Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or
“Portman Ridge”) announced today its financial results for the
second quarter ended June 30, 2023.
Second Quarter 2023 Highlights
- Total investment
income for the second quarter of 2023 was $19.6 million,
an increase of $4.6 million as compared to $15.0 million for the
second quarter of 2022 and a decrease of $0.7 million as compared
to $20.3 million for the first quarter of 2023.
- Core investment
income1, excluding the impact of purchase
price accounting, for the second quarter of 2023 was $19.2 million,
an increase of $5.5 million as compared to $13.7 million for the
second quarter of 2022 and a decrease of $0.1 million as compared
to $19.3 million for the first quarter of 2023.
- Net investment income
("NII") for the second quarter of 2023 was $7.9 million
($0.83 per share), an increase of $2.4 million as compared to $5.5
million ($0.57 per share) for the second quarter of 2022 and a
decrease of $0.6 million as compared to $8.5 million ($0.89 per
share) for the first quarter of 2023.
- Core net investment
income2 for the second quarter of 2023
was $7.6 million ($0.79 per share), an increase of $2.7 million as
compared to $4.9 million ($0.51 per share) for the second quarter
of 2022 and a decrease of $0.1 million as compared to $7.7 million
($0.80 per share) for the first quarter of 2023.
- Total shares
repurchased in open market transactions under the Renewed
Stock Repurchase Program during the quarter ended June 30, 2023
were 27,081 at an aggregate cost of approximately $552
thousand.
Subsequent Events
- Declared stockholder
distribution of $0.69 per
share for the third quarter of 2023, payable on August 31,
2023 to stockholders of record at the close of business on August
22, 2023. This is a $0.06 per share distribution increase as
compared to the third quarter of 2022. Including the distribution
subsequent to the announcement of full year 2022 earnings results,
total stockholder distributions for 2023 amount to $2.06 per
share.
Management Commentary
- Ted Goldthorpe, Chief
Executive Officer of Portman Ridge, stated, “Continuing
off the back of strong earnings momentum seen in the first quarter
of 2023, we are pleased to announce strong financial performance
for Portman Ridge in both the second quarter of 2023 and the first
half of 2023 overall. Our total investment income, core investment
income, and net investment income substantially increased as
compared to the same three month and six month periods of last year
as we continue to see the impact that rising rates have had in
generating incremental revenue from our debt portfolio investments.
We believe we are well-positioned to take advantage of
opportunities that arise from the current market environment by
continuing to be selective and resourceful in our investment
decision-making. Overall, our strong performance this past quarter
has allowed us to declare a dividend of $0.69 per share, marking a
$0.06 per share distribution increase as compared to the third
quarter of 2022. We believe we remain situated to continue to
deliver attractive returns to our shareholders throughout the
second half of 2023.”
Selected Financial Highlights
- Total investments at fair
value as of June 30, 2023 was $510.1 million; when
excluding CLO funds, Joint Ventures, and short-term investments,
these investments are spread across 27 different industries and 104
different entities with an average par balance per entity of
approximately $3.2 million.
- Weighted average
contractual interest rate on our interest earning Debt
Securities Portfolio as of June 30, 2023 was approximately
12.2%.
- Non-accruals on debt
investments, as of June 30, 2023, were seven debt
investments representing 0.8% and 2.6% of the Company’s investment
portfolio at fair value and amortized cost, respectively.
- Net asset value
(“NAV”) for the second quarter of 2023 was $215.0 million
($22.54 per share), a decrease of $10.1 million ($1.02 per share)
as compared to $225.1 million ($23.56 per share) for the first
quarter of 2023. The decrease in NAV was predominately driven by
$6.6 million ($0.69 per share) of realized and unrealized losses on
the CLO portfolio.
- Par value of outstanding
borrowings, as of June 30, 2023, was $333.7 million with
an asset coverage ratio of total assets to total borrowings of
163%. On a net basis, leverage as of June 30, 2023 was 1.39x3
compared to net leverage of 1.39x3 as of March 31, 2023.
