Exhibit 99.1
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Full Year and Fourth Quarter 2019 Earnings Results |
Owl
Rock Capital Corp. Reports Full Year Results and Fourth
Quarter Net Investment Income Per Share of $0.37 and NAV Per Share of $15.24
NEW YORK— February 19, 2020 — Owl Rock Capital Corporation (NYSE: ORCC, or the “Company”) today reported net investment income of $145.4 million, or $0.37 per share, and net income of $140.2 million, or $0.36 per share, for the fourth quarter ended December 31, 2019. Reported net asset value per share was $15.24 at December 31, 2019 as compared to $15.22 at September 30, 2019.
The Company’s Board of Directors has declared a first quarter 2020 dividend of $0.31 per share and had previously declared a special dividend of $0.08 per share, both for stockholders of record as of March 31, 2020, payable on or before May 15, 2020.
The Board of Directors has previously declared the following special dividends, for shareholders of record as of the last day of each respective quarter:
| § | Q1 2020: $0.08 per share |
| § | Q2 2020: $0.08 per share |
| § | Q3 2020: $0.08 per share |
| § | Q4 2020: $0.08 per share |
Under the Company’s previously authorized 10b5-1 plan, the Company agent will repurchase shares of common stock on the Company’s behalf when the market price per share is below the most recently reported net asset value per share. This corresponds to a market price of $15.23 based on December 31, 2019 NAV per share of $15.24. The Company 10b5-1 Plan commenced August 19, 2019 and will terminate upon the earliest to occur of (i) February 19, 2021 or (ii) such time as the approved $150 million repurchase amount has been fully utilized, subject to certain conditions. As of December 31, 2019, no purchases have been made under the Company 10b5-1 Plan.
| Net Investment Income | |
| Q4 2019 ($mm) | $145.4 |
| Q4 2019 (per share) | $0.37 |
| Net Income | |
| Q4 2019 ($mm) | $140.2 |
| Q4 2019 (per share) | $0.36 |
| Net Asset Value | |
| Q4 2019 ($mm) | $5,977 |
| Q4 2019 (per share) | $15.24 |
| Dividend (per share) | |
| Q4 2019 Fixed | $0.31 |
| Q4 2019 Special | $0.04 |
| Q4 2019 Total Dividends | $0.35 |
| Q1 2020 Fixed | $0.31 |
| Q1 2020 Special | $0.08 |
| Q1 2020 Total Dividends | $0.39 |
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 1 |
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| Portfolio and Investing Activity |
Full Year
For the full year ended December 31, 2019, new investment commitments totaled $4,434.7 million. This compares to $5,196.1 million for year ended December 31, 2018.
For the full year ended December 31, 2019, the principal amount of new investments funded was $3,682.2 million across 38 new portfolio companies and 22 existing portfolio companies. For this period, the Company had $964.5 million aggregate principal amount in exits and repayments.
For the full year ended December 31, 2018, the principal amount of new investments funded was $4,248.6 million across 44 new portfolio companies and 14 existing portfolio companies. For this period, the Company had $881.1 million aggregate principal amount in exits and repayments.
Fourth Quarter
For the three months ended December 31, 2019, new investment commitments totaled $1,032.7 million. This compares to $1,546.3 million for the three months ended December 31, 2018.
For the three months ended December 31, 2019, the principal amount of new investments funded was $795.5 million across 7 new portfolio companies and 6 existing portfolio companies. For this period, the Company had $269.4 million aggregate principal amount in exits and repayments.
For the three months ended December 31, 2018, the principal amount of new investments funded was $1,151.9 million across 9 new portfolio companies and 6 existing portfolio companies. For this period, the Company had $88.7 million aggregate principal amount in exits and repayments.
As of December 31, 2019 and December 31, 2018, the Company had investments in 98 and 73 portfolio companies with an aggregate fair value of $8.8 billion and $5.8 billion, respectively. As of December 31, 2019, the average investment size in each portfolio company was $89.8 million based on fair value.
As of December 31, 2019, based on fair value, our portfolio consisted of 80.9% first lien senior secured debt investments, 18.0% second lien senior secured debt investments, 1.0% investment funds and vehicles, and 0.1% equity investments.
