UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
|
Date of Report (Date of earliest event reported): August 9, 2016 |
FS Investment Corporation
(Exact name of Registrant as specified in its charter)
|
Maryland (State or other jurisdiction of incorporation) |
814-00757 (Commission File Number) |
26-1630040 (I.R.S. Employer Identification No.) |
|
201 Rouse Boulevard Philadelphia, Pennsylvania (Address of principal executive offices) |
19112 (Zip Code) |
| Registrant’s telephone number, including area code: (215) 495-1150 |
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| □ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| □ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| □ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| □ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On August 9, 2016, FS Investment Corporation (the “Company”) issued a press release (the “Press Release”) providing an overview of its operating results for the quarter ended June 30, 2016.
A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 7.01. | Regulation FD Disclosure. |
On August 9, 2016, in the Press Release, the Company announced a regular cash distribution of $0.22275 per share, which will be paid on or about October 4, 2016, to stockholders of record as of the close of business on September 21, 2016. The Press Release is incorporated herein by reference.
The Company will make available under the “Presentations and Reports” page within the “Investor Relations” section of the Company’s website (www.fsinvestmentcorp.com) a presentation providing an overview of the Company’s operating results for the quarter ended June 30, 2016 in advance of its previously announced August 10, 2016 conference call.
Forward-Looking Statements
This Current Report on Form 8-K may contain certain forward-looking statements, including statements with regard to future events or the future performance or operation of the Company. Words such as “believes,” “expects,” “projects” and “future” or similar expressions are intended to identify 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 to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, risks associated with possible disruption in the Company’s operations or the economy generally due to terrorism or natural disasters, future changes in laws or regulations and conditions in the Company’s operating area, and the price at which shares of common stock may trade on the New York Stock Exchange. Some of these factors are enumerated in the filings the Company makes with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| Item 9.01. | Financial Statements and Exhibits. |
(d)
Exhibits.
EXHIBIT NUMBER |
DESCRIPTION | |
99.1 |
Press Release, dated August 9, 2016. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FS Investment Corporation | |||
| Date: August 9, 2016 | By: | /s/ Stephen S. Sypherd | |
| Stephen S. Sypherd | |||
Vice President | |||
EXHIBIT INDEX
EXHIBIT NUMBER |
DESCRIPTION | |
99.1 |
|
Exhibit 99.1
FSIC Reports Second Quarter 2016 Financial Results and
Declares Regular Distribution for Third Quarter
PHILADELPHIA, PA, August 9, 2016 – FS Investment Corporation (NYSE: FSIC), a publicly traded business development company focused on providing customized credit solutions to private middle market U.S. companies, announced its operating results for the quarter ended June 30, 2016, and announced that its board of directors has declared its third quarter 2016 regular distribution.
Financial Highlights for the Quarter Ended June 30, 20161
| ● | Net investment income of $0.23 per share, compared to $0.39 per share for the quarter ended June 30, 2015. | |
| ● | Adjusted net investment income of $0.24 per share, compared to $0.35 per share for the quarter ended June 30, 2015.2 | |
| ● | Total net realized loss on investments of $0.03 per share and total net change in unrealized appreciation on investments of $0.37 per share, compared to a total net realized loss on investments of $0.10 per share and a total net change in unrealized depreciation on investments of $0.07 per share for the quarter ended June 30, 2015. | |
| ● | Paid cash distributions to stockholders totaling $0.22275 per share.3 | |
| ● | Total purchases of $389.8 million versus $413.0 million of sales and repayments, resulting in net proceeds of $23.2 million, which were primarily used to reduce borrowings. | |
| ● | Net asset value of $9.18 per share, compared to $8.82 per share as of March 31, 2016. |
“Investor appetite for corporate credit improved in the second quarter of 2016 amid generally positive U.S. economic data and rising commodity prices,” said Michael C. Forman, Chairman and Chief Executive Officer of FSIC. “As market sentiment and asset prices improved during the quarter, our primary focus was on leveraging the capital base of the Franklin Square BDC platform and the resources and credit expertise of GSO / Blackstone to improve the liquidity and operating efficiencies of our portfolio companies.”