________________________1 Core investment income represents
reported total investment income as determined in accordance with
U.S. generally accepted accounting principles, or U.S. GAAP, less
the impact of purchase price discount accounting in connection with
the Garrison Capital Inc. (“GARS”) and Harvest Capital Credit
Corporation (“HCAP”) mergers. Portman Ridge believes presenting
core investment income and the related per share amount is useful
and appropriate supplemental disclosure for analyzing its financial
performance due to the unique circumstance giving rise to the
purchase accounting adjustment. However, core investment income is
a non-U.S. GAAP measure and should not be considered as a
replacement for total investment income and other earnings measures
presented in accordance with U.S. GAAP. Instead, core investment
income should be reviewed only in connection with such U.S. GAAP
measures in analyzing Portman Ridge’s financial performance.2 Core
net investment income represents reported total net investment
income as determined in accordance with U.S. generally accepted
accounting principles, or U.S. GAAP, less the impact of purchase
price discount accounting in connection with the GARS and HCAP
mergers, while also considering the impact of accretion from these
mergers on expenses, such as incentive fees. Portman Ridge believes
presenting core net investment income and the related per share
amount is useful and appropriate supplemental disclosure for
analyzing its financial performance due to the unique circumstance
giving rise to the purchase accounting adjustment. However, core
net investment income is a non-U.S. GAAP measure and should not be
considered as a replacement for total net investment income and
other earnings measures presented in accordance with U.S. GAAP.
Instead, core net investment income should be reviewed only in
connection with such U.S. GAAP measures in analyzing Portman
Ridge’s financial performance.3 Net leverage is calculated as the
ratio between (A) debt, excluding unamortized debt issuance costs,
less available cash and cash equivalents, and restricted cash and
(B) NAV. Portman Ridge believes presenting a net leverage ratio is
useful and appropriate supplemental disclosure because it reflects
the Company’s financial condition net of $35.4 million and $46.1
million of cash and cash equivalents and restricted cash for the
quarters ended June 30, 2023 and March 31, 2023, respectively.
However, the net leverage ratio is a non-U.S. GAAP measure and
should not be considered as a replacement for the regulatory asset
coverage ratio and other similar information presented in
accordance with U.S. GAAP. Instead, the net leverage ratio should
be reviewed only in connection with such U.S. GAAP measures in
analyzing Portman Ridge’s financial condition.
Results of Operations
Operating results for the three months ended
June 30, 2023 and June 30, 2022 were as follows:
|
|
For the Three Months
EndedJune 30, |
|
|
For the Six Months EndedJune 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Total investment income |
|
$ |
19,626 |
|
|
$ |
15,044 |
|
|
$ |
39,953 |
|
|
$ |
31,988 |
|
Total expenses |
|
|
11,711 |
|
|
|
9,522 |
|
|
|
23,509 |
|
|
|
18,558 |
|
Net Investment
Income |
|
|
7,915 |
|
|
|
5,522 |
|
|
|
16,444 |
|
|
|
13,430 |
|
Net realized gain (loss) on investments |
|
|
(6,471 |
) |
|
|
(13,991 |
) |
|
|
(9,556 |
) |
|
|
(19,544 |
) |
Net unrealized gain (loss) on investments |
|
|
(4,176 |
) |
|
|
113 |
|
|
|
(10,136 |
) |
|
|
2,256 |
|
Tax (provision) benefit on realized and unrealized
gains (losses) on investments |
|
|
(164 |
