Record Net Investment Income of $40.6 Million,
or $0.37 per Share, provides 116% Coverage of Base Distribution
Payout
Available Liquidity of $438.2 Million
Record Total Investment Income of $73.6
Million
Record Total Debt Investments of $2.24 Billion,
at Cost
New Debt and Equity Commitments of $256.8
Million
Undistributed Earnings Spillover of $73.2
Million, or $0.66(1) per Ending Shares Outstanding
Q1 2020 Financial Achievements and Highlights
- Record Net Investment Income “NII” of $40.6 million, or $0.37
per share, an increase of 39.8% year-over-year
- Provides 116% coverage of base distribution payout
- Record Total Investment Income of $73.6 million, an increase of
25.2% year-over-year
- $438.2 million of available liquidity, subject to existing
terms and covenants
- New debt and equity commitments of $256.8 million
- Total gross fundings of $233.6 million
- Unscheduled early principal repayments or “early loan
repayments” of $150.5 million
- 15.6% Return on Average Equity “ROAE” (NII/Average Equity)
- 7.2% Return on Average Assets “ROAA” (NII/Average Assets)
- GAAP leverage of 116.8% and regulatory leverage of
106.7%(2)
- Net Asset Value “NAV” decreased to $9.92 from $10.55, down 6.0%
from Q4 2019
- 13.6% GAAP Effective Yield and 11.8% Core Yield(3), a non-GAAP
measure
Footnotes:
(1) $0.67 per Weighted Average Shares Outstanding
(2) Regulatory leverage represents debt-to-equity ratio,
excluding our Small Business Administration “SBA” debenture
(3) Core Yield excludes early loan repayments and one-time fees,
and includes income and fees from expired commitments
Hercules Capital, Inc. (NYSE: HTGC) (“Hercules” or the
“Company”), the largest and leading specialty financing provider to
innovative venture, growth and established stage companies backed
by some of the leading and top-tier venture capital and select
private equity firms, today announced its financial results for the
first quarter ended March 31, 2020.
“Our Q1 2020 earnings generated significant NII which covers
116% of our base shareholder distribution,” stated Scott Bluestein,
chief executive officer and chief investment officer of Hercules.
“During the quarter, we continued to support new and existing
portfolio companies through total commitments of $256.8 million and
completed several strategic balance sheet activities which
strengthened our liquidity to $438.2 million. In addition, we
generated core yields within management’s targeted range of 11.5 to
12.5 percent—reflecting the 150 basis points of Fed Funds
cuts—maintained solid credit quality combined with prudent
portfolio management, and modestly grew the debt investment
portfolio to $2.24 billion at cost. Fortunately, our performance
during the quarter puts us in a favorable position as we enter Q2
and the ongoing uncertainty brought about by the coronavirus
situation.”
Bluestein added, “As we vigilantly monitor the evolving health
situation and economic impact associated with the COVID-19
pandemic, our priorities remain squarely focused on keeping our
employees safe, supporting our portfolio companies, and protecting
the interests of all our stakeholders, all while managing the
continuity of our business. Our seasoned group of investment and
credit professionals will continue to communicate frequently with
our portfolio companies which are highly diversified and backed by
some of the most well-established venture capital and private
equity sponsors in U.S. With an enhanced financial position, record
undistributed earnings spillover and no near-term maturities, we
will adhere to our strict credit-centric investment discipline with
a focus on long-term shareholder value.”
Q1 2020 Review and Operating Results
Debt Investment Portfolio
Hercules delivered new debt and equity commitments totaling
$256.8 million and gross fundings totaling $233.6 million.
During the first quarter, Hercules realized early loan
repayments of $150.5 million, which along with normal scheduled
amortization of $17.0 million, resulted in total debt repayments of
$167.5 million.
The new debt investment origination and funding activities lead
to net debt investment portfolio growth of $72.8 million during the
first quarter, on a cost basis.
