Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - MCG CAPITAL CORP | d8k.htm |
Exhibit 99.1
|
MCG Capital Corporation | PRESS RELEASE | ||||
| 1100 Wilson Boulevard | ||||||
| Suite 3000 | Contact: Stephen Bacica | |||||
| Arlington, VA 22209 | (703) 562-7110 | |||||
| (703) 247-7500 | SBacica@MCGCapital.com | |||||
| (866) 904-4775 (FAX) | ||||||
| www.MCGCapital.com | ||||||
| FOR IMMEDIATE RELEASE |
MCG CAPITAL CORPORATION REPORTS SECOND QUARTER 2011 RESULTS
DECLARES DIVIDEND OF $0.17 PER SHARE
ARLINGTON, VA—August 4, 2011—MCG Capital Corporation (Nasdaq: MCGC) (“MCG” or the “Company”) announced today its financial results for the quarter ended June 30, 2011. MCG will host an investment community conference call today, August 4, 2011 at 10:30 a.m. (Eastern Time). Slides and financial information to be reviewed during the investor conference call will be available on MCG’s website at http://www.mcgcapital.com prior to the call.
HIGHLIGHTS
| • | Distributable net operating income, or DNOI, for the quarter ended June 30, 2011 was $11.6 million, or $0.15 per share. DNOI refers to net operating income adjusted for amortization of employee restricted stock awards. |
| • | Net operating income for the quarter ended June 30, 2011 was $11.2 million, or $0.15 per share. |
| • | Net loss for the quarter ended June 30, 2011 was $10.2 million, or $0.13 per share. |
| • | Net investment loss for the quarter ended June 30, 2011 was $21.4 million, which included a $24.8 million reduction in the fair value of Broadview Networks Holdings, Inc., or Broadview, resulting from a change in the methodology used to value this portfolio company from a projected forward EBITDA and new owner cash flow basis to a trailing EBITDA basis. |
| • | During the quarter ended June 30, 2011, MCG had $107.8 million of advances and originations, including $52.5 million in investments to five new portfolio companies. Payoffs and portfolio monetization activities totaled $178.2 million during the quarter. |
| • | MCG’s ratio of total assets to total borrowings and other senior securities was 232% as of June 30, 2011. |
DIVIDEND DECLARATION
MCG also announced today that its board of directors declared a dividend of $0.17 per share. The dividend is payable as follows:
Record date: September 14, 2011
Payable date: October 14, 2011
OVERVIEW
Today, MCG reported a second quarter 2011 net loss of $10.2 million, or $0.13 per basic and diluted share, which represented a $9.5 million, or $0.12 per share, decrease from the net loss of $0.8 million, or $0.01 per share, reported for the comparable period in 2010. The incremental net loss resulted primarily from an $8.5 million increase in MCG’s net investment loss before income tax provision and a $3.5 million reduction in gain on extinguishment of debt, partially offset by a $3.0 million reduction in operating expense.
MCG’s revenue for the second quarter of 2011 was $21.2 million, which represented a $0.6 million, or 2.6%, decrease from the comparable period in 2010. This decrease was composed of a $1.0 million decrease in interest and dividend income, partially offset by a $0.4 million increase in advisory fees and other income. MCG reported DNOI of $11.6 million, or $0.15 per share, which represented a $1.7 million, or $0.02 per share, increase over the second quarter of 2010. Net operating income during the second quarter of 2011 was $11.2 million, which represents a $2.4 million, or 27.0%, increase over the comparable period in 2010.
MCG Capital Corporation
August 4, 2011
Page 2
“During the quarter, the velocity of payoffs by our portfolio companies outpaced our origination activity, which resulted in a $0.02 reduction in our NOI on a sequential basis. However, in future months, we expect that the impact of payoffs will decline and we expect to redeploy such payoffs into income-earning investments. We believe that these actions, combined with our cost-cutting corporate restructuring should increase our NOI sufficiently to cover our dividend over the next few quarters. We expect to maintain a $0.17 quarterly dividend through the remainder of 2011, to reflect our expectation that our net operating income and PIK and dividend collections will exceed our dividend level for all of 2011,” said Steven Tunney, President and CEO. “Once again, we had a disappointing result relating to our investment in Broadview. This quarter, Broadview withdrew a tender offer for its $300 million senior secured bonds due to uncertain market conditions. Due to this uncertainty, we changed our methodology for valuing Broadview from a projected forward EBITDA and new owner cash flow basis to a trailing EBITDA basis and reduced our investment value accordingly. While another Broadview mark is certainly disappointing, we believe that this methodology change will bring some stability to our valuation on a go-forward basis.”
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2011, MCG had $65.8 million cash and cash equivalents and $135.7 million of cash in securitization and restricted accounts, which could be deployed for suitable new investment opportunities. However, because the reinvestment period for principal collections for the Company’s Commercial Loan Trust 2006-1 facility (“MCG 2006-1”) expired on July 20, 2011, MCG must begin to repay this facility beginning on October 20, 2011 with all principal collections of collateral in that facility. At that time, MCG must use at least $55.9 million of securitized cash in that facility (representing previous principal collections) to repay a portion of the MCG 2006-1 facility. Subsequent to June 30, 2011, approximately $13.1 million was transferred from securitization cash to cash and cash equivalents from the periodic distributions allowed through the MCG 2006-1 and MCG Commercial Loan Funding Trust (“MCG CLFT”) facilities. Also subsequent to June 30, 2011, MCG transferred additional assets of $13.3 million to the MCG 2006-1 facility and $10.0 million to the MCG CLFT facility for which the Company received cash from the securitization cash accounts.
