MCG Capital Corporation
MCGC ("MCG" or the "Company") today announced that Keith Kennedy,
MCG's President, 44, has been elected as Chief Executive Officer, as a member
of the Company's Board of Directors as a Class I director and as a member of
the investment and valuation committee. Mr. Kennedy succeeds B. Hagen Saville,
who retired.
Rick Neu, Chairman of the MCG Board of Directors, said "On behalf of the
Board, I would like to thank Hagen for his hard work and devotion to MCG over
a sixteen-year period. As a founding member of the management team and a
member of the Board since 2006, Hagen has been focused on promoting the best
interests of the Company and its stockholders. We wish him success and the
best of luck in his future endeavors. We are also excited to recognize Keith's
past contributions to the Company as Chief Financial Officer and President and
in his new role as Chief Executive Officer. Through Keith's years of work in
public accounting and in sourcing, leading and managing investments, he has
developed expertise and skills that are relevant to understanding the risks
and opportunities that MCG faces. His prior service to MCG as our Chief
Financial Officer and President provides him with intimate knowledge of our
Company and our investments, which we believe is critical to implementing our
strategic goals and evaluating our operational performance, which should
benefit both the Company and its stockholders."
Mr. Saville said "I have valued my tenure at MCG and, in particular, am
grateful for the opportunity to have served in many roles at MCG and to have
worked with some very dedicated employees and Board members. I am confident
that Keith Kennedy and the rest of the team will continue to look after the
best interests of MCG's investors while furthering our mission of supporting
lower middle-market companies."
Mr. Kennedy joined MCG in February 2012 as an Executive Vice President and
Managing Director, served as the Company's Chief Financial Officer and
Treasurer beginning in May 2012, and became MCG's President in March 2014.
Preliminary First Quarter 2014 Results
Set forth below are certain preliminary estimates of the Company's financial
condition and results of operations for the three months ended March 31,
2014. These estimates are subject to the completion of the Company's financial
closing procedures and are not a comprehensive statement of the Company's
financial results for the three months ended March 31, 2014. The Company
advises you that its actual results may differ materially from these estimates
as a result of the completion of its financial closing procedures, final
adjustments, new information that may become available to the Company about
its investment portfolio and other developments arising between now and the
time that its financial results for the three months ended March 31, 2014 are
finalized. This information is inherently uncertain.
For the three months ended March 31, 2014, the Company expects to generate
between $4.1 and 4.3 million of net operating income, $23.0 and $24.0 million
of net investment losses and $18.9 and $19.5 million of net losses. Per
weighted average share for the quarter, the Company expects to generate
between $0.05 and 0.06 per share of net operating income, $0.33 and $0.35 per
share of net investment losses and $0.27 and $0.29 per share of net losses.
The Company expects to record between $23.0 and $24.0 million of unrealized
depreciation on its loan and equity portfolio, principally from two
investments. Based on operational, financial and business challenges facing
Education Management, Inc., the Company expects to mark down its investment by
approximately $15.2 million. Furthermore, the Company reduced its valuation
multiple for RadioPharmacy Investors, LLC and expects to mark down its
investment by approximately $6.3 million based on volume, pricing and
supply-cost challenges facing the RadioPharmacy's core business. The
investment and valuation committee of the Board reviewed and made a
determination with respect to the recommended fair value of each of the
Company's portfolio investments. The fair values presented here are on based
on such recommendation; however, as of the date of this press release, the
Board of Directors has not met to determine the fair value of each of the
Company's portfolio investments or its net asset value per share for the
quarter ended March 31, 2014.
For the three months ended March 31, 2014, the Company made approximately $6.6
million in advances to existing portfolio companies and received approximately
$26.4 million in gross payments, reductions and sales of securities that
includes $23.8 million from the monetization of the Company's investment in
G&L Investment Holdings, LLC. At March 31, 2014, the Company expects to report
approximately $113 million of investable cash, $116 million of total cash,
$326 million of total investments, $449 million of total assets, $150 million
of interest bearing debt, $153 million of total liabilities and $296 million
of net asset value.
