BlackRock Kelso Capital Corporation Declares Regular First Quarter Dividend of $0.26 Per Share, Announces Financial Results for the Quarter and Year Ended December 31, 2011
HIGHLIGHTS: |
Investment Portfolio: $1,056.7 million |
Net Assets: $701.0 million |
Indebtedness (borrowings under credit facility and senior secured notes): $343.0 million |
Net Asset Value per share: $9.58 |
Portfolio Activity for the Quarter Ended December 31, 2011: |
Cost of investments during period: $141.0 million |
Sales, repayments and other exits during period: $86.1 million |
Portfolio Activity for the Year Ended December 31, 2011: |
Cost of investments during period: $401.5 million |
Sales, repayments and other exits during period: $249.1 million |
Number of portfolio companies at end of period: 54 |
Operating Results for the Quarter Ended December 31, 2011: |
Net investment income per share: $0.15 |
Net investment income per share, as adjusted1 : $0.27 |
Dividends declared per share: $0.26 |
Earnings per share: $0.10 |
Net investment income: $11.3 million |
Net investment income, as adjusted1: $19.7 million |
Net realized and unrealized losses: $4.2 million |
Net increase in net assets from operations: $7.0 million |
Operating Results for the Year Ended December 31, 2011: |
Net investment income per share: $1.00 |
Dividends declared per share: $1.10 |
Earnings per share: $1.05 |
Net investment income: $72.9 million |
Net realized and unrealized gains: $4.0 million |
Net increase in net assets from operations: $76.9 million |
Portfolio and Investment Activity
During the three months ended
During the year ended
At
The weighted average yields of the debt and income producing equity
securities in our portfolio at fair value were 12.7% at
At
Results of Operations
Results comparisons are for the three months and years ended
Investment Income
Investment income totaled
Expenses
Total expenses for the three months and year ended
Net Investment Income
Net investment income totaled
Net Realized Gain or Loss
Total net realized loss for the three months and year ended
Net Unrealized Appreciation or Depreciation
For the three months and year ended
Net Increase in Net Assets from Operations
For the three months and year ended
Liquidity and Capital Resources
At
On
Dividends
On
Dividends declared to stockholders for the three months and year ended
We have elected to be taxed as a regulated investment company, or RIC,
under Subchapter M of the Internal Revenue Code. To maintain our status
as a RIC, we must distribute annually to our stockholders at least 90%
of our investment company taxable income; and to avoid an excise tax
imposed on RICs, we must distribute annually to our stockholders at
least 98% of our ordinary income and 98.2% of our net capital gains. We
have made, and intend to continue to make, timely distributions
sufficient to satisfy the annual distribution requirements to maintain
our qualification as a RIC. We also intend to make distributions of net
realized capital gains, if any, at least annually. We may, at our
discretion, carry forward taxable income in excess of calendar year
distributions and pay a 4% excise tax on this income. We recorded a
provision for federal excise taxes of approximately zero and
Dividend Reinvestment Plan
We maintain an “opt out” dividend reinvestment plan for our common
stockholders. As a result, if we declare a dividend, stockholders’ cash
dividends will be automatically reinvested in additional shares of our
common stock, unless they specifically “opt out” of the dividend
reinvestment plan so as to receive cash dividends. With respect to our
dividends paid to stockholders for the years ended
Share Repurchase Plan
In 2008, our Board of Directors approved a share repurchase plan under
which we may repurchase up to 2.5% of our outstanding shares of common
stock from time to time in open market or privately negotiated
transactions. In 2009, our Board of Directors approved an extension and
increase to the plan which authorized us to repurchase up to an
additional 2.5% of our outstanding shares of common stock. In
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that from time to time we may purchase shares of our common stock in the open market at prevailing market prices.
Conference Call
Both the teleconference and webcast will be available for replay by
PRIOR TO THE WEBCAST/TELECONFERENCE, AN INVESTOR PRESENTATION THAT COMPLEMENTS THE EARNINGS CONFERENCE CALL WILL BE POSTED TO BLACKROCK KELSO CAPITAL’S WEBSITE WITHIN THE PRESENTATIONS SECTION OF THE INVESTOR RELATIONS PAGE (http://www.blackrockkelso.com/InvestorRelations/Presentations/index.htm).
