Prospect Capital's CEO Discusses F4Q 2012 Results - Earnings Call Transcript

Tickers in this article: PSEC

Prospect Capital Corp. (PSEC)

FQ4 2012 Earnings Call

August 23, 2012 10:00 am ET

Executives

John F Barry III – Chairman of the Board & Chief Executive Officer

M. Grier Eliasek – President & Chief Operating Officer

Brian Oswald – Chief Financial Officer & Chief Compliance Officer of PSEC

Analysts

Arren Cyganovich – Evercore Partners

Mickey Schleien – Ladenburg Thalmann & Co.

Robert Dodd – Raymond James

Greg Mason – Stifel Nicolaus

John Ellis – Private Investor

[Steve Koloff] – Private Investor

Lynn Cook – Private Investor

Presentation

Operator

Good day and welcome to the Prospect Capital Fiscal Year Earnings Release and Conference Call. (Operator instructions.) Please note this event is being recorded. I would now like to turn the conference over to Mr. John F Barry III, Chairman and CEO. Mr. Barry, the floor is yours, sir.

John F Barry III

Well thank you, Mike. Joining me on the call today are Grier Eliasek, our President and Chief Operating Officer; and Brian Oswald, our Chief Financial Officer. Brian?

Brian Oswald

Thanks, John. This call is the property of Prospect Capital Corporation. Unauthorized use is prohibited. This call contains forward-looking statements within the meaning of the securities laws that are intended to be a Safe Harbor protection. Actual outcomes and results could differ materially from those forecast due to the impact of many factors. We do not undertake to update our forward-looking statements unless required by law. For additional disclosure, see our earnings press release and our 10(k) filed previously. Now, I’ll turn the call back over to John.

John F Barry III

Thanks, Brian. Over the past year your management delivered record prospect net investment income and record prospect year-over-year growth in the June 2012 quarter as well as in the 2012 fiscal year. Your management also delivered $0.47 per share growth in net asset value per share over the course of the last year.

Net investment income for 2012 was $187 million, up 98% from the prior year. On a per share basis, net investment income for the year was $1.63, up 48% from 2011. Net investment income for the quarter was $64 million, up 113% from the prior year. On a per share basis, net investment income for the quarter was $0.51, up 66% from the prior year. Your management delivered strong net investment income growth while keeping leverage low.

Net of cash and equivalents, our debt to equity ratio was less than 36% in June. We have substantial unused debt capacity and liquidity to drive future earnings. We estimate our net investment income per share in the current September quarter will be $0.41 to $0.46. We just announced more shareholder distributions through October which will be Prospect’s 51 st shareholder distribution and 28 th consecutive per share monthly increase.