MVC Capital, Inc.
Mar 12, 2018

MVC Capital Announces First Quarter 2018 Results

PURCHASE, N.Y., March 12, 2018 (GLOBE NEWSWIRE) -- 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 first quarter ended January 31, 2018.

Operational Highlights:

Financing & Other Capital Activities

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1 $1.9 million in savings is calculated as the differential in interest expense between the 6.25% senior notes and the 7.25% senior notes over the five year term of the 6.25% notes, net of estimated offering fees and expenses. 

Financial Results

      
 Quarter Ended
(Unaudited) ($ in thousands except for per share data)Q1 2018Q4 2017 Q3 2017Q2 2017Q1 2017
Total operating income 5,207 5,490 7,305 3,929 3,380 
      
Management fee1,411 1,335 1,393 1,696 1,814 
Portfolio fees - asset management147 148   146  138 177 
Management fee - asset management67 67 67 49 62 
Administrative1,295 983 804 1,172 1,474 
Interest, fees and other borrowing costs3,117 2,495 2,649 2,606 2,538 
Loss on extinguishment of debt 1,783 - - -  - 
Net incentive compensation267 (1,224)5,077 985 760 
Total waiver by adviser(390)(372 )(386)(461)(491)
Tax expense0 1 0 0 1 
      
Net operating (loss) income before net realized and unrealized gains(2,490)2,057 (2,445)(2,256)(2,955)
Net increase (decrease) in net assets resulting from operations950 (4,028)23,906 3,069 4,377 
Net increase (decrease) in net assets resulting from operations per share0.05 (0.17)1.06 0.14  0.19 
Net asset value per share13.42 13.24 13.38 12.45 12.45 
           

Key Financial Metrics

For the first quarter of fiscal 2018, the Company earned $4.3 million in interest income and $891,000 in dividend and fee income, compared to $2.8 million and $609,000, respectively, for the same quarter of fiscal 2017.

The Company reported total operating income of $5.2 million for the first quarter of fiscal 2018, compared to total operating income of $3.4 million for the first quarter of fiscal 2017.  The Company reported a net operating loss of $2.5 million for the first quarter of fiscal 2018, compared to a net operating loss of $3.0 million for the same quarter in fiscal 2017. The net operating loss for the first quarter of fiscal 2018 includes $2.6 million of one-time expenses associated with the redemption of the Company's 7.25% notes.

As of January 31, 2018, the Company's net assets were $252.6 million, or $13.42 per share, compared with net assets of $279.5 million, or $13.24 per share, at the end of the prior fiscal quarter. 

As of January 31, 2018, MVC had investments in portfolio companies totaling $308.0 million and cash and cash equivalents of $61.5 million, including $5.3 million in restricted cash.

At January 31, 2018, there were no outstanding borrowings under MVC's revolving credit facility with Branch Banking and Trust Company ("BB&T") and there were no outstanding borrowings under its credit facility with Santander Bank N.A.

Dividends

On December 19, 2017, the Company's Board of Directors declared a dividend of $0.15 per share, paid on January 8, 2018 to shareholders of record on December 29, 2017.

Since implementing its dividend policy in July of 2005, MVC has paid fifty-one consecutive quarterly dividends, which have grown over time. Through January 31, 2018, dividends paid total approximately $153 million or $6.84 per share.

Subsequent Events

On February 9, 2018, FDS, Inc. repaid its $2.4 million loan in full including all accrued interest.

On February 26, 2018, in connection with the sale of U.S. Gas & Electric, Inc. (U.S. Gas), the Credit Facility with Santander Bank N.A. was amended, effective as of July 5, 2017, to exclude from collateral the U.S. Gas 9.5% second-lien callable notes due July 2025 with a face amount of approximately $40.5 million.  All other material terms of the Credit Facility remained unchanged.

On February 28, 2018, the Company committed $6.0 million in the form of a first lien project loan with an interest rate of 10% and a maturity date of August 31, 2018 to Custom Alloy, to support working capital for large orders.  The funded amount is currently $2.6 million

On March 9, the Company invested $15 million in a first lien loan at a 12% interest rate into Apex Industrial Technologies, LLC, a scalable hardware and software solutions provider that streamlines the flow of products, materials, supplies, equipment and critical parts, and provides secure, automated self-serve delivery.

MVC-G

About MVC Capital, Inc.

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

The information contained in this press release contains forward-looking statements. 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: MVC Capital's ability to deliver value to all shareholders and execute its yield investment strategy; the ability to pay and grow MVC distributions; the performance of MVC Capital's investments, including, portfolio companies in which the Company invested this past quarter; 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 is no assurance that the market price of MVC's shares, either absolutely or relative to net asset value, will increase as a result of any share repurchases, or that the program will enhance shareholder value over the long-term. There can be no assurance that MVC will achieve its investment objective.

Contact:

Investor Relations

Jackie Rothchild
MVC Capital
914.510.9400

Or

Jeffrey Goldberger / Allison Soss
KCSA Strategic Communications
212.896.1249 / 212.896.1267

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Source: MVC Capital, Inc.

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