Tortoise Capital Resources Corp. Releases Fiscal 2010 First Quarter Financial Results
LEAWOOD, Kan.--(BUSINESS WIRE)-- Tortoise Capital Resources Corp. (NYSE: TTO) (the company) today announced that it has filed its Form 10-Q for its first quarter ended Feb. 28, 2010.
-- Net assets of $87.1 million or $9.60 per share as of Feb. 28, 2010 -- Total assets of $88.9 million as of Feb. 28, 2010 -- Distributable cash flow (DCF) of $1.2 million for the fiscal quarter ended Feb. 28, 2010 -- First quarter 2010 distribution of $0.13 per share paid March 1, 2010 -- Mowood, LLC (Mowood) closed on sale of its subsidiary Timberline Energy, LLC (Timberline) on Feb. 9, 2010 -- Credit facility fully repaid and terminated
On March 1, 2010, the company paid a distribution of $0.13 per common share, the same amount paid last quarter. The company determines the amount of distributions paid to stockholders based on DCF, which is distributions received from investments less total expenses.
On Feb. 10, 2010, the company paid off the remaining balance under the credit facility with proceeds from the sale of investments and the credit facility was terminated.
Net Asset Value
At Feb. 28, 2010, the company's net asset value was $9.60 per share compared to $9.29 per share at Nov. 30, 2010. The increase in net asset value is largely attributable to an increase in the private company valuations, most notably International Resource Partners and Mowood (which continues to own and operate Omega Pipeline Company).
As of Feb. 28, 2010, the fair value of the company's investment portfolio (excluding short-term investments) totaled $76.9 million, including equity investments of $71.6 million and debt investments of $5.3 million. The company's portfolio is diversified among approximately 57 percent midstream and downstream investments, 8 percent upstream, and 35 percent in aggregates and coal. The weighted average yield-to-cost on the investment portfolio (excluding short-term investments) as of Feb. 28, 2010 was 6.9 percent.
As previously reported, Mowood closed the sale of its wholly owned subsidiary, Timberline Energy, LLC, to Landfill Energy Systems in February. The company received $9.0 million in cash distributions from Mowood, and used a portion of the proceeds to pay off its credit facility, which had an outstanding balance of $4.6 million as of Nov. 30, 2009. The company also invested $750,000 this quarter in Mowood, in the form of subordinated debt, to facilitate growth projects at Omega. The remainder of the proceeds received from the sale of Timberline was invested in publicly-traded securities after the company's quarter end. Over the next two years additional proceeds of up to $2.4 million could be received by the company from Mowood, based on the contingent and escrow terms contained in the sale agreement, as amended. The company expects the impact of the Timberline sale and the elimination of its credit facility to be neutral to its distributable cash flow.
Quest Midstream Partners, LP (Quest Midstream) completed its transformation into a publicly traded C-corp, PostRock Energy Corporation (PostRock) (NASDAQ: PSTR). PostRock is a new corporation formed for the purpose of wholly owning Quest Midstream, Quest Resource Partners, LP (formerly NASDAQ: QRCP) and Quest Energy Partners, LP (formerly NASDAQ: QELP). PostRock announced on March 5, 2010 that shareholders of QRCP and QELP and unit holders of Quest Midstream had approved the merger and PostRock began trading on the NASDAQ on March 8, 2010. Upon closing of the merger, the company received 490,769 freely tradable common units of PostRock in exchange for its 1,216,881 common units of Quest Midstream.
The company will host a conference call at 4 p.m. CDT on Thursday, April 8, 2010 to discuss its financial results for the fiscal quarter ended Feb. 28, 2010. Please dial-in approximately five to 10 minutes prior to the scheduled start time.
The call will also be webcast in a listen-only format. A link to the webcast will be accessible at www.tortoiseadvisors.com.
A replay of the call will be available beginning at 6:00 p.m. CDT on April 8, 2010 and continuing until 11:59 p.m. CDT April 23, 2010, by dialing 800-406-7325 (U.S./Canada). The replay access code is 4262236#. A replay of the webcast will also be available on the company's Web site at www.tortoiseadvisors.com through April 8, 2011.
