Phenixfin Corporation · NASDAQ:PFX
Phenixfin — Medley Capital — Q3 2016 Earnings Presentation
22 slides from Phenixfin's earnings presentation, August 2016
Slide 1: Medley Capital Corporation Investor Presentation
Medley Capital Corporation (NYSE: MCC) Investor Presentation Quarter Ended June 30, 2016
Slide 2: Important Notice
Important Notice This presentation contains “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to risks and uncertainties. Actual outcomes and results could differ materially from those suggested by this presentation du
Slide 3: Medley's Platform
Medley's Platform MEDLEY (NYSE: MDLY) Public Vehicles Private Vehicles Medley Capital Sierra Income Separately Corporation Corporation Private Funds (NYSE: MCC) (Public non-traded BDC) Managed Accounts Middle Medley Senior Senior Senior Loan Fund Senior Loan Fund Market Loans Opportunity Loan Fund D
Slide 4: MCC Presents an Attractive Investment Opportunity
MCC Presents an Attractive Investment Opportunity • Attractive dividend yield with lower leverage levels vs. other yield oriented asset classes Price / NAV Dividend Yield 1 Leverage 2 MCC 0.74x 12.2% 0.69x BDCs 3 0.93x 10.4% 0.72x REITs 4 2.85x 3.0% 1.11x MLPs 5 1.99x 9.0% 1.53x Banks 6 1.21x 2.5% 7
Slide 5: Highly Diversified Senior Secured Floating Rate Portfolio
Highly Diversified Senior Secured Floating Rate Portfolio • MCC has a diversified portfolio of 63 companies with a 12.0% weighted average yield1 Industry Geography 2 1% 1% 1% Services: Business Automotive 1% 2%2% 14% Construction & Building 6% 2% Banking, Finance, Insurance & Real Estate 3% 2% Healt
Slide 6: Portfolio by Issuer
Portfolio by Issuer Top 20 Investments: 53% Harrison Gypsum LLC 5% DHISCO Electronic Distribution, Inc. 4% Omnivere LLC 4% Nation Safe Drivers Holdings, Inc. 3% RCS Management Corporation Merchant Cash and Capital LLC 3% Accupac, Inc. MCC Senior Loan Strategy JV I LLC 3% 47% Seotowncenter, Inc. 3% N
Slide 7: Oil & Gas Exposure
Oil & Gas Exposure • MCC’s energy/oil & gas exposure is 5% of the portfolio representing four positions in total, and is in line with BDC peers • The companies are service businesses with revenues diversified across upstream, midstream and downstream sectors Percentage of Portfolio in Energy Energy
Slide 8: Selective Investment Process
Selective Investment Process Pipeline – LTM 6/30/2016 Portfolio Construction Senior Secured • UCC (lien) filings / Cash control / Covenants Deals Originated 1,110 Broadly diversified • Sector / Collateral / Position size / Geography Thorough diligence • Deep underwriting by internal team Early Read
Slide 9: Well Positioned for a Rising Rate Environment
Well Positioned for a Rising Rate Environment • MCC is well positioned for a rising interest Assets rate environment 12/31/2011 6/30/2016 • 78% of the portfolio is floating rate • 62% of liabilities are fixed rate Floating Fixed • Favorable asset & liability mix 34% 22% The weighted average maturi
Slide 10: Debt Maturity Profile
Debt Maturity Profile • MCC’s liabilities are well diversified with a staggered debt maturity profile $250.0 $200.0 ING Term Loan $174.02 $150.0 USD in Millions $100.0 SBA Debenture Notes $5.04 SBA Debenture Notes 2023 $50.0 2021 $95.04 Notes Notes (MCV) SBA 2019 (MCX) $63.51 Debenture Notes ING $74
Slide 11: Comparable Headcount to AUM
