Allied Capital Announces 2007 Financial Results.WASHINGTON -- Allied Capital Corporation (NYSE NYSE See: New York Stock Exchange :ALD ALD abbr. adrenoleukodystrophy ALD, n.pr See adrenoleukodystrophy. ALD aldolase. ) today announced 2007 financial results. Highlights for 2007 * Net investment income was $0.91 per share, or $141.0 million * Net realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. were $1.74 per share, or $268.5 million * The total of net investment income and net realized gains was $2.65 per share, or $409.5 million * Net unrealized depreciation was $1.66 per share, or $256.2 million; including the reversal of net unrealized appreciation associated with net realized gains of $1.25 per share, or $192.8 million and net declines in investment values of $0.41 per share, or $63.4 million * Net income was $0.99 per share, or $153.3 million * Paid $2.64 per share, or $407.3 million in dividends to shareholders * Net asset value per share was $17.54 at December 31, 2007 * Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $2.8 billion at December 31, 2007 * New investments totaled $1.8 billion for the year, including $609.3 million in the fourth quarter For the year ended December 31, 2007, net investment income was $141.0 million or $0.91 per share compared to net investment income of $189.2 million or $1.30 per share for the year ended December 31, 2006. For the year ended December 31, 2007, the company had net realized gains of $268.5 million, including a $262.4 million gain from the sale of its investment in Mercury Air Centers, Inc. For the year ended December 31, 2006, the company had net realized gains of $533.3 million, including a $434.4 million gain from the sale of its majority investment in Advantage Sales & Marketing, Inc. For the year ended December 31, 2007, the sum of net investment income and net realized gains was $409.5 million or $2.65 per share, as compared to $722.5 million or $4.96 per share for the year ended December 31, 2006. Net investment income was reduced in 2007 by stock option expense of $35.2 million or $0.23 per share, which included a one-time charge of $14.4 million or $0.09 per share resulting from a FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). 123R expense related to the cancellation of stock options in conjunction with a tender offer that was completed in the third quarter of 2007. Stock option expense for 2006 was $15.6 million or $0.11 per share. In addition, net investment income was reduced by excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. expense of $16.3 million or $0.11 per share for 2007 and $15.1 million or $0.10 per share for 2006. For the year ended December 31, 2007, net change in unrealized appreciation or depreciation was a decrease of $256.2 million or $1.66 per share. The net depreciation for 2007 resulted from the reversal of net unrealized appreciation associated with net realized gains of $192.8 million or $1.25 per share and net declines in investment values of $63.4 million or $0.41 per share. Net declines in investment values for the year ended December 31, 2007, included depreciation of $174.5 million in the value of Ciena Capital, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control (formerly Business Loan Express, LLC) and net appreciation in the remainder of the portfolio of $111.1 million. For the year ended December 31, 2006, net change in unrealized appreciation or depreciation was a decrease of $477.4 million or $3.28 per share. The net depreciation for 2006 resulted from the reversal of net unrealized appreciation associated with net realized gains of $479.0 million or $3.29 per share and net increases in investment values of $1.6 million or $0.01 per share. Net income for the year ended December 31, 2007, was $153.3 million or $0.99 per share, as compared to $245.1 million or $1.68 per share for the year ended December 31, 2006. For the three months ended December 31, 2007, net investment income was $58.0 million or $0.37 per share compared to net investment income of $49.1 million or $0.33 per share for the three months ended December 31, 2006. For the three months ended December 31, 2007, the company had net realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. of $46.4 million or $0.30 per share. For the three months ended December 31, 2006, the company had net realized losses of $9.7 million or $0.06 per share. For the three months ended December 31, 2007, the sum of net investment income and net realized gains was $11.6 million or $0.07 per share, as compared to $39.4 million or $0.26 per share for the quarter ended December 31, 2006. For the three months ended December 31, 2007, net change in unrealized appreciation or depreciation was an increase of $15.9 million or $0.10 per share. The net appreciation for the quarter resulted from the reversal of net unrealized depreciation associated with net realized losses of $50.1 million or $0.32 per share and net declines in investment values of $34.2 million or $0.22 per share. For the three months ended December 31, 2006, net change in unrealized appreciation or depreciation was a decrease of $5.5 million or $0.04 per share. Net income for the three months ended December 31, 2007, was $27.5 million or $0.18 per share, as compared to $33.9 million or $0.23 per share for the three months ended December 31, 2006. Net income can vary substantially from period to period due to the recognition of realized gains and losses and unrealized appreciation and depreciation, among other factors. As a