Declaration of Regular Distribution for Third Quarter 2016
FSIC’s board of directors has declared a regular cash distribution for the third quarter of $0.22275 per share, which will be paid on or about October 4, 2016, to stockholders of record as of the close of business on September 21, 2016.
| 1 |
Summary Consolidated Results
| Three Months Ended | ||||||||||||
| (dollars in thousands, except per share data) (all per share amounts are basic and diluted)1 | June 30, 2016 | March 31, 2016 | June 30, 2015 | |||||||||
| Total investment income | $ | 110,211 | $ | 103,063 | $ | 147,731 | ||||||
| Net investment income | 56,840 | 49,938 | 93,524 | |||||||||
| Net increase (decrease) in net assets resulting from operations | 140,157 | (12,097 | ) | 51,706 | ||||||||
| Net investment income per share | $ | 0.23 | $ | 0.21 | $ | 0.39 | ||||||
| Adjusted net investment income per share2 | $ | 0.24 | $ | 0.21 | $ | 0.35 | ||||||
| Total net realized and unrealized gain (loss) on investments per share | $ | 0.34 | $ | (0.26 | ) | $ | (0.17 | ) | ||||
| Net increase (decrease) in net assets resulting from operations (Earnings per Share) | $ | 0.58 | $ | (0.05 | ) | $ | 0.21 | |||||
| Stockholder distributions per share3 | $ | 0.22275 | $ | 0.22275 | $ | 0.22275 | ||||||
| Net asset value per share at period end | $ | 9.18 | $ | 8.82 | $ | 9.89 | ||||||
| Weighted average shares outstanding | 243,435,681 | 242,847,016 | 241,653,069 | |||||||||
| Shares outstanding, end of period | 243,488,590 | 242,847,016 | 241,702,625 | |||||||||
| (dollar amounts in thousands) | As of June 30, 2016 | As of December 31, 2015 | ||||||
| Total fair value of investments | $ | 3,934,628 | $ | 4,029,371 | ||||
| Total assets | 4,041,192 | 4,149,663 | ||||||
| Total stockholders’ equity | 2,234,322 | 2,208,928 |
Portfolio Highlights as of June 30, 2016
| ● | Total fair value of investments was $3.9 billion. |
| ● | Core investment strategies4 represented 97% of the portfolio by fair value as of June 30, 2016, including 85% from direct originations and 12% from opportunistic investments. Broadly syndicated/other investments represented the remaining 3% of the portfolio by fair value. |
| ● | Gross portfolio yield prior to leverage (based on amortized cost and excluding non-income producing assets)5 was 10.2%, compared to 10.4% as of March 31, 2016. |
| ● | Total commitments to direct originations (including unfunded commitments) made during the second quarter of 2016 was $398.9 million in 8 companies, all of which were existing portfolio companies. |
| ● | As of June 30, 2016, approximately 0.3% of investments were on non-accrual based on fair value.6 |
| 2 |
Total Portfolio Activity
| Three Months Ended | ||||||||||||
| (dollar amounts in thousands) | June 30, 2016 | March 31, 2016 | June 30, 2015 | |||||||||
| Purchases | $ | 389,802 | $ | 55,617 | $ | 608,796 | ||||||
| Sales and redemptions | (413,039 | ) | (169,128 | ) | (747,209 | ) | ||||||
| Net portfolio activity | $ | (23,237 | ) | $ | (113,511 | ) | $ | (138,413 | ) | |||
| Portfolio Data | As of June 30, 2016 | As of December 31, 2015 | ||||||
| Total fair value of investments | $ | 3,934,628 | $ | 4,029,371 | ||||
| Number of Portfolio Companies | 108 | 114 | ||||||
| Average Annual EBITDA of Portfolio Companies | $ | 112,900 | $ | 113,200 | ||||
| Weighted Average Purchase Price of Debt Investments (as a % of par) | 98.1 | % | 98.3 | % | ||||
% of Investments on Non-Accrual (based on fair value)6 | 0.3 | % | — | |||||
