180 Degree Capital Corp. Establishes Discount Management Program And Reports Net Asset Value Per Share (“Nav”) Of $4.91, Comprised Of 97% Cash And Public Securities, As Of September 30, 2023
13 Novembro 2023 - 6:05PM
180 Degree Capital Corp. (NASDAQ:TURN) (“180” and the “Company”),
today announced a discount management program, reported its
financial results as of September 30, 2023, and noted additional
developments from the fourth quarter of 2023. The Company also
published a letter to shareholders that can be viewed at
https://ir.180degreecapital.com/financial-results.
“The third quarter of 2023 was challenging for
180 and the public markets as a whole,” said Kevin M. Rendino,
Chief Executive Officer of 180. “While our public portfolio
declined 12.8%, an additional decline in our largest legacy private
portfolio company, AgBiome, LLC, due to financing risk led to an
overall decline of 21.1% in NAV to $4.91 as of the end of the
quarter. If it wasn’t clear before, it certainly is now; had we not
changed direction and created 180 in 2017, the predecessor company
very well may have been forced to liquidate. Since
2017, the legacy business accounted for decreases in value of $2.28
per share, versus the increase in value of $2.77 per share in our
current strategy. Our balance sheet is now comprised of
approximately 97% cash and public and public related securities1
versus approximately 27% when we started, in 2017.”
“While many of 180’s current portfolio companies
have been swept up in the recent vicious market selling,
particularly for microcap companies, we do not believe the
businesses and balance sheets of many of these holdings reflect the
distress that their falling stock prices indicate,” added Daniel B.
Wolfe, President of 180. “For example, the list below includes
developments from some of 180’s portfolio companies during Q3 2023
and to date in Q4 2023:
- Synchronoss Technologies, Inc.,
(SNCR) sold its non-core assets and is now a pure-play cloud
service company that is currently expected to generate material
positive free cash flows and 25%+ EBITDA margins in 2024.
- Intevac, Inc., (IVAC) is in the
final stages of certification for its new TRIO tool with its
partner, Corning.
- The Arena Group Holdings, Inc.
(AREN) signed definitive agreements to merge with Bridge Media, a
company owned by the founder and owner of Five Hour Energy, that
will result in a combined company with 100 owned and affiliated
stations and over-the-top partnerships across 46 states.
- Lantronix, Inc., (LTRX) announced
that it is beginning volume production of its smart-meter product
for Gridspertise/Enel that is expected to drive material organic
growth and profitability in 2024.
- Potbelly Corporation (PBPB)
announced a new shop development agreement for 36 additional shops
and 4 refranchised shops that brings its new contracted franchised
shops to 150, as well as announcing record average unit volumes and
continued growth in shop-level margins and gains in market
share.”
Mr. Rendino continued, “While our performance
has been challenged over the past seven quarters after five years
of strong performance, the notes above are just a portion of the
reasons we believe our portfolio is positioned well for the
creation of value for shareholders in 2024 and beyond. We will use
this period to ramp up our collegial and constructive activism.
Hope is not a strategy. Activism is.”
Discount Management Program
In addition to reporting its financial results
for Q3 2023, 180 announced a Discount Management Program (the
“Program”) that is discussed in more detail in a press release that
can be found at https://ir.180degreecapital.com/news-events. This
Program establishes measurement periods for 180’s common stock
price as a percentage of NAV2. Should the average daily discount
following each of these periods exceed 12%, then 180’s Board of
Directors will consider all available options to narrow such
discount.
