THL Credit, Inc. (NASDAQ: TCRD) (“THL Credit” or the “Company”), a
direct lender to middle market companies, today announced financial
results for its fourth fiscal quarter ended December 31,
2018. Additionally, THL Credit announced that its Board of
Directors has declared a first fiscal quarter 2019 dividend of
$0.21 per share payable on March 29, 2019, to stockholders of
record as of March 20, 2019.
HIGHLIGHTS
($ in millions, except per share amounts) |
|
Portfolio results |
As of December
31,2018 |
|
Total assets |
$518.5 |
|
|
Investment portfolio, at fair value |
$493.7 |
|
|
Net assets |
$295.7 |
|
|
Net asset value per share |
$9.15 |
|
|
Weighted average yield on investments |
|
10.7 |
% |
|
|
Year ended December 31,
2018 |
Quarter ended December 31,
2018 |
Portfolio activity |
|
Total portfolio investments made, at par |
$123.5 |
|
$66.5 |
|
Total portfolio investments made, at cost |
$122.3 |
|
$65.9 |
|
Number of new portfolio investments |
|
9 |
|
|
7 |
|
Number of portfolio investments at end of period |
|
42 |
|
|
42 |
|
Operating results |
|
|
Total investment income |
$66.9 |
|
$15.8 |
|
Net investment income |
$34.8 |
|
$7.3 |
|
Net decrease in net assets from operations |
($10.6 |
) |
($23.1 |
) |
Net investment income per share (1) |
$1.07 |
|
$0.23 |
|
Dividends declared per share |
$1.08 |
|
$0.27 |
|
(1) For the quarter ended December 31, 2018 net
investment income excluding the impact of the acceleration of
deferred financing costs in connection with the redemption of
certain borrowings was $0.26 per share.
“Over the past year, we have made significant
progress on our strategic objectives across four dimensions —
shifting the composition of our portfolio into primarily first lien
floating rate assets, reducing our concentrated positions,
increasing our investment in the Logan JV, and exiting our
non-income producing securities,” said Chris Flynn, CEO. “We remain
confident that the steps we are taking to reduce risk in our
portfolio will result in a more diversified senior secured floating
rate portfolio that is positioned to deliver more stable and
predictable returns for our shareholders over the long term.”
THL Credit’s Board of Directors also voted to
adjust the dividend to reflect the BDC’s current earnings
potential. In addition, the Advisor decided to waive additional
incentive fees to the extent earned through the end of 2019, as
well as to lower the base management fee to more closely align with
what it believes is appropriate for a first lien floating rate
portfolio.
THL Credit will also be implementing a new $15
million 10b5-1 stock repurchase plan and intends to repurchase
stock at levels that are accretive to shareholders with proceeds
from exits of additional control equity positions this year.
PORTFOLIO AND INVESTMENT
ACTIVITYIn the fourth quarter, THL Credit closed on seven
new investments totaling $54.6 million, $23.5 million of which was
related to refinancing of three existing investments, and an
additional $11.9 million in follow-on investments, including
revolver fundings.
Notable investment purchases for the fourth
quarter included:
- $10.0 million first lien senior secured term loan in
HealthDrive Corporation as part of the refinancing of the existing
debt investment. HealthDrive Corporation is a provider of mobile
specialty services to long-term care facilities in the US.
- $9.5 million first lien senior secured term loan in Evergreen
Services Group, LLC, a provider of fully outsourced IT services to
small and medium businesses;
- $8.0 million first lien senior secured term loan in Rollins
Enterprises LLC, a cosmetic procedure provider focusing exclusively
on body contouring;
- $7.6 million first lien senior secured term loan in MeriCal,
LLC as part of the refinancing of the existing debt investment.
MeriCal is a manufacturer of vitamins, minerals, and
supplements.
- $7.2 million first lien senior secured term loan and an
unfunded revolver in NCP Investor Inc., a provider of home health,
home care, and case management to workers exposed to
radiation;
- $6.0 million first lien senior secured term loan in Women’s
Health USA, Inc. as part of the refinancing of the existing debt
investment. Women’s Health is a management services organization
that partners with physician practices specializing in women’s
health to provide outsourced administrative support.
- $5.0 million first lien senior secured term loan in SRS Acquiom
Holdings LLC, a provider of shareholder representation, payments
administration, and escrow services to merger parties in M&A
transactions.
Notable realizations for the fourth quarter
included:
- Sale of the first lien senior secured term loans and
controlling equity investment in Tri Starr Management Services,
Inc., which resulted in proceeds of $13.5 million and an additional
$1.9 million escrow receivable booked at time of sale;
- Repayment of a first lien senior secured term loan in
Constructive Media LLC at par, which resulted in proceeds of $9.8
million, and sale of common equity, which resulted in proceeds of
$1.1 million;
- Sale of a TRA investment in Duff & Phelps Corporation,
which resulted in proceeds of $9.8 million.
As of December 31, 2018, these transactions,
coupled with changes in net unrealized depreciation on the
portfolio during the quarter, bring the total fair value of THL
Credit’s investment portfolio to $493.7 million across 42 portfolio
investments. THL Credit’s investment portfolio at fair value was
allocated 67 percent in first lien senior secured debt (including
unitranche investments), 17 percent in the Logan JV, 5 percent in
second lien debt, 1 percent in subordinated debt, and 10 percent in
equity securities and warrants. The weighted average yield on debt
and Logan JV investments made in the fourth quarter of 2018 was 9.4
percent. As of December 31, 2018, the weighted average yield of the
debt and income-producing securities, including the Logan JV and
reflecting the impact of investments on non-accrual status, in the
investment portfolio at their current cost basis was 10.7 percent.
As of December 31, 2018, THL Credit had loans on non-accrual status
with an aggregate amortized cost of $38.0 million and fair value of
$18.1 million, or 7.0 percent and 3.7 percent of the portfolio’s
amortized cost and fair value, respectively. As of December 31,
2018, 96.5 percent of THL Credit’s debt investments bore interest
based at floating rates, which may be subject to interest rate
floors, such as London Interbank offer rate, or LIBOR, or
Canadian Dollar offer rate, or CDOR, and 3.5 percent of its debt
investments bore interest at fixed rates.
This compares to the portfolio as of December
31, 2017, which had a fair value of $608.7 million across 47
portfolio investments allocated 67 percent in first lien senior
secured debt (including unitranche investments), 11 percent in
the Logan JV, 5 percent in second lien debt, 3 percent in
subordinated debt, 2 percent in other income-producing securities
and 12 percent in equity securities and warrants. The weighted
average yield on new and follow-on investments made in the fourth
quarter of 2017 was 8.5 percent. The weighted average yield of the
debt and other income-producing securities in the investment
portfolio, including the Logan JV, at their cost basis was 10.7
percent. As of December 31, 2017, THL Credit had loans on
non-accrual status with an aggregate amortized cost of $56.3
million and fair value of $21.0 million, or 8.8 percent and 3.4
percent of the portfolio’s amortized cost and fair value,
respectively. As of December 31, 2017, 93 percent of its debt
investments bore interest based at floating rates, which may be
subject to interest rate floors, such as LIBOR, and 7 percent of
its debt investments bore interest at fixed rates.
RESULTS OF OPERATIONS
Investment income Total
investment income for the three months ended Dec. 31, 2018 and 2017
was $15.8 million and $18.6 million, respectively, and consisted of
$11.4 million and $13.3 million of interest income on debt
securities (which included PIK interest of $0.7 million and $0.3
million and prepayment premiums of $0.2 million and $0.1 million,
respectively), $3.4 million and $3.4 million of dividend income,
$0.5 million and $1.1 million of interest income on other
income-producing securities, and $0.5 million and $0.8 million of
other income, including fees from THL Credit’s managed vehicles,
respectively.
The decrease in investment income compared to
the prior period was primarily due to a contraction in the overall
investment portfolio since Dec. 31, 2017, which led to lower
interest income.
