PHILADELPHIA, Nov. 7, 2018 /PRNewswire/ -- FS Investment
Corporation (NYSE: FSIC), a publicly traded business development
company focused on providing customized credit solutions to private
middle market U.S. companies, announced its operating results for
the quarter ended September 30, 2018,
and that its board of directors has declared a special distribution
and its fourth quarter 2018 regular distribution.
Financial Highlights for the Quarter Ended September 30, 20181
- Net investment income of $0.23
per share, compared to $0.21 per
share for the quarter ended September 30,
2017
- Adjusted net investment income of $0.24 per share, compared to $0.21 per share for the quarter ended
September 30,
20172
- Total net realized gain of $0.12 per share and total net change in
unrealized depreciation of $0.41 per
share, compared to a total net realized loss of $0.07 per share and a total net change in
unrealized appreciation of $0.21 per
share for the quarter ended September 30, 2017
- Paid cash distributions to stockholders totaling
$0.19 per share3
- Total purchases of $184.5
million versus $223.4 million
of sales and repayments
- Net asset value of $8.64 per
share, compared to $8.87 per share as
of June 30, 2018
"We are pleased with the origination opportunities the FS/KKR
partnership has produced and the credit discipline we've exhibited
in the current lending environment," said Michael Forman, Chairman and Chief Executive
Officer of FSIC. "We remain focused on successfully completing the
merger with Corporate Capital Trust before year-end and positioning
the company for long-term success."
Declaration of Special and Regular Distributions for Fourth
Quarter 2018
FSIC's board of directors has declared a special cash
distribution of $0.09 per share and a
regular cash distribution for the fourth quarter of $0.19 per share. The special cash distribution
will be paid on or about December 3,
2018 to stockholders of record as of the close of business
on November 19, 2018. The regular
cash distribution will be paid on or about January 2, 2019 to stockholders of record as of
the close of business on December 12,
2018.
Summary
Consolidated Results
|
|
|
|
Three Months
Ended
|
(dollars in
thousands, except per share data)
(all per share amounts are basic and
diluted)1
|
September 30,
2018
|
June 30,
2018
|
September 30,
2017
|
Total investment
income
|
$94,519
|
$95,575
|
$103,691
|
Net investment
income
|
56,082
|
45,955
|
50,648
|
Net increase
(decrease) in net assets resulting from operations
|
(11,340)
|
(31,338)
|
85,398
|
|
|
|
|
Net investment income
per share
|
$0.23
|
$0.19
|
$0.21
|
Adjusted net
investment income per share2
|
$0.24
|
$0.19
|
$0.21
|
Total net realized
and unrealized gain (loss) per share
|
$(0.28)
|
$(0.32)
|
$0.14
|
Net increase
(decrease) in net assets resulting from operations
(Earnings per Share)
|
$(0.05)
|
$(0.13)
|
$0.35
|
Stockholder
distributions per share3
|
$0.19000
|
$0.19000
|
$0.22275
|
Net asset value per
share at period end
|
$8.64
|
$8.87
|
$9.43
|
Weighted average
shares outstanding
|
239,495,341
|
242,801,446
|
245,678,745
|
Shares outstanding,
end of period
|
239,154,069
|
240,602,753
|
245,725,416
|
|
|
|
|
|
|
(dollar amounts in
thousands)
|
|
|
|
As
of September 30,
2018
|
As
of December 31,
2017
|
Total fair value of
investments
|
|
|
|
$3,537,252
|
$3,926,234
|
Total
assets
|
|
|
|
3,698,713
|
4,104,275
|
Total stockholders'
equity
|
|
|
|
2,066,861
|
2,284,723
|
Portfolio Highlights as of September 30, 2018
- Total fair value of investments was $3.5
billion.
- Core investment strategies4 represented
approximately 100% of the portfolio by fair value as of
September 30, 2018, including 93%
from direct originations and 7% from opportunistic investments.
Broadly syndicated/other investments represented less than 1% of
the portfolio by fair value.
