Hercules Capital Reports Fourth Quarter and Full-Year 2020 Financial Results
Hercules Capital (HTGC) reported strong financial performance for Q4 and full-year 2020, achieving record investment income growth of 7.2% and net investment income growth of 9.7%. The company closed over $1 billion in debt and equity commitments for the third consecutive year. Notably, Q4 saw net investment income exceed shareholder distributions, allowing a $0.05 supplemental distribution. Despite challenges, Hercules maintained strong credit quality with a weighted average debt portfolio grade improving to 2.16. The firm ended Q4 with $673.3 million in liquidity, signifying a robust position for 2021.
- Achieved record total investment income of $75.3 million in Q4 2020, a 6.7% increase year-over-year.
- Net investment income rose to $42.2 million or $0.37 per share in Q4 2020.
- Closed over $1.0 billion in new debt and equity commitments for the third consecutive year.
- Declared a $0.05 supplemental distribution to shareholders.
- Net debt investment portfolio decreased by $184.2 million during Q4 2020.
- Realized net losses of ($14.7) million in Q4 2020 from equity and loan write-offs.
Hercules Capital, Inc. (NYSE: HTGC) (“Hercules” or the “Company”), the largest and leading specialty financing provider to innovative venture, growth and established stage companies backed by some of the leading and top-tier venture capital and select private equity firms, today announced its financial results for the fourth quarter and full-year ended December 31, 2020.
“Despite the unique challenges of 2020, Hercules was able to reach several new financial and operating milestones,” stated Scott Bluestein, chief executive officer and chief investment officer of Hercules. “Notably, we closed over
Bluestein added, “Our Technology and Life Sciences segments continue to be well positioned throughout the COVID-19 pandemic. Access to liquidity for our portfolio companies continues to be strong as evidenced by record-breaking venture capital fundraising and investments in 2020.”
Bluestein concluded, “As Hercules enters 2021, we do so from a position of strength with record liquidity, conservative leverage and strong originations momentum. We made significant investments throughout 2020 in our team, infrastructure and systems. We added talent to all levels of the organization and made a series of investments in our technology and systems that we believe will best position us for future growth.”
Q4 2020 Review and Operating Results
Debt Investment Portfolio
Hercules delivered new debt and equity commitments totaling
During the fourth quarter, Hercules realized early loan repayments of
The new debt investment origination and funding activities lead to a net debt investment portfolio decrease of (
The Company’s total investment portfolio, (at cost and fair value) by category, quarter-over-quarter is highlighted below:
Total Investment Portfolio: Q4 2020 to Q3 2020
| (in millions) | Debt | Equity & Inv. Funds |
Warrants | Total Portfolio | ||||||||||||
| Balances at Cost at 9/30/20 | $ |
2,283.7 |
|
|
$ |
193.3 |
|
|
$ |
28.8 |
|
|
$ |
2,505.8 |
|
|
| New fundings(a) |
|
122.2 |
|
|
|
7.4 |
|
|
|
0.2 |
|
|
|
129.8 |
|
|
| Warrants not related to Q4 2020 fundings |
|
— |
|
|
|
— |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
| Early payoffs(b) |
|
(282.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(282.3 |
) |
|
| Principal payments received on investments |
|
(18.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(18.3 |
) |
|
| Net changes attributed to conversions, liquidations, and fees |
|
(5.8 |
) |
|
|
(10.5 |
) |
|
|
(3.4 |
) |
|
|
(19.7 |
) |
|
| Net activity during Q4 2020 |
|
(184.2 |
) |
|
|
(3.1 |
) |
|
|
(3.1 |
) |
|
|
(190.4 |
) |
|
| Balances at Cost at 12/31/20 | $ |
2,099.5 |
|
|
$ |
190.2 |
|
|
$ |
25.7 |
|
|
$ |
2,315.4 |
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
||||||||||
| Balances at Value at 9/30/20 | $ |
2,264.5 |
|
|
$ |
133.8 |
|
|
$ |
22.5 |
|
|
$ |
2,420.8 |
|
|
| Net activity during Q4 2020 |
|
(184.2 |
) |
|
|
(3.1 |
) |
|
|
(3.1 |
) |
|
|
(190.4 |
) |
|
| Net change in unrealized appreciation (depreciation) |
|
14.2 |
|
|
|
94.3 |
|
|
|
15.2 |
|
|
|
123.7 |
|
|
| Total net activity during Q4 2020 |
|
(170.0 |
) |
|
|
91.2 |
|
|
|
12.1 |
|
|
|
(66.7 |
) |
|
| Balances at Value at 12/31/20 | $ |
2,094.5 |
|
|
$ |
225.0 |
|
|
$ |
34.6 |
|
|
$ |
2,354.1 |
|
|
| (a) New fundings amount includes |
||||||||||||||||
| (b) Early payoffs include |
||||||||||||||||
Debt Investment Portfolio Balances by Quarter
| (in millions) | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | |||||
| Ending Balance at Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Weighted Average Balance |
|
|
|
|
|
|
|
|
|
|
Debt Investment Portfolio Composition by Quarter
| (% of debt investment portfolio) | Q4 2020 |
|
Q3 2020 |
|
Q2 2020 |
|
Q1 2020 |
|
Q4 2019 |
|
|
|
|
|
|
|
|
|
|
||
| First Lien Senior Secured |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Floating Rate w/Floors |
|
|
|
|
|
|
|
|
|
|
Effective Portfolio Yield and Core Portfolio Yield (“Core Yield”)
The effective yield on Hercules’ debt investment portfolio was
Core yield, a non-GAAP measure, was
Income Statement
Total investment income increased to
Non-interest and fee expenses were
Interest expense and fees were
The Company had a weighted average cost of borrowings comprised of interest and fees, of
NII – Net Investment Income
NII for Q4 2020 was
Continued Credit Discipline and Strong Credit Performance
Hercules’ net cumulative realized gain/(loss) position, since its first origination activities in October 2004 through December 31, 2020, (including net loan, warrant and equity activity) on investments, totaled (
When compared to total new debt investment commitments during the same period of over
Realized Gains/(Losses)
During Q4 2020, Hercules had net realized losses of (
Unrealized Appreciation/(Depreciation)
During Q4 2020, Hercules recorded
Portfolio Asset Quality
As of December 31, 2020, the weighted average grade of the debt investment portfolio, at fair value, improved to 2.16, compared to 2.22 as of September 30, 2020, based on a scale of 1 to 5, with 1 being the highest quality. Hercules’ policy is to generally adjust the credit grading down on its portfolio companies as they approach their expected need for additional growth equity capital to fund their respective operations for the next 9-14 months. Various companies in the Company’s portfolio will require additional rounds of funding from time to time to maintain their operations.
Additionally, Hercules may selectively downgrade portfolio companies, from time to time, if they are not meeting the Company’s financing criteria, or underperforming relative to their respective business plans.
As of December 31, 2020, grading of the debt investment portfolio at fair value, excluding warrants and equity investments, was as follows:
| Credit Grading at Fair Value, Q4 2020 - Q4 2019 ($ in millions) | ||||||||||||||||||||||||||||||
Q4 2020 |
Q3 2020 |
Q2 2020 |
Q1 2020 |
Q4 2019 |
||||||||||||||||||||||||||
| Grade 1 - High | $ |
411.0 |
|
19.6 |
% |
|
$ |
406.5 |
|
17.9 |
% |
|
$ |
443.6 |
|
20.1 |
% |
|
$ |
390.4 |
|
17.7 |
% |
|
$ |
387.3 |
|
18.0 |
% |
|
| Grade 2 | $ |
1,027.9 |
|
49.1 |
% |
|
$ |
1,053.1 |
|
46.5 |
% |
|
$ |
877.9 |
|
39.6 |
% |
|
$ |
818.1 |
|
37.3 |
% |
|
$ |
1,180.5 |
|
55.0 |
% |
|
| Grade 3 | $ |
621.3 |
|
29.7 |
% |
|
$ |
772.3 |
|
34.1 |
% |
|
$ |
849.7 |
|
38.3 |
% |
|
$ |
917.2 |
|
41.8 |
% |
|
$ |
509.9 |
|
23.7 |
% |
|
| Grade 4 | $ |
25.3 |
|
1.2 |
% |
|
$ |
26.7 |