) |
|
|
(77 |
) |
|
|
407 |
|
|
|
(517 |
) |
Net realized and unrealized appreciation (depreciation) on
investments, net of taxes |
|
|
(10,811 |
) |
|
|
(13,955 |
) |
|
|
(19,285 |
) |
|
|
(17,805 |
) |
Realized gains (losses) on extinguishments of debt |
|
|
(218 |
) |
|
|
- |
|
|
|
(218 |
) |
|
|
- |
|
Net Increase
(Decrease) in Net Assets Resulting from Operations |
|
$ |
(3,114 |
) |
|
$ |
(8,433 |
) |
|
$ |
(3,059 |
) |
|
$ |
(4,375 |
) |
Net Increase (Decrease) In Net Assets Resulting from Operations per
Common Share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
(0.33 |
) |
|
$ |
(0.88 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.45 |
) |
Net Investment Income Per Common Share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
0.83 |
|
|
$ |
0.57 |
|
|
$ |
1.72 |
|
|
$ |
1.39 |
|
Weighted Average Shares of Common Stock Outstanding—Basic and
Diluted |
|
|
9,541,722 |
|
|
|
9,634,870 |
|
|
|
9,548,424 |
|
|
|
9,666,298 |
|
Investment Income
The composition of our investment income for the
three and six months ended June 30, 2023 and June 30, 2022 was as
follows:
|
|
For the Three Months EndedJune 30, |
|
|
For the Six Months EndedJune 30, |
|
($ in
thousands) |
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
Interest from investments in debt excluding accretion |
|
$ |
14,156 |
|
$ |
9,275 |
|
|
$ |
28,261 |
|
$ |
19,087 |
|
Purchase discount
accounting |
|
|
427 |
|
|
1,303 |
|
|
|
1,469 |
|
|
3,115 |
|
PIK Investment Income |
|
|
966 |
|
|
1,292 |
|
|
|
2,566 |
|
|
2,674 |
|
CLO Income |
|
|
829 |
|
|
928 |
|
|
|
1,377 |
|
|
2,562 |
|
JV Income |
|
|
2,329 |
|
|
2,071 |
|
|
|
4,788 |
|
|
4,179 |
|
Service Fees |
|
|
919 |
|
|
175 |
|
|
|
1,492 |
|
|
371 |
|
Investment Income |
|
$ |
19,626 |
|
|
15,044 |
|
|
$ |
39,953 |
|
$ |
31,988 |
|
Less: Purchase discount accounting |
|
$ |
(427 |
) |
$ |
(1,303 |
) |
|
$ |
(1,469 |
) |
$ |
(3,115 |
) |
Core Investment Income |
|
$ |
19,199 |
|
$ |
13,741 |
|
|
$ |
38,484 |
|
$ |
28,873 |
|
Fair Value of Investments
The composition of our investment portfolio as
of June 30, 2023 and December 31, 2022 at cost and fair value was
as follows:
($ in
thousands) |
|
June 30,
2023(Unaudited) |
|
|
December 31, 2022 |
|
Security
Type |
|
Cost/AmortizedCost |
|
|
Fair Value |
|
|
%(4) |
|
|
Cost/AmortizedCost |
|
|
Fair Value |
|
|
%(4) |
|
Senior Secured Loan |
|
$ |
396,674 |
|
|
$ |
376,539 |
|
|
|
74 |
|
|
$ |
435,856 |
|
|
$ |
418,722 |
|
|
|
73 |
|
Junior Secured Loan |
|
|
51,707 |
|
|
|
37,962 |
|
|
|
7 |
|
|
|
65,776 |
|
|
|
56,400 |
|
|
|
10 |
|
Senior Unsecured Bond |
|
|
416 |
|
|
|
43 |
|
|
|
0 |
|
|
|
416 |
|
|
|
43 |
|
|
|
0 |
|
Equity Securities |
|
|
28,901 |
|
|
|
20,013 |
|
|
|
4 |
|
|
|
28,848 |
|
|
|
21,905 |
|
|
|
4 |
|
CLO Fund Securities |
|
|
25,577 |
|
|
|
12,996 |
|
|
|
3 |
|
|
|
34,649 |
|
|
|
20,453 |
|
|
|
3 |
|
Asset Manager
Affiliates(5) |
|
|
17,791 |
|
|
|
- |
|
|
|
- |
|
|
|
17,791 |
|
|
|
- |
|
|
|
- |
|
Joint Ventures |
|
|
74,878 |
|
|
|
62,547 |
|
|
|
12 |
|
|
|
68,850 |
|
|
|
58,955 |
|
|
|
10 |
|
Derivatives |
|
|
31 |
|
|
|
- |
|
|
|
- |
|
|
|
31 |
|
|
|
- |
|
|
|
- |
|
Total |
|
$ |
595,975 |
|
|
$ |
510,100 |
|
|
|
100 |
% |
|
$ |
652,217 |
|
|
$ |
576,478 |
|
|
|
100 |
% |
4Represents percentage of total portfolio at fair
value5Represents the equity investment in the Asset Manager
Affiliates
Liquidity and Capital
Resources
As of June 30, 2023, the Company had $333.7
million (par value) of borrowings outstanding at a current weighted
average interest rate of 6.7%, of which $108.0 million par value
had a fixed rate and $225.7 million par value had a floating rate.