result, quarterly or annual comparisons of net income may not be meaningful. For 2007, the company paid $407.3 million or $2.64 per share in dividends to shareholders. Substantially all of the 2007 dividend payments were made from excess 2006 taxable earnings. As a result, substantially all of the taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. generated from 2007 net investment income and net realized gains will be available for distribution in 2008. At December 31, 2007, the company estimates that it has excess taxable income of $400 million available to be carried over for distribution to shareholders in 2008. The company's Board of Directors declared a $0.65 per share dividend for the first quarter of 2008. In addition to spillover spill·o·ver n. 1. The act or an instance of spilling over. 2. An amount or quantity spilled over. 3. A side effect arising from or as if from an unpredicted source: taxable income, the company had approximately $230 million in deferred taxable income resulting from installment sale Installment sale The sale of an asset in exchange for a specified series of payments (the installments). installment sale A sale in which the buyer is scheduled to make a series of payments over a period of time. gains as of December 31, 2007. These gains may be deferred for tax purposes until the notes or other amounts received from the sale of the related investments are sold or collected in cash. Portfolio and Investment Activity New investments totaled $609.3 million for the fourth quarter of 2007. These investments included: * $83.0 million to support the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of DirectBuy, Inc., a domestic franchisor of membership-based consumer buying centers A buying center (also known as a decision making unit), in marketing, procurement, and organizational studies, is a group of employees responsible for purchasing an item for the organization. in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. ; * $72.3 million to support the buyout of CitiPostal, Inc., a full-service document storage and management company; * $52.8 million in the subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and the income notes of Knightsbridge CLO CLO See: Collateralized Loan Obligation. 2007-1 Ltd., a senior loan CLO; * $50.9 million to support the recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. of PC Helps Support, LLC, a provider of phone-based support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services for off-the-shelf desktop software and mobile device applications; * $49.5 million to support the acquisition of Interwrite Learning by eInstruction Corporation, to form a provider of interactive classroom solutions serving the K-12 and higher education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. markets; * $45.8 million to support the buyout of Gilchrist & Soames, Inc., a supplier of branded luxury personal care products and amenities for the hotel industry; * $40.8 million to support the buyout of Reed Group, Ltd., a publisher of workplace guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. for disability duration used by third-party administrators, insurance companies, and employers; * $40.0 million to support the recapitalization of Tradesmen International, Inc., a provider of skilled craftsmen to large and mid-sized construction companies; * $28.6 million in the subordinated debt and the income notes of Dryden XVII Leveraged Loan 2007 Ltd., a senior loan CLO; and * $21.8 million in the income notes of Callidus Debt Partners CLO Fund VII, Ltd., a senior loan CLO. After principal collections related to investment repayments or sales of $125.0 million for the quarter, portfolio exits and valuation and other changes during the quarter, the total portfolio at value was $4.8 billion at December 31, 2007. At December 31, 2007, the weighted average yield on the interest-bearing portfolio was 12.1%, as compared to 11.9% at December 31, 2006. Portfolio Quality Grade 4 and Grade 5 assets were 4.2% of the total portfolio at value at December 31, 2007, as compared to 4.6% at December 31, 2006. Grade 4 and 5 assets included certain Ciena Capital, LLC (Ciena) equity interests totaling $68.6 million at value and $74.8 million at value at December 31, 2007 and 2006, respectively. Excluding the company's investment in Ciena Capital, LLC, Grade 4 and 5 assets were 2.8% and 3.0% of the total portfolio at value at December 31, 2007 and 2006, respectively. Loans on non-accrual were $212.0 million or 4.4% of the total portfolio at value at December 31, 2007, as compared to $238.8 million or 5.3% of the total portfolio at value at December 31, 2006. Loans on non-accrual included Ciena Class A equity interests totaling $68.6 million and $66.6 million at December 31, 2007 and 2006, respectively. Loans on non-accrual excluding the company's investment in Ciena's Class A equity interests were 3.0% and 3.8% of the total portfolio at value at December 31, 2007 and 2006, respectively. Liquidity and Capital Resources At December 31, 2007, the company had cash and money market and other securities totaling $204.8 million. The company had outstanding long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. of $1.9 billion and outstanding borrowings on its revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. of $367.3 million. The company had availability under its revolving line of credit of $496.7 million. At December 31, 2007, the company had a weighted average cost of debt of 6.5% and its regulatory