HCAP - Harvest Capital Credit Corporation Announces December 31 2018 Financial Results
Harvest Capital Credit Corporation (the “Company”) (NASDAQ:HCAP) announced financial results for the fourth quarter and year ended December 31, 2018.
FINANCIAL HIGHLIGHTS
| Q4-18 |
| Q4-17 |
| FY-18 |
| FY-17 |
| Amount |
| Per |
| Amount |
| Per |
| Amount |
| Per |
| Amount |
| Per |
| Net investment income |
| $ |
| 1,575,141 |
| $ |
| 0.25 |
| $ |
| 1,924,508 |
| $ |
| 0.30 |
| $ |
| 5,982,399 |
| $ |
| 0.93 |
| $ |
| 8,236,854 |
| $ |
| 1.28 |
| Core net investment income (1) |
| $ |
| 1,575,141 |
| $ |
| 0.25 |
| $ |
| 1,924,508 |
| $ |
| 0.30 |
| $ |
| 5,982,399 |
| $ |
| 0.93 |
| $ |
| 8,973,657 |
| $ |
| 1.40 |
| Net realized gains (losses) on investments |
| $ |
| 122,440 |
| $ |
| 0.02 |
| - |
| - |
| ($486,680 |
| ) |
| ($0.07 |
| ) |
| ($8,062,441 |
| ) |
| ($1.26 |
| ) |
| Net change in unrealized appreciation (depreciation) on investments |
| $ |
| (164,944 |
| ) |
| $ |
| (0.03 |
| ) |
| $ |
| (432,485 |
| ) |
| $ |
| (0.07 |
| ) |
| ($428,921 |
| ) |
| ($0.07 |
| ) |
| $ |
| 1,458,173 |
| $ |
| 0.23 |
| Benefit for taxes on unrealized losses on investments (2) |
| $ |
| 15,584 |
| - |
| - |
| - |
| - |
| - |
| - |
| - |
| Net income |
| $ |
| 1,548,221 |
| $ |
| 0.24 |
| $ |
| 1,492,023 |
| $ |
| 0.23 |
| $ |
| 5,066,798 |
| $ |
| 0.79 |
| $ |
| 1,632,586 |
| $ |
| 0.25 |
| Weighted average shares outstanding (basic and diluted) |
| 6,401,887 |
| 6,474,769 |
| 6,406,869 |
| 6,412,215 |
| (1) |
| Core net investment income and core net investment income per share are non-GAAP financial measures. Reconciliations of core net investment income and core net investment income per share to the most directly comparable GAAP financial measure and other information regarding these non-GAAP financial measures are set forth in Schedule 1 hereto. |
| (2) |
| Rounds to less than $0.01 per share. |
PORTFOLIO ACTIVITY
| December 31, |
| December 31, |
| Portfolio investments at fair value |
| $ |
| 94,913,862 |
| $ |
| 115,600,678 |
| Total assets |
| $ |
| 125,319,701 |
| $ |
| 128,152,840 |
| Net assets |
| $ |
| 78,395,964 |
| $ |
| 81,781,429 |
| Shares outstanding |
| 6,372,581 |
| 6,457,588 |
| Net asset value per share |
| $ |
| 12.30 |
| $ |
| 12.66 |
| Q4-18 |
| Q4-17 |
| YTD-18 |
| YTD-17 |
| Portfolio activity during the period: |
| New debt investments |
| $ |
| 567,000 |
| $ |
| 12,215,000 |
| $ |
| 19,179,500 |
| $ |
| 52,942,222 |
| New equity investments |
| 718,000 |
| 521,146 |
| 1,559,899 |
| 4,114,786 |
| Exits of debt investments |
| (18,552,045 |
| ) |
| (9,190,481 |
| ) |
| (37,478,412 |
| ) |
| (58,610,753 |
| ) |
| Exits of equity investments |
| (12,500 |
| ) |
| — |
| 1,591,091 |
| * |
| (180,597 |
| ) |
| Principal repayments |
| (1,035,336 |
| ) |
| (773,819 |
| ) |
| (5,480,533 |
| ) |
| (17,128,341 |
| ) |
| Net activity |
| $ |
| (18,314,881 |
| ) |
| $ |
| 2,771,846 |
| $ |
| (20,628,455 |
| ) |
| $ |
| (18,862,683 |
| ) |
| *Includes exit of Revenue Linked Security |
| December 31, |
| December 31, |
| Number of portfolio company investments |
| 24 |
| 31 |
| Number of debt investments |
| 17 |
| 24 |
| Weighted average yield of debt and other income producing investments (1): |
| Cash |
| 12.5 |
| % |
| 11.3 |
| % |
| PIK |
| 1.0 |
| % |
| 1.4 |
| % |
| Fee amortization |
| 1.3 |
| % |
| 2.6 |
| % |
| Total |
| 14.8 |
| % |
| 15.3 |
| % |
| Weighted average yield on total investments (2): |
| Cash |
| 10.7 |
| % |
| 10.2 |
| % |
| PIK |
| 0.9 |
| % |
| 1.2 |
| % |
| Fee amortization |
| 1.1 |