Total investment income for the years ended Dec.
31, 2018 and 2017 was $66.9 million and $78.8 million,
respectively, and consisted of $49.7 million and $56.8 million of
interest income on debt securities (which included PIK interest of
$2.3 million and $1.7 million and prepayment premiums of $0.6
million and $0.1 million, respectively), $12.2 million and $13.5
million of dividend income, $2.8 million and $4.6 million of
interest income on other income-producing securities and $2.2
million and $3.9 million of other income, including fees from THL
Credit’s managed vehicles, respectively.
The decrease in investment income from 2017 to 2018 was
primarily due to a contraction in the overall investment portfolio
since Dec. 31, 2017, which led to lower interest income. The
decrease was also attributed to lower dividend income from certain
equity investments and lower other income related to one-time
amendment and structuring fees.
Expenses Expenses for the three
months ended Dec. 31, 2018 and 2017 were $8.5 million and $9.9
million, respectively. For the three months ended Dec. 31,
2018 and 2017, base management fees were $2.1 million and $2.6
million, administrator and other expenses were $1.3 million and
$1.5 million, and fees and expenses related to THL Credit’s
borrowings were $5.0 million and $5.7 million, respectively. In
addition, for each of the three months ended Dec. 31, 2018 and
2017, THL Credit recorded an income tax provision related to its
consolidated blocker corporations, excise and other taxes of $0.1
million and $0.1 million, respectively.
The decrease in operating expenses was due to a
decrease in management fees as a result of portfolio contraction,
lower interest and fees on our credit facility due to reduction in
borrowings outstanding offset by a one-time cost of $0.9 million
related to accelerated amortization of deferred financing costs and
lower administrator expenses allocated from the Advisor.
Expenses for the years ended Dec. 31, 2018 and
2017 were $32.1 million and $39.1 million, respectively. For
the years ended Dec. 31, 2018 and 2017, base management fees were
$9.0 million and $10.4 million, net incentive fees were ($0.0)
million and $2.4 million, administrator and other expenses were
$6.1 million and $7.4 million, and fees and expenses related to THL
Credit’s credit facility for the same periods were $16.7 million
and $18.7 million, respectively. In addition, for the years ended
Dec. 31, 2018 and 2017, THL Credit recorded income tax provisions
related to its consolidated blocker corporations, excise and other
taxes of $0.3 million and $0.2 million, respectively.
The decrease in operating expenses from 2017 to 2018 was due
primarily to lower interest and fees on our credit facility due to
the reduction in borrowings outstanding, lower administrator
expenses allocated from the Advisor, lower net incentive fees due
to the effect of the waiver, and lower base management fees as a
result of portfolio contraction.
Net investment incomeNet
investment income totaled $7.3 million and $8.7 million for the
three months ended Dec. 31, 2018 and 2017, or $0.23 and $0.27 per
share based upon 32,515,187 and 32,673,590 weighted average common
shares outstanding, respectively.
Net investment income was lower due to a
decrease in interest income on debt and income-producing securities
as a result of contraction of the overall investment portfolio,
which was partially offset by lower borrowing costs.
Net investment income totaled $34.8 million and
$39.7 million for the years ended Dec. 31, 2018 and 2017, or $1.07
and $1.21 per share based upon 32,633,663 and 32,797,233 weighted
average common shares outstanding, respectively.
The decrease in net investment income from 2017 to 2018 is
primarily attributable to a decrease in interest on debt and other
income-producing investments due to portfolio contraction offset by
lower borrowing costs, incentive and base management fees.
Net realized gains and losses on
investments, net of income tax provisionFor the three
months ended Dec. 31, 2018, THL Credit recognized a net realized
gain on portfolio investments of $6.2 million, primarily related to
a net realized gain recognized on the exit of THL Credit’s control
investment in Tri-Starr Management Services, Inc. For the three
months ended Dec. 31, 2017, THL Credit recognized a net realized
gain on portfolio investments of $5.0 million, primarily related to
a realized gain recognized on the exit of its equity investments in
Thibaut, Inc.
