Published: February 09, 2006
Prospect Energy Corporation Announces Financial Results for Second Fiscal Quarter Ended December 31, 2005 and Provides Guidance for Third Fiscal Quarter
Prospect Energy Corporation (NASDAQ: PSEC)
today announced financial results for its second fiscal quarter ended
December 31, 2005.
Our net investment income for the second fiscal quarter of 2005 was $2.040
million, or $0.29 per share. Excluding non-recurring expense, our net
investment income was $2.250 million, or $0.32 per share (see Supplemental
Financial Information below). At December 31, 2005, our net asset value per
share was $14.69, an increase of $0.09 over the prior quarter end.
We estimate that our net investment income for the current third fiscal
quarter ending March 31, 2006, will be $0.28 to $0.32 per share. Excluding
non-recurring expense, we estimate that our net investment income for the
current quarter will be $0.30 to $0.34 per share. We will announce our
third fiscal quarter dividend in the next few weeks.
OPERATING RESULTS
We have included additional disclosures in this release separating
recurring and non-recurring charges. Non-recurring charges include legal
fees associated with previously reported events, including certain judicial
proceedings.
HIGHLIGHTS
Equity values:
Stockholders' equity as of December 31, 2005: $103.653 million
Net asset value per share: $14.69
Second Fiscal Quarter Operating Results:
Net investment income: $2.040 million
Net investment income per share: $0.29
Net investment income excluding non-recurring items*: $2.250 million
Net investment income per share excluding non-recurring items*: $0.32
Net unrealized appreciation: $0.488 million
Dividends to shareholders per share: $0.28
See Supplemental Financial Information.
PORTFOLIO AND INVESTMENT ACTIVITY
December 31, 2005, marked the end of our second fiscal quarter with our
portfolio invested approximately $77.826 million in eight long-term
investments, and the remainder in cash and short-term instruments.
As of December 31, 2005, our portfolio generated a current yield of 18.3%
across all our long-term debt and equity investments. This current yield
includes interest from all our long-term investments as well as dividends
from Gas Solutions Holdings, Inc. ("Gas Solutions") and Unity Virginia
Holdings ("Unity"). Monetization of, or dividends from, other equity
positions is not included in this current yield calculation.
During the second fiscal quarter, we were repaid our loan to Miller
Petroleum, Inc. ("Miller"), retaining our warrants in Miller.
Since December 31, 2005, we have provided follow-on capital of $0.790
million to and have become the majority shareholder of Worcester Energy
Partners, Inc. ("WECO"). We have also provided follow-on capital of $0.100
million to Whymore Coal Company, Inc. ("Whymore"), and $1.000 million to
Natural Gas Systems, Inc. ("NGS"). Our capital in each case has been
invested as additional senior secured debt with additional equity
participation rights.
During the second fiscal quarter, we completed no new investments, as
investments we were targeting to close in that quarter were delayed into
the current quarter, reflecting the lengthy negotiation, structuring, due
diligence, and documentation that must be completed prior to closing.
On February 9, 2006, we provided $6.925 million of senior secured debt
financing to Genesis Coal Company, Inc. ("Genesis"), and we received a
significant equity ownership investment in Genesis as part of the
investment.
CREDIT FACILITY
We have substantially completed our discussions and negotiations with a
major North American financial institution and expect to close our credit
facility this month barring unforeseen delays.
CONFERENCE CALL
We will host a conference call Friday, February 10, 2006, at 11:00 am
Eastern Time. The conference call dial-in number is (877) 407-8031. A
recording of the conference call will be available for approximately 7
days. To hear a replay, call (877) 660-6853 and use Playback Access Account
code 286 and Playback Conference ID code 190588.
BALANCE SHEETS As of As of
(in thousands) December June 30,
31, 2005 2005
------------------------------------------------------------------------
Assets (Unaudited)
Cash held in segregated account $- $9,587
Investment, Gas Solutions Holdings, Inc.