- Gross portfolio yield prior to leverage (based on amortized
cost and excluding non-income producing assets)5 was
11.1%, compared to 11.1% as of June
30, 2018.
- Total commitments to direct originations (including unfunded
commitments) made during the third quarter of 2018 was $250.6 million in 9 companies, 6 of which
were existing portfolio companies.
- Approximately 2.7% of investments were on non-accrual based on
fair value.6
Total Portfolio
Activity
|
|
|
|
Three Months
Ended
|
|
(dollar amounts in
thousands)
|
September 30,
2018
|
June 30,
2018
|
September 30,
2017
|
|
Purchases
|
$184,495
|
$240,443
|
$183,384
|
|
Sales and
redemptions
|
(223,419)
|
(350,253)
|
(255,483)
|
|
Net portfolio
activity
|
$(38,924)
|
$(109,810)
|
$(42,099)
|
|
|
|
Portfolio
Data
|
As of
September 30, 2018
|
As of
December 31, 2017
|
|
Total fair value of
investments
|
$3,537,252
|
$3,926,234
|
|
Number of Portfolio
Companies
|
92
|
100
|
|
Average Annual EBITDA
of Portfolio Companies
|
$92,500
|
$85,700
|
|
Weighted Average
Purchase Price of Debt Investments (as a % of par)
|
99.5%
|
99.5%
|
|
% of Investments on
Non-Accrual
(based on fair
value)6
|
2.7%
|
0.2%
|
|
|
|
|
Asset Class
(based on fair value)
|
|
|
Senior Secured Loans
— First Lien
|
70%
|
64%
|
|
Senior Secured Loans
— Second Lien
|
4%
|
5%
|
|
Senior Secured
Bonds
|
5%
|
4%
|
|
Subordinated
Debt
|
10%
|
13%
|
|
Collateralized
Securities
|
1%
|
1%
|
|
Equity/Other
|
10%
|
13%
|
|
|
|
|
Portfolio
Composition by Strategy (based on fair
value)4
|
|
|
Direct
Originations
|
93%
|
92%
|
|
Opportunistic
|
7%
|
7%
|
|
Broadly
Syndicated/Other
|
0%
|
1%
|
|
|
|
|
Interest Rate
Type (based on fair value)
|
|
|
% Variable
Rate
|
72.2%
|
69.4%
|
|
% Fixed
Rate
|
17.3%
|
17.8%
|
|
% Income Producing
Equity/Other Investments
|
2.5%
|
2.3%
|
|
% Non-Income
Producing Equity/Other Investments
|
8.0%
|
10.5%
|
|
|
|
|
Yields (based
on amortized cost)5
|
|
|
Gross Portfolio Yield
Prior to Leverage
|
9.6%
|
9.6%
|
|
Gross Portfolio Yield
Prior to Leverage — Excluding Non-Income
Producing Assets
|
11.1%
|
10.5%
|
|
|
|
|
|
|
|
|
Direct Origination
Activity
|
|
|
Three Months
Ended
|
(dollar amounts in
thousands)
|
September 30,
2018
|
June 30,
2018
|
September 30,
2017
|
Total
Commitments
(including unfunded
commitments)
|
$250,578
|
$163,261
|
$199,157
|
Exited Investments
(including partial paydowns)
|
(125,119)
|
(288,451)
|
(169,035)
|
Net Direct
Originations
|
$125,459
|
$(125,190)
|
$30,122
|
Direct
Originations Portfolio Data
|
As of September
30, 2018
|
As of December 31,
2017
|
Total Fair Value of
Direct Originations
|
$3,277,054
|
$3,606,608
|
Number of Portfolio
Companies
|
73
|
75
|
Average Annual EBITDA
of Portfolio Companies
|
$89,500
|
$68,600
|
Average Leverage
Through Tranche of Portfolio Companies —
Excluding
Equity/Other and Collateralized Securities
|
5.7x
|
4.9x
|
% of Investments on
Non-Accrual (based on fair value)6
|
2.9%
|
—
|
|
|
|
|
|
|
Three Months
Ended
|
New Direct
Originations by Asset Class
(including unfunded commitments)
|
September 30,
2018
|
June 30,
2018
|
September 30,
2017
|
Senior Secured Loans
— First Lien
|
85%
|
92%
|
85%
|
Senior Secured Loans
— Second Lien
|
15%
|
—
|
2%
|
Senior Secured
Bonds
|
—
|
—
|
—
|
Subordinated
Debt
|
—
|
—
|
13%
|
Collateralized
Securities
|
—
|
—
|
—
|
Equity/Other
|
—
|
8%
|
—
|
Average New Direct
Origination Commitment
Amount
|
$27,842
|
$14,842
|
$49,789
|
Weighted Average
Maturity for New Direct
Originations
|
3/19/2024
|
7/16/2024
|
5/5/2023
|
Gross Portfolio Yield
