Exhibit 99.1
![]() | Contacts: Carl J. Crosetto GSC Group 212-884-6192 Michael H. Yip GSC Group 212-884-6216 |
GSC Investment Corp. Announces Second Quarter 2009 Financial Results
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NEW YORK, October 14, 2008 – GSC Investment Corp. (NYSE:GNV), a business development company, today announced results for the second quarter ended August 31, 2008.
Second Quarter 2009 Highlights
· | Net investment income of $3.5 million or $0.42 per share |
· | Declared regular dividend of $0.39 per share |
· | Net asset value of $11.05 per share |
Operating Results
For the quarter ended August 31, 2008, GSC Investment Corp. reported net investment income of $3.5 million or $0.42 per share for the quarter. Net investment income was offset by a net loss on investments of $6.0 million or $0.73 per share, resulting in a net decrease in net assets resulting from operations of $2.6 million or $0.31 per share for the quarter. Net asset value was $11.05 per share as of August 31, 2008.
“While we are disappointed by the unrealized losses in the portfolio, it is a testament to the fundamental strength of our strategy that, in the midst of unprecedented price declines and illiquidity in the corporate debt market, we were able to fully support our quarterly dividend of $0.39 per share out of net investment income,” said CEO Seth M. Katzenstein.
“We are mindful of the continued stress in the economy and have worked to diversify our investment portfolio to insulate it from credit events associated with any single company or industry,” said Mr. Katzenstein. “And we continue to closely monitor the performance of all our portfolio companies.”
Portfolio and Investment Activity
As of August 31, 2008, the value of the Company’s investment portfolio was $153.8 million. The overall portfolio composition consisted of 17.2% first lien term loans,
32.3% second lien term loans, 19.8% senior secured notes, 13.7% unsecured notes, 16.7% subordinated notes of GSCIC CLO and 0.3% equity/limited partnership interests.
The Company had one portfolio investment that was being accounted for on a non-accrual basis as a result of filing for bankruptcy during the quarter. All other portfolio investments were performing.
During the second quarter, GSC Investment Corp. made four investments in an aggregate amount of $9.2 million consisting of $6.4 million in new portfolio companies and $2.8 million in existing portfolio companies. For the quarter, the Company had $6.0 million in aggregate amount of exits and repayments, resulting in net investments of $3.2 million in aggregate amount.
“In today's challenging environment, we will continue to be selective and only pursue investments that are high in the capital structure and offer an attractive risk-adjusted return,” said Mr. Katzenstein.
As of August 31, 2008, the weighted average current yield on the Company’s first lien term loans, second lien term loans, senior secured notes, unsecured notes and the GSCIC CLO subordinated notes were 7.8%, 9.9%, 11.6% , 12.2% and 20.2%, respectively, which results in an aggregate weighted average current yield of 11.9%.
As of August 31, 2008, 42%, or $53.7 million, of the Company’s interest-bearing portfolio was fixed rate debt with a weighted average current coupon of 11.6% and 58%, or $74.1 million, of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 5.7%.
Liquidity and Capital Resources
As of August 31, 2008, the Company had $66.3 million in borrowings under its $100 million revolving credit facility. Based on the fair value and characteristics of the pledged collateral, the facility had limited availability remaining. The Company’s asset coverage ratio was 238%.
Dividend
On August 19, 2008, GSC Investment Corp. declared a first quarter dividend of $0.39 per share payable on September 15, 2008, to common shareholders of record on August 19, 2008.
2009 Second Quarter Conference Call/Webcast Information
When: Wednesday, October 15, 2008, 10:00 a.m. Eastern Time (ET)
Call: Interested parties may participate by dialing (877) 627-6590 (U.S. and Canada) or (719) 325-4852 (outside U.S. and Canada).
A replay of the call will be available from 1:00 p.m. ET on Wednesday, October 15, 2008 through midnight Wednesday, October 29, 2008 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (outside U.S. and Canada), passcode for both replay numbers: 9618747.
