Tortoise Capital Resources Corp. Releases Fiscal 2009 Results
LEAWOOD, Kan.--(BUSINESS WIRE)-- Tortoise Capital Resources Corp. (NYSE: TTO) (the company) today announced its financial results for the fiscal year ended Nov. 30, 2009, in its Annual Report on Form 10-K filed Feb. 16, 2010.
-- Net assets of $84.3 million, or $9.29 per share, as of Nov. 30, 2009 -- Total assets of $89.5 million as of Nov. 30, 2009 -- Distributable cash flow (DCF) of $5.9 million for the fiscal year ended Nov. 30, 2009 -- First quarter distribution of $0.13 per share to be paid Mar. 1, 2010 -- Mowood, LLC (Mowood) closes on sale of its subsidiary Timberline Energy, LLC (Timberline) on Feb. 9, 2010
On Feb. 9, 2010, the company announced a first quarter 2010 distribution of $0.13 per common share to be paid on Mar. 1, 2010, the same amount paid in the preceding quarter. The company determines the amount of distributions paid to stockholders based on distributable cash flow (DCF) which is distributions received from investments less total expenses. There were no distribution increases or decreases from portfolio companies for the first quarter 2010.
On Aug. 20, 2009, the company entered into a six-month extension of its amended credit facility through Feb. 20, 2010. The balance outstanding on the credit facility at Nov. 30, 2009 was $4.6 million. On Feb. 10, 2010, the company fully repaid the outstanding balance on its credit facility utilizing distribution proceeds it received from Mowood's sale of Timberline.
Net Asset Value
At Nov. 30, 2009, the company's net asset value was $9.29 per share compared to $8.76 per share at Aug. 31, 2009 and $9.96 per share at Nov. 30, 2008. The increase in net asset value in the fourth quarter was primarily related to an overall increase in the fair value of the private investments. The year-over-year decrease in net asset value was primarily the result of significant deleveraging to pay down the credit facility, as well as the decline of values in the broader market during the first part of 2009.
As of Nov. 30, 2009, the fair value of the company's investment portfolio (excluding short-term investments) totaled $82.5 million, including equity investments of $73.7 million and debt investments of $8.8 million. The portfolio consists of 61 percent midstream and downstream investments, 7 percent upstream investments, and 32 percent in aggregates and coal. The weighted average yield-to-cost on the investment portfolio (excluding short-term investments) as of Nov. 30, 2009 was 6.9 percent.
On Feb. 9, 2010, Mowood closed the sale of its wholly owned subsidiary, Timberline, to Landfill Energy Systems, LLC. Timberline is an owner and developer of projects that convert landfill gas to energy. Mowood will continue its ownership and operation of Omega Pipeline Company, LLC (Omega), a local distribution company which serves the natural gas and propane needs of Fort Leonard Wood and other customers in south central Missouri. The company received a partial distribution of proceeds in the amount of $3.8 million (out of an expected total of approximately $9.0 million), which it used to pay off the outstanding balance on its credit facility. The company intends to invest the remaining $5.2 million of the expected initial proceeds according to stated investment policies, which may include a potential investment in Omega to facilitate growth and investments in publicly-traded securities. Over the next two years, the company could receive additional proceeds of up to $2.4 million, based on contingent and escrow terms. The company expects the immediate impact of the transaction to be neutral to its distributable cash flow.
On Feb. 8, 2010, Quest Resource Corporation (NASDAQ: QRCP) and Quest Energy Partners, L.P. (NASDAQ: QELP) announced the Securities and Exchange Commission (SEC) declared the Registration Statement of PostRock Energy Corporation on Form S-4 effective. The Form S-4 registers with the SEC PostRock's common stock to be issued in connection with the pending merger of QRCP, QELP, and Quest Midstream Partners, L.P into PostRock, a new, publicly-traded corporation that would wholly own all three entities. Shareholders of record as of Feb. 1, 2010 of QRCP and QELP will be entitled to vote upon the merger at shareholder meetings scheduled for Mar. 5, 2010.
In Oct. 2009, Abraxas Energy Partners LP merged with its affiliate, Abraxas Petroleum Corporation (NASDAQ: AXAS). In connection with the merger, the holders of common units of Abraxas exchanged their units into publicly-traded shares of AXAS. The company received 1,946,376 shares of AXAS. These shares are subject to a staggered lock-up period which expires in February 2012.
On Dec. 31, 2009, the company received its expected cash distribution from Lonestar Midstream Partners, LP of approximately $804,000.
