Ares Capital Corporation Declares Fourth Quarter 2013 Dividend of $0.38 Per Share and Two Additional Dividends of $0.05 Per Share and Announces September 30, 2013 Financial Results
Nov 05, 2013 8:00 AM
Fourth Quarter 2013 Dividend and Two Additional Dividends Declared
HIGHLIGHTS | ||||||||||||
Financial | ||||||||||||
Q3-13 | Q3-12 | |||||||||||
(in millions, except per share data) |
Total Amount |
Per Share(1) |
Total Amount |
Per Share(1) |
||||||||
Core EPS (2) | $ | 0.48 | $ | 0.42 | ||||||||
Net investment income | $ | 126.2 | $ | 0.47 | $ | 89.5 | $ | 0.39 | ||||
Net realized gains | $ | 9.0 | $ | 0.03 | $ | 27.7 | $ | 0.12 | ||||
Net unrealized gains | $ | 5.6 | $ | 0.02 | $ | 19.4 | $ | 0.08 | ||||
GAAP net income | $ | 140.8 | $ | 0.52 | $ | 136.6 | $ | 0.59 | ||||
Dividends declared (3) | $ | 0.38 | $ | 0.43 | ||||||||
As of |
||||||||||||
(in millions, except per share data) | 2013 | 2012 | ||||||||||
Portfolio investments at fair value | $ | 7,385.3 | $ | 5,936.2 | ||||||||
Total assets | $ | 7,754.1 | $ | 6,301.2 | ||||||||
Stockholders’ equity | $ | 4,392.4 | $ | 3,908.7 | ||||||||
Net assets per share | $ | 16.35 | $ | 15.74 |
(1) | All per share amounts are basic and diluted. | |
(2) |
Basic and diluted Core EPS is a non-GAAP financial measure. Core EPS
is the net per share increase (decrease) in stockholders’ equity
resulting from operations less realized and unrealized gains and
losses, any incentive fees attributable to such net realized and
unrealized gains and losses and any income taxes related to such
realized gains. Basic and diluted GAAP EPS is the most directly
comparable GAAP financial measure. |
|
(3) |
For the three months ended |
Portfolio Activity |
||||||||
(dollar amounts in millions) | Q3-13 | Q3-12 | ||||||
Portfolio Activity During the Period: | ||||||||
Gross commitments | $ | 1,132.0 | $ | 1,022.3 | ||||
Exits of commitments | $ | 391.1 | $ | 652.6 | ||||
Portfolio as of the End of the Period: | ||||||||
Number of portfolio company investments | 175 | 153 | ||||||
Weighted average yield of debt and other income producing securities: | ||||||||
At amortized cost(3) | 10.6 | % | 11.6 | % | ||||
At fair value(4) | 10.5 | % | 11.4 | % | ||||
Weighted average yield on total investments: | ||||||||
At amortized cost(5) | 9.6 | % | 10.3 | % | ||||
At fair value(6) | 9.5 | % | 10.2 | % |
(3) | Computed as (a) annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount earned on accruing debt and other income producing securities, divided by (b) total accruing debt and other income producing securities at amortized cost. | |
(4) | Computed as (a) annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount earned on accruing debt and other income producing securities, divided by (b) total accruing debt and other income producing securities at fair value. | |
(5) | Computed as (a) annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount earned on accruing debt and other income producing securities, divided by (b) total investments at amortized cost. | |
(6) | Computed as (a) annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount earned on accruing debt and other income producing securities, divided by (b) total investments at fair value. |
THIRD QUARTER 2013 OPERATING RESULTS
For the quarter ended September 30, 2013,
Net income can vary substantially from period to period due to various factors, including the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.
As of September 30, 2013, total assets were
In the third quarter of 2013,
During the third quarter of 2013, significant new commitments included:
-
$221 million in the subordinated certificates of the SSLP to make co-investments with GE in first lien senior secured loans to eight portfolio companies in a variety of industries; -
$188 million in first lien senior secured revolving and term loans and equity of a web and mobile cloud performance testing and monitoring service provider; -
$100 million in a first lien senior secured delayed draw term loan of a gas turbine power generation facilities operator; -
$96 million in first lien senior secured revolving, delayed draw and term loans and second lien senior secured delayed draw and term loans of a dialysis provider; -
$95 million in first lien senior secured revolving and term loans of a chemical producer; -
$92 million in a first lien senior secured term loan of a gas turbine power generation facilities operator; -
$78 million in a second lien senior secured term loan of an outsourced mobile diagnostic healthcare service provider; and -
$58 million in first lien senior secured revolving, delayed draw and term loans of a provider of transportation systems products to the traffic and rail industries.
