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NEW YORK, July 12, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- GSC Investment Corp. (NYSE: GNV), a business development company externally managed by GSC Group, today announced results for the quarter ended May 31, 2007.
First Quarter 2008 Summary
* Completed IPO on March 28, 2007
* GAAP net income of $3.7 million, or $0.44 per share (basic and diluted)
* Adjusted net investment income of $2.2 million, or $0.26 per share
(basic and diluted )(1)
* Adjusted net gain on investments of $1.5 million, or $0.18 per share
(basic and diluted)(1)
* Net asset value of $14.21 per share as of May 31, 2007
* Paid a $0.24 per share dividend on June 6, 2007 for the partial quarter
Operating Results
For its first quarter of operations, GSC Investment Corp. reported net income of $3.7 million or $0.44 per share. Adjusted net investment income for the first quarter was $2.2 million or $0.26 per share. Adjusted net gain on investments was $1.5 million or $0.18 per share. Net asset value was $14.21 per share as of May 31, 2007. The Company's results for the partial quarter reflect its investment activities which commenced on March 28, 2007 (the completion of its IPO).
"We are pleased with the first quarter results which reflect our ability to source attractive investment opportunities using GSC Group's corporate credit platform," said Thomas V. Inglesby, Chief Executive Officer of GSC Investment Corp.
Portfolio and Investment Activity
As of May 31, 2007, the company's portfolio consisted of $208.9 million in aggregate principal amount of investments. The company had 41 investments in 34 portfolio companies with an average investment size of $5.1 million and a weighted average life of 3.9 years. The overall portfolio composition consisted of 13.4% first lien term loans, 42.9% second lien term loans, 18.5% senior secured notes, 23.8% unsecured notes, and 1.4% equity/limited partnership interests.
During the quarter, GSC Investment Corp. made investments in an aggregate principal amount of $243.1 million. Also during the quarter, the company had $34.2 million in repayments and sales of investments resulting in net investments of $208.9 million for the period.
As of May 31, 2007, the weighted average current yields on the company's first lien term loans, second lien term loans, senior secured notes and unsecured notes were 9.5%, 11.8%, 11.1% and 11.6%, respectively, which results in an aggregate weighted current yield of 11.3%. As of May 31, 2007, 45.5% or $95.0 million of its interest-bearing portfolio was fixed rate debt with a weighted average current yield of 11.3%, and 55.5% or $113.9 million of its interest-bearing portfolio was floating rate debt with a weighted average current spread of LIBOR plus 5.6%.
"We believe we have constructed an attractive portfolio diversified in terms of geography, industry and position in the capital structure," continued Inglesby. "We continue to focus our energies on sourcing attractive investment opportunities."
Liquidity and Capital Resources
On March 28, 2007, GSC Investment Corp. completed its initial public offering and received net proceeds of $101.7 million. As of May 31, 2007, the company had borrowed an aggregate of $100.2 million under its credit facilities and had $25.5 million of undrawn commitments remaining.
Dividend
On June 6, 2007, GSC Investment Corp. paid a dividend of $0.24 per share.
2008 First Quarter Conference Call/Webcast Information
When: Friday, July 13, 2007, 10:00 a.m. Eastern Time (ET)
Call: Interested parties may participate by dialing (866) 802-6730 (U.S. and Canada) or (913) 643-4200 (outside U.S. and Canada).
A replay of the call will be available from 1:00 p.m. ET on Friday, July 13, 2007 through midnight Friday, July 20, 2007 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (outside U.S. and Canada), passcode for both replay numbers: 4863041.
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, July 13, 2007 through midnight Friday, July 20, 2007.
About GSC Investment Corp.
GSC Investment Corp. is a specialty finance company that invests primarily in first and second lien term loans and mezzanine and debt of private, U.S. middle-market companies and high yield bonds. It has elected to be treated as a business development company under the Investment Company Act of 1940. The Company also may opportunistically invest in distressed debt; debt and equity securities of public companies; credit default swaps; emerging market debt; and collateralized debt obligation vehicles holding debt, equity or synthetic securities. 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 Group's corporate credit group manages approximately $8.5 billion of assets(2) in leveraged loans, high yield bonds and mezzanine debt. GSC Investment Corp. is traded on the New York Stock Exchange under the symbol "GNV."
Forward Looking Statements
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts and projections about future events that are forward-looking statements. These forward-looking statements generally relate to GSC Investment Corp.'s plans, objectives and expectations for future operations and are based upon management's current estimates and projections of future results or trends. Actual future results may differ materially from those projected as a result of certain risks and uncertainties. For a discussion of such risks and uncertainties, see "Note About Forward-Looking Statements" included in the Company's 10-K which has been filed with the U.S. Securities and Exchange Commission. These forward- looking statements are made only as of the date hereof, and GSC Investment Corp. undertakes no obligation to update or revise the forward-looking statements, whether as a result of the new information, future events or otherwise.
(1) Basic and diluted adjusted net investment income per share and
adjusted net gain on investments per share are non-GAAP financial
measures. Adjusted net investment income per share is the per share
increase in net assets from operations less realized and unrealized
gains and losses, and any incentive management fees attributable to
such net realized gains and losses. Adjusted net gain on investments
per share is the net gain on investments per share less any incentive
management fees attributable to such net realized gains and losses.