Webcast: Interested parties may also access a simultaneous webcast of the call by going to http://ir.gscinvestmentcorp.com/events.cfm. A replay of the webcast will be available from 1:00 p.m. ET on Wednesday, October 15, 2008 through midnight Wednesday, November 5, 2008.
About GSC Investment Corp.
GSC Investment Corp. is a specialty finance company that invests primarily in leveraged loans and mezzanine debt issued by U.S. middle-market companies, high yield bonds and collateralized loan obligations. It has elected to be treated as a business development company under the Investment Company Act of 1940. The Company may also opportunistically invest in distressed debt, debt issued by non-middle market companies, and equity securities issued by middle and non-middle market companies. The Company draws upon the support and investment advice of its external manager, GSC Group, an alternative asset investment manager that focuses on complex, credit-driven strategies. GSC Investment Corp. is traded on the New York Stock Exchange under the symbol “GNV.”
GSC Investment Corp.’s filings with the Securities and Exchange Commission, press releases, earnings releases and other financial information are available on its website at www.gscinvestmentcorp.com.
Forward Looking Statements
Information provided in this press release, including valuation of certain of our investments, may contain statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking statements. These forward-looking statements generally relate to GSC Investment Corp.’s plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see “Note About Forward-Looking Statements” included in the Company’s 10-Q which has been filed with the U.S. Securities and Exchange Commission. These forward-looking statements are made only as of the date hereof, and GSC Investment Corp. undertakes no obligation to update or revise the forward-looking statements, whether as a result of the new information, future events or otherwise.
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GSC Investment Corp. | ||||||||
Consolidated Balance Sheets | ||||||||
As of | ||||||||
August 31, 2008 | February 29, 2008 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investments at fair value | ||||||||
Non-control/non-affiliate investments (amortized cost of $150,104,717 and $162,888,724, respectively) | $ | 127,857,819 | $ | 143,745,269 | ||||
Control investments (amortized cost of $30,000,000 and $30,000,000, respectively) | 25,899,553 | 29,075,299 | ||||||
Affiliate investments (amortized cost of $0 and $0, respectively) | 16,233 | 16,233 | ||||||
Total investments at fair value (amortized cost of $180,104,717 and $192,888,724, respectively) | 153,773,605 | 172,836,801 | ||||||
Cash and cash equivalents | 4,858,988 | 1,072,641 | ||||||
Cash and cash equivalents, securitization accounts | 6,264,386 | 14,580,973 | ||||||
Outstanding interest rate cap at fair value (cost of $131,000 and $131,000, respectively) | 48,408 | 76,734 | ||||||
Interest receivable | 2,885,148 | 2,355,122 | ||||||
Due from manager | - | 940,903 | ||||||
Deferred credit facility financing costs, net | 634,337 | 723,231 | ||||||
Management fee receivable | 229,736 | 215,914 | ||||||
Other assets | 135,050 | 39,349 | ||||||
Total assets | $ | 168,829,658 | $ | 192,841,668 | ||||
LIABILITIES | ||||||||
Revolving credit facility | $ | 66,250,000 | $ | 78,450,000 | ||||
Payable for unsettled trades | 4,667,738 | 11,329,150 | ||||||
Dividend payable | 3,233,640 | 3,233,640 | ||||||
Management and incentive fees payable | 2,008,875 | 943,061 | ||||||
Accounts payable and accrued expenses | 821,626 | 713,422 | ||||||
Interest and credit facility fees payable | 198,210 | 292,307 | ||||||
Due to manager | 3,982 | 11,048 | ||||||