BlackRock Kelso Capital Corporation Statements of Assets and Liabilities (Unaudited) |
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December 31, 2011 |
December 31, 2010 |
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Assets: | ||||||||||||
Investments at fair value: | ||||||||||||
Non-controlled, non-affiliated investments (amortized cost of $959,635,127 and $822,763,237) |
$ | 890,691,404 |
$ |
707,262,774 |
||||||||
Non-controlled, affiliated investments (amortized cost of $59,633,913 and $80,424,668) |
71,035,799 | 77,376,201 | ||||||||||
Controlled investments (amortized cost of $78,601,629 and $82,489,600) | 87,225,239 | 95,446,691 | ||||||||||
Total investments at fair value (amortized cost of $1,097,870,669 and $985,677,505) |
1,048,952,442 | 880,085,666 | ||||||||||
Cash and cash equivalents | 7,478,904 | 1,344,159 | ||||||||||
Cash denominated in foreign currency (cost of $300,380 and $798,560) | 300,089 | 816,712 | ||||||||||
Receivable for investments sold | 2,734,705 | 5,316,189 | ||||||||||
Interest receivable | 16,474,871 | 10,763,333 | ||||||||||
Dividends receivable | 8,493,799 | 9,849,927 | ||||||||||
Prepaid expenses and other assets | 6,740,517 | 7,431,688 | ||||||||||
Total Assets | $ | 1,091,175,327 | $ | 915,607,674 | ||||||||
Liabilities: | ||||||||||||
Payable for investments purchased | $ | 421,597 | $ | 2,726,437 | ||||||||
Unrealized depreciation on forward foreign currency contracts | 1,106,241 | 368,445 | ||||||||||
Debt | 343,000,000 | 170,000,000 | ||||||||||
Interest payable | 5,592,184 | 256,084 | ||||||||||
Dividend distributions payable | 19,040,586 | 23,222,287 | ||||||||||
Base management fees payable | 5,293,755 | 4,355,021 | ||||||||||
Incentive management fees payable | 11,878,159 | 14,614,098 | ||||||||||
Accrued administrative services | 144,625 | 80,164 | ||||||||||
Other accrued expenses and payables | 3,689,331 | 1,505,214 | ||||||||||
Total Liabilities | 390,166,478 | 217,127,750 | ||||||||||
Net Assets: | ||||||||||||
Common stock, par value $.001 per share, 200,000,000 common shares authorized, 74,636,091 and 73,531,317 issued and 73,210,584 and 72,569,638 outstanding |
74,636 | 73,531 | ||||||||||
Paid-in capital in excess of par | 983,082,373 | 994,200,522 | ||||||||||
Distributions in excess of net investment income | (26,165,703 | ) | (4,029,341 | ) | ||||||||
Accumulated net realized loss | (194,505,823 | ) | (180,403,836 | ) | ||||||||
Net unrealized depreciation | (51,999,958 | ) | (105,935,052 | ) | ||||||||
Treasury stock at cost, 1,425,507 and 961,679 shares held | (9,476,676 | ) | (5,425,900 | ) | ||||||||
Total Net Assets | 701,008,849 | 698,479,924 | ||||||||||
Total Liabilities and Net Assets | $ | 1,091,175,327 | $ | 915,607,674 | ||||||||
Net Asset Value Per Share | $ | 9.58 | $ | 9.62 | ||||||||
BlackRock Kelso Capital Corporation |
Three months ended December 31, 2011 |
Three months ended December 31, 2010 |
Year ended December 31, 2011 |
Year ended
December 31, 2010 |
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Investment Income: | ||||||||||||||||||||||
From non-controlled, non-affiliated investments: | ||||||||||||||||||||||
Interest | $ | 29,449,310 | $ | 20,091,445 | $ | 112,416,047 | $ | 92,169,396 | ||||||||||||||
Dividends | 649,428 | 1,513,096 | 2,928,196 | 3,101,377 | ||||||||||||||||||
Other income | 739,177 | 24,754 | 776,677 | 62,254 | ||||||||||||||||||
From non-controlled, affiliated investments: | ||||||||||||||||||||||
Interest | 1,680,307 |
1,680,754 |
5,735,682 |
6,403,192 | ||||||||||||||||||
Dividends | 21,898 |
340,418 |
1,128,207 |
1,284,148 | ||||||||||||||||||
Other Income | 149,040 |
|
149,040 |
— | ||||||||||||||||||
From controlled investments: | ||||||||||||||||||||||
Interest | 3,249,435 | 1,342,146 | 8,318,689 | 2,800,470 | ||||||||||||||||||
Other Income | 50,000 | 50,000 | 50,000 | 50,000 | ||||||||||||||||||
Total investment income | 35,988,595 | 25,042,613 | 131,502,538 | 105,870,837 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||