Prior to Leverage (based on
amortized cost) of New Direct Originations Funded
during Period5
|
9.6%
|
11.5%
|
9.6%
|
Gross Portfolio Yield
Prior to Leverage (based on
amortized cost) of New Direct Originations Funded
during Period —
Excluding Non-Income
Producing Assets5
|
9.6%
|
11.5%
|
9.6%
|
Gross Portfolio Yield
Prior to Leverage (based on
amortized cost) of Direct Originations Exited during
Period5
|
10.2%
|
10.5%
|
12.0%
|
|
|
|
|
|
|
Leverage and Liquidity as of September 30, 2018
- Debt to equity ratio of 75%, based on $1.56 billion in total debt outstanding and
stockholders' equity of $2.07
billion. FSIC's weighted average effective interest rate
(including the effect of non-usage fees) was 4.59%
- Cash and foreign currency of approximately $100.0 million and availability under its
financing arrangements of $633.0
million, subject to borrowing base and other
limitations
- Seventeen unfunded debt investments with aggregate unfunded
commitments of $178.4 million and one
unfunded equity commitment with an unfunded commitment of
$71 thousand
Conference Call Information
FSIC will host a conference call at 10:00
a.m. (Eastern Time) on Thursday, November 8, 2018, to
discuss its third quarter financial results. All interested parties
are welcome to participate. You can access the conference call by
dialing (877) 472-8671 and using the conference ID 8464429
approximately 10 minutes prior to the call. The conference call
will also be webcast, which can be accessed from the Investor
Relations section of FSIC's website at
www.fsinvestmentcorp.com under Presentations and
Reports.
A replay of the call will be available for a period of 30 days
following the call by visiting the Investor Relations section of
FSIC's website at www.fsinvestmentcorp.com under
Presentations and Reports.
Supplemental Information
An investor presentation of financial information will be made
available prior to the call in the Investor Relations section of
FSIC's website at www.fsinvestmentcorp.com under
Presentations and Reports.
About FS Investment Corporation
FS Investment Corporation (NYSE: FSIC) is a publicly traded
business development company ("BDC") focused on providing
customized credit solutions to private middle market U.S.
companies. FSIC seeks to invest primarily in the senior secured
debt and, to a lesser extent, the subordinated debt of private
middle market companies to achieve the best risk-adjusted returns
for its investors. FSIC is advised by FS/KKR Advisor, LLC.
For more information, please visit
www.fsinvestmentcorp.com.
About FS/KKR Advisor, LLC
FS/KKR Advisor, LLC ("FS/KKR") is a partnership between FS
Investments and KKR Credit that serves as the investment adviser to
six BDCs, including FS Investment Corporation, FS Investment
Corporation II, FS Investment Corporation III, FS Investment
Corporation IV, Corporate Capital Trust, Inc. and Corporate Capital
Trust II.
FS/KKR seeks to leverage the size of its platform,
differentiated origination capabilities and expertise in capital
markets to maximize returns and preserve capital for investors.
FS Investments is a leading asset manager dedicated to helping
individuals, financial professionals and institutions design better
portfolios. The firm provides access to alternative sources of
income and growth and focuses on setting industry standards for
investor protection, education and transparency. FS Investments is
headquartered in Philadelphia, PA
with offices in New York, NY,
Orlando, FL and Washington, DC. Visit
www.fsinvestments.com to learn more.