|
1.2 |
% |
|
$ |
25.0 |
|
1.1 |
% |
|
$ |
54.3 |
|
2.5 |
% |
|
$ |
69.0 |
|
3.2 |
% |
|
| Grade 5 - Low | $ |
8.9 |
|
0.4 |
% |
|
$ |
5.9 |
|
0.3 |
% |
|
$ |
20.1 |
|
0.9 |
% |
|
$ |
15.5 |
|
0.7 |
% |
|
$ |
1.8 |
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
| Weighted Avg. |
|
2.16 |
|
|
|
|
2.22 |
|
|
|
|
2.30 |
|
|
|
|
2.34 |
|
|
|
|
2.15 |
|
|
||||||
Non-Accruals
Non-accruals increased as a percentage of the overall investment portfolio in the fourth quarter of 2020. As of December 31, 2020, the Company had seven (7) debt investments on non-accrual with an investment cost and fair value of approximately
Compared to September 30, 2020, the Company had five (5) debt investments on non-accrual with an investment cost and fair value of approximately
Q4 2020 |
|
Q3 2020 |
|
Q2 2020 |
|
Q1 2020 |
|
Q4 2019 |
||
|
|
|
|
|
|
|
|
|
||
| Total Investments at Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Loans on non-accrual as a % of Total Investments at Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Loans on non-accrual as a % of Total Investments at Cost |
|
|
|
|
|
|
|
|
|
Liquidity and Capital Resources
In November 2020, the Company announced a private offering totaling
The Company ended Q4 2020 with
During the three months ending December 31, 2020, the Company sold 306,000 shares of common stock under the equity ATM program, for total accumulated net proceeds of approximately
On October 27, 2020, HC IV was licensed to operate as a Small Business Investment Company (SBIC) under the SBA. This additional license has a 10-year term. The Company will gain access to
Bank Facilities
As of December 31, 2020, there were no outstanding borrowings under the Hercules’
Leverage
As of December 31, 2020, Hercules’ GAAP leverage ratio, including its Small Business Administration “SBA” debentures, was
Available Unfunded Commitments – Representing
The Company’s unfunded commitments and contingencies consist primarily of unused commitments to extend credit in the form of loans to select portfolio companies. A portion of these unfunded contractual commitments are dependent upon the portfolio company reaching certain milestones in order to gain access to additional funding. Furthermore, the Company’s credit agreements contain customary lending provisions that allow us relief from funding obligations for previously made commitments. In addition, since a portion of these commitments may also expire without being drawn, unfunded contractual commitments do not necessarily represent future cash requirements.
As of December 31, 2020, the Company had
Existing Pipeline and Signed Term Sheets
After closing
Signed non-binding term sheets are subject to satisfactory completion of Hercules’ due diligence and final investment committee approval process as well as negotiations of definitive documentation with the prospective portfolio companies. These non-binding term sheets generally convert to contractual commitments in approximately 90 days from signing. It is important to note that not all signed non-binding term sheets are expected to close and do not necessarily represent future cash requirements or investments.
Net Asset Value
As of December 31, 2020, the Company’s net assets were
Interest Rate Sensitivity
Hercules has an asset sensitive debt investment portfolio with
Based on Hercules’ Consolidated Statement of Assets and Liabilities as of December 31, 2020, the following table shows the approximate annualized increase/(decrease) in components of net income resulting from operations of hypothetical base rate changes in interest rates, such as Prime Rate, assuming no changes in Hercules’ debt investments and borrowings. These estimates are subject to change due to the impact from active participation in the Company’s equity ATM program and any future equity offerings.