| % |
| 2.3 |
| % |
| Total |
| 12.7 |
| % |
| 13.7 |
| % |
| (1) |
| The dollar-weighted average annualized effective yield is computed using the effective interest rates for our debt investments and other income producing investments, including cash and PIK interest as well as the accretion of deferred fees. The individual investment yields are then weighted by the respective fair values of the investments (as of the date presented) in calculating the weighted average effective yield of the portfolio. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors. Infinite Care, LLC was excluded from the calculation as of December 31, 2018 and December 31, 2017 because it was on non-accrual status on that date. |
| (2) |
| The dollar-weighted average yield on total investments takes the same yields but weights them to determine the weighted average effective yield as a percentage of the Company's total investments. The dollar-weighted average annualized yield on the Company's investments for a given period will generally be higher than what investors in our common stock would realize in a return over the same period because the dollar-weighted average annualized yield does not reflect the Company's expenses or any sales load that may be paid by investors. |
FOURTH QUARTER AND YEAR TO DATE 2018 OPERATING RESULTS
For the three months ended December 31, 2018, the Company recorded net income of $1.5 million, which is relatively flat compared to the quarter ended December 31, 2017. Per share earnings were $0.24 and $0.23 per share for the three months ended December 31, 2018 and 2017, respectively.
For the three months ended December 31, 2018, the Company's net investment income and core net investment income decreased by $0.3 million compared to the quarter ended December 31, 2017. Net investment income and core net investment income was $1.6 million, or $0.25 per share, for the quarter ended December 31, 2018, compared to net investment income and core net investment income of $1.9 million or $0.30 per share for the quarter ended December 31, 2017. Net investment income decreased in the quarter ended December 31, 2018, as compared to the quarter ended December 31, 2017, primarily as a result of the Company realizing higher expenses of $0.4 million, offset by an increase of $0.1 million tax benefit during the three months ended December 31, 2018.
For the year ended December 31, 2018, the Company recorded net income of $5.1 million, an increase of $3.5 million from $1.6 million of net income in the year ended December 31, 2017. The $3.5 million improvement was primarily attributable to a $7.6 million positive change in net realized losses offset by a $1.9 million decrease in change in unrealized appreciation. Per share earnings were $0.79 and $0.25 per share for the years ended December 31, 2018 and 2017, respectively.
For the year ended December 31, 2018, the Company's net investment income decreased by $2.2 million compared to the year ended December 31, 2017. Net investment income was $6.0 million, or $0.93 per share, for the year ended December 31, 2018, compared to net investment income of $8.2 million, or $1.28 per share, for the year ended December 31, 2017. Net investment income decreased in the year ended December 31, 2018, as compared to the year ended December 31, 2017, primarily as a result of the Company recording $2.5 million of lower investment income resulting from a smaller portfolio, offset by lower expenses of $0.1 million and recording a $0.1 million tax benefit for the year ended December 30, 2018.