Comparable Headcount to AUM • Medley has made a significant investment to build out the team to support origination and asset management Number of Investment Professionals Per $100M in AUM 1 3.0 2.5 2.5 2.5 2.0 2.0 1.5 1.1 1.0 0.9 1.1 0.7 0.6 0.5 0.0 TCPC MCC TCRD TSLX FSC ARCC PSEC Investment Profe
Slide 12: Attractive Industry Dynamics
Attractive Industry Dynamics
Slide 13: Middle Market Opportunity – Large Target Market
Middle Market Opportunity – Large Target Market • Standalone US middle market would rank as the 3rd largest global economy • Private equity dry powder continues to be elevated at all-time highs Top GDPs 1 $16.8 Revenue: $500M - $1B $9.2 $6.7 $4.9 $3.6 $2.7 $2.5 $2.2 United States China US Middle Mar
Slide 14: The Opportunity – Large Number of Borrowers
The Opportunity – Large Number of Borrowers Number of Businesses by Market 1 39,000 Revenue: 2,000 $500M - $1B Revenue: $50M - $500M Target Market: 37,000 2,600 Revenue: $1B+ Large Market Middle Market 1. U.S. Census Bureau, 2007 Economic Census. Page 14
Slide 15: Powerful Secular Trends
Powerful Secular Trends • Banks continue to shift toward large borrowers • Regulatory environment is a headwind for banks in the middle-market 11,000 U.S. FDIC Insured Commercial Banks¹ 80% Bank Participation in Levered Loan Market (%)² 70% 10,000 60% 9,000 50% 8,000 40% 30% 7,000 20% 6,000 10% 5,00
Slide 16: Regulatory Pressure Continues for Banks
Regulatory Pressure Continues for Banks Level 3 Assets for Financial Firms 1 Total Assets of Publicly Traded BDCs 2 $250 $681 $200 $150 BDC Opportunity as Banks Continue to Exit Level 3 Assets $100 $201 $50 $0 2007 6/30/2016 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Illustrati
Slide 17: MCC Financial Results
MCC Financial Results
Slide 18: Performance Overview
Performance Overview • Net asset value of $9.76 per share for the quarter ending 6/30/2016 • Net income of $0.26 per share for the quarter ending 6/30/2016 • Net investment income of $0.20 per share for the quarter ending 6/30/2016 • Quarterly dividend of $0.22 per share for the quarter ending 6/30/
Slide 19: Financial & Portfolio Highlights
Financial & Portfolio Highlights Financial Highlights 6/30/16 3/31/16 12/31/15 9/30/15 6/30/15 3/31/15 Net investment income per share $ 0.20 $ 0.26 $ 0.28 $ 0.31 $ 0.30 $ 0.30 Net realized gains (losses) $ (0.53) $ - $ 0.10 $ (0.74) $ (0.16) $ (0.16) Net unrealized gains (losses) $ 0.59 $ (0.25) $
Slide 20: Select Financial & Portfolio Information
Select Financial & Portfolio Information As of and for the Three Months Ended (dollars in millions, except per share data) 6/30/16 3/31/16 12/31/15 9/30/15 6/30/15 3/31/15 Net investment income per share - basic & diluted $ 0.20 $ 0.26 $ 0.28 $ 0.31 $ 0.30 $ 0.30 Net realized and unrealized gains pe
Slide 21: Balance Sheet
Balance Sheet As of (dollars in thousands, except per share data) 6/30/16 3/31/16 12/31/15 9/30/15 6/30/15 3/31/15 ASSETS (Unaudited) (Unaudited) (Unaudited) (Audited) (Unaudited) (Unaudited) Investments at fair value Non-control/non-affiliate investments $ 920,130 $ 932,054 $ 1,012,559 $ 1,131,894
Slide 22: Corporate Information
Corporate Information Board of Directors Corporate Officers Research Coverage Corporate Headquarters BROOK TAUBE BROOK TAUBE BARCLAYS 280 Park Avenue, 6th Floor Chairman & Chief Executive Officer Chairman & Chief Executive Officer Mark C. DeVries – (212)-526-9484 New York, NY 10017 (212)-759-0777 SE