Net Investment Income of $0.40 per share and Net Increase in Net
Assets of $0.45 per share
Record Investment Portfolio of $457.7 Million as of March 31, 2019
Declares Second Quarter 2019 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 first quarter ended March 31,
2019 and its second quarter 2019 distribution of $0.36 per share.
First Quarter 2019 Highlights
-
Earned net investment income of $9.9 million, or $0.40 per share;
-
Generated a net increase in net assets of $11.1 million, or $0.45 per
share, resulting in a net asset value of $13.59 per share;
-
Signed $250.0 million of new term sheets at TriplePoint Capital LLC
(“TPC”), and TPVG closed $191.0 million of new debt commitments to
venture growth stage companies;
-
Funded $89.5 million in debt investments with a 13.0% weighted average
annualized portfolio yield at origination;
-
Grew the investment portfolio to a record level of $457.7 million as
of March 31, 2019;
-
Achieved a 16.5% weighted average annualized portfolio yield on debt
investments, including the impact of prepayments;
-
Realized a 11.9% return on average equity, based on net investment
income, during the quarter; and
-
Declared a second quarter distribution of $0.36 per share, payable on
June 14, 2019; bringing total distributions to $7.44 per share since
the Company’s Initial Public Offering.
“The first quarter marked the fifth anniversary of our initial public
offering. Our brand, reputation, focus on venture growth stage companies
and our track record continue to differentiate us in the
market,” said Jim Labe, Chairman and Chief Executive Officer of TPVG.
“We are pleased to grow our platform and our investment portfolio while
delivering attractive returns to our stockholders.”
“We continue to have strong demand for venture growth stage lending from
high quality venture capital-backed companies,” said Sajal Srivastava,
President and Chief Investment Officer of the Company. “We will maintain
our disciplined underwriting as we capitalize on these opportunities.”
PORTFOLIO AND INVESTMENT ACTIVITY
During the first quarter of 2019, the Company entered into $191.0
million of new debt commitments with nine companies, funded debt
investments totaling $89.5 million to nine companies and acquired
warrant investments valued at $1.8 million in eight companies. Debt
investments funded during the quarter carried a weighted average
annualized portfolio yield of 13.0% at origination. During the quarter,
the Company had $57.6 million of early principal prepayments, $5.0
million of repayments at or near maturity and principal amortization of
$7.9 million. The weighted average annualized portfolio yield on debt
investments for the first quarter was 16.5%, including the impact of
prepayments and other activity, and 13.8% excluding the impact of
prepayments and other activity. 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, 2019, the Company held 86 debt investments with 29
companies and 66 warrant and equity investments in 60 companies. The
total cost and fair value of these investments were $458.2 million and
$457.7 million, respectively.
Total portfolio investment activity for the three months ended March 31,
2019 and 2018 was as follows:
|
|
|
|
|
For the Three Months Ended March 31,
|
|
(in thousands)
|
|
2019
|
|
2018
|
|
Beginning portfolio at fair value
|
|
$
|
433,417
|
|
|
$
|
372,103
|
|
|
New debt investments, net (1) |
|
|
87,639
|
|
|
|
36,968
|
|
|
Scheduled principal payments from debt investments
|
|
|
(12,960
|
)
|
|
|
(5,876
|
)
|
|
Early principal payments, repayments and recoveries
|
|
|
(57,553
|
)
|
|
|
(8,348
|
)
|
|
Accretion of debt investment fees
|
|
|
3,235
|
|
|
|
2,948
|
|
|
Payment-in-kind coupon
|
|
|
771
|
|
|
|
605
|
|
|
New warrant investments
|
|
|
1,814
|
|
|
|
615
|
|
|
New equity investments
|
|
|
500
|
|
|
|
250
|
|
|
Proceeds and dispositions of investments
|
|
|
(322
|
)
|
|
|
(3
|
)
|
|
Net realized (losses) gains
|
|
|
(29
|
)
|
|
|
8
|
|
|
Net unrealized gains on investments
|
|
|
1,183
|
|
|
|
1,988
|
|
|
Ending portfolio at fair value
|
|
$
|
457,695
|
|
|
$
|
401,258
|
|
|
|
|
|
|
(1) Debt balance is net of fees and discounts applied to the loan at
origination.
SIGNED TERM SHEETS
During the first quarter of 2019, TPC entered into $250.0 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 March 31, 2019, the Company’s unfunded commitments totaled $379.7
million, of which $102.0 million is dependent upon portfolio companies
reaching certain milestones. Of the $379.7 million of unfunded
commitments, $218.7 million will expire during 2019, $131.0 million will
expire during 2020 and $30.0 million will expire in 2021 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
Total investment and other income was $17.5 million for the first
quarter of 2019, representing a weighted average annualized portfolio
yield of 16.5% on debt investments, as compared to $12.6 million and
14.0%, for the first quarter of 2018. The increase in investment income
was driven by higher weighted average principal outstanding on our
investment portfolio and an increase in prepayments and other income.