This balance was comprised of $78.0 million of outstanding
borrowings under the Senior Secured Revolving Credit Facility,
$147.7 million of 2018-2 Secured Notes due 2029, and $108.0 million
of 4.875% Notes due 2026.
As of June 30, 2023 and December 31, 2022, the fair value of
investments and cash were as follows:
($ in
thousands) |
|
|
|
Security
Type |
|
June 30, 2023 |
|
|
December 31, 2022 |
|
Cash and cash equivalents |
|
$ |
20,254 |
|
|
$ |
5,148 |
|
Restricted Cash |
|
|
15,192 |
|
|
|
27,983 |
|
Senior Secured Loan |
|
|
376,539 |
|
|
|
418,722 |
|
Junior Secured Loan |
|
|
37,962 |
|
|
|
56,400 |
|
Senior Unsecured Bond |
|
|
43 |
|
|
|
43 |
|
Equity Securities |
|
|
20,013 |
|
|
|
21,905 |
|
CLO Fund Securities |
|
|
12,996 |
|
|
|
20,453 |
|
Asset Manager Affiliates |
|
|
- |
|
|
|
- |
|
Joint Ventures |
|
|
62,547 |
|
|
|
58,955 |
|
Derivatives |
|
|
- |
|
|
|
- |
|
Total |
|
$ |
545,546 |
|
|
$ |
609,609 |
|
As of June 30, 2023, the Company had
unrestricted cash of $20.3 million and restricted cash of $15.2
million. This compares to unrestricted cash of $11.9 million and
restricted cash of $34.2 million as of March 31, 2023. As of June
30, 2023, the Company had $37.0 million of available borrowing
capacity under the Senior Secured Revolving Credit Facility, and no
remaining borrowing capacity under the 2018-2 Secured Notes.
Interest Rate Risk
The Company’s investment income is affected by
fluctuations in various interest rates, including LIBOR, SOFR and
prime rates.
As of June 30, 2023, approximately 90.9% of our
Debt Securities Portfolio at par value were either floating rate
with a spread to an interest rate index such as LIBOR, SOFR or the
prime rate. 79.5% of these floating rate loans contain floors
ranging between 0.50% and 2.00%. We generally expect that future
portfolio investments will predominately be floating rate
investments.
In periods of rising or lowering interest rates,
the cost of the portion of debt associated with the 4.875% Notes
Due 2026 would remain the same, given that this debt is at a fixed
rate, while the interest rate on borrowings under the Revolving
Credit Facility would fluctuate with changes in interest rates.
