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Kohlberg Capital Corp. (KCAP) filed Quarterly Report for the period ended 2011-06-30.
Kohlberg Capital Corp. has a market cap of $150.9 million; its shares were traded at around $6.61 with a P/E ratio of 10.7 and P/S ratio of 5.2. The dividend yield of Kohlberg Capital Corp. stocks is 10.2%. Kohlberg Capital Corp. had an annual average earning growth of 94.4% over the past 5 years.
This is the annual revenues and earnings per share of KCAP over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of KCAP.
Highlight of Business Operations:
We are an internally managed, non-diversified closed-end investment company that has elected to be regulated as a business development company (“BDC”) under the 1940 Act. We originate, structure and invest in senior secured term loans, mezzanine debt and selected equity securities primarily in privately-held middle market companies. We define the middle market as comprising companies with earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA,” of $10 million to $50 million and/or total debt of $25 million to $150 million. In addition to our middle market investment business, our wholly-owned portfolio company, Katonah Debt Advisors, manages collateralized loan obligation funds (“CLO Funds”) that invest in broadly syndicated loans, high-yield bonds and other corporate credit instruments. We acquired Katonah Debt Advisors and certain related assets prior to our initial public offering from affiliates of Kohlberg & Co., LLC (“Kohlberg & Co.”), a leading private equity firm focused on middle market investing. As of June 30, 2011, Katonah Debt Advisors had approximately $1.9 billion of par value assets under management.
At December 31, 2010, we had approximately $87 million of outstanding indebtedness through a secured credit facility. On January 31, 2011, we repaid in full the outstanding balance under this facility. As a result, approximately $73 million of collateral previously securing the facility was released to us and we also received a $2 million cash settlement from the lenders to settle litigation previously initiated by us against the lenders. In order to pay off this facility, we utilized proceeds received from the paydown, amortization or sale of portfolio loan investments totaling approximately $133 million together with available cash.
On March 16, 2011, we issued $55 million in aggregate principal amount of unsecured 8.75% convertible senior notes due 2016 (“Convertible Senior Notes”). On March 23, 2011, pursuant to an over-allotment option, we issued an additional $5 million of such Convertible Senior Notes for a total of $60 million in aggregate principal amount. The net proceeds for the Convertible Senior Notes, following underwriting expenses, were approximately $57.7 million. Interest on the Convertible Senior Notes is paid semi-annually in arrears on March 15 and September 15, at a rate of 8.75%, commencing September 15, 2011. The Notes mature on March 15, 2016 unless converted earlier. The Convertible Senior Notes are senior unsecured obligations of the Company.
During the three and six months ended June 30, 2011, the Company s investments had a net increase in unrealized appreciation of approximately $9.9 million and $16 million, respectively; during three and six months ended June 30, 2010, the Company s investments had a net decrease in unrealized appreciation of approximately $554,000 and an increase of $734,000, respectively.
The net change in unrealized appreciation of approximately $9.9 million for the three months ended June 30, 2011 is primarily due to (i) one investment position with a cost basis of approximately $10.7 million and fair value of $250,000 as of March 31, 2011 that was written off which resulted in a decrease to unrealized depreciation on debt securities of approximately $10.5 million (additional fair value adjustments of approximately $500,000 further increased the unrealized appreciation on debt securities for the period for a total of approximately $11 million); (ii) one CLO Fund security with a cost basis of approximately $3.2 million and a fair value of $1.9 million as of March 31, 2011 that was sold which resulted in a decrease to unrealized depreciation on CLO Fund securities managed by non-affiliates of approximately $1.3 million, offset by an increase in unrealized depreciation of approximately $1.7 million on the remaining CLO Fund securities; and (iii) an approximate decrease of $670,000 in the fair value of equity securities.
For the six months ended June 30, 2011, the net change of approximately $16.3 million in unrealized appreciation is primarily due to (i) one investment position with a cost basis of approximately $10.7 million and fair value of $250,000 as of March 31, 2011 that was written off which resulted in a decrease to unrealized depreciation on debt securities of approximately $10.5 million (additional fair value adjustments of approximately $3.2 million further increased the unrealized appreciation on debt securities for the period for a total of approximately $13.7 million); (ii) one CLO Fund security with a cost basis of approximately $3.2 million and a fair value of $1.9 million as of March 31, 2011 that was sold which resulted in a decrease to unrealized depreciation on CLO Fund securities managed by non-affiliates of approximately $1.3 million, along with an additional increase in unrealized appreciation of approximately $1.2 million on the remaining CLO Fund securities; (iii) an approximate decrease in unrealized depreciation of $680,000 in equity securities; and (iv) a net increase of approximately $860,000 in the unrealized appreciation of Katonah Debt Advisors.
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