KKR Credit is a subsidiary of KKR & Co. Inc., a leading
global investment firm that manages multiple alternative asset
classes, including private equity, energy, infrastructure, real
estate and credit, with strategic manager partnerships that manage
hedge funds. KKR aims to generate attractive investment returns for
its fund investors by following a patient and disciplined
investment approach, employing world-class people, and driving
growth and value creation with KKR portfolio companies. KKR invests
its own capital alongside the capital it manages for fund investors
and provides financing solutions and investment opportunities
through its capital markets business. References to KKR's
investments may include the activities of its sponsored funds. For
additional information about KKR & Co. Inc. (NYSE: KKR), please
visit KKR's website at www.kkr.com and on Twitter @KKR_Co.
Forward-Looking Statements and Important Disclosure
Notice
This announcement may contain certain forward-looking
statements, including statements with regard to future events or
the future performance or operations of FSIC. Words such as
"believes," "expects," "projects," and "future" or similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. Certain
factors could cause actual results to differ materially from those
projected in these forward-looking statements. Factors that could
cause actual results to differ materially include changes in the
economy, risks associated with possible disruption in FSIC's
operations or the economy generally due to terrorism or natural
disasters, future changes in laws or regulations and conditions in
FSIC's operating area, and the price at which shares of FSIC's
common stock trade on the New York Stock Exchange. Some of these
factors are enumerated in the filings FSIC makes with the SEC. FSIC
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
The press release above contains summaries of certain financial
and statistical information about FSIC. The information contained
in this press release is summary information that is intended to be
considered in the context of FSIC's SEC filings and other public
announcements that FSIC may make, by press release or otherwise,
from time to time. FSIC undertakes no duty or obligation to update
or revise the information contained in this press release. In
addition, information related to past performance, while helpful as
an evaluative tool, is not necessarily indicative of future
results, the achievement of which cannot be assured. Investors
should not view the past performance of FSIC, or information about
the market, as indicative of FSIC's future results.
Other Information
The information in this press release is summary information
only and should be read in conjunction with FSIC's quarterly report
on Form 10-Q for the quarterly period ended September 30, 2018, which FSIC filed with the
U.S. Securities and Exchange Commission (the "SEC") on November 7, 2018, as well as FSIC's other reports
filed with the SEC. A copy of FSIC's quarterly report on Form 10-Q
for the quarterly period ended September 30,
2018 and FSIC's other reports filed with the SEC can be
found on FSIC's website at www.fsinvestmentcorp.com and
the SEC's website at www.sec.gov.
Certain Information About Distributions
The determination of the tax attributes of FSIC's distributions
is made annually as of the end of its fiscal year based upon its
taxable income and distributions paid, in each case, for the full
year. Therefore, a determination as to the tax attributes of the
distributions made on a quarterly basis may not be representative
of the actual tax attributes for a full year. FSIC intends to
update stockholders quarterly with an estimated percentage of its
distributions that resulted from taxable ordinary income. The
actual tax characteristics of distributions to stockholders will be
reported to stockholders annually on Form 1099-DIV.
The timing and amount of any future distributions on FSIC's
shares of common stock are subject to applicable legal restrictions
and the sole discretion of its board of directors. There can be no
assurance as to the amount or timing of any such future
distributions, including the special distribution referenced
herein.
FSIC may fund its cash distributions to stockholders from any
sources of funds legally available to it, including proceeds from
the sale of shares of FSIC's common stock, borrowings, net
investment income from operations, capital gains proceeds from the
sale of assets, non-capital gains proceeds from the sale of assets
and dividends or other distributions paid to it on account of
preferred and common equity investments in portfolio companies.
FSIC has not established limits on the amount of funds it may use
from available sources to make distributions. There can be no
assurance that FSIC will be able to pay distributions at a specific
rate or at all.
