Delivered Record Quarterly Total Investment Income and $0.39
Increase In Net Asset Value Per Share
Declares Fourth Quarter 2016 Distribution 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 third quarter of 2016. TPVG also
declared a fourth quarter 2016 distribution of $0.36 per share.
Third Quarter 2016 Highlights:
-
GAAP net investment income and core net investment income1
of $6.5 million ($0.40 per share).
-
Net realized and unrealized investment gains of $4.9 million ($0.31
per share).
-
Four portfolio company exits during the quarter including the
acquisitions of Dollar Shave Club and Jet.com, the initial public
offering of Nutanix, and the announced acquisition of Endochoice.
-
Net increase in net assets resulting from operations of $11.4 million,
or $0.71 per share.
-
Net asset value per share increased by $0.39 to $13.44 per share, as
of September 30, 2016.
-
$89.0 million of signed term sheets; closed $69.0 million of new debt
commitments to venture growth stage companies.
-
Funded approximately $15.0 million in new investments with a 15.0%
weighted average yield on new loans at origination and received
prepayments of $10.0 million in principal balance.
-
Total investment portfolio fair value at September 30, 2016 of $308.9
million, includes 36 warrant and equity investments with a fair value
of $16.3 million.
-
15.1% weighted average annualized portfolio yield on debt investments
for the third quarter.
-
Repurchased 295,744 shares of common stock for an aggregate $3.4
million.
-
Declared a third quarter distribution of $0.36 per share, paid on
September 16, 2016.
-
Subsequent to the end of the third quarter, the Board of Directors
extended the Company’s existing $25 million share buy-back program to
October 2017.
“Our results for the third quarter demonstrate the earnings power of our
investment platform,” said Jim Labe, chairman and chief executive
officer of TPVG. “We delivered our highest quarterly total investment
income, generated substantial realized and unrealized gains, and grew
the investment portfolio for the fifth quarter in a row.”
“We continue to execute on our strategy of deploying our capital in a
disciplined fashion at attractive risk adjusted returns,” said Sajal
Srivastava, president and chief investment officer of the Company. “The
combination of our growing investment portfolio, strong portfolio yield,
portfolio company exits, and share repurchases enabled us to generate
earnings in excess of our dividend and increase our net asset value.”
Portfolio and Investment Activity
During the third quarter of 2016, the Company entered into $69.0 million
of new commitments, funded two loans and one equipment financing
totaling $15.0 million in principal balance, and acquired warrants,
equity and related investments valued at $0.5 million. The new debt
investments funded during the quarter had a 15.0% weighted average
annualized portfolio yield at origination. The Company’s weighted
average annualized portfolio yield on debt investments for the third
quarter was 15.1%; excluding the impact of prepayment income, the
weighted average portfolio yield was 13.7%. 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.2
As of September 30, 2016, the Company had 89 investments in 32
companies, and the total cost and fair value of these investments were
$306.6 million and $308.9 million, respectively. Total portfolio
investment activity as of and for the three and nine months ended
September 30, 2016 and 2015 was as follows:
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
(dollars in thousands)
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
Beginning portfolio at fair value
|
|
$
|
299,649
|
|
|
$
|
208,254
|
|
|
$
|
271,717
|
|
|
$
|
257,971
|
|
New debt investments
|
|
|
14,659
|
|
|
|
51,792
|
|
|
|
91,932
|
|
|
|
68,701
|
|
Principal payments and sale proceeds received from investments
|
|
|
(3,535
|
)
|
|
|
(2,766
|
)
|
|
|
(7,660
|
)
|
|
|
(14,400
|
)
|
Early pay-offs
|
|
|
(10,000
|
)
|
|
|
—
|
|
|
|
(41,115
|
)
|
|
|
(56,881
|
)
|
Accretion of debt investment fees
|
|
|
2,296
|
|
|
|
3,112
|
|
|
|
4,821
|
|
|
|
5,213
|
|
New warrants
|
|
|
334
|
|
|
|
692
|
|
|
|
1,677
|
|
|
|
1,186
|
|
New equity investments
|
|
|
196
|
|
|
|
—
|
|
|
|
196
|
|
|
|
750
|
|
Payment-in-kind coupon
|
|
|
316
|
|
|
|
—
|
|
|
|
1,284
|
|
|
|
—
|
|
Net realized gains (losses) on investments
|
|
|
1,081
|
|
|
|
—
|
|
|
|
(20,906
|
)
|
|
|
(317
|
)
|
Net unrealized gains (losses) on investments
|
|
|
3,861
|
|
|
|
1,046
|
|
|
|
6,911
|
|
|
|
(93
|
)
|
Ending portfolio at fair value
|
|
$
|
308,857
|
|
|
$
|
262,130
|
|
|
$
|
308,857
|
|
|
$
|
262,130
|
|
Signed Term Sheets
During the third quarter of 2016, TriplePoint Capital LLC (“TPC”)
entered into $89.0 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.