As of June 30, 2011, MCG had $511.2 million of borrowings (the majority of which was composed of $427.5 million of collateralized non-recourse borrowings). As of June 30, 2011, MCG had $124.0 million of borrowing capacity across all facilities, including $6 million of funded borrowing capacity available, subject to the approval of the United States Small Business Administration, or SBA, that is exempt from the statutory asset coverage ratio requirements. As of June 30, 2011, the total borrowing potential under the United States Small Business Administration, or SBA, license with Solutions Capital I, L.P. was $150.0 million. To access the entire $150.0 million borrowing potential, MCG would have to fund $25.4 million, in addition to the $49.6 million that it had funded through June 30, 2011. As of August 1, 2011, across all facilities the borrowing capacity available is $114.4 million which would require an additional $66.5 million cash and collateral contribution into the facilities.
As a business development company, MCG is required to meet an asset coverage ratio of total net assets to total borrowings and other senior securities of at least 200% in order to borrow under new or existing borrowing facilities or to distribute dividends to its stockholders. MCG’s asset coverage ratio was 232% as of June 30, 2011.
CORPORATE RESTRUCTURING
MCG is restructuring its business to simplify the organizational structure, refine operations and reduce annual operating expenses. On August 1, 2011, the Company’s board of directors approved a plan to reduce its workforce by 42%, including 22 current employees and 5 recent terminations. After effecting the plan, the Company’s headcount will be 36 employees. The Company believes this plan, which includes a cost reduction initiative, reflects the focus of its new asset origination orientation on high-yielding debt securities, aligns the size of the organization to its asset base and establishes an efficient framework that is scalable with its assets. The workforce reduction focuses primarily on sizing the organization at a level appropriate for the Company’s expected near-term objectives. Affected employees are eligible to receive severance pay, continuation of benefits and, for employees who have been awarded restricted stock, additional lapsing of restrictions associated with restricted stock awards.
MCG estimates that the aggregate charges associated with the plan will be approximately $4.3 million to $4.5 million, all of which will be incurred during the remainder of fiscal 2011. These estimated costs reflect severance pay and related obligations. MCG will account for these costs in accordance with ASC 420-10—Exit or Disposal Cost Obligations. MCG expects these actions, when combined with the closure of one of the Company’s facilities and other planned reductions in the general and administrative expense will result in approximately $6.75 million to $7.25 million of expected savings through December 31, 2012, or approximately $1.1 million to $1.3 million per quarter.
MCG Capital Corporation
August 4, 2011
Page 3
PORTFOLIO ACTIVITY
The fair value of MCG’s investment portfolio totaled $849.1 million as of June 30, 2011, as compared to $1,009.7 million as of December 31, 2010. During the second quarter of 2011, MCG had $107.8 million of originations and advances, including $52.5 million of originations to five new portfolio companies, $51.5 million of originations and advances to 15 existing portfolio companies under revolving and line of credit facilities, and $3.8 million of paid-in-kind, or PIK, advances. The $52.5 million of originations to new portfolio companies were all senior debt investments. The $51.5 million of originations and advances to existing portfolio companies included $45.5 million of investments in senior debt securities, $1.7 million in unsecured subordinated debt in one portfolio company and a total of $4.3 million of preferred equity in three portfolio companies. Gross payments, reductions and sales of securities during the second quarter of 2011 of $178.2 million were composed of $92.9 million of senior debt, $45.9 million of secured subordinated debt, $0.2 million in unsecured subordinated debt, $37.3 million of preferred equity and $1.9 million of common equity.
During the three months ended June 30, 2011, MCG reported net investment losses before income tax provision of $21.4 million, which are detailed below:
| Three months ended June 30, 2011 | ||||||||||||||||||||
| (in thousands)
Portfolio Company |
Industry |
Type | Realized Gain /(Loss) |
Unrealized (Depreciation)/ Appreciation |
Reversal
of Unrealized Depreciation/ (Appreciation) |
Net (Loss)/ Gain |
||||||||||||||
| Broadview Networks Holdings, Inc. |
Communications | Control | $ | — | $ | (24,829 | ) | $ | — | $ | (24,829 | ) | ||||||||
| Intran Media, LLC |
Other Media | Control | — | (3,758 | ) | — | (3,758 | ) | ||||||||||||
| PremierGarage Holdings, LLC |
Home Furnishings | Control | — | (2,141 | ) | — | (2,141 | ) | ||||||||||||
| VOX Communications Group Holdings, LLC |
Broadcasting | Non-Affiliate | (7,688 | ) | — | 5,645 | (2,043 | ) | ||||||||||||
| Jet Plastica Investors, LLC |
Plastic Products | Control | — | (1,274 | ) | — | (1,274 | ) | ||||||||||||
| Restaurant Technologies, Inc. |
Food Services | Non-Affiliate | 1,527 | — | (1,842 | ) | (315 | ) | ||||||||||||
| Provo Craft & Novelty, Inc. |
Leisure Activities | Non-Affiliate | (1,152 | ) | — | 1,151 | (1 | ) | ||||||||||||
| Active Brands International, Inc. |
Consumer Products | Non-Affiliate | (12,052 | ) | — | 12,053 | 1 | |||||||||||||
| GMC Television Broadcasting, LLC |
Broadcasting | Control | (1,000 | ) | 11 | 1,000 | 11 | |||||||||||||
| Avenue Broadband LLC |