Also during the third quarter of 2013,
The fair value of Ares Capital’s portfolio investments at September 30,
2013 was
Chief Executive Officer
President Kipp deVeer added, “Our market was relatively healthy during
the third quarter, allowing us to be quite active with
PORTFOLIO QUALITY
As of September 30, 2013, the weighted average grade of the investments in our portfolio at fair value was 3.0. Also, as of September 30, 2013, loans on non-accrual status represented 2.0% of total investments at amortized cost (or 1.1% at fair value).
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2013,
In July 2013, we issued
In the third quarter of 2013, we increased total commitments to our
senior secured revolving credit facility (the “Revolving Credit
Facility”) from
THIRD QUARTER 2013 DIVIDEND
For the three months ended September 30, 2013,
RECENT DEVELOPMENTS
In October 2013, we completed a public equity offering (the
“October 2013 Offering”) pursuant to which we sold 12,650,000 shares of
common stock at a price of
In October 2013, we increased total commitments of the Revolving Credit
Facility from
In
From
From
In addition, as of October 31, 2013, we had an investment backlog and pipeline of approximately $390 million and $930 million, respectively. Investment backlog includes transactions approved by our investment adviser’s investment committee and/or for which a formal mandate, letter of intent or signed commitment has been issued, and therefore we believe are likely to close. Investment pipeline includes transactions where due diligence and analysis are in process, but no formal mandate, letter of intent or signed commitment has been issued. The consummation of any of the investments in this backlog and pipeline depends upon, among other things, one or more of the following: satisfactory completion of our due diligence investigation of the prospective portfolio company, our acceptance of the terms and structure of such investment and the execution and delivery of satisfactory transaction documentation. In addition, we may syndicate a portion of these investments and certain of these investments may result in the repayment of existing investments. We cannot assure you that we will make any of these investments or that we will syndicate any portion of these investments.
WEBCAST / CONFERENCE CALL
All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Home page of the Investor Resources section of our website at http://www.arescapitalcorp.com. Please visit the website to test your connection before the webcast. Domestic callers can access the conference call by dialing (888) 317-6003. International callers can access the conference call by dialing +1 (412) 317-6061. All callers will need to enter the Participant Elite Entry Number 6197392 followed by the # sign and reference “Ares Capital Corporation” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected. For interested parties, an archived replay of the call will be available approximately one hour after the end of the call through November 18, 2013 at 5:00 p.m. (Eastern Time) to domestic callers by dialing (877) 344-7529 and to international callers by dialing +1 (412) 317-0088. For all replays, please reference conference number 10034529. An archived replay will also be available on a webcast link located on the Home page of the Investor Resources section of our website.
ABOUT
FORWARD-LOOKING STATEMENTS
Statements included herein or on the webcast/conference call may
constitute “forward-looking statements,” which relate to future events
or our future performance or financial condition. These statements are
not guarantees of future performance, condition or results and involve a
number of risks and uncertainties. Actual results and conditions may
differ materially from those in the forward-looking statements as a
result of a number of factors, including those described from time to
time in our filings with the
AVAILABLE INFORMATION
Ares Capital Corporation’s filings with the
ARES CAPITAL CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEET | |||||||
(Amounts in thousands, except per share data) | |||||||
As of | |||||||
|
|
||||||
(unaudited) | |||||||
ASSETS | |||||||
Total investments at fair value (amortized cost of |
$ | 7,385,285 | $ | 5,924,555 | |||
Cash and cash equivalents | 135,487 | 269,043 | |||||
Interest receivable | 120,503 | 108,998 | |||||
