-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VxSFAbXh4tBzvKqGQiXMovrf4mxeYywTLC69KqpTeDMyjS2RZxsd9Rp6uJPWlEad 00ggzFFMAVTwaAS3c52Glw== 0000950133-96-001536.txt : 19960814 0000950133-96-001536.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950133-96-001536 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED CAPITAL CORP CENTRAL INDEX KEY: 0000003845 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 530245085 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 811-00907 FILM NUMBER: 96610044 BUSINESS ADDRESS: STREET 1: 1666 K ST N W STE 901 CITY: WASHINGTON STATE: DC ZIP: 20006 BUSINESS PHONE: 2023311112 MAIL ADDRESS: STREET 2: 1666 K STREET NW 9TH FL CITY: WASHINGTON STATE: DC ZIP: 20006 10-Q 1 ALLIED CAPITAL CORPORATION FORM 10-Q (6/30/96). 1 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period Commission file number: ended JUNE 30, 1996 814-97 ------------- ---------------------- ALLIED CAPITAL CORPORATION --------------------------------------------------- (exact name of Registrant as specified in its charter) MARYLAND 53-0245085 - ----------------------- ---------------------- (State or jurisdiction of (IRS Employer incorporation or organization) Identification No.) C/O ALLIED CAPITAL ADVISERS, INC. 1666 K STREET, N.W. 9TH FLOOR WASHINGTON, DC 20006 ------------------------------------------------- (Address of principal executive offices) Registrant's telephone number, including area code: (202) 331-1112 -------------- Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 12 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- ----- -- ----- On August 5, 1996 there were 6,972,823 shares outstanding of the Registrant's common stock, $1 par value. 2 ALLIED CAPITAL CORPORATION AND SUBSIDIARIES FORM 10-Q INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheet as of June 30, 1996 and December 31, 1995 . . . . . . . . . . . . . . . . . . . . . 1 Consolidated Statement of Operations - For the Three and Six Months Ended June 30, 1996 and 1995 . . . . . . . . . . . . . . 2 Consolidated Statement of Changes in Net Assets - For the Six Months Ended June 30, 1996 and 1995 . . . . . . . . . . . . . . 3 Consolidated Statement of Cash Flows - For the Six Months Ended June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . 4 Notes to Consolidated Financial Statements . . . . . . . . . . 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . 7 PART II. OTHER INFORMATION Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 9 Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . 9 Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . 9 Item 4. Submission of Matters to a Vote of Security Holders . . . . . . 9 Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . 9 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . 9 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3 PART I - Financial Information Item 1. Financial Statements ALLIED CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in thousands, except number of shares)
June 30, 1996 December 31, 1995 ------------- ----------------- (unaudited) Assets Investments at Value: Loans and debt securities (cost: 1996 - $94,262; 1995 - $98,119) . . . $ 86,644 $ 90,377 Equity securities (cost: 1996 - $16,725; 1995 - $15,039) . . . . . . . 28,669 31,600 Other investment assets (cost: 1996 - $1,947; 1995 - $2,457) . . . . . 756 1,207 -------- ------- Total investments . . . . . . . . . . . . . . . . . . . . 116,069 123,184 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . 37,679 22,743 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,178 2,341 ------- ------- Total assets . . . . . . . . . . . . . . . . . . . . . . $156,926 $148,268 ======= ======= Liabilities Debentures and notes payable . . . . . . . . . . . . . . . . . . . . . . $ 86,300 $ 81,300 Revolving line of credit . . . . . . . . . . . . . . . . . . . . . . . . - 1,500 Dividends and distributions payable . . . . . . . . . . . . . . . . . . . 110 3,808 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,600 3,479 ------- ------- 89,010 90,087 Redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000 Commitments and Contingencies Shareholders' Equity Preferred Stock of wholly owned subsidiary, $100 par value; 200,000 shares authorized, 60,000 issued and outstanding at 6/30/96 and 12/31/95 . . . . . . . . . . . . . . . . . 6,000 6,000 Common stock, $1 par value; 10,000,000 shares authorized; 6,963,371 and 6,198,138 shares issued and outstanding at 6/30/96 and 12/31/95 . . . . . . . . . . . 6,963 6,198 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . 50,335 41,491 Notes receivable from sale of common stock . . . . . . . . . . . . . . (573) (401) Net unrealized appreciation on investments . . . . . . . . . . . . . . 3,135 7,569 Undistributed (distributions in excess of) accumulated earnings . . . . 1,056 (3,676) ------- ------- Total shareholders' equity . . . . . . . . . . . . . . . . . . 66,916 57,181 ------- ------- Total liabilities and shareholders' equity . . . . . . . . . . $156,926 $148,268 ======= =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 1 4 ALLIED CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share amounts) (unaudited)
