Exhibit 99.1
Solar Senior Capital Announces September 30, 2012 Financial Results; Declares Monthly Dividend of $0.1175 per Share for November 2012
NEW YORK--(BUSINESS WIRE)--November 1, 2012--Solar Senior Capital Ltd. (NASDAQ: SUNS) today reported earnings of $3.8 million, or $0.40 per share, and net investment income of $3.0 million, or $0.32 per share, for the quarter ended September 30, 2012. Net asset value (NAV) per share increased to $18.60, with 100% of the portfolio performing. At December 31, 2011 NAV per share was $18.15.
The Company also announced that its Board of Directors has declared a monthly dividend of $0.1175 per share for November 2012, which will be payable on December 4, 2012 to stockholders of record on November 22, 2012. The Company expects the dividend to be paid from taxable earnings with specific tax characteristics reported to stockholders after the end of the 2012 calendar year.
HIGHLIGHTS:
At September 30, 2012:
Investment Portfolio: $235.0 million
Number of portfolio companies: 31
Net Assets: $176.7 million
Net Asset Value per share: $18.60
Portfolio Activity for the Quarter Ended September 30, 2012:
Investments made during the quarter: $27.5 million
Investments repaid and sold during the quarter: $15.4 million
Operating Results for the Quarter Ended September 30, 2012:
Net investment income: $3.0 million
Net realized and unrealized gains: $0.8 million
Net increase in net assets from operations: $3.8 million
Net investment income per share: $0.32
Net realized and unrealized gains per share: $0.08
“We are pleased with our third quarter results,” said Michael Gross, Chairman and CEO of Solar Senior Capital. “Despite the heated state of the liquid credit markets, we increased our portfolio by 6% in investments that meet our stringent underwriting guidelines and that provide further portfolio diversification. We took advantage of market strength to opportunistically sell a few investments at gains. The continued fundamental strength of our portfolio companies and the positive portfolio growth enabled us to increase our combined monthly dividends declared during the quarter by 12.5% over the previous quarter. As we deploy our approximate $80 million of available capital to reach our target leverage, we anticipate further dividend growth.”
Portfolio and Investment Activity
The total value of our investments was approximately $235.0 million and $177.7 million at September 30, 2012 and December 31, 2011, respectively. During the three months ended September 30, 2012, we originated approximately $27.5 million of new investments in three new and two existing portfolio companies. We also had sales of approximately $8.0 million from two portfolio companies and had principal repayments of approximately $7.4 million, all in excess of our cost. During the nine months ended September 30, 2012, we originated approximately $136.3 million of new investments in 15 new and 7 existing portfolio companies. We also had sales of approximately $19.7 million and principal repayments of approximately $62.2 million.
At September 30, 2012, we had investments in debt securities of 31 portfolio companies, totaling approximately $235.0 million. At December 31, 2011, we had investments in debt securities of 21 portfolio companies, totaling approximately $177.7 million. As of September 30, 2012, the weighted average yield on income producing investments in our portfolio measured at fair value was approximately 8.1%.
Results of Operations
Revenue
For the three and nine month periods ended September 30, 2012, investment income totaled $4.9 million and $14.4 million, respectively. For the three month period ended September 30, 2011 and the period January 28, 2011 through September 30, 2011, investment income totaled $2.9 million and $4.3 million, respectively. Investment income growth for each of the respective comparative periods was due to portfolio growth.
Expenses
Investment advisory and management fees for the three and nine month periods ended September 30, 2012 increased relative to the comparative periods in 2011. The increase was driven primarily from the Company’s continued net portfolio growth since its IPO in January 2011. Performance-based incentive fees also increased for the three and nine month periods ended September 30, 2012 due to the increase in net investment income and net unrealized appreciation generated from a larger and appreciating portfolio of investments.
Interest and other credit facility expenses are primarily based upon outstanding loan balances of the Credit Facility during the periods presented. That said, interest and other credit facility expenses for the three and nine month periods ended September 30, 2012 are not comparable to the same periods in 2011 since the Company had not established the Credit Facility until August 2011.
Administrative services fees and other general administrative expenses were higher for the three and nine months ended September 30, 2012 as compared to the three month period ended September 30, 2011 and the period January 28, 2011 through September 30, 2011 primarily due to generally lower operating expenses during the Company’s initial year of start-up operations.
Net Realized and Unrealized Gain on Investments
For the three and nine month periods ended September 30, 2012, net realized and unrealized gains totaled $0.8 million and $4.1 million, respectively. This compared to net realized and unrealized (losses) totaling ($4.8) million and ($4.5) million, respectively, for the comparable 2011 periods. The general increase in net realized and unrealized gains was primarily attributable to the increasing fair market values on our portfolio company investments at September 30, 2012 due to the general tightening of credit spreads and the continued strong financial health of our overall portfolio.
Liquidity and Capital Resources
At September 30, 2012 and December 31, 2011, we had cash and cash equivalents of approximately $3.6 million and $2.9 million, respectively. Cash used in operating activities for the nine months ended September 30, 2012 was approximately $38.8 million. We expect that all current liquidity needs will be met with cash flows from operations, borrowings, and other activities. As of September 30, 2012, we had approximately $80 million of capital available to reach our target leverage.
Conference Call and Webcast
The company will host an earnings conference call and audio webcast at 11:00 a.m. (Eastern Time) on Friday, November 2, 2012. All interested parties may participate in the conference call by dialing (866) 800-8652 approximately 5-10 minutes prior to the call. International callers should dial (617) 614-2705. Participants should reference Solar Senior Capital Ltd. and the participant passcode of 56627747 when prompted. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through Solar Senior Capital’s website, www.solarseniorcap.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, an archived replay of the call will be available shortly after the call on the Solar Senior Capital website.