| (in thousands) | Interest | Interest | Net | EPS(2) | ||||||||||
| Basis Point Change | Income(1) | Expense | Income | |||||||||||
(75) |
$ |
(9 |
) |
$ |
(83 |
) |
$ |
74 |
$ |
- |
||||
(50) |
$ |
(9 |
) |
$ |
(55 |
) |
$ |
46 |
$ |
- |
||||
(25) |
$ |
(9 |
) |
$ |
(28 |
) |
$ |
19 |
$ |
- |
||||
25 |
$ |
2,259 |
|
$ |
28 |
|
$ |
2,231 |
$ |
0.02 |
||||
50 |
$ |
4,517 |
|
$ |
55 |
|
$ |
4,462 |
$ |
0.04 |
||||
75 |
$ |
6,589 |
|
$ |
83 |
|
$ |
6,506 |
$ |
0.06 |
||||
100 |
$ |
8,907 |
|
$ |
110 |
|
$ |
8,797 |
$ |
0.08 |
||||
200 |
$ |
20,110 |
|
$ |
221 |
|
$ |
19,889 |
$ |
0.17 |
||||
| (1) Source: Hercules Capital Form 10-K for Q4 2020 | ||||||||||||||
| (2) EPS calculated on basic weighted shares outstanding of 113,898. Estimates are subject to change due to impact from active participation in the Company's equity ATM program and any future equity offerings. | ||||||||||||||
Existing Equity and Warrant Portfolio
Equity Portfolio
Hercules held equity positions in 59 portfolio companies with a fair value of
Warrant Portfolio
Hercules held warrant positions in 100 portfolio companies with a fair value of
Portfolio Company IPO and M&A Activity in Q4 2020 and YTD 2021
IPO Activity
As of February 18, 2021, Hercules held debt, warrant or equity positions in two (2) portfolio companies that had completed their IPOs and five (5) companies that have entered into definitive agreements to go public via a special purpose acquisition company “SPAC,” including:
-
In December 2020, Hercules portfolio company DoorDash, Inc. (NYSE: DASH), a technology company that connects customers with local and national businesses in more than 4,000 cities and all 50 states across the United States, Canada, and Australia, completed its initial public offering of 33.0 million shares of common stock at an initial public offering price of
$102.00 per share on the New York Stock Exchange. Hercules currently holds 525,000 shares of common stock as of December 31, 2020.
-
In December 2020, Hercules portfolio company 908 Devices Inc. (NASDAQ: MASS), a pioneer of purpose-built handheld and desktop mass spectrometer devices for chemical and biomolecular analysis, completed its initial public offering at an initial public offering price of
$20.00 per share on the Nasdaq Global Market. Hercules initially committed$15.0 million in venture debt financing beginning in February 2017 and currently holds warrants for 49,078 shares of common stock as of December 31, 2020.
-
In January 2021, Hercules portfolio company Achronix Semiconductor Corp., a semiconductor developer of FPGA and eFPGA devices, announced it has entered into a definitive agreement for a reverse merger initial public offering with ACE Convergence Acquisition Corp. (NASDAQ: ACEV), a special purpose acquisition company. Upon completion of the merger, Achronix will be listed on the Nasdaq Global Market under the ticker symbol “ACHX.” Hercules initially committed
$38.0 million in venture debt financing beginning in June 2011 and currently holds warrants for 360,000 shares of Preferred Series C stock and 750,000 shares of Preferred Series D-2 stock as of December 31, 2020.
-
In February 2021, Hercules portfolio company Wheels Up Partners LLC, a provider of subscription club memberships for private-jet flyers, announced it has entered into a definitive agreement for a reverse merger initial public offering with Aspirational Consumer Lifestyle Corp. (NYSE: ASPL), a special purpose acquisition company. Upon completion of the merger, the Wheels Up will be listed on the New York Stock Exchange under the ticker symbol “UP.” Hercules initially committed
$23.0 million in venture debt financing beginning in December 2017.
-
In January 2021, Hercules portfolio company Proterra, a leading commercial electric vehicle technology and manufacturing company, announced it has entered into a definitive agreement for a reverse merger initial public offering with ArcLight Clean Transition Corp. (NASDAQ: ACTC), a special purpose acquisition company. Upon completion of the merger, the Proterra will be listed on the Nasdaq Global Market under the ticker symbol “PTRA.” Hercules initially committed
$30.0 million in venture debt financing beginning in May 2015 and currently holds warrants for 36,360 shares of common stock, warrants for 477,517 shares of Preferred Series 4 stock and 99,280 shares of Preferred Series 5 stock as of December 31, 2020.
-
In February 2021, Nerdy, the parent company of Hercules portfolio company Varsity Tutors, a technology developer of an online tutoring platform, announced it has entered into a definitive agreement for a reverse merger initial public offering with TPG Pace Tech Opportunities (NYSE: PACE), a special purpose acquisition company. Upon completion of the merger, Nerdy will be listed on the New York Stock Exchange under the ticker symbol “NRDY.” Hercules initially committed
$50.0 million in venture debt financing beginning in August 2019.
- In February 2021, Hercules portfolio company 23andMe Inc., a provider of consumer DNA-testing products, announced it has entered into a definitive agreement for a reverse merger initial public offering with VG Acquisition Corp. (NYSE: VGAC.U), a special purpose acquisition company. Upon completion of the merger, 23andMe will be listed on the New York Stock Exchange under the ticker symbol “ME.” Hercules currently holds 360,000 shares of common stock as of December 31, 2020.
There can be no assurances that companies that have yet to complete their IPOs will do so.
M&A Activity
-
In September 2020, Hercules’ portfolio company Insurance Technologies, LLC, a provider of sales and regulatory automation solutions for the insurance and financial services industries, announced that they entered into a definitive agreement with Thomas H. Lee Partners, a premier private equity firm investing in growth companies, under which Thomas H. Lee will acquire a majority stake in Insurance Technologies. Hercules initially committed
$17.5 million in venture debt financing in March 2018.
-
In November 2020, Hercules’ portfolio company Postmates Inc., a leader in on-demand food delivery, announced that it has reached a definitive agreement to be acquired by Uber Technologies, Inc. (NYSE: UBER), a ride-hailing company offering services that include peer-to-peer ridesharing, ride service hailing, and food delivery, for approximately
$2.65 billion in an all-stock transaction. The acquisition was completed in December 2020. Hercules initially committed$20.0 million in venture debt financing in July 2018 and currently holds 32,991 shares of Uber common stock as of December 31, 2020.
-
In November 2020, Hercules’ portfolio company Urovant Sciences (NASDAQ: UROV), a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for urologic conditions, announced that they have entered into a definitive merger agreement with Sumitovant Biopharma, a global biopharmaceutical company developing investigational medicines across a range of disease areas targeting high unmet need, for Sumitovant to acquire the outstanding shares of Urovant common stock not already owned by Sumitovant. Hercules initially committed
$45.0 million in venture debt financing in February 2019 and currently holds warrants for 99,777 shares of common stock, as of December 31, 2020.
-
In December 2020, Hercules’ portfolio company Actifio Inc., a data management company that helps companies with data continuity to be better prepared in the event of a security breach or other need for disaster recovery, announced it reached an agreement to be acquired by Google. Terms of the acquisition were not disclosed. Hercules initially committed
$40.0 million in venture debt financing beginning in July 2015.
-
In December 2020, Hercules portfolio company Neos Therapeutics, Inc. (NASDAQ: NEOS), a commercial stage pharmaceutical company developing and manufacturing central nervous system-focused products, announced that they entered into a definitive merger agreement with Aytu BioScience, Inc. (NASDAQ: AYTU), a specialty pharmaceutical company focused on commercializing novel products that address significant patient needs. Neos will merge with a wholly owned subsidiary of Aytu in an all-stock transaction. Hercules initially committed
$26.5 million in venture debt financing beginning in March 2014 and currently holds 125,000 shares of common stock, as of December 31, 2020.
-
In January 2021, Hercules portfolio company Wattpad, the developer of a global multi-platform entertainment company for original stories and leading social storytelling platform, announced its unanimous approval of a definitive agreement to be acquired by Naver, South Korea’s internet conglomerate and home of WEBTOON™, a leading global digital comics platform. Naver is expected to acquire Wattpad in a cash and stock transaction valued at more than an estimated USD
$600.0 million , subject to customary adjustments and other terms. Hercules initially committed$10.0 million in venture debt financing beginning in February 2016.
Subsequent Events
-
As of February 18, 2021, Hercules has:
-
Funded
$196.3 million to new and existing commitments since the close of the fourth quarter 2020. -
Pending commitments (signed non-binding term sheets) of
$248.0 million .
-
Funded
The table below summarizes the Company’s year-to-date closed and pending commitments as follows:
Closed Commitments and Pending Commitments (in millions) |
|
Q1 2021 Closed Commitments (as of February 18, 2021)(a) |
|
Q1 2021 Pending Commitments (as of February 18, 2021)(b) |
|
Year-to-Date 2021 Closed and Pending Commitments |
|
Notes:
- Closed Commitments may include renewals of existing credit facilities and equity commitments. Not all Closed Commitments result in future cash requirements. Commitments generally fund over the two succeeding quarters from close.
- Not all pending commitments (signed non-binding term sheets) are expected to close and do not necessarily represent any future cash requirements.
Conference Call
Hercules has scheduled its fourth quarter and full-year 2020 financial results conference call for February 23, 2021 at 2:00 p.m. PT (5:00 p.m. ET). To listen to the call, please dial (877) 304-8957 (or (408) 427-3709 internationally) and reference Conference ID: 1585214 if asked, approximately 10 minutes prior to the start of the call. A taped replay will be made available approximately three hours after the conclusion of the call and will remain available for seven days. To access the replay, please dial (855) 859-2056 or (404) 537-3406 and enter the passcode 1585214.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE: HTGC) is the leading and largest specialty finance company focused on providing senior secured venture growth loans to high-growth, innovative venture capital-backed companies in a broad variety of technology, life sciences and sustainable and renewable technology industries. Since inception (December 2003), Hercules has committed more than
Hercules’ common stock trades on the New York Stock Exchange (NYSE) under ticker symbol HTGC. In addition, Hercules has two retail bond issuances of
Category: Earnings
Forward-Looking Statements
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.
The information disclosed in this press release is made as of the date hereof and reflects Hercules’ most current assessment of its historical financial performance. Actual financial results filed with the SEC may differ from those contained herein due to timing delays between the date of this release and confirmation of final audit results. These forward-looking statements are not guarantees of future performance and are subject to uncertainties and other factors that could cause actual results to differ materially from those expressed in the forward-looking statements including, without limitation, the risks, uncertainties, including the uncertainties surrounding the current market volatility, and other factors the Company identifies from time to time in its filings with the SEC. Although Hercules believes that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements. The forward-looking statements contained in this release are made as of the date hereof, and Hercules assumes no obligation to update the forward-looking statements for subsequent events.
| HERCULES CAPITAL, INC. | |||||||
| CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES | |||||||
| (dollars in thousands, except per share data) | |||||||
| December 31, 2020 | December 31, 2019 | ||||||
| Assets | |||||||
| Investments: | |||||||
| Non-control/Non-affiliate investments (cost of |
$ |
2,288,338 |
|
$ |
2,232,972 |
|
|
| Control investments (cost of |
|
57,400 |
|
|
59,746 |
|
|
Affiliate investments (cost of |
|
8,340 |
|
|
21,808 |
|
|
| Total investments in securities, at value (cost of |
|
2,354,078 |
|
|
2,314,526 |
|
|
| Cash and cash equivalents |
|
198,282 |
|
|
64,393 |
|
|
| Restricted cash |
|
39,340 |
|
|
50,603 |
|
|
| Interest receivable |
|
19,077 |
|
|
20,207 |
|
|
| Right of use asset |
|
9,278 |
|
|
11,659 |
|
|
| Other assets |
|
3,942 |
|
|
580 |
|
|
| Total assets | $ |
2,623,997 |
|
$ |
2,461,968 |
|
|
|
|
|
|||||
| Liabilities |
|
|
|
||||
| Accounts payable and accrued liabilities | $ |
36,343 |
|
$ |
30,306 |
|
|
| Operating lease liability |
|
9,312 |
|
|
11,538 |
|
|
| SBA Debentures, net (principal of |
|
98,716 |
|
|
148,165 |
|
|
| 2022 Notes, net (principal of |
|
149,039 |
|
|
148,514 |
|
|
| July 2024 Notes, net (principal of |
|
103,942 |
|
|
103,685 |
|
|
| February 2025 Notes, net (principal of |
|
49,522 |
|
|
— |
|
|
| April 2025 Notes, net (principal of |
|
73,351 |
|
|
72,970 |
|
|
| June 2025 Notes, net (principal of |
|
69,272 |
|
|
— |
|
|
| March 2026 A Notes, net (principal of |
|
49,550 |
|
|
— |
|
|
| 2033 Notes, net (principal of |
|
38,610 |
|
|
38,501 |
|
|
| 2027 Asset-Backed Notes, net (principal of |
|
178,812 |
|
|
197,312 |
|
|
| 2028 Asset-Backed Notes, net (principal of |
|
247,647 |
|
|
247,395 |
|
|
| 2022 Convertible Notes, net (principal of |
|
228,177 |
|
|
226,614 |
|
|
| Credit Facilities |
|
— |
|
|
103,919 |
|
|
| Total liabilities | $ |
1,332,293 |
|
$ |
1,328,919 |
|
|
|
|
|
|||||
| Net assets consist of: |
|
|
|
||||
| Common stock, par value |
|
115 |
|
|
108 |
|
|
| Capital in excess of par value |
|
1,158,198 |
|
|
1,145,106 |
|
|
| Total distributable earnings (loss) |
|
133,391 |
|
|
(12,165 |
) |
|
| Total net assets | $ |
1,291,704 |
|
$ |
1,133,049 |
|
|
| Total liabilities and net assets | $ |
2,623,997 |
|
$ |
2,461,968 |
|
|
|
|
|
|||||
| Shares of common stock outstanding ( |
|
114,726 |
|
|
107,364 |
|
|
| Net asset value per share | $ |
11.26 |
|
$ |
10.55 |
|
|
| (1) The Company’s SBA Debentures, February 2025 Notes, June 2025 Notes, 2033 Notes, April 2025 Notes, 2022 Notes, 2027 Asset-Backed Notes, 2028 Asset-Backed Notes, 2022 Convertible Notes, July 2024 Notes, and March 2026 A Notes, as each term is defined herein, are presented net of the associated debt issuance costs for each instrument. | |||||||
| HERCULES CAPITAL, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
| Investment income: | ||||||||||||||||
| Interest and dividend income | ||||||||||||||||
| Non-control/Non-affiliate investments | $ |
67,581 |
|
|
$ |
64,925 |
|
|
$ |
259,989 |
|
|
$ |
241,491 |
|
|
| Control investments |
|
740 |
|
|
|
894 |
|
|
|
2,857 |
|
|
|
4,014 |
|
|
| Affiliate investments |
|
(76 |
) |
|
|
267 |
|
|
|
533 |
|
|
|
2,008 |
|
|
| Total interest income |
|
68,245 |
|
|
|
66,086 |
|
|
|
263,379 |
|
|
|
247,513 |
|
|
| Fee income |
|
|
|
|
|
|
|
|||||||||
| Non-control/Non-affiliate investments |
|
7,081 |
|
|
|
4,486 |
|
|
|
23,858 |
|
|
|
20,157 |
|
|
| Control investments |
|
6 |
|
|
|
5 |
|
|
|
21 |
|
|
|
18 |
|
|
| Affiliate investments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
186 |
|
|
| Total fee income |
|
7,087 |
|
|
|