| Asset Class (based on fair value) | ||||||||
| Senior Secured Loans — First Lien | 53 | % | 54 | % | ||||
| Senior Secured Loans — Second Lien | 15 | % | 15 | % | ||||
| Senior Secured Bonds | 5 | % | 6 | % | ||||
| Subordinated Debt | 11 | % | 11 | % | ||||
| Collateralized Securities | 2 | % | 2 | % | ||||
| Equity/Other | 14 | % | 12 | % | ||||
| Portfolio Composition by Strategy (based on fair value)4 | ||||||||
| Direct Originations | 85 | % | 85 | % | ||||
| Opportunistic | 12 | % | 12 | % | ||||
| Broadly Syndicated/Other | 3 | % | 3 | % | ||||
| Interest Rate Type (based on fair value) | ||||||||
| % Variable Rate | 65.5 | % | 66.8 | % | ||||
| % Fixed Rate | 20.6 | % | 21.6 | % | ||||
| % Income Producing Equity/Other Investments | 3.7 | % | 4.1 | % | ||||
| % Non-Income Producing Equity/Other Investments | 10.2 | % | 7.5 | % | ||||
| Yields (based on amortized cost)5 | ||||||||
| Gross Portfolio Yield Prior to Leverage | 9.3 | % | 9.8 | % | ||||
| Gross Portfolio Yield Prior to Leverage— Excluding Non-Income Producing Assets | 10.2 | % | 10.4 | % | ||||
| 3 |
Direct Origination Activity
| Three Months Ended | ||||||||||||
| (dollar amounts in thousands) | June 30, 2016 | March 31, 2016 | June 30, 2015 | |||||||||
| Total Commitments (including unfunded commitments) | $ | 398,896 | $ | 43,598 | $ | 494,661 | ||||||
| Exited Investments (including partial paydowns) | (386,600 | ) | (113,615 | ) | (623,554 | ) | ||||||
| Net Direct Originations | $ | 12,296 | $ | (70,017 | ) | $ | (128,893 | ) | ||||
| Direct Originations Portfolio Data | As of June 30, 2016 |
As of December 31, 2015 | ||||||
| Total Fair Value of Direct Originations | $ | 3,346,315 | $ | 3,434,588 | ||||
| Number of Portfolio Companies | 68 | 71 | ||||||
| Average Annual EBITDA of Portfolio Companies | $ | 65,400 | $ | 61,500 | ||||
| Average Leverage Through Tranche of Portfolio Companies — Excluding Equity/Other and Collateralized Securities | 5.4 | x | 4.9 | x | ||||
| % of Investments on Non-Accrual (based on Fair Value)6 | 0.1 | % | — | |||||
| Three Months Ended | ||||||||||||
| New Direct Originations by Asset Class (including unfunded commitments) | June 30, 2016 | March 31, 2016 | June 30, 2015 | |||||||||
| Senior Secured Loans — First Lien | 76 | % | 20 | % | 64 | % | ||||||
| Senior Secured Loans — Second Lien | 6 | % | — | 24 | % | |||||||
| Senior Secured Bonds | 2 | % | — | — | ||||||||
| Subordinated Debt | 3 | % | 26 | % | 4 | % | ||||||
| Collateralized Securities | — | — | — | |||||||||
| Equity/Other | 13 | % | 54 | % | 8 | % | ||||||
| Average New Direct Origination Commitment Amount | $ | 49,862 | $ | 8,720 | $ | 29,098 | ||||||
| Weighted Average Maturity for New Direct Originations | 7/21/2020 | 11/23/2025 | 9/6/2020 | |||||||||
| Gross Portfolio Yield Prior to Leverage (based on amortized cost) of New Direct Originations Funded during Period5 | 9.1 | % | 6.0 | % | 9.1 | % | ||||||
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of New Direct Originations Funded during Period — Excluding Non-Income Producing Assets5 | 10.8 | % | 10.9 | % | 9.9 | % | ||||||
| Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Direct Originations Exited during Period5 | 10.3 | % | 9.0 | % | 10.7 | % | ||||||
Leverage and Liquidity as of June 30, 2016
●
Debt to equity ratio was 76%, based on $1.71 billion in total debt outstanding and stockholders’ equity of $2.23 billion. FSIC’s weighted average effective interest rate (including the effect of non-usage fees) was 3.98%.
