-- For the quarter ended June 30, 2008, we recorded net investment income
of approximately $5.8 million, or approximately $0.25 per share, net
realized capital gains on investments of approximately $933,000 and net
unrealized depreciation on investments of approximately $955,000. In
total, we had a net increase in net assets resulting from operations of
approximately $0.25 per share for the second quarter.
-- Total investment income for the second quarter amounted to
approximately $10.1 million, of which approximately $9.8 million was
interest income and approximately $300,000 was fee income.
-- During the quarter ended June 30, 2008, we had realized capital gains
of approximately $1.6 million due to the repayment on our debt and
sale of our equity investment in Aviel Services, Inc. This gain was
partially offset by realized losses associated with the sale of
several of our other debt investments of approximately $700,000.
-- We recorded unrealized depreciation on our investments largely due to
the reversal of previously recorded unrealized appreciation on our
debt and equity investment in Aviel Services, Inc. upon the repayment
and sale, respectively, of those investments; this was partially
offset by the reversal of previously recorded unrealized depreciation
on several of our other debt investments upon the sale of those
investments.
-- Our Board of Directors has declared a distribution of $0.20 per share
for the third quarter of 2008
-- Payable Date: September 30, 2008
-- Record Date: September 10, 2008
-- Over the past year, the credit markets have gone through dramatic
changes. Since the end of the first quarter, and in the absence of
having received a written offer for extension of our credit facility
from our existing lenders, we have taken steps to reduce our borrowings
under our credit facility, and effective August 6, 2008 we have reduced
the size of the facility from $150 million to $55 million. On a
risk-adjusted basis, we believe that until leverage can be obtained at
appropriate pricing and terms with a longer maturity that more closely
matches the maturity of our investments, we are better served by
de-levering the portfolio. As a result of de-levering our portfolio, our
net investment income is now and will likely continue to be less than it
might otherwise be on a more fully levered portfolio. However, we
believe it is more prudent to remove the uncertainty of continued credit
availability on commercially reasonable terms, or at all. Until such
time as we can obtain financing on terms which are cost-effective and
which more closely approximates the maturity of our borrowings with the
average maturity of our investments, we believe that de-levering the
portfolio is the appropriate course of action. We also note that,
largely as a result of this de-levering, our Board has determined to
adjust the third quarter dividend to a level more consistent with that
idea.
-- For the quarter ended June 30, 2008 we had repayments of $18.9 million
largely consisting of repayments by Aviel Services, Inc. of $14.5
million. Also during the quarter ended June 30, 2008, we received
approximately $32.0 million from the sale of portfolio securities,
largely resulting from the sale of our investments in Intergraph
Corporation ($14.2 million), Integra Telecomm, Inc. ($7.7 million) and
Iridium Satellite LLC ($7.4 million).
-- At June 30, 2008, the weighted average yield of our debt investments
(excluding cash equivalents and assuming no interest income on the
investments placed on non-accrual status) was approximately 10.3%.
-- Expenses for the quarter were approximately $5.8 million, including
approximately $1.3 million in interest expense, reflecting outstanding
borrowings under our credit facility, and approximately $1.9 million in
investment advisory fees.
-- At June 30, 2008, approximately $70.0 million was outstanding under
our credit facility. As of August 8, 2008, approximately $55.0
million was outstanding under the facility.
-- On May 23, 2008 we issued to our stockholders of record as of May 23,
2008 transferable rights to subscribe for up to 4,339,226 shares of our
common stock. Record date stockholders received one right for each
outstanding share of common stock owned on the record date. The rights
offering, which was oversubscribed, resulted in the issuance of
approximately 4.3 million shares of TICC common stock on June 18, 2008.
The net proceeds after payment of dealer-manager fees and after other
offering-related expenses were approximately $20.9 million.
Subsequently, we used the net proceeds received in this offering to
repay indebtedness owed under our credit facility.
SUBSEQUENT EVENTS
-- On July 31, 2008, the Board of Directors declared a distribution of
$0.20 per share for the third quarter, payable on September 30, 2008 to
shareholders of record as of September 10, 2008.
-- Pursuant to our request and in accordance with the terms of our credit
facility, the amount under our credit facility was reduced from $150
million to $55 million, effective August 6, 2008.
We will host a conference call to discuss our second quarter results and
our leverage strategy today, Monday, August 11, 2008 at 10:00 AM EDT.
