Phenixfin Corporation · NASDAQ:PFX
Phenixfin — Medley Capital — Q4 2016 Earnings Presentation
20 slides from Phenixfin's earnings presentation, February 2017
Slide 1: Medley Capital Corporation Investor Presentation
Medley Capital Corporation (NYSE: MCC) Investor Presentation Quarter Ended December 31, 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: Diversified AUM Across Multiple Funds
Diversified AUM Across Multiple Funds • Broad distribution through public and private vehicles • Permanent capital, long-dated funds and managed accounts not subject to traditional outflows MEDLEY (NYSE: MDLY) Public Vehicles Institutional Capital Medley Sierra Capital Long-Dated Funds and Income Co
Slide 4: Highly Diversified Senior Secured Floating Rate Portfolio
Highly Diversified Senior Secured Floating Rate Portfolio • MCC has a diversified portfolio of 60 companies with a 11.7% weighted average yield1 Industry Geography2 Services: Business Banking, Finance, Insurance & Real Estate 4% 14% 14% Construction & Building 14% South Western US 3% Healthcare & Ph
Slide 5: Portfolio by Issuer
Portfolio by Issuer Top 20 Investments: 60% Harrison Gypsum LLC 6% MCC Senior Loan Strategy JV I LLC 4% Nation Safe Drivers Holdings, Inc. Omnivere LLC 4% DHISCO Electronic Distribution, Inc. Merchant Cash and Capital LLC 4% 40% NVTN LLC NCM Group Holdings LLC 4% Accupac, Inc. 3% Nielsen & Bainbridg
Slide 6: 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 12/31/2016 • 84% of the portfolio is floating rate • 63% of liabilities are fixed rate Fixed 16% • Favorable asset & liability mix Floating 34% The weighted average matur
Slide 7: Pro Forma Debt Maturity Profile
Pro Forma Debt Maturity Profile • MCC’s liabilities are well diversified with a staggered debt maturity profile • Subsequent to quarter end, MCC issued $39.0M of newly issued 2023 Notes and redeemed the 2019 Notes $250.0 $200.0 ING Term Loan $174.02 USD in Millions $150.0 SBA Debenture Notes $5.04 $
Slide 8: Attractive Industry Dynamics
Attractive Industry Dynamics
Slide 9: 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 GDPs1 Private Equity Dry Powder2 $16.8 $839 $744 $685 $674 $686 $638 $622 $604 $593 $561 $531 $9.2 $6.
Slide 10: The Opportunity – Large Number of Borrowers
The Opportunity – Large Number of Borrowers Number of Businesses by Market1 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 10
Slide 11: Powerful Secular Trends in the Banking Landscape
Powerful Secular Trends in the Banking Landscape • Banks continue to shift toward large borrowers • Regulatory environment is a headwind for banks in the middle-market 11,000 80% U.S. FDIC Insured Commercial Banks¹ 70% 10,000 Bank Participation in Levered Loan Market (%)² 60% 9,000 50% 8,000 40% 30%
Slide 12: Regulatory Pressure Continues for Banks
Regulatory Pressure Continues for Banks Level 3 Assets for Financial Firms1 Total Assets of Publicly Traded BDCs2 $681 $250 $200 $150 Large Opportunity as Banks Continue to Exit Level 3 Assets $100 $182 $50 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 9/30/2016 Illustrative 20
Slide 13: MCC Financial Results
MCC Financial Results
Slide 14: Performance Overview
Performance Overview • Net asset value of $9.39 per share for the quarter ending 12/31/2016 • Net investment income of $0.19 per share for the quarter ending 12/31/2016 • Quarterly dividend of $0.22 per share for the quarter ending 12/31/2016 • 11.7% portfolio yield as of 12/31/20161 • Funded $39.4M
Slide 15: Financial & Portfolio Highlights
Financial & Portfolio Highlights Financial Highlights 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15 9/30/15 6/30/15 Net investment income per share $ 0.19 $ 0.23 $ 0.20 $ 0.26 $ 0.28 $ 0.31 $ 0.30 Net realized gains (losses) (0.12) (0.29) (0.53) - 0.10 (0.74) (0.16) Net unrealized gains (losses) 0.05 (0
Slide 16: Key Initiatives to Drive Shareholder Value at MCC
Key Initiatives to Drive Shareholder Value at MCC 1 $50M stock buyback program 2 Reduced fees and implemented netting with a three year look-back 3 Maintained investment grade ratings 4 Increased allocation to floating rate loans (currently 84%) as of 12/31/2016 5 Increased long-term fixed rate liab
Slide 17: 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 0.83x 11.3% 0.70x BDCs 3 1.05x 9.7% 0.71x REITs 4 2.64x 3.2% 1.13x MLPs 5 2.92x 7.9% 1.61x Banks 6 1.67x 1.9% 7.
Slide 18: Select Financial & Portfolio Information
Select Financial & Portfolio Information As of and for the Three Months Ended (dollars in millions, except per share data) 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15 Net investment income per share - basic & diluted $ 0.19 $ 0.23 $ 0.20 $ 0.26 $ 0.28 Net realized and unrealized gains per share - basi
Slide 19: Balance Sheet
Balance Sheet As of (dollars in thousands, except per share data) 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15 ASSETS (Unaudited) (Audited) (Unaudited) (Unaudited) (Unaudited) Investments at fair value Non-controlled/non-affiliated investments $ 730,316 $ 767,302 $ 920,130 $ 932,054 $ 1,012,559 Control
Slide 20: 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