Exhibit 99.1
Medley Capital Corporation Announces Fourth Quarter and Fiscal Year Ended September 30, 2016 Financial Results
New York, NY – December 8, 2016
Financial Results for the Quarter and Year Ended September 30, 2016
Fourth Quarter Highlights
| · | Declared a dividend of $0.22 per share |
| · | Net investment income of $0.23 per share |
| · | Net asset value (NAV) of $9.49 per share |
Post Quarter-end Highlights
| · | The Board of Directors approved an extension of the current $50 million share repurchase program through December 31, 2017 |
Portfolio Investments
The total value of our investments was $914.2 million at September 30, 2016. During the quarter ended September 30, 2016, the Company had net repayments of $116.0 million. As of September 30, 2016, the Company had investments in securities of 58 portfolio companies with approximately 64.8% consisting of senior secured first lien investments, 23.4% consisting of senior secured second lien investments, 5.8% in unsecured debt and 6.0% in equities / warrants. As of September 30, 2016, the weighted average yield based upon the cost basis of our portfolio investments, excluding cash and cash equivalents, was 11.8%.
Results of Operations: Three Months Ended September 30, 2016
For the three months ended September 30, 2016, the Company reported net investment income per share and net loss per share of $0.23 and $0.06, respectively, calculated based upon the weighted average shares outstanding. As of September 30, 2016, the Company’s NAV was $9.49 per share.
Investment Income
For the three months ended September 30, 2016, gross investment income was $27.2 million and consisted of $24.5 million of portfolio interest income, $0.7 million of dividend income, net of provisional taxes, and $2.0 million of fee income.
Expenses
For the three months ended September 30, 2016, total expenses net of management and incentive fee waivers were $14.8 million and consisted of the following: base management fees net of waiver of $4.6 million, interest and financing expenses of $7.7 million, professional fees of $0.5 million, administrator expenses of $1.0 million, directors fees of $0.1 million, and other general and administrative related expenses of $0.9 million.
Net Investment Income
For the three months ended September 30, 2016, the Company reported net investment income of $12.4 million, or $0.23 on a weighted average per share basis.
Net Realized and Unrealized Gains/Losses
For the three months ended September 30, 2016, the Company reported a net realized loss of $15.7 million and net unrealized appreciation, including the provision for income taxes on unrealized depreciation on investments, of $0.1 million.
Results of Operations: Year Ended September 30, 2016
The Company reported net investment income and net loss of $0.97 per share and $0.50 per share, respectively, calculated based upon the weighted average shares outstanding, for the year ended September 30, 2016.
Investment Income
For the year ended September 30, 2016, gross investment income was $120.7 million and consisted of $112.2 million of portfolio interest income, $1.0 million of dividend income, net of provisional taxes, and $7.5 million of fee income.
Expenses
For the year ended September 30, 2016, total expenses net of management and incentive fee waivers were $67.2 million and consisted of the following: base management fees net of waiver of $19.3 million, incentive fees net of waiver of $8.0 million, interest and financing expenses of $30.3 million, professional fees of $2.3 million, administrator expenses of $3.9 million, directors fees of $0.5 million, and other general and administrative related expenses of $2.9 million.
Net Investment Income
For the year ended September 30, 2016, the Company reported net investment income of $53.6 million, or $0.97 on a weighted average per share basis.
Net Realized and Unrealized Gains/Losses
For the year ended September 30, 2016, the Company reported a net realized loss of $39.4 million and net unrealized depreciation, including the provision for income taxes on unrealized depreciation on investments, of $42.2 million.
Liquidity and Capital Resources
As of September 30, 2016, the Company had a cash balance of $104.5 million and $14.0 million of debt outstanding under its $343.5 million senior secured revolving credit facility.
The Company also had $174.0 million of debt outstanding under its senior secured term loan credit facility, $150.0 million outstanding in SBA-guaranteed debentures, $40.0 million outstanding in aggregate principal amount of 7.125% senior notes due 2019, $74.0 million outstanding in aggregate principal amount of 6.5% senior notes due 2021 and $63.5 million outstanding in aggregate principal amount of 6.125% senior notes due 2023.
Dividend Declaration
On November 3, 2016, the Company’s board of directors declared a quarterly dividend of $0.22 per share payable on December 23, 2016 to stockholders of record at the close of business on November 23, 2016.
Share Repurchase Program
During the quarter ended September 30, 2016, 289,200 shares were repurchased at a weighted average price of $7.50, including commission, with a total cost of approximately $2.2 million. Since inception of the stock repurchase program, the Company has repurchased a total of 4.3 million shares at a weighted average price of $8.00, including commission, with a total cost of approximately $34.1 million.
On December 7, 2016, the Board authorized an extension of the current $50 million share repurchase program through December 31, 2017.
Webcast/Conference Call
The Company will host an earnings conference call and audio webcast at 10:00 a.m. (Eastern Time) on Friday, December 9, 2016.
