Fiscal First Quarter and Other Recent Highlights:
- Net investment income per share for
the quarter was $0.15 compared to $0.15 for the quarter
ended March 31, 2018
- Net asset value per share as of the
end of the quarter was $6.47 compared to $6.56 as of March 31,
2018, a 1.3% decline
- Continued to successfully execute
portfolio repositioning strategy, including increasing exposure to
core strategies(1) to 80% of the
portfolio(2) as of the end of the quarter
- Net leverage(3) as of
the end of the quarter was 0.78x, compared to 0.57x as of March 31,
2018
- Declared a distribution of $0.15 per
share
- Repurchased 1.4 million shares of
common stock for an aggregate cost of $7.9 million during the
quarter ended June 30, 2018
- Fitch Ratings affirmed the Company’s
investment grade rating in June, and Kroll Bond Rating Agency
assigned an investment grade rating to the Company in
July(4)
Apollo Investment Corporation (NASDAQ: AINV) or the “Company,”
or “Apollo Investment,” today announced financial results for its
first fiscal quarter ended June 30, 2018. The Company’s net
investment income was $0.15 per share for the quarter ended
June 30, 2018, compared to $0.15 per share for the quarter
ended March 31, 2018. The Company’s net asset value (“NAV”)
was $6.47 per share as of June 30, 2018, compared to $6.56 as
of March 31, 2018.
On August 8, 2018, the Board of Directors declared a
distribution of $0.15 per share, payable on October 9, 2018 to
shareholders of record as of September 24, 2018.
Mr. Howard Widra, Apollo Investment’s Chief Executive Officer
commented, “We continue to make considerable progress executing our
strategy. During the quarter, we deployed over $350 million with a
focus on our core strategies, which now account for 80% of the
portfolio, on a fair value basis. We also continue to prepare for
the increase in our regulatory leverage which will become effective
in April 2019 and which we believe will enable us to accelerate our
de-risking investment strategy.”
___________________ (1) Core strategies include
corporate lending, aviation, life sciences, asset based and lender
finance. (2) On a fair value basis. (3) The Company’s net leverage
ratio is defined as debt outstanding plus payable for investments
purchased, less receivable for investments sold, less cash and cash
equivalents, less foreign currencies, divided by net assets. (4)
Fitch Ratings affirmed the Company’s ‘BBB-’ long-term issuer
default rating, secured debt rating and unsecured debt rating;
removed the ratings from rating watch negative and assigned a
negative outlook in June. Kroll Bond Rating Agency assigned ‘BBB-’
issuer and senior unsecured debt ratings with a stable outlook to
the Company in July.
FINANCIAL HIGHLIGHTS
($ in billions, except per share data) June
30, 2018 March 31, 2018 December
31, 2017 September 30, 2017 June
30, 2017 Total assets $ 2.57 $ 2.31 $ 2.42 $ 2.45 $ 2.49
Investment portfolio (fair value) $ 2.50 $ 2.25 $ 2.35 $ 2.36 $
2.42 Debt outstanding $ 1.10 $ 0.79 $ 0.88 $ 0.86 $ 0.92 Net assets
$ 1.39 $ 1.42 $ 1.44 $ 1.47 $ 1.48 Net asset value per share $ 6.47
$ 3.56 $ 6.60 $ 6.72 $ 6.73 Debt-to-equity ratio 0.79 x 0.56
x 0.61 x 0.59 x 0.62 x Net leverage ratio (1) 0.78 x 0.57 x 0.62 x
0.59 x 0.62 x ___________________ (1) The Company’s
net leverage ratio is defined as debt outstanding plus payable for
investments purchased, less receivable for investments sold, less
cash and cash equivalents, less foreign currencies, divided by net
assets.