Receivable for open trades | 13,121 | 131 | |||||
Other assets | 99,749 | 98,497 | |||||
Total assets | $ | 7,754,145 | $ | 6,401,224 | |||
LIABILITIES | |||||||
Debt | $ | 3,137,883 | $ | 2,195,872 | |||
Management and incentive fees payable | 136,196 | 131,585 | |||||
Accounts payable and other liabilities | 58,202 | 53,178 | |||||
Interest and facility fees payable | 28,860 | 30,603 | |||||
Payable for open trades | 648 | 1,640 | |||||
Total liabilities | 3,361,789 | 2,412,878 | |||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock, par value |
269 | 249 | |||||
Capital in excess of par value | 4,465,173 | 4,117,517 | |||||
Accumulated overdistributed net investment income | (7,317 | ) | (27,910 | ) | |||
Accumulated net realized loss on investments, foreign currency
transactions, |
(173,342 | ) | (202,614 | ) | |||
Net unrealized gain on investments | 107,573 | 101,104 | |||||
Total stockholders’ equity | 4,392,356 | 3,988,346 | |||||
Total liabilities and stockholders’ equity | $ | 7,754,145 | $ | 6,401,224 | |||
NET ASSETS PER SHARE | $ | 16.35 | $ | 16.04 |
ARES CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data) |
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For the three months ended | For the nine months ended | ||||||||||||
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(unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||
INVESTMENT INCOME: | |||||||||||||
Interest income from investments | $ | 169,623 | $ | 144,638 | $ | 471,769 | $ | 415,565 | |||||
Capital structuring service fees | 31,555 | 29,575 | 61,695 | 68,502 | |||||||||
Dividend income | 34,848 | 9,400 | 82,715 | 27,557 | |||||||||
Management and other fees | 5,384 | 4,707 | 14,875 | 14,151 | |||||||||
Other income | 5,391 | 2,252 | 16,925 | 10,090 | |||||||||
Total investment income | 246,801 | 190,572 | 647,979 | 535,865 | |||||||||
EXPENSES: | |||||||||||||
Interest and credit facility fees | 44,424 | 35,702 | 124,032 | 103,496 | |||||||||
Base management fees | 27,467 | 22,316 | 75,587 | 63,113 | |||||||||
Incentive fees | 35,199 | 34,139 | 88,658 | 83,258 | |||||||||
Professional fees | 3,143 | 1,923 | 10,023 | 9,157 | |||||||||
Administrative fees | 3,346 | 2,269 | 8,544 | 6,806 | |||||||||
Other general and administrative | 3,009 | 2,726 | 10,525 | 8,001 | |||||||||
Total expenses | 116,588 | 99,075 | 317,369 | 273,831 | |||||||||
NET INVESTMENT INCOME BEFORE INCOME |
130,213 | 91,497 | 330,610 | 262,034 | |||||||||
Income tax expense, including excise tax | 3,991 | 2,037 | 11,714 | 7,635 | |||||||||
NET INVESTMENT INCOME | 126,222 | 89,460 | 318,896 | 254,399 | |||||||||
REALIZED AND UNREALIZED GAINS |
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Net realized gains (losses) | 8,946 | 27,667 | 29,272 | (18,901 | ) | ||||||||
Net unrealized gains | 5,629 | 19,428 | 6,469 | 100,214 | |||||||||
Net realized and unrealized gains on investments | 14,575 | 47,095 | 35,741 | 81,313 | |||||||||
REALIZED LOSS ON EXTINGUISHMENT OF |
— | — | — | (2,678 | ) | ||||||||
NET INCREASE IN STOCKHOLDERS’ EQUITY |
$ | 140,797 | $ | 136,555 | $ | 354,637 | $ | 333,034 | |||||
BASIC AND DILUTED EARNINGS PER |
$ | 0.52 | $ | 0.59 | $ | 1.36 | $ | 1.49 | |||||
WEIGHTED AVERAGE SHARES OF COMMON |
268,312 | 233,126 | 261,120 | 224,049 |
SCHEDULE 1
Reconciliations of basic and diluted Core EPS to basic and diluted GAAP EPS
Reconciliations of basic and diluted Core EPS to basic and diluted GAAP EPS, the most directly comparable GAAP financial measure, for the three months ended September 30, 2013 and 2012 are provided below.
For the three months ended |
|||||||
2013 (unaudited) |
2012 (unaudited) |
||||||
Basic and diluted Core EPS(1) | $ | 0.48 | $ | 0.42 | |||
Net realized and unrealized gains | 0.05 | 0.20 | |||||
Incentive fees attributed to net realized and unrealized gains and losses | (0.01 | ) | (0.03 | ) | |||
Income tax expense related to realized gains | — | — | |||||
Basic and diluted GAAP EPS | $ | 0.52 | $ | 0.59 |
(1) |
Basic and diluted Core EPS is a non-GAAP financial measure. Core EPS
is the net per share increase (decrease) in stockholders’ equity
resulting from operations less realized and unrealized gains and
losses, any incentive fees attributable to such net realized and
unrealized gains and losses and any income taxes related to such
realized gains. Basic and diluted GAAP EPS is the most directly
comparable GAAP financial measure. |
Source: