NEW YORK, Jan. 14 /PRNewswire-FirstCall/ -- GSC Investment Corp. , a business development company, today announced financial results for the fiscal third quarter ended November 30, 2009.
Operating Results
For the quarter ended November 30, 2009, GSC Investment Corp. reported net investment income of $0.9 million, or $0.10 per share, and net gain on investments of $8.3 million, or $0.91 per share, resulting in a net increase in net assets from operations of $9.1 million, or $1.01 per share. $8.8 million of the net gain was due to unrealized appreciation. Net asset value was $3.80 per share as of November 30, 2009 as compared to $6.91 per share as of August 31, 2009. The decrease in NAV per share from August 31, 2009 was primarily the result of the distribution of 8.6 million shares of common stock on December 31, 2009 for the stock portion of the dividend declared on November 13, 2009. In accordance with generally accepted accounting principals, the number of shares outstanding used to calculate NAV per share as of November 30, 2009 was retroactively adjusted to reflect the additional shares issued as a result of the stock dividend. Excluding the issuance of these additional shares, the NAV per share would have been $7.76 as of November 30, 2009.
Portfolio and Investment Activity
As of November 30, 2009, the value of the Company's investment portfolio was $103.3 million, principally invested in 29 portfolio companies and one collateralized loan obligation fund ("CLO"). The overall portfolio composition consisted of 15.4% first lien term loans, 29.1% second lien term loans, 27.5% senior secured notes, 7.1% unsecured notes, 20.8% subordinated notes of GSCIC CLO and 0.1% equity/limited partnership interests.
During the third quarter, GSC Investment Corp. made no investments in new or existing portfolio companies. For the quarter, the Company had $5.7 million in aggregate amount of exits and repayments, resulting in net repayments of $5.7 million.
As of November 30, 2009, the weighted average current yield on the Company's first lien term loans, second lien term loans, senior secured notes, unsecured notes and the GSCIC CLO subordinated notes were 7.8%, 8.0%, 11.6%, 12.3% and 11.0%, respectively, which resulted in an aggregate weighted average current yield of 9.8%.
As of November 30, 2009, 43.2%, or $35.3 million, of the Company's interest-bearing portfolio was fixed rate debt with a weighted average current coupon of 11.7% and 56.8%, or $46.5 million, of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 7.1%.
Liquidity and Capital Resources
At November 30, 2009, the Company had $43.8 million in borrowings under its credit facility and an asset coverage ratio of 247%.
On July 30, 2009, an unremedied borrowing base deficiency became an event of default, which is currently continuing. During the continuance of an event of default, the lender has the ability to terminate the facility and sell the underlying collateral necessary to satisfy outstanding borrowings. The lender has elected not to accelerate the obligation to date, but has reserved the right to do so. Including $6.3 million of repayments made subsequent to November 30, 2009, the Company has repaid $18.3 million of outstanding borrowings since the event of default consisting of $11.6 million of proceeds from asset sales and repayments and $6.7 million from cash interest received in excess of interest expense.
The Company continues to work with the investment banking firm of Stifel Nicolaus & Company as it actively evaluates strategic alternatives to maximize long-term shareholder value.
Dividend
On November 13, 2009, the Company's Board of Directors declared a dividend of $1.825 per share is payable on December 31, 2009, to shareholders of record as of November 25, 2009. Shareholders had until December 17, 2009 to elect whether to receive the dividend in cash (up to an aggregate maximum cash amount of approximately $2.1 million or approximately 13.7% of the total dividend paid) or in shares of common stock. The dividend consisted of $2.1 million in cash and 8,648,725 shares of common stock or 104% of GSC Investment Corp's outstanding shares prior to the dividend. The dividend included the balance of the Company's fiscal year 2009 taxable income and a significant portion of the Company's fiscal year 2010 taxable income including a component for the third quarter of fiscal year 2010.
2010 Third Quarter Conference Call/Webcast Information When: Friday, January 15, 2010, 10:00 a.m. Eastern Time (ET)
Call: Interested parties may participate by dialing (877) 852-6561 (U.S. and Canada) or (719) 325-4900 (outside U.S. and Canada).
Webcast: Interested parties may also access a simultaneous webcast of the call by going to http://ir.gscinvestmentcorp.com/events.cfm. A replay of the webcast will be available from 1:00 p.m. ET on Friday, January 15, 2010 through 11:59 p.m. ET, Wednesday, January 27, 2010.
About GSC Investment Corp.
GSC Investment Corp. is a specialty finance company that invests primarily in leveraged loans and mezzanine debt issued by U.S. middle-market companies, high yield bonds and collateralized loan obligations. It has elected to be treated as a business development company under the Investment Company Act of 1940. The Company may also opportunistically invest in distressed debt, debt issued by non-middle market companies, and equity securities issued by middle and non-middle market companies. The Company draws upon the support and investment advice of its external manager, GSC Group, an alternative asset investment manager that focuses on complex, credit-driven strategies. GSC Investment Corp. is traded on the New York Stock Exchange under the symbol "GNV."