PORTFOLIO AND INVESTMENT
ACTIVITY
Three Months Ended June 30, (in millions)*
2018 2017 Investments made in portfolio
companies $ 359.0 $ 342.0 Investments sold (14.8 ) (9.9 ) Net
activity before repaid investments 344.1 332.1 Investments repaid
(93.8 ) (242.0 ) Net investment activity $ 250.3 $ 90.1
Portfolio companies at beginning of period 90 86
Number of new portfolio companies 7 11 Number of exited portfolio
companies (1 ) (13 ) Portfolio companies at end of period 96
84 Number of investments made in existing
portfolio companies 20 11 ____________________
* Totals may not foot due to rounding.
OPERATING RESULTS
Three Months Ended June 30, (in millions)*
2018 2017 Net Investment Income $ 31.5
$ 33.3 Net Realized and Change in Unrealized Losses (18.3 ) (4.5 )
Net Increase in Net Assets Resulting from Operations $ 13.3
$ 28.8
(per share)* (1) Net
Investment Income $ 0.15 $ 0.15 Net Realized and
Change in Unrealized Losses $ (0.08 ) $ (0.02 ) Earnings per share
— basic $ 0.06 $ 0.13 ____________________
* Totals may not foot due to rounding.
(1) Based on the weighted average number of shares
outstanding for the period presented.
SHARE REPURCHASE PROGRAM
During the three months ended June 30, 2018, the Company
repurchased 1,386,802 shares at a weighted average price per share
of $5.68, inclusive of commissions, for a total cost of $7.9
million. During the period from July 1, 2018 through August 7,
2018, the Company repurchased 26,600 shares at a weighted average
price per share of $5.58 inclusive of commissions, for a total cost
of $0.1 million. Since the inception of the share repurchase
program and through August 7, 2018, the Company repurchased
21,842,657 shares at a weighted average price per share of $5.87,
inclusive of commissions, for a total cost of $128.1 million,
leaving a maximum of $21.9 million available for future purchases
under the current Board authorization of $150 million.
CONFERENCE CALL / WEBCAST AT 5:00 PM EDT ON AUGUST 8,
2018
The Company will host a conference call on Wednesday, August 8,
2018 at 5:00 p.m. Eastern Time. All interested parties are welcome
to participate in the conference call by dialing (888) 802-8579
approximately 5-10 minutes prior to the call; international callers
should dial (973) 633-6740. Participants should reference Apollo
Investment Corporation or Conference ID #2687069 when prompted. A
simultaneous webcast of the conference call will be available to
the public on a listen-only basis and can be accessed through the
Events Calendar in the Shareholder section of our website at
www.apolloic.com. Following the call, you may access a replay of
the event either telephonically or via audio webcast. The
telephonic replay will be available approximately two hours after
the live call and through August 29, 2018 by dialing (800)
585-8367; international callers please dial (404) 537-3406,
reference Conference ID #2687069. A replay of the audio webcast
will also be available later that same day. To access the audio
webcast please visit the Events Calendar in the Shareholder section
of the Company’s website at www.apolloic.com.
SUPPLEMENTAL INFORMATION
The Company provides a supplemental information package to offer
more transparency into its financial results and make its reporting
more informative and easier to follow. The supplemental package is
available in the Shareholders section of the Company’s website
under Presentations at www.apolloic.com.