Debt Investment Commitments
As of September 30, 2016, the Company’s unfunded commitments totaled
$115.5 million of which $38.0 million is dependent upon customers
reaching certain milestones. Of the $115.5 million of unfunded
commitments, $38.5 million will expire during 2016, $72.0 million will
expire during 2017 and $5.0 million will expire during 2018 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.
Results of Operations
For the third quarter of 2016, the Company’s total investment and other
income was $12.5 million as compared to $9.2 million for the third
quarter of 2015, representing a weighted average annualized portfolio
yield on its debt investments of 15.1% during the third quarter of 2016
as compared to 17.5% for the third quarter of 2015. For the nine months
ended September 30, 2016, the Company’s total investment and other
income was $33.0 million, representing a weighted average annualized
portfolio yield on its debt investments of 14.7% as compared to $30.7
million and a weighted average annualized portfolio yield on its debt
investments of 16.7% for the nine months ended September 30, 2015.
Operating expenses for the third quarter of 2016 were $6.0 million as
compared to $4.6 million for the third quarter of 2015. Operating
expenses for the third quarter of 2016 consisted of $2.0 million of
interest expense and amortization of deferred credit facility costs,
$1.4 million of base management fees, $1.6 million of income incentive
fee, $0.4 million of administration agreement expenses and $0.6 million
of general and administrative expenses. The Company’s operating expenses
were $14.8 million and $14.7 million for the nine months ended September
30, 2016 and 2015, respectively.
For the third quarter of 2016, the Company recorded net investment
income and core net investment income of $6.5 million, or $0.40 per
share, as compared to $4.7 million, or $0.28 per share of net investment
income and $4.9 million, or $0.29 per share of core net investment
income for the third quarter of 2015. The Company’s net investment
income and core net investment income were both $18.2 million, or $1.12
per share during the nine months ended September 30, 2016. This compares
to $15.9 million, or $1.10 per share of net investment income and $15.8
million, or $1.09 per share of core net investment income during the
nine months ended September 30, 2015.
For the third quarter of 2016, the Company recorded net realized and
unrealized gains of $4.9 million, or $0.31 per share, as compared to net
unrealized gains of $1.0 million, or $0.06 per share, for the third
quarter of 2015.
The Company’s net increase in net assets resulting from operations for
the third quarter of 2016 was approximately $11.4 million, or $0.71 per
share, as compared to a net increase of $5.7 million, or $0.34 per
share, for the third quarter of 2015. For the nine months ended
September 30, 2016, the Company’s net increase in net assets resulting
from operations was approximately $4.2 million, or $0.26 per share, as
compared to $15.5 million, or $1.07 per share, for the nine months ended
September 30, 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 September 30, 2016, the weighted
average investment ranking of the Company’s debt investment portfolio
was 2.05 as compared to 2.06 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 September 30, 2016.
The following table shows the credit rankings for the Company’s debt
investments at fair value as of September 30, 2016 and as of June 30,
2016.
|
|
As of September 30, 2016
|
|
As of June 30, 2016
|
(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)
|
|
$
|
61,437
|
|
21.0
|
%
|
|
3
|
|
$
|
40,140
|
|
14.0
|
%
|
|
2
|
White (2)
|
|
|
170,279
|
|
58.2
|
|
|
10
|
|
|
205,323
|
|
71.6
|
|
|
13
|
Yellow (3)
|
|
|
46,264
|
|
15.8
|
|
|
2
|
|
|
26,345
|
|
9.2
|
|
|
1
|
Orange (4)
|
|
|
14,585
|
|
5.0
|
|
|
2
|
|
|
15,008
|
|
5.2
|
|
|
2
|
Red (5)
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
292,565
|
|
100.0
|
%
|
|
17
|
|
$
|
286,816
|
|
100.0
|
%
|
|
18
|
Net Asset Value
As of September 30, 2016, the Company’s net assets were $214.4 million,
or $13.44 per share, compared to $211.8 million, or $13.05 per share, as
of June 30, 2016.
Share Repurchase Program
As part of the Company’s $25 million share repurchase program approved
in October 2015 and extended to October 2017, during the quarter ended
September 30, 2016, 295,744 shares were repurchased at a weighted
average price of $11.41, including commissions, with a total cost of
approximately $3.4 million, bringing total repurchases to 952,206 shares
representing $10.9 million including commissions.