Generally, the Company would expect that an
increase in the base rate index for floating rate investment assets
would increase gross investment income and a decrease in the base
rate index for such assets would decrease gross investment income
(in either case, such increase/decrease may be limited by interest
rate floors/minimums for certain investment assets).
|
|
Impact on net investment income froma
change in interest rates at: |
($ in thousands) |
|
1% |
|
2% |
|
3% |
Increase in interest rate |
|
$ |
1,797 |
|
|
$ |
3,594 |
|
|
$ |
5,392 |
|
Decrease in interest rate |
|
$ |
(1,797 |
) |
|
$ |
(3,594 |
) |
|
$ |
(5,392 |
) |
Conference Call and Webcast
We will hold a conference call on August 10,
2023, at 9:00 am Eastern Time to discuss our second quarter 2023
financial results. To access the call, stockholders, prospective
stockholders and analysts should dial (646) 307-1963 approximately
10 minutes prior to the start of the conference call and use the
conference ID 3296365.
A live audio webcast of the conference call can
be accessed via the Internet, on a listen-only basis on the
Company’s website www.portmanridge.com in the Investor Relations
section under Events and Presentations. The webcast can also be
accessed by clicking the following link:
https://edge.media-server.com/mmc/p/fx5skorp. The online archive of
the webcast will be available on the Company’s website shortly
after the call.
About Portman Ridge Finance
Corporation
Portman Ridge Finance Corporation (Nasdaq: PTMN)
is a publicly traded, externally managed investment company that
has elected to be regulated as a business development company under
the Investment Company Act of 1940. Portman Ridge’s middle market
investment business originates, structures, finances and manages a
portfolio of term loans, mezzanine investments and selected equity
securities in middle market companies. Portman Ridge’s investment
activities are managed by its investment adviser, Sierra Crest
Investment Management LLC, an affiliate of BC Partners Advisors,
LP.
Portman Ridge’s filings with the Securities and
Exchange Commission (the “SEC”), earnings releases, press releases
and other financial, operational and governance information are
available on the Company's website at www.portmanridge.com.
About BC Partners Advisors L.P. and BC
Partners Credit
BC Partners is a leading international
investment firm with over €40 billion of assets under management in
private equity, private credit and real estate strategies.
Established in 1986, BC Partners has played an active role in
developing the European buyout market for three decades. Today, BC
Partners executives operate across markets as an integrated team
through the firm's offices in North America and Europe. Since
inception, BC Partners has completed 117 private equity investments
in companies with a total enterprise value of €149 billion and is
currently investing its eleventh private equity fund. For more
information, please visit www.bcpartners.com.
BC Partners Credit was launched in February 2017
and has pursued a strategy focused on identifying attractive credit
opportunities in any market environment and across sectors,
leveraging the deal sourcing and infrastructure made available from
BC Partners.
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains forward-looking
statements. The matters discussed in this press release, as well as
in future oral and written statements by management of Portman
Ridge Finance Corporation, that are forward-looking statements are
based on current management expectations that involve substantial
risks and uncertainties which could cause actual results to differ
materially from the results expressed in, or implied by, these
forward-looking statements.
Forward-looking statements relate to future
events or our future financial performance and include, but are not
limited to, projected financial performance, expected development
of the business, plans and expectations about future investments
and the future liquidity of the Company. We generally identify
forward-looking statements by terminology such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“target,” “projects,” “outlook”, “contemplates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative
of these terms or other similar words. Forward-looking statements
are based upon current plans, estimates and expectations that are
subject to risks, uncertainties, and assumptions. Should one or
more of these risks or uncertainties materialize, or should
underlying assumptions prove to be incorrect, actual results may
vary materially from those indicated or anticipated by such
forward-looking statements.
