Slide 1: Committed to Effecting Change and Maximizing Value for TICC Stockholders
Committed to Effecting Change and Maximizing Value for TICC Stockholders February 2016 http://www.changeticcnow.com/
Slide 2: Disclaimers
Disclaimers Forward-Looking Statements Information set forth herein includes forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding TSLX’s proposed business combination transaction with TICC Capital Corp. (“TICC”) (including any financing r
Slide 3: Disclaimers (continued)
Disclaimers (continued) Third Party-Sourced Statements and Information Certain statements and information included herein have been sourced from third parties. TSLX does not make any representations regarding the accuracy, completeness or timeliness of such third party statements or information. Exc
Slide 4: TSLX Encourages Fellow Stockholders to Take Action to Preserve their Investment
TSLX Encourages Fellow Stockholders to Take Action to Preserve their Investment 1 Poor returns for stockholders TICC Capital Corp. (“TICC”) has consistently and dramatically underperformed the BDC sector since its IPO, delivering total returns of just 27.0% versus 188.8% for the BDC Composite1 – 7.1
Slide 5: Stewardship has Resulted in Drastic Long-Term Underperformance
Poor Stewardship has Resulted in Drastic Long-Term Underperformance Poor Returns for Stockholders 1 Poor Corporate Governance 2 Poor Capital Allocation 3 Poor and Costly Investment Strategy 4 TICC Relative Underperformance Total Return (%)(¹) YTD 1Y 3Y Since IPO(²) Since IPO Annualized(²) YTD 1Y 3Y
Slide 6: Stockholders have Continued to Suffer Since BSP Deal was Defeated
Stockholders have Continued to Suffer Since BSP Deal was Defeated Poor Returns for Stockholders 1 Poor Corporate Governance 2 Poor Capital Allocation 3 Poor and Costly Investment Strategy 4 Total return indexed to December 22, 2015. Calculation includes share price appreciation and cumulative divide
Slide 7: TICC has Consistently Destroyed Stockholder Value by Eroding NAV
Poor Returns for Stockholders 1 Poor Corporate Governance 2 Poor Capital Allocation 3 Poor and Costly Investment Strategy 4 TICC has Consistently Destroyed Stockholder Value by Eroding NAV TICC Net Asset Value per Share TICC’s NAV has declined sequentially in 8 of the last 10 quarters, resulting in
Slide 8: The Board has Failed to Fulfill its Duties and has Sought to Mislead Stockholders
“The pre-execution framework ... serve[s] as a disconcerting example of the substantial risks and uncertainties associated with a narrow, conflict-laden review process motivated more by the preferences of senior management than the interests of the Company’s unaffiliated shareholders” Glass Lewis &
Slide 9: The Board has Refused to Implement Any Changes to the Status Quo
Poor Returns for Stockholders 1 Poor Corporate Governance 2 Poor Capital Allocation 3 Poor and Costly Investment Strategy 4 The Board has Refused to Implement Any Changes to the Status Quo TICC’s Board has readily admitted that the incumbent management team has failed, but has blatantly disregarded
Slide 10: TICC has Consistently Under-Earned its Dividend and Eroded NAV
Poor Corporate Governance 2 Poor Returns for Stockholders 1 TICC has Consistently Under-Earned its Dividend and Eroded NAV Poor Capital Allocation 3 Poor and Costly Investment Strategy 4 Over the past four quarters, TICC has under-earned its dividend by a cumulative 31.6%, significantly eroding NAV
Slide 11: TICC has Failed to Repurchase a Meaningful Amount of Stock
Poor Corporate Governance 2 Poor Returns for Stockholders 1 TICC has Failed to Repurchase a Meaningful Amount of Stock Poor Capital Allocation 3 Poor and Costly Investment Strategy 4 TICC Discount to NAV and Amount of Stock Repurchased TICC has failed to repurchase meaningful amounts of stock, prese
Slide 12: Management has Taken a Disproportionate Share of Total Economics
Poor Corporate Governance 2 Poor Returns for Stockholders 1 Management has Taken a Disproportionate Share of Total Economics "Some BDC managers have perpetually delivered lackluster returns, leading to comparatively outsized fees for themselves. While we believe that shareholder focus on this issue
Slide 13: Management is Vastly Overcompensated Given Portfolio Composition
Poor Corporate Governance 2 Poor Returns for Stockholders 1 Management is Vastly Overcompensated Given Portfolio Composition Poor Capital Allocation 3 Poor and Costly Investment Strategy 4 TICC provides stockholders with exposure to assets that can otherwise be accessed significantly less expensivel
Slide 14: Where do TICC Stockholders Stand Today?
Where do TICC Stockholders Stand Today? In August 2015, TICC’s Board approved a sale of TICC’s external manager that would have rewarded the failed incumbent manager and fellow Board members through a $60 million2 transfer of value while delivering no tangible benefits to TICC’s long-suffering stock
Slide 15: Stockholders have Viable Avenues to Preserve the Value of their Investment
Stockholders have Viable Avenues to Preserve the Value of their Investment It is time for stockholders to take action. The time for change is now. TICC stockholders have delivered a clear mandate for change, and TSLX calls on fellow stockholders to exercise their rights as the true owners of TICC At
Slide 16: Appendix: Reconciliation of Certain Non-GAAP Financial Measures
Appendix Reconciliation of Certain Non-GAAP Financial Measures
Slide 17: Reconciliation – Ratio of Shareholder Fees and Expenses to Total Economics
Reconciliation of Certain Non-GAAP Financial Measures – Ratio of Shareholder Fees and Expenses to Total Economics Ratio of Shareholder Fees and Expenses as a portion of Total Economics of your investment, as set forth in this presentation, may be considered a non-GAAP financial measure. TSLX provide
Slide 18: Shareholder Fees & Expenses and Economic Profit Reconciliation
TICC 2012 2013 2014 2015 (through Sep 30) Cumulative Net Increase in Net Assets Resulting from Operations (GAAP) $ 68,323 $ 58,945 $(3,348) $ 1,122 $ 125,041 Shareholder Fees & Expenses: Compensation expense (GAAP) $ 1,183 $ 1,648 $ 1,861 $ 965 $ 5,657 Investment advisory fees (GAAP) 11,223 19,096 2
Slide 19: Reconciliation – TICC Expense Ratio
Reconciliation of Certain Non-GAAP Financial Measures – TICC Expense Ratio The TICC Expense Ratio, as set forth in this presentation, may be considered a non-GAAP financial measure. TSLX provides this information to stockholders because TSLX believes it enhances stockholders’ understanding of the re
Slide 20: TICC Expense Ratio Calculation by Quarter
TICC Quarter Ended Dec-2015 Mar-2015 Jun-2015 Sep-2015 Cumulative Shareholder Fees & Expenses: Compensation expense (GAAP) $ 461 $ 479 $ 396 $ 90 $ 1,427 Investment advisory fees (GAAP) 5,386 5,010 5,308 5,256 20,960 Professional fees (GAAP) 548 606 905 819 2,879 General and administrative (GAAP) (1