●
Cash and foreign currency of approximately $44.2 million and availability under its financing arrangements of $242.1 million, subject to borrowing base and other limitations.
●
Seventeen unfunded debt investments with aggregate unfunded commitments of $161.1 million and one unfunded equity investment with an unfunded commitment of $217 thousand.
| 4 |
Conference Call Information
FSIC will host a conference call at 10:00 a.m. (Eastern Time) on Wednesday, August 10, 2016, to discuss its second quarter 2016 results. All interested parties are welcome to participate. You can access the conference call by dialing (877) 443-2408 and using the conference ID 51807210 approximately 10 minutes prior to the call. The conference call will also be webcast, which can be accessed from the Investor Relations section of FSIC’s website at www.fsinvestmentcorp.com under Presentations and Reports.
A replay of the call will be available for a period of 30 days following the call by visiting the Investor Relations section of FSIC’s website at www.fsinvestmentcorp.com under Presentations and Reports.
Supplemental Information
An investor presentation of financial information will be made available prior to the call in the Investor Relations section of FSIC’s website at www.fsinvestmentcorp.com under Presentations and Reports.
About FS Investment Corporation
FS Investment Corporation (NYSE: FSIC) is a publicly traded business development company (“BDC”) focused on providing customized credit solutions to private middle market U.S. companies. FSIC seeks to invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market companies to achieve the best risk-adjusted returns for its investors. In connection with its debt investments, FSIC may receive equity interests such as warrants or options.
FSIC is advised by FB Income Advisor, LLC, an affiliate of Franklin Square Capital Partners (“Franklin Square”), and is sub-advised by GSO / Blackstone Debt Funds Management LLC, an affiliate of GSO Capital Partners (“GSO”). GSO, with approximately $84.7 billion in assets under management as of June 30, 2016, is the credit platform of Blackstone, one of the world’s leading managers of alternative investments. For more information, please visit www.fsinvestmentcorp.com.
About Franklin Square
Franklin Square is a leading manager of alternative investment funds designed to enhance investors’ portfolios by providing access to asset classes, strategies and asset managers that typically have been available to only the largest institutional investors. The firm’s funds offer “endowment-style” investment strategies that help construct diversified portfolios and manage risk. Franklin Square strives not only to maximize investment returns but also to set the industry standard for best practices by focusing on transparency, investor protection and education for investment professionals and their clients.
Founded in Philadelphia in 2007, Franklin Square quickly established itself as a leader in the world of alternative investments by introducing innovative credit-based income funds, including the industry’s first non-traded BDC. The firm managed approximately $17.0 billion in assets as of March 31, 2016, and is the largest manager of BDC assets with approximately $15.4 billion in BDC assets as of March 31, 2016. For more information, please visit www.franklinsquare.com.