As of December 31, 2018, our total portfolio investments at fair value and total assets were $94.9 million and $125.3 million, respectively, compared to $115.6 million and $128.2 million at December 31, 2017. Net asset value per share was $12.30 at December 31, 2018, compared to $12.66 at December 31, 2017.
During the fourth quarter of 2018, the Company made investments in 3 companies totaling $1.3 million. All three were additional investments in existing portfolio companies. The Company also had investment sales, payoffs, and commitment expirations totaling $18.6 million during the three months ended December 31, 2018. The investment activity for the quarter ended December 31, 2018 was as follows:
NEW AND INCREMENTAL INVESTMENTS
During the fourth quarter of 2018, the Company advanced Infinite Care, LLC $0.1 million on its revolving line of credit and made a $0.6 million add-on equity investment.
In October 2018, the Company increased its commitment under its revolving line of credit facility to Coastal Screen and Rail, LLC by $0.5 million and advanced $0.3 million.
During November 2018, the Company made a $0.1 million add-on equity investment in Flight Lease VII, LLC.
INVESTMENT SALES AND PAYOFFS
On October 15, 2018, the Company received $0.3 million for the redemption of the Douglas Machine Corp. warrants and recognized a $0.3 million gain. The cost basis of the equity investment was $12,500. The Company generated an internal rate of return* (“IRR”) of 60.4% on its investment.
On November 9, 2018, the Company received a full repayment, at par, of its senior secured debt investments in DirectMed Parts & Service, LLC. The original par values of the debt investment was $5.6 million. In addition, the Company terminated the $1.0 million revolving line of credit commitment. The Company received a $0.1 prepayment fee and generated an IRR* of 14.7% on its investment.
On December 3, 2018, the Company received a full repayment, at par, of its senior secured debt investments in Yucatan Foods, L.P. The original par value of the debt investments were $10.8 million and the Company received a $0.3 prepayment fee. The Company generated an IRR* of 16.1% on its investment.
* IRR is the rate of return that makes the net present value of all cash flows into or from the investment equal to zero, and is calculated based on the amount of each cash flow received or invested by the Company and the day it was received or invested.
"We reported fourth quarter net investment income of $0.25 per share, despite continued disappointing new investment activity," said Joseph A. Jolson, Chairman and CEO. "We believe the situation is temporary and expect to earn our recently reduced cash dividend in the second half of 2019, assuming we close on currently mandated deals in our pipeline. Meanwhile, in accordance with the Board authorization that expires in June 2019, we continue to repurchase our shares at recent stock prices, which is immediately accretive to our book value per share and our core earnings per share, and is another means for us to deploy our capital at attractive returns on equity for shareholders," continued Mr. Jolson.
"Credit quality has improved to a weighted average risk rating of 2.24, even though the investment portfolio has shrunk from payoffs of well performing credits. The operating performance of our only non-accruing 5-rated loan appears to have stabilized and we are guardedly optimistic about its prospects for 2019. Net asset value decreased slightly at December 31, 2018 to $12.30 per share," concluded Mr. Jolson.
CREDIT QUALITY
The Company employs various risk management and monitoring tools to categorize and assess its investments. No less frequently than quarterly, the Company applies an investment risk rating system which uses a five-level numeric scale. The following is a description of the conditions associated with each investment rating:
- Investment Rating 1 is used for investments that are performing above expectations, and whose risks remain favorable compared to the expected risk at the time of the original investment.
- Investment Rating 2 is used for investments that are performing within expectations and whose risks remain neutral compared to the expected risk at the time of the original investment. All new loans are initially rated 2.
- Investment Rating 3 is used for investments that are performing below expectations and that require closer monitoring, but where no loss of return or principal is expected. Portfolio companies with a rating of 3 may be out of compliance with financial covenants.
- Investment Rating 4 is used for investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are often in workout. Investments with a rating of 4 are those for which there is an increased possibility of some loss of return but no loss of principal is expected.
