MVC Capital Announces Second Quarter 2020 Results
09 Junho 2020 - 6:18PM
MVC Capital, Inc. (NYSE: MVC) (the “Company”), a publicly traded
business development company (BDC) that makes private debt and
equity investments, announced its financial results for the fiscal
second quarter ended April 30, 2020.
Financial Results
For the second quarter of fiscal 2020, the Company earned
interest income of $7.5 million and dividend, fee and other income
of $0.2 million, compared to $6.4 million and $2.2 million,
respectively, for the same quarter of fiscal 2019.
The Company reported total operating income of $7.7 million for
the second quarter of fiscal 2020, compared to $8.6 million for the
second quarter of fiscal 2019. The Company reported net operating
income of $3.5 million for the second quarter of fiscal 2020,
compared to $4.2 million for the same quarter in fiscal 2019.
As of April 30, 2020, the Company’s net assets were $186.0
million or $10.49 per share, compared with $229.4 million or $12.94
per share at the end of the prior fiscal quarter. The reduction in
net assets during the quarter was largely attributable to
unrealized losses across the portfolio primarily caused by the
adverse global economic effects of COVID-19, but also includes
portfolio company specific events.
As of April 30, 2020, MVC had investments in portfolio companies
totaling $226.3 million and cash and cash equivalents of $50.6
million, including $5.0 million in restricted cash and cash
equivalents.
Key Financial Metrics
|
Quarter Ended |
(Unaudited)($ in thousands, except per share data) |
Q2 2020 |
Q1 2020 |
Q4 2019 |
Q3 2019 |
Q2 2019 |
Total operating income |
7,652 |
|
7,786 |
|
8,046 |
|
7,469 |
|
8,593 |
|
|
|
|
|
|
|
Management fee |
1,104 |
|
1,370 |
|
1,662 |
|
1,643 |
|
1,590 |
|
Portfolio fees - asset management |
71 |
|
169 |
|
82 |
|
89 |
|
76 |
|
Management fee - asset management |
52 |
|
64 |
|
69 |
|
79 |
|
69 |
|
Administrative |
922 |
|
1,221 |
|
1,404 |
|
998 |
|
990 |
|
Interest, fees and other borrowing costs |
2,125 |
|
2,206 |
|
2,378 |
|
2,510 |
|
2,283 |
|
Net Incentive compensation |
- |
|
- |
|
- |
|
- |
|
- |
|
Loss on extinguishment of debt |
345 |
|
- |
|
- |
|
- |
|
- |
|
Total waiver by adviser |
(452) |
|
(551) |
|
(660) |
|
(654) |
|
(635) |
|
Tax expense |
- |
|
1 |
|
- |
|
1 |
|
1 |
|
|
|
|
|
|
|
Net operating income before net realized and unrealized gains |
3,485 |
|
3,306 |
|
3,111 |
|
2,803 |
|
4,219 |
|
Net increase (decrease) in net assets resulting from
operations |
(40,332) |
|
4,416 |
|
3,057 |
|
348 |
|
15,964 |
|
Net increase (decrease) in net assets resulting from operations per
share |
(2.28) |
|
0.25 |
|
0.17 |
|
0.02 |
|
0.90 |
|
Net asset value per share |
10.49 |
|
12.94 |
|
12.86 |
|
12.86 |
|
12.99 |
|
Portfolio Activity During the second
quarter of fiscal 2020, the Company made five follow-on investments
in four portfolio companies totaling approximately $3.1 million in
Jedson ($1.7 million), RuMe ($300,000), Security Holdings
($381,500) and Custom Alloy ($320,000 and $430,000).
Dividends
On April 14, 2020, the Company's Board of Directors declared a
quarterly dividend of $0.17 per share, which was paid on April 30,
2020.
Since implementing its dividend policy in July of 2005, the
Company has paid sixty consecutive quarterly dividends. Through
April 30, 2020, dividends paid total $8.25 per share and total
distributions and share repurchases (including tender offers) have
surpassed $287 million.
Subsequent Events
On May 14, 2020, Folio announced it entered into an agreement to
become a part of The Goldman Sachs Group, Inc. (“Goldman
Sachs”). The acquisition, while subject to regulatory
approval, is expected to close in the third calendar quarter of
2020. If the transaction closes, the Company expects to
receive approximately $15 million in proceeds.
On May 27, 2020, the Company and Wynnefield Capital announced an
agreement under which six of the Company’s current directors and
three independent director candidates proposed by Wynnefield
Capital will be nominated by the Company’s Board of Directors for
election at the 2020 annual meeting of stockholders, currently
scheduled for July 15, 2020. The Board of Directors will
remain at its current size of nine directors. A committee
comprised of Chairman Tokarz and two independent Board members will
continue to explore strategic alternatives and other value
enhancing opportunities and there will be no changes to the
Company’s current management agreement with The Tokarz Group
Advisers LLC prior to the annual meeting. Under the
agreement, the Company has agreed to pay the fees and expenses of
Wynnefield Capital in the amount of approximately $290,000.
On June 5, 2020, the Company and BB&T entered into a Waiver
and Thirteenth Amendment to the Secured Revolving Credit Agreement
(the “Credit Facility Amendment”), amending the Net Worth covenant
to no less than $150 million. All other terms of the Credit
Facility II remain unchanged and borrowings continue to be secured
by cash, short-term and long-term government securities.
MVC-G
About MVC Capital, Inc.
MVC Capital (MVC) is a business development company traded on
the New York Stock Exchange that provides long-term debt and equity
investment capital to fund growth, acquisitions and
recapitalizations of companies in a variety of industries. For
additional information about MVC, please visit MVC's website at
www.mvccapital.com.
Safe Harbor Statement and Other Disclosures
These forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. Certain
factors could cause actual results and conditions to differ
materially from those projected in these forward-looking
statements, including, among other things: MVC Capital's
ability to deliver value to shareholders; MVC Capital’s ability to
generate and grow net operating and net investment income,
including beyond the current dividend level; the ability to pay and
grow shareholder distributions (including beyond the $0.17 dividend
level recently paid); MVC Capital’s ability to support and cover
its dividend on an on-going basis; the ability to maintain
expenses; the performance of MVC Capital's investments and changes
in economic or financial market conditions and other factors that
are enumerated in the Company's periodic filings with the
Securities and Exchange Commission. MVC Capital disclaims and does
not undertake any obligation to update or revise any
forward-looking statement in this press release.
The press release contains unaudited financial results. For ease
of review, we have excluded the word "approximately" when rounding
the results.
There can be no assurance that future dividend payments will
match or exceed historic ones, or that they will be made at all.
This press release is for informational purposes only and is not an
offer to purchase or a solicitation of an offer to sell shares of
MVC's common stock. There can be no assurance that MVC will achieve
its investment objective.
Investor Contact
Jackie Rothchild MVC Capital 914.510.9400
Or
Jeffrey Goldberger / Allison Soss KCSA Strategic
Communications 212.896.1249 / 212.896.1267
MVC Capital (NYSE:MVC)
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