Forward-Looking Statements and Important Disclosure Notice
This announcement may contain certain forward-looking statements, including statements with regard to future events or the future performance or operations of FSIC. Words such as “believes,” “expects,” “projects,” and “future” or similar expressions are intended to identify 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 to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, risks associated with possible disruption in FSIC’s operations or the economy generally due to terrorism or natural disasters, future changes in laws or regulations and conditions in FSIC’s operating area, and the price at which shares of FSIC’s common stock trade on the New York Stock Exchange. Some of these factors are enumerated in the filings FSIC makes with the SEC. FSIC undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| 5 |
The press release above contains summaries of certain financial and statistical information about FSIC. The information contained in this press release is summary information that is intended to be considered in the context of FSIC’s SEC filings and other public announcements that FSIC may make, by press release or otherwise, from time to time. FSIC undertakes no duty or obligation to update or revise the information contained in this press release. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSIC, or information about the market, as indicative of FSIC’s future results.
Individual investors and endowments may have different investment horizons, liquidity needs and risk tolerances. In addition, fees that may be incurred by an investor in a fund sponsored by Franklin Square may be different than fees incurred by an endowment investing in similar assets as those in which the funds invest.
Other Information
The information in this press release is summary information only and should be read in conjunction with FSIC’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2016, which FSIC filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 9, 2016, as well as FSIC’s other reports filed with the SEC. A copy of FSIC’s quarterly report on Form 10-Q for the quarterly period ended June 30, 2016, and FSIC’s other reports filed with the SEC can be found on FSIC’s website at www.fsinvestmentcorp.com and the SEC’s website at www.sec.gov.
Certain Information About Distributions
The determination of the tax attributes of FSIC’s distributions is made annually as of the end of its fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination as to the tax attributes of the distributions made on a quarterly basis may not be representative of the actual tax attributes for a full year. FSIC intends to update stockholders quarterly with an estimated percentage of its distributions that resulted from taxable ordinary income. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.
The timing and amount of any future distributions on FSIC’s shares of common stock are subject to applicable legal restrictions and the sole discretion of its board of directors. There can be no assurance as to the amount or timing of any such future distributions.
FSIC may fund its cash distributions to stockholders from any sources of funds legally available to it, including proceeds from the sale of shares of FSIC’s common stock, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets and dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies. FSIC has not established limits on the amount of funds it may use from available sources to make distributions. There can be no assurance that FSIC will be able to pay distributions at a specific rate or at all.
Contact Information:
Investors:
Dominic Mammarella
Director,
Investor Relations
dominic.mammarella@franklinsquare.com
215-220-4280
Media:
Franklin Square Media Team
media@franklinsquare.com
215-495-1174
| 6 |
Income Statement
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Investment income | ||||||||||||||||
| From non-controlled/unaffiliated investments: | ||||||||||||||||
| Interest income | $ | 92,319 | $ | 115,773 | $ | 191,771 | $ | 219,712 | ||||||||
| Fee income | 15,335 | 25,721 | 16,977 | 30,417 | ||||||||||||
| Dividend income | — | 5,519 | — | 5,519 | ||||||||||||
| From non-controlled/affiliated investments: | ||||||||||||||||