The table below summarizes 180’s performance
over periods of time through the end of Q3 20233:
|
Quarter |
YTD |
1 Year |
Recent Peak |
3 Year |
5 Year |
Inception to Date |
|
Q3 2023 |
Q4 2022- Q3 2023 |
Q3 2022- Q3 2023 |
11/8/21 - 9/30/23 |
Q3 2020- Q3 2023 |
Q3 2018- Q3 2023 |
Q4 2016- Q3 2023 |
TURN Public Portfolio Gross Total Return (Excluding SMA Carried
Interest) |
-12.8% |
|
-13.2% |
|
-19.8% |
|
-46.0% |
|
-23.2% |
|
22.9% |
|
164.7% |
|
TURN Public Portfolio Gross Total Return (Including SMA Carried
Interest) |
-12.8% |
|
-13.3% |
|
-19.8% |
|
-44.0% |
|
-18.0% |
|
31.2% |
|
182.0% |
|
|
|
|
|
|
|
|
|
Change in NAV |
-21.1% |
|
-22.3% |
|
-39.4% |
|
-55.9% |
|
-43.6% |
|
-41.8% |
|
-30.1% |
|
|
|
|
|
|
|
|
|
Change in Stock Price |
-4.7% |
|
-19.7% |
|
-22.8% |
|
-41.1% |
|
-25.2% |
|
-34.9% |
|
2.4% |
|
|
|
|
|
|
|
|
|
Russell Microcap Index |
-7.9% |
|
-5.9% |
|
-1.4% |
|
-33.8% |
|
15.1% |
|
1.0% |
|
27.7% |
|
Russell Microcap Value Index |
-5.6% |
|
-6.3% |
|
-0.6% |
|
-25.0% |
|
44.0% |
|
13.7% |
|
38.8% |
|
Russell Microcap Growth Index |
-12.1% |
|
-7.4% |
|
-4.9% |
|
-44.9% |
|
-16.8% |
|
-16.4% |
|
11.2% |
|
Russell 2000 |
-5.1% |
|
2.5% |
|
8.9% |
|
-9.0% |
|
22.9% |
|
12.4% |
|
43.7% |
|
Mr. Rendino and Mr. Wolfe will host a conference
call tomorrow, Tuesday, November 14, 2023, at 9am Eastern Time, to
discuss the results from Q3 2023 and developments to date during Q4
2023. The call can be accessed by phone at (609) 746-1082 passcode
415049 or via the web at
https://www.freeconferencecall.com/wall/180degreecapital.
Additionally, slides that will be referred to during the
presentation can be found on 180’s investor relations website at
https://ir.180degreecapital.com/ir-calendar.
About 180 Degree Capital
Corp.
180 Degree Capital Corp. is a publicly traded
registered closed-end fund focused on investing in and providing
value-added assistance through constructive activism to what we
believe are substantially undervalued small, publicly traded
companies that have potential for significant turnarounds. Our goal
is that the result of our constructive activism leads to a reversal
in direction for the share price of these investee companies, i.e.,
a 180-degree turn. Detailed information about 180 and its holdings
can be found on its website at www.180degreecapital.com.
Press Contact:Daniel B. Wolfe180 Degree Capital
Corp.973-746-4500ir@180degreecapital.com
Mo ShafrothPeaks
Strategiesmshafroth@peaksstrategies.com
Forward-Looking Statements
This press release may contain statements of a
forward-looking nature relating to future events. These
forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. These
statements reflect the Company's current beliefs, and a number of
important factors could cause actual results to differ materially
from those expressed in this press release. Please see the
Company's securities filings filed with the Securities and Exchange
Commission for a more detailed discussion of the risks and
uncertainties associated with the Company's business and other
significant factors that could affect the Company's actual results.
Except as otherwise required by Federal securities laws, the
Company undertakes no obligation to update or revise these
forward-looking statements to reflect new events or uncertainties.
The reference and link to the website
www.180degreecapital.com has been provided as a convenience,
and the information contained on such website is not incorporated
by reference into this press release. 180 is not responsible for
the contents of third-party websites.
1. Cash including our holdings in money-market
cash sweep funds and the expected receipt of $1.3 million in April
2024 related to the sale of TARA Biosystems, Inc., to Valo Health
LLC.
2. Average discount of equity focused closed-end
funds calculated using Bloomberg. 180 reports its NAV publicly on a
quarterly basis. Daily estimated NAVs used for the discount
calculation outside of quarter-end dates are determined as
prescribed in 180’s Valuation Procedures.
3. Past performance is not an indication or
guarantee of future performance. Gross unrealized and realized
total returns of 180's cash and securities of publicly traded
companies are compounded on a quarterly basis, and intra-quarter
cash flows from investments in or proceeds received from privately
held investments are treated as inflows or outflows of cash
available to invest or withdrawn, respectively, for the purposes of
this calculation. 180 is an internally managed registered
closed-end fund that has a portion of its assets in legacy
privately held companies that are fair valued on a quarterly basis
by the Valuation Committee of its Board of Directors, and 180 does
not have an external manager that is paid fees based on assets
and/or returns. Please see 180's filings with the SEC, including
its 2022 Annual Report on Form N-CSR for information on its
expenses and expense ratios.
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