From the press release: With respect to the Company's announced adjustment of its quarterly dividend, E. Ashton Poole, President and CEO, stated, "One of the hallmarks of Triangle has been the Company's long-standing policy of generating net investment income in excess of its dividends. Since 2013, the market pricing for our type of investments has changed from 14%-15% to 11%-13%. As a result, given that our quarterly earnings power is lower in today's market environment, we believe it is appropriate to adjust our dividend to a foundational level from which we can grow in the future.
TCAP Reports NII of $0.2867/share compared to a forward Dividend of $0.45 - prior dividend was $0.54/quarter
What They Earned Triangle Capital Corporation reported for Q1-16 Net Investment Income of $9.598 million ($0.2867/share). Total Investment Income was $26.646 million ($0.7962/share). The Net Increase in Net Assets Resulting from Operations was $12.427 million ($0.3712/share) due to $2.825 million in realized and unrealized gains. The NII/TII ratio was 36% (that is a big surprise). TCAP's net asset value per share was $15.02 compared to $15.23 at the end of Q4-15.
From the consensus projections at Yahoo Finance:
Earnings Est | Current Qtr. Mar 16 | Next Qtr. Jun 16 | Current Year Dec 16 | Next Year Dec 17 |
---|---|---|---|---|
Avg. Estimate | 0.40 | 0.56 | 2.10 | 2.35 |
No. of Analysts | 9.00 | 9.00 | 9.00 | 8.00 |
Low Estimate | 0.31 | 0.50 | 1.89 | 2.31 |
High Estimate | 0.58 | 0.59 | 2.32 | 2.50 |
Year Ago EPS | 0.54 | 0.49 | 2.16 | 2.10 |
Revenue Est | Current Qtr. Mar 16 | Next Qtr. Jun 16 | Current Year Dec 16 | Next Year Dec 17 |
---|---|---|---|---|
Avg. Estimate | 30.56M | 31.50M | 129.48M | 144.71M |
No. of Analysts | 7 | 7 | 8 | 7 |
Low Estimate | 27.90M | 28.90M | 117.50M | 129.42M |
High Estimate | 31.86M | 32.35M | 142.00M | 168.00M |
Year Ago Sales | 30.78M | 27.82M | 121.29M | 129.48M |
My historical context spreadsheets:
Realized & Unrealized Gains | 2.825 | -1.039 | -2.597 | -12.542 | -15.475 | -24.106 | 10.123 | -1.074 | 5.906 | |
Realized & Unrealized Gains/share | 0.845 | -0.0312 | -0.0781 | -0.3789 | -0.5197 | -0.7926 | 0.3627 | -0.0386 | 0.2138 | |
Non-Accrual Assets as a Percentage of Total Portfolio | ||
Quarter | at Cost | at Fair Value |
Q1-16 | 3.6% | 0.9% |
Q4-15 | 2.0% | 0.7% |
Q3-15 | 2.0% | 0.7% |
Q2-15 | 3.1% | 1.6% |
Q1-15 | 6.1% | 2.7% |
Q4-14 | 5.8% | 3.0% |
Q3-14 | 8.3% | 3.8% |
Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 | Q4-14 | Q3-14 | Q2-14 | Q1-14 | Q4-13 | |
Interest income | 21.761 | x | 22.595 | 21.232 | 21.150 | x | 21.058 | 17.494 | 20.230 | x |
Dividend income | -1.087 | x | 0.582 | 0.327 | 1.845 | x | 0.970 | 0.996 | x | x |
Fee income | 2.034 | x | 3.746 | 2.435 | 3.834 | x | 1.339 | 2.247 | x | x |
PIK income | 3.911 | x | 3.862 | 3.764 | 3.897 | x | 3.756 | 4.147 | 3.734 | x |
Interest on cash | 0.037 | x | 0.058 | 0.067 | 0.053 | x | 0.062 | 0.057 | 0.075 | x |
Total investment income | 26.656 | 31.839 | 30.843 | 27.825 | 30.780 | 30.657 | 24.876 | 24.940 | 24.039 | 21.991 |
TCAP began the separation of dividend and fee income from interest income in Q2-15 |
How do you have negative dividend income? The decrease in dividend income includes a negative true-up adjustment of $1.3 million related to a portfolio company distribution that was received in 2015. In 2015, Triangle received information that indicated the tax character of the distribution was 100% dividend income, but received updated information in 2016 indicating that a majority of the distribution was a return of capital, which necessitated the adjustment.
Q1-16 | Q4-15 | Q3-15 | Q2-15 | Q1-15 | Q4-14 | Q3-14 | Q2-14 | Q1-14 | Q4-13 | |
Total investment income | 26.656 | 31.839 | 30.843 | 27.825 | 30.780 | 30.657 | 24.876 | 24.940 | 24.039 | 21.991 |
Net investment income | 9.598 | 19.176 | 18.518 | 16.166 | 17.769 | 18.098 | 15.417 | 14.658 | 13.843 | 13.244 |
Investments @ fair value | 0.940 | 0.977 | 0.968 | 0.885 | 0.877 | 0.887 | 0.842 | 0.736 | 0.690 | 0.664 |
Wt Av Share Count | 33.480 | x | 33.275 | 33.235 | 33.099 | 32.950 | 30.412 | 27.910 | 27.805 | 27.697 |
TII/share | $0.7962 | x | $0.9269 | $0.8372 | $0.9299 | $0.9304 | $0.8180 | $0.8936 | $0.8646 | $0.7940 |
NII/share | $0.2867 | $0.58 | $0.5565 | $0.4864 | $0.5368 | $0.5493 | $0.5069 | $0.5252 | $0.4979 | $0.4782 |
NAV/share | $15.02 | $15.23 | $15.48 | $15.47 | $15.64 | $16.11 | $16.64 | $15.95 | $15.72 | $16.10 |
Wt Av Yield | 12.3% | 12.2% | 12.3% | 12.6% | 12.8% | 13.0% | 13.2% | 13.8% | 13.9% | 14.1% |
Comments: With BDCs, 'imploding income' events happen. There were tiny hints - in the lack of 2016 dividend coverage - that this cut was coming. But the hints were not big enough to generate a big red flag from this source. This source has warned you to be diversified and keep your sector weighting small. For those of you who heeded that warning and still owned TCAP - the negativity of this event is manageable.