The company will host a conference call at 4 p.m. CDT on Tuesday, Feb. 16, 2010 to discuss its financial results for the fiscal year ended Nov. 30, 2009. Please dial-in approximately five to 10 minutes prior to the scheduled start time.
U.S./Canada: (866) 225-8754
International: (480) 629-9692
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 Feb. 16, 2010 and continuing until 11:59 p.m. CDT Feb. 23, 2010, by dialing (800) 406-7325 (U.S./Canada). The replay access code is 4187167#. A replay of the webcast will also be available on the company's Web site at www.tortoiseadvisors.com through Feb. 16, 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 Jan. 31, 2010, the adviser had approximately $3.0 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 November 30, 2009 November 30, 2008 Assets Investments at fair value, control (cost $28,180,070 and $30,418,802, $ 33,458,046 $ 30,213,280 respectively) Investments at fair value, affiliated (cost $52,676,299 and $56,662,500, 41,658,847 48,016,925 respectively) Investments at fair value, non-affiliated (cost $9,568,566 and 8,865,047 27,921,025 $49,760,304, respectively) Total investments (cost $90,424,935 and 83,981,940 106,151,230 $136,841,606, respectively) Income tax receivable - 212,054 Receivable for Adviser expense 49,843 88,925 reimbursement Interest receivable from control - 76,609 investments Dividends receivable 87 696 Deferred tax asset, net 5,429,391 5,683,747 Prepaid expenses and other assets 16,792 107,796 Total assets 89,478,053 112,321,057 Liabilities Base management fees payable to Adviser 299,060 533,552 Accrued expenses and other liabilities 282,408 362,205 Short-term borrowings 4,600,000 22,200,000 Total liabilities 5,181,468 23,095,757 Net assets applicable to common $ 84,296,585 $ 89,225,300 stockholders Net Assets Applicable to Common Stockholders Consist of: Warrants, no par value; 945,594 issued and outstanding at November 30, 2009 and November 30, 2008 (5,000,000 authorized) $ 1,370,700 $ 1,370,700 Capital stock, $0.001 par value; 9,078,090 shares issued and outstanding at November 30, 2009 and 8,962,147 issued and outstanding at November 30, 2008 (100,000,000 shares 9,078 8,962 authorized) Additional paid-in capital 101,929,307 106,869,132 Accumulated net investment loss, net of (3,304,416 ) (2,544,267 ) income taxes Accumulated realized gain (loss), net of (14,041,614 ) 6,364,262 income taxes Net unrealized depreciation of (1,666,470 ) (22,843,489 ) investments, net of income taxes Net assets applicable to common $ 84,296,585 $ 89,225,300 stockholders Net Asset Value per common share outstanding (net assets applicable to common stock, divided by common $ 9.29 $ 9.96 shares outstanding)
Year Ended Year Ended Year Ended Distributable Cash Flow November 30, 2009 November 30, 2008 November 30, 2007 Total from Investments Distributions from $ 7,724,577 $ 9,688,521 $ 6,520,432 investments Distributions paid in - 2,186,767 295,120 stock (1) Interest income from 807,848 1,103,059 921,978 investments Dividends from money 1,986 18,205 624,385 market mutual funds Other income 61,514 28,987 - Total from Investments 8,595,925 13,025,539 8,361,915 Operating Expenses Before Leverage Costs Advisory fees (net of expense reimbursement by 1,126,327 1,928,109 1,831,878 Adviser) Other operating expenses (excluding capital gain 911,779 1,037,624 1,094,677 incentive fees) Total Operating Expenses, 2,038,106 2,965,733 2,926,555 before Leverage Costs Distributable cash flow 6,557,819 10,059,806 5,435,360 before leverage costs Leverage costs 627,707 1,650,926 1,076,171 Distributable Cash Flow $ 5,930,112 $ 8,408,880 $ 4,359,189 Distributions paid on $ 5,582,473 $ 9,265,351 $ 5,349,244 common stock Payout percentage for 94 % 110 % 123 % period(2) DCF/GAAP Reconciliation Distributable Cash Flow $ 5,930,112 $ 8,408,880 $ 4,359,189 Adjustments to reconcile to Net Investment Loss, before Income Taxes: Distributions paid in - (2,186,767 ) (295,120 ) stock Return of capital on distributions received (6,791,394 ) (7,894,819 ) (5,031,851 ) from equity investments Capital gain incentive - 307,611 (307,611 ) fees Loss on redemption of - - (731,713 ) preferred stock Net Investment Loss, $ (861,282 ) $ (1,365,095 ) $ (2,007,106 ) before Income Taxes (1) Distributions paid in stock for the year ended November 30, 2008 include paid-in-kind distributions from Lonestar Midstream, LP, High Sierra Energy, LP and High Sierra Energy GP, LLC. Distributions paid in stock for the year ended November 30, 2007 include paid-in-kind distributions from Lonestar Midstream, LP. (2) Distributions paid as a percentage of Distributable Cash Flow.