Cable | Control | 11,917 | — | (11,895 | ) | 22 | |||||||||||||
| Jenzabar, Inc. |
Technology | Non-Affiliate | — | 1,531 | — | 1,531 | ||||||||||||||
| Coastal Sunbelt Real Estate, Inc. |
Real Estate Investments | Non-Affiliate | — | 2,186 | — | 2,186 | ||||||||||||||
| GSDM Holdings, LLC |
Healthcare | Non-Affiliate | — | 2,479 | — | 2,479 | ||||||||||||||
| RadioPharmacy Investors, LLC |
Healthcare | Control | — | 2,727 | — | 2,727 | ||||||||||||||
| NPS Holding Group, LLC |
Business Services | Control | — | 3,855 | — | 3,855 | ||||||||||||||
| Other (< $1 million net gain (loss)) |
(58 | ) | (353 | ) | 512 | 101 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | (8,506 | ) | $ | (19,566 | ) | $ | 6,624 | $ | (21,448 | ) | |||||||||
|
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|
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A summary of the reasons for significant changes in realized and unrealized (loss) and gain on investments and changes in unrealized appreciation and depreciation on investments for the three months ended June 30, 2011, are summarized below:
| • | During the quarter ended June 30, 2011, MCG recorded a $24.8 million decrease in the fair value of its investment in Broadview, the Company’s single largest portfolio investment. Late in the quarter ending June 30, 2011, Broadview withdrew its tender offer for $300 million of its 113/8% Senior Secured Notes, due on August 31, 2012, following Broadview’s review of market conditions. Due to these uncertain market conditions, the Company changed the methodology by which it values Broadview to a trailing EBITDA basis as opposed to its prior methodology under which the Company valued its investment on a projected forward EBITDA basis and new owner cash flows. |
| • | MCG also recorded unrealized depreciation on its investments in PremierGarage Holdings, LLC and Intran Media, LLC to reflect the Company’s portion of the estimated liquidation value of these portfolio companies. |
| • | MCG also recorded unrealized depreciation on its investment in Jet Plastica Investors, LLC to reflect an incremental investment in this portfolio company during the quarter ended June 30, 2011, that the Company subsequently wrote down to zero. |
MCG Capital Corporation
August 4, 2011
Page 4
| • | MCG received payments of $4.1 million in satisfaction of its $11.8 million debt investment in VOX Communications Group Holdings, LLC and wrote off the remaining investment in that portfolio company. As a result of that transaction, the Company reversed $5.6 million of previously unrealized depreciation and realized a $7.7 million loss. |
| • | MCG wrote off its remaining subordinated debt investment in Active Brands International, Inc., resulting in the reversal of $12.1 million of previously unrealized depreciation and the realization of a $12.1 million loss. |
| • | MCG sold its investment in Avenue Broadband LLC, resulting in the reversal of $11.9 million of previously unrealized appreciation and the realization of an $11.9 million gain. |
The remaining unrealized depreciation and appreciation shown in the above table resulted predominantly from a change in the performance of certain of the Company’s portfolio companies and the multiples used to value certain of its investments.
| Conference Call (Live Call) |
Date and time | Thursday, August 4, 2011 at 10:30 a.m. Eastern Time | ||
| Dial-in Number (No Conference ID required) |
(877) 878-2269 domestic (847) 829-0062 international | |||
| Webcast | http://investor.mcgcapital.com | |||
| Replay (Available through August 18, 2011) | Call Replay (Conference ID for replay is #87864142) |
(855) 859-2056 domestic (404) 537-3406 international | ||
| Web Replay | http://investor.mcgcapital.com | |||
MCG Capital Corporation
August 4, 2011
Page 5
MCG Capital Corporation
Consolidated Balance Sheets
| (in thousands, except per share amounts) |
June 30, 2011 |
December 31, 2010 |
||||||
| (unaudited) | ||||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 65,847 | $ | 44,970 | ||||
| Cash, securitization accounts |
93,582 | 42,245 | ||||||
| Cash, restricted |
42,154 | 29,383 | ||||||
| Investments at fair value |
||||||||
| Non-affiliate investments (cost of $588,143 and $684,785, respectively) |
604,202 | 646,116 | ||||||
| Affiliate investments (cost of $43,442 and $43,721, respectively) |
54,110 | 53,300 | ||||||
| Control investments (cost of $460,507 and $517,167, respectively) |
190,789 | 310,289 | ||||||
|
|
|
|
|
|||||
| Total investments (cost of $1,092,092 and $1,245,673, respectively) |
849,101 | 1,009,705 | ||||||
| Interest receivable |
2,248 | 5,453 | ||||||
| Other assets |
13,124 | 13,521 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 1,066,056 | $ | 1,145,277 | ||||
|
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|
|||||
| Liabilities |
||||||||
| Borrowings (maturing within one year of $0 and $18,858, respectively) |
$ | 511,210 | $ | 546,882 | ||||
| Interest payable |
2,620 | 2,291 | ||||||
| Dividends payable |
13,101 | 10,735 | ||||||
| Other liabilities |
5,092 | 7,353 | ||||||
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|
|||||
| Total liabilities |
532,023 | 567,261 | ||||||
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| Stockholders’ equity |
||||||||
| Preferred stock, par value $0.01, authorized 1 share, none issued and outstanding |
— | — | ||||||
| Common stock, par value $0.01, authorized 200,000 shares on June 30, 2011 and December 31, 2010, 77,046 issued and outstanding on June 30, 2011 and 76,662 issued and outstanding on December 31, 2010 |
770 | 767 | ||||||
| Paid-in capital |
1,008,553 | 1,008,823 | ||||||
| Distributions in excess of earnings |
||||||||
| Paid-in capital |