Contact Information:
Investor Relations Contact
Marc Yaklofsky
marc.yaklofsky@fsinvestments.com
FS Investments Media Team
Marc Yaklofsky
media@fsinvestments.com
Income
Statement
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Investment
income
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
73,344
|
|
|
$
|
82,349
|
|
|
$
|
226,071
|
|
|
$
|
230,115
|
|
Paid-in-kind interest
income
|
|
9,940
|
|
|
8,430
|
|
|
27,092
|
|
|
22,899
|
|
Fee income
|
|
4,342
|
|
|
5,005
|
|
|
9,788
|
|
|
34,081
|
|
Dividend
income
|
|
345
|
|
|
21
|
|
|
7,700
|
|
|
21
|
|
From
non-controlled/affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
898
|
|
|
3,448
|
|
|
4,549
|
|
|
10,485
|
|
Paid-in-kind interest
income
|
|
1,353
|
|
|
550
|
|
|
5,226
|
|
|
1,855
|
|
Fee income
|
|
20
|
|
|
1,232
|
|
|
20
|
|
|
1,263
|
|
From
controlled/affiliated investments:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
1,273
|
|
|
966
|
|
|
3,797
|
|
|
3,407
|
|
Paid-in-kind interest
income
|
|
3,004
|
|
|
1,690
|
|
|
6,869
|
|
|
4,324
|
|
Total investment
income
|
|
94,519
|
|
|
103,691
|
|
|
291,112
|
|
|
308,450
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Management
fees
|
|
14,259
|
|
|
18,038
|
|
|
47,426
|
|
|
54,772
|
|
Subordinated income
incentive fees
|
|
—
|
|
|
12,662
|
|
|
22,905
|
|
|
37,426
|
|
Administrative
services expenses
|
|
1,125
|
|
|
750
|
|
|
2,601
|
|
|
2,226
|
|
Accounting and
administrative fees
|
|
210
|
|
|
254
|
|
|
713
|
|
|
774
|
|
Interest
expense
|
|
20,671
|
|
|
19,885
|
|
|
61,506
|
|
|
58,941
|
|
Directors'
fees
|
|
227
|
|
|
277
|
|
|
997
|
|
|
822
|
|
Other general and
administrative expenses
|
|
1,945
|
|
|
1,177
|
|
|
5,156
|
|
|
3,791
|
|
Total operating
expenses
|
|
38,437
|
|
|
53,043
|
|
|
141,304
|
|
|
158,752
|
|
Management fee
waiver
|
|
—
|
|
|
—
|
|
|
(2,776)
|
|
|
—
|
|
Net expenses
|
|
38,437
|
|
|
53,043
|
|
|
138,528
|
|
|
158,752
|
|
Net investment
income
|
|
56,082
|
|
|
50,648
|
|
|
152,584
|
|
|
149,698
|
|
|
|
|
|
|
|
|
|
|
Realized and
unrealized gain/loss
|
|
|
|
|
|
|
|
|
Net realized gain
(loss) on investments:
|
|
|
|
|
|
|
|
|
Non-controlled/unaffiliated investments
|
|
23,888
|
|
|
(24,767)
|
|
|
60,273
|
|
|
(87,361)
|
|
Non-controlled/affiliated investments
|
|
7
|
|
|
6,551
|
|
|
(10,068)
|
|
|
6,856
|
|
Controlled/affiliated
investments
|
|
—
|
|
|
—
|
|
|
12
|
|
|
(52,879)
|
|
Net realized gain
(loss) on foreign currency
|
|
5,993
|
|
|
(19)
|
|
|
6,090
|
|
|
165
|
|
Net change in
unrealized appreciation (depreciation) on
investments:
|
|
|
|
|
|
|
|
|
Non-controlled/unaffiliated investments
|
|
(104,254)
|
|
|
29,820
|
|
|
(203,228)
|
|
|
149,622
|
|
Non-controlled/affiliated investments
|
|
7,610
|
|
|
16,951
|
|
|
(18,993)
|
|
|
(979)
|
|
Controlled/affiliated
investments
|
|
5,753
|
|
|
7,408
|
|
|
(11,940)
|
|
|
7,041
|
|
Net change in
unrealized appreciation (depreciation) on secured
borrowing
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(7)
|
|
Net change in
unrealized gain (loss) on foreign currency
|
|
(6,419)
|
|
|
(1,197)
|
|
|
(4,483)
|
|
|
(4,923)
|
|
Total net realized and
unrealized gain (loss)
|
|
(67,422)
|
|
|
34,750
|
|
|
(182,337)
|
|
|
17,535
|
|
Net increase
(decrease) in net assets resulting from
operations
|
|
$
|
(11,340)
|
|
|
$
|
85,398
|
|
|
$
|
(29,753)
|
|
|
$
|
167,233
|
|
|
|
|
|
|
|
|
|
|
Per share
information—basic and diluted