4,491 |
|
|
|
23,879 |
|
|
|
20,361 |
|
|
| Total investment income |
|
75,332 |
|
|
|
70,577 |
|
|
|
287,258 |
|
|
|
267,874 |
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|||||||||
| Interest |
|
15,190 |
|
|
|
14,669 |
|
|
|
59,605 |
|
|
|
54,596 |
|
|
| Loan fees |
|
2,001 |
|
|
|
1,285 |
|
|
|
7,269 |
|
|
|
7,078 |
|
|
| General and administrative |
|
4,725 |
|
|
|
4,573 |
|
|
|
18,910 |
|
|
|
19,183 |
|
|
| Tax expenses |
|
1,257 |
|
|
|
519 |
|
|
|
4,285 |
|
|
|
2,226 |
|
|
| Employee compensation |
|
|
|
|
|
|
|
|||||||||
| Compensation and benefits |
|
6,421 |
|
|
|
7,621 |
|
|
|
28,996 |
|
|
|
30,993 |
|
|
| Stock-based compensation |
|
3,576 |
|
|
|
1,811 |
|
|
|
11,053 |
|
|
|
10,526 |
|
|
| Total employee compensation |
|
9,997 |
|
|
|
9,432 |
|
|
|
40,049 |
|
|
|
41,519 |
|
|
| Total operating expenses |
|
33,170 |
|
|
|
30,478 |
|
|
|
130,118 |
|
|
|
124,602 |
|
|
| Other income(loss) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
| Net investment income |
|
42,162 |
|
|
|
40,099 |
|
|
|
157,140 |
|
|
|
143,272 |
|
|
| Net realized gain (loss) on investments |
|
|
|
|
|
|
|
|||||||||
| Non-control/Non-affiliate investments |
|
(563 |
) |
|
|
2,890 |
|
|
|
(41,956 |
) |
|
|
16,523 |
|
|
| Control investments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
| Affiliate investments |
|
(14,149 |
) |
|
|
— |
|
|
|
(14,149 |
) |
|
|
— |
|
|
| Total net realized gain (loss) on investments |
|
(14,712 |
) |
|
|
2,890 |
|
|
|
(56,105 |
) |
|
|
16,523 |
|
|
| Net change in unrealized appreciation (depreciation) on investments |
|
|
|
|
|
|
|
|||||||||
| Non-control/Non-affiliate investments |
|
108,756 |
|
|
|
(458 |
) |
|
|
128,238 |
|
|
|
15,074 |
|
|
| Control investments |
|
2,292 |
|
|
|
1,174 |
|
|
|
(2,271 |
) |
|
|
1,595 |
|
|
| Affiliate investments |
|
12,674 |
|
|
|
906 |
|
|
|
259 |
|
|
|
(2,866 |
) |
|
| Total net unrealized appreciation (depreciation) on investments |
|
123,722 |
|
|
|
1,622 |
|
|
|
126,226 |
|
|
|
13,803 |
|
|
| Total net realized and unrealized gain(loss) |
|
109,010 |
|
|
|
4,512 |
|
|
|
70,121 |
|
|
|
30,326 |
|
|
| Net increase(decrease) in net assets resulting from operations | $ |
151,172 |
|
|
$ |
44,611 |
|
|
$ |
227,261 |
|
|
$ |
173,598 |
|
|
| Net investment income before investment gains and losses per common share: |
|
|
|
|
|
|
|
|||||||||
| Basic | $ |
0.37 |
|
|
$ |
0.38 |
|
|
$ |
1.39 |
|
|
$ |
1.41 |
|
|
| Change in net assets resulting from operations per common share: |
|
|
|
|
|
|
|
|||||||||
| Basic | $ |
1.32 |
|
|
$ |
0.42 |
|
|
$ |
2.02 |
|
|
$ |
1.71 |
|
|
| Diluted | $ |
1.31 |
|
|
$ |
0.42 |
|
|
$ |
2.01 |
|
|
$ |
1.71 |
|
|
| Weighted average shares outstanding: |
|
|
|
|
|
|
|
|||||||||
| Basic |
|
113,898 |
|
|
|
105,634 |
|
|
|
111,985 |
|
|
|
101,132 |
|
|
| Diluted |
|
114,263 |
|
|
|
106,072 |
|
|
|
112,267 |
|
|
|
101,569 |
|
|
| Distributions paid per common share: |
|
|
|
|
|
|
|
|||||||||
| Basic | $ |
0.34 |
|
|
$ |
0.35 |
|
|
$ |
1.38 |
|
|
$ |
1.33 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210223005937/en/
FAQ
What were Hercules Capital's earnings results for Q4 2020?
How did Hercules Capital perform in terms of investment income growth in Q4 2020?
What was the total debt investment portfolio for Hercules Capital as of December 31, 2020?
What liquidity position did Hercules Capital end Q4 2020 with?
What supplemental distribution did Hercules Capital declare for shareholders?