For the year ended Dec. 31, 2018, THL Credit recognized a net
realized loss of $32.4 million, primarily related to realized
losses recognized in connection with the sale and restructuring of
certain debt investments. For the year ended Dec. 31, 2017, THL
Credit recognized a net realized loss of $17.3 million, primarily
related to realized losses recognized in connection with the sale
of certain debt investments.
For the year ended Dec. 31, 2018, THL Credit
recorded no income tax provision on realized gains. For the year
ended Dec. 31, 2017, THL Credit recorded an income tax provision on
realized gains of $0.8 million related to the exit of an investment
held in a blocker corporation.
Net change in unrealized appreciation
(depreciation) on investmentsFor the three months ended
Dec. 31, 2018 and 2017, THL Credit’s investment portfolio had a net
change in unrealized depreciation of $36.7 million and $32.2
million, respectively. For the years ended Dec. 31, 2018 and 2017,
THL Credit’s investment portfolio had a net change in unrealized
depreciation of $11.9 million and $31.6 million, respectively.
The net change in unrealized appreciation on our
investments was primarily the result of the performance of certain
portfolio investments, including certain control investments,
partially offset by the reversal of prior period unrealized
depreciation upon a realization of a controlled investment noted in
the portfolio and investment activity section.
Benefit for taxes on unrealized gain on
investmentsFor the three months ended Dec. 31, 2018 and
2017, THL Credit recognized an income tax benefit (provision) for
taxes on unrealized gains of $0.1 million and ($0.1) million
related to consolidated subsidiaries, respectively. For the years
ended Dec. 31, 2018 and 2017, the income tax (provision) benefit
for taxes on unrealized gains on investments was ($0.3)million and
$2.1 million, respectively.
The change in provision for tax on unrealized
gains on investments relates primarily to changes to the unrealized
appreciation (depreciation) of the investments held in these
taxable consolidated subsidiaries, other temporary differences and
a change in the prior year estimates received from certain
portfolio companies.
Change in net assets resulting from
operationsChange in net assets resulting from operations
totaled ($23.1) million and ($18.5) million, or ($0.71) and ($0.56)
per share based upon 32,515,187 and 32,673,590 weighted average
common shares outstanding, for the three months ended Dec. 31, 2018
and 2017, respectively.
Net decrease in net assets resulting from
operations totaled ($10.6) million and ($7.9) million, or ($0.32)
and ($0.24) per share based upon 32,633,663 and 32,797,233 weighted
average common shares outstanding, for the years ended Dec. 31,
2018 and 2017, respectively.
The decrease in net assets resulting from
operations for the respective periods is due primarily to net
realized and unrealized losses in the portfolio.
FINANCIAL CONDITION, INCLUDING LIQUIDITY
AND CAPITAL RESOURCES
As of December 31, 2018, THL Credit had cash of
$6.9 million.
As of December 31, 2018, THL Credit had $219.3
million in outstanding borrowings, which was comprised of $107.7
million outstanding on the revolving credit facility and $111.6
million of notes payable outstanding. As of December 31, 2018,
borrowings outstanding had a weighted average interest rate of 5.70
percent. For the year ended December 31, 2018, THL Credit borrowed
$177.5 million and repaid $235.6 million under the revolving credit
facility. Additionally, THL Credit issued $51.6 million 2023 Notes
and used those proceeds to redeem $50.0 million 2021 Notes.
For the year ended December 31, 2018, THL
Credit’s operating activities provided cash of $99.6 million
primarily in connection with the purchase and sales of portfolio
investments. Financing activities included net repayments of $58.1
million on our Revolving Facility, used to make $35.2 million in
distributions to stockholders, $2.6 million to repurchase common
stock and $2.1 million for the payment of financing and offering
costs relating to $51.6 million 2023 Notes issuance.
For the year ended December 31, 2017, THL Credit
operating activities provided cash of $53.4 million primarily in
connection with the purchase and sales of investments. Its
financing activities used $16.9 million for net repayments on its
credit facility, $35.4 million for distributions to stockholders,
$2.5 million to repurchase common stock and $1.4 million for the
payment of financing and offering costs.