All interested parties may participate in the conference call by dialing (888) 637-5728 approximately 5-10 minutes prior to the call, international callers should dial (484) 747-6636. Participants should reference Medley Capital Corporation and the Conference ID: 7308028. Following the call you may access a replay of the event via audio webcast. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's website, http://www.medleycapitalcorp.com. To listen to the live call, please go to the Company's website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the Company's website.
Financial Statements
Medley Capital Corporation
Consolidated Statements of Assets and Liabilities
(in thousands, except share and per share data)
| As of | ||||||||
| September 30, 2016 | September 30, 2015 | |||||||
| ASSETS | ||||||||
| Investments at fair value | ||||||||
| Non-controlled/non-affiliated investments (amortized cost of $813,814 and $1,175,785, respectively) | $ | 767,302 | $ | 1,131,894 | ||||
| Controlled investments (amortized cost of $189,077 and $86,756, respectively) | 136,882 | 74,198 | ||||||
| Affiliated investments (amortized cost of $10,000 and $10,000, respectively) | 10,000 | 10,000 | ||||||
| Total investments at fair value | 914,184 | 1,216,092 | ||||||
| Cash and cash equivalents | 104,485 | 15,714 | ||||||
| Interest receivable | 8,982 | 9,543 | ||||||
| Fees receivable | 1,404 | 1,390 | ||||||
| Other assets | 893 | 556 | ||||||
| Receivable for dispositions and investments sold | 689 | 579 | ||||||
| Deferred offering costs | 243 | 208 | ||||||
| Total assets | $ | 1,030,880 | $ | 1,244,082 | ||||
| LIABILITIES | ||||||||
| Revolving credit facility payable (net of debt issuance costs of $3,590 and $4,160, respectively) | $ | 10,410 | $ | 188,540 | ||||
| Term loan payable (net of debt issuance costs of $2,197 and $2,437, respectively) | 171,803 | 171,563 | ||||||
| Notes payable (net of debt issuance costs of $4,630 and $2,325, respectively) | 172,883 | 101,175 | ||||||
| SBA debentures payable (net of debt issuance costs of $3,525 and $4,206, respectively) | 146,475 | 145,794 | ||||||
| Management and incentive fees payable | 4,559 | 9,963 | ||||||
| Accounts payable and accrued expenses | 2,663 | 2,504 | ||||||
| Deferred tax liability | 2,004 | 1,797 | ||||||
| Interest and fees payable | 1,714 | 1,314 | ||||||
| Administrator expenses payable | 990 | 1,001 | ||||||
| Deferred revenue | 370 | 402 | ||||||
| Due to affiliate | 90 | 109 | ||||||
| Total liabilities | $ | 513,961 | $ | 624,162 | ||||
| NET ASSETS | ||||||||
| Common stock, par value $0.001 per share, 100,000,000 common shares authorized, 54,474,211 and 56,337,152 common shares issued and outstanding, respectively | $ | 54 | $ | 56 | ||||
| Capital in excess of par value | 705,326 | 718,241 | ||||||
| Accumulated undistributed net investment income | 10,812 | 20,352 | ||||||
| Accumulated net realized gain/(loss) from investments | (99,000 | ) | (60,626 | ) | ||||
| Net unrealized appreciation/(depreciation) on investments, net of deferred taxes | (100,273 | ) | (58,103 | ) | ||||
| Total net assets | 516,919 | 619,920 | ||||||
| Total liabilities and net assets | $ | 1,030,880 | $ | 1,244,082 | ||||
| NET ASSET VALUE PER SHARE | $ | 9.49 | $ | 11.00 | ||||
Medley Capital Corporation
Consolidated Statements of Operations
(in thousands, except share and per share data)
| For the three months ended September 30 | For the years ended September 30 | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| INVESTMENT INCOME: | ||||||||||||||||
| Interest from investments | ||||||||||||||||
| Non-controlled/non-affiliated investments: | ||||||||||||||||
| Cash | $ | 21,155 | $ | 30,957 | $ | 98,057 | $ | 125,023 | ||||||||
| Payment-in-kind | 1,862 | 2,389 | 8,010 | 8,293 | ||||||||||||
| Affiliated investments: | ||||||||||||||||
| Cash | 167 | 167 | 667 | 1,139 | ||||||||||||
| Payment-in-kind | - | - | - | 190 | ||||||||||||
| Controlled investments: | ||||||||||||||||
| Cash | 44 | 837 | 950 | 2,031 | ||||||||||||
| Payment-in-kind | 1,234 | 228 | 4,531 | 1,670 | ||||||||||||
| Total interest income | 24,462 | 34,578 | 112,215 | 138,346 | ||||||||||||
| Dividend income, net of provisional taxes ($512 and $144, respectively) | 713 | - | 1,047 | 107 | ||||||||||||
| Interest from cash and cash equivalents | 16 | 1 | 32 | 6 | ||||||||||||
| Fee income | 2,004 | 2,028 | 7,455 | 10,737 | ||||||||||||
| Total investment income | 27,195 | 36,607 | 120,749 | 149,196 | ||||||||||||
| EXPENSES: | ||||||||||||||||
| Base management fees | 4,589 | 5,574 | 19,470 | 22,450 | ||||||||||||
| Incentive fees | 1,633 | 4,388 | 11,492 | 18,234 | ||||||||||||
| Interest and financing expenses | 7,706 | 6,766 | 30,277 | 25,531 | ||||||||||||