Important assumptions include our ability to
originate new investments, and achieve certain margins and levels
of profitability, the availability of additional capital, and the
ability to maintain certain debt to asset ratios. In light of these
and other uncertainties, the inclusion of a projection or
forward-looking statement in this press release should not be
regarded as a representation that such plans, estimates,
expectations or objectives will be achieved. Important factors that
could cause actual results to differ materially from such plans,
estimates or expectations include, among others,
(1) uncertainty of the expected financial performance of the
Company; (2) expected synergies and savings associated with. merger
transactions effectuated by the Company; (3) the ability of the
Company and/or its adviser to implement its business strategy;
(4) evolving legal, regulatory and tax regimes;
(5) changes in general economic and/or industry specific
conditions, including but not limited to the impact of inflation;
(6) the impact of increased competition; (7) business
prospects and the prospects of the Company’s portfolio companies;
(8) contractual arrangements with third parties; (9) any
future financings by the Company; (10) the ability of Sierra
Crest Investment Management LLC to attract and retain highly
talented professionals; (11) the Company’s ability to fund any
unfunded commitments; (12) any future distributions by the
Company; (13) changes in regional or national economic conditions,
including but not limited to the impact of the COVID-19 pandemic,
and their impact on the industries in which we invest; and(14)
other changes in the conditions of the industries in which we
invest and other factors enumerated in our filings with the SEC.
The forward-looking statements should be read in conjunction with
the risks and uncertainties discussed in the Company’s filings with
the SEC, including the Company’s most recent Form 10-K and other
SEC filings. We do not undertake to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required to be reported under
the rules and regulations of the SEC.
Contacts:Portman Ridge Finance
Corporation
650 Madison Avenue, 23rd floorNew York, NY
10022info@portmanridge.com
Jason Roos Jason.Roos@bcpartners.com(212)
891-2880
The Equity Group Inc.Lena
Catilcati@equityny.com(212) 836-9611
Val Ferrarovferraro@equityny.com(212)
836-9633
|
PORTMAN RIDGE FINANCE
CORPORATIONCONSOLIDATED BALANCE
SHEETS(in thousands, except share
and per share amounts) |
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
Investments at fair
value: |
|
|
|
|
|
Non-controlled/non-affiliated investments (amortized cost: 2023 -
$465,608; 2022 - $518,699) |
$ |
422,072 |
|
|
$ |
483,698 |
|
Non-controlled affiliated investments (amortized cost: 2023 -
$72,325; 2022 - $75,196) |
|
71,411 |
|
|
|
73,827 |
|
Controlled affiliated investments (cost: 2023 - $58,042; 2022 -
$58,322) |
|
16,617 |
|
|
|
18,953 |
|
Total Investments at Fair
Value (cost: 2023 - $595,975; 2022 - $652,217) |
$ |
510,100 |
|
|
$ |
576,478 |
|
Cash and cash equivalents |
|
20,254 |
|
|
|
5,148 |
|
Restricted cash |
|
15,192 |
|
|
|
27,983 |
|
Interest receivable |
|
5,245 |
|
|
|
4,828 |
|
Receivable for unsettled
trades |
|
1,755 |
|
|
|
1,395 |
|