asset coverage was 221%. The company is required to maintain regulatory asset coverage of at least 200%. On February 4, 2008, the company completed the sale of 4.0 million shares of common stock for net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). , after the underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. discount and estimated offering expenses, of $85.8 million. The proceeds from the issuance of common stock were used to reduce borrowings outstanding under the company's revolving line of credit, to invest in debt or equity securities and for other general corporate purposes. Quarterly Dividend of $0.65 Per Share To Be Paid for the First Quarter of 2008 As previously released, the company declared a first quarter dividend of $0.65 per share. The first quarter dividend represents the 178th consecutive quarterly dividend for Allied Capital shareholders since 1963. The dividend is payable as follows: < < < < < Record date: March 12, 2008 < < < < < Payable date: March 27, 2008 The company's dividend is paid from taxable income. The Board determines the dividend based on estimates of annual taxable income, which differs from book income due to changes in unrealized appreciation and depreciation and due to temporary and permanent differences in income and expense recognition, and the amount of taxable income carried over from the prior year for distribution in the current year. Webcast/ Conference Call at 10:15 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on Wednesday, February 20, 2008 The company will host a webcast/conference call at 10:15 a.m. (Eastern Time) on Wednesday, February 20, 2008, to discuss the results for the quarter. PLEASE VISIT THE PRESENTATIONS & REPORTS SECTION OF THE INVESTOR RESOURCES PORTION OF THE COMPANY'S WEBSITE FOR A SLIDE PRESENTATION THAT COMPLEMENTS TODAY'S CONFERENCE CALL. All interested parties are welcome to attend the live webcast, which will be hosted through our website at www.alliedcapital.com. Please visit the website to test your connection before the call. You can also access the conference call by dialing (888) 689-4612 approximately 15 minutes prior to the call. International callers should dial (706) 645-0106. All callers should reference the passcode "Allied Capital." An archived replay of the event will be available through March 5, 2008 by calling (800) 642-1687 (international callers please dial (706) 645-9291). Please reference passcode "33831144." An archived replay will also be available on our website. For complete information about the webcast/conference call and the replay, please visit our website or call Allied Capital Investor Relations Investor relations The process by which the corporation communicates with its investors. at (888) 818-5298. About Allied Capital Allied Capital is a leading business development company (BDC (Backup Domain Controller) In a Windows NT server, a copy of the Primary Domain Controller (PDC). The BDC is periodically synchronized with the PDC. See PDC. BDC - Backup Domain Controller ) in the U.S. that invests private debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital is celebrating 50 years of investing in and supporting the U.S. entrepreneurial en·tre·pre·neur n. A person who organizes, operates, and assumes the risk for a business venture. [French, from Old French, from entreprendre, to undertake; see enterprise. economy. Allied Capital provides long-term debt and equity capital for management and sponsor-led buyouts, and for recapitalizations, acquisitions and growth of middle market companies. Allied Capital's one-stop financing capabilities include first and second lien A Second lien financing is a form of financing secured on a second ranking basis by (more or less) the same security, which secures the first ranking financing. The first lien lenders and the second lien lenders agree that, in the event of a security enforcement or bankruptcy, the senior loans, unitranche debt, junior or subordinated debt and equity. Allied Capital seeks to invest in stable, less cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. companies that produce significant free cash flow and high returns on invested capital. At December 31, 2007, the company's private finance portfolio included investments in 120 companies that generate aggregate revenues of over $13 billion and employ more than 95,000 people. Allied Capital provides flexible, competitive debt and equity capital for management and sponsor-led buyouts, recapitalizations, acquisitions and growth of middle market companies. Allied Capital's seamless, one-stop financing capabilities include first and second lien senior loans, unitranche debt, junior or mezzanine mez·za·nine n. 1. A partial story between two main stories of a building. 2. The lowest balcony in a theater or the first few rows of that balcony. debt and equity. Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in the company's New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Stock Exchange-listed stock, which is traded under the symbol ALD. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated This term is often used in law as equivalent to mentioned specifically, designated, or expressly named or granted; as in speaking of enumerated governmental powers, items of property, or articles in a tariff schedule. in Allied Capital's filings with the Securities and Exchange Commission. This press release should be read in conjunction with the company's recent SEC filings. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion