Declares Second Quarter 2016 Dividend of $0.36 Per Share
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 first quarter of 2016. TPVG also
declared a second quarter 2016 dividend of $0.36 per share.
First Quarter 2016 Highlights:
-
GAAP net investment income and core net investment income1
of $6.7 million ($0.41 per share) and $6.7 million ($0.41 per share),
respectively.
-
$73.0 million of signed term sheets; closed $90.0 million of new debt
commitments to domestic and international venture growth stage
companies.
-
Funded $56.4 million in new investments and received prepayments of
$29.8 million in principal balance, resulting in a total investment
portfolio at March 31, 2016 of $282.8 million at fair value.
-
Total investment portfolio includes 38 warrant and equity investments
with $12.2 million of fair value at March 31, 2016.
-
15.7% weighted average portfolio yield for the first quarter.
-
Renewed $200 million credit facility which extended the revolving
period and the maturity date by two years and reduced the applicable
margin during the revolving period from 3.5% to 3.0%.
-
Declared a first quarter regular dividend of $0.36 per share, paid on
April 15, 2016.
-
Net asset value of $218.5 million, or $13.40 per share, as of March
31, 2016.
“The first quarter marked the second anniversary of our initial public
offering and we are proud of how our brand, reputation, venture growth
stage focus and track record continue to differentiate us in the
market,” said Jim Labe, Chairman and Chief Executive Officer of TPVG.
“We plan to maintain our discipline while growing our portfolio,
increasing our use of leverage, and delivering attractive returns to our
stakeholders.”
“We remain focused on building our franchise and managing our
portfolio,” said Sajal Srivastava, Chief Investment Officer. “We
continue to see strong demand from exciting and robust venture growth
stage companies with innovative technologies, strong growth trajectories
and top tier investors.”
Portfolio and Investment Activity
During the first quarter of 2016, the Company entered into $90.0 million
of new commitments, funded five loans and three equipment leases
totaling $56.4 million in principal balance, and acquired warrants
valued at $0.7 million.
Three portfolio companies prepaid loans totaling $29.8 million in
principal balance during the quarter. The Company’s weighted average
portfolio yield for the first quarter was 15.7%. Excluding the impact of
prepayments, the weighted average portfolio yield was 14.3% for the
quarter. The Company calculates weighted average portfolio yield as the
annualized rate of the interest income recognized during the period
divided by the average amortized cost of debt investments in the
portfolio at the beginning of each month in the period.
As of March 31, 2016, the Company had 90 investments in 34 companies,
and the total cost and fair value of these investments were $300.7
million and $282.8 million, respectively. Total portfolio investment
activity as of and for the three months ended March 31, 2016 and 2015
was as follows:
|
|
For the Three Months Ended March 31,
|
|
(dollars in thousands)
|
|
2016
|
|
|
2015
|
|
Beginning portfolio at fair value
|
|
$
|
271,717
|
|
|
$
|
257,971
|
|
New debt investments
|
|
|
55,363
|
|
|
|
9,609
|
|
Principal payments received on investments
|
|
|
(2,621
|
)
|
|
|
(5,739
|
)
|
Early pay-offs
|
|
|
(29,817
|
)
|
|
|
(10,000
|
)
|
Accretion of debt investment fees
|
|
|
795
|
|
|
|
1,933
|
|
New warrants
|
|
|
660
|
|
|
|
(101
|
)
|
New equity
|
|
|
—
|
|
|
|
250
|
|
Payment-in-kind coupon
|
|
|
640
|
|
|
|
—
|
|
Net realized losses on investments
|
|
|
(651
|
)
|
|
|
(317
|
)
|
Net unrealized losses on investments
|
|
|
(13,329
|
)
|
|
|
(1,892
|
)
|
Ending portfolio at fair value
|
|
$
|
282,757
|
|
|
$
|
251,714
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments
As of March 31, 2016, the Company’s unfunded commitments totaled $191.3
million, $83.0 million of which is dependent upon customers reaching
certain milestones before being permitted to request funding. Of the
$191.3 million of unfunded commitments, $121.3 million will expire
during 2016 and $70.0 million will expire during 2017 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 first quarter of 2016, TriplePoint Capital LLC (“TPC”)
entered into $73.0 million of 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 TPC’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 TPC focuses its venture growth stage business.
Results of Operations
For the first quarter of 2016, the Company’s total investment and other
income was $11.1 million as compared to $9.8 million for the first
quarter of 2015, representing a weighted average portfolio yield of
15.7% on its debt investments during the first quarter of 2016 as
compared to 14.6% for the first quarter of 2015.
Operating expenses for the first quarter of 2016 were $4.4 million as
compared to $4.9 million for the first quarter of 2015. Operating
expenses for the first quarter of 2016 consisted of $1.8 million of
interest expense and amortization of deferred credit facility costs,
$1.4 million of base management fees, $0.4 million of administration
agreement expenses and $0.8 million of general and administrative
expenses. Due to the total return requirement under the investment
income component of the Company’s advisory fee, the Company did not pay
any incentive fees in the first quarter of 2016.
For the first quarter of 2016, the Company recorded net investment
income of $6.7 million, or $0.41 per share, as compared to $4.9 million,
or $0.48 per share for the first quarter of 2015. The Company’s core net
investment income1, which excludes the impact of the capital
gains incentive fee, was $6.7 million, or $0.41 per share, as compared
to $4.6 million, or $0.45 per share for the first quarter of 2015. These
per share calculations are based on the Company’s shares of common stock
outstanding as of the end of the respective periods and include the
impact of the Company’s common stock equity offering and share
repurchases in 2015. The Company believes an important measure of the
investment income that the Company distributes each year is core net
investment income, since capital gains incentive fees are accrued based
on net realized and unrealized gains but are not earned until net
realized gains occur.
For the first quarter of 2016, the Company’s net change in unrealized
losses on investments was $13.3 million, or $0.82 per share, as compared
to $1.9 million, or $0.18 per share, for the first quarter of 2015. Net
change in unrealized losses on investments for the first quarter of 2016
consisted of $13.4 million net unrealized losses on debt investments
primarily due to mark-downs of loans to three portfolio companies, $0.2
million net unrealized gains on warrant investments and $0.2 million net
unrealized losses on equity investments.
The Company had approximately $0.7 million, or $0.04 per share, in
realized losses during the first quarter of 2016 as a result of writing
off certain warrants, as compared to $0.3 million in realized losses, or
$0.03 per share, for the first quarter of 2015.
The Company’s net decrease in net assets resulting from operations for
the first quarter of 2016 was $7.3 million, or $0.45 per share, as
compared to a net increase of $2.7 million, or $0.27 per share, for the
first quarter of 2015.
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 Clear, or 1, is the highest rating and all new loans are initially
assigned a rating of White, or 2. As of March 31, 2016, the weighted
average investment ranking of the Company’s debt investment portfolio
was 2.09 as compared to 2.23 at the end of the prior quarter. Additional
information regarding our credit rating methodology is detailed in our
Form 10-Q for the period ended March 31, 2016.
The following table shows the credit rankings for the Company’s debt
investments at fair value as of March 31, 2016 and as of December 31,
2015.
|
|
As of March 31, 2016
|
|
|
As of December 31, 2015
|
(dollars in thousands)
Category
|
|
Fair Value
|
|
|
Percentage of Debt
Investment Portfolio
|
|
|
|
Number of Portfolio Companies
|
|
|
Fair Value
|
|
|
Percentage of Debt
Investment Portfolio
|
|
|
|
Number of Portfolio Companies
|
Clear (1)
|
|
$
|
69,045
|
|
|
|
25.5
|
|
%
|
|
|
2
|
|
|
$
|
43,711
|
|
|
|
16.9
|
|
%
|
|
|
2
|
White (2)
|
|
|
152,770
|
|
|
|
56.5
|
|
|
|
|
12
|
|
|
|
160,988
|
|
|
|
62.0
|
|
|
|
|
12
|
Yellow (3)
|
|
|
6,165
|
|
|
|
2.3
|
|
|
|
|
1
|
|
|
|
7,078
|
|
|
|
2.7
|
|
|
|
|
1
|
Orange (4)
|
|
|
41,427
|
|
|
|
15.3
|
|
|
|
|
3
|
|
|
|
47,808
|
|
|
|
18.4
|
|
|
|
|
3
|
Red (5)
|
|
|
1,173
|
|
|
|
0.4
|
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
$
|
270,580
|
|
|
|
100.0
|
|
%
|
|
|
19
|
|
|
$
|
259,585
|
|
|
|
100.0
|
|
%
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value
As of March 31, 2016, the Company’s net assets were $218.5 million, or
$13.40 per share, compared to $231.6 million, or $14.21 per share, as of
December 31, 2015.
Liquidity and Capital Resources
As of March 31, 2016, the Company had total cash of $15.1 million, with
available capacity of $182.0 million under its revolving credit
facility. As of March 31, 2016, the Company had cash equivalents of
$79.9 million, consisting of short-term investments of U.S. Treasury
bills that the Company sold on April 4, 2016.
Dividend
The Company’s board of directors declared a quarterly dividend of $0.36
per share for the second quarter of 2016 payable on June 16, 2016, to
stockholders of record as of May 31, 2016.
Subsequent Events
Since March 31, 2016:
-
TriplePoint Capital’s direct originations platform entered into $20.0
million of additional non-binding signed term sheets with venture
growth stage companies.
-
Virtual Instruments Corporation, credit rated Orange (4), merged with
Load Dynamix, Inc. which assumed the Company’s loans in full. The fair
value of the Company’s loans as of March 31, 2016 reflected the impact
of such merger.
-
HouseTrip Limited, credit rated Red (5), merged with TripAdvisor, Inc.
and the Company expects to recover $1.2 million, which was the fair
value of such debt investment as of March 31, 2016.
Conference Call
The Company will host a conference call at 5:00 p.m. Eastern time today,
May 9, 2016, to discuss its financial results for the quarter ending
March 31, 2016. To listen to the call, investors and analysts should
dial 877-201-0168 (domestic) or 647-788-4901 (international) and enter
conference ID 98712673. Please dial in at least five minutes before the
scheduled start time. A replay of the call will be available through May
23, 2016, by dialing 855-859-2056 (domestic) or 404-537-3406
(international) and entering conference ID 98712673. 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), 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, 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. It was formed to expand the venture growth stage business
segment of 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. Forward-looking statements are not
guarantees of future performance, condition or results and involve a
number of 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.
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 the Company’s filings with the Securities and
Exchange Commission. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as may be required
by law.
1 Core net investment income is a non-GAAP measure and is
provided in addition to, but not as a substitute for, net investment
income. Core net investment income represents net investment income
excluding the Company’s capital gains incentive fee. See additional
information under “Reconciliation of Core Net Investment Income” below.
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
March 31, 2016
|
|
|
December 31, 2015
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investments at fair value (amortized cost of $300,722 and $276,352,
respectively)
|
|
$
|
282,757
|
|
|
$
|
271,717
|
|
Short-term investments at fair value (cost of $79,863 and $69,998,
respectively)
|
|
|
79,856
|
|
|
|
69,995
|
|
Cash
|
|
|
12,160
|
|
|
|
32,451
|
|
Restricted cash
|
|
|
2,962
|
|
|
|
6,028
|
|
Deferred credit facility costs and prepaid expenses
|
|
|
3,369
|
|
|
|
2,132
|
|
Total Assets
|
|
|
381,104
|
|
|
|
382,323
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Revolving credit facility payable
|
|
|
18,000
|
|
|
|
18,000
|
|
2020 Notes, net
|
|
|
53,005
|
|
|
|
52,910
|
|
Payable for U.S. Treasury bill assets
|
|
|
79,863
|
|
|
|
69,998
|
|
Other payables, accrued expenses, and liabilities
|
|
|
11,716
|
|
|
|
9,769
|
|
Total Liabilities
|
|
|
162,584
|
|
|
|
150,677
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
218,520
|
|
|
$
|
231,646
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000,000 shares
authorized; no shares issued and outstanding as of March 31, 2016
and December 31, 2015)
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, par value $0.01 per share (450,000,000 shares
authorized; 16,302,036 and 16,302,036 shares issued and outstanding
as of March 31, 2016 and December 31, 2015, respectively)
|
|
|
163
|
|
|
|
163
|
|
Paid-in capital in excess of par value
|
|
|
235,205
|
|
|
|
235,205
|
|
Net investment income
|
|
|
41,495
|
|
|
|
34,767
|
|
Accumulated net realized losses
|
|
|
(968
|
)
|
|
|
(317
|
)
|
Accumulated net unrealized losses
|
|
|
(17,972
|
)
|
|
|
(4,638
|
)
|
Dividend distributions
|
|
|
(39,403
|
)
|
|
|
(33,534
|
)
|
Net Assets
|
|
$
|
218,520
|
|
|
$
|
231,646
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value per Share
|
|
$
|
13.40
|
|
|
$
|
14.21
|
|
|
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data)
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
Investment Income
|
|
|
|
|
|
|
|
|
Interest income from investments
|
|
$
|
10,725
|
|
|
$
|
9,161
|
|
Other income
|
|
|
354
|
|
|
|
647
|
|
Total investment and other income
|
|
|
11,079
|
|
|
|
9,808
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
Base management fee
|
|
|
1,365
|
|
|
|
1,159
|
|
Income incentive fee
|
|
|
—
|
|
|
|
1,162
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
|
(296
|
)
|
Interest expense and amortization of fees
|
|
|
1,794
|
|
|
|
1,644
|
|
Administration agreement expenses
|
|
|
397
|
|
|
|
371
|
|
General and administrative expenses
|
|
|
795
|
|
|
|
823
|
|
Total Operating Expenses
|
|
|
4,351
|
|
|
|
4,863
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
6,728
|
|
|
|
4,945
|
|
Net realized losses
|
|
|
(651
|
)
|
|
|
(317
|
)
|
Net change in unrealized losses on investments
|
|
|
(13,334
|
)
|
|
|
(1,889
|
)
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Net Assets Resulting from
Operations
|
|
$
|
(7,257
|
)
|
|
$
|
2,739
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net investment income per share
|
|
$
|
0.41
|
|
|
$
|
0.48
|
|
Basic and diluted net (decrease) increase in net assets per share
|
|
$
|
(0.45
|
)
|
|
$
|
0.27
|
|
Basic and diluted weighted average shares of common stock
outstanding
|
|
|
16,302,036
|
|
|
|
10,285,282
|
|
|
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Weighted average portfolio yield (1)
|
|
|
15.7
|
%
|
|
|
14.6
|
%
|
Coupon income (1)
|
|
|
10.6
|
%
|
|
|
11.0
|
%
|
Net amortization and accretion of premiums and discounts (1)
|
|
|
0.7
|
%
|
|
|
0.6
|
%
|
Net accretion of end-of-term payments (1)
|
|
|
3.0
|
%
|
|
|
2.9
|
%
|
Impact of prepayments (1)
|
|
|
1.4
|
%
|
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
Net investment income to average net asset value (2)
|
|
|
11.6
|
%
|
|
|
13.2
|
%
|
Net (decrease) increase in net assets to average net asset value (2)
|
|
|
(12.5
|
)%
|
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
Total operating expenses to average net asset value (2)
|
|
|
7.5
|
%
|
|
|
13.0
|
%
|
Operating expenses excluding incentive fees to average net asset
value (2)
|
|
|
7.5
|
%
|
|
|
10.7
|
%
|
Income component of incentive fees to average net asset value (2)
|
|
|
0.0
|
%
|
|
|
3.1
|
%
|
Capital gains component of incentive fees to average net asset value
(2)
|
|
|
0.0
|
%
|
|
|
(0.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Weighted average portfolio yields for periods shown are the
annualized rate of the interest income recognized during the period
divided by the average amortized cost of debt investments in the
portfolio at the beginning of each month in the period.
|
|
|
|
|
|
(2)
|
|
Percentage is presented on an annualized basis.
|
|
|
|
|
|
|
|
|
The following table provides a reconciliation of net investment income
to core net investment income for the three months ended March 31, 2016
and March 31, 2015.
|
|
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
|
|
For the Three Months Ended March 31,
|
|
(dollars in thousands, except per share amounts)
|
|
2016
|
|
|
2015
|
|
Net Investment Income
|
|
$
|
6,728
|
|
|
$
|
4,945
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
|
(296
|
)
|
Core Net Investment Income
|
|
$
|
6,728
|
|
|
$
|
4,649
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income per Share
|
|
$
|
0.41
|
|
|
$
|
0.48
|
|
Capital gains incentive fee per share
|
|
$
|
—
|
|
|
$
|
(0.03
|
)
|
Core Net Investment Income per Share
|
|
$
|
0.41
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|
|
|
For the three months ended March 31, 2016, the Company had no accrued
capital gains incentive fee and for the three months ended March 31,
2015, the Company recorded a reversal in accrued capital gains incentive
fee of $0.3 million. 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 applicable calendar year.
The actual capital gains incentive fee payable to the Company’s
investment adviser is calculated and paid as of the end of each calendar
year and is only 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160509006489/en/
Source: TriplePoint Venture Growth BDC Corp.