Continues to Scale Platform Globally with High-Yielding Portfolio
of Venture Capital-Backed Companies
MENLO PARK, Calif.--(BUSINESS WIRE)--
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the “Company” or
"TPVG"), the leading financing provider to venture growth stage
companies backed by a select group of venture capital firms in the
technology, life sciences and other high growth industries, today
announced its financial results for the second quarter ended June 30,
2014. Reflecting the growth of its high-yielding investment portfolio,
TPVG also declared a third quarter 2014 dividend of $0.32 per share.
Q2 2014 Highlights:
-
Continued scaling TPVG’s platform with $95.0 million of new debt
commitments to domestic and international venture growth stage
companies.
-
Investment portfolio growth of $62.1 million to $205.7 million of fair
value, with 75% of debt investment funding occurring in June.
-
14.6% weighted average yield for debt investments funded in Q2
resulting in an overall weighted average portfolio yield of 14.4% as
of June 30, 2014.
-
Core(1) and GAAP net investment income of $2.9 million or
$0.29 per share.
-
Strong continued portfolio growth with $163.0 million of unfunded
commitments as of June 30, 2014.
-
Held 20 warrants and 3 equity investments with a fair value of $7.7
million as of June 30, 2014.
-
Net asset value of $143.0 million or $14.49 per share, as of June 30,
2014.
-
Subsequent to quarter’s end, increased credit facility from $150
million to $200 million.
-
Paid an initial dividend of $0.09 per share on April 30, 2014, and a
second quarter dividend of $0.30 per share on June 17, 2014.
“We are proud of our performance during our first full quarter as a
publicly traded company and since our IPO in March,” said
Jim Labe
,
chief executive officer and chairman of the board of TPVG. “Our focus
continues to be on building and scaling our platform in a disciplined
manner, as we continue to capitalize on the brand, reputation, track
record and relationships of our sponsor, TriplePoint Capital.”
“We are pleased with the performance of our portfolio during the quarter
and with the continued strong global demand for debt financing from
promising, venture growth stage companies,” said
Sajal Srivastava
,
president and chief investment officer of the Company. “We are grateful
for the continued support from our select venture capital investors,
optimistic for our near term growth given our creative and
relationship-focused approach to lending and look forward to delivering
exceptional returns in a disciplined fashion to our investors.”
Portfolio and Investment Activity
During the second quarter of 2014, the Company entered into $95.0
million of new commitments, funded 10 debt investments with $61.0
million in principal value, one equity investment for $0.3 million, and
acquired warrants valued at $1.3 million. Of the $61.0 million of debt
investments funded in the second quarter, approximately $46.0 million,
or 75%, of the total debt investments, were funded during the month of
June. As a result, net investment income for the second quarter reflects
less than a full quarter benefit of these new fundings. The $61.0
million of debt investments funded in the second quarter had a weighted
average yield of approximately 14.6%, contributing to a weighted average
portfolio yield of 14.4% as of June 30, 2014, up from the weighted
average portfolio yield of 14.3% as of March 31, 2014. The Company had
no prepayment activity during the second quarter.
As of June 30, 2014, the Company had 62 investments in 21 companies. The
total cost and fair value of these investments were $204.3 million and
$205.7 million, respectively. As of June 30, 2014, one of the Company’s
customers was publicly traded.
The following table shows detailed information of the total investment
portfolio as of June 30, 2014.
|
|
|
As of June 30, 2014
|
|
(dollars in thousands)
|
|
Cost
|
|
Fair Value
|
|
Net Unrealized
Gains
|
|
Number of
Investments
|
|
Number of
Companies
|
|
Debt Investments
|
|
$
|
197,247
|
|
$
|
197,970
|
|
$
|
723
|
|
39
|
|
16
|
|
Warrants
|
|
|
4,810
|
|
|
5,498
|
|
|
688
|
|
20
|
|
20
|
|
Equity Investments
|
|
|
2,250
|
|
|
2,250
|
|
|
-
|
|
3
|
|
3
|
|
Total Investments
|
|
$
|
204,307
|
|
$
|
205,718
|
|
$
|
1,411
|
|
62
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments
As of June 30, 2014, the Company’s unfunded commitments totaled
approximately $163.0 million. Approximately $35.0 million of these
unfunded commitments are dependent upon the companies reaching certain
milestones before the debt commitment becomes available to them. Of the
approximately $163.0 million of unfunded obligations, approximately
$67.5 million expire during 2014 and approximately $95.5 million will
expire during 2015 if not drawn prior to expiration. Since these
commitments may expire without being drawn upon, unfunded commitments do
not necessarily represent future cash requirements or future earning
assets for the Company.