Liquidity and Capital Resources
As of September 30, 2016, the Company had total cash of $20.8 million,
with available capacity of $143.0 million under its revolving credit
facility. As of September 30, 2016, the Company had short term
investments of $79.8 million in fair value, consisting of U.S. Treasury
bills that the Company sold on October 4, 2016.
Distribution
The Company’s board of directors declared a quarterly distribution of
$0.36 per share for the fourth quarter of 2016 payable on December 16,
2016, to stockholders of record as of November 30, 2016.
Subsequent Events
Since September 30, 2016:
-
The Company closed $2.5 million of additional debt commitments.
-
The Company funded $4.5 million in new investments.
-
TriplePoint Capital’s direct originations platform entered into $12.5
million of additional non-binding signed term sheets with venture
growth stage companies.
-
The Company announced today that Harold Zagunis, chief financial
officer, will be leaving the Company at the end of the year and the
Company has commenced a search for a new chief financial officer.
Conference Call
The Company will host a conference call at 5:00 p.m. Eastern time today,
November 7, 2016, to discuss its financial results for the quarter ended
September 30, 2016. To listen to the call, investors and analysts should
dial 1 (866) 652-5200 (domestic) or 1 (412) 317-6060 (international) and
ask to join the TriplePoint Venture Growth call. Please dial in at least
five minutes before the scheduled start time. A replay of the call will
be available through December 7, 2016, by dialing 1 (877) 344-7529
(domestic) or 1 (412) 317-0088 (international) and entering conference
ID 10095720. 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 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.
2 The Company’s weighted average annualized portfolio yield
on debt investments may be higher than an investor’s yield on an
investment in shares of its common stock. The weighted average
annualized portfolio yield on debt investments does not reflect
operating expenses that may be incurred by the Company. In addition, the
Company’s weighted average annualized portfolio yield on debt
investments disclosed above do not consider the effect of any sales
commissions or charges that may be incurred in connection with the sale
of shares of its common stock.
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
Assets
|
|
|
|
|
Investments at fair value (amortized cost of $306,581 and $276,352,
respectively)
|
|
$
|
308,857
|
|
|
$
|
271,717
|
|
Short-term investments at fair value (cost of $79,837 and $69,998,
respectively)
|
|
|
79,829
|
|
|
|
69,995
|
|
Cash
|
|
|
14,497
|
|
|
|
32,451
|
|
Restricted cash
|
|
|
6,265
|
|
|
|
6,028
|
|
Deferred credit facility costs and other assets
|
|
|
4,898
|
|
|
|
2,132
|
|
Total Assets
|
|
|
414,346
|
|
|
|
382,323
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Revolving credit facility payable
|
|
|
57,000
|
|
|
|
18,000
|
|
2020 Notes, net
|
|
|
53,194
|
|
|
|
52,910
|
|
Payable for U.S. Treasury bill assets
|
|
|
79,837
|
|
|
|
69,998
|
|
Other payables, accrued expenses, and liabilities
|
|
|
9,923
|
|
|
|
9,769
|
|
Total Liabilities
|
|
|
199,954
|
|
|
|
150,677
|
|
|
|
|
|
|
Net Assets
|
|
$
|
214,392
|
|
|
$
|
231,646
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000,000 shares
authorized; no shares issued and outstanding as of September 30,
2016 and December 31, 2015)
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, par value $0.01 per share (450,000,000 shares
authorized; 15,957,555 and 16,302,036 shares issued and outstanding
as of September 30, 2016 and December 31, 2015, respectively)
|
|
|
160
|
|
|
|
163
|
|
Paid-in capital in excess of par value
|
|
|
231,248
|
|
|
|
235,205
|
|
Net investment income
|
|
|
52,948
|
|
|
|
34,767
|
|
Accumulated net realized losses on investments
|
|
|
(21,223
|
)
|
|
|
(317
|
)
|
Accumulated net unrealized gains (losses) on investments
|
|
|
2,268
|
|
|
|
(4,638
|
)
|
Distributions
|
|
|
(51,009
|
)
|
|
|
(33,534
|
)
|
Net Assets
|
|
$
|
214,392