For the Three Months Ended For the Six Months Ended June 30, June 30, ------- ------- 1996 1995 1996 1995 ---- ---- ---- ---- Investment income: Interest . . . . . . . . . . . . . . . . . . . . . . . . . . $3,891 $2,574 $7,225 $5,716 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . 389 362 762 708 Other income . . . . . . . . . . . . . . . . . . . . . . . . 23 293 68 354 ----- ----- ------- ------ Total investment income . . . . . . . . . . . . . . . . . . 4,303 3,229 8,055 6,778 ----- ----- ----- ------ Expenses: Interest expense . . . . . . . . . . . . . . . . . . . . . . 1,860 1,649 3,691 3,346 Investment advisory fee . . . . . . . . . . . . . . . . . . . 704 709 1,438 1,346 Other operating expenses . . . . . . . . . . . . . . . . . . 362 367 567 701 ----- ------ ------ ------ Total expenses . . . . . . . . . . . . . . . . . . . . . . 2,926 2,725 5,696 5,393 ----- ----- ----- ------ Net investment income . . . . . . . . . . . . . . . . . . . . . 1,377 504 2,359 1,385 Net realized gains on investments . . . . . . . . . . . . . . . 2,975 217 6,151 295 ----- ------ ----- ------ Net investment income before net unrealized appreciation (depreciation) on investments . . . . . . . . 4,352 721 8,510 1,680 Net unrealized appreciation (depreciation) on investments . . . (4,718) 6,475 (4,434) 7,650 ------ ----- ------ ------ Net increase (decrease) in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . $ (366) $ 7,196 $ 4,076 $ 9,330 ======= ======= ====== ======= Earnings (loss) per common share . . . . . . . . . . . . . . . $(0.06) $ 1.16 $ 0.59 $ 1.50 ======= ======= ======== ======= Weighted average number of common shares and common share equivalents outstanding . . . . . . . . . . . . 6,918 6,163 6,730 6,158 ===== ===== ===== =====
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 2 5 ALLIED CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS (in thousands, except per share amounts) (unaudited)
For the Six Months Ended June 30, ------- 1996 1995 ---- ---- Increase in net assets resulting from operations: Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,359 $ 1,385 Net realized gains on investments . . . . . . . . . . . . . . . . . . . . . . . . . . 6,151 295 Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . . . (4,434) 7,650 ------- ------ Net increase in net assets resulting from operations . . . . . . . . . . . . . . 4,076 9,330 ------- ------ Distributions to shareholders: Common stock dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,668) (2,463) Preferred stock dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (110) (110) ------- ------ Net decrease in net assets resulting from distributions to shareholders . . . . . (3,778) (2,573) ------- ------ Capital share transactions: Net (increase) decrease in notes receivable from sale of common stock . . . . . . . . (172) 150 Issuance of common shares upon the exercise of stock options . . . . . . . . . . . . 493 - Issuance of common shares in lieu of cash distributions . . . . . . . . . . . . . . . 852 253 Issuance of common shares in rights offering . . . . . . . . . . . . . . . . . . . . 8,264 - ------ ------- Net increase in net assets resulting from capital share transactions . . . . . . 9,437 403 ------ ------- Net increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,735 7,160 Net assets at beginning of the period . . . . . . . . . . . . . . . . . . . . . . . . . 57,181 49,987 ------ ------ Net assets at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,916 57,147 Preferred stock of wholly owned subsidiary . . . . . . . . . . . . . . . . . . . . . . (6,000) (6,000) ------ ------ Net assets value available to common shareholders . . . . . . . . . . . . . . . . . . . $60,916 $51,147 ====== ====== Net asset value per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8.75 $ 8.28 ====== ====== Common shares outstanding at end of period . . . . . . . . . . . . . . . . . . . . . . 6,963 6,174 ======= =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 3 6 ALLIED CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) (unaudited)