Signed Term Sheets
During the second quarter, TriplePoint Capital’s direct originations
platform generated approximately $57.5 million of signed, non-binding
term sheets to venture growth stage companies. All of these
opportunities are subject to a number of conditions including completion
of due diligence, negotiation of definitive documentation, and
investment committee approval, as well as compliance with TriplePoint
Capital's allocation policy. Accordingly, there is no assurance that any
or all of these transactions will be completed or assigned to the
Company even though the Company is the primary vehicle through which
TriplePoint Capital focuses its venture growth stage business.
Income Statement
For the second quarter of 2014, the Company’s investment income totaled
approximately $5.4 million, representing a weighted average yield of
14.4% on the average balance of its debt investments in the quarter.
Operating expenses for the second quarter of 2014 were approximately
$2.6 million, consisting of $0.8 million of interest expense and
amortization of deferred credit facility costs, $0.7 million of base
management fees, $0.3 million of administration agreement expenses, $0.6
million of general and administrative expenses, $0.2 million of income
incentive fees, and $7,000 of accrued capital gains incentive fees.
For the second quarter of 2014, the Company recorded net investment
income of approximately $2.9 million or $0.29 per share. The Company’s
core net investment income,(1) which excludes the impact of
the capital gains incentive fee, was also approximately $2.9 million, or
$0.29 per share.
For the second quarter of 2014, the Company’s net change in unrealized
gains on investments was approximately $36,000, or less than $0.005 per
share, consisting of $158,000 of net change in unrealized losses on
warrants and $194,000 of net change in unrealized gains on investments.
The Company had no realized gains or losses during the second quarter.
The Company’s net increase in net assets resulting from operations for
the second quarter of 2014 was approximately $2.9 million, or $0.29 per
share.
Credit Quality
The Company maintains a credit watch list with borrowers placed into one
of five categories based on management’s judgment of credit quality,
where 1 is the highest rating and all new loans are initially assigned a
rating of 2. As of June 30, 2014, the weighted average investment
ranking of the Company’s debt investment portfolio was 1.97. The
following table shows the credit rankings for the 16 companies with
which the Company has debt investments outstanding, as of June 30, 2014.
|
|
|
As of June 30, 2014
|
|
(dollars in thousands)
Category
|
|
Fair Value
|
|
Percentage of
Debt Investment Portfolio
|
|
Number of
Companies
|
|
Clear (1)
|
$
|
5,284
|
|
2.7
|
%
|
1
|
|
White (2)
|
|
192,686
|
|
97.3
|
|
15
|
|
Yellow (3)
|
|
-
|
|
-
|
|
-
|
|
Orange (4)
|
|
-
|
|
-
|
|
-
|
|
Red (5)
|
|
-
|
|
-
|
|
-
|
|
|
|
$
|
197,970
|
|
100.0
|
%
|
16
|
|
|
|
|
|
|
|
|
|
Net Asset Value
As of June 30, 2014, the Company’s net assets were approximately $143.0
million, or $14.49 per share, as compared to approximately $143.5
million, or $14.58 per share as of March 31, 2014. The difference
reflects the declaration and payment of the first quarter’s dividend in
April 2014 and the second quarter’s dividend in June 2014. The per share
calculation is based on the Company’s approximately 9.9 million shares
of common stock outstanding as of June 30, 2014.
Liquidity and Capital Resources
As of June 30, 2014, the Company had total cash of approximately $8.7
million, with available capacity of approximately $81.5 million under
its revolving credit facility. As of June 30, 2014, the Company had cash
equivalents of approximately $60.0 million, consisting of short-term
investments of U.S. Treasury bills that the Company sold on July 1,
2014. Subsequent to the quarter’s end, the Company increased its credit
facility capacity from $150 million to $200 million.
Dividend
The Company’s board of directors declared a quarterly dividend of $0.32
per share for the third quarter of 2014 payable on September 16, 2014,
to stockholders of record as of August 29, 2014. This dividend reflects
an annualized dividend rate of $1.28 per share, and is an increase from
the Company’s dividend of $0.30 per share for the second quarter of 2014.
Subsequent Events
Since June 30, 2014:
-
The Company closed commitments of $2.5 million.
-
The Company funded $8.3 million in new investments.
-
TriplePoint Capital’s direct originations platform entered into $27.0
million of additional non-binding signed term sheets with venture
growth stage companies.
-
The Company increased its credit facility capacity from $150 million
to $200 million.
Conference Call
The Company will host a conference call at 5:00 p.m. Eastern Time today,
August 11, 2014, to discuss its financial results for the quarter ending
June 30, 2014. To listen to the call, investors and analysts should dial
877-201-0168 (domestic) or 647-788-4901 (international) and enter
conference ID 37027811. Please dial in at least five minutes before the
scheduled start time. A replay of the call will be available through
August 25, 2014, by dialing 855-859-2056 (domestic) or 404-537-3406
(international) and entering the passcode 37027811. The conference call
also will be available via a live audio webcast in the investor
relations section of the Company’s website, http://www.tpvg.com.
An online archive of the webcast will be available on the Company’s
website for 30 days after the call.
About TriplePoint Venture Growth BDC Corp.
TriplePoint Venture Growth BDC Corp. (the “Company”) (NYSE: TPVG) is an
externally managed, closed-end, non-diversified management investment
company that has elected to be regulated as a business development
company under the Investment Company Act of 1940, as amended. It was
formed to expand the venture growth stage business segment of its
sponsor, TriplePoint Capital LLC. The Company’s investment objective is
to maximize its total return to stockholders primarily in the form of
current income and, to a lesser extent, capital appreciation by
primarily lending with warrants to venture growth stage companies
focused in technology, life sciences and other high growth industries
backed by a select group of leading venture capital investors. More
information is available at http://www.tpvg.com.
Forward-Looking Statements
Certain statements contained in this press release constitute
forward-looking statements as such term is defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and such statements are intended to be
covered by the safe harbor provided by the same. Forward-looking
statements are subject to substantial risks and uncertainties, many of
which are difficult to predict and are generally beyond the Company's
control. Words such as "anticipates," "expects," "intends," "plans,"
"will," "may," "continue," "believes," "seeks," "estimates," "would,"
"could," "should," "targets," "projects," and variations of these words
and similar expressions are intended to identify forward-looking
statements. For a further list and description of such risks and
uncertainties, see the Company's final prospectus filed with the
Securities and Exchange Commission on March 7, 2014, and other reports
filed by the Company with the Securities and Exchange Commission. The
forward-looking statements, and other risks, uncertainties and factors
are based on the Company's beliefs, assumptions and expectations of its
future performance, taking into account all information currently
available to the Company. Forward-looking statements are not predictions
of future events. The Company disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
|
As of June 30, 2014
|
|
|
Assets
|
|
|
|
|
Investments at fair value (amortized cost of $204,307)
|
|
$
|
205,718
|
|
|
Short-term investments at fair value (cost of $59,997)
|
|
59,996
|
|
|
Cash
|
|
7,048
|
|
|
Restricted cash
|
|
1,673
|
|
|
Deferred credit facility costs and prepaid expenses
|
|
2,925
|
|
|
Total Assets
|
|
277,360
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Revolving credit facility payable
|
|
68,500
|
|
|
Payable for U.S. Treasury bill assets
|
|
59,997
|
|
|
Other payables, accrued expenses, and liabilities
|
|
5,912
|
|
|
Total Liabilities
|
|
134,409
