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FULL CIRCLE CAPITAL CORP
Symbol	U : FULL
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Full Circle Capital Corporation Announces Second Quarter Fiscal 2013 Earnings

2013-02-11 16:26 ET - News Release

Net Investment Income Increases to $0.22 Per Share, Up 10% Quarter-Over-Quarter

Announces Monthly Distributions of $0.077 per Share for a Total of $0.231 Per Share for Fourth Fiscal Quarter 2013, Equal to Annualized Distribution Rate of $0.924 Per Share

RYE BROOK, N.Y. -- (Business Wire)

Full Circle Capital Corporation (Nasdaq: FULL) (the “Company”) today announced its financial results for the second quarter of fiscal 2013 ended December 31, 2012.

Financial Highlights for the Second Quarter of Fiscal 2013

Net asset value was $8.03 per share at December 31, 2012.
Total investment income was $3.1 million, including income from fees, dividends and other sources of $0.5 million.
Net investment income was $1.5 million, or $0.22 per share.
Monthly distributions of $0.077 per share were paid on November 15, 2012, December 14, 2012 and January 15, 2013, totaling $0.23 per share for the quarter.
Net realized losses were $(3.2) million, or $(0.49) per share, and net unrealized gains were $1.3 million, or $0.20 per share, and combined with net investment income, resulted in a net decrease in net assets from operations of $(0.4) million, or $(0.06) per share.
Total portfolio investments at December 31, 2012 were $77.6 million (excluding U.S. treasury bills of $22.0 million), compared to $75.5 million (excluding U.S. treasury bills of $25.0 million) at September 30, 2012.
Weighted average portfolio interest rate was 12.55% at December 31, 2012.
New originations were $3.9 million, consisting of a new debt facility to SOLEX Fine Foods, LLC. Additional funding to existing borrowers totaled $1.6 million (excluding regular borrowing under revolvers).
At December 31, 2012, 88% of portfolio company investments were first lien senior secured loans.
At December 31, 2012, debt outstanding was $20.0 million consisting of $16.6 million drawn under the Company’s $35.0 million senior credit facility and $3.4 million of senior unsecured notes.
On November 27, 2012 the Company raised $10.1 million of net equity capital through a public offering of 1.35 million common shares priced at $7.90 per share.

On February 5, 2013, the Board of Directors declared monthly distributions for the fourth quarter of fiscal 2013 as follows:

Record Date

Payment Date

Per Share Amount

April 30, 2013

May 15, 2013

$0.077

May 31, 2013

June 14, 2013

$0.077

June 28, 2013

July 15, 2013

$0.077

These distributions equate to a $0.924 annualized distribution rate, or a current annualized yield of 11.9%, based on the closing price of the Company’s common stock of $7.76 per share on February 8, 2013.

Management Commentary

“Net investment income per share increased 10% sequentially to $0.22, marking the second consecutive quarter of such growth. While growing net investment income, we have continued to increase our investment portfolio which totaled $77.6 million at quarter end, the largest level since our IPO in 2010,” said John Stuart, Chairman and Chief Executive Officer of Full Circle Capital Corp. “Our primary strategy of investing in first lien senior secured loans to smaller and lower middle-market companies with a desirable yield continues to produce highly competitive portfolio metrics. We now have debt investments in 18 companies with first lien senior secured loans comprising 88% of the total investment portfolio. The weighted average yield on the portfolio was 12.55% for the quarter, within our current target range. Our positions are further supported by a loan-to-value ratio of 59%, with floating rate flexibility in 84% of our investments.”

“With the capital raised during the quarter, we have additional resources to continue to expand our investment portfolio. Originations and additional funding to existing borrowers totaled $5.5 million for the second quarter and subsequent to the end of the quarter we added, net of payoffs, a $2.0 million investment to our portfolio. Our flexible uni-tranche lending solutions continue to attract quality credit opportunities allowing us to remain highly selective in the current market environment.”

Second Quarter Fiscal 2013 Results

The Company’s net asset value at December 31, 2012 was $8.03 per share. During the quarter, the Company generated $2.6 million of interest income, of which 100% was paid in cash. Income from fees, dividends and other sources totaled $0.5 million. The Company recorded net investment income of $1.5 million, or $0.22 per share. Net realized losses were $(3.2) million, or $(0.49) per share, and unrealized gains were $1.3 million, or $0.20 per share, both primarily related to the disposition of one investment. Net decrease in net assets from operations was $(0.4) million, or $(0.06) per share. Per share amounts for the quarter ended December 31, 2012 are based on approximately 6.7 million weighted average shares outstanding.