RECENT DEVELOPMENTS
From January 1, 2019 through March 6, 2019, we
made new investments totaling $13.8 million and follow-on
investments of $12.2 million at a combined weighted average yield
based upon cost at the time of the investment of 12.9%.
On January 11, 2019, Alex Toys, LLC. first lien
senior secured term loan was sold for total proceeds of $7.6
million.
On February 8, 2019, Home Partners of America,
Inc. first lien senior secured term loan was sold for total
proceeds of $7.7 million.
On March 5, 2019, our board of directors
declared a dividend of $0.21 per share payable on March 29, 2019 to
stockholders of record at the close of business on March 20,
2019.
On March 5, 2019, in consultation with our board
of directors, we accepted the Advisor’s proposal to extend the
waiver of 100% of the incentive fees accrued for the period
commencing on January 1, 2019 and ending on December 31, 2019 and
waive base management fees in excess of 1.0% per annum commencing
April 1, 2019. Previously, incentive fees were waived through June
30, 2019. Furthermore, the board of directors accepted the
Advisor’s proposal to present to our stockholders at the annual
meeting an amendment to the investment management agreement to
permanently reduce our incentive fee based on pre-incentive fee
income to 17.5% and reduce our base management fees to 1.0% of the
gross assets commencing January 1, 2020. Waived incentive and
base management fees shall not be subject to recoupment.
On March 5, 2019, in consultation with our board
of directors, we accepted the Advisor’s proposal to move forward
with a proposal for stockholder approval for increased leverage up
to an amount that reduces our asset coverage ratio of 200% to an
asset coverage ratio of 150%. If we receive stockholder approval,
we would be allowed to increase our leverage capacity on the first
day after such approval. However, in connection with the increased
leverage, we would also need to amend our Revolving facility with
lender consent.
On March 5, 2019, our board of directors
authorized the purchase of up to $15.0 million of our common stock
through the renewal of our preexisting stock repurchase
program. Such stock repurchase plan shall be in effect
through March 5, 2020 and repurchases shall be at such prices,
times and manner as determined by certain officers of THL Credit.
We have provided our stockholders with notice of our ability to
repurchase shares of the common stock in accordance with 1940 Act
requirements. We will retire immediately all such shares of common
stock that we purchase in connection with the stock repurchase
program.
We expect to enter into a 10b5-1 plan on or
before March 15, 2019 to repurchase such stock in accordance with
the stock repurchase plan.
CONFERENCE CALL
THL Credit will host a conference call to
discuss these results and its business outlook on March 7, 2019, at
10:30 a.m. Eastern Time.
For those wishing to participate by telephone,
please dial (877) 375-9141 (domestic) or (253) 237-1151
(international). Use passcode 4766748. The Company will
also broadcast the conference call live via the Investor Relations
section of its website at www.THLCreditBDC.com. Starting
approximately two hours after the conclusion of the call, a replay
will be available through March 17, 2019, by dialing (855) 859-2056
(domestic) or (404) 537-3406 (international) and entering passcode
4766748. The replay will also be available on the THL Credit’s
website.
AVAILABLE INFORMATIONTHL
Credit’s filings with the Securities and Exchange Commission, press
releases, earnings releases, investor presentation and other
financial information are available on its website at
www.THLCreditBDC.com.
|
|
|
|
THL CREDIT, INC.
AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES(in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
December 31, 2018 |
|
December 31, 2017 |
|
|
Assets: |
|
|
|
|
|
Investments at fair
value: |
|
|
|
|
|
Non-controlled, non-affiliated investments (cost of $333,023
and $484,816, respectively) |
$ |
313,377 |
|
|
$ |
449,951 |
|
|
|
Controlled
investments (cost of $181,325 and $155,547, respectively) |
|
167,733 |
|
|
|
158,736 |
|
|
|
Non-controlled, affiliated investments (cost of $25,292 and
$4, respectively) |
|
12,543 |
|
|
|
4 |
|
|
|
Cash |
|
6,860 |
|
|
|
3,617 |
|
|
|
Escrow receivable |
|
7,306 |
|
|
|
— |
|
|
|
Interest, dividends, and
fees receivable |
|
5,480 |
|
|
|
7,835 |
|
|
|
Deferred financing
costs |
|
2,314 |
|
|
|
2,890 |
|
|
|
Deferred tax assets |
|
2,056 |
|
|
|
2,661 |
|
|
|
Due from affiliate |
|
377 |
|
|
|
407 |
|
|
|
Distributions
receivable |
|
207 |
|
|
|
— |
|
|
|
Prepaid expenses and other
assets |
|
198 |
|
|
|
1,583 |
|
|
|
Total assets |
$ |
518,451 |
|
|
$ |
627,684 |
|
|
|
Liabilities: |
|
|
|
|
|
Loans payable |
$ |
107,657 |
|
|
$ |
167,317 |
|
|
|
Notes payable ($111,607
and $110,000 face amounts, respectively, reported net of
deferred financing costs of $3,541 and $2,985, respectively) |
|
108,067 |
|
|
|
107,015 |
|
|
|
Base management fees
payable |
|
2,112 |
|
|
|
2,556 |
|
|
|
Deferred tax
liability |
|
1,972 |
|
|
|
2,336 |
|
|
|
Accrued expenses and other
payables |
|
1,633 |
|
|
|
2,829 |
|
|
|
Accrued incentive
fees |
|
677 |
|
|
|
972 |
|
|
|
Accrued interest and
fees |
|
633 |
|
|
|
551 |
|
|
|
Other deferred
liabilities |
|
19 |
|
|
|
79 |
|
|
|
Total liabilities |
|
222,770 |
|
|
|
283,655 |
|
|
|
|
|
|
|
|
|
Net
Assets: |
|
|
|
|
|
Common stock, par value
$.001 per share, 100,000 common shares authorized, 32,318
and 32,674 shares issued and outstanding at December 31, 2018 and
December 31, 2017, respectively |
|
32 |
|
|
|
33 |
|
|
|
Paid-in capital in excess
of par |
|
431,361 |
|
|
|
434,197 |
|
|
|
Distributable
earnings |
|
(135,712 |
) |
|
|
(90,903 |
) |
|
|
Total net
assets attributable to THL Credit, Inc. |
|
295,681 |
|
|
|
343,327 |
|
|
|
Net assets attributable to
non-controlling interest |
|
— |
|
|
|
702 |
|
|
|
Total net
assets |
$ |
295,681 |
|
|
$ |
344,029 |
|
|
|
Total liabilities and net
assets |
$ |
518,451 |
|
|
$ |
627,684 |
|
|
|
Net asset value per share
attributable to THL Credit, Inc. |
$ |
9.15 |
|
|
$ |
10.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THL CREDIT, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the years ended December
31, |
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
Investment
Income: |
|
|
|
|
|
|
|
|
From non-controlled,
non-affiliated investments: |
|
|
|
|
|
|
|
|
Interest
income |
|
$ |
45,412 |
|
|
$ |
53,842 |
|
|
$ |
66,077 |
|
|
|
Dividend
income |
|
|
33 |
|
|
|
139 |
|
|
|
186 |
|
|
|
Other
income |
|
|
914 |
|
|
|
2,302 |
|
|
|
1,867 |
|
|
|
From non-controlled,
affiliated investments: |
|
|
|
|
|
|
|
|
Interest
income |
|
|
1,689 |
|
|
|
— |
|
|
|
— |
|
|
|
Other
income |
|
|
1,044 |
|
|
|
1,089 |
|
|
|
1,588 |
|
|
|
From controlled
investments: |
|
|
|
|
|
|
|
|
Interest
income |
|
|
5,465 |
|
|
|
7,511 |
|
|
|
3,645 |
|
|
|
Dividend
income |
|
|
12,128 |
|
|
|
13,376 |
|
|
|
10,972 |
|
|
|
Other
income |
|
|
257 |
|
|
|
514 |
|
|
|
250 |
|
|
|
Total
investment income |
|
|
66,942 |
|
|
|
78,773 |