GSC Investment Corp. Consolidated Balance Sheets As of -------- November 30, 2009 February 28, 2009 ----------------- ----------------- (unaudited) ASSETS Investments at fair value Non-control/non-affiliate investments (amortized cost of $126,612,792 and $137,020,449, respectively) $81,805,383 $96,462,919 Control investments (cost of $29,233,097 and $29,905,194, respectively) 21,464,041 22,439,029 Affiliate investments (cost of $0 and $0, respectively) 318 10,527 --- ------ Total investments at fair value (amortized cost of $155,845,889 and $166,925,643, respectively) 103,269,742 118,912,475 Cash and cash equivalents 5,459,780 6,356,225 Cash and cash equivalents, securitization accounts 839,290 1,178,201 Outstanding interest rate cap at fair value (cost of $131,000 and $131,000, respectively) 72,593 39,513 Interest receivable, net of reserve 3,122,764 3,087,668 Deferred credit facility financing costs, net - 529,767 Management fee receivable 1,058,861 237,370 Other assets 113,150 321,260 Receivable from unsettled trades 600,036 - ------- ---- Total assets $114,536,216 $130,662,479 ============ ============ LIABILITIES Revolving credit facility $43,840,749 $58,994,673 Dividend payable 2,073,066 - Management and incentive fees payable 3,093,400 2,880,667 Accounts payable and accrued expenses 827,707 700,537 Interest and credit facility fees payable 357,455 72,825 Total liabilities $50,192,377 $62,648,702 =========== =========== NET ASSETS Common stock, par value $.0001 per share, 100,000,000 common shares authorized, 16,940,109 and 8,291,384 common shares issued and outstanding, respectively 1,694 829 Capital in excess of par value 130,001,583 116,943,738 Accumulated undistributed net investment income (loss) (4,496,445) 6,122,492 Accumulated net realized loss from investments and derivatives (8,528,440) (6,948,628) Net unrealized depreciation on investments and derivatives (52,634,553) (48,104,654) ----------- ----------- Total Net Assets 64,343,839 68,013,777 ---------- ---------- Total liabilities and Net Assets $114,536,216 $130,662,479 ============ ============ NET ASSET VALUE PER SHARE $3.80 $8.20 ----- ----- GSC Investment Corp. Consolidated Statements of Operations For the three months ended For the nine months ended November 30 November 30 --------------------------- -------------------------- 2009 2008 2009 2008 ---- ---- ---- ---- (unaudited) (unaudited) (unaudited) (unaudited) INVESTMENT INCOME Interest from investments Non-control/ Non-affiliate investments $2,593,082 $4,269,985 $8,566,587 $12,873,546 Control investments 368,374 1,452,237 1,686,088 3,198,626 ------- --------- --------- --------- Total interest income 2,961,456 5,722,222 10,252,675 16,072,172 Interest from cash and cash equivalents 2,752 38,377 22,934 141,074 Management fee income 511,236 517,875 1,549,167 1,529,762 Other income 54,699 82,189 155,111 164,683 ------ ------ ------- ------- Total investment income 3,530,143 6,360,663 11,979,887 17,907,691 --------- --------- ---------- ---------- EXPENSES Interest and credit facility financing expenses 1,126,162 693,830 3,174,603 2,150,639 Base management fees 462,755 653,995 1,515,813 2,108,026 Professional fees 714,789 272,196 1,396,567 932,785 Administrator expenses 171,861 241,317 515,583 750,661 Incentive management fees - 542,231 322,183 1,289,365 Insurance 220,059 173,353 649,535 518,001 Directors fees and expenses 71,989 72,490 217,125 212,375 General & administrative 65,298 65,289 191,223 208,230 Expenses before expense waiver and reimbursement 2,832,913 2,714,701 7,982,632 8,170,082 --------- --------- --------- --------- Expense reimbursement (171,861) (241,317) (515,583) (800,376) -------- -------- -------- -------- Total expenses net of expense waiver and reimbursement 2,661,052 2,473,384 7,467,049 7,369,706 --------- --------- --------- --------- NET INVESTMENT INCOME 869,091 3,887,279 4,512,838 10,537,985 ------- --------- --------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss from investments (549,864) (7,293,875) (1,579,812) (7,423,694) Net realized gain from derivatives - - - 30,454 Net unrealized appreciation/ (depreciation) on investments 8,825,100 (4,142,827) (4,562,979) (10,422,015) Net unrealized appreciation/ (depreciation) on derivatives (16,754) (1,419) 33,080 (29,745) ------- ------ ------ ------- Net gain/ (loss) on investments 8,258,482 (11,438,121) (6,109,711) (17,845,000) --------- ----------- ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $9,127,573 $(7,550,842) $(1,596,873) $(7,307,015) ========== =========== =========== =========== WEIGHTED AVERAGE - BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE $1.01 $(0.91) $(0.19) $(0.88) WEIGHTED AVERAGE COMMON STOCK OUTSTANDING - BASIC AND DILUTED 9,051,711 8,291,384 8,542,983 8,291,384 Contact: Debbie Lombardi GSC Group 973-593-5438
GSC Investment Corp.
CONTACT: Debbie Lombardi, GSC Group, +1-973-593-5438; or Roland
Tomforde, Broadgate Consultants, LLC, +1-212-232-2222