For the three months ended March 31, 2014, MCG repurchased 2,759,267 shares of
its common stock at a weighted average price of $3.84. From January 1, 2014
through April 17, 2014, MCG repurchased and settled 5,845,088 shares of its
common stock at a weighted average price of $3.80. For the three months ended
March 31, 2014, the Company expects to report weighted-average common shares
outstanding of 69.4 million. At March 31, 2014, the Company expects to report
common shares outstanding of 67.7 million.
At March 31, 2014, MCG expects its net asset value to be approximately $4.37
per share.
The Company currently expects to file its quarterly report on Form 10-Q on or
about April 28, 2014. The preliminary financial estimates provided herein have
been prepared by, and are the responsibility of, management. Ernst & Young
LLP, the Company's independent registered public accounting firm, has not
audited, reviewed, compiled, or performed any procedures with respect to the
accompanying preliminary financial data. Accordingly, Ernst & Young LLP does
not express an opinion or any form of assurance with respect thereto.
First Quarter 2014 Earnings Investor Call
The Company will report first quarter 2014 financial results and Rick Neu,
Chairman of the Board, and Keith Kennedy, President and Chief Executive
Officer, will discuss MCG's business outlook on Monday, April 28, 2014. MCG
invites all interested persons to participate in its conference call at 9:00
a.m., Eastern Time. The dial-in number for the call is
877-312-8798. International callers should dial: 253-237-1193. Please dial in
at least five minutes prior to the call to register. The call may also be
accessed via an audio webcast available on the MCG website at
http://investor.mcgcapital.com. Click on the April 28, 2014 Conference Call
link to access the call. MCG plans to release its first quarter 2014 financial
results in advance of the call.
A recording of the call will be available through May 12, 2014. The replay
dial-in is 855-859-2056. International callers should dial 404-537-3406. The
replay conference ID is 30492217. The replay will also be available via MCG's
website.
Conference Call: April 28, 2014 at 9:00 a.m., Eastern Time
Dial-in Number: 877-312-8798 domestic; 253-237-1193 international
Live Webcast/Replay: http://investor.mcgcapital.com
Call Replay: 855-859-2056 domestic; 404-537-3406 international
Replay Conference ID: 30492217
About MCG Capital Corporation
MCG Capital Corporation is a solutions-focused commercial finance company
providing capital and advisory services to lower middle-market companies
throughout the United States. Our investment objective is to achieve
attractive returns by generating current income and capital gains on our
investments. Our capital is generally used by our portfolio companies to
finance acquisitions, recapitalizations, buyouts, organic growth, working
capital and other general corporate purposes. For more information, please
visit www.mcgcapital.com.
Forward-looking Statements:
Statements in this press release regarding management's future expectations,
beliefs, intentions, goals, strategies, plans or prospects may constitute
forward-looking statements for purposes of the safe harbor protection under
applicable securities laws. Forward-looking statements can be identified by
terminology such as "anticipate," "believe," "could," "could increase the
likelihood," "estimate," "expect," "intend," "is planned," "may," "should,"
"will," "will enable," "would be expected," "look forward," "may provide,"
"would" or similar terms, variations of such terms or the negative of those
terms. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors including statements regarding Mr. Kennedy's
ability to implement MCG's strategic goals and evaluate its operational
performance and MCG's preliminary first quarter 2014 results, when such
preliminary results are subject to the completion of the Company's financial
closing procedures, not a comprehensive statement of the Company's financial
results for the three months ended March 31, 2014, are inherently uncertain
and may differ materially from actual results for the three months ended March
31, 2014, as well as those risks, uncertainties and factors referred to in
MCG's Annual Report on Form 10-K for the year ended December 31, 2013 filed
with the Securities and Exchange Commission under the section "Risk Factors,"
as well as other documents that may be filed by MCG from time to time with the
Securities and Exchange Commission. As a result of such risks, uncertainties
and factors, actual results may differ materially from any future results,
performance or achievements discussed in or implied by the forward-looking
statements contained herein. MCG is providing the information in this press
release as of this date and assumes no obligations to update the information
included in this press release or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
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