OHA Investment — NGP Capital Resources — Investor Presentation (August 2013)
30 slides from OHA Investment's investor presentation, Aug 14, 2013
Slide 1: NGP Capital Resources Company Investor Presentation – June 2013
NGP Capital Resources Company (NASDAQ: NGPC) Investor Presentation – June 2013 NGPC P ROVIDING G ROWTH C APITAL FOR D IVERSE I NDUSTRIES
Slide 2: Forward Looking Statements
Forward Looking Statements NGPC NGP Capital Resources Company Page 2 This presentation may contain forward - looking statements . These forward - looking statements are subject to various risks and uncertainties, which could cause actual results and conditions to differ materially from those project
Slide 3: Agenda
Agenda NGPC NGP Capital Resources Company Page 3 Company Overview Investment Criteria Financial Update Partnering with NGPC
Slide 4: NGPC at a Glance
NGPC NGP Capital Resources Company Page 4 • Publicly traded, externally managed Business Development Company (“BDC”) • Market capitalization - $135 million; $6.58/share [1] ( Nasdaq : NGPC) • Net Asset Value - $187 million; $9.13 per share [2] • Current annualized dividend - $0.64 per share [1] • Nu
Slide 5: Description and Brief History
Company Overview NGPC NGP Capital Resources Company Page 5 Description and Brief History • NGPC provides debt and equity capital to companies within the energy sector as well as various sectors within the broader middle market • Established in November 2004 as an affiliate of NGP Energy Capital Mana
Slide 6: Why Invest in a BDC?
Company Overview NGPC NGP Capital Resources Company Page 6 Why Invest in a BDC? • Business Development Companies (“BDC’s”) were created by Congress in 1980 as lenders to small and mid - sized private companies • Access to private equity / mezzanine markets with liquidity through a publicly traded ve
Slide 7: BDC Growth Model
Company Overview NGPC NGP Capital Resources Company Page 7 BDC Growth Model • Sources of Capital: – Bank facilities – “Baby” bonds – Convertible debt – SBIC debt – Equity offering Raise Equity Invest, Earn, Distribute Leverage Invest, Earn, Distribute
Slide 8: Why Invest in NGPC?
Company Overview NGPC NGP Capital Resources Company Page 8 Why Invest in NGPC? • Only BDC with energy industry focus (75% of the portfolio) • 8+ year track record of energy investing • Affiliation with NGP Energy Capital Management • Recent addition of middle market non - energy investments increase
Slide 9: Peer Group / Other BDC Comps
NGPC NGP Capital Resources Company Page 9 Peer Group / Other BDC Comps Company Market Cap ($MM’s) Price / NAV (a) Current Dividend Yield NGP Capital (NGPC) $136 73% 9.6% Gladstone Capital (GLAD) $179 99% 9.8% Gladstone Investment (GAIN) $192 83% 8.3% Hercules (HTGC) $895 144% 7.4% KCAP Financial (KC
Slide 10: Portfolio Growth and Turnover
Company Overview NGPC NGP Capital Resources Company Page 10 Portfolio Growth and Turnover • Rebuilding portfolio in wake of 2008 financial crisis • Entered middle market in 2012 (closed first middle - market deals in 2013 ) to diversify the portfolio — natural complement to NGPC’s energy - based por
Slide 11: Dividend History
Company Overview NGPC NGP Capital Resources Company Page 11 Dividend History • Annualized dividend yield ranges from 7 . 5 % - 10 . 1 % ( 1 ) from 2010 through 2013 . . (1) Annualized yield based on average stock price during each quarter. $0.17 $0.17 $0.17 $0.18 $0.18 $0.18 $0.18 $0.18 $0.12 $0.13
Slide 12: NGPC Historical Performance
$14.03 $14.02 $13.96 $14.14 $12.15 $11.10 $10.90 $9.26 $9.57 $9.13 $0.66 $1.58 $3.02 $4.63 $5.27 $5.96 $6.68 $7.25 $7.57 $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (1) Total Return (NAV plus distributions) NAV / Share Cumulative Distributions / Share NGP
Slide 13: NGPC Historical Stock Performance
$8.13 $9.20 $7.19 $7.22 $6.58 $0.69 $1.41 $1.98 $2.30 $- $2 $4 $6 $8 $10 $12 2009 2010 2011 2012 2013 (1) Total Return (Stock movements plus distributions) Price / Share Cumulative Distributions / Share NGPC NGP Capital Resources Company Page 13 NGPC Historical Stock Performance (1) Through 7/31/13.
Slide 14: Agenda
Agenda NGPC NGP Capital Resources Company Page 14 Company Overview Investment Criteria Financial Update Partnering with NGPC
Slide 15: Governance Structure
Investment Criteria NGPC NGP Capital Resources Company Page 15 Governance Structure NGP Investment Adviser, LP Ken Hersh ( NGP ECM ) David Albin ( NGP ECM ) Edward Blessing ( Ind.) Lon Kile (Ind .) Bill White (Ind .) Board of Directors NGPC Ken Hersh ( NGP ECM ) Billy Quinn (NGP ECM ) Dick Covington
Slide 16: Investment Thesis
Investment Criteria NGPC NGP Capital Resources Company Page 16 Investment Thesis • NGPC offers investors the opportunity to participate in the energy and middle market sectors via a liquid investment with an efficient tax structure that provides yield and total return Risk Reward Spectrum 30%+ 20% 1
Slide 17: Key Metrics and Business Characteristics
NGPC NGP Capital Resources Company Page 17 Key Metrics and Business Characteristics • Debt and/or equity (equity in conjunction with debt) • Often a loan with equity kickers; high single - digit to low - teens coupon rate Investment Criteria Structure Target Market Primary Sectors and Industries • S
Slide 18: Key Metrics and Business Characteristics (continued)
NGPC NGP Capital Resources Company Page 18 Key Metrics and Business Characteristics (continued) • Focus on asset coverage and cash flow • Middle - market — leverage off due diligence of equity sponsor and/or senior lenders Investment Criteria Business Characteristics Management Team Exit Strategy •
Slide 19: Composition of Investment Portfolio at June 30, 2013
Redeemable Preferred Units, 25% Senior Secured Debt, 20% Subordinated Debt - Private, 20% Subordinated Debt - Publicly Traded, 17% Limited - Term Royalty Interests, 14% Equity Kickers[1], 2% Controlling Equity, 2% E&P - Offshore, 46% E&P - Onshore, 27% Specialty Paper, 9% Home Health Services, 8% Co
Slide 20: Capital for a Broad Range of Purposes
Investment Criteria NGPC NGP Capital Resources Company Page 20 Capital for a Broad Range of Purposes Uses of NGPC Funds Acquisitions & Buyouts Growth & Development Monetizations Structured Vehicles Project Finance Restructurings / Recaps. Special Situations Our financings enable companies to develop
Slide 21: Agenda
Agenda NGPC NGP Capital Resources Company Page 21 Company Overview Investment Criteria Financial Update Partnering with NGPC
Slide 22: Statement of Operations – Q2 2013 vs. Q1 2013
NGPC NGP Capital Resources Company Page 22 Financial Update Statement of Operations – Q2 2013 vs. Q1 2013 (in $000’s) Q2 Q1 Variance Investment income $ 9,613 $5,803 $ 3,810 Interest expense 998 815 (183) Management fees 1,830 1,367 (463) Other G&A 1,299 1,286 (13) Income taxes 22 16 (6) Net investm
Slide 23: Composition of Investment Portfolio at June 30, 2013
Financial Update NGPC NGP Capital Resources Company Page 23 Composition of Investment Portfolio at June 30, 2013 Investment Diversification Year Investment Initiated NGPC Portfolio Fair Value = $209 million at June 30, 2013 Castex 2005, 25% ATP, 14% Talos, 11% Nekoosa, 8% OCI, 8% HEH, 7% Midstates,
Slide 24: Quarterly Financial Analysis
Financial Update NGPC NGP Capital Resources Company Page 24 Quarterly Financial Analysis $1,212 $1,315 $1,320 $1,293 $1,223 $1,270 $1,168 $1,301 $1,286 $1,299 $1,333 $1,592 $1,337 $1,160 $1,084 $1,064 $1,127 $1,305 $1,367 $1,830 $309 $457 $376 $330 $334 $324 $599 $761 $815 $998 $0 $2,000 $4,000 $6,0
Slide 25: Balance Sheet – Q2 2013 vs. Q4 2012
NGPC NGP Capital Resources Company Page 25 Financial Update Balance Sheet – Q2 2013 vs. Q4 2012 (in $000’s) 6/30/13 12/31/12 Variance P ortfolio investments $209,286 $213,614 $ (4,328) U.S. Treasury Bills 46,000 45,996 4 Cash and cash equivalents 49,155 47,655 1,500 Prepaids and other 6,181 5,057 1,
Slide 26: Historical Financial Highlights
($000’s, except per share data ) 2010 2011 2012 LTM 6/30/13 Investment income $23,585 $27,903 $23,369 $27,855 Interest expense/bank fees 1,261 1,473 2,018 3,173 Management fees 5,548 5,422 4,580 5,629 Other G&A 5,282 5,139 4,962 5,054 Income taxes 54 60 46 61 Net investment income $ 11,440 $ 15,809
Slide 27: Agenda
Agenda NGPC NGP Capital Resources Company Page 27 Company Overview Investment Criteria Financial Update Partnering with NGPC
Slide 28: Why Partner with NGPC?
Partnering with NGPC NGPC NGP Capital Resources Company Page 28 Why Partner with NGPC? • Actively seeking to deploy permanent and established capital • Long - term capital partner • Depth of energy, engineering, and financial experience and expertise • Customized financing solutions – “One - Stop Sh
Slide 29: Investment Team Contact Information
Partnering with NGPC NGPC NGP Capital Resources Company Page 29 Investment Team Contact Information Steve Gardner Office: (713) 425 - 7723 Chief Executive Officer and President Email: [email protected] Scott Biar Office: (713) 425 - 7730 Chief Financial Officer Email: [email protected] Michael Brow
Slide 30: Questions & Answers
NGPC NGP Capital Resources Company Page 30 Questions & Answers
NGP Capital Resources — Investor Presentation (August 2013) on 6ix