Operating expenses for the first quarter of 2019 were $7.6 million as
compared to $6.7 million for the first quarter of 2018. Operating
expenses for the first quarter of 2019 consisted of $2.2 million of
interest expense and amortization of deferred credit facility costs,
$1.8 million of base management fees, $2.5 million of income incentive
fees, $0.4 million of administration agreement expenses and $0.7 million
of general and administrative expenses. Operating expenses for the first
quarter of 2018 consisted of $2.5 million of interest expense and
amortization of deferred credit facility costs, $1.5 million of base
management fees, $1.5 million of income incentive fees, $0.4 million of
administration agreement expenses and $0.7 million of general and
administrative expenses.
For the first quarter of 2019, the Company recorded net investment
income of $9.9 million, or $0.40 per share, as compared to $5.9 million,
or $0.34 per share, for the first quarter of 2018. Revenue increased in
the first quarter of 2019, as compared to the first quarter of 2018,
primarily due to an increase in weighted average principal outstanding
on debt investments and an increase in principal prepayments and other
income.
During the first quarter of 2019, the Company recorded $(29 thousand),
or $(0.00) per share, of net realized losses on investments, compared to
net realized gains on investments of $8 thousand, or $0.00 per share,
for the first quarter of 2018. Net unrealized appreciation on
investments for the first quarter of 2019 was $1.2 million, or $0.05 per
share, mainly resulting from market-related changes affecting fair value
estimates, as compared to net unrealized appreciation on investments of
$2.0 million, or $0.11 per share, for the first quarter of 2018.
The Company’s net increase in net assets resulting from operations for
the first quarter of 2019 was approximately $11.1 million, or $0.45 per
share, as compared to approximately $7.9 million, or $0.45 per share,
for the first quarter of 2018.
CREDIT QUALITY
The Company maintains a credit watch list with portfolio companies
placed into one of five categories, with Clear, or 1, being the highest
rating and Red, or 5, being the lowest. Generally, all new loans receive
an initial grade of White (2) unless the portfolio company’s credit
quality meets the characteristics of another risk category.
As of March 31, 2019, the weighted average investment ranking of the
Company’s debt investment portfolio was 1.95, as compared to 1.87 at the
end of the prior quarter. During the three months ended March 31, 2019,
portfolio company credit category changes, excluding fundings and
repayments, consisted of the following: one portfolio company with a
principal balance of $14.6 million was upgraded from White (2) to Clear
(1) and two portfolio companies with a combined principal balance of
$29.2 million were downgraded from Clear (1) to White (2). Additional
information regarding our credit rating methodology is detailed in our
Form 10-Q for the three months ended March 31, 2019.
The following table shows the credit rankings for the Company’s debt
investments at fair value as of March 31, 2019 and December 31, 2018.
|
|
|
|
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
|
Category
(dollars in thousands)
|
|
Fair Value
|
|
% of Debt
Investment
Portfolio
|
|
|
|
# of Portfolio
Companies
|
|
Fair Value
|
|
% of Debt
Investment
Portfolio
|
|
|
|
# of Portfolio
Companies
|
|
Clear (1)
|
|
$
|
81,225
|
|
19.1
|
|
%
|
|
4
|
|
$
|
112,032
|
|
27.6
|
|
%
|
|
7
|
|
White (2)
|
|
|
293,911
|
|
69.3
|
|
|
|
20
|
|
|
245,544
|
|
60.6
|
|
|
|
17
|
|
Yellow (3)
|
|
|
40,163
|
|
9.5
|
|
|
|
3
|
|
|
38,982
|
|
9.6
|
|
|
|
3
|
|
Orange (4)
|
|
|
6,886
|
|
1.6
|
|
|
|
1
|
|
|
6,789
|
|
1.7
|
|
|
|
1
|
|
Red (5)
|
|
|
2,211
|
|
0.5
|
|
|
|
1
|
|
|
2,000
|
|
0.5
|
|
|
|
1
|
|
|
$
|
424,396
|
|
100.0
|
|
%
|
|
29
|
|
$
|
405,347
|
|
100.0
|
|
%
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSET VALUE
As of March 31, 2019, the Company’s net assets were $337.2 million, or
$13.59 per share, as compared to $334.5 million, or $13.50 per share, as
of December 31, 2018.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2019, the Company had total liquidity of $171.2 million,
consisting of cash of $42.0 million and available capacity under its
revolving credit facility of $129.2 million, subject to existing advance
rates, terms and covenants.
DISTRIBUTION
The Company’s board of directors declared a quarterly distribution of
$0.36 per share for the second quarter of 2019, payable on June 14,
2019, to stockholders of record as of May 31, 2019.
SUBSEQUENT EVENTS
Since April 1, 2019:
-
The Company closed $17.1 million of additional debt commitments;
-
The Company funded $39.8 million in new investments; and
-
TPC’s direct originations platform entered into $95.0 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,
May 1, 2019, to discuss its financial results for the first quarter
ended March 31, 2019. To listen to the call, investors and analysts
should dial 1 (844) 826-3038 (domestic) or 1 (412) 317-5184
(international) and ask to join the TriplePoint Venture Growth BDC Corp.
call. Please dial in at least five minutes before the scheduled start
time. A replay of the call will be available through June 1, 2019, by
dialing 1 (877) 344-7529 (domestic) or 1 (412) 317-0088 (international)
and entering conference ID10131105. The conference call will also 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. Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect management’s opinions
only as of the date hereof. 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.
|
|
|
|
|
|
TriplePoint Venture Growth BDC Corp.
