Declares Fourth Quarter 2017 Distribution of $0.36 per Share
MENLO PARK, Calif.--(BUSINESS WIRE)--
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the “Company,”
"TPVG," “we,” “us,” or “our”), 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 2017. TPVG also
declared a fourth quarter 2017 distribution of $0.36 per share.
Third Quarter 2017 Highlights:
-
Signed a record $267.0 million of new term sheets and closed $121.9
million of new debt commitments to venture growth stage companies;
-
Funded a record $82.8 million in debt investments and $0.3 million in
equity investments to eleven portfolio companies;
-
Achieved a 15.4% weighted average annualized portfolio yield on debt
investments for the third quarter;
-
Earned GAAP net investment income of $4.4 million ($0.27 per share);
-
Realized $1.0 million of gains from the sale of warrants and equity
investments ($0.07 per share);
-
Issued $74.8 million of 5.75% notes due 2022 (NYSE: TPVY), redeemed
$54.6 million of 6.75% notes due 2020 (NYSE: TPVZ);
-
Appointed Andrew J. Olson as Chief Financial Officer;
-
Portfolio company Blue Bottle Coffee, Inc. announced selling a
majority stake to Nestlé S.A.;
-
Net asset value of $214.8 million, or $13.39 per share, at September
30, 2017;
-
Declared a fourth quarter distribution of $0.36 per share, payable on
December 1, 2017; bringing total distributions to $5.54 per share
since IPO;
-
Subsequent to the third quarter, raised approximately $21.6 million in
a private placement from investment funds managed by the Alternative
Investments & Manager Selection Group of Goldman Sachs Asset
Management, L.P. (“GSAM AIMS”) purchasing 1.6 million shares at $13.54
per share.
Year-To-Date 2017 Highlights:
-
Recognized total investment income of $40.4 million, or $2.53 per
share;
-
Earned GAAP net investment income of $21.1 million, or $1.32 per share;
-
Signed $459.7 million of debt term sheets and closed $264.9 million of
new debt commitments to venture growth stage companies;
-
Funded $155.4 million in debt and equity investments to 18 portfolio
companies;
-
Achieved a 17.4% weighted average annualized portfolio yield on debt
investments for the nine months ending September 30, 2017;
-
Received $204.5 million of repayments and prepayments from nine
portfolio companies; and
-
Paid $17.3 million of distributions, or $1.08 per share.
“The record level of new signed term sheets, customer fundings and our
strong portfolio growth reflect the strength and brand of the
TriplePoint global platform,” said Jim Labe, chairman and chief
executive officer of TPVG. “We will continue to leverage our three R’s –
Reputation, Relationships and References – to capitalize on the
favorable conditions in the venture capital markets and strong demand
for venture growth stage lending.”
“We welcome GSAM AIMS as a shareholder and the financial flexibility
provided by this new capital,” said Sajal Srivastava, president and
chief investment officer of the Company. “Our successful strategy of
working with a select group of venture capital investors and their
high-quality venture growth stage companies enables us to deploy our
capital and grow our investment portfolio in a disciplined fashion to
maximize total return to our shareholders.”
Portfolio and Investment Activity:
During the third quarter of 2017, the Company entered into $121.9
million of new debt commitments, funded twelve debt investments totaling
$82.8 million of principal, funded two equity investments totaling $0.3
million and acquired warrants valued at $1.5 million. The new debt
investments funded during the quarter had a 13.8% weighted average
annualized portfolio yield at origination. During the quarter, the
Company had $21.8 million of prepayments, resulting in a weighted
average annualized portfolio yield on debt investments for the third
quarter of 15.4%. 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 September 30, 2017, the Company held 53 debt investments with 19
companies and 44 warrant and equity investments with 41 companies. The
total cost and fair value of these investments were $309.2 million and
$311.1 million, respectively. Total portfolio investment activity for
the three and nine months ended September 30, 2017 and 2016 was as
follows:
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Beginning portfolio at fair value
|
|
$
|
253,804
|
|
|
$
|
299,649
|
|
|
$
|
374,311
|
|
|
$
|
271,717
|
|
New debt investments
|
|
|
79,996
|
|
|
|
14,659
|
|
|
|
146,485
|
|
|
|
91,932
|
|
Principal payments from debt investments
|
|
|
(3,136
|
)
|
|
|
(1,650
|
)
|
|
|
(7,796
|
)
|
|
|
(5,768
|
)
|
Early principal prepayments and repayments
|
|
|
(21,750
|
)
|
|
|
(10,000
|
)
|
|
|
(204,524
|
)
|
|
|
(41,115
|
)
|
Accretion of debt investment fees
|
|
|
775
|
|
|
|
2,296
|
|
|
|
637
|
|
|
|
4,821
|
|
Payment-in-kind coupon
|
|
|
611
|
|
|
|
316
|
|
|
|
1,501
|
|
|
|
1,284
|
|
New warrants
|
|
|
1,538
|
|
|
|
334
|
|
|
|
2,939
|
|
|
|
1,677
|
|
New equity investments
|
|
|
304
|
|
|
|
196
|
|
|
|
3,703
|
|
|
|
196
|
|
Proceeds from the sale of investments
|
|
|
(1,417
|
)
|
|
|
(1,885
|
)
|
|
|
(1,491
|
)
|
|
|
(1,892
|
)
|
Net realized gains (losses) on investments
|
|
|
1,044
|
|
|
|
1,081
|
|
|
|
(2,351
|
)
|
|
|
(20,906
|
)
|
Net change in unrealized gains (losses) on investments
|
|
|
(633
|
)
|
|
|
3,861
|
|
|
|
(2,278
|
)
|
|
|
6,911
|
|
Ending portfolio at fair value
|
|
$
|
311,136
|
|
|
$
|
308,857
|
|
|
$
|
311,136
|
|
|
$
|
308,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signed Term Sheets:
During the third quarter of 2017, TriplePoint Capital LLC (“TPC”)
entered into $267.0 million of non-binding term sheets to venture growth
stage companies. These opportunities are subject to underwriting
conditions including, but not limited to, the 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.