(166,029 | ) | (166,029 | ) | ||||
| Other |
(66,012 | ) | (28,555 | ) | ||||
| Net unrealized depreciation on investments |
(243,249 | ) | (236,990 | ) | ||||
|
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|
|
|||||
| Total stockholders’ equity |
534,033 | 578,016 | ||||||
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|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 1,066,056 | $ | 1,145,277 | ||||
|
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|
|||||
| Net asset value per common share at end of period |
$ | 6.93 | $ | 7.54 | ||||
MCG Capital Corporation
August 4, 2011
Page 6
MCG Capital Corporation
Consolidated Statements of Operations
| Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
| (in thousands, except per share amounts) |
2011 | 2010 | 2011 | 2010 | ||||||||||||
| Revenue |
||||||||||||||||
| Interest and dividend income |
||||||||||||||||
| Non-affiliate investments (less than 5% owned) |
$ | 16,221 | $ | 15,079 | $ | 33,779 | $ | 29,925 | ||||||||
| Affiliate investments (5% to 25% owned) |
1,775 | 783 | 2,918 | 1,765 | ||||||||||||
| Control investments (more than 25% owned) |
2,192 | 5,291 | 6,927 | 11,074 | ||||||||||||
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|
|||||||||
| Total interest and dividend income |
20,188 | 21,153 | 43,624 | 42,764 | ||||||||||||
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|||||||||
| Advisory fees and other income |
||||||||||||||||
| Non-affiliate investments (less than 5% owned) |
420 | 443 | 927 | 465 | ||||||||||||
| Control investments (more than 25% owned) |
600 | 172 | 960 | 285 | ||||||||||||
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|
|||||||||
| Total advisory fees and other income |
1,020 | 615 | 1,887 | 750 | ||||||||||||
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|
|||||||||
| Total revenue |
21,208 | 21,768 | 45,511 | 43,514 | ||||||||||||
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| Operating expense |
||||||||||||||||
| Interest expense |
3,945 | 4,383 | 7,818 | 8,856 | ||||||||||||
| Employee compensation |
||||||||||||||||
| Salaries and benefits |
2,908 | 3,742 | 6,884 | 8,538 | ||||||||||||
| Amortization of employee restricted stock awards |
406 | 1,123 | 1,030 | 2,350 | ||||||||||||
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|||||||||
| Total employee compensation |
3,314 | 4,865 | 7,914 | 10,888 | ||||||||||||
| General and administrative expense |
2,711 | 3,670 | 5,538 | 6,481 | ||||||||||||
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|||||||||
| Total operating expense |
9,970 | 12,918 | 21,270 | 26,225 | ||||||||||||
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| Net operating income before net investment loss, gain (loss) on extinguishment of debt and income tax provision |
11,238 | 8,850 | 24,241 | 17,289 | ||||||||||||
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| Net realized (loss) gain on investments |
||||||||||||||||
| Non-affiliate investments (less than 5% owned) |
(19,652 | ) | 2,722 | (47,569 | ) | 455 | ||||||||||
| Affiliate investments (5% to 25% owned) |
1 | — | (916 | ) | — | |||||||||||
| Control investments (more than 25% owned) |
11,145 | (1,979 | ) | 12,352 | (1,979 | ) | ||||||||||
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|
|||||||||
| Total net realized (loss) gain on investments |
(8,506 | ) | 743 | (36,133 | ) | (1,524 | ) | |||||||||
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|
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| Net unrealized depreciation on investments |
||||||||||||||||
| Non-affiliate investments (less than 5% owned) |
23,195 | 2,569 | 54,728 | 7,299 | ||||||||||||
| Affiliate investments (5% to 25% owned) |
(358 | ) | 278 | 1,089 | 1,478 | |||||||||||
| Control investments (more than 25% owned) |
(36,561 | ) | (16,832 | ) | (62,840 | ) | (22,946 | ) | ||||||||
| Derivative and other fair value adjustments |
782 | 276 | 764 | 363 | ||||||||||||
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|
|||||||||
| Total net unrealized depreciation on investments |
(12,942 | ) | (13,709 | ) | (6,259 | ) | (13,806 | ) | ||||||||
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| Net investment loss before income tax provision |
(21,448 | ) | (12,966 | ) | (42,392 | ) | (15,330 | ) | ||||||||
| Gain (loss) on extinguishment of debt before income tax provision |
— | 3,490 | (863 | ) | 3,432 | |||||||||||
| Income tax provision |
8 | 124 | 19 | 186 | ||||||||||||
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| Net (loss) earnings |
$ | (10,218 | ) | $ | (750 | ) | $ | (19,033 | ) | $ | 5,205 | |||||
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| (Loss) earnings per basic and diluted common share |
$ | (0.13 | ) | $ | (0.01 | ) | $ | (0.25 | ) | $ | 0.07 | |||||
| Cash distributions declared per common share |
$ | 0.17 | $ | 0.11 | $ | 0.32 | $ | 0.11 | ||||||||
| Weighted-average common shares outstanding—basic and diluted |
76,343 | 75,392 | 76,056 | 76,424 | ||||||||||||
MCG Capital Corporation
August 4, 2011
Page 7
MCG Capital Corporation
Consolidated Statements of Cash Flows
| Six months ended June 30, |
||||||||
| (in thousands) |
2011 | 2010 | ||||||
| Cash flows from operating activities |
||||||||
| Net (loss) income |
$ | (19,033 | ) | $ | 5,205 | |||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities |
||||||||
| Investments in portfolio companies |
(180,294 | ) | (80,614 | ) | ||||
| Principal collections related to investment repayments or sales |
277,299 | 57,970 | ||||||
| Decrease (increase) in interest receivable, accrued payment-in-kind interest and dividends |
24,108 | (4,911 | ) | |||||
| Amortization of restricted stock awards |
||||||||
| Employee |
1,030 | 2,350 | ||||||
| Non-employee director |
28 | 40 | ||||||
| Decrease (increase) in cash—securitization accounts from interest collections |
(2,503 | ) | 1,575 | |||||
| Increase in restricted cash—escrow accounts |
(7,518 | ) | — | |||||
| Depreciation and amortization |
1,765 | 2,088 | ||||||
| Decrease in other assets |
449 | 439 | ||||||
| Decrease in other liabilities |
(1,745 | ) | (4,339 | ) | ||||
| Realized loss on investments |
36,133 | 1,524 | ||||||
| Net change in unrealized depreciation on investments |
6,259 | 13,806 | ||||||
| Loss (gain) on extinguishment of debt |
863 | (3,432 | ) | |||||
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| Net cash provided by (used in) operating activities |
136,841 | (8,299 | ) | |||||
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| Cash flows from financing activities |
||||||||
| Payments on borrowings |
(41,535 | ) | (34,138 | ) | ||||
| Proceeds from borrowings |
5,000 | 14,000 | ||||||
| Decrease (increase) in cash in restricted and securitization accounts |
||||||||
| Securitization accounts for repayment of principal on debt |
(48,834 | ) | 16,121 | |||||
| Restricted cash |
(5,253 | ) | 4,065 | |||||
| Payment of financing costs |
(1,700 | ) | (1,729 | ) | ||||
| Distributions paid |
(22,317 | ) | — | |||||
| Common stock withheld to pay taxes applicable to the vesting of restricted stock |
(1,314 | ) | — | |||||
| Net forfeitures of restricted common stock |
(11 | ) | (9 | ) | ||||
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| Net cash used in financing activities |
(115,964 | ) | (1,690 | ) | ||||
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|||||
| Net increase (decrease) in cash and cash equivalents |
20,877 | (9,989 | ) | |||||
| Cash and cash equivalents |
||||||||
| Beginning balance |
44,970 | 54,187 | ||||||
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| Ending balance |
$ | 65,847 | $ | 44,198 | ||||
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| Supplemental disclosure of cash flow information |
||||||||
| Interest paid |
$ | 6,290 | $ | 7,589 | ||||
| Income taxes paid |
312 | 200 | ||||||
| Paid-in-kind interest collected |
18,044 | 4,818 | ||||||
| Dividend income collected |
12,053 | 956 | ||||||
MCG Capital Corporation
August 4, 2011
Page 8
SELECTED FINANCIAL DATA
QUARTERLY OPERATING INFORMATION
| (in thousands, except per share amounts) |
2010 Q2 |
2010 Q3 |
2010 Q4 |
2011 Q1 |
2011 Q2 |
|||||||||||||||
| Revenue |
||||||||||||||||||||
| Interest and dividend income |
||||||||||||||||||||
| Interest income |
$ | 19,089 | $ | 19,519 | $ | 18,459 | $ | 20,158 | $ | 17,153 | ||||||||||
| Dividend income |
1,494 | 1,561 | 2,984 | 2,497 | 2,116 | |||||||||||||||
| Loan fee income |
570 | 810 | 432 | 781 | 919 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total interest and dividend income |
21,153 | 21,890 | 21,875 | 23,436 | 20,188 | |||||||||||||||
| Advisory fees and other income |
615 | 681 | 1,609 | 867 | 1,020 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total revenue |
21,768 | 22,571 | 23,484 | 24,303 | 21,208 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating expense |
||||||||||||||||||||
| Interest expense |
4,383 | 4,326 | 3,709 | 3,873 | 3,945 | |||||||||||||||
| Salaries and benefits |
3,742 | 3,527 | 4,210 | 3,976 | 2,908 | |||||||||||||||
| Amortization of employee restricted stock awards |
1,123 | 1,013 | 979 | 624 | 406 | |||||||||||||||
| General and administrative |
3,670 | 2,305 | 2,710 | 2,827 | 2,711 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total operating expense |
12,918 | 11,171 | 11,608 | 11,300 | 9,970 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net operating income before net investment loss, gain (loss) on extinguishment of debt and income tax provision (benefit) |
8,850 | 11,400 | 11,876 | 13,003 | 11,238 | |||||||||||||||
| Net investment loss before income tax provision (benefit) |
(12,966 | ) | (9,800 | ) | (29,689 | ) | (20,944 | ) | (21,448 | ) | ||||||||||
| Gain (loss) on extinguishment of debt before income tax provision (benefit) |
3,490 | (449 | ) | — | (863 | ) | — | |||||||||||||
| Income tax provision (benefit) |
124 | 1,680 | (65 | ) | 11 | 8 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loss |
$ | (750 | ) | $ | (529 | ) | $ | (17,748 | ) | $ | (8,815 | ) | $ | (10,218 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Reconciliation of DNOI to net operating income |
||||||||||||||||||||
| Net operating income before net investment loss, gain (loss) on extinguishment of debt and income tax provision (benefit) |
$ | 8,850 | $ | 11,400 | $ | 11,876 | $ | 13,003 | $ | 11,238 | ||||||||||
| Amortization of employee restricted stock awards |
1,123 | 1,013 | 979 | 624 | 406 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
DNOI(a) |
$ | 9,973 | $ | 12,413 | $ | 12,855 | $ | 13,627 | $ | 11,644 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| DNOI per share-weighted average common shares—basic and diluted(a) |
$ | 0.13 | $ | 0.16 | $ | 0.17 | $ | 0.18 | $ | 0.15 | ||||||||||
| Per common share statistics |
||||||||||||||||||||
| Weighted-average common shares outstanding—basic and diluted |
75,392 | 75,486 | 75,648 | 75,765 | 76,343 | |||||||||||||||
| Net operating income before net investment loss, gain (loss) on extinguishment of debt and income tax provision (benefit) per common share—basic and diluted |
$ | 0.12 | $ | 0.15 | $ | 0.16 | $ | 0.17 | $ | 0.15 | ||||||||||
| Earnings (loss) per common share—basic and diluted |
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.23 | ) | $ | (0.12 | ) | $ | (0.13 | ) | |||||
| Net asset value per common share—period end |
$ | 8.03 | $ | 7.92 | $ | 7.54 | $ | 7.23 | $ | 6.93 | ||||||||||
| Dividends declared per common share(b) |
$ | 0.11 | $ | 0.12 | $ | 0.14 | $ | 0.15 | $ | 0.17 | ||||||||||
| (a) | DNOI represents net operating income before net investment loss, gain (loss) on extinguishment of debt and income tax provision (benefit), as determined in accordance with U.S. generally accepted accounting principles, or GAAP, adjusted for amortization of employee restricted stock awards. MCG views DNOI and the related per share measures as useful and appropriate supplements to net operating income, net income (loss), earnings (loss) per share and cash flows from operating activities. These measures serve as an additional measure of MCG’s operating performance exclusive of employee restricted stock amortization, which represents an expense of the Company but does not require settlement in cash. DNOI does include PIK interest and dividend income which are generally not payable in cash on a regular basis, but rather at investment maturity or when declared. DNOI should not be considered as an alternative to net operating income, net income (loss), earnings (loss) per share and cash flows from operating activities (each computed in accordance with GAAP). Instead, DNOI should be reviewed in connection with net operating income, net income (loss), earnings (loss) per share and cash flows from operating activities in MCG’s consolidated financial statements, to help analyze how MCG’s business is performing. |
| (b) | On August 1, 2011, MCG’s board of directors declared a dividend of $0.17 per share payable on October 14, 2011 to shareholders of record as of September 14, 2011. |
MCG Capital Corporation
August 4, 2011
Page 9
SELECTED FINANCIAL DATA
KEY QUARTERLY STATISTICS
| (dollars in thousands) |
2010 Q2 |
2010 Q3 |
2010 Q4 |
2011 Q1 |
2011 Q2 |
|||||||||||||||
| Average quarterly loan portfolio at fair value |
$ | 686,746 | $ | 670,726 | $ | 663,443 | $ | 756,842 | $ | 697,016 | ||||||||||
| Average quarterly total investment portfolio - fair value |
989,782 | 954,231 | 948,504 | 1,003,581 | 886,047 | |||||||||||||||
| Average quarterly total assets |
1,162,988 | 1,153,995 | 1,111,728 | 1,131,291 | 1,083,614 | |||||||||||||||
| Average quarterly stockholders’ equity |
620,079 | 606,933 | 600,816 | 574,024 | 544,602 | |||||||||||||||
| Return on average total assets (trailing 12 months) |
||||||||||||||||||||
| Net operating income before net investment loss, gain (loss) on extinguishment of debt and income tax provision (benefit) |
3.01 | % | 3.26 | % | 3.53 | % | 3.96 | % | 4.24 | % | ||||||||||
| Net income (loss) |
0.93 | % | 0.53 | % | (1.14 | )% | (2.44 | )% | (3.33 | )% | ||||||||||
| Return on average equity (trailing 12 months) |
||||||||||||||||||||
| Net operating income before net investment (loss) gain, gain (loss) on extinguishment of debt and income tax provision (benefit) |
5.77 | % | 6.21 | % | 6.64 | % | 7.51 | % | 8.17 | % | ||||||||||
| Net income (loss) |
1.79 | % | 1.02 | % | (2.14 | )% | (4.64 | )% | (6.41 | )% | ||||||||||
| Yield on average loan portfolio at fair value |
||||||||||||||||||||
| Average LIBOR (90-Day) |
0.43 | % | 0.39 | % | 0.29 | % | 0.31 | % | 0.26 | % | ||||||||||
| Spread to average LIBOR on average yielding loan portfolio at fair value(a) |
11.89 | % | 12.45 | % | 11.49 | % | 10.98 | % | 10.68 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 12.32 | % | 12.84 | % | 11.78 | % | 11.29 | % | 10.94 | % | |||||||||||
| Impact of fee accelerations of unearned fees on paid/restructured loans |
0.05 | % | 0.20 | % | 0.02 | % | 0.24 | % | 0.24 | % | ||||||||||
| Impact of non-accrual loans |
(0.89 | )% | (1.02 | )% | (0.50 | )% | (0.31 | )% | (0.78 | )% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total yield on average loan portfolio at fair value |
11.48 | % | 12.02 | % | 11.30 | % | 11.22 | % | 10.40 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cost of funds |
||||||||||||||||||||
| Average LIBOR |
0.43 | % | 0.39 | % | 0.29 | % | 0.31 | % | 0.26 | % | ||||||||||
| Spread to average LIBOR excluding amortization of deferred debt issuance costs(a) |
2.31 | % | 2.31 | % | 2.16 | % | 2.08 | % | 2.28 | % | ||||||||||
| Impact of amortization of deferred debt issuance costs |
0.57 | % | 0.50 | % | 0.46 | % | 0.45 | % | 0.44 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total cost of funds |
3.31 | % | 3.20 | % | 2.91 | % | 2.84 | % | 2.98 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net portfolio yield margin |
6.70 | % | 7.20 | % | 7.49 | % | 7.80 | % | 7.25 | % | ||||||||||
| Selected period-end balance sheet statistics |
||||||||||||||||||||
| Total investment portfolio at fair value |
$ | 997,590 | $ | 924,253 | $ | 1,009,705 | $ | 954,349 | $ | 849,101 | ||||||||||
| Total assets |
1,170,463 | 1,136,665 | 1,145,277 | 1,105,150 | 1,066,056 | |||||||||||||||
| Borrowings |
534,278 | 508,899 | 546,882 | 527,343 | 511,210 | |||||||||||||||
| Total equity |
614,855 | 606,078 | 578,016 | 557,093 | 534,033 | |||||||||||||||
| Cash, securitization and restricted accounts |
108,612 | 124,545 | 71,628 | 92,503 | 135,736 | |||||||||||||||
| Debt to equity |
86.89 | % | 83.97 | % | 94.61 | % | 94.66 | % | 95.73 | % | ||||||||||
| Debt, net of cash, securitization and restricted accounts to equity |
69.23 | % | 63.42 | % | 82.22 | % | 78.06 | % | 70.31 | % | ||||||||||
| Other statistics (at period end) |
||||||||||||||||||||
| BDC asset coverage ratio |
224 | % | 233 | % | 231 | % | 233 | % | 232 | % | ||||||||||
| Number of portfolio companies |
59 | 62 | 71 | 67 | 64 | |||||||||||||||
| Number of employees |
65 | 66 | 66 | 63 | 63 | |||||||||||||||
| Loans on non-accrual as a percentage of total debt investments |
||||||||||||||||||||
| Fair Value |
4.69 | % | 4.35 | % | 3.43 | % | 4.43 | % | 5.25 | % | ||||||||||
| Cost |
15.12 | % | 18.33 | % | 15.87 | % | 13.93 | % | 13.15 | % | ||||||||||
| (a) | The impact due to the timing of the LIBOR resets and floors is included in the spread to average LIBOR. The impact to the yield on average loan portfolio at fair value due to the timing of LIBOR resets and floors for Q2 2010, Q3 2010, Q4 2010, Q1 2011 and Q2 2011 was approximately 0.73%, 1.25%, 1.34%, 1.34% and 1.39%, respectively. The impact to the cost of funds due to the timing of LIBOR resets for Q2 2010, Q3 2010, Q4 2010, Q1 2011 and Q2 2011 was approximately (0.01)%, 0.05%, 0.05%, (0.3)% and 0.4%, respectively. |
MCG Capital Corporation
August 4, 2011
Page 10
SELECTED FINANCIAL DATA
QUARTERLY INVESTMENT RISK AND CHANGES IN PORTFOLIO COMPOSITION
| (dollars in thousands) |
2010 Q2 |
2010 Q3 |
2010 Q4 |
2011 Q1 |
2011 Q2 |
|||||||||||||||
| Investment rating:(a) |
||||||||||||||||||||
| IR 1 total investments at fair value(b) |
$ | 555,745 | $ | 451,743 | $ | 330,605 | $ | 319,588 | $ | 307,744 | ||||||||||
| IR 2 total investments at fair value |
194,690 | 242,579 | 370,694 | 336,050 | 293,927 | |||||||||||||||
| IR 3 total investments at fair value |
204,892 | 195,342 | 173,447 | 187,610 | 184,531 | |||||||||||||||
| IR 4 total investments at fair value |
1,988 | 6,796 | 112,811 | 94,293 | 2,994 | |||||||||||||||
| IR 5 total investments at fair value |
40,275 | 27,793 | 22,148 | 16,808 | 59,905 | |||||||||||||||
| IR 1 percentage of total portfolio |
55.7 | % | 48.9 | % | 32.7 | % | 33.5 | % | 33.0 | % | ||||||||||
| IR 2 percentage of total portfolio |
19.5 | % | 26.3 | % | 36.7 | % | 35.2 | % | 37.9 | % | ||||||||||
| IR 3 percentage of total portfolio |
20.6 | % | 21.1 | % | 17.2 | % | 19.6 | % | 21.7 | % | ||||||||||
| IR 4 percentage of total portfolio |
0.2 | % | 0.7 | % | 11.2 | % | 9.9 | % | 0.3 | % | ||||||||||
| IR 5 percentage of total portfolio |
4.0 | % | 3.0 | % | 2.2 | % | 1.8 | % | 7.1 | % | ||||||||||
| Originations and advances, including PIK, by security type: |
||||||||||||||||||||
| Senior secured debt |
$ | 34,596 | $ | 46,692 | $ | 145,440 | $ | 61,918 | $ | 99,022 | ||||||||||
| Subordinated debt—Secured |
4,001 | 17,986 | 9,116 | 30,143 | 560 | |||||||||||||||
| Subordinated debt—Unsecured |
10,178 | 2,855 | 75 | 57 | 1,757 | |||||||||||||||
| Preferred equity |
1,636 | 1,561 | 4,751 | 2,801 | 6,416 | |||||||||||||||
| Common/common equivalents equity |
1 | — | 716 | 184 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 50,412 | $ | 69,094 | $ | 160,098 | $ | 95,103 | $ | 107,755 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Exits and repayments by security type: |
||||||||||||||||||||
| Senior secured debt |
$ | 9,517 | $ | 21,315 | $ | 24,770 | $ | 73,186 | $ | 92,834 | ||||||||||
| Subordinated debt—Secured |
11,880 | 51,177 | 2,749 | 37,568 | 45,926 | |||||||||||||||
| Subordinated debt—Unsecured |
— | 31,618 | — | — | 228 | |||||||||||||||
| Preferred equity |
8,844 | 16,579 | 2,410 | 18,224 | 37,306 | |||||||||||||||
| Common/common equivalents equity |
55 | 12,531 | 12,774 | 245 | 1,879 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 30,296 | $ | 133,220 | $ | 42,703 | $ | 129,223 | $ | 178,173 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Exits and repayments by transaction type: |
||||||||||||||||||||
| Scheduled principal amortization |
$ | 16,933 | $ | 6,277 | $ | 12,186 | $ | 4,907 | $ | 11,896 | ||||||||||
| Principal prepayments and loan sales |
50 | 85,129 | 14,037 | 100,068 | 114,828 | |||||||||||||||
| Payment of payment-in-kind interest and dividends |
5,369 | 13,851 | 3,164 | 9,963 | 20,134 | |||||||||||||||
| Sale of equity investments |
7,944 | 27,963 | 13,316 | 14,285 | 31,315 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 30,296 | $ | 133,220 | $ | 42,703 | $ | 129,223 | $ | 178,173 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | MCG uses an investment rating system to characterize and monitor its expected level of returns on each investment in MCG’s portfolio. MCG uses the following 1 to 5 investment rating scale: |
| Investment Rating |
||||||
| 1 | Capital gain expected or realized | |||||
| 2 | Full return of principal and interest or dividend expected with customer performing in accordance with plan | |||||
| 3 | Full return of principal and interest or dividend expected but customer requires closer monitoring | |||||
| 4 | Some loss of interest or dividend expected but still expecting an overall positive internal rate of return on the investment | |||||
| 5 | Loss of interest or dividend and some loss of principal investment expected which would result in an overall negative internal rate of return on the investment |
| (b) | As of June 30, 2010, September 30, 2010, December 31, 2010, March 31, 2011 and June 30, 2011, approximately, $205 million, $117 million, $112 million, $119 million and $117 million, respectively, of MCG’s investments with an investment rating of “1” represented loans to companies in which MCG also held equity. |
MCG Capital Corporation
August 4, 2011
Page 11
SELECTED FINANCIAL DATA
PORTFOLIO COMPOSITION BY TYPE
| (dollars in thousands) |
2010 Q2 |
2010 Q3 |
2010 Q4 |
2011 Q1 |
2011 Q2 |
|||||||||||||||
| Composition of investments at period end, fair value |
||||||||||||||||||||
| Senior secured debt |
$ | 419,398 | $ | 437,709 | $ | 555,667 | $ | 547,280 | $ | 535,320 | ||||||||||
| Subordinated debt |
||||||||||||||||||||
| Secured |
237,226 | 187,918 | 190,309 | 177,628 | 132,830 | |||||||||||||||
| Unsecured |
40,848 | 12,241 | 12,321 | 12,588 | 14,353 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total debt investments |
697,472 | 637,868 | 758,297 | 737,496 | 682,503 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Preferred equity |
