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CORRECTED RELEASE; PLEASE DISREGARD PREVIOUS RELEASE.
FOR IMMEDIATE RELEASE:
May 1, 2000
Earlier versions of this release contained errors in the balance sheet introduced by PRNewswire. Specifically, figures for earnings per common share, basic and diluted, were transposed. Figures in the release below are correct. We apologize for any inconvenience.
Contact:
John Erickson, Chief Financial Officer (301) 951-6122
AMERICAN CAPITAL EARNINGS INCREASE 69% TO $1.05 PER SHARE
NET OPERATING INCOME INCREASES 12% TO $0.47 PER SHARE
Bethesda, MD -- American Capital Strategies, Ltd. (Nasdaq:ACAS) announced today the results for the quarter ended March 31, 2000. Earnings for the first quarter of 2000 increased to $19.3 million from $7.0 million in the first quarter of 1999. On a diluted per share basis, earnings for the quarter increased 69% to $1.05 per share compared to $0.62 in the first quarter of 1999. Net operating income for the quarter increased to $8.5 million compared to $4.7 million in the first quarter of 1999. On a diluted per share basis, net operating income for the quarter increased 12% to $0.47 per share compared to $0.42 per share in the first quarter of 1999.
In the first quarter of 2000, American Capital completed three financing transactions totaling $32 million, an increase of 22% over the first quarter of 1999's total of $26.2 million. First quarter 2000 transactions were composed of $13.5 million of senior debt, $12.0 million of subordinated debt, $4 million of preferred stock and $2.5 million of warrants, including $1.8 million of unfunded commitments.
Earnings for the quarter included unrealized appreciation of $10.8 million. American Capital recorded unrealized appreciation of $11.8 million at eight portfolio companies, including $7.6 million in appreciation in American Capital's investment in Clear Communications Group, and unrealized depreciation of $1.0 million at one portfolio company. The value of American Capital's investment in Capital.com remained unchanged at $72.5 million.
The weighted average interest rate on the total capital invested during the quarter was 11.9%. The weighted average interest rate on American Capital's total capital invested as of March 31, 2000 was 13.8%. All loans are current and at March 31, 2000, the weighted average grade of American Capital's loan portfolio increased from 3.2 in the fourth quarter of 1999 to 3.3 on a 4.0 scale.
American Capital will not be hosting its earnings conference call this quarter because the Company has a registration statement on file at the Securities and Exchange Commission.
Financial highlights for the quarter are as follows.
AMERICAN CAPITAL STRATEGIES, LTD.
Balance Sheets
(Unaudited)
(In thousands except per share data)
March 31, December 31,
2000 1999
Assets
Investments at fair value
(cost of $336,780 and $305,264,
respectively) $419,838 $377,554
Cash and cash equivalents 4,577 2,037
Investment in unconsolidated
operating subsidiary 4,335 4,893
Due from unconsolidated operating subsidiary 6,495 2,331
Interest receivable 3,761 2,417
Other 5,830 6,140
Total assets $444,836 $395,372
Liabilities and Shareholders' Equity
Revolving credit facility $117,212 78,545
Accrued dividends payable -- 547
Other 4,358 4,535
Total liabilities 121,570 83,627
Shareholders' equity:
Undesignated preferred stock,
$0.01 par value, 5,000 shares authorized,
0 issued and outstanding -- --
Common stock, $.01 par value,
70,000 shares authorized,
and 18,270 and 18,252 issued and
outstanding, respectively 183 183
Capital in excess of par value 256,297 255,922
Notes receivable from sale of common stock (23,003) (23,052)
Undistributed net realized earnings 1,409 1,080
Unrealized appreciation of investments 88,380 77,612
Total shareholders' equity 323,266 311,745
Total liabilities and shareholders' equity $444,836 $395,372
AMERICAN CAPITAL STRATEGIES, LTD.
Statements of Operations
(Unaudited)
(In thousands except per share data)
Three Months Three Months
Ended Ended
March 31, March 31,
2000 1999
Operating income:
Interest and dividend income $11,038 $5,854
Loan fees 480 666
Total operating income 11,518 6,520
Operating expenses:
Salaries and benefits 164 310
General, administrative and other 471 294
Interest 1,779 794
Total operating expenses 2,414 1,398
Operating income before equity
in loss of unconsolidated
operating subsidiary 9,104 5,122
Equity in loss of unconsolidated
operating subsidiary (558) (395)
Net operating income 8,546 4,727
Net realized gain on investments -- 316
Increase in unrealized
appreciation of investments 10,768 1,981
Net increase in shareholders' equity
resulting from operations $19,314 $7,024
Net operating income per share:
Basic $0.48 $0.43
Diluted $0.47 $0.42
Earnings per common share:
Basic $1.08 $0.63
Diluted $1.05 $0.62
Weighted average shares of
Common stock outstanding
Basic 17,833 11,070
Diluted 18,351 11,279
Dividends declared per share $0.45 $0.41
Portfolio Statistics
On a Weighted Average Basis*: 1999 Pre -1999
Aggregate Static Pool Static Pool
Interest Coverage 2.5 2.9 2.0
Debt Service Coverage 2.0 2.1 1.9
Debt to EBITDA 4.6 4.0 5.6
Investment Grade 3.3 3.3 3.3
Age of Portfolio Companies 44 years 38 years 43 years
Average Sales $65 million $69 million $68 million
American Capital
Ownership Percentage
of Portfolio Companies 30.6% 32.1% 34.8%
* These amounts do not include American Capital's equity investments in
Capital.com, ACS Equities, LP, and Wrenchead.com.
Click here for additional portfolio information.
American Capital is a publicly traded buyout and mezzanine fund. American Capital is an equity partner in management and employee buyouts; invests in debt and equity of companies led by private equity firms, and provides capital directly to private and small public companies. American Capital funds growth, acquisitions and recapitalizations.
Companies interested in learning more about American Capital's flexible financing and ability to provide senior debt, subordinated debt and equity should contact Mark Opel, Principal, at (800) 248-9340, or visit our website. Capital.com, Inc., a portfolio company of American Capital Strategies, Ltd. (Nasdaq:ACAS), is a business finance portal where premier financing sources compete to provide receivable and inventory financing, machinery and equipment loans and leasing, real estate and construction financing, subordinated debt and equity financing for growth, acquisitions, management buyouts, liquidity, recapitalizations, ESOP transactions and SBA loans. Companies in need of financing or information about financial services should contact Capital.com at info@Capital.com, or call Harry Kelly, vice president, at (646) 935-1100.
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements regarding expected results of American Capital Strategies are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional or national economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
This press release is neither an offer to sell nor a solicitation of an offer to buy shares. Such an offer is made by prospectus only.
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