UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_____________________
_____________________
FORM
8-K
CURRENT
REPORT
Pursuant
To Section 13 Or 15(d) of The Securities Exchange Act of
1934
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Date
of report (Date of earliest event reported): July 12,
2007
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GSC
Investment Corp.
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(Exact
name of registrant
as
specified in charter)
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Maryland
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001-33376
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20-8700615
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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12
East 49th Street, New York, NY 10017
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(Address
of principal executive offices)
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Registrant’s
telephone number, including area code: (212) 884-6200
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N/A
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(Former
name or former address, if changed since last report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
2.02 Results of Operations and Financial
Condition.
On
July
12, 2007, we issued a press release announcing our financial results for
the quarter ended May 31, 2007. A copy of the press release, together with
the related financial schedules, are attached hereto as Exhibit 99.1, the
text 3
month quarter of which are incorporated by reference herein. This press release,
together with the related financial schedules, are not to be deemed “filed” for
purposes of Section 18 of the Exchange Act of 1934, as amended (the “Exchange
Act”), or incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as shall be expressly set forth
by
specific reference in such a filing, or to form a part of our public disclosure
in the United States or otherwise.
Item
9.01 Financial Statements and Exhibits.
Exhibit
No. Description
99.1 Press
Release dated July 12, 2007
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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GSC
Investment Corp.
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Date:
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July
12, 2007
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By:
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/s/
David L. Goret
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Name:
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David
L. Goret
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Title:
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Vice
President and Secretary
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Exhibit
99.1
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Investor
Contacts: Carl J. Crosetto
GSC
Group
973-437-1007
Michael
H.
Yip
GSC
Group
973-593-5424
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GSC
Investment Corp. Announces First Quarter 2008 Financial
Results
__________________________________________
NEW
YORK, July 12,
2007 – GSC Investment Corp. (NYSE:GNV), a business development company
externally managed by GSC Group, today announced results for the quarter ended
May 31, 2007.
First
Quarter 2008 Summary
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·
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Completed
IPO
on March 28, 2007
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·
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GAAP
net
income of $3.7 million, or $0.44 per share (basic and
diluted)
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·
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Adjusted
net
investment income of $2.2 million, or $0.26 per share (basic and
diluted )1
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·
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Adjusted
net
gain on investments of $1.5 million, or $0.18 per share (basic and
diluted)1
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·
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Net
asset
value of $14.21 per share as of May 31,
2007
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·
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Paid
a $0.24
per share dividend on June 6, 2007 for the partial
quarter
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Operating
Results
For
its first
quarter of operations, GSC Investment Corp. reported net income of $3.7 million
or $0.44 per share. Adjusted net investment income for the first
quarter was $2.2 million or $0.26 per share. Adjusted net gain on investments
was $1.5 million or $0.18 per share. Net asset value was $14.21 per
share as of May 31, 2007. The Company's results for the partial
quarter reflect its investment activities which commenced on March 28, 2007
(the
completion of its IPO).
"We
are pleased with
the first quarter results which reflect our ability to source attractive
investment opportunities using GSC Group's corporate credit platform."
said Thomas V. Inglesby, Chief Executive Officer of GSC Investment
Corp.
Portfolio
and Investment Activity
As
of May 31, 2007,
the company’s portfolio consisted of $208.9 million in aggregate principal
amount of investments. The company had 41 investments in 34 portfolio
companies
with an
average investment size of $5.1 million and a weighted average life of 3.9
years. The overall portfolio composition consisted of 13.4% first
lien term loans, 42.9% second lien term loans, 18.5% senior secured notes,
23.8%
unsecured notes, and 1.4% equity/limited partnership interests.
During
the quarter,
GSC Investment Corp. made investments in an aggregate principal amount of $243.1
million. Also during the quarter, the company had $34.2 million
in repayments and sales of investments resulting in net investments of $208.9
million for the period.
As
of May 31, 2007,
the weighted average current yields on the company’s first lien term loans,
second lien term loans, senior secured notes and unsecured notes were 9.5%,
11.8%, 11.1% and 11.6%, respectively, which results in an aggregate
weighted current yield of 11.3%. As of May 31, 2007,
45.5% or $95.0 million of its interest-bearing portfolio was fixed rate debt
with a weighted average current yield of 11.3%, and 55.5% or $113.9 million
of
its interest-bearing portfolio was floating rate debt with a weighted average
current spread of LIBOR plus 5.6%.
“We
believe we
have constructed an attractive and diversified portfolio in terms of geography,
industry and position in the capital structure," continued Inglesby, "We
continue to focus our energies on sourcing attractive investment
opportunities."
Liquidity
and Capital Resources
On
March 28, 2007,
GSC Investment Corp. completed its initial public offering and received net
proceeds of $101.7 million. As of May 31, 2007, the company had
borrowed an aggregate of $100.2 million under its credit facilities and had
$25.5 million of undrawn commitments remaining.
Dividend
On
June 6, 2007, GSC
Investment Corp. paid a dividend of $0.24 per share.
2008
First Quarter Conference Call/Webcast Information
When:
Friday, July 13, 2007, 10:00 a.m. Eastern Time (ET)
Call: Interested
parties may participate by dialing (866) 802-6730 (U.S.
and Canada) or (913) 643-4200 (outside U.S. and Canada).
A
replay of the call
will be available from 1:00 p.m. ET on Friday, July 13, 2007 through
midnight Friday, July 20, 2007 by dialing (888) 203-1112 (U.S. and
Canada) or (719) 457-0820 (outside U.S. and Canada), passcode for both replay
numbers: 4863041.
Webcast:
Interested parties may also access a simultaneous webcast of the call
by going to http://ir.gscinvestmentcorp.com/events.cfm. A replay of the
webcast will be available from 1:00 p.m. ET on Friday, July 13, 2007 through
midnight Friday, July 20, 2007.
2
About
GSC
Investment Corp.
GSC
Investment Corp.
is a specialty finance company that invests primarily in first and second lien
term loans and mezzanine debt of private, U.S. middle-market companies and
high yield bonds. It has elected to be treated as a business development company
under the Investment Company Act of 1940. The Company also may opportunistically
invest in distressed debt; debt and equity securities of public companies;
credit default swaps; emerging market debt; and collateralized debt obligation
vehicles holding debt, equity or synthetic securities. The Company draws upon
the support and investment advice of its external manager, GSC Group, an
alternative asset investment manager that focuses on complex, credit-driven
strategies. GSC Group's corporate credit group manages approximately $8.5
billion of assets2
in
leveraged loans, high yield bonds and mezzanine debt. GSC Investment
Corp. is traded on the New York Stock Exchange under the symbol
“GNV.”
Forward
Looking Statements
Information
provided
in this press release may contain statements relating to current expectations,
estimates, forecasts and projections about future events that are
forward-looking statements. These forward-looking statements generally relate
to
GSC Investment Corp.’s plans, objectives and expectations for future operations
and are based upon management’s current estimates and projections of future
results or trends. Actual future results may differ materially from those
projected as a result of certain risks and uncertainties. For a discussion
of
such risks and uncertainties, see “Note About Forward-Looking Statements”
included in the Company’s 10-K which has been filed with the U.S. Securities and
Exchange Commission. These forward-looking statements are made only as of the
date hereof, and GSC Investment Corp. undertakes no obligation to update or
revise the forward-looking statements, whether as a result of the new
information, future events or otherwise.
####
_______________________
1 Basic
and diluted adjusted net investment income per share and adjusted net gain
on
investments per share are non-GAAP financial measures. Adjusted net
investment income per share is the per share increase in net assets from
operations less realized and unrealized gains and losses, and any incentive
management fees attributable to such net realized gains and
losses. Adjusted net gain on investments per share is the net gain on
investments per share less any incentive management fees attributable to such
net realized gains and losses. The most directly comparable GAAP
financial measure is the net per share increase in net assets from operations,
which is reflected above as GAAP net income under the heading “First
Quarter 2008 Summary.” GSC Investment Corp. believes that adjusted
net investment income per share and adjusted net gain on investments per share
provide useful information to investors regarding financial performance because
it is one method GSC Investment Corp. uses to measure its financial condition
and results of operations. 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 basic and diluted adjusted net investment income per share and adjusted
net
gain on investments per share to the most directly comparable GAAP financial
measure are set forth in Schedule 1 hereto.
2 As
of March 31, 2007. Includes leverage and warehoused
assets.
3
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GSC
Investment Corp.
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Consolidated
Balance Sheets
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As
of
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May
31,
2007
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February
28,
2007
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(Unaudited)
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ASSETS
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Investments
at
fair value (amortized cost of $208,010,746 and $0,
respectively)
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Non-control/non-affiliate
investments
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$ |
205,938,745
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$ |
-
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Control
investments
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2,583,634
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-
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||||||
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Affiliate
investments
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239,168
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-
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||||||
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Total
investments at fair value
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208,761,547
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-
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||||||
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Cash
and cash
equivalents
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2,265,303
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1,030
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||||||
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Cash,
securitization accounts
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3,590,672
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-
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||||||
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Interest
receivable
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4,441,802
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-
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||||||
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Receivable
from open trades
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410,586
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-
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Due
from
manager
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673,662
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-
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Other
assets
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976,132
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Deferred
financing costs, net
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1,171,612
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-
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Deferred
offering costs
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-
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808,617
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Total
assets
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$ |
222,291,316
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$ |
809,647
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LIABILITIES
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Debt
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$ |
100,208,119
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$ |
-
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Accounts
payable and accrued expenses
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554,550
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105,000
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Interest
and
credit facility fees payable
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690,312
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-
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Management
and
incentive fees payable
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719,856
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-
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Dividend
payable
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1,989,932
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-
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Accrued
offering cost
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266,883
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760,000
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Due
to
affiliate
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-
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73,810
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Total
liabilities
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$ |
104,429,652
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$ |
938,810
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STOCKHOLDERS'
EQUITY (DEFICIT)
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Common
stock,
par value $.0001 per share, 100,000,000 common shares
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authorized,
8,291,384 and 66 2/3 common shares issued and outstanding,
respectively
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829
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-
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Capital
in
excess of par value
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114,311,250
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1,000
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Accumulated
undistributed net investment income (loss)
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1,827,736
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(130,163 | ) | |||||
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Accumulated
net realized gain on sale of investments
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1,021,068
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-
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||||||
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Net
unrealized
appreciation on investments and derivatives
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700,781
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-
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Total
stockholders' equity (deficit)
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117,861,664
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(129,163 | ) | |||||
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Total
liabilities and stockholders' equity (deficit)
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$ |
222,291,316
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$ |
809,647
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NET
ASSET
VALUE PER SHARE
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$ |
14.21
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n/a
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4
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GSC
Investment Corp.