Please call 800-860-2442 to participate. A replay of the conference call
will be available for approximately 30 days. The replay number is
877-344-7529, the replay passcode is 421640.
The following financial statements are unaudited and without footnotes.
Readers who would like additional information should obtain our Form 10-K
for the period ended December 31, 2007, and subsequent reports on Form 10-Q
as they are filed.
TICC CAPITAL CORP.
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
June 30, December 31,
2008 2007
------------- -------------
ASSETS (unaudited)
Investments, at fair value (cost:
$361,185,620 @ 6/30/08; $411,125,347 @
12/31/07)
Non-affiliated/non-control investments
($340,073,159 @ 6/30/08; $389,288,207 @
12/31/07) $ 286,448,295 $ 360,530,609
Control investments (cost: $21,112,461 @
6/30/08; $21,837,140 @ 12/31/07) 25,625,000 24,837,140
------------- -------------
Total investments at fair value 312,073,295 385,367,749
------------- -------------
Cash and cash equivalents 15,366,663 7,944,608
Interest receivable 1,564,860 2,876,424
Prepaid expenses and other assets 297,168 201,372
------------- -------------
Total assets $ 329,301,986 $ 396,390,153
============= =============
LIABILITIES
Investment advisory fee payable to
affiliate $ 1,904,270 $ 2,123,168
Accrued interest payable 56,724 310,312
Accrued expenses 1,882,307 87,170
Loans payable 70,000,000 136,500,000
------------- -------------
Total liabilities 73,843,301 139,020,650
------------- -------------
NET ASSETS
Common stock, $0.01 par value, 100,000,000
shares authorized, and 26,189,851 and
21,563,717 issued and outstanding,
respectively 261,899 215,637
Capital in excess of par value 319,306,013 296,578,543
Net unrealized depreciation on
investments (49,112,325) (25,757,598)
Accumulated net realized losses on
investments (12,490,384) (13,389,509)
Distributions in excess of investment
income (2,506,518) (277,570)
------------- -------------
Total net assets 255,458,685 257,369,503
------------- -------------
Total liabilities and net assets $ 329,301,986 $ 396,390,153
============= =============
Net asset value per common share $ 9.75 $ 11.94
TICC CAPITAL CORP.
STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Three Months Six Months
Ended Ended Six Months Ended
June 30, June 30, Ended June 30,
2008 2007 June 30, 2008 2007
------------ ------------ ------------- ------------
INVESTMENT INCOME
From
non-affiliated/
non-control
investments:
Interest income -
debt investments $ 8,933,424 $ 8,694,043 $ 19,382,948 $ 17,352,443
Interest income -
cash and cash
equivalents 68,691 103,030 124,683 224,549
Other income 323,645 1,025,462 531,425 1,305,712
------------ ------------ ------------- ------------
Total investment
income from
non-affiliated/
non-control
investments 9,325,760 9,822,535 20,039,056 18,882,704
------------ ------------ ------------- ------------
From control
investments:
Interest income -
debt investments 748,660 848,134 1,515,187 1,684,825
Other income 0 0 0 0
------------ ------------ ------------- ------------
Total investment
income from
control
investments 748,660 848,134 1,515,187 1,684,825
------------ ------------ ------------- ------------
Total investment
income 10,074,420 10,670,669 21,554,243 20,567,529
------------ ------------ ------------- ------------
EXPENSES
Compensation
expense 222,000 200,000 444,000 400,000
Investment
advisory fees 1,904,271 1,781,001 4,084,126 3,422,556
Professional fees 375,689 191,512 725,616 442,697
Interest expense 1,261,630 1,233,562 3,323,067 2,237,788
General and
administrative 538,656 307,606 934,604 479,347
------------ ------------ ------------- ------------
Total expenses 4,302,246 3,713,681 9,511,413 6,982,388
------------ ------------ ------------- ------------
Net investment
income 5,772,174 6,956,988 12,042,830 13,585,141
------------ ------------ ------------- ------------
Net change in
unrealized
appreciation or
depreciation on
investments (955,331) (6,822,463) (23,354,727) (9,847,924)
------------ ------------ ------------- ------------
Net realized gains
on investments 932,944 236,972 899,125 93,765
------------ ------------ ------------- ------------
Net increase
(decrease) in net
assets resulting
from operations $ 5,749,787 $ 371,497 $ (10,412,772) $ 3,830,982
============ ============ ============= ============
Net increase in
net assets
resulting from
net investment
income per
common share:
Basic and
diluted(1) $ 0.25 $ 0.34 $ 0.54 $ 0.67
Net increase
(decrease) in net
assets resulting
from operations
per common share:
Basic and
diluted(1) $ 0.25 $ 0.02 $ (0.47) $ 0.19
Weighted average
shares of common
stock
outstanding:
Basic and
diluted(1) 22,708,251 20,228,754 22,363,146 20,187,949
(1) In accordance with SFAS 128-Earnings per Share, the weighted-average
shares of common stock outstanding used in computing basic and diluted
earnings per share were increased retroactively by a factor of 1.021% to
recognize the bonus element associated with rights to acquire shares of
common stock that were issued to stockholders on May 23, 2008.