The Company’s total investment portfolio, (at cost and fair
value) by category, quarter-over-quarter is highlighted
below:
Total Investment Portfolio: Q1 2020 to
Q4 2019
(in millions) Debt Equity
Warrants Total Portfolio Balances at Cost at
12/31/19
$
2,170.1
$
196.9
$
35.0
$
2,402.0
New fundings(a)
232.0
—
1.6
233.6
Warrants not related to Q1 2020 fundings
—
—
—
—
Early payoffs(b)
(150.5
)
—
—
(150.5
)
Principal payments received on investments
(17.0
)
—
—
(17.0
)
Net changes attributed to conversions, liquidations, and fees
8.3
(6.6
)
(3.5
)
(1.8
)
Net activity during Q1 2020
72.8
(6.6
)
(1.9
)
64.3
Balances at Cost at 3/31/20
$
2,242.9
$
190.3
$
33.1
$
2,466.3
Balances at Value at 12/31/19
$
2,148.6
$
145.0
$
20.9
$
2,314.5
Net activity during Q1 2020
72.8
(6.6
)
(1.9
)
64.3
Net change in unrealized appreciation (depreciation)
(25.8
)
(43.9
)
(6.6
)
(76.3
)
Total net activity during Q1 2020
47.0
(50.5
)
(8.5
)
(12.0
)
Balances at Value at 3/31/20
$
2,195.6
$
94.5
$
12.4
$
2,302.5
(a)New fundings amount includes $3.1 fundings associated
with revolver loans during Q1 2020. (b)Early payoffs include $5.5M
paydown on revolvers during Q1 2020.
Debt Investment Portfolio Balances by Quarter
(in millions)
Q1 2020 Q4 2019 Q3 2019 Q2
2019 Q1 2019 Ending Balance at Cost
$
2,242.9
$
2,170.1
$
2,101.3
$
2,077.2
$
1,913.4
Weighted Average Balance
$
2,178.0
$
2,164.0
$
2,061.0
$
1,939.0
$
1,806.0
Debt Investment Portfolio Composition by Quarter
(% of debt investment portfolio)
Q1 2020 Q4 2019
Q3 2019 Q2 2019 Q1 2019 First Lien
Senior Secured
83.0
%
84.0
%
84.8
%
81.8
%
82.0
%
Floating Rate w/Floors
97.8
%
97.4
%
97.6
%
97.7
%
97.5
%
Effective Portfolio Yield and Core Portfolio Yield (“Core
Yield”)
The effective yield on Hercules’ debt investment portfolio was
13.6% during Q1 2020, as compared to 13.0% for Q4 2019. The Company
realized $150.5 million of early loan repayments in Q1 2020
compared to $160.8 million in Q4 2019, or a decrease of 6.4%.
Effective yields generally include the effects of fees and income
accelerations attributed to early loan repayments, and other
one-time events. Effective yields are materially impacted by the
elevated or reduced levels of early loan repayments and derived by
dividing total investment income by the weighted average earning
investment portfolio assets outstanding during the quarter, which
excludes non-interest earning assets such as warrants and equity
investments.
Core yield, a non-GAAP measure, was 11.8% during Q1 2020, within
the Company’s expected range of 11.5% to 12.5%, and decreased
compared to 12.3% in Q4 2019. Hercules defines core yield as yields
that generally exclude any benefit from income related to early
repayments attributed to the acceleration of unamortized income and
prepayment fees and includes income from expired commitments.
Income Statement
Total investment income increased to $73.6 million for Q1 2020,
compared to $58.8 million in Q1 2019, an increase of 25.2%
year-over-year. The increase is primarily attributable to a higher
average debt investment balance and increased income from
acceleration due a higher level of early loan repayments between
periods.
Non-interest and fee expenses were $16.7 million in Q1 2020
versus $14.2 million for Q1 2019. The increase was due to higher
general and administrative expenses and compensation and benefits,
offset by a decrease in stock-based compensation expenses.
Interest expense and fees were $16.3 million in Q1 2020,
compared to $15.6 million in Q1 2019. The increase was due to
higher weighted-average borrowings as well as increased average
borrowing under our credit facilities.
The Company had a weighted average cost of borrowings comprised
of interest and fees, of 5.2% in Q1 2020, as compared to 5.8% for
Q1 2019.
NII – Net Investment Income
NII for Q1 2020 was $40.6 million, or $0.37 per share, based on
109.0 million basic weighted average shares outstanding, compared
to $29.0 million, or $0.30 per share, based on 96.2 million basic
weighted average shares outstanding in Q1 2019, an increase of
39.8% year-over-year. The increase is primarily attributable to a
higher average debt investment balance and increased income from
acceleration due to a higher level of early loan repayments between
periods.