- Investment Rating 5 is used for investments that are performing substantially below expectations and whose risks have increased substantially since the original investment. These investments are almost always in workout. Investments with a rating of 5 are those for which some loss of return and principal is expected.
As of December 31, 2018, the weighted average risk rating of the debt investments in the Company's portfolio decreased slightly to 2.24 from 2.35 in the previous quarter. Also, as of December 31, 2018, five of the Company’s 17 debt investments were rated 1, seven investments were rated 2, three investments were rated 3, one investment was rated 4, and one investment was rated 5. As of December 31, 2018, one investment was on non-accrual status.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2018, the Company had $28.8 million of cash and restricted cash and $7.3 million of undrawn capacity on its $55.0 million senior secured revolving credit facility. The credit facility is secured by all of the Company’s assets and has an accordion feature that allows the size of the facility to increase up to $85.0 million.
SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO DECEMBER 31, 2018
On January 8, 2019, the Company received a full repayment at par value, plus accrued and unpaid interest, plus a 1.0% prepayment fee on its junior secured term loan in Wetmore Tool and Engineering Company. The Company generated an IRR of 15.2% on its investment.
On January 10, 2019, the Company received a full repayment at par value, plus accrued and unpaid interest, plus a 2.0% prepayment fee on its junior secured term loan in Douglas Machines Corp. The Company generated an IRR of 14.7% on its investment.
On January 18, 2019, the Company made a $3.0 million senior secured debt investment in Dell International L.L.C. The term loan carries a current interest rate of LIBOR + 2.0% with a 0.75% LIBOR floor.
On January 22, 2019, the Company purchased $3.0 million of senior secured term loans in HCA Inc. The term loans carry interest rates of LIBOR + 2.0%.
Between January 24, 2019 and March 4, 2019, the Company purchased $5.0 million of senior secured term loans in Deluxe Entertainment Services Group, Inc. The term loans carry interest rates of LIBOR + 5.5% and LIBOR + 6.0%, respectively.
On January 28, 2019, the Company received a $2.0 million partial repayment on its senior secured term loan in Safety Services Acquisition Corp.
On February 15, 2019, the Company co-invested alongside affiliate funds of JMP Group and made a $5.3 million senior secured debt investment in Peerless Media, LLC. The term loan carries an interest rate of LIBOR + 8.5% with a 2.4% LIBOR floor.
On February 15, 2019, the Company declared monthly distributions of $0.08 per share payable on each of March 7, 2019, March 28, 2019, and April 25, 2019.
On February 19, 2019, the Company purchased $5.0 million senior secured term loans in General Nutrition Centers, Inc. The term loans carry an interest rate of LIBOR + 9.25% .
During the first quarter of 2019, through March 13, 2019, the Company repurchased 118,991 shares of its common stock at an average price of $10.48 per share. Inclusive of the shares repurchased during the fourth quarter of 2018, the Company has 91,545 shares remaining to be repurchased under its current repurchase plan which expires on June 30, 2019.
CONFERENCE CALL
The Company will host a conference call on Friday, March 15, 2019 at 11:00 a.m. Eastern Time to discuss its third quarter results. All interested parties are invited to participate in the conference call by dialing (888) 566-6060 (domestic) or (973) 200-3100 (international). Participants should enter the Conference ID 4879401 when prompted.
ABOUT HARVEST CAPITAL CREDIT CORPORATION
Harvest Capital Credit Corporation (NASDAQ: HCAP) provides customized financing solutions to privately held small and mid-sized companies in the U.S., generally targeting companies with annual revenues of less than $100 million and annual EBITDA of less than $15 million. The Company’s investment objective is to generate both current income and capital appreciation primarily by making direct investments in the form of subordinated debt, senior debt and, to a lesser extent, minority equity investments. Harvest Capital Credit Corporation is externally managed and has elected to be treated as a business development company under the Investment Company Act of 1940. For more information about Harvest Capital Credit Corporation, visit www.harvestcapitalcredit.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.
