Fidus Investment Corporation Announces First Quarter 2016 Financial Results

EVANSTON, Ill., May 05, 2016 (GLOBE NEWSWIRE) — Fidus Investment Corporation (NASDAQ:FDUS) (“Fidus” or the “Company”), a provider of customized debt and equity financing solutions primarily to lower middle-market companies based in the United States, today announced its financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Financial Highlights

• Total investment income of $14.7 million
• Net investment income of $7.1 million, or $0.43 per share
• Adjusted net investment income of $7.2 million, or $0.44 per share⁽¹⁾
• Net increase in net assets resulting from operations of $7.5 million, or $0.46 per share
• Invested $42.3 million in debt and equity securities, including investments in three new portfolio companies
• Received proceeds from sales and realizations of $31.6 million
• Paid regular quarterly dividend of $0.39 per share on March 25, 2016
• Net asset value (NAV) of $248.7 million, or $15.25 per share, as of March 31, 2016

Management Commentary

“For the first quarter, our diverse portfolio continued to produce adjusted net investment income growth and covered our regular quarterly dividend. Compared to the same period last year, adjusted net investment income increased 12.8%,” said Edward Ross, Chairman and CEO of Fidus Investment Corporation. “From an investment perspective, the first quarter was relatively robust due in part to closings of new portfolio company investments from the fourth quarter’s pipeline. Although investment  activity is currently slow relative to the past several quarters, we believe that adhering to our proven strategy of focusing on high-quality companies that generate strong free cash flow and have positive long-term outlooks will keep us well positioned to perform well over the long term.”

(1) Supplemental information regarding adjusted net investment income:

On a supplemental basis, we provide information relating to adjusted net investment income, which is a non-GAAP measure.This measure is provided in addition to, but not as a substitute for, net investment income.Adjusted net investment income represents net investment income excluding any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses.The management agreement with our advisor provides that a capital gains incentive fee is determined and paid annually with respect to cumulative realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized losses.In addition, we accrue, but do not pay, a capital gains incentive fee in connection with any unrealized capital appreciation, as appropriate.As such, we believe that adjusted net investment income is a useful indicator of operations exclusive of any capital gains incentive fee expense or (reversal) attributable to realized and unrealized gains and losses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. Reconciliations of net investment income to adjusted net investment income are set forth in Schedule 1.

First Quarter 2016 Financial Results

For the three months ended March 31, 2016, total investment income was $14.7 million, an increase of $1.9 million, or 14.4%, over the $12.8 million of total investment income for the three months ended March 31, 2015. The increase was attributable to a $1.5 million increase in interest income resulting largely from higher average levels of debt investments outstanding, a $0.1 million increase in dividend income due to increased levels of distributions received from equity investments and a $0.2 million increase in fee income resulting from a higher level of prepayment activity for the three months ended March 31, 2016, as compared to the three months ended March 31, 2015.

For the three months ended March 31, 2016, total expenses, including income tax provision, were $7.6 million, an increase of $1.0 million or 15.1%, over the $6.6 million of total expenses, including income tax provision, for the three months ended March 31, 2015. Interest and financing expenses for the three months ended March 31, 2016 were $2.6 million, an increase of $0.5 million or 22.1%, compared to $2.1 million for the three months ended March 31, 2015 as a result of higher average balances of SBA debentures and borrowings under the Credit Facility outstanding during 2016. The base management fee increased $0.2 million, or 10.7%, to $2.0 million for the three months ended March 31, 2016 due to higher average total assets less cash and cash equivalents for the three months ended March 31, 2016 than the three months ended March 31, 2015. The incentive fee for the three months ended March 31, 2016 was $1.9 million, a $0.3 million, or 17.6%, increase from the $1.6 million incentive fee for the three months ended March 31, 2015 which was primarily the result of a $0.2 million increase in the income incentive fee to $1.8 million. The administrative service fee, professional fees and other general and administrative expenses totaled $1.1 million for both the three months ended March 31, 2016 and March 31, 2015.