Continued Credit Discipline and Strong Credit
Performance
Hercules’ net cumulative realized gain/(loss) position, since
its first origination activities in October 2004 through March 31,
2020, (including net loan, warrant and equity activity) on
investments, totaled ($16.6) million, on a GAAP basis, spanning
over 15 years of investment activities.
When compared to total new debt investment commitments during
the same period of over $10.2 billion, the total realized
gain/(loss) since inception of ($16.6) million represents
approximately 16 basis points “bps,” or 0.16%, of cumulative debt
commitments, or an effective annualized loss rate of 1.0 bps, or
0.01%.
Realized Gains/(Losses)
During Q1 2020, Hercules had net realized gains/(losses) of $7.0
million primarily from gross realized gains of $12.2 million from
the sale of our public equity holdings, partially offset by the
gross realized losses of ($5.2) million primarily from the
liquidation or write-off of certain of our equity and warrant
positions during the quarter.
Unrealized Appreciation/(Depreciation)
During Q1 2020, Hercules recorded ($76.3) million of net
unrealized depreciation primarily related to the mark-to-market
impact of our public equity and warrant investments, as well as our
private equity investments and debt investments, due to the
economic disruption caused by the COVID-19 pandemic.
Portfolio Asset Quality
As of March 31, 2020, the weighted average grade of the debt
investment portfolio, at fair value, declined to 2.34, compared to
2.15 as of December 31, 2019, based on a scale of 1 to 5, with 1
being the highest quality. Hercules’ policy is to generally adjust
the credit grading down on its portfolio companies as they approach
their expected need for additional growth equity capital to fund
their respective operations for the next 9-14 months. Various
companies in the Company’s portfolio will require additional rounds
of funding from time to time to maintain their operations.
Additionally, Hercules may selectively downgrade portfolio
companies, from time to time, if they are not meeting the Company’s
financing criteria, or underperforming relative to their respective
business plans.
As of March 31, 2020, grading of the debt investment portfolio
at fair value, excluding warrants and equity investments, was as
follows:
Credit Grading at Fair Value, Q1 2020 - Q1 2019 ($ in
millions)
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Grade 1 - High
$
390.4
17.7
%
$
387.3
18.0
%
$
237.9
11.4
%
$
256.2
12.4
%
$
299.2
15.8
%
Grade 2
$
818.1
37.3
%
$
1,180.5
55.0
%
$
1,331.2
64.0
%
$
1,317.7
63.9
%
$
1,056.4
55.7
%
Grade 3
$
917.2
41.8
%
$
509.9
23.7
%
$
479.0
23.1
%
$
413.0
20.1
%
$
469.7
24.7
%
Grade 4
$
54.3
2.5
%
$
69.0
3.2
%
$
29.7
1.4
%
$
67.8
3.3
%
$
66.5
3.5
%
Grade 5 - Low
$
15.5
0.7
%
$
1.8
0.1
%
$
2.1
0.1
%
$
6.9
0.3
%
$
5.3
0.3
%
Weighted Avg.
2.34
2.15
2.17
2.18
2.19
Non-Accruals
Non-accruals increased slightly as a percentage of the overall
investment portfolio in the first quarter of 2020. As of March 31,
2020, the Company had four (4) debt investments on non-accrual with
an investment cost and fair value of approximately $20.4 million
and $0.4 million, respectively, or 0.8% and 0.0% as a percentage of
the Company’s total investment portfolio at cost and value,
respectively.
Compared to December 31, 2019, the Company had three (3) debt
investments on non-accrual with an investment cost and fair value
of approximately $9.0 million and $1.0 million, respectively, or
0.4% and 0.0% as a percentage of the total investment portfolio at
cost and value, respectively.
Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1
2019 Total Investments at Cost
$
2,466.3
$
2,402.0
$
2,336.3
$
2,315.7
$
2,153.3
Loans on non-accrual as a % of Total Investments
at Value
0.0
%
0.0
%
0.1
%
0.2
%
0.02
%
Loans on non-accrual as a % of Total
0.8
%
0.4
%
0.4
%
0.4
%
0.1
%
Investments at Cost
Liquidity and Capital Resources
In February 2020, the Company announced a private offering
totaling $120.0 million in aggregate principal amount of $50.0
million 4.28% Notes due February 2025 (the “February Notes”) and
$70.0 million 4.31% Notes due June 2025 (the “June Notes”). The
issuance of $50.0 million of the February Notes occurred on
February 5, 2020 and the issuance of $70.0 million of the June
Notes is expected to occur in June 2020.