|
|
|
$
|
231,646
|
|
|
|
|
|
|
Net Asset Value per Share
|
|
$
|
13.44
|
|
|
$
|
14.21
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
|
2015
|
|
Investment Income
|
|
|
|
|
|
|
|
|
Interest income from investments
|
|
$
|
11,207
|
|
$
|
9,184
|
|
$
|
31,214
|
|
|
$
|
28,832
|
|
Other income
|
|
|
1,295
|
|
|
61
|
|
|
1,772
|
|
|
|
1,827
|
|
Total investment and other income
|
|
|
12,502
|
|
|
9,245
|
|
|
32,986
|
|
|
|
30,659
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
Base management fee
|
|
|
1,376
|
|
|
1,490
|
|
|
4,076
|
|
|
|
4,053
|
|
Income incentive fee
|
|
|
1,568
|
|
|
170
|
|
|
1,568
|
|
|
|
2,907
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
209
|
|
|
—
|
|
|
|
(81
|
)
|
Interest expense and amortization of fees
|
|
|
2,036
|
|
|
1,656
|
|
|
5,733
|
|
|
|
4,494
|
|
Administration agreement expenses
|
|
|
395
|
|
|
417
|
|
|
1,190
|
|
|
|
1,194
|
|
General and administrative expenses
|
|
|
632
|
|
|
632
|
|
|
2,238
|
|
|
|
2,181
|
|
Total Operating Expenses
|
|
|
6,007
|
|
|
4,574
|
|
|
14,805
|
|
|
|
14,748
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
6,495
|
|
|
4,671
|
|
|
18,181
|
|
|
|
15,911
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gains (losses) on investments
|
|
|
|
|
|
|
|
|
Net realized gains (losses) on investments
|
|
|
1,081
|
|
|
—
|
|
|
(20,906
|
)
|
|
|
(317
|
)
|
Net change in unrealized gains (losses) on investments
|
|
|
3,859
|
|
|
1,044
|
|
|
6,906
|
|
|
|
(92
|
)
|
Net realized and unrealized gains (losses) on investments
|
|
|
4,940
|
|
|
1,044
|
|
|
(14,000
|
)
|
|
|
(409
|
)
|
|
|
|
|
|
|
|
|
|
Net Increase in Net Assets Resulting from Operations
|
|
$
|
11,435
|
|
$
|
5,715
|
|
$
|
4,181
|
|
|
$
|
15,502
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net investment income per share
|
|
$
|
0.40
|
|
$
|
0.28
|
|
$
|
1.12
|
|
|
$
|
1.10
|
|
Basic and diluted net increase in net assets per share
|
|
$
|
0.71
|
|
$
|
0.34
|
|
$
|
0.26
|
|
|
$
|
1.07
|
|
Basic and diluted weighted average shares of common stock outstanding
|
|
|
16,090,942
|
|
|
16,648,379
|
|
|
16,226,677
|
|
|
|
14,524,330
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE PORTFOLIO YIELD ON DEBT INVESTMENTS
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
|
|
|
2016
|
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average portfolio yield on debt investments
|
|
|
15.1
|
%
|
|
|
17.5
|
%
|
|
14.7
|
%
|
|
16.7
|
%
|
Coupon income
|
|
|
10.5
|
%
|
|
|
10.7
|
%
|
|
10.5
|
%
|
|
10.8
|
%
|
Net amortization and accretion of premiums and discounts
|
|
|
0.8
|
%
|
|
|
0.8
|
%
|
|
0.7
|
%
|
|
0.7
|
%
|
Net accretion of end-of-term payments
|
|
|
2.4
|
%
|
|
|
6.0
|
%
|
|
2.6
|
%
|
|
3.9
|
%
|
Impact of prepayments
|
|
|
1.4
|
%
|
|
|
0.0
|
%
|
|
0.9
|
%
|
|
1.3
|
%
|
Weighted average portfolio yield on debt investments 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.
|
|
|
|
|
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 September 30,
|
|
For the Nine Months Ended September 30,
|
(dollars in thousands, except per share amounts)
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net Investment Income
|
|
$
|
6,495
|
|
$
|
4,671
|
|
$
|
18,181
|
|
$
|
15,911
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
209
|
|
|
—
|
|
|
(81
|
)
|
Core Net Investment Income
|
|
$
|
6,495
|
|
$
|
4,880
|
|
$
|
18,181
|
|
$
|
15,830
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income per Share
|
|
$
|
0.40
|
|
$
|
0.28
|
|
$
|
1.12
|
|
$
|
1.10
|
|
Capital gains incentive fee per share
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
|
(0.01
|
)
|
Core Net Investment Income per Share
|
|
$
|
0.40
|
|
$
|
0.29
|
|
$
|
1.12
|
|
$
|
1.09
|
|
For the three and nine months ended September 30, 2016, the
Company had no accrued capital gains incentive fee and for the
three and nine months ended September 30, 2015, the Company
recorded accrued capital gains incentive fee of $0.2 million and a
reversal of $0.1 million, respectively. 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/20161107006510/en/
Source: TriplePoint Venture Growth BDC Corp.