Forward-Looking Statements
This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not of historical fact (including statements containing the words "believes", "plans", "anticipates", "expects", "estimates", and similar expressions) should also be considered to be forward-looking statements. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.
| Harvest Capital Credit Corporation |
| Consolidated Statements of Assets and Liabilities |
| December 31, |
| December 31, |
| 2018 |
| 2017 |
| ASSETS: |
| Non-affiliated/non-control investments, at fair value (cost of $59,603,853 at 12/31/18 and $80,790,705 at 12/31/17) |
| $ |
| 61,919,954 |
| $ |
| 82,902,537 |
| Affiliated investments, at fair value (cost of $25,848,928 at 12/31/18 and $26,365,364 at 12/31/17) |
| 24,645,597 |
| 25,983,871 |
| Control investments, at fair value (cost of $13,430,013 at 12/31/18 and $11,984,621 at 12/31/17) |
| 8,348,311 |
| 6,714,270 |
| Cash |
| 26,963,310 |
| 4,233,597 |
| Restricted cash |
| 1,812,238 |
| 7,230,840 |
| Interest receivable |
| 721,195 |
| 287,408 |
| Accounts receivable – other |
| 178,883 |
| 37,688 |
| Deferred offering costs |
| — |
| 146,446 |
| Deferred financing costs |
| 623,442 |
| 508,284 |
| Other assets |
| 106,771 |
| 107,899 |
| Total assets |
| $ |
| 125,319,701 |
| $ |
| 128,152,840 |
| LIABILITIES: |
| Revolving line of credit |
| $ |
| 17,000,000 |
| $ |
| 16,721,853 |
| Unsecured notes (net of deferred offering costs of $869,403 at 9/30/18 and $1,004,448 at 12/31/17) |
| 27,928,121 |
| 27,745,552 |
| Accrued interest payable |
| 115,919 |
| 139,148 |
| Accounts payable - base management fees |
| 531,628 |
| 582,912 |
| Accounts payable - incentive management fees |
| 361,090 |
| — |
| Accounts payable - administrative services |
| 366,667 |
| 397,463 |
| Accounts payable - accrued expenses |
| 620,312 |
| 782,726 |
| Other liabilities |
| — |
| 1,757 |
| Total liabilities |
| 46,923,737 |
| 46,371,411 |
| Commitments and contingencies (Note 8) |
| NET ASSETS: |
| Common stock, $0.001 par value, 100,000,000 shares authorized, 6,554,010 issued and 6,372,581 outstanding at 12/31/18 and 6,519,978 issued and 6,457,588 outstanding at 12/31/17 |
| 6,554 |
| 6,520 |
| Capital in excess of common stock |
| 92,270,273 |
| 93,043,208 |
| Treasury shares at cost, 181,429 and 62,390 shares at 12/31/18 and 12/31/17, respectively |
| (1,956,055 |
| ) |
| (724,039 |
| ) |
| Accumulated over distributed earnings |
| (11,924,808 |
| ) |
| (10,544,260 |
| ) |
| Total net assets |
| 78,395,964 |
| 81,781,429 |
| Total liabilities and net assets |
| $ |
| 125,319,701 |
| $ |
| 128,152,840 |
| Common stock outstanding |
| 6,372,581 |
| 6,457,588 |
| Net asset value per common share |
| $ |
| 12.30 |
| $ |
| 12.66 |
| Harvest Capital Credit Corporation |
| Consolidated Statements of Operations (Unaudited) |
| Three Months Ended December 31, |
| Year Ended December 31, |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| Investment Income: |
| Interest: |
| Cash - non-affiliated/non-control investments |
| $ |
| 2,372,856 |
| $ |
| 2,732,468 |
| $ |
| 9,732,421 |
| $ |
| 10,811,964 |
| Cash - affiliated investments |
| 745,898 |
| 221,530 |
