Tortoise Capital Resources Announces Fiscal 2007 First Quarter Financial Results
OVERLAND PARK, Kan., April 12 /PRNewswire-FirstCall/ -- Tortoise Capital Resources Corp. (NYSE: TTO) today announced its financial results for the three months ended Feb. 28, 2007, its first fiscal quarter-end following its initial public offering.
Highlights for the Quarter -- Completed our IPO -- Completed Two Investments -- Approximately 60% of Total Assets Invested -- Net Unrealized Appreciation of $1.8 million -- Net Assets of $122,192,391 or $13.84 per share -- Number of Portfolio Companies - Two Public/Four Private Portfolio and Investment Activity
As of Feb. 28, 2007, Tortoise Capital Resources' investment portfolio (excluding short-term investments) totaled $74.6 million, including equity investments in six portfolio companies representing approximately $70.0 million and a subordinated debt investment in one portfolio company representing $4.6 million.
In December 2006, the company made two new investments: -- $17.5 million private placement in Millennium Midstream Partners, LP, a private limited partnership that owns midstream assets located in Texas, Louisiana and the Gulf of Mexico. -- $17.5 million private placement of equity in Quest Midstream Partners, LP, a private limited partnership that owns and operates a gas gathering system in the Cherokee Basin, which is located in southeastern Kansas and northern Oklahoma.
"We continue to see a strong pipeline of private transactions in the midstream and downstream sectors of the energy infrastructure area. The upstream sector is also growing with the successful launch of a handful of publicly-traded energy production MLPs, including Legacy Reserves LP," said Tortoise Capital Resources Manager, Edward Russell. "Legacy Reserves joined Eagle Rock as our second holding to complete an IPO, validating our investment strategy."
Distributions Received from Investments: For the period ended Feb. 28, 2007, we received $0.6 million in gross distributions from investments, including $0.5 million which was characterized as return of capital, and $0.3 million in dividends from money market mutual funds and interest income from debt investments. The weighted average yield on the company's investment portfolio (excluding short-term investments) as of Feb. 28, 2007 was 9.1 percent.
Operating Expenses: Recurring operating expenses were $0.8 million which consisted of $0.4 million in management fees, $0.3 million in interest expense on our line of credit and preferred dividends, and $0.1 million of other operating expenses. Total operating expenses were $2.1 million, which includes two items that will not be part of the company's recurring distributable cash flow. The company accrued $0.5 million for capital gain incentive fees that are not due until an investment is liquidated, and incurred costs for redemption of previously outstanding Series A Redeemable Preferred Stock. The Series A Redeemable Preferred Stock issuance was utilized as bridge financing to fund portfolio investments and was fully redeemed upon completion of our initial public offering.
Distributable Cash Flow (DCF): DCF for the quarter ended Feb. 28, 2007 was $0.02 million, comprised of $0.87 million received from investments less $0.85 million in expenses. Expenses include $0.2 million in preferred stock dividends and exclude the accrued capital gain incentive fee provision.
Net Income/Loss: Net loss for the period was $1.4 million, which included a deferred tax benefit of $0.3 million.
Net Unrealized Gain: During the period, net unrealized gain was $1.8 million after a deferred tax expense of $1.1 million.
Liquidity and Capital Resources
On Feb. 7, 2007, the company completed an initial public offering (IPO) of 5,740,000 shares of common stock at $15.00 per share for gross proceeds of $86.1 million. After underwriting discount and offering expenses, the company received net proceeds of $79.5 million.
From these net proceeds, approximately $11.6 million was used to repay the full amount then outstanding under the credit facility and $18.5 million to redeem all of the Series A Redeemable Preferred Stock. The company has $49.4 million remaining from the net proceeds of the IPO for investments and $20 million available under its secured revolving credit facility.
On Feb. 7, 2007, we paid a quarterly dividend to our stockholders of record as of Jan. 31, 2007 of $0.10 per common share. The company anticipates its next quarterly distribution will be paid on or about May 31, 2007.
Annual Stockholders' Meeting and First Quarter Results Call
The company will discuss fiscal fourth quarter 2006 and fiscal first quarter 2007 financial results at its annual stockholders' meeting on April 13, 2007 at 11 a.m. CT at the University of Kansas Edwards Campus, Regnier Hall 165, 12600 Quivira Road, Overland Park, Kan. Company leaders will respond to investor questions following the meeting.
For those unable to attend the meeting, a conference call will be provided. Please dial-in approximately five to 10 minutes prior to the scheduled start time.
U.S./Canada: (800) 218-0204 International: (303) 262-2140
The meeting will also be webcast in a listen-only format. The link to the webcast and a supporting slide presentation will be accessible at www.tortoiseadvisors.com.
A replay of the meeting will be available beginning at 2 p.m. CT on April 13, 2007 and continuing until 12 p.m. CT April 27, 2007, by dialing (800) 405- 2236 (U.S./Canada). The replay access code is 11082820#. A replay of the webcast will also be available on the company's Web site at www.tortoiseadvisors.com through April 13, 2008.
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 segments of the U.S. energy infrastructure sector. Tortoise Capital Resources seeks to provide stockholders a high level of total return, with an emphasis on dividends and dividend growth.