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in net assets resulting from operations
(Earnings per Share)
|
|
$
|
(0.05)
|
|
|
$
|
0.35
|
|
|
$
|
(0.12)
|
|
|
$
|
0.68
|
|
Weighted average
shares outstanding
|
|
239,495,341
|
|
|
245,678,745
|
|
|
242,647,216
|
|
|
245,117,823
|
|
Balance
Sheet
|
|
September 30,
2018
|
|
|
|
|
(Unaudited)
|
|
December 31,
2017
|
Assets
|
|
|
|
|
Investments, at fair
value
|
|
|
|
|
Non-controlled/unaffiliated investments (amortized
cost—$3,352,266 and $3,532,517, respectively)
|
|
$
|
3,217,432
|
|
|
$
|
3,600,911
|
|
Non-controlled/affiliated investments (amortized
cost—$200,981 and $197,468, respectively)
|
|
214,575
|
|
|
230,055
|
|
Controlled/affiliated
investments (amortized cost—$108,778 and $86,861,
respectively)
|
|
105,245
|
|
|
95,268
|
|
Total investments, at
fair value (amortized cost—$3,662,025 and $3,816,846,
respectively)
|
|
3,537,252
|
|
|
3,926,234
|
|
Cash
|
|
98,535
|
|
|
134,932
|
|
Foreign currency, at
fair value (cost—$1,411 and $3,685, respectively)
|
|
1,430
|
|
|
3,810
|
|
Receivable for
investments sold and repaid
|
|
27,681
|
|
|
3,477
|
|
Income
receivable
|
|
23,380
|
|
|
30,668
|
|
Deferred financing
costs
|
|
6,213
|
|
|
3,459
|
|
Deferred merger
costs
|
|
3,422
|
|
|
—
|
|
Prepaid expenses and
other assets
|
|
758
|
|
|
1,695
|
|
Total
assets
|
|
$
|
3,698,671
|
|
|
$
|
4,104,275
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Payable for
investments purchased
|
|
$
|
1,447
|
|
|
$
|
1,978
|
|
Credit facilities
payable (net of deferred financing costs of $2,341 and $3,179,
respectively)
|
|
474,700
|
|
|
638,571
|
|
Unsecured notes
payable (net of deferred financing costs of $925 and $1,402,
respectively)
|
|
1,075,615
|
|
|
1,073,445
|
|
Stockholder
distributions payable
|
|
45,481
|
|
|
46,704
|
|
Management fees
payable
|
|
14,259
|
|
|
15,450
|
|
Subordinated income
incentive fees payable
|
|
—
|
|
|
12,871
|
|
Administrative
services expense payable
|
|
817
|
|
|
294
|
|
Interest
payable
|
|
17,667
|
|
|
22,851
|
|
Directors' fees
payable
|
|
268
|
|
|
276
|
|
Other accrued
expenses and liabilities
|
|
1,556
|
|
|
7,112
|
|
Total
liabilities
|
|
1,631,810
|
|
|
1,819,552
|
|
Commitments and
contingencies
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Preferred stock,
$0.001 par value, 50,000,000 shares authorized, none issued and
outstanding
|
|
—
|
|
|
—
|
|
Common stock, $0.001
par value, 450,000,000 shares authorized, 239,154,069 and
245,725,416 shares
issued and outstanding,
respectively
|
|
239
|
|
|
246
|
|
Capital in excess of
par value
|
|
2,222,598
|
|
|
2,272,591
|
|
Retained
earnings
|
|
(155,976)
|
|
|
11,886
|
|
Total
stockholders' equity
|
|
2,066,861
|
|
|
2,284,723
|
|
Total
liabilities and stockholders' equity
|
|
$
|
3,698,671
|
|
|
$
|
4,104,275
|
|
Net asset value per
share of common stock at period end
|
|
$
|
8.64
|
|
|
$
|
9.30
|
|
Non-GAAP Financial Measures
This press release contains certain financial measures that have
not been prepared in accordance with generally accepted accounting
principles in the United States
("GAAP"). FSIC uses these non-GAAP financial measures internally in
analyzing financial results and believes that the use of these
non-GAAP financial measures is useful to investors as an additional
tool to evaluate ongoing results and trends and in comparing FSIC's
financial results with other BDCs.