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
142,951
|
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000,000 shares
authorized; no shares issued and outstanding)
|
|
$
|
-
|
|
|
Common stock, par value $0.01 per share (450,000,000 shares
authorized; 9,868,860 shares issued and outstanding)
|
|
99
|
|
|
Paid-in capital in excess of par value
|
|
141,859
|
|
|
Net investment income
|
|
3,423
|
|
|
Accumulated net unrealized gains
|
|
1,410
|
|
|
Dividend distributions
|
|
(3,840
|
)
|
|
Net Assets
|
|
$
|
142,951
|
|
|
|
|
|
|
|
Net Asset Value per Share
|
|
$
|
14.49
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except share data)
|
|
|
|
|
|
For the Three Months
Ended
June 30, 2014
|
|
For the Period from
March 5, 2014
(Commencement
of
Operations) to
June 30, 2014
|
|
|
|
|
|
|
|
Investment Income
|
|
|
|
|
|
Interest income from investments
|
|
$
|
5,394
|
|
$
|
6,702
|
|
Other income
|
|
95
|
|
95
|
|
Total investment and other income
|
|
5,489
|
|
6,797
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
Base management fee
|
|
674
|
|
818
|
|
Income incentive fee
|
|
219
|
|
219
|
|
Capital gains incentive fee
|
|
7
|
|
282
|
|
Interest expense and amortization of fees
|
|
776
|
|
930
|
|
Administration agreement expenses
|
|
340
|
|
392
|
|
General and administrative expenses
|
|
619
|
|
733
|
|
Total Operating Expenses
|
|
2,635
|
|
3,374
|
|
|
|
|
|
|
|
Net investment income
|
|
2,854
|
|
3,423
|
|
|
|
|
|
|
|
Net realized gains
|
|
—
|
|
—
|
|
Net change in unrealized gains on investments
|
|
36
|
|
1,410
|
|
|
|
|
|
|
|
Net Increase in Net Assets Resulting from Operations
|
|
$
|
2,890
|
|
$
|
4,833
|
|
|
|
|
|
|
|
Basic and diluted net investment income per share
|
|
$
|
0.29
|
|
$
|
0.35
|
|
Basic and diluted net increase in net assets per share
|
|
$
|
0.29
|
|
$
|
0.49
|
|
Basic and diluted weighted average shares of common stock outstanding
|
|
9,849,599
|
|
9,847,936
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
FINANCIAL HIGHLIGHTS
(dollars
in thousands, except share data)
|
|
|
|
For the Three Months
Ended
June 30, 2014
|
|
For the Period from
March 5, 2014
(Commencement
of
Operations) to
June 30, 2014
|
|
Per Share Data
|
|
|
|
|
|
|
Net asset value at beginning of period
|
|
$
|
14.58
|
|
$
|
15.00
|
|
|
Offering costs
|
|
|
—
|
|
|
(0.62
|
)
|
|
Net investment income
|
|
|
0.29
|
|
|
0.35
|
|
|
Net change in unrealized gain on investments
|
|
|
0.00
|
|
|
0.14
|
|
|
Dividend distributions
|
|
|
(0.39
|
)
|
|
(0.39
|
)
|
|
Other
|
|
|
0.01
|
|
|
0.01
|
|
|
Net asset value at end of period
|
|
$
|
14.49
|
|
$
|
14.49
|
|
|
|
|
|
|
|
|
|
Net investment income per share
|
|
$
|
0.29
|
|
$
|
0.35
|
|
|
Net increase in net assets per share
|
|
$
|
0.29
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
Weighted average shares of common stock outstanding
|
|
|
9,849,599
|
|
|
9,847,936
|
|
|
Shares of common stock outstanding at end of period
|
|
|
9,868,860
|
|
|
9,868,860
|
|
|
|
|
|
|
|
|
|
Ratios / Supplemental Data
|
|
|
|
|
|
|
Net asset value at end of period
|
|
$
|
142,951
|
|
$
|
142,951
|
|
|
Average net asset value
|
|
$
|
143,546
|
|
$
|
143,111
|
|
|
|
|
|
|
|
|
|
Total return based on net asset value (1)
|
|
|
2.1
|
%
|
|
3.5
|
%
|
|
Net asset value at beginning of period
|
|
$
|
14.58
|
|
$
|
14.38
|
|
|
Dividends per share paid during period
|
|
$
|
0.39
|
|
$
|
0.39
|
|
|
Net asset value at end of period
|
|
$
|
14.49
|
|
$
|
14.49
|
|
|
|
|
|
|
|
|
|
Total return based on net asset value (2)
|
|
|
3.3
|
%
|
|
11.8
|
%
|
|
Net asset value at beginning of period
|
|
$
|
16.24
|
|
$
|
15.00
|
|
|
Dividends per share paid during period
|
|
$
|
0.39
|
|
$
|
0.39
|
|
|
Stock price at end of period
|
|
$
|
16.38
|
|
$
|
16.38
|
|
|
|
|
|
|
|
|
|
Weighted average yield on debt investments (3)
|
|
|
14.4
|
%
|
|
14.4
|
%
|
|
Coupon income on debt investments (3)
|
|
|
11.1
|
%
|
|
11.1
|
%
|
|
Net accretion of discount and end-of-term payments (3)
|
|
|
3.3
|
%
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