Total liabilities | $ | 77,184,071 | $ | 94,972,628 | ||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock, par value $.0001 per share, 100,000,000 common shares | ||||||||
authorized, 8,291,384 and 8,291,384 common shares issued and outstanding, respectively | 829 | 829 | ||||||
Capital in excess of par value | 116,218,966 | 116,218,966 | ||||||
Accumulated undistributed net investment income | 639,002 | 455,576 | ||||||
Accumulated undistributed net realized gain from investments and derivatives | 1,200,493 | 1,299,858 | ||||||
Net unrealized depreciation on investments and derivatives | (26,413,703 | ) | (20,106,189 | ) | ||||
Total stockholders' equity | 91,645,587 | 97,869,040 | ||||||
Total liabilities and stockholders' equity | $ | 168,829,658 | $ | 192,841,668 | ||||
NET ASSET VALUE PER SHARE | $ | 11.05 | $ | 11.80 |
GSC Investment Corp. | ||||||||||||||||
Consolidated Statement of Operations | ||||||||||||||||
For the three months ended August 31 | For the six months ended August 31 | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
INVESTMENT INCOME | ||||||||||||||||
Interest from investments | ||||||||||||||||
Non-Control/Non-Affiliate investments | $ | 4,144,437 | $ | 5,725,983 | $ | 8,603,561 | $ | 9,406,828 | ||||||||
Control investments | 1,111,003 | - | 1,746,389 | - | ||||||||||||
Total interest income | 5,255,440 | 5,725,983 | 10,349,950 | 9,406,828 | ||||||||||||
Interest from cash and cash equivalents | 36,008 | 154,946 | 102,697 | 175,997 | ||||||||||||
Management fee income | 489,148 | - | 1,011,887 | 383,562 | ||||||||||||
Other income | 54,279 | 695 | 82,494 | 17,298 | ||||||||||||
Total investment income | 5,834,875 | 5,881,624 | 11,547,028 | 9,983,685 | ||||||||||||
EXPENSES | ||||||||||||||||
Interest and credit facility financing expenses | 623,611 | 1,450,870 | 1,456,809 | 2,171,635 | ||||||||||||
Base management fees | 705,532 | 918,157 | 1,454,031 | 1,278,645 | ||||||||||||
Professional fees | 315,130 | 321,678 | 660,589 | 864,294 | ||||||||||||
Administrator expenses | 260,946 | - | 509,344 | - | ||||||||||||
Incentive management fees | 407,027 | (18,546 | ) | 747,134 | 340,822 | |||||||||||
Insurance | 177,162 | 157,388 | 344,648 | 275,429 | ||||||||||||
Directors fees | 73,276 | 82,750 | 139,885 | 178,840 | ||||||||||||
General & administrative | 77,904 | 130,213 | 142,941 | 175,905 | ||||||||||||
Cost of acquiring management contract | - | - | - | 144,000 | ||||||||||||
Organizational expense | - | - | - | 22,868 | ||||||||||||
Expenses before manager expense waiver and reimbursement | 2,640,588 | 3,042,510 | 5,455,381 | 5,452,438 | ||||||||||||
Expense reimbursement | (260,946 | ) | (317,676 | ) | (559,059 | ) | (583,442 | ) | ||||||||
Total expenses net of expense waiver and reimbursement | 2,379,642 | 2,724,834 | 4,896,322 | 4,868,996 | ||||||||||||
NET INVESTMENT INCOME | 3,455,233 | 3,156,790 | 6,650,706 | 5,114,689 | ||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||||||||||||||||
Net realized gain/(loss) from investments | 173,681 | 424,187 | (129,819 | ) | 1,445,255 | |||||||||||
Net realized gain from derivatives | 14,364 | - | 30,454 | - | ||||||||||||
Net unrealized depreciation on investments | (6,194,371 | ) | (4,369,060 | ) | (6,279,188 | ) | (3,618,259 | ) | ||||||||
Net unrealized appreciation/(depreciation) on derivatives | (16,328 | ) | 5,973 | (28,326 | ) | (44,047 | ) | |||||||||
Net loss on investments | (6,022,654 | ) | (3,938,900 | ) | (6,406,879 | ) | (2,217,051 | ) | ||||||||
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (2,567,421 | ) | $ | (782,110 | ) | $ | 243,827 | $ | 2,897,638 | ||||||
WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS PER COMMON SHARE | $ | (0.31 | ) | $ | (0.09 | ) | $ | 0.03 | $ | 0.37 | ||||||
WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED | 8,291,384 | 8,291,384 | 8,291,384 | 7,938,438 |