The Company ended Q1 2020 with $438.2 million in available
liquidity, including $34.3 million in unrestricted cash and cash
equivalents, and $403.9 million in available credit facilities,
subject to existing terms and advance rates and regulatory and
covenant requirements.
During the three months ending March 31, 2020, the Company sold
2.4 million shares of common stock under the equity ATM program,
for total accumulated net proceeds of approximately $35.1 million,
including $362,000 of offering expenses. As of March 31, 2020,
approximately 5.6 million shares remain available for issuance and
sale under the Equity Distribution Agreement.
Bank Facilities
As of March 31, 2020, there were $71.1 million in outstanding
borrowings under the Hercules’ $400.0 million committed credit
facility with Union Bank as Agent and no outstanding borrowings
under the Hercules’ $75.0 million committed credit facility with
Wells Fargo Capital Finance, for a total of $71.1 million.
Leverage
As of March 31, 2020, Hercules’ GAAP leverage ratio, including
its Small Business Administration “SBA” debentures, was 116.8%.
Hercules’ regulatory leverage, or debt-to-equity ratio, excluding
its SBA debentures, was 106.7% and net regulatory leverage, a
non-GAAP measure (excluding cash of approximately $34.3 million),
was 103.6%. Hercules’ net leverage ratio, including its SBA
debentures, was 113.7%.
Available Unfunded Commitments – Representing 5.6% of Total
Assets
The Company’s unfunded commitments and contingencies consist
primarily of unused commitments to extend credit in the form of
loans to select portfolio companies. A portion of these unfunded
contractual commitments are dependent upon the portfolio company
reaching certain milestones in order to gain access to additional
funding. Furthermore, our credit agreements contain customary
lending provisions that allow us relief from funding obligations
for previously made commitments. In addition, since a portion of
these commitments may also expire without being drawn, unfunded
contractual commitments do not necessarily represent future cash
requirements.
As of March 31, 2020, the Company had $134.7 million of
available unfunded commitments at the request of the portfolio
company and unencumbered by any milestones, including undrawn
revolving facilities, representing 5.6% of Hercules’ total assets.
This increased slightly from the previous quarter of $133.7 million
of available unfunded commitments or 5.4% of Hercules’ total
assets.
Existing Pipeline and Signed Term Sheets
After closing $256.8 million in new debt and equity commitments
in Q1 2020, Hercules has pending commitments of $105.0 million in
signed non-binding term sheets outstanding as of April 30, 2020.
Since the close of Q1 2020 and as of April 30, 2020, Hercules has
closed new debt and equity commitments of $58.8 million and funded
$34.9 million.
Signed non-binding term sheets are subject to satisfactory
completion of Hercules’ due diligence and final investment
committee approval process as well as negotiations of definitive
documentation with the prospective portfolio companies. These
non-binding term sheets generally convert to contractual
commitments in approximately 90 days from signing. It is important
to note that not all signed non-binding term sheets are expected to
close and do not necessarily represent future cash requirements or
investments.
Net Asset Value
As of March 31, 2020, the Company’s net assets were $1.10
billion, compared to $1.13 billion at the end of Q4 2019. NAV per
share decreased 6.0% to $9.92 on 110.6 million outstanding shares
of common stock as of March 31, 2020, compared to $10.55 on 107.4
million outstanding shares of common stock as of December 31, 2019.
The decrease in NAV per share was primarily attributed to the
unrealized depreciation due to the mark-to-market impact on our
public equity and warrant investments, as well as our private
equity, warrant and debt investments, due to the economic
disruption caused by the COVID-19 pandemic, offset by earnings
exceeding the distribution paid in Q1 of $0.03 per share (including
realized gains) and net accretion to NAV on ATM offering, offset by
stock-based compensation, by $0.04 per share.
Interest Rate Sensitivity
Hercules has an asset sensitive debt investment portfolio with
97.8% of our debt investment portfolio being priced at floating
interest rates as of March 31, 2020, with a Prime or LIBOR-based
interest rate floor, combined with 94.4% of our outstanding debt
borrowings bearing fixed interest rates, leading to higher net
investment income sensitivity.