During the quarter, the Company originated a $3.9 million new loan facility, which was fully funded at closing. Additional funding to existing borrowers, excluding regular borrowing under revolvers, was $1.6 million during the quarter.

At December 31, 2012, the Company’s portfolio included investments in 21 companies, of which 18 were debt investments. The average portfolio company debt investment at December 31, 2012 was $4.0 million. The weighted average interest rate on investments was 12.55%. At fair value, 88% of portfolio investments were first lien loans, 4% were second lien loans and 8% were equity investments. Approximately 84% of the debt investment portfolio, at fair value, bore interest at floating rates. The loan-to-value ratio on the Company’s loans was 59% at December 31, 2012 compared to 62% at September 30, 2012.

Subsequent Events

On January 31, 2013 the Company received a full payoff of its senior secured term loan to The Selling Source, LLC, receiving $2.4 million in principal, interest and fees. On February 1, 2013, the Company invested $4.0 million in a new senior secured term loan to The Selling Source, LLC, bearing interest at 12.50% and maturing February 1, 2017.

Conference Call Details

Management will host a conference call to discuss these results on Tuesday, February 12, 2013 at 10:00 a.m. ET. To participate in the conference call, please call 866-305-6438 (domestic call-in) or 706-679-7161 (international call-in) and reference code # 96405426.

A live webcast of the conference call and the accompanying slide presentation will be available at http://ir.fccapital.com/CorporateProfile.aspx?iid=4151676. All participants should call or access the website approximately 10 minutes before the conference begins.

A telephone replay of the conference call will be available from 1:00 p.m. ET on February 12, 2013 until 11:59 p.m. ET on February 14, 2013 by calling 855-859-2056 (domestic) or 404-537-3406 (international) and entering confirmation # 96405426. An archived replay of the conference call and slide presentation will also be available in the investor relations section of the company’s website.

About Full Circle Capital Corporation

Full Circle Capital Corporation (www.fccapital.com) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Full Circle lends to and invests in senior secured loans and, to a lesser extent, mezzanine loans and equity securities issued by smaller and lower middle-market companies that operate in a diverse range of industries. Full Circle’s investment objective is to generate both current income and capital appreciation through debt and equity investments. For additional information visit the company’s web site www.fccapital.com.

Forward-Looking Statements

This press release contains forward-looking statements which relate to future events or Full Circle's future performance or financial condition. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results 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 Full Circle's filings with the Securities and Exchange Commission. Full Circle undertakes no duty to update any forward-looking statements made herein.


FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

	December 31, 2012			June 30, 2012
	(Unaudited)			(Audited)
Assets
Control Investments at Fair Value (Cost of $18,137,713 and
$6,639,648, respectively)	$	18,570,697		$	6,777,511
Affiliate Investments at Fair Value (Cost of $11,296,481 and
$6,802,017, respectively)		9,282,442			5,112,142
Non-Control/Non-Affiliate Investments at Fair Value (Cost of
$72,151,382 and $85,181,617, respectively)		71,765,827			82,957,117
Total Investments at Fair Value (Cost of $101,585,576 and
$98,623,282, respectively)		99,618,966			94,846,770

Cash		304,077			639,149
Deposit with Broker		2,250,000			2,350,000
Interest Receivable		848,630			902,711
Principal Receivable		251,751			513,372
Dividends Receivable		72,493			-
Due from Portfolio Investment		364,535			11,140
Receivable for Investments Sold		1,126,196			-
Prepaid Expenses		107,717			43,053
Other Assets		10,550			25,499
Deferred Offering Expenses		-			67,685
Deferred Credit Facility Fees		100,000			50,000
Total Assets		105,054,915			99,449,379

Liabilities
Due to Affiliate		710,556			580,353
Accounts Payable		19,337			115,741
Accrued Liabilities		47,455			79,651
Due to Broker		22,000,733			22,500,041
Dividends Payable		582,842			478,892
Interest Payable		100,479			142,518
Other Liabilities		759,692			140,458
Accrued Offering Expenses		-			19,697
Line of Credit		16,622,598			18,544,660
Distribution Notes		3,404,583			3,404,583
Total Liabilities		44,248,275			46,006,594