Due from affiliates |
|
1,896 |
|
|
|
930 |
|
Other assets |
|
2,802 |
|
|
|
2,724 |
|
Total
Assets |
$ |
557,244 |
|
|
$ |
619,486 |
|
LIABILITIES |
|
|
|
|
|
2018-2 Secured Notes (net of
discount of: 2023 - $938; 2022 - $1,226) |
$ |
146,734 |
|
|
$ |
176,937 |
|
4.875% Notes Due 2026 (net of
discount of: 2023 - $1,467; 2022 - $1,704; net of deferred
financing costs of: 2023 - $692; 2022 - $818) |
|
105,841 |
|
|
|
105,478 |
|
Great Lakes Portman Ridge
Funding LLC Revolving Credit Facility (net of deferred financing
costs of: 2023 - $941; 2022 - $1,107) |
|
77,059 |
|
|
|
90,893 |
|
Payable for unsettled
trades |
|
422 |
|
|
|
1,276 |
|
Accounts payable, accrued
expenses and other liabilities |
|
3,988 |
|
|
|
4,614 |
|
Accrued interest payable |
|
3,618 |
|
|
|
3,722 |
|
Due to affiliates |
|
1,021 |
|
|
|
900 |
|
Management and incentive fees
payable |
|
3,548 |
|
|
|
3,543 |
|
Total
Liabilities |
$ |
342,231 |
|
|
$ |
387,363 |
|
NET
ASSETS |
|
|
|
|
|
Common stock, par value $0.01
per share, 20,000,000 common shares authorized; 9,935,250 issued,
and 9,537,236 outstanding at June 30, 2023, and 9,916,856
issued, and 9,581,536 outstanding at December 31, 2022 |
$ |
95 |
|
|
$ |
96 |
|
Capital in excess of par
value |
|
735,808 |
|
|
|
736,784 |
|
Total distributable (loss)
earnings |
|
(520,890 |
) |
|
|
(504,757 |
) |
Total Net
Assets |
$ |
215,013 |
|
|
$ |
232,123 |
|
Total Liabilities and
Net Assets |
$ |
557,244 |
|
|
$ |
619,486 |
|
Net Asset Value Per Common
Share |
$ |
22.54 |
|
|
$ |
24.23 |
|
|
PORTMAN RIDGE FINANCE
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except
share and per share amounts) |
|
|
|
For the Three Months EndedJune 30, |
|
|
For the Six Months EndedJune 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
INVESTMENT
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
14,786 |
|
|
$ |
10,649 |
|
|
$ |
29,632 |
|
|
$ |
23,316 |
|
Non-controlled affiliated investments |
|
|
626 |
|
|
|
857 |
|
|
|
1,475 |
|
|
|
1,448 |
|
Total interest income |
|
$ |
15,412 |
|
|
$ |
11,506 |
|
|
$ |
31,107 |
|
|
$ |
24,764 |
|
Payment-in-kind income: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments(1) |
|
$ |
859 |
|
|
$ |
1,199 |
|
|
$ |
2,386 |
|
|
$ |
2,325 |
|
Non-controlled affiliated investments |
|
|
107 |
|
|
|
73 |
|
|
|
180 |
|
|
|
329 |
|
Controlled affiliated investments |
|
|
- |
|
|
|
20 |
|
|
|
- |
|
|
|
20 |
|
Total payment-in-kind income |
|
$ |
966 |
|
|
$ |
1,292 |
|
|
$ |
2,566 |
|
|
$ |
2,674 |
|
Dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled affiliated investments |
|
$ |
1,864 |
|
|
$ |
1,005 |
|
|
$ |
3,248 |
|
|
$ |
1,950 |
|
Controlled affiliated investments |
|
|
465 |
|
|
|
1,066 |
|
|
|
1,540 |
|
|
|
2,229 |
|
Total dividend income |
|
$ |
2,329 |
|
|
$ |
2,071 |
|
|
$ |
4,788 |
|
|
$ |
4,179 |
|
Fees and other income: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
905 |
|
|
$ |
175 |
|
|
$ |
1,478 |
|
|
$ |
371 |
|
Non-controlled affiliated investments |
|
|
14 |
|
|
|
- |
|
|
|
14 |
|
|
|
- |
|
Total fees and other income |
|
$ |
919 |
|
|
$ |
175 |
|
|
$ |
1,492 |
|
|
$ |
371 |
|
Total investment income |
|
$ |
19,626 |
|
|
$ |
15,044 |
|
|
$ |
39,953 |
|
|
$ |
31,988 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Management fees |
|
$ |