| Interest income | 1,112 | 718 | 2,079 | 718 | ||||||||||||
| Fee income | 633 | — | 633 | — | ||||||||||||
| Dividend income | — | — | 224 | — | ||||||||||||
| From controlled/affiliated investments: | ||||||||||||||||
| Interest income | 812 | — | 1,590 | — | ||||||||||||
| Total investment income | 110,211 | 147,731 | 213,274 | 256,366 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Management fees | 17,574 | 19,103 | 35,386 | 38,141 | ||||||||||||
| Capital gains incentive fees | — | (8,355 | ) | — | (4,607 | ) | ||||||||||
| Subordinated income incentive fees | 14,210 | 21,271 | 26,695 | 35,176 | ||||||||||||
| Administrative services expenses | 900 | 882 | 2,096 | 1,873 | ||||||||||||
| Accounting and administrative fees | 235 | 285 | 463 | 561 | ||||||||||||
| Interest expense | 18,064 | 19,048 | 36,958 | 36,347 | ||||||||||||
| Directors’ fees | 274 | 229 | 503 | 456 | ||||||||||||
| Other general and administrative expenses | 2,114 | 1,744 | 4,395 | 3,246 | ||||||||||||
| Total operating expenses | 53,371 | 54,207 | 106,496 | 111,193 | ||||||||||||
| Net investment income | 56,840 | 93,524 | 106,778 | 145,173 | ||||||||||||
| Realized and unrealized gain/loss | ||||||||||||||||
| Net realized gain (loss) on investments: | ||||||||||||||||
| Non-controlled/unaffiliated investments | (7,648 | ) | (24,174 | ) | (21,427 | ) | (20,889 | ) | ||||||||
| Net realized gain (loss) on foreign currency | 94 | (1,007 | ) | 178 | (897 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on investments: | ||||||||||||||||
| Non-controlled/unaffiliated investments | 86,922 | (24,301 | ) | 32,219 | (13,712 | ) | ||||||||||
| Non-controlled/affiliated investments | 1,919 | 8,050 | 8,286 | 9,395 | ||||||||||||
| Controlled/affiliated investments | 705 | — | 2,338 | — | ||||||||||||
| Net change in unrealized gain (loss) on foreign currency | 1,325 | (386 | ) | (312 | ) | 3,062 | ||||||||||
| Total net realized and unrealized gain (loss) on investments | 83,317 | (41,818 | ) | 21,282 | (23,041 | ) | ||||||||||
| Net increase (decrease) in net assets resulting from operations | $ | 140,157 | $ | 51,706 | $ | 128,060 | $ | 122,132 | ||||||||
| Per share information—basic and diluted | ||||||||||||||||
| Net increase (decrease) in net assets resulting from operations (Earnings per Share) | $ | 0.58 | $ | 0.21 | $ | 0.53 | $ | 0.51 | ||||||||
| Weighted average shares outstanding | 243,435,681 | 241,653,069 | 243,141,349 | 241,370,252 | ||||||||||||
| 7 |
Balance Sheet
| June 30, 2016 | ||||||||
| (Unaudited) | December 31, 2015 | |||||||
| Assets | ||||||||
| Investments, at fair value | ||||||||
| Non-controlled/unaffiliated investments (amortized cost—$3,845,357 and $4,027,950, respectively) | $ | 3,669,909 | $ | 3,820,283 | ||||
| Non-controlled/affiliated investments (amortized cost—$125,334 and $91,248, respectively) | 174,729 | 132,357 | ||||||
| Controlled/affiliated investments (amortized cost—$86,909 and $75,988, respectively) | 89,990 | 76,731 | ||||||
| Total investments, at fair value (amortized cost—$4,057,600 and $4,195,186, respectively) | 3,934,628 | 4,029,371 | ||||||
| Cash | 43,197 | 80,807 | ||||||
| Foreign currency, at fair value (cost—$977 and $1,175, respectively) | 973 | 1,180 | ||||||
| Receivable for investments sold and repaid | 11,772 | 66 | ||||||
| Interest receivable | 48,945 | 34,600 | ||||||
| Deferred financing costs | 857 | 1,420 | ||||||
| Prepaid expenses and other assets | 820 | 729 | ||||||
| Total assets | $ | 4,041,192 | $ | 4,148,173 | ||||
| Liabilities | ||||||||
| Payable for investments purchased | $ | 1,303 | $ | — | ||||
| Credit facilities payable | 57,854 | 34,625 | ||||||
| Unsecured notes payable (net of deferred financing costs of $1,318 and $1,490, respectively) | 989,642 | 988,274 | ||||||
| Repurchase agreement payable | 650,000 | 800,000 | ||||||
| Stockholder distributions payable | 54,236 | 54,093 | ||||||
| Management fees payable | 17,574 | 18,415 | ||||||
| Subordinated income incentive fees payable | 14,210 | 13,374 | ||||||
| Administrative services expense payable | 898 | 946 | ||||||
| Interest payable | 19,837 | 22,061 | ||||||
| Directors’ fees payable | 225 | 282 | ||||||
| Other accrued expenses and liabilities | 1,091 | 7,175 | ||||||