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||||||||
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Consolidated
Statement of Operations
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||||||||
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For
the
three
months
ended
May
31,
2007
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||||||||
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(unaudited)
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INVESTMENT
INCOME
|
||||||||
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Interest
from
investments
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$ |
3,680,845
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||||||
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Interest
from
cash and cash equivalents
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21,051
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|||||||
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Management
fee
income
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383,562
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|||||||
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Other
income
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16,603
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|||||||
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Total
investment income
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4,102,061
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|||||||
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EXPENSES
|
||||||||
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Interest
and
credit facility expenses
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720,765
|
|||||||
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Professional
fees
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542,616
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|||||||
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Base
management fees
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360,488
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|||||||
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Incentive
management fees
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359,368
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|||||||
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Insurance
|
118,041
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|||||||
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Directors
fees
|
96,090
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|||||||
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Administrative
|
45,692
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|||||||
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Cost
of
acquiring management contract
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144,000
|
|||||||
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Organizational
expense
|
22,868
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|||||||
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Expenses
before manager reimbursement
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2,409,928
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|||||||
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Expense
reimbursement
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(265,766 | ) | ||||||
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Total
expenses
net of expense reimbursement
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2,144,162
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|||||||
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NET
INVESTMENT
INCOME
|
1,957,899
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|||||||
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REALIZED
AND
UNREALIZED GAIN (LOSS) ON INVESTMENTS:
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||||||||
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Net
realized
gain on sale of investments
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1,021,068
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|||||||
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Net
change in
unrealized appreciation on investments
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750,801
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|||||||
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Unrealized
depreciation on derivatives
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(50,020 | ) | ||||||
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Net
gain
(loss) on investments
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1,721,849
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|||||||
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NET
INCREASE
IN NET ASSETS RESULTING FROM OPERATIONS
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$ |
3,679,748
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BASIC
AND
DILUTED EARNINGS PER COMMON SHARE
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$ |
0.44
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||||||
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COMMON
STOCK
OUTSTANDING—BASIC AND DILUTED
|
8,291,384
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5
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Schedule
I
Reconciliation
to Basic and Diluted GAAP EPS
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||||||||
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Reconciliation
of basic and diluted adjusted net investment income per share and
basic
and diluted adjusted net gain on investments per share to basic and
diluted GAAP EPS, the most directly comparable GAAP financial measure,
for
the three months ended May 31, 2007 is provided below.
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For
the three
months ended May 31, 2007
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||||||||
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(unaudited)
|
||||||||
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Net
investment
income per share, basic and diluted
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$ |
0.24
|
||||||
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Incentive
fees
attributed to gains (losses)
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$ |
0.02
|
||||||
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Adjusted
net
investment income per share, basic and diluted
|
$ |
0.26
|
||||||
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Net
gain on
investments per share, basic and diluted
|
$ |
0.20
|
||||||
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Incentive
fees
attributed to gains (losses)
|
$ | (0.02 | ) | |||||
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Adjusted
net
gain on investments per share, basic and diluted
|
$ |
0.18
|
||||||
|
Basic
and
diluted GAAP EPS
|
$ |
0.44
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||||||
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(1)
Basic and
diluted adjusted net investment income per share and basic and diluted
adjusted net gain on investments per share are non-GAAP financial
measures. Adjusted net investment income per share is the net per
share increase in net assets from operations less realized and unrealized
gains and losses and any incentive management fees attributable to
such
net realized gains and losses. Adjusted net gain on investments per
share
is the net gain on investments per share less any incentive management
fees attributable to such net realized gains and losses. The company
believes that adjusted net investment income per share and adjusted
net
gain on investments per share provide useful information to investors
regarding financial performance because it is one method the company
uses
to measure its financial condition and results of operations. 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.
|
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6