Tortoise Capital Resources Corporation STATEMENTS OF OPERATIONS Year Ended Year Ended Year Ended November 30, 2009 November 30, 2008 November 30, 2007 Investment Income Distributions from investments Control investments $ 2,270,189 $ 1,576,716 $ 389,720 Affiliated 3,379,159 4,699,082 4,245,481 investments Non-affiliated 2,075,229 3,412,723 1,885,231 investments Total distributions 7,724,577 9,688,521 6,520,432 from investments Less return of capital on (6,791,394 ) (7,894,819 ) (5,031,851 ) distributions Net distributions 933,183 1,793,702 1,488,581 from investments Interest income from 807,848 1,103,059 921,978 control investments Dividends from money 1,986 18,205 624,385 market mutual funds Fee income 61,514 - - Other income - 28,987 - Total Investment 1,804,531 2,943,953 3,034,944 Income Operating Expenses Base management fees 1,351,593 2,313,731 1,926,059 Capital gain - (307,611 ) 307,611 incentive fees Professional fees 553,856 642,615 727,055 Administrator fees 63,074 107,325 81,002 Directors' fees 90,257 86,406 84,609 Reports to 61,130 58,943 53,610 stockholders Fund accounting fees 31,968 34,546 32,183 Registration fees 31,306 29,668 40,660 Custodian fees and 16,928 17,426 10,174 expenses Stock transfer agent 13,506 13,538 13,600 fees Other expenses 49,754 47,157 51,784 Total Operating 2,263,372 3,043,744 3,328,347 Expenses Interest expense 627,707 1,650,926 847,421 Loss on redemption - - 228,750 of preferred stock Preferred stock - - 731,713 distributions Total Interest Expense, Loss on Redemption of Preferred Stock and Preferred Stock 627,707 1,650,926 1,807,884 Distributions Total Expenses 2,891,079 4,694,670 5,136,231 Less expense reimbursement by (225,266 ) (385,622 ) (94,181 ) Adviser Net Expenses 2,665,813 4,309,048 5,042,050 Net Investment Loss, (861,282 ) (1,365,095 ) (2,007,106 ) before Income Taxes Current tax benefit - (6,881 ) 261,667 (expense) Deferred tax benefit 101,133 393,483 179,665 Income tax benefit, 101,133 386,602 441,332 net Net Investment Loss (760,149 ) (978,493 ) (1,565,774 ) Realized and Unrealized Gain (Loss) on Investments Net realized gain (loss) on (23,120,748 ) 8,716,197 260,290 investments, before income taxes Deferred tax benefit 2,714,872 (2,512,409 ) (98,910 ) (expense) Net realized gain (loss) on (20,405,876 ) 6,203,788 161,380 investments Net unrealized appreciation 5,483,497 (2,976,609 ) 2,771,088 (depreciation) of control investments Net unrealized appreciation (depreciation) of (2,371,877 ) (11,145,652 ) 2,262,736 affiliated investments Net unrealized appreciation (depreciation) of 21,135,760 (27,458,859 ) 5,528,064 non-affiliated investments Net unrealized appreciation 24,247,380 (41,581,120 ) 10,561,888 (depreciation), before income taxes Deferred tax benefit (3,070,361 ) 11,985,592 (4,013,518 ) (expense) Net unrealized appreciation 21,177,019 (29,595,528 ) 6,548,370 (depreciation) of investments Net Realized and Unrealized Gain 771,143 (23,391,740 ) 6,709,750 (Loss) on Investments Net Increase (Decrease) in Net Assets Applicable to Common Stockholders Resulting from $ 10,994 $ (24,370,233 ) $ 5,143,976 Operations Net Increase (Decrease) in Net Assets Applicable to Common Stockholders Resulting from Operations Per Common Share: Basic and Diluted $ 0.00 (1) $ (2.74 ) $ 0.66 Weighted Average Shares of Common Stock Outstanding: Basic and Diluted 8,997,145 8,887,085 7,751,591 (1)Less than $0.01 per share.
Source: Tortoise Capital Resources Corp.
Released February 16, 2010