Full Circle Capital (FULL) Reports In-Line Q4 EPS; Will Evaluate Strategic Options

Full Circle Capital (NASDAQ: FULL) reported Q4 EPS of $0.11, in-line with the analyst estimate of $0.11.

Review of Strategic Alternatives

Public equity market conditions for business development companies (“BDCs”) have been challenging for an extended period of time. Similar to many other BDCs, the Company’s common stock has been trading at a significant discount to its net asset value and, as a result, has limited the Company’s ability to grow and reap the benefits of increased scale, including the ability to commit to larger hold sizes, enhanced liquidity for its shareholders and substantially increased operating leverage. The Company does not believe that these market conditions are likely to abate in the near term.

In light of the current situation, the Company’s Board of Directors formed a Special Committee, composed solely of independent directors Mark C. Biderman, Edward H. Cohen and Thomas A. Ortwein, Jr., in November 2015 to consider various strategic alternatives potentially available to the Company. The Special Committee is authorized to consider, negotiate and potentially implement all strategic alternatives reasonably available to the Company, including, but not limited to, the acquisition or disposition of assets and the sale or merger of the Company. The Special Committee has engaged Houlihan Lokey Capital, Inc. as its financial advisor.

In order to maximize the types of potential strategic alternatives available to the Company and enhance the benefits to be derived therefrom for its stockholders, Management has opted to retain the cash proceeds received by the Company in connection with loan repayments and sales and have otherwise limited the Company’s origination activities. However, because the Company’s investment income has declined and is expected to continue to decline in the current and subsequent quarters as a result of this change in investment strategy, the Board of Directors has decided to suspend the declaration of any future distributions to stockholders beyond the previously declared distribution of $0.035 per share to stockholders of record on March 31, 2016 and payable on April 15, 2016.

In addition, given that the Board of Directors has chosen to pursue a strategic process which, among other things, calls for reducing the size of the Company’s investment portfolio and the resulting impact that such reduction has had and will have on the fees payable to its investment adviser, the Company’s Board of Directors has terminated, effective January 1, 2016, its investment adviser’s management and incentive fee waiver and operating expense reimbursement obligations to ensure the investment adviser’s continuing financial and operational viability pending the completion of the strategic process.

For earnings history and earnings-related data on Full Circle Capital (FULL) click here.

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