Financial Statements and Tables
| SOLAR SENIOR CAPITAL LTD. |
| |
| CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES |
| (in thousands, except shares) |
| | | | |
| | | | |
| | September 30, 2012
(unaudited) | | December 31, 2011 |
| Assets | | | | |
Non-controlled, non-affiliated investments, at fair value (cost: $233,680 and $180,023,
respectively) | | $ | 234,951 | | $ | 177,749 |
| Cash and cash equivalents | | | 3,631 | | | 2,934 |
| Receivable for investments sold | | | 5,018 | | | 4,931 |
| Interest receivable | | | 1,446 | | | 1,687 |
| Deferred offering costs | | | 89 | | | — |
| Prepaid expenses and other receivables | | | 24 | | | 94 |
| | | | |
| Total Assets | | | 245,159 | | | 187,395 |
| | | | |
| Liabilities | | | | |
| Credit facility payable, at fair value (cost: $55,900 and $8,600, respectively) | | | 55,900 | | | 8,600 |
| Payable for investments purchased | | | 9,925 | | | 4,912 |
| Dividends payable | | | 1,121 | | | — |
| Investment advisory and management fee payable | | | 594 | | | 944 |
| Accrued performance-based incentive fees | | | 331 | | | — |
| Administrative service fees payable | | | 270 | | | 141 |
| Other accrued expenses and payables | | | 320 | | | 363 |
| | | | |
| Total Liabilities | | | 68,461 | | | 14,960 |
| | | | |
| Net Assets | | | | |
Common stock, par value $0.01 per share, 9,500,100 and 9,500,100 shares issued and outstanding,
respectively, 200,000,000 authorized | | | 95 | | | 95 |
| Paid-in capital in excess of par | | | 177,827 | | | 177,815 |
| Distributions in excess of net investment income | | | (2,463) | | | (2,625) |
| Accumulated net realized loss on investments | | | (32) | | | (576) |
| Net unrealized appreciation (depreciation) on investments | | | 1,271 | | | (2,274) |
| | | | |
| Total Net Assets | | $ | 176,698 | | $ | 172,435 |
| | | | |
| Number of shares outstanding | | | 9,500,100 | | | 9,500,100 |
| | | | |
| Net Asset Value Per Share | | $ | 18.60 | | $ | 18.15 |
| SOLAR SENIOR CAPITAL LTD. |
| |
| CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
| (in thousands, except shares) |
| | | | | | | | |
| | For the three months
ended September 30,
2012 | | For the three months
ended September 30,
2011 | | For the nine months
ended September 30,
2012 | | For the period
January 28, 2011 (1)
to September 30, 2011 |
| INVESTMENT INCOME (2): | | | | | | | | |
| Interest income | | $ | 4,890 | | $ | 2,874 | | | $ | 14,398 | | $ | 4,336 | |
| | | | | | | | |
| EXPENSES: | | | | | | | | |
| Investment advisory and management fees | | | 594 | | | 334 | | | | 1,635 | | | 490 | |
| Interest and other credit facility expenses | | | 407 | | | 52 | | | | 1,046 | | | — | |
| Performance-based incentive fees | | | 244 | | | (64 | ) | | | 743 | | | — | |
| Administrative service fee | | | 170 | | | 87 | | | | 660 | | | 206 | |
| Insurance expense | | | 102 | | | 101 | | | | 301 | | | 242 | |
| Other general and administrative expenses | | | 372 | | | 234 | | | | 892 | | | 594 | |
| | | | | | | | |
| Total expenses before debt issuance costs | | | 1,889 | | | 744 | | | | 5,277 | | | 1,532 | |
| | | | | | | | |
| Debt issuance costs | | | — | | | 2,774 | | | | 53 | | | 2,774 | |
| | | | | | | | |
| Total expenses | | | 1,889 | | | 3,518 | | | | 5,330 | | | 4,306 | |
| | | | | | | | |
| Net investment income | | | 3,001 | | | (644 | ) | | | 9,068 | | | 30 | |
| | | | | | | | |
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (2): | | | | | | | | |
| Net realized gain | | | 143 | | | 89 | | | | 544 | | | 89 | |
| Net change in unrealized gain (loss) | | | 663 | | | (4,933 | ) | | | 3,545 | | | (4,615 | ) |
| | | | | | | | |
Net realized and unrealized gain
(loss) on investments | | | 806 | | | (4,844 | ) | | | 4,089 | | | (4,526 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS | | $ | 3,807 | | $ | (5,488 | ) | | $ | 13,157 | | $ | (4,496 | ) |
| | | | | | | | |
| Earnings (loss) per share | | $ | 0.40 | | $ | (0.58 | ) | | $ | 1.38 | | $ | (0.54 | ) |
| | | | | | | | | | | | | | |
(1) Commencement of operations |
(2) From non-controlled, non-affiliated investments |
About Solar Senior Capital Ltd.
Solar Senior Capital Ltd. is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. The Company invests primarily in leveraged, middle market companies in the form of senior secured loans including first lien, unitranche, and second lien debt instruments.
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements,” which relate to future events or our future performance or financial condition. These 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 our filings with the Securities and Exchange Commission. Solar Senior Capital Ltd. undertakes no duty to update any forward-looking statements made herein.
CONTACT:
Solar Senior Capital Ltd.
Richard Pivirotto, 212-994-8543