1,869 |
|
|
$ |
2,088 |
|
|
$ |
3,822 |
|
|
$ |
4,223 |
|
Performance-based incentive fees |
|
|
1,680 |
|
|
|
1,169 |
|
|
|
3,488 |
|
|
|
2,847 |
|
Interest and amortization of debt issuance costs |
|
|
6,372 |
|
|
|
3,889 |
|
|
|
12,704 |
|
|
|
7,233 |
|
Professional fees |
|
|
699 |
|
|
|
879 |
|
|
|
1,302 |
|
|
|
1,724 |
|
Administrative services expense |
|
|
659 |
|
|
|
822 |
|
|
|
1,330 |
|
|
|
1,669 |
|
Other general and administrative expenses |
|
|
432 |
|
|
|
675 |
|
|
|
863 |
|
|
|
862 |
|
Total expenses |
|
$ |
11,711 |
|
|
$ |
9,522 |
|
|
$ |
23,509 |
|
|
$ |
18,558 |
|
NET INVESTMENT
INCOME |
|
$ |
7,915 |
|
|
$ |
5,522 |
|
|
$ |
16,444 |
|
|
$ |
13,430 |
|
REALIZED AND
UNREALIZED GAINS (LOSSES) ON INVESTMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses)
from investment transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
(5,267 |
) |
|
$ |
(14,109 |
) |
|
$ |
(8,352 |
) |
|
$ |
(17,779 |
) |
Non-controlled affiliated investments |
|
|
(1,124 |
) |
|
|
118 |
|
|
|
(1,124 |
) |
|
|
330 |
|
Controlled affiliated investments |
|
|
(80 |
) |
|
|
- |
|
|
|
(80 |
) |
|
|
- |
|
Derivatives |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,095 |
) |
Net realized gain (loss) on investments |
|
$ |
(6,471 |
) |
|
$ |
(13,991 |
) |
|
$ |
(9,556 |
) |
|
$ |
(19,544 |
) |
Net change in unrealized
appreciation (depreciation) on: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlled/non-affiliated investments |
|
$ |
(5,478 |
) |
|
$ |
4,870 |
|
|
$ |
(8,535 |
) |
|
$ |
5,699 |
|
Non-controlled affiliated investments |
|
|
766 |
|
|
|
(1,329 |
) |
|
|
455 |
|
|
|
(1,212 |
) |
Controlled affiliated investments |
|
|
536 |
|
|
|
(3,428 |
) |
|
|
(2,056 |
) |
|
|
(4,673 |
) |
Derivatives |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,442 |
|
Net unrealized gain (loss) on investments |
|
$ |
(4,176 |
) |
|
$ |
113 |
|
|
$ |
(10,136 |
) |
|
$ |
2,256 |
|
Tax (provision) benefit on
realized and unrealized gains (losses) on investments |
|
$ |
(164 |
) |
|
$ |
(77 |
) |
|
$ |
407 |
|
|
$ |
(517 |
) |
Net realized and unrealized appreciation (depreciation) on
investments, net of taxes |
|
$ |
(10,811 |
) |
|
$ |
(13,955 |
) |
|
$ |
(19,285 |
) |
|
$ |
(17,805 |
) |
Realized gains (losses) on
extinguishments of debt |
|
$ |
(218 |
) |
|
$ |
- |
|
|
$ |
(218 |
) |
|
$ |
- |
|
NET INCREASE
(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
|
$ |
(3,114 |
) |
|
$ |
(8,433 |
) |
|
$ |
(3,059 |
) |
|
$ |
(4,375 |
) |
Net Increase (Decrease) In Net Assets Resulting from Operations per
Common Share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
(0.33 |
) |
|
$ |
(0.88 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.45 |
) |
Net Investment Income Per Common Share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted: |
|
$ |
0.83 |
|
|
$ |
0.57 |
|
|
$ |
1.72 |
|
|
$ |
1.39 |
|
Weighted Average Shares of Common Stock Outstanding—Basic and
Diluted |
|
|
9,541,722 |
|
|
|
9,634,870 |
|
|
|
9,548,424 |
|
|
|
9,666,298 |
|
(1) During the three and six months ended June 30, 2023, the
Company received $191.2 thousand and $492.4 thousand, respectively
of non-recurring fee income that was paid in-kind and included in
this financial statement line item.
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