|
|
|
84,585 |
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
Interest and
fees on borrowings |
|
|
14,498 |
|
|
|
16,007 |
|
|
|
14,146 |
|
|
|
Base
management fees |
|
|
9,006 |
|
|
|
10,389 |
|
|
|
10,998 |
|
|
|
Incentive
fees |
|
|
1,696 |
|
|
|
3,185 |
|
|
|
4,461 |
|
|
|
Administrator expenses |
|
|
2,083 |
|
|
|
2,869 |
|
|
|
3,625 |
|
|
|
Other
general and administrative expenses |
|
|
1,742 |
|
|
|
1,953 |
|
|
|
2,171 |
|
|
|
Amortization
of deferred financing costs |
|
|
2,232 |
|
|
|
2,748 |
|
|
|
2,071 |
|
|
|
Professional
fees |
|
|
1,505 |
|
|
|
1,858 |
|
|
|
1,531 |
|
|
|
Directors'
fees |
|
|
742 |
|
|
|
693 |
|
|
|
727 |
|
|
|
Total
expenses before incentive fee waivers |
|
|
33,504 |
|
|
|
39,702 |
|
|
|
39,730 |
|
|
|
Incentive
fee waiver |
|
|
(1,741 |
) |
|
|
(811 |
) |
|
|
— |
|
|
|
Total
expenses, net of incentive fee waivers |
|
|
31,763 |
|
|
|
38,891 |
|
|
|
39,730 |
|
|
|
Income tax
provision, excise and other taxes |
|
|
355 |
|
|
|
168 |
|
|
|
155 |
|
|
|
Net
investment income |
|
|
34,824 |
|
|
|
39,714 |
|
|
|
44,700 |
|
|
|
Realized Gain
(Loss) and Change in Unrealized Appreciation (Depreciation) on
Investments: |
|
|
|
|
|
|
|
|
Net
realized (loss) gain on investments: |
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments |
|
|
(37,784 |
) |
|
|
(21,866 |
) |
|
|
(28,211 |
) |
|
|
Controlled
investments |
|
|
5,424 |
|
|
|
4,582 |
|
|
|
(10,914 |
) |
|
|
Foreign
currency transactions |
|
|
(205 |
) |
|
|
(69 |
) |
|
|
— |
|
|
|
Net
realized loss on investments |
|
|
(32,565 |
) |
|
|
(17,353 |
) |
|
|
(39,125 |
) |
|
|
Net change in
unrealized (depreciation) appreciation on investments: |
|
|
|
|
|
|
|
|
Non-controlled, non-affiliated investments |
|
|
15,220 |
|
|
|
(16,957 |
) |
|
|
(8,094 |
) |
|
|
Non-controlled, affiliated investments |
|
|
(12,750 |
) |
|
|
— |
|
|
|
— |
|
|
|
Controlled
investments |
|
|
(16,077 |
) |
|
|
(13,253 |
) |
|
|
19,391 |
|
|
|
Translation
of assets and liabilities in foreign currencies |
|
|
1,736 |
|
|
|
(1,346 |
) |
|
|
— |
|
|
|
Net change in
unrealized (depreciation) appreciation on investments |
|
|
(11,871 |
) |
|
|
(31,556 |
) |
|
|
11,297 |
|
|
|
Net change in
unrealized (depreciation) appreciation attributable to
non-controlling interests |
|
|
(703 |
) |
|
|
(13 |
) |
|
|
140 |
|
|
|
Net
realized and unrealized loss from investments |
|
|
(45,139 |
) |
|
|
(48,922 |
) |
|
|
(27,688 |
) |
|
|
Provision
for taxes on realized gain on investments |
|
|
— |
|
|
|
(842 |
) |
|
|
— |
|
|
|
(Provision)
benefit for taxes on unrealized gain/loss on investments |
|
|
(284 |
) |
|
|
2,146 |
|
|
|
137 |
|
|
|
(Provision)
benefit for taxes on realized and unrealized gain/loss on
investments |
|
|
(284 |
) |
|
|
1,304 |
|
|
|
137 |
|
|
|
Net
(decrease) increase in net assets resulting from operations |
|
$ |
(10,599 |
) |
|
$ |
(7,904 |
) |
|
$ |
17,149 |
|
|
|
Net
investment income per common share: |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
1.07 |
|
|
$ |
1.21 |
|
|
$ |
1.35 |
|
|
|
Net
(decrease) increase in net assets resulting from operations per
common share: |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
(0.32 |
) |
|
$ |
(0.24 |
) |
|
$ |
0.51 |
|
|
|
Weighted
average shares of common stock outstanding: |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
32,634 |
|
|
|
32,797 |
|
|
|
33,197 |
|
|
|
|
|
|
|
|
|
|
|
About THL Credit, Inc.