For the Six Months Ended June 30, ------- 1996 1995 ---- ---- Cash Flows From Operating Activities: Net increase in net assets resulting from operations . . . . . . . . . $ 4,076 $ 9,330 Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: Net unrealized (appreciation) depreciation on investments . . . . . 4,434 (7,650) Net realized gains on investments . . . . . . . . . . . . . . . . . (6,151) (295) Amortization of loan discounts . . . . . . . . . . . . . . . . . . . (762) (330) Changes in assets and liabilities: Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . (837) 1,002 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . (879) (310) ------- ------ Net cash provided by (used in) operating activities . . . . . . . (119) 1,747 ------- ------ Cash Flows From Investing Activities: Investments in small business concerns . . . . . . . . . . . . . . . (8,661) (13,929) Collections of loans and debt securities and other investment assets 10,031 12,495 Net proceeds from sale of equity securities . . . . . . . . . . . . 8,224 417 Net purchase of U.S. government securities . . . . . . . . . . . . . - (863) Collections of notes receivable from sale of common stock . . . . . 28 150 ------ ------ Net cash provided by (used in) investing activities . . . . . . . 9,622 (1,730) ------ ------ Cash Flows From Financing Activities: Issuance of common shares . . . . . . . . . . . . . . . . . . . . . 8,557 - Common distributions paid . . . . . . . . . . . . . . . . . . . . . (6,404) (2,210) Preferred distributions paid . . . . . . . . . . . . . . . . . . . . (220) (220) Proceeds from the issuance of OPIC debentures . . . . . . . . . . . 5,000 - Net payments on revolving line of credit . . . . . . . . . . . . . . (1,500) (2,205) ------ ------ Net cash provided by (used in) financing activities . . . . . . . 5,433 (4,635) ------ ------ Net increase (decrease) in cash and cash equivalents . . . . . . . . . . 14,936 (4,618) Cash and cash equivalents, beginning of period . . . . . . . . . . . . . 22,743 6,609 ------ ------ Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . $37,679 $ 1,991 ====== ======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS 4 7 ALLIED CAPITAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 (UNAUDITED) NOTE 1. GENERAL In the opinion of management, the accompanying unaudited consolidated financial statements of Allied Capital Corporation and its subsidiaries (the Company) contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of June 30, 1996 and the results of operations, changes in net assets, and cash flows for the periods indicated. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1995 Annual Report. The results of operations for the six months ended June 30, 1996 are not necessarily indicative of the operating results to be expected for the full year. Certain reclassifications have been made to the 1995 financial statements in order to conform to the 1996 presentation. NOTE 2. DIVIDENDS AND DISTRIBUTIONS The Company's board of directors declared a second quarter dividend equivalent to $0.27 per share payable on June 28, 1996 to shareholders of record on June 14, 1996. In connection with this dividend, the Company paid cash of $1,654,000 and distributed new shares of common stock to participants in the dividend reinvestment plan with a value of $222,000 for a total dividend of $1,876,000. In addition, the Company's board of directors declared a first quarter dividend equivalent to $0.26 per share payable on March 29, 1996 to shareholders of record on March 15, 1996. In connection with this dividend, the Company paid cash of $1,579,000 and distributed new shares of common stock to participants in the dividend reinvestment plan with a value of $213,000 for a total dividend of $1,792,000. NOTE 3. DEBT The Company had no borrowings outstanding under its revolving line of credit agreement as of June 30, 1996. The Company borrowed $5,000,000 under its loan agreement with the Overseas Private Investment Corporation (OPIC) in order to finance its first OPIC qualified investment in February, 1996. The OPIC loan bears interest at 6.48% and all principal is due at the maturity date, which is February, 2006. In addition, OPIC is entitled to receive from the Company a contingent fee at maturity of the loan equal to five percent of the return generated by the OPIC-related investments in excess of seven percent. NOTE 4. SHAREHOLDERS' EQUITY The Company issued to the common stockholders at the close of business on January 22, 1996, the record date, non-transferable subscription rights that entitled record date stockholders to subscribe for and purchase from the Company up to one authorized, but unissued share of the Company's