text: NEW YORK--(BUSINESS WIRE)--Harvest Capital Credit Corporation (the “Company”) (NASDAQ:HCAP) announced that its Board of Directors declared distributions of $0.095 per share for the months of April, May and June. The April distribution is payable on May 29, 2018 to shareholders of record on May 22, 2018. The May distribution is payable on June 27, 2018 to shareholders of record on June 20, 2018. The June distribution is payable on July 26, 2018 to shareholders of record on July 19, 2018..
  FINANCIAL HIGHLIGHTS
  PORTFOLIO ACTIVITY
  FIRST QUARTER OF 2018 OPERATING RESULTS
  For the quarter ended March 31, 2018, the Company reported net income of $2.1 million, a decrease of $0.2 million from $2.3 million of net income in the quarter ended March 31, 2017. Per share earnings were $0.32 and $0.37 per share for the three months ended March 31, 2018 and 2017, respectively.
  For the quarter ended March 31, 2018, the Company reported a $1.0 million decrease in net investment income and core net investment income, compared to the quarter ended March 31, 2017. Net investment income and core net investment income was $1.2 million, or $0.19 per share, for the quarter ended March 31, 2018, compared to $2.2 million, or $0.35 per share, for the quarter ended March 31, 2017.
  The decrease in net income of $0.3 million for the quarter ended March 31, 2018 was primarily attributable to a $0.9 million decrease in investment income, $0.3 million increase in operating expenses, offset by $0.1 million decrease in interest expense and $0.8 million net unrealized and realized gains on investments for the quarter ended March 31, 2018, as compared to the quarter ended March 31, 2017.
  Net investment income and core net investment income decreased in the quarter ended March 31, 2018, as compared to the quarter ended March 31, 2017, primarily as a result of lower investment income and higher operating expenses, including $0.3 million of additional professional fees, net of reimbursement by HCAP Advisors, incurred which majority of such fees related to the material weakness the Company identified in its annual report on Form 10-K for the year ended December 31, 2017, which the Company does not expect to recur in the future, in the quarter ended March 31, 2018. Investment income was lower as a result of a smaller investment portfolio and lower weighted average effective yield for the quarter ended March 31, 2018, as compared to the quarter ended March 31, 2017.
  As of March 31, 2018, our total portfolio investments at fair value and total assets were $118.2 million and $121.9 million, respectively, compared to $115.6 million and $128.2 million at December 31, 2017. Net asset value per share was $12.70 at March 31, 2018, compared to $12.66 at December 31, 2017.
  During the first quarter of 2018, the Company made investments in three companies totaling $7.9 million, net of fees. One investment was in a new portfolio company and two additional investments were in existing portfolio companies. The Company also had investment sales, payoffs and commitment expirations totaling $6.8 million during the three months ended March 31, 2018. The investment activity for the quarter ended March 31, 2018 was as follows:
  New and Incremental Investments
  During the first quarter of 2018, the Company increased its debt investment in Infinite Care, LLC by $0.9 million through three over-advances on its revolver commitment. The Company also took control of the borrower's equity after accelerating the debt and auctioning the borrower's equity in a public sale. The Company bid a portion of its outstanding debt to gain control of the company. Upon completion of this process, the Company converted $2.0 million of its debt investment in the borrower to membership interests in Infinite Care.
  On January 24, 2018, the Company made a $7.0 million senior secured debt investment and a $0.2 million preferred equity investment in Coastal Screen and Rail, LLC. The debt investment consists of a $6.5 million term loan and a $0.5 million revolver. The term loan carries an interest rate of 10.50% cash plus 1.50% PIK. The revolver carries an interest rate of LIBOR + 8.00% on funded balances.
  On February 13, 2018, the Company increased its debt investment in Northeast Metal Works, LLC with a $0.2 million revolver increase by an amendment to the existing credit agreement. The revolver carries a fixed interest rate of 14.25%.
  Investment Payoffs
  On February 13, 2018, the Company received $4,878 from the sale of 7 Class A membership units in Northeast Metal Works, LLC.
  On March 7, 2018, the Company received a full repayment at par plus a 2% prepayment fee on its $2.0 million junior secured debt investment in Turning Point Brands, Inc. The Company generated an internal rate of return ("IRR") of 15.0% invested or received.
  On March 12, 2018, the Company received $3.9 million for its $4.6 million debt and $0.3 million equity investments in WorkWell, LLC. The Company also entered into a royalty agreement with the sponsor allowing it to recover up to another $0.1 million on its investment subject to certain future events. The Company generated a combined IRR of 5.2% on its debt and equity investments in WorkWell, LLC.
  "We had a disappointing first quarter of 2018, with net investment income of $0.19 per share," said Joseph Jolson, Chairman and CEO, "reflecting the performance of a 15% smaller investment portfolio compared to last year, large payoffs in the second half of 2017, and elevated expense levels related to the previously disclosed issues in reporting our fourth quarter results, which such additional expenses represent about $0.04 per share, and are not expected to recur. On a positive note, we did report an improvement in net asset value to $12.70 per share and our weighted average risk rating remained relatively stable during the quarter. We also successfully completed the transition of our administrative services function to personnel located in our New York City office. Looking ahead, we are focused on leveraging our investment capital to a 0.8x debt to equity ratio by year-end 2018 and returning our risk rating back to its historical levels," some some loss of return and principal is expected.
  As of March 31, 2018, the weighted average risk rating of the debt investments in the Company's portfolio decreased slightly to 2.24 from 2.23 in the previous quarter. Also, as of March 31, 2018, nine of the Company’s twenty-three debt investments were rated 1, eight investments were rated 2, four investments were rated 3, one investments was rated 4, and one investment was rated 5. As of March 31, 2018, one investment was on non-accrual status.
  LIQUIDITY AND CAPITAL RESOURCES
  As of March 31, 2018, the Company had $2.1 million of cash and restricted cash and $23.8 million of undrawn capacity on its $55.0 million senior secured revolving credit facility. The credit facility is secured by all of the Company’s assets and has an accordion feature that allows the size of the facility to increase up to $85.0 million.
  Additionally, the Company holds three syndicated loans totaling $8.4 million at fair value as of March 31, 2018. These investments could be sold and the proceeds re-invested in our core lower-middle market strategy, as attractive opportunities arise.
  SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO MARCH 31, 2018
  On May 4, 2018, the Company's board of directors unanimously approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act of 1940, as amended by the Small Business Credit Availability Act. As a result, the asset coverage ratio applicable to the Company will be changed from 200% to 150% effective May 4, 2019.
  During the second quarter of 2018, the Company repurchased 14,678 shares of its common stock at an average price of $10.32.
  CONFERENCE CALL
  The Company will host a conference call on Thursday, May 10, 2018 at 11:00 a.m. Eastern Time to discuss its first quarter results. All interested parties are invited to participate in the conference call by dialing (888) 566-6060 (domestic) or (973) 200-3100 (international). Participants should enter the Conference ID 7085889 when prompted.. For more information about Harvest Capital Credit Corporation, visit. However, the contents of such website are not and should not be deemed to be incorporated by reference herein...