THL Credit, Inc. (NASDAQ: TCRD) is a closed-end
management investment company that has elected to be treated as a
business development company under the Investment Company Act of
1940. The Company’s investment objective is to generate both
current income and capital appreciation, primarily through
investments in privately negotiated debt and equity securities of
middle market companies. The company is a direct lender to middle
market companies and invest primarily in directly originated first
lien senior secured loans, including unitranche investments. In
certain instances, the Company also makes second lien secured loans
and subordinated or mezzanine, debt investments, which may include
an associated equity component such as warrants, preferred stock or
other similar securities and direct equity co-investments. The
Company targets investments primarily in middle market companies
with annual EBITDA generally between $5 million and $25 million.
The Company is headquartered in Boston, with additional origination
teams in Chicago, Dallas, Los Angeles and New York. The Company’s
investment activities are managed by THL Credit Advisors LLC, an
investment adviser registered under the Investment Advisers Act of
1940. For more information, please visit www.THLCreditBDC.com.
Forward-Looking Statements
Statements made in this press release may
constitute forward-looking statements. Such statements reflect
various assumptions by the Company concerning anticipated results
and are not guarantees of future performance. These statements
include but are not limited to, projected financial performance,
expected development of the business, anticipated share repurchases
or lack thereof, our plans and expectations about future
investments and the future liquidity of the company. The accuracy
of such statements involves known and unknown risks, uncertainties
and other factors that, in some ways, are beyond management’s
control, including the factors described from time to time in
filings by the Company with the Securities and Exchange Commission.
Such factors include: the introduction, withdrawal, success and
timing of business initiatives and strategies; changes in
political, economic or industry conditions, the interest rate
environment or financial and capital markets, which could result in
changes in the value of our assets; the relative and absolute
investment performance and operations of our investment
adviser; the impact of increased competition; the impact of
future acquisitions and divestitures; the unfavorable
resolution of legal proceedings; our business prospects and the
prospects of our portfolio companies; the impact, extent and timing
of technological changes and the adequacy of intellectual property
protection; the impact of legislative and regulatory actions and
reforms and regulatory, supervisory or enforcement actions of
government agencies relating to us or THL Credit Advisors LLC, the
Advisor; the ability of the Advisor to identify suitable
investments for us and to monitor and administer our investments;
our contractual arrangements and relationships with third
parties; any future financings by us; the ability of
the Advisor to attract and retain highly talented professionals;
fluctuations in foreign currency exchange rates; the impact of
changes to tax legislation and, generally, our tax position; our
ability to exit a control investment in a timely manner; and
the ability to fund Logan JV’s unfunded commitments to the extent
approved by each member of the Logan JV investment committee.
The Company undertakes no duty to update any
forward-looking statements made herein. All forward-looking
statements speak only as of the date of this press release.
Investor Contact:THL Credit,
Inc. Lauren Vieira 617-790-6070lvieira@thlcredit.com
Media Contact:Stanton Public Relations and
Marketing, LLCDoug Allen646-502-3530dallen@stantonprm.com
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