| 3,052,524 |
| 2,583,523 |
| Cash - control investments |
| — |
| 594,116 |
| 130,934 |
| 813,486 |
| PIK - non-affiliated/non-control investments |
| 105,814 |
| 191,876 |
| 590,980 |
| 959,768 |
| PIK - affiliated investments |
| 196,094 |
| (92,669 |
| ) |
| 739,773 |
| 568,482 |
| PIK - control investments |
| — |
| 264,837 |
| — |
| 264,837 |
| Amortization of fees, discounts and premiums, net: |
| Non-affiliated/non-control investments |
| 287,825 |
| 218,473 |
| 1,185,784 |
| 2,247,071 |
| Affiliated investments |
| 17,653 |
| (34,068 |
| ) |
| 93,248 |
| 147,859 |
| Control investments |
| — |
| 53,881 |
| — |
| 71,072 |
| Total interest income |
| 3,726,140 |
| 4,150,444 |
| 15,525,664 |
| 18,468,062 |
| Other income |
| 340,104 |
| (13,969 |
| ) |
| 658,257 |
| 236,198 |
| Total investment income |
| 4,066,244 |
| 4,136,475 |
| 16,183,921 |
| 18,704,260 |
| Expenses: |
| Interest expense – revolving line of credit |
| 84,034 |
| 114,669 |
| 530,474 |
| 717,465 |
| Interest expense - unused line of credit |
| 94,015 |
| 86,487 |
| 341,476 |
| 276,197 |
| Interest expense - deferred financing costs |
| 56,299 |
| 53,401 |
| 227,814 |
| 233,993 |
| Interest expense - unsecured notes |
| 440,235 |
| 440,235 |
| 1,760,940 |
| 2,022,195 |
| Interest expense - deferred offering costs |
| 47,524 |
| 44,845 |
| 185,068 |
| 198,966 |
| Loss on extinguishment of debt |
| — |
| — |
| — |
| 581,734 |
| Total interest expense |
| 722,107 |
| 739,637 |
| 3,045,772 |
| 4,030,550 |
| Professional fees |
| 359,186 |
| 328,462 |
| 1,965,589 |
| 1,109,774 |
| General and administrative |
| 257,013 |
| 235,988 |
| 1,071,024 |
| 1,148,817 |
| Base management fees |
| 531,629 |
| 582,912 |
| 2,312,957 |
| 2,597,120 |
| Incentive management fees |
| 361,090 |
| — |
| 910,755 |
| 58,005 |
| Administrative services expense |
| 366,668 |
| 300,000 |
| 1,400,000 |
| 1,394,925 |
| Total expenses, before reimbursement |
| 2,597,693 |
| 2,186,999 |
| 10,706,097 |
| 10,339,191 |
| Less: Professional fees reimbursed by HCAP Advisors, LLC |
| — |
| — |
| (449,835 |
| ) |
| — |
| Total expenses, after reimbursement |
| 2,597,693 |
| 2,186,999 |
| 10,256,262 |
| 10,339,191 |
| Net Investment Income, before taxes |
| 1,468,551 |
| 1,949,476 |
| 5,927,659 |
| 8,365,069 |
| Excise tax |
| — |
| (38,597 |
| ) |
| 8,825 |
| 64,650 |
| Current income tax expense (benefit) |
| (106,590 |
| ) |
| 63,565 |
| (63,565 |
| ) |
| 63,565 |
| Net Investment Income, after taxes |
| 1,575,141 |
| 1,924,508 |
| 5,982,399 |
| 8,236,854 |
| Net realized gains (losses): |
| Non-Affiliated / Non-Control investments |
| 260,501 |
| — |
| 225,072 |
| (5,962,020 |
| ) |
| Affiliated investments |
| (15,500 |
| ) |
| — |
| (626,136 |
| ) |
| (2,100,421 |
| ) |
| Control investments |
| (122,560 |
| ) |
| — |
| (85,616 |
| ) |
| — |
| Net realized gains (losses) |
| 122,441 |
| — |
| (486,680 |
| ) |
| (8,062,441 |
| ) |
| Net change in unrealized appreciation (depreciation) on investments: |
| Non-Affiliated / Non-Control investments |
| 62,084 |
| 1,067,665 |
| 204,267 |
| 3,377,985 |
| Affiliated investments |
| (76,240 |
| ) |
| 96,034 |
| (821,837 |
| ) |
| 1,601,553 |
| Control investments |