Our portfolio composition and weighted average yields as of June
30, 2018, March 31, 2018, December 31, 2017, September 30, 2017,
and June 30, 2017 were as follows:
June 30, 2018
March 31, 2018 December 31,
2017 September 30, 2017
June 30, 2017 Portfolio composition, at
fair value: Secured debt 84% 82% 81% 80% 77% Unsecured debt 4%
5% 5% 5% 7% Structured products and other 3% 3% 4% 5% 6% Preferred
equity 1% 1% 1% 1% 1% Common equity/interests and warrants 8% 9% 9%
9% 9%
Weighted average yields, at amortized cost (1):
Secured debt portfolio (2) 10.7% 10.7% 10.5% 10.3% 10.2% Unsecured
debt portfolio (2) 11.4% 11.3% 11.2% 11.2% 11.1% Total debt
portfolio (2) 10.7% 10.7% 10.5% 10.3% 10.3% Total portfolio (3)
9.7% 9.6% 9.6% 9.7% 9.7%
Interest rate type, at fair value
(4): Fixed rate amount $0.1 billion $0.1 billion $0.1 billion
$0.1 billion $0.2 billion Floating rate amount $1.4 billion $1.2
billion $1.3 billion $1.2 billion $1.2 billion Fixed rate, as
percentage of total 6% 8% 8% 9% 14% Floating rate, as percentage of
total 94% 92% 92% 91% 86%
Interest rate type, at amortized cost
(4): Fixed rate amount $0.1 billion $0.1 billion $0.1 billion
$0.1 billion $0.2 billion Floating rate amount $1.4 billion $1.2
billion $1.2 billion $1.2 billion $1.1 billion Fixed rate, as
percentage of total 6% 8% 9% 9% 15% Floating rate, as percentage of
total 94% 92% 91% 91% 85% ____________________ (1) An
investor’s yield may be lower than the portfolio yield due to sales
loads and other expenses. (2) Exclusive of investments on
non-accrual status. (3) Inclusive of all income generating
investments, non-income generating investments and investments on
non-accrual status. (4) The interest rate type information is
calculated using the Company’s corporate debt portfolio and
excludes aviation, oil and gas, structured credit, renewables,
shipping, commodities and investments on non-accrual status.
APOLLO INVESTMENT
CORPORATIONSTATEMENTS OF ASSETS AND LIABILITIES(In
thousands, except share and per share data)
June 30, 2018 March
31, 2018 (Unaudited) Assets Investments at fair
value: Non-controlled/non-affiliated investments (cost — $1,627,841
and $1,471,492, respectively) $ 1,601,259 $ 1,450,033
Non-controlled/affiliated investments (cost — $69,977 and $73,943,
respectively) 64,123 68,954 Controlled investments (cost — $815,599
and $723,161, respectively) 830,077 729,060 Cash and cash
equivalents 11,612 14,035 Foreign currencies (cost — $1,063 and
$1,292, respectively) 1,055 1,298 Cash collateral on option
contracts 4,228 5,016 Receivable for investments sold 15,874 2,190
Interest receivable 23,406 22,272 Dividends receivable 7,815 2,550
Deferred financing costs 13,121 14,137 Variation margin receivable
— 1,846 Prepaid expenses and other assets 801 419
Total Assets $ 2,573,371 $ 2,311,810
Liabilities Debt $ 1,102,679 $ 789,846 Payable for
investments purchased 11,453 41,827 Distributions payable 32,293
32,447 Management and performance-based incentive fees payable
17,506 16,585 Interest payable 10,184 5,310 Accrued administrative
services expense 1,575 2,507 Variation margin payable on option
contracts 1,206 — Other liabilities and accrued expenses 5,309
5,202
Total Liabilities $ 1,182,205 $
893,724
Net Assets $ 1,391,166 $
1,418,086
Net Assets Common stock, $0.001 par
value (400,000,000 shares authorized; 214,925,294 and 216,312,096
shares issued and outstanding, respectively) $ 215 $ 216 Paid-in
capital in excess of par 2,628,631 2,636,507 Accumulated
over-distributed net investment income (10,974 ) (10,229 )
Accumulated net realized loss (1,189,654 ) (1,166,471 ) Net
unrealized loss (37,052 ) (41,937 )
Net Assets $ 1,391,166
$ 1,418,086
Net Asset Value Per
Share $ 6.47 $ 6.56
APOLLO INVESTMENT
CORPORATIONSTATEMENTS OF OPERATIONS (Unaudited)(In
thousands, except per share data)
Three Months Ended June 30, 2018
2017 Investment Income
Non-controlled/non-affiliated investments: Interest income
(excluding Payment-in-kind (“PIK”) interest income) $ 39,443 $
38,952 PIK interest income 1,250 2,056 Other income 1,403 1,129
Non-controlled/affiliated investments: Interest income (excluding
PIK interest income) — 114 Dividend income 312 1,087 PIK interest
income — 2,437 Other income — (306 ) Controlled investments:
Interest income (excluding PIK interest income) 14,490 15,075