| Total liabilities | 1,806,870 | 1,939,245 | ||||||
| Commitments and contingencies | — | — | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | ||||||
| Common stock, $0.001 par value, 450,000,000 shares authorized, 243,488,590 and 242,847,016 shares issued and outstanding, respectively | 243 | 243 | ||||||
| Capital in excess of par value | 2,270,010 | 2,264,345 | ||||||
| Accumulated undistributed net realized gain/loss on investments and gain/loss on foreign currency | (66,997 | ) | (45,748 | ) | ||||
| Accumulated undistributed (distributions in excess of) net investment income | 146,393 | 147,946 | ||||||
| Net unrealized appreciation (depreciation) on investments and unrealized gain/loss on foreign currency | (115,327 | ) | (157,858 | ) | ||||
| Total stockholders’ equity | 2,234,322 | 2,208,928 | ||||||
| Total liabilities and stockholders’ equity | $ | 4,041,192 | $ | 4,148,173 | ||||
| Net asset value per share of common stock at period end | $ | 9.18 | $ | 9.10 | ||||
| 8 |
Non-GAAP Financial Measures
This press release contains certain financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). FSIC uses these non-GAAP financial measures internally in analyzing financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing results and trends and in comparing FSIC’s financial results with other BDCs.
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with FSIC’s consolidated financial statements prepared in accordance with GAAP. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures has been provided in this press release, and investors are encouraged to review the reconciliation.
Reconciliation of Non-GAAP Financial Measures1
| Three Months Ended | ||||||||||||
| June 30, 2016 | March 31, 2016 | June 30, 2015 | ||||||||||
| GAAP net investment income per share | $ | 0.23 | $ | 0.21 | $ | 0.39 | ||||||
| Plus capital gains incentive fees per share | — | — | (0.03 | ) | ||||||||
| Plus excise taxes per share | — | — | — | |||||||||
| Plus one-time expenses per share7 | 0.00 | 0.00 | — | |||||||||
| Adjusted net investment income per share2 | $ | 0.24 | $ | 0.21 | $ | 0.35 | ||||||
| 1) | Per share data was derived by using the weighted average shares of FSIC’s common stock outstanding during the applicable period. Per share numbers may not sum due to rounding. | |
| 2) | Adjusted net investment income is a non-GAAP financial measure. Adjusted net investment income is presented for all periods as GAAP net investment income excluding (i) the accrual for the capital gains incentive fee for realized and unrealized gains; (ii) excise taxes; and (iii) certain non-recurring operating expenses that are one-time in nature and are not representative of ongoing operating expenses incurred during FSIC’s normal course of business (referred to herein as one-time expenses). FSIC uses this non-GAAP financial measure internally in analyzing financial results and believes that the use of this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends and in comparing its financial results with other business development companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of GAAP net investment income to adjusted net investment income can be found above. | |
| 3) | The per share data for distributions reflects the amount of distributions paid on July 5, 2016, to stockholders of record as of the close of business on June 22, 2016. | |
| 4) | See FSIC’s quarterly report on Form 10-Q for the quarter ended June 30, 2016, for a description of FSIC’s investment strategies. | |
| 5) | Gross portfolio yield represents the expected annualized yield of FSIC’s investment portfolio based on the composition of the portfolio as of the applicable date. | |
| 6) | Interest income is recorded on an accrual basis. See FSIC’s quarterly report on Form 10-Q for the quarter ended June 30, 2016, for a description of FSIC’s revenue recognition policy. | |
| 7) | During the three months ended June 30, 2016, FSIC incurred one-time expenses of $469 relating to breakage fees associated with the partial paydown of the JPM Facility. These costs were partially offset by a $94 reduction in FSIC’s subordinated incentive fee on income due to the reduction in pre-incentive fee net investment income associated with this one-time expense. |
| 9 |