Net Assets	$	60,806,640		$	53,442,785
Components of Net Assets
Common Stock, par value $0.01 per share
(100,000,000 authorized; 7,569,382 and 6,219,382 issued
and outstanding, respectively)	$	75,694		$	62,194
Paid-in Capital in Excess of Par		67,420,152			57,455,232
Distributions in Excess of Net Investment Income		(500,122	)		(122,763	)
Accumulated Net Realized Losses		(4,222,474	)		(175,366	)
Accumulated Net Unrealized Losses		(1,966,610	)		(3,776,512	)
Net Assets	$	60,806,640		$	53,442,785
Net Asset Value Per Share	$	8.03		$	8.59


FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

		Three Months Ended						Six Months Ended
		December 31,						December 31,
		2012			2011			2012			2011
Investment Income
Interest Income from Non-Control/Non-Affiliate Investments	$	1,974,071		$	2,104,779		$	3,994,055		$	3,930,042
Interest Income from Affiliate Investments		280,567			-			560,508			234,864
Interest Income from Control Investments		319,411			227,071			598,584			254,644
Dividend Income from Control Investments		72,493			1,823			106,590			1,823
Other Income from Non-Control/Non-Affiliate Investments		384,553			64,992			528,580			376,449
Other Income from Affiliate Investments		56,004			-			59,585			54,086
Other Income from Control Investments		12,500			-			25,000			105,000
Total Investment Income		3,099,599			2,398,665			5,872,902			4,956,908

Operating Expenses
Management Fee		345,126			300,690			679,162			586,650
Incentive Fee		365,430			274,674			673,362			646,276
Total Advisory Fees		710,556			575,364			1,352,524			1,232,926

Allocation of Overhead Expenses		84,552			89,207			141,308			174,892
Sub-Administration Fees		50,000			78,115			123,429			156,229
Officers’ Compensation		75,160			71,629			150,354			117,553
Total Costs Incurred Under Administration Agreement		209,712			238,951			415,091			448,674

Directors’ Fees		33,125			26,125			61,750			54,250
Interest Expense		438,587			244,405			835,082			366,965
Professional Services Expense		109,902			93,806			275,063			314,679
Bank Fees		5,230			3,285			8,320			6,966
Other		126,837			118,089			221,177			203,258
Total Gross Operating Expenses		1,633,949			1,300,025			3,169,007			2,627,718

Management Fee Waiver and Expense Reimbursement		-			-			-			(313,792	)
Total Net Operating Expenses		1,633,949			1,300,025			3,169,007			2,313,926

Net Investment Income		1,465,650			1,098,640			2,703,895			2,642,982
Net Change in Unrealized Gain (Loss) on Investments		1,292,589			(846,865	)		1,809,902			(917,680	)
Net Realized Gain (Loss) on Investments		(3,186,441	)		766			(4,047,108	)		126,572
Net Increase (Decrease) in Net Assets Resulting
from Operations	$	(428,202	)	$	252,541		$	466,689		$	1,851,874

Earnings (Loss) per Common Share Basic and Diluted	$	(0.06	)	$	0.04		$	0.07		$	0.30
Net Investment Income per Common Share Basic and Diluted	$	0.22		$	0.18		$	0.42		$	0.43
Weighted Average Shares of Common Share
Outstanding Basic and Diluted		6,732,969			6,219,382			6,476,175			6,219,382


FULL CIRCLE CAPITAL CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Unaudited)


	Three months ended			Three months ended			Six months ended				Six months ended
	December 31, 2012			December 31, 2011			December 31, 2012				December 31, 2011
Per Share Data ¹ :
Net asset value at beginning of period	$	8.51		$	9.11		$	8.59		$	9.08
Dilution from offering ²		(0.17	)		-			(0.17	)		-
Offering costs		(0.01	)		-			(0.01	)		-
Net investment income		0.22			0.18			0.42			0.43
Change in unrealized gain (loss)		0.20			(0.14	)		0.28			(0.15	)
Realized gain (loss)		(0.49	)		-			(0.62	)		0.02
Dividends declared		(0.23	)		(0.23	)		(0.46	)		(0.46	)
Net asset value at end of period	$	8.03		$	8.92		$	8.03		$	8.92


			¹				Financial highlights are based on weighted average shares outstanding.

			²				Dilution from offering is based on the change in net asset value from the secondary offering on November 27, 2012.

Contacts:

Company:
Full Circle Capital Corporation
John E. Stuart, CEO
914-220-6300
jstuart@fccapital.com
or
Investor Relations:
LHA
Stephanie Prince/Jody Burfening
212-838-3777
sprince@lhai.com

Source: Full Circle Capital Corporation