,782) | ||
| Net unrealized appreciation (depreciation) of portfolio securities | (44,971,263) | (17,460,796) | ||
| Total net assets | 208,286,797 | 235,725,928 | ||
| Total liabilities and net assets | $ 289,905,907 | $ 291,588,633 | ||
| Net asset value per share | $ 9.63 | $ 10.90 | ||
| NGP CAPITAL RESOURCES COMPANY | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| For The Three Months Ended | For The Six Months Ended | |||||||
| June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||
| Investment income | ||||||||
| Interest income: | ||||||||
| Control investments - majority owned | $ 5,810,435 | $ 1,095,924 | $ 7,166,344 | $ 2,195,903 | ||||
| Affiliate investments | (320,821) | 899,981 | 631,044 | 1,732,894 | ||||
| Non-affiliate investments | 3,038,632 | 3,379,706 | 6,517,637 | 6,557,247 | ||||
| Royalty income (loss), net of amortization: | ||||||||
| Control investments - majority owned | 201,785 | 459,974 | 680,135 | 754,785 | ||||
| Non-affiliate investments | 270,906 | (444,619) | 526,688 | (962,675) | ||||
| Other income | 58,887 | 640,000 | 92,637 | 946,079 | ||||
| Total investment income | 9,059,824 | 6,030,966 | 15,614,485 | 11,224,233 | ||||
| Operating expenses | ||||||||
| Management and incentive fees | 1,591,714 | 1,423,830 | 2,925,002 | 2,762,399 | ||||
| Professional fees | 236,026 | 221,672 | 435,066 | 486,976 | ||||
| Insurance expense | 182,303 | 185,658 | 364,846 | 371,316 | ||||
| Interest expense and fees | 457,256 | 304,118 | 766,677 | 617,181 | ||||
| Other general and administrative expenses | 896,969 | 843,568 | 1,726,704 | 1,789,988 | ||||
| Total operating expenses | 3,364,268 | 2,978,846 | 6,218,295 | 6,027,860 | ||||
| Net investment income before income taxes | 5,695,556 | 3,052,120 | 9,396,190 | 5,196,373 | ||||
| Benefit (provision) for income taxes | (1,295,534) | 222,496 | (1,998,250) | 509,570 | ||||
| Net investment income | 4,400,022 | 3,274,616 | 7,397,940 | 5,705,943 | ||||
| Net realized capital gain (loss) on investments | ||||||||
| Net realized capital gain (loss) on portfolio securities: | ||||||||
| Control investments - majority owned | -- | -- | 81,275 | -- | ||||
| Non-affiliate investments | 984,571 | -- | 378,210 | -- | ||||
| Benefit (provision) for taxes on capital gain (loss) | (223) | (9,462) | 64 | (18,613) | ||||
| Total net realized capital gain (loss) on investments | 984,348 | (9,462) | 459,549 | (18,613) | ||||
| Net unrealized gain (loss) on investments | ||||||||
| Net increase (decrease) in unrealized appreciation | ||||||||
| (depreciation) on portfolio securities | ||||||||
| Control investments - majority owned | (12,665,451) | (93,176) | (9,238,088) | (86,675) | ||||
| Affiliate investments | (10,343,205) | (748,010) | (21,537,528) | (189,291) | ||||
| Non-affiliate investments | (58,606) | 1,733,136 | 1,281,867 | 4,047,125 | ||||
| Benefit (provision) for taxes on unrealized gain (loss) | 1,289,139 | (284,237) | 1,983,282 | (577,386) | ||||
| Total net unrealized gain (loss) on investments | (21,778,123) | 607,713 | (27,510,467) | 3,193,773 | ||||
| Net increase (decrease) in net assets resulting | ||||||||
| from operations | $ (16,393,753) | $ 3,872,867 | $ (19,652,978) | $ 8,881,103 | ||||
| Net increase (decrease) in net assets resulting | ||||||||
| from operations per common share | $ (0.76) | $ 0.18 | $ (0.91) | $ 0.42 | ||||
| For The Three Months Ended | For The Six Months Ended | ||||
| Per Share Data (1) | June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |
| unaudited | unaudited | unaudited | unaudited | ||
| Net asset value, beginning of period | $ 10.57 | $ 11.17 | $ 10.90 | $ 11.10 | |
| Net investment income | 0.20 | 0.15 | 0.34 | 0.26 | |
| Net realized and unrealized gain (loss) on portfolio securities | (0.96) | 0.03 | (1.25) | 0.16 | |
| Net increase (decrease) in net assets resulting from | |||||
| operations | (0.76) | 0.18 | (0.91) | 0.42 | |
| Net asset value before dividends | 9.81 | 11.35 | 9.99 | 11.52 | |
| Dividends declared | (0.18) | (0.17) | (0.36) | (0.34) | |
| Net asset value, end of period | $ 9.63 | $ 11.18 | $ 9.63 | $ 11.18 | |
| (1) We base Per Share Data on common shares outstanding at the end of the period. | |||||
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 energy related 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 Energy Capital Management, L.L.C., based in Irving, Texas, is a leading investment firm with over $9.5 billion of cumulative capital under management since inception, serving all sectors of the energy industry.
The NGP Capital Resources Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4362
Forward-Looking Statements 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.
INVESTMENT CONTACT: Please send investment proposals to: NGP Capital Resources Company, Kelly Plato (kplato@ngpcrc.com), Dan Schockling (dschockling@ngpcrc.com), Hans Hubbard (hhubbard@ngpcrc.com), or Chris Ryals (cryals@ngpcrc.com), 713-752-0062.