at value (cost - $23,274 and $23,327,
respectively) 30,100 29,500
Investments, at value (cost - $74,477 and
$64,197, respectively) 74,557 64,366
Accrued interest receivable 483 206
Prepaid expenses 219 49
Due from affiliates 25 201
Total assets $105,384 $103,909
Liabilities
Accrued liabilities 592 818
Due to Investment Adviser 1,032 77
Other current liabilities 107 47
Total liabilities 1,731 942
Stockholders' Equity
Common stock, par value $.001 per share,
100,000,000 common shares authorized,
7,055,100 issued and outstanding 7 7
Paid-in capital in excess of par 97,026 96,955
Distributions in excess of net
investment income (286) (337)
Net unrealized appreciation 6,906 6,342
Total stockholders' equity 103,653 102,967
Total liabilities and
stockholders' equity $105,384 $103,909
STATEMENTS OF OPERATIONS Three months Three months
(UNAUDITED) ended ended
(in thousands) December 31, December 31,
2005 2004
-------------------------------------------------------------------------
Investment Income
Interest income $ 1,855 $ 271
Interest income, Gas Solutions Holdings, Inc. 828 976
Dividend income 163 -
Dividend income, Gas Solutions Holdings, Inc. 843 1,700
Other income 246 -
Total investment income 3,935 2,947
Operating Expenses
Investment advisory fees
Base management fee 524 495
Income incentive fee 508 -
Total investment advisory fees 1,032 495
Administration costs 87 96
Legal fees 391 984
Valuation services 45 -
Other professional fees 107 -
Insurance expense 85 87
Directors fees 55 55
General and administrative expenses 93 1
Total operating expenses 1,895 1,718
Net investment income 2,040 1,229
Net realized loss - -
Net unrealized appreciation 488 -
Net increase in stockholders' equity resulting
from operations $ 2,528 $ 1,229
Basic net increase in stockholders' equity per
common share resulting from operations $ 0.36 $ 0.17
PER SHARE DATA (UNAUDITED) For the six For the
months ended twelve months
December 31, ended June
2005 30, 2005
Net asset value, beginning of period $14.59 $ (.01)
Proceeds from initial public offering - 13.95
Costs related to the initial public
offering 0.01 (.21)
Net investment income 0.49 0.34
Net unrealized appreciation 0.08 0.90
Dividend declared and paid (0.48) (.38)
Net asset value at end of period $ 14.69 $ 14.59
SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED) (IN THOUSANDS)
Please note that the following supplemental financial information
represents a reconciliation of a GAAP measure (Net investment income) to a
non-GAAP measure (Adjusted net investment income).
Three months Twelve
ended months ended
December 31, June 30, 2005
2005
-------------------------------------------------------------------------
Total investment income $3,935 $8,093
Total operating expenses 1,895 5,682
Net investment income 2,040 2,411
Add back non-recurring items 210 2,083
Adjusted net investment income $2,250 $4,494
Net investment income per common share $0.29 $0.40
Adjusted net investment income
per common share $0.32 $0.64
ABOUT PROSPECT ENERGY CORPORATION
Prospect Energy Corporation (www.prospectenergy.com) is a closed-end
investment company that lends to and invests in energy-related businesses
and assets. Prospect Energy's investment objective is to generate both
current income and long-term capital appreciation through debt and equity
investments.
Prospect Energy has elected to be treated as a business development company
under the Investment Company Act of 1940 ("1940 Act"). Accordingly, we are
required to comply with a series of regulatory requirements under the 1940
Act as well as applicable NASDAQ, state, and federal rules and regulations.
In addition, we have elected to be treated as a regulated investment
company under the Internal Revenue Code of 1986. Failure to comply with any
of the laws and regulations that apply to Prospect Energy could have a
material adverse effect on Prospect Energy and its shareholders.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve risks and uncertainties, including, but not limited to,
statements as to our future operating results; our business prospects and
the prospects of our portfolio companies; the impact of investments that we
expect to make; the dependence of our future success on the general economy
and its impact on the industries in which we invest; the ability of our
portfolio companies to achieve their objectives; our expected financings
and investments; the adequacy of our cash resources and working capital;
and the timing of cash flows, if any, from the operations of our portfolio
companies.
We may use words such as "anticipates," "believes," "expects," "intends,"
"will," "should," "may," "hope" and similar expressions to identify
forward-looking statements. Such statements are based on currently
available operating, financial and competitive information and are subject
to various risks and uncertainties that could cause actual results to
differ materially from our historical experience and our present
expectations. Undue reliance should not be placed on such forward-looking
statements as such statements speak only as of the date on which they are
made. We do not undertake to update our forward-looking statements unless
required by law.
Distributed by Market Wire
Copyright © 2012, MarketWire
Copyright © 2012, NewsBlaze,
Daily News
Search News