About Tortoise Capital Resources Corp.
Tortoise Capital Resources invests primarily in privately-held and micro-cap public companies operating in the midstream and downstream segments, and to a lesser extent the upstream and coal/aggregate segments, of the U.S. energy infrastructure sector.
About Tortoise Capital Advisors
Tortoise is an investment manager specializing in listed energy infrastructure, such as pipeline and power companies. As of March 31, 2010, the adviser had approximately $3.3 billion of assets under management in five NYSE-listed investment companies and private accounts. For more information, visit our Web site at www.tortoiseadvisors.com.
Safe Harbor Statement
This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.
This press release contains certain statements that may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements." Although the company and Tortoise Capital Advisors believe that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the company's reports that are filed with the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required by law, the company and Tortoise Capital Advisors do not assume a duty to update this forward-looking statement. Any distribution paid in the future to our stockholders will depend on the actual performance of the company's investments, its costs of leverage and other operating expenses and will be subject to the approval of the company's Board and compliance with asset coverage requirements of the Investment Company Act of 1940 and the leverage covenants.
Tortoise Capital Resources Corporation STATEMENTS OF ASSETS & LIABILITIES February 28, 2010 November 30, 2009 (Unaudited) Assets Investments at fair value, control (cost $ 27,765,626 $ 33,458,046 $20,952,193 and $28,180,070, respectively) Investments at fair value, affiliated (cost $51,439,159 and $52,676,299, 41,629,781 41,658,847 respectively) Investments at fair value, non-affiliated (cost $15,139,576 and $9,568,566, 14,633,831 8,865,047 respectively) Total investments (cost $87,530,928 and 84,029,238 83,981,940 $90,424,935, respectively) Receivable for Adviser expense 51,654 49,843 reimbursement Interest receivable from control 55,031 - investments Dividends receivable 103 87 Deferred tax asset 4,703,740 5,429,391 Prepaid expenses and other assets 18,460 16,792 Total assets 88,858,226 89,478,053 Liabilities Base management fees payable to Adviser 309,922 299,060 Distribution payable to common 1,180,152 - stockholders Accrued expenses and other liabilities 234,196 282,408 Short-term borrowings - 4,600,000 Total liabilities 1,724,270 5,181,468 Net assets applicable to common $ 87,133,956 $ 84,296,585 stockholders Net Assets Applicable to Common Stockholders Consist of: Warrants, no par value; 945,594 issued and outstanding at February 28, 2010 and $ 1,370,700 $ 1,370,700 November 30, 2009 (5,000,000 authorized) Capital stock, $0.001 par value; 9,078,090 shares issued and outstanding at February 9,078 9,078 28, 2010 and November 30, 2009 (100,000,000 shares authorized) Additional paid-in capital 100,749,155 101,929,307 Accumulated net investment loss, net of (3,123,409 ) (3,304,416 ) income taxes Accumulated realized loss, net of income (12,696,417 ) (14,041,614 ) taxes Net unrealized appreciation (depreciation) 824,849 (1,666,470 ) of investments, net of income taxes Net assets applicable to common $ 87,133,956 $ 84,296,585 stockholders Net Asset Value per common share outstanding (net assets applicable to $ 9.60 $ 9.29 common stock, divided by common shares outstanding)
Tortoise Capital Resources Corporation For the three For the three Distributable Cash Flow months ended months ended February 28, 2010 February 28, 2009 Total from Investments Distributions from investments $ 1,488,756 $ 2,691,635 Interest income from investments 191,431 201,598 Dividends from money market mutual 217 725 funds Other income 10,392 15,000 Total from Investments 1,690,796 2,908,958 Operating Expenses Before Leverage Costs Advisory fees (net of expense 258,268 327,308 reimbursement by Adviser) Other operating expenses 174,568 217,582 Total Operating Expenses, before Leverage 432,836 544,890 Costs Distributable cash flow before 1,257,960 2,364,068 leverage costs Leverage costs 45,619 171,116 Distributable Cash Flow $ 1,212,341 $ 2,192,952 Distributions paid on common stock $ 1,180,152 $ 2,061,294 Payout percentage for period(1) 97 % 94 % DCF/GAAP Reconciliation Distributable Cash Flow $ 1,212,341 $ 2,192,952 Adjustments to reconcile to Net Investment Income, before Income Taxes: Distributions paid in stock (2) - 28,136 Return of capital on distributions (998,640 ) (1,853,248 ) received from equity investments Net Investment Income, before Income $ 213,701 $ 367,840 Taxes (1) Distributions paid as a percentage of Distributable Cash Flow. The only distributions paid in stock for the three months ended February (2) 28, 2009 were from Abraxas Energy Partners, L.P. which were paid in stock as a result of credit constraints and therefore were not included in DCF.