Consolidated Statements of Assets and Liabilities
(in thousands, except per share data)
|
|
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Assets
|
|
(unaudited)
|
|
|
|
Investments at fair value (amortized cost of $458,176 and $435,084,
respectively)
|
|
$
|
457,695
|
|
$
|
433,417
|
|
Short-term investments at fair value (cost of $49,994 and $19,999,
respectively)
|
|
|
49,994
|
|
|
19,999
|
|
Cash
|
|
|
35,973
|
|
|
3,382
|
|
Restricted cash
|
|
|
6,014
|
|
|
6,567
|
|
Deferred credit facility costs and other assets
|
|
|
4,700
|
|
|
3,689
|
|
Total assets
|
|
$
|
554,376
|
|
$
|
467,054
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Revolving credit facility payable
|
|
$
|
80,776
|
|
$
|
23,000
|
|
2022 Notes, net
|
|
|
73,071
|
|
|
72,943
|
|
Payable for U.S. Treasury bill assets
|
|
|
49,994
|
|
|
19,999
|
|
Other payables, accrued expenses, and liabilities
|
|
|
13,336
|
|
|
16,581
|
|
Total liabilities
|
|
$
|
217,177
|
|
$
|
132,523
|
|
|
|
|
|
|
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;
24,820 and 24,780 shares issued and outstanding, respectively)
|
|
|
248
|
|
|
248
|
|
Paid-in capital in excess of par value
|
|
|
331,847
|
|
|
331,329
|
|
Total distributable earnings
|
|
|
5,104
|
|
|
2,954
|
|
Total net assets
|
|
$
|
337,199
|
|
$
|
334,531
|
|
Total liabilities and net assets
|
|
$
|
554,376
|
|
$
|
467,054
|
|
|
|
|
|
|
Net asset value per share
|
|
$
|
13.59
|
|
$
|
13.50
|
|
|
|
|
|
|
|
|
|
|
|
TriplePoint Venture Growth BDC Corp.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
2019
|
|
2018
|
|
Investment income
|
|
|
|
|
|
Interest income from investments
|
|
$
|
17,147
|
|
|
$
|
12,616
|
|
Other income
|
|
|
344
|
|
|
|
3
|
|
Total investment and other income
|
|
|
17,491
|
|
|
|
12,619
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
Base management fee
|
|
|
1,761
|
|
|
|
1,528
|
|
Income incentive fee
|
|
|
2,479
|
|
|
|
1,487
|
|
Capital gains incentive fee
|
|
|
—
|
|
|
|
—
|
|
Interest expense and amortization of fees
|
|
|
2,203
|
|
|
|
2,518
|
|
Administration agreement expenses
|
|
|
422
|
|
|
|
407
|
|
General and administrative expenses
|
|
|
711
|
|
|
|
732
|
|
Total operating expenses
|
|
|
7,576
|
|
|
|
6,672
|
|
|
|
|
|
|
Net investment income
|
|
|
9,915
|
|
|
|
5,947
|
|
|
|
|
|
|
Net realized and unrealized gains (losses)
|
|
|
|
|
|
Net realized (losses) gains on investments
|
|
|
(29
|
)
|
|
|
8
|
|
Net change in unrealized gains on investments
|
|
|
1,183
|
|
|
|
1,988
|
|
Net realized and unrealized gains (losses)
|
|
|
1,154
|
|
|
|
1,996
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
11,069
|
|
|
$
|
7,943
|
|
|
|
|
|
|
Basic and diluted net investment income per share
|
|
$
|
0.40
|
|
|
$
|
0.34
|
|
Basic and diluted net increase in net assets per share
|
|
$
|
0.45
|
|
|
$
|
0.45
|
|
Basic and diluted weighted average shares of common stock outstanding
|
|
|
24,782
|
|
|
|
17,730
|
|
|
|
|
|
Weighted Average Portfolio Yield on Debt Investments
|
|
|
|
|
|
|
For the Three Months Ended March 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
Weighted average portfolio yield on debt investments
|
|
16.5
|
%
|
|
14.0
|
%
|
|
Coupon income
|
|
10.7
|
%
|
|
10.5
|
%
|
|
Net amortization and accretion of premiums and discounts
|
|
0.9
|
%
|
|
0.9
|
%
|
|
Net accretion of end-of-term payments
|
|
2.2
|
%
|
|
2.2
|
%
|
|
Impact of prepayments
|
|
2.7
|
%
|
|
0.4
|
%
|
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.
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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190501005924/en/
INVESTOR RELATIONS AND MEDIA CONTACT
Abernathy MacGregor
Group
Alan Oshiki / Sheila Ennis
212-371-5999 / 415-745-3294
aho@abmac.com
/ sbe@abmac.com
Source: TriplePoint Venture Growth BDC Corp.