Declares Second Quarter 2017 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 first quarter of 2017. TPVG also
declared a second quarter 2017 distribution of $0.36 per share.
First Quarter 2017 Highlights:
-
Record total investment income of $14.3 million, or $0.89 per share,
and net investment income of $7.9 million, or $0.50 per share, an
increase of 29.1% and 17.7%, respectively, compared to the first
quarter of 2016.
-
16.8% weighted average annualized portfolio yield on debt investments
for the first quarter.
-
$53.3 million of prepayments primarily from two portfolio exits during
the quarter including the acquisitions of Simplivity, Inc. and
ModCloth, Inc.
-
$48.8 million of signed term sheets; closed $37.0 million of new debt
commitments to venture growth stage companies.
-
Funded $12.0 million in new debt investments and $2.4 million in
equity investments.
-
Total investment portfolio fair value at March 31, 2017 of $328.4
million, an increase of 16.1% compared to the first quarter of 2016.
-
Portfolio includes 29 warrants and 9 equity investments with a fair
value of $15.4 million.
-
Declared a second quarter distribution of $0.36 per share, payable on
June 16, 2017, bringing total distributions since the initial public
offering in March 2014 to $4.82 per share.
-
Net asset value of $213.9 million, or $13.38 per share, as of March
31, 2017.
“We are pleased to announce a record quarter for investment income that
demonstrates our differentiated venture growth lending model,” said Jim
Labe, chairman and chief executive officer of TPVG. “The yield profile
of our loans, portfolio exits, and prepayment activity together reflect
the quality of our portfolio, our significant expertise, and strong
brand.”
“We continue to see attractive venture growth stage lending
opportunities to grow our portfolio and our franchise,” said Sajal
Srivastava, president and chief investment officer of the Company. “We
will maintain our disciplined underwriting and redeploy the proceeds
from prepayments, while increasing our use of leverage and continuing to
deliver attractive risk-adjusted returns to our stockholders.”
Portfolio and Investment Activity
During the first quarter of 2017, the Company entered into $37.0 million
of new commitments, funded three loans totaling $12.0 million in
principal balance, funded two equity investments totaling $2.4 million,
and acquired warrants valued at $0.2 million. The Company had
prepayments of $53.3 million during the quarter, resulting in a weighted
average annualized portfolio yield on debt investments for the first
quarter of 16.8%. 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.1
As of March 31, 2017, the Company had 51 debt investments with 18
companies and 38 warrant and equity investments with 33 companies. The
total cost and fair value of these investments were $326.7 million and
$328.4 million, respectively. Total portfolio investment activity for
the three months ended March 31, 2017 and 2016 was as follows:
|
|
|
For the Three Months Ended March 31,
|
|
(dollars in thousands)
|
|
|
2017
|
|
|
|
2016
|
|
|
Beginning portfolio at fair value
|
|
$
|
374,311
|
|
|
$
|
271,717
|
|
|
New debt investments
|
|
|
11,762
|
|
|
|
55,363
|
|
|
Scheduled principal payments and sale proceeds received from
investments
|
|
|
(1,926
|
)
|
|
|
(2,621
|
)
|
|
Early principal prepayments
|
|
|
(53,274
|
)
|
|
|
(29,817
|
)
|
|
Accretion of debt investment fees
|
|
|
(1,197
|
)
|
|
|
795
|
|
|
New warrants
|
|
|
157
|
|
|
|
660
|
|
|
New equity investments
|
|
|
2,400
|
|
|
|
—
|
|
|
Payment-in-kind coupon
|
|
|
317
|
|
|
|
640
|
|
|
Net realized gains (losses) on investments
|
|
|
(1,681
|
)
|
|
|
(651
|
)
|
|
Net unrealized gains (losses) on investments
|
|
|
(2,461
|
)
|
|
|
(13,329
|
)
|
|
Ending portfolio at fair value
|
|
$
|
328,408
|
|
|
$
|
282,757
|
|
|
|
|
|
|
|
Signed Term Sheets
During the first quarter of 2017, TriplePoint Capital LLC (“TPC”)
entered into $48.8 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 March 31, 2017, the Company’s unfunded commitments totaled $117.4
million of which $50.0 million is dependent upon customers reaching
certain milestones. Of the $117.4 million of unfunded commitments, $72.4
million will expire during 2017, $40.0 million will expire during 2018
and $5.0 million will expire during 2019 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 first quarter of 2017 the Company’s total investment and other
income was $14.3 million, as compared to $11.1 million for the first
quarter of 2016, representing a weighted average annualized portfolio
yield on its debt investments of 16.8% during the first quarter of 2017
as compared to 15.7% for the first quarter of 2016.