The most directly comparable GAAP financial measure is the net per
share increase in net assets from operations, which is reflected above
as GAAP net income under the heading "First Quarter 2008 Summary."
GSC Investment Corp. believes that adjusted net investment income per
share and adjusted net gain on investments per share provide useful
information to investors regarding financial performance because it is
one method GSC Investment Corp. uses to measure its financial
condition and results of operations. The presentation of this
additional information is not meant to be considered in isolation or
as a substitute for financial results prepared in accordance with
GAAP. Reconciliations of basic and diluted adjusted net investment
income per share and adjusted net gain on investments per share to the
most directly comparable GAAP financial measure are set forth in
Schedule 1 hereto.
(2) As of March 31, 2007. Includes leverage and warehoused assets.
GSC Investment Corp.
Consolidated Balance Sheets
As of
May 31, 2007 Feb. 28, 2007
(Unaudited)
ASSETS
Investments at fair value (amortized
cost of $208,010,746 and $0,
respectively)
Non-control/non-affiliate
investments $205,938,745 $-
Control investments 2,583,634 -
Affiliate investments 239,168 -
Total investments at fair value 208,761,547 -
Cash and cash equivalents 2,265,303 1,030
Cash, securitization accounts 3,590,672 -
Interest receivable 4,441,802 -
Receivable from open trades 410,586 -
Due from manager 673,662 -
Other assets 976,132
Deferred financing costs, net 1,171,612 -
Deferred offering costs - 808,617
Total assets $222,291,316 $809,647
LIABILITIES
Debt $100,208,119 $-
Accounts payable and accrued expenses 554,550 105,000
Interest and credit facility fees
payable 690,312 -
Management and incentive fees payable 719,856 -
Dividend payable 1,989,932 -
Accrued offering cost 266,883 760,000
Due to affiliate - 73,810
Total liabilities $104,429,652 $938,810
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.0001 per
share, 100,000,000 common shares
authorized, 8,291,384 and 66 2/3
common shares issued and
outstanding, respectively 829 -
Capital in excess of par value 114,311,250 1,000
Accumulated undistributed net
investment income (loss) 1,827,736 (130,163)
Accumulated net realized gain on sale
of investments 1,021,068 -
Net unrealized appreciation on
investments and derivatives 700,781 -
Total stockholders' equity (deficit) 117,861,664 (129,163)
Total liabilities and stockholders'
equity (deficit) $222,291,316 $809,647
NET ASSET VALUE PER SHARE $14.21 n/a
GSC Investment Corp.
Consolidated Statement of Operations
For the three months
ended May 31, 2007
(unaudited)
INVESTMENT INCOME
Interest from investments $3,680,845
Interest from cash and cash equivalents 21,051
Management fee income 383,562
Other income 16,603
Total investment income 4,102,061
EXPENSES
Interest and credit facility expenses 720,765
Professional fees 542,616
Base management fees 360,488
Incentive management fees 359,368
Insurance 118,041
Directors fees 96,090
Administrative 45,692
Cost of acquiring management contract 144,000
Organizational expense 22,868
Expenses before manager reimbursement 2,409,928
Expense reimbursement (265,766)
Total expenses net of expense reimbursement 2,144,162
NET INVESTMENT INCOME 1,957,899
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain on sale of investments 1,021,068
Net change in unrealized appreciation
on investments 750,801
Unrealized depreciation on derivatives (50,020)
Net gain (loss) on investments 1,721,849
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $3,679,748
BASIC AND DILUTED EARNINGS PER COMMON SHARE $0.44
COMMON STOCK OUTSTANDING-BASIC AND DILUTED 8,291,384
Schedule 1
Reconciliation to Basic and Diluted GAAP EPS
Reconciliation of basic and diluted adjusted net investment income per
share and basic and diluted adjusted net gain on investments per share to
basic and diluted GAAP EPS, the most directly comparable GAAP financial
measure, for the three months ended May 31, 2007 is provided below.
For the three months ended May 31,
2007
(unaudited)
Net investment income per share, basic
and diluted $0.24
Incentive fees attributed to gains (losses) $0.02
Adjusted net investment income per
share, basic and diluted $0.26
Net gain on investments per share,
basic and diluted $0.20
Incentive fees attributed to gains(losses) $(0.02)
Adjusted net gain on investments per
share, basic and diluted $0.18
Basic and diluted GAAP EPS $0.44
(1) Basic and diluted adjusted net investment income per share and basic
and diluted adjusted net gain on investments per share are non-GAAP
financial measures. Adjusted net investment income per share is the
per share increase in net assets from operations less realized and
unrealized gains and losses and any incentive management fees
attributable to such net realized gains and losses. Adjusted net gain
on investments per share is the net gain on investments per share less
any incentive management fees attributable to such net realized gains
and losses. The company believes that adjusted net investment income
per share and adjusted net gain on investments per share provide
useful information to investors regarding financial performance
because it is one method the company uses to measure its financial
condition and results of operations. The presentation of this
additional information is not meant to be considered in
isolation or as a substitute for financial results prepared in
accordance with GAAP.
SOURCE GSC Investment Corp.
Investors, Carl J. Crosetto, +1-973-437-1007, or Michael H. Yip, +1-973-593-5424, both of GSC Group, or Press, Roland Tomforde, Broadgate Consultants, +1-212-232-2222, for GSC Group
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