Unfunded Commitments:
As of September 30, 2017, the Company’s unfunded commitments totaled
$158.2 million, of which $50.0 million is dependent upon customers
reaching certain milestones. Of the $158.2 million of unfunded
commitments, $31.0 million will expire during 2017, $97.2 million will
expire during 2018 and $30.0 million will expire during 2019, if not
drawn prior to expiration. Since these commitments may expire without
being drawn, unfunded commitments do not necessarily represent future
cash requirements or future earning assets for the Company.
Results of Operations:
For the third quarter of 2017, total investment and other income was
$10.4 million, as compared to $12.5 million for the third quarter of
2016, resulting in a weighted average annualized portfolio yield of
15.4% and 15.1%, respectively. The decline is largely due to a lower
average portfolio balance as compared to a year ago as well as lower
income from expirations / terminations of unfunded commitments. For the
nine months ended September 30, 2017, the Company’s total investment and
other income was $40.4 million, as compared to $33.0 million for the
nine months ended September 30, 2016, representing a weighted average
annualized portfolio yield on its debt investments of 17.4% and 14.7%,
respectively.
Operating expenses for the third quarter of 2017 were $6.1 million as
compared to $6.0 million for the third quarter of 2016. Operating
expenses for the third quarter of 2017 consisted of $2.3 million of
interest expense and amortization of deferred credit facility costs
including $0.3 million of interest overlap related to the repayment of
the 6.75% notes due in 2020 (“2020 Notes”), $1.6 million of base
management fees, $1.1 million of income incentive fees, $0.3 million of
administration agreement expenses and $0.8 million of general and
administrative expenses. 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 fees, $0.4 million of administration
agreement expenses and $0.6 million of general and administrative
expenses. The Company’s operating expenses were $19.3 million and $14.8
million for the nine months ended September 30, 2017 and 2016,
respectively.
For the third quarter of 2017, the Company recorded net investment
income of $4.4 million, or $0.27 per share, as compared to $6.5 million,
or $0.40 per share for the third quarter of 2016. Net investment income
for the nine months ended September 30, 2017 was $21.1 million, or $1.32
per share compared to $18.2 million, or $1.12 per share during the nine
months ended September 30, 2016.
During the third quarter of 2017, the Company recorded net realized
gains on the sale of portfolio investments of $1.0 million, or $0.07 per
share, offset by a non-cash realized loss on debt extinguishment of
$(1.1) million, or $(0.07) per share, due to the acceleration of
unamortized issuance costs in connection with the redemption of its
6.75% Notes due 2020 and issuance of its 5.75% Notes due 2022. Net
unrealized losses for the third quarter of 2017 were $(0.6) million, or
$(0.04) per share, due to the reversal of unrealized gains of $(0.8)
million due to realized activity offset by $0.2 million of unrealized
appreciation. This compares to net unrealized gains of $3.9 million, or
$0.24 per share, for the third quarter of 2016. The Company’s net
realized and unrealized losses were $(5.7) million and $(14.0) million
for the nine months ended September 30, 2017 and 2016, respectively.
The Company’s net increase in net assets resulting from operations for
the third quarter of 2017 was approximately $3.7 million, or $0.23 per
share, as compared to a net increase in net assets of $11.4 million, or
$0.71 per share, for the third quarter of 2016. For the nine months
ended September 30, 2017, the Company’s net increase in net assets
resulting from operations was approximately $15.4 million, or $0.96 per
share, as compared to a $4.2 million, or $0.26 per share, for the nine
months ended September 30, 2016.