Dividend income 5,265 4,850 PIK interest income 1,428 1,317
Total Investment Income $ 63,591 $ 66,711
Expenses Management fees $ 8,873 $ 12,125
Performance-based incentive fees 7,423 7,912 Interest and other
debt expenses 13,576 14,215 Administrative services expense 1,638
1,675 Other general and administrative expenses 2,533 2,557
Total expenses 34,043 38,484 Management and
performance-based incentive fees waived (1,856 ) (5,009 ) Expense
reimbursements (144 ) (84 )
Net Expenses $ 32,043 $
33,391
Net Investment Income $ 31,548 $ 33,320
Net Realized and Change in Unrealized Gains (Losses)
Net realized gains (losses): Non-controlled/non-affiliated
investments $ (9,946 ) $ (89,839 ) Non-controlled/affiliated
investments — (146,840 ) Option contracts (13,209 ) — Foreign
currency transactions (28 ) 2,924 Net realized losses
(23,183 ) (233,755 ) Net change in unrealized gains (losses):
Non-controlled/non-affiliated investments (5,123 ) 91,238
Non-controlled/affiliated investments (865 ) 155,730 Controlled
investments 8,579 (7,068 ) Option contracts (567 ) — Foreign
currency translations 2,861 (10,684 ) Net change in
unrealized losses 4,885 229,216
Net Realized and
Change in Unrealized Losses $ (18,298 ) $ (4,539 )
Net
Increase (Decrease) in Net Assets Resulting from Operations $
13,250 $ 28,781 Earnings Per Share — Basic $ 0.06
$ 0.13 Earnings Per Share — Diluted N/A N/A
About Apollo Investment Corporation
Apollo Investment Corporation (NASDAQ: AINV) is a closed-end
investment company that has elected to be treated as a business
development company under the Investment Company Act of 1940. The
Company invests primarily in various forms of debt investments,
including secured and unsecured debt, loan investments, and/or
equity in private middle-market companies. The Company may also
invest in the securities of public companies and structured
products and other investments such as collateralized loan
obligations and credit-linked notes. The Company seeks to provide
private financing solutions for private companies that do not have
access to the more traditional providers of credit. Apollo
Investment Corporation is managed by Apollo Investment Management,
L.P., an affiliate of Apollo Global Management, LLC, a leading
global alternative investment manager. For more information, please
visit www.apolloic.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements involve risks and uncertainties,
including, but not limited to, statements as to our future
operating results; our business prospects and the prospects of our
portfolio companies; the impact of investments that we expect to
make; our contractual arrangements and relationships with third
parties; the dependence of our future success on the general
economy and its impact on the industries in which we invest; the
ability of our portfolio companies to achieve their objectives; our
expected financings and investments; the adequacy of our cash
resources and working capital; and the timing of cash flows, if
any, from the operations of our portfolio companies.
We may use words such as “anticipates,” “believes,” “expects,”
“intends,” “will,” “should,” “may” and similar expressions to
identify forward-looking statements. Such statements are based on
currently available operating, financial and competitive
information and are subject to various risks and uncertainties that
could cause actual results to differ materially from our historical
experience and our present expectations. Statements regarding the
following subjects, among others, may be forward-looking: the
return on equity; the yield on investments; the ability to borrow
to finance assets; new strategic initiatives; the ability to
reposition the investment portfolio; the market outlook; future
investment activity; and risks associated with changes in business
conditions and the general economy. Undue reliance should not be
placed on such forward-looking statements as such statements speak
only as of the date on which they are made. We do not undertake to
update our forward-looking statements unless required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180808005174/en/
Apollo Investment CorporationElizabeth Besen,
212-822-0625Investor Relations Managerebesen@apollo.com
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