TICC CAPITAL CORP.
FINANCIAL HIGHLIGHTS (UNAUDITED)
Three Three
Months Months Six Months Six Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Per Share Data
Net asset value at
beginning of period $ 10.81 $ 13.60 $ 11.94 $ 13.77
---------- ---------- ---------- ----------
Net investment income(1) 0.25 0.34 0.54 0.67
Net realized and unrealized
capital gains (losses) (2) 0.01 (0.32) (1.01) (0.48)
Effect of shares issued,
net of offering expenses (1.02) 0.01 (1.06) 0.03
---------- ---------- ---------- ----------
Total from investment
operations (0.76) 0.03 (1.53) 0.22
---------- ---------- ---------- ----------
Total distributions(3) (0.30) (0.36) (0.66) (0.72)
---------- ---------- ---------- ----------
Net asset value at end of
period $ 9.75 $ 13.27 $ 9.75 $ 13.27
========== ========== ========== ==========
Per share market value at
beginning of period $ 7.52 $ 16.91 $ 9.23 $ 16.14
Per share market value at
end of period $ 5.46 $ 15.79 $ 5.46 $ 15.79
Total return(4) (23.40%) (4.49%) (34.61%) 2.19%
Shares outstanding at end
of period 26,189,851 19,907,086 26,189,851 19,907,086
Ratios/Supplemental Data
Net assets at end of period
(000's) $ 255,459 $ 264,207 $ 255,459 $ 264,207
Average net assets (000's) $ 239,778 $ 272,266 $ 249,956 $ 272,908
Ratio of expenses to
average net assets(5) 7.18% 5.46% 7.61% 5.12%
Ratio of expenses,
excluding interest
expense, to average net
assets(5) 5.07% 3.64% 4.95% 3.48%
Ratio of net investment
income to average net
assets(5) 9.63% 10.22% 9.64% 9.96%
(1) Represents per share net investment income for the period, based upon
average shares outstanding.
(2) Net realized and unrealized capital gains (losses) include rounding
adjustment to reconcile change in net asset value per share.
(3) Dividends for the second quarter of 2008 were funded from net
investment income for the three months ended June 30, 2008.
Management monitors available taxable earnings, including net
investment income and realized capital gains, to determine if a tax
return of capital may occur for the year. To the extent the Company's
taxable earnings fall below the total amount of the Company's
distributions for a fiscal year, a portion of those distributions may
be deemed a tax return of capital to the Company's stockholders.
However, if the character of such distributions were determined as of
June 30, 2008, approximately $0.12 per share of the Company's
distributions for the six-month period, would have been characterized
as a tax return of capital to the Company's stockholders.
(4) Total return equals the increase or decrease of ending market value
over beginning market value, plus distributions, divided by the
beginning market value, assuming dividend reinvestment prices obtained
under the Company's dividend reinvestment plan. Total return is not
annualized.
(5) Annualized.
About TICC Capital Corp.
We are a publicly traded business development company principally engaged
in providing capital to small to mid-size technology-related companies.
While the structures of our financings vary, we look to invest primarily in
the debt of established technology-related businesses. Companies interested
in learning more about financing opportunities should contact Barry Osherow
at (203) 661-9572 or visit our website at www.ticc.com.
Forward-Looking Statements
This press release contains forward-looking statements subject to the
inherent uncertainties in predicting future results and conditions. 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. Certain factors could cause actual results and
conditions to differ materially from those projected in these
forward-looking statements. These factors are identified from time to time
in our filings with the Securities and Exchange Commission. We undertake no
obligation to update such statements to reflect subsequent events.
Contact Information: Contact: Patrick Conroy 203-983-5282 Bruce Rubin 203-983-5280