Credit Quality:
The Company maintains a credit watch list with borrowers placed into one
of five categories, with Clear, or 1, being the highest rating and Red,
or 5, being the lowest. All new loans are initially assigned a rating of
White, or 2. As of September 30, 2017, the weighted average investment
ranking of the Company’s debt investment portfolio was 2.02, as compared
to 2.06 at the end of the prior quarter. During the three months ended
September 30, 2017, there were four changes within the credit
categories. Two portfolio companies were upgraded from White (2) to
Clear (1) and two portfolio companies were downgraded from White (2) to
Yellow (3). Additional information regarding our credit rating
methodology is detailed in our Form 10-Q for the three months ended
September 30, 2017.
The following table shows the credit rankings for the Company’s debt
investments at fair value as of September 30, 2017 and as of June 30,
2017.
|
|
|
|
|
|
|
As of September 30, 2017
|
|
As of June 30, 2017
|
Category (dollars in thousands)
|
|
Fair Value
|
|
Percentage of Debt Investment Portfolio
|
|
|
Number of Portfolio Companies
|
|
Fair Value
|
|
Percentage of Debt Investment Portfolio
|
|
|
Number of Portfolio Companies
|
Clear (1)
|
|
$
|
65,602
|
|
22.4
|
%
|
|
4
|
|
$
|
38,711
|
|
16.4
|
%
|
|
2
|
White (2)
|
|
|
167,332
|
|
57.2
|
|
|
10
|
|
|
155,609
|
|
66.0
|
|
|
11
|
Yellow (3)
|
|
|
47,210
|
|
16.1
|
|
|
3
|
|
|
29,777
|
|
12.6
|
|
|
1
|
Orange (4)
|
|
|
12,539
|
|
4.3
|
|
|
2
|
|
|
11,802
|
|
5.0
|
|
|
2
|
Red (5)
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
$
|
292,683
|
|
100.0
|
%
|
|
19
|
|
$
|
235,899
|
|
100.0
|
%
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value:
As of September 30, 2017, the Company’s net assets were $214.8 million,
or $13.39 per share, as compared to $216.5 million, or $13.52 per share,
as of June 30, 2017.
Liquidity and Capital Resources:
As of September 30, 2017, the Company had total cash of $8.5 million,
with available capacity of $174.5 million under its revolving credit
facility. Subsequent to the end of the third quarter, the Company raised
$22.6 million of proceeds from the issuance of common stock in a private
placement with $21.6 million from GSAM AIMS and $1.0 million from Jim
Labe, Sajal Srivastava, and Andrew Olson.
Distribution:
The Company’s board of directors declared a quarterly distribution of
$0.36 per share for the fourth quarter of 2017 payable on December 1,
2017, to stockholders of record as of November 17, 2017.
Subsequent Events:
Since September 30, 2017:
-
The Company funded $35.5 million in new investments;
-
MongoDB, Inc. priced its initial public offering on October 19, 2017,
raising gross proceeds of $192 million; and
-
TPC’s direct originations platform entered into $10.0 million of
additional non-binding signed term sheets with venture growth stage
companies.
Conference Call:
The Company will host a conference call at 5:00 p.m. Eastern time today,
November 6, 2017, to discuss its financial results for the third quarter
ended September 30, 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 December 6, 2017, by
dialing 1 (877) 344-7529 or 1 (412) 317-0088 (international) and
entering conference ID 10114090. 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
(in thousands, except per share data)
|
|
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
Assets
|
|
(unaudited)
|
|
|
Investments at fair value (amortized cost of $309,219 and $370,116,
respectively)
|
|
$
|
311,136
|
|
|
$
|
374,311
|
|
Short-term investments at fair value (cost of $94,962 and $39,990,
respectively)
|
|
|
94,962
|
|
|
|
39,990
|
|
Cash
|
|
|
5,145
|
|
|
|
7,776
|
|
Restricted cash
|
|
|
3,327
|
|
|
|
7,702
|
|
Deferred credit facility costs and other assets
|
|
|
3,035
|
|
|
|
4,443
|
|
Total assets
|
|
$
|
417,605
|
|
|
$
|
434,222
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Revolving credit facility payable
|
|
$
|
25,500
|
|
|
$
|
115,000
|
|
2020 Notes, net