Based on Hercules’ Consolidated Statement of Assets and
Liabilities as of March 31, 2020, the following table shows the
approximate annualized increase/(decrease) in components of net
income resulting from operations of hypothetical base rate changes
in interest rates, such as Prime Rate, assuming no changes in
Hercules’ debt investments and borrowings. These estimates are
subject to change due to the impact from active participation in
the Company’s equity ATM program and any future equity
offerings.
(in thousands) Interest Interest Net
EPS(2) Basis Point Change Income(1)
Expense Income
(75
)
$
(2,067
)
$
(84
)
$
(1,983
)
$
(0.02
)
(50
)
$
(1,444
)
$
(56
)
$
(1,388
)
$
(0.01
)
(25
)
$
(728
)
$
(28
)
$
(700
)
$
(0.01
)
25
$
1,224
$
28
$
1,196
$
0.01
50
$
2,509
$
56
$
2,453
$
0.02
75
$
3,912
$
84
$
3,828
$
0.04
100
$
5,553
$
112
$
5,441
$
0.05
200
$
15,442
$
224
$
15,218
$
0.14
(1)
Source: Hercules Capital Form 10-Q for Q1 2020
(2)
EPS calculated on basic weighted shares outstanding of 108,955.
Estimates are subject to change due to impact from active
participation in the Company's equity ATM program and any future
equity offerings.
Existing Equity and Warrant Portfolio
Equity Portfolio
Hercules held equity positions in 50 portfolio companies with a
fair value of $94.6 million and a cost basis of $190.3 million as
of March 31, 2020. On a fair value basis, 20.0% or $18.6 million is
related to existing public equity positions.
Warrant Portfolio
Hercules held warrant positions in 110 portfolio companies with
a fair value of $12.4 million and a cost basis of $33.0 million as
of March 31, 2020. On a fair value basis, 33.0% or $4.1 million is
related to existing public warrant positions.
Portfolio Company IPO and M&A Activity in Q1 2020
IPO Activity
As of April 30, 2020, Hercules held debt, warrant or equity
positions in four (4) portfolio companies that had filed
Registration Statements in contemplation of a potential IPO,
including:
- Four (4) portfolio companies filed confidentially under the
JOBS Act.
There can be no assurances that companies that have yet to
complete their IPOs will do so.
M&A Activity
- In January 2020, Hercules’ portfolio company Quid, a
leader in AI driven text analytics, announced a joint merger with
NetBase, the industry leader in social media analytics. The
combined company is the next generation consumer and market
intelligence platform. The platform will deliver contextual
insights that reveal business trends from across all forms of
structured and unstructured data. The two companies will join
forces under their new collective name, NetBase Quid. Hercules
initially committed $17.5 million in venture debt financing in
April 2016.
- In January 2020, Hercules’ portfolio company CareCloud
Corporation, a healthcare technology company specializing in
software and services, was acquired by MTBC, Inc., a leading
provider of cloud-based healthcare IT and revenue cycle management
solutions. Hercules initially committed $19.5 million in venture
debt financing in May 2014.
- In March 2020, Hercules’ portfolio company Elenion
Technologies, LLC, a semiconductor company that designs and
develops highly integrated system-on-chip optical engines for
telecom, data center and networking applications, was acquired by
Nokia, a global technology provider of network equipment, software
and services. The planned acquisition was originally announced
February 19, 2020. Terms of the acquisition were not disclosed.
Hercules initially committed $16.5 million in venture debt
financing in February 2019.
- In March 2020, Hercules’ portfolio company TAS Energy
Inc., a leading engineering, design and construction provider
of modular construction systems serving the technology, power and
industrial sectors, announced that it has entered into a definitive
agreement to be acquired by Comfort Systems USA, Inc. (NYSE: FIX),
a leading provider of commercial, industrial and institutional
heating, ventilation, air conditioning and electrical contracting
services. The acquisition was completed in April 2020. Terms of the
acquisition were not disclosed. Hercules initially committed $45.0
million in venture debt financing in January 2013.
Subsequent Events
- As of April 30, 2020, Hercules has:
- Funded $34.9 million to new and existing commitments since the
close of the first quarter 2020.