About Tortoise Capital Advisors, LLC
Tortoise Capital Advisors, LLC, the adviser to Tortoise Capital Resources Corp., is a pioneer in the capital markets for master limited partnership (MLP) investment companies and a leader in closed-end funds and separately managed accounts focused on MLPs in the energy infrastructure sector. As of March 31, 2007, the adviser had approximately $2.7 billion of energy infrastructure investment assets under management.
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.
Tortoise Capital Resources Corporation STATEMENTS OF ASSETS & LIABILITIES February 28, November 30, 2007 2006 (Unaudited) Assets Investments at value, non-affiliated (cost $65,842,743 and $21,867,831, respectively) $68,500,103 $22,196,689 Investments at value, affiliated (cost $49,616,450 and $14,828,825, respectively) 50,076,418 14,828,825 Investments at value, control (cost $5,550,000 and $5,550,000, respectively) 5,683,519 5,550,000 Total investments (cost $121,009,193 and $42,246,656, respectively) 124,260,040 42,575,514 Dividends receivable 113,682 24,262 Interest receivable from affiliate 40,950 43,983 Other receivable from affiliate -0 44,487 Prepaid expenses and other assets 73,781 244,766 Total assets 124,488,453 42,933,012 Liabilities Management fees payable to Adviser 218,957 112,765 Accrued capital gain incentive fees payable to Adviser (Note 4) 487,627 -0 Accrued expenses and other liabilities 457,020 155,303 Current tax liability 86,386 86,386 Deferred tax liability 1,046,072 250,156 Total liabilities 2,296,062 604,610 Net assets applicable to common stockholders $122,192,391 $42,328,402 Net Assets Applicable to Common Stockholders Consist of Warrants, no par value; 957,130 issued and outstanding at February 28, 2007 and 772,124 issued and outstanding at November 30, 2006 (5,000,000 authorized) $1,387,196 $1,104,137 Capital stock, $0.001 par value; 8,828,596 shares issued and outstanding at February 28, 2007 and 3,088,596 issued and outstanding at November 30, 2006 (100,000,000 shares authorized) 8,829 3,089 Additional paid-in capital 120,176,813 41,018,413 Accumulated net investment loss, net of deferred tax benefit (1,394,844) -0 Accumulated realized loss, net of income tax benefit (906) (906) Net unrealized appreciation of investments, net of deferred tax expense 2,015,303 203,669 Net assets applicable to common stockholders $122,192,391 $42,328,402 Net Asset Value per common share outstanding (net assets applicable to common shares, divided by common shares outstanding) $13.84 $13.70 Tortoise Capital Resources Corporation STATEMENTS OF OPERATIONS (Unaudited) Period from For the three December 8, months ended 2005(1)through February 28, 2007 February 28, 2006 Investment Income Distributions received from investments Non-affiliated investments $ 348,430 $ - Affiliated investments 255,257 - Less return of capital on distributions Non-affiliated investments (286,252) - Affiliated investments (193,805) - Net distribution income from investments 123,630 - Dividends from money market mutual funds 139,533 403,505 Interest income from control investments 128,472 - Total Investment Income 391,635 403,505 Expenses Base management fees 380,067 136,796 Capital gain incentive fees (Note 4) 487,627 - Professional fees 57,381 39,396 Directors' fees 23,168 20,614 Administrator fees 10,673 6,844 Reports to stockholders 4,458 13,743 Fund accounting fees 5,849 5,810 Stock transfer agent fees 3,600 2,749 Custodian fees and expenses 2,600 1,828 Registration fees 1,668 - Other expenses 6,538 6,941 Total Expenses before Interest Expense, Preferred Stock Dividends and Loss on Redemption of Preferred Stock 983,629 234,721 Interest expense 123,481 - Preferred stock dividends 228,750 - Loss on redemption of preferred stock 765,059 - Total Interest Expense, Preferred Stock Dividends and Loss on Redemption of Preferred Stock 1,117,290 - Total Expenses 2,100,919 234,721 Net Investment Income (Loss), before Income Taxes (1,709,284) 168,784 Current tax expense - (61,100) Deferred tax benefit 314,440 - Total Tax Expense 314,440 (61,100) Net Investment Income (Loss) (1,394,844) 107,684 Unrealized Appreciation of Investments Net unrealized appreciation of non- affiliated investments 2,328,503 - Net unrealized appreciation of affiliated investments 459,968 - Net unrealized appreciation of control investments 133,519 - Net unrealized appreciation, before deferred tax expense 2,921,990 - Deferred tax expense (1,110,356) - Net Unrealized Appreciation of Investments 1,811,634 - Net Increase in Net Assets Applicable to Common Stockholders Resulting from Operations $ 416,790 $ 107,684 Net Investment Income (Loss) Per Common Share Basic and diluted $ (0.31) $ 0.03 Net Increase in Net Assets Applicable To Common Stockholders Resulting from Operations Per Common Share Basic and Diluted $ 0.09 $ 0.03 Weighted Average Shares of Common Stock Outstanding: Basic and diluted 4,491,707 3,088,596 (1) Commencement of Operations.
SOURCE Tortoise Capital Resources Corp.
Released April 12, 2007