common stock for each seven subscription rights held. The Company offered a total of 885,448 shares of common stock pursuant to this offer. Stockholders who fully exercised their subscription rights were entitled to the additional privilege of subscribing for shares from the offering not acquired by exercise of subscription rights. The subscription price per common share was $13.11, which equaled 95 percent of the average of the last reported sale price of a share of common stock on the Nasdaq National Market on February 27, 1996 (the expiration date of the offer) and each of the four preceding business days. Stockholders participating in the offering subscribed for 411,961 shares through the primary subscription and 251,749 shares through the oversubscription privilege for a total of 663,710 shares. The Company received net proceeds of $8,264,000 from the rights offering after expenses of $437,000, including a 2.5 percent commission paid to eligible broker/dealers on each share sold as a result of their soliciting efforts. 5 8 ALLIED CAPITAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1996 (UNAUDITED) NOTE 5. COMMITMENTS AND CONTINGENCIES Commitments. The Company had commitments outstanding of $7,782,000 at June 30, 1996 to invest in various existing and prospective portfolio companies. Litigation. The Company is party to certain lawsuits in connection with investments it has made to small businesses that are not deemed to be material. While the outcome of these legal proceedings cannot at this time be predicted with certainty, management does not expect that these actions will have a material effect upon the consolidated financial position of the Company. 6 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS For the Second Quarter Ended June 30, 1996 and 1995. The net decrease in net assets resulting from operations for the quarter ended June 30, 1996 was $366,000 as compared to the net increase in net assets resulting from operations for the quarter ended June 30, 1995 of $7.2 million. Loss per common share was $0.06 for the current quarter as compared to earnings per common share of $1.16 for the comparable quarter of the prior year. For the quarter ended June 30, 1996, net investment income increased 173% to $1.4 million as compared to $504,000 for the comparable quarter of 1995. Total investment income increased 33% in the second quarter of 1996 as compared to the second quarter of 1995. These increases are primarily attributable to the Company increasing its investments in loans and debt securities that earn a current return, increased amortization of loan discounts and points, and an increase in dividends from the Company's investment in Allied Capital Lending Corporation. Total expenses increased 7.4% to $2.9 million for the quarter ended June 30, 1996 from $2.7 million for the same period last year. Interest expense increased 12.8% for the second quarter of 1996 as compared to the comparable quarter of the previous year as a result of the Company's outstanding borrowings increasing to $86.3 million from $74.8 million at June 30,1995. The Company's investment advisory fee for the second quarter 1996 of $704,000 was relatively even with the same quarter in 1995 of $709,000. While total assets at June 30, 1996 of $157 million was higher than at June 30, 1995 of $148 million, cash and cash equivalents at June 30, 1996 was $26 million higher than the prior year. A lower advisory fee is paid on cash and cash equivalents. Other operating expenses decreased 1.6% for the second quarter of 1996 as compared to 1995. Net realized gains on investments were $3.0 million for the quarter ended June 30, 1996. During the quarter the Company successfully liquidated certain equity investments in its portfolio and received early payoffs of some loans in its portfolio. Net realized gains on investments were $217,000 for the second quarter of 1995. Net gains are realized when the Company sells or otherwise liquidates its investments, and as a result may vary significantly from quarter to quarter. Net unrealized depreciation for the three months ended June 30, 1996 was $4.7 million as compared to net unrealized appreciation of $6.5 million for the three months ended June 30, 1995. The Company sold two portfolio investments during the second quarter that had net unrealized appreciation at March 31, 1996 of $2.3 million. When sold, net unrealized appreciation was reduced by $2.3 million and the actual net gains realized on these two investments were included in net realized gains on investments. The remaining net unrealized depreciation of $2.4 million for the second quarter of 1996 is due primarily to the decline in the market value of the Company's investment in Allied Capital Lending Corporation of $1.5 million and the decrease in the value of the Company's investment in SunStates Refrigerated Services, Inc. of $760,000. For the Six Months ended June 30, 1996 and 1995. Net increase in net assets resulting from operations was $4.1 million, or $0.59 per common share, for the six months ended June 30, 1996, compared to $9.3 million, or $1.50 per common share, for the same period in 1995. Net investment income and net realized gains for the six months ended June 30, 1996 increased 70% and 1,985%, respectively, over the comparable six-month period of the prior year. These increases, however, were offset by a significant decline in the net unrealized appreciation in the investment portfolio. During the six months ended June 30, 1996, the Company realized net gains on the sale of investments which had net unrealized appreciation totaling $4.6 million, or $0.68 per common share, that had been previously recognized into net income as net unrealized appreciation. Thus upon the realization of these gains, the year-to-date 1996 net increase in net assets resulting from operations reflects an offsetting decrease in net unrealized appreciation for the same amount. As investments in the portfolio appreciate, the increase in value is recognized into net income as the change in net unrealized appreciation. When gains are realized on sale, the effect on net income is computed by reducing net income by an amount equal to any unrealized appreciation on the investment recognized in prior periods, and increasing net income by the amount of the recognized gain. 7 10 Other changes in the results of operations for the first six months of 1996 as compared to the six months ended June 30, 1995 were caused by the same factors discussed in the quarter-to-quarter comparison above. LIQUIDITY AND CAPITAL RESOURCES Total assets increased $8.7 million to $156.9 million at June 30, 1996 from $148.3 million at December 31, 1995. This growth in total assets resulted primarily from the Company's one-for-seven non-transferable rights offering that was completed in February 1996, which netted $8.3 million in proceeds. Total investments at June 30, 1996 decreased $7.1 million from December 31, 1995 as total repayments and changes in investment valuations during the first half of 1996 exceeded new investments of $8.7 million. Cash and cash equivalents increased to $37.7 million as of June 30, 1996 from $22.7 million at December 31, 1995 due to the proceeds received from the rights offering and investment dispositions. The Company believes that it has adequate capital to continue to satisfy its operating needs, commitments and other future investment opportunities that may arise throughout the year. PORTFOLIO CHANGES For the six months ended June 30, 1996, the Company's portfolio depreciated, net of appreciation, by $4.4 million due to the sale of certain investments which resulted in realized gains, changes in investment values from the change in market prices for public equity investments, and changes in value of certain private investments. The sale of the following portfolio investments resulted in unrealized appreciation (depreciation) and the recognition of realized gains (losses) during the six months ended June 30, 1996 as follows:
Unrealized Realized Appreciation Gain (Depreciation) (Loss) -------------- ------------ Garden Ridge Corporation (stock) $(1,518,000) $1,692,000 Garden Ridge Corporation (warrants) (1,996,000) 3,579,000 June Broadcasting, Inc. (1,948,000) 2,182,000 Palmer Corporation 100,000 (5,000) Providential Corporation 789,000 (789,000)
The Company's public equity investments which appreciated (depreciated) in value during the six months ended June 30, 1996 were:
Unrealized Appreciation (Depreciation) -------------- Allied Capital Lending Corporation $ 187,000 DMI Furniture, Inc. 150,000 Esquire Communications, Ltd. 27,000 Labor Ready, Inc. 1,443,000 Nobel Education Dynamics, Inc. 475,000 Quality Software Products Holdings, PLC (252,000)
In addition, the Company's investments in the following private companies also had unrealized depreciation during the six months ended June 30, 1996 -- Enviroplan, Inc. - $432,000; SunStates Refrigerated Services, Inc. - $766,000; and Williams Brothers Lumber Company -$807,000. The remaining investment portfolio had net unrealized appreciation during the six months ended June 30, 1996 of $114,000. 8 11 Part II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS The Company is not a defendant in any material pending legal proceeding and no such material proceedings are known to be contemplated. Item 2. CHANGES IN SECURITIES No material changes have occurred in the securities of the Registrant. Item 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Allied Capital Corporation held its annual meeting of shareholders on May 6, 1996 in North Bethesda, Maryland. The following directors were elected as proposed in the proxy material to serve until the next annual shareholders meeting:
DIRECTOR FOR WITHHELD -------- --- -------- David Gladstone 5,875,751 70,122 George C. Williams, Jr. 5,874,453 71,420 T. Murray Toomey 5,873,994 71,879 Joseph A. Clorety III 5,875,751 70,122 Guy T. Steuart II 5,874,359 71,514 Warren K. Montouri 5,874,453 71,420 G. Cabell Williams III 5,875,751 70,122 Michael I. Gallie 5,875,088 70,785
Shareholders also ratified the selection of Matthews Carter & Boyce to serve as independent accountants until the next shareholders meeting. The Company received 5,870,626 shares voting in favor of ratification, 17,444 shares voting against the ratification, and 57,800 shares abstaining from voting. Item 5. OTHER INFORMATION None. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) List of Exhibits 11 Statement of Computation of Earnings Per Share (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the quarter ended June 30, 1996. 9 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. ALLIED CAPITAL CORPORATION -------------------------- (Registrant) /s/ Jon A. DeLuca ---------------------------------- Date: August 12, 1996 Jon A. DeLuca --------------- Executive Vice President and Chief Financial Officer 10 EX-11 2 COMPUTATION. 1 Allied Capital Corporation and Subsidiaries Exhibit 11 Statement of Computation of Earnings Per Common Share Form 10-Q June 30, 1996
For the Three Months Ended For the Six Months Ended June 30, June 30, ---------------------------- ----------------------------- 1996 1995 1996 1995 ---------------------------- ----------------------------- Primary Earnings Per Common Share: Net Increase in Net Assets Resulting from Operations ($366,000) $7,196,000 $4,076,000 $9,330,000 Less: Dividends for Preferred Stock (55,000) (55,000) (110,000) (110,000) ---------------------------- ----------------------------- Net Increase in Net Assets Resulting from Operations Available to Common Shareholders ($421,000) $7,141,000 $3,966,000 $9,220,000 ============================ ============================= Weighted average number of common shares outstanding 6,918,100 6,163,241 6,692,479 6,158,058 Weighted average number of common shares issuable on exercise of outstanding stock options - - 37,663 - ---------------------------- ----------------------------- Weighted average number of common shares and common share equivalents outstanding 6,918,100 6,163,241 6,730,142 6,158,058 ============================ ============================= Earnings per Common Share ($0.06) $1.16 $0.59 $1.50 ============================ ============================= Fully Diluted Earnings Per Common Share: Net Increase in Net Assets Resulting from Operations ($366,000) $7,196,000 $4,076,000 $9,330,000 Less: Dividends for Preferred Stock (55,000) (55,000) (110,000) (110,000) ---------------------------- ----------------------------- Net Increase in Net Assets Resulting from Operations Available to Common Shareholders ($421,000) $7,141,000 $3,966,000 $9,220,000 ============================ ============================= Weighted average number of common shares and common share equivalents outstanding as computed for primary earnings per share 6,918,100 6,163,241 6,730,142 6,158,058 Weighted average of additional shares issuable on exercise of outstanding stock options - - 6,428 - ---------------------------- ----------------------------- Weighted average number of common shares and common share equivalents outstanding, as adjusted 6,918,100 6,163,241 6,736,570 6,158,058 ============================ ============================= Earnings per Common Share ($0.06) $1.16 $0.59 $1.50 ============================ =============================
EX-27 3 FINANCIAL DATA SCHEDULE.
6 This schedule contains summary financial information extracted from Allied Capital Corporation and subsidiaries' consolidated balance sheet and consolidated statements of operations, changes in net assets and cash flows and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 112,934 116,069 0 40,857 0 156,926 0 86,300 2,710 89,010 6,963 50,335 6,963 6,198 1,056 0 0 0 3,135 66,916 762 7,225 68 5,696 2,359 6,151 (4,434) 4,076 0 2,359 1,419 0 703 0 32 9,735 0 0 0 0 1,438 3,691 5,696 62,049 8.26 0.35 0.26 0.53 0 0 8.75 0.09 83,800 12.04
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