|
|
|
—
|
|
|
|
53,288
|
|
2022 Notes, net
|
|
|
72,302
|
|
|
|
—
|
|
Payable for U.S. Treasury bill assets
|
|
|
94,962
|
|
|
|
39,990
|
|
Other payables, accrued expenses, and liabilities
|
|
|
10,082
|
|
|
|
10,081
|
|
Total liabilities
|
|
$
|
202,846
|
|
|
$
|
218,359
|
|
|
|
|
|
|
Net assets
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000 shares
authorized; no shares issued and outstanding, respectively)
|
|
$
|
—
|
|
|
$
|
—
|
|
Common stock, par value $0.01 per share (450,000 shares authorized;
16,043 and 15,981 shares issued and outstanding, respectively)
|
|
|
160
|
|
|
|
160
|
|
Paid-in capital in excess of par value
|
|
|
232,317
|
|
|
|
231,518
|
|
Undistributed net investment income
|
|
|
4,862
|
|
|
|
1,025
|
|
Accumulated net realized losses
|
|
|
(24,498
|
)
|
|
|
(21,035
|
)
|
Accumulated net unrealized gains on investments
|
|
|
1,918
|
|
|
|
4,195
|
|
Total net assets
|
|
$
|
214,759
|
|
|
$
|
215,863
|
|
Total liabilities and net assets
|
|
$
|
417,605
|
|
|
$
|
434,222
|
|
|
|
|
|
|
Net asset value per share
|
|
$
|
13.39
|
|
|
$
|
13.51
|
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
|
For the Nine Months Ended September 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income from investments
|
|
$
|
10,310
|
|
|
$
|
11,207
|
|
|
$
|
39,061
|
|
|
$
|
31,214
|
|
Other income
|
|
|
109
|
|
|
|
1,295
|
|
|
|
1,344
|
|
|
|
1,772
|
|
Total investment and other income
|
|
|
10,419
|
|
|
|
12,502
|
|
|
|
40,405
|
|
|
|
32,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base management fee
|
|
|
1,567
|
|
|
|
1,376
|
|
|
|
4,805
|
|
|
|
4,076
|
|
Income incentive fee
|
|
|
1,066
|
|
|
|
1,568
|
|
|
|
4,520
|
|
|
|
1,568
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Interest expense and amortization of fees
|
|
|
2,306
|
|
|
|
2,036
|
|
|
|
6,861
|
|
|
|
5,733
|
|
Administration agreement expenses
|
|
|
346
|
|
|
|
395
|
|
|
|
1,058
|
|
|
|
1,190
|
|
General and administrative expenses
|
|
|
767
|
|
|
|
632
|
|
|
|
2,044
|
|
|
|
2,238
|
|
Total operating expenses
|
|
|
6,052
|
|
|
|
6,007
|
|
|
|
19,288
|
|
|
|
14,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
4,367
|
|
|
|
6,495
|
|
|
|
21,117
|
|
|
|
18,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gains (losses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) on investments
|
|
|
1,044
|
|
|
|
1,081
|
|
|
|
(2,351
|
)
|
|
|
(20,906
|
)
|
Net change in unrealized (losses) gains on investments
|
|
|
(620
|
)
|
|
|
3,859
|
|
|
|
(2,277
|
)
|
|
|
6,906
|
|
Net realized loss on extinguishment of debt
|
|
|
(1,112
|
)
|
|
|
—
|
|
|
|
(1,112
|
)
|
|
|
—
|
|
Net realized and unrealized (losses) gains
|
|
|
(688
|
)
|
|
|
4,940
|
|
|
|
(5,740
|
)
|
|
|
(14,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
$
|
3,679
|
|
|
$
|
11,435
|
|
|
$
|
15,377
|
|
|
$
|
4,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net investment income per share
|
|
$
|
0.27
|
|
|
$
|
0.40
|
|
|
$
|
1.32
|
|
|
$
|
1.12
|
|
Basic and diluted net increase (decrease) in net assets per share
|
|
$
|
0.23
|
|
|
$
|
0.71
|
|
|
$
|
0.96
|
|
|
$
|
0.26
|
|
Basic and diluted weighted average shares of common stock outstanding
|
|
|
16,023
|
|
|
|
16,091
|
|
|
|
16,001
|
|
|
|
16,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE PORTFOLIO YIELD ON DEBT INVESTMENTS
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
|
For the Nine Months Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Weighted average portfolio yield on debt investments
|
|
15.4
|
%
|
|
15.1
|
%
|
|
17.4
|
%
|
|
14.7
|
%
|
Coupon income
|
|
10.4
|
%
|
|
10.5
|
%
|
|
10.4
|
%
|
|
10.5
|
%
|
Net amortization and accretion of premiums and discounts
|
|
0.9
|
%
|
|
0.8
|
%
|
|
0.7
|
%
|
|
0.7
|
%
|
Net accretion of end-of-term payments
|
|
2.2
|
%
|
|
2.4
|
%
|
|
1.9
|
%
|
|
2.6
|
%
|
Impact of prepayments
|
|
1.9
|
%
|
|
1.4
|
%
|
|
4.4
|
%
|
|
0.9
|
%
|
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/20171106006277/en/
Source: TriplePoint Venture Growth BDC Corp.