As of December 31, 2018, based on fair value, our portfolio consisted of 78.7% first lien senior secured debt investments, 19.2% second lien senior secured debt investments, 0.4% unsecured debt investments, 1.5% investment funds and vehicles, and 0.2% equity investments.
As of December 31, 2019 and December 31, 2018, approximately 98.9% and 97.9% of the portfolio was invested in secured debt, respectively. As of December 31, 2019, 100.0% of our debt investments based on fair value in our portfolio were at floating rates.
As of December 31, 2019 and December 31, 2018, the weighted average total yield of debt and income-producing securities at fair value (which includes interest income and amortization of fees and discounts) was 8.7% and 9.4%, respectively, and the weighted average total yield of debt and income-producing securities at amortized cost (which includes interest income and amortization of fees and discounts) was 8.6% and 9.4%, respectively.
As of December 31, 2019, no investments were on non-accrual status.
| New Investment Commitments | |
| Q4 2019 ($mm) | $1,032.7 |
| Net Fundings | |
| Q4 2019 ($mm) | $795.5 |
| Average Investment Size |
| $89.8 million (1.0% of the portfolio at fair value) |
| First Lien Debt Investments (% FV) |
| 80.9% |
| Secured Investments (% FV) |
| 98.9% |
| Borrower EBITDA |
| $79 million 1 |
| Weighted Average Portfolio Yield 2 | |
| Fair Value | 8.7% |
| Amortized Cost | 8.6% |
| 1. | Borrower EBITDA is derived from the most recently available portfolio company financial statements, has not been independently verified by Owl Rock, and may reflect a normalized or adjusted amount. Accordingly, Owl Rock makes no representation or warranty in respect of this information. This represents 96.9% of our total portfolio based on fair value and excludes certain investments that fall outside of our typical borrower profile. |
| 2. | Weighted average total yield of the portfolio. |
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 2 |
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Results of Operations for the Full Year and Quarter Ended December 31, 2019 |
Full Year
Investment income increased to $718.0 million for the full year ended December 31, 2019 from $388.9 million for the full year ended December 31, 2018. The increase was primarily due to an increase in interest income as a result of an increase in our investment portfolio.
Total net expenses increased to $217.1 million for the full year ended December 31, 2019 from $142.2 million for the full year ended December 31, 2018, primarily due to higher interest expense.
Fourth Quarter
Investment income increased to $202.3 million for the three months ended December 31, 2019 from $126.8 million for the three months ended December 31, 2018. The increase was primarily due to an increase in interest income as a result of an increase in our investment portfolio.
Total net expenses increased to $56.7 million for the three months ended December 31, 2019 from $43.7 million for the three months ended December 31, 2018, which was almost entirely due to higher interest expense in connection with increasing leverage quarter over quarter.
Liquidity and Capital Resources
As of December 31, 2019, we had $317 million in cash and restricted cash, $3.1 billion in total principal value of debt outstanding, and $1.8 billion of undrawn capacity on our credit facilities. The Company’s weighted average interest rate on debt outstanding was 4.6% and 4.4% for the three months ended December 31, 2019 and December 31, 2018, respectively. Average debt to equity was 0.46x and 0.71x during the three months ended December 31, 2019 and December 31, 2018, respectively.
| Total Investment Income |
| $202.3 million |
| Total Net Expenses |
| $56.7 million |
| Principal Debt Outstanding |
| $3.1 billion |
| Available Liquidity |
| $1.8 billion 1 |
| Debt to Equity Ratio | |
| Q4 2019 Quarter-end | 0.46x |
| Q4 2019 Average 2 | 0.46x |
| 1. | The amount available does not reflect limitations related to each credit facility’s borrowing base. Reflects the use of the July 2025 Notes proceeds to pay down a portion of the Secured Revolver. |
| 2. | Daily average debt outstanding during the quarter divided by daily average net assets during the quarter. Daily average net assets is calculated by starting with the prior quarter end net asset value and adjusting for capital activity during the quarter. |
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 3 |
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| Conference Call and Webcast Information |
Conference Call Information:
The conference call will be broadcast live on February 20, 2020 at 9:00 a.m. Eastern Time on the Investor Resources section of ORCC’s website at www.OwlRockCapitalCorporation.com. Please visit the website to test your connection before the webcast.
Participants are also invited to access the conference call by dialing one of the following numbers:
Domestic: (866) 393-4306
International: (734) 385-2616
Conference ID: 9941586
All callers will need to enter the Conference ID followed by the # sign and reference “Owl Rock Capital Corporation” once connected with the operator. All callers are asked to dial in 10-15 minutes prior to the call so that name and company information can be collected.
Replay Information:
An archived replay will be available for 14 days via a webcast link located on the Investor Resources section of ORCC’s website, and via the dial-in numbers listed below:
Domestic: (855) 859-2056
International: (404) 537-3406
Conference ID: 9941586
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 4 |
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Financial Highlights |
Owl Rock Capital Corporation
Consolidated Financial Highlights
(Amounts in thousands, except per share amounts)
| For the three months ended | |||||||||||||
| December 31, 2019 | September 30, 2019 | December 31, 2018 | |||||||||||
| Investments at Fair Value | $ | 8,799,225 | $ | 8,270,254 | $ | 5,784,069 | |||||||
| Total Assets | $ | 9,203,619 | $ | 8,568,677 | $ | 5,951,042 | |||||||
| Net Asset Value Per Share | $ | 15.24 | $ | 15.22 | $ | 15.10 | |||||||
| Investment Income | $ | 202,255 | $ | 188,154 | $ | 126,829 | |||||||
| Net Investment Income | $ | 145,373 | $ | 137,906 | $ | 82,896 | |||||||
| Net Income | $ | 140,192 | $ | 118,652 | $ | 34,926 | |||||||
| Net Investment Income Per Share | $ | 0.37 | $ | 0.36 | $ | 0.42 | |||||||
| Net Realized and Unrealized Gains (and Losses) Per Share | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.24 | ) | ||||
| Net Income Per Share | $ | 0.36 | $ | 0.31 | $ | 0.18 | |||||||
| Distributions Declared from Net Investment Income | $ | 0.35 | $ | 0.33 | $ | 0.36 | |||||||
| Weighted Average Yield of Debt and Income Producing Securities at Fair Value | 8.7 | % | 9.0 | % | 9.4 | % | |||||||
| Weighted Average Yield of Debt and Income Producing Securities at Amortized Cost | 8.6 | % | 8.9 | % | 9.4 | % | |||||||
| Percentage of Debt Investment Commitments at Floating Rates | 100.0 | % | 100.0 | % | 99.6 | % | |||||||
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 5 |
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Consolidated Statements of Assets and Liabilities |
Owl Rock Capital Corporation
Consolidated Statements of Assets and Liabilities
(Amounts in thousands, except share and per share amounts)
| December
31, 2019 | December
31, 2018 | ||||||||
| Assets | |||||||||
| Investments at fair value | |||||||||
| Non-controlled, non-affiliated investments (amortized cost of $8,738,520 and $5,720,295, respectively) | $ | 8,709,700 | $ | 5,697,447 | |||||
| Controlled, affiliated investments (amortized cost of $90,336 and $91,138, respectively) | 89,525 | 86,622 | |||||||
| Total investments at fair value (amortized cost of $8,828,856 and $5,811,433, respectively) | 8,799,225 | 5,784,069 | |||||||
| Cash (restricted cash of $7,587 and $6,013, respectively) | 317,159 | 127,603 | |||||||
| Interest receivable | 57,632 | 29,680 | |||||||
| Receivable for investments sold | 9,250 | — | |||||||
| Receivable from a controlled affiliate | 2,475 | 8,100 | |||||||
| Prepaid expenses and other assets | 17,878 | 1,590 | |||||||
| Total Assets | $ | 9,203,619 | $ | 5,951,042 | |||||
| Liabilities | |||||||||
| Debt (net of unamortized debt issuance costs of $44,302 and $22,335, respectively) | $ | 3,038,232 | $ | 2,567,717 | |||||
| Distribution payable | 137,245 | 78,350 | |||||||
| Management fee payable | 16,256 | 14,049 | |||||||
| Payables to affiliates | 5,775 | 2,847 | |||||||
| Payable for investments purchased | — | 3,180 | |||||||
| Accrued expenses and other liabilities | 28,828 | 20,054 | |||||||
| Total Liabilities | 3,226,336 | 2,686,197 | |||||||
| Commitments and contingencies | |||||||||
| Net Assets | |||||||||
| Common shares $0.01 par value, 500,000,000 shares authorized; 392,129,619 and 216,204,837 shares issued and outstanding, respectively | 3,921 | 2,162 | |||||||
| Additional paid-in-capital | 5,955,610 | 3,271,162 | |||||||
| Total distributable earnings (losses) | 17,752 | (8,479 | ) | ||||||
| Total Net Assets | 5,977,283 | 3,264,845 | |||||||
| Total Liabilities and Net Assets | $ | 9,203,619 | $ | 5,951,042 | |||||
| Net Asset Value Per Share | $ | 15.24 | $ | 15.10 | |||||
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 6 |
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Consolidated Statements of Operations |
Owl Rock Capital Corporation
Consolidated Statement of Operations
(Amounts in thousands, except share and per share amounts)
| For the Years Ended December 31, | |||||||||||||
| 2019 | 2018 | 2017 | |||||||||||
| Investment Income | |||||||||||||
| Investment income from non-controlled, non-affiliated | |||||||||||||
| Interest income | $ | 691,854 | $ | 366,858 | $ | 151,246 | |||||||
| Other income | 16,119 | 8,750 | 5,130 | ||||||||||
| Total investment income from non-controlled, non-affiliated investments | 707,973 | 375,608 | 156,376 | ||||||||||
| Investment income from controlled, affiliated investments: | |||||||||||||
| Dividend income | 10,046 | 8,379 | 125 | ||||||||||
| Other income | — | 4,871 | 3,378 | ||||||||||
| Total investment income from controlled, affiliated investments | 10,046 | 13,250 | 3,503 | ||||||||||
| Total Investment Income | 718,019 | 388,858 | 159,879 | ||||||||||
| Expenses | |||||||||||||
| Interest expense | 136,445 | 76,774 | 24,580 | ||||||||||
| Management fee | 89,947 | 52,148 | 31,062 | ||||||||||
| Performance based incentive fees | 45,114 | — | — | ||||||||||
| Professional fees | 10,029 | 7,823 | 5,430 | ||||||||||
| Directors' fees | 623 | 533 | 387 | ||||||||||
| Other general and administrative | 8,374 | 4,965 | 4,472 | ||||||||||
| Total Operating Expenses | 290,532 | 142,243 | 65,931 | ||||||||||
| Management and incentive fees waived | (73,403 | ) | — | — | |||||||||
| Net Operating Expenses | 217,129 | 142,243 | 65,931 | ||||||||||
| Net Investment Income (Loss) Before Taxes | 500,890 | 246,615 | 93,948 | ||||||||||
| Excise tax expense (benefit) | 1,984 | 1,093 | 158 | ||||||||||
| Net Investment Income (Loss) After Taxes | $ | 498,906 | $ | 245,522 | $ | 93,790 | |||||||
| Net Realized and Unrealized Gain (Loss) | |||||||||||||
| Net change in unrealized gain (loss): | |||||||||||||
| Non-controlled, non-affiliated investments | $ | (7,235 | ) | $ | (38,426 | ) | $ | 8,640 | |||||
| Controlled affiliated investments | 3,705 | (5,087 | ) | 571 | |||||||||
| Translation of assets and liabilities in foreign currencies | (222 | ) | (133 | ) | — | ||||||||
| Total Net Change in Unrealized Gain (Loss) | (3,752 | ) | (43,646 | ) | 9,211 | ||||||||
| Net realized gain (loss): | |||||||||||||
| Non-controlled, non-affiliated investments | 2,633 | 234 | 739 | ||||||||||
| Foreign currency transactions | 214 | 133 | — | ||||||||||
| Total Net Realized Gain (Loss) | 2,847 | 367 | 739 | ||||||||||
| Total Net Realized and Unrealized Gain (Loss) | (905 | ) | (43,279 | ) | 9,950 | ||||||||
| Net Increase (Decrease) in Net Assets Resulting from | $ | 498,001 | $ | 202,243 | $ | 103,740 | |||||||
| Earnings Per Share - Basic and Diluted | $ | 1.53 | $ | 1.38 | $ | 1.55 | |||||||
| Weighted Average Shares Outstanding - Basic and Diluted | 324,630,279 | 146,422,371 | 67,082,905 | ||||||||||
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 7 |
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Portfolio and Investment Activity |
Owl Rock Capital Corporation
Portfolio and Investment Activity
(Amounts in thousands)
| For the Years Ended December 31, | |||||||||||||
| 2019 | 2018 | 2017 | |||||||||||
| New investment commitments | |||||||||||||
| Gross originations | $ | 4,625,939 | $ | 5,814,181 | $ | 2,277,528 | |||||||
| Less: Sell downs | (191,277 | ) | (618,040 | ) | (396,375 | ) | |||||||
| Total new investment commitments | $ | 4,434,662 | $ | 5,196,141 | $ | 1,881,153 | |||||||
| Principal amount of investments funded: | |||||||||||||
| First-lien senior secured debt investments | $ | 3,083,777 | $ | 3,388,527 | $ | 1,242,944 | |||||||
| Second-lien senior secured debt investments | 596,421 | 799,701 | 434,750 | ||||||||||
| Unsecured debt investments | — | 23,000 | — | ||||||||||
| Equity investments | 1,991 | 11,215 | 2,760 | ||||||||||
| Investment funds and vehicles | — | 26,110 | 65,028 | ||||||||||
| Total principal amount of investments funded | $ | 3,682,189 | $ | 4,248,553 | $ | 1,745,482 | |||||||
| Principal amount of investments sold or repaid: | |||||||||||||
| First-lien senior secured debt investments | $ | (820,602 | ) | $ | (536,715 | ) | $ | (187,351 | ) | ||||
| Second-lien senior secured debt investments | (116,700 | ) | (341,600 | ) | (138,500 | ) | |||||||
| Unsecured debt investments | (23,000 | ) | — | — | |||||||||
| Equity investments | (1,991 | ) | (2,760 | ) | — | ||||||||
| Investment funds and vehicles | (2,250 | ) | — | — | |||||||||
| Total principal amount of investments sold or repaid | $ | (964,543 | ) | $ | (881,075 | ) | $ | (325,851 | ) | ||||
| Number of new investment commitments in new portfolio companies(1) | 38 | 44 | 25 | ||||||||||
| Average new investment commitment amount | $ | 107,981 | $ | 105,689 | $ | 72,566 | |||||||
| Weighted average term for new investment commitments (in years) | 6.3 | 6.2 | 6.0 | ||||||||||
| Percentage of new debt investment commitments at floating rates | 100.0 | % | 99.6 | % | 98.1 | % | |||||||
| Percentage of new debt investment commitments at fixed rates | 0.0 | % | 0.4 | % | 1.9 | % | |||||||
| Weighted average interest rate of new investment commitments(2) | 8.0 | % | 8.8 | % | 8.3 | % | |||||||
| Weighted average spread over LIBOR of new floating rate investment commitments | 6.1 | % | 6.0 | % | 6.5 | % | |||||||
(1) Number of new investment commitments represents commitments to a particular portfolio company.
(2) Assumes each floating rate commitment is subject to the greater of the interest rate floor (if applicable) or 3-month LIBOR, which was 1.9%, 2.3% and 1.7% as of December 31, 2019, 2018 and 2017, respectively
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 8 |
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About Owl Rock Capital Corporation |
Owl Rock Capital Corporation (ORCC) is a specialty finance company focused on lending to U.S. middle-market companies. As of December 31, 2019 ORCC had investments in 98 portfolio companies with an aggregate fair value of $8.8 billion. ORCC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. ORCC is externally managed by Owl Rock Capital Advisors LLC, an SEC-registered investment adviser that is an affiliate of Owl Rock Capital Partners. Owl Rock Capital Partners, together with its subsidiaries, is a New York based direct lending platform with approximately $16.4 billion of assets under management as of December 31, 2019.
Certain information contained herein may constitute “forward-looking statements” that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about ORCC, its current and prospective portfolio investments, its industry, its beliefs and opinions, and its assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond ORCC’s control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors identified in ORCC’s filings with the SEC. Investors should not place undue reliance on these forward-looking statements, which apply only as of the date on which ORCC makes them. ORCC does not undertake any obligation to update or revise any forward- looking statements or any other information contained herein, except as required by applicable law.
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Investor Contacts |
Investor Contact:
Dana Sclafani
(212) 651-4705
ORCCIR@owlrock.com
Media Contact:
Sard Verbinnen & Co
OwlRock-SVC@sardverb.com
| www.OwlRockCapitalCorporation.com | NYSE: ORCC | 9 |