Net investment income to average net asset value (4)
|
|
|
8.0
|
%
|
|
7.4
|
%
|
|
Net increase in net assets to average net asset value (4)
|
|
|
8.1
|
%
|
|
10.5
|
%
|
|
|
|
|
|
|
|
|
Total operating expenses to average net asset value (4)
|
|
|
7.4
|
%
|
|
7.3
|
%
|
|
Operating expenses excluding incentive fees to average net asset
value (4)
|
|
|
6.8
|
%
|
|
6.2
|
%
|
|
Income component of incentive fees to average net asset value (4)
|
|
|
0.6
|
%
|
|
0.5
|
%
|
|
Capital gains component of incentive fees to average net asset value
(4)
|
|
*
|
|
|
0.6
|
%
|
|
|
|
|
|
|
(1)
|
|
Total return based on net asset value (NAV) is the change in the
ending NAV per share plus dividends paid during the period divided
by the beginning NAV per share. The NAV per share as of March 5,
2014 (commencement of operations) is the NAV per share immediately
after Company’s initial public offering. The total return is for the
period shown and is not annualized.
|
|
|
|
|
|
|
(2)
|
|
Total return is the change in the ending stock price of the
Company’s common stock plus dividends paid during the period divided
by the beginning stock price of the Company’s common stock. The
stock price as of March 5, 2014 (commencement of operations) is the
issuance price of the Company’s initial public offering. The total
return is for the period shown and is not annualized.
|
|
|
|
|
|
|
(3)
|
|
Weighted average yields are based on the average cost basis of the
debt investments for the periods shown and are annualized.
|
|
|
|
|
|
|
(4)
|
|
Percentage is presented on an annualized basis.
|
|
|
|
|
|
|
|
|
*: Less than 0.05%.
|
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of net investment income
to core net investment income for the three months ended June 30, 2014,
and for the period from March 5, 2014 (commencement of operations) to
June 30, 2014.
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
RECONCILIATION OF CORE NET INVESTMENT INCOME
(dollars in thousands, except share data)
|
Net Investment Income and Core Net Investment Income
(dollars
in thousands, except per share amounts)
|
|
For the Three
Months Ended
June 30, 2014
|
|
For the Period from
March 5, 2014
(Commencement
of
Operations) to
June 30, 2014
|
|
|
|
|
|
|
|
Net Investment Income
|
|
$
|
2,854
|
|
$
|
3,423
|
|
Capital gains incentive fee
|
|
7
|
|
282
|
|
Core Net Investment Income
|
|
$
|
2,861
|
|
$
|
3,705
|
|
|
|
|
|
|
|
Net Investment Income per Share
|
|
$
|
0.29
|
|
$
|
0.35
|
|
Capital gains incentive fee per share
|
|
*
|
|
0.03
|
|
Core Net Investment Income per Share
|
|
$
|
0.29
|
|
$
|
0.38
|
* Less than $0.005 per share
For the three months ended June 30, 2014, the Company recorded accrued
capital gains incentive fees of $7,000 and for the period from March 5,
2014 (commencement of operations) to June 30, 2014, the Company recorded
accrued capital gains incentive fee of $282,000. The capital gains
incentive fee accrual, as reported under generally accepted accounting
principles, is calculated on the basis of net realized and unrealized
gains and losses at the end of each period. The accrued capital gains
incentive fee related to the hypothetical liquidation of the portfolio
(and assuming no other changes in realized or unrealized gains and
losses) would only have become payable to its investment adviser in the
event of a complete liquidation of its portfolio as of period end and
the termination of the Investment Advisory Agreement (“Agreement”).
The amount of the capital gains incentive fee, if any, which will
actually be payable is determined in accordance with the terms of the
Agreement and is calculated as of the end of each calendar year (or upon
termination of the Agreement). The terms of the Agreement state that the
capital gains incentive fee calculation is based on net realized gains,
if any, offset by gross unrealized depreciation for the calendar year.
No effect is given to gross unrealized appreciation in this calculation.
Source: TriplePoint Venture Growth BDC Corp.