TICC Capital (TICC)
Q1 2013 Earnings Call
May 07, 2013 10:00 am ET
Jonathan H. Cohen - Chief Executive Officer, Director and Member of Investment Committee
Bruce L. Rubin - Senior Vice President, Controller and Treasurer
Patrick Francis Conroy - Chief Financial Officer, Chief Compliance Officer, Principal Accounting Officer and Corporate Secretary
Mickey M. Schleien - Ladenburg Thalmann & Co. Inc., Research Division
Boris E. Pialloux - National Securities Corporation, Research Division
Greg M. Mason - Stifel, Nicolaus & Co., Inc., Research Division
Good morning, and welcome to the TICC Capital Corp. First Quarter 2013 Earnings Call. [Operator Instructions]
I would now like to turn the conference over to Mr. Jonathan Cohen, Chief Executive Officer. Please go ahead.
Jonathan H. Cohen
Previous Statements by TICC
» TICC Capital Management Discusses Q4 2012 Results - Earnings Call Transcript
» TICC Capital's CEO Discusses Q3 2012 Results - Earnings Call Transcript
» TICC Capital Management Discusses Q2 2012 Results - Earnings Call Transcript
Bruce, could you open the call today with a discussion regarding forward-looking statements?
Bruce L. Rubin
Sure, Jonathan. Today’s call is being recorded. An audio replay of the conference call will be available for 30 days. Replay information is included in our press release that was released earlier this morning. Please note that this call is the property of TICC Capital Corp. Any unauthorized rebroadcast of this call, in any form, is strictly prohibited. I’d also like to call your attention to the customary disclosure in our press release this morning regarding forward-looking information.
Today’s conference call includes forward-looking statements and projections, and we ask that you refer to our most recent filings at the SEC for important factors that could cause actual results to differ materially from these projections.
We do not undertake to update our forward-looking statements unless required to do so by law. To obtain copies of our latest SEC filings, please visit our website at www.ticc.com.
With that, I'll turn the call back to Jonathan.
Jonathan H. Cohen
Thanks, Bruce. For the first quarter, TICC reported core net investment income of approximately $0.24 per share, $0.23 per share on a GAAP basis and a core net increase in net assets resulting from operations of $0.46 per share. That was the same earnings per share as earnings per share on a GAAP basis.
At March 31, 2013, net asset value per share stood at $10.02 compared with net asset value at the end of the fourth quarter of $9.90. We reported total investment income of approximately $21.7 million for the first quarter of 2013, representing an increase of approximately $1.4 million from the fourth quarter. That increase was largely due to greater interest income in distributions from our CLO equity investments during the first quarter.
We also recorded net realized capital gains of approximately $6.6 million and net unrealized depreciation of $3.6 million for the quarter.
Our first quarter GAAP net investment income was approximately $10.7 million or $0.23 per share, which includes the impact of the capital gains incentive fee accrual of approximately $215,000. Excluding the impact of that accrual, our core net investment income was approximately $10.9 million or $0.24 per share. Our weighted average credit rating on a fair value basis was 2.1 at the end of the first quarter of 2013, which remains the same from the credit rating at the end of the fourth quarter of 2012.
During the first quarter of 2013, we made additional investments of approximately $217 million. For the same period, we received proceeds of approximately $65 million from repayments, sales and amortization payments on our debt investments.
For the quarter ending March 31, 2013, TICC recorded earned income from our investment portfolio as follows: Approximately $8.8 million from our CLO equity investments; approximately $1.2 million from our CLO debt investments; and approximately $11 million from our syndicated and bilateral debt investments.
At March 31, 2013, the weighted average yield of our debt investments was approximately 9.2% compared with 9.4% at December 31, 2012. I would note that we currently have 2 investments on nonaccrual status with an aggregate par value of approximately $24.7 million and a fair value of approximately $8.1 million.
Of those amounts, $17.8 million and $6.1 million, respectively, representing 72% and 76%, respectively, resulted from the investment in a senior secured loan executed in 2 purchases at a weighted average price of 32% at par during the quarter ended March 31, 2013, which was expected to be nonaccruing at the time of purchase.
While we do not generally focus on distressed debt investments, we have been and remain open to those opportunities where the potential for attractive risk-adjusted return exists.
On February 25, 2013, we completed the sale of $60 million of incremental senior debt, in connection with the collateralized loan obligation transaction that originally closed on August 23, 2012. The issuance of additional notes was proportional across all existing classes of notes originally issued.
Also, during the first quarter, we issued approximately 11.1 million shares of our common stock and received net proceeds of approximately $110.4 million in 2 equity races and in connection with an at-the-market plan.
Our Board of Directors has declared a distribution of $0.29 per share for the second quarter of this year, payable on June 28, 2013, to stockholders of record as of June 14.