| Administrator expenses | 990 | 921 | 3,915 | 4,107 | ||||||||||||
| General and administrative | 848 | 535 | 2,336 | 1,932 | ||||||||||||
| Professional fees | 450 | 588 | 2,277 | 2,865 | ||||||||||||
| Directors fees | 147 | 146 | 544 | 579 | ||||||||||||
| Insurance | 100 | 136 | 494 | 562 | ||||||||||||
| Expenses before management and incentive fee waivers | 16,463 | 19,054 | 70,805 | 76,260 | ||||||||||||
| Management fee waiver | (31 | ) | - | (143 | ) | - | ||||||||||
| Incentive fee waiver | (1,633 | ) | - | (3,504 | ) | - | ||||||||||
| Total expenses net of management and incentive fee waivers | 14,799 | 19,054 | 67,158 | 76,260 | ||||||||||||
| NET INVESTMENT INCOME | 12,396 | 17,553 | 53,591 | 72,936 | ||||||||||||
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: | ||||||||||||||||
| Net realized gain/(loss) from investments | (15,684 | ) | (42,282 | ) | (39,383 | ) | (60,910 | ) | ||||||||
| Net unrealized appreciation/(depreciation) on investments | (426 | ) | 7,414 | (42,257 | ) | (26,723 | ) | |||||||||
| Change in provision for deferred taxes on unrealized (appreciation)/depreciation on investments | 486 | 717 | 87 | (61 | ) | |||||||||||
| Net gain/(loss) on investments | (15,624 | ) | (34,151 | ) | (81,553 | ) | (87,694 | ) | ||||||||
| NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | $ | (3,228 | ) | $ | (16,598 | ) | $ | (27,962 | ) | $ | (14,758 | ) | ||||
| WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS | $ | 0.06 | $ | (0.29 | ) | $ | (0.50 | ) | $ | (0.26 | ) | |||||
| PER COMMON SHARE | ||||||||||||||||
| WEIGHTED AVERAGE - BASIC AND DILUTED NET INVESTMENT INCOME | ||||||||||||||||
| PER COMMON SHARE | $ | 0.23 | $ | 0.31 | $ | 0.97 | $ | 1.27 | ||||||||
| WEIGHTED AVERAGE COMMON STOCK OUTSTANDING | ||||||||||||||||
| - BASIC AND DILUTED | 54,747,189 | 57,032,056 | 55,399,646 | 57,624,779 | ||||||||||||
| DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.22 | $ | 0.30 | $ | 1.12 | $ | 1.27 | ||||||||
ABOUT MEDLEY CAPITAL CORPORATION
Medley Capital Corporation is a closed-end, externally managed business development company ("BDC") that trades on the New York Stock Exchange (NYSE: MCC). Medley Capital Corporation's investment objective is to generate current income and capital appreciation by lending to privately-held middle market companies, primarily through directly originated transactions, to help these companies expand their businesses, refinance and make acquisitions. Our portfolio generally consists of senior secured first lien loans and senior secured second lien loans. In many of our investments, we receive warrants or other equity participation features, which we believe will increase the total investment returns. Medley Capital Corporation is externally managed by MCC Advisors LLC, which is an investment adviser registered under the Investment Advisers Act of 1940, as amended. For additional information, please visit Medley Capital Corporation at www.medleycapitalcorp.com.
ABOUT MCC ADVISORS LLC
MCC Advisors LLC is a subsidiary of Medley Management Inc. (NYSE: MDLY). Medley is a credit-focused asset management firm offering yield solutions to retail and institutional investors. Medley's national direct origination franchise, with over 85 people, is a premier provider of capital to the middle market in the U.S. Medley has over $5 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE: MCC) and Sierra Income Corporation, as well as private investment vehicles. Over the past 14 years, we have provided in excess of $6 billion capital to over 350 companies across 35 industries in North America. For additional information, please visit Medley Management Inc. atwww.mdly.com.
Medley LLC, the operating company of Medley Management Inc., has outstanding bonds which trade on the NYSE under the symbol (NYSE: MDLX). Medley Capital Corporation (NYSE: MCC) has outstanding bonds which trade on the NYSE under the symbols (NYSE: MCQ), (NYSE: MCV), and (NYSE: MCX).
FORWARD-LOOKING STATEMENTS
Statements included herein may contain "forward-looking statements". Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of assumptions, risks and uncertainties, which change over time. Actual results may differ materially from those anticipated in any forward-looking statements as a result of a number of factors, including those described from time to time in filings by the Company with the Securities and Exchange Commission. Except as required by law, the Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
SOURCE: Medley Capital Corporation
Investor Relations Contact:
Sam Anderson
Head of Capital Markets & Risk Management
Medley Management Inc.
212.759.0777
Media Contact:
Liz Bruce
Fitzroy Communications
212.498.9197