-
Pending commitments (signed non-binding term sheets) of $105.0
million.
The table below summarizes our year-to-date closed and pending
commitments as follows:
Closed Commitments and Pending
Commitments (in millions)
Q1 2020 Closed Commitments(a)
$256.8
Q2 2020 Closed Commitments (as of April
30, 2020)(a)
$58.8
Year-to-Date 2020 Closed
Commitments
$315.6
Q2 2020 Pending Commitments (as of April
30, 2020)(b)
$105.0
Year-to-Date 2020 Closed and Pending
Commitments
$420.6
Notes:
- Closed Commitments may include renewals of existing credit
facilities. Not all Closed Commitments result in future cash
requirements. Commitments generally fund over the two succeeding
quarters from close.
- Not all pending commitments (signed non-binding term sheets)
are expected to close and do not necessarily represent any future
cash requirements.
Conference Call
Hercules has scheduled its first quarter 2020 financial results
conference call for May 4, 2020 at 2:00 p.m. PT (5:00 p.m. ET). To
listen to the call, please dial (877) 304-8957 (or (408) 427-3709
internationally) and reference Conference ID: 1048257 if asked,
approximately 10 minutes prior to the start of the call. A taped
replay will be made available approximately three hours after the
conclusion of the call and will remain available for seven days. To
access the replay, please dial (855) 859-2056 or (404) 537-3406 and
enter the passcode 1048257.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE: HTGC) is the leading and largest
specialty finance company focused on providing senior secured
venture growth loans to high-growth, innovative venture
capital-backed companies in a broad variety of technology, life
sciences and sustainable and renewable technology industries. Since
inception (December 2003), Hercules has committed more than $10.2
billion to over 500 companies and is the lender of choice for
entrepreneurs and venture capital firms seeking growth capital
financing. Companies interested in learning more about financing
opportunities should contact info@htgc.com, or call
650.289.3060.
Hercules’ common stock trades on the New York Stock Exchange
(NYSE) under ticker symbol HTGC. In addition, Hercules has two
retail bond issuances of 5.25% Notes due 2025 (NYSE: HCXZ) and
6.25% Notes due 2033 (NYSE: HCXY).
Forward-Looking Statements
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. You should understand that under Section 27A(b)(2)(B) of
the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of
the Securities Exchange Act of 1934, as amended, or the Exchange
Act, the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995 do not apply to forward-looking
statements made in periodic reports we file under the Exchange
Act.
The information disclosed in this press release is made as of
the date hereof and reflects Hercules’ most current assessment of
its historical financial performance. Actual financial results
filed with the SEC may differ from those contained herein due to
timing delays between the date of this release and confirmation of
final audit results. These forward-looking statements are not
guarantees of future performance and are subject to uncertainties
and other factors that could cause actual results to differ
materially from those expressed in the forward-looking statements
including, without limitation, the risks, uncertainties, including
the uncertainties surrounding the current market volatility, and
other factors the Company identifies from time to time in its
filings with the SEC. Although Hercules believes that the
assumptions on which these forward-looking statements are based are
reasonable, any of those assumptions could prove to be inaccurate
and, as a result, the forward-looking statements based on those
assumptions also could be incorrect. You should not place undue
reliance on these forward-looking statements. The forward-looking
statements contained in this release are made as of the date
hereof, and Hercules assumes no obligation to update the
forward-looking statements for subsequent events.
HERCULES CAPITAL, INC.