| (150,787 |
| ) |
| (1,596,184 |
| ) |
| 188,649 |
| (3,521,365 |
| ) |
| Net change in unrealized appreciation (depreciation) on investments |
| (164,943 |
| ) |
| (432,485 |
| ) |
| (428,921 |
| ) |
| 1,458,173 |
| Total net unrealized and realized losses on investments |
| (42,502 |
| ) |
| (432,485 |
| ) |
| (915,601 |
| ) |
| (6,604,268 |
| ) |
| Benefit for taxes on unrealized losses on investments |
| 15,584 |
| — |
| — |
| — |
| Net increase in net assets resulting from operations |
| $ |
| 1,548,223 |
| $ |
| 1,492,023 |
| $ |
| 5,066,798 |
| $ |
| 1,632,586 |
| Net investment income per share |
| $0.25 |
| $0.30 |
| $0.93 |
| $1.28 |
| Net increase in net assets resulting from operations per share |
| $0.24 |
| $0.23 |
| $0.79 |
| $0.25 |
| Weighted average shares outstanding (basic and diluted) |
| 6,401,887 |
| 6,474,769 |
| 6,406,869 |
| 6,412,215 |
SCHEDULE 1
| Reconciliations of Net Investment Income to Core Net Investment Income |
| Three months ended December 31, |
| Year ended December 31, |
| 2018 |
| 2017 |
| 2018 |
| 2017 |
| Amount |
| Per |
| Amount |
| Per |
| Amount |
| Per |
| Amount |
| Per |
| Net investment income |
| $ |
| 1,575,141 |
| $ |
| 0.25 |
| $ |
| 1,924,508 |
| $ |
| 0.30 |
| $ |
| 5,982,399 |
| $ |
| 0.93 |
| $ |
| 8,236,854 |
| $ |
| 1.28 |
| Loss on extinguishment of debt |
| — |
| — |
| — |
| — |
| — |
| — |
| 581,734 |
| 0.09 |
| Interest expense on redeemed bonds during required 30-day notice period |
| — |
| — |
| — |
| — |
| — |
| — |
| 155,069 |
| 0.02 |
| Core net investment income |
| $ |
| 1,575,141 |
| $ |
| 0.25 |
| $ |
| 1,924,508 |
| $ |
| 0.30 |
| $ |
| 5,982,399 |
| $ |
| 0.93 |
| $ |
| 8,973,657 |
| $ |
| 1.39 |
| (1) |
| All per share amounts are basic and diluted unless indicated otherwise. |
The purpose of core net investment income is to present net investment income without the effect of certain non-recurring charges, without the effect of incentive fees related to items not included in net investment income, and without the effect of any excise taxes related to realized capital gains and losses. During the year ended December 31, 2017, this resulted in excluding the non-recurring charges related to the Company's redemption of its 2020 Notes. During this period, in conjunction with the redemption of its 2020 Notes, the Company expensed the unamortized deferred finance costs related to the 2020 Notes that were redeemed and recorded this as a loss on extinguishment of debt. Additionally, the Company was required to give the note holders a 30-day notice period before redeeming the 2020 Notes. As such, the Company had twice the amount of debt on its balance sheet for 30 days than it otherwise would have had and incurred additional interest expense as a result. The cost of these two items has been added to net investment income in the calculation of core net investment income.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190315005045/en/
Investor & Media Relations:
Harvest Capital Credit Corporation
Joseph A. Jolson
Chairman & Chief Executive Officer
(415) 835-8970
jjolson@harvestcaps.com
William E. Alvarez, Jr.
Chief Financial Officer
(212) 906-3589
balvarez@harvestcaps.com