Operating expenses for the first quarter of 2017 were $6.4 million as
compared to $4.4 million for the first quarter of 2016. Operating
expenses for the first quarter of 2017 consisted of $2.4 million of
interest expense and amortization of deferred credit facility costs,
$1.6 million of base management fees, $1.5 million of income incentive
fees, $0.4 million of administration agreement expenses and $0.5 million
of general and administrative expenses. 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.
For the first quarter of 2017, the Company recorded net investment
income of $7.9 million, or $0.50 per share, as compared to $6.7 million,
or $0.41 per share for the first quarter of 2016.
For the first quarter of 2017, the Company recorded net realized losses
of $1.7 million, or $(0.11) per share, due to the termination of
warrants as a result of the acquisitions of Simplivity, Inc. and
ModCloth, Inc., as compared to net realized losses of $0.7 million, or
$(0.04) per share, for the first quarter of 2016. Net unrealized losses
for the first quarter of 2017 were $2.5 million, or $(0.15) per share,
primarily related to the reversal of prior gains associated with
Simplivity, Inc. which were recognized as interest income during the
quarter, as compared to net unrealized losses of $13.3 million, or
$(0.82) per share, for the first quarter of 2016.
The Company’s net increase in net assets resulting from operations for
the first quarter of 2017 was approximately $3.8 million, or $0.24 per
share, as compared to a net decrease of $7.3 million, or $(0.45) per
share, for the first quarter of 2016.
Credit Quality
The Company maintains a credit watch list with borrowers placed into one
of five categories, 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,
2017, the weighted average investment ranking of the Company’s debt
investment portfolio was 1.94, as compared to 1.85 at the end of the
prior quarter. Additional information regarding our credit rating
methodology is detailed in our Form 10-Q for the three months ended
March 31, 2017. Subsequent to quarter’s end, one borrower rated Yellow,
or 3, repaid its loans with $22.5 million of outstanding principal
balance and was removed from the credit watch list.
The following table shows the credit rankings for the Company’s debt
investments at fair value as of March 31, 2017 and as of December 31,
2016.
|
|
|
As of March 31, 2017
|
|
As of December 31, 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)
|
|
$
|
95,820
|
|
30.7
|
%
|
|
4
|
|
$
|
129,878
|
|
36.1
|
%
|
|
4
|
|
White (2)
|
|
|
152,233
|
|
48.6
|
|
|
10
|
|
|
166,908
|
|
46.4
|
|
|
11
|
|
Yellow (3)
|
|
|
53,043
|
|
16.9
|
|
|
2
|
|
|
51,014
|
|
14.2
|
|
|
2
|
|
Orange (4)
|
|
|
11,955
|
|
3.8
|
|
|
2
|
|
|
12,207
|
|
3.3
|
|
|
2
|
|
Red (5)
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
|
$
|
313,051
|
|
100.0
|
%
|
|
18
|
|
$
|
360,007
|
|
100.0
|
%
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value
As of March 31, 2017, the Company’s net assets were $213.9 million, or
$13.38 per share, compared to $215.9 million, or $13.51 per share, as of
December 31, 2016.
Liquidity and Capital Resources
As of March 31, 2017, the Company had total cash of $36.6 million, with
available capacity of $114.0 million under its revolving credit
facility. As of March 31, 2017, the Company had short term investments
of $79.9 million in fair value, consisting of U.S. Treasury bills that
the Company sold on April 4, 2017.
Distribution
The Company’s board of directors declared a quarterly distribution of
$0.36 per share for the second quarter of 2017 payable on June 16, 2017,
to stockholders of record as of May 31, 2017.
Subsequent Events
Since March 31, 2017:
-
The Company funded $0.7 million in new investments.
-
TPC’s direct originations platform entered into $85.0 million of
additional non-binding signed term sheets with venture growth stage
companies.
-
Xirrus, Inc. announced its sale to Riverbed Technology, Inc. and
repaid loans with $22.5 million of outstanding principal balance.
-
Birst, Inc. announced that it had reached an agreement to be acquired
by Infor, Inc.
Conference Call
The Company will host a conference call at 5:00 p.m. Eastern time today,
May 9, 2017, to discuss its financial results for the first quarter
ended March 31, 2017. 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 June 9, 2017, by dialing 1
(877) 344-7529 or 1 (412) 317-0088 (international) and entering
conference ID 10105632. 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.
The Company serves as the primary financing source for the venture
growth stage business segment of TriplePoint Capital LLC, the leading
global provider of financing across all stages of development to
technology, life sciences and other high growth companies backed by a
select group of venture capital firms. 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.