Tortoise Capital Resources Corporation STATEMENTS OF OPERATIONS (Unaudited) For the three months For the three months ended February 28, ended February 28, 2010 2009 Investment Income Distributions from investments Control investments $ 555,879 $ 579,215 Affiliated investments 856,892 829,338 Non-affiliated investments 75,985 1,311,218 Total distributions from investments 1,488,756 2,719,771 Less return of capital on (998,640 ) (1,853,248 ) distributions Net distributions from investments 490,116 866,523 Interest income from control 191,431 201,598 investments Dividends from money market mutual 217 725 funds Fee income 10,392 15,000 Total Investment Income 692,156 1,083,846 Operating Expenses Base management fees 309,922 392,769 Professional fees 85,162 129,092 Directors' fees 26,161 21,657 Reports to stockholders 15,703 15,073 Administrator fees 14,460 18,329 Fund accounting fees 6,972 8,005 Registration fees 6,355 7,719 Stock transfer agent fees 3,130 3,181 Franchise tax expense 2,572 - Custodian fees and expenses 1,575 3,087 Other expenses 12,478 11,439 Total Operating Expenses 484,490 610,351 Interest expense 45,619 171,116 Total Expenses 530,109 781,467 Less expense reimbursement by (51,654 ) (65,461 ) Adviser Net Expenses 478,455 716,006 Net Investment Income, before Income 213,701 367,840 Taxes Deferred tax expense (32,694 ) (101,183 ) Net Investment Income 181,007 266,657 Realized and Unrealized Gain (Loss) on Investments Net realized gain on control 1,578,001 - investments Net realized loss on affiliated (17,445 ) (499,818 ) investments Net realized gain on non-affiliated 27,612 - investments Net realized gain (loss), before 1,588,168 (499,818 ) income taxes Deferred tax benefit (expense) (242,971 ) 137,487 Net realized gain (loss) on 1,345,197 (362,331 ) investments Net unrealized appreciation of 1,535,457 127,710 control investments Net unrealized appreciation (depreciation) of affiliated 1,208,074 (8,278,048 ) investments Net unrealized appreciation (depreciation) of non-affiliated 197,774 (4,783,720 ) investments Net unrealized appreciation 2,941,305 (12,934,058 ) (depreciation), before income taxes Deferred tax benefit (expense) (449,986 ) 3,557,817 Net unrealized appreciation 2,491,319 (9,376,241 ) (depreciation) of investments Net Realized and Unrealized Gain 3,836,516 (9,738,572 ) (Loss) on Investments Net Increase (Decrease) in Net Assets Applicable to Common Stockholders Resulting from Operations $ 4,017,523 $ (9,471,915 ) Net Increase (Decrease) in Net Assets Applicable to Common Stockholders Resulting from Operations Per Common Share: Basic and Diluted $ 0.44 $ (1.06 ) Weighted Average Shares of Common Stock Outstanding: Basic and Diluted 9,078,090 8,962,147
Source: Tortoise Capital Resources Corp.
Released April 8, 2010