Non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for comparable GAAP financial
measures, and should be read only in conjunction with FSIC's
consolidated financial statements prepared in accordance with GAAP.
A reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measures has been provided in this press
release, and investors are encouraged to review the
reconciliation.
Reconciliation of
Non-GAAP Financial Measures1
|
|
Three Months
Ended
|
|
September 30,
2018
|
June 30,
2018
|
September 30,
2017
|
GAAP net investment
income per share
|
$0.23
|
$0.19
|
$0.21
|
Plus capital gains
incentive fees per share
|
—
|
—
|
—
|
Plus excise taxes per
share
|
—
|
—
|
—
|
Plus one-time
expenses per share7
|
0.01
|
—
|
—
|
Adjusted net
investment income per share2
|
$0.24
|
$0.19
|
$0.21
|
1)
|
Per share data was
derived by using the weighted average shares of FSIC's common stock
outstanding during the applicable
period. Per share numbers may not sum due to rounding.
|
2)
|
Adjusted net
investment income is a non-GAAP financial measure. Adjusted net
investment income is presented for all
periods as GAAP net investment income excluding (i) the accrual for
the capital gains incentive fee for realized and
unrealized gains; (ii) excise taxes; and (iii) certain
non-recurring operating expenses that are one-time in nature and
are not
representative of ongoing operating expenses incurred during FSIC's
normal course of business (referred to herein as one-
time expenses). FSIC uses this non-GAAP financial measure
internally in analyzing financial results and believes that the
use
of this non-GAAP financial measure is useful to investors as an
additional tool to evaluate ongoing results and trends and in
comparing its financial results with other business development
companies. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for
financial results prepared in accordance with GAAP. A
reconciliation of GAAP net investment income to adjusted net
investment income can be found above.
|
3)
|
The per share data
for distributions reflects the amount of distributions paid per
share of our common stock to stockholders of
record during each applicable period.
|
4)
|
See FSIC's quarterly
report on Form 10-Q for the three months ended September 30, 2018
for a description of FSIC's
investment strategies.
|
5)
|
Gross portfolio yield
represents the expected annualized yield of FSIC's investment
portfolio based on the composition of the
portfolio as of the applicable date. FSIC's estimated gross
portfolio yield may be higher than an investor's yield on an
investment in shares of FSIC's common stock because it does not
reflect sales commissions or charges that may be incurred
in connection with the purchase or sale of such shares, or
operating expenses that may be incurred by FSIC. FSIC's
estimated
gross portfolio yield does not represent an actual investment
return to stockholders, is subject to change and, in the
future,
may be greater or less than the rates set forth herein.
|
6)
|
Interest income is
recorded on an accrual basis. See FSIC's quarterly report on Form
10-Q for the three months ended
September 30, 2018 for a description of FSIC's revenue recognition
policy.
|
7)
|
FSIC's one-time
expenses for the three months ended September 30, 2018 were $1,297
resulting from the acceleration of the
remaining unamortized deferred financing costs associated with the
closing of the Hamilton Street Credit Facility.
|
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SOURCE FS Investment Corporation