Base management fees | 5,293,755 | 4,355,022 | 19,841,258 | 16,877,854 | ||||||||||||||||||
Interest and credit facility fees | 4,658,465 | 1,663,213 | 16,561,095 | 6,233,689 | ||||||||||||||||||
Incentive management fees | 11,878,159 | 14,614,098 | 11,878,159 | 15,108,049 | ||||||||||||||||||
Amortization of debt issuance costs | 628,558 | 666,557 | 2,499,742 | 2,136,038 | ||||||||||||||||||
Professional fees | 560,174 | 87,110 | 1,905,782 | 877,930 | ||||||||||||||||||
Investment advisor expenses | 603,284 | 444,690 | 1,779,734 | 1,622,957 | ||||||||||||||||||
Administrative services | 307,633 | 81,984 | 1,173,754 | 763,876 | ||||||||||||||||||
Insurance | 136,153 | 123,408 | 486,759 | 581,428 | ||||||||||||||||||
Director fees | 108,295 | 104,581 | 417,564 | 385,750 | ||||||||||||||||||
Other | 515,809 | 249,993 | 2,079,900 | 1,134,155 | ||||||||||||||||||
Total expenses | 24,690,285 | 22,390,656 | 58,623,747 | 45,721,726 | ||||||||||||||||||
Net investment income before excise taxes | 11,298,310 | 2,651,957 | 72,878,791 | 60,149,111 | ||||||||||||||||||
Excise tax expense | — | (298,322 | ) | — | (298,322 | ) | ||||||||||||||||
Net Investment Income | 11,298,310 | 2,353,635 | 72,878,791 | 59,850,789 | ||||||||||||||||||
Realized and Unrealized Gain (Loss): | ||||||||||||||||||||||
Net realized gain (loss): | ||||||||||||||||||||||
Non-controlled, non-affiliated investments | (1,241,275 | ) | (26,397,180 | ) | (38,314,683 | ) | (53,083,081 | ) | ||||||||||||||
Non-controlled, affiliated investments | 6,051 | 667 | (4,886,347 | ) | (36,221,198 | ) | ||||||||||||||||
Controlled investments | (7,923,526 | ) | — | (7,901,154 | ) | 2,515 | ||||||||||||||||
Foreign currency | 1,704,988 | (1,101,957 | ) | 1,208,808 | (934,959 | ) | ||||||||||||||||
Net realized gain (loss) | (7,453,762 | ) | (27,498,470 | ) | (49,893,376 | ) | (90,236,723 | ) | ||||||||||||||
Net change in unrealized appreciation or |
||||||||||||||||||||||
Non-controlled, non-affiliated investments | 294,194 | 23,279,906 | 44,577,066 | 32,535,681 | ||||||||||||||||||
Non-controlled, affiliated investments | 4,586,672 | 2,864,581 | 15,033,972 | 39,491,418 | ||||||||||||||||||
Controlled investments | 633,029 | 1,343,868 | (4,915,504 | ) | 30,459,019 | |||||||||||||||||
Foreign currency translation | (2,308,686 | ) | 72,454 | (760,440 | ) | (550,623 | ) | |||||||||||||||
Net change in unrealized appreciation or depreciation | 3,205,209 | 27,560,809 | 53,935,094 | 101,935,495 | ||||||||||||||||||
Net realized and unrealized gain (loss) | (4,248,553 | ) | 62,339 | 4,041,718 | 11,698,772 | |||||||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 7,049,757 | $ | 2,415,974 | $ | 76,920,509 | $ | 71,549,561 | ||||||||||||||
Net Investment Income Per Share | $ | 0.15 | $ | 0.03 | $ | 1.00 | $ | 0.96 | ||||||||||||||
Earnings Per Share | $ | 0.10 | $ | 0.03 | $ | 1.05 | $ | 1.14 | ||||||||||||||
Basic and Diluted Weighted-Average Shares Outstanding | 73,248,862 | 70,867,464 | 73,037,357 | 62,663,002 | ||||||||||||||||||
Dividends Declared Per Share | $ | 0.26 | $ | 0.32 | $ | 1.10 | $ | 1.28 | ||||||||||||||
Supplemental Information
The Company reports its financial results on a GAAP basis; however, management believes that evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP basis financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and, for the reasons described below, considers them to be effective indicators, for both management and investors, of the Company’s financial performance over time. The Company’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
The Company records its liability for incentive management fees as it
becomes legally obligated to pay them, based on a hypothetical
liquidation at the end of each reporting period. The Company’s
obligation to pay incentive management fees with respect to any fiscal
quarter is based on a formula that reflects the Company’s results over a
trailing four-fiscal quarter period ending with the current fiscal