The Company 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. 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 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 does 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
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
Assets
|
|
(unaudited)
|
|
|
|
Investments at fair value (amortized cost of $326,674 and $370,116,
respectively)
|
|
$
|
328,408
|
|
|
$
|
374,311
|
|
|
Short-term investments at fair value (cost of $79,963 and $39,990,
respectively)
|
|
|
79,963
|
|
|
|
39,990
|
|
|
Cash
|
|
|
30,165
|
|
|
|
7,776
|
|
|
Restricted cash
|
|
|
6,459
|
|
|
|
7,702
|
|
|
Deferred credit facility costs and other assets
|
|
|
4,433
|
|
|
|
4,443
|
|
|
Total Assets
|
|
|
449,428
|
|
|
|
434,222
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Revolving credit facility payable
|
|
|
86,000
|
|
|
|
115,000
|
|
|
2020 Notes, net
|
|
|
53,383
|
|
|
|
53,288
|
|
|
Payable for U.S. Treasury bill assets
|
|
|
79,963
|
|
|
|
39,990
|
|
|
Other payables, accrued expenses, and liabilities
|
|
|
16,195
|
|
|
|
10,081
|
|
|
Total Liabilities
|
|
|
235,541
|
|
|
|
218,359
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
213,887
|
|
|
$
|
215,863
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000,000 shares
authorized; no shares issued and outstanding as of March 31, 2017
and December 31, 2016)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Common stock, par value $0.01 per share (450,000,000 shares
authorized; 15,980,768 and 15,980,768 shares issued and outstanding
as of March 31, 2017 and December 31, 2016, respectively)
|
|
|
160
|
|
|
|
160
|
|
|
Paid-in capital in excess of par value
|
|
|
231,518
|
|
|
|
231,518
|
|
|
Undistributed net investment income
|
|
|
3,191
|
|
|
|
1,025
|
|
|
Accumulated net realized losses on investments
|
|
|
(22,716
|
)
|
|
|
(21,035
|
)
|
|
Accumulated net unrealized gains (losses) on investments
|
|
|
1,734
|
|
|
|
4,195
|
|
|
Net Assets
|
|
$
|
213,887
|
|
|
$
|
215,863
|
|
|
|
|
|
|
|
|
Net Asset Value per Share
|
|
$
|
13.38
|
|
|
$
|
13.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data)
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
Investment Income
|
|
|
|
|
|
|
|
|
|
Interest income from investments
|
|
$
|
14,252
|
|
|
$
|
10,725
|
|
|
Other income
|
|
|
52
|
|
|
|
354
|
|
|
Total investment and other income
|
|
|
14,304
|
|
|
|
11,079
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
Base management fee
|
|
|
1,572
|
|
|
|
1,365
|
|
|
Income incentive fee
|
|
|
1,473
|
|
|
|
—
|
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
|
—
|
|
|
Interest expense and amortization of fees
|
|
|
2,405
|
|
|
|
1,794
|
|
|
Administration agreement expenses
|
|
|
374
|
|
|
|
397
|
|
|
General and administrative expenses
|
|
|
561
|
|
|
|
795
|
|
|
Total Operating Expenses
|
|
|
6,385
|
|
|
|
4,351
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
7,919
|
|
|
|
6,728
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gains (losses) on investments
|
|
|
|
|
|
|
|
|
|
Net realized losses on investments
|
|
|
(1,681
|
)
|
|
|
(651
|
)
|
|
Net change in unrealized gains (losses) on investments
|
|
|
(2,461
|
)
|
|
|
(13,334
|
)
|
|
Net realized and unrealized gains (losses) on investments
|
|
|
(4,142
|
)
|
|
|
(13,985
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Net Assets Resulting from Operations
|
|
$
|
3,777
|
|
|
$
|
(7,257
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net investment income per share
|
|
$
|
0.50
|
|
|
$
|
0.41
|
|
|
Basic and diluted net increase (decrease) in net assets per share
|
|
$
|
0.24
|
|
|
$
|
(0.45
|
)
|
|
Basic and diluted weighted average shares of common stock outstanding
|
|
|
15,980,768
|
|
|
|
16,302,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE PORTFOLIO YIELD ON DEBT INVESTMENTS
|
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
Weighted average portfolio yield on debt investments
|
|
16.8%
|
|
15.7%
|
|
Coupon income
|
|
10.1%
|
|
10.6%
|
|
Net amortization and accretion of premiums and discounts
|
|
0.7%
|
|
0.7%
|
|
Net accretion of end-of-term payments
|
|
1.7%
|
|
3.0%
|
|
Impact of prepayments
|
|
4.3%
|
|
1.4%
|
|
|
|
|
|
|
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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170509006578/en/
Source: TriplePoint Venture Growth BDC Corp.