248,983 | 244,864 | 218,690 | 183,735 | 133,350 | |||||||||||||||
| Common/common equivalents equity |
51,135 | 41,521 | 32,718 | 33,118 | 33,248 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total equity investments |
300,118 | 286,385 | 251,408 | 216,853 | 166,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total investments |
$ | 997,590 | $ | 924,253 | $ | 1,009,705 | $ | 954,349 | $ | 849,101 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Percentage of investments at period end, fair value |
||||||||||||||||||||
| Senior secured debt |
42.0 | % | 47.4 | % | 55.0 | % | 57.4 | % | 63.0 | % | ||||||||||
| Subordinated debt |
||||||||||||||||||||
| Secured |
23.8 | % | 20.3 | % | 18.9 | % | 18.6 | % | 15.7 | % | ||||||||||
| Unsecured |
4.1 | % | 1.3 | % | 1.2 | % | 1.3 | % | 1.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total debt investments |
69.9 | % | 69.0 | % | 75.1 | % | 77.3 | % | 80.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Preferred equity |
25.0 | % | 26.5 | % | 21.7 | % | 19.2 | % | 15.7 | % | ||||||||||
| Common/common equivalents equity |
5.1 | % | 4.5 | % | 3.2 | % | 3.5 | % | 3.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total equity investments |
30.1 | % | 31.0 | % | 24.9 | % | 22.7 | % | 19.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total investments |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
IMPORTANT INFORMATION ABOUT NON-GAAP REFERENCES
References by MCG Capital Corporation to distributable net operating income, or DNOI, refer to net operating income before net investment loss, gain (loss) on extinguishment of debt and income tax provision (benefit), as determined in accordance with GAAP adjusted for amortization of employee restricted stock awards.
The Company’s management uses DNOI and the related per share measures as useful and appropriate supplements to net operating income, net income (loss), earnings (loss) per share and cash flows from operating activities. These measures serve as an additional measure of MCG’s operating performance exclusive of employee restricted stock amortization, which represents an expense of the Company but does not require settlement in cash. DNOI does include PIK interest and dividend income that generally are not payable in cash on a regular basis, but rather at investment maturity or when declared.
The Company believes that providing non-GAAP DNOI and DNOI per share affords investors a view of results that may be more easily compared to peer companies and enables investors to consider the Company’s results on both a GAAP and non-GAAP basis in periods when the Company is undertaking non-recurring activities. DNOI should not be considered as an alternative to, as an indicator of the Company’s operating performance, or as a substitute for net operating income, net (loss) income, earnings (loss) per share and cash flows from operating activities (each computed in accordance with GAAP). Instead, DNOI should be reviewed in connection with net operating income, net (loss) income, earnings (loss) per share and cash flows from operating activities in MCG’s consolidated financial statements, to help analyze how MCG’s business is performing because the items excluded from the non-GAAP measures often have a material impact on the Company’s results of operations. Therefore, management uses, and investors should use, non-GAAP measures only in conjunction with its reported GAAP results.
MCG Capital Corporation
August 4, 2011
Page 12
ABOUT MCG CAPITAL CORPORATION
MCG Capital Corporation is a solutions-focused commercial finance company providing capital and advisory services to middle market companies throughout the United States. MCG’s investment objective is to achieve current income and capital gains. Portfolio companies generally use capital provided by MCG to finance acquisitions, recapitalizations, buyouts, organic growth and working capital.
Forward-looking Statements:
Statements in this press release regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to: MCG’s results of operations, including revenues, net operating income, distributable net operating income, net investment losses and general and administrative expenses and the factors that may affect such results; the performance of current or former MCG portfolio companies; the cause of net investment losses; the belief that the valuation methodology change with regard to Broadview Network Holdings will bring stability to the valuation of that company on a go-forward basis; management’s expectations that the impact of payoffs will decline, such payoffs will be redeployed in income-earning investments and, when combined with the cost-cutting corporate restructuring, should increase NOI sufficiently to cover the Company’s dividend over the next few quarters; maintaining the Company’s quarterly dividend at $0.17 per share through the remainder of 2011, reflecting the expectation that net operating income and PIK and dividend collections will exceed the dividend level for all of 2011, when there can be no assurance that the Company will meet such targets and will pay a dividend at that level; the belief that the Company’s restructuring plan reflects the focus of its new asset origination orientation on high-yielding debt securities, aligns the size of the Company’s organization to its asset base and establishes an efficient framework that is scalable with its assets; the estimated savings from the Company’s restructuring and general economic factors 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 those risks, uncertainties and factors referred to in MCG’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 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.