quarter. The Company is legally obligated to pay the amount resulting
from the formula less any cash payments of incentive management fees
during the prior three quarters. The formula’s requirement to reduce the
incentive management fee by amounts paid with respect to incentive fees
in the prior three quarters has caused the Company’s incentive fee
expense to become, and currently is expected to be, concentrated in the
fourth quarter of each year. Management believes that reflecting
incentive fees throughout the year, as the related investment income is
earned, is an effective measure of the Company’s profitability and
financial performance that facilitates comparison of current results
with historical results and with those of the Company’s peers. The
Company’s “as adjusted” results reflect incentive management fees based
on the formula the Company utilizes for each trailing four-fiscal
quarter period, with the formula applied to the current quarter’s
incremental earnings and without any reduction for incentive management
fees paid during the prior three quarters. The resulting amount
represents an upper limit of each quarter’s incremental incentive
management fees that the Company may become legally obligated to pay at
the end of the year. Prior year amounts are estimated in the same
manner. These estimates represent upper limits because, in any calendar
year, subsequent quarters’ investment underperformance could reduce the
incentive management fees payable by the Company with respect to prior
quarters’ operating results. The incremental incentive management fees
disclosed for a given period are not necessarily indicative of actual
full year results. Changes in the economic environment, financial
markets and other parameters used in determining such estimates could
cause actual results to differ and such differences could be material.
For a more detailed description of the Company’s incentive management
fee, please refer to the Company's Annual Report on Form 10-K for the
fiscal year ended
Computations for the periods below are derived from the Company's financial statements as follows:
Three months
ended |
Three months
ended |
|||||||||||
GAAP Basis: | ||||||||||||
Net Investment Income | $ | 11,298,310 | $ | 2,353,635 | ||||||||
Net Increase in Net Assets from Operations | 7,049,757 | 2,415,974 | ||||||||||
Less: Incremental incentive management fee expense using existing formula as applied to current period operating results |
(3,479,010 | ) | (1,763,143 | ) | ||||||||
Addback: GAAP incentive management fee expensed in the current quarter |
11,878,159 | 14,614,098 | ||||||||||
As Adjusted: | ||||||||||||
Net Investment Income | $ | 19,697,459 | $ | 15,204,590 | ||||||||
Net Increase in Net Assets from Operations | 15,448,906 | 15,266,929 | ||||||||||
Per Share Amounts, GAAP Basis: | ||||||||||||
Net Investment Income | $ | 0.15 | $ | 0.03 | ||||||||
Net Increase in Net Assets from Operations | 0.10 | 0.03 | ||||||||||
Per Share Amounts, As Adjusted: | ||||||||||||
Net Investment Income | $ | 0.27 | $ | 0.21 | ||||||||
Net Increase in Net Assets from Operations | 0.21 | 0.22 | ||||||||||
About
The Company's investment objective is to generate both current income and capital appreciation through debt and equity investments. The Company invests primarily in middle-market companies in the form of senior and junior secured and unsecured debt securities and loans, each of which may include an equity component, and by making direct preferred, common and other equity investments in such companies.
Forward-Looking Statements
This press release, and other statements that
In addition to factors previously disclosed in
BlackRock Kelso Capital’s Annual Report on Form 10-K for the year ended
Available Information
BlackRock Kelso Capital’s filings with the
1 Non-GAAP basis financial measure. See Supplemental Information on page 8.
Source:
BlackRock Kelso Capital Corporation
Investor:
Corinne
Pankovcin, 212-810-5798
or
Press:
Brian Beades,
212-810-5596