CONSOLIDATED STATEMENTS OF
ASSETS AND LIABILITIES
(dollars in thousands, except
per share data)
March 31, 2020 December 31, 2019 Assets
Investments: Non-control/Non-affiliate investments (cost of
$2,312,460 and $2,248,524, respectively)
$
2,238,479
$
2,232,972
Control investments (cost of $65,213 and $65,333, respectively)
51,775
59,746
Affiliate investments (cost of $88,584 and $88,175, respectively)
12,226
21,808
Total investments in securities, at value (cost of $2,466,256 and
$2,402,032, respectively)
2,302,480
2,314,526
Cash and cash equivalents
34,282
64,393
Restricted cash
22,060
50,603
Interest receivable
19,137
20,207
Other assets
18,792
12,239
Total assets
$
2,396,751
$
2,461,968
Liabilities Accounts payable and accrued liabilities
$
33,594
$
41,844
SBA Debentures, net (principal of $110,250 and $149,000,
respectively)(1)
109,725
148,165
2022 Notes, net (principal of $150,000 and $150,000,
respectively)(1)
148,645
148,514
July 2024 Notes, net (principal of $105,000 and $105,000,
respectively)(1)
103,721
103,685
February 2025 Notes, net (principal of $50,000 and $0,
respectively)(1)
49,442
—
2025 Notes, net (principal of $75,000 and $75,000, respectively)(1)
73,066
72,970
2033 Notes, net (principal of $40,000 and $40,000, respectively)(1)
38,528
38,501
2027 Asset-Backed Notes, net (principal of $200,000 and $200,000
respectively)(1)
197,377
197,312
2028 Asset-Backed Notes, net (principal of $250,000 and $250,000,
respectively)(1)
247,444
247,395
2022 Convertible Notes, net (principal of $230,000 and $230,000,
respectively)(1)
227,004
226,614
Credit Facilities
71,125
103,919
Total liabilities
$
1,299,671
$
1,328,919
Net assets consist of: Common stock, par value
111
108
Capital in excess of par value
1,182,080
1,145,106
Total distributable earnings (loss)
(85,111
)
(12,165
)
Total net assets
$
1,097,080
$
1,133,049
Total liabilities and net assets
$
2,396,752
$
2,461,968
Shares of common stock outstanding ($0.001 par value,
200,000,000 authorized)
110,601
107,364
Net asset value per share
$
9.92
$
10.55
(1) The Company’s SBA Debentures, February 2025 Notes, 2033 Notes,
2025 Notes, 2022 Notes, 2027 Asset-Backed Notes, 2028 Asset-Backed
Notes, 2022 Convertible Notes, and July 2024 Notes, as each term is
defined herein, are presented net of the associated debt issuance
costs for each instrument.
HERCULES CAPITAL, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (in thousands,
except per share data)
Three Months Ended March
31,
2020
2019
Investment income: Interest income Non-control/Non-affiliate
investments
$
65,338
$
53,941
Control investments
646
1,024
Affiliate investments
220
508
Total interest income
66,204
55,473
Fee income Commitment, facility and loan fee income
Non-control/Non-affiliate investments
4,196
2,450
Control investments
5
4
Affiliate investments
—
88
Total commitment, facility and loan fee income
4,201
2,542
One-time fee income Non-control/Non-affiliate investments
3,214
780
Total one-time fee income
3,214
780
Total fee income
7,415
3,322
Total investment income
73,619
58,795
Operating expenses: Interest
14,532
12,555
Loan fees
1,794
3,009
General and administrative Legal expenses
899
663
Tax expenses
1,135
298
Other expenses
4,025
3,192
Total general and administrative
6,059
4,153
Employee compensation Compensation and benefits
8,214
6,623
Stock-based compensation
2,440
3,422
Total employee compensation
10,654
10,045
Total operating expenses
33,039
29,762
Net investment income
40,580
29,033
Net realized gain (loss) on investments
Non-control/Non-affiliate investments
6,967
4,555
Total net realized gain (loss) on investments
6,967
4,555
Net change in unrealized appreciation (depreciation) on
investments Non-control/Non-affiliate investments
(58,430
)
32,091
Control investments
(7,851
)
(2,875
)
Affiliate investments
(9,989
)
(1,219
)
Total net unrealized appreciation (depreciation) on investments
(76,270
)
27,997
Total net realized and unrealized gain(loss)
(69,303
)
32,552
Net increase(decrease) in net assets resulting from
operations
$
(28,723
)
$
61,585
Net investment income before investment gains and losses per common
share: Basic
$
0.37
$
0.30
Change in net assets resulting from operations per common share:
Basic
$
(0.27
)
$
0.64
Diluted
$
(0.27
)
$
0.64
Weighted average shares outstanding: Basic
108,955
96,218
Diluted
108,955
96,508
Distributions paid per common share: Basic
$
0.40
$
0.31
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200504005540/en/
Michael Hara Investor Relations and Corporate Communications
Hercules Capital, Inc. 650-433-5578 mhara@htgc.com
Hercules Capital (NYSE:HTGC)
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